You are on page 1of 334

IMPORTANT NOTICE

THIS OFFERING IS AVAILABLE ONLY TO INVESTORS WHO ARE EITHER (1) QIBS (AS DEFINED BELOW)
OR (2) PERSONS OTHER THAN US PERSONS (AS DEFINED IN REGULATION S UNDER THE US
SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT)) LOCATED OUTSIDE OF THE
UNITED STATES
IMPORTANT: You must read the following disclaimer before continuing. The following disclaimer applies to the attached
offering circular (the Document) following this page and you are therefore advised to read this disclaimer carefully
before reading, accessing or making any other use of the attached Document. In accessing the attached Document, you
agree to be bound by the following terms and conditions, including any modifications to them from time to time, each
time you receive any information from the Company or the Joint Lead Managers (as defined in the Document) as a
result of such access.
NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF SECURITIES FOR SALE
IN THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO. THE
NOTES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE SECURITIES ACT, OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR OTHER US JURISDICTION, AND THE
NOTES MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, US PERSONS (AS DEFINED IN REGULATION S
UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND APPLICABLE STATE OR LOCAL SECURITIES LAWS.
THE ATTACHED DOCUMENT MAY NOT BE FORWARDED OR DISTRIBUTED TO ANY OTHER PERSON
AND MAY NOT BE REPRODUCED IN ANY MANNER WHATSOEVER AND, IN PARTICULAR, MAY NOT
BE FORWARDED TO ANY US ADDRESS. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF
THIS DOCUMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS
DIRECTIVE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS OF
OTHER JURISDICTIONS. IF YOU HAVE GAINED ACCESS TO THIS TRANSMISSION CONTRARY TO ANY
OF THE FOREGOING RESTRICTIONS, YOU ARE NOT AUTHORISED AND WILL NOT BE ABLE TO
PURCHASE ANY OF THE SECURITIES.
Confirmation of your representation: In order to be eligible to view the attached Document or make an investment
decision with respect to the securities being offered, prospective investors must be either (1) Qualified Institutional
Buyers (QIBs) (within the meaning of Rule 144A (Rule 144A) under the Securities Act) or (2) a person other than
a US person (as defined in Regulation S under the Securities Act) located outside the United States. This Document is
being sent to you at your request, and by accepting the e-mail and accessing this Document you shall be deemed to
have represented to the Company and the Joint Lead Managers that (1) either (a) you and any customers you represent
are QIBs or (b) you are a person other than a US person (as defined in Regulation S under the Securities Act) located
outside the United States and you are purchasing the securities being offered in an offshore transaction (within the
meaning of Regulation S under the Securities Act) and the electronic mail address that you gave us and to which this
email has been delivered is not located in the United States, and (2) you consent to delivery of such Document by
electronic transmission.
You are reminded that this Document has been delivered to you on the basis that you are a person into whose
possession this Document may be lawfully delivered in accordance with the laws of the jurisdiction in which you are
located and you may not, nor are you authorised to, deliver or disclose the contents of this Document to any other
person.
The materials relating to this offering of securities do not constitute, and may not be used in connection with, an offer
or solicitation in any place where offers or solicitations are not permitted by law. If a jurisdiction requires that this
issuance of securities be made by a licensed broker or dealer, and the Joint Lead Managers or any affiliates of the Joint
Lead Managers is a licensed broker or dealer in the relevant jurisdiction, this offering shall be deemed to be made by
the Joint Lead Managers or such affiliates on behalf of the Company in such jurisdiction.
The attached Document may only be distributed to, and is only directed at (a) persons who have professional
experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the Order), (b) high net worth bodies corporate falling within Article 49(2) of the
Order, and (c) any other persons to whom it may otherwise lawfully be communicated (all such persons together being
referred to as relevant persons). Any person who is not a relevant person should not act or rely on this Document or
any of its contents.
The attached Document has been sent to you in an electronic form. You are reminded that documents transmitted via
this medium may be altered or changed during the process of electronic transmission and consequently none of the
Company or the Joint Lead Managers, any person who controls them or any director, officer, employee or agent of
them or affiliate of any such person accepts any liability or responsibility whatsoever in respect of any difference
between the Document distributed to you in electronic format and the hard copy version available to you on request
from the Joint Lead Managers.

OFFERING CIRCULAR

ANADOLU EFES BIRACILIK VE MALT SANAYII ANONIM SIRKETI


US$500,000,000 3.375% Notes due 2022
Anadolu Efes Biraclk ve Malt Sanayii Anonim Sirketi, a public joint stock company (the Company or Issuer), is
issuing US$500,000,000 3.375% Notes due 2022 (the Notes). The Notes have not been and will not be registered
under the United States Securities Act of 1933, as amended (the Securities Act), or the securities or blue sky laws
of any state of the United States of America (United States or US), the United Kingdom or any other jurisdiction,
and are being offered: (a) for sale in the United States (the US Offering) to qualified institutional buyers only (each a
QIB) as defined in, and in reliance upon, Rule 144A under the Securities Act (Rule 144A) and (b) for sale to nonUS persons outside the United States (the International Offering and, with the US Offering, the Offering) in
reliance upon Regulation S under the Securities Act (Regulation S). For a description of certain restrictions on sale
and transfer of investments in the Notes, see Plan of Distribution, Selling Restrictions and Transfer Restrictions
herein.
INVESTING IN THE NOTES INVOLVES RISKS. PROSPECTIVE INVESTORS SHOULD CONSIDER THE
FACTORS SET FORTH UNDER RISK FACTORS BEGINNING ON PAGE 3 OF THIS OFFERING CIRCULAR.
Interest on the Notes will be paid in arrear on the first day of each May and November; provided that if any such date
is not a Business Day (as defined below), then such payment will be made on the next Business Day. Principal of the
Notes is scheduled to be paid on 1 November 2022, but may be paid earlier under certain circumstances as further
described herein. The Notes initially will be sold to investors at a price equal to 98.761% of the principal amount
thereof. For a more detailed description of the Notes, see Conditions of the Notes.
This Offering Circular (the Offering Circular) has been approved by the Central Bank of Ireland, as competent
authority under Directive 2003/71/EC (the Prospectus Directive) as amended (which includes the amendments made by
Directive 2010/73/EU to the extent that such amendments have been implemented in a relevant Member State of the
European Economic Area). The Central Bank of Ireland only approves this Offering Circular as meeting the
requirements imposed under Irish and EU law pursuant to the Prospectus Directive. Application has been made to the
Irish Stock Exchange for the Notes to be admitted to the Official List and to trading on its regulated market (the
Main Securities Market). Such approval only relates to Notes which are to be admitted to trading on a regulated
market for the purposes of Directive 2004/39/EC and/or which are to be offered to the public in any Member State of
the European Economic Area. References in this Offering Circular to the Notes being listed (and all related
references) will mean that the Notes have been admitted to the Official List and have been admitted to trading on the
Main Securities Market. The Main Securities Market is a regulated market for the purposes of Directive 2004/39/EC.
Application has been made to the Capital Markets Board of Turkey (the CMB) in its capacity as competent
authority under Law No. 2499 of the Republic of Turkey (Turkey) relating to capital markets (the Capital Markets
Law) for the registration of the Notes with the CMB and the issuance of the Notes by the Company outside Turkey.
The issuance of the Notes was approved by the CMB on 15 October 2012, and the registration certificate relating to
the Notes is expected to be obtained from the CMB on or about 23 October 2012.
Under current Turkish tax law, withholding tax at the rate of 0% applies to interest on the Notes. See Taxation
Certain Turkish Tax Considerations.
The Notes are expected to be rated at issuance Baa3 by Moodys Investors Services Ltd. (Moodys) and BBB-
by Standard & Poors Credit Market Services Europe Limited, a division of the McGraw Hill Companies, Inc. (S&P
and, together with Moodys, the Rating Agencies). The Rating Agencies have also issued ratings in respect of the
Turkish government, as set out on page 18 of this Offering Circular. A rating is not a recommendation to buy, sell or
hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating
organisation. As of the date of this Offering Circular, each of the Rating Agencies is established in the European Union
and is registered under Regulation (EU) No 1060/2009, as amended (the CRA Regulation).
The Notes are being offered under Rule 144A and Regulation S by each of HSBC Bank plc, J.P. Morgan Securities
plc, Merrill Lynch, Pierce, Fenner & Smith Incorporated and The Royal Bank of Scotland plc (each, a Joint Lead
Manager and, collectively, the Joint Lead Managers), subject to their acceptance and right to reject orders in whole
or in part.
The Notes will initially be represented by two global certificates in registered form (the Global Certificates), one of
which will be issued in respect of the Notes (Rule 144A Notes) offered and sold in reliance on Rule 144A (the
Restricted Global Certificate) and will be registered in the name of Cede & Co., as nominee for DTC, and the other
of which will be issued in respect of the Notes (Regulation S Notes) offered and sold in reliance on Regulation S (the
Unrestricted Global Certificate) and will be registered in the name of a nominee of a common depositary for
Euroclear Bank S A/N V (Euroclear) and Clearstream Banking, societe anonyme (Clearstream, Luxembourg). It is
expected that delivery of the Global Certificates will be made in immediately available funds on 30 October 2012 (i.e.,
the seventh Business Day following the date of pricing of the Notes (such date being referred to herein as the Issue
Date and such settlement cycle being herein referred to as T+7).
Joint Lead Managers

BofA Merrill Lynch

HSBC

J.P. Morgan

The Royal Bank of Scotland

The date of this Offering Circular is 23 October 2012.

This Offering Circular constitutes a prospectus for the purpose of Article 5 of the Prospectus Directive.
This Offering Circular is to be read in conjunction with the Groups Consolidated Financial Statements
(as defined in Presentation of InformationPresentation of Financial Information), which form part of
this Offering Circular and are included herein.
This Offering Circular does not constitute an offer of, or an invitation by or on behalf of the
Company and the Joint Lead Managers to subscribe for or purchase, any Notes (or beneficial
interests therein). This Offering Circular is intended only to provide information to assist potential
investors in deciding whether or not to subscribe for or purchase Notes (or beneficial interests
therein) in accordance with the terms and conditions specified by the Joint Lead Managers. The
Notes (and beneficial interests therein) may not be offered or sold, directly or indirectly, and this
Offering Circular may not be circulated, in any jurisdiction except in accordance with legal
requirements applicable to such jurisdiction.
The distribution or delivery of this Offering Circular and the offer or sale of the Notes (or beneficial
interests therein) in certain jurisdictions may be restricted by law. Persons into whose possession this
Offering Circular may come are required by the Company and the Joint Lead Managers to inform
themselves about and to observe any such restrictions. For a description of certain restrictions on
offers, sales and deliveries of the Notes (or beneficial interests therein) and on the distribution or
delivery of this Offering Circular and other offering material relating to the Notes, see Selling
Restrictions and Transfer Restrictions.
No person has been authorised in connection with the offering of the Notes (or beneficial interests
therein) to give any information or make any representation regarding the Group, the Joint Lead
Managers or the Notes other than as contained in this Offering Circular. Any such representation or
information must not be relied upon as having been authorised by the Company or the Joint Lead
Managers. The delivery of this Offering Circular at any time does not imply that there has been no
change in the Groups affairs or that the information contained in it is correct as of any time
subsequent to its date or that any other information supplied in connection with the Offering of the
Notes is correct as of any time subsequent to the date indicated in the document containing the
same. This Offering Circular may only be used for the purpose for which it has been published. The
Joint Lead Managers expressly do not undertake to review the financial condition or affairs of the
Company during the life of the Notes or to advise any investor in the Notes of any information
coming to their attention. None of the Joint Lead Managers assumes any responsibility for the
accuracy or completeness of the information contained herein. Accordingly, no representation or
warranty, express or implied, is made by the Joint Lead Managers as to the accuracy or completeness
of the information set forth in this Offering Circular, and nothing contained in this Offering Circular
is, or should be relied upon as, a promise or representation, whether as to the past or the future.
None of the Joint Lead Managers assumes any responsibility or liability for the accuracy or
completeness of the information set forth in this Offering Circular. No Joint Lead Manager accepts
any liability in relation to the information contained in this Offering Circular or any other
information provided by the Company in connection with the offer or sale of the Notes or their
distribution.
Neither this Offering Circular nor any other information supplied in connection with the offering of
the Notes (a) is intended to provide the basis of any credit or other evaluation or (b) should be
considered as a recommendation by the Issuer or any of the Joint Lead Managers that any recipient
of this Offering Circular or any other information supplied in connection with the offer or sale of the
Notes should purchase the Notes. Each person contemplating making an investment in the Notes
must make its own investigation and analysis of the creditworthiness of the Company and its own
determination of the suitability of any such investment, with particular reference to its own
investment objectives and experience, and any other factors that may be relevant to it in connection
with such investment. In particular, each potential investor should:
*

have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the
merits and risks of investing in the Notes and the information contained in this Offering
Circular or any applicable supplement,

have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its
particular financial situation, an investment in the Notes and the impact such investment will
have on its overall investment portfolio,

c107169pu010Proof6:22.10.12_10:37B/LRevision:0OperatorHarS

have sufficient financial resources and liquidity to bear all of the risks of an investment in the
Notes, including where the currency for principal and interest payments is different from the
potential investors currency,

understand thoroughly the terms of the Notes and be familiar with the behaviour of financial
markets in which they participate, and

be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for
economic, interest rate and other factors that may affect its investment and its ability to bear
the applicable risks.

None of the Company, the Joint Lead Managers or any of their respective representatives is making
any representation to any offeree or purchaser of the Notes (or beneficial interests therein) regarding
the legality of any investment by such offeree or purchaser under applicable legal investment or
similar laws. Each investor should consult with its own advisers as to the legal, tax, business,
financial and related aspects of an investment in the Notes.

GENERAL INFORMATION
The Notes have not been and will not be registered under the Securities Act or under the securities
or blue sky laws of any state of the United States or any other US jurisdiction. Each investor, by
purchasing a Note (or a beneficial interest therein), agrees that the Notes (or beneficial interests
therein) may only be reoffered, resold, pledged or otherwise transferred only upon registration under
the Securities Act or pursuant to the exemptions therefrom described under Transfer Restrictions.
Each investor also will be deemed to have made certain representations and agreements as described
therein. Any resale or other transfer, or attempted resale or other attempted transfer, that is not
made in accordance with the transfer restrictions may subject the transferor and transferee to certain
liabilities under applicable securities laws.
The offering of the Notes has been authorised by the CMB only for the purpose of the sale of the
Notes outside of Turkey in accordance with Article 15(b) of Decree 32 on the Protection of the Value
of the Turkish Currency (as amended from time to time, Decree 32) and Articles 6 and 25 of
Communique Serial II, No. 22 on the Principles on the Registration and Sale of Debt Instruments
(the Communique). The Notes (or beneficial interests therein) have to be offered or sold outside of
Turkey and the CMB has authorised the offering of the Notes; provided that, following the primary
sale of the Notes, no transaction that may be deemed as a sale of the Notes (or beneficial interests
therein) in Turkey by way of private placement or public offering may be engaged in. Pursuant to
Article 15(d)(ii) of Decree 32, there is no restriction on the purchase or sale of the Notes (or
beneficial interests therein) by residents of Turkey; provided that they purchase or sell such Notes (or
beneficial interests) in the financial markets outside of Turkey and such sale and purchase is made
through banks and/or licensed brokerage institutions authorised pursuant to CMB regulations. The
registration certificate relating to the Notes is expected to be obtained from the CMB on or about
23 October 2012. This Offering Circular is being provided on a confidential basis in the United States
to a limited number of QIBs for informational use solely in connection with the consideration of the
purchase of the Notes. It may not be copied or reproduced in whole or in part nor may it be
distributed or any of its contents disclosed to anyone other than the prospective investors to whom it
is originally submitted.
Notes offered and sold to QIBs in reliance upon Rule 144A will be represented by beneficial interests
in one or more permanent global certificates in fully registered form without interest coupons. Notes
offered and sold outside the United States to non-US persons pursuant to Regulation S will be
represented by beneficial interests in one or more permanent global certificates in fully registered form
without interest coupons. Except as described in this Offering Circular, beneficial interests in the
Global Certificates will be represented through accounts of financial institutions acting on behalf of
beneficial owners as direct and indirect participants in DTC, Euroclear and Clearstream, Luxembourg.
Except as described in this Offering Circular, owners of beneficial interests in the Global Certificates
will not be entitled to have the Notes registered in their names, will not receive or be entitled to
receive physical delivery of the Notes in definitive form and will not be considered holders of the
Notes under the Notes and the Agency Agreement.
An application has been made to admit the Notes to listing on the Official List and to have the
Notes admitted to trading on the Main Securities Market; however, no assurance can be given that
such application will be accepted.

c107169pu010Proof6:22.10.12_10:37B/LRevision:0OperatorHarS

ii

In connection with the issue of the Notes, Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
Stabilising Manager) (or persons acting on behalf of the Stabilising Manager) may over-allot Notes
or effect transactions with a view to supporting the market price of the Notes at a level higher than
that which might otherwise prevail; however, there is no assurance that the Stabilising Manager (or
persons acting on behalf of the Stabilising Manager) will undertake any stabilisation action. Any
stabilisation action may begin on or after the date on which adequate public disclosure of the terms
of the offer of the Notes is made and, if begun, may be ended at any time, but it must end no later
than the earlier of 30 days after the Issue Date and 60 days after the date of the allotment of the
Notes. Any stabilisation action or over-allotment must be conducted by the Stabilising Manager (or
persons acting on behalf of the Stabilising Manager) in accordance with all applicable laws and rules.
Notwithstanding anything herein to the contrary, the Company may not (whether through overallotment or otherwise) issue more Notes than have been registered with the CMB.
Other than authorisation by the CMB, the Notes have not been approved or disapproved by the US
Securities and Exchange Commission (the SEC), any state securities commission or any other US,
Turkish, Irish, United Kingdom or other regulatory authority, nor have any of the foregoing
authorities passed upon or endorsed the merits of this Offering or the accuracy or adequacy of this
Offering Circular. Any representation to the contrary may be a criminal offense.
The distribution of this Offering Circular and the offering of the Notes (and beneficial interests
therein) in certain jurisdictions may be restricted by law. Persons that come into possession of this
Offering Circular are required by the Company and the Joint Lead Managers to inform themselves
about and to observe any such restrictions.
This Offering Circular does not constitute an offer to sell or the solicitation of an offer to buy the
Notes (or any beneficial interest therein) in any jurisdiction to the extent that such offer or
solicitation is unlawful. In particular, there are restrictions on the distribution of this Offering
Circular and the offer and sale of the Notes (and beneficial interests therein) in the United States,
Turkey, Ireland, the United Kingdom and numerous other jurisdictions.
In this Offering Circular Company means Anadolu Efes Biraclk ve Malt Sanayii Anonim Sirketi
on a stand alone basis and Group means the Company and its subsidiaries and joint ventures.
Unless otherwise noted, references to management are to the members of the Companys board of
directors and statements as to the Companys or Groups beliefs, expectations, estimates and options
are to those of the Companys management.

RESPONSIBILITY STATEMENT
The Company accepts responsibility for the information contained in this Offering Circular. To the
best of the knowledge and belief of the Company (which has taken all reasonable care to ensure that
such is the case), the information contained in this Offering Circular is in accordance with the facts
and contains no omission likely to affect the import of such information.
The Company has extracted substantially all of the information contained in this Offering Circular
concerning the Turkish market and its competitors from publicly available information, including
press releases and filings made under various securities laws. Unless otherwise indicated, all data
relating to the Turkish economy, including statistical data, has been obtained from the website of the
Turkish Statistical Institute (Turkiye Istatistik Kurumu) (TurkStat) at www.turkstat.gov.tr, the
website of the Central Bank of Turkey (Turkiye Cumhuriyeti Merkez Bankas) (the Central Bank) at
www.tcmb.gov.tr or the Turkish Treasurys website at www.hazine.gov.tr. Data have been
downloaded/observed on various different days and may be the result of calculations made by the
Company, and therefore may not appear in the exact same form on such websites or elsewhere. Such
websites do not, and should not, be deemed to be a part of, or to be incorporated into, this Offering
Circular.
Where third-party information has been used in this Offering Circular, the source of such information
has been identified. In the case of the presented statistical information, similar statistics may be
obtainable from other sources, although the underlying assumptions and methodology, and
consequently the resulting data, may vary from source to source. Where information has been sourced
from a third party, such publications generally state that the information they contain has been
obtained from sources believed to be reliable but that the accuracy and completeness of such
information is not guaranteed. Information regarding the Companys shareholders (including
ownership levels and agreements) in The Group and Its Business and Ownership sections has been
iii

based upon public filings and announcements by such parties, including Anadolu group of companies
(the Anadolu Group). Such data (including from TurkStat and the Central Bank), while believed to
be reliable and accurately extracted by the Company for the purposes of this Offering Circular, has
not been independently verified by the Company or any other party and prospective investors should
not place undue reliance upon such data included in this Offering Circular. As far as the Company is
aware and able to ascertain from the information published by such third-party sources, this
information has been accurately reproduced and no facts have been omitted that would render the
reproduction of this information inaccurate or misleading.
Where information in this Offering Circular has been identified as obtained from Nielsen, calculations
and data:
*

with respect to Turkey, Efes Pilsen calculation is based in part on data reported by Nielsen
through its Retail Index Service for the related category, for the year 2011, for Total Turkey
market. (Copyright# 2012, The Nielsen Company);

with respect to Russia, ZAO Moscow Efes Brewery, calculation is based in part on data
reported by Nielsen through its Retail Index Service for the Beer category for urban Russia offtrade, valid for 19 September 2012 (Copyright# 2012, ZAO ACNIELSEN);

with respect to Kazakstan, are based on the data provided by ACNielsen Kazahkstan for the
period from 2011 year and January 2012 June 2012 for Kazahkstan, National;

with respect to Ukraine, PJSC Miller Brands Ukraine calculation is based on data reported by
LLC ACNielsen Ukraine through its Retail Index Service for the Beer category for the periods
January 2011 June 2012 in urban parts of Ukraine (Copyright# 2012, The Nielsen Company);
for CCI, are based in part on data reported by Nielsen through its Retail Index Service for the
related categories, for the year 2011, for Total Turkey w/o Bim market. (Copyright# 2012, The
Nielsen Company);

for CC Pakistan, are based in part on data reported by Nielsen through its Retail Index Service
for the related categories, for the year 2011, for Pakistan (as per Modern General Stores,
Traditional General Stores, Pan/Cigarette Vendors, Beverage Street Vendors, Conventional
Restaurants, Local Food Stands & Others). (Copyright# 2012, The Nielsen Company);

for CC Kazakhstan, Coca Cola Almaty Bottlers LLP calculation are based in part on data
reported by AC Nielsen Kazakhstan LLP through its Carbonated Soft Drinks category Retail
Measurement Service, for total National Kazakhstan market, 52-week period ending December
21, 2011. (Copyright# 2012, ACNIELSEN KAZAKHSTAN LLP); and

for CC Azerbaijan, Coca-Cola calculation based in part on data reported by Nielsen through its
Retail Index Service for the Carbonated Soft Drinks for the 52-week period ending December
31, 2011, for the total Baku, Sumgait and Ganja grocery market valid for 03.10.2012.
(Copyright# 2012, ZAO ACNIELSEN).

Where information in this Offering Circular has been identified as obtained from GAMMA Retail
Audit, data is based on GAMMA Retail Audit for the related categories, for the years 2011-2012, for
Georgian market.

NOTICE TO NEW HAMPSHIRE RESIDENTS


NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR
A LICENSE HAS BEEN FILED UNDER CHAPTER 421B OF THE NEW HAMPSHIRE
REVISED STATUTES ANNOTATED (THE RSA) WITH THE STATE OF NEW HAMPSHIRE
NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS
LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE
NEW HAMPSHIRE SECRETARY OF STATE THAT ANY DOCUMENT FILED UNDER RSA
421B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR
THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR
A TRANSACTION MEANS THAT THE NEW HAMPSHIRE SECRETARY OF STATE HAS
PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR
RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR
TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY
PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION
INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

c107169pu010Proof6:22.10.12_10:37B/LRevision:0OperatorHarS

iv

TURKISH TAX CONSIDERATIONS


The withholding tax rates for interest payments of bonds issued by Turkish companies outside of
Turkey vary depending upon the maturity of such bonds as specified under Decree No. 2010/1182
dated 29 December 2010 and Decree No. 2011/1854 dated 26 April 2011 (together, the Decrees).
According to the Decrees, the withholding tax rate on interest payments on the Notes (including any
original-issue discount) is 0% for notes with an initial maturity of 5 years and more. See Taxation
Certain Turkish Tax Considerations.

c107169pu010Proof6:22.10.12_10:37B/LRevision:0OperatorHarS

TABLE OF CONTENTS
OVERVIEW OF THE ISSUER ........................................................................................................
RISK FACTORS ...............................................................................................................................

1
3

OVERVIEW OF THE NOTES .........................................................................................................


SUMMARY FINANCIAL INFORMATION..................................................................................

23
26

PRESENTATION OF INFORMATION .........................................................................................


FORWARD-LOOKING STATEMENTS.........................................................................................

29
32

USE OF PROCEEDS ........................................................................................................................

33

EXCHANGE RATES ........................................................................................................................


CAPITALISATION OF THE GROUP ............................................................................................

34
35

SELECTED FINANCIAL INFORMATION...................................................................................


PRO-FORMA FINANCIAL INFORMATION ...............................................................................

36
39

OPERATING AND FINANCIAL REVIEW...................................................................................

44

THE GROUP AND ITS BUSINESS ................................................................................................


REGULATION..................................................................................................................................

85
111

MANAGEMENT...............................................................................................................................
OWNERSHIP.....................................................................................................................................

117
124

CONDITIONS OF THE NOTES......................................................................................................

127

THE GLOBAL CERTIFICATES .....................................................................................................


BOOK-ENTRY CLEARANCE SYSTEMS ......................................................................................

141
143

TAXATION .......................................................................................................................................
PLAN OF DISTRIBUTION .............................................................................................................

145
149

SELLING RESTRICTIONS..............................................................................................................

151

TRANSFER RESTRICTIONS .........................................................................................................


ENFORCEMENT OF JUDGMENTS AND SERVICE OF PROCESS .........................................

153
157

LEGAL MATTERS ...........................................................................................................................


OTHER GENERAL INFORMATION ............................................................................................

158
159

INDEX OF TERMS ..........................................................................................................................

161

FINANCIAL STATEMENTS ...........................................................................................................


APPENDIX A SUMMARY OF CERTAIN DIFFERENCES BETWEEN IFRS AND CMB
FINANCIAL REPORTING STANDARDS................................................................................

F-1

c107169pu010Proof6:22.10.12_10:37B/LRevision:0OperatorHarS

vi

A-1

OVERVIEW OF THE ISSUER


Overview
The Group is a leading international brewer and the majority shareholder of Coca-Cola Icecek A.S.
(CCI), the Coca-Cola bottler in Turkey and other countries, through which the Group conducts its
soft drinks activities. Based on publicly available information, management estimates that the Group
is Europes fifth largest brewer and Canadean Global Beer Trends 2011 reports that the Group was
the worlds 12th largest beer-maker in 2010, each as measured by sales volume. CCI is the sixth
largest bottler in the Coca-Cola system, as measured by sales volume, according to information
provided to CCI by The Coca-Cola Company (TCCC). The Group operates 18 breweries, seven
malteries and 22 bottling plants, and its products and services are supplied to more than 600 million
consumers across 16 principal markets.
The Group is Turkeys largest beer maker, with a share of 84% of the Turkish beer market as
measured by sales volume for the six months ended 30 June 2012, according to Nielsen. It is also the
second largest brewer in Russia (on a combined basis) and the largest brewer in Kazakhstan,
Moldova and Georgia in terms of market share by volume. The Group has a portfolio of 51 beer
brands, which includes the Efes Pilsener international brand, as well as a number of premium and
local mainstream beer brands, many of which hold leading positions in their respective market
segments, as well as various licenses for international premium brands for its principal markets,
including SABMiller brands. The Group operates 18 breweries, seven malteries and one hops
processing plant in six markets and has sales operations in a further three countries. As of 30 June
2012, the Group had an annual production capacity of approximately 43.7 million hectolitres of beer
and approximately 290,000 tons of malt.
In March 2012, in connection with its strategic alliance with SABMiller, the Group acquired the
Russian and Ukrainian brewing operations of SABMiller and is in the process of integrating these
operations. In 2011, prior to their acquisition by the Group, SABMiller Russia had a 7.1% market
share by sales volume in Russia and Miller Brands Ukraine (MBU) was the number four player in
the Ukrainian beer market with 5.2% market share by sales volume, according to Nielsen.
The Group also produces, sells and distributes Coca-Cola trademarked soft drinks through CCI, its
joint venture with The Coca-Cola Company, in which the Group holds a controlling 50.3% interest.
These include sparkling beverages such as Coca-Cola, Sprite and Fanta, as well as still beverages such
as fruit juice, bottled water, energy and sports drinks, tea and iced tea. CCI and its subsidiaries and
joint ventures operate 22 bottling plants across 8 markets and have sales operations in two other
countries, giving CCI a presence in 10 markets, and as of 30 June 2012 had an annual bottling
capacity of approximately 1,154 million unit cases. Based on information from Nielsen and CCI
estimates, management believes that, as measured by sales volume, CCI ranks first, or in certain cases
second, in all of the markets in which it has production activities. In Turkey, CCI is the leading
sparkling soft drinks bottler, with a share of 70% of the Turkish sparkling soft drinks market, as
measured by sales volume for 2011, according to Nielsen.
The Group has two business lines, beer and soft drinks, and reports these business lines in three
segments, Turkey Beer, International Beer and Soft Drinks. The following table sets forth the
Groups net sales by segment for the six months ended 30 June 2012 and 2011 and for the years
ended 31 December 2011, 2010 and 2009:
Six months ended
30 June

2012
(TRL
Segment(1)
millions)
Turkey Beer ............................
846.1
International Beer...................
1,387.0
Beer Group Combined .........
2,233.1
960.4
Soft Drinks(2) ..........................
Other and Eliminations ..........
12.3
Total ......................................

3,205.8

2012

Year ended 31 December

2011

Change

(TRL
(%)
millions)
26.4
707.1
43.3
785.6
69.7
1,492.7
30.0
781.4
0.4
7.9
100

2011

(TRL
(%)
millions)
19.7
1,390.8
76.6
1,630.7
49.6
3,021.5
22.9
1,713.0
55.7
26.7

2,281.9

40.5

4,761.3

2011
(%)
29.2
34.2
63.4
36.0
0.6
100

2010

2009

(TRL millions)
1,293.4
1,264.2
1,464.2
1,325.1
2,757.6
2,589.2
1,383.6
1,209.9
27.6
11.9
4,168.8

3,811.1

CAGR
1/1/09
-31/12/11
(%)
4.9
10.9
8.0
19.0
49.8
11.8

(1) Segment revenue information in the table excludes inter-segment revenue elimination, which is reported within the line item
Other and Eliminations.
(2) Reflects the Groups share of 50.3% of revenues from CCI.

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

The following table sets forth certain information regarding the Groups sales volume by segment for
the six months ended 30 June 2012 and 2011 and the years 2011, 2010 and 2009:
Six months ended 30 June

2012
Segment
Turkey Beer (mn litres).................
International Beer (mn litres).......
Beer Group Combined
(mn litres) .................................
Soft Drinks(1) (mn unit cases(2)) ..
Total (mn litres(3)) .......................

2011

For the Year Ended 31 December

Change

2011

Change
2011 v
2010

2010

2009

451.4
1,031.9

426.5
753.1

(%)
5.8
37.0

842.2
1,463.3

849.3
1,568.6

(%)
(0.8)
(6.7)

851.8
1,361.6

1,483.3
198.3
2,609.4

1,179.6
179.2
2,195.2

25.7
10.7
18.9

2,305.5
382.8
4,476.6

2,417.8
334.4
4,315.7

(4.6)
14.5
3.7

2,213.3
294.7
3,886.1

Change
2010 v
2009

CAGR
1/1/09 31/12/11

(%)
(0.3)
15.2
9.2
13.4
11.0

(%)
(0.6)
3.7
2.1
14.0
7.3

(1) Reflects the Groups share of 50.3% of CCIs sales volumes.


(2) One unit case represents 5.678 litres.
(3) Unit cases have been converted to litres at the ratio of 5.678 litres per one unit case.

Strengths
The Group believes that it has developed certain key competitive strengths that have supported its
growth to date and are expected to underpin its growth in the future, including:
*

Leading market
demographics.

positions

in

emerging

markets

with

growth

potential

and

attractive

Strong brand portfolio with significant development capability.

Leading Coca-Cola franchise in the region.

Expertise in managing organic growth and integrating acquisitions.

Strong management team with significant experience in and knowledge of the Groups markets.

Vertically integrated operations in key markets.

Strategy
The Group aims to continue to strengthen its position as a leading international brewer and soft
drinks producer capitalising on its presence in growing markets with a focus on increasing
profitability. The Group has several strategies with respect to its beer and soft drinks businesses
including the following:
*

In its beer business, the Group aims to grow its beer markets, improve beer culture, create
brand loyalty and enhance the balance of its brand portfolio to further satisfy consumer demand
across the premium, mainstream and economy segments, while maintaining a focus on the
profitability of its operations.
In the soft drinks business, CCIs goal (and the Groups goal for CCI) is to have and defend
leading positions across its key markets by maintaining its commitment to productivity and
continuous innovation at each stage of its business and continuing to closely monitor consumer
demand, preferences and trends to enhance the management of its product portfolio through
introducing new brands, flavours and packaging alternatives.

Recent Developments
Under certain agreements with the Group, the European Bank for Reconstruction and Development
(the EBRD) has the right to sell the shares it owns in the share capital of Moscow Efes Brewery
CJSC (MEB) back to the Group, at a price to be determined by an independent valuation. The
EBRD currently owns 8.76% of MEB. The EBRD has informed the Group that it would like to
exercise its option, and management expects that this transaction will be completed by the end of
2012. The parties are currently negotiating to finalise the terms of this transaction, but have agreed in
principal that the consideration for the shares will be converted into a 7 year loan from the EBRD to
EBI. At completion of this transaction, EBI would hold 99.7% of MEB.
On 21 September 2012, CCI announced the completion of an acquisition in Iraq, whereby CCI,
through its Iraqi subsidiary, acquired an effective interest of 65% of Al Waha for Soft Drinks,
Mineral Water and Juices LLC and its second and third bottling facilities in Iraq.

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

RISK FACTORS
An investment in the Notes involves certain risks. Prior to making an investment decision, prospective
purchasers of the Notes should carefully read the entire Offering Circular. In addition to the other
information in this Offering Circular, prospective investors should carefully consider, in light of their own
financial circumstances and investment objectives, the following risks before making an investment in the
Notes. If any of the following risks actually occurs, the market value of the Notes may be adversely
affected. In addition, factors that are material for the purpose of assessing the market risks associated
with the Notes are also described below. The Company believes that the factors described below
represent the principal risks inherent in investing in the Notes, but the Company makes no representation
that the statements below regarding the risks of holding any Notes are exhaustive.
Risks Related to the Groups Business
Economic conditions in Turkey, Russia, the CIS and other countries in which the Group operates and globally
can affect demand for and prices of its products.
Economic conditions, including slowing or negative GDP growth, inflation and declining GDP per
capita and disposable income, in Turkey, Russia, the CIS and other markets in which the Group
operates can have a material impact on the Groups sales and profitability. Beer and soft drinks
consumption in many of the countries in which the Group operates is closely linked to general
economic conditions in those countries. For both the beer and the soft drinks business, slowing or
negative GDP growth can affect demand, and can adversely impact sales volumes and prices that can
be achieved for beer and soft drinks in the relevant markets. In general, beer and soft drinks
consumption levels tend to rise or fall in accordance with moves in per capita income, per capita
disposable income and the perception of economic conditions and prospects. Disposable income levels
in many of the countries in which the Group operates are lower than average disposable income
levels in more developed economies. Any decrease in disposable income resulting from deteriorating
economic conditions, increases in cost of living or taxes, or due to other factors, could adversely
affect demand for both beer and soft drinks, leading to lower consumption levels for both, or in
some cases, consumption of lower value brands with lower margins for the Group.
In addition, global economic conditions and economic cycles may impact the balance of supply and
demand for the Groups beer and soft drinks products. Since the start of the global financial crisis in
2008, global economic conditions have remained challenging and levels of volatility have remained
persistently high, particularly given the on-going Eurozone sovereign debt crisis. In particular, adverse
economic conditions may reduce general levels of consumption, leading to production overcapacity in
the beer and soft drinks industries, which may adversely affect product prices. On the other hand,
reduced investment in production capacity may lead to undercapacity when demand is high in the
industry in general, or for certain producers (including the Group), who could then be at a
disadvantage as compared to their competitors.
Adverse economic conditions, declining disposable income and negative economic expectations can
have an adverse effect on consumption levels and prices of the Groups beer and soft drinks
products, while economic cycles may lead to supply and demand imbalances in the countries in which
the Group operates and globally, and these factors can have a material adverse effect on the Groups
business, financial condition and results of operations.
The Group operates in a number of emerging markets, which exposes it to economic and political risks in these
markets.
In addition to its operations in Turkey and Russia, the Group has operations in a number of
emerging markets in the CIS, including Kazakhstan, Moldova, Ukraine, Georgia, Azerbaijan and
Turkmenistan, as well as countries in the Middle East, including Iraq, Jordan and Pakistan, which
may expose the Group to risks greater than those associated with more developed markets. For the
year ended 31 December 2011 and the six months ended 30 June 2012, sales revenue generated from
these markets (other than Turkey and Russia) accounted for approximately 22% and 23%,
respectively, of the Groups total sales revenue for the period. The Groups operations in these
markets are subject to the risks of operating in emerging markets, including:
*

political, economic and social instability, which could make it difficult for the Group to
anticipate future business conditions in these markets;

uncertainty of local contractual terms and of enforcing terms in disputes before local courts;

expropriation or nationalisation of property;

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

the introduction of exchange controls, foreign investment controls, restrictions on foreign


investments in sectors considered to be strategically important and other restrictions by foreign
governments;

generally less developed public infrastructure;

boycotts and embargoes that may be imposed by the international community on countries in
which it operates;

labour unrest; and

the complexities and uncertainties of complying with local regulatory requirements.

Such factors could affect the Groups results by causing interruptions to its operations, increasing the
costs of operating in those countries or limiting the ability of the Group to extract profits from those
countries. Moreover, emerging market economies are often affected by developments in other
emerging market countries, and, accordingly, adverse changes in emerging markets elsewhere in the
world could have a negative impact on the markets in which the Group operates. Any failure by the
Group to effectively manage these risks could have a material adverse effect on its business, financial
condition and results of operations.
Demand for the Groups products may be adversely affected by changes in consumer preferences.
To generate sales revenue and profits, the Group must sell products that appeal to its customers and
to consumers generally. Consumer preferences and demand for beer and soft drinks are affected by a
variety of factors and considerations, including price, changes in prevailing economic conditions,
changes in the demographic make-up of target consumers, changing social trends, religious views and
attitudes regarding alcoholic beverages, well-being and health consciousness and related
considerations, as well as the ability of brewers and bottlers to influence consumer preferences and
build brand awareness through advertising and marketing. There can be no assurance that the Group
will be able to successfully identify and respond to shifting consumer preferences.
The average per capita consumption of beer and soft drinks varies widely across the Groups markets
and is lower in many cases than in North American and Western European markets. In Turkey, beer
consumption is relatively low at 12 litres per capita for the wider population in 2011, as estimated by
Canadean Global Beer Trends 2011. Management believes it is closer to 28 litres per capita among
consumers in Turkey who drink alcoholic beverages (based on market research conducted by the
Company), as a large proportion of the population do not drink alcoholic beverages. Beer
consumption is higher in the CIS and other regions, where population is on average younger than in
more developed economies. In Russia, consumer preferences for alcoholic products strongly favour
spirits over beer. Accordingly, there can be no assurance that the Group can shift consumer
preferences in favour of its products.
In recent years, the Group has experienced new trends in key markets in which it operates. In
particular, in Turkey there has been increasing demand for premium beer, such as flavoured beer. In
addition, in Turkey there has also been a recent trend of well-being awareness and preference for
healthier ingredients in beer and soft drinks. In Russia, the Group has experienced a growing trend
of increased consumption of premium beers at the expense of lower value beer brands, as well as a
recent trend towards affordable (not premium) international beer brands replacing local brands.
Overall, there has been increasing attention directed at the alcoholic beverage industry, in Turkey and
Russia and in other more developed countries, mainly relating to health consequences of the misuse
of alcohol and underage drinking. Such public concerns and any resulting restrictions may cause
consumption trends to shift away from beer to non-alcoholic beverages.
In addition, in the soft drinks market generally there is also increasing consumer focus on well-being
and health and fitness, as well as concerns about obesity. Although CCIs strategy is to expand its
range of products in the still beverages category (which includes juices, waters, sports and energy
drinks and iced tea) in its key markets, its revenues continue to depend to a large extent on the sales
of sparkling beverages. There can be no assurance that demand for sparkling beverages in its markets
will not weaken in the future, including as a result of evolving consumer preferences toward still
beverage alternatives.
Significant changes in consumer preferences or the inability of the Group to anticipate, identify or
react to such changes could result in reduced demand for its products and have a material adverse
effect on the Groups business, financial condition and results of operations.

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

Seasonal consumption cycles, weather conditions and the timing of Ramadan may adversely affect demand for
the Groups products.
Demand for the Groups products may be affected by seasonal consumption cycles and adverse
weather conditions. The Group experiences the strongest demand for its products when temperatures
rise and particularly during the summer months. Adverse weather conditions, such as unseasonably
cool or wet weather in the spring and summer or spring months, can adversely affect sales volumes.
Moreover, when the Ramadan period, during which alcohol consumption decreases in Turkey,
coincides with the peak consumption periods of the warmer spring and summer months, the Group
may not be able to take full advantage of that peak demand period. As a result, management expects
sales volumes in the spring and summer months in Turkey to continue to be negatively affected over
the coming three to five years, as each coming summer Ramadan will start 11 calendar days earlier in
the peak summer season (starting from 9 July in 2013). Seasonal consumption cycles, adverse weather
conditions and the timing of Ramadan can therefore have a material adverse effect on the Groups
business, financial condition and results of operations.
The Group faces competition in the markets in which it operates and may face increased competition in its
markets, including as a result of consolidation in the global beer and beverages industry.
The Group competes with brewers and other alcoholic and soft drinks producers. Globally, players in
the beverage industry compete mainly on the basis of brand image, price, customer service and
distribution networks. The soft drinks business in particular is highly competitive in each of the
countries in which the Group has soft drinks operations. The Group competes with, among others,
bottlers of other international or domestic soft drinks brands, some of which are aggressively
expanding in certain of the Groups markets. The Group also faces significant competition from
private label soft drinks brands of large retail groups, particularly in Turkey. A change in the number
of competitors, the level of marketing or investment undertaken by the Groups competitors, or other
changes in the competitive environment in its markets may cause a reduction in the consumption of
the Groups soft drinks products or its market share.
Consolidation in the international brewers industry has significantly increased the geographic reach of
the Groups competitors in some of the markets in which it operates, as well as the cost of
competition. Consolidation trends are expected to continue, which could further intensify competition
both in the industry generally and in terms of any expansion of the Group into new markets.
Examples of this international consolidation trend include Heineken International B.V.s (Heineken)
acquisition of the Mexican and Brazilian beer businesses of Fomento Economico Mexicana in 2010,
Kirin Groups acquisition of Lion Nathan National Foods in 2009 and the Schincariol Group in
2011, SABMillers acquisition of Fosters in 2011, Molson Coors acquisition of StarBev in 2012 and
ABInBevs acquisition of the remaining shares in Grupo Modelo in 2012.
In most of the Groups beer markets, key competitors include international brewing groups such as
Carlsberg in Russia, Kazakhstan, Ukraine and Moldova and ABInBev in Russia, Kazakhstan,
Moldova and Ukraine and Heineken in Russia and Moldova. Some of the Groups competitors may
have more prominent market positions, better positioned brands or greater financial resources than
the Group. Although the Group has a strong share of the Turkish beer market, the size of the
market on a per capita basis is relatively low compared to many developed markets and the Group
may face intense competition in seeking to grow the size of the market, and there can be no
assurance that current or potential competing beer producers will not effectively compete and acquire
beer market share in Turkey, materially adversely affecting the Groups market share.
Competition with soft drinks producers and brewers in its various markets could cause the Group to
reduce pricing, increase capital, marketing and other expenditure, or lose market share, any of which
could have a material adverse effect on the Groups business, financial condition and results of
operations.
CCI and its Bottlers agreements with The Coca-Cola Company (TCCC) are critical to the Groups business.
CCI and its Bottlers agreements with TCCC are critical to the Groups business. Sales revenue of the
Groups Soft Drinks segment represented 30.0% and 36.0% of the Groups total sales revenue for the
six months ended 30 June 2012 and the year ended 31 December 2011, respectively. The Group
produces, sells and distributes TCCCs trademarked beverages pursuant to standard bottlers
agreements with TCCC covering each of its territories. The bottlers agreements include limitations on
the Groups degree of exclusivity in its territories and, to the extent permitted by law, on its ability to
market competing brands not owned by TCCC in its markets.

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

CCI and its Bottlers enter into bottlers agreements with TCCC for each of their markets. Each of the
bottlers agreements has a fixed initial term, with the agreement for Turkey and Kazakhstan expiring
in June 2016 and the agreement for Pakistan in May 2013. These agreements may be renewed at
TCCCs discretion. Accordingly, the Groups business is dependent on TCCCs willingness to renew
the bottlers agreements when they expire. In addition, TCCC has the right to terminate the bottlers
agreements upon the occurrence of certain events. See The Group and Its BusinessBusiness Lines
Soft DrinksRelationship with The Coca-Cola Company. If TCCC exercises its right to terminate the
bottlers agreements upon the occurrence of certain events, or, if upon expiration, TCCC is unwilling
to renew these agreements, or if TCCC is unwilling to renew the bottlers agreements on terms at
least as favourable to CCI and its Bottlers as the current terms, this could have a material adverse
effect on the Groups business, financial condition and results of operations. See Risks Related to
the Notes and the Groups Capital StructureClaims of Noteholders under the Notes are effectively
subordinated to those of certain other creditors and liabilities of the Companys subsidiaries. Noteholders
will also not have the benefit of the negative pledge or certain of the events of default under the Notes in
respect of CCI and neither the negative pledge nor any of the events of default will apply to any of
CCIs subsidiaries.
The Group may be impacted by changes in the availability or price of raw materials and packaging.
A significant portion of the Groups cost of sales relates to raw materials, primarily malted barley,
hops and water, being the key ingredients for beer production, and other ingredients of beer or soft
drinks, including wheat, corn syrup, rice, flavoured concentrate, fruit concentrate, sugar and sweetener
and packaging raw materials, such as glass, polyethylene terephthalate (PET) preforms, aluminium
cans, labels, cardboard boxes and plastic crates. Many of these raw materials are, or are sourced
from, commodities. The supply and price of raw materials and packaging used by the Group can
fluctuate widely as a result of a number of factors beyond the Groups control, including the level of
crop production around the world, export demand, government regulations and legislation affecting
agriculture, quality and availability of supply, speculative movements in the raw materials or
commodities markets, adverse weather conditions, currency fluctuations, economic factors affecting
growth decisions and various plant diseases and pests. The prices of these materials are also
determined by the relative bargaining power of the suppliers, which can increase through further
consolidation of suppliers, thus reducing supply alternatives for the Group. Moreover, in Turkey the
Group is required by Turkish regulations to buy sugar locally, often at prices higher than those
prevailing in the market generally. As a result, the Group cannot predict the future availability or
prices of raw materials required for the production or packaging of its products.
In recent years, average market prices of malting barley have fluctuated significantly from below c150
per tonne in 2006, to more than c300 per tonne in late 2007 and early 2008, declining to lows of
approximately c150 per tonne through 2009 and 2010 and increasing again and reaching a peak of
over c300 per tonne in mid-2011, and currently fluctuate at prices of approximately c250-c270 per
tonne. In addition, market prices for aluminium have also fluctuated significantly from over US$3,000
per metric tonne in mid-2008 to below US$1,300 per metric tonne in spring 2009, then increasing to
over US$2,600 per metric tonne in spring 2011, and have since decreased somewhat to approximately
US$2,150 US$2,200 per metric tonne.
The Groups results have in the past been negatively impacted by raw materials price increases,
particularly barley, and there can be no assurance that significant raw material price increases or endproduct price increases in the future will not affect the Groups profitability, or that the Group will
benefit from significant raw material price declines in the event it has pre-purchased significant
quantities of such raw materials at higher prices.
If the Group cannot pass on raw material or packaging price increases to customers, or if sales
volumes decrease as a result of higher product prices, the Groups sales and/or profits may decrease,
which could have a material adverse effect on the Groups business, financial condition and results of
operations.
The Group relies on a limited number of suppliers for certain raw materials and packaging materials used in
the production of its products.
The Group relies on a limited number of third-party suppliers for certain key raw materials and
packaging materials for its beer and soft drinks, including for malt, bottles and cans. Key suppliers of
the Groups raw materials and packaging products are highly consolidated and there can be no
assurance that additional consolidation will not occur in the future, which could further reduce the
number of suppliers available to the Group and increase the relative bargaining power of such

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

suppliers (and potentially increase the prices the Group pays). Any interruptions in the operations of
the Groups suppliers or any failure of such suppliers to maintain their production volumes could
result in material production delays, increased production costs, reductions in shipment volumes or
delays in shipments of the Groups products, or require the Group to make purchases from
alternative suppliers at potentially higher prices, any of which could have a material adverse effect on
the Groups business, financial condition and results of operations.
CCI and its Bottlers agreements with The Coca-Cola Company restrict sources of supply for some raw
materials, which could increase the Groups costs and otherwise restrict its operations.
CCI and its Bottlers agreements govern their purchases of concentrate, which represents the most
significant raw materials cost for the soft drinks segment. TCCC determines the price CCI and its
Bottlers pay for concentrate at its sole discretion, including the conditions of shipment and payment,
as well as the currency of the transaction. If CCI does not agree with the revised payment conditions,
the bottlers agreement automatically terminates after CCI notifies TCCC of its disagreement. TCCC
normally sets concentrate prices after discussions with CCI so as to reflect trading conditions in the
relevant country. However, there can be no assurance that TCCC will continue this practice in the
future. TCCC has other important rights under the bottlers agreements, including the right, to the
extent permitted by local law, to set the maximum price CCI and its Bottlers may charge to
customers and the right to approve suppliers of certain packaging and other raw materials. There can
be no assurance that TCCCs objectives with the exercise of its rights under the bottlers agreements
will in all cases be fully aligned with CCIs or the Groups business objectives. TCCCs right to set
concentrate prices could give TCCC considerable influence over CCIs results of operations and thus
have a material adverse effect on the Groups business, financial condition and results of operations.
Interruptions in supply or significant increases in the prices of water and energy can affect the Groups
operating and financial performance.
The Groups production processes require consumption of large amounts of water, including during
the brewing process and production of soft drinks, as well as in the agricultural supply chain.
Changes in precipitation patterns and other weather events may affect the Groups water supply and,
as a result, its operations. Any stoppage, scarcity or interruption in water supply may result in the
Group having to suspend production at its facilities. In addition, significant increases in the price of
water in its key countries of operation may result in increases to the Groups manufacturing costs.
Furthermore, interruptions in the supply of energy or significant energy price increases could also
have an adverse effect on the Groups operating and financial performance. The Group uses
substantial amounts of electricity, natural gas and other energy sources to operate its breweries and
bottling plants and, in some of its markets, to operate fleets of motor vehicles. Energy prices have
been subject to significant price volatility in the recent past and may be volatile in the future. High
energy prices over an extended period of time, as well as changes in energy taxation and regulation in
certain jurisdictions, may have an adverse effect on the Groups operating income and profitability in
certain markets.
There can be no assurance that the Group will be able to pass on price increases of water or energy
to consumers through end-product pricing. Scarcity or interruptions in water or energy supplies, or
material increases in the price of water or energy, could have a material adverse effect on the
Groups business, financial condition and results of operations.
The Group depends on independent dealers and distributors to sell its products.
The Group principally sells its products to independent dealers and distributors for resale to retail
outlets and, directly and indirectly, to retailers, including supermarkets, specialised beer or alcoholic
beverage stores, pubs and restaurants. In particular, the Group sells the majority of its products to
third party dealers and distributors in its key markets of Turkey and Russia. In Turkey, third party
dealers and distributors can act on an exclusive basis with respect to the Groups products, while
exclusivity is not permitted for the Groups arrangements with retailers. There can be no assurance
that independent dealers and distributors (who often act both for the Group and its competitors) and
retailers will not give higher priority to competitors brands, purchase less of the Groups products or
purchase at lower prices, devote inadequate promotional support to the Groups products or
otherwise reduce their efforts to sell the Groups products. In most cases, poor performance by a
dealer or a distributor is not grounds for replacement. In addition, as a result of social or religious
considerations, certain retailers in Turkey have decided to cease selling alcoholic products.

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

As part of its efforts to increase the retail presence of its products, especially in areas where their
retail availability is scarce, the Group has launched an initiative supporting the set-up of small retail
outlets, called Ekomini, by independent entrepreneurs by providing them know-how and logistical
support. See The Group and Its BusinessBusiness LinesBeerTurkey BeerMarketing, sales and
distribution. There can be no assurance that this initiative will be successful or that the cost
associated with this initiative will have the expected return.
Actions by the Groups dealers, or the inability of the Group to replace unproductive or inefficient
dealers, or failure of the Group to otherwise support wholesale and retail distribution of its products
could have a material adverse effect on the Groups business, financial condition and results of
operations.
Excise taxes have significantly increased in Turkey and Russia and the beer and beverage industry may be
subject to further adverse changes in taxation.
Taxation on the Groups beer products in the countries in which it operates comprises different taxes
specific to the Groups products in each jurisdiction, such as excise and other indirect taxes, in
addition to general consumption taxes such as VAT. In many jurisdictions, such excise and other
indirect taxes make up a large proportion of the cost of beer charged to customers. Turkey, Russia,
Kazakhstan and Ukraine recently increased excise taxes on beer.
In Turkey, the cumulative increase in excise tax on alcoholic products since 2008 has been 161%,
while in Russia the cumulative increase in excise tax on alcoholic products since 2008 has been 338%.
Most recently, in October 2011, the excise tax levied on beer in Turkey increased by 20%, and by a
further 17% in September 2012; in January 2012, the excise tax on beer in Russia also increased by
20%. These taxes have resulted in significant price increases in both countries, and continue to cause
pressures on the Groups sales of beer in these countries, which could adversely affect the Groups
sales volumes, sales revenues and profit margins from its beer operations. Currently, excise tax on
alcoholic products in Turkey, which is linked to the alcohol content of a drink, on average is
approximately 40% of the total price paid by a consumer for beer of average alcohol content. The
Turkish Parliament recently passed Law No. 6322, which, when it enters into force as of 1 January
2013, is expected to require the amount of excise tax to be adjusted every six months (i.e. in January
and July each year) for inflation based on the rate of the Producer Price Index (PPI) in Turkey.
The adjustment will be made automatically following the official declaration of the PPI by the State
Statistics Institution. In Russia, the current excise tax on beer containing up to 8.6% alcohol is 12
Rubles per litre, and rates of 15 Rubles in 2013 and 18 Rubles in 2014 have been introduced into the
Russian tax code, while the Russian government has announced that excise tax is expected to be
increased to 20 Rubles in 2015. In addition, in Turkey an excise tax of 25% applies to sales of colatype soft drinks. See Operating and Financial ReviewFactors Affecting the Groups Financial and
Operating PerformanceChanges in Taxes.
Increases in excise and other indirect taxes applicable to the Groups products, either on an absolute
basis or relative to the levels applicable to other beverages, tend to adversely affect sales, both by
reducing overall consumption of its products and by encouraging consumers to switch to other
categories of beverages. These increases also adversely affect the affordability of the Groups products
and its profitability.
In addition, there is no assurance that the operations of the Groups breweries and other facilities will
not become subject to increased taxation by national, local or foreign authorities. Changes in
corporate income tax rates or regulations on repatriation of dividends and capital would also
adversely affect the Groups cash flow.
Adverse changes in taxation, whether on the Groups products or otherwise affecting its operations,
could have a material adverse effect on the Groups business, financial condition and results of
operations.
The Group may not be able to successfully carry out further acquisitions and business integrations.
The Group has made in the past and may make in the future acquisitions of or investments in other
companies and businesses. The Groups ability to execute further acquisitions or investments is subject
to a number of risks, including:
*

it may not be able to identify suitable targets or acquire businesses or operations on favourable
terms;

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

the price it pays may prove to be too high as a result of various factors, including a significant
change in market conditions, limited opportunity to conduct due diligence or an unexpected
change in the acquired business;

it may experience increasing competition for targets, which could result in decreased availability
of suitable targets or could increase the price the Group would have to pay for such targets;

it may experience difficulties in the execution of acquisitions, as a result of a number of factors,


including legal, financial, antitrust and other; and

it may not have the necessary financial resources or may not be able to obtain the necessary
financing, on commercially acceptable terms or at all, to finance such acquisitions.

Such transactions may also involve the assumption of certain actual or potential, known or unknown,
liabilities that could have an impact on the Groups financial risk profile. No assurance can be made
that the Group will be able to successfully carry out further acquisitions, investments and business
integrations.
Moreover, the Group will need to successfully integrate such businesses or operations in an efficient
and effective manner. This is subject to a number of uncertainties, including:
*

the incurrence of unanticipated expenses;

the failure to realise anticipated synergies or a delay in realising such synergies;

the diversion of managements attention from other business concerns and potential disruption
to the Groups on-going business; and

the consolidation of functional areas.

Any failure to successfully acquire or integrate a business, or the acquisition of a business with risks
or liabilities that the Group was unaware of, could have a material adverse effect on the Groups
business, financial condition and results of operations.
The integration process for the Groups newly acquired businesses in Russia and Ukraine is not yet complete
and is subject to uncertainties, including the ability to realise anticipated cost synergies and negotiating
favorable arrangements with dealers, distributors and key accounts in Russia.
In March 2012 the Group entered into a strategic alliance with SABMiller, whereby the Group
acquired the Russian and Ukrainian brewing operations of SABMiller and is in the process of
integrating the new operations. As part of the arrangement, SABMiller acquired 142,105,263 newlyissued shares of the Company, representing an interest of 24%. See The Group and Its BusinessStrategic Alliance with SABMiller and Ownership. As part of the integration process in Russia, the
Group is in the process of discussing the terms of its arrangements with dealers, distributors and key
accounts in Russia that MEB and SABMiller Russia have in common, but no assurance can be given
that the Group will be able to renegotiate the same or better terms with such dealers, distributors or
key accounts, which could have an adverse impact on sales volumes, sales revenues and profit
margins of the Groups International Beer operations. Although the Group has not to date
experienced material post-acquisition difficulties in connection with the integration of the acquired
operations, no assurance can be given that the Group may not experience such difficulties in the
future, or that the cost of the integration may not exceed the Groups initial estimates. Any failure to
renegotiate the same or better terms with dealers, distributors or key accounts, or otherwise to
successfully integrate the SABMiller Russian and Ukrainian brewing operations, could have a material
adverse effect on the Groups business, financial condition and results of operations.
Certain of the Groups operations, including its soft drinks operations through CCI, are conducted through
jointly controlled affiliates and ventures.
Certain of the Groups operations, including its soft drinks operations through CCI, are currently
conducted through jointly controlled affiliates and ventures, and the Group may enter into further
joint ventures in the future. The Group does not hold an effective majority interest in certain of its
joint ventures, including CC Pakistan and Anadolu Etap. While the Group holds more than 50% of
the voting rights of CCI, certain decisions require the consent of TCCC. See The Group and Its
BusinessBusiness LinesSoft DrinksRelationships with The Coca Cola Company. Accordingly, the
Groups ability to exercise control over its joint venture operations is limited. The success of the
Groups joint ventures depends in part on co-operation between the Group and the other
shareholders and the satisfactory performance by such shareholders of their joint venture obligations.
While the Group considers its current relationships with other shareholders and partners to be

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

successful, there can be no assurance that this will continue to be the case. In addition, there can be
no assurance that the Group will otherwise be able to maintain its current relationships or establish
new relationships with joint venture partners in the future. Any disputes, deadlocks or litigation with
strategic partners or other failure to establish or maintain successful joint venture relationships could
in turn have a material adverse effect on the Groups business, financial condition and results of
operations.
The Groups operations may be limited by anti-trust regulations.
The Group has leading positions in several of its markets for beer and certain soft drinks, including
in Turkey, Russia, Kazakhstan, Georgia, Moldova and Azerbaijan and therefore there may be
limitations on how the Group can grow and conduct its operations in these markets. In particular,
because of the Groups leading market share in certain of these jurisdictions, any future acquisitions
in the relevant product markets by the Group may be subject to closer scrutiny by the relevant antitrust authorities in these markets, which may conclude that such acquisitions would restrict actual or
potential competition in a given market and prohibit such acquisition. Moreover, there can be no
assurance that the Groups current market share in certain jurisdictions will not result in the initiation
of proceedings or investigations by the relevant authorities for alleged breaches of anti-monopoly laws
and regulations. For example, in 2011 the Turkish Competition Authority imposed a fine of TRL 6.1
million on the Group, citing its infringement of the Turkish Competition Law by restricting
competition through vertical agreements with its distributors by conducting exclusive sales with end
sellers or demanding exclusivity from end sellers in exchange for certain discounts and related terms.
Any decision by the relevant anti-trust authorities to restrict the Groups ability to expand through
acquisitions or to impose fines or other sanctions as a result of the Groups market position and
practices could have a material adverse effect on the Groups business, financial condition and results
of operations.
Restrictions on beer advertising, sales or consumption may adversely affect the Groups business.
Existing or additional restrictions on, or prohibition of, beer advertising in the mass media or certain
sales channels in the Groups key markets can have a material adverse effect on its sales and
operating and financial results. In Turkey, one of the Groups two largest market by sales volume
and revenues, there is a general prohibition of beer advertising in the mass media and other general
sales channels, with limited exceptions such as printed media and in-trade activities (such as in sales
outlets, restaurants and bars). In addition, advertising targeting to persons who are under age 24 is
restricted, including restrictions on alcoholic beverage producers in sponsoring certain events where
young people are in attendance. See RegulationTurkey.
Russia, the Groups other largest market, has also imposed extensive restrictions on beer advertising,
which include a ban on the broadcasting of beer commercials on television, and radio and their
publication on the Internet, as well as limitations regarding locations of beer sales and consumption.
Additional restrictions, such as ban of beer commercials in periodical print media, is to come into
force in 2013, and further restrictions being discussed in Russia may include a ban on PET packaging
and new labelling and health warning requirements. See RegulationRussia. Ukraine is also
considering restrictions, including a ban on beer advertising and certain sales and consumption
limitations.
In addition, in certain CIS countries that have histories of high average levels of alcohol
consumption, legal restrictions and limitations on alcohol consumption, including in connection with
public order, are becoming increasingly strict and in some cases stricter than in western European
countries.
There can be no assurance that additional restrictions on, or prohibition of, beer advertising and
limitations on consumption in the Groups key markets will not be introduced in the future.
Restrictions on beer advertising, sales or consumption could restrict growth in those beer markets or
make new product launches more challenging, which could have a material adverse effect on the
Turkish, Russian or other beer markets in general and on the Groups business, financial condition
and results of operations.
Intensifying pressures against alcohol consumption or promotion in Turkey may adversely affect demand for
the Groups beer products in Turkey.
For cultural and socioeconomic reasons, consumption of alcoholic beverages in Turkey is not as
prevalent as it is in many Western jurisdictions, and a significant proportion of the population totally
abstains from drinking alcoholic beverages. While over recent years there has been an increase in

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

10

consumption of alcohol overall, due in part to the increasing urbanisation of the country, there have
also been increasing concerns in Turkish society advocating against the consumption of alcohol,
including for cultural and health reasons. Overall, there has been increasing attention directed at the
alcoholic beverage industry, both in Turkey and in other more developed countries, particularly in
relation to the health consequences of the misuse of alcohol and underage drinking. In parallel, recent
legislation restricts alcohol advertising and promotion through sports and youth activities. See
Restrictions on beer advertising, sales or consumption may adversely affect the Groups business and
RegulationTurkey. Such concerns may result in increasing pressures against alcohol consumption,
and could potentially result in the imposition of stricter limitations on the advertising, visibility and
availability of alcoholic beverages, which could have materially adverse effects on the levels of alcohol
consumption in the Turkish market, one of the Groups two most important markets in terms of
sales volumes and revenues, which could have a material adverse effect on the Groups business,
financial condition and results of operations.
The Group is exposed to currency exchange rate risk.
The Company presents its consolidated financial statements in Lira, which is the functional currency
of the Company and its Turkish subsidiaries and joint ventures. Subsidiaries and joint ventures
outside Turkey, particularly those operating in the International Beer segment, generally use their
local currency as their functional currency; however, EBI, the holding company for the Groups
International Beer operations, has adopted the US dollar as its functional currency. See note 2.2 of
the 2011 Audited Consolidated Financial Statements for information about the functional currency of
certain of the Groups subsidiaries and joint ventures. The results of operations of those subsidiaries
and joint ventures whose functional currency is not the Lira are translated into Lira at the applicable
exchange rate for inclusion in the Groups consolidated financial statements. In the case of the
Groups International Beer operations, the results of operations of those entities, and particularly Efes
Russia, are subject to a double translation as their results are first translated from their local currency
into US dollars (for consolidation within EBIs results), and then from US dollars into Lira.
In addition, although the Group incurs its capital and operating expenses and derives its revenues
primarily in the currency of the countries in which it operates, the substantial majority of the Groups
borrowings are in currencies other than the Lira, principally the US dollar. As of 30 June 2012, 96%
and 3% of the Groups long-term borrowings (including the current portion thereof) were
denominated in US dollars and Euros, respectively. Moreover, 84% of the Groups short-term
borrowings (excluding the current portion of long-term borrowings) were denominated in US dollars
(and no such short-term borrowings in Euros), while only 3% of such short-term borrowings were
denominated in Lira.
The exchange rate between the Lira and the US dollar was relatively stable in 2010 but in 2011 the
US dollar strengthened against the Lira and then weakened in the first half of 2012. The translation
effect resulting from the fluctuations in the exchange rate between the Lira and the relevant
functional currencies of Group members can have a material adverse effect on the Groups
consolidated results of operations and financial condition.
The Group principally relies on natural hedges that arise from offsetting foreign currency
denominated revenues and expenses in the different jurisdictions in which it operates. However, from
time to time the Group hedges its exposure to currency risk through the use of derivative
instruments. While the use of such instruments helps reduce the Groups exposure to exchange rate
fluctuations, the Group incurs costs associates with such transactions. In addition, any default by the
counterparties to these transactions could adversely affect the Group.
Increases in inflation could adversely affect demand for the Groups products.
Rising inflation in the markets in which the Group operates may have an adverse effect on demand
for the Groups products. In particular, both Turkey and Russia have experienced high levels of
inflation in the past and, while the consumer price index has been relatively stable in Russia in the
past few years, Turkey has recently experienced rising levels of inflation. The PPI and Consumer Price
Index (CPI) in Turkey increased to 8.9% and 6.4%, respectively, for the December 2009 to
December 2010 period and to 13.3% and 10.5%, respectively, for the December 2010 to December
2011 period (source: TurkStat). As of August 2012, the PPI decreased by 0.3 as compared to
December 2011, although it increased to 4.6% for the August 2011 to August 2012 period (source:
TurkStat). The CPI as of August 2012 increased by 2.3% as compared to December 2011 and by
8.9% for the August 2011 to August 2012 period (source: TurkStat). See also Operating and
Financial ReviewFactors Affecting the Groups Financial and Operating PerformanceMacroeconomic

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

11

Conditions. Recent increases in prices, such as commodity and food prices, indicate further increases
in inflation. Moreover, the Central Bank has recently reduced interest rates, which could in turn lead
to additional inflationary pressures in the Turkish economy. Higher rates of inflation, particularly if
coupled with slowing GDP growth, could result in a reduction of the purchasing power of consumers.
While the Group has not experienced a significant impact in the past, this could lead to lower
consumption levels of the Groups products, particularly in the soft drink sector, or customers
moving away from the higher margin brands, such as the Efes Pilsen brand, and instead consuming
lower value beer brands. In addition, under recently-enacted legislation the increase of excise tax on
beer products in Turkey has been linked to the Turkish PPI; as a result, PPI increases will also
impact the prices of the Groups products in Turkey through increased excise tax. Increases in
inflation in the markets in which the Group operates, and particularly in its key markets of Turkey
and Russia, could have a material adverse effect on the Groups business, financial condition and
results of operations.
The Group is effectively controlled by the Ozilhan and Yazc families, whose interests (along with the interests
of SABMiller Anadolu Efes Ltd., another significant shareholder) may conflict with the interests of the holders
of the Notes.
zilhan and Yazc families directly and indirectly together hold 43% of the Companys
The O
outstanding share capital, including through their ownership of Anadolu Endustri Holding, which
zilhan and Yazc families have significant influence
holds 6% of the Companys share capital. The O
over the Groups business and operations, matters decided by the board of directors (the current
zilhan family), as well as the outcome of all or substantially all
Chairman is a member of the O
matters decided by a vote of shareholders, including the election of directors and approving mergers
or sales of the Groups assets. Furthermore, SABMiller Anadolu Efes Ltd. holds 24% of the
zilhan and Yazc
Companys outstanding share capital. It is possible that the interests of the O
families and of SABMiller as a minority shareholder may not coincide or conflict, or that they may
not always align with, the interests of the holders of the Notes. See Note 20 of the 2012 Interim
Financial Statement for information about related party transactions and The Group and Its
BusinessStrategic Alliance with SABMiller and Ownership for information about certain
corporate governance and other matters related to the strategic alliance.
The Group is reliant on the reputation of its brands and the protection of its intellectual property rights.
An event, or a series of events, that materially damages the reputation of one or more of the Groups
current or future brands could have an adverse effect on the value of that brand and subsequent sales
from that brand or business. The Group has invested considerable effort in protecting its brands,
including the registration of trademarks and domain names. While the Group expects to continue to
timely file trademark and patent applications seeking to protect newly developed brands and products,
there can be no assurance that registrations will be issued with respect to any of its applications, or
that once issued such registrations will not be challenged or circumvented by competitors. In
connection with the Groups Soft Drinks business, TCCC owns the trademarks of all of its products
produced, distributed and sold by CCI and its Bottlers, and the Group is thus reliant on TCCC to
protect its trademarks. Moreover, some of the countries in which the Group operates, including its
soft drinks operations, offer less effective intellectual property protection than is available in western
jurisdictions. If the Group or TCCC are unable to protect their respective intellectual property, any
infringement or misappropriation could materially harm the Groups business. In addition, if the
Group fails to ensure the relevance and attractiveness of its brands, including Coca-Cola trademarked
products, and the enhancement of brand marketing, there is a risk that significant growth
opportunities may not be realised. Any failure to protect the intellectual property owned or used by
the Group or the reputation of its brands could have a material adverse effect on the Groups
business, financial condition and results of operations.
CCIs and its Bottlers success depends in part on The Coca-Cola Companys success in marketing activities.
CCI and its Bottlers derive the majority of their sales revenue from the production, sale and
distribution of the trademarked beverages of TCCC. TCCC owns the trademarks of these products
and has primary responsibility for consumer marketing and brand promotion. The profitable growth
of CCI and its Bottlers soft drinks brands depends in part on TCCCs consumer marketing activities,
including TCCCs discretionary contributions to CCIs annual marketing plan. If TCCC were to
reduce its marketing activities, the level of its contributions to CCIs annual marketing plan or its
commitment to the development or acquisition of new products, particularly new still and water
beverages, these reductions could lead to decreased consumption of trademarked beverages of TCCC

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

12

in the countries in which CCI and its Bottlers operate. This could, in turn, lead to a decline in CCI
and its Bottlers share of the soft drinks market and sales volume, and thus have a material adverse
effect on the Groups business, financial condition and results of operations.
If any of the Groups products are found to contain contaminants, the Group may be subject to product recalls
or other liabilities which could cause it to incur significant additional costs.
The Group takes precautions to ensure that its beverage products are free from contaminants. Such
precautions include quality-control programmes for primary materials, the production process and the
Groups final products. The Group has established procedures to correct problems detected but does
not maintain product recall insurance. Although the Group has not had any material problems in the
past with contamination of any of its products, in the event that contamination does occur, it may
lead to business interruption, product recalls or liability, each of which could have a material adverse
effect on the Groups business, financial condition and results of operations.
The Group may not be able to maintain its current licensing arrangements on acceptable terms or at all.
In certain of the markets in which it operates the Group produces a number of beer brands of other
international brewers under licensing agreements with such brewers. Such brands produced by the
Group under license with the brand owners include in Turkey Becks and Miller Genuine Draft and
in Russia Miller Genuine Draft, Velkopopovicky Kozel, Warsteiner, Pilsner Urquell, Grolsch and
Bavaria, which are typically premium brands. Licensing agreements are subject to renegotiation,
amendments and termination. The Groups licensors may decide to terminate such arrangements with
the Group and potentially license to one of the Groups competitors, or renegotiate the licenses under
terms that are less favourable for the Group. Any such renegotiation, deterioration of terms, or
termination and loss of a license to produce and distribute certain brands in certain of the Groups
markets could have a material adverse effect on the Groups business, financial condition and results
of operations.
A number of the Groups production facilities in Turkey are located in high-risk earthquake zones.
Almost 45% of Turkeys population and most of its economic resources are located in a first-degree
earthquake risk zone (the zone with the highest level of risk of damage from earthquakes) and a
number of the Groups properties in Turkey are located in high-risk earthquake zones. On 17 August
1999, an earthquake measuring 7.6 on the Richter scale struck the area surrounding Izmit. On 12
November 1999, another earthquake measuring 7.2 on the Richter scale occurred in the city of
Duzce, between Ankara and Istanbul. More recently, on 8 March 2010, an earthquake measuring 6.0
on the Richter scale struck the eastern province of Elazg and, in October 2011, the eastern part of
the country was struck by an earthquake measuring 7.2 on the Richter scale, causing significant
property damage and loss of life.
The Companys headquarters and the Groups Istanbul, Izmir and Luleburgaz breweries are located
in first degree earthquake risk zones, while its Adana brewery is located in a second degree
earthquake risk zone and its Ankara brewery is located in a third degree earthquake risk zone. In
addition, the Group has Coca-Cola production facilities in C
orlu and Bursa, which are located in first
degree earthquake risk zones, in Kemalpasa, which is located in a second degree earthquake risk
zone, and in Ankara and Mersin, which are located in third degree earthquake risk zones. Although
the Group maintains earthquake insurance, business interruption insurance and insurance for loss of
profits, there can be no assurance that it will be able to fully enforce its rights under these policies.
The occurrence of a severe earthquake could adversely affect one or more of the Groups facilities,
causing an interruption in, and an adverse effect on, its business. In addition, as has been seen in the
case of the recent earthquake and tsunami affecting Japan, a severe earthquake could severely harm
the Turkish economy in general, which could have a material adverse effect on the Groups business,
financial condition and results of operations.
The Group is exposed to operational risks, including mechanical and technical failures that could adversely
affect its business.
The Group is exposed to operational risks, including the risk of unanticipated equipment breakdown
or failure at its production facilities, which could cause interruptions in production or a process
shutdown while repairs are carried out. Interruptions in production or process shutdowns (which
could be followed by delays in restarting the production process) could reduce the Groups
production volumes. The Group could also be subject to interruptions in production or the loss of
inventory as a result of catastrophic events such as fires, explosions or natural disasters, particularly

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

13

in relation to its operations in Turkey, which are located in high-risk earthquake zones. Although the
Group maintains insurance against lost profit and product damage for natural disasters, there can be
no assurance that this coverage will be sufficient. See Turkey is located in a high-risk earthquake
zone. Moreover, the Group is increasingly reliant on its information technology and systems, as it
maintains operations in multiple markets, and such systems may be vulnerable to operational or
security challenges such as telecommunications failures, interruptions and security breaches. Any
interruptions in the Groups production capacity, the loss of inventory or interference with its
information technology and systems may require the Group to incur significant expenses to remedy
the situation, which could have a material adverse effect on the Groups business, financial condition
and results of operations.
Disruption to, or increased cost of, railway transportation of raw materials and beverages in Russia and other
CIS countries could adversely affect the Groups business.
Railway transportation is the principal means of transporting raw materials to the Groups
production facilities and finished products to customers in Russia and, to a lesser degree, other CIS
countries. The Groups operations in Russia and, to a lesser degree, other CIS countries depend on
the Russian and other national rail systems for transportation of raw materials and products. In
Russia and other CIS countries, the rail system and related infrastructure is a monopoly ultimately
controlled by the state and it has generally not been adequately maintained or modernised since the
dissolution of the Soviet Union. This lack of upkeep could lead to derailments or other accidents on
the line. Moreover, the Russian government sets domestic rail freight prices, which are subject to
adjustment based on, among other factors, inflation and the acute funding needs of the capital
investment program in the railway system, and in the past tariff price increases have been significantly
higher than inflation. If rail tariffs or freight prices increase further, or there is a disruption in
transportation of the Groups raw materials or finished products due to accidents or other
infrastructure issues, this could have a material adverse effect on the Groups business, financial
condition and results of operations.
The Groups failure to attract and retain key personnel could adversely affect its business.
The Groups success depends to a large degree on the services of its senior management team and
key personnel with particular expertise. In particular, the loss or unavailability of its senior
management team for an extended period of time could have an adverse effect on the Groups
operations. The Group does not currently have any key man insurance policies for its senior
management. In addition, the Group must compete with other companies in each of its markets for
suitably qualified personnel, including employees having a deep understanding of the local markets
and the intricacies of sales, marketing and distribution of alcoholic and soft drinks in such markets.
The Group has in the past experienced increased turnover with respect to employees engaged in sales
and marketing, especially in Russia and other CIS countries. The Groups inability to attract and
retain key personnel could have a material adverse effect on the Groups business, financial condition
and results of operations.
The Group does not carry the types of insurance coverage customary in western jurisdictions for a business of
its type and size.
The Groups insurance coverage may not adequately protect it from the risks associated with its
business. The insurance industry is not yet fully developed in many of the jurisdictions in which it
operates and many forms of insurance protection common in western jurisdictions are not yet
available, either at all or on comparable terms (including as to price). The Group maintains business
interruption insurance, insurance for lost profits, earthquake insurance and third party and product
liability insurance for its operations, as well as insurance coverage for incidents such as fire, flood,
terrorism, machinery breakdown and personal accident. However, the Group does not maintain
insurance in respect of certain other risks, including product recall or receivables insurance, and may
be subject to losses that are not covered, or not sufficiently covered, by insurance. In the event of
severe damage to its facilities, the Group could experience disruption to its production capacity, for
which it may not be compensated. If the Group does not have insurance coverage in respect of
particular risks, it will be forced to cover any losses or thirdparty claims out of its own funds. The
Group does not currently maintain separate funds or otherwise set aside reserves to cover such losses
or thirdparty claims, and any such losses or claims could have a material adverse effect on the
Groups business, financial condition and results of operations.

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

14

Risks Related to Turkey


Economic developments in Turkey, as well as global economic conditions generally, may have a material
adverse effect on the Groups business, financial condition and results of operations.
Since the mid-1980s, the Turkish economy has undergone a transformation from a highly protected
and regulated system to a free market system. Reforms have, among other things, largely removed
price controls and reduced subsidies, reduced the role of the public sector in the economy, emphasised
growth in the industrial and service sectors, liberalised foreign trade, reduced tariffs, promoted export
growth, eased capital transfer and exchange controls, encouraged foreign investment, strengthened the
independence of the Central Bank, led to full convertibility of the Lira and overhauled the tax
system.
Although the Turkish economy has generally improved in response to this transformation, it has also
experienced a succession of financial crises and severe macroeconomic imbalances since that time,
which have led to substantial budget deficits, significant balance of payments deficits, high rates of
inflation, high real rates of interest and considerable levels of unemployment. This in turn resulted in
a substantial depreciation of the Lira against major foreign currencies, particularly between 1994 and
2001.
In 2001, Turkey implemented a macroeconomic programme designed to improve the Turkish
economys resilience and reduce its volatility in the short-term, as well as to achieve sustainable
growth through fundamental structural reforms in the medium to long-term, and from 2002 through
2007, Turkeys GDP expanded by an average of 6.8% in real terms, according to TurkStat. However,
growth momentum had begun to weaken from early 2007 and real GDP growth fell to 4.7% in 2007
from 6.9% in 2006, according to TurkStat. In 2008, due to the global economic crisis and continuing
political tensions in Turkey, real GDP growth was only 0.7% (Source: TurkStat). The economic
contraction that began in 2008 deepened in 2009 as domestic demand slumped sharply and GDP
declined by 4.8%, according to TurkStat. Since then, real GDP growth increased by 9.2% in 2010, by
8.5% in 2011 but slowed to 3.1% in the first half of 2012 (Source: TurkStat).
While the global financial crisis and problems in the Eurozone have had a relatively limited effect on
Turkeys economy, these continue to have a significant effect on many of the worlds largest
economies. If there is a significant decline in the economic growth of any of Turkeys major trading
partners, such as the European Union, or any Euro area member experiences difficulties issuing
securities in the sovereign debt market or servicing existing debt, it could adversely affect Turkeys
balance of trade and economic growth. There can be no assurance that Turkey will be able to remain
economically stable during any periods of renewed global economic weakness. Future negative
developments in the Turkish economy could impair the Groups business strategies and have a
material adverse effect on the Groups business, financial condition and results of operations.
The level of inflation and the state of the current account deficit in Turkey could adversely affect the Groups
business, financial condition and results of operations.
In the past, Turkey has experienced high rates of inflation, including rates of over 50% a year in
2001. Since 2001, pursuant to stand-by agreements with the International Monetary Fund, the
Turkish government has implemented measures to significantly reduce inflation. While levels of
inflation have dropped considerably since that time, Turkey has recently experienced rising levels of
inflation. The PPI and CPI in Turkey increased to 8.9% and 6.4%, respectively, for the December
2009 to December 2010 period and to 13.3% and 10.5%, respectively, for the December 2010 to
December 2011 period (source: TurkStat). As of August 2012, the PPI decreased by 0.3 as compared
to December 2011, although it increased to 4.6% for the August 2011 to August 2012 period (source:
TurkStat). The CPI as of August 2012 increased by 2.3% as compared to December 2011 and by
8.9% for the August 2011 to August 2012 period (source: TurkStat). See Risks Related to the
Groups BusinessIncreases in inflation could adversely affect demand for the Groups products. There
can be no assurance that inflation will not increase further in Turkey in the near future. In particular,
recent increases in prices, such as energy (principally oil) and food prices, could cause an increase in
inflation. The Central Bank has recently reduced interest rates and implemented excise tax increases in
various sectors, which could in turn lead to inflationary pressures in the Turkish economy.
Furthermore, certain actions taken by the Turkish government to combat inflation could have
negative effects on the Turkish economy.
Turkeys current account deficit has widened considerably in recent years, increasing from US$7.5
billion in 2003 (2.5% of GDP) to US$77.1 billion (9.7% of GDP) in 2011 (Source: Turkish Central
Bank). This rapid acceleration has raised concerns regarding financial stability in Turkey, and the

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

15

Turkish Central Bank, the Banking Regulation and Supervision Agency and Ministry of Finance have
recently initiated coordinated measures to lengthen the maturity of deposits, reduce short-term capital
inflows and curb domestic demand. The main aim of these measures is to slow down the widening of
the current account deficit by controlling the rate of loan growth. From January to July 2012, the
current account deficit decreased by US$15.7 billion compared to same period in 2011 according to
data published by the Turkish Central Bank. Given Turkeys savings and investments structure, it is
not possible for Turkey to achieve its targeted growth figures without current account imbalances.
Should the current account deficit widen persistently, this may lead to a sudden downward adjustment
in the Lira with inflationary consequences, which could have an adverse effect on Turkeys debt
servicing ability. There can be no assurance that inflationary pressures in Turkey and government
intervention designed to counteract that pressure but which is harmful to the Groups interests will
not occur in the future.
The Turkish foreign exchange markets have historically been volatile, which could adversely affect Turkeys
general economy as well as the Groups business, financial condition and results of operations.
The Lira has been subject to significant volatility in the years since the financial crisis of 2000 to
2002, and during that period the Lira depreciated from TRL 0.6750 per US dollar on 31 December
2000 to TRL 1.4465 per US dollar on 31 December 2001 and then further depreciated to TRL 1.6424
per US dollar on 31 December 2002. As the Turkish government began implementing economic and
financial reforms, the value of the Lira appreciated in the period from 2003 to 2007, but began to
depreciate again thereafter and the exchange rate was TRL 1.8065 per US dollar on 30 June 2012.
Amounts in Lira with respect to periods before 2005 have been translated into present day Turkish
Lira at an exchange rate of TRL 1,000,000 = TRL 1.00. Although the Lira has a more stable
outlook compared to the 1990s, the exchange rate remains volatile and any significant depreciation of
the Lira against the US dollar or other major currencies may adversely affect the financial condition
of Turkey as a whole and may have a material adverse effect on the Groups business, financial
condition and results of operations.
Political developments in Turkey may have a material adverse effect on the Groups business.
Turkey has been a parliamentary democracy since 1923. Unstable coalition governments have been
common, and in the almost 90 years since its formation, the Republic of Turkey has had 61
governments, with political disagreements frequently resulting in early elections. While recent
constitutional and legislative changes and changes in the political environment have sought to reduce
the possibility of military intervention, the Turkish military establishment has historically played a
significant role in Turkish government and politics, intervening in the political process in the past.
A general election was held on 12 June 2011 in which 24 political parties and independent candidates
contested 550 seats in the Turkish parliament. The currently ruling Justice and Development Party
received approximately 50% of the total votes, whereas the Republican Peoples Party and Nationalist
Movement Party received 26% and 13% of the total votes, respectively. Additionally 29 independent
members of parliament joined the Peace and Democracy Party. The AKP, which has been in power
since 2002, is the first party since 1987 to have a parliamentary majority and be able to govern
without a coalition partner. Any significant changes in the political environment may adversely affect
the stability of the Turkish economy and, in turn, the Groups business, financial condition and
results of operations.
The market for Turkish securities is subject to a high degree of volatility due to developments and perceptions
of risks in other emerging market countries.
In general, investing in the securities of issuers that have operations primarily in emerging markets
like Turkey involves a higher degree of risk than investing in the securities of issuers with substantial
operations in the United States, the countries of the European Union (EU) or other similar
jurisdictions. International investors reactions to the events occurring in one emerging market country
sometimes appear to demonstrate a contagion effect, in which an entire region or class of
investment is disfavoured by international investors. As a result, crises in other emerging market
countries may diminish investor interest in securities of Turkish issuers, including the Company,
which could adversely affect the market price of the Companys securities. An increase in the
perceived risks associated with investing in emerging economies could dampen capital flows to Turkey
and adversely affect the Turkish economy. There can be no assurance that investors interest in
Turkey will not be negatively affected by events in other emerging markets or the global economy in
general. See also Economic developments in Turkey, as well as global economic conditions generally,

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

16

may have a material adverse effect on the Groups business, financial condition and results of
operations.
Uncertainties relating to Turkeys proposed accession to the European Union may adversely affect the Turkish
financial markets and result in greater volatility.
Turkey has been a candidate country for EU membership since the Helsinki European Council of
December 1999. The EU resolved on 17 December 2004 to commence accession negotiations with
Turkey and affirmed that Turkeys candidacy will be judged by the same twenty-eight criteria (or
Chapters) applied to other candidates. These criteria require a range of political, legislative and
economic reforms to be implemented. Among these legislative reforms are two new major laws: the
Turkish Commercial Code and the Code of Obligations which are replacing current Turkish
Commercial Code No. 6762 and Code of Obligations No. 818, respectively (see Recent changes in
Turkish law may have a significant impact).
Although Turkey has had a long relationship with the EU, that relationship has at times been
strained. During 2006, the EU issued several warnings in connection with Turkeys undertakings
under the additional protocol dated July 2005 relating to the Customs Union and to the recognition
of the Republic of Southern Cyprus. Following this, in December 2006 the EU decided that
negotiations of eight Chapters should be suspended and that no Chapter would be closed until the
EU has verified that Turkey has fulfilled its commitments relating to the additional protocol of July
2005. There can be no assurance that the EU will continue to maintain an open approach to
Turkeys EU membership, that Turkey will maintain an open approach to EU membership or that
Turkey will be able to meet all the criteria applicable to becoming a member state, including the new
Chapters applicable from 2009 relating to taxation and the environment.
Potential delays or other adverse developments in Turkeys proposed accession to the EU may have a
negative effect on Turkeys economy in general, and Turkeys economic performance and credit
ratings in particular, and could, as a result, have a material adverse effect on the Groups business,
financial condition and results of operations.
Recent changes in Turkish law may have a significant impact.
Recently, three major pieces of legislation have been subject to substantial amendment, namely the
Turkish Code of Obligations, the Turkish Code of Civil Procedures and the Turkish Commercial
Code. Both the Turkish Code of Obligations and the Turkish Commercial Code came into effect as
of 1 July 2012, and the Turkish Code of Civil Procedures came into effect on 1 October 2011. This
legislation implemented substantial changes to Turkish law and it is anticipated that it will have a
major impact on commercial life in Turkey and on the Groups business, financial condition, results
of operations and prospects. At this stage, such potential impact cannot be quantified and it is also
possible that amendments will be made to the respective laws from time to time until their effective
date.
Conflict, civil unrest and terrorism within Turkey or conflict, civil unrest and terrorism in neighbouring and
nearby countries, including Syria, may have a material adverse effect on the Groups business, financial
condition and results of operations.
Turkey is located in a region that has been subject to ongoing political and security concerns,
especially in recent years. Political uncertainty in certain neighbouring and nearby countries, such as
Syria, Iraq, Egypt, Iran, Cyprus, Georgia and Armenia, has historically been one of the potential
risks associated with an investment in Turkish securities. Political instability in the Middle East has
increased since the terrorist attacks in the United States of 11 September 2001 and the
commencement of military action by the United States and its allies in March 2003. Frequent
incidents of violence and sectarian conflict in Iraq and the recent unrest and, in certain cases, regime
change in a number of other countries near Turkey, have increased concern about the stability of
those countries and led to greater volatility in the financial markets of the region. Recently, there has
been a particularly high level of violence and unrest in Syria, including in areas bordering on Turkey.
Turkey has recently been hit by shellfire in connection with the unrest of Syria, and as a result the
Turkish parliament has authorised cross-border military action against Syria should the government
believe that such action is warranted. There has also been an increasing level of unrest in the Middle
East generally, including violent anti-American protests in countries such as Egypt, Libya, and Yemen
around 11 September 2012, which, among other things, may lead to further risk of volatility in
political conditions and financial markets.

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

17

As a result of the continuing violence and civil unrest in Iraq and Syria, neighbouring countries,
including Turkey, have experienced and may continue to experience certain negative economic effects,
such as decreases in revenues from trade and tourism, increases in oil expenditures, decreases in
capital inflow, increases in interest rates and increases in military expenditures. Furthermore, the
Middle East is subject to tensions that could result in economic and/or diplomatic sanctions being
imposed on one or more of Turkeys neighbours, particularly Iran, which could lead to military
action that could have a negative impact on Turkeys economy and political stability. Turkey has also
experienced problems with domestic terrorist and separatist groups. For example, Turkey has faced
terrorism especially in the south-eastern part of the country for many years, mainly undertaken by
the Peoples Congress of Kurdistan, known as the PKK (an organization that is listed as a terrorist
organisation by states and organisations including Turkey, the EU and the United States), which has
been exacerbated as a result of political instability in the neighbouring countries of Iraq and, more
recently, Syria. This issue could create a potential source of political instability. Any of the foregoing
factors could, as a result, have a material adverse effect on the Groups business, financial conditions
and results of operations.
The Companys credit ratings may not reflect all risks, and changes to Turkeys credit ratings may affect the
Companys ability to obtain funding.
Credit ratings affect the cost and other terms upon which the Company is able to obtain funding.
The Notes are expected to be rated BBB- by S&P and Baa3 by Moodys on issue. Any ratings
of any of the Company and the Notes may not reflect the potential impact of all risks related to the
Notes structure and the global financial market, the additional factors described in this Risk
Factors section and any other factors that may affect the value of the Notes. There can be no
assurance that the rating agencies will maintain the Companys ratings or outlooks, which could
materially adversely affect the trading values of the Notes and the Companys ability to finance its
operations, which could materially adversely affect the Groups business, financial conditions and
results of operations. Moreover, a downgrade or potential downgrade of the Turkish sovereign rating
(rated Ba1 (positive outlook) by Moodys and BB (stable outlook) by S&P) could negatively affect
the Companys ratings. Investors should be aware that a credit rating is not a recommendation to
buy, sell or hold securities and may be revised or withdrawn by its assigning rating agency at any
time.
The Governments influence over the Turkish economy could negatively impact the Groups business.
The Government has exercised and continues to exercise significant influence over many aspects of the
Turkish economy. The government is also directly involved in the Turkish economy through its
ownership and administration of State Economic Enterprises (SEEs) which, despite the divestments
undertaken in the Governments privatisation programme, continue to represent a significant portion
of the Turkish economy. Although none of the SEEs operate in any business segment in which the
Group operates, any decisions taken by the government with respect to the SEEs may significantly
impact the Turkish economy and thus indirectly the Group.
Turkish disclosure standards differ in certain significant respects from those in more developed markets,
leading to a relatively limited amount of information being available.
The disclosure obligations applicable to Turkish companies differ in certain respects from those
applicable to similar companies in the United States and the United Kingdom. As a result, investors
might not have access to the same depth of disclosure relating to the Group as they would for
investments in companies in the United States, the United Kingdom, the EU and other moredeveloped markets.
Risks Related to the Notes and the Groups Capital Structure
The Notes will constitute unsecured obligations of the Company.
The Companys obligations under the Notes will constitute unsecured obligations of the Company.
Accordingly, any claims against the Company under the Notes would be unsecured claims. The
ability of the Company to pay such claims will depend upon, among other factors, its liquidity,
overall financial strength and ability to generate asset flows, which could be affected by (inter alia)
the circumstances described in these Risk Factors.

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

18

Claims of Noteholders under the Notes are effectively subordinated to those of certain other creditors and
liabilities of the Companys subsidiaries. Noteholders will also not have the benefit of the negative pledge or
certain of the events of default under the Notes in respect of CCI and neither the negative pledge nor any of the
events of default will apply to any of CCIs subsidiaries.
The Notes are unsecured and unsubordinated obligations of the Company. The Notes will rank
equally with all of the Companys other unsecured and unsubordinated indebtedness; however, the
Notes will be effectively subordinated to the Companys secured indebtedness and securitisations, if
any, to the extent of the value of the assets securing such transactions, and will be subject to certain
preferential obligations under Turkish law, such as wages of employees.
Generally, lenders and trade and other creditors of the Companys subsidiaries are entitled to
payment of their claims from the assets of such subsidiaries before these assets are made available for
distribution to the Company, as direct or indirect shareholder. Any debt that the Companys
subsidiaries may incur in the future will also rank structurally senior to the Notes.
In addition, in the case of CCI and its subsidiaries, Noteholders will not have the benefit of the
negative pledge in respect of (i) any Principal Property (as defined in Condition 4.2) owned or leased
by any of them or (ii) the shares of CCI or any of its subsidiaries owning or leasing any such
property. Accordingly, the terms of Notes will not prevent or impose any limitation on CCI or its
subsidiaries creating or having outstanding any secured indebtedness or entering into any sale and
lease back transaction in respect of such property. See Condition 4 (Covenants).
The cross-acceleration provisions included in the Events of Default (as defined in Condition 10
(Events of Default)) under the Notes also do not apply to CCI or any of its subsidiaries (see
Condition 10.1(c)) and CCIs subsidiaries are further excluded from the application of the Events of
Default more generally. Accordingly, Noteholders will not have any right to accelerate repayment of
the Notes as a result of any default by CCI or any of its subsidiaries in respect of any of their
outstanding indebtedness for borrowed money or, in the case of CCIs subsidaries, any related or
other events that may otherwise give rise to an Event of Default.
Total borrowings and trade payables of CCI and its subsidiaries as at 30 June 2012 were TRL 1,827.8
million.
There is no public trading market for the Notes and an active trading market may not develop or be sustained
in the future.
There is no active trading market for investments in the Notes. If investments in the Notes are traded
after their initial issuance, then they might trade at a discount to their initial offering price, depending
upon prevailing interest rates, the market for similar securities, general economic conditions and the
Companys financial condition. Although application has been made for the Notes to be listed on the
Official List maintained by the Irish Stock Exchange and to be admitted to trading on the Main
Securities Market, there can be no assurance that such application will be accepted, that an active
trading market will develop or, if developed, that it can be sustained. If an active trading market for
investments in the Notes is not developed or maintained, then the market or trading price and
liquidity of investments in the Notes may be adversely affected.
The market price of the Notes is subject to a high degree of volatility.
The market price of investments in the Notes could be subject to significant fluctuations in response
to actual or anticipated variations in the Companys operating results, adverse business developments,
changes to the regulatory environment in which the Group operates, changes in financial estimates by
securities analysts and the actual or expected sale by the Group of other debt securities, as well as
other factors, including the trading market for notes issued by the Republic of Turkey. In addition,
in recent years the global financial markets have experienced significant price and volume fluctuations
that, if repeated in the future, could adversely affect the market price of investments in the Notes
without regard to the Companys financial condition or results of operations.
The market price of investments in the Notes is also influenced by economic and market conditions
in Turkey and, to varying degrees, economic and market conditions in emerging markets generally.
Although economic conditions differ in each country, the reaction of investors to developments in one
country may cause capital markets in other countries to fluctuate. Developments or economic
conditions in other emerging market countries have at times significantly affected the availability of
credit to the Turkish economy and resulted in considerable outflows of funds and declines in the
amount of foreign investments in Turkey. Crises in other emerging market countries may diminish

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

19

investor interest in securities of Turkish issuers, including the Companys, which could adversely affect
the market price of investments in the Notes.
Credit ratings may not reflect all risks.
In addition to the ratings on the Notes provided by Moodys and S&P, one or more other
independent credit rating agencies may assign credit ratings to the Notes. The ratings might not
reflect the potential impact of all risks related to structure, market and other factors that may affect
the value of the Notes. Credit ratings assigned to the Notes do not necessarily mean that they are a
suitable investment. A rating is not a recommendation to buy, sell or hold securities and may be
subject to revision, suspension or withdrawal at any time by the assigning rating organisation. Similar
ratings on different types of notes do not necessarily mean the same thing. The initial ratings by
Moodys and S&P will not address the likelihood that the principal on the Notes will be prepaid or
paid on the scheduled maturity date. Such ratings also will not address the marketability of
investments in the Notes or any market price. Any change in the credit ratings of the Notes or the
Company could adversely affect the price that a subsequent purchaser will be willing to pay for
investments in the Notes. The significance of each rating should be analysed independently from any
other rating.
Decisions of the holders of the required majority of the Notes bind all Noteholders.
The conditions of the Notes will contain provisions for calling meetings of Noteholders to consider
matters affecting their interests generally. These provisions will permit Noteholders holding defined
percentages of Notes to bind all Noteholders, including Noteholders who did not vote at the relevant
meeting and Noteholders who voted in a manner contrary to the majority.
Transfer of investments in the Notes will be subject to certain restrictions.
Although the Notes have been registered with the CMB as debt securities to be offered outside
Turkey, the Notes have not been and will not be registered under the Securities Act or any US state
securities laws. Prospective investors may not offer or sell the Notes, except pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the Securities Act and
applicable state securities laws. Similar restrictions will apply in other jurisdictions. Prospective
investors should read the discussion under the heading Transfer Restrictions for further information
about these transfer restrictions. It is their obligation to ensure that their offers and sales of the
Notes within the United States and other countries comply with any applicable securities laws.
Investors in the Notes must rely on DTC, Euroclear and Clearstream procedures.
The Regulation S Notes will be represented on issue by an Unrestricted Global Certificate that will
be delivered to a common depositary for, and registered in the name of a common nominee of,
Euroclear and Clearstream, Luxembourg. Except in the circumstances described in the Unrestricted
Global Certificate, investors will not be entitled to receive Notes in definitive form. Euroclear and
Clearstream, Luxembourg and their respective participants will maintain records of the beneficial
interests in the Unrestricted Global Certificate. While the Notes are represented by the Unrestricted
Global Certificate, investors will be able to trade their beneficial interests only through Euroclear and
Clearstream, Luxembourg and their respective participants.
The Rule 144A Notes will be represented on issue by a Restricted Global Certificate that will be
deposited with a nominee for DTC. Except in the circumstances described in the Restricted Global
Certificate, investors will not be entitled to receive Notes in definitive form. DTC and its direct and
indirect participants will maintain records of the beneficial interests in the Restricted Global
Certificate. While the Notes are represented by the Restricted Global Certificate, investors will be able
to trade their beneficial interests only through DTC. While the Notes are represented by the
Restricted Global Certificates, the Issuer will discharge its payment obligation under the Notes by
making payments through the relevant clearing systems. A holder of a beneficial interest in a Global
Certificate must rely on the procedures of the relevant clearing system and its participants to receive
payments under the Notes. The Issuer has no responsibility or liability for the records relating to, or
payments made in respect of, beneficial interests in either Global Certificate. Holders of beneficial
interests in a Global Certificate will not have a direct right to vote in respect of the Notes. Instead,
such holders will be permitted to act only to the extent that they are enabled by the relevant clearing
system and its participants to appoint appropriate proxies.

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

20

The Company may create and issue further Notes.


The Company may from time to time without the consent of the Noteholders create and issue further
Notes, having terms and conditions that are the same as those of the Notes, or the same except for
the amount of the first payment of interest, which new Notes may be consolidated and form a single
series with the outstanding Notes even if doing so may adversely affect the value of the original
Notes.
It may not be possible for investors to enforce foreign judgments against the Company or its management.
The Company is a public joint stock company organised under the laws of Turkey. Certain of the
directors and officers of the Company reside inside Turkey and all or a substantial portion of the
assets of such persons may be, and substantially all of the assets of the Company are, located in
Turkey. As a result, it may not be possible for investors to effect service of process upon such
persons outside Turkey or to enforce against them in the courts of jurisdictions other than Turkey
any judgments obtained in such courts that are predicated upon the laws of such other jurisdictions.
In addition, under the International Private and Procedure Law of the Republic of Turkey (Law No.
5718), a judgment of a court established in a country other than the Republic of Turkey may not be
enforced in Turkish courts in certain circumstances. Although Turkish courts generally recognise
enforceable judgments of English courts on the basis that there is de facto reciprocity between the
United Kingdom and Turkey with respect to the enforcement of judgments of their respective courts,
there is no treaty between the United Kingdom and Turkey providing for reciprocal enforcement of
judgments. For further information, see Enforcement of Judgments and Service of Process.
The Company is a holding company and depends to a certain degree on the results of operations of its
subsidiaries.
While the Company has significant revenue-generating operations of its own, it still depends to a
certain degree upon dividends, permitted repayment of intercompany debt, if any, and other transfers
of funds from its subsidiaries and joint ventures. Certain of the Companys subsidiaries (including
EBI and MEB) are parties to various loan agreements, as a result of which a portion of their cash
flows goes to paying interest and principal on outstanding borrowings under these facilities.
Additional restrictions on the distribution of cash to the Company arise from, among other things,
applicable corporate and other laws and regulations and by the terms of other agreements to which
its subsidiaries are or may become subject. As a result of the above, the Companys ability to service
cash interest payments or other cash needs may be restricted. If the Companys subsidiaries and joint
ventures are unable to pay dividends or otherwise transfer funds to it, then it may be unable to
satisfy its obligations to pay interest on the Notes and would be required to refinance these
obligations to avoid default. The Company can provide no assurance that its own revenue-generating
operations will be sufficient to provide the necessary funds, that it will be able to obtain the necessary
funds from its subsidiaries or joint ventures or that it would be able to refinance its obligations.
EU Savings Directive.
Under EC Council Directive 2003/48/EC on the Taxation of Savings Income (the EU Savings
Directive), member states are required to provide to the tax authorities of another member state
details of payments of interest (or similar income) paid by a person within its jurisdiction to an
individual resident in that other member state or to certain limited types of entities established in that
other member state, except that Austria and Luxembourg are required to impose a withholding
system in relation to such payments for a transitional period (unless during such period they elect
otherwise) (the ending of such transitional period being dependent upon the conclusion of certain
other agreements relating to information exchange with certain other countries). A number of non-EU
countries and territories have adopted similar measures (for example, a withholding system in the case
of Switzerland).
The European Commission has proposed certain amendments to such EU Savings Directive, which
may, if implemented, amend or broaden the scope of the requirements described herein.
If a payment were to be made or collected through a member state that has opted for a withholding
system and an amount of, or in respect of, tax were to be withheld from that payment, then neither
the Company nor any Paying Agent nor any other person would be obliged to pay additional
amounts with respect to any Note as a result of the imposition of such withholding tax. The
Company is required to maintain a Paying Agent in a Member State that is not obliged to withhold
or deduct tax pursuant to the EU Savings Directive.

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

21

US Foreign Account Tax Compliance Withholding


Should the Notes be significantly modified after 31 December 2012 or the Issuer create and issue
further notes after 31 December 2012 that are consolidated and form a single series with the
outstanding Notes as permitted by Condition 14 (Further Issues) herein, then (pursuant to Sections
1471 through 1474 of the Code or similar law implementing an intergovernmental approach thereto
(FATCA)) the Issuer and other financial institutions through which payments on the Notes are
made may be required to withhold US tax at a 30% rate on all, or a portion of, payments made
after 31 December 2016 in respect of such Notes.
The application of FATCA to interest, principal or other amounts paid with respect to the Notes is
not clear. If FATCA were to require that an amount in respect of US withholding tax were to be
deducted or withheld from interest, principal or other payments on (or with respect to) the Notes,
then the Issuer, any paying agent or any other person would not, pursuant to the conditions of the
Notes, be required to pay additional amounts as a result of the deduction or withholding of such tax.
As a result, investors may, if FATCA is implemented as currently proposed by the United States
Internal Revenue Service, receive less interest or principal than expected.
US persons investing in the Notes might have indirect contact with countries sanctioned by the Office of
Foreign Assets Control of the US Department of Treasury as a result of the Companys investments in and
business with countries on the sanctions list.
The Office of Foreign Assets Control of the US Department of Treasury (OFAC) administers
regulations that restrict the ability of US persons to invest in, or otherwise engage in business with,
certain countries, including Iran and Sudan, and specially designated nationals (together Sanction
Targets). As the Company is not a Sanction Target, OFAC regulations do not prohibit US persons
from investing in, or otherwise engaging in business with, the Company; however, to the extent that
the Company invests in, or otherwise engages in business with, Sanction Targets directly or indirectly,
US persons investing in the Company may incur the risk of indirect contact with Sanction Targets.
Non-US persons from jurisdictions with similar sanctions may similarly incur the risk of indirect
contacts with Sanction Targets.

c107169pu015Proof6:22.10.12_10:38B/LRevision:0OperatorHarS

22

OVERVIEW OF THE NOTES


The following is an overview of certain information relating to the offering of the Notes, including the
principal provisions of the terms and conditions thereof. This overview is indicative only, does not purport
to be complete and is qualified in its entirety by the more detailed information appearing elsewhere in
this Offering Circular. See, in particular, Conditions of the Notes.
Issue:................................................
Interest and Interest Payment
Dates: ..............................................

US$500,000,000 principal amount of 3.375% Notes due 2022.


The Notes will bear interest from and including 30 October 2012 at
the rate of 3.375% per annum, payable semi-annually in arrear on
each of 1 May and 1 November in each year (each an Interest
Payment Date); provided that, as described in Condition 6.4, if
any such date is not a Business Day (as defined in Condition 6),
then such payment will be made on the next Business Day. The first
payment (for the period from and including the Issue Date to but
excluding 1 May 2013 and amounting to US$16.97 per US$1,000
principal amount of Notes) will be made on 1 May 2013 (long first
coupon).

Maturity Date: ................................

1 November 2022.

Use of Proceeds:..............................

The net proceeds of the Offering will be used by the Company to


repay certain existing indebtedness and for general corporate
purposes, including paying expenses relating to the issuance of the
Notes.

Status: .............................................

The Notes will be direct, unconditional and (subject to the


provisions of Condition 4.1) unsecured obligations of the
Company and (subject as provided above) rank and will rank
pari passu, without any preference among themselves, with all other
outstanding unsecured and unsubordinated obligations of the
Company, present and future, but, in the event of insolvency,
only to the extent permitted by applicable laws relating to creditors
rights.

Negative Pledge:..............................

The terms of the Notes contain a negative pledge provision binding


on the Company as further described in Condition 4.

Sale and leaseback transactions: .....

The terms of the Notes contain a limitation on the Company or


certain of its subsidiaries entering into sale and leaseback
transactions in respect of principal property, as further described
in Condition 4.3.

Taxation; Payment of Additional


Amounts:..........................................

All payments in respect of the Notes by or on behalf of the


Company shall be made without withholding or deduction for, or
on account of, any present or future taxes, duties, assessments or
governmental charges of whatever nature (Taxes) imposed or
levied by or on behalf of a Relevant Jurisdiction (as defined in
Condition 8), unless the withholding or deduction of the Taxes is
required by law. In that event, the Company will (subject to certain
exceptions and exclusions) pay such additional amounts as may be
necessary in order that the net amounts received by the Noteholders
after the withholding or deduction shall equal the respective
amounts which would have been receivable in respect of the Notes
in the absence of the withholding or deduction. Under current
Turkish law, withholding tax at the rate of 0% applies on interest
on the Notes with a maturity of 5 years and more. See Taxation
Certain Turkish Tax Considerations.
See Conditions of the NotesCondition 8

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

23

Redemption for Taxation Reasons: .

The Notes may be redeemed at the option of the Company in


whole, but not in part, at any time (subject to certain conditions), at
their principal amount (together with interest accrued to but
excluding the date fixed for redemption) if:
(a)

(b)
Redemption at the Option of the
Holders upon a Change of
Control: ..........................................

Events of Default: ...........................

Form, Transfer and


Denominations: ................................

as a result of any change in, or amendment to, the laws or


regulations of a Relevant Jurisdiction, or any change in the
application or official interpretation of the laws or regulations
of a Relevant Jurisdiction, which change or amendment
becomes effective after 23 October 2012, on the next Interest
Payment Date:
(i)

the Company would be required to pay additional


amounts as provided or referred to in Condition 8, and

(ii)

the Company would be required to make any


withholding or deduction for, or on account of, any
Taxes imposed or levied by or on behalf of the Relevant
Jurisdiction beyond the prevailing applicable rates on
23 October 2012, and

the requirement cannot be avoided by the Company taking


reasonable measures available to it.

If a Change of Control Put Event occurs (as defined in


Condition 7.3), each Noteholder will have a right, at such
Noteholders option, to require the Company to redeem in whole
(but not in part) such Noteholders Notes at 101% of their principal
amount together with interest accrued to the date of redemption, as
further described in Condition 7.3.
The Notes will be subject to certain Events of Default including
(among others) non-payment of principal for three Business Days,
non-payment of interest for 20 Business Days, failure to perform or
observe any of the other obligations in respect of the Notes, crossacceleration and certain events related to disposals, bankruptcy and
insolvency, all as further described in Condition 10. See Conditions
of the NotesCondition 10.
Notes offered and sold in reliance upon Regulation S will be
represented by beneficial interests in the Unrestricted Global
Certificate in registered form, without interest coupons attached,
which will be delivered to a common depositary for, and registered
in the name of a common nominee of, Euroclear and Clearstream,
Luxembourg. Notes offered and sold in reliance upon Rule 144A
will be represented by beneficial interests in the Restricted Global
Certificate(s), in registered form, without interest coupons attached,
which will be deposited with the Custodian and registered in the
name of Cede & Co. as nominee for DTC. Except in limited
circumstances, certificates for the Notes will not be issued in
exchange for beneficial interests in the Global Certificates. See
Conditions of the NotesCondition 1.
Interests in the Rule 144A Notes will be subject to certain
restrictions on transfer. See Transfer Restrictions. Interests in
the Global Certificates will be shown on, and transfers thereof will
be effected only through, records maintained by Euroclear and
Clearstream, Luxembourg, in the case of the Regulation S Notes,
and by DTC and its direct and indirect participants, in the case of
Rule 144A Notes. Notes will be issued in denominations of
US$200,000 and integral multiples of US$1,000 in excess thereof.

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

24

Governing Law: ...............................

The Notes, the Agency Agreement and any non-contractual


obligations arising out of or in connection with the Notes or the
Agency Agreement, as the case may be, will be governed by, and
construed in accordance with, English law.

Listing: ............................................

Application has been made to the Irish Stock Exchange for the
Notes to be admitted to listing on the Official List and to trading on
the Main Securities Market; however, no assurance can be given
that such applications will be accepted.

Selling Restrictions: .........................

The Notes have not been and will not be registered under the
Securities Act or any state securities laws and beneficial interests
therein may not be offered or sold within the United States or to, or
for the account or benefit of, any US person (as defined in
Regulation S under the Securities Act) except to QIBs in reliance
upon the exemption from the registration requirements of the
Securities Act provided by Rule 144A or otherwise pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. The offer and sale of Notes (or
beneficial interests therein) is also subject to restrictions in Turkey
and the United Kingdom. See Selling Restrictions.

Risk Factors: ...................................

For a discussion of certain risk factors relating to the Group,


Turkey and the Notes that prospective investors should carefully
consider prior to making an investment in the Notes, see Risk
Factors.

Issue Price: ......................................

98.761% of the principal amount.

Yield: ...............................................

3.523%.

Regulation S Notes Security Codes:

ISIN: XS0848940523
Common Code: 084894052

Rule 144A Notes Security Codes: ...

ISIN: US032523AA09
CUSIP: 032523 AA0
Common Code: 084894087

Representation of Noteholders:........

There will be no trustee.

Expected Rating(s): ........................

Baa3 by Moodys and BBB- by S&P.

Fiscal Agent, Paying Agent, and


Transfer Agent: ...............................

Citibank, N.A., London Branch

Registrar:.........................................

Citigroup Global Markets Deutschland AG

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

25

SUMMARY FINANCIAL INFORMATION


This section should be read together with the information contained in Presentation of Information,
Use of Proceeds, Capitalisation of the Group, Selected Financial Information, Operating and
Financial Review, the Consolidated Financial Statements and the respective notes thereto included
elsewhere in this Offering Circular.
The following summary consolidated historical financial information as at and for the years ended 31
December 2011, 2010 and 2009 has been extracted from the Audited Consolidated Financial
Statements, which are included elsewhere in this Offering Circular. The unaudited summary
consolidated historical interim financial information as at and for the six months ended 30 June 2012
and 2011 has been extracted from the 2012 Interim Financial Statements, which are included
elsewhere in this Offering Circular. Investors should not rely on interim results as being indicative of
results the Group may expect for the full year.
Summary Consolidated Income Statement Data
Six months ended
30 June

Year ended 31 December

2012

2011

2011

2010

2009

Sales ..........................................................................
Cost of Sales .............................................................

3,205.8
(1,598.9)

2,281.9
(1,158.3)

4,168.8
(2,051.3)

3,811.1
(1,907.9)

Gross Profit from Operations ...................................


Marketing, Selling and Distribution Expenses .........
General and Administration Expenses......................
Other Operating Income ...........................................
Other Operating Expenses ........................................

1,606.9
(857.9)
(321.6)
24.4
(20.1)

1,123.6
(579.1)
(201.0)
17.1
(21.0)

2,281.7
(1,262.8)
(414.8)
43.1
(42.1)

2,117.4
(1,060.5)
(354.0)
25.0
(34.4)

1,903.1
(928.1)
(322.1)
41.5
(46.5)

Profit from Operations ..............................................


Loss from Associates ................................................
Financial Income.......................................................
Financial Expenses....................................................

431.7
(4.5)
203.4
(193.5)

339.6
(3.3)
119.6
(127.5)

605.1
(6.8)
240.7
(374.0)

693.6
(17.9)
244.3
(261.5)

648.0
(10.9)
375.1
(468.4)

Profit Before Tax From Continuing Operations ........


Current Period Tax Expense.....................................
Deferred Tax Income/(Expense) ...............................

437.1
(123.6)
34.7

328.4
(84.6)
6.0

465.0
(117.5)
12.0

658.6
(127.8)
(12.3)

543.8
(127.3)
5.8

Profit for the Year .....................................................


Other Comprehensive Income:
Currency Translation Differences .............................
Revaluation Due to Change in Scope of
Consolidation ............................................................
Value Increase/(Decrease) in Available-for-Sale
Securities ...................................................................
Tax Income /(Expense) on Other Comprehensive
Income.......................................................................

348.1

249.8

359.5

518.4

422.3

(388.8)

204.4

303.2

25.2

(57.8)

4.9

(3.3)

(3.5)

(12.4)

2.3

17.4

0.2

0.2

0.6

(0.1)

(0.9)

(TRL millions)
4,761.3
(2,479.6)

Other Comprehensive Income, (Net of Taxes) ...........

(392.0)

201.1

291.5

27.4

(36.3)

Total Comprehensive Income .....................................

(43.9)

450.9

651.0

545.9

385.9

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

26

Summary Consolidated Balance Sheet Data


As at 30 June
2012

As at 31 December

2011

2011

2010

2009

(TRL millions)
Assets
Current Assets
Cash and Cash Equivalents ......................................
Financial Investments ...............................................
Trade Receivables .....................................................
Due from Related Parties .........................................
Other Receivables......................................................
Inventories.................................................................
Other Current Assets ................................................

983.2
2.4
1,238.0
0.0
25.1
690.0
325.8

656.7
17.8
883.0
0.1
18.1
653.5
219.8

917.6
22.6
578.4
0.1
16.9
561.5
246.1

939.3
55.1
518.3
0.3
7.9
467.9
152.0

1,053.3
21.2
421.5
0.8
5.8
412.4
141.6

Total Current Assets..................................................

3,264.5

2,449.1

2,343.3

2,140.8

2,056.7

Non-Current Assets
Other Receivables......................................................
Financial Investments ..............................................
Investments in Associates .........................................
Biological Assets .......................................................
Property, Plant and Equipment ................................
Intangible Assets .......................................................
Goodwill....................................................................
Deferred Tax Asset ...................................................
Other Non-Current Assets ........................................

1.9
21.6
13.5
8.1
3,415.9
592.8
2,891.5
74.0
146.4

1.2
33.9
20.9
3.3
2,366.4
403.7
955.6
51.5
85.4

1.6
25.2
18.4
6.5
2,510.3
447.0
912.6
62.4
93.4

1.3
37.5
21.4
1.5
2,043.8
361.9
871.1
40.0
69.5

0.9
40.1
45.4

1,981.6
357.0
855.6
46.9
45.9

Total Non-Current Assets ..........................................

7,165.9

3,921.8

4,077.5

3,448.0

3,373.4

Total Assets ...............................................................

10,430.4

6,370.9

6,420.7

5,588.8

5,430.0

Liabilities
Current Liabilities
Borrowings ................................................................
Trade Payables ..........................................................
Due to Related Parties..............................................
Other Payables ..........................................................
Provision for Corporate Tax ....................................
Provision ...................................................................
Other Current Liabilities...........................................

837.7
563.9
67.4
663.3
63.5
64.9
224.1

712.5
461.5
11.1
482.0
38.6
50.9
214.2

795.6
307.6
9.2
342.8
9.4
28.0
136.0

996.1
253.3
8.6
290.8
15.3
23.7
169.3

949.3
234.9
15.0
202.3
16.5
20.3
50.3

Total Current Liabilities ............................................

2,484.7

1,970.7

1,628.6

1,757.2

1,488.6

Non-Current Liabilities
Borrowings ................................................................
Other Payables ..........................................................
Provision for Employee Benefits ...............................
Deferred Tax Liability ..............................................
Other Non-Current Liabilities ..................................

1,377.6
191.9
58.7
68.2
27.8

1,117.3
159.5
51.7
49.9
14.7

1,303.8
165.7
54.0
52.3
9.3

768.4
144.4
51.3
42.8
9.7

908.1
126.6
40.1
33.8
98.6

Total Non-Current Liabilities ....................................

1,724.1

1,393.1

1,585.2

1,016.6

1,207.2

Total Liabilities .........................................................

4,208.8

3,363.8

3,213.8

2,773.8

2,695.9

Equity
Issued Capital............................................................
Inflation Adjustment to Issued Capital ....................
Share Premium..........................................................
Fair Value Reserve....................................................
Currency Translation Differences .............................
Restricted Reserves Allocated from Net Income......
Other Reserves ..........................................................
Accumulated Profits..................................................
Net Income ..............................................................

592.1
63.6
3,137.7
4.7
(95.9)
209.6
(5.7)
1,908.0
335.7

450.0
63.6

16.2
197.0
177.0
(5.7)
1,820.2
241.5

450.0
63.6

7.8
289.8
177.0
(5.7)
1,820.2
341.2

450.0
63.6

19.6
(4.1)
138.4
(5.7)
1,601.7
503.6

450.0
63.6

17.3
(18.0)
108.2
4.9
1,378.3
422.6

Equity Attributable to Equity Holders of the Parent .

6,149.7

2,959.8

3,143.9

2,767.1

2,426.9

Minority Interests .....................................................

71.9

47.3

63.0

47.9

307.3

Total Equity...............................................................

6,221.5

3,007.1

3,206.9

2,815.0

2,734.2

Total Liabilities and Equity .......................................

10,430.4

6,370.9

6,420.7

5,588.8

5,430.0

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

27

Summary Consolidated Cash Flow Data


Six months
ended 30 June
2012
Cash flow from operating activities ..........................
Net cash used in investing activities .........................
Net cash used financing activities .............................
Currency translation differences on cash and cash
transactions ...............................................................
Net increase in cash and cash equivalents ................
Cash and cash equivalents at the beginning of the
period ........................................................................
Cash and cash equivalents at the end of the period.

2011

2011
(TRL millions)
663.9
(539.6)
(242.6)

477.5
(341.5)
(30.2)

240.1
(307.9)
(237.1)

(39.9)
105.8

23.4
(304.9)

95.2
(118.2)

913.2
979.0

936.2
654.7

936.2
913.2

28
c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

Year ended 31 December


2010

2009

809.2
(631.2)
(297.6)

937.7
(417.3)
(129.6)

7.3
(119.6)

(29.5)
390.9

1,048.5
936.2

687.1
1,048.5

PRESENTATION OF INFORMATION
Presentation of Financial Information
Financial Information
As the Company is listed on the Istanbul Stock Exchange the Consolidated Financial Statements are
required to be prepared in conformity with the financial reporting standards accepted by the CMB
(CMB Financial Reporting Standards). The 2012 Interim Financial Statements were prepared in
accordance with CMB Financial Reporting Standards. The Audited Consolidated Financial
Statements and the 2012 Interim Financial Statements have not been prepared in accordance with the
international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC)
No 1606/2002. There may be material differences in the financial information had Regulation (EC)
No 1606/2002 been applied to the historical financial information of the Company. See Appendix
ASummary of Certain Differences between IFRS and CMB Financial Reporting Standards for a
discussion of the significant differences between International Financial Reporting Standards (IFRS)
as promulgated by the International Accounting Standards Board (IASB) and CMB Financial
Reporting Standards.
The Groups consolidated financial statements include:
*

the Groups audited annual consolidated financial statements as at and for the year ended
31 December 2011, which include comparative financial information as at and for the year
ended 31 December 2010 (the 2011 Audited Consolidated Financial Statements);

the Groups audited annual consolidated financial statements as at and for the year ended
31 December 2010, which include comparative financial information as at and for the year
ended 31 December 2009 (the 2010 Audited Consolidated Financial Statements and, together
with the 2011 Audited Consolidated Financial Statements, the Audited Consolidated Financial
Statements); and

the Groups unaudited condensed consolidated interim financial statements as at and for the six
months ended 30 June 2012, which include comparative financial information as at and for the
six months ended 30 June 2011 (the 2012 Interim Financial Statements, and together with the
Audited Consolidated Financial Statements, the Consolidated Financial Statements).

In addition, unaudited pro forma consolidated financial information as of and for the year ended
31 December 2011 and for the six months ended 30 June 2012 is included in this Offering Circular
(the Pro Forma Financial Information). The Pro Forma Financial Information is presented for
comparative purposes only in order to provide information about what the Groups results of
operations might have looked like had the acquisition of SABMiller Russia occurred as of 1 January
2011, as the Group believes this provides a more meaningful discussion of its business postacquisition. The pro forma adjustments are based upon available information and certain assumptions
that management believes are reasonable, although such pro forma statements are not prepared in a
format in compliance with the rules of the US Securities and Exchange Commission. The Pro Forma
Financial Information has been derived from historical financial information of each of the Group
and SABMiller Russia. The pro forma financial information should not be relied upon as an
indication of what the Groups results of operations might have been had the acquisition occurred at
such date, nor should it be used as an indication of the results the Group might achieve in the
future. See Pro Forma Financial Information. See also The Group and Its BusinessStrategic
Alliance with SABMiller for information about the acquisition of SABMiller Russia.
Basaran Nas Bagmsz Denetim ve Serbest Muhasebeci Mali Musavirlik A.S (PwC Turkey), a
member of PricewaterhouseCoopers (PwC), audited and issued auditors reports with respect to the
annual consolidated financial statements as at and for the years ended 31 December 2011 and 2010.
PwC Turkey reviewed and issued a review report with respect to the unaudited condensed
consolidated interim financial statements as of and for the six months period June 30, 2012. The term
review refers to limited procedures performed in accordance with principles and standards on the
review of interim financial statements as set out in Section 34 of the Communique No: X-22 on the
auditing standards issued by the Capital Markets Board for a review of such information and does
not constitute an audit.

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

29

Guney Basmsz Denetim ve Serbest Muhasebeci Mali Musavirlik A.S., an affiliated firm of Ernst &
Young International (E&Y), audited and issued an auditors report with respect to the annual
consolidated financial statements as at and for the years ended 31 December 2009. The Companys
Board of Directors, in accordance with provisions on the mandatory rotation of auditors in force at
such time, selected PwC Turkey to be its independent auditors in October 2009.
The Group consists of the Company and its subsidiaries and joint ventures. See Note 1 of the 2012
Interim Financial Statements for lists of subsidiaries that are fully consolidated with the results of the
Company and of joint ventures that are proportionately consolidated with the results of the Company
in accordance with the Companys interest in the joint venture. In particular, the results of CCI and
Anadolu Etap are proportionately consolidated in accordance with the Companys interest in the joint
venture (50.26% and 33.33%, respectively).
Certain of the comparative data for the six months ended 30 June 2011, which are included in the
2012 Interim Financial Statements, have been restated to reflect the restatement of temporarily
recognised goodwill. In March 2011 CCIs 30% indirect share in CC Beverage Limited (CCBL)
increased to 100% (see Note 3 of the 2012 Interim Financial Statements for further information). Fair
value exercise of the related acquisition was completed as of 30 September 2011. Accordingly,
temporarily recognised goodwill during the year has been restated in accordance with IFRS 3
Business Combinations. In accordance with the change in the scope of consolidation, the Groups
share of the fair value increase amounting to TRL 3.0 million arising from the fair value of net
assets, relating to the formerly 30% share owned by CCI, was reflected in the consolidated interim
income statement, consolidated interim comprehensive income statement and consolidated interim
statement of changes in equity for the six-month period ended 30 June 2011. This adjustment is
shown in Note 14 of the 2012 Interim Financial Statements.
The auditors report on the 2010 Audited Consolidated Financial Statements contains an other
matter paragraph, noting that the Groups financial statements as at and for the year ended
31 December 2009 were audited by other auditors (E&Y), whose report expressed an unqualified
opinion on those financial statements.
The Consolidated Financial Statements, together with the respective notes thereto, are included in the
Offering Circular beginning on page F-2.
Rounding
Certain numerical figures set out in this Offering Circular, including financial data presented in
thousands and millions and percentages, have been subject to rounding adjustments and, as a result,
the totals of the data in this Offering Circular may vary slightly from the actual arithmetic totals of
such information. Percentages and amounts reflecting changes over time periods relating to financial
and other data set out in Operating and Financial Review are calculated using the numerical data in
the Consolidated Financial Statements or the tabular presentation of other data (subject to rounding)
contained in this Offering Circular, as applicable, and not using the numerical data in the narrative
description thereof. Accordingly, in certain instances the sum of the numbers in a column or a row in
tables contained in this Offering Circular may not conform exactly to the total figure given for that
column or row. Some percentages in tables in this Offering Circular have also been rounded and
accordingly the totals in these tables may not add up to 100%.
Currency Presentation and Exchange Rate Information
In this Offering Circular, all references to Lira or TRL are to the lawful currency of Turkey; all
references to US dollars, US$ OR USD are to the lawful currency of the United States of
America; all references to Euro, d or EUR are to the single currency of the participating
member states of the European and Monetary Union of the Treaty Establishing the European
Community, as amended from time to time; and all references to Ruble or RUR are to the
lawful currency of the Russian Federation.
Available Information
THE COMPANY HAS AGREED THAT, FOR SO LONG AS ANY NOTES ARE
RESTRICTED SECURITIES WITHIN THE MEANING OF RULE 144(a)(3) UNDER THE
SECURITIES ACT, IT WILL, DURING ANY PERIOD IN WHICH IT IS NEITHER SUBJECT
TO AND IN COMPLIANCE WITH SECTION 13 OR 15(D) OF THE UNITED STATES
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE EXCHANGE ACT), NOR
EXEMPT FROM REPORTING PURSUANT TO RULE 12g32(b) THEREUNDER, FURNISH

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

30

UPON REQUEST TO ANY HOLDER OR BENEFICIAL OWNER OF NOTES, OR ANY


PROSPECTIVE PURCHASER DESIGNATED BY ANY SUCH HOLDER OR BENEFICIAL
OWNER, THE INFORMATION SPECIFIED IN, AND MEETING THE REQUIREMENTS OF,
RULE 144A(d)(4) UNDER THE SECURITIES ACT.

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

31

FORWARD-LOOKING STATEMENTS
This Offering Circular contains statements that may be considered to be forward-looking
statements (as that term is defined in the US Private Securities Litigation Reform Act of 1995)
relating to the Groups financial position, business strategy, plans and objectives of management for
future operations (including development plans and objectives relating to the Groups businesses).
When used in this Offering Circular, the words anticipates, estimates, expects, believes,
intends, plans, aims, may, will, should and any similar expression generally identify
forward-looking statements. Forward-looking statements appear in a number of places throughout
this Offering Circular, including (without limitation) under Risk Factors, Use of Proceeds,
Operating and Financial Review and The Group and Its Business and include, but are not limited
to, statements regarding:
*

strategy and objectives;

trends affecting the Groups results of operations and financial condition;

future developments in the markets in which the Group operates;

anticipated regulatory changes in the markets in which the Group operates; and

the Groups potential exposure to market risk and other risk factors.

Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ
materially from those expressed in these forward-looking statements.
The Company has identified some of the risks inherent in these forward-looking statements under
Risk Factors. Important factors that could cause actual results to differ materially from those in
these forward-looking statements include, among others:
*

economic and political developments in the markets in which the Group operates, particularly
Turkey and Russia;

seasonal consumption cycles and weather conditions;

availability and price of raw materials and packaging;

changes in taxation for the Groups products and in the beer and beverage industry generally;

changes or further restrictions on beer advertising, sales or consumption;

increased competition;

currency exchange rate exposure;

relations with The Coca-Cola Company;

operational or other risks that could cause substantial losses, including earthquakes in Turkey;
and

the Groups ability to identify and successfully complete acquisitions and subsequently integrate
such acquisitions.

Should one or more of these factors or uncertainties materialise, or should underlying assumptions
prove incorrect, actual results may vary materially from those described herein as anticipated,
believed, estimated, expected or intended. There may be other risks, including some risks of which the
Company is unaware, that could adversely affect the Groups results or the accuracy of forwardlooking statements in this Offering Circular. Therefore, potential investors should not consider the
factors discussed here or under Risk Factors to be a complete set of all potential risks or
uncertainties of investing in the Notes.
Potential investors should not place undue reliance upon any forward-looking statements. The
Company does not have any intention or obligation to update forward-looking statements to reflect
new information or future events or risks that may cause the forward-looking events discussed in this
Offering Circular not to occur or to occur in a manner different from what the Company currently
expects.

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

32

USE OF PROCEEDS
The Company will use the net proceeds from the issuance of the Notes to repay certain existing
indebtedness and for general corporate purposes, including paying expenses relating to the issuance of
the Notes.

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

33

EXCHANGE RATES
The table below sets forth, for the periods indicated, the period-end, average and high and low rates
determined by the Central Bank of Turkey, in each case for the purchase of TRL, all expressed in
TRL per US Dollar. The TRL/US dollar exchange rate determined by the Central Bank on
19 October 2012 was TRL 1.7933 to US$1.00. The rates may differ from the actual rates used in the
preparation of the Companys Consolidated Financial Statements and other financial information
appearing in this Offering Circular. The Issuer does not represent that the US dollar amounts referred
to below could be or could have been converted into TRL at any particular rate indicated or any
other rate at all.
TRL per US$1.00
Period

High

October 2012 (through 19 October 2012) .............


September 2012......................................................
August 2012...........................................................
July 2012................................................................
January to June 2012.............................................
2011 .......................................................................
2010 .......................................................................
2009 .......................................................................
2008 .......................................................................
2007 .......................................................................

1.8126
1.8151
1.8285
1.8162
1.8889
1.9065
1.5978
1.7958
1.6956
1.4498

Low
1.7886
1.7820
1.7752
1.7925
1.7340
1.4955
1.3884
1.4365
1.1449
1.1626

Average(1)
1.8001
1.7956
1.7968
1.8049
1.7942
1.6700
1.5004
1.5471
1.2929
1.3015

Period
end(2)
1.7933
1.7820
1.8182
1.8011
1.8153
1.8889
1.5460
1.5057
1.5123
1.1647

(1) For each of the years 2007 to 2011, this represents the yearly averages of the monthly averages of the TRL/US$ dollar exchange
rates determined by the Central Bank for the relevant period, which monthly averages were computed by calculating the average
of the daily TRL/US$ dollar exchange rates on the business days of each month during the relevant period. For the months (or
periods) of 2012, this represents the monthly (or period) averages of the TRL/US$ dollar exchange rates determined by the Central
Bank for such month (or period), which averages were computed in the same manner described above.
(2) Represents the TRL/US$ dollar exchange rates for the purchase of US Dollars determined by the Central Bank on the last
working day of the relevant period.

Fluctuations in the exchange rates between the Lira and US dollar in the past are not necessarily
indicative of fluctuations that may occur in the future. No representation is made that Lira amounts
referred to in this Offering Circular could have been or could be converted into US dollars at the
above exchange rates or at any other rate.

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

34

CAPITALISATION OF THE GROUP


The following table set forth the capitalisation of the Group as of 30 June 2012. The historical
financial information as of the six months ended 30 June 2012 has been extracted from the 2012
Interim Financial Statements, which are included elsewhere in this Offering Circular. Prospective
investors should read the following table in conjunction with Selected Financial Information,
Operating and Financial Review and the Consolidated Financial Statements, together with the
respective notes thereto, included elsewhere in this Offering Circular.
As at
30 June 2012
Cash and Cash Equivalents ..............................................................................................
Financial Investments(1) ....................................................................................................
Total Current Borrowings(2) .............................................................................................
Total Non-Current Borrowings(3) .....................................................................................
Equity
Equity Attributable to Equity Holders of the Parent.......................................................
Minority Interests ............................................................................................................

(TRL millions)
983.2
24.0
837.7
1,377.6
6,149.7
71.9

Total equity........................................................................................................................

6,221.5

Total capitalisation(4) .........................................................................................................

8,436.8

(1) Financial investments mainly comprise current financial investments such as time deposits with a maturity of more than three
months and investment funds held and non-current financial investments such as the Alternatifbank A.S. shares held by the
Group.
(2) Total current borrowings includes the current portion of non-current borrowings.
(3) Total non-current borrowings is long-term borrowings, net of current portion.
(4) Total capitalisation is the sum of total current borrowings, total non-current borrowings and total equity.

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

35

SELECTED FINANCIAL INFORMATION


This section should be read together with the information contained in Presentation of Information,
Use of Proceeds, Capitalisation of the Group, Summary Financial Information, Operating and
Financial Review, the 2012 Interim Financial Statements and the Audited Consolidated Financial
Statements and the respective notes thereto included elsewhere in this Offering Circular.
The following selected consolidated historical financial information as at and for the years ended
31 December 2011, 2010 and 2009 has been extracted from the Audited Consolidated Financial
Statements, which are included elsewhere in this Offering Circular. The unaudited selected
consolidated historical interim financial information as at and for the six months ended 30 June 2012
and 2011 has been extracted from the 2012 Interim Financial Statements, which are included
elsewhere in this Offering Circular. Investors should not rely on interim results as being indicative of
results the Group may expect for the full year.
Selected Consolidated Income Statement Data
Six months ended
30 June

Year ended 31 December

2012

2011

2011

2010

2009

Sales ..........................................................................
Cost of Sales .............................................................

3,205.8
(1,598.9)

2,281.9
(1,158.3)

4,168.8
(2,051.3)

3,811.1
(1,907.9)

Gross Profit from Operations ...................................


Marketing, Selling and Distribution Expenses .........
General and Administration Expenses......................
Other Operating Income ...........................................
Other Operating Expenses ........................................

1,606.9
(857.9)
(321.6)
24.4
(20.1)

1,123.6
(579.1)
(201.0)
17.1
(21.0)

2,281.7
(1,262.8)
(414.8)
43.1
(42.1)

2,117.4
(1,060.5)
(354.0)
25.0
(34.4)

1,903.1
(928.1)
(322.1)
41.5
(46.5)

Profit from Operations ..............................................


Loss from Associates ................................................
Financial Income.......................................................
Financial Expenses....................................................

431.7
(4.5)
203.4
(193.5)

339.6
(3.3)
119.6
(127.5)

605.1
(6.8)
240.7
(374.0)

693.6
(17.9)
244.3
(261.5)

648.0
(10.9)
375.1
(468.4)

Profit Before Tax From Continuing Operations ........


Current Period Tax Expense.....................................
Deferred Tax Income/(Expense) ...............................

437.1
(123.6)
34.7

328.4
(84.6)
6.0

465.0
(117.5)
12.0

658.6
(127.8)
(12.3)

543.8
(127.3)
5.8

Profit for the Year .....................................................


Other Comprehensive Income:
Currency Translation Differences .............................
Revaluation Due to Change in Scope of
Consolidation ............................................................
Value Increase/(Decrease) in Available-for-Sale
Securities ...................................................................
Tax Income /(Expense) on Other Comprehensive
Income.......................................................................

348.1

249.8

359.5

518.4

422.3

(388.8)

204.4

303.2

25.2

(57.8)

4.9

(3.3)

(3.5)

(12.4)

2.3

17.4

0.2

0.2

0.6

(0.1)

(0.9)

(TRL millions)
4,761.3
(2,479.6)

Other Comprehensive Income, (Net of Taxes) ...........

(392.0)

201.1

291.5

27.4

(36.3)

Total Comprehensive Income ....................................

(43.9)

450.9

651.0

545.9

385.9

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

36

Selected Consolidated Balance Sheet Data


As at 30 June
2012

As at 31 December

2011

2011

2010

2009

(TRL millions)
Assets
Current Assets
Cash and Cash Equivalents ......................................
Financial Investments ...............................................
Trade Receivables .....................................................
Due from Related Parties .........................................
Other Receivables......................................................
Inventories.................................................................
Other Current Assets ................................................

983.2
2.4
1,238.0
0.0
25.1
690.0
325.8

656.7
17.8
883.0
0.1
18.1
653.5
219.8

917.6
22.6
578.4
0.1
16.9
561.5
246.1

939.3
55.1
518.3
0.3
7.9
467.9
152.0

1,053.3
21.2
421.5
0.8
5.8
412.4
141.6

Total Current Assets..................................................

3,264.5

2,449.1

2,343.3

2,140.8

2,056.7

Non-Current Assets
Other Receivables......................................................
Financial Investments ...............................................
Investments in Associates .........................................
Biological Assets .......................................................
Property, Plant and Equipment ................................
Intangible Assets .......................................................
Goodwill....................................................................
Deferred Tax Asset ...................................................
Other Non-Current Assets ........................................

1.9
21.6
13.5
8.1
3,415.9
592.8
2,891.5
74.0
146.4

1.2
33.9
20.9
3.3
2,366.4
403.7
955.6
51.5
85.4

1.6
25.2
18.4
6.5
2,510.3
447.0
912.6
62.4
93.4

1.3
37.5
21.4
1.5
2,043.8
361.9
871.1
40.0
69.5

0.9
40.1
45.4

1,981.6
357.0
855.6
46.9
45.9

Total Non-Current Assets ..........................................

7,165.9

3,921.8

4,077.5

3,448.0

3,373.4

Total Assets ...............................................................

10,430.4

6,370.9

6,420.7

5,588.8

5,430.0

Liabilities
Current Liabilities
Borrowings ................................................................
Trade Payables ..........................................................
Due to Related Parties..............................................
Other Payables ..........................................................
Provision for Corporate Tax ....................................
Provision ...................................................................
Other Current Liabilities...........................................

837.7
563.9
67.4
663.3
63.5
64.9
224.1

712.5
461.5
11.1
482.0
38.6
50.9
214.2

795.6
307.6
9.2
342.8
9.4
28.0
136.0

996.1
253.3
8.6
290.8
15.3
23.7
169.3

949.3
234.9
15.0
202.3
16.5
20.3
50.3

Total Current Liabilities ............................................

2,484.7

1,970.7

1,628.6

1,757.2

1,488.6

Non-Current Liabilities
Borrowings ................................................................
Other Payables ..........................................................
Provision for Employee Benefits ...............................
Deferred Tax Liability ..............................................
Other Non-Current Liabilities ..................................

1,377.6
191.9
58.7
68.2
27.8

1,117.3
159.5
51.7
49.9
14.7

1,303.8
165.7
54.0
52.3
9.3

768.4
144.4
51.3
42.8
9.7

908.1
126.6
40.1
33.8
98.6

Total Non-Current Liabilities ....................................

1,724.1

1,393.1

1,585.2

1,016.6

1,207.2

Total Liabilities .........................................................

4,208.8

3,363.8

3,213.8

2,773.8

2,695.9

Equity
Issued Capital............................................................
Inflation Adjustment to Issued Capital ....................
Share Premium..........................................................
Fair Value Reserve....................................................
Currency Translation Differences .............................
Restricted Reserves Allocated from Net Income......
Other Reserves ..........................................................
Accumulated Profits..................................................
Net Income ..............................................................

592.1
63.6
3,137.7
4.7
(95.9)
209.6
(5.7)
1,908.0
335.7

450.0
63.6

16.2
197.0
177.0
(5.7)
1,820.2
241.5

450.0
63.6

7.8
289.8
177.0
(5.7)
1,820.2
341.2

450.0
63.6

19.6
(4.1)
138.4
(5.7)
1,601.7
503.6

450.0
63.6

17.3
(18.0)
108.2
4.9
1,378.3
422.6

Equity Attributable to Equity Holders of the Parent .

6,149.7

2,959.8

3,143.9

2,767.1

2,426.9

Minority Interests .....................................................

71.9

47.3

63.0

47.9

307.3

Total Equity...............................................................

6,221.5

3,007.1

3,206.9

2,815.0

2,734.2

Total Liabilities and Equity .......................................

10,430.4

6,370.9

6,420.7

5,588.8

5,430.0

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

37

Selected Consolidated Cash Flow Data


Six months ended
30 June
2012
Cash flow from operating activities ..........................
Net cash used in investing activities .........................
Net cash used financing activities .............................
Currency translation differences on cash and cash
transactions ...............................................................
Net increase in cash and cash equivalents ................
Cash and cash equivalents at the beginning of the
period ........................................................................
Cash and cash equivalents at the end of the period.

2011
(TRL millions)
663.9
(539.6)
(242.6)

477.5
(341.5)
(30.2)

240.1
(307.9)
(237.1)

(39.9)
105.8

23.4
(304.9)

95.2
(118.2)

913.2
979.0

936.2
654.7

936.2
913.2

38
c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

2011

Year ended 31 December


2010

2009

809.2
(631.2)
(297.6)

937.7
(417.3)
(129.6)

7.3
(119.6)

(29.5)
390.9

1,048.5
936.2

687.1
1,048.5

PRO-FORMA FINANCIAL INFORMATION


The unaudited pro forma consolidated financial information has been prepared on the basis described in
this Pro Forma Financial Information section. The pro forma adjustments are based upon available
information and certain assumptions that management believes are reasonable, although such pro
forma statements are not prepared in a format in compliance with the rules of the US Securities and
Exchange Commission. The pro forma financial information has been derived from historical financial
information of each of the Group and SABMiller Russia, after performing a number of pro forma
adjustments, and should be read in conjunction with Operating and Financial Review and the
Consolidated Financial Statements, together with the respective notes thereto, included elsewhere in this
Offering Circular.
The pro forma financial information is presented for comparative purposes only in order to provide
information about what the Groups results of operations might have looked like had the acquisition of
SABMiller Russia occurred as of 1 January 2011, as the Group believes this provides a more meaningful
discussion of its business post-acquisition. The pro forma financial information should not be relied upon
as an indication of what the Groups results of operations might have been had the acquisition occurred
at such date, nor should it be used as an indication of the results the Group might achieve in the future.
The following unaudited pro forma consolidated financial information has been prepared in
accordance with the CMB Financial Reporting Standards and gives effect to the acquisition of
SABMiller Russia and the brands acquired from SABMiller. See The Group and Its Business
Strategic Alliance with SABMiller. The pro forma consolidated financial information presented below
excludes the effects of the acquisition of MBU.
The unaudited pro forma consolidated income statement for the year ended 31 December 2011 and
the unaudited pro forma consolidated income statement for the six months ended 30 June 2012 are
based on the acquisition method of accounting under IFRS 3 Business Combinations, after giving
effect to the pro forma adjustments described in the accompanying notes. The unaudited pro forma
income statement for the twelve months ended 31 December 2011 is based on and derived from the
Groups historical consolidated income statement for the twelve months ended 31 December 2011,
which is included elsewhere in this Offering Circular, and the historical income statement for the
twelve months ended 31 December 2011 of SABMiller Russia prepared in accordance with the CMB
Financial Reporting Standards, as derived from SABMiller Russias internal reporting according to
the CMB Financial Reporting Standards. The unaudited pro forma consolidated income statement for
the six-month period ended 30 June 2012 is based on and derived from the historical consolidated
income statement for the six months ended 30 June 2012 of the Group, which is included elsewhere
in this Offering Circular, and the historical income statement for the two month period ended 29
February 2012 of SABMiller Russia prepared in accordance with the CMB Financial Reporting
Standards, as derived from SABMiller Russias internal reporting according to the CMB Financial
Reporting Standards. The functional and presentation currency of SABMiller Russia is the Russian
Ruble. However in order to incorporate the historical income statements of SABMiller Russia into
the pro forma consolidated income statement, the historical income statements of SABMiller Russia
were converted into TRL by using the daily average exchange rates published by the central banks of
each country.
These unaudited pro forma consolidated financial information should be read in conjunction with the
accompanying notes and the Consolidated Financial Statements (and related notes) of the Group
prepared in accordance with the CMB Financial Reporting Standards included elsewhere in this
Offering Circular. The unaudited pro forma consolidated financial information is presented for
illustrative purposes only. This information addresses a hypothetical situation and, therefore, does not
represent the Groups actual financial position or results. It is not necessarily indicative of the
operating results or financial position that might have occurred had the acquisition occurred on the
date indicated, nor is it necessarily indicative of the future operating results or financial position of
the Group.
The pro forma adjustments reflecting the acquisition of SABMiller Russia under the acquisition
method of accounting are based on certain estimates and assumptions. Acquisition accounting is
dependent upon certain valuations and other studies that have yet to progress to a stage where there
is sufficient information for a definitive measurement. As the fair value appraisal of the identifiable
assets, liabilities and contingent liabilities is still in process, the pro-forma adjustments are preliminary
and have been made solely for the purposes of providing unaudited pro forma financial information.
Given the purchase price allocation is still preliminary at this point in time, the difference between

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

39

the total consideration of the business combination and Anadolu Efes share in the historical carrying
value of SABMiller Russia identifiable assets, liabilities and contingent liabilities and the acquired
brand names is temporarily recorded as goodwill amounting to TRL 2,031.5 million. Differences
between these preliminary estimates and final acquisition accounting may occur and these differences
may have a material impact on the accompanying unaudited pro forma financial information and the
Groups future results of operation and financial position. Management believes that the assumptions
underlying the pro forma assumptions provide a reasonable basis for presenting all of the significant
effects of the transactions contemplated and that the pro forma adjustments give appropriate effect to
those assumptions and are properly applied in the unaudited pro forma consolidated financial
statements.
The estimates and assumptions underlying the unaudited pro forma consolidated financial statements
are preliminary and have been made solely for the purposes of developing such pro forma
information. The pro forma adjustments are described in the accompanying footnotes. The pro forma
adjustments included in the unaudited pro forma consolidated financial information have been limited
to only those adjustments that are directly attributable to the transaction, factually supportable and
expected to have a continuing impact on the Groups financial results. In addition, the unaudited pro
forma financial statements do not include the impact of any potential operating efficiencies, savings
from expected synergies, any costs necessary to achieve savings from expected synergies, nor do the
unaudited pro forma consolidated financial statements include the portion of any restructuring and
integration costs expected to be incurred by the Group subsequent to 30 June 2012.
The following unaudited pro forma consolidated income statements give effect to the acquisition as if
it had occurred as of 1 January 2011.
Unaudited Pro Forma Consolidated Income Statement for the year ended 31 December 2011

The Group
Sales ..................................................................
Cost of Sales .....................................................
Gross Profit from Operations ............................
Marketing, Selling and Distribution
Expenses ........................................................
General and Administration Expenses ..........
Other Income/Expenses .................................
Profit from Operations...................................
Loss from Associates.....................................
Financial Income/Expenses ...........................
Profit Before Tax from Continuing
Operations......................................................
Tax Income /(Expense), net(1) .......................
Profit For The Year .......................................
Attributable to:
Non controlling interests...............................
Equity holders of the parent .........................
Weighted average number of shares(2) ..........
Earnings per share (TRL) .............................

SABMiller
Russia

Pro Forma
Adjustments

Pro Forma

(TRL million, except as noted)


4,761.3
1,057.7

(2,479.6)
(469.9)

2,281.7
587.8

5,818.9
(2,949.4)
2,869.5

(1,262.8)
(414.8)
1.0
605.1
(6.8)
(133.4)

(1,504.7)
(547.9)
(4.2)
812.7
(6.8)
(135.4)

(241.9)
(171.5)
(5.2)
169.1

(2.0)

38.5

38.5

465.0
(105.5)
359.5

167.1
106.0
273.1

38.5

38.5

670.5
0.5
671.0

18.3
341.2

273.1

38.5

18.3
652.7

450,000,000
0.7582

592,105,263
1.1024

(1) Tax income at SABMiller Russia includes tax income relating to a reversal of tax provision recognized during the fiscal year ended
31 December 2010. The tax provision has been reversed since the tax exposure has been removed.
(2) Earnings per share is calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year.

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

40

Unaudited Pro Forma Consolidated Income Statement for the six-month period ended 30 June 2012

The Group
Sales ..................................................................
Cost of Sales .....................................................
Gross Profit from Operations ............................
Marketing, Selling and Distribution
Expenses ........................................................
General and Administration Expenses ..........
Other Income/Expenses .................................
Profit from Operations ......................................
Loss from Associates.....................................
Financial Income/Expenses ...........................
Profit Before Tax from Continuing Operations .
Tax Income /(Expense), net...........................
Profit For The Year...........................................
Attributable to:
Non controlling interests...............................
Equity holders of the parent .........................
Weighted average number of shares(2) ..........
Earnings per share (TRL) .............................

SABMiller
Russia(1)

Pro Forma
Adjustments

(TRL million, except as noted)


3,205.8
128.6

(1,598.9)
(59.6)

1,606.9
69.0

Pro Forma
3,334.4
(1,658.5)
1,675.9

(857.9)
(321.6)
4.2
431.7
(4.5)
9.9
437.1
(88.9)
348.1

(27.9)
(29.7)
0.4
11.7

(0.3)
11.4
0.8
12.2

3.2

3.2

3.2

3.2

(885.8)
(348.1)
4.6
446.6
(4.5)
9.6
451.7
(88.1)
363.5

12.5
335.7

12.2

3.2

12.5
351.1

540,572,585
0.6209

592,105,263
0.5929

(1) For the two months ended 29 February 2012. SABMiller Russia was consolidated with the Group as of 1 March 2012.
(2) Earnings per share is calculated by dividing the profit for the period attributable to equity holders of the parent by the weighted
average number of ordinary shares outstanding during the period.

Notes to Unaudited Pro Forma Consolidated Financial Information


Description of Transaction
On 6 March 2012 after the required approval from the Turkish Competition Board related to the
alliance with SABMiller, control of SABMillers beer operations in Ukraine and Russia were
transferred to the Group (see The Group and Its BusinessStrategic Alliance with SABMiller).
SABMillers Russian operations are in the process of being integrated with the Groups existing
Russian operations and continued to operate immediately following the acquisition. In order to
finance the acquisition, EBIs respective share capital was increased in the amount of total US$1.859
million. The Company participated in the capital increase of EBI by contributing US$358.8 million in
cash and contributing US$1,500 million via loan notes. Euro-Asiens respective share capital was
increased by US$118 million contributed by EBI. Subsequently, EBI and Euro-Asien acquired
SABMiller Russia for a total consideration in the amount of US$1,757 million which is equivalent to
TRL 3,103.0 million, including the acquisition of beer brands in Russia amounting to US$86.4 million
and post acquisition costs. In addition EBI acquired a 99.91% share in MBU in the amount of
US$75 million. Additionally the shareholder loan from SABMiller plc to MBU amounting to
US$99.6 million was settled by EBI.
On 6 March 2012 it was resolved to increase the Companys issued capital to TRL 592.105 million,
while the shareholders right to purchase new shares were restricted. The newly-issued 142,105,263
bearer shares, which are above nominal value, were allocated in the name of SABMiller Anadolu Efes
Limited (SABMiller AEL), a subsidiary of SABMiller. SABMiller AEL fulfilled its capital and
premium commitment amounting to TRL 3,279,789 by settlement of vendor loan notes that had been
issued to SABMiller in course of the transaction at 6 March 2012 and the issued shares were
transferred to SABMiller AEL in the Istanbul Stock Exchange Wholesale Market on 14 March 2012.
All share transfers planned in accordance with the strategic alliance have been completed as of this
date.
SABMiller Russia has been included in the consolidation by using the full consolidation method when
control rights were transferred to the Group after the 89% share purchase by EBI and 11% share
purchase by Euro Asien. MBU has been included in the consolidation by using the full consolidation
method after the completion of the 99.91% share acquisition by EBI became effective.

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

41

Accounting Policies
Upon consummation of the share exchange and initial consolidation, the Company and SABMiller
Russia have reviewed their accounting policies. As a result of that review, no major differences have
been identified. As such, the unaudited pro forma consolidated financial information does not assume
any material differences in accounting policies.
Consideration Transferred
The following consideration has been transferred:
SABMiller
Russia
Total Consideration transferred........................................................................................
Cash acquired....................................................................................................................
Net Consideration Transferred...........................................................................................

(TRL millions)
3,103.0
(41.8)
3,061.3

Estimate of Assets Acquired and Liabilities Assumed


Since a fair value appraisal of the identifiable assets, liabilities and contingent liabilities of SABMiller
Russia is in progress, the Group has accounted for the acquisition based on the carrying values of
identifiable assets, liabilities and contingent liabilities on SABMiller Russias financial statements in
accordance with IFRS 3 Business Combinations. As such, the difference between total
consideration of the business combination and the Groups share in the carrying value of SABMiller
Russias identifiable assets, liabilities and contingent liabilities is temporarily recorded as goodwill.
SABMiller
Russia
Cash and cash equivalents ................................................................................................
Trade and other receivables ..............................................................................................
Due from related parties ...................................................................................................
Inventories.........................................................................................................................
Other assets .......................................................................................................................
Property, plant and equipment .........................................................................................
Intangible assets ................................................................................................................
Financial liabilities ............................................................................................................
Trade payables ..................................................................................................................
Due to related parties........................................................................................................
Other liabilities ..................................................................................................................
Deferred tax liability .........................................................................................................
Carrying value of net assets acquired ...............................................................................

(TRL million)
41.8
101.9
3.3
75.4
37.3
911.9
165.2
(30.5)
(119.8)
(11.0)
(69.2)
(34.8)
1,071.6

Total consideration.............................................................................................................

3,103.0

Groups share in net assets.................................................................................................

(1,071.6)

Goodwill arising from acquisition.......................................................................................

2,031.5

Unaudited Pro Forma Income Statement Adjustments


For the Unaudited Pro Forma Consolidated Income Statement for the year ended 31 December 2011,
the pro forma adjustments include management fee income accrual and elimination and royalty
income accrual and elimination:
*

Management fee elimination: This adjustment reverses management fee expenses amounting to
TRL 26.9 million incurred by SABMiller Russia during fiscal year 2011 relating to technical
management consultancy services provided by the SABMiller group.
Subsequent to the
acquisition, technical management consultancy services are provided by the Group to SABMiller
Russia, so management fees are eliminated in consolidation for purposes of the Groups

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

42

consolidated financial statements. The above-mentioned management fee income would be


recognised in the financial statements of EBI. There would not be any tax effect of this income
recognition as EBI has carry-forward tax losses that are utilised against taxable profit at the
EBI level.
*

Royalty fee elimination: This adjustment reverses royalty fee expenses amounting to TRL 11.5
million incurred by SABMiller Russia during fiscal year 2011 for the use of the brands
according to a royalty agreement between SABMiller Russia and the SABMiller group. This
adjustment reflects the effect of the acquisition of the brands that are subject to the payment of
the royalty fees by EBI. Subsequent to the acquisition, royalty fees and royalty expenses are
eliminated in consolidation for purposes of the Groups consolidated financial statements. The
above-mentioned royalty fee income would be recognised in the financial statements of EBI,
which acquired the brands from SABMiller group companies. There would not be any tax effect
of this income recognition as EBI has carry forward tax losses which are utilised against taxable
profit at the EBI level.

For the Unaudited Pro Forma Consolidated Income Statement for the six-month period ended
30 June 2012, the only pro forma adjustment is royalty income accrual and elimination.
*

Royalty fee elimination: This adjustment reverses royalty fee expenses amounting to TRL 3.2
million incurred by SABMiller Russia for the period prior to the brands being owned by EBI
and for the use of the brands according to a royalty agreement between SABMiller Russia and
the SABMiller group. This adjustment reflects the effect of the acquisition of the brands that are
subject to the payment of the royalty fees by EBI. Subsequent to the acquisition, royalty fees
and royalty expenses are eliminated in consolidation for purposes of the Groups consolidated
financial statements. The above-mentioned royalty fee income would be recognised in the
financial statements of EBI, which acquired the brands from the SABMiller group. There would
not be any tax effect of this income recognition as EBI has carry forward tax losses which are
utilised against taxable profit at the EBI level.

c107169pu020Proof6:22.10.12_10:39B/LRevision:0OperatorHarS

43

OPERATING AND FINANCIAL REVIEW


The following is a discussion and analysis of the results of operations and financial condition of the
Group for the six month periods ended 30 June 2012 and 2011 and for the years ended 31 December
2011, 2010 and 2009. The following discussion and analysis should be read in conjunction with the 2012
Interim Consolidated Financial Statements and the Audited Consolidated Financial Statements included
elsewhere in this Offering Circular, including the notes thereto, the information relating to the Groups
business set out in The Group and Its Business and Risk Factors and other information about the
Group included elsewhere in this Offering Circular. This discussion and analysis contains forward-looking
statements about the Groups future sales revenues, operating results and expectations that have not been
audited and involve risks and uncertainties. The Groups actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors including, but not limited
to, the risks discussed in Risk Factors and in Forward-Looking Statements.
Overview
The Group is a leading international brewer and the majority shareholder of Coca-Cola Icecek A.S.,
the Coca-Cola bottler in Turkey and other countries, through which the Group conducts its soft
drinks activities. The Group operates 18 breweries, seven malteries and 22 bottling plants, and its
products and services are supplied to more than 600 million consumers across 16 principal markets.
The Group has a portfolio of 51 beer brands, which includes the Efes Pilsener international brand, as
well as a number of premium and local mainstream beer brands, many of which hold leading
positions in their respective market segments, as well as various licenses for international premium
brands for its principal markets, including SABMiller brands. The Group operates 18 breweries, seven
malteries and one hops processing plant in six markets and has sales operations in a further three
countries. As of 30 June 2012, the Group had an annual production capacity of approximately 43.7
million hectolitres of beer and approximately 290,000 tons of malt. In March 2012, in connection
with its strategic alliance with SABMiller, the Group acquired the Russian and Ukrainian brewing
operations of SABMiller and is in the process of integrating these operations.
The Group also produces, sells and distributes Coca-Cola trademarked soft drinks through CCI, its
joint venture with The Coca-Cola Company, in which the Group holds a controlling 50.3% interest.
These include sparkling beverages such as Coca-Cola, Sprite and Fanta, as well as still beverages such
as fruit juice, bottled water, energy and sports drinks, tea and iced tea. CCI and its subsidiaries and
joint ventures operate 22 bottling plants across 8 markets and have sales operations in two other
countries, giving CCI a presence in 10 markets, and as of 30 June 2012 had an annual bottling
capacity of approximately 1,154 million unit cases.
The Group has two business lines, beer and soft drinks, and reports these business lines in three
segments, Turkey Beer, International Beer and Soft Drinks.
Group Consolidation and Other Financial Statement Matters
The Group consists of the Company and its subsidiaries and joint ventures. See Note 1 of the 2012
Interim Financial Statements for lists of subsidiaries that are consolidated with the results of the
Company and of joint ventures that are proportionately consolidated with the results of the Company
in accordance with the Companys interest in the joint venture. In particular, the results of CCI and
Anadolu Etap are proportionately consolidated in accordance with the Companys interest in the joint
venture (50.3% and 33.3%, respectively).
As the Company is listed on the Istanbul Stock Exchange, the Consolidated Financial Statements are
required to be prepared in conformity with CMB Financial Reporting Standards. The 2012 Interim
Financial Statements were prepared in accordance with the CMB Financial Reporting Standards. See
Appendix ASummary of Certain Differences between IFRS and CMB Financial Reporting
Standards for a discussion of the differences between IFRS as promulgated by the IASB and the
CMB Financial Reporting Standards.
Certain of the comparative data for the six months ended 30 June 2011, which are included in the
2012 Interim Financial Statements, have been restated to reflect the restatement of temporarily
recognised goodwill. In March 2011, CCIs 30% indirect share in CCBL increased to 100% (see
Factors Affecting Comparability of the Groups ResultsCCI Holland Acquisitions and Note 3 of the
2012 Interim Financial Statements for further information). Fair value exercise of the related
acquisition was completed as of 30 September 2011. Accordingly, temporarily recognised goodwill
during the year has been restated in accordance with IFRS 3 Business Combinations. In accordance

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

44

with the change in the scope of consolidation, the Groups share of the fair value increase amounting
to TRL 3.0 million arising from the fair value of net assets, relating to the formerly 30% share owned
by CCI, was reflected in the consolidated interim income statement, consolidated interim
comprehensive income statement and consolidated interim statement of changes in equity for the sixmonth period ended 30 June 2011. This adjustment is shown in Note 14 of the 2012 Interim
Financial Statements.
See also Factors Affecting Comparability of the Groups ResultsStrategic Alliance with SABMiller
and Note 3 of the 2012 Interim Financial Statements for information about the acquisition by the
Group of the beer operations of SABMiller in Russia and Ukraine in March 2012 and their
consolidation in the Groups 2012 Interim Financial Statements. See also Pro Forma Financial
Information.
The auditors report on the 2010 Audited Consolidated Financial Statements contains an other
matter paragraph, noting that the Groups financial statements as at and for the year ended 31
December 2009 were audited by other auditors, whose report expressed an unqualified opinion on
those financial statements.
Recent Developments
Under certain agreements with the Group, the European Bank for Reconstruction and Development
(the EBRD) has the right to sell the shares it owns in the share capital of Moscow Efes Brewery
back to the Group, at a price to be determined by an independent valuation. The EBRD currently
owns 8.76% of MEB. The EBRD has informed the Group that it would like to exercise its option,
and management expects that this transaction will be completed by the end of 2012. The parties are
currently negotiating to finalise the terms of this transaction, but have agreed in principal that the
consideration for the shares will be converted into a 7 year loan from the EBRD to EBI. At
completion of this transaction, EBI would hold 99.7% of MEB.
On 21 September 2012, CCI announced the completion of an acquisition in Iraq, whereby CCI,
through its Iraqi subsidiary, acquired an effective interest of 65% of Al Waha for Soft Drinks,
Mineral Water and Juices LLC and its second and third bottling facilities in Iraq.
Factors Affecting Comparability of the Groups Results
Key factors affecting the comparability of the Groups results of operations include:
SABMiller Strategic Alliance
The Group has entered into a strategic alliance with SABMiller pursuant to which Anadolu Efes will
be responsible for SABMiller Russia and MBU in the regions in which the Group operates on behalf
of both parties. As part of the arrangement, SABMiller transferred all of its beer operations in
Russia and Ukraine to the Group and acquired 142,105,263 newly-issued shares in the share capital
of the Company, representing an interest of 24%. The Companys stock price on the closing date of
the transaction was TRL 25. The total proceeds received from SABMiller on the closing day was
approximately TRL 3.3 billion, resulting in an indicative Company share price of TRL 23.08. The
closing price of the Companys stock was TRL 20.60 the day prior to the initial announcement of the
transaction.
The Group acquired SABMillers Russian and Ukrainian beer operations as of 6 March 2012, but
such operations were consolidated into the Groups results as of 1 March 2012. See The Group and
Its BusinessStrategic Alliance with SABMiller and Note 3 of the 2012 Interim Financial Statements
for further information about the strategic alliance with SABMiller. See also Pro-Forma Financial
Information. The Group has sales revenue of TRL 3,205.8 million for the six months ended 30 June
2012. On the basis of the Groups pro forma consolidated income statement, for the six months ended
30 June 2012 the Group would have had sales revenue of TRL 3,334.4 million, had the acquisition of
SABMiller Russia occurred as of 1 January 2012.
EBI Delisting
In 2004, global depositary receipts representing approximately 29.78% of EBIs share capital were
listed on the London Stock Exchange. After acquiring shares representing approximately 3.25% in
2009, in 2010 the Company resolved to acquire the remaining shares of EBI that it did not already
own and through a tender offer process and subsequent Dutch squeeze-out procedure, it acquired the
remaining 26.53% shares of EBI for a consideration of TRL 290.5 million. The squeeze-out process
was completed in October 2010, at which time EBI became a wholly-owned subsidiary of the

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

45

Company. See Note 3 of the 2011 Audited Consolidated Financial Statements for additional
information about the delisting of EBI.
Knyaz Rurik Acquisition
In July 2010, EBI acquired 62.96% of the shares of OAO Knyaz Rurik (Knyaz Rurik), which owns
80.02% of ZAO Mutena Maltery (Mutena Maltery), for cash consideration of TRL 18.6 million.
Knyaz Rurik and Mutena Maltery are part of the Groups Russian beer operations. The Group now
owns 99.95% of Knyaz Rurik and following competition board approval, Knyaz Rurik was included
in the full consolidation in August 2010. Mutena Maltery was previously accounted for under noncurrent financial investments but is now fully consolidated. See Note 3 of the 2011 Audited
Consolidated Financial Statements for additional information about the acquisition of Knyaz Rurik.
CCI Holland Acquisitions
In March 2011, CCI Holland acquired 100% of the shares of SSG and 50% of the shares of CCBI
from The Coca-Cola Export Corporation for a cash consideration of TRL 35.4 million. CCBI, which
was previously 50% owned by CCI Holland, owned 60% of the shares of CCBL and SSG owned 40%
of the shares of CCBL as at 31 December 2010. Following this acquisition, CCIs indirect
shareholding in CCBL increased to 100% from 30%. Accordingly, from March 2011 CCI fully
consolidated SSG, CCBI and CCBL in its results. See Note 3 of the 2011 Audited Consolidated
Financial Statements for additional information about the acquisitions of CCI Holland. See above
Group Consolidation and Other Financial Statement Matters.
Factors Affecting the Groups Financial and Operating Performance
The Groups performance and results of operations have been and continue to be affected by a
number of factors, including sales volume, prices for the Groups products, economic conditions,
seasonal consumption cycles, weather conditions and the timing of Ramadan, changes in availability
and prices of raw materials and packaging, prices of water and energy, adverse changes in taxation,
restrictions on advertising of beer products, foreign currency fluctuations and changes in taxes. See
also Risk Factors.
Macroeconomic Conditions
The Groups results have been in the past, and future results are likely to be, affected by the
economic conditions, including slowing or negative GDP growth, inflation and declining GDP per
capita and disposable income, in one or more of the key markets in which the Group operates.
Beer and soft drinks consumption in many of the countries in which the Group operates is closely
linked to general economic conditions in these countries. For both the beer and the soft drinks
business, slowing or negative GDP growth can affect demand, and can adversely impact sales volumes
and prices that can be achieved for beer and soft drinks in the relevant markets. In general, beer and
soft drinks consumption levels tend to rise or fall in accordance with moves in per capita income, per
capita disposable income and the perception of economic conditions and prospects. Disposable income
levels in many of the countries in which the Group operates is lower than average disposable income
levels in more developed economies. Any decrease in disposable income resulting from deteriorating
economic conditions, increases in cost of living or taxes, or due to other factors, could adversely
affect demand for both beer and soft drinks, leading to lower consumption levels for both, or in
some cases, consumption of lower value beer brands.
The following table presents certain data regarding Turkey:
2006
GDP growth (real)(1) .....
Producer price index(1) ..
Consumer price index(1)

2007

6.9%
11.6%
9.7%

2008

4.7%
5.9%
8.4%

0.7%
8.1%
10.1%

(1) As published by TurkStat.


(2) Year on year increase from H1 2011 to H1 2012.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

46

2009
(4.8)%
5.9%
6.5%

2010
9.2%
8.9%
6.4%

2011
8.5%
13.3%
10.5%

H1 2012
3.1%(2)
6.4%(2)
8.9%(2)

The following table presents certain data regarding Russia:


2006
GDP growth (real)(1) .....
Producer price index(1) ..
Consumer price index(1)

2007

8.9%
10.4%
9%

2008

9.2%
25.1%
11.9%

2009

(1.3)%
(7)%
13.3%

2010

(2.6)%
13.9%
8.8%

2011

4.9%
16.7%
8.8%

4.8%
12%
6.1%

H1 2012
4%(2)
4.1%(2)
4.3%(2)

(1) As published by Bloomberg.


(2) Year on year increase from H1 2011 to H1 2012.

In addition, global economic conditions and economic cycles may impact the balance of supply and
demand for beer and soft drinks products. In particular, adverse economic conditions have had and
may have impact in the future on general levels of consumption, leading to production overcapacity
in the beer and soft drinks industries, which may adversely affect product prices, while reduced
investment in production capacity may, at other times lead to under capacity in the industry in
general, or for certain producers, who can then be at a disadvantage as compared to their
competitors.
Sales Volumes
The Groups results of operations are affected by its sales volume in each given period.
The following table sets forth certain information regarding the Groups sales volume by segment for
the six months ended 30 June 2012 and 2011 and the years 2011, 2010 and 2009:
Six months ended 30 June

2012

2011

Change

For the Year Ended 31 December

2011

2010

(%)
Segment
Turkey Beer (mn litres) ..........
International Beer (mn litres).
Beer Group Combined (mn
litres) ...................................
Soft Drinks(1) (mn unit
cases(2)) ..................................
Total (mn litres(3)) .................

Change
2011 v
2010

2009

(%)

Change
2010 v
2009
(%)

451.4
1,031.9

426.5
753.1

5.8
37.0

842.2
1,463.3

849.3
1,568.6

(0.8)
(6.7)

851.8
1,361.6

(0.3)
15.2

1,483.3

1,179.6

25.7

2,305.5

2,417.8

(4.6)

2,213.3

9.2

198.3
2,609.4

179.2
2,195.2

10.7
18.9

382.8
4,476.6

334.4
4,315.7

14.5
3.7

294.8
3,886.1

13.4
11.0

(1) Reflects the Groups share of 50.3% of CCIs sales volumes.


(2) One unit case represents 5.678 litres.
(3) Unit cases have been converted to litres at the ratio of 5.678 litres per one unit case.

Sales volumes of beer in Turkey increased by 5.8% in the six months ended 30 June 2012, as
compared to the same period in 2011, supported by intensified marketing efforts, despite the negative
impact of weather conditions and higher prices due to higher excise taxes. See Changes in taxes
below for a discussion of the excise tax increases in the Groups key markets and Prices for the
Groups Products below for a discussion of the Groups pricing strategy. Sales volumes of beer in
Turkey remained relatively flat over 2009, 2010 and 2011, reflecting principally the impact of a
substantial increase in excise tax on beer in October 2010 and unfavourable weather conditions,
especially in the summer of 2011. Sales volumes in Turkey as well as operating expenses and profit
margins may continue to be adversely affected by recent and future excise tax increases.
Sales volumes of beer in the International Beer operations increased significantly in the six months
ended 30 June 2012, as compared to the same period in 2011, as a result of the acquisition in March
2012 by the Group of the SABMiller beer operations in Russia and Ukraine. Following the
acquisition of SABMiller Russia, sales in Russia accounted for approximately 70% of the sales
volume of the International Beer segment for the six months ended 30 June 2012. Sales volumes of
beer in the International Beer operations declined in 2011, as compared to a relatively high base in
2010, reflecting the adverse impact of higher prices. This was mainly due to higher excise taxes and
input prices and intense competition in Russia, despite growth in sales in Kazakhstan, Moldova and
Georgia. Sales volumes increased in 2010, as compared to 2009, mainly due to favourable weather

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

47

conditions in the summer and consumer promotions, especially in Russia, despite the negative effect
of increases in excise tax. Sales volumes in Russia and the International Beer segment can be
adversely affected by recent and future excise tax increases and the post-acquisition integration
process of MEB and SABMiller Russia and such volumes are likely to be somewhat negatively
impacted by these factors in the second half of 2012 as the integration process continues. See Risk
FactorsRisks Related to the Groups BusinessThe integration process of the Groups newly acquired
businesses in Russia and Ukraine is not yet complete and is subject to uncertainties, including the ability
to realise anticipated cost synergies and negotiating favourable arrangements with dealers, distributors
and key accounts.
For the six months ended 30 June 2012, soft drink sales in Turkey accounted for approximately 68%
of the sales volume of the Soft Drinks segment. Sales volumes of the Soft Drinks operations
increased in the six months ended 30 June 2012, as compared to the same period in 2011, as a result
of intensified marketing efforts across sparkling, still and tea beverages as well as improved consumer
spending in Central Asian and Middle East countries. Sales volumes of the Soft Drinks operations
also increased in 2011, as compared to 2010, as a result of growth in Turkey and international
operations, and in 2010, as compared to 2009, mainly due to favourable weather conditions and
successful marketing activities.
Prices for the Groups Products
The Group generally sets prices for its products by reference to a number of factors, including
customer demand, consumer trends and preferences, macroeconomic conditions, inflation, competition
and pricing pressures, and taxation of alcoholic and other products, while also taking into account
cost of sales, including cost of raw materials, utilities, transportation and other factors.
The Group generally measures its average per unit sale prices (per litre of beer and per unit case of
soft drinks) by dividing sales revenue (which excludes excise tax and certain deductions) by sales
volumes (millions of litres of beer or unit cases of soft drinks sold, respectively). As a result, average
per unit prices set out below are presented net of the impact of taxes (including excise tax on
alcoholic products). In addition, unit prices set out below are presented in Lira, which means that
due to the effects of currency translation, they may not always show the actual moves of prices of
the Groups products in their respective local currencies (for example, results of operations in Russia
are translated from Ruble to US dollar and then from US dollar to Lira); as a result, in certain
cases, moves in TRL-denominated per unit prices set out below may show price trends that may not
accurately reflect or are reverse to the trends of actual products prices in their local currency.
The following table sets forth certain information regarding the Groups average net sales price per
litre of beer and per unit case of soft drinks for the six months ended 30 June 2012 and 2011 and the
years 2011, 2010 and 2009:
Six months ended 30 June

2012

2011

(TRL)
Segment
Turkey Beer (TRL per litre)...
International Beer (TRL per
litre) ........................................
Beer Group Combined (TRL
per litre)...............................
Soft Drinks (TRL per unit
case(1)).....................................
Group Consolidated(2) (TRL
per litre) ..................................

Change
(%)

For the Year Ended 31 December

2011

2010
(TRL)

Change
2011 v
2010

2009

Change
2010 v
2009

(%)

(TRL)

(%)

1.87

1.66

13.1

1.65

1.52

8.4

1.48

2.6

1.34

1.04

28.9

1.11

0.93

19.4

0.97

(4.1)

1.51

1.27

19.0

1.31

1.14

14.9

1.17

(2.5)

4.84

4.36

11.1

4.47

4.14

8.2

4.10

0.8

1.23

1.04

18.3

1.06

0.97

10.1

0.98

(1.5)

(1) One unit case represents 5.678 litres.


(2) For purposes of calculation of consolidated net average per unit sales prices, unit cases have been converted to litres at the ratio of
5.678 litres per one unit case.

The Group prices its products in such a way as to reflect changes in raw materials and packaging
prices, excise taxes (for beer) and inflation. Product mix also affects the Groups average sales prices.
Beer brands are classified into different market segments (such as premium, mainstream and

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

48

economy), although this classification varies by market. Such segmentation is largely decided by
companies such as Nielsen that evaluate the relevant markets. For example, in certain markets, such
as Russia and Kazakhstan, the Efes brand is a premium brand while in other markets, such as
Turkey, it is a mainstream brand. In most cases the economy and certain mainstream brands
comprise mainly local brands, particularly in Russia and the CIS countries.
The Groups general strategy is to pass through any increases in excise tax to consumers, and if
possible, increase prices slightly in excess of such tax increases, although such increases may be passed
through in stages which may lead to pressure on the Groups margins until such price increases can
be absorbed by the market. Average net sale prices per litre of beer in Turkey increased in the six
months ended 30 June 2012, as compared to the same period in 2011, mainly due to applied product
prices increases that were higher than the rate required to pass on the full impact of the increase in
beer excise tax. Average net sales price per litre of beer in Turkey also increased in 2011, as
compared to 2010, as the Group was seeking to increase prices in line with the inflation rate in
Turkey in order to preserve margins in light of overall price increases in Turkey. Average net sales
price per litre of beer in Turkey also increased in 2010, as compared to 2009, principally due to an
average price increase of 14%, which was introduced simultaneously with the 35% rise in excise tax as
of 1 January 2010 and an average price increase of 17% which was introduced simultaneously with
the 26% excise tax increase as of 28 October 2010.
With respect to the International Beer operations, in the six months ended 30 June 2012, as
compared to the same period in 2011, average net sales price per litre of beer increased mainly due to
the contribution of the premium brand portfolio of SABMillers operations in Russia, which were
acquired in March 2012, partially offset by the adverse impact of the US dollar strengthening against
the Ruble. Prior to the SABMiller transaction, the Groups brand portfolio in Russia was principally
positioned in the mainstream segment, including the Stary Melnik and Beliy Medved brands. The
acquired SABMiller brands, including Miller Genuine Draft and Peroni which are positioned in the
high premium segment, provided brands that are in both premium and mainstream segments,
resulting in a broader and more balanced brand portfolio. The Group has experienced a growing
trend of increased consumption of premium beers in Russia at the expense of lower value beer
brands, as well as a recent trend towards relatively affordable (not premier) international beer brands
replacing local brands. In 2011, as compared to 2010, product prices in Russia and other
international markets experienced local currency product price increases in line with inflation, which
were not offset by exchange rate moves and thus contributed to slightly improved net average per
unit prices in US dollar terms, while the significant increase in Lira per unit prices was mainly due to
the effect of the strengthening of the US dollar. In 2010, as compared to 2009, average net sales
prices (net of the impact of taxes, including excise tax on alcoholic products) decreased mainly as a
result of high excise tax increase of approximately 200% in Russia.
In the soft drinks market the Group prices its products in such a way as to reflect changes in prices
of raw materials (other than concentrate) and packaging, inflation and taking competition into
account. Cost of concentrate, which is the most significant cost element for a large part of the
Groups soft drinks, is linked to the products end price, as for sparkling beverages CCI and its
Bottlers buy concentrate and beverage bases from The Coca-Cola Company, or its authorised
suppliers, at prices established by TCCC. See The Group and Its BusinessBusiness linesSoft
drinksRelationship with The Coca-Cola Company. Product mix also affects average sales prices to
an extent, but less so than for beer (the main classification for soft drinks is sparkling and still).
Average net sale prices per unit case in the Soft Drinks operations increased in the six months ended
30 June 2012, as compared to the same period in 2011, as the Group sought to increase prices in line
with inflation and as a result of US dollar to Lira movements. Average net sale prices per unit case
in the Soft Drinks operations increased in 2011, as compared to 2010, reflecting higher per unit
pricing in Turkey and international markets, while it remained rather flat in 2010, as compared to
2009, mainly due to increase in deductions and discounts applied in Turkey.
Production Levels
The Group operates five breweries in Turkey with a total installed capacity of 10.4 million hectolitres
per year, eight breweries in Russia of total installed capacity of 25.97 million hectolitres per year, as
well as two breweries in Kazakhstan and one in each of Georgia, Moldova and Ukraine. In addition,
it operates eight soft drinks bottling facilities in Turkey, six in Pakistan and one in each of
Kazakhstan, Azerbaijan, Kyrgyzstan, Iraq, Jordan and Turkmenistan.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

49

The Group aims to operate its production facilities at such capacity levels as to increase operating
efficiency and ensure that production levels sufficiently cover demand for its products in the relevant
markets. As demand for beer and soft drinks usually increases in the warm periods of late spring and
summer, the Group usually tends to increase production in the spring in order to adequately cover
demand during its peak and builds up stock in warehousing space typically owned by the Group and
located in its brewery and production facilities. See below Seasonal Consumption Cycles, Weather
Conditions and Timing of Ramadan.
The following tables set forth certain information about the breweries, malteries, hops processing
facility and bottling facilities of the Company:
Average Capacity
Brewery
Installed Capacity
Utilised, 2011
Turkey .....................................................................................
Russia ......................................................................................
Kazakhstan..............................................................................
Moldova ..................................................................................
Ukraine....................................................................................
Georgia....................................................................................

Processing Facility
Turkey ...............................................................
Turkey ...............................................................
Russia................................................................

(million hectolitres)
10.4
26.0
2.6
1.3
2.3
1.14
Installed
Capacity

Type
Maltery
Hops Processing
Maltery

Bottling Facility

(tonnes)
117,680
1,200
175,976

Installed Capacity

Turkey .....................................................................................
Kazakhstan..............................................................................
Kyrgyzstan ..............................................................................
Azerbaijan ...............................................................................
Iraq(1).......................................................................................
Jordan......................................................................................
Turkmenistan ..........................................................................
Pakistan...................................................................................

(mn unit cases)


717
75
19
46
24
25
42
206

(%)
87
63
85
71
71
51
Average
Capacity
Utilised, 2011
(%)
94
63
85
Average Capacity
Utilised, 2011
(%)
67
71
56
66
75
47
34
65

(1) Two additional bottling facilities were acquired in connection with CCIs acquisition of an effective interest of 65% of Al Waha for
Soft Drinks, Mineral Water and Juices LLC. See Recent Developments.

Seasonal Consumption Cycles, Weather Conditions and Timing of Ramadan


Demand for the Groups products has been in the past and may in the future be affected by seasonal
consumption cycles and adverse weather conditions. The Group experiences the strongest demand for
its products when temperatures rise and particularly during the spring and summer months. Adverse
weather conditions, such as unseasonably cool or wet weather in the summer or spring months, have
had and may have in the future an adverse effect on sales volumes. For example, consumption was
significantly negatively impacted by unfavourable weather conditions in Turkey in the first half of
2011. Moreover, when the Ramadan period, during which alcohol consumption decreases in Turkey,
coincides with the peak consumption periods of the warmer spring and summer months, the Group
may not be able to take full advantage of that peak demand period. As a result, management expects
sales volumes in the spring and summer months in Turkey to be negatively affected over the coming
three to five years, as each coming summer Ramadan will start 11 calendar days earlier in the peak
summer season (starting from 9 July in 2013).

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

50

Changes in the Availability or Price of Raw Materials and Packaging


A significant portion of the Groups cost of sales relates to raw materials and commodities, primarily
malted barley, hops and water, being the key ingredients for beer production, and other ingredients of
beer or soft drinks, including wheat, corn grits, corn syrup, rice, flavoured concentrate, fruit
concentrate, sugar, sweetener, and packaging raw materials, such as glass, PET bottles, aluminium
cans, labels and plastic crates. Malt is one of the Groups most important raw materials, representing
approximately 20% of total cost of sales for beer on average. Many of these raw materials are, or are
sourced from, commodities. The supply and prices of raw materials and packaging used by the Group
have in the past and can in the future fluctuate widely as a result of a number of factors beyond the
Groups control, including the level of crop production around the world, export demand,
government regulations and legislation affecting agriculture, quality and availability of supply,
speculative movements in the raw materials or commodities markets, adverse weather conditions,
currency fluctuations, economic factors affecting growth decisions and various plant diseases and
pests. The prices of these materials are also affected by the relative bargaining power of the suppliers,
which has in the past and can in the future further strengthen, due to suppliers consolidation, thus
reducing supply alternatives for the Group. Moreover, in Turkey the Group is required by Turkish
regulations to buy sugar locally, often at prices higher than those prevailing in the market generally.
In recent years, market prices of malting barley have fluctuated significantly from below c150 per
tonne in 2006, to more than c300 per tonne in late 2007 and early 2008, declining to lows of
approximately c150 per tonne through 2009 and 2010 and increasing again and reaching a peak of
over c300 per tonne in mid-2011, and currently fluctuate at prices of approximately c250-c270 per
tonne. In addition, market prices for aluminium have also fluctuated significantly from over US$3,000
per metric tonne in mid-2008 to below US$1,300 per metric tonne in spring 2009, then increasing to
over US$2,600 per metric tonne in spring 2011, and have since decreased somewhat to approximately
US$2,150-US$2,000 per metric tonne.
The Group tries to manage the timing and prices at which it purchases raw materials and packaging
in order to secure lower prices, and to price its products in such a way as to pass on raw material
and packaging price increases to its consumers. Certain of the Groups purchase contracts for raw
and packaging materials are for longer periods, although the Group usually renegotiates them on a
yearly basis (or in some cases for shorter periods of semi-annual or quarterly terms) and while some
are linked to market prices which can fluctuate, others are for fixed prices and in others pricing may
be part-fixed and part-linked to floating market prices. As a result, the Group may in certain cases
secure advantageous low prices for raw materials when purchasing at the lows of price cycles, but
may also fail to benefit from lower prices when it has fixed its purchase agreements at higher price
levels.
Prices of Water and Energy
The Groups production processes require consumption of large amounts of water, including both
during the brewing process and production of soft drinks, as well as in the agricultural supply chain.
Changes in precipitation patterns and other weather events have in the past and may in the future
affect the Groups water supply and, as a result, its operations. Any stoppage, scarcity or interruption
in water supply may result in the group having to suspend production at its facilities. In addition,
significant increases in the price of water in its key countries of operation have in the past and may
in the future result in increases to the Groups manufacturing costs.
Furthermore, interruptions in the supply of energy or significant energy price increases have in the
past and can in the future also have an adverse effect on the Groups operating and financial
performance. The Group uses material amounts of electricity, natural gas and other energy sources to
operate its breweries and bottling plants and, in some of its markets, to operate fleets of motor
vehicles. Energy prices have been subject to significant price volatility in the recent past and may be
volatile in the future. High energy prices over an extended period of time, as well as changes in
energy taxation and regulation in certain geographies, may have an adverse effect on the Groups
operating income and could potentially challenge the Groups profitability in certain markets.
In recent years, in most of the key markets in which the Group operates, price increases for water
and energy have, with limited exceptions, been broadly in line with inflation.
Changes in taxes
Taxation on the Groups beer products in the countries in which it operates comprises different taxes
specific to the Groups products in each jurisdiction, such as excise and other indirect taxes, in

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

51

addition to general consumption taxes such as VAT. In many jurisdictions, such excise and other
indirect taxes make up a large proportion of the cost of beer charged to customers. Turkey, Russia,
Kazakhstan and Ukraine recently increased excise taxes on beer. In Turkey, the cumulative increase
in excise tax on alcoholic products since 2008 has been 161%, while in Russia the cumulative increase
in excise tax on alcoholic products since 2008 has been 338%. In particular, in October 2011, the
excise tax levied on beer in Turkey increased by 20%, and by a further 17% in September 2012; in
January 2012, the excise tax on beer in Russia also increased by 20%. These taxes have resulted in
significant price increases in both countries, and continue to cause pressures on the Groups sales of
beer in these countries, which could adversely affect the Groups sales volumes, sales revenues and
profit margins from its beer operations. Currently, excise tax on alcoholic products in Turkey, which
is linked to the alcohol content of a drink, on average is approximately 40% of the total price paid
by a consumer for beer of average alcohol content, and represents one of the highest rates in the
European and CIS regions. The Turkish Parliament recently passed Law No. 6322, which, when it
enters into force as of 1 January 2013, requires the amount of excise tax to be adjusted every six
months (i.e., in January and July each year) for inflation based on the rate of the Producer Price
Index (PPI) in Turkey. The adjustment will be made automatically following the official declaration
of the PPI by the State Statistics Institution. In Russia, the current excise tax on beer containing up
to 8.6% alcohol is 12 Rubles per litre, and rates of 15 Rubles in 2013 and 18 Rubles in 2014 have
been introduced into the Russian tax code, while the Russian government has announced that excise
tax is expected to be increased to 20 Rubles in 2015. In addition, in Turkey an excise tax of 25%
applies to sales of cola-type soft drinks. See Risks FactorsRisks Related to the Groups Business
Excise taxes have significantly increased in Turkey and Russia and the beer and beverage industry may
be subject to further adverse changes in taxation.
Increases in excise and other indirect taxes applicable to the Groups products, either on an absolute
basis or relative to the levels applicable to other beverages, tend to adversely affect sales, both by
reducing overall consumption of its products and by encouraging consumers to switch to other
categories of beverages. These increases also adversely affect the affordability of the Groups products
and its profitability.
Foreign Currency Fluctuations
The Company presents its consolidated financial statements in Lira, which is the functional currency
of the Company and its Turkish subsidiaries and joint ventures. Subsidiaries and joint ventures
outside Turkey, particularly those operating in the International Beer segment, generally use their
local currency as their functional currency; however, EBI, the holding company for the Groups
International Beer operations, has adopted the US dollar as its functional currency. See note 2.2 of
the 2011 Audited Consolidated Financial Statements for information about the functional currency of
certain of the Groups subsidiaries and joint ventures. The results of operations of those subsidiaries
and joint ventures whose functional currency is not the Lira are translated into Lira at the applicable
exchange rate for inclusion in the Groups consolidated financial statements. In the case of the
Groups International Beer operations, the results of operations of those entities, and particularly Efes
Russia, are subject to a double translation as their results are first translated from their local currency
into US dollars (for consolidation within EBIs results), and then from US dollars into Lira.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

52

The following table sets out average and period end exchange rates of the Ruble against the Lira, the
US dollar against the Lira and the US dollar against the Ruble for the four years ended 31
December 2011 and the six months ended 30 June 2011 and 2012:
RUR / TRL(1)
Period
Year ended 31 December
2008................................
2009................................
2010................................
2011................................
Six months ended 30 June
2011................................
2012................................

Average

USD / TRL

Period
End

Average

USD / RUR

Period
End

Average

Period
End

20.52
20.28
17.63

19.31
20.09
19.71
17.04

1.55
1.50
1.67

1.51
1.55
1.89

31.72
30.37
29.39

29.39
30.24
30.48
32.20

18.31
17.08

17.22
18.17

1.56
1.79

1.63
1.81

28.62
30.64

28.08
32.82

(1) Exchange rates derived by the company using the above USD/TRL and USD/RUR rates.

The exchange rate between the Lira and the US dollar was relatively stable in 2009 and 2010, but in
2011 the US dollar strengthened against the Lira and then weakened in the first half of 2012, while
during the same periods the Ruble did not fluctuate significantly against the US dollar. This had a
significant positive effect on the translation of Groups sales revenues mainly from International Beer
and from the international operations of Soft Drinks.
In addition, although the Group incurs its capital and operating expenses and derives its sales
revenues primarily in the currency of the countries in which it operates, the substantial majority of
the Groups borrowings are in currencies other than the Lira, principally the US dollar. As of 30
June 2012, 96% and 3% of the Groups long-term borrowings (including the current portion thereof)
were denominated in US dollars and Euros, respectively. Moreover, 84% of the Groups short-term
borrowings (excluding the current portion long-term borrowings) were denominated in US dollars
(and no such short-term borrowings in Euros), while only 3% of such short-term borrowings were
denominated in Lira.

Restriction on Advertising of Beer Products


Existing or additional restrictions on, or prohibition of, beer advertising in the mass media or certain
sales channels in the Groups key markets have had in the past and can have in the future a material
adverse effect on its sales and operating and financial results. In Turkey, one of the Groups two
largest markets by sales volume and revenues, there is a general prohibition of beer advertising in the
mass media and other general sales channels, with limited exceptions such as advertisements in onand off-trade outlets. In addition, advertising targeting persons who are under age 24 is restricted,
including restrictions on alcoholic beverage producers in sponsoring certain events where young
people are in attendance (see RegulationTurkey and Risk FactorsRisks Related to the Groups
BusinessRestrictions on beer advertising, sales or consumption may adversely affect the Groups
business). Russia, the Groups other largest market, has also imposed extensive restrictions on beer
advertising, which include a ban on the broadcasting of beer commercials on television and radio,
and more recently digital media, and limitations regarding locations of beer sales and consumption.
Additional restrictions, such as a ban on beer commercials in periodical print media, is to come into
force in 2013, and further restrictions being discussed in Russia, including a ban on PET packaging
and new labelling and health warning requirements. See RegulationRussia. Ukraine is also
considering restrictions, including a ban in beer advertising and certain sales and consumption
limitations. In addition, in certain CIS countries that have histories of high average levels of alcohol
consumption, legal restrictions and limitations on alcohol consumption, including in connection with
public order, are becoming increasingly strict and in some cases stricter than in western European
countries. Restrictions on beer advertising, sales or consumption have in the past and could in the
future adversely affect the Groups results of operations.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

53

Explanation of Key Consolidated Income Statement Items


Sales
Sales represents net sales after deducting excise tax and certain deductions and discounts (mainly for
dealers, distributors and key accounts) from the Groups gross sales revenue. The Group derives its
sales revenue from the sale of beer and soft drinks in its home market of Turkey and internationally
across a broad region that includes Russia, the CIS and countries in the Middle East.
In the six months ended 30 June 2012, 26%, 43% and 30% of its total sales revenue came from
Turkey Beer, International Beer and Soft Drinks, respectively, as compared to 31%, 34% and 34% in
the six months ended 30 June 2011. For the year ended 31 December 2011, 29%, 34% and 36% of its
total sales revenue came from Turkey Beer, International Beer and Soft Drinks, respectively, as
compared to 31%, 35% and 33% for the year ended 31 December 2010. The Group also has a
segment of other and eliminations, which principally comprises sales of Cypex (a subsidiary of
Anadolu Efes in charge of marketing and distribution of beer in the Turkish Republic of Northern
Cyprus), Anadolu Etap (a joint venture of Anadolu Efes engaged in the production and sales of fruit
juice concentrate and puree in which the Group holds a 33.3% interest) and intercompany
eliminations.
Cost of Sales
Cost of sales comprises net change in inventory, depreciation and amortisation expense on PP&E and
intangible assets, personnel expenses, utility expenses, provision for retirement pay liability and other
expenses. In each of the periods presented, a significant proportion (over 70% in each period) of total
cost of sales consist of net change in inventory. Cost of sales relates to the Groups production and
production facilities, and those personnel associated with its production activities.
Net change in inventory. Net change in inventory reflects the consumption of raw, packaging and
other materials for the goods sold and the cost of trade goods sold.
Depreciation and amortisation expense on PP&E and intangible assets. Depreciation and amortisation
expenses on PP&E and intangible assets include straight line depreciation and amortization charges
for tangible and intangible assets.
Personnel expenses. Personnel expenses include wages and salaries, social security costs, pension
payments and payments for post-employment benefits other than pensions.
Utility expenses. Utility expenses include energy (electricity, fuel, natural gas, etc.) and other utility
(water) expenses.
Provision for retirement pay liability. Provision for retirement pay liability reflects the change in the
Companys lump sum obligation for its Turkish employees in case of an employment contract
termination due to retirement or for reasons other than resignation or misconduct.
Other expenses. Other expenses include repair and maintenance, spare parts consumption and other
cost related expenditures.
Marketing, Selling and Distribution Expenses
Marketing, selling and distribution expenses comprise advertising, selling and marketing expenses,
personnel expenses, transportation and distribution expenses, depreciation and amortisation expense
on PP&E and intangible assets, utilities and communication expenses, rent expenses, repair and
maintenance expenses, provision for retirement pay liability and other expenses. Such expenses relate
to the Groups selling, distribution and marketing facilities and those personnel that are associated
with the Groups sales and distribution activities.
Advertising, selling and marketing expenses. Advertising, selling and marketing expenses includes point
of sale materials expenses, advertisement (on TV, radio, newspaper, boards, etc.) expenses, sales
premiums and other selling and marketing related expenses.
Personnel expenses. Personnel expenses include wages and salaries, social security costs, pension
payments and payments for post-employment benefits other than pensions.
Transportation and distribution expenses. Transportation and distribution expenses include in-house
and external transportation and distribution expenses of goods produced and sold.
Depreciation and amortisation expense on PP&E and intangible assets. Depreciation and amortisation
expense on PP&E and intangible assets includes straight line depreciation and amortization charges
for tangible and intangible assets.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

54

General and Administration Expenses


General and administration expenses comprise personnel expenses, services rendered from outside,
taxation (other than on income) expenses, depreciation and amortisation expenses on PP&E and
intangible assets, utilities and communication expenses, meeting and travel expenses, insurance
expenses, provision for retirement pay liability, repair and maintenance expenses and other expenses.
General and administration expenses relate to the Companys headquarters and the administrative and
headquarter expenses of other Group members.
Personnel expenses. Personnel expenses include wages and salaries, social security costs, pension
payments and payments for post-employment benefits other than pensions.
Services rendered from outside. Services rendered from outside include tax, auditing, legal and other
consultancies and outsourced services (security, cleaning, etc.)
Taxation (other than on income) expenses. Taxation (other than on income) expenses include taxation
on properties, stamp taxes and other taxes.
Depreciation and amortisation expense on PP&E and intangible assets. Depreciation and amortisation
expense on PP&E and intangible assets include straight line depreciation and amortization charges for
tangible and intangible assets.
Other Operating Income
Other operating income primarily comprises gain on sale of fixed assets, income from scrap and other
materials, rent income and insurance compensation income. In 2011, other operating income included
a one-time item for the fair value difference related to the change in scope of consolidation in
connection with the acquisition by CCI Holland of shares in SSG and CCBI, the companies who
own shares in CCBL. See Factors Affecting Comparability of the Groups ResultsCCI Holland
Acquisitions and Group Consolidation and Other Financial Statement Matters.
Other Operating Expenses
Other operating expenses include donations, losses from fixed assets sales, impairment loss on fixed
assets and other expenses. In 2011, the Group also had a one-time fine of TRL 6.1 million paid to
the Competition Board. See Risk FactorsRisks Related to the Groups BusinessThe Groups
operations may be limited by anti-monopoly regulations.
Loss from Associates
Loss from associates reflects the loss on the Companys investment in certain of its associates,
principally Central Europe Beverages B.V. (the entity in which the Group holds an interest of 28%
and which owns brewing operations in Serbia).
Financial Income
Financial income principally comprises the interest income earned by the Group on time deposits, and
foreign exchange gains on foreign currency (i.e., any currency other than the functional currency of
Group and its subsidiaries) transactions. Financial income also includes any gain from derivative
financial instruments.
Financial Expenses
Financial expenses principally comprise the interest expense paid by the Group and foreign exchange
losses on the Groups foreign currency (i.e., any currency other than the functional currency of the
Group and its subsidiaries) transactions. Financial expenses also include any loss from derivative
financial instruments as well as syndicated loan expense.
Current Period Tax Expense
Current period tax expense includes the tax charge for the current period measured at the amount
expected to be paid to the tax authorities. The tax expense is calculated in accordance with the tax
laws enacted (or substantively enacted) at the balance sheet date in the countries where the relevant
Group member operates. The corporate tax rate in Turkey for the periods presented was 20%.
Deferred Tax Income/ (Expense)
Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet
date between the tax bases of assets and liabilities and their carrying amounts.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

55

Currency Translation Differences


Currency translation differences relate to the impact of translation of the results of members of the
Group into Lira for presentation of the Groups consolidated financial statements.
Value Increase / (Decrease) in Available-for-Sale Securities
Value increase/(decrease) in available for sale securities reflects the change in fair value of the 7.5%
interest in the share capital of Alternatifbank A.S., whose shares are listed on the Istanbul Stock
Exchange, held by the Group as of 30 June 2012. Other securities held by the Group as available for
sale are carried at cost as such securities do not have a quoted market price in an active market, and
their fair value cannot be reliably measured by alternative valuation methods.
Operating and Financial Results
Historical Results
The following table sets forth the Groups results of operations for the six months ended 30 June
2012 and 2011 and for the years ended 31 December 2011, 2010 and 2009, derived from the
Consolidated Financial Statements unless otherwise indicated:
Six months ended 30 June

2012

2011

Change

(TRL millions)
Continuing Operations
Sales ......................................................
Cost of Sales .........................................
Gross Profit from Operations ................
Marketing, Selling and Distribution
Expenses ................................................
General and Administration Expenses .
Other Operating Income .......................
Other Operating Expenses ....................

Year ended 31 December

2011

Change
2011 v 2010

2010

(TRL millions)

Change
2010 v 2009

2009
(TRL
millions)

3,205.8
(1,598.9)

2,281.9
(1,158.3)

40.5
38.0

4,761.3
(2,479.6)

4,168.8
(2,051.3)

14.2
20.9

3,811.1
(1,907.9)

9.4
7.5

1,606.9

1,123.6

43.0

2,281.7

2,117.4

7.8

1,903.1

11.3

(857.9)
(321.6)
24.4
(20.1)

(579.1)
(201.0)
17.1
(21.0)

48.1
60.0
42.3
(4.2)

(1,262.8)
(414.8)
43.1
(42.1)

(1,060.5)
(354.0)
25.0
(34.4)

19.1
17.2
72.1
22.2

(928.1)
(322.1)
41.5
(46.5)

14.3
9.9
(39.7)
(26.0)

Profit from Operations ..........................


Loss from Associates ............................
Financial Income ..................................
Financial Expenses................................

431.7
(4.5)
203.4
(193.5)

339.6
(3.3)
119.6
(127.5)

27.1
37.2
70.0
51.8

605.1
(6.8)
240.7
(374.0)

693.6
(17.9)
244.3
(261.5)

(12.8)
(62.1)
(1.5)
43.1

648.0
(10.9)
375.1
(468.4)

7.0
63.9
(34.9)
(44.2)

Profit Before Tax From Continuing


Operations .............................................
Current Period Tax Expense.................
Deferred Tax Income/(Expense) ...........

437.1
(123.6)
34.7

328.4
(84.6)
6.0

33.1
46.2
481.3

465.0
(117.5)
12.0

658.6
(127.8)
(12.3)

(29.4)
(8.1)
(197.6)

543.8
(127.3)
5.8

21.1
0.59
(312.3)

348.1

249.8

39.3

359.5

518.4

(30.7)

422.3

(388.8)

204.4

(290.2)

303.2

25.2

1103.2

(57.8)

(143.6)

4.9

(100.0)

(3.3)

(3.5)

(5.0)

(12.4)

2.3

(626.8)

17.4

(86.5)

0.2

0.2

(4.6)

0.6

(0.1)

(628.2)

(0.9)

(86.6)

(175.5)

Profit for the Period ..............................


Other Comprehensive Income:
Currency Translation Differences .........
Revaluation due to change in scope of
consolidation .........................................
Value Increase/(Decrease) in Availablefor-Sale Securities..................................
Tax Income /(Expense) on Other
Comprehensive Income .........................
Other Comprehensive Income, (Net of
Taxes)....................................................

(392.0)

201.1

(294.9)

291.5

27.4

962.6

(36.3)

Total Comprehensive Income .................

(43.9)

450.9

(109.7)

651.0

545.9

19.3

385.9

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

56

22.8

41.4

The following table sets forth the Groups sales by segment for the six months ended 30 June 2012
and 2011 and for the years ended 31 December 2011, 2010 and 2009, derived from the Consolidated
Financial Statements unless otherwise indicated:
Six months ended 30 June

2012

2011

(TRL millions)

Year ended 31 December

Change

2011

2010

Change
2011 v 2010

(TRL millions)

2009

Change
2010 v 2009

(TRL
millions)

(1)

Segment
Turkey Beer...........................................
International Beer .................................
Beer Group Combined ........................
Soft Drinks(2) ........................................
Other and Eliminations.........................

846.1
1,387.0
2,233.1
960.4
12.3

707.1
785.6
1,492.7
781.4
7.9

19.7
76.6
49.6
22.9
55.7

1,390.8
1,630.7
3,021.5
1,713.0
26.7

1,293.4
1,464.2
2,757.6
1,383.6
27.6

7.5
11.4
9.6
23.8
(3.3)

1,264.2
1,325.1
2,589.2
1,209.9
11.9

2.3
10.5
6.5
14.4
131.9

Total

3,205.8

2,281.9

40.5

4,761.3

4,168.8

14.2

3,811.1

9.4

(1) Segment revenue information in the table excludes inter-segment revenue elimination, which is reported within the line item
Other and Eliminations.
(2) Reflects the Groups share of 50.3% of revenues from CCI.

Results of Operations for the Six Months Ended 30 June 2012 and 2011
The following table sets forth the Groups results of operations for the six months ended 30 June
2012 and 2011, derived from the 2012 Interim Financial Statements:
Six months ended 30 June
2012

2011

(TRL millions)

Change
(%)

Continuing Operations
Sales .............................................................................................
Cost of Sales ................................................................................

3,205.8
(1,598.9)

2,281.9
(1,158.3)

40.5
38.0

Gross Profit from Operations.......................................................


Marketing, Selling and Distribution Expenses ............................
General and Administration Expenses ........................................
Other Operating Income..............................................................
Other Operating Expenses ...........................................................

1,606.9
(857.9)
(321.6)
24.4
(20.1)

1,123.6
(579.1)
(201.0)
17.1
(21.0)

43.0
48.1
60.0
42.3
(4.2)

Profit from Operations .................................................................


Loss from Associates ...................................................................
Financial Income .........................................................................
Financial Expenses ......................................................................

431.7
(4.5)
203.4
(193.5)

339.6
(3.3)
119.6
(127.5)

27.1
37.2
70.0
51.8

Profit Before Tax From Continuing Operations...........................


Current Period Tax Expense .......................................................
Deferred Tax Income/(Expense) ..................................................

437.1
(123.6)
34.7

328.4
(84.6)
6.0

33.1
46.2
481.3

Profit for the Period .....................................................................


Other Comprehensive Income:
Currency Translation Differences................................................
Value Increase/(Decrease) in Available-for-Sale Securities .........
Tax Income /(Expense) on Other Comprehensive Income..........

348.1

249.8

39.3

(388.8)
(3.3)
0.2

204.4
(3.5)
0.2

(290.2)
(5.0)
(4.6)

Other Comprehensive Income, (Net of Taxes)..............................

(392.0)

201.1

(294.9)

Total Comprehensive Income........................................................

(43.9)

450.9

(109.7)

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

57

Sales
The Groups sales revenue was TRL 3,205.8 million for the six months ended 30 June 2012, as
compared to TRL 2,281.9 million for the six months ended 30 June 2011, representing an increase of
40% (or TRL 923.9 million). The increase in the six months ended 30 June 2012 was principally due
to the increase in revenue derived from International Beer due to the acquisition of the operations of
SABMiller in Russia and Ukraine which were consolidated in the Groups results as of March 2012
(an effect on sales revenue of TRL 495.2 million for the four months ended 30 June 2012), as well as
organic growth for Turkey Beer and Soft Drinks operations driven by volume and price increases.
The strengthening of the US dollar against the Lira (an average of 1.79 in the first half of 2012, as
compared to an average of 1.56 in the first half of 2011, while the Ruble did not fluctuate
significantly against the US dollar over the same periods) also had a positive impact on sales revenues
from International Beer and Turkey Beer revenues derived from exports.
The following table sets forth the breakdown of the Groups sales revenue by segment for the periods
indicated:
Six months ended 30 June
2012

2011

(TRL millions)

Change
(%)

Segment(1)
Turkey Beer .................................................................................
International Beer........................................................................
Beer Group Combined...............................................................
Soft Drinks(2) ...............................................................................
Other and Eliminations ...............................................................

846.1
1,387.0
2,233.1
960.4
12.3

707.1
785.6
1,492.7
781.4
7.9

19.7
76.6
49.6
22.9
55.7

Total.............................................................................................

3,205.8

2,281.9

40.5

(1) Segment revenue information in the table excludes inter-segment revenue elimination, which is reported within the line item
Other and Eliminations.
(2) Reflects the Groups share of 50.3% of CCIs revenues.

The following table sets forth certain information regarding the Groups sales volume by segment for
the periods indicated:
Six months ended 30 June
2012

2011

Change
(%)

Segment
Turkey Beer (million litres) ..........................................................
International Beer (million litres).................................................
Beer Group Combined (million litres) ......................................
Soft Drinks(1) (million unit cases(2)) .............................................
Total (million litres(3)) ..................................................................
(1) Reflects the Groups share of 50.3% of CCIs sales volumes.
(2) One unit case represents 5.678 litres.
(3) Unit cases have been converted to litres at the ratio of 5.678 litres one unit case.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

58

451.4
1,031.9
1,483.3
198.3
2,609.4

426.5
753.1
1,179.6
179.2
2,195.2

5.8
37.0
25.7
10.7
18.9

The following table sets forth certain information regarding the Groups average net sale prices per
litre of beer and per unit case of soft drinks for the periods shown:
Six months ended 30 June
2012

2011
(TRL)

Segment
Turkey Beer (TRL per litre) ........................................................
International Beer (TRL per litre) ...............................................
Beer Group Combined (TRL per litre) ....................................
Soft Drinks (TRL per unit case(1))...............................................
Group Consolidated(2) (TRL per litre) ........................................

1.87
1.34
1.51
4.84
1.23

Change
(%)

1.66
1.04
1.27
4.36
1.04

13.1
28.9
19.0
11.1
18.3

(1) One unit case represents 5.678 litres.


(2) For purposes of calculation of consolidated net average per unit sales prices, unit cases have been converted to litres at the ratio of
5.678 litres one unit case.

Turkey Beer. The Groups sales revenue from Turkey Beer was TRL 846.1 million for the six months
ended 30 June 2012, as compared to TRL 707.1 million for the six months ended 30 June 2011,
representing an increase of 19.7% (or TRL 139.0 million). The increase was primarily due to increases
of 13.1% in average sales prices and 5.8% in sales volumes (despite a small decline in market share)
over the same periods, as well as the accounting effect of new regulations prohibiting free beer
incentives to distributors, which also led to a slight increase in sales revenue in Turkey.
International Beer. The Groups sales revenue from International Beer was TRL 1,387.0 million for
the six months ended 30 June 2012, as compared to TRL 785.6 million for the six months ended 30
June 2011, representing an increase of 77% (or TRL 601.4 million), mainly due to the significant
contribution of TRL 495.2 million for the four months ended 30 June 2012 from the newly-acquired
beer operations of SABMiller in Russia and Ukraine, which had an impact on both sales volumes
and sales prices, as well as the impact of the strengthening of the US dollar against the Lira over the
same periods. In US dollar terms, sales revenue from International Beer was US$773.4 million for the
six months ended 30 June 2012, as compared to US$502.3 million for the six months ended 30 June
2011, representing an increase of 54% (the contribution of SABMiller in Russia and Ukraine to sales
was approximately US$276.1 million).
Soft Drinks. The Groups sales revenue from soft drinks was TRL 960.4 million for the six months
ended 30 June 2012, as compared to TRL 781.4 million for the six months ended 30 June 2011,
representing an increase of 23% (or TRL 179.0 million). The increase in revenue from the Groups
soft drinks business was mainly due to increases of 10.7% in sales volume and 11.1% in average sales
prices for soft drinks over the same periods and the positive impact of the strengthening US dollar
against the Lira on non-Lira-denominated sales of soft drinks.
Other and eliminations. The Groups sales revenue from other and eliminations was TRL 12.3 million
for the six months ended 30 June 2012, as compared to TRL 7.9 million for the six months ended 30
June 2011, representing an increase of 56% (or TRL 4.4 million). The increase was mainly due to
sales volume and price increases of both Cypex and Etap, as well as other inter-segment elimination
effects.
Cost of Sales
The Groups cost of sales was TRL 1,598.9 million for the six months ended 30 June 2012, as
compared to TRL 1,158.3 million for the six months ended 30 June 2011, representing an increase of
38% (or TRL 440.6 million). The increase was primarily due to volume growth driven by the newlyacquired beer operations of SABMiller in Russia and Ukraine, as well as increases in input prices
across the Groups operations.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

59

The following table sets forth the breakdown of the Groups cost of sales for the periods indicated:
Six months ended 30 June
2012

2011

(TRL millions)
Cost of Sales
Net change in inventory
Depreciation and amortisation expense on PP&E and intangible
assets ............................................................................................
Personnel expenses.......................................................................
Utility expenses............................................................................
Provision for retirement pay liability ..........................................
Other expenses .............................................................................
Total.............................................................................................

Change
(%)

1,245.0

900.7

38.2

106.3
84.7
70.3
1.5
91.2

77.7
63.0
50.8
1.1
65.1

36.8
34.5
38.4
34.8
40.1

1,598.9

1,158.3

38.0

The following table sets forth the Groups cost of sales by segment for the periods shown:
Six months ended 30 June
2012

2011

(TRL millions)

Change
(%)

Segment(1)
Turkey Beer .................................................................................
International Beer........................................................................
Beer Group Combined...............................................................
Soft Drinks(2) ...............................................................................
Other and Eliminations ...............................................................

255.8
744.1
999.8
587.1
12.0

210.5
444.0
654.5
496.9
6.9

21.5
67.6
52.8
18.2
73.9

Total.............................................................................................

1,598.9

1,158.3

38.0

(1) Segment revenue information in the table excludes inter-segment cost of sales elimination, which is reported within the line item
Other and Eliminations.
(2) Reflects the Groups share of 50.3% of CCIs cost of sales.

The following table sets forth the Groups cost of sales on a per unit basis for the periods shown:
Six months ended 30 June
2012

2011
(TRL)

Segment
Turkey Beer .................................................................................
International Beer........................................................................
Beer Group Combined...............................................................
Soft Drinks ..................................................................................

0.57
0.72
0.67
2.96

Change
(%)

0.49
0.59
0.55
2.77

14.8
22.3
21.5
6.8

Net change in inventory. The Groups net change in inventory was TRL 1,245.0 million for the six
months ended 30 June 2012, as compared to TRL 900.7 million for the six months ended 30 June
2011, representing an increase of 38% (or TRL 344.3 million). This increase was mainly due to
volume growth driven by the newly-acquired beer operations of SABMiller in Russia and Ukraine
(which had an effect of TRL 228.1 million or US$127.2 million for the four months ended 30 June
2012) and the strengthening of the US dollar against the Lira (average 1.79 in the first half of 2012,
as compared to 1.56 in the first half of 2011). The cost per litre of beer in the Turkey and
International Beer operations increases by 21.5% in the six months ended 30 June 2012 compared to
six months ended 30 June 2011. The increase in cost per litre of beer in Turkey Beer operations of
14.8% in the same period, was due to the combined effects of producer prices increase, devaluation of
the Lira against the currencies of imported production materials, for example malt and can. The

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

60

increase in cost per litre of International Beer operations of 22.3% in the same period was mainly due
to higher cost base of newly acquired SABMiller operations in Russia and Ukraine as of March
2012, depreciation of the Lira against local currencies of international operations and producer price
increases on input prices.
Depreciation and amortisation expense on PP&E and intangible assets. The Groups depreciation and
amortisation expense on PP&E and intangible assets was TRL 106.3 million for the six months ended
30 June 2012, as compared to TRL 77.7 million for the six months ended 30 June 2011, representing
an increase of 37% (or TRL 28.6 million) mainly due to new investments aimed at increasing
production efficiency and capacity and additional investment and increase in PP&E, due to the
acquisition of the beer operations of SABMiller in Russia and Ukraine.
Personnel expenses. The Groups personnel expenses were TRL 84.7 million for the six months ended
30 June 2012, as compared to TRL 63.0 million for the six months ended 30 June 2011, representing
an increase of 34% (or TRL 21.7 million), mainly due to the acquisition of the beer operations of
SABMiller in Russia and Ukraine and increases in headcount due to growth in existing operations
and salary increases.
Utility expenses. The Groups utility expenses were TRL 70.3 million for the six months ended 30
June 2012, as compared to TRL 50.8 million for the six months ended 30 June 2011, representing an
increase of 38% (or TRL 19.5 million) mainly due to the acquisition of the beer operations of
SABMiller in Russia and Ukraine and increases in cost of electricity, gas and water approximately in
line with inflation.
Other expenses. The Groups other expenses were TRL 91.2 million for the six months ended 30 June
2012, as compared to TRL 65.1 million for the six months ended 30 June 2011, representing an
increase of 40% (or TRL 26.1 million) mainly due to an increase in maintenance expenses of the
International Beer operations.
Gross Profit from Operations
As a result of the foregoing factors, the Groups gross profit from operations was TRL 1,606.9
million for the six months ended 30 June 2012, as compared to TRL 1,123.6 million for the six
months ended 30 June 2011, representing an increase of 43% (or TRL 483.3 million). Gross margin
was 50.1% for the six months ended 30 June 2012, as compared to 49.2% for the six months ended
30 June 2011, reflecting principally a higher rate of increase in sales than the rate of increase in cost
of sales during the periods under review.
Marketing, Selling and Distribution Expenses
The Groups marketing, selling and distribution expenses were TRL 857.9 million for the six months
ended 30 June 2012, as compared to TRL 579.1 million for the six months ended 30 June 2011,
representing an increase of 48% (or TRL 278.8 million). The increase was mainly due to an increase
in advertising, selling and marketing, transportation and distribution, and personnel expenses.
The following table sets forth the breakdown of the Groups marketing, selling and distribution
expenses for the periods indicated:
Six months ended 30 June
2012

2011

(TRL millions)
Marketing, Selling and Distribution Expenses
Advertising, selling and marketing expenses ...............................
Personnel expenses.......................................................................
Transportation and distribution expenses ...................................
Depreciation and amortization expense on PP&E and intangible
assets ............................................................................................
Utilities and communication expenses.........................................
Rent expenses ..............................................................................
Repair and maintenance expenses ...............................................
Provision for retirement pay liability
Other expenses .............................................................................
Total.............................................................................................

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

61

Change
(%)

364.5
157.8
166.1

231.8
114.4
111.0

57.2
37.9
49.7

96.3
12.3
5.7
3.9
2.2
49.1

71.9
10.4
5.0
4.5
1.6
28.5

33.8
18.7
14.5
(14.0)
39.8
72.3

857.9

579.1

48.1

Advertising, selling and marketing expenses. The Groups advertising, selling and marketing expenses
were TRL 364.5 million for the six months ended 30 June 2012, as compared to TRL 231.8 million
for the six months ended 30 June 2011, representing an increase of 57% (or TRL 132.7 million)
mainly due to the increase in advertising activities, as a result of the expansion of the Groups
product portfolio, as well as the increase in selling activities relating to sales volume growth, both
resulting principally from the acquisition of the beer operations of SABMiller in Russia and Ukraine
in March 2012. The increase was also due to increased investment in new points of sale and other
marketing activities for the Turkey Beer operations and intensification of advertising activities in
Russia in advance of new advertising restrictions.
Personnel expenses. The Groups personnel expenses were TRL 157.8 million for the six months ended
30 June 2012, as compared to TRL 114.4 million for the six months ended 30 June 2011, representing
an increase of 38% (or TRL 43.4 million), mainly due to growth in headcount (additional marketing
and selling personnel) resulting from the acquisition of the beer operations of SABMiller in Russia
and Ukraine in March 2012, as well as salary increases in line with the inflation as of January 2012.
Transportation and distribution expenses. The Groups transportation and distribution expenses were
TRL 166.1 million for the six months ended 30 June 2012, as compared to TRL 111.0 million for the
six months ended 30 June 2011, representing an increase of 50% (or TRL 55.1 million), mainly due to
volume growth resulting from the acquisition of the beer operations of SABMiller in Russia and
Ukraine in March 2012.
Depreciation and amortisation expense on PP&E and intangible assets. The Groups depreciation and
amortisation expense on PP&E and intangible assets was TRL 96.3 million for the six months ended
30 June 2012, as compared to TRL 71.9 million for the six months ended 30 June 2011, representing
an increase of 34% (or TRL 24.4 million), mainly due to new investments aimed at increasing
production efficiency and capacity and additional investment and increase in PP&E driven by the
acquisition of the beer operations of SABMiller in Russia and Ukraine in March 2012.
General and Administration Expenses
The Groups general and administration expenses were TRL 321.6 million for the six months ended
30 June 2012, as compared to TRL 201.0 million for the six months ended 30 June 2011, representing
an increase of 60% (or TRL 120.6 million). The increase was mainly due to the increase in personnel
expense and expenses for consulting and advice.
The following table sets forth the breakdown of the Groups general and administration expenses for
the periods indicated:
Six months ended 30 June
2012

2011

(TRL millions)
General and Administration Expenses
Personnel expenses.......................................................................
Consulting, auditing and legal consulting expenses ....................
Taxation (other than on income) expenses .................................
Depreciation and amortisation expense on PP&E and intangible
assets ............................................................................................
Utilities and communication expenses.........................................
Meeting and travel expenses........................................................
Insurance expenses.......................................................................
Provision for retirement pay liability ..........................................
Repair and maintenance expenses ...............................................
Other expenses .............................................................................
Total.............................................................................................

Change
(%)

144.6
77.6
15.6

101.4
38.0
10.8

42.6
104.2
45.1

13.9
6.5
3.6
4.9
3.7
2.3
48.9

8.9
5.5
3.0
2.8
2.5
1.8
26.2

55.2
18.5
18.3
74.5
47.1
30.3
86.4

321.6

201.0

60.0

Personnel expenses. The Groups personnel expenses were TRL 144.6 million for the six months ended
30 June 2012, as compared to TRL 101.4 million for the six months ended 30 June 2011, representing
an increase of 43% (or TRL 43.2 million) mainly due to the growth in headcount resulting from the

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

62

acquisition of the beer operations of SABMiller in Russia and Ukraine in March 2012 (which had an
effect of TRL 20.1 million), salary increases and restructuring expenses.
Consulting, auditing and legal consulting expenses. The Groups consulting, auditing and legal
consulting expenses were TRL 77.6 million for the six months ended 30 June 2012, as compared to
TRL 38.0 million for the six months ended 30 June 2011, representing an increase of 104% (or
TRL 39.6 million), mainly due to consultancy services delivered to the Group in connection with the
acquisition and integration of SABMiller operations in Russia and Ukraine.
Taxation (other than on income) expenses. The Groups taxation (other than on income) expenses
were TRL 15.6 million for the six months ended 30 June 2012, as compared to TRL 10.8 million for
the six months ended 30 June 2011, representing an increase of 45% (or TRL 4.8 million), mainly due
to taxes paid in connection with the acquisition of the beer operations of SABMiller in Russia and
Ukraine in March 2012, as well as the impact of the strengthening of the US dollar against the Lira.
Depreciation and amortisation expense on PP&E and intangible assets. The Groups depreciation and
amortisation expense on PP&E and intangible assets was TRL 13.9 million for the six months ended
30 June 2012, as compared to TRL 8.9 million for the six months ended 30 June 2011, representing
an increase of 55% (or TRL 5.0 million) mainly due to new investments aimed at increasing
production efficiency and capacity and additional investment and increase in PP&E driven by the
newly-acquired SABMiller beer operations.
Other Operating Income
The Groups other operating income was TRL 24.4 million for the six months ended 30 June 2012,
as compared to TRL 17.1 million for the six months ended 30 June 2011, representing an increase of
42% (or TRL 7.3 million). The increase was mainly due to an increase in advertising subsidies for
exports.
Other Operating Expenses
The Groups other operating expenses were TRL 20.1 million for the six months ended 30 June 2012,
as compared to TRL 21.0 million for the six months ended 30 June 2011, representing a decrease of
4% (or TRL 0.9 million). Other operating expenses for the six months ended 30 June 2012 included
increased donations made by Turkey Beer operations, while other operating expenses for the six
months ended 30 June 2011 included a fine of TRL 6.1 million paid to the Competition Board. See
Risk FactorsRisks Related to the Groups Businessthe Groups operations may be limited by antimonopoly regulations.
Profit from Operations
As a result of the foregoing factors, the Groups profit from operations was TRL 431.7 million for
the six months ended 30 June 2012, as compared to TRL 339.6 million for the six months ended 30
June 2011, representing an increase of 27% (or TRL 92.1 million). Operating margin was 13.5% for
the six months ended 30 June 2012, as compared to 14.9% for the six months ended 30 June 2011,
mainly as a result of the impact of the acquisition of the beer operations of SABMiller in Russia and
Ukraine in March 2012.
Loss from Associates
The Groups loss from associates was TRL 4.5 million for the six months ended 30 June 2012, as
compared to TRL 3.3 million for the six months ended 30 June 2011, representing an increase of 37%
(or TRL 1.2 million). The increase was mainly due to the lower net income derived from Central
Europe Beverages B.V., the Groups associate in Serbia.
Financial Income
The Groups financial income was TRL 203.4 million for the six months ended 30 June 2012, as
compared to TRL 119.6 million for the six months ended 30 June 2011, representing an increase of
70% (or TRL 83.8 million). The increase was mainly due to the strengthening of the Ruble against
the US dollar, which resulted in higher foreign exchange gains in the first quarter of 2012.
Financial Expenses
The Groups financial expenses were TRL 193.5 million for the six months ended 30 June 2012, as
compared to TRL 127.5 million for the six months ended 30 June 2011, representing an increase of
52% (or TRL 66.0 million). The increase was mainly due to the strengthening of the US dollar
against the Lira and Ruble, which resulted in higher foreign exchange losses.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

63

Current Period Tax Expense


The Groups current period tax expense was TRL 123.6 million for the six months ended 30 June
2012, as compared to TRL 84.6 million for the six months ended 30 June 2011, representing an
increase of 46% (or TRL 39.0 million). The increase is related to the increase in net profit and the
acquisition of SABMiller operations in Russia and Ukraine.
Deferred Tax Income
The Groups deferred tax income was TRL 34.7 million for the six months ended 30 June 2012, as
compared to TRL 6.0 million for the six months ended 30 June 2011, representing an increase of
481% (or TRL 28.7 million).
Profit For The Period
As a result of the foregoing factors, the Groups profit for the period was TRL 348.1 million for the
six months ended 30 June 2012, as compared to TRL 249.8 million for the six months ended 30 June
2011, representing an increase of 39% (or TRL 98.3 million), mainly reflecting higher net financial
income in the six months ended 30 June 2012.
Currency Translation Differences
The Groups currency translation differences were TRL (388.8) million for the six months ended 30
June 2012, as compared to TRL 204.4 million for the six months ended 30 June 2011, representing
an increase of TRL 593.2 million. The increase was mainly due to fluctuation in the exchange rate of
the US dollar against the Lira and the effect of currency translation of mainly net assets acquired
through the acquisition of the SABMiller beer operations in Russia and Ukraine.
Total Comprehensive Income
As a result of the foregoing factors, the Group realised total comprehensive loss (net of taxes) of
TRL 43.9 million for the six months ended 30 June 2012, as compared to total comprehensive income
of TRL 450.9 million for the six months ended 30 June 2011, representing a decrease in total
comprehensive income of TRL 494.8 million.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

64

Results of Operations for the Years ended 31 December 2011, 2010 and 2009
The following table sets forth the Groups results of operations for the years ended 31 December
2011, 2010 and 2009, derived from the Audited Consolidated Financial Statements unless otherwise
indicated:
For the Year Ended 31 December

2011

2010

(TRL millions)
Continuing Operations
Sales.................................................
Cost of Sales....................................

Change
2011 v
2010

2009

Change
2010 v
2009

(%)

(TRL
millions)

(%)

4,761.3
(2,479.6)

4,168.8
(2,051.3)

14.2
20.9

3,811.1
(1,907.9)

9.4
7.5

2,281.7

2,117.4

7.8

1,903.1

11.3

(1,262.8)

(1,060.5)

19.1

(928.1)

14.3

(414.8)
43.1
(42.1)

(354.0)
25.0
(34.4)

17.2
72.1
22.2

(322.1)
41.5
(46.5)

9.9
(39.7)
(26.0)

Profit from Operations.....................


Loss from Associates.......................
Financial Income .............................
Financial Expenses ..........................

605.1
(6.8)
240.7
(374.0)

693.6
(17.9)
244.3
(261.5)

(12.8)
(62.1)
(1.5)
43.1

648.0
(10.9)
375.1
(468.4)

7.0
63.9
(34.9)
(44.2)

Profit Before Tax From Continuing


Operations........................................
Current Period Tax Expense ...........
Deferred Tax Income/(Expense)......

465.0
(117.5)
12.0

658.6
(127.8)
(12.3)

(29.4)
(8.1)
(197.6)

543.8
(127.3)
5.8

21.1
0.5
(312.3)

359.5

518.4

(30.7)

422.3

303.2

25.2

1103.2

(57.8)

(143.6)

4.9

(100.0)

(12.4)

2.3

(626.8)

17.4

(86.5)

0.6

(0.1)

(628.2)

(0.9)

(86.6)
(175.5)

Gross Profit from Operations...........


Marketing, Selling and Distribution
Expenses ..........................................
General and Administration
Expenses ..........................................
Other Operating Income .................
Other Operating Expenses...............

Profit for the Period.........................


Other Comprehensive Income:
Currency Translation Differences ...
Revaluation due to change in scope
of consolidation ...............................
Value Increase/(Decrease) in
Available-for-Sale Securities............
Tax Income /(Expense) on Other
Comprehensive Income ...................
Other Comprehensive Income, (Net
of Taxes)..........................................

291.5

27.4

962.6

(36.3)

Total Comprehensive Income ...........

651.0

545.9

19.3

385.9

22.8

41.4

Sales
The Groups sales revenue was TRL 4,761.3 million for the year ended 31 December 2011, as
compared to TRL 4,168.8 million and TRL 3,811.1 million for the years ended 31 December 2010
and 2009, respectively, representing an increase of 14.2% (or TRL 592.5 million) in 2011 as compared
to 2010, and an increase of 9.4% (or TRL 357.7 million) in 2010 as compared to 2009. The increase
in 2011 was principally due to increased revenues derived primarily from the Soft Drinks segment,
driven mainly by volume growth in soft drinks and increases in average net sales prices in
International Beer, Turkey Beer and Soft Drinks. The increase in 2010 was principally due to
increased revenues derived primarily from the Soft Drinks and International Beer segments, driven
mainly by volume growth.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

65

The following table sets forth the breakdown of the Groups revenue by segment for the years
indicated:
For the Year Ended 31 December

2011

2010

(TRL millions)

Change
2011 v
2010

2009

Change
2010 v
2009

(%)

(TRL
millions)

(%)

Segment(1)
Turkey Beer .....................................
International Beer............................
Beer Group Combined ..................
Soft Drinks(2) ...................................
Other and Eliminations ...................

1,390.8
1,630.7
3,021.5
1,713.0
26.7

1,293.4
1,464.2
2,757.6
1,383.6
27.6

7.5
11.4
9.6
23.8
(3.3)

1,264.2
1,325.1
2,589.2
1,209.9
11.9

2.3
10.5
6.5
14.4
131.9

Total ................................................

4,761.3

4,168.8

14.2

3,811.1

9.4

(1) Segment revenue information in the table excludes inter-segment revenue elimination, which is reported within the line item
Other and Eliminations.
(2) Reflects the Groups share of 50.3% of CCIs revenues.

The following table sets forth certain information regarding the Groups sales volume by segment for
the years indicated:
For the Year Ended 31 December

2011

2010

Change
2011 v
2010

2009

(%)
Segment
Turkey Beer (million litres)..............
International Beer (million litres) ....
Beer Group Combined (million
litres) ...........................................
Soft Drinks(1) (million unit cases(2)) .
Total (million litres(3)) ......................

(%)

842.2
1,463.3

849.3
1,568.6

(0.8)
(6.7)

851.8
1,361.6

(0.3)
15.2

2,305.5
382.8
4,476.6

2,417.8
334.4
4,315.7

(4.6)
14.5
3.7

2,213.3
294.7
3,886.1

9.2
13.4
11.0

(1) Reflects the Groups share of 50.3% of CCIs sales volumes.


(2) One unit case represents 5.678 litres.
(3) Unit cases have been converted to litres at the ratio of 5.678 litres one unit case.

66
c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

Change
2010 v
2009

The following table sets forth certain information regarding the Groups average net sale prices per
litre of beer and per unit case of soft drinks for the years indicated:
For the Year Ended 31 December

2011

2010
(TRL)

Segment
Turkey Beer (TRL per litre) ............
International Beer (TRL per litre)...
Beer Group Combined (TRL per
litre).................................................
Soft Drinks(1) (TRL per unit case(2))
Group Consolidated(3) (TRL per
litre) .................................................

Change
2011 v
2010

2009

Change
2010 v
2009

(%)

(TRL)

(%)

1.65
1.11

1.52
0.93

8.4
19.4

1.48
0.97

2.6
(4.1)

1.31
4.47

1.14
4.14

14.9
8.2

1.17
4.10

(2.5)
0.8

1.06

0.97

10.1

0.98

(1.5)

(1) Reflects the Groups share of 50.3% of CCIs sales volumes.


(2) One unit case represents 5.678 litres.
(3) For purposes of calculation of consolidated net average sales prices, unit cases have been converted to litres at the ratio of 5.678
litres one unit case.

Turkey Beer. The Groups sales revenue from Turkey Beer was TRL 1,390.8 million for the year
ended 31 December 2011, as compared to TRL 1,293.4 million and TRL 1,264.2 million for the years
ended 31 December 2010 and 2009, respectively, representing an increase of 7.5% (or TRL 97.4
million) in 2011 as compared to 2010, and an increase of 2.3% (or TRL 29.2 million) in 2010 as
compared to 2009. Both the 7.5% increase in 2011 and the 2.3% increase in 2010 were mainly due to
higher average per unit sales prices (mainly due to price increases ahead of an excise tax increase in
2011 supported by an exchange rate increase for export sales in 2010), while sales volumes were flat
year-on-year, with higher prices and unfavourable weather conditions in the first half of 2011
offsetting the impact of the Groups continuing marketing efforts to increase beer availability, beer
culture and consumption in Turkey.
International Beer. The Groups sales revenue from International Beer was TRL 1,630.7 million for
the year ended 31 December 2011, as compared to TRL 1,464.2 million and TRL 1,325.1 million for
the years ended 31 December 2010 and 2009, respectively, representing an increase of 11.4% (or TRL
166.5 million) in 2011 as compared to 2010, and an increase of 10.5% (or TRL 139.1 million) in 2010
as compared to 2009. The 11.4% increase in 2011 was principally due to higher average per unit sales
prices (mainly due to the positive impact of the strengthening of the US dollar against the Lira and
price increases of products in local currencies), partially offset by a decrease in sales volumes, mainly
driven by higher excise taxes and input prices and intense competition in Russia, despite growth in
sales in Kazakhstan, Moldova and Georgia. The 10.5% increase in 2010 was principally due to an
increase in sales volumes, partially offset by a decrease in average per unit sales prices (due to an
applied price increase that was less than the excise tax increase in Russia).
Soft Drinks. The Groups sales revenue from Soft Drinks was TRL 1,713.0 million for the year ended
31 December 2011, as compared to TRL 1,383.6 million and TRL 1,209.9 million for the years ended
31 December 2010 and 2009, respectively, representing an increase of 23.8% (or TRL 329.4 million) in
2011, as compared to 2010, and an increase of 14.4% (or TRL 173.7 million) in 2010, as compared to
2009. The increase in 2011 was due to both volume growth and higher sales prices, driven by
successful marketing campaigns, promotions and successful innovation launches. The increase in 2010
was principally due to volume growth, driven by successful marketing campaigns, promotions and
successful innovation launches, while on average prices were flat year-on-year.
Other and Eliminations. The Groups revenue from other and eliminations was TRL 26.7 million for
the year ended 31 December 2011, as compared to TRL 27.6 million and TRL 11.9 million for the
years ended 31 December 2010 and 2009, respectively, representing a decrease of 3% (or TRL 0.9
million) in 2011 as compared to 2010, and an increase of 131.9% (or TRL 15.7 million) in 2010 as
compared to 2009. The increase in 2011 was principally due to an increase in Anadolu Etaps sales
revenue. The 131.9% increase in 2010 was principally due to the proportionate consolidation of

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

67

Anadolu Etap as of January 2010, following the acquisition by the Group of a 33.3% interest in
Anadolu Etap at the end of 2009.
Cost of Sales
The Groups cost of sales was TRL 2,479.6 million for the year ended 31 December 2011, as
compared to TRL 2,051.3 million and TRL 1,907.9 million for the years ended 31 December 2010
and 2009, respectively, representing an increase of 20.9% (or TRL 428.3 million) in 2011 as compared
to 2010, and an increase of 7.5% (or TRL 143.4 million) in 2010 as compared to 2009. The increase
in 2011 was principally due to higher input costs, principally of malt due to the poor harvest of malt
in 2010 as a result of unfavourable weather conditions in Russia. The increase in 2010 was principally
due to volume growth.
The following table sets forth the breakdown of the Groups cost of sales for the years indicated:
For the Year Ended 31 December

2011

2010

(TRL millions)
Cost of Sales
Net change in inventory ..................
Depreciation and amortisation
expense on PP&E and intangible
assets................................................
Personnel expenses ..........................
Utility expenses................................
Provision for retirement pay liability
Other expenses.................................
Total ................................................

Change
2011 v
2010

2009

Change
2010 v
2009

(%)

(TRL
millions)

(%)

1,939.9

1,581.2

22.7

1,488.8

6.2

166.5
127.0
102.8
2.1
141.2

157.8
109.0
89.8
4.0
109.7

5.5
16.6
14.5
(46.7)
28.8

134.8
102.0
88.4
1.9
92.0

17.0
6.9
1.6
112.7
19.1

2,479.6

2,051.3

20.9

1,907.9

7.5

The following table sets forth the breakdown of the Groups cost of sales by segment for the periods
indicated:
For the Year Ended 31 December

2011

2010

(TRL millions)

Change
2011 v
2010

2009

Change
2010 v
2009

(%)

(TRL
millions)

(%)

Segment(1)
Turkey Beer .....................................
International Beer............................
Beer Group Combined.....................
Soft Drinks(2) ...................................
Other and Eliminations ...................

429.6
944.5
1,374.1
1.078.4
27.1

403.8
762.2
1,166.0
865.2
20.1

6.4
23.9
17.8
24.6
34.8

424.0
703.5
1,127.4
773.4
7.1

Total

2,479.6

2,051.3

20.9

1,907.9

(4.8)
8.3
3.4
11.9
183.1
7.5

(1) Segment revenue information in the table excludes inter-segment cost of sales elimination, which is reported within the line item
Other and Eliminations.
(2) Reflects the Groups share of 50.3% of CCIs cost of sales.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

68

The following table sets forth the Groups cost of sales on a per unit basis for the periods shown.
For the Year Ended 31 December

2011

2010
(TRL)

Segment
Turkey Beer .....................................
International Beer............................
Beer Group Combined ..................
Soft Drinks ......................................

0.51
0.65
0.60
2.82

Change
2011 v
2010
(%)

0.48
0.49
0.48
2.59

7.3
32.8
23.6
8.9

2009
(TRL)
0.50
0.52
0.51
2.62

Change
2010 v
2009
(%)
(4.5)
(6.0)
(5.3)
(1.4)

Net change in inventory. The Groups net change in inventory was TRL 1,939.9 million for the year
ended 31 December 2011, as compared to TRL 1,581.2 million and TRL 1,488.8 million for the years
ended 31 December 2010 and 2009, respectively, representing an increase of 23% (or TRL 358.7
million) in 2011 as compared to 2010, and an increase of 6% (or TRL 92.4 million) in 2010 as
compared to 2009. The cost per litre of beer increased in the International Beer segment in 2011, as
compared to 2010, mainly as a result of an increase in raw material prices driven by increases in malt
prices due to poor harvest of malt in 2010 (especially in Russia), due to unfavourable weather
conditions in Russia, in oil prices and the effect of the strengthening of the US dollar and foreign
operations currencies against the Lira. The increase in 2010 was principally due to volume growth,
partially offset by decreases in input prices, such as malt in Russia, due to a good harvest, and
economies of scale, as cost of goods sold on a per unit basis decreased across the board. In the
period between 2009 and 2011, the compounded annual increase in malt prices, which is a basic
material making approximately 20% of total cost, was realized as approximately 5%.
Depreciation and amortisation expense on PP&E and intangible assets. The Groups depreciation and
amortisation expense on PP&E and intangible assets was TRL 166.5 million for the year ended 31
December 2011, as compared to TRL 157.8 million and TRL 134.8 million for the years ended 31
December 2010 and 2009, respectively, representing an increase of 5% (or TRL 8.7 million) in 2011 as
compared to 2010, and an increase of 17% (or TRL 23.0 million) in 2010 as compared to 2009. The
increases in both 2011 and 2010 were principally due to the increasing cumulative effect of recent
years investments that are aimed at increasing efficiency and capacity especially in the Groups
international operations.
Personnel expenses. The Groups personnel expenses were TRL 127.0 million for the year ended 31
December 2011, as compared to TRL 109.0 million and TRL 102.0 million for the years ended 31
December 2010 and 2009, respectively, representing an increase of 17% (or TRL 18.0 million) in 2011
as compared to 2010, and an increase of 7% (or TRL 7.0 million) in 2010 as compared to 2009. The
increase in 2011 was principally due to increases in salaries and the impact of foreign exchange rates
used for conversion of International Beer operations. The increase in 2010 was also principally due to
salary increases as the number of personnel remained relatively stable. Salary increases were typically
in line with the inflation during such periods.
Utility expenses. The Groups utilities expenses were TRL 102.8 million for the year ended 31
December 2011, as compared to TRL 89.8 million and TRL 88.4 million for the years ended 31
December 2010 and 2009, respectively, representing an increase of 15% (or TRL 13.0 million) in 2011
as compared to 2010, and an increase of 2% (or TRL 1.4 million) in 2010 as compared to 2009. The
increase in 2011 was principally due to the increase in prices of energy raw materials such as oil for
the Groups international operations. The increase in 2010 was principally due to tariff changes.
Other expenses. The Groups other expenses were TRL 141.2 million for the year ended 31 December
2011, as compared to TRL 109.7 million and TRL 92.0 million for the years ended 31 December
2010 and 2009, respectively, representing an increase of 29% (or TRL 31.5 million) in 2011 as
compared to 2010, and an increase of 19% (or TRL 17.7 million) in 2010 as compared to 2009.
Gross Profit from Operations
As a result of the foregoing factors, the Groups gross profit from operations was TRL 2,281.7
million for the year ended 31 December 2011, as compared to TRL 2,117.4 million and TRL 1,903.1
million for the years ended 31 December 2010 and 2009, respectively, representing an increase of 8%

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

69

(or TRL 164.3 million) in 2011 as compared to 2010, and an increase of 11% (or TRL 214.3 million)
in 2010 as compared to 2009. Gross margin was 47.9% for the year ended 31 December 2011, as
compared to 50.8% and 49.9% for the years ended 31 December 2010 and 2009, respectively.
Marketing, Selling and Distribution Expenses
The Groups marketing, selling and distribution expenses were TRL 1,262.8 million for the year
ended 31 December 2011, as compared to TRL 1,060.5 million and TRL 928.1 million for the years
ended 31 December 2010 and 2009, respectively, representing an increase of 19% (or TRL 202.3
million) in 2011 as compared to 2010, and an increase of 14% (or TRL 132.4 million) in 2010 as
compared to 2009. The increases in 2011 and 2010 were principally due to increases in advertising,
selling and marketing expenses, transportation and distribution expenses, personnel expenses and
depreciation and amortization expenses.
The following table sets forth the breakdown of the Groups marketing, selling and distribution
expenses for the years indicated:
For the Year Ended 31 December

2011

2010

(TRL millions)
Marketing, Selling and Distribution
Expenses
Advertising, selling and marketing
expenses ...........................................
Personnel expenses ..........................
Transportation and distribution
expenses ...........................................
Depreciation and amortization
expense on PP&E and intangible
assets................................................
Utilities and communication
expenses ...........................................
Rent expenses ..................................
Repair and maintenance expenses...
Provision for retirement pay liability
Other expenses.................................
Total ................................................

Change
2011 v
2010

2009

Change
2010 v
2009

(%)

(TRL
millions)

(%)

539.4
238.8

449.3
194.7

20.1
22.6

405.9
168.5

10.7
15.5

227.1

181.4

25.2

148.2

22.4

147.7

126.4

16.8

114.3

10.6

24.4
10.1
8.1
2.9
64.3

19.5
10.5
8.3
2.7
67.7

25.0
(3.8)
(1.9)
8.2
(5.0)

17.4
9.2
7.4
2.8
54.5

12.3
14.2
12.5
(4.0)
24.3

1,262.8

1,060.5

19.1

928.1

14.3

Advertising, selling and marketing expenses. The Groups advertising, selling and marketing expenses
were TRL 539.4 million for the year ended 31 December 2011, as compared to TRL 449.3 million
and TRL 405.9 million for the years ended 31 December 2010 and 2009, respectively, representing an
increase of 19.1% (or TRL 90.1 million) in 2011 as compared to 2010, and an increase of 14.3% (or
TRL 43.4 million) in 2010 as compared to 2009. The increase in 2011 was principally due to an
increase in above- and below-the-line marketing expenses of Soft Drinks operations (by TRL 48.0
million) and an increase in advertising expenses of Turkey Beer operations by TRL 32.6 million. The
increase in 2010 was principally due to an increase in above- and below-the-line marketing expenses
of Soft Drinks operations (by TRL 13.5 million) and an increase in advertising expenses of Turkey
Beer operations by TRL 24.3 million.
Personnel expenses. The Groups personnel expenses were TRL 238.8 million for the year ended 31
December 2011, as compared to TRL 194.7 million and TRL 168.5 million for the years ended 31
December 2010 and 2009, respectively, representing an increase of 23% (or TRL 44.1 million) in 2011
as compared to 2010, and an increase of 16% (or TRL 26.2 million) in 2010 as compared to 2009.
The increase in 2011 was principally due to salary increases, the strengthening of the US dollar
against the Lira and headcount increases in Soft Drinks operations. The increase in 2010 was

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

70

principally due to salary increases and higher bonus payments to personnel due to better
performance.
Transportation and distribution expenses. The Groups transportation and distribution expenses were
TRL 227.1 million for the year ended 31 December 2011, as compared to TRL 181.4 million and
TRL 148.2 million for the years ended 31 December 2010 and 2009, respectively, representing an
increase of 25% (or TRL 45.7 million) in 2011 as compared to 2010, and an increase of 22% (or
TRL 33.2 million) in 2010 as compared to 2009. The increase in 2011 was principally due to an
increase in global oil prices and higher Soft Drinks sales volumes, partially offset by lower
International Beer volumes. The increase in 2010 was principally due to an increase in International
Beer and Soft Drinks sales volumes.
Depreciation and amortisation expense on PP&E and intangible assets. The Groups depreciation and
amortisation expense on PP&E and intangible assets was TRL 147.7 million for the year ended 31
December 2011, as compared to TRL 126.4 million and TRL 114.3 million for the years ended 31
December 2010 and 2009, respectively, representing an increase of 17% (or TRL 21.3 million) in 2011
as compared to 2010, and an increase of 11% (or TRL 12.1 million) in 2010 as compared to 2009.
The increases in 2011 and 2010 were principally due to marketing investments in Soft Drinks and
International Beer operations mainly due to the coolers and other advertising equipment installations
at points of sale, with the latter also affected by the strengthening of the US dollar against the Lira.
General and Administration Expenses
The Groups general and administration expenses were TRL 414.8 million for the year ended 31
December 2011, as compared to TRL 354.0 million and TRL 322.1 million for the years ended 31
December 2010 and 2009, respectively, representing an increase of 17% (or TRL 60.8 million) in 2011
as compared to 2010, and an increase of 10% (or TRL 31.9 million) in 2010 as compared to 2009.
The increase in 2011 was principally due to an increase in personnel expenses, consulting expenses,
taxation other than on income and depreciation and amortization. The increase in 2010 was
principally due to an increase in personnel expenses.
The following table sets forth the breakdown of the Groups general and administration expenses for
the years indicated:
For the Year Ended 31 December

2011

2010

(TRL millions)
General and Administration
Expenses
Personnel expenses ..........................
Consulting, auditing and legal
consulting expenses..........................
Taxation (other than on income)
expenses ...........................................
Depreciation and amortisation
expense on PP&E and intangible
assets................................................
Utilities and communication
expenses ...........................................
Meeting and travel expenses............
Insurance expenses ..........................
Provision for retirement pay liability
Repair and maintenance expenses...
Other expenses.................................
Total ................................................

2009

Change
2010 v
2009

(%)

(TRL
millions)

(%)

193.6

168.1

15.2

144.0

16.8

86.2

70.2

22.9

68.5

2.5

23.5

19.2

22.1

18.0

6.5

20.0

16.8

19.3

16.0

5.1

12.5
6.5
5.7
5.4
4.6
56.7

10.7
4.4
6.4
5.9
3.7
48.6

17.0
48.7
(11.0)
(8.6)
25.3
16.8

9.4
3.9
7.3
4.4
3.3
47.3

13.5
11.9
(12.1)
33.6
11.3
2.8

414.8

354.0

17.2

322.1

9.9

71
c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

Change
2011 v
2010

Personnel expenses. The Groups general and administration personnel expenses were TRL 193.6
million for the year ended 31 December 2011, as compared to TRL 168.1 million and TRL 144.0
million for the years ended 31 December 2010 and 2009, respectively, representing an increase of 15%
(or TRL 25.5 million) in 2011 as compared to 2010, and an increase of 17% (or TRL 24.1 million) in
2010 as compared to 2009. The increase in 2011 was principally due to an increase in salaries and the
strengthening of the US dollar against the Lira, which affected the translation of results of
International Beer and international soft drinks operations. The increase in 2010 was principally due
to salary increase and higher bonus payments due to better performance.
Consulting, auditing and legal consulting expenses. Consulting, auditing and legal consulting expenses
were TRL 86.2 million for the year ended 31 December 2011, as compared to TRL 70.2 million and
TRL 68.5 million for the years ended 31 December 2010 and 2009, respectively, representing an
increase of 23% (or TRL 16.0 million) in 2011 as compared to 2010, and an increase of 2% (or TRL
1.7 million) in 2010 as compared to 2009. The increase in 2011 was principally due to the
strengthening of the US dollar against the Lira and business services rendered for International and
Turkey Beer operations.
Taxation (other than on income) expenses. The Groups taxation (other than on income) expenses
were TRL 23.5 million for the year ended 31 December 2011, as compared to TRL 19.2 million and
TRL 18.0 million for the years ended 31 December 2010 and 2009, respectively, representing an
increase of 22% (or TRL 4.3 million) in 2011 as compared to 2010, and an increase of 7% (or TRL
1.2 million) in 2010 as compared to 2009.
Depreciation and amortisation expense on PP&E and intangible assets. The Groups depreciation and
amortisation expense on PP&E and intangible assets was TRL 20.0 million for the year ended 31
December 2011, as compared to TRL 16.8 million and TRL 16.0 million for the years ended 31
December 2010 and 2009, respectively, representing an increase of 19% (or TRL 3.2 million) in 2011
as compared to 2010, and an increase of 5% (or TRL 0.8 million) in 2010 as compared to 2009. The
increase in 2011 was principally due to investments in International Beer and Soft Drinks operations.
The increase in 2010 was principally due to the strengthening of the US dollar against the Lira which
affected the translation of results of international operations.
Other Operating Income
The Groups other operating income was TRL 43.1 million for the year ended 31 December 2011, as
compared to TRL 25.0 million and TRL 41.5 million for the years ended 31 December 2010 and
2009, respectively, representing an increase of 72% (or TRL 18.1 million) in 2011 as compared to
2010, and a decrease of 40% (or TRL 16.5 million) in 2010 as compared to 2009. The increase in
2011 was principally due to an increase in gains from sales of fixed assets, an increase in fair value
due to the increase in the Groups holding in CCBI and an increase in advertising subsidies for
exports, partially offset by a decrease in income from scrap. The decrease in 2010 was principally due
to the existence of negative goodwill related to the acquisition of EBIs minority shares and the
acquisition by CCI of shares in CC Turkmenistan and a new water business cumulatively amounting
in 2009 to TRL 13.5 million.
Other Operating Expenses
The Groups other operating expenses were TRL 42.1 million for the year ended 31 December 2011,
as compared to TRL 34.4 million and TRL 46.5 million for the years ended 31 December 2010 and
2009, respectively, representing an increase of 22% (or TRL 7.7 million) in 2011 as compared to 2010,
and a decrease of 26% (or TRL 12.1 million) in 2010 as compared to 2009. The increase in 2011 was
principally due to a fine paid to the Competition Board (as noted above) of TRL 6.1 million,
partially offset by lower donations in 2011.
Profit from Operations
As a result of the foregoing factors, the Groups profit from operations was TRL 605.1 million for
the year ended 31 December 2011, as compared to TRL 693.6 million and TRL 648.0 million for the
years ended 31 December 2010 and 2009, respectively, representing a decrease of 13% (or TRL 88.5
million) in 2011 as compared to 2010, and an increase of 7% (or TRL 45.6 million) in 2010 as
compared to 2009. Operating margin was 12.7% for the year ended 31 December 2011, as compared
to 16.6% and 17.0% for the years ended 31 December 2010 and 2009, respectively.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

72

Loss from Associates


The Groups loss from associates was TRL 6.8 million for the year ended 31 December 2011, as
compared to TRL 17.9 million and TRL 10.9 million for the years ended 31 December 2010 and
2009, respectively, representing a decrease of 62% (or TRL 11.1 million) in 2011 as compared to
2010, and an increase of 64% (or TRL 7.0 million) in 2010 as compared to 2009. Both the increase in
2011 and decrease in 2010 are principally due to an impairment charge on fixed assets of Central
Europe Beverages B.V., the Groups associate in Serbia, in 2010.
Financial Income
The Groups financial income was TRL 240.7 million for the year ended 31 December 2011, as
compared to TRL 244.3 million and TRL 375.1 million for the years ended 31 December 2010 and
2009, respectively, representing a decrease of 1% (or TRL 3.6 million) in 2011 as compared to 2010,
and a decrease of 35% (or TRL 130.8 million) in 2010 as compared to 2009. The decrease in 2011
was principally due to a decrease in interest income, partially offset by an increase in foreign
exchange gains. The decrease in 2010 was principally due to a decrease in foreign exchange gains in
the International Beer operations, partially offset by an increase in interest income.
Financial Expenses
The Groups financial expenses were TRL 374.0 million for the year ended 31 December 2011, as
compared to TRL 261.5 million and TRL 468.4 million for the years ended 31 December 2010 and
2009, respectively, representing an increase of 43% (or TRL 112.5 million) in 2011 as compared to
2010, and a decrease of 44% (or TRL 206.9 million) in 2010 as compared to 2009. The increase in
2011 was principally due to an increase in foreign exchange loss, partially offset by a decrease in
interest expense, and the decrease in 2010 was principally due to decrease in foreign exchange loss of
the International Beer operations and a decrease in interest expense.
Current Period Tax Expense
The Groups current period tax expense was TRL 117.5 million for the year ended 31 December
2011, as compared to TRL 127.8 million and TRL 127.3 million for the years ended 31 December
2010 and 2009, respectively, representing a decrease of 8% (or TRL 10.3 million) in 2011 as compared
to 2010, and an increase of 0.4% (or TRL 0.5 million) in 2010 as compared to 2009. The changes in
tax expenses are directly related to the statutory taxable incomes of the Group companies.
Deferred Tax Income
The Groups deferred tax income was TRL 12.0 million for the year ended 31 December 2011, as
compared to TRL 12.3 million and TRL 5.8 million for the years ended 31 December 2010 and 2009,
respectively, representing an increase of TRL 24.3 million in 2011 as compared to 2010, and a
decrease of TRL 18.1 million in 2010 as compared to 2009. The changes should be evaluated together
with current tax expense and relate to taxable income.
Profit For The Year
As a result of the foregoing factors, the Groups profit for the year was TRL 359.5 million for the
year ended 31 December 2011, as compared to TRL 518.4 million and TRL 422.3 million for the
years ended 31 December 2010 and 2009, respectively, representing an decrease of 31% (or TRL 158.9
million) in 2011 as compared to 2010, and an increase of 23% (or TRL 96.1 million) in 2010 as
compared to 2009.
Currency Translation Differences
The Groups currency translation difference was TRL 303.2 million for the year ended 31 December
2011, as compared to TRL 25.2 million and TRL (57.8) million for the years ended 31 December
2010 and 2009, respectively, representing an increase of TRL 278.0 million in 2011 as compared to
2010, and an increase of TRL 83.0 million in 2010 as compared to 2009. The increase in 2011 was
principally due to the US dollar to Lira exchange rate being higher at period end than the yearly
average exchange rate used for the income statement and for the previous years period end exchange
rate used for the net assets of the previous year. The increase in 2010 was principally due to an
increase in the period end US dollar to Lira exchange rate compared to the 2009 period end rate.
Value Increase/(Decrease) in Available-for-Sale Securities
The Groups value increase in available-for-sale securities was TRL (12.4) million for the year ended
31 December 2011, as compared to TRL 2.3 million and TRL 17.4 million for the years ended 31

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

73

December 2010 and 2009, respectively, representing a decrease of TRL 14.7 million in 2011 as
compared to 2010, and a decrease of 87% (or TRL 15.1 million) in 2010 as compared to 2009. The
decreases in 2011 and 2010 relate to gains or losses due to changes in the Groups holding of shares
in Alternatif Bank.
Tax Income/(Expense) on Other Comprehensive Income
The Groups tax income on other comprehensive income was TRL 0.6 million for the year ended 31
December 2011, as compared to TRL (0.1) million and TRL (0.9) million for the years ended 31
December 2010 and 2009, respectively, representing an increase of TRL 0.7 million in 2011 compared
to 2010, and an increase of TRL 0.8 million in 2010 compared to 2009. The changes relate to gains
or losses due to changes in the Groups holding of shares in Alternatif Bank.
Total Comprehensive Income
As a result of the foregoing factors, the Groups total comprehensive income was TRL 651.0 million
for the year ended 31 December 2011, as compared to TRL 545.9 million and TRL 385.9 million for
the years ended 31 December 2010 and 2009, respectively, representing an increase of 19% (or TRL
105.1 million) in 2011 as compared to 2010, and an increase of 41% (or TRL 160.0 million) in 2010
as compared to 2009.
Liquidity and Capital Resources
The Groups liquidity needs arise principally from funding its growth strategies and related
investments and capital expenditures. In the periods under review, the Group has met most of its
liquidity needs through its operating cash flows and cash and borrowings from qualified credit
institutions.
CCI, which is listed on the Istanbul Stock Exchange, is an independent business from the Groups
beer operations. There is no shared management and CCI is responsible for meeting its own capital
expenditure and other working capital needs through its own cash flows and borrowings. As of 30
June 2012, there were no intercompany loans to CCI and management does not currently anticipate
providing any such loans. See also The Group and Its BusinessBusiness LinesSoft Drinks
Relationship with The Coca-Cola Company.
The Group had cash and cash equivalents of TRL 983.2 million as of 30 June 2012. Management is
of the opinion that taking into account the Groups current banking facilities and operating cash
flows, the working capital available to the Group is sufficient to meet its present requirements for at
least the next 12 months following the date of publication of this Offering Circular.
Cash Flows
The following table sets out a summary of the Groups cash flows for the periods indicated:
Six months ended 30 June
2012
Cash flow from operating activities..
Net cash used in investing activities..
Net cash used financing activities....
Currency translation differences on
cash and cash transactions ..............
Net increase in cash and cash
equivalents .......................................
Cash and cash equivalents at the
beginning of the period ...................
Cash and cash equivalents at the
end of the period .............................

2011

Year ended 31 December


2011

(TRL
240.1
(307.9)
(237.1)

477.5
(341.5)
(30.2)

millions)
663.9
(539.6)
(242.6)

2010

2009

809.2
(631.2)
(297.6)
7.3

937.7
(417.3)
(129.6)

(39.9)

23.4

95.2

105.8

(304.9)

(118.2)

913.2

936.2

936.2

1,048.5

687.1

979.0

654.7

913.2

936.2

1,048.5

(119.6)

(29.5)
390.9

Cash flow from operating activities


The Groups cash flow from operating activities was TRL 477.5 million for the six months ended 30
June 2012, as compared to TRL 240.1 million for the six months ended 30 June 2011, representing
an increase of 99% (or TRL 237.4 million). This increase reflects an increase in operating profit

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

74

before changes in operating assets and liabilities of TRL 143.4 million and the negative net changes
in operating assets and liabilities of TRL 182.9 million in the six months ended 30 June 2012, as
compared to TRL 276.8 million in the six months 2011. The increase in operating profit before
changes in operating assets and liabilities principally resulted from the TRL 108.6 million increase in
continuing operations profit before tax, which was positively adjusted in the six months ended 30
June 2012 by TRL 217.3 million in depreciation and amortization expenses, which related principally
to the acquisition of the beer operations of SABMiller in Russia and Ukraine and new investments
aimed at increasing production efficiency and capacity (six months ended 30 June 2011: TRL 158.9
million). The changes in operating assets and liabilities principally reflect an increase in trade
receivables, mainly due to an increase in sales volumes of Turkey Beer and Soft Drinks operations
and the acquisition of the beer operations of SABMiller in Russia and Ukraine; this was partially
offset by a decrease in other assets, other liabilities and provisions of TRL 307.0 million in the six
months ended 30 June 2012 (six months ended 30 June 2011: TRL 157.6 million). In large measure
the substantial increase in cash flow from operating activities for the six months ended 30 June 2012
reflects the contribution of the newly-acquired beer operations of SABMiller in Russia and Ukraine.
The Groups cash flow from operating activities was TRL 663.9 million for the year ended 31
December 2011, as compared to TRL 809.2 million for the year ended 31 December 2010,
representing a decrease of 18% (or TRL 145.3 million). This decrease reflects a decrease in operating
profit before changes in operating assets and liabilities of TRL 31.3 million and the negative net
changes in operating assets and liabilities of TRL 319.3 million in 2011 (2010: TRL 205.3 million).
The decrease in operating profit before changes in operating assets and liabilities principally resulted
from the TRL 193.6 million decrease in continuing operations profit before tax, which was positively
adjusted in 2011 by TRL 335.6 million in depreciation and amortization expenses, principally due to
new investments aimed at increasing production efficiency and capacity (2010: TRL 301.0 million),
and TRL 157.5 million in foreign exchange loss raised from loans, net (2010: TRL 5.4 million gain),
which was principally due to the strengthening of the US dollar in 2011. The changes in operating
assets and liabilities principally reflect increases in trade receivables of TRL 102.1 million (2010: TRL
97.9 million), inventories of TRL 88.0 million (2010: TRL 54.8 million), and an increase in other
assets, other liabilities and provisions of TRL 46.2 million, representing a change of TRL 114.6
million from 2010. This was partially offset by higher trade payables of TRL 54.1 million.
The Groups cash flow from operating activities was TRL 809.2 million for the year ended 31
December 2010, as compared to TRL 937.7 million for the year ended 31 December 2009,
representing a decrease of 14% (or TRL 128.5 million). This decrease reflects an increase in operating
profit before changes in operating assets and liabilities of TRL 120.9 million and the negative net
changes in operating assets and liabilities of TRL 205.3 million in 2010, as compared to a net
increase of TRL 44.1 million in 2009. The increase in operating profit before changes in operating
assets and liabilities principally resulted from the TRL 114.8 million increase in continuing operations
profit before tax, which was positively adjusted in 2010 by TRL 301.0 million in depreciation and
amortization expenses, principally due to new investments aimed at increasing production efficiency
and capacity (2009: TRL 265.6 million), and TRL 5.4 million in foreign exchange gains raised from
loans, net (2009: TRL 36.6 million foreign exchange losses raised from loans, net). The changes in
operating assets and liabilities principally reflect an increase in trade receivables of TRL 97.9 million,
mainly due to increases in volumes and gross sales price per litre and increased excise taxes in Russia,
and a decrease in inventories of TRL 54.8 million, principally due to increased sales volume and
enhanced inventory management. This was partially offset by a decrease in other assets, other
liabilities and provisions of TRL 65.2 million in 2009.
Net cash used in investing activities
The Groups net cash used in investment activities was TRL 341.5 million for the six months ended
30 June 2012 as compared to TRL 307.9 million for the six months ended 30 June 2011. Net cash
used in investing activities for the six months ended 30 June 2012 principally reflect increased
purchase of property, plant and equipment and intangible assets amounting to TRL 271.4 million,
which mainly related to growth of Soft Drinks and International Beer operations, and net cash
payments for subsidiary acquisition amounting to TRL 75.9 million, reflecting the difference in total
attributed value between the 24% interest in the share capital of Anadolu Efes issued to SABMiller
Anadolu Efes Limited, with the total acquired assets of SABMiller in Russia and Ukraine acquired
by the Group in return. Net cash used in investment activities for the six months ended 30 June 2011
principally reflects purchase of property, plant and equipment and intangible assets amounting to

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

75

TRL 320.9 million, which mainly related to technical and marketing related investments of the
Group.
The Groups net cash used in investment activities was TRL 539.6 million for the year ended 31
December 2011, as compared to TRL 631.2 million for the year ended 31 December 2010 and TRL
417.3 million for the year ended 31 December 2009.
In 2011, net cash used in investment activities principally reflected TRL 553.4 million for the purchase
of property, plant and equipment and intangible assets, which mainly related to growth of Soft
Drinks and International Beer operations, which was partially offset by TRL 18.8 million in proceeds
from sale of property, plant and equipment and intangible assets.
In 2010, net cash used in investment activities principally reflected TRL 330.7 million for the purchase
of property, plant and equipment and intangible assets, which mainly related to technical and
marketing related investments of the Group, TRL 290.5 million in cash payment for acquired
minority shares, related to the acquisition of EBI shares not previously owned by the Company, as
discussed above, and TRL 22.7 million for acquisition of subsidiaries and joint venture, net of cash
acquired. This was partially offset by TRL 14.2 million in proceeds from sale of property, plant and
equipment and intangible assets.
In 2009, net cash used in investment activities principally reflected TRL 317.7 million for the purchase
of property, plant and equipment and intangible assets, principally related to technical and marketing
investments of the Group, TRL 78.2 million in cash payment for acquired minority shares, which
related to the acquisition of the Krasny Vostok Brewing Groups (the KV Group) minority shares
by ZAO Moscow-Efes Brewery (MEB), EBIs minority shares by the Company and CC
Azerbaijans minority shares by CCI, and TRL 14.8 million in water source business investment,
which mainly related to the purchase of certain real estate, movables, licenses and other assets of a
natural water company by CCI. These expenditures were partially offset by TRL 13.5 million in
proceeds from sale of property, plant and equipment and intangible assets.
Net cash from financing activities
The Groups net cash used in financing activities was TRL 30.2 million for the six months ended 30
June 2012, as compared to TRL 237.1 million for the six months ended 30 June 2011, representing a
decrease of 87% (or TRL 206.9 million). The decrease mainly reflected increased net borrowing in
2011, required to cover financing needs relating to the acquisition of the beer operations of
SABMiller in Russia and Ukraine, as well as capital expenditures and short-term financing needs of
operations. The change in net cash used in financing activities also reflected lower dividend payments
of TRL 221.0 million in the six months ended 30 June 2012, as compared to TRL 246.5 million in
the six months ended 30 June 2011.
The Groups net cash from financing activities was TRL 242.6 million for the year ended 31
December 2011 as compared to TRL 297.6 million for the year ended 31 December 2010 and TRL
129.6 million for the year ended 31 December 2009. Net cash from financing activities in 2011
principally reflected higher dividends paid of TRL 246.5 million (plus dividends paid to minority
shareholders of TRL 12.3 million), net repayment of short-term and long-term debt of TRL 10.5
million and net interest paid of TRL 6.1 million. This was partially offset by TRL 32.8 million
change in time deposits with maturity more than three months. Net cash from financing activities in
2010 principally reflected dividends paid of TRL 169.0 million, net repayment of short-term and longterm debt of TRL 115.1 million and net interest paid of TRL 5.7 million, which was partially offset
by TRL 26.9 million capital increase in subsidiaries by minority shareholders (principally reflecting the
share capital increase in MEB by minority shareholders). Net cash from financing activities in 2009
principally reflected dividends paid of TRL 133.5 million and net interest paid of TRL 31.4 million.
This was partially offset by net proceeds from short-term and long-term debt of TRL 54.6 million.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

76

Borrowings
As at 30 June 2012, the Groups outstanding loans and borrowings were TRL 2,215.2 million
including TRL 836.6 million in current loans and borrowings. The following table sets forth
information about certain of the Groups material long-term loans and borrowings as at the dates
indicated:
Date of
signature

Anadolu Efes Rabobank Loan 1 .....


Anadolu Efes Rabobank Loan 2 .....
Anadolu Efes Rabobank Loan 3 .....
Anadolu Efes S. Generale ................
EBI Rabobank Loan 4.....................
EBI Akbank .....................................
MEB HSBC Loan ............................
EKB EBRD Loan 1 .........................
EKB EBRD Loan 2 .........................
Vitanta EBRD Loan 3 .....................
Lomisi EBRD Loan 4 ......................
CCI BoA Club Loan........................
CCI-BNP Club Loan (USD portion)..
CCI-BNP Club Loan (EUR portion) .

23.02.2012
19.03.2012
31.05.2011
24.06.2011
29.08.2011
19.10.2010
10.05.2011
29.05.2012
09.06.2008
01.10.2008
20.07.2010
22.09.2011
07.03.2011
07.03.2011

Duration

Outstanding Principal
Amount of Loan
(as of 30 June 2012)

(months)
36
36
36
36
36
24
36
72
72
72
60
36
36
36

Amount due
through 30
June 2013

US$150,000,000
US$50,000,000
US$80,000,000
US$26,667,000
US$100,000,000
US$100,000,000
US$67,500,000
KZT2,184,000,000(1)
US$28,000,000
US$12,600,000
US$13,094,000
US$150.000.000
US$538,000,000
EUR46,824,193

54,195,000
18,065,000
72,260,000
24,086,065
72,260,000
180,650,000
40,646,250
17,603,159
20,232,800
9,104,760
3,311,604
0
0
0

Amount due
after 30 June
2013
(TRL millions)
216,780,000
72,260,000
72,260,000
24,087,871
108,390,000
0
81,292,500
8,801,579
30,349,200
13,657,140
20,342,707
270,975,000
971,897,000
106,487,580

Total

270,975,000
90,325,000
144,520,000
48,173,936
180,650,000
180,650,000
121,938,750
26,404,738
50,582,000
22,761,900
23,654,311
270,975,000
971,897,000
106,487,580

(1) KZT means Kazakh Tenge, the official currency of the Republic of Kazakhstan.

The Groups Lira-denominated loans have fixed interest rates ranging from 5.00% to 14.75%. Our US
dollar-denominated loans have fixed interest rates ranging from 3.60% to 6.70% and floating interest
rates ranging from LIBOR plus 1.00% to LIBOR plus 3.87%. The Groups Euro-denominated loans
have fixed interest rates of 5.75% and floating interest rates for LIBOR plus 1.80%. The Groups
loans in currencies other than Lira, US dollar or Euro have fixed interest rates of 8.11% and floating
interest rates ranging from LIBOR plus 0.40% to 0.50%. The Groups leasing agreements have fixed
interest rates ranging from 3.45% to 8%.
The following table sets forth the Groups gross indebtedness for the periods indicated:
As at 30 June
2012

2011

Bank overdrafts and short term loans ..


Short-term payables to other lenders....
Other short-term payables ....................
Current financial debts...........................
Long-term bank loans...........................
Non-current payables to other lenders .
Other long-term payables......................
Non-current financial debts ....................

836.6

1.0
837.7
1,375.3

2.2
1,377.6

711.7

0.8
712.58
1,145.1

2.2
1,117.3

Total Gross Financial Debt ...................

2,215.2

1,829.3

As at 31 December
2011
(TRL millions)
794.8

0.9
795.6
1,301.7

2.1
1,303.8
2,099.5

2010

2009

995.6

0.6
996.1
766.8

1.6
768.4

948.5

0.8
949.3
906.8

1.2
908.1

1,764.5

1,857.4

The majority of the Groups current financial debt is mainly in the form of short-term loans (equal to
TRL 836.6 million as of 30 June 2012). These are credit lines that the Company and its subsidiaries
and joint ventures enter into on a bilateral basis with various banks. As of 30 June 2012, the Group
had over 60 such agreements, of various sizes, up to TRL 10 million. Funds drawn on these credit
lines incur interest, must be repaid within 12 months and can be revoked at the lending banks
discretion.
For a description of certain of the Groups other indebtedness and its material terms, see below
Description of Certain Indebtedness. See also Note 6 of the 2012 Interim Financial Statements for
further information about the Groups borrowings.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

77

Capital Expenditures
In the three years ended 31 December 2011 and in the six months ended 30 June 2012, the Groups
principal investments in an aggregate amount of TRL 1,473.2 million (excluding biological asset
purchases) related primarily to the Groups growth strategies and technical investments, including
upgrades to its production facilities, and marketing related expenditures such as refrigerated units for
point-of-sale purchases. The historical capital expenditure figure includes the Groups share of 50.3%
of CCIs capital expenditures over the period. As CCI is an independent business from the Groups
beer operations, CCI is responsible for meeting its own capital expenditure and other working capital
needs through its own cash flows and borrowings.
Based on its current plans, the Group expects that its capital expenditures in the short and mediumterm will principally relate to equipment purchases for technical replacements, regulatory expenditures
and marketing-related cooler improvements and is additionally contemplating building a third brewing
facility in Kazakhstan and increasing production capacity of its brewing facilities in Turkey. Such
expenditures relate only to the Groups beer operations. As noted above, CCI is responsible for
meeting its own capital expenditure and other working capital needs.
The Groups actual capital expenditures may vary significantly from its estimates and depend on a
variety of factors, including market conditions, levels of demand for the Groups products, the
availability of funding, operating cash flow and other factors fully or partially outside the Groups
control.
Contractual Obligations and Commitments
The table below sets forth the amount of the Groups contractual obligations and commitments, as at
30 June 2012, based on contractual undiscounted payments:
Total

Less than
1 year

Loans and borrowings.....................


Leases ..............................................
Put option........................................

2,212.0
3.3
86.2

836.6
3.3
86.2

Total ................................................

2,301.5

926.1

1-2 years
(TRL millions)
998.4

998.4

2-5 years

More than
5 years

376.5

0.4

376.5

0.4

As of 30 June 2012, the Company had TRL 831.6 million in guarantees, pledges and mortgages given
in favour of the Company and its fully consolidated subsidiaries. See Note 12 to the 2012 Interim
Financial Statements for further information about such guarantees, pledges and mortgages, including
a breakdown by currency. In addition, as of 30 June 2012 CCI had provided letters of guarantee to
various third parties and public institutions amounting to TRL 218.1 million.
In 1998, EBI and the European Bank for Reconstruction and Development (the EBRD) entered
into an agreement pursuant to which, among other things, the EBRD was given the right to sell
shares of Moscow Efes Brewery CJSC (MEB) acquired by the EBRD to predecessors of the
Company. The Company, EBI and the EBRD subsequently entered into an amended agreement
whereby the EBRDs right is now exercisable between 1 July 2011 and 30 June 2015. The share price
for such a sale is to be determined by an independent valuation. The Company has measured its
liability for this put option by applying a weighting of different valuation techniques based on best
estimates currently available to it, and as at 30 June 2012, it estimated the fair value of its liability
for the put option at TRL 84.0 million. See Recent Developments.
One of the shareholders in the Coca-Cola bottler in Turkmenistan (CC Turkmenistan) has a right
to sell its shares in CC Turkmenistan to CCI. For further information about this put option and the
put option of the EBRD, see Note 12 of the 2012 Interim Financial Statements.
Related Party Transactions
See Note 20 to the 2012 Interim Financial Statements and Note 37 to the 2011 Audited Consolidated
Financial Statements.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

78

Quantitative and Qualitative Disclosures about Market Risk


The Group has exposure to interest rate risk, foreign currency risk, liquidity risk, price risk and credit
risk. The Groups risk management policies are established to identify and analyse the risks faced by
the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
The Groups policy is to ensure that it maintains a strong credit rating and healthy capital ratios in
order to support its business and maximize shareholder value. The Company periodically measures
net debt to EBITDA ratio to maintain capital risk management. Net debt is calculated by deducting
cash and cash equivalents from total borrowings. The Groups related risk policies can be summarised
as follows:
Interest Rate Risk
The Groups exposure to interest rate risk relates primarily to the Groups debt obligations. Certain
of the interest rates on the Groups borrowings are based on market interest rates and therefore the
Group is exposed to interest rate fluctuations, both in Turkey and the international markets The
Group manages interest rate risk by using natural hedges that arise from offsetting interest rate of
assets and liabilities or derivative financial instruments. See Note 38(a) to the 2011 Audited
Consolidated Financial Statements for further information about the Groups sensitivity to interest
rates, including a breakdown of the amount of instruments held by the Group with fixed and floating
rates.
Foreign Currency Risk
The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a
currency other than the Lira. The currencies in which these transactions primarily are denominated
are US dollars and Euro. The Group manages foreign currency risk by using natural hedges that
arise from offsetting foreign currency denominated assets and liabilities.
The Groups exposure to foreign currency risk for the periods indicated is set forth in the table
below:
USDEUROtherUSDEUROtherUSDEUROtherdenominated denominated denominated denominated denominated denominated denominated denominated denominated
2011
2011
2011
2010
2010
2010
2009
2009
2009

Current assets ......................


Non-current assets ...............
Total assets ..........................
Current liabilities .................
Non-current liabilities..........
Total liabilities .....................

249.9
0.4
250.3
(310.9)
(882.9)
(1,193.8)

34.5
0.9
35.4
(155.3)
(54.3)
(209.6)

30.2
0.5
30.7
(20.0)

(20.0)

Net exposure ........................

(943.5)

(174.2)

10.7

(TRL millions)
48.5
10.1

48.5
10.1
(466.3)
(112.4)
(353.9)
(84.3)
(820.3)
(196.6)

27.2

27.2
(6.4)

(6.4)

77.9

77.9
(488.1)
(315.2)
(803.3)

85.2

85.2
(100.5)
(280.8)
(381.3)

25.7

25.7
(4.4)

(4.4)

(771.9)

20.8

(725.4)

(296.2)

21.2

(186.5)

A strengthening of the US dollar and the Euro, as indicated in the table below, against the Lira as at
the date indicated below would have increased (decreased) income or loss and equity by the amounts
shown below.
Income / loss

Equity

(TRL millions)
2011
USD (10% strengthening) .........................................................................
EUR (10% strengthening).........................................................................
2010
USD (10% strengthening) .........................................................................
EUR (10% strengthening).........................................................................
2009
USD (10% strengthening) .........................................................................
EUR (10% strengthening).........................................................................

(94.4)
(17.4)

151.3
2.3

(77.1)
(18.7)

112.8
2.2

(72.5)
(29.6)

105.9
2.1

A weakening of the Lira against the above currencies at 31 December would have had the equal, but
opposite effect on the above currencies to the amounts shown above, on the basis that all other
variables remain constant.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

79

Liquidity Risk
Liquidity risk is the risk that an entity will be unable to meet its net funding requirements. The
Groups approach to managing liquidity is to match the cash in and out flow volume supported by
committed lending limits from qualified credit institutions. For information about the contractual
maturities of the Groups financial liabilities and other contractual obligations and commitments as at
31 December 2011, see Note 38(c) to the 2011 Audited Consolidated Financial Statements.
Price Risk
Price risk is a combination of currency, interest and market risks which the Group manages through
natural hedges that arise from offsetting the same currency receivables and payables, interest bearing
assets and liabilities. Market risk is closely monitored by the management using the available market
information and appropriate valuation methods.
Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and
cause the other party to incur a financial loss. The Groups maximum exposure to credit risk was
TRL 1,757.5 million as at 31 December 2011. For more detail about the Groups maximum exposure
to credit risk, see Note 38(e) of the 2011 Audited Consolidated Financial Statements.
The aging of the Groups trade receivables for the periods indicated was:
As of
31 December
2011
Past
Past
Past
Past

due
due
due
due

1-30 days ...............................................................


1-3 months ............................................................
3-12 months...........................................................
more than 1 year...................................................

41.8
8.8
1.9
3.2

Total.....................................................................................

55.7

As of
31 December
2010
(TRL millions)
23.9
9.1
3.3
2.4
38.7

As of
31 December
2009
21.4
13.4
6.9
6.3
48.0

The Group attempts to control credit risk by limiting transactions with specific counterparties and
continually assessing the creditworthiness of its counterparties. It also seeks to manage its credit risk
exposure through diversification of sales activities to avoid undue concentrations of risks with
individuals or groups of customers in specific locations or businesses. The Group obtains guarantees
from its customers when it deems appropriate.
Critical Accounting Policies
The Company has identified the accounting policies discussed below as critical to the Groups
business and results of operations. The following accounting policies are both important to the
portrayal of the Groups reported amounts of expenses, assets, liabilities and the disclosure of
contingent liabilities at the reporting date and require the Companys managements most subjective
or complex judgments, often as a result of the need to estimate the effects of matters that are
inherently uncertain. The Companys management bases its estimates and assumptions on historical
experience, where applicable and other factors believed to be reasonable under the circumstances.
However, uncertainty about these assumptions and estimates could result in outcomes that could
require a material adjustment to the carrying amount of the asset or liability affected in the future.
The Company and its management cannot offer any assurance that the actual results will be
consistent with these estimates and assumptions.
Provision for Doubtful Receivables
Provision for doubtful receivables is an estimated amount that management believes to reflect the
possible future losses on existing receivables that have collection risk due to current economic
conditions. During the impairment test performed for receivables, debtors, other than the key
accounts and related parties, are assessed in relation to (i) their prior year performances, (ii) their
credit risk in the current market and (iii) their performance after the balance sheet date and up to the
issuing date of the relevant financial statements. In addition, the renegotiation conditions with these

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

80

debtors are considered. For information on the Groups provision for doubtful accounts as of 31
December 2011, see Note 10 of the 2011 Audited Consolidated Financial Statements.
Reserves for Inventory Obsolescence
During the assessment of the reserve for inventory obsolescence, the Group analyses its inventories
physically and historically, and considers the employment and usefulness of its inventories having
regard to the views of its technical personnel. The listed sales prices, average discount rates given for
sale and the expected cost incurred to sell the inventory are used to determine the net realisable value
of the inventories. For information on the Groups reserve for inventory obsolescence as of 31
December 2011, see Note 13 of the 2011 Audited Consolidated Financial Statements.
Impairment
The Group performs impairment tests for tangible assets, intangible assets with an indefinite useful
life and goodwill annually or when circumstances indicate that the carrying value may be impaired.
As of 31 December 2011, the impairment test for intangible assets with an indefinite useful life and
goodwill was generated by comparing its carrying amount with the recoverable amount. The
recoverable amount is the higher of net selling price and value in use.
In these calculations, estimated free cash flows before tax from financial budgets covering a three-year
period and approved by Board of Directors are used. Estimated free cash flows before tax after a
three-year period are calculated for five to ten years period by using expected growth rates. Estimated
free cash flows before tax are discounted to expected present value for future cash flows. Key
assumptions such as country specific market growth rates, gross domestic product per capita and
consumer price indices are derived from external sources. Other key estimates such as raw material
and good prices, working capital requirements and capital expenditures are based on the Groups key
assumptions and historical operating data. The enterprise value used as a base for the impairment test
are calculated using cash flow projections from the strategic business plan approved by the Board of
Directors and no impairment has been detected on goodwill. Perpetuity growth rate used in 2011 in
the impairment test in the operating units is between 1.00% 3.00% (2010: 1.00 % 3.00 %) and
after tax discount rate in 2011 was between 8.8% and 14.7% (2010: 9.59% 13.05%).
Liability for Put Options
The liability for the put options has been measured by applying a weighting of different valuation
techniques, and is presented in other current liabilities in the consolidated balance sheet. For
information on the put options, see Note 23 of the 2011 Audited Consolidated Financial Statements
and Contractual Obligations and Commitments.
Discount Rates Related to Retirement Pay
The discount rates related to retirement pay liability are actuarial assumptions determined in
connection with expected future salary increases and employee turnover rates. For information on the
Groups employee benefit obligations, see Note 24 of the 2011 Audited Consolidated Financial
Statements.
Deferred Tax Asset
A deferred tax asset is only recorded if it is probable that taxable income will be realised in the
future. Where it is expected that taxable income will be realised in the future, deferred tax is
calculated over the temporary differences by carrying forward the deferred tax asset in the previous
years and the accumulated losses. As of 31 December 2011, management believed that the estimations
made to indicate that the Company will incur taxable profits in the future periods were reasonable,
and deferred tax asset was recorded. For information on the Groups deferred tax assets and
liabilities, see Note 35 of the 2011 Audited Consolidated Financial Statements.
New Accounting Standards
Certain new standards, amendments and interpretations have been published were not yet effective as
of 31 December 2011 and were not applied in preparing the 2011 Audited Consolidated Financial
Statements and the 2012 Interim Financial Statements. For information on these new accounting
pronouncements that may impact the Groups operations, see Note 2.3 to the 2011 Audited
Consolidated Financial Statements and Note 2.5 to the 2012 Interim Financial Statements included
elsewhere in this Offering Circular.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

81

Description of Certain Indebtedness


The following summary of certain provisions of the Groups material indebtedness does not purport
to be complete and is subject to, and qualified in its entirety by references to the underlying
documents.
Anadolu Efes Rabobank Loan 1. On 23 February 2012, the Company, as borrower, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., Dublin Branch, as lender, entered into a credit
facility agreement (Rabobank Loan 1). Rabobank Loan 1 provides for financing of up to
US$150,000,000 with a duration of three years. Rabobank Loan 1 matures on 27 February 2015 and
is subject to half-yearly payments in five equal instalments of amounts equal to US$30,000,000
together with the interest accrued and any and all Rabobank expenses. The interest rate under
Rabobank Loan 1 is LIBOR plus a margin. Rabobank Loan 1 contains undertakings and
representations and warranties common to facilities of this type and includes customary operating and
financial covenants. Rabobank Loan 1 requires the Company to maintain the following financial
ratios: consolidated EBITDA to consolidated net finance charges and consolidated total net debt to
consolidated EBITDA. Rabobank Loan 1 is governed by Turkish law. Obligations under Rabobank
Loan 1 are not guaranteed or secured.
Anadolu Efes Rabobank Loan 2. On 19 March 2012, the Company, as borrower, and Cooperatieve
Centrale Raiffeisen-Boerenleenbank B.A., Dublin Branch, as lender, and EBI as the guarantor,
entered into a credit facility agreement (Rabobank Loan 2). Rabobank Loan 2 provides for
financing of up to US$50,000,000 with a duration of three years. The interest rate under Rabobank
Loan 2 is LIBOR plus a fixed margin. Rabobank Loan 2 matures on 23 March 2015 and is subject
to half-yearly payments in five equal instalments of amounts equal to US$10,000,000 together with
the interest accrued and any and all Rabobank expenses. Rabobank Loan 2 contains undertakings
and representations and warranties common to facilities of this type and includes customary operating
and financial covenants. Rabobank Loan 2 requires the Company to maintain the following financial
ratios: consolidated EBITDA to consolidated net finance charges and consolidated total net debt to
consolidated EBITDA. Rabobank Loan 2 is governed by Turkish law. Obligations under Rabobank
Loan 2 are guaranteed by EBI, a wholly owned subsidiary of the Company.
Anadolu Efes Rabobank Loan 3. On 31 May 2011, the Company, as borrower, and Cooperatieve
Centrale Raiffeisen-Boerenleenbank B.A., Dublin Branch, as lender, entered into a credit facility
agreement (Rabobank Loan 3). Rabobank Loan 3 provides for financing of up to US$80,000,000
with a duration of three years. The interest rate under Rabobank Loan 3 is LIBOR plus a fixed
margin. Rabobank Loan 3 matures on 6 June 2014 and is subject to half-yearly payments in four
equal instalments of amounts equal to US$20,000,000. Rabobank Loan 3 contains undertakings and
representations and warranties common to facilities of this type and includes customary operating and
financial covenants. Rabobank Loan 3 requires the Company to maintain the following financial
ratios: consolidated EBITDA to consolidated net finance charges and consolidated total net debt to
consolidated EBITDA. Rabobank Loan 3 is governed by Turkish law. Obligations under Rabobank
Loan 3 are not guaranteed or secured.
Anadolu Efes S. Generale. On 24 June 2011, the Company, as borrower and Societe Generale S.A.
Paris, as lender and Banc of America Securities Limited, as agent, entered into a fixed term loan
facility agreement (Societe Generale Loan). Societe Generale Loan provides for financing of up to
US$40,000,000 with repayment in three annual instalments with final repayment date on 24 June
2014. The interest rate under is LIBOR plus a fixed margin. Societe Generale Loan contains
undertakings and representations and warranties common to facilities of this type and includes
customary operating and financial covenants. Societe Generale Loan requires the Company to
maintain the following financial ratios: consolidated EBITDA to consolidated net finance charges and
consolidated total net debt to consolidated EBITDA. Societe Generale Loan is governed by Turkish
law. Obligations under Societe Generale Loan are not guaranteed or secured.
EBI Rabobank Loan 4. In 2011, EBI, as borrower, and Cooperatieve Centrale RaiffeisenBoerenleenbank B.A., Dublin Branch, as lender and the Company, as the guarantor, entered into a
credit facility agreement (Rabobank Loan 4). Rabobank Loan 4 provides for financing of up to
US$100,000,000 with a duration of three years. The interest rate under Rabobank Loan 4 is LIBOR
plus a fixed margin. Rabobank Loan 4 matures on 2 September 2014 and is subject to half-yearly
payments in five equal instalments of amounts equal to US$20,000,000 together with the interest
accrued and any and all Rabobank expenses. Rabobank Loan 4 contains undertakings and
representations and warranties common to facilities of this type and includes customary operating and
financial covenants. Rabobank Loan 4 requires the EBI to maintain the following financial ratios:

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

82

consolidated EBITDA to consolidated net finance charges and consolidated total net debt to
consolidated EBITDA. Rabobank Loan 4 is governed by Turkish law. Obligations under Rabobank
Loan 4 are guaranteed by the Company.
EBI Akbank. On 19 October 2010, EBI, as borrower and the Company, as the surety and Akbank
T.A.S. Malta Branch, as the lender, entered into a loan agreement (the Akbank Loan). The Akbank
Loan provides for financing of up to US$100,000,000 with a duration of two years. The interest rate
under the Akbank Loan is LIBOR plus a fixed margin. The Akbank Loan matures on 22 October
2012. The Akbank Loan contains undertakings and representations and warranties common to
facilities of this type. The Akbank Loan is governed by Turkish law. Obligations under the Akbank
Loan are guaranteed by Company, as the surety.
MEB HSBC Loan. On 10 May 2011, MEB, as borrower and HSBC Bank (RR) LLC as lender,
entered into a credit agreement (HSBC Loan). HSBC Loan provides for financing of up to
US$90,000,000 with a final maturity date of 8 May 2014. The interest rate under the HSBC Loan is
LIBOR plus a fixed margin. HSBC Loan contains undertakings and representations and warranties
common to facilities of this type and includes customary operating covenants. HSBC Loan is
governed by Russian law. Obligations under HSBC Loan are secured by EBI.
EKB EBRD Loan 1. On 29 May 2007, Efes Karanda Brewery JSC, as the Borrower and European
Bank for Reconstruction and Development, as lender, entered into a loan agreement (EBRD Loan
1). EBRD Loan 1 provides for financing of up to KZT5,200,000,000 repayable in nine gradually
increasing instalments, with the last instalment due in July 2013. The interest rate under EBRD Loan
1 is fixed. EBRD Loan 1 contains undertakings and representations and warranties common to
facilities of this type and includes customary operating and financial covenants. EBRD Loan 1 is
governed by English law. Obligations under EBRD Loan 1 are guaranteed by EBI.
EKB EBRD Loan 2. On 9 June 2008, Efes Karanda Brewery JSC, as the Borrower and European
Bank for Reconstruction and Development, as lender, entered into a loan agreement (EBRD Loan
2). EBRD Loan 2 provides for financing of up to US$40,000,000 repayable in nine gradually
increasing semi-annual instalments from the first repayment date on 3 September 2010. The interest
rate under EBRD Loan 2 is LIBOR plus a fixed margin. EBRD Loan 2 contains undertakings and
representations and warranties common to facilities of this type and includes customary operating and
financial covenants. EBRD Loan 2 is governed by English law. Obligations under EBRD Loan 2 are
guaranteed by EBI.
Vitanta EBRD Loan 3. In October 2008, IM Efes Vitanta Moldova Brewery SA, as the borrower,
and the European Bank for Reconstruction and Development, as the lender, entered into a loan
agreement (EBRD Loan 3). EBRD Loan 3 provides for financing of up to US$18,000,000. EBRD
Loan 3 is repayable in nine gradually increasing semi-annual instalments with final repayment date on
8 November 2014. The interest rate under EBRD Loan 3 is the interbank rate plus a fixed margin.
EBRD Loan 3 contains undertakings and representations and warranties common to facilities of this
type and includes customary operating and financial covenants. EBRD Loan 3 also requires the
borrower to maintain certain financial ratios, including a minimum equity amount. EBRD Loan 3 is
governed by English law. Obligations under EBRD Loan 3 are guaranteed by EBI.
Lomisi EBRD Loan 4. On 20 July 2010, JSC Lomisi, as borrower, EBI as guarantor and European
Bank for Reconstruction and Development as lender, entered into a loan agreement (EBRD Loan
4). EBRD Loan 4 provides for financing of up to EUR10,000,000 or equivalent amount in US
dollars repayable in seven instalments with the last instalment due on 23 September 2015. The current
interest rate under EBRD Loan 4 is LIBOR plus a fixed margin. The margin may step up and is
based on net debt to EBITDA ratio of the guarantor. EBRD Loan 4 contains undertakings and
representations and warranties common to facilities of this type and includes customary operating and
financial covenants. EBRD Loan 4 is governed by English law. Obligations under EBRD Loan 4 are
guaranteed by EBI.
CCI BoA Club Loan. On 22 September 2011, Coca-Cola Icecek A.S., as the borrower, four
financial institutions, as the lenders and Banc of America Securities Limited, as the agent, entered
into a facility arrangement with respect to CCI and its subsidiaries (the BoA Club Loan). The BoA
Club Loan provides for financing of up to US$150,000,000. US$125,000,000 of the Facility has been
utilised by CCI and the remaining US$25,000,000 by subsidiaries of CCI. The BoA Club Loan
matures on 22 September 2014. The interest rate under the BoA Loan is LIBOR plus a fixed margin.
The BoA Club Loan contains undertakings and representations and warranties common to facilities
of this type and includes customary operating and financial covenants. The BoA Club Loan requires

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

83

the borrower to maintain the following financial ratios: consolidated net debt to consolidated
EBITDA and consolidated EBIT to consolidated net finance charges. The BoA Club Loan is
governed by English law. Obligations of CCI under the BoA Club Loan are not guaranteed or
secured; obligations of the subsidiaries are guaranteed by CCI.
CCI BNP Club Loan. On 7 March 2011, Coca-Cola Icecek A.S., as the borrower, 12 financial
institutions, as the lenders, and BNP Paribas, as the agent, entered into a facility arrangement with
respect to CCI and its subsidiaries (the BNP Club Loan). The BNP Loan provides for financing of
up to US$600,000,000. The loan may be utilized in EUR. CCI has utilised US$363,000,000 and
c46,824,193 of the facility; the remainder has been utilised in US dollars by subsidiaries of CCI. The
BNP Club Loan matures on 7 March 2014. The interest rate under the BNP Club Loan is LIBOR or
Euribor plus a fixed margin. The BNP Club Loan contains undertakings and representations and
warranties common to facilities of this type and includes customary operating and financial covenants.
The BNP Club Loan requires the borrower to maintain the following financial ratios: consolidated
net debt to consolidated EBITDA and consolidated EBIT to consolidated net finance charges. The
BNP Club Loan is governed by English law. Obligations of CCI under the BNP Club Loan are not
guaranteed or secured; obligations of the subsidiaries are guaranteed by CCI.

c107169pu030Proof6:22.10.12_10:40B/LRevision:0OperatorHarS

84

THE GROUP AND ITS BUSINESS


Overview
The Group is a leading international brewer and the majority shareholder of Coca-Cola Icecek A.S.
(CCI), the Coca-Cola bottler in Turkey and other countries, through which the Group conducts its
soft drinks activities. Based on publicly available information, management estimates that the Group
is Europes fifth largest brewer and Canadean Global Beer Trends 2011 reports that the Group was
the worlds 12th largest beer-maker in 2010, each as measured by sales volume. CCI is the sixth
largest bottler in the Coca-Cola system, as measured by sales volume, according to information
provided to CCI by The Coca-Cola Company. The Group operates 18 breweries, seven malteries and
22 bottling plants, and its products and services are supplied to more than 600 million consumers
across 16 principal markets.
The Group is Turkeys largest beer maker, with a share of 84% of the Turkish beer market as
measured by sales volume for the six months ended 30 June 2012, according to Nielsen. It is also the
second largest brewer in Russia (on a combined basis) and the largest brewer in Kazakhstan,
Moldova and Georgia in terms of market share by volume. The Group has a portfolio of 51 beer
brands, which includes the Efes Pilsener international brand, as well as a number of premium and
local mainstream beer brands, many of which hold leading positions in their respective market
segments, as well as various licenses for international premium brands for its principal markets,
including SABMiller brands. The Group operates 18 breweries, seven malteries and one hops
processing plant in six markets and has sales operations in a further three countries. As of 30 June
2012, the Group had an annual production capacity of approximately 43.7 million hectolitres of beer
and approximately 290,000 tons of malt.
In March 2012, in connection with its strategic alliance with SABMiller, the Group acquired the
Russian and Ukrainian brewing operations of SABMiller and is in the process of integrating these
operations. In 2011, prior to their acquisition by the Group, SABMiller Russia had a 7.1% market
share by sales volume in Russia and Miller Brands Ukraine (MBU) was the number four player in
the Ukrainian beer market with 5.2% market share by sales volume, according to Nielsen.
The Group also produces, sells and distributes Coca-Cola trademarked soft drinks through CCI, its
joint venture with The Coca-Cola Company, in which the Group holds a controlling 50.3% interest.
These include sparkling beverages such as Coca-Cola, Sprite and Fanta, as well as still beverages such
as fruit juice, bottled water, energy and sports drinks, tea and iced tea. CCI and its subsidiaries and
joint ventures operate 22 bottling plants across 8 markets and have sales operations in two other
countries, giving CCI a presence in 10 markets, and as of 30 June 2012 had an annual bottling
capacity of approximately 1,154 million unit cases. Based on information from Nielson and CCI
estimates, management believes that, as measured by sales volume, CCI ranks first, or in certain cases
second, in all of the markets in which it has production activities. In Turkey, CCI is the leading
sparkling soft drinks bottler, with a share of 70% of the Turkish sparkling soft drinks market, as
measured by sales volume for 2011, according to Nielsen.
The Group has two business lines, beer and soft drinks, and reports these business lines in three
segments, Turkey Beer, International Beer and Soft Drinks. The following table sets forth the
Groups net sales by segment for the six months ended 30 June 2012 and 2011 and for the years
ended 31 December 2011, 2010 and 2009:
Six months ended 30 June

Year ended 31 December

2012

2012

2011

Change

2011

2011

2010

2009

(TRL
millions)

(%)

(TRL
millions)

(%)

(TRL
millions)

(%)

(TRL millions)

CAGR
1/1/0931/12/11

(%)

Segment(1)
Turkey Beer....................
International Beer ..........
Beer Group Combined .
Soft Drinks(2) .................
Other and Eliminations..

846.1
1,387.0
2,233.1
960.4
12.3

26.4
43.3
69.7
30.0
0.4

707.1
785.6
1,492.7
781.4
7.9

19.7
76.6
49.6
22.9
55.7

1,390.8
1,630.7
3,021.5
1,713.0
26.7

29.2
34.2
63.4
36.0
0.6

1,293.4
1,464.2
2,757.6
1,383.6
27.6

1,264.2
1,325.1
2,589.2
1,209.9
11.9

4.9
10.9
8.0
19.0
49.8

Total ..............................

3,205.8

100

2,281.9

40.5

4,761.3

100

4,168.8

3,811.1

11.8

(1) Segment revenue information in the table excludes inter-segment revenue elimination, which is reported within the line item
Other and Eliminations.
(2) Reflects the Groups share of 50.3% of revenues from CCI.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

85

The following table sets forth certain information regarding the Groups sales volume by segment for
the six months ended 30 June 2012 and 2011 and the years 2011, 2010 and 2009:
Six months ended 30 June

2012

2011

For the Year Ended 31 December

Change

2011

(%)
Segment
Turkey Beer (mn litres) .........
International Beer (mn litres)
Beer Group Combined (mn
litres)...................................
Soft Drinks(1) (mn unit
cases(2))..................................
Total (mn litres(3)).................

2010

(%)

Change
2011 v
2010

2009

(%)

Change
2010 v
2009

CAGR
1/1/0931/12/11

(%)

451.4
1,031.9

426.5
753.1

5.8
37.0

842.2
1,463.3

849.3
1,568.6

(0.8)
(6.7)

851.8
1,361.6

(0.3)
15.2

(0.6)
3.7

1,483.3

1,179.6

25.7

2,305.5

2,417.8

(4.6)

2,213.3

9.2

2.1

198.3
2,609.4

179.2
2,195.2

10.7
18.9

382.8
4,476.6

334.4
4,315.7

14.5
3.7

294.7
3,886.1

13.4
11.0

14.0
7.3

(1) Reflects the Groups share of 50.3% of CCIs sales volumes.


(2) One unit case represents 5.678 litres.
(3) Unit cases have been converted to litres at the ratio of 5.678 litres per one unit case.

Strengths
The Group believes that it has developed certain key competitive strengths that have supported its
growth to date and are expected to underpin its growth in the future, including:
Leading market positions in emerging markets with growth potential and attractive demographics. The
Group is among the leading brewers and soft drinks producers in its markets, with market leading
positions and brands for beer and soft drinks in key markets such as Turkey and Kazakhstan, and
strong market positioning in Russia following the recent acquisition of SABMiller Russia. In several
of these markets the average per capita consumption (for both beer and soft drinks) and the average
age of the population are below compared to those of more developed markets in western Europe
and the United States. As a result, these and other markets in which the Group operates have
experienced, and management believes there is potential for further growth in the beer and soft drinks
markets. Management believes that the Group, with its strong market position and balanced brand
portfolio, is well placed to benefit from attractive demographics supporting continued growth in
alcohol and soft drinks consumption in the markets in which it operates. Furthermore, management
believes that the Groups strong market position and balanced brand portfolio will continue to
support further interest in its products and present opportunities for expanding its brand range.
Strong brand portfolio with significant development capability. The Groups balanced product portfolio
includes some of the most popular and well-known brands in the markets in which it operates,
including Efes Pilsen, Stary Melnik and Karagandinskoe in its beer portfolio and Coca-Cola, Fanta
and Sprite in its soft drinks portfolio. In 2011 and the six months ended 30 June 2012, the Groups
beer portfolio included the leading brands in each of the Turkish, Kazakh, Moldovan and Georgian
markets, as well as the number three brand in Russia, according to Nielsen. Its soft drinks portfolio
also includes leading brands in its markets, including in Turkey, where management believes that
Coca-Cola is the leading sparkling beverage as measured by sales volume. The Groups portfolio
spans the premium, mainstream and economy segments in each of its beer markets, and the
acquisition of SABMiller Russia has significantly enhanced its premium product offering in Russia,
including the Miller Genuine Draft and Peroni brands. Moreover, the Group has considerable
expertise in both launching new beer brands and re-launching existing brands, promoting them to
national prominence in their markets. For example, following the acquisition of Ufa Brewery in 2003,
the Group promoted the Beliy Medved and Sokol brands, which were mainly regional brands with a
total sales volume of 93 million litres in 2003 to national brands with total sales volume of 417
million litres in 2011, resulting in a CAGR over the period of 21%. The Beliy Medved brand is now
the third brand in terms of sales volume in Russia for the six months ended 30 June 2012 as
measured by Nielsen. Management believes that its strong, balanced brand portfolio, combined with
its deep knowledge of the markets in which it operates and experience in introducing new products
provides a strong platform for capturing a proportion of growth in the expanding beer and soft
drinks markets.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

86

Leading Coca-Cola franchise in the region. The Group has a long-standing, strong partnership with
The Coca-Cola Company since 1993, which is conducted through CCIs soft drink operations. See
Business LinesSoft Drinks. Management believes that this partnership with one of the worlds
leading soft drink companies brings significant benefits to the Group, including but not limited to
rights to produce and sell well-known brands such as Coca-Cola, Fanta, Sprite and Cappy. The
strength and global brand appeal of Coca-Cola trademarked beverages have aided the Group in
building a strong presence in its soft drinks markets, whereby based on information from Nielsen and
CCI estimates, management believes that CCI ranks either first or second in all of the markets in
which it has production activities, as measured by sales volume. This partnership enables the Group
to offer its customers a range of alcoholic and non-alcoholic beverage choices, which is particularly
important in Turkey where a significant proportion of the population does not drink alcoholic
beverages.
Expertise in managing organic growth and integrating acquisitions. The Group has a strong track
record of successfully managing rapid organic growth and integrating new acquisitions into its
operations. In the past decade, the Group has grown through a combination of strategic acquisitions
and greenfield developments, including in Russia, Kazakhstan, Moldova and Georgia in its beer
business and in Pakistan, Jordan and Iraq in its soft drinks business. Most recently, the Group
entered into a strategic alliance with SABMiller and acquired the Russian and Ukrainian brewing
operations of SABMiller and is in the process of integrating these operations. See Strategic
Alliance with SABMiller. Management believes that the experience and know-how it has obtained
through its previous acquisitions and expansions is helping it successfully complete the on-going
integration of SABMiller Russia and MBU and may help it successfully integrate further acquisitions
in the future. Moreover, the acquisition and strategic alliance with SABMiller provides the Group the
opportunity to consider practices and procedures implemented by SABMiller, and it is in the process
of adopting and implementing certain SABMiller practices aimed at improving efficiencies across its
operations. Management also believes that this strategic alliance with SABMiller gives the Group a
competitive advantage in a consolidating industry environment. Management believes that this track
record leaves the Group well positioned to continue growing organically, as well as taking advantage
of future opportunities for strategic acquisitions.
Strong management team with significant experience in and knowledge of the Groups markets. Key
management personnel in the Groups markets, and particularly in Turkey, Russia and Kazakhstan,
have significant experience in the beverage industry and in the markets in which they operate. Such
personnel, many of whom are expatriates, have been living and working in their respective markets
for a number of years, and many of them have been in their respective markets for about a decade.
This experience and knowledge of both the industry and the respective markets assists the Group in
evaluating and capitalising on growth opportunities in its markets, and management believes this
provides the Group with certain advantages over other competitors.
Vertically integrated operations in key markets. Management believes that the Group derives
significant benefit from the vertical integration of its beer operations in its key markets of Turkey,
where the Group is highly integrated, and Russia. In Turkey, this integration begins with the Groups
work with local farmers and extends to its strong sales and marketing team that works with retailers
and entrepreneurs to grow the beer market and expand the beer culture. See Research and
Development and Business LinesBeerTurkey BeerMarketing, sales and distribution. In
particular, the Group works with Turkish farmers, often using seed varieties it has developed, to
secure its hops and malting barley requirements, and its facilities produce substantially all of the hops
and malt that the Group needs for its Turkey Beer operations. The Groups Russian malteries also
produce a significant amount of the malt that the Group needs and it is also able to produce a
portion of the PET bottles that it uses for bottling its beer in Russia. In addition, CCI has PET
bottle production capabilities in all of its markets. Management believes that this vertical integration
provides a distinct competitive advantage over many local producers in these markets and helps
assure quality, cost and security of supply.
Strategy
The Group aims to continue to strengthen its position as a leading international brewer and soft
drinks producer capitalising on its presence in growing markets with a focus on increasing
profitability. The Group has the following strategies with respect to its beer and soft drinks
businesses.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

87

Beer
In its beer business, the Groups vision is to become the most admired beer company in the markets
in which it operates. The Group aims to grow its beer markets, improve beer culture, create brand
loyalty and enhance the balance of its brand portfolio to further satisfy consumer demands across the
premium, mainstream and economy segments, while maintaining a focus on the profitability of its
operations. In light of its overall strategy for its beer business, the Group has identified a more
specific strategic focus for its different markets:
*

Turkey: in Turkey, the Groups strategy is focused on:


o

growing the overall beer market and expanding the beer culture;

increasing product availability, by continuing to support retailers and entrepreneurs in the


establishment of small retail outlets and on premise locations where consumers can better
enjoy beer (see Business LinesBeerTurkey BeerMarketing, sales and distribution);
and

increasing its product innovation and product variety, while maintaining its differentiation
and profitability.

Russia: in Russia, the Groups focus is on:


o

completing the integration of SABMiller Russia into the Groups existing operations
expediently and efficiently in order to achieve the expected synergies as soon as practicable;

improving cost efficiencies through the integration of SABMiller Russia and otherwise;

helping to shift consumer preferences for alcoholic products, which in Russia strongly
favour spirits over beer, including by leveraging the strength of the combined brand
portfolio; and

aiming to grow market share, by sustaining leadership in the premium segment, while
growing its share of the mainstream segment.

Other markets: in its other international beer markets, the Groups strategy is to grow the
respective overall markets, maintain its leadership (and in the case of Ukraine, becoming the
leading beer company in Eastern Ukraine), increase product penetration and availability,
differentiate the Group through its product development and increase efficiencies. The Group
may also seek non-organic growth opportunities.

Soft Drinks
With respect to the soft drink business, CCIs goal (and the Groups goal for CCI) is to have and
defend leading positions across its key markets. CCI intends to:
*

maintain its commitment to productivity and continuous innovation at each stage of its
business, concentrating on greater operational efficiency and effectiveness to help drive its
financial performance; and

continue to closely monitor consumer demand, preferences and trends to enhance the
management of its product portfolio through introducing new brands, flavours and packaging
alternatives, such as the tea and water beverages it has introduced relatively recently, with the
aim of growing both the sparkling and still categories to drive market share gains and increased
sales volumes across the markets in which it operates.

History
The group is part of the broader Anadolu Group, which consists of Anadolu Endustri Holding A.S.
(AEH) and its subsidiaries and affiliates, one of Turkeys leading conglomerates. The foundations
zilhan and Yazc families in
of the Anadolu Group were laid in the early 1950s by members of the O
Turkey. In 1969, a diverse assortment of companies and activities was brought together under AEH.
Since its inception, the Anadolu Group has grown steadily, becoming what is today a conglomerate
of more than 80 companies in 16 countries ranging from the Atlantic to the Pacific that are active
mainly in beer and soft drinks (through the Group), and the automotive, retail, and financial services
sectors. The Anadolu Group has also expanded its range of activities with investments in the
informatics, electronics, energy, food and healthcare sectors.
The Group commenced beer production in 1969 when its first two breweries in Turkey began
producing Efes Pilsen. Throughout the 1970s and 1980s, the business expanded to include hops
processing and malt production, and two breweries and two malteries were established in Turkey. In

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

88

the late 1990s, the Group acquired a fifth brewery in Turkey, along with the Marmara brand. A
marketing and distribution company was also established in this period to handle sales and marketing
in Turkey. Four Turkey-based breweries and malteries were listed on the Istanbul Stock Exchange
during the course of the 1980s and 1990s, and were ultimately merged in 2000 to form the Company.
Efes Breweries International N.V. (EBI) was established in The Netherlands in 1996 as a holding
company for the Groups international brewing operations.
The Group expanded into Kazakhstan and Russia in the late 1990s through the acquisition of a
brewery in Kazakhstan and the establishment of the Moscow Efes Brewery. The Groups Russian
brand, Stary Melnik, was also launched at this time. The Group subsequently expanded into Moldova
through the acquisition of a brewery. The scope of the Groups operations in Kazakhstan and Russia
were also expanded through the commencement of production at new breweries in Kazakhstan and
Russia and the acquisition of an additional brewery in Russia. In 2006, the Group acquired the thenseventh largest brewer in Russia, the KV Group, which at that time was the Groups largest
acquisition. The KV Group acquisition added two new breweries, four new malteries and one preform (or PET bottle) production facility to the Groups existing operations in Russia, helping to
solidify its position in Russia. The Group entered the Georgian market in 2008 through the
acquisition of one of the leading brewers in Georgia. In 2010, the Company established a Germany
subsidiary to begin selling the Efes Pilsener brand beer in Germany, which is produced for the Group
by Einbecker Brauhaus AG. The Groups strategic alliance with SABMiller formally commenced in
March 2012, and as part of those arrangements, the Group has acquired all of SABMillers brewing
operations in Russia and Ukraine. See Strategic Alliance with SABMiller below.
In the mid-1990s, the Group also began focusing on making Coca-Cola bottling investments in the
CIS through its subsidiary Efes Snai Holding A.S. (Efes Invest). Production of Coca-Cola products
began in Kazakhstan in 1995 and then expanded into Kyrgyzstan and Azerbaijan in 1996 and to
Turkmenistan in 1998. In 1996, the Group also purchased a 33.3% interest in each of the four CocaCola bottling companies that accounted for approximately 80% of Coca-Colas Turkish operations
from TCCC. In 1998 the Turkish Coca-Cola bottling operations were merged and Turkeys exclusive
bottler was set up, in which the Groups stake further increased to 40%. A new greenfield Coca-Cola
bottling plant in Almaty, Kazakhstan began operations in 2005 to meet the increasing demand for
Coca-Cola products in Kazakhstan. Also in 2005, Efes Invest acquired a 90% interest in the
Jordanian Coca-Cola bottling company. In 2005 and 2006 the Groups international soft drinks
operations through Efes Invest and Turkey soft drink operations through CCI were reorganised under
CCI, and CCIs shares were listed on the Istanbul Stock Exchange in 2006. A joint venture also
began in 2006 with a local partner in the Iraqi market (CCI now holds 100% of this Iraqi bottling
company). In 2008, CCI acquired 49% of the Coca-Cola bottling company in Pakistan. Recently in
February 2012, CCI, together with TCCC, bought a majority stake in a company that is involved in
the production, sales and distribution of soft drinks in Southern Iraq. All of the Groups Coca-Cola
bottling operations are conducted through CCI and its subsidiaries and joint ventures.
In 2009, the Group expanded into the fruit juice concentrate market, acquiring a 33.3% interest in
Anadolu Etap, a company that makes fruit juice concentrate in Turkey for sale in both in Turkey
and internationally.
Strategic Alliance with SABMiller
On 6 March 2012 the Company entered into a strategic alliance with SABMiller plc (SABMiller)
whereby EBI acquired 89% and Euro-Asian Brauereien Holding GmbH, a wholly-owned subsidiary of
EBI, acquired 11% of the shares in SABMiller RUS LLC. EBI also acquired 99% of the shares in
PJSC Miller Brands Ukraine. SABMiller also received an option to request EBI to purchase and EBI
acquired an option, conditional upon termination of a series of licensing and joint venture agreements
with the Heineken group of companies to acquire, 100% of the shares of IBT LLP in Kazakhstan for
US$1.00 in cash. IBT LLP controls SABMillers Kazakh beer operations.
In connection with the Groups acquisition of SABMiller Russia and MBU, the Company issued
142,105,263 new shares to SABMiller Anadolu Efes Limited (SABMiller AEL), a subsidiary of
SABMiller, which shares comprise 24% of the entire issued share capital of the Company. The total
proceeds received from SABMiller on the closing date were approximately TRL 3.3 billion, resulting
in an indicative Company share price of TRL 23.08. The closing price of the Companys stock was
TRL 20.60 the day prior to the initial announcement of the transaction.
At the same time, the Company entered into a relationship agreement (the Relationship Agreement)
with SABMiller, SABMiller AEL, and three other major shareholders of the Company: Yazicilar

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

89

zilhan Sinai Yatirim A.S (Ozilhan) and AEH (AEH together with
Holding A.S (Yazicilar), O
zilhan, the AE Company Group). The Relationship Agreement governs the
Yazicilar and O
relationship between the AE Company Group, SABMiller, SABMiller AEL and the Company.
Pursuant to the Relationship Agreement, certain restrictions have been imposed on the Company.
While any acquisitions in the AE Area (being Belarus, Afghanistan, Pakistan, Kazakhstan,
Kyrgyzstan, Russia, Tajikistan, Uzbekistan, Azerbaijan, Georgia, Moldova, Ukraine, Armenia,
Turkmenistan, Bahrain, Jordan, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, Syria, Turkey,
United Arab Emirates and Yemen) can only be undertaken through the Company, outside of the AE
Area SABMiller has a right of first refusal over certain geographic markets.
The Relationship Agreement also sets forth how SABMiller and the AE Company Group will
appoint directors to the Company and its Russian and Ukrainian subsidiaries, and voting in
connection with certain matters. See OwnershipCertain Arrangements with SABMillerRelationship
Agreement.
As part of the strategic alliance, AEH was issued one share in SABMiller AEL. All other shares in
SABMiller AEL are owned by SABMiller Holdings Europe Limited (SABMiller HE), a subsidiary
of SABMiller. SABMiller HE and AEH have entered into a shareholders agreement (the
Shareholders Agreement) relating to SABMiller AEL. The purpose of SABMiller AEL is to hold
and conduct transactions in relation to its shares in the Company. The Shareholders Agreement
addresses the appointment of directors of SABMiller AEL, voting in connection with certain matters
and how the rights of SABMiller AEL and the AE Company Group over the Companys share are
to be exercised. The Shareholders Agreement also sets forth certain restrictions on the transfer of
shares in the Company and SABMiller AEL. See OwnershipCertain Arrangements with
SABMillerShareholders Agreement.
Corporate Structure
The following chart shows the principal subsidiaries and joint ventures of the Group:

72.0%

(1)
(2)
(3)
*

99.9%

zgorkey Holding.
An additional 4% of CCI is held by O
TCCC (The Coca-Cola Company, through The Coca-Cola Export Corporation).
Merger not legally complete.
Only the principal subsidiaries and joint ventures of the Group are presented numbers may not add to 100% due to rounding.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

90

See Strategic Alliance with SABMiller and OwnershipCertain Arrangements with SABMiller
for information about certain agreements between the Company and SABMiller. See Business
LinesSoft DrinksRelationship with The Coca-Cola Company for information about certain
shareholding and corporate governance matters contained in CCIs constituent documents.
Business Lines
The Group operates two distinct business lines, beer and soft drinks. Through its interest in Anadolu
Etap, the Group also produces fruit juice concentrate in Turkey for sale both in Turkey and
internationally.
Beer
The Group runs its beer operations in two segments, Turkey Beer and International Beer. The
Turkey Beer segment is overseen by the Company, which owns the Turkish production facilities, and
includes Efes Pazarlama ve Dagitim Tic. A.S. (EFPA), a subsidiary that is responsible for the sales,
marketing and distribution of beer in Turkey, and Tarbes Tarim Urunleri ve Besicilik San. Tic. A.S.
(Tarbes), a subsidiary that produces hops. The Groups International Beer operations, which
encompass five countries with production facilities, are conducted through EBI. In addition to its over
60 export markets, the Group also coordinates the sale of its beer products in Germany, Belarus and
Azerbaijan. See Marketing, sales and distribution below.
Raw materials procurement
The principal raw materials used in the Groups brewing operations are barley, malt, hops, yeast,
water and packaging materials, which include glass bottles, aluminium cans, PET bottles and kegs.
The majority of raw materials used in the Groups manufacture of beer products are supplied locally.
The Group produces all of the malt requirements for its Turkish brewing operations at its two
malting plants in Afyon and C
umra. These plants have a combined annual capacity of approximately
118,000 tonnes. Through Tarbes, the Group also produces a substantial part of its hops requirement
for its Turkey Beer operations at its hops plant in Bilecik.
In addition, the Group manufactures an important part of the malt requirement for Efes Russia at its
malting plants in Moscow and Kazan, which have a total annual capacity of approximately 176,000
tonnes. Management believes that the Groups ability to generate a consistent supply of malt for its
operations in the key markets of Turkey and Russia provide a distinct competitive advantage over
many local producers in those markets. The remaining malt requirements of the Groups brewing
operations are obtained locally to the extent possible from third party suppliers, and in countries
where there are no local malt producers, through imports. The Group obtains the remaining raw
material requirements such as hops, barley and packaging materials from the open market.
The countries in which the Groups brewing operations are located are among the leading grain
producers of the world, and management does not expect any interruptions in supply of barley for
malting. Rice, sugar and hops are generally procured locally, but are imported when the quality of
such raw materials does not conform to the requirements of the Groups breweries. In Turkey,
through its research and development activities the Group has created new varieties of barley and
hops seeds with a view to improving their quality and yield. It works with Turkish farmers to grow
these varieties for use in its malteries and hops plant. See Research and development.
Packaging materials, mainly glass bottles, aluminium cans, PET bottles, cases and pallets, are
procured locally to the extent possible. The most important packaging material is glass bottles. In
Turkey, a substantial proportion of the Groups sales volume is from beer sold in returnable bottles
(approximately 53% in 2011). The use of returnable bottles necessitates an efficient two-way
distribution system, which management believes is one of the Groups strengths in Turkey.
The supply and price of raw materials used by the Group can fluctuate as a result of a number of
factors beyond the Groups control, including the level of crop production around the world, export
demand, government regulations and legislation affecting agriculture, quality and availability of
supply, speculative movements in the raw materials or commodities markets, adverse weather
conditions, currency fluctuations, economic factors affecting growth decisions and various plant
diseases and pests. The Group tries to manage the timing of purchases of raw materials in order to
benefit from lower prices, and to pass on raw materials price increases to consumers through endproduct pricing, but also uses various risk management tools such as entering into long term supply
agreements, utilizing hedging mechanisms for some of its raw materials and diversifying its supplier

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

91

base. See Risk Factors Risks Relating to the Groups Business The Group may be impacted by
changes in the availability or price of raw materials and packaging.
The brewing process
Barley is the fundamental ingredient of beer. Barley is malted and combined with other ingredients
such as sugar, rice, corn or wheat, which are added to produce different beer flavours. The
proportion of ancillary ingredients used in brewing varies according to local taste preferences and
type of beer.
The brewing process begins with the malted barley being lightly crushed into a coarse powder called
grist. At this stage, other cereals can be introduced, if required by the brewers recipe, to produce
particular characteristics of flavour, colour or appearance. The grist is transferred to a large vessel
called a mash tun, where it is mashed with hot water. The natural sugars within the malt dissolve in
the water (brewers term this water liquor), and eventually a sweet, yellow liquid is run off. The
wort, as it is called, is then boiled with hops in large vessels, known as coppers.
The next stage is fermentation, the most critical process of all. The hopped wort is cooled and run
into fermentation vessels. Yeast is added, and it begins to convert the natural sugars into alcohol,
carbon dioxide and a range of subtle flavours. Lagers are fermented with a yeast that works at cool
temperatures and sinks to the bottom of the fermenting vessel, which is known as bottom
fermentation. To ensure hygienic conditions, enclosed fermenters are used with a conical base, in
which the yeast settles into the base. Lagers are brought to condition in the brewery; some are refined
and filtered and some are pasteurised to guard against deterioration from microbes. The beer reaches
consumers in kegs, bottles or cans.
The Groups manufacturing facilities adhere to strict quality principles that control all stages of
production starting from the raw material procurement stage and continuing throughout the
production and distribution stages.
Marketing, sales and distribution
The Group views its brand portfolio as a key asset, as management believes that it fosters helping
people enjoy life better by offering both products for refreshment and brands that create emotional
bonds with consumers through creating new occasions for enjoyment.
The Group seeks to have a brand portfolio in each of its markets consisting of:
*

Strong local brand: at least one strong local brand either through acquiring and re-launching an
existing brand or creating a new brand from scratch. Management believes that local positioning
is one of the key elements that have brought success to the Group, as consumers in its markets
exhibit a preference for local beer brands; and

Licensed/imported premium brand: at least one licensed or imported brand to meet the premium
preferences of consumers. The Groups policy is to have the Efes Pilsener brand as a part of its
premium portfolio outside of Turkey. With respect to the Efes Pilsener brand, marketing efforts
are coordinated by the Company across the Groups markets and are aimed at reinforcing the
image of the brand as a premium international beer. See Support from Anadolu Efes.

In order to satisfy the different needs of consumers while using a multilayer segmentation strategy
(taking account of factors such as demographics, socio-economic status and cultural differences), the
Groups marketing efforts are focused on reaching consumers in the premium and mainstream
segments and on attaining and maintaining a greater market share by value than by sales volume.
Each of the Groups operating subsidiaries funds all marketing activities within its market both in
respect of the Efes Pilsener brand and their respective local and other licensed brands.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

92

The following table sets forth the Groups principal brands in the markets where it has brewing
operations:
Market

Principal Brands

Turkey............................

Efes Pilsen, Efes Light, Efes Dark, Efes Xtra, Marmara Gold, Marmara
Krrmz, Gusta, Mariachi, Miller Genuine Draft, Becks, Peroni
Efes Pilsener, Beliy Medved, Gold Mine Beer, Stary Melnik, Velkopopovicky
Kozel, Zolotaya Bochka , Green Beer, Tri Bogatyrya, Zhigulevskoe, Miller
Genuine Draft, Bavaria, Sokol, ESSA, Grolsch, Peroni, Redds, Zwei Meister,
Efes Pilsener, Karagandinskoe, Beliy Medved, Kruzhka Svezhego, Gold Mine
Beer, Lyubitelskoe, Bavaria, Amsterdam Navigator, Zhigilevskoe, Tyan Shan
Efes Pilsener, Chisinau, Stary Melnik, Beliy Medved, Miller Genuine Draft,
Velkopopovicky Kozel
Sarmat, Zhigulevskoe, Miller Genuine Draft, Zolotaya Bochka,
Velkopopovicky Kozel, Amsterdam Mariner
Efes Pilsener, Natakhtari, Mtieli, Miller Genuine Draft, Kaiser

Russia ............................

Kazakhstan ....................
Moldova.........................
Ukraine ..........................
Georgia ..........................

The Groups marketing is principally aimed at the population aged from 18 to 40 (unless there is a
specific legal requirement to the contrary). The Group focuses on this particular demographic group
because people within this age range typically consume more beer per capita than other age group
and are more likely to adopt and enjoy the beer culture, as they are generally more receptive to
Western per capita consumption patterns and are more likely to remain loyal to a brand if they form
that loyalty at a young age. Management believes that beer brands have longer product life cycles
than brands in many other consumer product sectors and that the strength of a beer brand tends to
endure over a long period of time once brand loyalty is established.
The Group uses a 3608 marketing strategy that aims to reach consumers in all available channels and
be a part of their daily life. In a number of its markets there are broad restrictions on beer
advertising. In Turkey, for example, where there have been restrictions in place for over 20 years,
there is a general prohibition on beer advertising in the mass media and other general sales channels,
with limited exceptions such as printed media and in-trade activities (such as in sales outlets,
restaurants and bars). In addition, advertising targeting to persons who are under age 24 is restricted,
including restrictions on alcoholic beverage producers in sponsoring certain events where young
people are in attendance. Russia has also imposed extensive restrictions on beer advertising, including
a ban on the broadcasting of beer commercials on television and radio, and more recently digital
media. See Regulation and Risk FactorsRisks Relating to the Groups BusinessRestrictions on
beer advertising, sales or consumption may adversely affect the Groups business. Management believes
these advertising restrictions will primarily affect potential market entrants, acting as a barrier to
entry by disabling the use of an important brand building tool. Management also believes that these
restrictions could, to some extent, represent an obstacle for current participants to launch new
products. However, management believes that these restrictions are less likely to affect the Groups
brands given their well-established position in the Turkish market and the Groups strong sales and
distribution network. Moreover, the Group believes that its long experience operating under
advertising restrictions in the Turkish market means it is well positioned to adapt its marketing
activities to the increasingly stringent restrictions in some of its other markets, such as Russia and
Ukraine.
The Company sells its beer products through third party dealers and distributors. Generally, in highdensity population areas, such as Istanbul, Ankara, Moscow, Rostov, St. Petersburg, Almaty,
Chisinau and Tbilisi, the Group uses a hybrid system whereby the Groups own sales force engages in
direct order taking with the customer, and third-party distributors are responsible for delivery,
invoicing and collection. In smaller cities and towns orders are taken by sales personnel employed by
dealers, who in many cases work exclusively with the Group and are supervised by the Group. The
Group places significant emphasis on its relationship with authorised dealers and distributors, thereby
minimising logistical complexity. Depending on the market, outlets can consist of supermarkets, mini
markets, food shops, kiosks, bars, restaurants, pubs or cafes. Authorised dealers and distributors
assume the risk of sale and collection of payments after products are delivered to them.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

93

Turkey Beer
The Groups beer operations in Turkey are overseen by the
breweries and malteries in Turkey. Its wholly-owned subsidiary,
of the Groups sales, marketing and distribution activities in
subsidiaries, Tarbes, produces a substantial amount of the hops
production.

Company. The Company owns the


EFPA, is responsible for the conduct
Turkey. Another of the Companys
needed for the Groups Turkish beer

During the six months ended 30 June 2012, the Group sold approximately 4.2 million hectolitres of
beer domestically in Turkey, as compared to 4.0 million hectolitres during the six months ended 30
June 2011. Including exports, the total sales volume generated by the Groups Turkey Beer operations
was approximately 4.5 million hectoliters during the six months ended 30 June 2012, as compared to
4.3 million hectoliters during the six months ended 30 June 2011. The Groups domestic sales volume
was approximately 7.9 million hectolitres of beer in each on 2011 and 2010. Including exports, the
Groups total sales volume was approximately 8.4 million hectolitres in 2011 as compared to 8.5
million hectolitres in 2010.
For the six months ended 30 June 2012, the Groups Turkey Beer segment had net sales revenue of
TRL 846.1 million, as compared to TRL 707.1 million for the six months ended 30 June 2011. In
2011, Groups Turkey Beer segment had net sales revenue of TRL 1,390.8 million, as compared to
TRL 1,293.4 million in 2010.
Market Overview
The size of the beer market in Turkey in terms of consumption is estimated by Canadean Global
Beer Trends 2011 to be approximately 8.9 million hectolitres with a relatively low per capita
consumption of 12 litres per year in 2011. Management believes it is closer to 28 litres per capita
among consumers who drink alcoholic beverages (based on market research conducted by the
Company), as a large proportion of the population do not drink alcoholic beverages.
The Group is Turkeys largest beer maker with a share of 84% of the Turkish beer market for the six
months ended 30 June 2012, as measured by sales volume, according to Nielsen. The Companys
primary competition in the Turkish beer market is Turk Tuborg Bira ve Malt Sanayii A.S. (Turk
Tuborg), a subsidiary of International Beer Breweries Ltd. Turk Tuborg primarily produces and sells
Carlsbergs brands under license. Other competitors are smaller independent labels and direct imports.
In Turkey, the Group competes on the basis of brand loyalty, availability, brand image and quality.
Facilities
The Group operates five breweries, two malteries and one hops processing facility in Turkey. The
Groups Turkish beer operations are highly vertically integrated. In particular, the Group works with
Turkish farmers, often using seed varieties it has developed, to secure its hops and malting barley
requirements, and its facilities produce substantially all of the hops and malt that the Group needs
for its Turkey Beer operations. See Research and Development. The following tables set forth
certain information about the facilities of the Group in Turkey:
Average
Installed
Capacity
Principal Brands Produced
Facility
Type
Capacity
Utilised, 2011(1)

Izmir ..............

Brewery

(million
hectolitres)
3.3

(%)

Istanbul .........
Ankara ..........

Brewery
Brewery

1.6
3.0

95
95

Adana............

Brewery

1.6

84

Luleburgaz.....

Brewery

0.9

81

79

Efes Pilsen, Efes Xtra, Marmara


Krrmz, Marmara Gold, Stary Melnik
Efes Pilsen, Becks, Efes Xtra, Bomonti
Efes Pilsen, Miller, Efes Dark, Gusta,
Mariachi, Efes Light, Efes Xtra,
Marmara Krrmz
Efes Pilsen, Efes Xtra, Marmara
Krrmz, Efes Alkolsuz, Marmara Gold
Efes Pilsen, Mojo Mix, Satsu Mix, Efes
Xtra, Marmara Krrmz, Marmara
Gold

(1) Total capacity is calculated by multiplying monthly capacity by 10, rather than 12, incorporating stoppage time for regular
working shifts, maintenance and other activities.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

94

Facility
C
umra ............................
Afyon .............................
Bilecik ............................

Type

Installed Capacity

Average Capacity
Utilised, 2011(1)

(tonnes)

(%)

Maltery
Maltery
Hops Processing

85,680
32,000
1,200

92
100
63

(1) Total capacity is calculated by multiplying monthly capacity by 10, rather than 12, incorporating stoppage time for regular
working shifts, maintenance and other activities.

Each of the Groups brewing facilities in Turkey have adjacent warehouse space.
Products
The Groups brand portfolio in the Turkish beer market also includes Efes Light, Efes Dark, Efes
Xtra, Efes Pilsen Unfiltered, Efes Alkolsuz, Bomonti, Gusta, Mariachi, Mariachi Black, Mojo Mix,
Satsu Mix, Stary Melnik, Marmara Krrmz, M34 and Marmara Gold, as well as Miller Genuine
Draft and Becks, which are produced under license and Peroni, which is imported by the Group. In
2011, the Group introduced several flavoured beers, including Mojo Mix and Efes Lemon-Flavored
Draft, to take advantage of the growing popularity of flavoured beers and lemon-flavored beverages.
Management believes the Group has developed a brand portfolio that provides effective coverage of
the beer market segments in Turkey. The following table sets forth the beer brands sold by the
Group in Turkey by market segment:
Market Segment

Brand

Super Premium ..............


Premium.........................

Peroni
Efes Dark Brown, Miller Genuine Draft, Gusta, Mariachi, Mariachi Black,
Becks, Satsu Mix, Mojo Mix
Efes Pilsen, Efes Light, Efes Dark, Efes Xtra, Efes Pilsen Unfiltered, Bomonti,
Marmara Krrmz, Stary Melnik
Marmara Gold
Efes Alkolsuz

Mainstream ....................
Economy ........................
Non-alcoholic beer.........

For the six months ended 30 June 2012, Efes Pilsen accounted for approximately 89% of the Groups
sales volume in Turkey, Efes Xtra for approximately 6%, and Miller Genuine Draft for approximately
2%. The Groups products in Turkey are currently packaged in cans, kegs and 33 and 50 centilitre
glass bottles.
Marketing, sales and distribution
The Groups primary strategy in the Turkish beer market is to grow the beer market and expand the
beer culture by increasing both new product innovation and varieties and the number of beer selling
outlets and improving beer consumption occasions and venues, as well as appealing to consumer
preferences. In addition, the Group is seeking to maximize efficiencies and to refine and improve its
brand management.
As part of its efforts to increase the retail presence of its products and grow the beer market,
especially in areas where beers retail availability is scarce, the Group has launched an initiative
supporting the set-up of small retail outlets, called Ekomini, by independent entrepreneurs by
providing them know-how and logistical support. The number of Ekomini (together with the initial
format, which was then called OTC) has grown from approximately 220 in 2009 to approximately
1,600 as of 30 June 2012 and management believes that its initiative has been successful in creating
new beer selling outlets and increasing sales. The Group also works with entrepreneurs to develop onpremise locations where consumers can enjoy beer, whereby the Group will work with entrepreneurs
to identify likely locations, undertake feasibility studies and organize the decoration of the premises,
while the entrepreneur retains overall responsibility for the operations of the venue (including profit
and loss).
The Group believes that the Turkish beer market is reflecting an increased variance of customer
preferences comprising a shift in consumer preferences toward brand quality. Consumers have also
started to value and seek information on the ingredients and origins of the products, as well as the
production process.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

95

The Group employs alternative marketing channels in the absence of access to TV and radio
advertising, neither of which can be used to advertise beer in Turkey. These alternative channels take
the form of consumer promotions and outdoor (billboard) advertising. In particular, the Group
sponsors the Anadolu Efes basketball team in Turkey, which ranks number one in terms of total
number of championships won in the Turkish basketball league. The Groups marketing, sales and
distribution activities in Turkey are conducted by EFPA. EFPA controls a network of approximately
180 dealers and 28 distributors in 15 sales regions to supply customers across Turkey with the
Groups beer products. EFPA typically enters into a standard distributor agreement, generally for an
initial two to five year term. Prices reflect the prevailing factory price at the time an order is placed,
with payment as agreed between the parties. EFPA also takes orders directly from outlets through its
own sales force in five of Turkeys largest cities, including Istanbul, Ankara and Izmir.
International Beer
The Groups International Beer operations are conducted through EBI, a wholly-owned subsidiary of
the Company. The Group has brewing operations in Russia, Kazakhstan, Moldova, Ukraine and
Georgia, and sales distribution capabilities in Belarus. These operations encompass 13 breweries and 5
malteries with an annual production capacity of approximately 33.3 million hectolitres of beer and
176,000 tonnes of malt, respectively, as of 30 June 2012.
Since 2008, the Group has collaborated with Heineken in two markets, Kazakhstan and Serbia.
Within the scope of this collaboration, Heineken holds 28% of the shares of Efes Kazakhstan and
EBI holds 28% of the shares of Central Europe Beverages (CEB), which owns the brewing
operations in Serbia. EBI and Heineken are in the process of transferring EBIs 28% shareholding in
CEB to Heineken and transferring Heinekens 28% shareholding in Efes Kazakhstan to EBI, which is
expected by management to be completed by the end 2012. The funds required for payment of the
purchase price of Heinekens 28% shareholding in Efes Kazakhstan are expected to come from the
Groups existing cash resources.
During the six months ended 30 June 2012, the Groups International Beer operations sold
approximately 10.3 million hectolitres of beer, as compared to 7.5 million hectolitres during the six
months ended 30 June 2011. In 2011, the Groups International Beer operations sold approximately
14.6 million hectolitres of beer, as compared to 15.7 million hectolitres in 2010. For the six months
ended 30 June 2012, the Groups International Beer segment had net sales revenue of TRL 1,386.9
million, as compared to TRL 783.1 million for the six months ended 30 June 2011. In 2011, Groups
International Beer segment had net sales revenue of TRL 1,626.3 million, as compared to TRL 1,464.0
million in 2010.
Russia
Moscow-Efes Brewery, in which the Group holds a 91% interest, was established by the Group in
1997 with the participation of Knyaz Rurik, a company established by the government of the City of
Moscow, to build a brewery and malting complex in Moscow and undertake the production,
marketing and sale of beer and malt. Through acquisitions and greenfield development, MEB grew to
encompass five breweries and five malteries. In March 2012, in connection with its strategic alliance
with SABMiller, the Group acquired the Russian and Ukrainian brewing operations of SABMiller
and is in the process of integrating SABMiller Russia with its existing Russian brewing operations. As
part of the integration process, the Group is in the process of discussing the terms of its
arrangements with dealers, distributors and key accounts in Russia that MEB and SABMiller Russia
have in common. See Risk FactorsRisks Related to the Groups BusinessThe integration process of
the Groups newly acquired businesses in Russia and Ukraine is not yet complete and is subject to
uncertainties, including the ability to realise anticipated cost synergies and negotiating favourable
arrangements with dealers, distributors and key accounts in Russia.
SABMiller entered the Russian beer market in 1998 by establishing a greenfield brewery in Kaluga,
close to Moscow. It subsequently acquired a brewery in Vladivostok and commissioned a further
greenfield site in Ulyanovsk. Leading brands produced by SABMiller Russia include Zolotaya
Bochka, Tri Bogatyrya and Moya Kaluga, alongside SABMillers international brands such as Miller
Genuine Draft, Velkopopovicky Kozel and Pilsner Urquell. The acquisition of SABMiller Russia has
significantly enhanced the Groups premium product offering in Russia. At the time of its acquisition,
SABMiller Russia had three breweries (in Kaluga, Ulyanovsk and Vladivostok) and a total annual
brewing capacity of approximately 9.9 million hectolitres. SAB Miller Russia was consolidated with
the Group as of 1 March 2012. See Strategic Alliance with SABMiller.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

96

During the six months ended 30 June 2012, Efes Russia sold approximately 7.3 million hectolitres of
beer, as compared to 5.5 million hectolitres during the six months ended 30 June 2011. In 2011, Efes
Russia sold approximately 10.5 million hectolitres of beer, as compared to 12.0 million hectolitres in
2010.
Market Overview
The size of the beer market in Russia in terms of consumption is estimated by Canadean Global Beer
Trends 2011 to be approximately 109.6 million hectolitres and is estimated by Canadean to be the
worlds fourth largest beer market in 2011 by consumption.
Efes Russia, which comprises the Groups existing Russian operations and the newly-acquired
operations of SABMiller Russia, ranks second on a combined basis for the six months ended 30 June
2012 in terms of market share by volume, with 17% (MEB: 10.4%; SABMiller Russia: 6.6%) based on
information from Nielsen. Prior to its acquisition by the Group, SABMiller Russia had a 7.1%
market share by sales volume in 2011, according to Nielsen.
The Russian beer market is significantly consolidated, with the top five brewers, Baltika (part of the
Carlsberg group), ABInBev, Heineken, MEB and SABMiller Russia, accounting for approximately
82% of the market share by volume for the six months ended 30 June 2012 according to Nielsen.
Facilities
Efes Russia operates a brewery in each of Moscow, Rostov, Ufa, Kazan and Novosibirsk, as well as
the three breweries in Kaluga, Ulyanovsk and Vladivostok acquired in connection with its strategic
alliance with SABMiller. It also operates five malteries, one in Moscow and four in Kazan. The
following tables set forth certain information about the brewery and maltery facilities of Efes Russia:
Brewery

Installed
Capacity

Average Capacity
Utilised, 2011(1)
(%)

Moscow .............................

(million
hectolitres)
3.99

Rostov ...............................

0.99

67

Ufa ....................................

3.49

69

Kazan ................................

4.94

62

Novosibirsk .......................

2.65

66

Kaluga...............................

5.93

64

Ulyanovsk .........................

3.25

42

Vladivostok .......................

0.73

100

63

Brands Produced

Efes Pilsener, Beliy Medved, Gold Mine


Beer, Stary Melnik, Green Beer,
Zhigulevskoe, Warsteiner, Bavaria
Gold Mine Beer, Beliy Medved, Green
Beer, Stary Melnik, Zhigulevskoe
Efes Pilsener, Beliy Medved, Gold Mine
Beer, Stary Melnik, Bavaria, Green Beer,
Sokol, Zhigulevskoe
Beliy Medved, Gold Mine Beer, Stary
Melnik, Green Beer, Zhigulevskoe
Beliy Medved, Gold Mine Beer, Stary
Melnik, Bavaria, Green Beer, Sokol,
Zhigulevskoe
Zolotaya Bochka, Tri Bogatyrya, Moya
Kaluga, V. Kozel, Miller Genuine Draft,
Pilsner Urquell, Grolsch Premium Lager,
Zwei Meister, AmberWeiss, ESSA P.G.,
Redds, Simbirskoe Light, Amsterdam
Navigator
Zolotaya Bochka, V. Kozel, Miller
Genuine Draft, Tri Bogatyrya, Zwei
Meister, Simbirskoe, Moya Kaluga
Matushkin Kvass, Vladpivo, Studuonoe,
Zhigulevskoe, Rytzar Primorja, Zolotaya
Bochka, V. Kozel

(1) Total capacity is calculated by multiplying monthly capacity by 10, rather than 12, incorporating stoppage time for regular
working shifts, maintenance and other activities.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

97

Maltery

Production Capacity

Average Capacity
Utilised, 2011(1)

(tonnes)

(%)
130,081(2)
45,895

Kazan (4 malteries) ...............................................


Moscow .................................................................

80(2)
100

(1) Total capacity is calculated by multiplying monthly capacity by 10, rather than 12, incorporating stoppage time for regular
working shifts, maintenance and other activities.
(2) Shows total production capacity and total average capacity utilised for the four Kazan malteries.

In addition, the Kazan facilities have the capacity to produce approximately 1.3 million units of preform (or PET bottles) per day, which assists in making Efes Russia self-sufficient in this material.
Products
The following table sets forth the beer brands sold by Efes Russia in Russia by market segment:
Market Segment
High premium................
Mid premium .................
Low premium ................
Upper mainstream .........
Lower mainstream .........
Discount.........................

Brand
Warsteiner, Miller Genuine Draft, Redds, Peroni
Essa, Grolsch, Amberweiss, Pilsner Urquell
Efes Pilsener, Bavaria, V. Kozel, Amsterdam Navigator
Stary Melnik, Sokol, Zwei Meister, Zolotoya Bochka
Beliy Medved, Zhigulovskoe, Moya Kaluga, Green Beer, Gold Mine, Polny
Nokaut, Tribo, Rytsar Primorya, Simbirskoe, Studenoe, Vladpivo
Matushkin Kvass, Nash Vkus

For the six months ended 30 June 2012, Beliy Medved accounted for approximately 29% of the
Groups sales volume in Russia, Gold Mine for approximately 15%, and Stary Melnik for
approximately 11%. The Groups products in Russia are currently packaged in cans, kegs, glass
bottles and PET containers.
Marketing, sales and distribution
The Groups marketing strategy in Russia is currently aimed at leveraging the strength of the merged
portfolio, sustaining its leading position in the premium segment and further growing its share of the
upper mainstream segment. Its marketing efforts typically take the form of indirect marketing
activities (such as outdoor digital advertisement) and below-the-line activities such as in-store
consumer promotions, trade activities and sponsorships. For example, the Stary Melnik brand has
been sponsoring the Russian national football (soccer) team since 2002.
Efes Russia employs direct order-taking in Moscow, and covers neighbouring regions and other
metropolitan cities by sales to authorised distributors. Efes Russia also has exclusive sales teams in
more than 60 cities and towns in Russia including Rostov, Ufa, Ekaterinburg, Samara, Novosibirsk
and St. Petersburg. In larger cities, the Groups own sales personnel are responsible for sales
merchandising and order taking, while delivery and invoicing is made by third party distributors. Efes
Russia also sells its products through authorised dealers pursuant to standard dealership agreements,
generally for one to three year terms. Prices reflect the prevailing factory price at the time an order is
placed, with payment generally due at or before shipment. Dealers must usually provide a bank or
other form of guarantee to Efes Russia. In locations where the Group does not use a hybrid system,
sales personnel of the dealers are responsible for sales and order taking. Authorised dealers and
distributors assume the risk of sale and collection of payment after products are delivered to them.
Kazakhstan
The Group entered the Kazakh market in 1996 by acquiring a brewing facility in Karaganda through
a privatization process. Efes Kazakhstan now also operates a brewery in Almaty. During the six
months ended 30 June 2012, Efes Kazakhstan sold approximately 1.4 million hectolitres of beer, as
compared to 1.1 million hectolitres during the six months ended 30 June 2011. In 2011, Efes
Kazakhstan sold approximately 2.3 million hectolitres of beer, as compared to 1.9 million hectolitres
in 2010.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

98

Market Overview
The size of the beer market in Kazakhstan in terms of consumption is estimated by Canadean Global
Beer Trends 2011 to be approximately 5.5 million hectolitres with an annual per capita consumption
of 35 litres in 2011.
Efes Kazakhstan ranks first in terms of market share by volume in Kazakhstan, with 53% share for
the six months ended 30 June 2012, according to Nielsen. The Groups Beliy Medved and Kruzhka
Svezhego brands are the leading brands in the Kazakh beer market with a market share by sales
volume of approximately 17% and 13%, respectively, for the six months ended 30 June 2012
according to Nielsen. Efes Kazakhstan and Baltic Beverages Holding, a subsidiary of Carlsberg
(BBH) are the two dominant participants in the Kazakh market. The remaining participants are
local producers.
Facilities
The following table sets forth certain information about the two brewing facilities of Efes
Kazakhstan:
Brewery

Installed Capacity

Karaganda. .......

(million hectolitres)
1.1

Almaty ..............

1.5

Average Capacity
Utilised, 2011(1)

Brands Produced

(%)
95

78

Kruzhka Svezhego, Karagandinskoe,


Beliy Medved, Zhigulevskoe, Efes
Pilsener, Lyubitelskoe, Sokol, Tian-Shan
Kruzhka Svezhego, Karagandinskoe,
Beliy Medved, Efes Pilsener, Sokol, Tyan
Shan, Amsterdam Navigator, Bavaria,
Lyubitelskoe

(1) Total capacity is calculated by multiplying monthly capacity by 10, rather than 12, incorporating stoppage time for regular
working shifts, maintenance and other activities.

Products
The following table sets forth the beer brands sold by Efes Kazakhstan in Kazakhstan by market
segment:
Market Segment
Premium.........................
Upper Mainstream.........
Lower Mainstream ........
Economy ........................

Brand
Efes Pilsener, Bavaria, Amsterdam Navigator, Heineken
Kruzhka Svezhego, Sokol, Gold Mine
Beliy Medved, Karagandinskoe, Zhigulevskoe, Tyan Shan
Lyubitelskoe

For the six months ended 30 June 2012, Beliy Medved accounted for approximately 38% of the
Groups sales volume in Kazakhstan, Kruzhka Svezhego for approximately 27%, and Karagandinskoe
for approximately 19%. The Groups products in Kazakhstan are currently packaged in cans, kegs
and 33 and 50 centilitre glass bottles. Efes Kazakhstan produces and packages Beliy Medved,
Kruzhka Svezhego, Karagandinskoe, Sokol, Tyan Shan, Lyubitelskoe, Gold Mine and Efes Pilsener in
bottles, cans and kegs.
Marketing, sales and distribution
The Groups marketing strategy in Kazakhstan is currently aimed at growing per capita beer
consumption, increasing product penetration and availability, increasing market share (particularly in
certain regions) and differentiating itself through product development. Its marketing efforts typically
take the form of indirect marketing activities, such as TV advertising and outdoor advertising on
billboards for alcohol-free beer, as well as trade marketing activities around points of sale.
Due to its terrain and relatively large area, Kazakhstan is a challenging market in terms of
establishing a nationwide distribution network. In order to overcome the distribution challenges
presented by the terrain, Efes Kazakhstan has extended the shelf life of its products and has
rationalised distribution according to the location of its production centres. Efes Kazakhstan
principally uses a hybrid system, whereby Efes Kazakhstan is responsible for calling customers and

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

99

taking orders. Ordered products are then sold to distributors, who are responsible for warehousing
and delivering products, as well as collecting amounts due from their customers. Efes Kazakhstan
utilises a network of approximately 15 distributors. Management estimates that Efes Kazakhstan
covers approximately 70% of its market using this hybrid system. For the remainder of the market,
Efes Kazakhstan relies on approximately 20 authorised dealers that are located in various regions.
Authorised dealers are supported, and their performance is monitored by, a regional sales manager
employed by Efes Kazakhstan who supervises the sales points, gauges the effectiveness of distribution,
analyses local market trends and supports the authorised dealers.
Moldova
The Group entered the Moldovan market in 2003 through the acquisition of a brewery in Chisinau.
During the six months ended 30 June 2012, Efes Moldova sold approximately 0.50 million hectolitres
of beer, as compared to 0.47 million hectolitres during the six months ended 30 June 2011. In 2011,
Efes Moldova sold approximately 0.99 million hectolitres of beer, as compared to 0.90 million
hectolitres in 2010.
Market Overview
The size of the beer market in Moldova in terms of consumption is estimated by Canadean Global
Beer Trends 2011 to be approximately 1.2 million hectolitres with an annual per capita consumption
of 34 litres in 2011.
Efes Moldova is the largest brewer in the country, with a market share by volume of approximately
78% for the six months ended 30 June 2012, according to Retail Zoom Moldova. Efes Moldovas
Chisinau brand is the best-selling brand in the market as a whole by both sales value and volume for
the six months ended 30 June 2012, according to Retail Zoom Moldova. In addition to Efes
Moldova, the other two large international participants in the Moldovan market are BBH and
ABInBev.
Facilities
The Chisinau brewery has a brewing capacity of 1.3 million hectolitres per year and in 2011, average
capacity utilisation of the plant was 71%.
Products
The following table sets forth the beer brands sold by Efes Moldova in Moldova by market segment:
Market Segment

Brand

Super Premium ..............

Efes Pilsener, Warsteiner, Grolsch, Pilsner Urquell, Miller Genuine Draft, V.


Kozel
Stary Melnik, Sokol
Chisinau
Beliy Medved

Premium.........................
Mainstream ....................
Economy ........................

For the six months ended 30 June 2012, Chisinau accounted for approximately 67% of the Groups
sales volume in Moldova, Beliy Medved for approximately 23% and Stary Melnik for approximately
4%. The Groups products in Moldova are currently packaged in glass bottles, kegs and PET
containers.
Marketing, sales and distribution
The Groups marketing strategy in Moldova is currently aimed at growing per capita beer
consumption, maintaining market position and differentiation through product and service
development. Its marketing efforts take the form of a variety of above-the-line efforts designed to
promote its brands widely, such as billboard advertisements, and below-the-line efforts to create
incentives to buy its products, such as point-of-sale displays.
Efes Moldova sells its products across Moldova through direct order-taking, while distribution of its
products is effected through authorised distributors. Efes Moldova uses approximately 15 authorised
distributors who are located in major cities of Moldova.
Ukraine
In March 2012, in connection with its strategic alliance with SABMiller, the Group acquired the
Russian and Ukrainian brewing operations of SABMiller. Prior to March 2012, the Group did not

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

100

have a presence in Ukraine. MBU was consolidated with the Group as of 1 March 2012. See
Strategic Alliance with SABMiller. SABMiller entered the Ukrainian beer market in 2008 by
acquiring a 99.8% shareholding in CJSC Sarmat, which had one brewery in Donetsk.
Market Overview
The size of the beer market in Ukraine in terms of consumption is estimated by Canadean Global
Beer Trends 2011 to be approximately 27.1 million hectolitres with an annual per capita consumption
of 60 litres in 2011.
MBU was the number four player in the Ukrainian beer market, with 5.7% market share by sales
volume for the six months ended 30 June 2012 according to Nielsen. The top participants in the
Ukrainian market are ABInBev, Carlsberg, Obolon and MBU, and accounted for over 90% of the
market share for the six months ended 30 June 2012 according to Nielsen.
Facilities
The Donetsk brewery has a brewing capacity of 2.3 million hectolitres per year and in 2011, average
capacity utilisation of the plant was 71%.
Products
The following table sets forth the beer brands sold by MBU in Ukraine by market segment:
Market Segment
Super Premium ..............
Premium.........................
Mainstream ....................
Economy ........................

Brand
Redds, Miller Genuine Draft
Zolotaya Bochka, V. Kozel
Amsterdam Mariner
Sarmat, Zhigulivske

For the six months ended 30 June 2012, Zhigulevskoe accounted for approximately 47% of the
Groups sales volume in Ukraine, Sarmat for approximately 34% and Zolotaya Bochka for
approximately 11%. MBUs products are currently packaged in cans, kegs, 33 and 50 centilitre glass
bottles and PET containers.
Marketing, sales and distribution
The Groups marketing strategy in Ukraine is currently aimed at becoming the leading beer company
in Eastern Ukraine, where its brewery is located. Its marketing efforts typically take the form of
indirect marketing activities such as TV advertising, in-store promotions and outdoor advertising such
as billboards and sponsorships.
MBU sells its products across Ukraine through a network of distributors and recently introduced a
hybrid system for its home territory of the Donbass region. MBU uses approximately 60 authorised
dealers.
Georgia
The Group entered the Georgian market in 2008 through its acquisition of Lomisi Ltd., a leading
Georgian brewer. With its strategic location between Europe and Asia and low per capita beer
consumption rates, the Group sees strong potential in the Georgian market. During the six months
ended 30 June 2012, Efes Georgia sold approximately 0.46 million hectolitres of beer, as compared to
0.42 million hectolitres during the six months ended 30 June 2011. In 2011, Efes Georgia sold
approximately 0.91 million hectolitres of beer, as compared to 0.87 million hectolitres in 2010.
Market Overview
The size of the beer market in Georgia in terms of consumption is estimated by Canadean Global
Beer Trends 2011 to be approximately 0.7 million hectolitres with an annual per capita consumption
of only 16 litres 2011.
Efes Georgia ranks first in terms of market share by volume in Georgia, with 64% for the six months
ended 30 June 2012 according to GAMMA Retail Audit. In Georgia the Group faces competition
from local brewers such as Georgian Beer Company and Kazbegi, as well as from various imported
brands.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

101

Facilities
Efes Georgias brewery is located in the Mtskheta region of Georgia. It has a brewing capacity of
1.14 million hectolitres per year and in 2011, average capacity utilisation of the plant was 51%.
Products
The following table sets forth the beer brands sold by Efes Georgia in Georgia by market segment:
Market Segment
Super premium ..............
Premium.........................
Mainstream ....................

Brand
Miller Genuine Draft
Efes Pilsener
Natakhtari, Mtieli, Kaiser

For the six months ended 30 June 2012, Natakhtari accounted for approximately 70% of the Groups
sales volume in Georgia, Mtieli for approximately 27% and Efes Pilsener for approximately 3%. The
Groups products are currently packaged in cans, kegs, 33 and 50 centilitre glass bottles and PET
containers.
Marketing, sales and distribution
The Groups marketing strategy in Georgia is currently aimed at growing per capita beer
consumption, increasing product penetration and availability, increasing market share and
differentiating itself through product development. Its marketing efforts typically take the form of
indirect marketing activities such as in-store promotions, outdoor advertising such as billboards and
sponsorships, and direct marketing activities such as TV advertising.
Soft Drinks
The Group produces, sells and distributes Coca-Cola trademarked beverages, both sparkling and still,
through CCI, in which the Company holds a 50.3% interest. The Group has had a relationship with
Coca-Cola since 1993. CCI operates the Coca-Cola franchise in Turkey and its subsidiaries and joint
ventures operate the Coca-Cola franchises in nine other markets across Central Asia and the Middle
East.
CCI is the sixth largest bottler in the Coca-Cola system as measured by sales volume, according to
information provided to CCI by TCCC. CCI, which has 22 bottling plants, has operations in Turkey,
Pakistan, Kazakhstan, Azerbaijan, Kyrgyzstan, Turkmenistan, Jordan, Iraq and Syria, as well as
exports to Tajikistan. It offers a wide range of beverages to a consumer base of close to 360 million
people. In addition to sparkling beverages, CCIs product portfolio includes juices, bottled waters,
sports and energy drinks, tea and iced tea.
CCI, which is listed on the Istanbul Stock Exchange, is an independent business from the Groups
beer operations. There is no shared management and CCI is responsible for meeting its own capital
expenditure and other working capital needs through its own cash flows and borrowings. As of 30
June 2012, there were no intercompany loans to CCI and management does not currently anticipate
providing any such loans. The Company receives monthly management accounts from CCI and
personnel from CCI are typically present at the Companys board meetings to discuss CCIs results.
Relationship with The Coca-Cola Company
Bottlers agreement

CCI and its subsidiaries and joint ventures (CCIs Bottlers) are producers, distributors and sellers
of products of The Coca-Cola Company. TCCC controls the global product development and
marketing of its brands. CCI and its Bottlers produce Coca-Cola, Fanta, Cappy and other
trademarked beverages, develop local distribution channels and distribute their products to customers,
either directly or indirectly through independent distributors. They also engage in local marketing and
promotional activities and establish business relationships with local customers. The business
relationship with TCCC is mainly governed by a bottlers agreement (and a distribution agreement, if
any) with respect to each country in which CCI has soft drinks operations.
A bottlers agreement is essential to participate as a bottler in the Coca-Cola system. The bottlers
agreements are based on a standard form that The Coca-Cola Company uses with bottlers outside the
United States and the European Union. TCCC has the right to establish in its sole discretion the
prices of the concentrates and beverage bases purchased from it, or its authorised suppliers of
concentrates and beverage bases, the conditions of shipment and the currency in which payment must

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

102

be made. TCCC normally sets concentrate prices after discussions with CCI so as to reflect trading
conditions in the relevant country TCCC has no obligation to continue this practice. TCCC has the
right to change the authorised suppliers and, at any time, revise the price of concentrate and the
currency or currencies acceptable to it or its authorised suppliers. CCI has a wide number of
authorised suppliers to choose from across its markets. If CCI or its Bottlers are unwilling to pay the
revised price, TCCC may terminate the relevant agreement or withdraw its authorisation with respect
to certain beverages.
Under the agreements, generally CCI and its Bottlers have the exclusive rights granted by TCCC in
their territories to sell the beverages covered by their respective agreements in containers authorized
for use by TCCC. TCCC has retained the right, under certain circumstances, to produce and sell, or
authorise third parties to produce and sell the beverages in any manner or form not specified in the
agreement within the territories of CCI and its Bottlers. CCI and its Bottlers are prohibited from
making sales of the beverages outside of their respective territories, or to anyone intending to resell
the beverages outside their territories. The agreements also contemplate that there may be instances in
which large or special buyers have operations transcending the boundaries of the territories of CCI
and its Bottlers and, in such instances, CCI and its Bottlers agree to collaborate with TCCC to
provide sales and distribution to such customers.
Any party to the relevant bottlers agreement may, with 60 days written notice to the other parties,
terminate the bottlers agreement in the event of non-compliance by another party with its terms so
long as the non-complying party has not cured such non-compliance during this 60-day period. In
addition, TCCC may terminate the relevant agreement upon the insolvency, bankruptcy, change of
control or similar event of CCI or its Bottlers. The bottlers agreement for Turkey and Kazakhstan
expire in June 2016 and the agreement for Pakistan in May 2013, unless it is renewed by the parties.
The agreement may be renewed at TCCCs discretion; CCI does not have an automatic right of
renewal. See Risk FactorsRisks Related to the Groups BusinessCCI and its Bottlers agreements
with The Coca-Cola Company are critical to the Groups business.
Certain shareholding arrangements
CCI has three classes of shares: the Company and EFPA hold the A Group registered shares (A
Shares); TCCC, through The Coca-Cola Export Corporation (TCCEC) and Cemal Ahmet Bozer
(CAB) hold the B Group registered shares (B Shares); and the Company and EFPA together
with the other shareholders also hold C Group bearer shares (C Shares). Each share is entitled to
one vote at ordinary or extraordinary general meeting of shareholders. The holders of A Shares and
the holders of B Shares have special rights and privileges, some of which are described below.
Appointment of the board of directors and the managing director. The majority of holders of A Shares
can appoint seven and the majority of holders of B Shares can appoint one, out of twelve directors
of CCI. CCIs daily operations are administered by the managing director who is appointed out of
candidates nominated by those members of the board of directors of CCI, who were appointed by
the holders of A Shares. The Group holds an interest of 50.3% in A Shares of CCI.
Directors voting. Decisions of CCIs board of directors can be taken by seven members (unless a
higher number of members have to vote as prescribed by the Turkish Commercial Code and Turkish
Capital Market Law). Certain Major Decisions also require approval of the member of the board
of directors, who were appointed by the majority of holders of B Shares. The Major Decisions
include proposals to amend the issued share capital of CCI; proposals to dissolve or merge CCI;
decisions relating to capital expenditure exceeding $5,000,000 which were not already approved in the
annual capital budget; and decisions to issue new securities. The Major Decisions which are
submitted for voting at the general meeting of shareholders (e.g. such Major Decisions include
amendment of the issued share capital of CCI; and dissolution or merger of CCI) require an
affirmative vote of shareholders who represent at least 80% of A Shares and B Shares.
Transfer of shares in CCI. Any amount of A Shares or B Shares in CCI can be transferred by a
shareholder to its respective affiliate, but if the transfer is to a third party then a shareholder can
transfer its A Shares or B Shares if all A Shares or B Shares, as the case may be, are transferred in
its entirety.
When contemplating a transfer of A Shares to a third party, a shareholder must first offer such
shares to the holders of B Shares; and when contemplating a transfer of B Shares to a third party a
shareholder must first offer such shares to the holders of A Shares. In each of the said cases the nonselling shareholder has ninety days to accept the offer to purchase CCIs shares from the other
shareholder(s). There are no restrictions on the transfer of C Shares.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

103

Holders of B Shares may demand the holders of A Shares to sell their A Shares to the holders of B
Shares upon occurrence of certain events, which include an unresolved deadlock by the shareholders
over any of the Major Decisions; bankruptcy of the Company or any of its affiliates; a change of
control of the Company; termination or non-renewal of any Bottlers Agreement signed between CCI,
TCCC and TCCEC. The holders of A Shares may demand the holders of B Shares to purchase its A
Shares in the event that TCCC or TCCEC terminate or fail to renew any Bottlers Agreement other
than as allowed by the Bottlers Agreement. In either of the said cases, the shares are to be sold at a
price to be agreed between the holders of A shares and the holders of B Shares; and failing an
agreement by reference to the stock price of CCI or, if this is not available, by referral to an audit
firm.
Raw materials procurement
Raw material requirements comprise the ingredients required for production of beverages and
materials required for packaging and labelling of beverages. The ingredients required for the
production of beverages include concentrate, sweeteners, purified water and carbon dioxide. Packaging
materials include cans, can ends, returnable and non-returnable glass bottles, PET resin, labels, caps,
crowns, cardboard and plastic film.
In compliance with the quality standards prescribed by its bottlers agreements, CCI and its Bottlers
purchase all containers, closures, cases, aseptic packages and other packaging materials and labels
from approved manufacturers. In addition, CCI and its Bottlers coordinate with a cross-enterprise
procurement group across the wider Coca-Cola network with respect to the purchase of certain
materials, such as PET resin, cans and glass. As noted above, pursuant to the terms of the bottlers
agreements, concentrates and beverage bases are purchased from TCCC or a company designated by
it.
Marketing, sales and distribution
Marketing efforts with respect to CCIs products are divided into two types of marketing:
*
consumer marketing, which targets the individuals who ultimately consume CCIs products; and
*
customer marketing, which targets the retailers and distributors to whom CCI sell products for
onward sale to consumers.
The Coca-Cola Company is generally responsible for, and pays for, brand promotion, sponsorships
and other above-the-line marketing activities. Generally, TCCC focuses on consumer marketing,
involving the building of brand equity, analysing consumer preferences, formulating the brand
marketing strategy and media advertising design. The consumer marketing effort is carried out by
The Coca-Cola Company, and includes television, radio and cinema advertising, particularly around
significant events such as Ramadan and various music events in Turkey and CCIs other markets.
CCI is principally responsible for below-the-line marketing activities, principally, designed to create
incentives to buy its products, such as point-of-sale displays. CCI concentrates on executing marketing
activities at the customer level, involving the development of the relationship with its customers,
occasion-based marketing at the point of purchase and carrying out other promotional activities to
build a strong presence in the marketplace.
CCIs sales and marketing strategy is to drive profitable volume growth by creating and supplying
demand for its products and, in particular, by increasing the number of occasions during which
consumers can enjoy them. Accordingly, CCI aims to reach consumers wherever they are, with the
right mix of brands, in the right packages (including availability of cold drinks for immediate
consumption) and with a regionally tailored brand message that is relevant for the particular market.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

104

The following table sets forth the principal brands in each of CCIs markets:
Market
Turkey............................
Kazakhstan ....................
Kyrgyzstan .....................
Azerbaijan......................
Iraq ................................
Jordan ............................
Tajikistan .......................
Turkmenistan.................
Pakistan .........................
Syria ...............................

Principal Brands
Coca-Cola, Coca-Cola Zero, Coca-Cola Light, Fanta, Sprite, Cappy,
Schweppes, Sensun, Burn, Fuse tea, Damla, Damla Minera, Gladiator
Coca-Cola, Coca-Cola Light, Coca-Cola Zero, Fanta, Sprite, Schweppes,
Burn, Piko, Bonaqua, Fuse Tea
Coca-Cola, Coca-Cola Light, Coca-Cola Zero, Fanta, Sprite, Schweppes,
Burn, Piko, Bonaqua, Fuse Tea
Coca-Cola, Coca-Cola Light, Coca-Cola Zero, Fanta, Sprite, Cappy,
Bonaqua, Fuse Tea
Coca-Cola, Coca-Cola Light, Fanta, Sprite, Cappy
Coca-Cola, Coca-Cola Light, Coca-Cola Zero, Fanta, Sprite, Sprite Light,
Burn, Cappy, Riwa
Coca-Cola, Fanta, Sprite
Coca-Cola, Coca-Cola Zero, Fanta, Sprite, Bonaqua, Fuse Tea
Coca-Cola, Coca-Cola Light, Fanta, Sprite, Sprite Zero, Sprite 3G, Minute
Maid, Kinley
Coca-Cola, Coca-Cola Light, Coca-Cola Zero, Fanta, Sprite, Sprite light,
Riwa

CCI has designated different geographic sales regions in each of the countries in which it operates.
Each has a sales manager who has responsibility for implementing CCIs strategies at the local level
and who leads a team of representatives responsible for sales, customer relations, merchandising and
individual account management. In each of its markets, CCI tailors it sales strategy to reflect the level
of development and local customs in the marketplace. CCI believes that its local sales management is
in the best position to evaluate the particular circumstances of each market and address its particular
needs. CCI also uses key account management to build and reinforce strong relationships with its
major customers. Key account managers work with customers to increase sales volume, revenue and
category profitability by sharing their expertise in merchandising and supply chain management, and
by helping customers through developing tailor-made promotions. Key account managers also
negotiate the commercial terms of their relationship with major customers.
In Turkey, CCIs sales force is organized by channel within each geographic region. The sales
organizations outside of Turkey differ based on the geographic size of each country, the population
density and the business opportunities. Generally, the bottling operation in each country has a sales
and marketing manager who is responsible for the sales force.
Competition
The soft drinks industry is highly competitive. Soft drinks are offered by a wide range of competitors,
including major international beverage companies such as the Pepsi Bottling Group and local
lker Group in Turkey. In particular, CCI faces price competition
beverage companies such as the U
from local non-premium brand producers and distributors, which typically produce, market and sell
sparkling and still beverages at prices lower than CCIs, especially during the summer months.
Bottling Operations in Turkey
Overview
CCI is the leading sparkling soft drinks bottler in Turkey, with a share of 70% of the Turkish
sparkling soft drinks market, as measured by sales volume for 2011, according to Nielsen. Turkey
accounts for approximately 70% of the sales volume of the Groups Soft Drinks segment.
During the six months ended 30 June 2012, in Turkey CCI sold approximately 268.3 million unit
cases, as compared to 259.0 million unit cases during the six months ended 30 June 2011. In 2011, in
Turkey CCI sold approximately 546.8 million unit cases in Turkey, as compared to 494.4 million unit
cases in 2010.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

105

Facilities
CCI owns and operates eight bottling facilities, in Turkey. The following table sets forth certain
information about CCIs bottling facilities:
Facility

Installed Capacity
(2011)

Average Capacity
Utilised, 2011

Ankara..............

(mn unit cases)


79.3

C
orlu.................

137.9

71

Izmir .................

98.6

72

Bursa.................

154.7

56

Mersin...............

78.4

73

Elazg ................

69.8

52

Mahmudiye.......
Koycegiz ...........

59.0
38.7

79
50

Brands Produced

(%)
87

Coca-Cola, Coca-Cola Light, Coca-Cola


Zero, Fanta, Sprite, Sensun, Schweppes
Coca-Cola, Coca-Cola Light, Coca-Cola
Zero, Fanta, Sprite, Sensun
SchweppesCappy, Fuse Tea, Powerade
Coca-Cola, Coca-Cola Light, Coca-Cola
Zero, Fanta, Sprite, Sensun, Schweppes
Coca-Cola, Coca-Cola Light, Coca-Cola
Zero, Fanta, Sprite, Sensun, Cappy, Fuse
Tea, Burn, Gladiator, Damla, Damla
Minera
Coca-Cola, Coca-Cola Light, Coca-Cola
Zero, Fanta, Sprite, Sensun, Schweppes,
Cappy, FuseTea
Coca-Cola, Coca-Cola Light, Coca-Cola
Zero, Fanta, Sensun
Damla
Damla

Products
The following table sets forth the products sold by CCI in Turkey, their year of introduction in
Turkey and (if relevant) the flavours in which they are currently offered:
Brand

Year of introduction

Flavours / Types

Sparkling Beverages
Coca-Cola ......................
Sensun............................
Fanta..............................
Coca-Cola light..............
Sprite..............................
Schweppes ......................
Burn ...............................
Coca-Cola zero ..............

1964
1971
1985
1986
1987
1990(1)
2003
2008

Orange, Lemon, Mandarin

Bitter Lemon, Mandarin, Tonic, Soda Water


Blue, Berry

Still Beverages
Cappy.............................

1994

Powerade........................
Damla water ..................
Damla Minera ...............
Gladiator........................
Fuse Tea ........................

2002
2007
2008
2011
2012

Orange, Peach, Apricot, Sour Cherry, Multifruit, 100%


Apple, 100% Orange, 100% Citrus Mix, 100% Peach,
100% Sour cherry, 100% Apricot, Tropic, Pulpy Orange,
Sour cherry, Pineapple, Tomato, Apricot mix, Red mix,
Yellow mix, Fruit Scherbet, Black mulberry, Fruit
Beats, Lemonade
Ice Blast, Citrus Charge, Sun Rush

Strawberry, Apple, Lemon, Sour cherry

Lemon, Peach, Mango-pineapple, Watermelon

(1) Relaunch

CCI sells Schweppes in various flavours pursuant to a separate agreement with Schweppes Holdings
Limited, a subsidiary of TCCC. Under the agreement, if TCCC terminates CCIs bottlers agreement
for Turkey, then Schweppes has the right to terminate its agreement.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

106

Marketing, sales and distribution


CCI does not produce, sell or distribute in Turkey its own brands or products from other companies
unaffiliated with TCCC. CCI does not distribute outside of Turkey any products produced in its
Turkish plants; however, CCI has received special authorisation under its bottlers agreement to sell
products to a subsidiary of TCCC in Turkey for resale in the Turkish Republic of Northern Cyprus.
CCIs marketing strategy in relation to sparkling beverages is to sustain volume and value growth by
increasing the availability of its products, having consistent consumer communications across all
media and effective segment-based pricing and packaging, as well as maintaining its presence across
the range of sparkling beverages to enhance revenues from consumers at all income levels. Sparkling
beverage consumption in Turkey grew by 4.1% in 2011 and 8.8% in 2010, according to Nielsen Retail
Panel.
CCIs leading sparkling beverages by sales volume in Turkey are Coca-Cola and Fanta. Other key
brands in the sparkling category are Coca-Cola light, Sprite, Schweppes and Sensun. CCI intends to
continue its efforts to increase consumption of sparkling beverages in Turkey in general, as well as
developing campaigns surrounding the launch of new flavours.
The variety of still beverages continues to grow in Turkey, with new products being brought to the
market on a regular basis. Recent years have seen the relative importance of still beverages grow in
CCIs range of beverages offered in Turkey. This is partly attributable to changing consumer
preferences as well as CCIs increased emphasis on offering a wider variety of alcohol-free beverages.
CCIs still range of beverages includes fruit juices, nectars, iced tea, tea, sports drinks, energy drinks
and water. In the six months ended 30 June 2012 and the year ended 31 December 2011, still
beverages accounted for approximately 21.9% and 20.9%, respectively, of CCIs total unit case sales
volume in Turkey.
In Turkey, CCIs sales force is organized by channel within each geographic region and focuses on
acquiring new customers and developing strategies with their customers to increase sales. CCIs Home
Office Delivery (HOD) water business in Turkey has a separate, dedicated organization dealing with
the sale and distribution of 19-litre refillable containers to the HOD market.
CCIs distribution network in Turkey services its customers through its direct distribution system and
through independent distributors. Most deliveries, whether made directly or through independent
distributors, are made using Coca-Cola branded vehicles. As of 30 June 2012, there were
approximately 1,400 Coca-Cola branded vehicles in Turkey, of which approximately 40 were in CCIs
fleet and the remainder were owned or leased by independent distributors.
International bottling operations
The Groups international soft drinks operations, which are located in Central Asia and the Middle
East, are conducted through CCIs subsidiaries and joint ventures. Management estimates that CCI is
the largest sparkling soft drinks business operating in Central Asia. CCI ultimately owns and operates
the Coca-Cola bottling facilities in Kazakhstan (CC Kazakhstan), Kyrgyzstan, Azerbaijan,
Tajikistan, Iraq and Jordan, and is the largest shareholder of the CocaCola bottling facilities in
Turkmenistan. CCI also proportionately consolidates the results of its joint venture bottling
operations in Pakistan (CC Pakistan) and Syria, in which it has a 49% and 50% interest,
respectively. Kazakhstan and Pakistan are CCIs two largest international markets.
International bottling operations encompass 12 bottling plants with an annual production capacity of
approximately 539.5 million unit cases. During the six months ended 30 June 2012, CCIs
international bottling operations produced approximately 166.2 million unit cases, as compared to
131.2 million unit case during the six months ended 30 June 2011. In 2011, CCIs international
bottling operations produced approximately 275.9 million unit cases, as compared to 236.5 million
unit case in 2010.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

107

The following table sets for certain information about CCIs international markets and production
operations:
Percentage of
Soft Drinks
Segment
Number of
Sales Volume
Facilities
(six months
Production
Market Share
(30 June
ended 30 June
Products
Country
Capacity
(2011)
2012)
2012)
Produced
(mn unit
cases)
Kyrgyzstan ................
Azerbaijan .................
Jordan........................
Turkmenistan ............
Iraq ............................
Pakistan .....................
Kazakhstan................

19
46
25
42
24
206
75

(%)

(%)
n.a.(1)
57(2)
11(2)
n.a.(1)
n.a.(1)
28(2)
36(2)

1
1
1
1
1(3)
6
1

1.4
4.3
1.5
2.2
3.7
10.6
8.2

(a of SKUs)
76
66
66
32
34
34
89

(1) No independent source available.


(2) Source: Nielsen.
(3) Two additional bottling facilities were acquired in connection with CCIs acquisition of an effective interest of 65% of Al Waha for
Soft Drinks, Mineral Water and Juices LLC. See Operating and Financial ReviewRecent Developments.

CCI also has sales operations in Tajikistan and Syria.


Kazakhstan
Overview
CC Kazakhstan ranks first in terms of market share by volume in Kazakhstan, with 36% for 2011,
according to Nielsen. CC Kazakhstan was established in 1995 and became the first producer of
TCCC products in Kazakhstan in 1996. During the six months ended 30 June 2012, CC Kazakhstan
sold approximately 32.8 million unit cases, as compared to 25.1 million unit cases during the six
months ended 30 June 2011. In 2011, CC Kazakhstan sold approximately 53.6 million unit cases, as
compared to 42.8 million unit cases in 2010.
Facilities
CC Kazakhstan operates one bottling plant located in Almaty. The bottling capacity of the plant is
75 million unit cases per year and in 2011, average utilisation of the plant was 71%.
Marketing, sales and distribution
CC Kazakhstan manages the distribution of its products through a combination of direct and indirect
distribution. Direct deliveries are made primarily to key accounts and other retail outlets in the large
cities of Almaty, Shymkent and Astana. CC Kazakhstan operates through approximately 30
distributors in Kazakhstan and has approximately 300 trucks in its own fleet. CC Kazakhstan ships
products by train directly from its plant in Almaty.
Pakistan
Overview
CC Pakistan ranks second in terms of market share by volume in Pakistan, with 28% for 2011,
according to Nielsen. CC Pakistan was established in 2008. During the six months ended 30 June
2012, CC Pakistans total sales were approximately 86.5 million unit cases, as compared to 69.1
million unit cases during the six months ended 30 June 2011. In 2011, CC Pakistan sold
approximately 136.8 million unit cases, as compared to 117.6 million unit cases in 2010.
Facilities
CC Pakistan operates six bottling plants. The total bottling capacity of the six plants is 206 million
unit cases and in 2011, the total average utilisation of the plants was 65%.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

108

Marketing, sales and distribution


CC Pakistan manages the distribution of its products through a combination of direct and indirect
distribution. Direct deliveries are made primarily to key accounts. CC Pakistan operates through
approximately 685 distributors in Pakistan and has approximately 490 trucks in its own fleet.
Support from Anadolu Efes
The Company provides certain shared central support services to its Turkey Beer and International
Beer operations. These services include all applicable headquarter support functions, depending on the
need of the operations. The Company also provides central sales and marketing support across its
beer operations, including for the sales and marketing of the Efes brand to consistently reinforce
the image of the brand as a premium international beer. The Company does not provide such central
support to CCI.
Intellectual Property
The Group owns the trademarks of all of the beer products that it produces and sells, except for
certain international brands that the Group produces under licensing arrangements, such as Miller
Genuine Draft, Velkopopovicky Kozel, Bavaria and Becks. All the trademarks owned by the Group
that are in use in Turkey are registered with the Turkish Patent Institute, or are the subject of
pending applications, in the name of the Company, directly or indirectly through its subsidiaries. The
Group has invested considerable effort in protecting its brands, including the registration of
trademarks and domain names, and management believes that it has taken appropriate measures to
protect all of its material intellectual property in the countries in which it is employed. See Risk
FactorsRisks Related to the Groups BusinessThe Group is reliant on the reputation of its brands
and the protection of its intellectual property rights.
In connection with the Groups soft-drink operations, CCI and its Bottlers are party to certain
bottling agreements with TCCC. TCCC is the sole owner of the trademarks that distinguish TCCCs
beverage bases, syrups and beverages. CCI and its Bottlers are prohibited from producing other
products or packages that would imitate, infringe or cause confusion with the products, containers or
trademarks of TCCC, or from acquiring or holding an interest in a party that engages in such
activities.
Research and development
Management considers research and development activities an important component of its business.
Most research and development activities of the Group comprise continuing research and development
work on improvements in raw materials, products, and packaging and production techniques for its
beer operations.
Research and development activities of the Group are undertaken at facilities in Turkey, with the
cooperation of several universities and the Ministry of Agriculture. The Groups efforts have yielded
improved strains of barley seed and have resulted in the creation of new, experimental seed varieties.
The Group also conducts intensive research in hops varieties with a view to improving their quality
and yield and has patented several varieties with the Turkish Ministry of Agriculture. The Group
evaluates on an ongoing basis the possible application of these products to its own production
processes, under the coordination of the Efes technical directorate, which is located in Istanbul.
In addition, the Groups brewing companies share technical know-how through the Efes technical
directorate. The Efes technical directorate oversees all of the design, implementation and development
work of the Companys existing and new breweries. It also monitors and ensures that technical
specifications for a given project are met and that construction is implemented as budgeted and
scheduled.
Regulatory and Environmental Matters
The Groups business is subject to a comprehensive regulatory framework regarding, among other
matters, advertising, sanitation, environmental protection, competition and health and safety at work.
Several of the Groups markets feature restrictions on advertising and other communications to
customers. For further information about the regulatory environment in the Groups key markets of
Turkey and Russia, see Regulation. Moreover, the Groups operates in a number of emerging
markets, and the regulatory framework in these jurisdictions can be subject to frequent amendment,
often becoming more stringent.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

109

Employees
The following table sets forth the distribution of the Groups full-time employees by segment as of
the dates indicated:
As of
30 June
2012

As of 31 December
2011

2010

2009

Segment
Turkey Beer ...........................................................
International Beer..................................................
Soft Drinks ............................................................
Headquarters and other.........................................

1,846
7,105
10,031
111

1,781
4,359
9,244
108

1,777
4,446
8,628
104

1,757
4,548
8,451
96

Total ......................................................................

19,093

15,492

14,955

14,852

Management estimates that approximately 40% of the Groups Turkey Beer employees are members
of a trade union. A collective bargaining agreement covering such employees is entered into every two
years and under such agreement wage increases are generally linked to the inflation rate in Turkey.
The current agreement was renewed in October 2011. Certain employees in the Groups International
Beer operations (other than in Georgia) are also members of a trade union, although in many
instances trade union membership is a legacy from Soviet times and mandated under local law. The
Group has not experienced any work stoppages resulting from labour union disputes. Management
believes that the Group enjoys good relations with its employees.
The Group has also experienced certain management changes recently. In particular, in connection
with the integration of SABMiller Russias operations with the Groups existing Russian brewing
operations there have been certain new appointments in the newly combined management structure of
Efes Russia. In addition, the previous Chief Executive Officer of CCI recently reached retirement age,
and Damian Gammell was appointed as the new CEO in January 2012. See Risk FactorsRisks
Related to the Groups BusinessThe Groups failure to attract and retain key personnel could adversely
affect its business.
Insurance
The Group maintains business interruption insurance, insurance for lost profits, earthquake insurance
and third party and product liability insurance for its operations, as well as insurance coverage for
incidents such as fire, flood, terrorism, machinery breakdown and personal accident. However, the
Group does not maintain insurance in respect of certain other risks, including product recall or
receivables insurance, and may be subject to losses that are not covered, or not sufficiently covered,
by insurance. In the event of severe damage to its facilities, the Group could experience disruption to
its production capacity, for which it may not be compensated. See Risk FactorsRisks Related to
the Groups BusinessThe Group does not carry the types of insurance coverage customary in western
jurisdictions for a business of its type and size.
Legal matters
From time to time in the ordinary course of business, the Group is involved in legal proceedings
relating to its activities. Risk FactorsRisks Related to the Groups BusinessThe Groups operations
may be limited by anti-trust regulations. However, the Group has not been involved in any
governmental, legal or arbitration proceedings (including any such proceedings that are pending or
threatened of which the Group is aware) during the last 12 months that have had, or that it expects
in the future may have, significant effects on the Groups financial position or profitability.

c107169pu040Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

110

REGULATION
As with other participants in the alcoholic beverage and soft drinks industry in Turkey, Russia and
other countries, the Groups business is subject to certain regulatory requirements, including rules and
regulations relating to production, distribution, marketing and advertising, food safety, health and
safety at work and environmental matters. In many of the markets in which the Group operates,
advertising, marketing and sales of alcoholic beverages are subject to various restrictions, including
restrictions on the type of media used, as well as on the style of advertising and messages used. See
Risk FactorsRisk Related to the Groups BusinessRestrictions on beer advertising, sales or
consumption may adversely affect the Groups business. As well, in many jurisdictions, excise and
other indirect duties make up a large proportion of the cost of beer (and in Turkey, cola as well)
charged to customers. See Risk FactorsRisks Related to the Groups BusinessExcise taxes have
significantly increased in Turkey and Russian and the beer and beverage industry may be subject to
adverse changes in taxation. Furthermore, the Group is subject to antitrust and competition laws in
various jurisdictions in which it operates and may be subject to regulatory scrutiny in certain of these
jurisdictions. See Risk FactorsRisks Related to the Groups BusinessThe Groups operations may
be limited by anti-trust regulations.
The Group is also subject to varying environmental legislation and controls in each of the countries
in which it operates. Environmental laws in the countries in which it operates relate to a number of
matters, including the conformity of operating procedures with environmental standards regarding,
among other things, the emission of gas and liquid effluents. The regulatory climate in most countries
in which the Group operates is becoming increasingly strict with respect to environmental issues.
Set forth below is a summary of material provisions relating to the Groups operations in its key
markets of Turkey and Russia in effect as of the date of this Offering Circular.
Turkey
Tobacco Products and Alcoholic Beverages Market Regulatory Authority
In 1939 private spirit factories and breweries were taken under state monopoly. In 1955 the state
monopoly on beer was lifted, opening the beer market to private players. Until recently, spirits
remained under state monopoly. As part of the process of meeting EU accession criteria, the Turkish
government has gradually been privatising the alcoholic beverages market. Law No. 4733 was enacted
in 2002 and based on this Law the Tobacco Products and Alcoholic Beverages Market Regulatory
Authority (Authority or TAPDK) was established as the sole regulatory body with powers to
monitor and supervise all players in the alcoholic beverages sector.
Pursuant to its regulatory powers, TAPDK has over the years promulgated numerous different
regulations governing the activities of both alcoholic beverage producers and sellers. The three main
pieces of regulation are:
*

Regulation on the Technical Conditions That the Alcohol and Alcoholic Beverage Facilities
Must Bear and on the Procedures and Principles Concerning Their Foundation, Operation and
Control (Facilities Regulation);

Regulation on Methods and Essentials Regarding Domestic and Foreign Trade of Alcohol and
Alcoholic Beverages (Alcohol Trade Regulation); and

Regulation on the Procedures and Principles of the Sales and Advertising of Tobacco Products
and Alcoholic Beverages (Sales and Advertising Regulation).

Beer Production
TAPDK regulations
According to the Facilities Regulation, a production license must be obtained from TAPDK for each
production facility. Production licenses are issued for a maximum term of five years and have to be
renewed at the end of their term. Production licenses for beer do not contain any restrictions on
production volumes whereas production licenses for spirits contain production limitations.
Furthermore, a separate competency certificate is required for each and every different type of
alcoholic beverage (eg. beer, whisky, wine) produced within the same production facility. As Anadolu
Efes only produces beer, separate competency certificates are not required. The production licenses
held by Anadolu Efes in Turkey will expire on 30 June 2013.
The Facilities Regulation contains detailed provisions with respect to certain technical and
technological requirements (quality control system, equipments, and other) and waste management

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

111

issues among others. Finally, any transfer of the ownership of the facility is subject to TAPDKs
prior written approval.
Turkish food codex
Pursuant to the Turkish Regulation on Food Production and Sale Facilities and the Regulation on
Registration and Approval of Food Premises, the Company must register all of its production
facilities (malteries, breweries, hops or barley facilities) with the Ministry of Food, Agriculture and
Livestock. Production facilities are subject to inspection at least once a year by the relevant provincial
directorate of the Ministry of Food, Agriculture and Livestock. Provincial directorates can also
conduct random inspections at their own discretion or following complaints. Under Turkish law, a
plant breeder is entitled to register its variety with the Variety Registration and Seed Certification
Center provided that such seeds have not been sold or otherwise disposed within Turkey during the
year prior to the registration application. The Company and Tarbes have registered certain types of
barley and hops seeds with the Variety Registration and Seed Certification Center. The duration of
protection is 25 years from the grant of the right.
In addition, pursuant to a recently promulgated regulation, bottle producers are required to register
their production facilities with the Ministry of Food Agriculture and Livestock and obtain a registry
number. The Company must then include this registry number on the labels it applies to the bottles.
Sales and Distribution of Beer Products
Sales licenses
The Alcohol Trade Regulation restricts the sale of alcoholic beverage to license holders only and
envisages a three layer sale system. Accordingly, only producers or importers that have obtained an
import approval certificate may sell domestically produced or imported alcoholic beverages in Turkey.
This sale by producers and importers is restricted to holders of a distribution competence certificate
or to wholesale license holders. Such distributors and/or wholesalers may then conduct sales only to
wholesalers, retail license holders or open-sale license holders (i.e., restaurants and other venues that
serve alcoholic beverages) who then may sell to consumers. In this respect, Anadolu Efes, as a
producer, sells its domestically produced beer products to EFPA, and EFPA, as a competent
distributor and licensed wholesaler, supplies domestically produced or imported beer products to
wholesale, retail, and open-sale license holders.
In order to prevent illegal sales by unauthorised persons, TAPDK has established a monitoring
system which can be accessed on TAPDKs website. As part of this monitoring system, TAPDK
regularly publishes a list of wholesale, retail and on-trade license holders. In addition, both producers
and importers must submit monthly sales reports evidencing their trade activities. Furthermore, in
order to prevent illegal trade, TAPDK makes frequent inspections to check whether alcoholic
beverages bear specific barcodes as required under applicable legislation.
Import of beer into Turkey may be done under an import approval certificate issued by TAPDK as
per the Alcohol Trade Regulation. The application for the import approval certificate has to include
detailed information on the beer to be imported such as geographical indication, brand, label and
bottle stopper of the product, together with the names and addresses of the producer. Furthermore, it
is mandatory to prepare and place a Turkish label on the imported products.
Export of beer is conducted under the general export regulation and there are no specific provisions
in the Alcohol Trade Regulation in this respect. However, under this regulation, Anadolu Efes, as the
producer, and EFPA, as the exporter, are jointly and severally liable for the quality of their products
and all information and symbols included on product packaging.
Sales restrictions
The Sales and Advertising Regulation was amended to introduce new limitations on places that are
allowed to serve alcoholic beverages. Accordingly, sale of alcoholic beverages in educational
institutions, dormitories, sports clubs, Turkish local coffee houses (kraathane/kahvehane) and
patisseries is forbidden. Furthermore, alcoholic beverages may be sold at events such as festivals and
fairs with TAPDKs written permission as well as the approval of the relevant municipality or highest
local authority.
Recent amendments to the Regulation on Business Opening and Operation Permits have placed
additional requirements on on-trade license holders. In order to apply to TAPDK for an on-trade
license, a business owner has to submit a business opening and operation permit or certificate issued
by the competent authority that explicitly allows serving alcoholic beverages. Such authorities may

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

112

grant these permits or certificates if the applicant is located within an area which is specifically
allocated for serving alcoholic beverages (ickili yer bolgesi). The only exceptions are for touristic
establishments holding tourism licenses issued by the Ministry of Culture and Tourism, which are
exempted from obtaining separate permits from municipalities or other authorities.
For premises located outside of municipal boundaries, it now necessary to obtain an unqualified
opinion from the highest administrative authority as to the public security and order in respect of the
area in which the on-trade license will be used before applying to TAPDK for an on-trade license.
Beer Advertising
In addition to the restrictions above, the Sales and Advertising Regulation imposes various promotion
restrictions, including in connection with shelf allocation, media and sports clubs. Restrictions on
shelf allocation inside stores have limited the capacity of the areas in shops where alcoholic beverages
are offered for sale. Alcoholic beverages must now be placed in a separate section of the store, and
goods concerning minors cannot be located near alcoholic beverages.
The Sales and Advertising Regulation also forbids advertising of alcoholic beverages on radio and
television broadcast. Hence, the only venues in which alcoholic beverages may be advertised are
newspapers and other printed/electronic media. However, placing alcoholic beverage advertisements in
sections/pages directed at children or young adults and in the sports pages in printed or online media
is also prohibited. Such advertisements also cannot be placed in the first and last pages of
newspapers, magazines, brochures or other written and electronic media.
In addition, according to recent amendments to the Sales and Advertising Regulation, symbols,
emblems, flags and other signs of any religion, race, flag, political party, organization, society or
foundation and symbols and forms of any sportive expression cannot be used for the sales,
marketing, advertising and packaging of alcoholic beverages. Any practice that may be deemed as
creating a link between an alcoholic beverage brand and sports clubs/teams or any sports activity,
service or organisation is also prohibited. Therefore, sports clubs/teams cannot use names, logos,
emblems and signs associated with alcoholic beverage brands. As a result of the amendments, the
Efes Pilsen S.K. professional basketball team is now known as Anadolu Efes S.K..
Moreover, advertising targeted to events (sports, concerts and other) attended by persons under 24
years of age is restricted. On the other hand, the legal drinking age is 18. This restriction
predominantly has an impact on events previously organised or sponsored by alcoholic beverage
producers or importers where young people are in attendance.
Environmental Regulations
The main environmental legislation related to the operation of production facilities are the
Environmental Law No. 2872 (Environmental Law), the Environmental Impact Assessment
Regulation (EIA Regulation) and the Regulation on the Permits and Licenses required under the
Environmental Law (Environmental Permit and License Regulation). Turkey amended its
environmental legislation in 2009, which eased the licensing procedures by unifying all separate
permits into a single document (Environmental Permit) and removing several bureaucratic controls.
Accordingly, an assessment with regards to the impact of a facilitys activities on the environment is
made and an Environmental Permit is issued that covers all specific activities of the facility. An
Environmental Permit covers emissions, waste water and other discharges, noise control and other
aspects of the environmental laws.
Product Liability
Pursuant to Turkish law, the protection of consumers is a constitutional principle. Although there is
no specific code of product liability in Turkey, numerous regulations have been adopted in line with
Council Directive 92/59/EEC on general product safety. Furthermore, there is a general consumer
protection law in Turkey that has been amended over the years to bring it in line with EU directives.
In case a defective product is produced, the producer is obliged to notify TAPDK and recall such
batch. Furthermore, in case of a defective product, each consumer may make an indemnification
claim for damages caused by such defective product. The indemnification standard is an absolute
liability standard and the manufacturer/producer will be held liable even if it has not acted negligently
in the production process.

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

113

Health and Safety


A new law on Work Health and Safety has been promulgated and will enter into force on 30
January 2013. This law provides for more stringent health and safety requirements in production
facilities in general. Accordingly all corporations operating production facilities have to set up work
health and safety units, employ workplace doctors and either employ or outsource occupational safety
experts.
Taxation
In Turkey, beer and other alcoholic beverages are subject to excise taxes, as well as general and
special consumption taxes such as VAT. Following enactment of Law No. 6322, beginning on
1 January 2013, lump-sum excise duty levied on alcoholic beverages will be adjusted in line with the
change in the PPI for each six month-period (in January and July). This adjustment will be made
automatically upon official declaration of the PPI by the Turkish Statistical Institute. However, the
Ministry of Finance still has the right to enact additional excise tax increases, if deemed necessary,
such as when needed to increase indirect taxes to reduce the budget deficit.
The Council of Ministers has the authority pursuant to the Turkish Constitution to determine public
expenditures and borrowings in light of the economic conditions of the country. Article 12 of the
Excise Duty Law authorises the Council of Ministers to adjust in a limited manner the tax rates and
fixed (minimum) amounts set for goods set out in List No. (III) to the Excise Duty Law, which list
includes tobacco and tobacco products and alcoholic beverages. By decree of the Council of Ministers
No. 2012/3735 which entered into force on 22 September 2012, the Council of Ministers increased the
fixed (minimum) amounts of excise duty on certain goods (including malt beer) in List No. (III) by
17%.
Anti-trust Law
Turkish anti-trust (competition) laws and regulations are similar to those of the European Union. An
entity in a dominant position within a certain market, such as EFPA in the Turkish beer market and
CCI in the Turkish soft drinks market, have to comply with the restrictions imposed by Turkish antitrust regulations and are under close scrutiny of the Competition Board due to such dominant
position in the relevant product markets. All activities such as abuse of dominant position,
anticompetitive arrangements, and completing mergers and acquisitions without obtaining the
approval of the Competition Board (when such approval is required) lead to an investigation and
might cause a monetary fine at rates calculated on the basis of the turnover of the concerned
company. The fine can vary depending on the type and duration of a violation.
Dominant position
A company with a dominant position is prohibited from abusing its dominant position in Turkey
through agreements with others or through concerted practices. In particular, such a company is
prohibited from preventing other companies from entering the relevant market; from frustrating
activities of competitors in the market; directly or indirectly discriminating by offering different terms
to purchasers with equal status for the same and equal goods; or restricting production, marketing or
technical development to the prejudice of consumers.
Potential acquisitions by a company with a dominant position in the relevant market will be
specifically reviewed by the Competition Board for the potential impact of such acquisitions on the
relevant Turkish product market. An acquisition would be permitted if it does not lead to
strengthening of or abuse of such companys dominant position. There are no exact parameters in
making such assessment and it will be based on the market conditions at the time of a particular
acquisition.
Anticompetitive agreements and concerted practice between market participants
The Turkish Law on the Protection of Competition prohibits agreements and concert practices
between companies, and decisions and practices of associations of companies that are aimed at
effecting or are likely to effect the prevention, distortion or restriction of competition directly or
indirectly in a particular relevant market. In particular, the following practices and conduct are
prohibited: fixing the purchase or sale price elements such as cost and profit; partitioning markets for
goods or services; controlling the amount of supply or demand in relation to goods or services;
restricting access of new entrants to the market or obstructing competitor activities; and creating
resale price maintenance (including, setting profit margin and certain rebates while following the
recommended prices).

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

114

Russia
Legal Provisions
A number of significant amendments have recently been made to Russian laws that are intended to
increase state regulation over the production and distribution of alcoholic products. Following these
amendments, beer and beer products are considered to be alcoholic products and are thus regulated
by the laws and provisions applicable to alcoholic products, some of which were amended as of 1
July 2012. The alcoholic products market in the Russian Federation is regulated by the Federal Law
On the State Regulation of the Production and Trade of Ethanol, Alcoholic and Alcohol-Containing
Products and Limitation of Consumption (Drinking) of Alcoholic Products No. 171-FZ dated 22
November 1995 (Law on Alcohol). Separate provisions of state regulation regarding the production
and trade of alcoholic products are contained in other Russian laws such as the Customs Code of the
Russian Federation, the Tax Code of the Russian Federation, the Federal Law On Technical
Regulation No. 184-FZ dated 27 December 2002 and the Federal Law On Quality and Safety of
Food Products No. 29-FE dated 2 January 2000.
The main authority that regulates and controls the alcoholic products market in Russia is the Federal
Regulatory Service for Alcoholic Market (FRSAM). FRSAM was established by Presidential
Decree on 31 December 2008. Its main functions include developing and realising state policies and
regulations and controlling and rendering services in the area of producing and distributing alcoholic
products. Pursuant to its regulatory powers, FRSAM has promulgated numerous regulations
governing the activities of both alcoholic beverage producers and sellers.
Beer Production, Sales and Distribution
Beer and beer products can be produced and distributed by legal entities and individual
entrepreneurs. According to the Law on Alcohol, beer production and trade are not subject to
licensing or marking. The volume of retail trade of beer and beer products is required to be recorded
and declared to FRSAM.
Since 1 July 2012, the amended Law on Alcohol imposes certain restrictions on the distribution of
beer and beer products with alcohol content of more than 5%. As of 1 January 2013, these
restrictions will apply to all beer and beer products without exemptions. Such distribution is
prohibited:
*

in non-stationary retail facilities and

at night time (from 11 p.m. until 8 a.m.) excluding on-trade.

Sales of alcoholic products is prohibited in or near infant, educational and medical organisations,
sport facilities and contiguous territories, cultural organisations (except for catering institutions), all
public transport, bus stops and petrol stations. Beer cannot be sold in wholesale and retail market
places, railway stations, airports, other places of mass accumulation of people or near sources of
increased danger (lists of sources are determined by the authorities of the constituent entities of the
Russian Federation).
In addition, from 1 January 2013, core process equipment for beer production must be equipped with
automatic instruments that measure and record the volume of the finished product.
Beer Advertising
Russia has also imposed extensive restrictions on beer advertising, which includes a ban on the
broadcasting of beer commercials on television and radio and its publication on the Internet, as well
as limitations regarding locations of beer sales and consumption. Additional restrictions, such as a
ban on beer commercials in periodical print media, is to come into force in 2013, and further
restrictions being discussed in Russia including a ban on PET packaging and new labelling and health
warning requirements.
Environmental Regulations, Health and Safety
In Russia environmental matters are regulated by a number of different laws, including the Federal
Law On Safety of Environment No. 7-FZ dated 10 January 2002, the Federal Law On Air
Security No. 96-FZ dated 4 May 1999, the Federal Law On Health and Hygiene Welfare of
People No. 52-FZ dated 30 March 1999 and the Federal Law On Waste from Production and
Consumption No. 89-FZ dated 24 June 1998. Additional laws also contain provisions on
environmental regulation.

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

115

Beer must be produced, transported and preserved in accordance with the federal standards and
standards of the constituent entities of the Russian Federation. Water and raw materials used in beer
producing must meet numerous health and hygiene rules. The Law on Alcohol establishes certain
technical and technological requirements (premises, facilities, equipment, etc.) on the producers and
distributors of alcoholic products. Waste management requirements must be met as well.
Product Liability
Russian legislation in the field of product liability is customer-focused and strict with regard to
manufacturers, sellers and retailers. The main pieces of legislation are the Civil Code of the Russian
Federation, the Federal Law On Customers Rights Protection No. 2300-1 dated 7 February 1992
and the Federal Law On Technical Regulation No. 184-FZ dated 27 December 2002. The main
governmental bodies responsible for the control of product quality and safety are the Technical
Regulation and Metrology Federal Agency and the Federal Consumer Protection and Human Welfare
Agency. All information and documents that these authorities may request of manufacturers, sellers
and importers regarding a products quality and safety must be provided.
If a product violates mandatory standards and technical regulations, rendering it a potential risk to
consumers, then the proper authorities must be notified. The manufacturer must then develop and
implement a plan of action to prevent or limit potential damage. If mandatory standards and
technical regulations are found to have been violated, the authorities may recall the product from the
market, at the manufacturers expense. Personal injury and damage to property arising from product
defects must be compensated in full. The claimant is entitled to claim damages for distress or mental
anguish as well as damages for material loss.

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

116

MANAGEMENT
Board of Directors
The Board of Directors is responsible for the management of the Companys operations. It is vested
with the broadest powers to take any actions necessary or useful to fulfil the Companys corporate
purpose, with the exception of actions reserved by Turkish law or the Companys articles of
association to the General Assembly. The Board of Directors must consist of a minimum of 7
directors and a maximum of 13 directors according to the Companys articles of association. All
members of the Board of Directors may be appointed and/or dismissed by the General Assembly, for
a period not exceeding 3 years and until their successors are elected. The Board of Directors may
deliberate and act validly only if the simple majority of its members are present. Decisions of the
Board of Directors are taken by a simple majority of the votes validly cast by the members of the
Board of Directors present or represented. Each directors term expires at the annual General
Assembly in the year indicated below. Directors whose term has expired may be re-elected. Any
director may be removed at any time from his or her office by a resolution of the General Assembly
if the meeting agenda contains a provision in this respect or, even if not included into the meeting
agenda, if the dismissal is based on a justified reason.
The table below sets forth the names, respective ages, positions, year of election and terms of office
of the current members of the Board of Directors as of the date of the Offering Circular.
Name
zilhan....................................
Tuncay O
Ernest Arthur Graham Mackay ..........
Salih Metin Ecevit ...............................
Recep Ylmaz Arguden........................
Mehmet Cem Kozlu ............................
Mehmet Hursit Zorlu ..........................
Alejandro Jimenez Fonseca .................
Ahmet Dorduncu .................................
mer Bozer..........................................
O
Mehmet Mete Basol.............................
Christos-Alexis Komninos ...................
Ege Cansen ..........................................
Ahmet Boyacoglu ...............................

Age
65
63
66
54
66
53
62
59
54
55
69
73
66

Position
Chairman
Vice Chairman
Member
Member
Member
Member
Member
Independent Member
Independent Member
Independent Member
Independent Member
Advisor
Advisor

Year of
Appointment
2012
2012
2012
2012
2012
2012
2012
2012
2012
2012
2012
2012
2012

Expiration of
term of office
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013

zilhan, Mr. Salih Metin Ecevit, Mr. Mehmet Hursit Zorlu and
The business address of Mr. Tuncay O
Mr. Ahmet Boyacoglu is Umut Sok. No:12 Icerenkoy 34752, Istanbul, Turkey. The business address
of Mr. Ernest Arthur Graham Mackay is One Stanhope Gate, London W1K 1 AF, England. The
business address of each of the other directors is Esentepe Mah. Anadolu Cad. No: 1, Kartal 34870,
Istanbul, Turkey.
A brief description of the qualifications and professional experience of the members of the Board of
Directors is presented below.
zilhan graduated from Saint Joseph High
Mr. Tuncay Ozilhan, Chairman. Born in 1947, Tuncay O
School and the Faculty of Economics of Istanbul University; he received his MBA in Management
Sciences from Long Island University in USA. His professional career began in 1977 as General
Director of Erciyas Biraclk (brewery); he later became Coordinator of Anadolu Endustri Holding
Beer Group and General Coordinator of Anadolu Endustri Holding until his appointment as CEO of
zilhan was appointed Chairman of Anadolu Group and
the Anadolu Group in 1984. In 2007, Mr. O
still continues to serve in this position. He also serves as the Chairman of several Anadolu Group
zilhan also serves as the Vice-President of TU
SIAD (Turkish Industry and Business
companies. Mr. O
Association) High Advisory Council, President of Anadolu Efes Sports Club, Estonian Honorary
Consulate and President of the Turkish-Japanese Business Council.
Mr. Ernest Arthur Graham Mackay, Vice-Chairman. Chief Executive of SABMiller plc, Mr. Mackay
holds a BSc Engineering from the University of Witwatersrand and a BCom from the University of
South Africa. He joined South African Breweries Ltd (SAB Ltd) in 1978. He was appointed Group
Managing Director of the South African Breweries Ltd, then Chief Executive of South African
Breweries plc upon its listing on the London Stock Exchange in 1999. Mr. Mackay is the senior

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

117

independent non-executive director of Reckitt Benckiser Group plc and a director of Philip Morris
International Inc.
Mr. Salih Metin Ecevit, Member. Born in 1946, Mr. Metin Ecevit graduated from Siyasal Bilgiler
Fakultesi in 1967. He also received a masters degree from Syracuse University in Economics in 1976.
From 1967 to 1980, he worked as a Government Auditor and served as Deputy General Manager of
General Directorate of Revenues at the Ministry of Finance. Mr. Ecevit joined Anadolu Group in
1980 and worked in various roles, serving as General Manager, Board Member, and Chairman of the
Board of Directors in automotive companies of Anadolu Group. He retired in 2006, while he was
serving as the Automotive Group President, owing to the retirement age limit regulations of the
Group. He served as Board Member and Chairman of the Association of Imported Car Distributors
in Turkey from 1992 to 2004. He is a member of the Board of Directors of many Anadolu Group
companies and serves as the Chairman of the Board of Directors at Yazclar Holding A.S.
Mr. Recep Ylmaz Arguden, Member. Dr. Ylmaz Arguden graduated from Bogaziei University with
The Top Graduating Engineering Award. He received his PhD in policy analysis from The RAND
Graduate School with General Distinction. He began his professional career at the R&D Center of
Koc Holding. Later he worked as a Strategic Analysis Specialist at the RAND Corporation. Dr.
Arguden worked with 20 countries during his employment as the Section Chief at the World Bank.
Upon the invitation of the Turkish government, he returned back to Turkey in 1988 and he led the
Privatization Program until 1990 and served as the Chief Economic Advisor to the Prime Minister
(1991). He is the Chairman of a leading management consulting firm, ARGE Consulting, which has
been recognised by the European Parliament as one of the top three companies Shaping the Future
with its commitment to corporate social responsibility. Dr. Arguden has sat on the boards of
Anadolu Group, Borusan, Koc Holding and Vestel group companies, Petkim, Sumerbank and Inmet
Mining, which has operations spread over four continents. He served as the Chairman of the largest
Turkish steel company, Erdemir from 1997 to 1999. He also serves as the Chairman of Rothschild
Turkey, one of worlds leading investment banks, since 2005. Having authored more than 20 books
and hundreds of articles, Dr. Arguden has lectured on strategy at a number of universities. He
represents Turkey in the United Nations Global Compact and is a member of the Private Sector
Advisory Group under the Global Corporate Governance Forum established by the OECD and the
World Bank. Dr. Arguden was selected by the World Economic Forum among 100 Global Leaders
for Tomorrow for his commitment to improving the quality of life.
Mr. Mehmet Cem Kozlu, Member. Born in 1946, Dr. Cem Kozlu completed middle and high school
at Robert College after which he received his bachelors degree from Denison University, an MBA
from Stanford University and a PhD from Bogaziei University. Dr. Kozlu lectured International
Marketing and Export Administration at Bogaziei University from 1978 to 1981 and was a visiting
Professor in the Department of Economics at Denison University in 1985. After holding executive
positions in various domestic and international companies, Dr. Kozlu was appointed General
Manager and Chairman of the Board of Directors of Turkish Airlines in 1988 and held these
positions until 1991. He also served as the Chairman of the Association of European Airlines (AEA)
in 1990. Cem Kozlu served as a Member of the Turkish Grand National Assembly from 1991 to
1995 and Chairman of the THY Board of Directors from 1997 to 2003. Dr. Kozlu has held different
positions in The Coca-Cola Company since 1996. He assumed the posts of Turkey, Caucasia and
Central Asian Republics Executive Director and the Vienna based Central Europe, Eurasia and
Middle East Group President successively, retiring in April 2006. Currently, he works as a consultant
to The Coca- Cola Company for Eurasia & Africa and he is also the Chairman of the Board of
Directors of Noktacom Medya Internet Hizmetleri A.S. (media and internet services) and a member
of the Board of Directors of the CCBCS (Coca-Cola Bottling Company of Saudi Arabia). Dr. Kozlu
also serves as member of the Boards of Directors of Istanbul-based TAV Havalimanlar Holding
A.S., Coca-Cola Ieecek A.S., Evyap Sabun, Yag ve Gliserin Sanayii ve Ticaret A.S., Anadolu
Endustri Holding, Kamil Yazc Yonetim ve Dansmanlk A.S., The Marmara Hotels & Residences
and the Foreign Economic Relations Board and as member of the Boards of Trustees of AnadoluJohns Hopkins Saglk Merkezi (Anadolu-Johns Hopkins Health Center) and Istanbul Modern
Sanatlar Vakf (Istanbul Modern Arts Foundation).
Mr. Mehmet Hursit Zorlu, Member. Born in 1959, Mr. Zorlu holds a Bachelor of Science degree in
Economics from Istanbul University. After working in Toz Metal and Turkish Airlines, he joined
Anadolu Group in 1984 as a Marketing Specialist in the Efes Beverage Group and has held various
positions including Marketing Supervisor, Assistant Project Development Manager, Project
Development Manager and Business Development & Investor Relations Director. Between 2000-2008,

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

118

Mr. Zorlu served as Efes Beverage Group Finance and Investor Relations Director. In 2008, Mr.
Zorlu was appointed as the CFO of the Anadolu Group and he is also a Board Member in several
Anadolu Group companies. He also serves as a board member in Corporate Governance Association
of Turkey, Investor Relations Association of Turkey, Ethics and Reputation Society of Turkey and
KOTEDER.
Mr. Alejandro Jimenez Fonseca, Member. Alejandro Jimenez, holding a Bachelor of Science degree in
Chemical Engineering from the University of Texas, began his professional career in 1973 at TCCC
in Costa Rica and served in various marketing and technical positions. Following his appointment as
Central America Regional Director for TCCC Costa Rica, he assumed the responsibility of TCCC
Puerto Rico Caribbean Regional Director in 1984. He served as the Vice President and Director of
Marketing Operations responsible for Latin America at TCCC Headquarters from 1989 until 1991. In
1991, Mr. Jimenez was appointed as the President of Panamco Mexico, a subsidiary of Panamco, the
largest bottler in Latin America and the second largest bottler of Coca-Cola products in the world. In
1994, he became President and Member of the Board of Directors at Panamco where he assumed
these responsibilities until 2001. Mr. Jimenez was working as General Director at Mexico-based
Dinesa which was giving financial and management consultancy services to consumer goods
companies in their initial and developmental stages until February 2007 when he was appointed as
Efes Beer Group President.
Mr. Ahmet Dorduncu, Independent Member. Born in 1953, in Istanbul, Mr. Ahmet Cemal Dorduncu
graduated from C
ukurova College and holds a bachelors degree from C
ukurova University and a
masters degree from Mannheim University. Starting his professional career in Germany in 1981, he
joined Sabanc Group in 1987 and worked in several management positions. Between 1999-2004, he
served Chairman and Managing Director positions in Groups various companies. In 2004, he was
appointed as Sabanc Holding Business Development and Strategic Planning Executive Vice President
and between 2005-2010 he assumed the position of CEO and he was also BOD member. Ahmet
SIAD Energy Working Group, Member of Endeavor Turkiye
Dorduncu is also the Chairman of TU
and Founding Member of National Innovation Initiative.
mer Bozer holds a bachelors
Mr. Omer Bozer, Independent Member. Born in 1958, in Istanbul, O
degree from METU Business Administration and received his MBA from Georgia State University.
Mr. Bozer began his professional career in Koc Group as an MT and held management positions in
Maret and Duzey Pazarlama, respectively. He was appointed as General Manager of Migros in 2002.
Between 2005-2006, Mr. Bozer served as President of Food, Retailing and Tourism Group, between
years 2006-2008 worked as President of Food and Retailing Group and then became the President of
Food, Retailing and Tourism Group once again between 2008-2011.
Mr. Mehmet Mete Basol, Independent Member. Born in 1957, in Istanbul. Mr. M. Mete Basol is
graduated from the Economics Department of Arizona State University. Between 1984-1988, he
worked in Interbank at various banking positions; between 1988-2001 he served as Deputy Chief
Executive, Chief Executive Officer and Chairman of the Board at Turk Merchant Banka A.S.,
Bankers Trust A.S. and at Deutsche Bank A.S. Between 2001-2003, he has undertaken the post of
Managing Director at Public Banks Joint Board for restructuring and rehabilitation practice. He has
been a Counsellor and Director at various financial institutions since 2003. Mr. Basol has also been a
member of Isbanks board and alternate member of its Credit Committee since 2011.
Mr. Christos-Alexis Komninos, Independent Member. Mr. Komninos holds a Chemical Engineering
degree from the Technical University of Istanbul (I.T.U.) in Turkey. In 1972, Mr. Komninos joined
Hellenic Bottling Company (currently Coca-Cola Hellenic) and until 1987 he held various positions in
the Company. From 1987 to 1990, he was the Managing Director in The Coca-Cola Bottlers Ireland
(a subsidiary of Hellenic Bottling). In 1990, he returned to Greece and in 1995, became the Chief
Executive of Hellenic Bottling, position held until 2000. From 2000 to 2003, he was appointed
Chairman and C.E.O. of Papastratos Cigarette Manufacturing Company. After the acquisition of the
Papastratos Company by Philip Morris S.A., he joined the Athens 2004 Olympic Games Organizing
Committee as the Head of Opening and Closing Ceremonies. From 2005 till January 31, 2010 he held
the position of the Executive Vice President of both Shelman S.A. (wood product manufacturing
company) and ELMAR S.A. (shipping company). He was a member of the Supervisory Board of
Efes Breweries International between 2005 and March 2011. Currently, he is the Chairman of the
Board of Directors of Hellenic Petroleum.
Mr. Ege Cansen, Advisor. Ege Cansen received his BS degree in Business Administration from the
Middle East Technical University and his MBA from the Wharton School of the University of

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

119

Pennsylvania. He served as Assistant General Manager of Arcelik, Industrial Affairs Coordinator of


Koc Holding, Manager of Soyer Hafriyat and Managing Director of Anadolu Endustri Holding.
Teaching Business Economics at Marmara University between 1987 and 2000, Mr. Cansen has
worked as Economics Columnist at Hurriyet daily newspaper since 1983. Mr. Cansen is also a
shareholder of Cansen & Cansen Management Consultancy.
Mr. Ahmet Boyacoglu, Advisor. Ahmet Boyacoglu, born in 1946, holds a bachelors degree in
Business Administration from the Middle East Technical University. Mr. Boyacoglu began his
professional career with the Efes Beverage Group (Anadolu Efes) in 1973. He served in various
positions from 1973 to 2005 including President of the Beer Group, Strategy and Business
Development Director, International Beer Group President, Eastern Europe Regional Director, Ege
Biraclk ve Malt San. A.S. General Manager, Guney Biraclk ve Malt San. A.S. General Manager,
Ege Biraclk ve Malt San. A.S. Sales Manager and Regional Sales Manager for the Bursa Region.
Mr. Boyacoglu was appointed as the President of the Efes Beer Group in May 2005 and retired on 1
February 2007. Currently, he is an Advisor to the Board of Directors of Anadolu Efes and sits on
the Boards of Directors of some Anadolu Group companies.
Board Committees
The Board of Directors has appointed an audit committee, a corporate governance committee and a
committee for early detection of risks from among its members.
Audit Committee
The Audit Committee is composed of two directors, Ahmet Dorduncu and Mete Basol, both of
whom are independent members of the Board of Directors. Mr. Dorduncu serves as Chairman of the
Audit Committee. Among other matters, the Audit Committee ensures that adequate and suitable
internal controls are in place and appropriate to the Companys needs; that (in conjunction with the
Committee for Early Detection of Risks) significant business and financial risks have been identified
and are being monitored and managed.
Corporate Governance Committee
The Corporate Governance Committee is composed of four directors, Christos-Alexis Komninos,
Hursit Zorlu, Ylmaz Arguden and Alan Clark. Mr. Komninos serves as Chairman of the Corporate
Governance Committee. The remit of the Corporate Governance Committee is to develop and
implement continuous improvement processes to facilitate the application of best practices pursuant to
the CMB Regulations and Corporate Governance Principles and, more broadly, international
standards. The Corporate Governance Committee also currently carries out the functions of the
nominations committee and remuneration committee as defined in the CMB Regulations and
Corporate Governance Principles.
Committee for Early Detection of Risks
mer Bozer, Cem Kozlu,
The Committee for Early Detection of Risks is composed of five directors, O
Metin Ecevit, Hursit Zorlu and Jamie Wilson. Mr. Bozer serves as Chairman of the Committee for
Early Detection of Risks. The remit of the committee for early detection of risks is to detect risks
that might endanger the existence and development of the Company and to design studies and
measurements to detect such risks, as well as to create strategies for risk management and oversee the
application of such strategies.

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

120

Key Executives
In the opinion of the Company the following persons are the most important for the management of
the Groups operations (the Key Executives):
Name

Age

Alejandro Jimenez Fonseca .................


Damian Paul Gammell ........................
Can C
aka(1) ..........................................
Altug Aksoy.........................................
Tugrul Agrbas .....................................
Yuksel Gokbulut .................................

62
42
40
41
44
50

Cem Guner ..........................................


zcelik......................................
Kenan O

47
53

Saltuk Ertop.........................................
zturk ......................................
Ahmet O

47
40

Position
Efes Beer Group President
Efes Soft Drinks Group President
Anadolu Efes Finance and Investor Relations Director
Efes Turkey Managing Director
Efes Russia Managing Director
Eastern Europe and CIS Group Managing Director
Efes Beer Group Market Development Director and
Acting Commercial Director
Efes Beer Group Supply Chain Director
Efes Beer Group Corporate and Regulatory Affairs
Director
Efes Beer Group Internal Audit Director

(1) Can C
aka is to become the Chief Financial Officer of AEH, the holding company of the wider Anadolu Group of companies,
effective as of 1 January 2013. Mr C
akas responsibilities in Anadolu Efes will be assumed by Mr Onur C
evikel.

The business address of each of the Key Executives other than Mr. Damian Paul Gammell and Mr.
Tugrul Agrbas is Esentepe Mah. Anadolu Cad. No: 1, Kartal 34870, Istanbul, Turkey. The business
mraniye 34776, Istanbul, Turkey.
address of Mr. Gammell is Esenkent Mah. Deniz Feneri Sk. No:4 U
The business address of Mr. Agrbas is 20, Malaya Dmitrovka street, Moscow, 127006 Russia.
Alejandro Jimenez Fonseca, Efes Beer Group President. Mr. Alejandro Jimenez, who has a Bachelor of
Science degree in Chemical Engineering from the University of Texas, began his professional career in
1973 at TCCC in Costa Rica and served in various marketing and technical positions. Following his
appointment as Central America Regional Director for TCCC Costa Rica, he became TCCC Puerto
Rico Caribbean Regional Director in 1984. He served as the Vice President and Director of
Marketing Operations responsible for Latin America at TCCC Headquarters from 1989 until 1991. In
1991, Mr. Jimenez was appointed as President of Panamco Mexico, a subsidiary of Panamco, one of
Coca-Colas Latin American bottlers. In 1994, he became President and a member of the Board of
Directors of Panamco until 2001. Prior to his appointment as Efes Beer Group President in 2007,
Mr. Jimenez was General Director at Mexico-based Dinesa, which provides financial and management
consultancy services to consumer goods companies in their initial and developmental stages.
Damian Paul Gammell, Efes Soft Drinks Group President. Mr. Damian Gammell was appointed as
Efes Soft Drinks Group President effective 1 January 2012. Mr. Gammell is a graduate of the College
of Marketing, Dublin. He studied for his Masters at Oxford University and HEC Paris and
graduated with a MSc in Change Management. Mr. Gammell has over 20 years of experience in the
Coca-Cola system and has held a variety of senior roles across the fields of commercial and general
management both in Europe and Australia. Most recently he was Chief Executive Officer of the
bottling business in Russia between 2001 and 2004. In 2005, he was appointed as CEO of Coca-Cola
Erfrischungsgetranke, where he led the German business, one of Coca-Colas largest markets
worldwide, for 6 years until taking up the post as CCIs CEO.
Can Caka, Anadolu Efes Finance and Investor Relations Director. Mr. Can C
aka received his BS
degree from the Department of Electrical and Electronics Engineering at Middle East Technical
University and a graduate degree from the Faculty of Economics and Administrative Sciences at the
same University. Mr. C
aka began his career as Business Analyst and Systems Engineer at Texas
Instruments Software Ltd. In 1997, he joined Anadolu Efes as a Finance Specialist and has held
various positions with the Group, including Strategy and Business Development Manager (and
subsequently Director) of Efes Beer Group. Mr. C
aka was appointed as the Director of Strategy,
Business and Market Development of Efes Beer Group in November 2007 and served in this position
until March 2008. He has been the Director of Finance & Investor Relations at Anadolu Efes since
April 2008. Mr. Can C
aka is expected to be promoted to Chief Financial Officer of AEH effective as
of 1 January 2013.

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

121

Altug Aksoy, Efes Turkey Managing Director. Mr Altug Aksoy received his bachelors degree from
Oglethorpe University in the United States. He began his career as Finance Assistant Specialist within
the Anadolu Group in 1995 and was appointed Finance Specialist in 1996. Mr. Aksoy worked as a
Human Resources and Treasury Specialist from 1998 to 2000. He served as Director of Sales and
Marketing at Efes Invest from 2000 to 2003 and was appointed as the Director of Trade and Export
of Efes Beer Group in January 2003. Continuing his career with the Group as the Director of
Purchasing and Logistics in 2006, Mr. Aksoy was appointed Director of Supply Chain of Efes Beer
Group in June 2008. Mr. Aksoy served in this position until November 2011, when he was appointed
as Efes Turkey Managing Director.
Tugrul Agrbas, Efes Russia Managing Director. Mr Tugrul Agrbas received his bachelors degree in
Business Administration from Istanbul University and joined Efes Beverage Group in 1990. From
1990 to 2001. Mr. Agrbas worked as Project Development Specialist, Marketing Specialist, Istanbul
Region Sales Supervisor, New Product Development Supervisor, Group Product Manager, Sales
Manager of Marmara Region and Marketing Manager of Miller. Mr. Agrbas was appointed as the
Marketing Director of Efes Russia in 2001 and Managing Director of MEB in June 2005. He
assumed the post of Efes Turkey Managing Director on 1 January 2010. Mr. Agrbas was appointed
Managing Director of Efes Russia in November 2011.
Yuksel Gokbulut, Eastern Europe and CIS Group Managing Director. Mr Yuksel Gokbulut received his
bachelors degree in Journalism & Public Relations from Marmara University and worked as Sales
Development and Audit Inspector at Hurriyet Holding prior to joining Efes Beverage Group. Mr.
Gokbulut joined Efes Beer Group as a Marketing Specialist in 1990 and worked as a Market
Research Supervisor from 1994 to 1996; Domestic Sales Assistant Manager in Ege Biraclk from
1996 to 1997; Marketing Manager in the Eastern Europe Region from 1997 to 1999 and Marketing
Director of Turkey Beer operations from 1999 to 2006. Appointed as Sales Director of Efes Beer
Group in September 2006, Mr. Yuksel Gokbulut subsequently appointed Marketing and Sales
Director of Efes Beer Group. Mr. Gokbulut was appointed as Efes Russia Managing Director in
January 2010 and as Eastern Europe and CIS Group Managing Director in November 2011.
Cem Guner, Efes Beer Group Market Development Director and Acting Commercial Director. Mr. Cem
Guner holds a bachelors degree in Business Administration from Middle East Technical University.
He began his professional career with the Group as a Marketing Specialist in 1991. From 1994 to
2003 he served as Sales Manager with Efes Invest, Product Marketing Supervisor with EFPA,
Marketing Manager with MEB and Product Development Manager with Efes Beverage Group. He
was appointed as the Marketing Director of Efes Beverage Group in February 2003. Mr. Guner
served as the Efes Moldova General Manager from October 2007 until August 2009, when he was
appointed as the Market Development Director.
zcelik received his bachelors
Kenan Ozcelik, Efes Beer Group Supply Chain Director. Mr. Kenan O
degree in Mechanical Engineering from the Vienna University of Technology and obtained his MBA
from the same University. Completing the Brewing Science program at Munich Technical University,
zcelik began his career as a Systems Programmer at Siemens in 1986, and worked freelance
Mr. O
zcelik began his career with the Group as a
from 1987 to 1994 before joining the Group. Mr. O
Filling Engineer at Erciyas Biraclk in 1994. He worked as Assistant Technical Manager at the
Moscow facility from 1999 to 2000 and Technical Manager with MEB from 2000 to 2006. Appointed
zcelik also served as Technical Director of the
as the Technical Director of MEB in 2006, Mr. O

Turkey Beer Group from 2006 to 2009. Mr. Ozcelik was appointed as Efes Moldova Managing
Director in 2009 and Efes Beer Group Supply Chain Director in November 2011.
Saltuk Ertop, Efes Beer Group Corporate and Regulatory Affairs Director. Mr. Saltuk Ertop graduated
from the Istanbul University Faculty of Law, and received his graduate degree in Tax Law from the
same university. He has an Executive MBA in Finance from the University of Wales. He began his
professional career at C
aylgil & Gundogdu Law Firm as an attorney in 1990. Mr. Ertop worked at
Alcatel as Legal Counsel, International Legal Counsel (Belgium), General Counsel, Human Resources
Director, Career Development Director at Alcatel Headquarters (France), Vice President of Human
Resources at South Asia and Vice President of South Asia Operations (India) at Alcatel-Lucent from
1993 to 2008. Joining Efes Beer Group as Human Resources Director in March 2008, Mr. Ertop has
served as Efes Beer Group Corporate and Regulatory Affairs Director since April 2010.
zturk graduated from the
Ahmet Ozturk, Efes Beer Group Internal Audit Director. Mr. Ahmet O
Department of Economics of the Faculty of Economics, Administrative and Social Sciences at Bilkent
University and joined the Anadolu Group in 1995. He began his professional career as Assistant

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

122

Specialist in the Audit Department and later served in a number of positions with various
responsibilities with international companies operating under the Anadolu Group. He worked as
Financial Control Manager at Coca-Cola Rostov Bottlers in 1998 and as Director of Financial
Affairs at Coca-Cola Turkmenistan, Coca-Cola Azerbaijan, Efes Ukraine and Efes Serbia operations
zturk assumed responsibility for internal audit activities of international
from 1999 to 2007. Mr. O
zturk has been the Internal Audit Director at Efes Beer Group since
operations in 2007. Mr. O
January 2011.
Onur Cevikel, Anadolu Efes Finance and Investor Relations Director (effective 1 January 2013). Mr.
Onur C
evikel has been appointed as the Anadolu Efes Finance and Investor Relations Director
effective as of 1 January 2013 upon the promotion of Mr Can C
aka. Mr. C
evikel holds a bachelors
degree in Business Administration from Istanbul University. He began his professional career with the
Efes Beer Group as Finance Specialist in 1995. He held various positions including Finance Manager
of Coca-Cola Kuban Bottlers, Finance Manager of Coca-Cola Rostov Bottlers, Finance Manager and
Finance Director MEB and Operations Director of Efes Russia. Following the announcement of the
strategic alliance with SABMiller, he was appointed as Integration Director leading the Integration
team coordinating the integration activities in Russia including benchmarking best practices for the
integrated businesses.
Interests of Directors and Key Executives
zilhan and Yazc families directly and indirectly together hold 43% of the Companys
The O
outstanding share capital, including through their ownership of Anadolu Endustri Holding, which
holds 6% of the Companys share capital, and the current Chairman of the Board is a member of the
zilhan family. SAB Miller Anadolu Efes Ltd. holds 24% of the Companys outstanding share
O
capital, and Mr. Mackay, Vice-Chairman of the Board, is the CEO of SABMiller. Save as set out
above and in Risk FactorsRisk Related to the Groups BusinessThe Group is effectively controlled
by the Ozilhan and Yazc families, whose interests (along with the interests of SABMiller Anadolu Efes
Ltd., another significant shareholder) may conflict with the interests of the holders of the Notes, there
are no actual or potential conflicts of interest between the obligations of the members of the Board of
Directors and the Key Executives toward the Company and their respective private interests and
duties or obligations to the Company.

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

123

OWNERSHIP
Set forth in the table below is the Companys shareholding structure as at the date of this Offering
Circular:
Percentage
Holding

Holder
Yazclar Holding A.S..............................................................................................................
zilhan Snai Yatrm A.S. ......................................................................................................
O
Anadolu Endustri Holding A.S.(1) ...........................................................................................
SAB Miller Anadolu Efes Ltd. ................................................................................................
Public and miscellaneous .........................................................................................................

23.6
13.5
6.0
24.0
32.9
100.0

zilhan and Yazc families, with O


zilhan Snai Yatrm A.S. holding 32% of the share capital of AEH and
(1) AEH is owned by the O
Yazclar Holding A.S. holding 68%. See Risk FactorsRisk Related to the Groups BusinessThe Group is effectively controlled
by the Ozilhan and Yazc families, whose interests (along with the interests of SABMiller Anadolu Efes Ltd., another significant
shareholder) may conflict with the interests of the holders of the Notes.

Certain Corporate Governance Provisions for Companies Listed on the Istanbul Stock Exchange
As a company whose shares are listed on the Istanbul Stock Exchange, the Company is subject to the
Turkish Capital Markets Law, Communiques issued by the CMB and the rules of the Istanbul Stock
Exchange. In particular, the Company is subject to the principles set out in Communique Serial: IV,
No: 56 on the Determination and Implementation of Corporate Governance Principles (Communique
No IV-56), published in the Official Gazette dated 30 December 2011, which addresses matters
including the approval of material transactions, conflicts of interest and related party transactions.
According to the Communique, certain material transactions such as the lease or transfer of all or
substantially all of a listed companies assets, the acquisition or lease of material assets and delisting
from the Istanbul Stock Exchange may be approved by a companys board of directors if a majority
of the independent directors also voted in favour of such transaction. However, if a companys board
of directors approves a material transaction without the approval of a majority of the independent
directors, the approval of the general assembly of the shareholders is required for the material
transaction to be approved. In such case, the reasons behind the dissenting votes of the independent
directors must be disclosed to the public, notified to the CMB and presented to the general assembly
convened for the approval of the relevant material transaction.
Moreover, if the material transaction is also considered to be a related party transactions, such
related parties shall not vote at the relevant general assembly of shareholders. There is no meeting
quorum for these meetings and the resolution is adopted by a majority of the votes present at the
meeting.
The prior approval of the general assembly of shareholders is required for transactions that may lead
to a conflict of interest or competition with the listed company and its controlling shareholders, board
members, high level executives and their up to second degree relatives. The general assembly is also
required to be informed of these transactions and competitive activities.
The board of directors of a listed company should be composed of at least five members consisting of
both executive and non-executive members, and the majority of the board should consist of nonexecutive directors. Additionally, the number of independent directors should not be less than one
third of the Board, although the relevant communiques and rules provide that in certain
circumstances a listed company may only have two independent directors on their board. Independent
directors may be appointed for a period up to three years and can be re-elected, provided that they
do not serve as a board member for more than six years within the last ten years.
Board resolutions regarding related party transactions or granting any guarantee, pledge or mortgage
in favour of third parties require the affirmative vote of the majority of independent board members.
If the majority of independent board members do not approve the relevant board resolution, then
such matter will be referred to the general assembly of shareholders.

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

124

Certain Arrangements with SABMiller


In connection with its strategic alliance with SABMiller, the Company entered into the Relationship
Agreement with SABMiller, SABMiller AEL and the AE Company Group. SABMiller AEL and
AEH have also entered into the Shareholders Agreement with respect to SABMiller AEL as part of
the strategic alliance. See The Group and Its BusinessStrategic Alliance with SABMiller.
Relationship Agreement
Nomination of directors
Pursuant to the Relationship Agreement, the AE Company Group has the right to nominate six and
SABMiller AEL has the right to nominate one of the eleven directors of the Company. In addition
SABMiller AEL has the right to nominate two out of eight directors to the board of each Russian
and Ukrainian subsidiary of the Company.
Approval of certain matters
Generally speaking, Board of Directors matters with respect to the Company can be approved by a
majority (i.e., six out of eleven) of the Companys Directors. However, certain Minority Protection
Matters can only be approved with the consent of the director nominated by SABMiller AEL.
Minority Protection Matters include the appointment and dismissal of the Chief Executive Officer
of the Groups beer operations and the Chief Financial Officer of the Company; undertaking a
transaction with a value in excess of US$2 million outside the ordinary course of business; and
issuing or agreeing to issue any securities convertible into or exchangeable for the Companys shares.
In addition, certain Russia and Ukraine Protection Matters with respect to Efes Russia and MBU
must be decided unanimously by all directors of the relevant Russian or Ukrainian subsidiary. These
matters include the appointment and dismissal of the Chief Executive Officer of the relevant
subsidiary; the composition of the joint management team (executive committee) to run the Russian
business of the Company; and key strategic initiatives, objectives and resourcing for the Russian
business of the Company.
Shareholders Agreement
Board of directors
Pursuant to the Shareholders Agreement SAB Miller HE has the right to nominate four and AEH
has the right to nominate one of the five directors of SABMiller AEL. Under the Shareholders
Agreement, if a matter arises with respect to SABMiller AELs shares in the Company that is a
Minority Protection Matter then that matter shall be decided only if approved by a director
appointed by SABMiller. Any other matter arising with respect to SABMiller AELs shares in the
Company that is not a Minority Protection Matter shall be decided with approval of any director
nominated by SABMiller HE and the director nominated by AEH. All other matters with respect to
SABMiller AEL can be approved by a majority (i.e., three out of five) of SABMiller AELs directors.
Exercise of SABMiller AELs rights over the Companys shares
SABMiller AELs rights with respect to the Companys shares are to be exercised by its Corporate
Representative, who is the chairman of AEH. The Corporate Representative may act only on the
basis of joint instructions from SABMiller HE and AEH, which instructions shall adhere to the
agreement on voting as described in Board of Directors above.
The Shareholders Agreement permits (i) SABMiller HE and AEH to transfer shares in SABMiller
AEL and (ii) SABMiller AEL and the AE Company Group to transfer shares in the Company, only
as authorised by the Shareholders Agreement or approved in writing by SABMiller HE and AEH, as
relevant.
Subject to satisfying certain formalities, any AE Company Group and SABMiller AEL may transfer
its shares in the Company to its respective affiliates or, in the case of AE Company Group, members
zilhan and Yazclar families (as described in the Shareholders Agreement).
of the O
If any of the AE Company Group decides to transfer any of their respective shares in the Company
or SABMiller HE decides to transfer its shares in SABMiller AEL (each, otherwise than permitted
pursuant to the Shareholders Agreement), such shareholder has to first offer such shares to the other
shareholder at a value determined in accordance with the Shareholders Agreement (Fair Value).
The other shareholder can accept an offer to purchase shares within 20 business days from the day of
the offer. If the offer to purchase shares has been declined or is deemed declined if no answer is

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

125

given during the 20 business day period), the selling shareholder may sell the offered shares to any
third party (at its discretion) provided that such party pays more than the Fair Value and signs a
deed of adhesion to the Shareholders Agreement.

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

126

CONDITIONS OF THE NOTES


The following is the text of the Conditions of the Notes which (subject to modification and except for
the paragraphs in italics) will be endorsed on the Certificates issued in respect of the Notes:
The US$500,000,000 3.375 per cent. Notes due 2022 (the Notes, which expression shall in these
Conditions, unless the context otherwise requires, include any further notes issued pursuant to
Condition 14 and forming a single series with the Notes) of Anadolu Efes Biraclk ve Malt Sanayii
Anonim Sirketi (the Issuer) are issued subject to and with the benefit of an Agency Agreement dated
30 October 2012 (such agreement as amended and/or supplemented and/or restated from time to time,
the Agency Agreement) made between the Issuer, Citigroup Global Markets Deutschland AG as
registrar (the Registrar), Citibank, N.A., London Branch as fiscal agent and principal paying agent
(the Fiscal Agent) and the other initial paying agents named in the Agency Agreement (together with
the Fiscal Agent, the Paying Agents) and the other agents named in it (together with the Fiscal
Agent, the Registrar and the other Paying Agents, the Agents). The holders of the Notes (the
Noteholders) are entitled to the benefit of a Deed of Covenant (the Deed of Covenant) dated 30
October 2012 and made by the Issuer. The original of the Deed of Covenant is held by the Fiscal
Agent on behalf of the Noteholders at its specified office.
The statements in these Conditions include summaries of, and are subject to, the detailed provisions
of and definitions in the Agency Agreement. Copies of the Agency Agreement are available for
inspection during normal business hours by the holders of the Notes (the Noteholders) appertaining to
the Notes at the specified office of each of the Paying Agents. The Noteholders are entitled to the
benefit of, are bound by, and are deemed to have notice of, all the provisions of the Agency
Agreement and the Deed of Covenant applicable to them. References in these Conditions to the
Fiscal Agent, the Registrar, the Paying Agents and the Agents shall include any successor appointed
under the Agency Agreement.
The owners shown in the records of Euroclear Bank S.A./N.V. (Euroclear), Clearstream Banking,
societe anonyme (Clearstream, Luxembourg) and the Depository Trust Company (DTC) of book-entry
interests in Notes are entitled to the benefit of, are bound by, and are deemed to have notice of, all the
provisions of the Agency Agreement applicable to them.
1.

FORM, DENOMINATION AND TITLE

1.1

Form and Denomination


The Notes are issued in registered form in amounts of US$200,000 and integral multiples of
US$1,000 in excess thereof (referred to as the principal amount of a Note). A certificate (each, a
Certificate) will be issued to each Noteholder in respect of its registered holding of Notes. Each
Certificate will be numbered serially with an identifying number which will be recorded on the
relevant Certificate and in the register of Noteholders which the Issuer will procure to be kept
by the Registrar. The Notes are issued pursuant to the Turkish Commercial Code (Law No.
6102), the Capital Markets Law (Law No. 2499) and Articles 6 and 25 of the Communique
Serial II, No. 22 of the Capital Markets Board (CMB) on Registration and Sale of Debt
Instruments.

1.2

Title
Title to the Notes passes only by registration in the register of Noteholders. The holder of any
Note will (except as otherwise required by law) be treated as its absolute owner for all purposes
(whether or not it is overdue and regardless of any notice of ownership, trust or any interest or
any writing on, or the theft or loss of, the Certificate issued in respect of it) and no person will
be liable for so treating the holder. In these Conditions, Noteholder and (in relation to a Note)
holder means the person in whose name a Note is registered in the register of Noteholders.
For a description of the procedures for transferring title to book-entry interests in the Notes, see
Book-Entry Clearance Systems.

2.

TRANSFERS OF NOTES AND ISSUE OF CERTIFICATES

2.1

Transfers
A Note may be transferred by depositing the Certificate issued in respect of that Note, with the
form of transfer on the back duly completed and signed, at the specified office of the Registrar
or any of the Agents.

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

127

For a description of certain restrictions on transfers of interests in the Notes, see Transfer
Restrictions.
2.2

Delivery of new Certificates


Each new Certificate to be issued upon transfer of Notes will, within five business days of
receipt by the Registrar or the relevant Agent of the duly completed form of transfer endorsed
on the relevant Certificate, be mailed by uninsured mail at the risk of the holder entitled to the
Note to the address specified in the form of transfer. For the purposes of this Condition,
business day shall mean a day on which banks are open for business in the city in which the
specified office of the Agent with whom a Certificate is deposited in connection with a transfer
is located.
Except in the limited circumstances described herein (see The Global Certificates Registration
of Title), owners of interests in the Notes will not be entitled to receive physical delivery of
Certificates. Issues of Certificates upon transfer of Notes are subject to compliance by the
transferor and transferee with the certification procedures described above and in the Agency
Agreement and, in the case of Restricted Notes, compliance with the Securities Act Legend.
Where some but not all of the Notes in respect of which a Certificate is issued are to be
transferred a new Certificate in respect of the Notes not so transferred will, within five business
days of receipt by the Registrar or the relevant Agent of the original Certificate (or such longer
period as may be required to comply with any fiscal or other regulations), be mailed by
uninsured mail at the risk of the holder of the Notes not so transferred to the address of such
holder appearing on the register of Noteholders or as specified in the form of transfer.

2.3

Formalities free of charge


Registration of transfer of Notes will be effected without charge by or on behalf of the Issuer
or any Agent but upon payment by the Noteholder (or the giving of such indemnity as the
Issuer or any Agent may reasonably require) in respect of any tax or other governmental
charges which may be imposed in relation to such transfer.

2.4

Closed Periods
No Noteholder may require the transfer of a Note to be registered during the period of 15 days
ending on the due date for any payment of principal or interest on that Note.

2.5

Regulations
All transfers of Notes and entries on the register of Noteholders will be made subject to the
detailed regulations concerning transfer of Notes scheduled to the Agency Agreement. The
regulations may be changed by the Issuer with the prior written approval of the Registrar. A
copy of the current regulations will be mailed (free of charge) by the Registrar to any
Noteholder who requests one.

3.
STATUS
The Notes are direct, unconditional and (subject to the provisions of Condition 4.1) unsecured
obligations of the Issuer and (subject as provided above) rank and will rank pari passu, without any
preference among themselves, with all other outstanding unsecured and unsubordinated obligations of
the Issuer, present and future, but, in the event of insolvency, only to the extent permitted by
applicable laws relating to creditors rights.
4.

COVENANTS

4.1

Negative Pledge
So long as any of the Notes remains outstanding, the Issuer will not, and the Issuer will procure
that none of its Subsidiaries will, create or have outstanding any mortgage, charge, lien, pledge
or other security interest, including the entry into of any Sale and Lease Back Transaction (each
a Security Interest), other than a Permitted Security Interest, upon, or with respect to, any
Principal Property or shares or equity stock of any Restricted Subsidiary to secure any Relevant
Indebtedness, unless the Issuer, in the case of the creation of a Security Interest, before or at
the same time and, in any other case, promptly, takes any and all action necessary to ensure
that:

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

128

(a)

all amounts payable by it under the Notes are secured by the Security Interest equally and
rateably with the Relevant Indebtedness; or

(b)

such other Security Interest or other arrangement (whether or not it includes the giving of
a Security Interest) is provided as is approved by an Extraordinary Resolution,

except that the Issuer and any of its Subsidiaries may at any time create a Security Interest
upon, or with respect to, any Principal Property or shares or equity stock of any Restricted
Subsidiary to secure Relevant Indebtedness or enter into a Sale and Lease Back Transaction
with respect to any Principal Property without so securing amounts payable by the Issuer under
the Notes if at that time the sum of:
(i)

the total amount of outstanding Relevant Indebtedness secured by Security Interests upon,
or with respect to, all Principal Properties or shares or equity stock of Restricted
Subsidiaries without taking account of any Sale and Leaseback Transactions and excluding
any Relevant Indebtedness secured by Permitted Security Interests; and

(ii)

the Attributable Value of all Sale and Leaseback Transactions entered into after the Issue
Date and not otherwise permitted under these Conditions,

does not exceed an amount equal to the greater of US$200,000,000 or 10 per cent. of the
Consolidated Net Tangible Assets of the Issuer.
4.2

Interpretation
In these Conditions:
Attributable Value means at any time and in respect of any particular Sale and Leaseback
Transaction, the total net amount of rent required to be paid by the Issuer or the relevant
Restricted Subsidiary under the lease during the remaining term of the lease (excluding any
subsequent renewal or other extension option held by the Issuer or that Restricted Subsidiary,
as the case may be, but, in the case of any lease which is terminable by the Issuer or the
Restricted Subsidiary upon the payment of a penalty, including the amount of such penalty and
as if the lease expires on the first date it may be terminated following such payment), discounted
from the respective due dates to the date of determination at a rate equivalent to the rate used
for the purposes of the financial reporting of the Issuer or the Restricted Subsidiary in
accordance with generally accepted accounting principles and practices applicable to the business
of the Issuer or the Restricted Subsidiary (as determined in good faith by the principal
accounting officer of the Issuer or the Restricted Subsidiary). The net amount of rent required
to be paid under the lease for any period will be the aggregate amount of rent payable by the
lessee with respect to that period, excluding amounts required to be paid on account of
maintenance and repairs, insurance, taxes, assessments, utility, operating and labour costs and
similar charges and as reduced by the present value of the rent, if any (determined on the
foregoing basis), that any sub-lessee is required to pay for all or part of the leased property for
the relevant period;
CMB Financial Reporting Standards means the financial reporting standards accepted by the
CMB, being International Financial Reporting Standards (formerly International Accounting
Standards) as described in the CMBs Communique on Financial Reporting in Capital
Markets Serial XI, No. 29, promulgated in the Official Gazette dated 9 April 2008 and
effective from 1 January 2008 (as amended, supplemented or restated from time to time);
Coca-Cola Icecek means Coca-Cola Icecek A.S.;
Consolidated Net Tangible Assets means at any time (a) the consolidated total assets of the
Issuer less (b) the sum of: (i) all current liabilities and (ii) all goodwill and intangible assets, all
as calculated by reference to the most recent audited or reviewed consolidated balance sheet of
the Issuer prepared in accordance with CMB Financial Reporting Standards consistently applied
and within 150 days of the date as of which the calculation is being made and adjusted as
deemed appropriate by the Issuer to take account of any non-controlling interests of any other
persons in any of its Subsidiaries;
Issue Date means the date of issue of the Notes;
Permitted Security Interest means:
(a)

any Security Interest existing on the Issue Date;

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

129

(b)

any Security Interest upon, or with respect to, any Principal Property or shares or equity
stock of any Restricted Subsidiary (which becomes a Restricted Subsidiary after the Issue
Date) existing before the date of such Restricted Subsidiary becoming a Restricted
Subsidiary, provided that such Security Interest was not created in contemplation of such
Restricted Subsidiary becoming a Restricted Subsidiary;

(c)

any Security Interest upon, or with respect to, any Principal Property or shares or equity
stock of any Restricted Subsidiary acquired by the Issuer or any Restricted Subsidiary as
security for, or for indebtedness incurred to finance, all or part of the price of its
acquisition or the costs of its construction, development modification or improvement;

(d)

any Security Interest upon, or with respect to, any Principal Property or shares or equity
stock of any Restricted Subsidiary which is acquired by the Issuer or any Restricted
Subsidiary subject to such Security Interest, provided that such Security Interest was not
created in contemplation of such acquisition;

(e)

any Security Interest arising by operation of law and not securing amounts more than 90
days overdue unless being contested in good faith;

(f)

judgment Security Interests not giving rise to an Event of Default;

(g)

any Security Interest securing taxes or assessments or other applicable governmental


charges or levies which are not overdue or are being contested in good faith and adequate
reserves or provisions (if any) as may be required have been established or made in
accordance with applicable generally accepted accounting principles;

(h)

any Security Interest in favour of the Issuer or a Restricted Subsidiary and securing any
Relevant Indebtedness of another Restricted Subsidiary that is owed to the Issuer or that
Restricted Subsidiary;

(i)

any Security Interest arising under a Sale and Leaseback Transaction permitted under
Condition 4.3;

(j)

any extension, renewal or replacement of any Security Interest referred to in paragraphs (a)
to (i) (inclusive) above to secure amounts not exceeding the principal amount of the
Relevant Indebtedness secured by such Security Interest, provided that the Principal
Property or shares or equity stock of the Restricted Subsidiary secured by the extended,
renewed or replaced Security Interest is limited to all or a part of the same Principal
Property or shares or equity stock of the Restricted Subsidiary that was the subject of the
Security Interest so extended, renewed or replaced (together with any improvements to
such Principal Property).

Principal Property means any present or future building, structure or other facility, together with
the land upon which it is erected and fixtures comprising a part thereof that is owned or leased
by the Issuer or any of its Subsidiaries and has a gross book value (without deduction of any
applicable depreciation reserves) on the date as of which the determination is being made of
more than 2 per cent. of the Consolidated Net Tangible Assets of the Issuer, other than any
such building, structure or facility which, in the opinion of the Board of Directors of the Issuer,
is determined in good faith not to be materially important to the total business conducted by
the Issuer and its Subsidiaries, taken as a whole, and Principal Properties shall be construed
accordingly;
Relevant Indebtedness means (i) any present or future indebtedness (whether being principal,
interest or other amounts) for or in respect of any borrowed money and (ii) any guarantee or
indemnity of any such indebtedness;
Restricted Subsidiary means any Subsidiary of the Issuer that owns or leases any Principal
Property;
Sale and Leaseback Transaction means any arrangement entered into by the Issuer or any
Restricted Subsidiary with any lender or investor, or to which that lender or investor is a party,
providing for the leasing by the Issuer or that Restricted Subsidiary of any Principal Property
which has been or is being sold or transferred by the Issuer or that Restricted Subsidiary more
than 6 months after its acquisition by the Issuer or the Restricted Subsidiary or the completion
of its construction or commencement of its operation to that lender or investor or to any person
to whom any amount has been or is to be advanced by that lender or investor on the security
of that Principal Property. The stated maturity of any such arrangement shall be the date of the

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

130

last payment of rent or any other amount due under the arrangement before the first date on
which it may be terminated by the lessee without payment of any penalty (which termination
date may also be the date of such last payment); and
Subsidiary means, in relation to the Issuer, any company other than Coca-Cola Icecek (i) in
which the Issuer holds a majority of the voting rights or (ii) of which the Issuer is a member
and has the right to appoint or remove a majority of the board of directors or (iii) of which the
Issuer is a member and controls a majority of the voting rights, and includes any company
which is a Subsidiary of a Subsidiary of the Issuer (but shall not include any company which is
a Subsidiary of Coca-Cola Icecek).
4.3

Limitation on Sale and Leaseback Transactions


So long as any of the Notes remains outstanding, the Issuer will not, and the Issuer will procure
that none of its Restricted Subsidiaries will, enter into any Sale and Leaseback Transaction in
respect of any Principal Property, other than any such transaction involving a lease for a term
(including extensions and renewals) of not more than three years or any transaction between the
Issuer and any Restricted Subsidiaries, or between Restricted Subsidiaries, unless:
(a)

the Issuer or the Restricted Subsidiary, as the case may be, could, in accordance with the
provisions of Condition 4.1, enter into a Sale and Leaseback Transaction in respect of
such Principal Property or create or have outstanding any Security Interest upon, or with
respect to, such Principal Property to secure any Relevant Indebtedness without equally
and rateably securing the Notes or providing for such other Security Interest or other
arrangement as is approved by an Extraordinary Resolution of the Noteholders; or

(b)

the Issuer or the Restricted Subsidiary, as the case may be, applies, within 120 days of the
effective date of the sale or transfer of the relevant Principal Property, an amount equal to
the Attributable Value of such Sale and Leaseback Transaction to either (or a combination
of) (i) the prepayment, repayment, redemption, reduction or retirement of indebtedness
which matures more than 12 months after the date on which it is incurred, assumed,
guaranteed or otherwise arises or (ii) expenditures for the acquisition, construction,
development or improvement of any Principal Property.

5.
5.1

INTEREST
Interest Rate and Interest Payment Dates
The Notes bear interest from and including 30 October 2012 at the rate of 3.375 per cent. per
annum, payable semi-annually in arrear on each of 1 May and 1 November in each year (each
an Interest Payment Date). The first payment (for the period from and including 30 October
2012 to but excluding 1 May 2013 and amounting to US$16.97 per US$1,000 principal amount
of Notes) shall be made on 1 May 2013.

5.2

Interest Accrual
Each Note will cease to bear interest from and including its due date for redemption unless,
upon due presentation, payment of the principal in respect of the Note is improperly withheld
or refused or unless default is otherwise made in respect of payment. In such event, interest will
continue to accrue until whichever is the earlier of:

5.3

(a)

the date on which all amounts due in respect of such Note have been paid; and

(b)

five days after the date on which the full amount of the moneys payable in respect of such
Notes has been received by the Fiscal Agent or the Registrar, as the case may be, and
notice to that effect has been given to the Noteholders in accordance with Condition 12.

Calculation of Broken Interest


When interest is required to be calculated in respect of a period of less than a full six months, it
shall be calculated on the basis of a 360-day year consisting of 12 months of 30 days each and,
in the case of an incomplete month, the number of days elapsed on the basis of a month of 30
days.

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

131

6.

PAYMENTS

6.1

Payments in respect of Notes


Payment of principal and interest will be made by transfer to the registered account of the
Noteholder or by US dollar cheque drawn on a bank that processes payments in US dollar
mailed to the registered address of the Noteholder if it does not have a registered account.
Payments of principal and payments of interest due otherwise than on an Interest Payment Date
will only be made against surrender of the relevant Certificate at the specified office of any of
the Agents. Interest on Notes due on an Interest Payment Date will be paid to the holder
shown on the register of Noteholders at the close of business on the date (the record date) being
the fifteenth day before the due date for the payment of interest.
For the purposes of this Condition, a Noteholders registered account means the US dollar
account maintained by or on behalf of it with a bank that processes payments in US dollar,
details of which appear on the register of Noteholders at the close of business, in the case of
principal, on the second Business Day (as defined in Condition 6.4 below) before the due date
for payment and, in the case of interest, on the relevant record date, and a Noteholders
registered address means its address appearing on the register of Noteholders at that time.

6.2

Payments subject to Applicable Laws


Payments in respect of principal and interest on the Notes are subject in all cases to (i) any
fiscal or other laws and regulations applicable in the place of payment, but without prejudice to
the provisions of Condition 8 and (ii) any withholding or deduction required pursuant to an
agreement described in Section 1471(b) of the US Internal Revenue Code of 1986 (the Code) or
otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any regulations or
agreements thereunder or official interpretations thereof (FATCA), or any law implementing an
intergovernmental approach thereto.

6.3

No commissions
No commissions or expenses shall be charged to the Noteholders in respect of any payments
made in accordance with this Condition.

6.4

Payment on Business Days


Where payment is to be made by transfer to a registered account, payment instructions (for
value the due date or, if that is not a Business Day, for value the first following day which is a
Business Day) will be initiated and, where payment is to be made by cheque, the cheque will be
mailed, on the Business Day preceding the due date for payment or, in the case of a payment
of principal or a payment of interest due otherwise than on an Interest Payment Date, if later,
on the Business Day on which the relevant Certificate is surrendered at the specified office of an
Agent.
Noteholders will not be entitled to any interest or other payment for any delay after the due
date in receiving the amount due if the due date is not a Business Day, if the Noteholder is late
in surrendering its Certificate (if required to do so) or if a cheque mailed in accordance with
this Condition arrives after the due date for payment.
In these Conditions, Business Day means a day (other than a Saturday or Sunday) on which
commercial banks are open for business in London and New York City and, in the case of
presentation of a Note Certificate, in the place in which the Note Certificate is presented.

6.5

Partial Payments
If the amount of principal or interest which is due on the Notes is not paid in full, the
Registrar will annotate the register of Noteholders with a record of the amount of principal or
interest in fact paid.

6.6

Agents
The names of the initial Agents and their initial specified offices are set out at the end of these
Conditions. The Issuer reserves the right at any time to vary or terminate the appointment of
any Agent and to appoint additional or other Agents provided that:
(a)

there will at all times be a Fiscal Agent;

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

132

(b)

there will at all times be an Agent (which may be the Fiscal Agent) having a specified
office in a European city;

(c)

the Issuer undertakes that it will ensure that it maintains a Paying Agent in a Member
State of the European Union that is not obliged to withhold or deduct tax pursuant to
European Council Directive 2003/48/EC or any law implementing or complying with, or
introduced in order to conform to, such Directive;

(d)

there will at all times be a Paying Agent in a jurisdiction within Europe, other than the
jurisdiction in which the Issuer is incorporated; and

(e)

there will at all times be a Registrar.

Notice of any termination or appointment and of any changes in specified offices given to the
Noteholders promptly by the Issuer in accordance with Condition 12.
7.
7.1

REDEMPTION AND PURCHASE


Redemption at Maturity
Unless previously redeemed or purchased and cancelled as provided below, the Issuer will
redeem the Notes at their principal amount on 1 November 2022 (the Maturity Date).

7.2

Redemption for Taxation Reasons


If:
(a)

as a result of any change in, or amendment to, the laws or regulations of a Relevant
Jurisdiction (as defined in Condition 8), or any change in the application or official
interpretation of the laws or regulations of a Relevant Jurisdiction, which change or
amendment becomes effective after 23 October 2012, on the next Interest Payment Date (i)
the Issuer would be required to pay additional amounts as provided or referred to in
Condition 8; and (ii) the Issuer would be required to make any withholding or deduction
for, or on account of, any Taxes imposed or levied by or on behalf of the Relevant
Jurisdiction, beyond the prevailing applicable rates on 23 October 2012; and

(b)

the requirement cannot be avoided by the Issuer taking reasonable measures available to it,

the Issuer may at its option, having given not less than 30 nor more than 60 days notice to the
Noteholders in accordance with Condition 12 (which notice shall be irrevocable), redeem all the
Notes, but not some only, at any time at their principal amount together with interest accrued
to but excluding the date of redemption. Prior to the publication of any notice of redemption
pursuant to this paragraph, the Issuer shall deliver to the Fiscal Agent a certificate signed by
two Directors of the Issuer stating that the requirement referred to in (a) above will apply on
the next Interest Payment Date and cannot be avoided by the Issuer taking reasonable measures
available to it and an opinion of independent legal advisers of recognised standing to the effect
that the Issuer has or will become obliged to pay such additional amounts as a result of the
change or amendment.
7.3

Redemption at the Option of the Holders Upon a Change of Control


If a Change of Control Put Event occurs, the Issuer will, upon any Noteholder giving to the
Issuer through an Agent notice within the Change of Control Put Period (unless prior to the
giving of such notice the Issuer has given notice of redemption under Condition 7.2) redeem in
whole (but not in part) the Notes the subject of the notice on the Change of Control
Redemption Date at 101 per cent. of their principal amount (the Change of Control Redemption
Amount) together with interest accrued to the date of redemption.
Promptly upon the Issuer becoming aware that a Change of Control Put Event has occurred,
the Issuer shall give notice to the Noteholders in accordance with Condition 12 (a Change of
Control Notice) specifying the nature of the relevant Change of Control Put Event, the
circumstances giving rise to it and the procedure for Noteholders to exercise their rights to
require redemption of any Notes pursuant to this Condition 7.3.
To exercise such right, any holder of the Notes must deliver at the specified office of any Agent
on any Business Day falling within the Change of Control Put Period, a duly signed and
completed notice of exercise in the form obtainable from any specified office of any Agent (a
Change of Control Put Notice) and in which the holder must specify a bank account (or, if
payment is required to be made by cheque, an address) to which payment is to be made under

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

133

this paragraph accompanied by the Certificate for such Notes or evidence satisfactory to the
Agent concerned that the Certificate for such Notes will, following the delivery of the Change of
Control Put Notice, be held to its order or under its control. A Change of Control Put Notice
given by a holder of any Note shall be irrevocable except where, prior to the due date of
redemption, an Event of Default has occurred and is continuing in which event such holder, at
its option, may elect by notice to the Issuer to withdraw the Change of Control Put Notice and
instead to give notice that the Note is immediately due and repayable under Condition 10.
If 85 per cent. or more in nominal amount of the Notes outstanding on the Change of Control
Redemption Date immediately prior to any redemption of the Notes pursuant to this Condition
7.3 are redeemed on such redemption, the Issuer may, on giving not less than 30 nor more than
60 days notice to the Noteholders in accordance with Condition 12 (such notice to be given
within 30 days of the Change of Control Redemption Date), redeem all but not some only of
the remaining outstanding Notes at the Change of Control Redemption Amount together with
interest accrued to the date of redemption.
For the purposes of this Condition 8.3:
zilhan Snai Yatrm A. S. and/or Anadolu
Anadolu Group means Yazclar Holding A.S., O
Endustri Holding A.S.;
a Change of Control will occur if at any time either (i) the Anadolu Group ceases to own,
directly or indirectly, at least 35 per cent. of the issued share capital of the Issuer or otherwise
ceases to control, directly or indirectly the Issuer or (ii) the Issuer ceases to own, directly or
indirectly, more than 50 per cent. of the issued share capital of Coca-Cola Icecek or otherwise
ceases to control, directly or indirectly Coca-Cola Icecek. For the purposes of this definition,
each of the Anadolu Group, in the case of the Issuer, and the Issuer, in the case of Coca-Cola
Icecek, will be deemed to control the Issuer or Coca-Cola Icecek, respectively, if (whether
directly or indirectly and whether by the ownership of share capital, the possession of voting
power, contract, trust or otherwise) it has the power to appoint and/or remove all or the
majority of the members of the board of directors or other governing body of the Issuer or
Coca-Cola Icecek;
Change of Control Period means the period commencing on the Relevant Announcement Date
and ending 90 days after the Change of Control (or such longer period for which the Notes are
under consideration (such consideration having been announced publicly within the period
ending 90 days after the Change of Control) for rating review or, as the case may be, rating by
a Rating Agency, such period not to exceed 60 days after the public announcement of such
consideration);
a Change of Control Put Event will be deemed to occur if a Change of Control occurs and on
the Relevant Announcement Date the Notes have:
(a)

been assigned at the invitation of the Issuer:


(i)

an investment grade rating by any Rating Agency and, within the Change of Control
Period, that credit rating is either downgraded to a non-investment grade rating or
such Rating Agency ceases to assign a credit rating to the Notes and, in each case,
does not subsequently upgrade its credit rating assigned to the Notes to an
investment grade rating or re-assign an investment grade rating to the Notes by the
end of the Change of Control Period; or

(ii)

a non-investment grade rating by any Rating Agency and, within the Change of
Control Period, that credit rating is either downgraded by one or more categories (by
way of example, BB+ to BB being one rating category) or such Rating Agency ceases
to assign a credit rating to the Notes and, in each case, does not subsequently
upgrade its credit rating assigned to the Notes to, or re-assign a credit rating to the
Notes of, the category assigned to the Notes on the Relevant Announcement Date or
better by the end of the Change of Control Period,

provided that if on the Relevant Announcement Date the Notes have been assigned at the
invitation of the Issuer a credit rating from more than one Rating Agency, at least one of
which is an investment grade rating, then paragraph (i) only will apply; or
(b)

not been assigned a credit rating by any Rating Agency at the invitation of the Issuer and
a Negative Rating Event also occurs within the Change of Control Period;

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

134

Change of Control Put Period means the period of 30 days following the date on which a
Change of Control Notice is given;
Change of Control Redemption Date means the fifth Business Day following the expiry of the
Change of Control Put Period;
an investment grade rating shall mean, in relation to S&P, a rating of BBB- or above, in relation
to Moodys, a rating of Baa3 or above, in relation to Fitch, Inc., a rating of BBB- or above
and, in the case of any other Rating Agency, a comparable rating from that Rating Agency;
a Negative Rating Event shall be deemed to have occurred at any time if at such time there is
no credit rating assigned to the Notes by any Rating Agency at the invitation of the Issuer and
(i) the Issuer does not, either prior to, or not later than 21 days after, the occurrence of the
Change of Control seek, and thereafter throughout the Change of Control Period use all
reasonable endeavours to obtain, a credit rating of the Notes or (ii) if the Issuer does so seek
and use such endeavours, it is unable to obtain such a credit rating that is an investment grade
rating by the end of the Change of Control Period;
a non-investment grade rating shall mean, in relation to S&P, a rating of BB+ or below, in
relation to Moodys, a rating of Ba1 or below, in relation to Fitch, Inc., a rating of BB+ or
below and, in the case of any other Rating Agency, a comparable rating from that Rating
Agency;
Rating Agency means Standard & Poors Credit Market Services Europe Limited, a division of
the McGraw Hill Companies, Inc. (S&P), Fitch Ratings Ltd. (Fitch) or Moodys Investors
Service Ltd. (Moodys), or any of their respective successors, or any other rating agency of
international standing;
Relevant Announcement Date means the date that is the earlier of (i) the date of the first public
announcement of the relevant Change of Control and (ii) the date of the earliest Relevant
Potential Change of Control Announcement (if any); and
Relevant Potential Change of Control Announcement means any public announcement or
statement by the Issuer, any actual or potential bidder or any adviser acting on behalf of any
actual or potential bidder relating to any potential Change of Control where within 180 days
following the date of such announcement or statement, a Change of Control occurs.
7.4

Purchases
The Issuer or any of its Subsidiaries (as defined above) may at any time purchase Notes in any
manner and at any price. Such Notes may be held, re-issued, resold or, at the option of the
Issuer, surrendered to any Paying Agent or the Registrar for cancellation.

7.5

Notices Final
Upon the expiry of any notice as is referred to in Conditions 7.2 or 7.3 above the Issuer shall
be bound to redeem the Notes to which the notice refers in accordance with the terms of such
paragraph.

8.

TAXATION

8.1

Payment without Withholding


All payments in respect of the Notes by or on behalf of the Issuer shall be made without
withholding or deduction for, or on account of, any present or future taxes, duties, assessments
or governmental charges of whatever nature (Taxes) imposed or levied by or on behalf of a
Relevant Jurisdiction, unless the withholding or deduction of the Taxes is required by law. In
that event, the Issuer will pay such additional amounts as may be necessary in order that the
net amounts received by the Noteholders after the withholding or deduction shall equal the
respective amounts which would have been receivable in respect of the Notes in the absence of
the withholding or deduction; except that no additional amounts shall be payable in relation to
any payment in respect of any Note:
(a)

presented for payment by or on behalf of a holder who is liable to the Taxes in respect of
the Note by reason of his having some connection with any Relevant Jurisdiction other
than the mere holding of the Note; or

(b)

presented for payment in the Republic of Turkey; or

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

135

(c)

where such withholding or deduction is imposed on a payment to an individual and is


required to be made pursuant to European Council Directive 2003/48/EC or any law
implementing or complying with, or introduced in order to conform to, such Directive;

(d)

presented for payment by or on behalf of a holder who would have been able to avoid
such withholding or deduction by presenting the relevant Note to another Paying Agent in
a Member State of the European Union; or

(e)

presented for payment more than 30 days after the Relevant Date (as defined below)
except to the extent that a holder would have been entitled to additional amounts on
presenting the same for payment on the last day of the period of 30 days assuming that
day to have been a Business Day.

Notwithstanding any other provision of these Conditions, in no event will the Issuer be required
to pay any additional amounts in respect of the Notes for, or on account of, any withholding
or deduction required pursuant to FATCA (including pursuant to any agreement described in
Section 1471(b) of the Code) or any law implementing an intergovernmental approach to
FATCA.
8.2

8.3

Interpretation
In these Conditions:
(a)

Relevant Date means the date on which the payment first becomes due but, if the full
amount of the money payable has not been received by the Fiscal Agent on or before the
due date, it means the date on which, the full amount of the money having been so
received, notice to that effect has been duly given to the Noteholders by the Issuer in
accordance with Condition 12; and

(b)

Relevant Jurisdiction means the Republic of Turkey or any political subdivision or any
authority thereof or therein having power to tax or any other jurisdiction or any political
subdivision or any authority thereof or therein having power to tax to which the Issuer
becomes subject in respect of payments made by it of principal and interest on the Notes.

Additional Amounts
Any reference in these Conditions to any amounts in respect of the Notes shall be deemed also
to refer to any additional amounts which may be payable under this Condition.

9.
PRESCRIPTION
Claims in respect of principal and interest will become prescribed unless made within 10 years (in the
case of principal) and five years (in the case of interest) from the Relevant Date, as defined in
Condition 8.
10. EVENTS OF DEFAULT
10.1 Events of Default
The holder of any Note may give notice to the Issuer that the Note is, and it shall accordingly
forthwith become, immediately due and repayable at its principal amount, together with interest
accrued to the date of repayment, if any of the following events (Events of Default) shall have
occurred and be continuing:
(a)

if default is made in the payment of any principal or interest due in respect of the Notes
or any of them and the default continues for a period of 3 Business Days in the case of
principal or 20 Business Days in the case of interest; or

(b)

if the Issuer fails to perform or observe any of its other obligations under these Conditions
and (except in any case where the failure is incapable of remedy, when no continuation or
notice as is hereinafter mentioned will be required) the failure continues for the period of
90 days following the service by any Noteholder on the Issuer of notice requiring the same
to be remedied; or

(c)

(i) any Indebtedness for Borrowed Money of the Issuer or any of its Principal Subsidiaries
becomes due and repayable prematurely by reason of an event of default (however
described); (ii) the Issuer or any of its Principal Subsidiaries fails to make any payment in
respect of any Indebtedness for Borrowed Money on the due date for payment or (as the
case may be) within any originally applicable grace period for the payment thereof; (iii)

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

136

any security given by the Issuer or any of its Principal Subsidiaries for any Indebtedness
for Borrowed Money becomes enforceable; or (iv) default is made by the Issuer or any of
its Principal Subsidiaries in making any payment due under any guarantee and/or
indemnity given by it in relation to any Indebtedness for Borrowed Money of any other
person, provided that the aggregate nominal amount of any such Indebtedness for
Borrowed Money of the Issuer or such Principal Subsidiary in the case of (i), (ii) and/or
(iii) above, and/or amount of Indebtedness for Borrowed Money in relation to which such
guarantee and/or indemnity of the Issuer or such Principal Subsidiary has been given in
the case of (iv) above, is at least US$50,000,000 (or its equivalent in any other currency);
or
(d)

if (i) the Issuer or any of its Principal Subsidiaries sells or otherwise disposes of all or a
substantial part of its assets or ceases or threatens to cease to carry on the whole or a
substantial part of its business (other than (A) in respect of a Change of Control of CocaCola Icecek and (B) in the case of Coca-Cola Icecek as a Principal Subsidiary, any sale or
disposal by Coca-Cola Icecek of a substantial part of its assets or the ceasing to carry on
by Coca-Cola Icecek of a substantial part of its business) or (ii) an order is made by any
competent court or an effective resolution is passed for the winding-up, dissolution or
liquidation of the Issuer or any of its Principal Subsidiaries, save for the purposes of or
pursuant to an amalgamation, reorganisation or restructuring while solvent (I) in the case
of a Principal Subsidiary, by which the assets and undertaking of that Principal Subsidiary
are transferred to the Issuer and/or any other Subsidiary(ies) of the Issuer or (II) on terms
approved by an Extraordinary Resolution of Noteholders, or (iii) the Issuer or any of its
Principal Subsidiaries stops or threatens to stop payment of, or is unable to, or admits
inability to, pay, its debts (or any class of its debts) as they fall due or is deemed unable
to pay its debts pursuant to or for the purposes of any applicable law, or is adjudicated or
found bankrupt or insolvent; or

(e)

if (i) proceedings are initiated against the Issuer or any of its Principal Subsidiaries under
any applicable liquidation, insolvency, composition, reorganisation or other similar laws or
an application is made (or documents filed with a court) for the appointment of an
administrative or other receiver, manager, administrator or other similar official, or an
administrative or other receiver, manager, administrator or other similar official is
appointed, in relation to the Issuer or any of its Principal Subsidiaries or, as the case may
be, in relation to the whole or any part of the undertaking or assets of any of them or an
encumbrancer takes possession of the whole or any part of the undertaking or assets of
any of them, or a distress, execution, attachment, sequestration or other process is levied,
enforced upon, sued out or put in force against the whole or any part of the undertaking
or assets of any of them, and (ii) in any such case (other than the appointment of an
administrator) unless initiated by the relevant company, any amount (A) in respect of
which such proceedings are initiated or (B) of any indebtedness in respect of which such
application is made or which is secured by the relevant encumbrance, is at least
US$10,000,000 and the relevant proceedings, application, appointment, taking of possession
or process is not discharged within 90 days; or

(f)

if the Issuer or any of its Principal Subsidiaries (or their respective directors or
shareholders) initiates or consents to judicial proceedings relating to itself under any
applicable liquidation, insolvency, composition, reorganisation or other similar laws
(including the obtaining of a moratorium) or makes a conveyance or assignment for the
benefit of, or enters into any composition or other arrangement with, its creditors generally
(or any class of its creditors) or any meeting is convened to consider a proposal for an
arrangement or composition with its creditors generally (or any class of its creditors); or

(g)

any event occurs which under the laws of the Republic of Turkey or any other applicable
jurisdiction has an analogous effect to any of the events referred to in paragraphs (d) to
(f) inclusive above.

10.2 Interpretation
For the purposes of this Condition 10:
(a)

a Principal Subsidiary means at any time a Subsidiary of the Issuer (including, for the
purposes of this Condition 10, other than Condition 10.1(c), Coca-Cola Icecek):

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

137

(i)

whose total sales (consolidated in the case of a Subsidiary which itself has
Subsidiaries) or whose total assets (consolidated in the case of a Subsidiary which
itself has Subsidiaries) represent in each case (or, in the case of a Subsidiary acquired
after the end of the financial period to which the then latest audited consolidated
accounts of the Issuer and its Subsidiaries relate, are equal to) not less than 10 per
cent. of the consolidated total sales of the Issuer, or, as the case may be,
consolidated total assets, of the Issuer and its Subsidiaries taken as a whole, all as
calculated respectively by reference to the then latest audited accounts (consolidated
or, as the case may be, unconsolidated) of such Subsidiary and the then latest
audited consolidated accounts of the Issuer and its Subsidiaries, provided that, in the
case of a Subsidiary of the Issuer acquired after the end of the financial period to
which the then latest audited consolidated accounts of the Issuer and its Subsidiaries
relate, the reference to the then latest audited consolidated accounts of the Issuer and
its Subsidiaries for the purposes of the calculation above shall, until consolidated
accounts for the financial period in which the acquisition is made have been prepared
and audited as aforesaid, be deemed to be a reference to such first-mentioned
accounts as if such Subsidiary had been shown in such accounts by reference to its
then latest relevant audited accounts, adjusted as deemed appropriate by the Issuer;

(ii)

to which is transferred the whole or substantially the whole of the undertaking and
assets of a Subsidiary of the Issuer which immediately prior to such transfer is a
Principal Subsidiary, provided that the transferor Subsidiary shall upon such transfer
forthwith cease to be a Principal Subsidiary and the transferee Subsidiary shall cease
to be a Principal Subsidiary pursuant to this subparagraph (a)(ii) on the date on
which the consolidated accounts of the Issuer and its Subsidiaries for the financial
period current at the date of such transfer have been prepared and audited as
aforesaid but so that such transferor Subsidiary or such transferee Subsidiary may be
a Principal Subsidiary on or at any time after the date on which such consolidated
accounts have been prepared and audited as aforesaid by virtue of the provisions of
subparagraph (a)(i) above or, prior to or after such date, by virtue of any other
applicable provision of this definition; or

(iii) to which is transferred an undertaking or assets which, taken together with the
undertaking or assets of the transferee Subsidiary, generated (or, in the case of the
transferee Subsidiary being acquired after the end of the financial period to which the
then latest audited consolidated accounts of the Issuer and its Subsidiaries relate,
generate gross revenues/net profits equal to) not less than 10 per cent. of the
consolidated total sales of the Issuer, or represent (or, in the case aforesaid, are equal
to) not less than 10 per cent. of the consolidated total assets of the Issuer and its
Subsidiaries taken as a whole, all as calculated as referred to in subparagraph (a)(i)
above, provided that the transferor Subsidiary (if a Principal Subsidiary) shall upon
such transfer forthwith cease to be a Principal Subsidiary unless immediately
following such transfer its undertaking and assets generate (or, in the case aforesaid,
generate total sales equal to) not less than 10 per cent. of the consolidated total sales
of the Issuer, or its assets represent (or, in the case aforesaid, are equal to) not less
than 10 per cent. of the consolidated total assets of the Issuer and its Subsidiaries
taken as a whole, all as calculated as referred to in subparagraph (a)(i) above, and
the transferee Subsidiary shall cease to be a Principal Subsidiary pursuant to this
subparagraph (a)(iii) on the date on which the consolidated accounts of the Issuer
and its Subsidiaries for the financial period current at the date of such transfer have
been prepared and audited but so that such transferor Subsidiary or such transferee
Subsidiary may be a Principal Subsidiary on or at any time after the date on which
such consolidated accounts have been prepared and audited as aforesaid by virtue of
the provisions of subparagraph (a)(i) above or, prior to or after such date, by virtue
of any other applicable provision of this definition,
all as more particularly defined in the Agency Agreement; and
(b)

Indebtedness for Borrowed Money means any indebtedness (whether being principal, interest
or other amounts) for or in respect of any borrowed money.

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

138

10.3 Reports
A certificate of two Directors of the Issuer that in their opinion a Subsidiary of the Issuer is or
is not or was or was not at any particular time or throughout any specified period a Principal
Subsidiary, shall, in the absence of manifest error, be conclusive and binding on all parties.
11. REPLACEMENT OF CERTIFICATES
If any Certificate is lost, stolen, mutilated, defaced or destroyed it may be replaced at the specified
office of the Registrar upon payment by the claimant of the expenses incurred in connection with the
replacement and on such terms as to evidence and indemnity as the Issuer may reasonably require.
Mutilated or defaced Certificates must be surrendered before replacements will be issued.
12. NOTICES
12.1 Notices to the Noteholders
All notices to the Noteholders will be valid if mailed to them at their respective addresses in the
register of Noteholders maintained by the Registrar. The Issuer shall also ensure that notices are
duly given or published in a manner which complies with the rules and regulations of any stock
exchange or other relevant authority on which the Notes are for the time being listed. Any
notice shall be deemed to have been given on the day after being so mailed or on the date of
publication or, if so published more than once or on different dates, on the date of the first
publication.
12.2 Notices from the Noteholders
Notices to be given by any Noteholder shall be in writing and given by lodging the same,
together with the relative Certificate, with the Fiscal Agent or, if the Certificates are held in a
clearing system, may be given through the clearing system in accordance with its standard rules
and procedures.
13. MEETINGS OF NOTEHOLDERS AND MODIFICATION
13.1 Meetings of Noteholders
The Agency Agreement contains provisions for convening meetings of the Noteholders to
consider any matter affecting their interests, including the modification by Extraordinary
Resolution of any of these Conditions or any of the provisions of the Agency Agreement. The
quorum at any meeting for passing an Extraordinary Resolution will be one or more persons
present holding or representing more than 50 per cent. in principal amount of the Notes for the
time being outstanding, or at any adjourned meeting one or more persons present whatever the
principal amount of the Notes held or represented by him or them, except that at any meeting
the business of which includes the modification of certain of these Conditions the necessary
quorum for passing an Extraordinary Resolution will be one or more persons present holding or
representing not less than two-thirds, or at any adjourned meeting not less than one-third, of
the principal amount of the Notes for the time being outstanding. An Extraordinary Resolution
passed at any meeting of the Noteholders will be binding on all Noteholders, whether or not
they are present at the meeting.
13.2 Modification
The Fiscal Agent may agree, without the consent of the Noteholders, to any modification of any
of these Conditions or any of the provisions of the Agency Agreement either (i) for the purpose
of curing any ambiguity or of curing, correcting or supplementing any manifest or proven error
or any other defective provision contained herein or therein or (ii) in any other manner which is
not materially prejudicial to the interests of the Noteholders. Any modification shall be binding
on the Noteholders and, unless the Fiscal Agent agrees otherwise, any modification shall be
notified by the Issuer to the Noteholders as soon as practicable thereafter in accordance with
Condition 12.
14. FURTHER ISSUES
The Issuer may from time to time without the consent of the Noteholders create and issue further
notes, having terms and conditions the same as those of the Notes, or the same except for the
amount of the first payment of interest, which may be consolidated and form a single series with the
outstanding Notes.

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

139

15. GOVERNING LAW AND SUBMISSION TO JURISDICTION


15.1 Governing Law
The Agency Agreement, the Deed of Covenant and the Notes, and any non-contractual
obligations arising out of or in connection with the Agency Agreement, the Deed of Covenant
and the Notes, are governed by, and will be construed in accordance with, English law.
15.2 Jurisdiction of English courts
The Issuer has irrevocably agreed for the benefit of the Noteholders that the courts of England
are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection
with the Notes, and any non-contractual obligations arising out of or in connection with the
Notes, and accordingly has submitted to the exclusive jurisdiction of the English courts. The
Issuer has waived any objection to the courts of England on the grounds that they are an
inconvenient or inappropriate forum.
The Noteholders may take any suit, action or proceeding arising out of or in connection with
the Notes (together referred to as Proceedings) against the Issuer in any other court of
competent jurisdiction and concurrent Proceedings in any number of jurisdictions.
15.3 Consent to Enforcement
The Issuer agrees, without prejudice to the enforcement of a judgment obtained in the English
courts according to the provisions of Article 54 of the International Private and Procedural Law
of Turkey (Law No. 5718), that in the event that any action is brought in relation to the Issuer
in a court in the Republic of Turkey in connection with the Notes, any judgment obtained in
the courts of England in connection with such action shall constitute conclusive evidence of the
existence and amount of the claim against the Issuer, pursuant to the provisions of the first
sentence of Article 193 of the Civil Procedure Code of Turkey (Law No. 6100) and Articles 58
and 59 of the International Private and Procedural Law of Turkey (Law No. 5718).
15.4 Appointment of Process Agent
The Issuer hereby irrevocably and unconditionally appoints Law Debenture Corporate Services
Limited at its registered office at Fifth Floor, 100 Wood Street, London EC2V 7EX, United
Kingdom as its agent for service of process in England in respect of any Proceedings and
undertakes that in the event of such agent ceasing so to act it will appoint another person as its
agent for that purpose.
15.5 Other Documents
The Issuer has in the Agency Agreement and the Deed of Covenant submitted to the
jurisdiction of the English courts and appointed an agent in England for service of process, in
terms substantially similar to those set out above.
16. RIGHTS OF THIRD PARTIES
No rights are conferred on any person under the Contracts (Rights of Third Parties) Act 1999 to
enforce any term of this Note, but this does not affect any right or remedy of any person which
exists or is available apart from that Act.

c107169pu050Proof6:22.10.12_10:41B/LRevision:0OperatorHarS

140

THE GLOBAL CERTIFICATES


The Global Certificates contain the following provisions which apply to the Notes in respect of which
they are issued whilst they are represented by the Global Certificates, some of which modify the effect of
the Conditions of the Notes. Terms defined in the Conditions of the Notes have the same meaning in
paragraphs in this The Global Certificates section.
Accountholders
For so long as any of the Notes are represented by the Global Certificates, each person (other than
another clearing system) who is for the time being shown in the records of DTC or Euroclear or
Clearstream, Luxembourg (as the case may be) as the holder of a particular aggregate principal
amount of such Notes (each an Accountholder) (in which regard any certificate or other document
issued by DTC or Euroclear or Clearstream, Luxembourg (as the case may be) as to the aggregate
principal amount of such Notes standing to the account of any person shall be conclusive and
binding for all purposes) shall be treated as the holder of such aggregate principal amount of such
Notes (and the expression Noteholders and references to holding of Notes and to holder of
Notes shall be construed accordingly) for all purposes other than with respect to payments on such
Notes, the right to which shall be vested, as against the Issuer, solely in the nominee for the relevant
clearing system (the Relevant Nominee) in accordance with and subject to the terms of the Global
Certificates. Each Accountholder must look solely to DTC or Euroclear or Clearstream, Luxembourg,
as the case may be, for its share of each payment made to the Relevant Nominee.
Cancellation
Cancellation of any Note following its redemption or purchase by the Issuer or any of its subsidiaries
will be effected by reduction in the aggregate principal amount of the Notes in the register of
Noteholders and by the annotation of the appropriate schedule to the relevant Global Certificate.
Payments
Payments of principal and interest in respect of Notes
made upon presentation or, if no further payment falls
presentation and surrender of such Global Certificate to
other Agent as shall have been notified to the holders of

represented by a Global Certificate will be


to be made in respect of the Notes, against
or to the order of the Fiscal Agent or such
the Global Certificates for such purpose.

Distributions of amounts with respect to book-entry interests in the Regulation S Notes held through
Euroclear or Clearstream, Luxembourg will be credited, to the extent received by the Fiscal Agent, to
the cash accounts of Euroclear or Clearstream, Luxembourg participants in accordance with the
relevant systems rules and procedures.
Holders of book-entry interests in the Rule 144A Notes holding through DTC will receive, to the
extent received by the Fiscal Agent, all distribution of amounts with respect to book-entry interests in
such Notes from the Fiscal Agent through DTC. Distributions in the United States will be subject to
relevant US tax laws and regulations.
A record of each payment made will be endorsed on the appropriate schedule to the relevant Global
Certificate by or on behalf of the Fiscal Agent and shall be prima facie evidence that payment has
been made.
Notices
So long as the Notes are represented by a Global Certificate and such Global Certificate is held on
behalf of a clearing system, notices to Noteholders may be given by delivery of the relevant notice to
that clearing system for communication by it to entitled Accountholders in substitution for
notification as required by Condition 12. Any such notice shall be deemed to have been given to the
Noteholders on the day after the day on which such notice is delivered to such clearing system.
Whilst any of the Notes held by a Noteholder are represented by a Global Certificate, notices to be
given by such Noteholder may be given by such Noteholder (where applicable) through the applicable
clearing systems operational procedures and otherwise in such manner as the Fiscal Agent and the
applicable clearing system may approve for this purpose.

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

141

Change of control put exercise notice


For so long as any Note is represented by a Global Certificate, to exercise the right to require
redemption of this Note under Condition 7.3 the Noteholder must, within the notice period set out in
Condition 7.3, give notice to any Agent of such exercise in accordance with the standard procedures
of Euroclear, Clearstream, Luxembourg or DTC, as applicable (which may include notice being given
on such Noteholders instruction by Euroclear, Clearstream, Luxembourg, DTC or any depositary for
them to any Agent by electronic means) in a form acceptable to Euroclear, Clearstream, Luxembourg
or DTC, as applicable, from time to time.
Any notice given in accordance with the standard procedures of Euroclear, Clearstream, Luxembourg
or DTC, as applicable, by a Noteholder under Condition 7.3 shall be irrevocable except where, prior
to the due date of redemption, an Event of Default has occurred and is continuing in which event
such Noteholder, at its option, may elect by notice to the Issuer to withdraw such notice and instead
to give notice that the Note is immediately due and repayable under Condition 10.
Registration of Title
Registration of title to Notes in a name other than that of the Relevant Nominee will not be
permitted unless Euroclear or Clearstream, Luxembourg or DTC, as appropriate, notifies the Issuer
that it is unwilling or unable to continue as a clearing system in connection with a Global Certificate
or, in the case of DTC only, DTC ceases to be a clearing agency registered under the US Securities
Exchange Act of 1934, and in each case a successor clearing system is not appointed by the Issuer
within 90 days after receiving such notice from Euroclear, Clearstream, Luxembourg or DTC or
becoming aware that DTC is no longer so registered. In these circumstances title to a Note may be
transferred into the names of holders notified by the Relevant Nominee in accordance with the
Conditions of the Notes, except that Certificates in respect of Notes so transferred may not be
available until 21 days after the request for transfer is duly made.
The Registrar will not register title to the Notes in a name other than that of the Relevant Nominee
for a period of 15 calendar days preceding the due date for any payment of principal or interest in
respect of the Notes.
If only one of the Global Certificates (the Exchanged Global Certificate) becomes exchangeable for
Certificates in accordance with the above paragraphs, transfers of Notes may not take place between,
on the one hand, persons holding Certificates issued in exchange for beneficial interests in the
Exchanged Global Certificate and, on the other hand, persons wishing to purchase beneficial interests
in the other Global Certificate.
Transfers
Transfers of book-entry interests in the Notes will be effected through the records of Euroclear,
Clearstream, Luxembourg and DTC and their respective participants in accordance with the rules and
procedures of Euroclear, Clearstream, Luxembourg and DTC and their respective direct and indirect
participants, as more fully described under Book-Entry Clearance Suystems.

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

142

BOOK-ENTRY CLEARANCE SYSTEMS


The information set out below is subject to any change in or reinterpretation of the rules, regulations
and procedures of each of DTC, Euroclear or Clearstream, Luxembourg (together, the Clearing
Systems) currently in effect. The information in this section concerning the Clearing Systems has
been obtained from sources that the Issuer believes to be reliable, but none of the Joint Lead
Managers takes any responsibility for the accuracy thereof. Investors wishing to use the facilities of
the Clearing Systems are advised to confirm the continued applicability of the rules, regulations and
procedures of such facilities. None of the Issuer nor any other party to the Agency Agreement will
have any responsibility or liability for any aspect of the records relating to, or payments made on
account of, beneficial ownership interests in the Notes held through the facilities of the Clearing
Systems or for maintaining, supervising or reviewing any records relating to such beneficial ownership
interests.
Book-Entry Systems
Euroclear and Clearstream, Luxembourg
Euroclear and Clearstream, Luxembourg each hold securities for their customers and facilitate the
clearance and settlement of securities transactions by electronic book-entry transfer between their
respective account holders. Euroclear and Clearstream, Luxembourg provide various services including
safekeeping, administration, clearance and settlement of internationally traded securities and securities
lending and borrowing. Euroclear and Clearstream, Luxembourg also deal with domestic securities
markets in several countries through established depositary and custodial relationships. Euroclear and
Clearstream, Luxembourg have established an electronic bridge between their two systems across
which their respective participants may settle trades with each other. Euroclear and Clearstream,
Luxembourg customers are worldwide financial institutions, including underwriters, securities brokers
and dealers, banks, trust companies and clearing corporations. Indirect access to Euroclear and
Clearstream, Luxembourg is available to other institutions that clear through or maintain a custodial
relationship with an account holder of either system.
DTC
DTC has advised the Issuer that it is a limited purpose trust company organised under the New York
Banking Law, a banking organisation within the meaning of the New York Banking Law, a
clearing corporation within the meaning of the New York Uniform Commercial Code and a
clearing agency registered pursuant to Section 17A of the Exchange Act. DTC holds securities that
its participants deposit with DTC. DTC also facilitates the settlement among its participants of
securities transactions, such as transfers and pledges, in deposited securities through electronic
computerised book-entry changes in participants accounts. Direct participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain other organisations.
Access to the DTC system is also available to others such as securities brokers and dealers, banks
and trust companies that clear through or maintain a custodial relationship with a direct participant,
either directly or indirectly.
Registration and Form
Book-entry interests in the Notes held through Euroclear and Clearstream, Luxembourg will be
represented by the Unrestricted Global Certificate registered in the name of a nominee of, and held
by, a common depositary for Euroclear and Clearstream, Luxembourg. Book-entry interests in the
Notes held through DTC will be represented by the Restricted Global Certificate registered in the
name of Cede & Co., as nominee for DTC, and held by a custodian for DTC. As necessary, the
Registrar will adjust the amounts of Notes on the Register for the accounts of Euroclear,
Clearstream, Luxembourg and DTC to reflect the amounts of Notes held through Euroclear,
Clearstream, Luxembourg and DTC, respectively. Beneficial ownership of book-entry interests in
Notes will be held through financial institutions as direct and indirect participants in Euroclear,
Clearstream, Luxembourg and DTC.
The aggregate holdings of book-entry interests in the Notes in Euroclear, Clearstream, Luxembourg
and DTC will be reflected in the book-entry accounts of each such institution. Euroclear,
Clearstream, Luxembourg or DTC, as the case may be, and every other intermediate holder in the
chain to the beneficial owner of book-entry interests in the Notes will be responsible for establishing
and maintaining accounts for their participants and customers having interests in the book-entry
interests in the Notes. The Registrar will be responsible for maintaining a record of the aggregate

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

143

holdings of Notes registered in the name of a common nominee for Euroclear and Clearstream,
Luxembourg, a nominee for DTC and/or, if individual Certificates are issued in the limited
circumstances described under The Global CertificatesRegistration of Title, holders of Notes
represented by those individual Certificates. The Fiscal Agent will be responsible for ensuring that
payments received by it from the Issuer for holders of book-entry interests in the Notes holding
through Euroclear and Clearstream, Luxembourg are credited to Euroclear or Clearstream,
Luxembourg, as the case may be, and the Fiscal Agent will also be responsible for ensuring that
payments received by the Fiscal Agent from the Issuer for holders of book-entry interests in the
Notes holding through DTC are credited to DTC.
The Issuer will not impose any fees in respect of holding the Notes; however, holders of book-entry
interests in the Notes may incur fees normally payable in respect of the maintenance and operation of
accounts in Euroclear, Clearstream, Luxembourg or DTC.
Clearing and Settlement Procedures
Initial Settlement
Upon their original issue, the Notes will be in global form represented by the two Global Certificates.
Interests in the Notes will be in uncertified book-entry form. Purchasers electing to hold book-entry
interests in the Notes through Euroclear and Clearstream, Luxembourg accounts will follow the
settlement procedures applicable to conventional Eurobonds. Book-entry interests in the Notes will be
credited to Euroclear and Clearstream, Luxembourg participants securities clearance accounts on the
business day following the Closing Date against payment (value the Closing Date). DTC participants
acting on behalf of purchasers electing to hold book-entry interests in the Notes through DTC will
follow the delivery practices applicable to securities eligible for DTCs Same Day Funds Settlement
system. DTC participants securities accounts will be credited with book-entry interests in the Notes
following confirmation of receipt of payment to the Issuer on the Closing Date.
Secondary Market Trading
Secondary market trades in the Notes will be settled by transfer of title to book-entry interests in the
Clearing Systems. Title to such book-entry interests will pass by registration of the transfer within the
records of Euroclear, Clearstream, Luxembourg or DTC, as the case may be, in accordance with their
respective procedures. Book-entry interests in the Notes may be transferred within Euroclear and
within Clearstream, Luxembourg and between Euroclear and Clearstream, Luxembourg in accordance
with procedures established for these purposes by Euroclear and Clearstream, Luxembourg. Bookentry interests in the Notes may be transferred within DTC in accordance with procedures established
for this purpose by DTC. Transfer of book-entry interests in the Notes between Euroclear or
Clearstream, Luxembourg and DTC may be effected in accordance with procedures established for
this purpose by Euroclear, Clearstream, Luxembourg and DTC.
General
None of Euroclear, Clearstream, Luxembourg or DTC is under any obligation to perform or continue
to perform the procedures referred to above, and such procedures may be discontinued at any time.
None of the Issuer, the Fiscal Agent or any of their agents will have any responsibility for the
performance by Euroclear, Clearstream, Luxembourg or DTC or their respective participants of their
respective obligations under the rules and procedures governing their operations or the arrangements
referred to above and none of them will have any liability for any aspect of the records relating to or
payments made on account of beneficial interests in the Notes represented by Global Certificates or
for maintaining, supervising or reviewing any records relating to such beneficial interests.

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

144

TAXATION
This is a general summary of certain US federal and Turkish income tax considerations in connection
with an investment in the Notes. This summary does not address all aspects of US federal and
Turkish income tax law and does not discuss any state or local tax considerations. While this
summary is considered to be a correct interpretation of existing laws in force on the date of this
Offering Circular, there can be no assurance that those laws or the interpretation of those laws will
not change. This summary does not discuss all of the income tax consequences that may be relevant
to an investor in light of such investors particular circumstances or to investors subject to special
rules, such as regulated investment companies, certain financial institutions or insurance companies.
Prospective investors are advised to consult their tax advisers with respect to the tax consequences of the
purchase, ownership or disposition of the Notes (or the purchase, ownership or disposition by an owner
of beneficial interests therein) as well as any tax consequences that may arise under the laws of any
state, municipality or other taxing jurisdiction. References to resident herein refer to tax residents of
Turkey and references to non-resident herein refer to persons who are not tax residents of Turkey.
Certain US Federal Income Tax Consequences
Notice Pursuant to IRS Circular 230
THE DISCUSSION OF US TAX MATTERS SET FORTH IN THIS OFFERING CIRCULAR WAS
WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THIS OFFERING
AND WAS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY ANY
TAXPAYER FOR THE PURPOSE OF AVOIDING TAX-RELATED PENALTIES UNDER US
FEDERAL, STATE OR LOCAL TAX LAW. EACH TAXPAYER SHOULD SEEK ADVICE BASED
UPON ITS PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISER.
The following summary describes certain US federal income tax consequences of the acquisition,
ownership and disposition of a Note by a US Holder (as defined below) whose functional currency is
the US dollar that acquires the Note in this Offering from the Initial Purchasers at a price equal to
the issue price of the Notes (the first price at which a substantial amount of the Notes is sold for
money to investors) and holds it as a capital asset. This summary does not address all aspects of US
federal income taxation that may be applicable to particular US Holders subject to special US federal
income tax rules, including, among others, tax-exempt organisations, financial institutions, dealers and
traders in securities or currencies, US Holders that will hold a Note as part of a straddle, hedging
transaction, conversion transaction or other integrated transaction for US federal income tax
purposes, US Holders that enter into constructive sale transactions with respect to the Notes, US
Holders liable for alternative minimum tax and certain US expatriates. In addition this summary does
not address consequences to US Holders of the acquisition, ownership and disposition of a Note
under any other US federal tax laws (e.g., estate or gift tax laws) or under the tax laws of any state,
locality or other political subdivision of the United States or other countries or jurisdictions.
As used herein, the term US Holder means a beneficial owner of a Note that is for US federal
income tax purposes: (a) an individual who is a citizen or resident of the United States, (b) a
corporation created or organised in or under the laws of the United States, any state thereof or the
District of Columbia, (c) an estate, the income of which is subject to US federal income taxation
regardless of its source, or (d) a trust that is subject to US tax on its worldwide income regardless of
its source. If an entity or arrangement treated as a partnership for US federal income tax purposes
holds a Note, the US federal income tax treatment of a partner will generally depend upon the status
of the partner and the activities of the partnership. Therefore, a partnership holding a Note and its
partners should consult their own tax advisers regarding the US federal income tax consequences of
the acquisition, ownership and disposition of a Note.
The discussion below is based upon the US Internal Revenue Code of 1986 (the Code), US
Treasury regulations thereunder, and judicial and administrative interpretations thereof, all as in effect
as of the date of this Offering Circular and any of which may at any time be repealed, revoked or
modified or subject to differing interpretations, potentially retroactively, so as to result in US federal
income tax consequences different from those discussed below.
The summary of the US federal income tax consequences set out below is for general information
only. Prospective purchasers should consult their tax advisers as to the particular tax consequences to
them of owning the Notes, including the applicability and effect of state, local, foreign and other tax
laws and possible changes in tax law.

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

145

The Issuer expects, and this discussion assumes, that the terms of the Notes, including the possible
payment of a premium pursuant to a Change of Control Put Event (see Conditions of the Notes
Condition 7.3), will not cause the Notes to be classified as contingent payment debt instruments
for US federal income tax purposes. However, no rulings have been or will be sought from the US
Internal Revenue Service, (the IRS), with respect to the Notes. If this conclusion were to be
successfully challenged by the IRS, US Holders would be subject to different rules than those
described below. Prospective investors should consult their own advisors with respect to these matters
and the significance of a possible recharacterization in their particular situations.
Payments of Interest
Payments of interest on the Notes, including additional amounts, if any, generally will be taxable to a
US Holder as ordinary income at the time that such payments are received or accrued, in accordance
with such US Holders usual method of accounting for US federal income tax purposes. Interest paid
on a Note generally will constitute foreign source income for US federal income tax purposes and
generally will be considered passive income, which is treated separately from other types of income
in computing the foreign tax credit that may be allowable to US Holders under US federal income
tax laws.
It is expected that the Notes will not be issued with original issue discount (OID) for US federal
income tax purposes. The Notes will be treated as issued with OID if their principal amount exceeds
their issue price by more than a de minimis amount of 0.25% of the principal amount multiplied by
the number of complete years from the issue date of the Notes until their maturity. If the Notes are
issued with more than a de minimis amount of OID, a US Holder would be required to include OID
in income as it accrues based on a constant yield to maturity method before the receipt of
corresponding cash payments.
The remainder of this discussion assumes that the Notes are not issued with more than a de minimis
amount of OID.
Sale, Exchange and Redemption of Notes
Upon the sale, exchange, redemption, retirement at maturity or other taxable disposition of a Note, a
US Holder generally will recognise taxable gain or loss equal to the difference between the amount
realised (i.e., the amount of cash and the fair market value of any property received on the
disposition (except to the extent the cash or property received is attributable to accrued and unpaid
interest not previously included in income, which is treated like a payment of interest)) and the US
Holders tax basis in the Note. A US Holders tax basis in a Note generally will equal the amount
paid for the Note. Gain or loss recognised by a US Holder on the sale, exchange or other disposition
of a Note will be capital gain or loss and will be long-term capital gain or loss if the Note was held
by the US Holder for more than one year. Gain or loss realised by a US Holder on the sale or
retirement of a Note generally will be US source. The deductibility of capital losses is subject to
significant limitations.
Medicare Tax
Recently enacted legislation requires certain US Holders who are individuals, estates or trusts to pay
an additional 3.8% tax on, among other things, interest on and capital gains from the sale, retirement
or other taxable disposition of Notes for taxable years beginning after 31 December 2012. US
Holders should consult their tax advisers regarding the effect, if any, of this new legislation on their
investment in the Notes.
Information Reporting and Backup Withholding
Information returns may be filed with the IRS (unless the US Holder establishes, if requested to do
so, that it is an exempt recipient) in connection with payments on the Notes, and the proceeds from
the sale, exchange or other disposition of Notes. If information reports are required to be made, a
US Holder may be subject to US backup withholding if it fails to provide its taxpayer identification
number, or to establish that it is exempt from backup withholding. The amount of any backup
withholding imposed on a payment will be allowed as a credit against any US federal income tax
liability of a US Holder and may entitle the US Holder to a refund, provided the required
information is timely furnished to the IRS.
US Holders should consult their own tax advisers regarding any filing and reporting obligations they
may have as a result of their acquisition, ownership or disposition of notes.

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

146

Recently enacted legislation significantly expands certain tax reporting obligations and related
penalties and statutes of limitations. For example, certain United States persons that own designated
types of financial assets, which would include a Note, have an information reporting obligation when
the aggregate value of all of those assets exceeds US$50,000. The new reporting requirement applies
to individuals and, if specified by the IRS, domestic entities formed or availed of for the purpose of
holding, directly or indirectly, specified types of foreign financial assets. The information required to
be reported will include the name and address of the issuer and information regarding the financial
asset. Persons required to report will file an information return, on Form 8938, with their US federal
income tax returns. Significant penalties and an extended statute of limitations apply with respect to
the new reporting requirement.
Certain Turkish Tax Considerations
The following discussion is a summary of certain Turkish tax considerations relating to an investment
by a person who is a non-resident of Turkey in Notes of a Turkish company issued abroad. The
discussion is based upon current law and is for general information only. The discussion below is not
intended to constitute a complete analysis of all tax consequences relating to the acquisition,
ownership or disposition of the Notes that may be relevant to a decision to make an investment in
the Notes. Furthermore, the discussion only relates to the investment by a person where the Notes
will not be held in connection with the conduct of a trade or business through a permanent
establishment in Turkey. Each investor should consult its own tax advisers concerning the tax
considerations applicable to its particular situation. This discussion is based upon laws and relevant
interpretations thereof in effect as of the date of this Offering Circular, all of which are subject to
change, possibly with a retroactive effect. In addition, it does not describe any tax consequences: (a)
arising under the laws of any taxing jurisdiction other than Turkey or (b) applicable to a resident of
Turkey or a permanent establishment in Turkey that is constituted either by the existence of a fixed
place of business or appointment of a permanent representative.
For Turkish tax purposes, a legal entity is a resident of Turkey if its corporate domicile is in Turkey
or its effective place of management is in Turkey. A resident legal entity is subject to Turkish taxes
on its worldwide income, whereas a non-resident legal entity is only liable to the Turkish taxes for
the trading income made through a permanent establishment or a permanent representative, or for
the income sourced in Turkey otherwise.
An individual is a resident of Turkey if such individual has established domicile in Turkey or stays in
Turkey more than six months in a calendar year. On the other hand, foreign individuals who stay in
Turkey for six months or more for a specific job or business or particular purposes that are specified
in the Income Tax Law are not treated as a resident of Turkey. A resident individual is liable for
Turkish taxes on his/her worldwide income, whereas a non-resident individual is liable for Turkish tax
for the income sourced in Turkey.
Income from capital investment is sourced in Turkey when the
Capital gain derived from trading income is considered sourced
transaction generating such income is performed or accounted for
for means that a payment is made in Turkey, or if the payment
the books in Turkey.

principal is invested
in Turkey when the
in Turkey. The term
is made abroad, it is

in Turkey.
activity or
accounted
recorded in

Any withholding tax levied on income derived by a non-resident person is the final tax for the nonresident person and no further declaration is needed. Any other income of a non-resident person
sourced in Turkey that has not been subject to withholding tax will be subject to taxation through
declaration where exemptions are reserved.
Interest paid on notes (such as the Notes) issued abroad by Turkish corporates is subject to
withholding tax. Through decrees dated 29 December 2010 numbered 2010/1182 and dated 26 April
2011 numbered 2011/1854, the withholding tax rates are set according to the initial maturity of notes
issued abroad as follows:
*

10% withholding tax for notes with an initial maturity of less than 1 year,

7% withholding tax for notes with an initial maturity of at least 1 year and less than 3 years,

3% withholding tax for notes with an initial maturity of at least 3 years and less than 5 years,
and

0% withholding tax for notes with an initial maturity of 5 years and more.

Such withholding tax is the final tax for a non-resident person and no further declaration is required.

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

147

In general, capital gains are not taxed through withholding tax and therefore any capital gain sourced
in Turkey with respect to the Notes may be subject to declaration. However, pursuant to Law
numbered 6111, special or separate tax returns will not be submitted for capital gains from the notes
of a Turkish corporate issued abroad when the income is derived by a non-resident. Therefore, no tax
is levied on the non-resident persons on capital gains from such Notes and no declaration is required.
A non-resident holder will not be liable for Turkish estate, inheritance or similar tax with respect to
its investment in the Notes, nor will it be liable for any Turkish stamp issue, registration or similar
tax or duty relating thereto.
Reduced Withholding Tax Rates
Under current Turkish laws and regulations, interest payments on notes by an issuer to a nonresident holder will be subject to a withholding tax at a rate between 10% and 0% in Turkey, as
detailed above.
If a double taxation treaty is in effect between Turkey and the country of the holder of the notes (in
some cases, for example, pursuant to the treaties with the United Kingdom and the United States,
the term beneficial owner is used), which provides for the application of a lower withholding tax
rate than the current rate to be applied by the corporation, then the lower rate may be applicable.
For the application of withholding at a reduced rate that benefits from the provisions of a double tax
treaty concluded between Turkey and the relevant jurisdiction where the investor is a resident, an
original copy of the certificate of residence signed by the competent authority referred to in Article 3
of the Treaty is required, together with a translated copy translated by a translation office, to verify
that the investor is subject to taxation over its worldwide gains in the relevant jurisdiction on the
basis of resident taxpayer status, as a resident of the relevant jurisdiction to the related tax office
directly or through the banks and intermediary institutions prior to the application of withholding. In
the event the certificate of residence is not delivered prior to the application of withholding tax, then
upon the subsequent delivery of the certificate of residence, refunding of the excess tax shall be
granted pursuant to the provisions of the relevant double taxation treaty and the Turkish tax
legislation.
EU Savings Directive
Under the EU Savings Directive, member states are required to provide to the tax authorities of
another member state details of payments of interest (or similar income) paid by a person within its
jurisdiction to an individual resident in that other member state or to certain limited types of entities
established in that other member state. However, for a transitional period, Luxembourg and Austria
are instead required (unless during that period they elect otherwise) to operate a withholding system
in relation to such payments (the ending of such transitional period being dependent upon the
conclusion of certain other agreements relating to information exchange with certain other countries).
A number of non-EU countries and territories including Switzerland have adopted similar measures (a
withholding system in the case of Switzerland).
The European Commission has proposed certain amendments to the EU Savings Directive, which
may, if implemented, amend or broaden the scope of the requirements described herein.

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

148

PLAN OF DISTRIBUTION
The Company intends to offer the Notes through the Joint Lead Managers and their broker-dealer
affiliates, as applicable, named below. Subject to the terms and conditions stated in a subscription
agreement dated 23 October 2012 among the Joint Lead Managers and the Company (the
Subscription Agreement), each of the Joint Lead Managers has severally agreed to purchase, and
the Company has agreed to sell to each of the Joint Lead Managers, the principal amount of the
Notes set forth opposite each Joint Lead Managers name below.
Principal
Amount of
Notes

Joint Lead Managers


HSBC Bank plc...............................................................................................................
J.P. Morgan Securities plc. .............................................................................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated. ...................................................
The Royal Bank of Scotland plc ....................................................................................

125,000,000
125,000,000
125,000,000
125,000,000

TOTAL ...........................................................................................................................

500,000,000

The Subscription Agreement provides that the obligations of the Joint Lead Managers to purchase
the Notes are subject to approval of legal matters by counsel and to other conditions. The offering of
the Notes by the Joint Lead Managers is subject to receipt and acceptance and subject to the Joint
Lead Managers right to reject any order in whole or in part.
The Company has been informed that the Joint Lead Managers propose to resell beneficial interests
in the Notes at the offering price set forth on the cover page of this Offering Circular within the
United States to persons reasonably believed to be QIBs in reliance upon Rule 144A, and to non-US
persons outside the United States in reliance upon Regulation S. See Transfer Restrictions. The
prices at which beneficial interests in the Notes are offered may be changed at any time without
notice.
Offers and sales of the Notes in the United States will be made by those Joint Lead Managers or
their affiliates that are registered broker-dealers under the Exchange Act, or in accordance with Rule
15a-6 thereunder.
The Notes have not been registered under the Securities Act or any state securities laws and may not
be offered or sold within the United States or to, or for the account or benefit of, US persons (as
defined in Regulation S under the Securities Act) except in transactions exempt from, or not subject
to, the registration requirements of the Securities Act. See Transfer Restrictions.
Accordingly, until 40 days after the closing date of this Offering (the Distribution Compliance
Period), an offer or sale of Notes (or beneficial interests therein) within the United States by a
dealer that is not participating in this Offering may violate the registration requirements of the
Securities Act if that offer or sale is made otherwise than in accordance with Rule 144A.
The Notes will constitute a new class of securities of the Company with no established trading
market. The Company cannot provide any assurances to investors that the prices at which the Notes
(or beneficial interests therein) will sell in the market after this Offering will not be lower than the
initial offering price or that an active trading market for the Notes will develop and continue after
this Offering. The Joint Lead Managers have advised the Company that they currently intend to
make a market in the Notes. However, they are not obligated to do so, and they may discontinue
any market-making activities with respect to the Notes at any time without notice. Applications have
been made to admit the Notes to listing on the Official List and to have the Notes admitted to
trading on the Main Securities Market; however, no assurance can be given that such applications will
be accepted. Accordingly, the Company cannot provide any assurances to investors as to the liquidity
of or the trading market for the Notes.
In connection with the Offering, one or more Joint Lead Manager(s) may purchase and sell Notes (or
beneficial interests therein) in the open market. These transactions may include overallotment,
syndicate covering transactions and stabilising transactions. Overallotment involves the sale of Notes
(or beneficial interests therein) in excess of the principal amount of Notes to be purchased by the
Joint Lead Managers in this Offering, which creates a short position for the Joint Lead Managers.
Covering transactions involve the purchase of the Notes (or beneficial interests therein) in the open

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

149

market after the distribution has been completed in order to cover short positions. Stabilising
transactions consist of certain bids or purchases of Notes (or beneficial interests therein) made for the
purpose of preventing or retarding a decline in the market price of the Notes (or beneficial interests
therein) while the offering is in progress. Any of these activities may have the effect of preventing or
retarding a decline in the market price of the Notes (or beneficial interests therein). They may also
cause the price of the Notes (or beneficial interests therein) to be higher than the price that otherwise
would exist in the open market in the absence of these transactions. The Joint Lead Managers may
conduct these transactions in the over-the-counter market or otherwise. If the Joint Lead Managers
commence any of these transactions, they may discontinue them at any time.
The Company expects that delivery of interests in the Notes will be made against payment therefor
on the Issue Date specified on the cover page of this Offering Circular, which will be the seventh
Business Day following the date of pricing of the Notes (this settlement cycle being referred to as
T+7). Under Rule 15c6-l of the Exchange Act, trades in the secondary market generally are
required to settle in three New York business days, unless the parties to any such trade expressly
agree otherwise. Accordingly, investors who wish to trade interests in the Notes on the date of this
Offering Circular or the next New York business days will be required, by virtue of the fact that the
Notes initially will settle in T+7, to specify an alternate settlement cycle at the time of any such trade
to prevent a failed settlement. Investors in the Notes who wish to trade interests in the Notes on the
date of this Offering Circular or the next New York business days should consult their own adviser.
The Joint Lead Managers and their respective affiliates are full service financial institutions engaged
in various activities, which may include securities trading, commercial and investment banking,
financial advisory, investment management, principal investment, hedging, financing and brokerage
activities. The Joint Lead Managers or their respective affiliates may have performed investment
banking and advisory services for the Company and its affiliates from time to time for which they
may have received fees, expenses, reimbursements and/or other compensation. The Joint Lead
Managers or their respective affiliates may, from time to time, engage in transactions with and
perform advisory and other services for the Company and its affiliates in the ordinary course of their
business. Certain of the Joint Lead Managers and/or their respective affiliates have acted and expect
in the future to act as a lender to the Company and/or other members of the Group and/or otherwise
participate in transactions with the Group.
In the ordinary course of their various business activities, the Joint Lead Managers and their
respective affiliates may make or hold a broad array of investments and actively trade debt and
equity securities (or related derivative securities) and financial instruments (including bank loans) for
their own account and for the accounts of their customers and may at any time hold long and short
positions in such securities and instruments. Such investment and securities activities may involve
securities and instruments of the Company. In addition, certain of the Joint Lead Managers and/or
their respective affiliates hedge their credit exposure to the Company pursuant to their customary risk
management policies. These hedging activities could have an adverse effect on the future trading
prices of the Notes offered hereby.
The Company has agreed to indemnify each Joint Lead Managers against certain liabilities, including
liabilities under the Securities Act, or to contribute to payments that the Joint Lead Managers may
be required to make because of those liabilities.

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

150

SELLING RESTRICTIONS
General
No action has been taken by the Issuer or any of the Joint Lead Managers that would, or is
intended to, permit a public offer of the Notes, or possession or distribution of this Offering Circular
or any other offering or publicity material relating to the Notes in any country or jurisdiction where
any such action for that purpose is required. Accordingly, each Joint Lead Manager has undertaken
that it will not, directly or indirectly, offer or sell any Notes or have in its possession, distribute or
publish any offering circular, prospectus, form of application, advertisement or other document or
information in any country or jurisdiction except under circumstances that will, to the best of its
knowledge and belief, result in compliance with any applicable laws and regulations and all offers and
sales of Notes by it will be made on the same terms.
United States
The Company has not registered the Notes under the Securities Act or the laws of any state securities
commission and, therefore, the Notes may not be offered or sold within the United States or to, or
for the account or benefit of, US persons (as defined in Regulation S under the Securities Act) except
pursuant to an exemption from, or in a transaction not subject to, the registration requirements of
the Securities Act. See Transfer Restrictions.
Turkey
THE OFFERING OF THE NOTES HAS BEEN AUTHORISED BY AND WILL BE
REGISTERED WITH THE CMB ONLY FOR THE PURPOSE OF THE SALE OF THE NOTES
OUTSIDE OF TURKEY IN ACCORDANCE WITH ARTICLE 15(B) OF DECREE 32 AND
ARTICLES 6 AND 25 OF THE COMMUNIQUE. THE NOTES (OR BENEFICIAL INTERESTS
THEREIN) HAVE TO BE OFFERED OR SOLD OUTSIDE OF TURKEY AND THE CMB HAS
AUTHORISED THE OFFERING OF THE NOTES; PROVIDED THAT, FOLLOWING THE
PRIMARY SALE OF THE NOTES, NO TRANSACTION THAT MAY BE DEEMED AS A
SALE OF THE NOTES (OR BENEFICIAL INTERESTS THEREIN) IN TURKEY BY WAY OF
PRIVATE PLACEMENT OR PUBLIC OFFERING MAY BE ENGAGED IN. PURSUANT TO
ARTICLE 15(D)(II) OF DECREE 32, THERE IS NO RESTRICTION ON THE PURCHASE OR
SALE OF THE NOTES (OR BENEFICIAL INTERESTS THEREIN) BY RESIDENTS OF
TURKEY; PROVIDED THAT THEY PURCHASE OR SELL SUCH NOTES (OR BENEFICIAL
INTERESTS) IN THE FINANCIAL MARKETS OUTSIDE OF TURKEY AND SUCH SALE
AND PURCHASE IS MADE THROUGH BANKS AND/OR LICENSED BROKERAGE
INSTITUTIONS AUTHORISED PURSUANT TO CMB REGULATIONS. THE REGISTRATION
CERTIFICATE RELATING TO THE NOTES IS EXPECTED TO BE OBTAINED FROM THE
CMB ON OR ABOUT 23 OCTOBER 2012.
THE JOINT LEAD MANAGERS HAVE AGREED THAT NEITHER THEY, NOR ANY OF
THEIR RESPECTIVE AFFILIATES, NOR ANY PERSON ACTING ON BEHALF OF ANY OF
THE JOINT LEAD MANAGERS OR ANY OF THEIR RESPECTIVE AFFILIATES, HAVE
ENGAGED OR WILL ENGAGE IN ANY DIRECTED SELLING EFFORTS WITHIN TURKEY
IN CONNECTION WITH THE NOTES. THE JOINT LEAD MANAGERS HAVE FURTHER
AGREED THAT NEITHER THEY NOR ANY OF THEIR RESPECTIVE AFFILIATES, NOR
ANY PERSON ACTING ON BEHALF OF ANY OF THE JOINT LEAD MANAGERS OR ANY
OF THEIR RESPECTIVE AFFILIATES (I) HAVE ENGAGED OR WILL ENGAGE IN ANY
FORM OF GENERAL SOLICITATION OR GENERAL ADVERTISING IN CONNECTION
WITH ANY OFFER AND SALE OF THE NOTES IN TURKEY, OR (II) WILL MAKE ANY
DISCLOSURE IN TURKEY IN RELATION TO THE ISSUER, THE NOTES OR THE
OFFERING CIRCULAR WITHOUT THE PRIOR CONSENT OF THE ISSUER, SAVE AS MAY
BE REQUIRED BY APPLICABLE LAW, COURT ORDER OR REGULATION.
United Kingdom
In the United Kingdom, this Offering Circular is being distributed only to and is directed only at: (a)
persons who have professional experience in matters relating to investments falling within Article
19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the
Order), (b) high net worth bodies corporate falling within Article 49(2) of the Order and (c) any
other persons to whom it may otherwise lawfully be communicated (all such persons together being
referred to as relevant persons). Each Joint Lead Manager has represented, warranted and agreed

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

151

that: (i) it has only communicated or caused to be communicated and will only communicate or cause
to be communicated any invitation or inducement to engage in investment activity (within the
meaning of Section 21 of the Financial Services and Markets Act 2000 (the FSMA)) received by it
in connection with the issue or sale of any Notes in circumstances in which Section 21(1) of the
FSMA does not apply to the Company, and (ii) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or
otherwise involving the United Kingdom.

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

152

TRANSFER RESTRICTIONS
Because the following restrictions will apply with respect to the Notes, investors in the Notes are
advised to consult legal counsel prior to making an offer, resale, pledge or transfer of any of the
Notes. References to Notes in this section should, as appropriate, be deemed to refer to the Notes
themselves and/or beneficial interests therein.
According to Article 15d(ii) of Decree 32 regarding the Protection of the Value of the Turkish
Currency, residents in Turkey will be free to purchase and sell securities and other capital market
instruments traded on financial markets abroad, and to transfer their purchasing proceeds abroad
through banks and the intermediary institutions authorised in accordance with capital market
legislation.
The Company has not registered the Notes under the Securities Act or the laws of any state securities
commission and, therefore, the Notes may not be offered or sold within the United States or to, or
for the account or benefit of, US persons (as defined in Regulation S under the Securities Act) except
pursuant to an exemption from, or in a transaction not subject to, the registration requirements of
the Securities Act. Accordingly, the Notes are being offered and sold only: (a) to persons reasonably
believed to be QIBs in reliance upon Rule 144A under the Securities Act and (b) to non-US persons
outside the United States in reliance upon Regulation S under the Securities Act.
If an investor invests in the Notes, then such investor will be deemed to have acknowledged,
represented and agreed with the Joint Lead Managers and the Company as follows:
(a)

Such investor understands and acknowledges that the Notes have not been registered under the
Securities Act or any other applicable securities law and that the Notes are being offered for
resale in transactions not requiring registration under the Securities Act or any other securities
law, including sales pursuant to Rule 144A under the Securities Act, and, unless so registered,
may not be offered, sold or otherwise transferred except in compliance with the registration
requirements of the Securities Act or any other applicable securities law, or pursuant to an
exemption therefrom or in a transaction not subject thereto, and in each case in compliance
with the conditions for transfer set forth in paragraph (d) below.

(b)

Such investor is not an affiliate (as defined in Rule 144 under the Securities Act) of the
Company and is not acting on the Companys or any such affiliates behalf and such investor is
either: (i) a QIB and is aware that any sale of Notes to it will be made in reliance upon Rule
144A and such acquisition will be for its own account or for the account of another QIB or (ii)
not a US person (as defined in Regulation S under the Securities Act) or purchasing for the
account or benefit of a US person (other than a distributor) and is purchasing Notes in an
offshore transaction in accordance with Regulation S under the Securities Act.

(c)

Such investor acknowledges that none of the Company or the Joint Lead Managers, or any
person representing the Company or the Joint Lead Managers, has made any representation to
it with respect to the Company or the offer or sale of any of the Notes, other than the
information contained in this Offering Circular, which has been delivered to the investor and
upon which such investor is relying in making its investment decision with respect to the Notes.
Such investor acknowledges that the Joint Lead Managers make no representation or warranty
as to the accuracy or completeness of this Offering Circular. Such investor has had access to
such financial and other information concerning the Company and the Notes as it has deemed
necessary in connection with its decision to purchase the Notes, including an opportunity to ask
questions of and request information from the Company and the Joint Lead Managers.

(d)

Such investor is purchasing the Notes for its own account, or for one or more investor accounts
for which such investor is acting as a fiduciary or agent, in each case for investment, and not
with a view to, or for offer or sale in connection with, any distribution thereof in violation of
the Securities Act or any other law. Such investor agrees (or will be deemed to agree) on its
own behalf and on behalf of any investor account for which it is purchasing Notes, and each
subsequent holder of the Notes by its acceptance thereof will agree, to offer, sell or otherwise
transfer such Notes prior to: (i) the date that is one year (or such shorter period of time as
permitted by Rule 144 under the Securities Act or any successor provision thereunder) after the
later of the Issue Date and the last date on which the Company or any affiliate of the
Company was the owner of such Notes (or any predecessor thereto), or (ii), such later date, if
any, as may be required by applicable law (the Resale Restriction Termination Date), only: (A)
to the Company, (B) pursuant to a registration statement that has been declared effective under

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

153

the Securities Act, (C) for so long as the Notes are eligible for resale pursuant to Rule 144A, to
a person reasonably believed to be a QIB that purchases for its own account or for the account
of another QIB to whom such investor gives notice that the transfer is being made in reliance
upon Rule 144A, (D) in an offshore transaction complying with Rule 903 or 904 of Regulation
S under the Securities Act or (E) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the foregoing cases to
compliance with any applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date; however, any resale of the Notes
thereafter will continue to need to comply with all applicable laws. Such investor acknowledges
that the Company reserves the right prior to any offer, sale or other transfer of the Notes
pursuant to clause (D) or (E) above to require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to the Company.
With respect to the Regulation S Notes, each investor therein agrees (or will be deemed to
agree) on its own behalf and on behalf of any investor account for which it is purchasing a
Regulation S Note, that no offer, sale, pledge or other transfer made during the Distribution
Compliance Period (i.e., prior to the date 40 days after the closing date of this Offering) will be
made to a US person or for the account or benefit of a US person (other than a distributor).
(e)

Each Rule 144A Note will contain a legend substantially in the following form:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE SECURITIES ACT), OR OTHER SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION OF THE UNITED STATES. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
THE HOLDER OF THIS NOTE (OR OF A BENEFICIAL INTEREST HEREIN) BY ITS
ACCEPTANCE HEREOF (OR OF A BENEFICIAL INTEREST HEREIN): (a)
REPRESENTS THAT IT IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT), THAT IS NOT A BROKER DEALER
WHICH OWNS AND INVESTS ON A DISCRETIONARY BASIS LESS THAN USD
250,000,000 IN SECURITIES OF UNAFFILIATED ISSUERS AND THAT IS NOT A
PARTICIPANT DIRECTED EMPLOYEE PLAN, SUCH AS A 401(k) PLAN, (b) AGREES
ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR
WHICH IT HAS PURCHASED THIS NOTE (OR A BENEFICIAL INTEREST HEREIN)
THAT IT WILL NOT PRIOR TO: (i) THE DATE THAT IS ONE YEAR (OR SUCH
SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE
LATER OF THE ISSUE DATE OR THE LAST DAY ON WHICH THE ISSUER OR ANY
AFFILIATE (AS DEFINED IN RULE 144) OF THE ISSUER WAS THE OWNER OF THIS
NOTE (OR ANY PREDECESSOR OF THIS NOTE), OR (ii) SUCH LATER DATE, IF
ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE RESALE RESTRICTION
TERMINATION DATE), OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE (OR
A BENEFICIAL INTEREST HEREIN) EXCEPT: (A) TO THE ISSUER, (B) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS NOTE IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON
IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE UPON RULE 144A UNDER THE SECURITIES ACT, (D)
PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR OUTSIDE
THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND, IN
EACH CASE, IN COMPLIANCE WITH THE RELEVANT SECURITIES LAWS OF ANY
OTHER JURISDICTION, AND (c) AGREES THAT IT WILL GIVE TO EACH PERSON

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

154

TO WHOM THIS NOTE (OR A BENEFICIAL INTEREST HEREIN) IS TRANSFERRED


A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT
THE ISSUER SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D) OR (E) ABOVE TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER
INFORMATION REASONABLY SATISFACTORY TO THE ISSUER. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER HEREOF AFTER THE
RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS
OFFSHORE TRANSACTION, UNITED STATES AND US PERSON HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE BENEFICIAL OWNER HEREOF HEREBY ACKNOWLEDGES THAT IF AT ANY
TIME WHILE IT HOLDS AN INTEREST IN THIS NOTE IT IS A US PERSON WITHIN
THE MEANING OF REGULATION S THAT IS NOT A QIB, THE ISSUER MAY (A)
COMPEL IT TO SELL ITS INTEREST IN THIS NOTE TO A PERSON WHO IS (I) A US
PERSON WHO IS A QIB THAT IS, IN EACH CASE, OTHERWISE QUALIFIED TO
PURCHASE THE NOTES REPRESENTED HEREBY IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT OR (II) NOT A US PERSON
WITHIN THE MEANING OF REGULATION S OR (B) COMPEL THE BENEFICIAL
OWNER TO SELL ITS INTEREST IN THE NOTES REPRESENTED HEREBY TO THE
ISSUER OR AN AFFILIATE OF THE ISSUER OR TRANSFER ITS INTEREST IN THIS
NOTE TO A PERSON DESIGNATED BY OR ACCEPTABLE TO THE ISSUER AT A
PRICE EQUAL TO THE LESSER OF (X) THE PURCHASE PRICE THEREFOR PAID BY
THE BENEFICIAL OWNER, (Y) 100% OF THE PRINCIPAL AMOUNT THEREOF OR
(Z) THE FAIR MARKET VALUE THEREOF. THE ISSUER HAS THE RIGHT TO
REFUSE TO HONOUR A TRANSFER OF AN INTEREST IN THE NOTES
REPRESENTED HEREBY TO A US PERSON WHO IS NOT A QIB, THE ISSUER HAS
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE INVESTMENT
COMPANY ACT.
THE ISSUER MAY COMPEL EACH BENEFICIAL OWNER OF THE NOTES
REPRESENTED HEREBY THAT IS A US PERSON WITHIN THE MEANING OF
REGULATION S TO CERTIFY THAT SUCH BENEFICIAL OWNER IS A QIB.
Each Regulation S Note will contain a legend substantially in the following form:
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US
SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR OTHER
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
(f)

If such investor is a purchaser in a sale that occurs outside


meaning of Regulation S, such investor acknowledges that until
distribution compliance period within the meaning of Rule 903
sale of the Notes will not be made by such investor to a US
benefit of a US person within the meaning of Rule 902 under the

(g)

Such investor acknowledges that the Registrar will not be required to accept for registration of
transfer any Notes acquired by it except upon presentation of evidence satisfactory to the
Company and the Registrar that the restrictions set forth herein have been complied with.

(h)

Such investor acknowledges that:


(i)

the Company, the Joint Lead Managers and others will rely upon the truth and accuracy
of such investors acknowledgements, representations and agreements set forth herein and
such investor agrees (or will be deemed to agree) that if any of its acknowledgements,
representations or agreements herein cease to be accurate and complete, such investor will
notify the Company and the Joint Lead Managers promptly in writing, and

(ii)

if such investor is acquiring any Notes as fiduciary or agent for one or more investor
accounts, such investor represents with respect to each such account that:
155

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

the United States within the


the expiration of the 40-day
of Regulation S, any offer or
person or for the account or
Securities Act.

(A) such investor has sole investment discretion, and


(B)

such investor has full power to make the foregoing acknowledgements,


representations and agreements on behalf of each such account and that each such
investment account is eligible to purchase the Notes.

(i)

Such investor agrees that it will give to each person to whom it transfers a Note notice of any
restrictions on the transfer of such Note.

(j)

Such investor understands that no action has been taken in any jurisdiction (including the
United States) by the Company or the Joint Lead Managers that would permit a public offering
of the Notes or the possession, circulation or distribution of this Offering Circular or any other
material relating to the Company or the Notes in any jurisdiction where action for that purpose
is required. Consequently, any transfer of the Notes will be subject to the selling restrictions set
forth under this Transfer Restrictions section and Selling Restrictions.

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

156

ENFORCEMENT OF JUDGMENTS AND SERVICE OF PROCESS


The Company is a public joint stock company organised under the laws of Turkey. Certain of the
directors and officers of the Company named herein reside inside Turkey and all or a significant
portion of the assets of such persons may be, and substantially all of the assets of the Company are,
located in Turkey. As a result, it may not be possible for investors to effect service of process upon
such persons outside Turkey or to enforce against them in the courts of jurisdictions other than
Turkey any judgments obtained in such courts that are predicated upon the laws of such other
jurisdictions. In order to enforce such judgments in Turkey, investors should initiate enforcement
lawsuits before the competent Turkish courts. In accordance with Articles 5059 of Turkeys
International Private and Procedure Law (Law No. 5718), the courts of Turkey will not enforce any
judgment obtained in a court established in a country other than Turkey unless:
(a)

there is in effect a treaty between such country and Turkey providing for reciprocal enforcement
of court judgments,

(b)

there is de facto enforcement in such country of judgments rendered by Turkish courts, or

(c)

there is a provision in the laws of such country that provides for the enforcement of judgments
of Turkish courts.

There is no treaty between Turkey and either the United States or the United Kingdom providing for
reciprocal enforcement of judgments. There is no de facto reciprocity between Turkey and the United
States. Turkish courts have rendered at least one judgment confirming de facto reciprocity between
Turkey and the United Kingdom; however, since de facto reciprocity is decided by the relevant court
on a case-by-case basis, there is uncertainty as to the enforceability of court judgments obtained in
the United States or the United Kingdom by Turkish courts. Moreover, there is uncertainty as to the
ability of an investor to bring an original action in Turkey based upon the US federal or any other
non-Turkish securities laws.
In addition, the courts of Turkey will not enforce any judgment obtained in a court established in a
country other than Turkey if:
(a)

the defendant was not duly summoned or represented or the defendants fundamental procedural
rights were not observed,

(b)

the judgment in question was rendered with respect to a matter within the exclusive jurisdiction
of the courts of Turkey,

(c)

the judgment is incompatible with a judgment of a court in Turkey between the same parties
and relating to the same issues or, as the case may be, with an earlier foreign judgment on the
same issue and enforceable in Turkey,

(d)

the judgment is not of a civil nature,

(e)

the judgment is clearly against public policy rules of Turkey,

(f)

the judgment is not final and binding with no further recourse for appeal under the laws of the
country where the judgment has been rendered, or

(g)

the judgment was rendered by a foreign court that has deemed itself competent even though it
has no actual relationship with the parties or the subject matter at hand.

In connection with the issuance of the Notes, service of process may be made upon the Company at
Law Debenture Corporate Services Limited, Fifth Floor, 100 Wood Street, London, EC2V 7EX,
United Kingdom with respect to any proceedings in England.

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

157

LEGAL MATTERS
Certain matters as to United States law will be passed upon for the Company by DLA Piper UK
LLP and by YukselKarknKucuk Avukatlk Ortaklg as to matters of Turkish law (who will also
pass upon matters of Turkish tax law). Certain matters as to English and United States law will be
passed upon for the Joint Lead Managers by Allen & Overy LLP, and certain matters as to Turkish
law will be passed upon for the Joint Lead Managers by Paksoy Ortak Avukat Burosu (who will also
pass upon matters of Turkish tax law).

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

158

OTHER GENERAL INFORMATION


Authorisation
The issuance and sale of the Notes by the Company and the execution and delivery by the Company
of the Transaction Documents have been authorised pursuant to the authority of the officers of the
Company under a resolution of its shareholders dated 5 October 2012 and its Board of Directors
dated 5 October 2012.
Listing
Application has been made to the Irish Stock Exchange for the Notes to be admitted to Official List
and to trading on its regulated market, however, no assurance can be given that such application will
be accepted. It is expected that admission of the Notes to the Official List and to trading on the
Main Securities Market will be granted on or about 31 October 2012, subject only to the issue of the
Notes.
The estimated total expenses related to the admission of the Notes to trading on the Main Securities
Market are US$8,000.
Listing Agent
Arthur Cox Listing Services Limited is acting solely in its capacity as listing agent for the Company
in connection with the Notes and is not itself seeking admission of the Notes to the Official List of
the Irish Stock Exchange or to trading on its regulated market for the purposes of the Prospectus
Directive.
Clearing Systems
The Unrestricted Global Certificate has been accepted for clearance through Euroclear and
Clearstream, Luxembourg (ISIN XS0848940523 and Common Code 084894052). Application has been
made for acceptance of the Restricted Global Certificate into DTCs book-entry settlement system
(ISIN US032523AA09 and CUSIP 032523 AA0).
No Significant or Material Adverse Change
There has been no significant change in the financial or trading position of either the Group or the
Company since 30 June 2012, being the end of the last financial period for which the Groups
financial statements have been published and no material adverse change in the financial position or
prospects of either the Group or the Company since 31 December 2011.
Interests of Natural and Legal Persons Involved in the Issue
So far as the Company is aware, no person involved in the offer of the Notes has an interest
material to the offer.
Independent Auditors
The annual consolidated financial statements of Anadolu Efes Biraclk ve Malt Sanayii Anonim
Sirketi as of and for the years ended 31 December 2011 and 2010 included in this Offering Circular,
have been audited by Basaran Nas Bagimsiz Denetim ve Serbest Muhasebeci Mali Musavirilik A.S.
(PwC Turkey), a member of PricewaterhouseCoopers (PwC), independent auditors, as stated in
the auditors reports appearing herein.
The unaudited condensed consolidated interim financial statements of Anadolu Efes Biraclk ve Malt
Sanayii Anonim Sirketi as of and for the six months period ended June 30, 2012 included in this
Offering Circular, have been reviewed by PwC Turkey as stated in the in the review report appearing
herein. The term review refers to limited procedures performed in accordance with principles and
standards on the review of interim financial statements as set out in Section 34 of the Communique
No: X-22 on the auditing standards issued by the Capital Markets Board for a review of such
information and does not constitute an audit.
The annual consolidated financial statements of Anadolu Efes Biraclk ve Malt Sanayii Anonim
Sirketi as of and for the years ended 31 December 2009 have been audited by Guney Bagmsz
Denetim ve Serbest Muhasebeci Mali Musavirlik A.S (Guney) an affiliate firm of E&Y. The
Companys Board of Directors, in accordance with provisions on the mandatory rotation of auditors
in force at such time, selected PwC Turkey to be its independent auditors in October 2009.
159

Both PWC Turkey and Guney, independent certified public accountants in Turkey, as members of the
independent auditors association are authorised by the CMB to conduct independent audits of
companies in Turkey.
Certain Information about the Company
Anadolu Efes Biraclk ve Malt Sanayii A.S. is a holding and operating company that was
incorporated in Istanbul, Turkey on 5 February 1966, under registration number 91324/36346. The
Company operates under the Turkish Commercial Code. The Companys principal office is at
Esentepe Mah. Anadolu Cad. No: 1, Kartal 34870, Istanbul, Turkey and its telephone number is +90
216 586 80 00.
Documents
The Company produces audited consolidated annual and unaudited consolidated quarterly and semiannual interim financial statements. Copies (with English translations where the documents at issue
are not in English) of the Companys articles of association and of its audited financial statements as
of and for the years ended 31 December 2009, 2010 and 2011, and copies of the transaction
documents referred to herein (including the forms of the Notes) will be available for inspection, at the
offices of the Company and the Fiscal Agent.
As long as the Notes are outstanding, copies of this Offering Circular, the constitutional documents
of the Company and (after the Issue Date) the Deed of Covenant and the Agency Agreement will be
available for inspection in physical form at Bahcelievler Mahallesi Sehit Ibrahim Koparr Cad. No:4
34180 Bahcelievler, Istanbul, Turkey.
Documents Incorporated by Reference
No document or content of any website are incorporated by reference in this Offering Circular.
Material Contracts
Except as disclosed in this Offering Circular under Operating and Financial Review and The Group
and Its Business, the Company has not entered into any material contract outside the ordinary
course of its business that could result in the Company being under an obligation or entitlement that
is material to its ability to meet its obligations in respect of the Notes.
Language
The language of this Offering Circular is English. Certain legislative references and technical terms
have been cited in their original language in order that the correct technical meaning may be ascribed
to them under applicable law.

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

160

INDEX OF TERMS
As used in this Offering Circular:
Definition
2010 Audited Consolidated Financial
Statements ..............................................

2011 Audited Consolidated Financial


Statements ..............................................

Meaning

means the Groups audited annual consolidated financial


statements as at and for the year ended 31 December 2010,
which includes comparative financial information as at and
for the year ended 31 December 2009
the Groups audited annual consolidated financial statements
as at and for the year ended 31 December 2011, which
includes comparative financial information as at and for the
year ended 31 December 2010

2012 Interim Financial Statements........

means the Groups unaudited condensed consolidated interim


financial statements as at and for the six months ended 30
June 2012, which includes comparative financial information
as at and for the six months ended 30 June 2011

ABInBev ...............................................

means Anheuser-Busch InBev Worldwide, Inc.

Admission..............................................

means admission to the Official List together with admission


to trading on the Irish Stock Exchanges Main Securities
Market

AEH .....................................................

means Anadolu Endustri Holding A.S

Affiliate .................................................

means Affiliate as defined in Rule 144 under the Securities


Act

Agency Agreement ................................


Anadolu Etap ........................................

means the agreement dated 30 October 2012 between


Citibank, N.A. and the Company
runleri San. ve Tic. A.S
means Anadolu Etap Tarim ve Gida U

Anadolu Group......................................

means AEH and its subsidiaries and affiliates

Audited Consolidated Financial


Statements...........................................

means together the 2010 Audited Consolidated Financial


Statements and the 2011 Audited Consolidated Financial
Statements

BBH......................................................

means Baltic Beverages Holding, a subsidiary of Carlsberg

Board and Board of Directors...........

means the executive and non-executive members of the


Companys Board of Directors

Business Day.........................................

has the meaning ascribed to it in Conditions of the Notes


Condition 2.2

CAGR ...................................................

means compound annual growth rate

Capital Markets Law............................

means Law No. 2499 of the Republic of Turkey

Central Bank and Turkish Central


Bank .......................................................

means the Central Bank of the Republic of Turkey

CC Kazakhstan .....................................

means J.V. Coca-Cola Almaty Bottlers Limited Liability


Partnership and Tonus Joint Stock Company acting together
to conduct Coca-Cola production, bottling, distribution and
selling operations in Kazakhstan

CC Pakistan .........................................

means Coca-Cola Beverages Pakistan Ltd, a company


conducting Coca-Cola production, bottling, distribution and
selling operations in Pakistan

CCBI ....................................................

means The Coca-Cola Bottling Company of Iraq FZCO

CCBL ...................................................

means CC Beverages Limited, a company conducting CocaCola production, bottling, distribution and selling operations
in Iraq

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

161

Definition

Meaning

CCI.......................................................
CCI and its Bottlers..............................

means Coca-Cola Icecek A.S.


means CCI together with its subsidiaries and joint ventures
who operate the Coca-Cola franchise in Turkey and certain
countries in Central Asia and the Middle East

CCI Holland .........................................

means CCI International Holland B.V.

CIS .......................................................

means Commonwealth of Independent States

Clearing Systems ..................................

means DTC, Euroclear and Clearstream, Luxembourg

Clearstream, Luxembourg.....................

means Clearstream Banking, societe anonyme

Closing Date .........................................

means 30 October 2012

CMB.....................................................

means the Capital Markets Board of Turkey

Communique .........................................

means the Communique Serial II, No. 22 on the Principles on


the Registration and Sale of Debt Instruments

Company, Issuer and Anadolu Efes

means Anadolu Efes Biraclk ve Malt Sanayii Anonim


Sirketi, a joint stock company

Competition Board ................................

means the Competition Board of The Turkish Competition


Authority

Council of Ministers..............................

means Bakanlar Kurulu or all ministers in the Cabinet and


Prime Minister of Turkey

Consolidated Financial Statements........

means the 2012 Interim Financial Statements together with


the Audited Consolidated Financial Statements

CPI .......................................................

means Consumer Price Index

CRA Regulation....................................

means Regulation (EU) No. 1060/2009

Decrees .................................................

means Decree No. 2010/1182 dated 29 December 2010 and


Decree No. 2011/1854 dated 26 April 2011

Decree 32 ..............................................

means Decree 32 on the Protection of the Value of the


Turkish Currency as amended from time to time

Distribution Compliance Period ............

means the period of 40 days following the closing date of this


Offering

DTC......................................................

means the Depository Trust Company

EBI .......................................................

means Efes Breweries International, N.V., a wholly-owned


subsidiary of the Company and the holding company for the
Groups international brewing operations

EEA ......................................................

means the European Economic Area

Efes Georgia .........................................

means J.S.C Lomisi, a subsidiary of the Company conducting


the production, marketing and sales of beer in Georgia

Efes Kazakhstan ...................................

means J.S.C. Efes Kazakhstan Brewery together with Dinal


LLP, subsidiaries of the Company conducting the production,
marketing and distribution of beer in Kazakhstan

Efes Moldova ........................................

means Efes Vintanta Moldova Brewery S.A., a subsidiary of


the Company conducting the production and marketing of
beer in Moldova

Efes Russia ...........................................

means together MEB and SABMiller Russia

EFPA....................................................

means Efes Pazarlama ve Dagitim Tic. A.S., a subsidiary of


the Company conducting sales, marketing and distribution of
beer in Turkey

EU ........................................................

means the European Union and its member states as at the


date of this Offering Circular

EUR, d and Euro..........................

means the currency of the participating member states in the


third stage of the Economic and Monetary Union of the
treaty establishing the European Community
162

Definition

Meaning

Euroclear ..............................................

means Euroclear Bank N.V./S.A.

Exchange Act........................................

means the United States Securities Exchange Act of 1934, as


amended

Excise Duty Law ..................................

means Excise Duty Law numbered 4760 and published at the


Official Gazette dated 12 June 2002 under number 24783

Fiscal Agent ..........................................

means Citibank, N.A.

Global Certificates ................................

means the Restricted Global Certificate together with the


Unrestricted Global Certificate

Group ....................................................

means the Company and its subsidiaries and joint ventures

IMF ......................................................

means the International Monetary Fund

International Offering ...........................

means the sale to non-US persons outside the United States in


reliance upon Regulation S under the Securities Act.

Irish Stock Exchange ............................

means the Irish Stock Exchange Limited

Issue Date .............................................

means the seventh Business Day following the pricing of the


Notes

Joint Lead Managers ...........................

means HSBC Bank plc, J.P. Morgan Securities plc, Merrill


Lynch, Pierce, Fenner & Smith Incorporated and the Royal
Bank of Scotland plc together

Knyaz Rurik..........................................

means OAO Knyaz Rurik, an investment company of EBI

KV Group .............................................

means the Krasny Vostok Brewing Group

Lira, and TRL ..................................

means the lawful currency of Turkey

Main Securities Market ........................

means the Irish Stock Exchanges Main Securities Market

MBU.....................................................

means PJSC Miller Brands Ukraine

MEB .....................................................

means ZAO Moscow-Efes Brewery

mhl ........................................................

means million hectolitres

Moodys ................................................

means Moodys Investors Services Ltd.

Nielsen ..................................................

means the Nielsen Company, a subsidiary of Nielsen


Holdings N.V.

Notes.....................................................

means the US$500,000,000 3.375% Notes due 2022

OFAC ...................................................

means the Office of Foreign Assets Control of the US


Department of Treasury

Offering.................................................

means the US Offering and the International Offering


together

Offering Circular ..................................

means this Offering Circular

Paying Agent ........................................

means Citibank, N.A.

PET Bottles ..........................................

means bottles made from polyethylene terephthalate

PP&E....................................................

means property, plant and equipment

PPI .......................................................

means Producer Price Index

Prospectus Directive..............................

means Directive 2003/71/EC

QIBs .....................................................

means qualified institutional buyers under Rule 144A

Rating Agencies ....................................

means S&P together with Moodys

Regulation S .........................................

means Regulation S under the Securities Act

Regulation S Notes ...............................

means the Notes offered and sold in reliance on Regulation S

Restricted Global Certificate or


Restricted Certificate ............................

means the certificate in registered form issued in respect of the


Rule 144A Notes

Rubles and RUR ...............................

means the lawful currency of Russia

Rule 144A .............................................

means Rule 144A under the Securities Act

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

163

Definition

Meaning

Rule 144A Notes...................................

means the Notes offered and sold in reliance on Rule 144A

S&P ......................................................

means Standard & Poors Credit Market Services Europe


Limited, a division of the McGraw Hill Companies, Inc.
means SABMiller plc

SABMiller.............................................
SABMiller Russia .................................
Securities Act .......................................
SSG ......................................................
Stabilising Manager ..............................
Subscription Agreement ........................
Tarbes ...................................................

means SABMiller RUS LLC and its successor SABMiller


RUS CJSC
means the United States Securities Act of 1933, as amended
means SSG Investment Limited, an investment company of
CCI
means Merrill Lynch, Pierce, Fenner & Smith Incorporated
means the agreement dated 23 October 2012 between the Joint
Lead Managers and the Company
means Tarbes Tarim Urunleri ve Besicilik San. Tic. A.S., a
subsidiary of the Company that produces hops

TCCC ...................................................
Turkey ..................................................

means The Coca-Cola Company


means the Republic of Turkey

Turkish Capital Market Law ................

means the Capital Market Law numbered 2499 and published


at the Official Gazette dated 30 July 1981 under No. 17416

Turkish Commercial Code ....................

means Turkish Commercial Code No.6102 and published in


the Official Gazette dated 14 February 2011 under No.27846

Turkish Law on the Protection of


Competition.............................................
Unrestricted Global Certificate or
Unrestricted Certificate .........................

means the law numbered 4054 published at the Official


Gazette dated 13 December 1994 under No. 22140
means the certificate in registered form issued in respect of the
Regulation S Notes

US or United States..........................
US$, USD and US dollars............

means the United States of America


means the lawful currency of the United States of America

US Offering ..........................................

means the sale in the United States to qualified institutional


buyers as defined in, and in reliance upon, Rule 144A under
the Securities Act

c107169pu060Proof6:22.10.12_10:42B/LRevision:0OperatorHarS

164

FINANCIAL STATEMENTS
Interim unaudited condensed consolidated financial statements of the Group as of and for
the six months ended 30 June 2012 .........................................................................................

F-2

Audited consolidated financial statements of the Group as of and for the year ended
31 December 2011 (including comparative financial information as at and for the year ended
31 December 2010) ..................................................................................................................

F-40

Audited consolidated financial statements of the Group as of and for the year ended
31 December 2010 (including comparative financial information as at and for the year ended
31 December 2009) ..................................................................................................................

F-100

c107169pu070Proof6:22.10.12_10:43B/LRevision:0OperatorHarS

F-1

Convenience Translation of Financial Statements


Originally Issued in Turkish

Anadolu Efes Biraclk ve


Malt Sanayii Anonim irketi
Interim Condensed Consolidated Financial Statements
as of June 30, 2012 Together with
Independent Auditors Review Report

F-2

CON
NVENIENC
CE TRANSL
LATION INT
TO ENGLIS
SH OF
IN
NDEPENDENT AUDIT
TORS REV
VIEW REPO
ORT
ORIGIINALLY ISS
SUED IN TU
URKISH
R
REPORT ON
N REVIEW OF
IN
NTERIM CO
ONDENSED
D CONSOLIIDATED FIINANCIAL S
NTS
STATEMEN
To
o the Board o
of Directors o
of
An
nadolu Efes B
Biraclk ve M
Malt Sanayii A..
A
Introduction
1.

We havee reviewed th
he accompanyying condenssed consolida
ated balance sheet of Anadolu Efes
Biraclk
k ve Malt San
nayii A.., its subsidiaries and joint ven
ntures (collecctively referrred to as the
Group) as of 30 Jun
ne 2012, and
d the related condensed
c
co
onsolidated sstatements off comprehen
nsive
income, consolidated
d changes in equity and co
onsolidated ccash flows for the six-mon
nth period th
hen
ended. T
The Group management is responsiblee for the prep
paration and fair presentaation of thesee
interim condensed
c
co
onsolidated ffinancial stattements in acccordance witth the financcial reporting
g
standard
ds accepted b
by the Capitall Markets Bo
oard. Our resp
ponsibility iss to express a conclusion on
o
these intterim conden
nsed consolid
dated financial statementss based on ou
ur review.

Sccope of review
w
2.

We cond
ducted our reeview in accordance with tthe principlees and standa
ards on the reeview of interrim
financiall statements as set out in Section 34 o
of the Comm
muniqu No: X-22
X
on the auditing
a
standard
ds issued by tthe Capital M
Markets Board
d. A review of interim fin
nancial statem
ments consissts of
making iinquiries, priimarily of persons respon
nsible for finaancial and acccounting maatters, and
applying
g analytical and other reviiew procedurres. A review
w is substantiaally less in sccope than an audit
conducteed in accordaance with ind
dependent au
uditing stand
dards issued b
by the Capita
al Markets Bo
oard
and conssequently does not enablee us to obtain
n assurance tthat we would
d become aw
ware of all
significaant matters th
hat might be identified in
n an audit. Acccordingly, w
we do not exprress an
independent audit op
pinion.

Co
onclusion
3.

Based on
n our review,, nothing hass come to ourr attention th
hat causes us to believe th
hat the
accompaanying interim
m condensed
d consolidateed financial statements arre not preparred, in all material
respects, in accordan
nce with finan
ncial reportin
ng standards accepted by the Capital M
Markets Boarrd
(Note 2)).

F-3

Ad
dditional parragraph for cconvenience translation iinto English
4.

The acco
ounting princciples describ
bed in Note 2 to the interiim condensed
d consolidateed financial
statemen
nts differ from
m Internatio
onal Financiaal Reporting S
Standards (IIFRS) issued
d by the
Internattional Accoun
nting Standarrds Board wiith respect to
o the application of inflatio
on accountin
ng for
the perio
od 1 January - 31 Decemb
ber 2005. Acccordingly, thee accompanyying interim condensed
c
consolid
dated financiaal statementss are not inteended to pressent the finan
ncial position
n and results of
operatio
ons of the Gro
oup in accord
dance with IF
FRS.

Ba
aaran Nas Bamsz Deneetim ve
Seerbest Muhassebeci Mali M
Mavirlik A.
.
am
member of
PrricewaterhouseCoopers

Bu
urak zpoyra
az, SMMM
Paartner
Isttanbul, 28 Au
ugust 2012

F-4

Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi


Interim Condensed Consolidated Financial Statements as of June 30, 2012
TABLE OF CONTENTS
Page
Consolidated Interim Balance Sheet ............................................................................................................................. 1
Consolidated Interim Income Statement ...................................................................................................................... 2
Consolidated Interim Statement of Comprehensive Income ...................................................................................... 3
Consolidated Interim Statement of Changes in Equity ............................................................................................... 4
Consolidated Interim Statement of Cash Flow ............................................................................................................ 5
Condensed Notes to the Interim Consolidated Financial Statements .................................................................. 6-34
Note 1
Note 2
Note 3
Note 4
Note 5
Note 6
Note 7
Note 8
Note 9
Note 10
Note 11
Note 12
Note 13
Note 14
Note 15
Note 16
Note 17
Note 18
Note 19
Note 20
Note 21
Note 22
Note 23

Groups Organization and Nature of Activities ................................................................................ 6-8


Basis of Presentation of Consolidated Financial Statements .......................................................... 9-12
Business Combinations ................................................................................................................. 13-15
Segment Information..................................................................................................................... 16-17
Cash and Cash Equivalents ................................................................................................................ 18
Borrowings.................................................................................................................................... 19-20
Other Receivables and Payables ................................................................................................... 20-21
Property, Plant and Equipment .......................................................................................................... 21
Intangible Assets ................................................................................................................................ 21
Goodwill ............................................................................................................................................ 22
Equity ............................................................................................................................................ 22-23
Commitments and Contingencies ................................................................................................. 24-25
Other Assets and Liabilities .......................................................................................................... 25-26
Other Operating Income / Expenses................................................................................................... 26
Financial Income ................................................................................................................................ 27
Financial Expenses............................................................................................................................. 27
Income Taxes, Deferred Tax Assets and Liabilities........................................................................... 27
Earnings per Share ............................................................................................................................. 28
Dividends Paid ................................................................................................................................... 28
Related Party Balances and Transactions...................................................................................... 28-30
Nature and Level of Risks Arising From Financial Instruments ................................................... 30-33
Financial Instruments .................................................................................................................... 33-34
Subsequent Events ............................................................................................................................. 34

F-5

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONSOLIDATED INTERIM BALANCE SHEET

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

Notes
ASSETS
Current Assets
Cash and Cash Equivalents
Financial Investments
Trade Receivables
Due from Related Parties
Other Receivables
Inventories
Other Current Assets

5
20
7
13

Non-Current Assets
Other Receivables
Financial Investments
Investments In Associates
Biological Assets
Property, Plant and Equipment
Intangible Assets
Goodwill
Deferred Tax Asset
Other Non-Current Assets

8
9
10
17
13

TOTAL ASSETS
LIABILITIES
Current Liabilities
Borrowings
Trade Payables
Due to Related Parties
Other Payables
Provision for Corporate Tax
Provisions
Other Current Liabilities

6
20
7
13

Non-Current Liabilities
Borrowings
Other Payables
Provision for Employee Benefits
Deferred Tax Liability
Other Non-Current Liabilities

6
7
17
13

Equity
Equity Attributable to Equity Holders of the Parent
Issued Capital
Inflation Adjustment to Issued Capital
Share Premium
Fair Value Reserve
Currency Translation Differences
Restricted Reserves Allocated from Net Income
Other Reserves
Accumulated Profits
Net Income

11
11
11
11
11
11
11

Minority Interests
TOTAL LIABILITIES

Reviewed
June 30, 2012

Audited
December 31, 2011

3.264.477
983.194
2.354
1.238.007
39
25.051
689.988
325.844

2.343.252
917.629
22.602
578.428
100
16.877
561.479
246.137

7.165.887
1.944
21.599
13.507
8.110
3.415.915
592.797
2.891.543
74.030
146.442

4.077.457
1.610
25.180
18.447
6.457
2.510.259
447.045
912.645
62.425
93.389

10.430.364

6.420.709

2.484.728
837.653
563.921
67.436
663.290
63.478
64.862
224.088

1.628.590
795.644
307.569
9.174
342.768
9.415
28.040
135.980

1.724.099
1.377.588
191.901
58.668
68.166
27.776

1.585.239
1.303.833
165.742
54.033
52.290
9.341

6.221.537
6.149.676
592.105
63.583
3.137.684
4.655
(95.861)
209.643
(5.736)
1.907.953
335.650

3.206.880
3.143.921
450.000
63.583
7.822
289.853
176.995
(5.736)
1.820.229
341.175

71.861

62.959

10.430.364

6.420.709

The accompanying notes form an integral part of these interim condensed consolidated financial statements.
(1)
F-6

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONSOLIDATED INTERIM INCOME STATEMENT

For the six-month period ended June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

Reviewed
January 1 Notes
June 30,
2012

April 1 June 30,


2012

Restated
Reviewed
January1 - April 1 June 30, June 30,
2011
2011

Continuing Operations
Sales
Cost of Sales (-)

Gross Profit From Operations

3.205.827 2.086.261 2.281.899 1.423.974


(1.598.945) (1.007.624) (1.158.346) (713.531)
1.606.882

Marketing, Selling and Distribution Expenses (-)


General and Administrative Expenses (-)
Other Operating Income
Other Operating Expenses (-)

14
14

Profit From Operations


Loss from Associates
Financial Income
Financial Expenses (-)

15
16

Profit Before Tax From Continuing Operations


Continuing Operations Tax Income / (Expense)
Current Period Tax Expense (-)
Deferred Tax Income

1.078.637

1.123.553

710.443

(857.850)
(321.606)
24.372
(20.126)

(541.904)
(173.181)
14.951
(13.523)

(579.096)
(200.950)
17.125
(21.018)

(332.947)
(101.455)
3.948
(14.426)

431.672

364.980

339.614

265.563

(4.462)
203.375
(193.525)

(1.954)
55.836
(121.062)

(3.253)
119.603
(127.521)

(1.141)
54.153
(76.191)

437.060

297.800

328.443

242.384

(123.618)
34.689

(85.894)
30.599

(84.571)
5.967

(51.681)
639

Profit For The Period

348.131

242.505

249.839

191.342

Attributable to
Minority interests
Equity holders of the parent

12.481
335.650

9.225
233.280

8.349
241.490

6.554
184.788

0,6209

0,3940

0,5366

0,4106

18

Earnings Per Share (Full TRL)

The accompanying notes form an integral part of these interim condensed consolidated financial statements.
(2)
F-7

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

For the six-month period ended June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

Reviewed
January 1 June 30,
2012
Profit for the Period

348.131

April 1
June 30,
2012

Restated
Reviewed
January 1 - April 1
June 30,
June 30,
2011
2011

242.505

249.839

191.342

Other Comprehensive Income:


Currency Translation Differences
Value Increase / (Decrease) in Available for Sale
Securities
Tax Income / (Expense) on Other Comprehensive
Income / (Loss)

(388.825)

(349.922)

204.413

109.874

(3.334)

(7.807)

(3.508)

2.251

Other Comprehensive Income, (Net of Taxes)

(391.992)

(357.338)

201.080

112.012

Total Comprehensive Income

(43.861)

(114.833)

450.919

303.354

Attributable to
Minority Interests
Equity Holders of the Parent

9.370
9.695
(53.231) (124.528)

11.643
439.276

7.254
296.100

167

391

175

(113)

The accompanying notes form an integral part of these interim condensed consolidated financial statements.
(3)
F-8

63.583

3.137.684

3.137.684

16.236

4.655

(3.167)
-

(3.167)

7.822

(3.333)

(3.333)

19.569

(95.861)

(385.714)
(385.714)
-

289.853

197.034

201.119
201.119

(4.085)

Fair Currency
Value Translation
Reserve Differences

Share
Premium
-

209.643

32.648
-

176.995

176.995

38.553
-

138.442

(5.736)

(5.736)

(5.736)

(5.736)

Restricted
Reserves
Allocated
from Net
Other
Income Reserves

335.650

(120.151)
(221.024)
-

335.650
335.650
-

341.175

241.490

(257.108)
(246.532)
-

241.490
241.490

503.640

Net Income

1.907.953

221

87.503
-

1.820.229

1.820.229

218.555
-

1.601.674

F-9

(4)

6.149.676

221

(221.024)

(388.881)
335.650
(53.231)
3.279.789

3.143.921

2.959.831

(246.532)
-

197.786
241.490
439.276

2.767.087

Equity
Attributable
to Equity
Accumulated Holders of
Profits the Parent

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

592.105

142.105

Other comprehensive income


Profit for the period
Total comprehensive income
Capital increase (Note 1, 3)
Transfer of previous year net income to
the accumulated profits
Dividends paid (Note 19)
Dividends declared to minority interests
Additions through subsidiary acquired
(Note 3)
Change in minority shares (Note 3)

Balance at June 30, 2012

450.000

Balance at December 31, 2011

63.583

63.583

450.000

Balance at June 30, 2011

63.583

450.000

Change in minority shares

Other comprehensive income


Profit for the period
Total comprehensive income
Transfer of previous year net income to
the accumulated profits
Dividends paid (Note 19)
Dividends paid to minority shareholders

Balance at December 31, 2010

Issued
Capital

Inflation
Adjustment
to Issued
Capital

(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

For the six-month period ended June 30, 2012

CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi

71.861

(36)
(221)

(211)

(3.111)
12.481
9.370

62.959

47.295

(12.035)
(231)

3.294
8.349
11.643

47.918

Minority
Interests

6.221.537

(36)

(221.024)
(211)

(391.992)
348.131
(43.861)
3.279.789

3.206.880

3.007.126

(246.532)
(12.035)
(231)

201.080
249.839
450.919

2.815.005

Total Equity

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONSOLIDATED INTERIM STATEMENT OF CASH FLOW

For the six-month period ended June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

Reviewed
Notes
Cash flows from operating activities
Continuing operations profit before tax
Adjustments for:
Depreciation and amortization expenses
4
(Gain)/loss on sale of property, plant and equipment and intangible assets, net 14
Provision for retirement pay liability
4
Provision for vacation pay liability
4
Provision /(reversal of provision) for inventory obsolescence, net
4
Provision/(reversal of provision) for doubtful receivables, net
4
Provision for long term incentive plan
Impairment/(reversal of impairment) on property, plant and equipment, net
4
Foreign exchange (gain) /loss raised from loans, net
Interest expense
16
Interest income
15
(Gain)/loss from derivative financial instruments, net
15,16
Syndication loan expense
16
Fair value increase related to change in scope of consolidation
3,4,14
Loss from associates
4
Other (income) / expense, net
Operating profit before changes in operating assets and liabilities
Change in trade receivables
Change in due from related parties
Change in inventories
Change in other assets, other liabilities and provisions
Change in trade payables
Change in due to related parties
Vacation pay, retirement pay liability and long term incentive plan paid
Taxes paid
Cash flows from operating activities
Investing activities
Purchase of property, plant and equipment and intangible assets
Proceeds from sale of property, plant and equipment and intangible assets
Biological asset investments
Acquisition of subsidiary, net of cash acquired

4,8,9
3

Net cash used in investing activities

June 30,
2012

Restated
June 30,
2011

437.060

328.443

217.288
(2.307)
7.363
6.690
2.528
(620)
5.677
511
(18.839)
35.549
(35.510)
(481)
708
4.462
254

158.864
(2.428)
5.176
5.106
(3.843)
(526)
4.258
1.639
17.847
34.864
(32.843)
25
83
(2.957)
3.253
8

660.333

516.969

(545.857)
61
(41.736)
306.955
128.287
18.249
(9.210)
(39.613)

(404.621)
204
(179.491)
157.629
207.984
2.192
(9.209)
(51.523)

477.469

240.134

(271.390)
7.416
(1.653)
(75.887)

(320.901)
14.749
(1.740)
-

(341.514)

Financing activities
Dividends paid
Capital increase in subsidiaries by minority shareholders
Proceeds from short-term and long-term debt
Repayment of short-term and long-term debt
Interest paid
Interest received
Change in time deposits with maturity more than three months
Cash flows from financing activities
Currency translation differences on cash transactions
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period

19

5
5

(221.024)
750.424
(581.141)
(34.015)
35.688
19.899
(30.169)
(39.949)
105.786
913.198
979.035

(307.892)
(246.532)
2
1.584.199
(1.612.301)
(33.448)
33.685
37.259
(237.136)
23.378
(304.894)
936.238
654.722

The accompanying notes form an integral part of these interim condensed consolidated financial statements.
(5)
F-10

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 1. GROUPS ORGANIZATION AND NATURE OF ACTIVITIES


General
Anadolu Efes Biraclk ve Malt Sanayii A.. (a Turkish corporation, Anadolu Efes, the Company) was established in
stanbul in 1966. Certain shares of Anadolu Efes are listed on the stanbul Stock Exchange (ISE).
The registered office of the Company is located at the address Bahelievler Mahallesi ehit brahim Koparr
Caddesi No: 4 Bahelievler stanbul.
The Group consists of the Company, its subsidiaries and joint ventures. The average number of permanent personnel
employed in the Group is 19.186 (December 31, 2011 15.507).
The interim condensed consolidated financial statements of the Group approved by the Board of Directors of the
Company and signed by the Chief Financial Officer and Finance Director were issued on August 28, 2012. General
Assembly and specified regulatory bodies have the right to make amendments on statutory financial statements after
issue.
Nature of Activities of the Group
The operations of the Group consist of production, bottling, selling and distribution of beer under a number of
trademarks and also production, bottling, selling and distribution of sparkling and still beverages with The CocaCola Company (TCCC) trademark. The Group owns and operates eighteen breweries (five in Turkey, eight in
Russia and five in other countries), seven malt production facilities (two in Turkey, five in Russia) and also eight
facilities in Turkey, twelve facilities in other countries for sparkling and still beverages production. The Group has
joint control over Coca-Cola ecek A.. (CC), which undertakes production, bottling and distribution facilities of
Coca-Cola products in Turkey, Pakistan, Central Asia and Middle East.
The Group also has joint control over Anadolu Etap Tarm ve Gda rnleri San. ve Tic. A.., which undertakes
production and sales of fruit juice concentrates and purees in Turkey. In addition, the Group has minority stakes that
have significant influence over an investment company which has breweries in Serbia, namely Central Europe
Beverages B.V. (CEB).
List of Shareholders
As of June 30, 2012 and December 31, 2011, the composition of shareholders and their respective percentage of
ownership can be summarized as follows:

Yazclar Holding A..


zilhan Snai Yatrm A..
Anadolu Endstri Holding A.. (AEH)
SABMiller Anadolu Efes Limited (SABMiller AEL)
Publicly traded and other

June 30, 2012


Amount
%

December 31, 2011


Amount
%

139.787
79.813
35.292
142.105
195.108

23,61
13,48
5,96
24,00
32,95

139.787
79.813
35.292
195.108

31,06
17,74
7,84
43,36

592.105

100,00

450.000

100,00

Capital structure of AEH, the shareholder of the Company, comprises of Yazclar Holding A.. (68%) and zilhan
Snai Yatrm A.. (32%); consequently, as of June 30, 2012 Yazclar Holding A.. and zilhan Snai Yatrm A..
together with SABMiller AEL represent directly and indirectly more than half of the voting rights of the Company
according to the shareholder agreement.
On March 6, 2012, Anadolu Efes Board of Directors decided to increase the Companys issued capital to
TRL592.105, while the shareholders right to purchase new shares has been restricted. The newly issued
142.105.263 bearer shares, which are above the nominal values, were allocated on the name of SABMiller AEL, a
subsidiary of SABMiller and issued shares had been transferred to SABMiller in stanbul Stock ExchangeWholesale Market on March 14, 2012.

(6)
F-11

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 1. GROUPS ORGANIZATION AND NATURE OF ACTIVITIES (continued)


List of Subsidiaries
The subsidiaries included in the consolidation and their effective shareholding rates at June 30, 2012 and December
31, 2011 are as follows:
Subsidiary

Country

Principal Activity

Segment

Efes Breweries International N.V. (EBI)

The Netherlands

Facilitating foreign investments in breweries International Beer

ZAO Moscow-Efes Brewery (Efes Moscow)

Russia

Production and marketing of beer

OAO Knyaz Rurik (Knyaz Rurik)

Russia

ZAO Mutena Maltery (Mutena Maltery)

Effective Shareholding
and Voting Rights %
June30, December 31,
2011
2012
100,00

100,00

International Beer

90,96

90,96

Investment company of EBI

International Beer

99,95

99,95

Russia

Production of malt

International Beer

99,95

99,95

OOO Vostok Solod (1)

Russia

Production of malt

International Beer

90,96

90,96

OOO T'sentralny Torgovy Dom (1)

Russia

Sales company

International Beer

90,96

90,96

ZAO Moskovskii Torgovyii Dom (1)

Russia

Sales company

International Beer

90,96

90,96

LLC SABMiller RUS (SABM RUS) (2)

Russia

Production and marketing of beer

International Beer

100,00

J.S.C. Efes Kazakhstan Brewery (Efes Kazakhstan)

Kazakhstan

Production and marketing of beer

International Beer

72,00

72,00

Dinal LLP (Dinal)

Kazakhstan

Distribution of beer

International Beer

72,00

72,00

Efes Vitanta Moldova Brewery S.A. (Efes Moldova)

Moldova

Production and marketing of beer, and low


alcoholic drinks

International Beer

96,83

96,83

Euro-Asien Brauerein Holding GmbH (Euro-Asien)

Germany

Investment company of EBI

International Beer

100,00

100,00

J.S.C. Lomisi (Efes Georgia)

Georgia

Production, marketing and sales of beer and


International Beer
carbonated soft drink

100,00

100,00

PJSC Miller Brands Ukraine (MBU) (2)

Ukraine

Production and marketing of beer

International Beer

99,92

Central Asian Beverages B.V. (Central Asian)

The Netherlands

Investment company of EBI

International Beer

60,00

60,00

Efes Trade BY FLLC (Efes Belarus)

Belarus

Market development

International Beer

100,00

100,00

Efes Pazarlama ve Datm Ticaret A.. (Ef-Pa) (3)

Turkey

Turkey Beer

100,00

100,00

Tarbes Tarm rnleri ve Besicilik Sanayi


Ticaret A.. (Tarbes) (3)

Turkey

Turkey Beer

99,75

99,75

Foreign trade

Other

99,82

99,82

Marketing and distribution of beer

Other

99,99

99,99

Providing technical assistance

Other

99,75

99,75

The Netherlands

Providing technical assistance

Other

99,75

99,75

Germany

Marketing and distribution of beer

Other

100,00

100,00

Anadolu Efes D Ticaret A.. (Aefes D Ticaret)


Cypex Co. Ltd. (Cypex)
Anadolu Efes Technical and Management
Consultancy N.V. (AETMC)
Efes Holland Technical Management
Consultancy B.V. (EHTMC)
Efes Deutschland GmbH (Efes Germany)

(1)
(2)

(3)

Turkey
Turkish Republic of
Northern Cyprus
The Netherlands
Antilles

Marketing and distribution company of the


Group in Turkey
Providing hops (major ingredient of beer) to
the breweries of the Group

Subsidiaries of Efes Moscow.


SABM RUS is included in the consolidation by using the full consolidation method when the control rights have been transferred to the
Group after the 89% share purchase by EBI, the subsidiary of the Group, and 11% share purchase by Euro Asien, the subsidiary of EBI,
were completed at March 6, 2012. MBU has been included in the consolidation by using the full consolidation method after the completion
of 99,91% share acquisition by EBI, the subsidiary of the Group (Note 3). After the initial acquisition, Groups shareholding rate has been
increased to 99,92% as a result of purchase of MBU minority shares by EBI.
Companys beer operations in Turkey form the Turkey Beer Operations together with Ef-Pa and Tarbes.

(7)
F-12

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 1. GROUPS ORGANIZATION AND NATURE OF ACTIVITIES (continued)


List of Joint Ventures
The joint ventures included in the consolidation proportionally and their effective shareholding rates at June 30,
2012 and December 31, 2011 are as follows:
Effective Shareholding
and Voting Rights %

Joint Venture

Country

Principal Activity

Segment

Coca-Cola ecek A.. (CC) (1)

Turkey

Production, bottling of Coca-Cola products

Soft Drinks

50,26

50,26

Coca-Cola Sat Datm A.. (CCSD)

Turkey

Distribution and selling of Coca-Cola, Doadan


and Mahmudiye products

Soft Drinks

50,25

50,25

Mahmudiye Kaynak Suyu Ltd. ti. (Mahmudiye)

Turkey

Filling of natural spring water

Soft Drinks

50,25

50,25

Efes Snai D Ticaret A.. (EST)

June 30, December 31,


2011
2012

Turkey

Foreign trade

Soft Drinks

50,35

50,35

J.V. Coca-Cola Almaty Bottlers Limited Liability


Partnership (Almaty CC)

Kazakhstan

Production, bottling, distribution and selling of


Coca-Cola and distributions of Efes products

Soft Drinks

50,11

50,11

Tonus Joint Stock Company (Tonus) (3)

Kazakhstan

Investment company of CC

Soft Drinks

47,33

47,33

Azerbaijan Coca-Cola Bottlers LLC (Azerbaijan CC)

Azerbaijan

Soft Drinks

50,19

50,19

Coca-Cola Bishkek Bottlers Closed Joint Stock


Company (Bishkek CC)

Kyrgyzstan

Soft Drinks

50,26

50,26

Production, bottling, distribution and selling of


Coca-Cola products
Production, bottling, distribution and selling of
Coca-Cola products

CCI International Holland B.V. (CCI Holland)

The Netherlands

Investment company of CC

Soft Drinks

50,26

50,26

The Coca-Cola Bottling Company of Iraq FZCO


(CCBI) (3)

United Arabic
Emirates

Investment company of CC

Soft Drinks

50,26

50,26

CC Beverage Limited (CCBL)

Iraq

Production, bottling, distribution and selling of


Coca-Cola products

Soft Drinks

50,26

50,26

SSG Investment Limited (SSG) (3)

British Virgin
Islands

Investment company of CC

Soft Drinks

50,26

Jordan

Production, bottling, distribution and selling of


Coca-Cola products

Soft Drinks

45,23

45,23

Syria

Distribution and selling of Coca-Cola products

Soft Drinks

25,13

25,13

Soft Drinks

24,82

24,82

Soft Drinks

29,90

29,90

Soft Drink

38,39

50,26

Soft Drink

50,26

Other

33,33

33,33

The Coca-Cola Bottling Company of Jordan Ltd.


(Jordan CC)
Syrian Soft Drink Sales and Distribution L.L.C.
(Syrian SD)
Coca-Cola Beverages Pakistan Ltd (CCBPL)

Pakistan

Turkmenistan Coca-Cola Bottlers Ltd.


(Turkmenistan CC)

Turkmenistan

Waha Beverages B.V. (2)

The Netherlands

Coca-Cola Beverages Tajikistan Ltd. (4)

Tajikistan

Anadolu Etap Tarm ve Gda rnleri


San. ve Tic. A.. (Anadolu Etap)

Turkey

Production, bottling, distribution and selling of


Coca-Cola products
Production, bottling, distribution and selling of
Coca-Cola products
Investment company of CC
Distribution and selling of Coca-Cola products
Production and sales of fruit juice concentrate and
puree

(1) Shares of CC are currently traded on ISE.


(2) 23,60% shares of Waha Beverages B.V, which was incorporated as a subsidiary 100% owned by CC with an initial capital amounting to
EUR18.000, were sold in February 2012 (Note 3).
(3) In accordance with CCs Board of Directors decision its approved to liquidate CCBI, SSG and Tonus. As of the issuance date of the
financial statements, liquidation processes of CCBI and Tonus are not completed. According to completion of these transactions, 4,85%
shares of Almaty CC owned by Tonus will be transferred to CC with its nominal value. Liquidation process of SSG has been completed in
June 2012.
(4) In accordance with the Board of Directors decision, a limited liability company in the Republic of Tajikistan has been established for an
unlimited duration to deal with sales, marketing and distribution of all kinds of carbonated and non-carbonated non-alcoholic drinks, with a
share capital of USD 2,5 million and with the name of Coca-Cola Beverages Tajikistan.

Although the Company represents and controls more than 50% of voting rights of CCI, since the members of the
board of directors of CC, representing the Company and other shareholders, take decisions mutually in the board of
directors meetings; the financial statements of CC is consolidated in accordance with interests in joint venture.
Work Environments and Economic Conditions of Subsidiaries and Joint Ventures in Foreign Countries
Certain countries, in which consolidated subsidiaries and joint ventures operate, have undergone substantial political
and economic changes in recent years. Accordingly, such markets do not possess well-developed business
infrastructures and the Groups operations in such countries might carry risks, which are not typically associated
with those in more developed markets. Uncertainties regarding the political, legal, tax and/or regulatory
environment, including the potential for adverse changes in any of these factors, could significantly affect the
commercial activities of subsidiaries and joint ventures.
(8)
F-13

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS


2.1

Basis of Preparation and Presentation of Consolidated Financial Statements


The Group companies, which operate in Turkey, keep their accounting books and their statutory financial
statements in Turkish Lira in accordance with the Generally Accepted Accounting Principles in Turkey
accepted by the Capital Markets Board (CMB), Turkish Commercial Code, Tax Legislation and the Uniform
Chart of Accounts issued by the Ministry of Finance. The foreign subsidiaries and joint ventures keep their
accounting books and statutory financial statements in their local currencies and in accordance with the rules
and regulations of the countries in which they operate.
The consolidated financial statements are based on the statutory financial statements of Groups subsidiaries
and joint ventures and presented in TRL in accordance with CMB Financial Reporting Standards with certain
adjustments and reclassifications for the purpose of fair presentation. Such adjustments are primarily related
to application of consolidation accounting, accounting for business combinations, accounting for deferred
taxes on temporary differences, accounting for employment termination benefits on an actuarial basis and
accruals for various expenses. Except for the financial assets carried from their fair values and assets and
liabilities included in business combinations application, financial statements are prepared on historical cost
basis.
In accordance with the CMB's "Communiqu on Financial Reporting in Capital Market" Serial XI, No:29
(Communiqu), promulgated in the Official Gazette dated April 9, 2008, effective from January 1, 2008,
listed companies are required to prepare their financial statements in conformity with International
Accounting/Financial Reporting Standards (IAS/IFRS) as prescribed in the CMB Communiqu. The
financial statements and explanatory notes are presented using the compulsory standard formats as published
by the Communiqu.
In accordance with the Communiqu, the entities are allowed to prepare a complete or condensed set of
interim financial statements in accordance with IAS 34, Interim Financial Reporting. In this respect, the
Group has preferred to prepare condensed consolidated financial statements in the interim periods and
prepared the aforementioned condensed consolidated financial statements in compliance with CMB Financial
Reporting Standards.
Furthermore, in accordance with the Communiqu and announcements regarding the explanations of the
Communiqu, guarantee pledge mortgage table, foreign currency position table, total export and total import
amounts and hedging amount of total foreign currency liabilities are presented in the condensed consolidated
financial statement disclosures (Note 12, 21).

2.2

Seasonality of Operations
Due to higher soft drinks consumption during the summer season, the interim condensed consolidated
financial results may include the effects of the seasonal variations. Therefore, the results of business
operations for the first six months up to June 30, 2012 may not necessarily constitute an indicator for the
results to be expected for the overall fiscal year.

2.3

Significant Accounting Estimates and Decisions


Preparation of consolidated financial statements requires management to make estimations and assumptions
which may affect the reported amounts of assets and liabilities as of the balance sheet date, the disclosure of
contingent assets and liabilities and the reported amounts of income and expenses during the financial period.
The accounting assessments, estimates and assumptions are reviewed considering past experiences, other
factors and reasonable expectations about future events under current conditions. Although the estimations
and assumptions are based on the best estimates of the managements existing incidents and operations, they
may differ from the actual results.

(9)
F-14

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)


2.4

Restatements on Financial Statements


In March, 2011 CCs 30% indirect share in CCBL increased to 100% (Note 3). Fair value accounting of the
related acquisition was completed as of September 30, 2011. Accordingly, temporary recorded goodwill
accounting during the year is restated in accordance with IFRS 3 Business Combinations.
In accordance with the change in the scope of consolidation, Groups share of the fair value increase
amounting to TRL2.957 arising from the fair value financial statements, related with the formerly owned
30% shares by CC, was reflected to the consolidated interim income statement, consolidated interim
comprehensive income statement and consolidated interim statement of changes in equity for the six-month
period ended June 30, 2011 (Note 3, 14).

2.5

Changes in Accounting Policies


The interim condensed consolidated financial statements of the Group for the period ended June 30, 2012
have been prepared in accordance with the accounting policies consistent with the accounting policies used in
the preparation of annual consolidated financial statements for the year ended December 31, 2011.
Accordingly, these interim condensed consolidated financial statements should be read in conjunction with
the annual consolidated financial statements for the year ended December 31, 2011.
Adoption of new and revised International Financial Reporting Standards
The standards and interpretations that are effective after January 1, 2012 are as follows:
IFRS 1 (Amendment) First Time Adoption (effective for annual periods beginning on or after 1 July
2011): Amendment provides guidance on how an entity should resume presenting financial statements in
accordance with IFRSs after a period when the entity was unable to comply with IFRSs because its
functional currency was subject to severe hyperinflation.
IFRS 7 (Amendment) Financial Instruments: Disclosures (effective for annual periods beginning on or
after July 1, 2011): The purpose of this amendment is to allow users of financial statements to improve
their understanding of transfer transactions of financial assets (e.g. securitizations), including understanding
the possible effects of any risks that may remain with the entity which transferred the assets. The
amendment also requires additional disclosures if a disproportionate amount of transfer transactions are
undertaken around the end of a reporting period. Comparative disclosures are not required.
IAS 12 (Amendment), Income Taxes (mandatory for annual periods beginning on or after January 1,
2012, but earlier application is permitted): IAS 12 has been updated to include:
(i) a rebuttable presumption that deferred tax on investment property measured using the fair value model
in IAS 40 should be determined on the bases that its carrying amount will be recovered through sale
(ii) a requirement that deferred tax on non-depreciable assets, measured using the revaluation model in IAS
16, should always be measured on a sale basis.

(10)
F-15

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)


2.5

Changes in Accounting Policies (continued)


The standards and interpretations that are effective after January 1, 2013 and have not been early
adopted by the Group:
IFRS 1 (amendment), First time adoption, on government loans, is effective for annual periods beginning
on or after 1 January 2013 and earlier application is permitted. The amendment introduces how the first
time adopters shall account the government loans at a below market rate of interest.
IFRS 7 (Amendment) Financial Instruments: Disclosures-Offsetting Financial Assets and Financial
Liabilities (to be retrospectively applied for annual periods beginning on or after January 1, 2013 and
interim periods within those annual periods). New disclosures would provide users of financial statements
with information that is useful in;
(i) evaluating the effect or potential effect of netting arrangements on an entitys financial position and
(ii) analysing and comparing financial statements prepared in accordance with IFRSs and other generally
accepted accounting standards.
IFRS 9 Financial Instruments (the new standard is effective for annual periods beginning on or after
January 1, 2015). Phase 1 of this new IFRS introduces new requirements for classifying and measuring
financial instruments. The amendments made to IFRS 9 will mainly affect the classification and
measurement of financial assets and measurement of fair value option (FVO) liabilities and requires that
the change in fair value of a FVO financial liability attributable to credit risk is presented under other
comprehensive income. Early adoption is permitted
IFRS 10 Consolidated Financial Statements (effective for annual periods beginning on or after January 1,
2013): This new Standard may be adopted early, but IFRS 11 Joint Arrangements and IFRS 12 Disclosure
of Interests in Other Entities should be also adopted early. IFRS 10 replaces the portion of IAS 27
Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial
statements. A new definition of control is introduced, which is used to determine which entities are
consolidated. This is a principle based standard and require preparers of financial statements to exercise
significant judgment. The standard is applied on a modified retrospective approach
IFRS 11 Joint Arrangements (effective for annual periods beginning on or after January 1, 2013): IFRS
11 provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of
the arrangement, rather than its legal form (as is currently the case). The standard addresses inconsistencies
in the reporting of joint arrangements by requiring a single method to account for interests in jointly
controlled entities. Proportional consolidation of joint ventures is no longer allowed. The standard will be
applied using a modified retrospective approach.
IFRS 12 Disclosure of Interests in Other Entities (effective for annual periods beginning on or after
January 1, 2013): IFRS 12 is applied on a modified retrospective basis. This new Standard may be adopted
early, but IFRS 10 Consolidated Financial Statements and IFRS 11 Joint Arrangements should be also
adopted early. IFRS 12 includes all of the disclosures that were previously in IAS 27 Consolidated and
Separate Financial Statements related to consolidated financial statements, as well as all of the disclosures
that were previously included in IAS 31 Interests in Joint Ventures and IAS 28 Investment in Associates.
These disclosures relate to an entitys interests in subsidiaries, joint arrangements, associates and structured
entities.
IAS 27 Separate Financial Statements (effective for annual periods beginning on or after January 1,
2013): As a consequential amendment to IFRS 10 and IFRS 12, the IASB also amended IAS 27, which is
now limited to accounting for subsidiaries, jointly controlled entities, and associates in separate financial
statements. Transitional requirement of this amendment is similar to IFRS 10.

(11)
F-16

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)


2.5

Changes in Accounting Policies (continued)


The standards and interpretations that are effective after January 1, 2013 and have not been early
adopted by the Group are as follows (continued):
IAS 28 Investments in Associates and Joint Ventures (effective for annual periods beginning on or after
January 1, 2013): This standard includes the requirements for joint ventures, as well as associates, to be
equity accounted following the issue of IFRS 11.
IFRS 10, IFRS 11 and IFRS 12 together with related updates to IAS 27 Separate Financial Statements and
IAS 28 Associates and Joint Ventures make up a package of five new and revised standards which must
be adopted simultaneously. Earlier application is permitted.
IFRS 13 Fair Value Measurement (effective for annual periods beginning on or after January 1, 2013):
IFRS 13 provides guidance on how to measure fair value under IFRS but does not change when an entity is
required to use fair value. It is a single source of guidance under IFRS for all fair value measurements. The
new standard also brings new disclosure requirements for fair value measurements. The standard is applied
prospectively. Early application is permitted.
IAS 1 (Amendment) Presentation of Financial Statements Presentation of Items of Other
Comprehensive Income (effective for annual periods beginning on or after July 1, 2012): IAS 1 has been
amended only for the grouping of items presented in other comprehensive income. Items that could be
reclassified (or recycled) to profit or loss at a future point in time would be presented separately from
items which will never be reclassified. The amendments will be applied retrospectively. Earlier application
is permitted.
IAS 19 (Amendment) Employee Benefits (effective for annual periods beginning on or after January 1,
2013). IAS 19 has been amended to remove the corridor mechanism and to make the distinction between
short-term and other long-term employee benefits based on expected timing of settlement rather than
employee entitlement. The revised standard is applied retrospectively with a few exceptions. Early adoption
is permitted.
IAS 32 (Amendment) Financial Instruments: Presentation - Offsetting Financial Assets and Financial
liabilities (to be retrospectively applied for annual periods beginning on or after January 1, 2014). The
amendments clarify the meaning of currently has a legally enforceable right to set-off and also clarify the
application of the IAS 32 offsetting criteria to settlement systems (such as central clearing house systems)
which apply gross settlement mechanisms that are not simultaneous.
IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine (effective for annual periods
beginning on or after January 1, 2013): Entities will be required to apply its requirements for production
phase stripping costs incurred from the start of the earliest comparative period presented. The Interpretation
clarifies when production stripping should lead to the recognition of an asset and how that asset should be
measured, both initially and in subsequent periods. Earlier application is permitted.
Improvements made to IFRS 1, IAS 1, IAS 16, IAS 32 and IAS 34 in 2011 will be effective for the periods
beginning on or after January 1, 2013.
Group is assessing the effects of the new standards and amendments on its consolidated financial statements.

(12)
F-17

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 3. BUSINESS COMBINATIONS


Transactions Related with 2012
a) Acquisitions
On March 6, 2012 after the required approval from the Competition Board related to the alliance with SABMiller,
SABMillers all beer operations in Ukraine and Russia are transferred to EBI, whose 100% shares are owned by
Anadolu Efes, and Euro-Asien Brauereien Holding GmbH (Euro-Asien), whose 100% shares are owned by EBI.
Anadolu Efes already owned operations in Russia and the operations transferred from SABMiller are combined and
started to operate immediately.
Within the scope of this transaction, EBI and Euro Asiens share capitals have been increased and Anadolu Efes
Board of Directors resolved to participate in the planned capital increase of EBI by full USD1.859 million, as
USD358,8 million in cash and USD1.500 million via loan notes. In return of SABMillers Russian and Ukrainian
beer businesses transfer, EBI and Euro Asien has fulfilled the commitment of USD1.933 million including postacqusition costs.
On March 6, 2012, it has been resolved to increase the Companys issued capital to TRL592.105, while the
shareholders right to purchase new shares has been restricted. The newly issued 142.105.263 bearer shares, which
are above the nominal values, were allocated on the name of SABMiller Anadolu Efes Limited (SABMiller AEL), a
subsidiary of SABMiller. In return of this capital increase, SABMiller AEL fulfilled its capital and premium
commitment amounting to TRL3.279.789 at March 6, 2012 and issued shares has been transferred to SABMiller
AEL in stanbul Stock Exchange Wholesale Market at March 14, 2012. All share transfers planned in accordance
with the strategic alliance have been completed as of this date.
SABM RUS and MBU are included in consolidation by using the full consolidation method after Group acquired
SABMillers beer operations in Russia by 100% and beer operations in Ukraine by 99,91% on March 2012.
TRL3.235.382 has been attributed for the transfer of SABM RUS and MBU and for the brands purchased from
SABMiller Group companies as a part of acquisition. MBUs shareholder loan amounting to TRL175.760 has been
taken over with the acquisition.
Anadolu Efes total share capital increase amounting to TRL3.279.789, acqusition cost amounting to TRL3.413.889
and net cash acquired in the subsidiaries are presented as net in the consolidated interim statement of cash flows.
Since fair value appraisal of the identifiable assets, liabilities and contingent liabilities of the acquired companies is
in progress, the Group has accounted the acquisition based on the carrying values of identifiable assets, liabilities
and contingent liabilities on SABM RUS and MBUs financial statements at the acquisition date in accordance with
IFRS 3 Business Combinations. As of 30 June 2012, the difference between the total consideration of business
combination and Groups share in the carrying value of acquirees identifiable assets, liabilities and contingent
liabilities amounting to TRL2.203.067 is temporarily recorded as goodwill in the interim condensed consolidated
financial statements (Note 10).

(13)
F-18

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 3. BUSINESS COMBINATIONS (continued)


Transactions Related with 2012 (continued)
a) Acquisitions (continued)
The carrying value of the net assets of SABM RUS and MBU derived from the financial statements as of the
acquisition date are as follows:
SABM RUS
41.787
101.942
3.263
75.411
37.270
911.925
165.200
(30.475)
(119.809)
(10.961)
(69.206)
(34.771)

MBU
16.426
10.626
13.484
3.266
122.343
628
(175.760)
(8.254)
(3.146)
(13.128)
(5.782)

1.071.576

(39.297)

3.103.044
(1.071.576)

132.338
39.261

Goodwill arising from acquisition

2.031.468

171.599

Total consideration
Cash in the subsidiary acquired

3.103.044
(41.787)

132.338
(16.426)

Net consideration related with acquisition

3.061.257

115.912

Cash and cash equivalents


Trade and other receivables
Due from related parties
Inventories
Other assets
Property, plant and equipment
Intangible assets
Financial liabilities
Trade payables
Due to related parties
Other liabilities
Deferred tax liability
Carrying value of net assets acquired
Total consideration
Groups share in net assets

Acqusition, transaction and integration costs amounting to TRL26.661 have been recognized as general and
administative expenses in the consolidated interim income statement for the six-month period ended June 30, 2012.
b) Disposals
In February 2012, CCI has announced a Share Purchase Agreement has been signed between Waha B.V. and the
current shareholders of Al Waha for Soft Drinks, Mineral Water and Juices LLC (Al Waha), who are domiciled in
Iraq, for the acquisition of 85% of the share capital of Al Waha by Waha B.V. On the other hand, 23,60% shares of
Waha B.V., which was established with initial share capital of EURO18.000 in the Netherlands for the purpose of
making investments in Southern Iraq and being a 100% subsidiary of CC, was sold for purchase price of
EURO4.248 to European Refreshments (ER), a 100% subsidiary of The Coca-Cola Company. The Groups share in
the change on minority shares amounting to TRL221, which is arising from the net liability of Waha B.V.;
amounting to TRL221 has been recorded under equity as change in minority shares in accordance with the IAS 27
Consolidated and Seperate Financial Statements.

(14)
F-19

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 3. BUSINESS COMBINATIONS (continued)


Transactions Related with 2011
In March 2011, CCI Holland acquired 100% of SSG shares and 50% of CCBI shares from The Coca-Cola Export
Corporation for a cash consideration of TRL35.416. CCBI, whose 50% shares owned by CCI Holland, owned 60%
shares of CCBL and SSG owned 40% shares of CCBL as at December 31, 2010. Following this acquisition, CCs
indirect shareholding rate in CCBL has reached to 100% from 30%. Accordingly, CC included SSG, CCBI and
CCBL in consolidation by using full consolidation method.
Regarding to the consolidation of aforementioned subsidiaries, the Groups share in the difference between the net
asset value calculated from the financial statements based on fair value accounting and the acquisition cost
amounting to TRL7.384 was recorded as goodwill retrospectively in the restated consolidated balance sheet as of the
acqusition date in accordance with IFRS 3 Business Combinations (Note 10).
According to this acquisition, the Groups share in the fair value difference occurred from the fair value financial
statements amounting to TRL2.957, which is related with the shares formerly owned by the Group, is recorded as
other operating income in the consolidated income statement in accordance with IFRS 3 (Note 14).
The carrying value of the net assets of SSG and CCBI derived from the financial statements as of acquisition date
including CCBL financial statements are as follows:
CCBI
SSG
Fair value Book value Fair value Book value
1.445
1.445
643
643
781
781
520
520
4.797
4.797
3.198
3.198
1.863
1.863
1.296
1.296
39.738
38.474
26.492
25.649
10.564
59
7.042
40
(271)
(271)
(180)
(180)
(51.534)
(51.534)
(21.550)
(21.550)
(536)
(536)
(159)
(159)

Cash and cash equivalents


Trade and other receivables
Inventories
Other assets
Property, plant and equipment
Intangible assets
Trade and other payables
Due to related parties
Other liabilities
Carrying value of net assets acquired

6.847

Total cash consideration, Groups share


Groups share in net assets

5.141
(1.720)

12.658
(8.695)

Goodwill arising from acquisition

3.421

3.963

Total cash consideration, Groups share


Cash in the subsidiary acquired, Groups share (-)

5.141
(363)

12.658
(323)

Net cash outflow on acquisition

4.778

12.335

(15)
F-20

(4.922)

17.302

9.457

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 4. SEGMENT INFORMATION


The management monitors the operating results of its three business units separately for the purpose of making
decisions about the resource allocation and performance assessment. The three operating segments are Turkey Beer
Operations (Turkey Beer) which is conducted by the Company, International Beer Operations (International Beer)
which is conducted by EBI and Soft Drinks Operations (Soft Drinks) which is conducted by CC.
Segment performance is evaluated based on profit from operations before depreciation, amortization and non-cash
expenses (EBITDA). EBITDA has been determined as the optimum indicator by the Group management for the
evaluation of the performance of the operating segments by considering the comparability with the entities in the
same business.
The Group's segment reporting in accordance with IFRS 8 is disclosed as follows:
Turkey
Beer

International
Beer

Soft
Drink

Other(1) and
Eliminations

Total

January 1 - June 30, 2012


Revenues
Inter-segment revenues

846.093
(6.635)

1.387.009
(105)

960.399
(5)

37.344
(18.273)

3.230.845
(25.018)

Total Sales

839.458

1.386.904

960.394

19.071

3.205.827

EBITDA

318.673

217.162

163.562

(31.494)

667.903

Profit / (loss) for the period

238.664

48.920

94.565

(34.018)

348.131

65.655

126.218

77.076

2.441

271.390

Revenues
Inter-segment revenues

508.932
(4.291)

953.968
(37)

616.610
(1)

24.455
(13.375)

2.103.965
(17.704)

Total Sales

504.641

953.931

616.609

11.080

2.086.261

EBITDA

201.076

170.947

122.057

(2.229)

491.851

Profit / (loss) for the period

140.061

34.692

69.578

(1.826)

242.505

39.352

75.363

50.574

1.756

167.045

707.053
(6.162)

785.604
(2.548)

781.352
(22)

21.897
(5.275)

2.295.906
(14.007)

Total Sales

700.891

783.056

781.330

16.622

2.281.899

EBITDA

292.842

121.621

112.460

(21.413)

505.510

Profit / (loss) for the period

203.207

28.141

40.833

(22.342)

249.839

46.132

138.934

133.682

2.153

320.901

Revenues
Inter-segment revenues

424.697
(2.656)

508.542
(2.487)

486.199
(22)

13.529
(3.828)

1.432.967
(8.993)

Total Sales

422.041

506.055

486.177

9.701

1.423.974

EBITDA

185.261

91.508

81.544

(10.594)

347.719

Profit / (loss) for the period

133.635

34.167

33.929

(10.389)

191.342

23.917

64.576

105.977

1.666

196.136

Capital expenditures (Note 8, 9)


April 1 - June 30, 2012

Capital expenditures
January 1 - June 30, 2011
Revenues
Inter-segment revenues

Capital expenditures (Note 8, 9)


April 1 - June 30, 2011

Capital expenditures

(1) Includes other subsidiaries included in the consolidation of Anadolu Efes and headquarter expenses.

(16)
F-21

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 4. SEGMENT INFORMATION (continued)


Turkey
Beer

International
Beer

Other(1) and
Eliminations

Soft
Drink

Total

June 30, 2012


Segment assets
Segment liabilities

6.844.319
1.342.993

6.245.939
1.675.052

2.055.042
1.174.537

13.507

3.094.136
871.460

2.829.313
1.258.990

1.903.453
1.064.143

18.447

Other disclosures
Investments in associates

(4.714.936)
16.245
-

10.430.364
4.208.827
13.507

December 31, 2011


Segment assets
Segment liabilities
Other disclosures
Investments in associates

(1.406.193)
19.236
-

6.420.709
3.213.829
18.447

(1) Includes other subsidiaries included in the consolidation of the Group.

Reconciliation of EBITDA to the consolidated profit before tax and its components as of June 30, 2012 and 2011
are as follows:
January 1
June 30, 2011

January 1
April 1
June 30, 2012 June 30, 2012
EBITDA
Depreciation and amortization expenses
Provision for retirement pay liability
Provision for vacation pay liability
(Impairment) / impairment reversal on
property, plant and equipment, net
(Provision) / reversal of provision for
inventory, net
Fair value increase related to change in
scope of consolidation
(Provision) / reversal of provision for doubtful
receivables, net
Other
Profit from Operations
Loss from Associates
Financial Income
Financial Expenses (-)
Profit Before Tax from Continuing Operations

April 1
June 30, 2011

667.903

491.851

505.510

347.719

(217.288)
(7.363)
(6.690)

(116.155)
(4.693)
(2.068)

(158.864)
(5.176)
(5.106)

(79.956)
(3.039)
(1.026)

(511)

(463)

(1.639)

160

(2.528)

(2.243)

3.843

2.526

2.957

620
(2.471)

(590)
(659)

431.672

364.980

339.614

265.563

(4.462)
203.375
(193.525)

(1.954)
55.836
(121.062)

(3.253)
119.603
(127.521)

(1.141)
54.153
(76.191)

437.060

297.800

328.443

242.384

(17)
F-22

526
(2.437)

126
(947)

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 5. CASH AND CASH EQUIVALENTS


June 30, 2012

December 31, 2011

Cash on hand
Bank accounts
- Time deposits
- Demand deposits
Other

3.913

1.466

868.261
106.807
54

843.873
67.859
-

Cash and cash equivalents in cash flow statement

979.035

913.198

Interest income accrual

4.159
983.194

4.431
917.629

As of June 30, 2012, annual interest rates of the TRL denominated time deposits vary between 5,6% and 12,0%
(December 31, 2011 - 3,8% - 13,3%) and annual interest rates of the USD, EURO denominated and other time
deposits vary between 0,2% and 10,5% (December 31, 2011 0,2% - 10,5%). As of June 30, 2012, cash deposit
amounting to 3.953 TRL is pledged as collateral by the Group (December 31, 2011 None).

(18)
F-23

Leasing obligations

TRL denominated borrowings


Foreign currency denominated borrowings (USD)
Foreign currency denominated borrowings (EURO)
Foreign currency denominated borrowings (Other)

Borrowings

Long-term

Leasing obligations

TRL denominated borrowings


Foreign currency denominated borrowings (USD)
Foreign currency denominated borrowings (EURO)
Foreign currency denominated borrowings (Other)

Short-term portion of long term borrowings

TRL denominated borrowings


Foreign currency denominated borrowings (USD)
Foreign currency denominated borrowings (EURO)
Foreign currency denominated borrowings (Other)

Borrowings

Short-term

(19)
F-24

2.099.477

2.115

1.301.718

1.170
1.238.794
52.535
9.219

795.644

888

657.241

123
520.181
100.813
36.124

137.515

5.394
63.880
416
67.825

Amount

2.215.241

Libor + 1,00% - Libor + 3,50%


Euribor + 1,80%
-

Libor + 1,00% - Libor + 3,50%


Euribor + 1,80%
-

Libor + 1,99% - Libor+3,87%


Kibor + 0,40% - Kibor + 0,50%
-

Floating rate

1.303.833

3,45% - 8,00%

5,00% - 10,00%
8,11%

3,45% - 8,00%

5,00% - 10,00%
4,90% - 6,10%
5,75%
8,11%

7,50% - 14,75%
3,60% - 6,70%
-

June 30, 2012


Fixed rate

1.377.588

2.243

1.375.345

1.177
1.311.871
53.516
8.781

837.653

1.013

582.739

135
561.419
3.062
18.123

253.901

7.413
212.271
34.217

Amount

Floating rate

3,45%- 8,00%

5,00% - 10,00%
4,90% - 6,10%
8,11%

3,45% - 8,00%

5,00% - 10,00%
2,90% - 6,10%
3,95%
8,11%

Libor + 1,00% - 2,50%


Euribor + 1,80%
-

Libor + 1,00% - 2,50%


Euribor + 1,80% - 2,00%
Mosprime + 1,00%

7,00% - 13,08%
4,40% - 7,50%
Libor + 1,99% - 3,60%
3,47% - 3,95%
6,75% - 8,50% Mosprime + 1,00% Kibor 0,50%

December 31, 2011


Fixed rate

As of June 30, 2012, total borrowings consist of principals (finance lease obligations included) amounting to TRL2.207.509 (December 31, 2011 TRL2.092.034) and interest
expense accrual amounting to TRL7.732 (December 31, 2011 TRL7.443). As of June 30, 2012 and December 31, 2011, total amount of borrowings and the effective interest rates
are as follows:

NOTE 6. BORROWINGS

(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

As at June 30, 2012

CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi

Convenience Translation of Financial Statements Originally Issued in Turkish

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 6. BORROWINGS (continued)


Repayments of long-term borrowings are scheduled as follows (excluding finance lease obligation):
2013
2014
2015
2016 and thereafter

June 30, 2012

December 31, 2011

220.241
1.053.592
98.471
3.041

326.832
944.326
27.371
3.189

1.375.345

1.301.718

As of June 30, 2012, TRL9.702 (December 31, 2011 TRL10.706) of the total borrowings that are secured by the
Group related with CC, its subsidiaries and joint ventures consist of certain property, plant and equipment
amounting to TRL24.165 (December 31, 2011 TRL26.344).
Lessee - Finance Lease
Properties leased by the Group include buildings, machinery and equipment, motor vehicles and furniture and
fixtures. The most significant obligations assumed under the lease terms, other than rental payments, are the upkeep
of the facilities, insurance and property taxes. Lease terms generally range from 3 to 25 years with options to renew
at varying terms.
As of June 30, 2012 and December 31, 2011, the costs of the property, plant and equipment obtained by finance
lease are TRL63.942 and TRL63.653, respectively whereas net book values are TRL5.222 and TRL5.604,
respectively.
Lessee - Operating Lease
One of the production facilities of Efes Moscow and the production facility of Mutena Maltery are situated on a site
leased from the Moscow City Government under a 49-year lease contract. Furthermore, the Group has operational
leasing agreements with elik Motor Ticaret A.., a related party of the Group.
NOTE 7. OTHER RECEIVABLES AND PAYABLES
a) Other Current Receivables
Due from personnel
Other receivables

June 30, 2012

December 31, 2011

7.660
17.391

4.006
12.871

25.051

16.877

June 30, 2012

December 31, 2011

1.423
521

1.252
358

1.944

1.610

June 30, 2012

December 31, 2011

564.120
71.502
15.552
12.116

307.762
29.967
1.599
3.440

663.290

342.768

b) Other Non-Current Receivables


Deposits and guarantees given
Other
c)

Other Current Payables


Taxes other than on income
Deposits and guarantees taken
Payables for goods in transit
Other

(20)
F-25

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 7. OTHER RECEIVABLES AND PAYABLES (continued)


d) Other Non-Current Payables
December 31, 2011

June 30, 2012


Deposits and guarantees taken

165.742

191.901

NOTE 8. PROPERTY, PLANT AND EQUIPMENT


For the six-month periods ended June 30, 2012 and 2011, the additions and disposals on property, plant and
equipment are as follows:
Addition Through
Additions Business Combination

Transfers

Disposals (net)

June 30, 2012


Land and land improvements
Buildings
Machinery and equipment
Vehicles
Furniture and fixtures
Leasehold improvements
Construction in progress

1.423
3.527
43.273
6.462
123.607
28
90.556

2.903
224.547
601.110
20.424
129.483
55.801

1.037
4.979
55.004
66
15.608
(77.710)

(72)
(47)
(2.750)
(646)
(1.592)
(2)

268.876

1.034.268

(1.016)

(5.109)

460
1.543
12.456
3.803
110.072
9
190.084

10.124
9.185
430
3.440
438

645
12.845
57.057
2.376
11.397
573
(84.893)

(80)
(3.775)
(4.617)
(1.778)
(2.052)
(19)

318.427

23.617

(12.321)

June 30, 2011


Land and land improvements
Buildings
Machinery and equipment
Vehicles
Furniture and fixtures
Leasehold improvements
Construction in progress

(*) There are transfers to intangible assets in 2012 amounting to TRL1.016 (2011 None).
NOTE 9. INTANGIBLE ASSETS
For the six-month periods ended June 30, 2012 and 2011, additions on intangible assets are as follows:
Addition Through
Additions Business Combination

Transfers

Disposals (net)

June 30, 2012


Rights
Brands
Other intangible assets

June 30, 2011


Bottling and distribution agreements
Rights
Other intangible assets

524
1.990

7.841
152.453
5.534

1.016

2.514

165.828

1.016

545
1.929

8.798
34

2.474

8.832

(21)
F-26

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 10. GOODWILL


For the six-month periods ended June 30, 2012 and 2011, movements of the goodwill are as follows:
June 30, 2012

June 30, 2011

At January 1
Additions (Note 3)
Currency translation differences

912.645
2.203.067
(224.169)

871.079
7.384
77.121

At June 30

2.891.543

955.584

NOTE 11. EQUITY


The legal reserves consist of first and second legal reserves in accordance with the Turkish Commercial Code. The
first legal reserve is appropriated out of the statutory net income (inflation-restated income in accordance with CMB)
at the rate of 5%, until the total reserve reaches a maximum of 20% of the Companys issued capital (inflationrestated issued capital in accordance with the communiqus and announcements of CMB). The second legal reserve
is appropriated at the rate of 10% of all distributions in excess of 5% of the Companys issued capital (inflationrestated capital in accordance with CMB). The legal reserves are not available for distribution unless they exceed
50% of the issued capital, other than that legal reserves cannot be used.
Quoted companies are subject to dividend requirements regulated by the Capital Markets Board of Turkey. Based on
the CMB Decree 1/6, dated January 9, 2009, companies that take their consolidated financial statements as basis for
their distributable profit, shall consider the profits of their subsidiaries, joint ventures and associates to the extent
that such profits do not exceed the amount recorded in the statutory financial statements of these companies and
without considering whether a profit distribution resolution is taken at their annual general meetings. Such profits as
reported in the financial statement as per Communiqu shall be subject to distributable dividend computations.
In accordance with the CMB decision dated January 27, 2010, its decided to remove the obligation related with the
minimum dividend distribution rate for publicly traded companies.
Inflation adjustment to shareholders' equity and carrying amount of extraordinary reserves can only be used as an
internal source for capital increase and used in the distribution of dividends and be netted of against prior years
losses. However, when inflation adjustment to shareholders' equity is used for cash dividend distribution, it is subject
to income tax.

(22)
F-27

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 11. EQUITY (continued)


For June 30, 2012 and December 31, 2011, nominal amounts, equity restatement differences and restated value of
equity are as follows:
Nominal
Amount

June 30, 2012


Issued capital
Legal reserves
Extraordinary reserves

Equity Restatement
Differences

Restated
Amount

592.105
209.643
466.134

63.583
74.697
26.091

655.688
284.340
492.225

1.267.882

164.371

1.432.253

Share premium
Value increase funds
Currency translation differences
Other reserves
Accumulated profits (Including net income)

3.137.684
4.655
(95.861)
(5.736)
1.676.681

Equity attributable to equity holders of the parent

6.149.676
Nominal
Amount

December 31, 2011


Issued capital
Legal reserves
Extraordinary reserves

Equity Restatement
Differences

Restated
Amount

450.000
176.995
464.805

63.583
74.697
26.091

513.583
251.692
490.896

1.091.800

164.371

1.256.171

Value increase funds


Currency translation differences
Other reserves
Accumulated profits (Including net income)

7.822
289.853
(5.736)
1.595.811

Equity attributable to equity holders of the parent

3.143.921

On March 6, 2012 Anadolu Efes Board of Directors decided to increase the Companys issued capital to
TRL592.105, while the shareholders right to purchase new shares has been restricted and allocated the newly issued
142.105.263 bearer shares on the name of SABMiller AEL, a subsidiary of SABMiller. SABMiller AEL has made
the 142.105.263 share purchase transaction for full TRL23,08 per each share and TRL142.105 issued capital and
TRL3.137.684 share premium have been recorded according to this transaction.

(23)
F-28

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 12. COMMITMENTS AND CONTINGENCIES


Parent Company (Anadolu Efes) and Subsidiaries Included in Full Consolidation
As of June 30, 2012 and December 31, 2011 guarantees, pledges and mortgages (GPMs) given in favor of the parent
company and subsidiaries included in full consolidation are as follows:
June 30, 2012

A. GPMs given on behalf of the Companys legal


personality
B. GPMs given in favor of subsidiaries included in full
consolidation (1)
C. GPMs given by the Company for the liabilities of 3rd
parties in order to run ordinary course of business
D. Other GPMs
i. GPMs given in favor of parent company
ii. GPMs given in favor of group companies not in the
scope of B and C above
iii. GPMs given in favor of third party companies not in
the scope of C above
Total
Ratio of other GPMs over the Companys equity (%)

Total TRL
Equivalent

Original
Currency
TRL

Original
Currency
Thousand
USD

Original
Currency
Thousand
EUR

Original
Currency
Thousand
KZT

Original
Currency
Thousand
RUR

Original
Currency
Thousand
UAH

107.667

26.882

7.471

7.441

553.780

87.962

723.976

386.145

2.184.000

831.643

26.882

393.616

7.441

2.184.000

553.780

87.962

December 31, 2011

A. GPMs given on behalf of the Companys legal


personality
B. GPMs given in favor of subsidiaries included in full
consolidation (1)
C. GPMs given by the Company for the liabilities of 3rd
parties in order to run ordinary course of business
D. Other GPMs
i. GPMs given in favor of parent company
ii. GPMs given in favor of group companies not in the
scope of B and C above
iii. GPMs given in favor of third party companies not in
the scope of C above
Total
Ratio of other GPMs over the Companys equity (%)

Total TRL
Equivalent

Original
Currency
TRL

Original
Currency
Thousand
USD

Original
Currency
Thousand
EUR

Original
Currency
Thousand
KZT

Original
Currency
Thousand
RUR

57.831

11.712

18.424

3.482

16.564

49.879

819.437

364.428

40.000

2.177.325

160.000

877.268

11.712

382.852

43.482

2.193.889

209.879

(1) Comprises the GPMs given in favor of subsidiaries included in full consolidation for their borrowings.

EBI and Its Subsidiaries


Put Option
The put option granted to European Bank for Reconstruction and Development (EBRD) by EBI that may be
exercisable between the 7th and the 10th anniversaries of the date of EBRDs first subscription in the share capital of
Efes Moscow has been restructured and the exercisable period of the put option has been revised as between 2011
and 2015. By such put option, EBRD will be entitled to sell its Efes Moscow shares to EBI at an option price
determined by an independent valuation. The liability for the put option has been measured by applying a weighting
of different valuation techniques based on best estimates currently available, and the fair value of liability for put
option amounting to TRL84.025 has been presented in other current liabilities in the consolidated interim balance
sheet (December 31, 2011 TRL87.859).
CC, Its Subsidiaries and Joint Ventures
a) Put Option
A put option has been granted to Day Investments Ltd. by CC that may be exercisable in 2012. By such option, Day
Investments Ltd. will have right to sell its shares in Turkmenistan CC to CC at the price of USD2.360 thousand.
Groups portion of the liability for the put option amounting to TRL2.143 has been presented in other current
liabilities (December 31, 2011 TRL2.240).
(24)
F-29

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 12. COMMITMENTS AND CONTINGENCIES (continued)


CC, Its Subsidiaries and Joint Ventures (continued)
b) Letters of Guarantee
As of June 30, 2012, CCs letters of guarantee given to various enterprises are amounting to TRL218.104
(December 31, 2011 TRL212.285).
Operational Lease
As of June 30, 2012, Groups contingent liability for the following periods resulting from the non-cancellable
operational lease agreements is amounting to TRL26.957 (December 31, 2011 TRL24.155).
Tax and Legal Matters
Legislation and regulations regarding taxation and foreign currency transactions in most of the territories in which
the Group operates out of Turkey continue to evolve as a result of the transformation from command to marketoriented economy managed by the government. The various legislation and regulations are not always clearly
written and the interpretation related with the implementation of these regulations is subject to the opinions of the
local, regional and national tax authorities, the Central Bank and Ministry of Finance. Tax declarations, together
with other legal compliance areas (as examples, customs and currency control) are subject to review and
investigation by a number of authorities, who are enabled by law to impose significant fines, penalties and interest
charges. These facts create tax risks in the territories in which the Group operates substantially more so than
typically found in countries with more developed tax systems
.
NOTE 13. OTHER ASSETS AND LIABILITIES
a) Other Current Assets

Prepayments
Advances given to suppliers
Value Added Tax (VAT) deductible or VAT to be transferred
Prepaid taxes
Other

June 30, 2012

December 31, 2011

154.923
91.592
68.961
7.193
3.175

79.482
54.990
87.373
22.453
1.839

325.844

246.137

June 30, 2012

December 31, 2011

98.358
27.116
18.043
2.925

71.234
8.549
13.508
98

146.442

93.389

b) Other Non-Current Assets

Prepayments
Deferred VAT and other taxes
Advances given to suppliers
Other

(25)
F-30

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 13. OTHER ASSETS AND LIABILITIES (continued)


c)

Other Current Liabilities


June 30, 2012

December 31, 2011

99.964
86.168
23.112
14.443
401

20.108
90.099
18.770
6.458
545

224.088

135.980

June 30, 2012

December 31, 2011

27.058
718

8.505
836

27.776

9.341

Expense accruals
Liability for put option (Note 12)
Advances taken
Due to personnel
Other

d) Other Non-Current Liabilities

Deferred VAT and other taxes


Other

NOTE 14. OTHER OPERATING INCOME / EXPENSES


a) Other Operating Income
April 1
June 30, 2012

January 1
June 30, 2011

April 1
June 30, 2011

3.728
1.984
1.967
1.494

1.008
1.022
1.176
797

4.165
984
1.424
831

213
596
868
630

15.199

10.948

2.957
6.764

1.641

24.372

14.951

17.125

3.948

January 1
June 30, 2012

April 1
June 30, 2012

January 1
June 30, 2011

April 1
June 30, 2011

(12.618)
(1.421)
(6.087)

(8.029)
(1.226)
(4.268)

(10.292)
(1.737)
(6.064)
(2.925)

(6.601)
(1.601)
(6.064)
(160)

(20.126)

(13.523)

(21.018)

(14.426)

January 1
June 30, 2012
Gain on sale of fixed assets
Rent income
Income from scrap and other materials
Insurance income
Fair value increase related to change in
the scope of consolidation
Other income

b) Other Operating Expenses

Donations
Loss from fixed assets sales
Competition Board provision
Other expenses

(26)
F-31

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 15. FINANCIAL INCOME

Foreign exchange gain


Interest income
Gain from derivative financial instruments

January 1
June 30, 2011

April 1
June 30, 2011

January 1
June 30, 2012

April 1
June 30, 2012

167.384
35.510
481

38.983
16.771
82

86.155
32.843
605

40.493
13.333
327

203.375

55.836

119.603

54.153

January 1
June 30, 2012

April 1
June 30, 2012

January 1
June 30, 2011

April 1
June 30, 2011

(155.251)
(35.549)
(708)
(2.017)

(101.929)
(18.178)
(372)
(583)

(89.962)
(34.864)
(630)
(83)
(1.982)

(59.010)
(15.678)
(304)
(1.199)

(193.525)

(121.062)

(127.521)

(76.191)

NOTE 16. FINANCIAL EXPENSES

Foreign exchange loss


Interest expense
Loss from derivative financial instruments
Syndication loan expense
Other financial expenses

NOTE 17. INCOME TAXES, DEFERRED TAX ASSETS AND LIABILITIES


The corporation tax rate for the fiscal year is 20% in Turkey (2011 - 20%). Corporate tax returns are required to be
filed until the twenty fifth of the fourth month following the fiscal year end and paid in full until the end of the same
month. The tax legislation provides for a provisional tax of 20% (2011 20%) to be calculated and paid based on
earnings generated for each quarter. The amounts thus calculated and paid are offset against the final corporate tax
liability for the fiscal year.
According to the Turkish Tax Law, corporate tax losses can be carried forward for a maximum period of five years
following the year in which the losses were incurred. The tax authorities can inspect tax returns and the related
accounting records for a retrospective maximum period of five years. In Turkey, the tax legislation does not permit
to file a consolidated tax return. Therefore, provision for taxes, as reflected in the consolidated financial statements,
has been calculated on a separate-entity basis.
As of June 30, 2012 and December 31, 2011 consolidated deferred tax assets and liabilities calculated by using
effective tax rates are summarized as below:
Assets
June 30, December 31,
2011
2012
PPE and intangible assets
Inventories
Carry forward losses
Retirement pay liability and
other employee benefits
Other provisions
Other (*)

Liabilities
June 30, December 31,
2011
2012

Net
December
June 30,
31, 2011
2012

19.852
95.432

5.329
100.710

(204.444)
-

(133.991)
-

(204.444)
19.852
95.432

(133.991)
5.329
100.710

16.125
34.231
44.668

14.965
2.487
20.635

16.125
34.231
44.668

14.965
2.487
20.635

210.308

144.126

(204.444)

(133.991)

5.864

10.135

(*) Includes the income tax paid regarding the disputed tax receivable from tax authorities which was not recognized
as income.
(27)
F-32

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 18. EARNINGS PER SHARE


Basic earnings per share is calculated by dividing the net income for the period attributable to ordinary shareholders
by the weighted average number of ordinary shares outstanding during the period.
Following table illustrates the net income and share figures used in earnings per share calculation:
January 1
June 30, 2012
Net income
Weighted average number of shares
Earnings per share (full TRL)

335.650
540.572.585
0,6209

April 1
June 30, 2012

January 1
June 30, 2011

April 1
June 30, 2011

233.280
592.105.263
0,3940

241.490
450.000.000
0,5366

184.788
450.000.000
0,4106

Number of shares, which was 450.000.000 as of December 31, 2011, has been increased with the Groups decision
of issued capital increase to full TRL592.105.263 at March 6, 2012 and additional 142.105.263 shares have been
registered by CMB on March 8, 2012.
Weighted average number of shares represents the number of shares as a result of capital increase and adjusted
number of shares at the beginning period multiplied with the time-weighting factor. Time weighting factor is
calculated by dividing the number of days that the shares are available by the total number of days of the period.
There have been no other transactions involving ordinary shares or potential ordinary shares between the financial
statement date and the date of approval of these financial statements.
NOTE 19. DIVIDENDS PAID
The Group distributed dividend in 2011, related with the year ended as of December 31, 2011, for a gross amount
of full TRL0,45 per share, amounting to a total of TRL221.024 including the payments to founders and members of
board of directors (2011 gross amount full TRL0,48 per share, total amount TRL246.532 including the payments
to founders and member of board of directors).
NOTE 20. RELATED PARTY BALANCES AND TRANSACTIONS
a) Balances with Related Parties
Bank and Available-For-Sale Securities Balances With Related Parties
June 30, 2012 December 31, 2011
Alternatifbank (2) (4)
Alternatif Yatrm A.. (4)

162.383
1.441

338.679
1.207

163.824

339.886

As of June 30, 2012, maturities of time deposits on Alternatifbank are less than three months and the weighted
average interest rates for TRL denominated time deposits is 10,98% (December 31, 2011 12,04%) and USD
denominated time deposits is 3,92% (December 31, 2011 5,46%)
(1)
(2)
(3)
(4)
(5)

Related party of Yazclar Holding A.. (a shareholder)


Non-current financial investment of the Group
The shareholder of the Group
Related party of AEH (a shareholder)
Related parties of SABMiller AEL (a shareholder)

(28)
F-33

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 20. RELATED PARTY BALANCES AND TRANSACTIONS (continued)


a) Balances with Related Parties (Continued)
Due from Related Parties
June 30, 2012

December 31, 2011

17
22

14
86

39

100

Anadolu Restoran letmeleri Ltd. ti. (4)


Dier
Due to Related Parties

June 30, 2012

Anadolu Efes Spor Kulb


SABMiller Group Companies (5)
Oyex Handels GmbH (4)
Anadolu Biliim Hizmetleri A.. (2) (4)
AEH (1) (3)
Efes Turizm letmeleri A..(4)
elik Motor Ticaret A.. (4)
Anadolu Vakf
Dier

December 31, 2011

29.168
27.322
6.476
1.590
1.492
691
121

2.133
860
3.846
445
636
925
329

576

9.174

67.436

b) Transactions with Related Parties


Purchases of Goods, Services and Donations
January 1
June 30,
2012

Nature of
transaction
Anadolu Efes Spor Kulb (6)

Service
Service and purchase
SABMiller Group Companies (5)
of finished goods
Purchase of materials
Oyex Handels GmbH (4)
and fixed asset
Anadolu Vakf
Donations
AEH (1) (3)
Consultancy service
elik Motor Ticaret A.. (4)
Rent a car
Travel and
Efes Turizm letmeleri A.. (4)
accomodation
Anadolu Biliim Hizmetleri A.. (2) (4)
Information service
Purchase of materials
AEH Mnih(4)
and fixed asset
Anadolu Isuzu Otomotiv San. ve Tic. A.. (1) Rent expense
Other

April 1
June 30,
2012

January 1
June 30,
2011

April 1
June 30,
2011

33.045

15.545

22.500

26.034

20.488

17.808
12.515
8.342
7.756

10.453
7.952
4.225
3.860

16.528
10.277
8.056
6.713

12.796
6.586
4.166
3.940

4.458
4.201

2.232
1.934

2.929
6.088

1.911
3.055

3.141
605
302

686
300
141

3.025
512
278

1.645
267
159

118.207

67.816

76.906

34.525

Financial Income / (Expense), Net


January 1
June 30,
2012

Nature of
transaction

Alternatifbank(2) (4)
Other

(1)
(2)
(3)
(4)
(5)

Interest gain / (loss), net

Related party of Yazclar Holding A.. (a shareholder)


Non-current financial investment of the Group
The shareholder of the Group
Related party of AEH (a shareholder)
Related parties of SABMiller AEL (a shareholder)

(29)
F-34

April 1
June 30,
2012

January 1
June 30,
2011

April 1
June 30,
2011

18.355
(115)

9.058
(115)

8.446
(82)

5.532
(40)

18.240

8.943

8.364

5.492

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 20. RELATED PARTY BALANCES AND TRANSACTIONS (continued)


b) Transactions with Related Parties (continued)
Other Income / (Expense), Net
January 1
June 30,
2012

Nature of
transaction
Alternatifbank (2) (4)
Anadolu Efes Spor Klb
Anadolu Restoran l. Ltd. ti. (4)
Dier

(1)
(2)
(3)
(4)
(5)

Rent income
Rent income
Scrap sales

April 1
June 30,
2012

January 1
June 30,
2011

April 1
June 30,
2011

57
40
58

25
20
10

51
42
116
51

23
21
63
37

155

55

260

144

Related party of Yazclar Holding A.. (a shareholder)


Non-current financial investment of the Group
The shareholder of the Group
Related party of AEH (a shareholder)
Related parties of SABMiller AEL (a shareholder)

Directors remuneration
Dividends paid to Board of Directors of Anadolu Efes are amounting to TRL13.154 and TRL21.682 as of June 30,
2012 and 2011, respectively. Remuneration and similar benefits received by total executive members of the Board of
Directors and executive directors in the period are as follows:

Short-term employee benefits


Post-employment benefits
Other long term benefits
Termination benefits
Share-based payments

January 1
June 30,
2012

April 1
June 30,
2012

6.285
4.750
11.035

2.050
4.127
6.177

January 1
June 30,
2011
6.547
1.258
7.805

April 1
June 30,
2011
3.283
3.283

NOTE 21. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS
The Groups principal financial instruments comprise bank borrowings, finance leases, cash and short-term deposits.
The main purpose of these financial instruments is to raise funds for the Groups operations. Besides, The Group has
various other financial instruments such as trade debtors and trade creditors, which arise directly from its operations.
The main risks arising from the Groups financial instruments can be identified as foreign currency risk, credit risk,
interest rate risk, price risk and liquidity risk. The board/management reviews and agrees policies for managing each
of these risks. The Group also monitors the market price risk arising from all financial instruments. Related policies
can be summarized as follows:
a) Interest Rate Risk
The Group is exposed to interest rate risk through the impact of rate changes on interest bearing assets and liabilities.
The Group manages interest rate risk by using natural hedges that arise from offsetting interest rate of assets and
liabilities or derivative financial instruments.
Certain parts of the interest rates related to borrowings are based on market interest rates; therefore the Group is
exposed to interest rate fluctuations on domestic and international markets. The Groups exposure to market risk for
changes in interest rates relates primarily to the Groups debt obligations.

(30)
F-35

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 21. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS (continued)
b) Foreign Currency Risk
Foreign currency risk arises from the EURO and USD denominated assets and liabilities of the Group. The
Group has transactional currency exposures. Such exposures arise from sales or purchases or borrowings by the
Group in currencies other than the Groups functional currency. The Group manages foreign currency risk by
using natural hedges that arise from offsetting foreign currency denominated assets and liabilities
Net foreign currency exposure for the consolidated Group companies as of June 30, 2012 and December 31,
2011 are presented below:
Foreign Currency Position Table
June 30, 2012
Total TRL
Equivalent
(Functional
Thousand
Currency)
USD
1. Trade Receivables and Due from Related Parties
2a. Monetary Financial Assets (Cash and cash equivalents included)
2b. Non- monetary Financial Assets
3. Other Current Assets and Receivables
4. Current Assets
5. Trade Receivables and Due from Related Parties
6a. Monetary Financial Assets
6b. Non-monetary Financial Assets
7. Other
8. Non-Current Assets
9. Total Assets
10.Trade Payables and Due to Related Parties
11.Short- term Borrowings and Current Portion of Long- term Borrowings
12a. Monetary Other Liabilities
12b. Non-monetary Other Liabilities
13. Current Liabilities
14. Trade Payables and Due to Related Parties
15. Long-Term Borrowings
16 a. Monetary Other Liabilities
16 b. Non-monetary Other Liabilities
17. Non-Current Liabilities
18. Total Liabilities
19. Off Balance Sheet Derivative Items Net Asset/(Liability) Position
19a. Total Hedged Assets
19b. Total Hedged Liabilities
20. Net Foreign Currency Asset / (Liability) Position
21. Monetary Items Net Foreign Currency Asset / (Liability) Position
22. Total Fair Value of Financial Instruments Used to Manage the
Foreign Currency Position
23.Total value of Hedged Foreign Currency Assets

TRL
Equivalent

Thousand
EURO

31.550
444.968
15.974
492.492
819
819
493.311
(123.979)
(451.419)
(14.670)
(590.068)
(1.068.280)
(1.068.280)
(1.658.348)
(1.165.037)
(1.181.830)

9.721
215.796
2
225.519
8
8
225.527
(22.059)
(249.330)
(1.186)
(272.575)
(560.659)
(560.659)
(833.234)
(607.707)
(607.717)

17.561
389.836
3
407.400
15
15
407.415
(39.850)
(450.415)
(2.143)
(492.408)
(1.012.830)
(1.012.830)
(1.505.238)
(1.097.823)
(1.097.841)

789
9.884
243
10.916
152
152
11.068
(28.381)
(441)
(132)
(28.954)
(24.382)
(24.382)
(53.336)
(42.268)
(42.663)

1.795
22.478
552
24.825
346
346
25.171
(64.545)
(1.004)
(301)
(65.850)
(55.450)
(55.450)
(121.300)
(96.129)
(97.027)

12.194
32.654
15.419
60.267
458
458
60.725
(19.584)
(12.226)
(31.810)
(31.810)
28.915
13.038

Foreign Currency Position Table


December 31, 2011
Total TRL
Equivalent
(Functional
Thousand
TRL
Currency)
USD
Equivalent
1. Trade Receivables and Due from Related Parties
2a. Monetary Financial Assets (Cash and cash equivalents included)
2b. Non- monetary Financial Assets
3. Other Current Assets and Receivables
4. Current Assets
5. Trade Receivables and Due from Related Parties
6a. Monetary Financial Assets
6b. Non-monetary Financial Assets
7. Other
8. Non-Current Assets
9. Total Assets
10.Trade Payables and Due to Related Parties
11.Short- term Borrowings and Current Portion of Long- term Borrowings
12a. Monetary Other Liabilities
12b. Non-monetary Other Liabilities
13. Current Liabilities
14. Trade Payables and Due to Related Parties
15. Long-Term Borrowings
16 a. Monetary Other Liabilities
16 b. Non-monetary Other Liabilities
17. Non-Current Liabilities
18. Total Liabilities
19. Off Balance Sheet Derivative Items Net Asset/(Liability) Position
19a. Total Hedged Assets
19b. Total Hedged Liabilities
20. Net Foreign Currency Asset / (Liability) Position
21. Monetary Items Net Foreign Currency Asset / (Liability) Position
22. Total Fair Value of Financial Instruments Used to Manage the Foreign
Currency Position
23.Total value of Hedged Foreign Currency Assets

Other Foreign
Currency TRL
Equivalent

TRL
Equivalent

Thousand
EURO

Other Foreign
Currency TRL
Equivalent

TRL
Equivalent

18.802
283.009
12.798
314.609
1.818
1.818
316.427
(76.392)
(399.256)
(10.532)
(486.180)
(937.221)
(937.221)
(1.423.401)
(1.106.974)
(1.121.590)

4.768
127.522
6
132.296
226
226
132.522
(4.744)
(158.675)
(1.186)
(164.605)
(467.422)
(467.422)
(632.027)
(499.505)
(499.737)

9.007
240.877
11
249.895
426
426
250.321
(8.961)
(299.722)
(2.241)
(310.924)
(882.913)
(882.913)
(1.193.837)
(943.516)
(943.953)

589
13.953
146
14.688
369
369
15.057
(23.588)
(42.369)
(134)
(66.091)
(23.118)
(23.118)
(89.209)
(74.152)
(74.667)

1.383
32.779
342
34.504
867
867
35.371
(55.412)
(99.534)
(314)
(155.260)
(54.308)
(54.308)
(209.568)
(174.197)
(175.406)

8.412
9.353
12.445
30.210
525
525
30.735
(12.019)
(7.977)
(19.996)
(19.996)
10.739
(2.231)

(31)
F-36

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 21. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS (continued)
b) Foreign Currency Risk (continued)
The information regarding the export and import figures realized as of June 30, 2012 and 2011 is as follows:

Total Export
Total Import

January 1
June 30, 2012

April 1
June 30, 2012

January 1
June 30, 2011

93.044
435.974

60.197
251.702

66.654
414.651

April 1
June 30, 2011
41.214
252.096

The following table demonstrates the sensitivity analysis of foreign currency as of June 30, 2012 and 2011:
Foreign Currency Position Sensitivity Analysis
June 30, 2012
Income / (Loss)
Equity
Decrease of
Increase of
Decrease of
Increase of
the foreign
the foreign
the foreign
the foreign
currency
currency
currency
currency
Increase / decrease in USD by 10%:
USD denominated net asset / (liability)
USD denominated hedging instruments(-)
Net effect in USD
Increase / decrease in EURO by 10%:
EURO denominated net asset / (liability)
EURO denominated hedging instruments(-)
Net effect in EURO
Increase / decrease in other foreign currencies by 10%:
Other foreign currency denominated net asset / (liability)
Other foreign currency hedging instruments(-)
Net effect in other foreign currency
TOTAL

(109.782)
(109.782)

109.782
109.782

450.539
450.539

(450.539)
(450.539)

(9.613)
(9.613)

9.613
9.613

3.494
3.494

(3.494)
(3.494)

2.892
2.892

(2.892)
(2.892)

(116.503)

116.503

454.033

(454.033)

Foreign Currency Position Sensitivity Analysis


June 30, 2011
Income / (Loss)
Equity
Increase of
Decrease of
Increase of
Decrease of
the foreign
the foreign
the foreign
the foreign
currency
currency
currency
currency
Increase / decrease in USD by 10%:
USD denominated net asset / (liability)
USD denominated hedging instruments(-)
Net effect in USD
Increase / decrease in EURO by 10%:
EURO denominated net asset / (liability)
EURO denominated hedging instruments(-)
Net effect in EURO
Increase / decrease in other foreign currencies by 10%:
Other foreign currency denominated net asset / (liability)
Other foreign currency hedging instruments(-)
Net effect in other foreign currency
TOTAL

(78.814)
(78.814)

78.814
78.814

132.531
132.531

(132.531)
(132.531)

(25.456)
(25.456)

25.456
25.456

2.780
2.780

(2.780)
(2.780)

2.023
2.023

(2.023)
(2.023)

(102.247)

102.247

135.311

(135.311)

c) Liquidity Risk
Liquidity risk is the risk that an entity will be unable to meet its net funding requirements. The risk is mitigated by
matching the cash in and out flow volume supported by committed lending limits from qualified credit institutions.

(32)
F-37

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 21. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS (continued)
d) Price Risk
This is a combination of currency, interest and market risks which the Group manages through natural hedges
that arise from offsetting the same currency receivables and payables, interest bearing assets and liabilities.
Market risk is closely monitored by the management using the available market information and appropriate
valuation methods.
e) Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the
other party to incur a financial loss. The Group attempts to control credit risk by limiting transactions with
specific counterparties and continually assessing the creditworthiness of the counterparties.
Concentrations of credit risk arise when a number of counterparties are engaged in similar business activities or
activities in the same geographic region, or have similar economic features that would cause their ability to meet
contractual obligations to be similarly affected by changes in economic, political or other conditions.
Concentrations of credit risk indicate the relative sensitivity of the Group's performance to developments
affecting a particular industry or geographic location.
The Group seeks to manage its credit risk exposure through diversification of sales activities to avoid undue
concentrations of risks with individuals or groups of customers in specific locations or businesses. The Group
also obtains guarantees from the customers when appropriate.
f) Capital Risk Management
The Groups policy is to ensure that it maintains a strong credit rating and healthy capital ratios in order to
support its business and maximize shareholder value. The Group periodically measures Net Debt to EBITDA
ratio to maintain capital risk management. Net Debt is calculated by deducting cash and cash equivalents from
total borrowings.
NOTE 22. FINANCIAL INSTRUMENTS
Fair Values
Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable, willing
parties in an arm's length transaction. The optimum fair value of a financial instrument is the quoted market value, if
any.
The financial assets and liabilities which are denominated in foreign currencies are evaluated by the foreign
exchange rates prevailing on the date of balance sheet which approximate to market rates. The following methods
and assumptions were used to estimate the fair value of each class of financial instrument of the Group for which it
is practicable to estimate a fair value:
a) Financial Assets
The fair values of certain financial assets carried at cost in the interim condensed consolidated financial
statements, including cash and cash equivalents plus the respective accrued interest and other financial assets are
considered to approximate their respective carrying values due to their short-term nature and negligible credit
losses. The carrying value of trade receivables along with the related allowance for unearned income and
uncollectibility are estimated to be their fair values.
b) Financial Liabilities
Trade payables and other monetary liabilities are considered to approximate their respective carrying values due
to their short-term nature. The bank borrowings are stated at their amortized costs and transaction costs are
included in the initial measurement of loans and bank borrowings. The fair value of bank borrowings are
considered to state their respective carrying values since the interest rate applied to bank loans and borrowings
are updated periodically by the lender to reflect active market price quotations. The carrying value of trade
payables along with the related allowance for unrealized cost is estimated to be their fair values.
(33)
F-38

Convenience Translation of Financial Statements Originally Issued in Turkish


Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As at June 30, 2012


(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

NOTE 22. FINANCIAL INSTRUMENTS (continued)


Derivative Financial Instruments, Risk Management Objectives and Policies
Derivative financial instruments are initially measured at cost. After initial recognition, derivatives are measured at
fair value. Groups newly acquired subsidiary SABM RUS had entered into cash flow hedge contracts, before the
date of acquisition; to hedge its exposure for the changes in foreign currency rates; which effects the cash outflows
for planned raw and packaging material purchases.
The notional amount of these contracts is USD8.095.247 and EURO1.004.575 as of June 30, 2012 and fair value
difference amounting to TRL52 has been reflected to other current assets in the interim consolidated financial
statements. The Group has recognized unrealized gain in the interim consolidated income statement as of June 30,
2012.
NOTE 23. SUBSEQUENT EVENTS
None.
................................

(34)
F-39

CONVENIENCE TRANSLATION INTO ENGLISH OF


CONSOLIDATED FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH

ANADOLU EFES BRACILIK VE


MALT SANAY ANONM RKET
CONSOLIDATED FINANCIAL STATEMENTS
AS OF 31 DECEMBER 2011
TOGETHER WITH INDEPENDENT AUDITORS REPORT

F-40

CON
NVENIENC
CE TRANSL
LATION INT
TO ENGLIS
SH OF
INDEP
PENDENT AUDITORS
A
S REPORT
ORIGIINALLY ISS
SUED IN TU
URKISH
INDEP
PENDENT AUDITORS
A
S REPORT
o the Board o
of Directos off
To
An
nadolu Efes B
Biraclk ve M
Malt Sanayii A..
A
1.

We havee audited the accompanying consolidaated financiall statements of Anadolu E


Efes Biraclk
k ve
Malt San
nayii A.., itss subsidiariess and joint veentures (colleectively referrred to as the Group), wh
hich
comprisee the consolidated balancce sheet at 311 December 2
2011 and the consolidated
d statement o
of
income, consolidated
d statement o
of comprehen
nsive incomee, consolidateed statement of changes in
n
equity an
nd consolidaated cash flow
w statement ffor the year th
hen ended, aand a summaary of significcant
accountiing policies aand other exp
planatory nottes.

Grroup Manageements Resp


ponsibility fo
or the Financcial Statemen
nts
2.

The Grou
up managem
ment is respon
nsible for thee preparation
n and fair preesentation of these
consolid
dated financiaal statementss in accordan
nce with the ffinancial repo
orting standaards accepted
d by
the Capiital Markets B
Board (CMB
B). This resp
ponsibility includes: desig
gning, implem
menting and
maintain
ning internall control relevvant to the prroper preparration of financial statemeents that are free
from maaterial misstaatement, wheether due to ffraud or errorr; selecting aand applying appropriate
accountiing policies; and
a making aaccounting eestimates thatt are reasona
able in the cirrcumstances.

uditors Resp
ponsibility
Au
3.

Our resp
ponsibility is to express an
n opinion on these consollidated finan
ncial statemen
nts based on our
audit. W
We conducted
d our audit in accordance w
with auditing
g standards iissued by thee CMB. Thosee
Standard
ds require th
hat we complyy with ethicall requiremen
nts and plan and
a perform the audit to
obtain reeasonable asssurance whetther the conssolidated finaancial statem
ments are freee of material
misstateement.
An auditt involves perrforming pro
ocedures to ob
btain audit eevidence abou
ut the amoun
nts and
disclosurres in the fin
nancial statem
ments. The prrocedures sellected depen
nd on the aud
ditors judgmeent,
includin
ng the assessm
ment of the riisks of materrial misstatem
ment of the fiinancial stateements, whetther
due to frraud or error. In making tthose risk asssessments, th
he auditor co
onsiders interrnal control
relevant to the entityys proper preeparation of tthe financial statements iin order to deesign audit
procedures that are aappropriate iin the circum
mstances, but not for the p
purpose of exxpressing an
he entitys internal controll. An audit allso includes eevaluating th
he
opinion on the effecttiveness of th
appropriiateness of acccounting po
olicies used and the reason
nableness off accounting eestimates maade
by manaagement, as well
w as evaluaating the overrall presentaation of the fin
nancial stateements.
We belieeve that the aaudit evidencce we have ob
btained is suffficient and aappropriate to
o provide a b
basis
for our aaudit opinion
n.

F-41

Op
pinion
4.

In our op
pinion, the accompanying
g consolidateed financial statements
s
prresent fairly, in all materiial
respects, the financiaal position off Anadolu Efees Biraclk vee Malt Sanayyii A.. as of 3
31 Decemberr
nd its financiaal performan
nce and its cassh flows for tthe year then
n ended in acccordance witth the
2011, an
2
financiall reporting sttandards acceepted by the CMB (Note 2).

dditional Parragraph for C


Conveniencee Translation
n into English
h
Ad
5.

The acco
ounting princciples describ
bed in Note 2 to the conso
olidated finan
ncial statemeents differ fro
om
Internattional Financcial Reporting
g Standards (IFRS)
(
issu
ued by the Intternational Accounting
A
Standard
ds Board with
h respect to tthe applicatio
on of inflatio
on accounting
g for the period 1 Januaryy 31 Decem
mber 2005. A
Accordingly, the accompaanying consollidated finan
ncial statemen
nts are not
intended
d to present tthe financial position and
d results of op
perations of tthe Group in accordance w
with
IFRS.

aaran Nas Bamsz Deneetim ve


Ba
Seerbest Muhassebeci Mali M
Mavirlik A.
.
am
member of
PrricewaterhouseCoopers

urak zpoyra
az, SMMM
Bu
Paartner
Isttanbul, 29 March 2012

2o
of 2

F-42

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
Consolidated Financial Statements as of 31 December 2011
TABLE OF CONTENTS
Page
Consolidated Balance Sheet ........................................................................................................................................ 1
Consolidated Income Statement ................................................................................................................................. 2
Consolidated Statement of Comprehensive Income ................................................................................................. 3
Consolidated Statement of Changes in Equity .......................................................................................................... 4
Consolidated Statement of Cash Flow ....................................................................................................................... 5
Notes to the Consolidated Financial Statements ................................................................................................. 6-56
Note 1
Note 2
Note 3
Note 4
Note 5
Note 6
Note 7
Note 8
Note 9
Note 10
Note 11
Note 12
Note 13
Note 14
Note 15
Note 16
Note 17
Note 18
Note 19
Note 20
Note 21
Note 22
Note 23
Note 24
Note 25
Note 26
Note 27
Note 28
Note 29
Note 30
Note 31
Note 32
Note 33
Note 34
Note 35
Note 36
Note 37
Note 38
Note 39
Note 40

Groups Organization and Nature of Activities ............................................................................ 6-8


Basis of Presentation of Consolidated Financial Statements ...................................................... 9-23
Business Combinations ............................................................................................................. 24-25
Joint Ventures ................................................................................................................................. 26
Segment Information................................................................................................................. 26-27
Cash and Cash Equivalents ............................................................................................................. 28
Financial Investments ..................................................................................................................... 28
Borrowings................................................................................................................................ 29-30
Other Financial Liabilities .............................................................................................................. 30
Trade Receivables and Payables ..................................................................................................... 31
Other Receivables and Payables ............................................................................................... 31-32
Receivables and Payables Related to Finance Sector...................................................................... 32
Inventories....................................................................................................................................... 32
Biological Assets ............................................................................................................................ 33
Receivables and Deferred Income from Continuing Construction Contracts ................................. 33
Investments in Associates. .............................................................................................................. 33
Investment Property ........................................................................................................................ 33
Property, Plant and Equipment ................................................................................................. 34-35
Intangible Assets ....................................................................................................................... 36-37
Goodwill ......................................................................................................................................... 38
Government Incentives and Grants ................................................................................................. 38
Provisions, Contingent Assets and Liabilities ................................................................................. 38
Commitments and Contingencies ............................................................................................. 39-40
Employee Benefits .................................................................................................................... 40-41
Pension Plans .................................................................................................................................. 41
Other Assets and Liabilities ...................................................................................................... 41-42
Equity ........................................................................................................................................ 42-43
Sales and Cost of Sales ................................................................................................................... 44
Operating Expenses......................................................................................................................... 44
Expenses by Nature......................................................................................................................... 45
Other Operating Income / Expenses................................................................................................ 45
Financial Income ............................................................................................................................. 46
Financial Expenses.......................................................................................................................... 46
Non-Current Assets Available For Sale and Discontinuing Operations ........................................ 46
Income Taxes, Deferred Tax Assets and Liabilities.................................................................. 46-47
Earnings per Share .......................................................................................................................... 48
Related Party Balances and Transactions.................................................................................. 48-49
Nature and Level of Risks Arising From Financial Instruments ............................................... 50-54
Financial Instruments ................................................................................................................ 55-56
Subsequent Events .......................................................................................................................... 56

F-43

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONSOLIDATED BALANCE SHEET
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
Notes

Audited
2011

2010

ASSETS
Current Assets
Cash and Cash Equivalents
Financial Investments
Trade Receivables
Due from Related Parties
Other Receivables
Inventories
Other Current Assets

6
7
10
37
11
13
26

2.343.252
917.629
22.602
578.428
100
16.877
561.479
246.137

2.140.817
939.324
55.090
518.251
337
7.919
467.864
152.032

Non-Current Assets
Other Receivables
Financial Investments
Investments in Associates
Biological Assets
Property, Plant and Equipment
Intangible Assets
Goodwill
Deferred Tax Assets
Other Non-Current Assets

11
7
16
14
18
19
20
35
26

4.077.457
1.610
25.180
18.447
6.457
2.510.259
447.045
912.645
62.425
93.389

3.448.014
1.325
37.488
21.441
1.512
2.043.794
361.889
871.079
40.008
69.478

6.420.709

5.588.831

1.757.195
996.113
253.332
8.646
290.846
15.292
23.676
169.290

Total Assets
LIABILITIES
Current Liabilities
Borrowings
Trade Payables
Due to Related Parties
Other Payables
Provision for Corporate Tax
Provisions
Other Current Liabilities

22
26

1.628.590
795.644
307.569
9.174
342.768
9.415
28.040
135.980

Non-Current Liabilities
Borrowings
Other Payables
Provision for Employee Benefits
Deferred Tax Liabilities
Other Non-Current Liabilities

8
11
24
35
26

1.585.239
1.303.833
165.742
54.033
52.290
9.341

1.016.631
768.383
144.366
51.337
42.843
9.702

3.206.880
3.143.921
450.000
63.583
7.822
289.853
176.995
(5.736)
1.820.229
341.175

2.815.005
2.767.087
450.000
63.583
19.569
(4.085)
138.442
(5.736)
1.601.674
503.640

8
10
37
11

Equity
Equity Attributable to Equity Holders of the Parent
Issued Capital
Inflation Adjustment to Issued Capital
Fair Value Reserve
Currency Translation Differences
Restricted Reserves Allocated from Net Income
Other Reserves
Accumulated Profits
Net Income

27
27
27
27
27
27
27

Minority Interests
Total Liabilities

62.959

47.918

6.420.709

5.588.831

The accompanying notes form an integral part of these consolidated financial statements.
(1)
F-44

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONSOLIDATED INCOME STATEMENT
For the year ended December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

Audited
Notes

2011

2010

Continuing Operations
Sales
Cost of Sales (-)

5, 28
28

Gross Profit From Operations


29
29
31
31

Marketing, Selling and Distribution Expenses (-)


General and Administration Expenses (-)
Other Operating Income
Other Operating Expenses (-)

4.761.266
(2.479.550)

4.168.793
(2.051.348)

2.281.716

2.117.445

(1.262.777)
(414.838)
43.074
(42.055)

(1.060.488)
(353.951)
25.022
(34.404)

605.120

693.624

(6.785)
240.686
(374.040)

(17.910)
244.302
(261.464)

464.981

658.552

(117.476)
11.967

(127.846)
(12.265)

Profit For The Year

359.472

518.441

Attributable to:
Minority interests
Equity holders of the parent

18.297
341.175

14.801
503.640

0,7582

1,1192

Profit From Operations


16
32
33

Loss from Associates


Financial Income
Financial Expenses (-)
Profit Before Tax From Continuing Operations
Continuing Operations Tax Income / (Expense)
Current Period Tax Expense (-)
Deferred Tax Income / (Expense)

35
35

36

Earnings per share (Full TRL)

The accompanying notes form an integral part of these consolidated financial statements.
(2)
F-45

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
Notes
Profit for the Year

Audited
2011
359.472

2010
518.441

Other Comprehensive Income:


Currency Translation Differences
Value Increase / (Decrease) in Available-for-Sale Securities
Tax Income / (Expense) on Other Comprehensive Income

303.231
(12.365)
618

25.202
2.347
(117)

Other Comprehensive Income, (Net of Taxes)

291.484

27.432

Total Comprehensive Income

650.956

545.873

Attributable to:
Minority Interests
Equity Holders of the Parent

27.590
623.366

26.072
519.801

7
7

The accompanying notes form an integral part of these consolidated financial statements.
(3)
F-46

Balance at December 31, 2011

Other comprehensive income


Profit for the year
Total comprehensive income
Transfer of previous year net income
to the accumulated profits
Dividends paid (Note 27)
Dividends paid to minority interests
Change in minority shares

Balance at December 31, 2010

Other comprehensive income


Profit for the year
Total comprehensive income
Transfer of previous year net income to
the accumulated profits
Dividends paid (Note 27)
Acquisition of minority shares (Note 3)

Balance at December 31, 2009

7.822

(11.747)
(11.747)

19.569

2.230
2.230

289.853

293.938
293.938

(4.085)

13.931
13.931

Fair
Currency
Value Translation
Reserve Differences
17.339
(18.016)

176.995

38.553

138.442

30.225

(253.609)

503.640
503.640

(5.736)

(5.736)

341.175

(246.532)
-

(257.108)

341.175
341.175

503.640

1.820.229

F-47

(4)

218.555

1.601.674

223.384

Net Accumulated
Income
Profits
422.588
1.378.290

- (168.979)
(10.652)
-

Restricted
Reserves
Allocated
from Net
Other
Income Reserves
108.217
4.916

The accompanying notes form an integral part of these consolidated financial statements.

63.583

450.000

63.583

450.000

Inflation
Adjustment
Issued
to Issued
Capital
Capital
450.000
63.583

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


For the year ended December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL)

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi

11.271
14.801
26.072

27.432
518.441
545.873

3.143.921

(246.532)
-

282.191
341.175
623.366

2.767.087

291.484
359.472
650.956

62.959 3.206.880

- (246.532)
(12.320) (12.320)
(229)
(229)

9.293
18.297
27.590

47.918 2.815.005

(168.979)
- (168.979)
(10.652) (285.415) (296.067)

16.161
503.640
519.801

Equity
Attributable
to Equity
Holders of Minority
Total
the Parent Interests Equity
2.426.917
307.261 2.734.178

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
Notes
Cash flows from operating activities
Continuing operations profit before tax
Adjustments for:
Depreciation and amortization expenses
5, 18, 19, 30
(Gain)/loss on sale of property, plant and equipment and intangible assets, net
31
Provision for retirement pay liability
5, 24, 28, 29
Provision for vacation pay liability
5, 22
Provision / (reversal of provision) for inventory obsolescence, net
5, 13
Provision / (reversal of provision) for doubtful receivables, net
5, 10
Provision for long term incentive plan
(Impairment reversal) / impairment on property, plant and equipment, net
5, 18, 31
Foreign exchange (gain) / loss raised from loans, net
Interest expense
33
Interest income
32
(Gain) / loss from derivative financial instruments
32, 33
Syndication loan expense
33
Fair value increase related to change in scope of consolidation
3, 5, 31
Loss from associates
5, 16
Other (income) / expense, net

Audited
2010
2011
464.981

658.552

335.607
(3.640)
10.353
3.258
(4.104)
494
7.261
1.374
157.471
64.934
(59.286)
71
886
(2.957)
6.785
(216)

301.031
(384)
12.487
3.124
941
1.064
7.241
2.079
(5.442)
77.534
(71.669)
224
10.073
17.910
(211)

Operating profit before changes in operating assets and liabilities

983.272

Change in trade receivables


Change in due from related parties
Change in inventories
Change in other assets, other liabilities and provisions
Change in trade payables
Change in due to related parties
Vacation pay, retirement pay liability and long term incentive plan paid
Taxes paid

(102.086)
237
(87.955)
(46.239)
54.079
245
(15.398)
(122.210)

(97.863)
473
(54.818)
68.399
18.452
695
(9.304)
(131.345)

663.945

809.243

(553.399)
18.771
(4.945)
-

(330.714)
14.210
(1.512)
(22.728)
(290.456)

(539.573)

(631.200)

22, 24

Cash flows from operating activities


Investing activities
Purchase of property, plant and equipment and intangible assets
Proceeds from sale of property, plant and equipment and intangible assets
Biological asset investments
Acquisition of subsidiaries and joint venture, net of cash acquired
Cash payment for acquired minority shares

5, 18, 19
3
3

Net cash used in investing activities


Financing activities
Dividends paid
Dividends paid to minority shareholders
Capital increase in subsidiaries by minority shareholders
Proceeds from short-term and long-term debt
Repayment of short-term and long-term debt
Interest paid
Interest received
Change in time deposits with maturity more than three months

27

Cash flow from financing activities

(168.979)
(246.532)
(12.320)
26.920
2
1.255.225
2.468.815
(2.479.263) (1.370.278)
(78.629)
(63.552)
72.980
57.504
(34.851)
32.771
(242.575)

Currency translation differences on cash and cash transactions

95.163

Net decrease in cash and cash equivalents

1.014.554

(118.203)

(297.612)
7.273
(119.569)

Cash and cash equivalents at the beginning of the year

936.238

1.048.534

Cash and cash equivalents at the end of the year

913.198

936.238

The accompanying notes form an integral part of these consolidated financial statements.
(5)
F-48

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 1. GROUPS ORGANIZATION AND NATURE OF ACTIVITIES
General
Anadolu Efes Biraclk ve Malt Sanayii A.. (a Turkish corporation, Anadolu Efes, the Company) was established in
stanbul in 1966. Certain shares of Anadolu Efes are listed on the stanbul Stock Exchange (ISE).
The registered office of the Company is located at the adress Bahelievler Mahallesi ehit brahim Koparr Caddesi
No: 4 Bahelievler stanbul.
The Group consists of the Company, its subsidiaries and joint ventures. The average number of permanent personnel
employed in the Group is 15.507 (December 31, 2010 15.202).
The consolidated financial statements of the Group approved by the Board of Directors of the Company and signed
by the Chief Financial Officer and Finance Director were issued on March 29, 2012. General Assembly and
specified regulatory bodies have the right to make amendments to statutory financial statements after issue.
Nature of Activities of the Group
The operations of the Group consist of production, bottling, selling and distribution of beer under a number of
trademarks and also production, bottling, selling and distribution of sparkling and still beverages with The CocaCola Company trademark. The Group owns and operates fourteen breweries (five in Turkey and nine in other
countries), seven malt production facilities (two in Turkey, five in Russia) and also eight facilities in Turkey, twelve
facilities in other countries for sparkling and still beverages production. The Group has joint control over Coca-Cola
ecek A.. (CC), which undertakes production, bottling and distribution facilities of Coca-Cola products in
Turkey, Pakistan, Central Asia and the Middle East.
The Group also has joint control over Anadolu Etap Tarm ve Gda rnleri San. ve Tic. A.., which undertakes
production and sales of fruit juice concentrates and purees in Turkey. In addition, the Group has minority stakes
having significant influence over an investment company that has breweries in Serbia, namely Central Europe
Beverages B.V. (CEB).
List of Shareholders
As of December 31, 2011 and 2010, the composition of shareholders and their respective percentage of ownership
can be summarized as follows:
2011
Amount
Yazclar Holding A..
zilhan Snai Yatrm A..
Anadolu Endstri Holding A.. (AEH)
Publicly traded and other

2010
Amount

139.787
79.813
35.292
195.108

31,06
17,74
7,84
43,36

139.251
78.937
35.292
196.520

30,94
17,54
7,84
43,68

450.000

100,00

450.000

100,00

Capital structure of AEH, the shareholder of the Company, comprises of Yazclar Holding A.. (68%) and zilhan
Snai Yatrm A.. (32%); consequently, Yazclar Holding A.. and zilhan Snai Yatrm A.. represent together
directly and indirectly more than half of the voting rights of the Company.
On March 6, 2012, it has been resolved to increase the Companys issued capital to 592.105.263 full TRL, while the
shareholders right to purchase new shares will be restricted. The newly issued 142.105.263 bearer shares, which are
above the nominal values, will be allocated on the name of SABMiller Anadolu Efes Limited (SABMiller AEL), a
subsidiary of SABMiller Plc. (Note 40).

(6)
F-49

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 1. GROUPS ORGANIZATION AND NATURE OF ACTIVITIES (continued)
List of Subsidiaries
The subsidiaries included in the consolidation and their effective shareholding rates at December 31, 2011 and 2010
are as follows:
Subsidiary

Country

Principal Activity

Segment

Efes Breweries International N.V. (EBI)

The Netherlands

Facilitating foreign investments in breweries International Beer

ZAO Moscow-Efes Brewery (Efes Moscow)

Russia

Production and marketing of beer

OOO Stary Melnik (Stary Melnik) (2)

Russia

ZAO Efes Entertainment (Efes Entertainment) (2)

Effective Shareholding
and Voting Rights %
December 31, December 31,
2010
2011
100,00

100,00

International Beer

90,96

90,97

Service sector

International Beer

90,96

Russia

Service sector

International Beer

90,97

OAO Krasny Vostok Solodovpivo (KV Group) (2)

Russia

Production of beer

International Beer

90,96

OAO Knyaz Rurik (Knyaz Rurik)

Russia

Investment company of EBI

International Beer

99,95

99,95

ZAO Mutena Maltery (Mutena Maltery)

Russia

Production of malt

International Beer

99,95

99,95

OOO Vostok Solod (1)

Russia

Production of malt

International Beer

90,96

90,96

OOO KV-Invest (2)

Russia

Finance

International Beer

90,96

OOO T'sentralny Torgovy Dom (1)

Russia

Sales company

International Beer

90,96

90,96

ZAO Moskovskii Torgovyii Dom (1)

Russia

Sales company

International Beer

90,96

90,96

J.S.C. Efes Karaganda Brewery (Efes Karaganda)

Kazakhstan

Production and marketing of beer

International Beer

72,00

72,00

Dinal LLP (Dinal)

Kazakhstan

Distribution of beer

International Beer

72,00

72,00

Efes Vitanta Moldova Brewery S.A. (Efes Moldova) (3) Moldova

Production and marketing of beer, and low


alcoholic drinks

International Beer

96,83

96,50

Efes Romania Industrie Si Comert S.A. (ERIC) (4)

Romania

Distribution of beer

International Beer

100,00

Euro-Asien Brauerein Holding GmbH (Euro-Asien)

Germany

Investment company of EBI

International Beer

100,00

100,00

J.S.C. Lomisi (Efes Georgia)

Georgia

Production, marketing and sales of beer and


International Beer
carbonated soft drink

100,00

100,00

Central Asian Beverages B.V. (Central Asian)

The Netherlands

Investment company of EBI

International Beer

60,00

60,00

Efes Trade BY FLLC (Efes Belarus)

Belarus

Market development

International Beer

100,00

100,00

100,00

100,00

99,75

99,75

Efes Pazarlama ve Datm Ticaret A.. (Ef-Pa) (5)

Turkey

Tarbes Tarm rnleri ve Besicilik Sanayi


Ticaret A.. (Tarbes) (5)

Turkey

Anadolu Efes D Ticaret A.. (Aefes D Ticaret) (6)

Foreign trade

Other

99,82

99,62

Marketing and distribution of beer

Other

99,99

99,99

Providing technical assistance

Other

99,75

99,75

The Netherlands

Providing technical assistance

Other

99,75

99,75

Caspian Marketing Ltd. (7)

Azerbaijan

Marketing and distribution of beer

Other

100,00

Efes Deutschland GmbH (Efes Germany)

Germany

Marketing and distribution of beer

Other

100,00

100,00

Cypex Co. Ltd. (Cypex)


Anadolu Efes Technical and Management
Consultancy N.V. (AETMC)
Efes Holland Technical Management
Consultancy B.V. (EHTMC)

(1)
(2)

(3)
(4)
(5)
(6)
(7)

Turkey

Marketing and distribution company of the


Turkey Beer
Group in Turkey
Providing hops (major ingredient of beer) to
Turkey Beer
the breweries of the Group

Turkish Republic of
Northern Cyprus
The Netherlands
Antilles

Subsidiaries of Efes Moscow.


In accordance with the restructuring of the Efes Beer Group Companies in 2011, the official merger process of Efes Entertainment, OOO
Stary Melnik, KV Group, OOO KV Invest with Moscow Efes Brewery was completed. After these mergers, OOO Vostok Solod, OOO
T'sentralny Torgovy Dom and ZAO Moskovskii Torgovyii Dom have become subsidiaries of Efes Moscow and effective shareholding rate
in Efes Moscow decreased to 90,96% from 90,97% regarding to the change in minority shares.
Groups share in Efes Moldova has raised to 96,83% through the capital increase from EBI.
In December 2000, ERIC adopted a plan of liquidation and as a result, changed its basis of accounting from going concern basis to a
liquidation basis. The liquidation process has been completed in April 2011.
Companys beer operations in Turkey form the Turkey Beer Operations together with Ef-Pa and Tarbes.
Groups share in Aefes D Ticaret has raised to 99,82% through the capital increase from the Company.
In 2011, Caspian Marketing Ltd. was sold after capital reduction.

(7)
F-50

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 1. GROUPS ORGANIZATION AND NATURE OF ACTIVITIES (continued)
List of Joint Ventures
The joint ventures included in the consolidation proportionally and their effective shareholding rates at December
31, 2011 and 2010 are as follows:
Effective Shareholding
and Voting Rights %

Joint Venture

Country

Principal Activity

Segment

Coca-Cola ecek A.. (CC) (1)

Turkey

Production, bottling of Coca-Cola products

Soft Drinks

50,26

50,26

Coca-Cola Sat Datm A.. (CCSD)

Turkey

Distribution and selling of Coca-Cola products

Soft Drinks

50,25

50,25

Mahmudiye Kaynak Suyu Ltd. ti. (Mahmudiye)

Turkey

Filling and selling of natural spring water

Soft Drinks

50,25

50,25

Efes Snai D Ticaret A.. (EST) (4)

December 31, December 31,


2010
2011

Turkey

Foreign trade

Soft Drinks

50,35

50,50

J.V. Coca-Cola Almaty Bottlers Limited Liability


Partnership (Almaty CC)

Kazakhstan

Production, bottling, distribution and selling of


Coca-Cola and distributions of Efes products

Soft Drinks

50,11

50,11

Tonus Joint Stock Company (Tonus)

Kazakhstan

Investment company of CC

Soft Drinks

47,33

47,33

Soft Drinks

50,19

50,19

Soft Drinks

50,26

50,26

Investment company of CC

Soft Drinks

50,26

50,26

Production, bottling, distribution and selling of


Coca-Cola products
Production, bottling, distribution and selling of
Coca-Cola products

Azerbaijan Coca-Cola Bottlers LLC (Azerbaijan CC)

Azerbaijan

Coca-Cola Bishkek Bottlers Closed Joint Stock


Company (Bishkek CC)

Kyrgyzstan

CCI International Holland B.V. (CCI Holland)

The Netherlands

The Coca-Cola Bottling Company of Iraq FZCO


(CCBI) (2)

United Arabic
Emirates

Investment company of CC

Soft Drinks

50,26

25,13

CC Beverage Limited (CCBL) (2)

Iraq

Production, bottling, distribution and selling of


Coca-Cola products

Soft Drinks

50,26

15,08

SSG Investment Limited (SSG) (2)

British Virgin
Islands

Investment company of CC

Soft Drinks

50,26

Jordan

Production, bottling, distribution and selling of


Coca-Cola products

Soft Drinks

45,23

45,23

Distribution and selling of Coca-Cola products

Soft Drinks

25,13

25,13

Soft Drinks

24,82

24,73

Soft Drinks

29,90

29,90

The Coca-Cola Bottling Company of Jordan Ltd.


(Jordan CC)
Syrian Soft Drink Sales and Distribution L.L.C.
(Syrian SD)

Syria

Production, bottling, distribution and selling of


Coca-Cola products
Production, bottling, distribution and selling of
Coca-Cola products

Coca-Cola Beverages Pakistan Ltd (CCBPL)

Pakistan

Turkmenistan Coca-Cola Bottlers Ltd.


(Turkmenistan CC)

Turkmenistan

Waha Beverages B.V. (3)

The Netherlands

Investment company of CC

Soft Drink

50,26

Anadolu Etap Tarm ve Gda rnleri


San. ve Tic. A.. (Anadolu Etap)

Turkey

Production and sales of fruit juice concentrate and


puree

Other

33,33

33,33

(1) Shares of CC are currently traded on ISE.


(2) Detailed information about SSG, CCBI and CCBL is disclosed in Note 3.
(3) The registration process of Waha Beverages B.V., which was incorporated as a subsidiary 100% owned by CC with an initial capital
amounting to EUR18.000, was completed in 2011.
(4) ESTs share capital has been increased by CC in 2011, therefore Groups shareholding rate has diluted.

Although the Company represents and controls more than half of CCs voting rights, since the members of the
board of directors of CC, representing the Company and other shareholders, take decisions mutually in the board of
directors meetings; the financial statements of CC are consolidated in accordance with interests in joint venture.
Work Environments and Economic Conditions of Subsidiaries and Joint Ventures in Foreign Countries
Certain countries, in which consolidated subsidiaries and joint ventures operate, have undergone substantial political
and economic changes in recent years. Accordingly, such markets do not possess well-developed business
infrastructures and the Groups operations in such countries might carry risks, which are not typically associated
with those in more developed markets. Uncertainties regarding the political, legal, tax and/or regulatory
environment, including the potential for adverse changes in any of these factors, could significantly affect the
commercial activities of subsidiaries and joint ventures.

(8)
F-51

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
2.1

Basis of Preparation and Presentation of Consolidated Financial Statements


The Group companies, which operate in Turkey, keep their accounting books and their statutory financial
statements in Turkish Lira in accordance with the Generally Accepted Accounting Principles in Turkey
accepted by the Capital Markets Board (CMB), Turkish Commercial Code, Tax Legislation and the Uniform
Chart of Accounts issued by the Ministry of Finance. The foreign subsidiaries and joint ventures keep their
accounting books and statutory financial statements in their local currencies and in accordance with the rules
and regulations of the countries in which they operate.
The consolidated financial statements are based on the statutory financial statements of Groups subsidiaries
and joint ventures and presented in TRL in accordance with CMB Financial Reporting Standards with certain
adjustments and reclassifications for the purpose of fair presentation. Such adjustments are primarily related
to application of consolidation accounting, accounting for business combinations, accounting for deferred
taxes on temporary differences, accounting for employment termination benefits on an actuarial basis and
accruals for various expenses. Except for the financial assets carried from their fair values and assets and
liabilities included in business combinations application, financial statements are prepared on historical cost
basis.
In accordance with the CMB's "Communiqu on Financial Reporting in Capital Market" Serial XI, No:29
(Communiqu), promulgated in the Official Gazette dated April 9, 2008, effective from January 1, 2008,
listed companies are required to prepare their financial statements in conformity with International
Accounting/Financial Reporting Standards (IAS/IFRS) as prescribed in the CMB Communiqu. The
financial statements and explanatory notes are presented using the compulsory standard formats as published
by the Communiqu.

2.2

Functional and Reporting Currency


Functional and reporting currency of the Company and its subsidiaries, joint ventures located in Turkey is
Turkish Lira. As a result of the structure of subsidiaries and joint ventures located in foreign countries and
the fact that some foreign subsidiaries and joint ventures carry out their transactions mostly in Euro (EURO)
or US Dollars (USD) more than in any other currency, those foreign subsidiaries or joint ventures have
adopted EURO or USD as their functional currencies.
Functional Currency of Significant Subsidiaries and Joint Ventures Located in Foreign Countries
Subsidiary or Joint Venture

Local Currency

EBI
Efes Moscow
Efes Karaganda
Efes Vitanta
Efes Georgia
CCI Holland
Almaty CC
Azerbaijan CC
Bishkek CC
CCBPL
Jordan CC
AETMC
EHTMC
Efes Germany
Knyaz Rurik

EURO
Russian Ruble (RUR)
Kazakh Tenge (KZT)
Moldovan Leu (MDL)
Georgian Lari (GEL)
EURO
KZT
Azerbaijan Manat (AZN)
Kirghiz Som (KGS)
Pakistan Rupee (PKR)
Jordanian Dinar (JOD)
EURO
EURO
EURO
RUR

(9)
F-52

Functional Currency
2010
2011
USD
USD
RUR
RUR
KZT
KZT
MDL
MDL
GEL
GEL
USD
USD
USD
USD
USD
USD
USD
USD
PKR
PKR
USD
USD
EURO
EURO
EURO
EURO
EURO
EURO
RUR
RUR

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.3 Changes in Accounting Policies
Revised and amended standards and interpretations that are effective after January 1, 2011 and do not
have any impact on the financial position or performance of the Group:
IFRS 1 (Amendment) First-time Adoption of International Financial Reporting Standards Limited
Exemption from Comparative IFRS 7 Disclosures for First-time Adopters (effective for annual periods
beginning on or after July 1, 2010): IFRS 1 has been amended to allow first-time adopters to utilise the
transitional provisions in IFRS 7 and give relief from providing comparative information in the first year of
application.
IAS 24 (Revised) Related Party Disclosures (effective for annual periods beginning on or after January 1,
2011): Revised standard clarifies the definition of a related party to simplify the identification of such
relationships and to eliminate inconsistencies in its application. In addition, the revised standard introduces a
partial exemption of general disclosure requirements for transactions with government-related entities.
IAS 32 (Amendment) Financial Instruments Presentation : Classification of Rights Issues (effective for
annual periods beginning on or after February 1, 2010): The amendment addresses the accounting for rights
issues that are denominated in a currency other than the functional currency of the issuer. Provided certain
conditions are met, such rights issues are now classified as equity regardless of the currency in which the
exercise price is denominated. Previously, these issues had to be accounted for as derivative liabilities. The
amendment applies retrospectively in accordance with IAS 8 Accounting policies, changes in accounting
estimates and errors.
IFRIC 14 (Amendment) Prepayments of a Minimum Funding Requirement (effective for annual periods
beginning on or after January 1, 2011): The amendments correct an unintended consequence of IFRIC 14,
IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction.
Without the amendments, entities are not permitted to recognise some voluntary prepayments for minimum
funding contributions as an asset. This was not intended when IFRIC 14 was issued, and the amendments
correct this. Early application is permitted. The amendment should be applied retrospectively to the earliest
comparative period presented.
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (effective for annual periods
beginning on or after July 1, 2010): The interpretation clarifies the accounting by an entity when the terms of
a financial liability are renegotiated and result in the entity issuing equity instruments to a creditor of the
entity to extinguish all or part of the financial liability (debt for equity swap). It requires a gain or loss to be
recognised in profit or loss, which is measured as the difference between the carrying amount of the financial
liability and the fair value of the equity instruments issued. If the fair value of the equity instruments issued
cannot be reliably measured, the equity instruments should be measured to reflect the fair value of the
financial liability extinguished.
In May 2010, the International Accounting Standards Board (IASB) issued its third omnibus of amendments to
its standards, primarily with a view to removing inconsistencies and clarifying wording. The effective dates of
the improvements are various and the earliest is effective for annual periods beginning on or after July 1, 2010.
Early application is permitted in all cases.

(10)
F-53

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.3

Changes in Accounting Policies (continued)

Revised and amended standards and interpretations that are effective after January 1, 2011 and do not have
any impact on the financial position or performance of the Group (continued)
IFRS 1 First Time Adoption of IFRS: The amendment:
(i)

clarifies that if a first time adopter changes its accounting policies or its use of exemptions in IFRS 1
after it has been published on interim financial report in accordance with IAS 34 Interim financial
reporting, it must explain those changes and update the reconciliations between previous GAAP and
IFRS. The amendment is applicable to annual periods beginning on or after January 1, 2011.

(ii) allows first-time adopters to use an event-driven fair value as deemed cost, even if the event occurs
after the date of transition, but before the first IFRS financial statements are issued. When such remeasurement occurs after the date of transition to IFRS, but during the period covered by its first IFRS
financial statements, the adjustment is recognized directly in retained earnings. The amendment is
applicable to annual periods beginning on or after January 1, 2011. Entities that adopted IFRS in
previous periods are permitted to apply the amendment retrospectively in the first annual period after
the amendment is effective.
(iii) expands the scope of deemed cost for property, plant and equipment or intangible assets to include
items used subject to rate regulated activities. The amendment is applicable to annual periods beginning
on or after January 1, 2011. The amendment is applied prospectively.
IFRS 3 Business Combinations: The amendment:
(i)

clarifies that the amendments to IFRS 7 Financial Instruments Disclosures, IAS 32 Financial
Instruments Presentation and IAS 39 Financial Instruments Recognition and Measurement, that
eliminate the exemption for contingent consideration, do not apply to contingent consideration that
arose from business combinations whose acquisition date precede the application of IFRS 3 (as revised
in 2008). The amendment is applicable to annual periods beginning on after July 1, 2010. The
amendment is applied retrospectively.

(ii) limits the scope of the measurement choices that only the components of non-controlling interests that
are present ownership interests that entitle their holders to a proportionate share of entitys net assets, in
the event of liquidation, shall be measured either at fair value or at the present ownership instruments
proportionate share of the acquirees identifiable net assets. This amendment is applicable to annual
periods beginning on after July 1, 2010. The amendment is applied prospectively from the date entity
applies IFRS 3 (Revised).
(iii) requires an entity (in a business combination) to account for the replacement of the acquirees share
based payment transactions (whether obliged or voluntarily). These transactions need to be split
between consideration paid as part of the business combination and post combination expenses. The
amendment is applicable to annual periods beginning on or after July 1, 2010. The amendment is
applied prospectively.
IFRS 7 (Amendment) Financial Instrument Disclosures: The amendment emphasizes the interaction
between quantitative and qualitative disclosures and the nature and extent of risks associated with financial
instruments. Among others, the improvement remove the disclosure requirement of the collateral held as
security and other credit enhancements and estimate of their fair value for financial assets that are past due
but not impaired and that are individually impaired; and instead include a disclosure requirement of financial
effect of collateral held as security and other credit enhancements for all financial assets. The amendment is
applicable to annual periods beginning on or after January 1, 2011. The amendment is applied
retrospectively.
IAS 1 (Amendment) Presentation of Financial Statements: The amendment clarifies that an entity will
present an analysis of other comprehensive income for each component of equity, either in the statement of
changes in equity or in the notes to financial statements. The amendment is applicable to annual periods
beginning on or after January 1, 2011. The amendment is applied retrospectively.
(11)
F-54

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.3 Changes in Accounting Policies (continued)
Revised and amended standards and interpretations that are effective after January 1, 2011 and do not
have any impact on the financial position or performance of the Group (continued)
IAS 27 (Amendment) Consolidated and Separate Financial Statements. The amendment clarifies that the
consequential amendments from IAS 27 made to IAS 21 The Effect of Changes in Foreign Exchange
Rates, IAS 28 Investment in Associates and IAS 31 Interests in Joint Ventures apply prospectively for
annual periods beginning on after July 1, 2009 or earlier when IAS 27 is applied earlier. This amendment is
applicable to annual periods beginning on after July 1, 2010. The amendment is applied retrospectively.
IAS 34 (Amendment) Interim Financial Reporting: The amendment provides guidance to illustrate how to
apply disclosure principles in IAS 34 and add disclosure requirements on i) the circumstances likely to affect
fair values of financial instruments and their classification, ii) transfers of financial instruments between
different levels of fair value hierarchy, iii) changes in classification of financial assets, iv) changes in
contingent assets and liabilities. The amendment is applicable to annual periods beginning on or after
January 1, 2011. The amendment is applied retrospectively.
IFRIC 13 Customer Loyalty Programmes: The improvement clarifies that when the fair value of award
credits is measured based on the value of the awards for which they could be redeemed, the amount of
discounts or incentives otherwise granted to customers not participating in the award credit scheme, is to be
taken into account.
The aforementioned standards do not have material impact on consolidated financial statements.
The standards and interpretations that are effective after January 1, 2012 and have not been early
adopted by the Group are as follows:
IFRS 1 (Amendment) First Time Adoption (effective for annual periods beginning on or after July 1,
2011): Amendment provides guidance on how an entity should resume presenting financial statements in
accordance with IFRSs after a period when the entity was unable to comply with IFRSs because its
functional currency was subject to severe hyperinflation.
IFRS 7 (Amendment) Financial Instruments: Disclosures (effective for annual periods beginning on or
after July 1, 2011): The purpose of this amendment is to allow users of financial statements to improve their
understanding of transfer transactions of financial assets (e.g. securitizations), including understanding the
possible effects of any risks that may remain with the entity which transferred the assets. The amendment
also requires additional disclosures if a disproportionate amount of transfer transactions are undertaken
around the end of a reporting period. Comparative disclosures are not required.
IAS 12 (Amendment), Income Taxes (mandatory for annual periods beginning on or after January 1, 2012,
but earlier application is permitted): IAS 12 has been updated to include:
(i) a rebuttable presumption that deferred tax on investment property measured using the fair value model
in IAS 40 should be determined on the bases that its carrying amount will be recovered through sale
(ii) a requirement that deferred tax on non-depreciable assets, measured using the revaluation model in IAS
16, should always be measured on a sale basis,

(12)
F-55

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.3 Changes in Accounting Policies (continued)
The standards and interpretations that are effective after January 1, 2013 and have not been early
adopted by the Group are as follows:
IFRS 7 (Amendment) Financial Instruments: Disclosures-Offsetting Financial Assets and Financial
Liabilities (to be retrospectively applied for annual periods beginning on or after January 1, 2013 and
interim periods within those annual periods). New disclosures would provide users of financial statements
with information that is useful in;
(i) evaluating the effect or potential effect of netting arrangements on an entitys financial position and
(ii) analysing and comparing financial statements prepared in accordance with IFRSs and other generally
accepted accounting standards.
IFRS 9 Financial Instruments (the new standard is effective for annual periods beginning on or after
January 1, 2015). Phase 1 of this new IFRS introduces new requirements for classifying and measuring
financial instruments. The amendments made to IFRS 9 will mainly affect the classification and
measurement of financial assets and measurement of fair value option (FVO) liabilities and requires that the
change in fair value of a FVO financial liability attributable to credit risk is presented under other
comprehensive income. Early adoption is permitted.
IFRS 10 Consolidated Financial Statements (effective for annual periods beginning on or after January 1,
2013): This new Standard may be adopted early, but IFRS 11 Joint Arrangements and IFRS 12 Disclosure of
Interests in Other Entities should be also adopted early. IFRS 10 replaces the portion of IAS 27 Consolidated
and Separate Financial Statements that addresses the accounting for consolidated financial statements. A new
definition of control is introduced, which is used to determine which entities are consolidated. This is a
principle based standard and require preparers of financial statements to exercise significant judgment. The
standard is applied on a modified retrospective approach.
IFRS 11 Joint Arrangements (effective for annual periods beginning on or after January 1, 2013): IFRS 11
provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the
arrangement, rather than its legal form (as is currently the case). The standard addresses inconsistencies in the
reporting of joint arrangements by requiring a single method to account for interests in jointly controlled
entities. Proportional consolidation of joint ventures is no longer allowed. The standard will be applied using
a modified retrospective approach.
IFRS 12 Disclosure of Interests in Other Entities (effective for annual periods beginning on or after
January 1, 2013): IFRS 12 is applied on a modified retrospective basis. This new Standard may be adopted
early, but IFRS 10 Consolidated Financial Statements and IFRS 11 Joint Arrangements should be also
adopted early. IFRS 12 includes all of the disclosures that were previously in IAS 27 Consolidated and
Separate Financial Statements related to consolidated financial statements, as well as all of the disclosures
that were previously included in IAS 31 Interests in Joint Ventures and IAS 28 Investment in Associates.
These disclosures relate to an entitys interests in subsidiaries, joint arrangements, associates and structured
entities.
IAS 27 Separate Financial Statements (effective for annual periods beginning on or after January 1, 2013):
As a consequential amendment to IFRS 10 and IFRS 12, the IASB also amended IAS 27, which is now
limited to accounting for subsidiaries, jointly controlled entities, and associates in separate financial
statements. Transitional requirement of this amendment is similar to IFRS 10.

(13)
F-56

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.3 Changes in Accounting Policies (continued)
The standards and interpretations that are effective after January 1, 2013 and have not been early
adopted by the Group are as follows: (continued)
IAS 28 Investments in Associates and Joint Ventures (effective for annual periods beginning on or after
January 1, 2013): This standard includes the requirements for joint ventures, as well as associates, to be
equity accounted following the issue of IFRS 11.
IFRS 10, IFRS 11 and IFRS 12 together with related updates to IAS 27 Separate Financial Statements and
IAS 28 Associates and Joint Ventures make up a package of five new and revised standards which must be
adopted simultaneously. Earlier application is permitted.
IFRS 13 Fair Value Measurement (effective for annual periods beginning on or after January 1, 2013):
IFRS 13 provides guidance on how to measure fair value under IFRS but does not change when an entity is
required to use fair value. It is a single source of guidance under IFRS for all fair value measurements. The
new standard also brings new disclosure requirements for fair value measurements. The standard is applied
prospectively. Early application is permitted.
IAS 1 (Amendment) Presentation of Financial Statements Presentation of Items of Other
Comprehensive Income (effective for annual periods beginning on or after July 1, 2012): IAS 1 has been
amended only for the grouping of items presented in other comprehensive income. Items that could be
reclassified (or recycled) to profit or loss at a future point in time would be presented separately from items
which will never be reclassified. The amendments will be applied retrospectively. Earlier application is
permitted.
IAS 19 (Revised) Employee Benefits (effective for annual periods beginning on or after January 1, 2013).
IAS 19 has been amended to remove the corridor mechanism and to make the distinction between short-term
and other long-term employee benefits based on expected timing of settlement rather than employee
entitlement. The revised standard is applied retrospectively with a few exceptions. Early adoption is
permitted.
IAS 32 (Amendment) Financial Instruments: Presentation - Offsetting Financial Assets and Financial
liabilities (to be retrospectively applied for annual periods beginning on or after January 1, 2014). The
amendments clarify the meaning of currently has a legally enforceable right to set-off and also clarify the
application of the IAS 32 offsetting criteria to settlement systems (such as central clearing house systems)
which apply gross settlement mechanisms that are not simultaneous.
IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine (effective for annual periods
beginning on or after January 1, 2013): Entities will be required to apply its requirements for production
phase stripping costs incurred from the start of the earliest comparative period presented. The Interpretation
clarifies when production stripping should lead to the recognition of an asset and how that asset should be
measured, both initially and in subsequent periods. Earlier application is permitted.
Group is assessing the effects of the new standards and amendments on its consolidated financial statements.
2.4

Changes in Accounting Estimates


The accounting estimates of the Group are adopted to be the same as prior years and there is no material
change from prior years accounting policies.

(14)
F-57

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.5

Offsetting
Financial assets and liabilities are offset and the net amount are reported in the consolidated financial
statements when there is a legally enforceable right to set-off the recognized amounts and there is an
intention to settle on a net basis or realize the assets and settle the liabilities simultaneously.

2.6

Basis of Consolidation
The consolidated financial statements comprise the financial statements of the parent company, Anadolu
Efes, its subsidiaries and joint ventures drawn up to the reporting date. The financial statements of the
companies included in the consolidation have been prepared based on the accounting policies and
presentation formats adopted by the Group in accordance with CMB Financial Reporting Standards.
Subsidiaries are companies in which Anadolu Efes has the power to exercise more than 50% of the voting
rights relating to the shares in the companies as a result of shares owned directly and/or indirectly by itself or
although not having the power to exercise more than 50% of the voting rights, exercises control in order to
make profit from the operations of companies through the exercise of actual dominant influence over the
financial and operating policies. Subsidiaries are consolidated by using the full consolidation method;
therefore, the carrying value of subsidiaries is eliminated against the related shareholders equity. The equity
and net income attributable to minority shareholders interests of subsidiaries are shown separately in the
consolidated balance sheet and consolidated income statement.
Joint ventures are companies in respect of which there are contractual arrangements through which an
economic activity is undertaken subject to joint control by the Group and its subsidiaries together with one or
more other parties. The Groups interest in joint ventures is accounted for by way of proportionate
consolidation; in other words, the Group includes its share of the assets, liabilities, income and expenses of
each joint venture in the relevant components of the financial statements.
Investments in associates are undertakings in which the Group generally has between 20% and 50% of the
voting rights and the Group has significant influence and which are not subsidiaries or joint ventures of the
Group. The Groups investments in associates are accounted for by using the equity method.
The investments in associates are carried in the consolidated balance sheet at cost plus post-acquisition
changes in the Groups share of net assets of the associates, less any impairment in value. The consolidated
income statement reflects the Groups share of the results of operations of the associates.
Intercompany balances and transactions, including intercompany profits and unrealized profits and losses are
eliminated. Consolidated financial statements are prepared using uniform accounting policies for similar
transactions and other events in similar circumstances.
The acquisition method of accounting is used for business acquistitions. Subsidiaries, joint ventures or
investment in associates, acquired or disposed of during the year are included in the consolidated financial
statements from the date of acquisition or to the date of disposal.

2.7

Cash and Cash Equivalents


Cash and cash equivalents comprise cash in hand, bank deposits and short-term investments, which can easily
be converted into cash for a certain amount, has high liquidity with original maturities of 3 months or less.
The deposits with the original maturities more than 3 months are classified to financial investments. The
amounts paid under reverse repurchase agreements are included in the cash and cash equivalents.

2.8

Trade Receivables and Provisions for Doubtful Receivables


Trade receivables that are originated by the Group by the way of providing goods or services are generally
collected in 5 to 90 day terms. Trade receivables are recognized and carried at discounted amount if they bear
significant interest less an allowance for any uncollectible amounts.
(15)
F-58

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.8

Trade Receivables and Provision for Doubtful Receivables (continued)


The provisions for doubtful receivables are set aside when there is objective evidence that a receivable cannot
be collected and is charged as an expense in the consolidated financial statements. The provision is the
difference between the carrying amount and the recoverable amount, being all cash flows, including amounts
recoverable from guarantees and collaterals.

2.9

Related Parties
Parties are considered to be related if one party directly or indirectly has the ability to control the other party
or exercise significant influence over the other party in making the financial and operating decisions or be the
associate of the group. Related parties also include individuals who are principle owners, management and
members of the Group's board of directors and their families. Amounts due from and due to related parties are
carried at cost. Related party transactions are transfers of resources, services or obligations between related
parties, regardless of whether a price is charged.

2.10 Inventories
Inventories, are valued at the lower of cost and net realizable value. Net realizable value is the selling price in
the ordinary course of business, less the costs of completion, marketing and distribution. Cost is determined
primarily on the basis of the weighted average cost method. For processed inventories, cost includes direct
materials, direct labor and the applicable allocation of fixed and variable overhead costs based on a normal
operating capacity.
2.11 Biological assets
Biological assets of the Group consist of sewed fruit tree seedlings of Anadolu Etap. The seedlings that are
accounted for as biological assets are carried at cost due to immateriality and nonexistence of an active and
fair market according to IAS 41.
2.12 Financial Investments
The Group has classified its financial assets as available-for-sale in accordance with IAS 39 Financial
Instruments: Recognition and Measurement. Financial assets, intended to be held for an indefinite period of
time, which may be sold in response to needs for liquidity or changes in interest rates are classified as
available-for-sale. These financial assets are included in non-current assets unless management has the
intention of holding the investment for less than twelve months from the balance sheet date, or unless they
will need to be sold to raise working capital, in which case they are included in current assets. Management
determines the appropriate classification of its financial assets at the time of the purchase and re-evaluates
such designation on a regular basis.
All investments are initially carried at cost, being the fair value of the consideration given and including
acquisition changes associated with the investment. After initial recognition, investments classified as
available-for-sale are measured at fair value. For investments actively traded in organized financial markets,
fair value is determined by reference to stock exchange quoted market bid prices at the close of business on
the balance sheet date and positive or negative valuation differences of investments, which are measured at
fair value, have been recognized under comprehensive income statements as value increase in available-forsale securities in the consolidated financial statements.
Investments classified as available-for-sale investments, that do not have a quoted market price on an active
market and whose fair value cannot be reliably measured by alternative valuation methods, are measured at
cost. The carrying amounts of such investments are reviewed at each balance sheet date for impairment.
All the acquisitions and disposals of the available for sale securities are recorded in the accounts at the date of
obligation of the Group for purchasing or selling the asset.

(16)
F-59

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.13 Property, Plant and Equipment
Property, plant and equipment (PP&E) are stated at cost less accumulated depreciation and any impairment
in value. Land is not depreciated. Depreciation is computed by the straight-line method over the following
estimated useful lives:
Buildings and land improvements
Machinery and equipment
Leasehold improvements
Furniture and fixtures
Vehicles
Returnable bottles and cases
Other tangible assets

10-50 years
4-20 years
4-15 years
3-15 years
5-10 years
5-10 years
2-14 years

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the
carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written
down to their recoverable amount. The recoverable amount of property, plant and equipment is the greater of
net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. For an asset that does not generate largely independent cash
inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. The
increase in the carrying amount of an asset attributable to a reversal of an impairment loss shall not exceed
the carrying amount that would have been determined (net of amortization or depreciation) had no
impairment loss been recognized for the asset in prior years. The increase is recognized in the consolidated
income statement (Note 31).
The Group management accounts returnable bottles under property, plant and equipment. Deposit
obligations relating to such returnable bottles are reflected in other payables. The Group carries the liabilities
related to returnable packages of Turkey Beer operation in the consolidated balance sheet, until the return of
these packages from points of sales. The Group sells its products also in non-returnable bottles. For such
sales, there is no deposit obligation of the Group.
Expenses for repair and maintenance of property, plant and equipment are normally charged to the income
statement. They are, however, capitalized and depreciated through the estimated useful life of the property,
plant and equipment in exceptional cases if they result in an enlargement or substantial improvement of the
respective assets.
2.14 Intangible Assets
Intangible assets acquired separately from a business are capitalized at cost.
Intangible assets acquired as part of an acquisition of a business are capitalized separately from goodwill, if
the fair value can be measured reliably. Intangible assets, excluding development costs, created within the
business are not capitalized and expenditure is charged against profits in the year in which it is incurred.
Supplies relating to promotion and marketing activities are incurred as expense when the right to reach these
supplies is recognized. Intangible assets are amortized on a straight-line basis over the best estimate of their
useful lives. Intangible assets with indefinite useful life formed in the financial statements in accordance with
purchase method, are not subject to amortization and the carrying amounts of such intangibles are reviewed
for impairment at least annually and whenever there is an indication of possible impairment.
a) Brands
The brands, which belong to International Beer Operations and which are acquired as part of a business
combination, are carried at their fair value and if it is acquired separately, carried at cost in the financial
statements. The Group expects that the brands will generate cash inflow indefinitely and therefore are not
amortised. The brands are tested for impairment annually.

(17)
F-60

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.14 Intangible Assets (continued)
b) Bottlers and Distribution Agreement
In the scope of consolidation, intangible assets identified in the fair value financial statements of
subsidiaries acquired by CC in 2005 and 2009, acquired through change in scope of consolidation in
2011 and joint venture acquired by CC in 2008 include the Bottlers and Distribution Agreements that
are signed with The Coca-Cola Company. Since the Group management expects to renew these
agreements without any additional costs after expiration, it is decided that there are no definite useful
lives of such assets. The intangible assets relating to the bottlers and distribution agreements are therefore
not amortized. Bottlers and distribution agreements are tested for impairment annually.
c)

Rights
The rights acquired as part of a business combination is carried at their fair value and if they are acquired
separately, then they are carried at cost in the financial statements. Rights in the consolidated financial
statements comprise mainly water sources usage rights and are amortized on a straight-line basis over 10
to 40 years.

d) Software
The cost of acquisition of new software is capitalized and treated as an intangible asset if these costs are
not an integral part of the related hardware. Software is amortized on a straight-line basis over 1 to 5
years.
2.15 Business combinations and goodwill
A business combination is the bringing together of separate entities or business into one reporting entity.
The Group accounted business combinations that occurred before January 1, 2010 using the purchase method
according to the IFRS 3 before revision. In this method, the cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of
exchange, plus costs directly attributable to the acquisition. When a business combination agreement provides
for an adjustment to the cost of the combination contingent on future events, the acquirer shall include the
amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable
and can be measured.
Goodwill is accounted in the consolidated financial statements being the excess of the cost of the business
combination over the Groups share is the net fair value of the acquirees identifiable assets, liabilities and
contingent liabilities.
Goodwill recognized in business combinations is tested for impairment annually (as of December 31) or more
frequently, if events or changes in circumstances indicate impairment, instead of amortization. Even though
these circumstances do not indicate impairment in the following periods, the impairment loss of goodwill
recognized in consolidated income statement is not subject to be reversed. During the impairment test,
goodwill relates to cash-generating units.
The excess of the Groups share in the net fair value of the identifiable assets, liabilities and contingent
liabilities over the cost of business combination is accounted for as an income in the related year (gain from
bargain purchase).
In business combinations involving entities under common control, assets and liabilities subject to a business
combination are recognized at their carrying amounts in the consolidated financial statements. As a result of
these transactions, no goodwill or gain from bargain purchase is directly accounted to the financial
statements.

(18)
F-61

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.15 Business combinations and goodwill (continued)
For business combinations occurred after January 1, 2010, the Group applied revised IFRS 3 Business
Combination which is effective for the periods beginning on January 1, 2010.
IFRS 3 (Revised) introduces a number of changes in the accounting of business combinations which will
impact the amount of goodwill recognized, the reported profit or loss in the period that a business
combination occurs, and profit or loss of the future periods. Such changes include the expensing of
acquisition related costs and recognizing subsequent changes in fair value of contingent consideration in the
profit or loss (rather than by adjusting goodwill). However, as permitted by the revised standard in
accordance with the transition period application, the Group recognized subsequent changes in the fair value
of contingent consideration balances originated in previous periods before the effective date of IFRS 3
(Revised) by adjusting goodwill.
The Group applies a policy of treating transactions with minority interests as transactions with equity owners
of the Group. Accordingly, for share purchases from minority interests, the difference between any
consideration paid and the relevant share acquired of the carrying value of the net assets of the subsidiary is
accounted for as an equity transaction.
2.16 Trade Payables
Trade payables are non-derivative financial liabilities with fixed or determinable payments that are not quoted
in an active market. Such financial liabilities are initially recognised at fair value and represented by the
original invoice amount. After initial recognition, trade payables are measured at amortised cost using the
effective interest rate method.
2.17 Borrowings
All borrowings are initially recognized at cost, being the fair value of the consideration received net of issue
costs associated with the borrowing. After initial recognition, borrowings are subsequently measured at
amortized cost using the effective interest rate method. Amortized cost is calculated by taking into account
any issue costs, and any discount or premium on settlement. Gains and losses are recognized in net profit or
loss when the obligations related with the borrowings are removed.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer the
settlement of the liability for at least 12 months after the balance sheet date.
a) Finance Lease
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership
of the leased item, are capitalized at the inception of the lease at the fair value of the leased property or, if
lower, at the present value of the minimum lease payments.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining balance of the liability. The initial direct costs
attributable for the finance lease are added to the amount recognized as an asset. Capitalized leased assets
are depreciated over the estimated useful life of the asset.
b) Operating Lease
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are
classified as operating leases. Group recognizes operating lease payments as an expense in the income
statement on a straight-line basis over the lease term.

(19)
F-62

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.18 Current Income Tax and Deferred Tax
The tax expense for the year comprises current and deferred tax. Tax is recognized in the income statement,
except to the extent that it relates to items recognized directly in equity. In such case, the tax is also
recognized in equity.
The current income tax charge is calculated in accordance with the tax laws enacted or substantively enacted
at the balance sheet date in the countries where the subsidiaries and joint ventures of the Group operate.
Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax related to the equity
items is carried under the equity and not reflected to income statement. Deferred tax assets are recognized for
all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent
of the probability that taxable profit will be available against which the deductible temporary differences,
carry-forward of unused tax assets and unused tax losses can be utilized. The carrying amount of deferred tax
assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Deferred
tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is
realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance sheet date.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to net off current
tax assets against current income tax liabilities and the deferred taxes relate to the same taxation authority.
2.19 Employee Benefits
a) Defined Benefit Plans
In accordance with existing social legislation in Turkey, the Group companies operating in Turkey are
required to make lump-sum termination indemnities to each employee who has completed over one year
of service with the Group and whose employment is terminated due to retirement or for reasons other
than resignation or misconduct. In the consolidated financial statements the Group has reflected a liability
using the Projected Unit Credit Method and based on estimated inflation rates and factors derived using
the Group's experience of personnel terminating their services and being eligible to receive such benefits
and discounted by using the current market yield at the balance sheet date on government bonds.
b) Defined Contribution Plans
The Group pays contributions to the Social Security Institution of Turkey on a mandatory basis. The
Group has no further payment obligations once the contributions have been paid. The contributions are
recognized as employee benefit expense when they are paid.
c)

Long Term Incentive Plans


The Group provides a benefit to its employees over a certain seniority level under the name long term
incentive plan. Provision for long term incentive plan accrued in consolidated financial statements
reflects the discounted value of the estimated total provision of possible future liabilities until the
financial statement date.

2.20 Provisions, Contingent Assets and Liabilities


a) Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of
the time value of money is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due
to the passage of time is recognized as an interest expense.
(20)
F-63

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.20 Provisions, Contingent Assets and Liabilities (continued)
b) Contingent Assets and Liabilities
Contingent liabilities are not recognized in the consolidated financial statements, but are disclosed unless
the possibility of an outflow of resources embodying economic benefits is remote. A contingent asset is
not recognized in the consolidated financial statements, but disclosed when an inflow of economic
benefits is probable.
2.21 Foreign Currency Translations
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences
are recorded in the consolidated income statement of the relevant period, as foreign currency loss or gain.
Foreign currency translation rates announced by the Central Bank of the Republic of Turkey and used by the
Groups subsidiaries and joint ventures in Turkey as of respective year-ends are as follows:
Date
December 31, 2011
December 31, 2010

USD / TRL
(full)

EURO / TRL
(full)

1,8889
1,5460

2,4438
2,0491

The assets and liabilities of subsidiaries and joint ventures operating in foreign countries are translated at the
rate of exchange ruling at the balance sheet date and the equity items are translated using the exchange rates
at the date of the transaction. The income statements of foreign subsidiaries and joint ventures are translated
at average exchange rates. Differences resulting from the deviation between the values of investment related
to equity accounts of consolidated subsidiaries and joint ventures and the appreciation of foreign currencies
against the Turkish Lira are accounted to equity as currency translation differences.
Goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as assets and
liabilities of the acquiring company and are recorded at the exchange rate of balance sheet date. On disposal
of a foreign entity, currency translation differences are recognized in the income statement as a component of
the gain or loss on disposal.
2.22 Paid in Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as deduction, net of tax, from the proceeds.
2.23 Dividends Payable
Dividends payable are recognized as an appropriation of profit in the period in which they are declared.
2.24 Subsequent Events
The Group adjusts the amount recognized in its financial statements to reflect the adjusting events after the
balance sheet date. If non-adjusting events after the balance sheet date have material influence on the economic
decisions of users of the financial statements, they are disclosed in the notes to the consolidated financial
statements.

(21)
F-64

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.25 Revenue
Revenue is recognized to the extent of probability that the economic benefits will flow to the Group and the
revenue can be reliably measured. Revenues are stated net of discounts and returns, value added and sales
taxes. The following specific recognition criteria must also be met before revenue is recognized:
a) Sale of Goods
Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to
the buyer and the amount of revenue can be measured reliably.
b) Interest Income
Interest income is recognized as the interest accrues. Interest income is reflected under the financial
income in the consolidated income statement.
c)

Dividend Income
Dividend income is recognized when the right to collect the dividend is established.

2.26 Borrowing Costs


Borrowing costs include interest charges and other costs incurred in connection with the borrowing of funds.
Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are
capitalized. Borrowing costs other than these are recoded as expensed at the date they are incurred.
2.27 Segment Reporting
The Group management monitors the operating results of its three business units separately for the purpose of
making decisions about resource allocation and performance assessment. The three operating segments are
Turkey Beer Operations (Turkey Beer), which is conducted by the Company; International Beer Operations
(International Beer), which is conducted by EBI; and Soft Drinks Operations (Soft Drinks) which is
conducted by CC.
Segment performance is evaluated based on profit from operations before depreciation, amortization and noncash expenses (EBITDA). EBITDA has been determined as the optimum indicator by the Group management
for the evaluation of the performance of the operating segments by considering the comparability with the
entities in the same business (Note 5).
2.28 Earnings per Share
Earnings per share in the consolidated income statements are calculated by dividing the net profit for the year
attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding
during the year. In Turkey, companies can increase their share capital by making distribution of free shares to
existing shareholders from inflation adjustment to shareholders equity.
For the purpose of the earnings per share computations, the weighted average number of shares outstanding
during the year has been adjusted with respect to free shares issued without corresponding change in resources
by giving them retroactive effect for the period in which they were issued and each earlier period.
2.29 Reporting of Cash Flows
In the consolidated statement of cash flows, cash flows are classified and reported according to their operating,
investing and financing activities. Cash flows related with investing activities present the cash flows provided
from and used in the Groups investing activities and cash flows related with financing activities present the
proceeds and repayments of sources in the Groups financing activities.

(22)
F-65

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.30 Use of Estimates
The preparation of the financial statements requires management to make estimates and assumptions that
effect the reported amounts of assets and liabilities at the date of balance sheet date. Actual results may vary
from the current estimates. These estimates are reviewed periodically, and, as adjustments become necessary,
they are reported in income statement in the periods in which they become known. The source of the
estimates and assumptions which may cause to significant adjustments at assets and liabilities at following
periods as of balance sheet date are as follows:
a) Provision for doubtful receivables is an estimated amount that management believes to reflect for possible
future losses on existing receivables that have collection risk due to current economic conditions. During
the impairment test for the receivables, the debtors, other than the key accounts and related parties, are
assessed with their prior year performances, their credit risk in the current market, their performance after
the balance sheet date up to the issuing date of the financial statements; and also the renegotiation
conditions with these debtors are considered (Note 10).
b) During the assessment of the reserve for inventory obsolescence the following are considered; analyzing
the inventories physically and historically, considering the employment and usefulness of the inventories
respecting to the technical personnel view. Sales prices listed, average discount rates given for sale and
expected cost incurred to sell are used to determine the net realizable value of the inventories (Note 13).
c) The Group performs impairment test for tangible assets, intangible assets with indefinite useful life and
goodwill annually or when circumstances indicate that the carrying value may be impaired. As of
December 31, 2011, impairment test for the intangible assets with indefinite useful life and goodwill is
generated by comparing its carrying amount with the recoverable amount. The recoverable amount is the
higher of net selling price and value in use.
In these calculations, estimated free cash flows before tax from financial budgets covering a 3-year period
and approved by Board of Directors are used. Estimated free cash flows before tax after a 3-year period
are calculated for 5 10 years period by using expected growth rates. Estimated free cash flows before
tax are discounted to expected present value for future cash flows. Key assumptions such as country
specific market growth rates, gross domestic product (GDP) per capita and consumer price indices were
derived from external sources. Main estimates such as raw material and good prices, working capital
requirements and capital expenditures were based on the Groups key assumptions and historical
operating data. The enterprise value used as a base for the impairment test has been calculated using cash
flow projections from the strategic business plan approved by the Board of Directors and no impairment
has been detected on goodwill. Perpetuity growth rate used in impairment test in the operating units is
between 1,00% - 3,00% (December 31, 2010 1,00 % - 3,00 %) and after tax discount rate is between
8,8% and 14,7% (December 31, 2010 9,59% - 13,05%). Based on the Groups sensitivity analysis,
adjusting the post-tax weighted average cost of capital by 0.3% up-ward or adjusting the perpetuity
growth rate by 0.5% down-ward in the recoverable amount calculation will not result any impairment
loss..
d) The liability for the put option that has been measured by applying a weighting of different valuation
techniques has been presented in other current liabilities in the consolidated balance sheet (Note 23).
e) The discount rates related with retirement pay liability are actuarial assumptions determined with future
salary increase and the employees turnover rates (Note 24).
f) Deferred tax asset is only recorded if it is probable that a taxable income will be realized in the future.
Under the circumstances that a taxable income will be realized in the future, deferred tax is calculated
over the temporary differences by carrying forward the deferred tax asset in the previous years and the
accumulated losses. As of December 31, 2011, the estimations made to indicate that the company will
incur taxable profits in the future periods were reasonable and deferred tax asset was recorded (Note 35).

(23)
F-66

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 3. BUSINESS COMBINATIONS
Transactions Related with 2011
In March 2011, CCI Holland acquired 100% of SSG shares and 50% of CCBI shares from The Coca-Cola Export
Corporation for a cash consideration of TRL35.416. CCBI, whose 50% shares owned by CCI Holland, owned 60%
shares of CCBL and SSG owned 40% shares of CCBL as at December 31, 2010. Following this acquisition, CCs
indirect shareholding rate in CCBL has reached to 100% from 30%. Accordingly, CC included SSG, CCBI and
CCBL in consolidation by using full consolidation method.
Regarding to the consolidation of aforementioned subsidiaries, the Groups share in the difference between the net
asset value calculated from the financial statements based on fair value accounting and the acquisition cost
amounting to TRL7.384 was recorded as goodwill in the consolidated balance sheet as of December 31, 2011 in
accordance with IFRS 3 Business Combinations (Note 20).
According to this acquisition, the Groups share in the fair value difference occurred from the fair value financial
statements amounting to TRL2.957, which is related with the shares formerly owned by the Group, is recorded as
other operating income in the consolidated income statement in accordance with IFRS 3 (Note 31).
The carrying value of the net assets of SSG and CCBI derived from the financial statements as of acquisition date
are as follows:
CCBI
SSG
Fair value Book value Fair value Book value
1.445
1.445
643
643
781
781
520
520
4.797
4.797
3.198
3.198
1.863
1.863
1.296
1.296
39.738
38.474
26.492
25.649
10.564
59
7.042
40
(271)
(271)
(180)
(180)
(51.534)
(51.534)
(21.550)
(21.550)
(536)
(536)
(159)
(159)

Cash and cash equivalents


Trade and other receivables
Inventories
Other assets
Property, plant and equipment
Intangible assets
Trade and other payables
Due to related parties
Other liabilities
Carrying value of net assets acquired

6.847

(4.922)

17.302

Total cash consideration, Groups share


Groups share in net assets

5.141
(1.720)

12.658
(8.695)

Goodwill arising from acquisition

3.421

3.963

Total cash consideration, Groups share


Cash in the subsidiary acquired, Groups share (-)

5.141
(363)

12.658
(323)

Net cash outflow on acquisition

4.778

12.335

9.457

Transactions Related with 2010


The Company acquired 11.219.811 EBI Global Depository Receipts (GDRs) representing approximately 26,53% of
the issued share capital of EBI from a group of shareholders at a price of USD 17,00 per GDR (each GDR
representing 5 EBI shares) for a total consideration of TRL290.456 during 2010. In accordance with IAS 27,
positive difference amounting to TRL5.041 between the net asset value of EBI and the acquisition cost has been
reflected to other reserves under the equity attributable to equity holders of the parent.

(24)
F-67

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 3. BUSINESS COMBINATIONS (continued)
Transactions Related with 2010 (continued)
As a result of holding over 95% of the issued share capital of EBI, the Company intends to acquire the outstanding
EBI shares by means of a squeeze-out procedure in accordance with the article 2:92a of the Dutch Civil Code before
the Enterprise Chamber of the Court of Appeals in Amsterdam, the Netherlands. The writ that introduces the
squeeze-out procedure was issued in June 2010 and the squeeze-out process was completed in October 2010.
At the extraordinary general meeting of shareholders of EBI held in Amsterdam on June 2010, the resolution
approving the cancellation of the admission of the GDRs to the official list of the UK Listing Authority and to
trading on the London Stock Exchange's main market for listed securities was passed. In addition, amendment to the
deposit agreement between the Company and The Bank of New York Mellon dated October 20, 2004 to permit
such delisting was approved. As the amendment to the deposit agreement became effective following the date on
which the extraordinary general meeting of shareholders has been held, de-listing of the GDRs was completed as of
October 6, 2010.
In July 2010, EBI acquired 62,96% shares of OAO Knyaz Rurik, which owns 80,02% of Mutena Maltery shares,
from Specialized State-Owned Unitary Enterprise for Sale of Property of the City of Moscow through a public
auction process for a cash consideration of TRL 18.608. After having the necessary approval from the competition
board in August 2010, Knyaz Rurik is included in the consolidation by using full consolidation method. The
difference between the cash consideration and the net assets calculated from the financial statements of Knyaz Rurik
based on fair value accounting prepared in conformity with IFRS 1, amounting to TRL1.373, and the fair value
difference amounting to (TRL1.580) arising from 19,98% shares on hand of Mutena Maltery, which was accounted
under non-current financial investments and currently is fully consolidated as subsidiary, are presented net under
the other operating income in the consolidated income statement.
The net asset value calculated over the financial statements of Knyaz Rurik based on fair value accounting as of the
acquisition date is as follows:
Fair Value
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Property, plant and equipment and intangible assets
Deferred tax liability
Other liabilities
Minority interests

1.666
7.052
1.775
1.089
20.384
(3.722)
(461)
(6.683)

Fair value of net assets acquired

21.100

Total cash consideration


Groups share in net assets

18.608
(17.235)

Net book value of Mutena Maltery shares on hand


Fair value of Mutena Maltery shares on hand

5.103
(6.683)

Amount recognised in income statement

(207)

Total cash consideration


Net cash acquired with the subsidiary (-)

18.608
(1.666)

Net cash outflow on acquisition

16.942

In November 2010, AETMC acquired 15,10% shares of OAO Knyaz Rurik, which owns 80,02% of Mutena
Maltery shares for a cash consideration of TRL5.786. The Group accounted the difference between the cash
consideration and the net assets of Knyaz Rurik amounting to TRL1.921 to other reserves under the equity
attributable to equity holders of the parent in accordance with IAS 27.
(25)
F-68

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 4. JOINT VENTURES
Summarized financial information about proportionally consolidated amounts included in the consolidated financial
statements before consolidation adjustments and reclassifications are as follows:
Current assets
Non-current assets
Total assets
Short-term liabilities
Long-term liabilities
Equity
Total liabilities

2011

2010

742.893
1.200.033
1.942.926
278.899
811.667
852.360
1.942.926

659.168
883.904
1.543.072
452.245
357.821
733.006
1.543.072

66.208

Net income

96.111

There are no commitments given by the Company on behalf of the joint ventures as of December 31, 2011 and
2010.
NOTE 5. SEGMENT INFORMATION
The Group's segment reporting disclosed in accordance with IFRS 8 is disclosed as follows with respect to operating
segments as of December 31, 2011 and 2010.
Turkey International
Beer
Beer

Soft
Drinks

Other (1) and


Eliminations

Total

2011
Revenues
Inter-segment revenues
Total Sales
EBITDA
Depreciation and amortization
Provision for retirement pay liability
Fair value increase related to change
in scope of consolidation
Other
Profit / (loss) for the year
Capital expenditures (Note 18, 19)

1.390.840
(11.069)

1.630.697
(4.362)

1.712.991
(43)

58.496
(16.284)

4.793.024
(31.758)

1.379.771

1.626.335

1.712.948

42.212

4.761.266

519.881

238.961

244.703

(50.129)

953.416

80.426
7.039

175.424
-

77.283
3.249

2.474
65

335.607
10.353

4.862

2.942

2.138

(4.649)

5.293

336.516

4.473

71.098

(52.615)

359.472

94.984

205.702

249.391

3.322

553.399

1.293.426
(10.821)

1.464.174 1.383.607
(188)
(38)

51.257
(12.624)

4.192.464
(23.671)

1.282.605

1.463.986 1.383.569

38.633

4.168.793

(2.957)

(2.957)

2010
Revenues
Inter-segment revenues
Total Sales
EBITDA
Depreciation and amortization
Provision for retirement pay liability
Other
Profit / (loss) for the year
Capital expenditures (Note 18, 19)

519.064

320.273

218.589

(38.922)

1.019.004

74.932
8.348
3.617

149.623
1.768

74.027
3.981
3.963

2.449
158
2.514

301.031
12.487
11.862

368.514

94.209

99.694

(43.976)

518.441

92.077

147.322

80.206

11.109

330.714

(1) Includes other subsidiaries included in the consolidation of Anadolu Efes and headquarters expenses.

(26)
F-69

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 5. SEGMENT INFORMATION (continued)
Segment assets and liabilities as of December 31, 2011 and 2010 is disclosed as follows:
Turkey International
Beer
Beer

Soft
Drinks

Other (1) and


Eliminations
(1.406.193)
19.236

Total

2011
Segment assets
Segment liabilities

3.094.136
871.460

2.829.313
1.258.990

1.903.453
1.064.143

18.447

3.002.585
851.663

2.294.972
1.124.038

1.514.717
793.535

21.441

6.420.709
3.213.829

Other disclosures
Investments in associates

18.447

2010
Segment assets
Segment liabilities
Other disclosures
Investments in associates

(1.223.443)
4.590
-

5.588.831
2.773.826
21.441

(1) Includes other subsidiaries included in the consolidation of Anadolu Efes.

Reconciliation of EBITDA to the consolidated profit before tax and its components as of December 31, 2011 and
2010 are explained in the following table:
2011
EBITDA
Depreciation and amortization expenses
Provision for retirement pay liability
Provision for vacation pay liability
(Impairment reversal) / impairment on property, plant and equipment, net
Provision / (reversal of provision) for doubtful receivables, net
Provision / (reversal of provision) for inventory obsolescence, net
Fair value increase related to change in scope of consolidation
Other
Profit from Operations
Loss from Associates
Financial Income
Financial Expenses (-)
Profit Before Tax from Continuing Operations

(27)
F-70

2010

953.416
(335.607)
(10.353)
(3.258)
(1.374)
(494)
4.104
2.957
(4.271)

1.019.004
(301.031)
(12.487)
(3.124)
(2.079)
(1.064)
(941)
(4.654)

605.120

693.624

(6.785)
240.686
(374.040)

(17.910)
244.302
(261.464)

464.981

658.552

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 6. CASH AND CASH EQUIVALENTS

Cash on hand
Bank accounts
- Time deposits
- Demand deposits
Other
Cash and cash equivalents in cash flow statement
Interest income accrual

2011

2010

1.466

855

843.873
67.859
913.198

896.289
39.042
52
936.238

4.431
917.629

3.086
939.324

As of December 31, 2011, as the maturity of all time deposits is less than three months, annual interest rates of the
TRL denominated time deposits vary between 3,8% and 13,3% (December 31, 2010 - 3,8% - 9,5%) and annual
interest rates of the USD, EURO denominated and other time deposits vary between 0,2% and 10,5% (December
31, 2010 0,1% - 5,4%).
NOTE 7. FINANCIAL INVESTMENTS
a) Current Investments

Time deposits with maturity more than three months


Investment funds

2011

2010

21.395
1.207
22.602

53.830
1.260
55.090

Investment funds in the consolidated financial statements are valued with their market value prevailing at the
balance sheet date. Time deposits with maturities over three months were made for periods varying between 3 to
7 months and earned interest is between 4,5% and 5,9% (December 31, 2010 for 3 to 8 months; 1,4% - 9,1%).
b) Non-current Investments
Ownership

Alternatifbank A..
Other

2011

2010

2011

2010

7,46%

7,46%

24.394
786

36.702
786

25.180

37.488

Available for sale securities (except for Alternatifbank) are carried at cost, since these investments do not have
a quoted market price in an active market and its fair value cannot be reliably measured by alternative valuation
methods. Shares of Alternatifbank are traded on the ISE, and the Group carried the shares of Alternatifbank at
fair value as of December 31, 2011 in the consolidated financial statements.
As a result of the valuation of current investments and shares of Alternatifbank at their market value, a negative
valuation difference amounting to TRL12.365 in 2011 is recognized under consolidated comprehensive income
statement as value increase / (decrease) in available for sale securities (December 31, 2010 TRL2.347
positive valuation difference). The deferred tax income effect of such valuation difference amounting to
TRL618 (December 31, 2010 TRL117 deferred tax expense) is also recognized under consolidated
comprehensive income statement.

(28)
F-71

Leasing obligations

TRL denominated borrowings


Foreign currency denominated borrowings (USD)
Foreign currency denominated borrowings (EURO)
Foreign currency denominated borrowings (Other)

Borrowings

Long-term

Leasing obligations

TRL denominated borrowings


Foreign currency denominated borrowings (USD)
Foreign currency denominated borrowings (EURO)
Foreign currency denominated borrowings (Other)

Short-term portion of long term borrowings

TRL denominated borrowings


Foreign currency denominated borrowings (USD)
Foreign currency denominated borrowings (EURO)
Foreign currency denominated borrowings (Other)

Borrowings

Short-term

(29)
F-72

1.764.496

1.623

766.760

661.322
82.630
22.808

996.113

563

530.911

2.720
467.861
45.115
15.215

464.639

397.003
13.343
54.293

Amount

2.099.477

Libor + 1,00% - 2,50%


Euribor + 1,80%
-

Libor + 1,00% - 2,50%


Euribor + 1,80% - 2,00%
Mosprime + 1,00%

Libor + 1,99% - 3,60%


Mosprime + 1,00% - Kibor + 0,50%

Floating rate

768.383

3,45% - 8,00%

5,00% - 10,00%
4,90% - 6,10%
8,11%

3,45% - 8,00%

5,00% - 10,00%
2,90% - 6,10%
3,95%
8,11%

7,00% - 13,08%
4,40% - 7,50%
3,47% - 3,95%
6,75% - 8,50%

December 31, 2011


Fixed rate

1.303.833

2.115

1.301.718

1.170
1.238.794
52.535
9.219

795.644

888

657.241

123
520.181
100.813
36.124

137.515

5.394
63.880
416
67.825

Amount

3,45%- 7,20%

4, 90%
8,11%

3,45%- 7,20%

11,30%
4,90%
8,11%

7,20% -7,93%
2,80%
5,50%

Floating rate

Libor + 1,00% - 2,80%


Euribor + 2,00%
-

Libor + 0,95% - 2,80%


Euribor + 1,00% - 2,00%
-

7,19% - 7,61%
Libor + 1,40%
Mosprime +1,00% - Kibor +1,25%

December 31, 2010


Fixed rate

As of December 31, 2011, total borrowings consist of principal (finance lease obligations included) amounting to TRL2.092.034 (2010 TRL1.759.960) and interest expense accrual
amounting to TRL7.443 (2010 TRL4.536). As of December 31, 2011 and 2010, total amount of borrowings and the effective interest rates are as follows:

NOTE 8. BORROWINGS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 8. BORROWINGS (continued)
Repayments of long-term borrowings are scheduled as follows (excluding finance lease obligation):

2012
2013
2014
2015 and thereafter

2011

2010

326.832
944.326
30.560

386.027
321.233
41.872
17.628

1.301.718

766.760

As of December 31, 2011, TRL10.706 (December 31, 2010 TRL1.560) of the total borrowings that are secured by
the Group related with CC, its subsidiaries and joint ventures consist of certain property, plant and equipment
amounting to TRL26.344 (December 31, 2010 TRL22.350).
Lessee - Finance Lease
Properties leased by the Group include buildings, machinery and equipment, motor vehicles and furniture and
fixtures. The most significant obligations assumed under the lease terms, other than rental payments, are the upkeep
of the facilities, insurance and property taxes. Lease terms generally range from 3 to 25 years with options to renew
at varying terms.
As of December 31, 2011 and 2010, the costs of the property plant and equipment obtained by finance lease are
TRL63.653 and TRL65.544, respectively whereas net book values are TRL5.604 and TRL7.387, respectively.
Lessee - Operating Lease
One of the production facilities of Efes Moscow and the production facility of Mutena Maltery are situated on a site
leased from the Moscow City Government under a 49-year lease contract. Furthermore, the Group has operational
leasing agreements with elik Motor Ticaret A.., a related party of the Group.
NOTE 9. OTHER FINANCIAL LIABILITIES
None (December 31, 2010 None).

(30)
F-73

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 10. TRADE RECEIVABLES AND PAYABLES
a) Short-Term Trade Receivables
2011
Trade receivables
Notes and cheques receivables
Provision for doubtful accounts (-)

2010

580.143
13.137
(14.852)

518.819
14.498
(15.066)

578.428

518.251

The movement of provision for doubtful accounts as of December 31, 2011 and 2010 is as follows:
2011

2010

Balance at January 1
Current year provision
Unused provisions
Write-offs from doubtful receivables
Disposals through liquidation
Currency translation differences

15.066
4.153
(3.659)
(1.527)
(297)
1.116

13.867
4.620
(3.556)
(127)
262

Balance at December 31

14.852

15.066

2011

2010

307.569

253.332

2011

2010

4.006
12.871

3.492
4.427

16.877

7.919

2011

2010

1.252
358

508
817

1.610

1.325

b) Short-Term Trade Payables

Trade payables
NOTE 11. OTHER RECEIVABLES AND PAYABLES
a) Other Current Receivables

Due from personnel


Other receivables

b) Other Non-Current Receivables

Deposits and guarantees given


Other

(31)
F-74

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 11. OTHER RECEIVABLES AND PAYABLES (continued)
c)

Other Current Payables

Taxes other than on income


Deposits and guarantees taken
Payables for goods in transit
Other

2011

2010

307.762
29.967
1.599
3.440

255.135
24.055
7.504
4.152

342.768

290.846

2011

2010

165.742

144.366

d) Other Non-Current Payables

Deposits and guarantees taken

NOTE 12. RECEIVABLES AND PAYABLES RELATED TO FINANCE SECTOR


None (December 31, 2010 - None).
NOTE 13. INVENTORIES
2011
Finished and trade goods
Work-in-process
Raw materials
Packaging materials
Supplies
Bottles and cases
Other
Reserve for obsolescence (-)

2010

105.425
67.819
239.088
35.265
69.708
29.042
21.905
(6.773)

95.975
50.426
187.762
36.339
58.515
30.264
21.056
(12.473)

561.479

467.864

The movement of reserve for obsolescence as of December 31, 2011 and 2010 is as below:

Balance at January 1
Current year provision
Inventories written off
Disposals through liquidation
Currency translation differences
Balance at December 31

(32)
F-75

2011

2010

12.473
3.261
(7.365)
(2.855)
1.259

11.357
4.205
(3.264)
175

6.773

12.473

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 14. BIOLOGICAL ASSETS
Planted fruit tree seedlings carried at cost in accordance with IAS 41 are amounting to TRL6.457 as of December
31, 2011. (31 December 2010, TRL1.512)
NOTE 15. RECEIVABLES AND DEFERRED INCOME FROM CONTINUING CONSTRUCTION
CONTRACTS
None (December 31, 2010 - None).
NOTE 16. INVESTMENTS IN ASSOCIATES

Ownership (%)

2011
Carrying value

28,00%

18.447

CEB
Total

2010
Ownership (%) Carrying value
28,00%

21.441
21.441

18.447

As of December 31, 2011 and 2010, total assets, liabilities and net loss for the year of CEB are shown as below:
2011

2010

Total Assets
Total Liabilities

60.122
41.675

49.586
28.145

Net Assets

18.447

21.441

Net Loss for the Year

(6.785)

(17.910)

The movement of investment in associates as of December 31, 2011 and 2010 is as below:
2011

2010

Balance at January 1
Loss from associates
Foreign currency translation

21.441
(6.785)
3.791

45.356
(17.910)
(6.005)

Balance at December 31

18.447

21.441

NOTE 17. INVESTMENT PROPERTY


None (December 31, 2010 - None).

(33)
F-76

330.596

2.526.147

2.043.794

3.361
27.587
174.407
9.413
114.783
1.045

34.451
269.153
1.525.176
45.068
649.638
2.661

546.661

4.569.941

Additions

1.465
22.450
91.488
9.342
191.124
75
230.717

167.407
853.491
2.438.350
75.299
970.740
3.866
60.788

2010

Additions

2010

(*) There are transfers to intangible assets in 2011 amounting to TRL1.079.

Net book value

Land and land improvements


Buildings
Machinery and equipment
Vehicles
Furniture and fixtures
Leasehold improvements

Accumulated Depreciation (-)

Land and land improvements


Buildings
Machinery and equipment
Vehicles
Furniture and fixtures
Leasehold improvements
Construction in progress

Cost

F-77

(34)

(75.038)

(115)
(7.222)
(27.178)
(4.150)
(36.373)
-

Disposals

(90.169)

(201)
(11.600)
(31.661)
(6.313)
(40.392)
(2)

Disposals

158.656

2.044
18.052
105.873
5.987
26.554
146

1.374

727
647
-

Impairment /
(Impairment
reversal), net

Addition Through
Business Foreign Currency
Combination
Translation

3.220
22.081
171.706
6.341
14.918
1.158
(220.503)
(1.079)

13.492
89.203
227.281
11.007
52.764
266
9.010

Transfers (*)

403.023

23.617

10.124
9.185
430
3.440
438

Addition Through
Business Foreign Currency
Combination
Translation

For the year ended December 31, 2011, the movements of property, plant and equipment are as follows:

NOTE 18. PROPERTY, PLANT AND EQUIPMENT

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi

2.510.259

2.941.735

39.741
307.570
1.779.005
56.318
755.249
3.852

2011

5.451.994

195.507
975.625
2.906.349
96.106
1.192.594
5.365
80.448

2011

(*) There are transfers to intangible assets in 2010 amounting to TRL576.

1.981.611

295.928

2.268.080

Net book value

2.975
23.883
159.821
8.234
100.826
189

31.257
243.348
1.366.467
40.863
583.647
2.498

Land and land improvements


Buildings
Machinery and equipment
Vehicles
Furniture and fixtures
Leasehold improvements

327.419

4.249.691

Additions

20.625
3.123
29.965
5.118
116.454
638
151.496

137.998
820.883
2.266.184
73.395
884.642
3.245
63.344

2009

Additions

2009

Accumulated Depreciation (-)

Land and land improvements


Buildings
Machinery and equipment
Vehicles
Furniture and fixtures
Leasehold improvements
Construction in progress

Cost

F-78

(35)

(58.348)

(278)
(14.783)
(4.728)
(38.512)
(47)

Disposals

(72.165)

(121)
(1.403)
(19.413)
(5.409)
(45.540)
(47)
(232)

Disposals

18.408

219
2.200
12.154
699
3.115
21

Foreign Currency
Translation

Addition Through
Business
Combination
-

45.188

1.742
10.347
25.760
1.171
5.196
30
942

Foreign Currency
Translation

20.384

3.540
6.673
10.146
6
19
-

Addition Through
Business
Combination

For the year ended December 31, 2010, the movements of property, plant and equipment are as follows:

NOTE 18. PROPERTY, PLANT AND EQUIPMENT (continued)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi

2.079

1.517
562
-

Impairment /
(Impairment
reversal)

(576)

3.623
13.868
125.708
1.018
9.969
(154.762)

Transfers (*)

2.043.794

2.526.147

34.451
269.153
1.525.176
45.068
649.638
2.661

2010

4.569.941

167.407
853.491
2.438.350
75.299
970.740
3.866
60.788

2010

Net book value

Bottling and distribution agreements


Brands
Rights
Other

Accumulated amortization (-)

Bottling and distribution agreements


Brands
Rights
Other

Cost

5.011

27.241

361.889

2.473
2.538

13.046
14.195

Additions

6.738

389.130

2010

818
5.920

Additions

180.025
160.440
27.426
21.239

2010

F-79

(36)

Disposals

Disposals

For the year ended December 31, 2011, movements of intangible assets are as follows:

NOTE 19. INTANGIBLE ASSETS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

8.832
Addition Through
Business
Combination

8.798
34

Addition Through
Business
Combination

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi

2.044

Impairment

Currency
translation
differences
9
2.035

1.079

1.079
-

Transfers

75.562

41.439
30.733
106
3.284

Currency
translation
differences

447.045

34.296

15.528
18.768

2011

481.341

230.262
191.173
29.429
30.477

2011

Net book value

Bottling and distribution agreements


Brands
Rights
Other

Accumulated amortization (-)

Bottling and distribution agreements


Brands
Rights
Other

Cost

F-80

(37)

5.103

22.009
357.016

2.294
2.809

10.747
11.262

Additions

3.295

379.025

2009

614
2.681

Additions

175.359
159.141
26.219
18.306

2009

For the year ended December 31, 2010, movements of intangible assets are as follows:

NOTE 19. INTANGIBLE ASSETS (continued)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

(126)

(126)

Disposals

(135)

(135)

Disposals

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi

255

5
250

Currency
translation
differences

6.369

4.666
1.299
17
387

Currency
translation
differences

Impairment

576

576
-

Transfers

361.889

27.241

13.046
14.195

2010

389.130

180.025
160.440
27.426
21.239

2010

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 20. GOODWILL
Movement of the goodwill during the period is as follows:
2011

2010

At January 1
Additions (Note 3)
Put option fair value change (Note 23)
Currency translation differences

871.079
7.384
(58.759)
92.941

855.570
6.147
9.362

At December 31

912.645

871.079

As of December 31, 2011 and 2010, operating segment distributions of goodwill are presented below:
Turkey Beer International Beer
2011
2010

50.099
50.099

563.041
538.043

Soft Drinks

Other

Total

287.327
270.759

12.178
12.178

912.645
871.079

NOTE 21. GOVERMENT INCENTIVES AND GRANTS


As of December 31, 2011, the Group used an incentive for its investment amounting to TRL24.505 on Bursa mineral
water and Elaz, Kyceiz and Mersin production lines by generating a total tax advantage of TRL4.962
(December 31, 2010 TRL665). The tax advantage amounting to TRL57 was recognized during 2011 (December
31, 2010 TRL26).

NOTE 22. PROVISIONS, CONTINGENT ASSETS AND LIABILITIES


As of December 31, 2011 and 2010, the movement of provisions is as follows:

Vacation pay liability


Management bonus accruals
Other

2011

2010

22.134
5.294
612

17.702
5.974
-

28.040

23.676

2011

2010

17.702
(480)
3.258
1.654

15.141
(765)
3.124
202

22.134

17.702

As of December 31, 2011 and 2010, movement of vacation pay liability is as follows:
Balance at January 1
Payments
Current year provision
Currency translation differences

As of December 31, 2011 and 2010 movement of management bonus accruals is as follows:
2011
Balance at January 1
Payments
Current year provision
Currency translation differences

(38)
F-81

2010

5.974
(28.776)
27.706
390

4.681
(23.031)
24.258
66

5.294

5.974

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 23. COMMITMENTS AND CONTINGENCIES
Parent Company (Anadolu Efes) and Subsidiaries Included in Full Consolidation
As of December 31, 2011 and 2010 guarantees, pledges and mortgages (GPMs) given in favor of the parent
company and subsidiaries included in full consolidation are as follows:
2011

A. GPMs given on behalf of the Companys legal


personality
B. GPMs given in favor of subsidiaries included in full
consolidation (1)
C. GPMs given by the Company for the liabilities of 3rd
parties in order to run ordinary course of business
D. Other GPMs
i. GPMs given in favor of parent company
ii. GPMs given in favor of group companies not in the
scope of B and C above
iii. GPMs given in favor of third party companies not in
the scope of C above
Total
Ratio of other GPMs over the Companys equity (%)

Total TRL
Equivalent

Original
Currency
TRL

Original
Currency
Thousand
USD

Original
Currency
Thousand
EUR

Original
Currency
Thousand
KZT

Original
Currency
Thousand
RUR

57.831

11.712

18.424

3.482

16.564

49.879

819.437

364.428

40.000

2.177.325

160.000

877.268

11.712

382.852

43.482

2.193.889

209.879

Total TRL
Equivalent

Original
Currency
TRL

Original
Currency
Thousand
USD

Original
Currency
Thousand
EUR

Original
Currency
Thousand KZT

Original
Currency
Thousand
RUR

2010

A. GPMs given on behalf of the Companys legal


personality
B. GPMs given in favor of subsidiaries included in full
consolidation
C. GPMs given by the Company for the liabilities of 3rd
parties in order to run ordinary course of business
D. Other GPMs
i. GPMs given in favor of parent company
ii. GPMs given in favor of group companies not in the
scope of B and C above
iii. GPMs given in favor of third party companies not in
the scope of C above
Total
Ratio of other GPMs over the Companys equity (%)
(1)

60.423

13.035

895

8.381

314.003

493.954

673.948

358.629

40.000

3.625.311

734.371

13.035

359.524

48.381

3.939.314

493.954

Comprises the GPMs given in favor of subsidiaries included in full consolidation for their borrowings.

EBI and Its Subsidiaries


Put Options
The put option granted to European Bank for Reconstruction and Development (EBRD) by EBI that may be
exercisable between the 7th and the 10th anniversaries of the date of EBRDs first subscription in the share capital of
Efes Moscow has been restructured and the exercisable period of the put option has been revised as between 2011
and 2015. By such put option, EBRD will be entitled to sell its Efes Moscow shares to EBI at an option price
determined by an independent valuation. The liability for the put option has been measured by applying a weighting
of different valuation techniques based on best estimates currently available, and the fair value of liability for put
option amounting to TRL87.859 has been presented in other current liabilities in the consolidated balance sheet
(December 31, 2010 TRL126.279). The negative valuation difference between current year fair value and prior
year fair value amounting to TRL58.759 has been disclosed as put option fair value change in goodwill in
accordance with IFRS 3 (December 31, 2010 positive valuation difference of TRL6.147).
CC, Its Subsidiaries and Joint Ventures
a) Put Options
A put option has been granted to Day Investments Ltd. by CC that may be exercisable in 2012. By such option,
Day Investments Ltd. will have right to sell its shares in Turkmenistan CC to CC at the price of USD2.360
thousand. Groups portion of the liability for the put option amounting to TRL2.240 has been presented in other
current liabilities (December 31, 2010 TRL1.834 in other non-current liabilities).
(39)
F-82

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 23. COMMITMENTS AND CONTINGENCIES (continued)
CC, Its Subsidiaries and Joint Ventures (continued)
b) Letters of Guarantee
As of December 31, 2011, CCs letters of guarantee given to various enterprises are amounting to TRL212.285
(December 31, 2010 TRL63.901).
Operational Lease
As of December 31, 2011, Groups contingent liability for the following 3 years resulting from the non-cancellable
operational lease agreements is amounting to TRL24.155 (December 31, 2010 TRL14.681).
Tax and Legal Matters
Legislation and regulations regarding taxation and foreign currency transactions in most of the territories in which
the Group operates out of Turkey continue to evolve as a result of the transformation from command to marketoriented economy managed by the government. The various legislation and regulations are not always clearly
written and the interpretation related with the implementation of these regulations is subject to the opinions of the
local, regional and national tax authorities, the Central Bank and Ministry of Finance. Tax declarations, together
with other legal compliance areas (as examples, customs and currency control) are subject to review and
investigation by a number of authorities, who are enabled by law to impose significant fines, penalties and interest
charges. These facts create tax risks in the territories in which the Group operates substantially more so than
typically found in countries with more developed tax systems.
The decision by Fourth Chamber of the Council of State dated September 22, 2008; which had cancelled the
Ministry of Finances communique dated 22 April 2008 and stating that the Article 4 of Law number 4207 on The
Prevention and Control of Harmful Effects of Tobacco and Tobacco Products is also applicable to alcoholic
products; has been annulled by Tax Law Divisions of the Council of State. The annulment decision on the stated
lawsuit is in the process of petition for a writ of error.
NOTE 24. EMPLOYEE BENEFITS

Employment termination benefits


Long-term incentive plans

2011

2010

43.522
10.511

39.010
12.327

54.033

51.337

In accordance with existing social legislation, the Groups companies incorporated in Turkey are required to make
lump-sum payments to employees whose employment is terminated due to retirement or for reasons other than
resignation or misconduct. Such payments are calculated on the basis of 30 days pay. The retirement pay liability
as at December 31, 2011 is subject to a ceiling of full TRL2.732 (December 31, 2010 full TRL2.517) (Retirement
pay liability ceiling has been increased to full TRL2.805 as of January 1, 2012). In the consolidated financial
statements as of December 31, 2011 and 2010, the Group reflected a liability calculated using the projected unit
credit method and based upon factors derived using their experience of personnel terminating their services and
being eligible to receive retirement pay and discounted by using the current market yield at the balance sheet date on
government bonds. Accordingly, net discount rates determined by considering expected payment dates are in a range
between 4,1% and 4,7% (December 31, 2010 4,7%)
Movement of provision for employment termination benefits represented in the consolidated financial statements is
as follows:

Balance at January 1
Payments
Interest cost
Current year provision

(40)
F-83

2011

2010

39.010
(5.841)
3.776
6.577

30.103
(3.580)
3.006
9.481

43.522

39.010

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 24. EMPLOYEE BENEFITS (continued)
Movement of provision for long-term incentive plan represented in the consolidated financial statements is as
follows:

Balance at January 1
Payments
Interest cost
Current year provision

2011

2010

12.327
(9.077)
780
6.481

10.045
(4.959)
693
6.548

10.511

12.327

2011

2010

87.373
79.482
54.990
22.453
1.839

58.100
35.661
34.267
23.251
753

246.137

152.032

2011

2010

71.234
13.508
8.549
98

48.341
14.274
6.690
173

93.389

69.478

2011

2010

90.099
20.108
18.770
6.458
545

126.279
24.418
12.185
5.169
1.239

135.980

169.290

NOTE 25. PENSION PLANS


None (December 31, 2010 None).
NOTE 26. OTHER ASSETS AND LIABILITIES
a) Other Current Assets

Value Added Tax (VAT) deductible or transferred


Prepayments
Advances given to suppliers
Prepaid taxes
Other

b) Other Non-Current Assets

Prepayments
Advances given
Deferred VAT and other taxes
Other

c)

Other Current Liabilities

Liability for put option (Note 23)


Expense accruals
Advances taken
Due to personnel
Other

(41)
F-84

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 26. OTHER ASSETS AND LIABILITIES (continued)
d) Other Non-Current Liabilities

Deferred VAT and other taxes


Liability for put option (Note 23)
Other

2011

2010

8.505
836

6.654
1.834
1.214

9.341

9.702

2011

2010

900.000
450.000

900.000
450.000

NOTE 27. EQUITY


a) Issued Capital and Adjustments to Share Capital and Equity Investments

Common shares 1 full TRL per value


Authorized capital
Issued capital

As of December 31, 2011 and 2010, the composition of shareholders and their respective percentage of
ownership can be summarized as follows:
2011
Amount

2010
Amount

Yazclar Holding A..


zilhan Snai Yatrm A..
Anadolu Endstri Holding A.. (AEH)
Publicly traded and other

139.787
79.813
35.292
195.108

31,06
17,74
7,84
43,36

139.251
78.937
35.292
196.520

30,94
17,54
7,84
43,68

Issued capital

450.000

100,00

450.000

100,00

Inflation correction adjustment

63.583

63.583

513.583

513.583

As of December 31, 2011 and 2010, there is not a privileged share representing the capital. According to the
articles of association, foundation shares that do not represent the share capital receives 2% of the profit that
remains after 10% of the paid in capital is deducted from the distributable profit. 5% of the remaining profit
after deducting the portion of the foundation shares is distributed to the members of the Board of Directors
equally.
b)

Restricted Reserves Allocated from Net Profit, Revaluation Fund and Accumulated Profits
The legal reserves consist of first and second legal reserves in accordance with the Turkish Commercial
Code. The first legal reserve is appropriated out of the statutory net income (inflation-restated income in
accordance with CMB) at the rate of 5%, until the total reserve reaches a maximum of 20% of the Companys
issued capital (inflation-restated issued capital in accordance with the communiqus and announcements of
CMB). The second legal reserve is appropriated at the rate of 10% of all distributions in excess of 5% of the
Companys issued capital (inflation-restated capital in accordance with CMB). The legal reserves are not
available for distribution unless they exceed 50% of the issued capital, other than that legal reserves cannot be
used.

(42)
F-85

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 27. EQUITY (continued)
b)

Restricted Reserves Allocated from Net Profit, Revaluation Fund and Accumulated Profits (continued)
Quoted companies are subject to dividend requirements regulated by the CMB as follows: Based on the CMB
Decree 1/6, dated January 9, 2009, companies that take their consolidated financial statements as basis for
their distributable profit, shall consider the profits of their subsidiaries, joint ventures and associates to the
extent that such profits do not exceed the amount recorded in the statutory financial statements of these
companies and without considering whether a profit distribution resolution is taken at their annual general
meetings. Such profits as reported in the financial statement as per Communiqu.
In accordance with the CMB decision dated January 27, 2010, its decided to remove the obligation related
with the minimum dividend distribution rate for publicly traded companies.
Inflation adjustment to shareholders' equity and carrying amount of extraordinary reserves can only be nettedoff against prior years' losses and used as an internal source for capital increase. However, when inflation
adjustment to shareholders' equity is used for cash dividend distribution, it is subject to income tax.
Net income for the year and other statutory resources treated for dividend distribution are TRL1.140.226 as of
December 31, 2011. (December 31, 2010 TRL1.161.584)
Anadolu Efes distributed dividend in 2011, related with the year ended as of December 31, 2010, for a gross
amount of full TRL0,48 per share, amounting to a total of TRL246.532 including the payments to founders
and members of board of directors (2010 gross amount full TRL0,32 per share, total amount TRL168.979
including the payments to founders and member of board of directors).
For December 31, 2011 and 2010, nominal amounts, equity restatement differences and restated value of
equity are as follows:
December 31, 2011
Issued capital
Legal reserves
Extraordinary reserves

Nominal
Amount

Equity Restatement
Differences

Restated
Amount

450.000
176.995
464.805

63.583
74.697
26.091

513.583
251.692
490.896

1.091.800

164.371

1.256.171

Fair value reserve


Currency translation differences
Other reserves
Accumulated profits (Including net income)

7.822
289.853
(5.736)
1.595.811

Equity attributable to equity holders of the parent

3.143.921

December 31, 2010

Nominal
Amount

Equity Restatement
Differences

Restated
Amount

Issued capital
Legal reserves
Extraordinary reserves

450.000
138.442
444.119

63.583
74.697
26.091

513.583
213.139
470.210

1.032.561

164.371

1.196.932

Fair value reserve


Currency translation differences
Other reserves
Accumulated profits (Including net income)

19.569
(4.085)
(5.736)
1.560.407

Equity attributable to equity holders of the parent

2.767.087

(43)
F-86

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 28. SALES AND COST OF SALES
2011

2010

Domestic revenues
Foreign revenues

2.625.332
2.135.934

2.361.655
1.807.138

Total Sales, net

4.761.266

4.168.793

Net change in inventory


Depreciation and amortisation expense on PP&E and intangible assets
Personnel expenses
Utility expenses
Provision for retirement pay liability
Other expenses

1.939.872
166.465
127.043
102.847
2.107
141.216

1.581.174
157.794
108.967
89.797
3.954
109.662

Total cost of sales

2.479.550

2.051.348

Gross Operating Profit

2.281.716

2.117.445

Revenues

Cost of Sales (-)

As of January 1- December 31, 2011 and 2010, the amount of excise tax accrued over beer sales by the Group in
Turkey are TRL1.847.001 and TRL1.470.821, respectively.
NOTE 29. OPERATING EXPENSES
a)

Selling, Distribution and Marketing Expenses

Advertising, selling and marketing expenses


Personnel expenses
Transportation and distribution expenses
Depreciation and amortization expense on PP&E and intangible assets
Utilities and communication expenses
Rent expenses
Repair and maintenance expenses
Provision for retirement pay liability
Other expenses

b)

2011

2010

539.413
238.758
227.137
147.651
24.377
10.089
8.137
2.868
64.347

449.321
194.726
181.399
126.365
19.498
10.490
8.292
2.651
67.746

1.262.777

1.060.488

2011

2010

193.637
86.206
23.454
20.032
12.544
6.521
5.707
5.378
4.627
56.732

168.112
70.158
19.209
16.793
10.720
4.384
6.414
5.882
3.694
48.585

414.838

353.951

General and Administration Expenses

Personnel expenses
Services rendered from outside
Taxation (other than on income) expenses
Depreciation and amortization expense on PP&E and intangible assets
Utilities and communication expenses
Meeting and travel expenses
Insurance expenses
Provision for retirement pay liability
Repair and maintenance expenses
Other expenses

(44)
F-87

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 30. EXPENSES BY NATURE
a) Depreciation and Amortization Expenses
2011
Cost of sales
Marketing, selling and distribution expenses
General and administration expenses
Other operating expenses

2010

(166.465)
(147.651)
(20.032)
(1.459)

(157.794)
(126.365)
(16.793)
(79)

(335.607)

(301.031)

b) Personnel Expenses
2011
Cost of sales
Marketing, selling and distribution expenses
General and administration expenses

2010

(127.043)
(238.758)
(193.637)

(108.967)
(194.726)
(168.112)

(559.438)

(471.805)

NOTE 31. OTHER OPERATING INCOME / EXPENSE


a) Other Operating Income

Gain on sale of fixed assets


Income from scrap and other materials
Rent income
Fair value difference related to change in scope of consolidation (Note 3)
Insurance compensation income
Impairment reversal of fixed assets (Note 18)
Other income

2011

2010

9.335
4.302
3.117
2.957
2.230
1.446
19.687

1.999
5.398
2.444
1.106
14.075

43.074

25.022

2011

2010

b) Other Operating Expenses

Donations
Competition Board Penalty
Loss from fixed assets sales
Impairment loss on fixed assets (Note 18)
Other expenses

(45)
F-88

(19.443)
(6.064)
(5.695)
(2.820)
(8.033)

(23.201)
(1.615)
(2.079)
(7.509)

(42.055)

(34.404)

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 32. FINANCIAL INCOME

Foreign exchange gain


Interest income
Gain from derivative financial instruments

2011

2010

180.795
59.286
605

171.740
71.669
893

240.686

244.302

2011

2010

NOTE 33. FINANCIAL EXPENSES

Foreign exchange loss


Interest expense
Loss from derivative financial instruments
Syndication loan expense
Other financial expenses

(302.842)
(64.934)
(676)
(886)
(4.702)

(168.047)
(77.534)
(1.117)
(10.073)
(4.693)

(374.040)

(261.464)

NOTE 34. NON-CURRENT ASSETS AVAILABLE FOR SALE AND DISCONTINUING OPERATIONS
None (December 31, 2010 - None).
NOTE 35. INCOME TAXES, DEFERRED TAX ASSETS AND LIABILITIES
The corporation tax rate for the fiscal year is 20% in Turkey (2010 - 20%). Corporate tax returns are required to be
filed until the twenty fifth of the fourth month following the fiscal year end and paid in full until the end of the same
month. The tax legislation provides for a provisional tax of 20% (2010 20%) to be calculated and paid based on
earnings generated for each quarter. The amounts thus calculated and paid are offset against the final corporate tax
liability for the fiscal year.
According to the Turkish Tax Law, corporate tax losses can be carried forward for a maximum period of five years
following the year in which the losses were incurred. The tax authorities can inspect tax returns and the related
accounting records for a retrospective maximum period of five years. In Turkey, the tax legislation does not permit
to file a consolidated tax return. Therefore, provision for taxes, as reflected in the consolidated financial statements,
has been calculated on a separate-entity basis.
The main components of tax income and expenses as of December 31, 2011 and 2010 are as follows:
2011
Current period tax expense
Deferred tax income / (expense), net

(46)
F-89

2010

(117.476)
11.967

(127.846)
(12.265)

(105.509)

(140.111)

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 35. INCOME TAXES, DEFERRED TAX ASSETS AND LIABILITIES (continued)
As of December 31, 2011 and 2010, the reconciliation of theoretical income tax calculated with the tax rates used in
the countries that Anadolu Efes operates in and total income tax is as follows:
2010

2011
Consolidated profit before tax
Enacted tax rate
Tax calculated at the parent company tax rate
Impact of tax paid via tax base increase regarding law no 6111
Non-deductible expenses
Income excluded from tax bases
Impact of different tax rates
Other

464.981
%20
(92.996)
(8.504)
(2.444)
7.218
1.481
(10.264)

658.552
20%
(131.710)
(5.978)
1.521
1.575
(5.519)

(105.509)

(140.111)

As of December 31, 2011 and 2010 consolidated deferred tax assets calculated by using effective tax rates are
summarized as below:
Asset
2010
2011
PPE and intangible assets
Inventories
Carry forward losses
Retirement pay liability and other
employee benefits
Other (*)

5.329
100.710

2.198
52.684

14.965
23.122

13.736
23.677

144.126

92.295

Liability
2010
2011
(133.991)
-

(95.130)
-

(133.991)
5.329
100.710

(133.991)

Net
2011

(95.130)

2010
(95.130)
2.198
52.684

14.965
23.122

13.736
23.677

10.135

(2.835)

(*) Includes the income tax paid regarding the disputed tax receivable from tax authorities which was not recognized
as income.
As of December 31, 2011 and 2010, the movement of deferred tax liability is as follows:
2011

2010

Balance at January 1,
Recorded to the consolidated income statement
Recognized in other comprehensive income (Note 7)
Addition through company acquisition
Currency translation differences

(2.835)
11.967
618
385

13.091
(12.265)
(117)
(3.722)
178

Balance at December 31

10.135

(2.835)

As a result of the Group managements assessment that sufficient taxable income will be generated and such carried
losses will be utilized in 9 years period, deferred tax asset amounting to TRL100.710 has been recognized.

(47)
F-90

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 36. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the net income for the year attributable to ordinary shareholders by
the weighted average number of ordinary shares outstanding during the period.
Following table illustrates the net income and share figures used in earnings per share calculation:

Net income
Weighted average number of shares
Earnings per share (full TRL)

2011

2010

341.175
450.000.000
0,7582

503.640
450.000.000
1,1192

There have been no other transactions involving ordinary shares or potential ordinary shares between the financial
statement date and the date of approval of these consolidated financial statements.
NOTE 37. RELATED PARTY BALANCES AND TRANSACTIONS
a) Balances with Related Parties
i)

Bank and Available-For-Sale Securities Balances With Related Parties

Alternatifbank (2) (4)


Alternatif Yatrm A.. (4)

2011

2010

338.679
1.207

202.200
1.260

339.886

203.460

As of 31 December 2011, maturities of time deposits on Alternatifbank are less than three months and the
weighted average interest rates for TRL denominated time deposits is 12,04% (December 31, 2010
7,85%) and USD denominated time deposits is 5,46% (December 31, 2010 2,67%)
ii)

Due from Related Parties

Anadolu Restoran letmeleri Ltd. ti. (4)


Other

2011

2010

14
86

337

100

337

2011
3.846
2.133
925
860
636
774

2010
2.822
4.990
612
11
211

9.174

8.646

iii) Due to Related Parties

AEH (1) (3)


Oyex Handels GmbH (4)
Anadolu Vakf
Anadolu Biliim Hizmetleri A.. (2) (4)
elik Motor Ticaret A.. (4)
Other

(1)
(2)
(3)
(4)

Related party of Yazclar Holding A.., a shareholder


Non-current financial investment of the Group
The shareholder of the Group
Related party of AEH, a shareholder

(48)
F-91

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 37. RELATED PARTY BALANCES AND TRANSACTIONS (continued)
b) Transactions with Related Parties
i)

Purchases of Goods and Other Charges


Nature of transaction
Anadolu Efes Spor Kulb
Oyex Handels GmbH (4)
Anadolu Vakf
AEH (1) (3)
elik Motor Ticaret A.. (4)
Anadolu Biliim Hizmetleri A.. (2) (4)
Efes Turizm letmeleri A.. (4)
AEH Mnih (4)
Anadolu Isuzu Otomotiv San. ve Tic. A.. (1)
Mutena Maltery (5)
Other

Service
Purchase of materials and fixed asset
Donations
Consultancy service
Vehicle leasing
Information service
Travel and accomodation
Purchase of materials and fixed asset
Rent expense
Purchase of raw material

2011

2010

49.000
27.427
19.243
17.971
14.499
12.946
6.515
3.573
1.065
612

42.000
26.729
23.128
15.828
11.123
12.642
5.203
3.557
1.142
5.321
2.906

152.851

149.579

2011

2010

16.156
(185)

7.384
(103)

15.971

7.281

2011

2010

121
97
14
119

210
193
237
393

351

1.033

ii) Financial Income / (Expense), Net


Nature of transaction
Alternatifbank (2) (4)
Other

Interest income / (expense), net

iii) Other Income / (Expense), Net


Nature of transaction
Anadolu Restoran letmeleri Ltd. ti. (4)
Alternatifbank (2) (4)
Anadolu Biliim Hizmetleri A.. (2) (4)
Other

(1)
(2)
(3)
(4)
(5)

Sale of by-product
Rent income
Rent income

Related party of Yazclar Holding A.., a shareholder


Non-current financial investment of the Group
The shareholder of the Group
Related party of AEH, a shareholder
Included in the consolidation by using the full consolidation method starting from August 2010.

iv) Directors remuneration


Dividends paid to Board of Directors of Anadolu Efes are amounting to TRL21.682 and TRL17.739 as of
December 31, 2011 and 2010, respectively. Remuneration and similar benefits received by total executive
members of the Board of Directors and executive directors in the current year are as follows:
Short-term employee benefits
Post-employment benefits
Other long term benefits
Termination benefits
Share-based payments

(49)
F-92

2011

2010

12.759
1.921
-

12.269
449
733
-

14.680

13.451

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 38. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS
The Groups principal financial instruments comprise bank borrowings, finance leases, cash and short-term deposits.
The main purpose of these financial instruments is to raise funds for the Groups operations. Besides, The Group has
various other financial instruments such as trade debtors and trade creditors, which arise directly from its operations.
The main risks arising from the Groups financial instruments can be identified as foreign currency risk, credit risk,
interest rate risk, price risk and liquidity risk. The board/management reviews and agrees policies for managing each
of these risks. The Group also monitors the market price risk arising from all financial instruments. Related policies
can be summarized as follows:
a) Interest Rate Risk
The Group is exposed to interest rate risk through the impact of rate changes on interest bearing assets and
liabilities. The Group manages interest rate risk by using natural hedges that arise from offsetting interest rate of
assets and liabilities or derivative financial instruments.
Certain parts of the interest rates related to borrowings are based on market interest rates; therefore the Group is
exposed to interest rate fluctuations on domestic and international markets. The Groups exposure to market risk
for changes in interest rates relates primarily to the Groups debt obligations.
The Groups financial instruments sensitive to interest rate risk is as follows:
Financial instruments with fixed interest rate
Financial assets
Financial assets at fair value through profit or loss
Financial liabilities
Financial instruments with floating interest rate
Financial liabilities

2011

2010

869.699
137.391

953.205
310.317

1.961.783

1.452.699

At December 31, 2011, if interest rate on the Groups foreign currency denominated borrowings would have
been 100 basis points higher / lower with all other variables held constant, then profit before tax and minority
interest for the period ended March 31, 2012, which is the following reporting period, would be:
2011

2010

Change in USD denominated borrowing interest rate


Change in EURO denominated borrowing interest rate
Change in Other denominated borrowing interest rate

4.318
376
183

2.815
318
104

Total

4.877

3.237

b) Foreign Currency Risk


Foreign currency risk arises from the EURO and USD denominated assets and liabilities of the Group. The
Group has transactional currency exposures. Such exposures arise from sales or purchases or borrowings by the
Group in currencies other than the Groups functional currency. The Group manages foreign currency risk by
using natural hedges that arise from offsetting foreign currency denominated assets and liabilities.

(50)
F-93

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 38. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS (continued)
b) Foreign Currency Risk (continued)
Net foreign currency exposure for the consolidated Group companies as of December 31, 2011 and 2010 are
presented below:
Foreign Currency Position Table
2011
Total TRL
Equivalent
(Functional
Thousand
Currency)
USD

TRL
Equivalent

Thousand
Euro

Other Foreign
Currency TRL
Equivalent

TRL
Equivalent

18.802
283.009
12.798
314.609
1.818
1.818
316.427
(76.392)
(399.256)
(10.532)
(486.180)
(937.221)
(937.221)
(1.423.401)
(1.106.974)
(1.121.590)

4.768
127.522
6
132.296
226
226
132.522
(4.744)
(158.675)
(1.186)
(164.605)
(467.422)
(467.422)
(632.027)
(499.505)
(499.737)

9.007
240.877
11
249.895
426
426
250.321
(8.961)
(299.722)
(2.241)
(310.924)
(882.913)
(882.913)
(1.193.837)
(943.516)
(943.953)

589
13.953
146
14.688
369
369
15.057
(23.588)
(42.369)
(134)
(66.091)
(23.118)
(23.118)
(89.209)
(74.152)
(74.667)

1.383
32.779
342
34.504
867
867
35.371
(55.412)
(99.534)
(314)
(155.260)
(54.308)
(54.308)
(209.568)
(174.197)
(175.406)

8.412
9.353
12.445
30.210
525
525
30.735
(12.019)
(7.977)
(19.996)
(19.996)
10.739
(2.231)

Foreign Currency Position Table


2010
Total TRL
Equivalent
(Functional
Thousand
Currency)
USD

TRL
Equivalent

Thousand
Euro

1. Trade Receivables and Due from Related Parties


2a. Monetary Financial Assets (Cash and cash equivalents included)
2b. Non- monetary Financial Assets
3. Other Current Assets and Receivables
4. Current Assets
5. Trade Receivables and Due from Related Parties
6a. Monetary Financial Assets
6b. Non-monetary Financial Assets
7. Other
8. Non-Current Assets
9. Total Assets
10.Trade Payables and Due to Related Parties
11.Short- term Borrowings and Current Portion of Long- term Borrowings
12a. Monetary Other Liabilities
12b. Non-monetary Other Liabilities
13. Current Liabilities
14. Trade Payables and Due to Related Parties
15. Long-Term Borrowings
16 a. Monetary Other Liabilities
16 b. Non-monetary Other Liabilities
17. Non-Current Liabilities
18. Total Liabilities
19. Off Balance Sheet Derivative Items Net Asset/(Liability) Position
19a. Total Hedged Assets
19b. Total Hedged Liabilities
20. Net Foreign Currency Asset / (Liability) Position
21. Monetary Items Net Foreign Currency Asset / (Liability) Position
22. Total Fair Value of Financial Instruments Used to Manage the Foreign
Currency Position
23.Total value of Hedged Foreign Currency Assets

1. Trade Receivables and Due from Related Parties


2a. Monetary Financial Assets (Cash and cash equivalents included)
2b. Non- monetary Financial Assets
3. Other Current Assets and Receivables
4. Current Assets
5. Trade Receivables and Due from Related Parties
6a. Monetary Financial Assets
6b. Non-monetary Financial Assets
7. Other
8. Non-Current Assets
9. Total Assets
10.Trade Payables and Due to Related Parties
11 Short- term Borrowings and Current Portion of Long- term Borrowings
12a. Monetary Other Liabilities
12b. Non-monetary Other Liabilities
13. Current Liabilities
14. Trade Payables and Due to Related Parties
15. Long-Term Borrowings
16 a. Monetary Other Liabilities
16 b. Non-monetary Other Liabilities
17. Non-Current Liabilities
18. Total Liabilities
19. Off Balance Sheet Derivative Items Net Asset/(Liability) Position
19a. Total Hedged Assets
19b. Total Hedged Liabilities
20. Net Foreign Currency Asset / (Liability) Position
21. Monetary Items Net Foreign Currency Asset / (Liability) Position
22. Total Fair Value of Financial Instruments Used to Manage the Foreign
Currency Position
23.Total value of Hedged Foreign Currency Assets

Other Foreign
Currency TRL
Equivalent

TRL
Equivalent

12.219
66.718
6.915
85.852
85.852
(75.043)
(505.118)
(4.982)
(585.143)
(436.370)
(1.833)
(438.203)
(1.023.346)
(937.494)
(944.409)

4.453
26.871
50
31.374
31.374
(3.750)
(297.179)
(706)
(301.635)
(227.759)
(1.186)
(228.945)
(530.580)
(499.206)
(499.256)

6.885
41.542
77
48.504
48.504
(5.798)
(459.439)
(1.092)
(466.329)
(352.116)
(1.833)
(353.949)
(820.278)
(771.774)
(771.851)

489
2.959
1.488
4.936
4.936
(32.280)
(22.292)
(276)
(54.848)
(41.118)
(41.118)
(95.966)
(91.030)
(92.518)

1.002
6.063
3.049
10.114
10.114
(66.145)
(45.679)
(565)
(112.389)
(84.254)
(84.254)
(196.643)
(186.529)
(189.578)

4.332
19.113
3.789
27.234
27.234
(3.100)
(3.325)
(6.425)
(6.425)
20.809
17.020

(51)
F-94

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 38. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS (continued)
b) Foreign Currency Risk (continued)
The information regarding the export and import figures realized as of December 31, 2011 and 2010 is as follows:
2011

2010

Total Export

139.269

115.196

Total Import

790.044

519.773

The following table demonstrates the sensitivity analysis of foreign currency as of December 31, 2011 and 2010:
Foreign Currency Position Sensitivity Analysis
2011
Income / (Loss)
Decrease of
Increase of
the foreign
the foreign
currency
currency
Increase / decrease in the USD by 10%:
USD denominated net asset / (liability)
USD denominated hedging instruments(-)
Net effect in USD
Increase / decrease in the EURO by 10%:
EURO denominated net asset / (liability)
EURO denominated hedging instruments(-)
Net effect in EURO
Increase / decrease in the other foreign currencies by 10%:
Other foreign currency denominated net asset / (liability)
Other foreign currency hedging instruments(-)
Net effect in other foreign currency
TOTAL

Equity
Decrease of
Increase of
the foreign
the foreign
currency
currency

(94.352)
(94.352)

94.352
94.352

151.274
151.274

(151.274)
(151.274)

(17.420)
(17.420)

17.420
17.420

2.292
2.292

(2.292)
(2.292)

1.074
1.074

(1.074)
(1.074)

(110.698)

110.698

153.566

(153.566)

Foreign Currency Position Sensitivity Analysis


2010
Income / (Loss)
Increase of
Decrease of
the foreign
the foreign
currency
currency
Increase / decrease in the USD by 10%:
USD denominated net asset / (liability)
USD denominated hedging instruments(-)
Net effect in USD
Increase / decrease in the EURO by 10%:
EURO denominated net asset / (liability)
EURO denominated hedging instruments(-)
Net effect in EURO
Increase / decrease in the other foreign currencies by 10%:
Other foreign currency denominated net asset / (liability)
Other foreign currency hedging instruments(-)
Net effect in other foreign currency
TOTAL

(52)
F-95

Increase of
the foreign
currency

Equity
Decrease of
the foreign
currency

(77.177)
(77.177)

77.177
77.177

112.810
112.810

(112.810)
(112.810)

(18.653)
(18.653)

18.653
18.653

2.190
2.190

(2.190)
(2.190)

2.081
2.081

(2.081)
(2.081)

(93.749)

93.749

115.000

(115.000)

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 38. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS (continued)
c) Liquidity Risk
Liquidity risk is the risk that an entity will be unable to meet its net funding requirements. The risk is mitigated
by matching the cash in and out flow volume supported by committed lending limits from qualified credit
institutions.
The table below summarizes the maturity profile of the Groups financial liabilities on the consolidated balance
sheet as of December 31, 2011 and 2010;

2011

Carrying
value

Contractual
payment
(=I+II+III+IV)

Less than
3month (I)

Between 3-12
month (II)

Between
1-5 year
(III)

More
than 5
year (IV)

Financial Liabilities
Trade Payable and due to related parties
Liability for put option

2.099.477
316.743
90.099

2.174.993
316.743
90.099

195.704
262.035
-

619.986
48.700
90.099

1.359.048
6.008
-

255
-

2.506.319

2.581.835

457.739

758.785

1.365.056

255

Carrying
value

Contractual
payment
(=I+II+III+IV)

Less than
3month (I)

Between 3-12
month (II)

Between
1-5 year
(III)

More
than 5
year
(IV)

1.764.496
261.978
128.113

1.822.992
261.978
128.113

454.346
221.390
-

556.589
38.678
126.279

812.057
1.910
1.834

2.154.587

2.213.083

675.736

721.546

815.801

2010
Financial Liabilities
Trade Payable and due to related parties
Liability for put option

d) Price Risk
This is a combination of currency, interest and market risks which the Group manages through natural hedges
that arise from offsetting the same currency receivables and payables, interest bearing assets and liabilities.
Market risk is closely monitored by the management using the available market information and appropriate
valuation methods.
e) Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the
other party to incur a financial loss. The Group attempts to control credit risk by limiting transactions with
specific counterparties and continually assessing the creditworthiness of the counterparties.
Concentrations of credit risk arise when a number of counterparties are engaged in similar business activities or
activities in the same geographic region, or have similar economic features that would cause their ability to meet
contractual obligations to be similarly affected by changes in economic, political or other conditions.
Concentrations of credit risk indicate the relative sensitivity of the Group's performance to developments
affecting a particular industry or geographic location.
The Group seeks to manage its credit risk exposure through diversification of sales activities to avoid undue
concentrations of risks with individuals or groups of customers in specific locations or businesses. The Group
also obtains guarantees from the customers when appropriate.

(53)
F-96

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 38. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS (continued)
e) Credit Risk (continued)
Maximum exposure to credit risk and aging of financial assets past due but not impaired as of December 31,
2011 and 2010 are disclosed as below:

Current Year
Maximum exposure to credit risk at the end of reporting
period
(A+B+C+D+E)
- Maximum credit risk secured by guarantees
A. Net carrying amount of financial assets that are neither past due
nor impaired
B. Carrying amount of financial assets whose term has been
renegotiated, otherwise past due or impaired
C. Net carrying amount of financial assets past due but not
impaired
- Under guarantee
D. Net carrying amount of financial assets impaired
- past due (gross carrying value)
- impaired (-)
- Net carrying amount of financial assets under guarantee
- not past due (gross carrying value)
- impaired (-)
- Net carrying amount of financial assets under guarantee
E. Off- balance sheet items which include credit risk

Current Year

Receivables
Trade Receivables
Other Receivables
Due from
Due from
Due from
Due from
related
third
related
third
parties
parties
parties
parties

100
-

578.428
372.786

100
-

Prior Year
Maximum exposure to credit risk at the end of reporting period
(A+B+C+D+E)
- Maximum credit risk secured by guarantees
A. Net carrying amount of financial assets that are neither past due
nor impaired
B. Carrying amount of financial assets whose term has been
renegotiated, otherwise past due or impaired
C. Net carrying amount of financial assets past due but not
impaired
- Under guarantee
D. Net carrying amount of financial assets impaired
- past due (gross carrying value)
- impaired (-)
- Net carrying amount of financial assets under guarantee
- not past due (gross carrying value)
- impaired (-)
- Net carrying amount of financial assets under guarantee
E. Off- balance sheet items which include credit risk

Prior Year
Past due between 1-30 days
Past due between 1-3 months
Past due between 3-12 months
Past due for more than 1 year

Other

18.487
-

937.558
-

222.948
-

520.833

18.487

937.558

55.712
21.566
1.883
16.735
(14.852)
1.883
-

222.948

Trade Receivables

Past due between 1-30 days


Past due between 1-3 months
Past due between 3-12 months
Past due for more than 1 year

Derivative
Instruments

Deposits

Other Receivables

41.798
8.808
1.934
3.172

Deposits

Derivative
Other
Instruments

Receivables
Trade Receivables
Other Receivables
Due from
Due from
Due from
related
Due from
related
third
parties
third parties
parties
parties

Deposits

Derivative
Instruments

Other

337
-

518.251
318.290

9.244
-

992.299
-

73.361
-

337

477.987

9.244

992.299

38.733
6.208
1.531
16.597
(15.066)
1.531
-

73.361

Trade Receivables
23.853
9.126
3.308
2.446

Other
Receivables
-

Deposits
-

Derivative
Instruments
-

Other
-

f) Capital Risk Management


The Groups policy is to ensure that it maintains a strong credit rating and healthy capital ratios in order to
support its business and maximize shareholder value. The Group periodically measures Net Debt to EBITDA
ratio to maintain capital risk management. Net Debt is calculated by deducting cash and cash equivalents from
total borrowings.
(54)
F-97

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 39. FINANCIAL INSTRUMENTS
Fair Value
Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable, willing
parties in an arm's length transaction. The optimum fair value of a financial instrument is the quoted market value, if
any.
The financial assets and liabilities which are denominated in foreign currencies are evaluated by the foreign
exchange rates prevailing on the date of balance sheet which approximate to market rates. The following methods
and assumptions were used to estimate the fair value of each class of financial instrument of the Group for which it
is practicable to estimate a fair value:
i) Financial Assets
The fair values of certain financial assets carried at cost in the consolidated financial statements, including
cash and cash equivalents plus the respective accrued interest and other financial assets are considered to
approximate their respective carrying values due to their short-term nature and negligible credit losses. The
carrying value of trade receivables along with the related allowance for unearned income and uncollectibility
are estimated to be their fair values.
ii) Financial Liabilities
Trade payables and other monetary liabilities are considered to approximate their respective carrying values
due to their short-term nature. The bank borrowings are stated at their amortized costs and transaction costs
are included in the initial measurement of loans and bank borrowings. The fair value of bank borrowings are
considered to state their respective carrying values since the interest rate applied to bank loans and
borrowings are updated periodically by the lender to reflect active market price quotations. The carrying
value of trade payables along with the related allowance for unrealized cost is estimated to be their fair
values.
Fair value hierarchy table
The Group classifies the fair value measurement of each class of financial instruments according to the source, using
the three-level hierarchy, as follows
Level 1: Market price valuation techniques for the determined financial instruments traded in markets
Level 2: Other valuation techniques including direct or indirect observable inputs
Level 3: Valuation techniques not containing observable market inputs
Current Year
Financial assets at fair value
Share certificates
Investment funds
Financial liabilities at fair value
Interest rate swap
Options (Note 23)
Prior Year
Financial assets at fair value
Share certificates
Investment funds
Financial liabilities at fair value
Interest rate swap
Options (Note 23)

(55)
F-98

Level 1

Level 2

Level 3

24.394
1.207

90.099

Level 1

Level 2

Level 3

36.702
1.260

596
-

128.113

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2011
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 39. FINANCIAL INSTRUMENTS (continued)
Derivative Financial Instruments, Risk Management Objectives and Policies
Derivative financial instruments are initially measured at cost. After initial recognition, derivatives are measured at
fair value. Structured forward buy-sell contracts and interest rate swap agreements are the main derivative financial
instruments of the Group, which are effective to avoid the occurrence of foreign currency and interest rate risks from
the operational and financial activities. Since the conditions for the hedge accounting in accordance with IAS 39
Financial Instruments: Recognition and Measurement are not met, hedge accounting is not applicable for these
derivative financial instruments.
NOTE 40. SUBSEQUENT EVENTS
a) In January 2012, the Company, together with its 56,64% shareholders Yazclar Holding A.., zilhan Snai
Yatrm A. and Anadolu Endstri Holding A. have signed Definitive Transaction Agreement with
SABMiller Plc. (SABMiller). According to this agreement, Anadolu Efes will be executing the investments of
SABMiller in Turkey, Russia, CIS countries, Central Asia and Middle East; and SABMiller have transferred all
Russian and Ukrainian beer businesses to Anadolu Efes with a consideration of USD 1,9 billion in full.
b) As of March 5, 2012, following the completion of approvals from all regulatory authorities, SABMillers
Russian and Ukrainian beer businesses have been transferred to EBI and Euro Asien.Within the scope of this
transaction, EBI and Euro Asiens share capitals have been increased and Anadolu Efes Board of Directors
resolved to participate in the planned capital increase of EBI by full USD1.858.000.000, as USD358.800.000 in
cash and USD1.500.000.000 via loan notes.
The initial accounting of this business combination is in progress as of the date of these consolidated financial
statements.
c) On March 6, 2012, it has been resolved to increase the Companys issued capital to 592.105.263 full TRL, while
the shareholders right to purchase new shares will be restricted. The newly issued 142.105.263 bearer shares,
which are above the nominal values, will be allocated on the name of SABMiller Anadolu Efes Limited
(SABMiller AEL), a subsidiary of SABMiller Plc. Additional 142.105.263 shares have been registered by CMB
on March 8, 2012.
d) Companys final shareholding structure after the sales of newly issued shares to SABMillers subsidiary
SABMiller Anadolu Efes Limited (SABMiller AEL) in return for increased capital on March 14, 2012 is as
follows:
Sermaye Art Sonras
Tutar
%
Yazclar Holding A..
zilhan Snai Yatrm A..
Anadolu Endstri Holding A.. (AEH)
SABMiller AEL
Halka ak ve dier

139.787
79.813
35.292
142.105
195.108
592.105

23,61
13,48
5,96
24,00
32,95
100,00

31 Aralk 2011
Tutar
%
139.787
79.813
35.292
195.108
450.000

31,06
17,74
7,84
43,36
100,00

e)

In February, 2012, CCI has announced that a Share Purchase Agreement has been signed between Waha B.V.
and the Iraq resident current shareholders of Al Waha for Soft Drinks, Mineral Water and Juices LLC (Al
Waha), for the acquisition of 85% of the share capital of Al Waha by Waha B.V. On the other hand, 23.60%
shares of Waha B.V., a 100% subsidiary of CCI which was established with initial share capital of Euro18.000
in the Netherlands for the purpose of making investments in Southern Iraq, was sold at the nominal value in
consideration of a purchase price of Euro 4.248 to European Refreshments (ER), a 100% subsidiary of The
Coca-Cola Company.

f)

In March 2012, the Company utilized financial borrowing with maturity of 3 years and Libor + 3,5% interest
rate amounting to USD150 million for investing and restructuring activities.
.
(56)
F-99

CONVENIENCE TRANSLATION INTO ENGLISH OF


CONSOLIDATED FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH

ANADOLU EFES BRACILIK VE


MALT SANAY ANONM RKET
CONSOLIDATED FINANCIAL STATEMENTS
AS OF 31 DECEMBER 2010
TOGETHER WITH INDEPENDENT AUDITORS REPORT

F-100

CONVENIENCE TRANSLATION INTO ENGLISH OF


INDEPENDENT AUDITORS REPORT
ORIGINALLY ISSUED IN TURKISH
INDEPENDENT AUDITORS REPORT
To the Board of Directos of
Anadolu Efes Biraclk ve Malt Sanayii A..
1.

We have audited the accompanying consolidated financial statements of Anadolu Efes Biraclk ve
Malt Sanayii A.., its subsidiaries and joint ventures (collectively referred to as the Group), which
comprise the consolidated balance sheet at 31 December 2010 and the related consolidated
statement of income, consolidated statement of comprehensive income, 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.

Managements Responsibility for the Financial Statements


2.

The Group management is responsible for the preparation and fair presentation of these
consolidated financial statements in accordance with the financial reporting standards accepted by
the Capital Markets Board (CMB). This responsibility includes: designing, implementing and
maintaining internal control relevant to the proper preparation of financial statements that are free
from material misstatement, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors 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 auditing standards issued by the CMB. Those
Standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance whether the consolidated financial statements are free of material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entitys proper preparation 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 entitys 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 financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.

F-101

Opinion
4.

In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the financial position of Anadolu Efes Biraclk ve Malt Sanayii A.. as of 31 December
2010, and its financial performance and its cash flows for the year then ended in accordance with
the financial reporting standards accepted by the CMB (Note 2).

Other Matter
5.

The financial statements of the Group as of 31 December 2009 were audited by other auditors
whose report, dated 30 March 2010 expressed an unqualified opinion on those statements.

Additional paragraph for convenience translation into English


6.

The accounting principles described in Note 2 to the 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 for the period 1 January 31 December 2005. Accordingly, the accompanying consolidated financial statements are not
intended to present the financial position and results of operations of the Group in accordance with
IFRS.

Baaran Nas Bamsz Denetim ve


Serbest Muhasebeci Mali Mavirlik A..
a member of
PricewaterhouseCoopers

Burak zpoyraz, SMMM


Partner
Istanbul, 29 March 2011

2 of 2

F-102

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi

TABLE OF CONTENTS
Page
Consolidated Balance Sheet ........................................................................................................................................ 1
Consolidated Income Statement ................................................................................................................................. 2
Consolidated Statement of Comprehensive Income ................................................................................................. 3
Consolidated Statement of Changes in Equity .......................................................................................................... 4
Consolidated Statement of Cash Flow ....................................................................................................................... 5
Explanatory Notes to the Consolidated Financial Statements (Notes) .............................................................. 6-56
Note 1
Note 2
Note 3
Note 4
Note 5
Note 6
Note 7
Note 8
Note 9
Note 10
Note 11
Note 12
Note 13
Note 14
Note 15
Note 16
Note 17
Note 18
Note 19
Note 20
Note 21
Note 22
Note 23
Note 24
Note 25
Note 26
Note 27
Note 28
Note 29
Note 30
Note 31
Note 32
Note 33
Note 34
Note 35
Note 36
Note 37
Note 38
Note 39
Note 40

Groups Organization and Nature of Activities ............................................................................ 6-8


Basis of Presentation of Consolidated Financial Statements ...................................................... 9-21
Business Combinations ............................................................................................................. 22-25
Joint Ventures ................................................................................................................................. 25
Segment Information................................................................................................................. 26-27
Cash and Cash Equivalents ............................................................................................................. 28
Financial Investments ..................................................................................................................... 28
Borrowings................................................................................................................................ 29-30
Other Financial Liabilities .............................................................................................................. 30
Trade Receivables and Payables ..................................................................................................... 31
Other Receivables and Payables ............................................................................................... 31-32
Receivables and Payables Related to Finance Sector...................................................................... 32
Inventories....................................................................................................................................... 32
Biological Assets ............................................................................................................................ 33
Receivables and Deferred Income from Continuing Construction Contracts ................................. 33
Investments in Associates. .............................................................................................................. 33
Investment Property ........................................................................................................................ 33
Property, Plant and Equipment ................................................................................................. 34-35
Intangible Assets ....................................................................................................................... 36-37
Goodwill ......................................................................................................................................... 38
Government Incentives and Grants ................................................................................................. 38
Provisions, Contingent Assets and Liabilities ................................................................................. 38
Commitments and Contingencies ............................................................................................. 39-40
Employee Benefits .................................................................................................................... 40-41
Pension Plans .................................................................................................................................. 41
Other Current / Non-Current Assets and Liabilities .................................................................. 41-42
Equity ........................................................................................................................................ 42-43
Sales and Cost of Sales ................................................................................................................... 44
Operating Expenses......................................................................................................................... 44
Expenses by Nature......................................................................................................................... 45
Other Operating Income / Expense ................................................................................................. 45
Financial Income ............................................................................................................................. 46
Financial Expenses.......................................................................................................................... 46
Non-Current Assets Available For Sale and Discontinuing Operations ........................................ 46
Income Taxes, Deferred Tax Assets and Liabilities.................................................................. 46-47
Earnings per Share .......................................................................................................................... 48
Related Party Balances and Transactions.................................................................................. 48-49
Nature and Level of Risks Arising From Financial Instruments ............................................... 50-54
Financial Instruments ................................................................................................................ 55-56
Subsequent Events .......................................................................................................................... 56

F-103

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONSOLIDATED BALANCE SHEET
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
Notes

Audited
2010

2009

ASSETS
Current Assets
Cash and Cash Equivalents
Financial Investments
Trade Receivables
Due from Related Parties
Other Receivables
Inventories
Other Current Assets

6
7
10
37
11
13
26

2.140.817
939.324
55.090
518.251
337
7.919
467.864
152.032

2.056.660
1.053.256
21.204
421.539
810
5.827
412.389
141.635

Non-Current Assets
Other Receivables
Financial Investments
Investments In Associates
Biological Assets
Property, Plant and Equipment
Intangible Assets
Goodwill
Deferred Tax Assets
Other Non-Current Assets

11
7
16
14
18
19
20
35
26

3.448.014
1.325
37.488
21.441
1.512
2.043.794
361.889
871.079
40.008
69.478

3.373.381
944
40.101
45.356
1.981.611
357.016
855.570
46.871
45.912

5.588.831

5.430.041

1.488.643
949.326
234.879
14.996
202.308
16.507
20.334
50.293

Total Assets
LIABILITIES
Current Liabilities
Borrowings
Trade Payables
Due to Related Parties
Other Payables
Provision for Corporate Tax
Provisions
Other Current Liabilities

22
26

1.757.195
996.113
253.332
8.646
290.846
15.292
23.676
169.290

Non-Current Liabilities
Borrowings
Other Payables
Provision for Employee Benefits
Deferred Tax Liability
Other Non-Current Liabilities

8
11
24
35
26

1.016.631
768.383
144.366
51.337
42.843
9.702

1.207.220
908.059
126.620
40.148
33.780
98.613

2.767.087
450.000
63.583
19.569
(4.085)
138.442
(5.736)
1.601.674
503.640

2.426.917
450.000
63.583
17.339
(18.016)
108.217
4.916
1.378.290
422.588

8
10
37
11

EQUITY
Equity Attributable to Equity Holders of the Parent
Issued Capital
Inflation Adjustment to Issued Capital
Fair Value Reserve
Currency Translation Differences
Restricted Reserves Allocated from Net Income
Other Reserves
Accumulated Profits
Net Income

27
27
27
27
27
27
27

Minority Interests
Total Liabilities

47.918

307.261

5.588.831

5.430.041

The accompanying notes form an integral part of these consolidated financial statements
(1)
F-104

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONSOLIDATED INCOME STATEMENT
For the year ended December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

Audited
Notes

2010

2009

Continuing Operations
Sales
Cost of Sales (-)

5, 28
28

Gross Profit From Operations


29
29
31
31

Marketing, Selling and Distribution Expenses (-)


General and Administration Expenses (-)
Other Operating Income
Other Operating Expense (-)

4.168.793
(2.051.348)

3.811.067
(1.907.934)

2.117.445

1.903.133

(1.060.488)
(353.951)
25.022
(34.404)

(928.050)
(322.094)
41.470
(46.478)

693.624

647.981

(17.910)
244.302
(261.464)

(10.925)
375.081
(468.383)

658.552

543.754

(127.846)
(12.265)

(127.260)
5.778

Profit For The Year

518.441

422.272

Attributable to:
Minority interests
Equity holders of the parent

14.801
503.640

(316)
422.588

1,1192

0,9391

Profit From Operations


16
32
33

Loss from Associates


Financial Income
Financial Expenses (-)
Profit Before Tax From Continuing Operations
Continuing Operations Tax Income / (Expense)
Current Period Tax Expense (-)
Deferred Tax Income / (Expense)

35
35

36

Earnings per share (Full TRL)

The accompanying notes form an integral part of these consolidated financial statements.
(2)
F-105

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
Notes
Profit for the Year

Audited
2010
518.441

2009
422.272

Other Comprehensive Income / (Loss):


Currency Translation Differences
Fair Value Difference
Value Increase / (Decrease) in Available-for-Sale Securities
Tax Income / (Expense) on Other Comprehensive Income / (Loss)

25.202
2.347
(117)

(57.786)
4.916
17.398
(870)

27.432

(36.342)

Total Comprehensive Income

545.873

385.930

Attributable to:
Minority Interests
Equity Holders of the Parent

26.072
519.801

(20.295)
406.225

Other Comprehensive Income / (Loss), (Net of Taxes)

3
7
7

The accompanying notes form an integral part of these consolidated financial statements.
(3)
F-106

(*)

63.583

450.000

63.583

450.000

19.569

2.230
2.230

17.339

16.528
16.528

(4.085)

13.931
13.931

(18.016)

(37.807)
(37.807)

Fair
Currency
Value Translation
Reserve Differences
811
19.791

138.442

30.225

108.217

24.264
-

(253.609)

503.640
503.640

422.588

(176.224)
(133.454)
-

422.588
422.588

(5.736)

503.640

1.601.674

223.384

1.378.290

151.960
-

Net Accumulated
Income
Profits
309.678
1.226.330

- (168.979)
(10.652)
-

4.916

4.916
4.916

Restricted
Reserves
Allocated
from Net
Other
Income Reserves
83.953
-

(36.342)
422.272
385.930

11.271
14.801
26.072

27.432
518.441
545.873

307.261 2.734.178

- (133.454)
(37)
(37)
(33.912) (33.912)

(19.979)
(316)
(20.295)

2.767.087

47.918 2.815.005

(168.979)
- (168.979)
(10.652) (285.415) (296.067)

16.161
503.640
519.801

2.426.917

(133.454)
-

(16.363)
422.588
406.225

Equity
Attributable
to Equity
Holders of Minority
Total
the Parent Interests Equity
2.154.146
361.505 2.515.651

F-107

(4)

The accompanying notes form an integral part of these consolidated financial statements.

The Company acquired minority shares of 26,53% of Efes Breweries International N.V. (EBI) and as a result of this share purchase, minority shares decreased by TRL285.415. (December 31, 2009 The Company acquired minority shares of 3,25% of its subsidiary EBI and EBI acquired minority shares of KV Group in 2009 and also Coca Cola ecek A.. (CC), which is the joint venture of the
Company, acquired minority shares of Azerbaijan Coca-Cola Bottlers LLC. As a result of these share purchases, minority interests decreased by TRL33.938, TRL2.338 and TRL3.412 respectively.
Furthermore, CC consolidated Turkmenistan Coca-Cola Bottlers Ltd. for using the full consolidation method. Accordingly, the minority interests increased by TRL5.776).

Balance at December 31, 2010

Other comprehensive income / (loss)


Profit for the year
Total comprehensive income / (loss)
Transfer of previous year net income
to the accumulated profits
Dividends paid (Note 27)
Acquisition of minority shares (*) (Note 3)

Balance at December 31, 2009

Other comprehensive income / (loss)


Profit for the year
Total comprehensive income / (loss)
Transfer of previous year net income to
the accumulated profits
Dividends paid (Note 27)
Dividends paid to minority interests
Change in minority shares (*) (Note 3)

Balance at December 31, 2008

Inflation
Adjustment
Issued
to Issued
Capital
Capital
450.000
63.583

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


For the year ended December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL)

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
Notes
Cash flows from operating activities
Continuing operations profit before tax
Adjustments for:
Depreciation and amortization expenses
5, 18, 19, 30
(Gain)/loss on sale of property, plant and equipment and intangible assets, net
31
Provision for retirement pay liability
5, 24
Provision for vacation pay liability
5, 22
Provision / (reversal of provision) for inventory obsolescence, net
5, 13
Provision / (reversal of provision) for doubtful receivables, net
5, 10
Provision for long term incentive plan
(Impairment reversal) / impairment on property, plant and equipment, net
5, 18, 31
Foreign exchange (gain) / loss raised from loans, net
Interest expense
33
Interest income
32
(Gain) / loss from derivative financial instruments
32, 33
Syndication loan expense
33
Negative goodwill
3, 5, 31
Loss from associates
5, 16
Other (income) / expense, net
Operating profit before changes in operating assets and liabilities

Cash flows from financing activities


Dividends paid
Dividends paid to minority shareholders
Capital increase in subsidiaries by minority shareholders
Proceeds from short-term and long-term debt
Repayment of short-term and long-term debt
Interest paid
Interest received
Change in time deposits with maturity more than three months
Net cash used in financing activities

658.552

543.754

301.031
(384)
12.487
3.124
941
1.064
7.241
2.079
(5.442)
77.534
(71.669)
224
10.073
17.910
(211)

265.557
4.627
9.023
25
3.409
1.498
4.484
(561)
36.571
84.007
(59.209)
587
2.966
(13.503)
10.925
(511)

1.014.554

Change in trade receivables


Change in due from related parties
Change in inventories
Change in other assets, other liabilities and provisions
Change in trade payables
Change in due to related parties
Vacation pay, retirement pay liability and long term incentive plan paid
Taxes paid
Net cash flows from operating activities
Cash flows used in investing activities
Purchase of property, plant and equipment and intangible assets
Water source business investment
Proceeds from sale of property, plant and equipment and intangible assets
Purchase of biological assets
Acquisition of subsidiaries and joint venture, net of cash acquired
Cash payment for acquired minority shares
Net cash used in investing activities

Audited
2009
2010

5, 18, 19
3
3
3

27

Currency translation differences on cash and cash transactions

(97.863)
473
(54.818)
68.681
18.452
695
(9.586)
(131.345)
809.243

(361)
3.063
90.115
65.218
24.156
(4.258)
(10.556)
(123.297)
937.729

(330.714)
14.210
(1.512)
(22.728)
(290.456)
(631.200)

(317.651)
(14.835)
13.543
(20.121)
(78.211)
(417.275)

(168.979)
26.920
1.255.225
(1.370.278)
(78.629)
72.980
(34.851)
(297.612)

(133.454)
(37)
944.482
(889.875)
(86.849)
55.422
(19.259)
(129.570)

7.273

Net increase /(decrease) in cash and cash equivalents

(119.569)

Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the year

1.048.534

(5)

(29.488)
390.884
687.138

936.238 1.048.534

The accompanying notes form an integral part of these consolidated financial statements.

F-108

893.649

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 1. GROUPS ORGANIZATION AND NATURE OF ACTIVITIES
General
Anadolu Efes Biraclk ve Malt Sanayii A.. (a Turkish corporation, Anadolu Efes, the Company) was established in
stanbul in 1966. Certain shares of Anadolu Efes are listed on the stanbul Stock Exchange (ISE).
The registered office address of the Company is located at Bahelievler Mahallesi ehit brahim Koparr Caddesi
No: 4 Bahelievler - stanbul.
The Group consists of the Company, its subsidiaries and joint ventures. The average number of permanent personnel
employed in the Group is 15.202 (December 31, 2009 15.122).
The consolidated financial statements of the Group are approved by the Board of Directors of the Company and
signed by Chief Financial Officer and Finance Director for issue on March 29, 2011. General Assembly and
specified regulatory bodies have the right to make amendments on statutory financial statements after issue.
Nature of Activities of the Group
The operations of the Group consist of production, bottling, selling and distribution of beer under a number of
trademarks and also production, bottling, selling and distribution of sparkling and still beverages with The CocaCola Company (TCCC) trademark. The Group owns and operates fourteen breweries (five in Turkey and nine in
other countries), seven malt production facilities (two in Turkey, five in Russia) and also eight facilities in Turkey,
twelve facilities in other countries for sparkling and still beverages production. The Group has a joint control over
Coca-Cola ecek A.. (CC), which undertakes production, bottling and distribution facilities of the Coca-Cola
Products in Turkey, Pakistan, Central Asia and Middle East.
The Group also has joint control over Anadolu Etap Tarm ve Gda rnleri San. ve Tic. A.., which undertakes
production and sales of fruit juice concentrates and purees in Turkey. In addition, the Group has minority stakes that
have significant influence over an investment company which has breweries in Serbia, namely Central Europe
Beverages B.V. (CEB).
List of Shareholders
As of December 31, 2010 and 2009, the composition of shareholders and their respective percentage of ownership
can be summarized as follows:
2010
Amount
Yazclar Holding A..
zilhan Snai Yatrm A..
Anadolu Endstri Holding A.. (AEH)
Publicly traded and other

(6)
F-109

2009
Amount

139.251
78.937
35.292
196.520

30,94
17,54
7,84
43,68

139.251
78.937
35.292
196.520

30,94
17,54
7,84
43,68

450.000

100,00

450.000

100,00

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 1. GROUPS ORGANIZATION AND NATURE OF ACTIVITIES (continued)
List of Subsidiaries
The subsidiaries included in the consolidation and their effective shareholding rates at December 31, 2010 and 2009
are as follows:
Subsidiary

Country

Principal Activity

Efes Breweries International N.V. (EBI) (1) (6)


ZAO Moscow-Efes Brewery (Efes Moscow)
OAO Amstar (Amstar) (2)
Rostov Beverages C.J.S.C. (Efes Rostov) (2)
OOO Stary Melnik (Stary Melnik) (3)
ZAO Efes Entertainment (Efes Entertainment) (3)
OAO Krasny Vostok Solodovpivo (KV Group) (3)
ZAO Siberian Brewery Company (2)
OAO Knyaz Rurik (Knyaz Rurik) (9)
ZAO Mutena Maltery (Mutena Maltery) (10)
OOO Vostok Solod (4)
OOO KV-Invest (4)
OOO T'sentralny Torgovy Dom (4)
ZAO Moskovskii Torgovyii Dom (4)
ZAO Samarskii Torgovyii Dom (8)
ZAO Saratovskii Torgovyii Dom (8)
OOO Volgogradskii Torgovyii Dom (8)
OOO Kurskii Torgovyii Dom (8)
OOO Nizhegorodskii Torgovyii Dom (8)
J.S.C. Efes Karaganda Brewery (Efes Karaganda)
Dinal LLP (Dinal)

The Netherlands
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Kazakhstan
Kazakhstan

Efes Vitanta Moldova Brewery S.A. (Efes Moldova)

Moldova

Efes Romania Industrie Si Comert S.A. (ERIC) (7)


Euro-Asian Brauerein Holding GmbH (Euro-Asian)

Romania
Germany

Facilitating foreign investments in breweries


Production and marketing of beer
Production of beer
Lease
Service sector
Service sector
Production of beer
Production and marketing of beer
Investment company of EBI
Production of malt
Production of malt
Finance
Sales company
Sales company
Sales company
Sales company
Sales company
Sales company
Sales company
Production and marketing of beer
Distribution of beer
Production and marketing of beer, and low
alcoholic drinks
Distribution of beer
Investment company of EBI
Production, marketing and sales of beer and
carbonated soft drink
Investment company of EBI
Market development
Marketing and distribution company of the
Group in Turkey
Providing hops (major ingredient of beer) to
the breweries of the Group
Foreign trade

J.S.C. Lomisi (Efes Georgia)

Georgia

Central Asian Beverages B.V. (Central Asian)


Efes Trade BY FLLC (Efes Belarus)

The Netherlands
Belarus

Efes Pazarlama ve Datm Ticaret A.. (Ef-Pa) (5)

Turkey

Tarbes Tarm rnleri ve Besicilik Sanayi


Ticaret A.. (Tarbes) (5)
Anadolu Efes D Ticaret A.. (Aefes D Ticaret)
Cypex Co. Ltd. (Cypex)
Anadolu Efes Technical and Management
Consultancy N.V. (AETMC)
Efes Holland Technical Management
Consultancy B.V. (EHTMC)
Caspian Marketing Ltd.
Efes Deutschland GmbH (Efes Germany)

Turkey
Turkey
Turkish Republic
of Northern
Cyprus
The Netherlands
Antilles

Segment
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer
International Beer

Effective Shareholding
and Voting Rights %
2009
2010
100,00
90,97
90,96
90,97
90,96
99,95
99,95
90,96
90,96
90,96
90,96
72,00
72,00

73,47
66,75
66,75
66,75
66,75
66,75
66,73
66,74
66,73
66,73
66,73
66,73
66,73
66,73
66,73
66,73
66,73
52,90
52,90

International Beer

96,50

70,90

International Beer
International Beer

100,00
100,00

73,46
73,47

International Beer

100,00

73,47

International Beer
International Beer

60,00
100,00

44,08
73,47

Turkey Beer

100,00

100,00

Turkey Beer

99,75

99,75

Other

99,62

99,62

Marketing and distribution of beer

Other

99,99

99,99

Providing technical assistance

Other

99,75

99,75

The Netherlands

Providing technical assistance

Other

99,75

99,75

Azerbaijan
Germany

Marketing and distribution of beer


Marketing and distribution of beer

Other
Other

100,00
100,00

100,00
100,00

(1)

Shares of EBI were traded on the London Stock Exchange as of December 31, 2009. The cancellation of listing on London Stock
Exchange is effective as of October 6, 2010 (Note 3).
(2)
The official merger of Amstar and Rostov Beverages with Efes Moscow was completed in March 2010. Following this merger, as a part of
the restructuring of Efes Beer Group Companies, the official merger of ZAO Siberian Brewery Company and Stary Melnik was completed
in October 2010.
(3)
Subsidiaries of Efes Moscow.
(4)
Subsidiaries of KV Group.
(5)
Companys beer operations in Turkey form the Turkey Beer Operations together with Ef-Pa and Tarbes.
(6)
As of October 2010, Company acquired EBI shares, representing approximately 26,53% of the issued share capital of EBI (Note 3).
(7)
In December 2000, ERIC adopted a plan of liquidation and as a result, changed its basis of accounting from going concern basis to a
liquidation basis.
(8)
Dissolved down in 2010 during the restructuring of KV Group companies.
(9)
In 2010, Knyaz Rurik has been acquired by EBI and AETMC and included in the scope of full consolidation (Note 3).
(10) After the acquisition of majority interests of Knyaz Rurik by EBI in 2010, Mutena Maltery, which was accounted as non current financial
investments, became subsidiary of EBI and is included in consolidation by using full consolidation method (Note 3).

(7)
F-110

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 1. GROUPS ORGANIZATION AND NATURE OF ACTIVITIES (continued)
List of Joint Ventures
The joint ventures included in the consolidation proportionally and their effective shareholding rates at December
31, 2010 and 2009 are as follows:
Joint Venture

Coca-Cola ecek A.. (CC) (1)


Coca-Cola Sat Datm A.. (CCSD)
Mahmudiye Kaynak Suyu Ltd. ti. (Mahmudiye)
Efes Snai D Ticaret A.. (EST)
J.V. Coca-Cola Almaty Bottlers Limited Liability
Partnership (Almaty CC)
Tonus Joint Stock Company (Tonus)
Azerbaijan Coca-Cola Bottlers LLC
(Azerbaijan CC)
Coca-Cola Bishkek Bottlers Closed Joint Stock
Company (Bishkek CC)
CCI International Holland B.V. (CCI Holland)
The Coca-Cola Bottling Company of Iraq FZCO
(JV Dubai)
CC Beverage Limited
The Coca-Cola Bottling Company of Jordan Ltd.
(Jordan CC)
Syrian Soft Drink Sales and Distribution L.L.C.
(Syrian SD)
Coca-Cola Beverages Pakistan Ltd (CCBPL)
Turkmenistan Coca-Cola Bottlers Ltd.
(Turkmenistan CC)
Anadolu Etap Tarm ve Gda rnleri
San. ve Tic. A.. (Anadolu Etap)

Country

Turkey
Turkey
Turkey
Turkey
Kazakhstan
Kazakhstan
Azerbaijan
Kyrgyzstan
The
Netherlands
United Arabic
Emirates
Iraq
Jordan
Syria
Pakistan
Trkmenistan
Turkey

Principal Activity

Production, bottling of Coca-Cola products


Distribution and selling of Coca-Cola products
Filling and selling of natural spring water
Foreign trade
Production, bottling, distribution and selling of
Coca-Cola and distributions of Efes products
Investment company of CC
Production, bottling, distribution and selling of
Coca-Cola products
Production, bottling, distribution and selling of
Coca-Cola products and distributions of Efes
products
Investment company of CC
Investment company of CC
Production, bottling, distribution and selling of
Coca-Cola products
Production, bottling, distribution and selling of
Coca-Cola products
Distribution and selling of Coca-Cola products
Production, bottling, distribution and selling of
Coca-Cola products
Production, bottling, distribution and selling of
Coca-Cola products
Production and sales of fruit juice concentrate
and puree

Segment

Effective Shareholding
and Voting Rights %

2010

2009

Soft Drinks
Soft Drinks
Soft Drinks
Soft Drinks
Soft Drinks

50,26
50,25
50,25
50,50

50,26
50,25
50,25
50,50

50,11

50,11

Soft Drinks
Soft Drinks

47,33

47,33

50,19

50,19

50,26

50,26

50,26

50,26

25,13

25,13

15,08

15,08

45,23

45,23

25,13

25,13

24,73

24,73

29,90

29,90

33,33

33,33

Soft Drinks
Soft Drinks
Soft Drinks
Soft Drinks
Soft Drinks
Soft Drinks
Soft Drinks
Soft Drinks
Other

(1) Shares of CC are currently traded on ISE.

Although the Company has been representing and controlling more than 50% of voting rights of CC, since the
members of the board of directors of CC, representing the Company and other shareholders, take decisions
mutually in the board of directors meetings; the financial statements of CC is consolidated in accordance with
interests in joint venture.
Environments and Economic Conditions of Subsidiaries and Joint Ventures in Foreign Countries
Certain countries, in which consolidated subsidiaries and joint ventures are operating, have undergone substantial
political and economical changes in recent years. Accordingly such markets do not possess well-developed business
infrastructures and the operations in such countries might carry risks, which are not typically associated with those
in more developed markets. Uncertainties regarding the political, legal, tax and/or regulatory environment, including
the potential for adverse changes in any of these factors, could significantly affect the subsidiaries and joint
ventures ability to operate commercially.

(8)
F-111

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
2.1

Basis of Preparation and Presentation of Consolidated Financial Statements


The Group companies, which operate in Turkey, maintain their books of account and prepare their statutory
financial statements in TRL in accordance with the Generally Accepted Accounting Principles in Turkey
accepted by the Capital Markets Board (CMB); and Turkish Commercial Code and Tax Legislation and the
Uniform Chart of Accounts issued by the Ministry of Finance. The foreign subsidiaries and joint ventures
maintain their books of account and prepare their statutory financial statements in their local currencies and
in accordance with the rules and regulations of the countries in which they operate.
The consolidated financial statements have been prepared from the statutory financial statements of Groups
subsidiaries and joint ventures and presented in TRL in accordance with CMB Financial Reporting Standards
with certain adjustments and reclassifications for the purpose of fair presentation. Such adjustments are
primarily related to application of consolidation accounting, accounting for business combinations,
accounting for deferred taxes on temporary differences, accounting for employment termination benefits on
an actuarial basis and accruals for various expenses. Except for the financial assets carried from their fair
values and assets and liabilities included in business combinations application, financial statements are
prepared on historical cost basis.
In accordance with the CMB's "Communiqu on Financial Reporting in Capital Market" Serial XI, No:29
(Communiqu), published in the Official Gazette dated April 9, 2008, effective from January 1, 2008, listed
companies are required to prepare their financial statements in conformity with International
Accounting/Financial Reporting Standards (IAS/IFRS) as prescribed in the CMB Communiqu. The
financial statements and explanatory notes are presented using the compulsory standard formats as published
by the Communiqu.

2.2

Functional and Presentation Currency


Functional and reporting currency of the Company and its subsidiaries, joint ventures located in Turkey is
Turkish Lira (TRL). As a result of the structure of subsidiaries and joint ventures located in foreign countries
and the fact that some foreign subsidiaries and joint ventures transact more of their business in Euro (EURO)
or US Dollars (USD) than in any other currency, those foreign subsidiaries or joint ventures have adopted
EURO or USD as their functional currencies.
Functional Currency of Significant Subsidiaries and Joint Ventures Located in Foreign Countries
Subsidiary or Joint Venture

Local Currency

EBI
Efes Moscow
KV Group
Efes Karaganda
Efes Vitanta
Efes Georgia
CCI Holland
Almaty CC
Azerbaijan CC
Bishkek CC
CCBPL
Jordan CC
AETMC
EHTMC
Efes Germany
Knyaz Rurik

EURO
Russian Ruble (RUR)
RUR
Kazakh Tenge (KZT)
Moldovan Leu (MDL)
Georgian Lari (GEL)
EURO
KZT
Azerbaijan Manat (AZN)
Kirghiz Som (KGS)
Pakistan Rupee (PKR)
Jordanian Dinar (JOD)
EURO
EURO
EURO
RUR

(9)
F-112

Functional Currency
2009
2010
USD
USD
RUR
RUR
RUR
RUR
KZT
KZT
MDL
MDL
GEL
GEL
USD
USD
USD
USD
USD
USD
USD
USD
PKR
PKR
USD
USD
EURO
EURO
EURO
EURO
EURO
EURO
RUR
RUR

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.3

Changes in Accounting Policies


Adoption of new and revised International Financial Reporting Standards
The changes in accounting policies that have an impact on the consolidated financial statements are as
follows:
IFRS 3 (Revised) Business Combinations: Revised IFRS 3 introduces a number of changes in the
accounting for business combinations which will impact the amount of goodwill recognized, the reported
results in the period that an acquisition occurs, and future reported results. Such changes include the
expensing of acquisition related costs and recognizing subsequent changes after the reporting period in fair
value of contingent consideration in the profit or loss rather than by adjusting goodwill. However, as
permitted by the revised standard in accordance with the transition period application, the Group
recognized subsequent changes in the fair value of contingent consideration balances, originated in
previous periods before the effective date of IFRS 3 (Revised), by adjusting goodwill.
IAS 27 (Amendment) Consolidated and Separate Financial Statements: The amended IAS 27 requires
that a change in ownership interest of a subsidiary is accounted for as an equity transaction. Therefore such
equity transaction will have no impact on goodwill, nor will it give raise to a gain or loss. Furthermore the
amended standard changes the accounting for losses incurred by the subsidiary as well as the loss of control
of a subsidiary.
The amendments to the following standards and adoption of the following new interpretations below did
not have any impact on the accounting policies, financial position or performance of the Group:
IFRS 1 (Amendment) First Time Adoption of IFRS
IFRS 2 (Amendment) Share-based Payment Vesting Conditions and Cancellation
IFRS 5 (Amendment) Non-current Assets Held for Sale and Discounted Operations
IAS 1 (Amendment) Presentation of Financial Statements
IAS 36 (Amendment) Impairment of Assets
IAS 39 Financial Instruments: Recognition and Measurement Eligible Hedged Items
IFRIC 16 Hedges of a Net Investment in a Foreign Operation
IFRIC 17 Distributions of Non-cash Assets to Owners
IFRIC 18 Transfer of Assets from Customers
Revised and amended standards and interpretations that are effective subsequent to December 31, 2010 and
do not have any impact on the financial position or performance of the Group:
IFRS 1 (Amendment) Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters
(effective for annual periods beginning on or after July 1, 2010): IFRS 1 has been amended to allow firsttime adopters to utilise the transitional provisions in IFRS 7 and give relief from providing comparative
information in the first year of application.
IFRS 9 Financial Instruments (effective for annual periods beginning on or after January 1, 2013): IFRS
9 introduces new requirements for classifying and measuring financial assets. The standard has not yet been
endorsed by the European Union (EU).
IAS 12 (Amendment), Income Taxes: IAS 12 has been updated to include:
i) a rebuttable presumption that deferred tax on investment property measured using the fair value model
in IAS 40 should be determined on the bases that its carrying amount will be recovered through sale.
ii) a requirement that deferred tax on non depreciable assets, measured using the revaluation model in IAS
16, should always be measured on a sale basis.

(10)
F-113

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.3

Changes in Accounting Policies (continued)


Adoption of new and revised International Financial Reporting Standards (continued)
IAS 24 (Revised) Related Party Disclosures (effective for annual periods beginning on or after January 1,
2011): The definition of a related party has been clarified and partial exemption from the disclosures for all
transactions of government-related entities with other government-related entities and government has been
included.
IAS 32 (Amendment) Financial Instruments Presentation : Classification of Rights Issues (effective for
annual periods beginning on or after February 1, 2010): The amendment addresses the accounting for rights
issues that are denominated in a currency other than the functional currency of the issuer. Provided certain
conditions are met, such rights issues are now classified as equity regardless of the currency in which the
exercise price is denominated. Previously, these issues had to be accounted for as derivative liabilities. The
amendment applies retrospectively in accordance with IAS 8 Accounting policies, changes in accounting
estimates and errors.
IFRIC 14 (Amendment) Prepayments of a Minimum Funding Requirement (effective for annual periods
beginning on or after January 1, 2011): The amendments correct an unintended consequence of IFRIC 14,
IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction.
Without the amendments, entities are not permitted to recognise as an asset some voluntary prepayments
for minimum funding contributions. This was not intended when IFRIC 14 was issued, and the
amendments correct this. Early application is permitted. The amendment should be applied retrospectively
to the earliest comparative period presented.
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (effective for annual periods
beginning on or after July 1, 2010): The interpretation clarifies the accounting by an entity when the terms
of a financial liability are renegotiated and result in the entity issuing equity instruments to a creditor of the
entity to extinguish all or part of the financial liability (debt for equity swap). It requires a gain or loss to be
recognised in profit or loss, which is measured as the difference between the carrying amount of the
financial liability and the fair value of the equity instruments issued. If the fair value of the equity
instruments issued cannot be reliably measured, the equity instruments should be measured to reflect the
fair value of the financial liability extinguished.
In May 2010, the IASB issued its third omnibus of amendments to its standards, primarily with a view to
removing inconsistencies and clarifying wording. The effective dates of the improvements are various and
the earliest is effective for annual periods beginning on or after July 1, 2010. Early application is permitted in
all cases and this annual improvements project has not yet been endorsed by the EU.
The following improvements to IFRS are not expected to have an impact on the financial statements of the
Group:
IFRS 1 First Time Adoption of IFRS: The amendments:
i)

clarify the requirements in case of accounting policy change in the year of adoption. The amendment is
applied prospectively.

ii) allow first-time adopters to use an event-driven fair value as deemed cost, even if the event occurs
after the date of transition, but before the first IFRS financial statements are issued. Entities that
adopted IFRS in previous periods are permitted to apply the amendment retrospectively in the first
annual period after the amendment is effective.
iii) expand the scope of deemed cost for property, plant and equipment or intangible assets to include
items used subject to rate regulated activities. The amendment is applied prospectively.
IFRIC 13 Customer Loyalty Programmes: The meaning of fair value is clarified in the context of
measuring award credits under customer loyalty programmes. The amendment is applied retrospectively.
(11)
F-114

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.3

Changes in Accounting Policies (continued)


Adoption of new and revised International Financial Reporting Standards (continued)
The impact of the improvement to IFRSs below on the financial statements is being assessed by the Group:
IFRS 3 Business Combinations: The amendments:
i)

clarify that the amendments to IFRS 7 Financial Instruments Disclosures, IAS 32 Financial
Instruments Presentation and IAS 39 Financial Instruments Recognition and Measurement, that
eliminate the exemption for contingent consideration, do not apply to contingent consideration that
arose from business combinations whose acquisition date precede the application of IFRS 3 (as revised
in 2008). The amendment is applicable to annual periods beginning on after July 1, 2010.

ii) limit the scope of the measurement choices that only the components of non-controlling interests that
are present ownership interests that entitle their holders to a proportionate share of entitys net assets,
in the event of liquidation, shall be measured either at fair value or at the present ownership
instruments proportionate share of the acquirees identifiable net assets. This amendment is applicable
to annual periods beginning on after July 1, 2010. The amendment is applied prospectively from the
date entity applies IFRS 3 (Revised).
iii) require an entity (in a business combination) to account for the replacement of the acquirees share
based payment transactions (whether obliged or voluntarily). The amendment is applicable to annual
periods beginning on or after July 1, 2010. The amendment is applied prospectively.
IFRS 7 Financial Instrument Disclosures: The amendment emphasizes the interaction between
quantitative and qualitative disclosures and the nature and extent of risks associated with financial
instruments. The amendment is applied retrospectively.
IAS 1 Presentation of Financial Statements: The amendment clarifies that an entity will present an
analysis of other comprehensive income for each component of equity, either in the statement of changes in
equity or in the notes to financial statements. The amendment is applied retrospectively.
IAS 27 Consolidated and Separate Financial Statements: The amendment clarifies that the consequential
amendments from IAS 27 made to IAS 21 The Effect of Changes in Foreign Exchange Rates, IAS 28
Investment in Associates and IAS 31 Interests in Joint Ventures. This amendment is applicable to
annual periods beginning on after July 1, 2010 and applicable for annual periods beginning on after July 1,
2009 prospectively if IAS 27 is applied earlier.
IAS 34 Interim Financial Reporting: The amendment provides guidance to illustrate how to apply
disclosure principles in IAS 34 and add disclosure requirements around the circumstances likely to affect
fair values of financial instruments and their classification, transfers of financial instruments between
different levels of fair value hierarchy, changes in classification of financial assets, changes in contingent
assets and liabilities. The amendment is applied retrospectively.
2.4

Changes in Accounting Estimates


The accounting estimates of the Group are adopted to be the same as prior years and there is no material
change from prior years accounting policies.

2.5

Offsetting
Financial assets and liabilities are offset and the net amount are reported in the consolidated financial
statements when there is a legally enforceable right to set-off the recognized amounts and there is an
intention to settle on a net basis or realize the assets and settle the liabilities simultaneously.

(12)
F-115

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.6

Basis of Consolidation
The consolidated financial statements comprise the financial statements of the parent company, Anadolu
Efes, its subsidiaries and joint ventures drawn up to reporting date. The financial statements of the companies
included in the consolidation have been prepared based on the accounting policies and presentation formats
adopted by the Group in accordance with the CMB Financial Reporting Standards.
Subsidiaries are companies in which Anadolu Efes has the power to exercise more than 50% of the voting
rights relating to the shares in the companies as a results of shares owned directly and/or indirectly by itself
or although not having the power to exercise more than 50% of the voting rights, exercises control in order to
make profit from the operations of companies through the exercise of actual dominant influence over the
financial and operating policies. Subsidiaries are consolidated for using the full consolidation method;
therefore, the carrying value of subsidiaries is eliminated against the related shareholders equity. The equity
and net income attributable to minority shareholders interests of subsidiaries are shown separately in the
consolidated balance sheet and consolidated income statement.
Joint ventures are companies in respect of which there are contractual arrangements through which an
economic activity is undertaken subject to joint control by the Group and its subsidiaries together with one or
more other parties. The Groups interest in joint ventures is accounted for by way of proportionate
consolidation; in other words, the Group includes its share of the assets, liabilities, income and expenses of
each joint venture in the relevant components of the financial statements.
Investments in associates are undertakings over which the Group generally has between 20% and 50% of the
voting rights and the Group has significant influence and which are not subsidiaries or joint ventures of the
Group. The Groups investments in associates are accounted for using the equity method.
The investments in associates are carried in the consolidated balance sheet at cost plus post-acquisition
changes in the Groups share of net assets of the associates, less any impairment in value. The consolidated
income statement reflects the Groups share of the results of operations of the associates.
Intercompany balances and transactions, including intercompany profits and unrealized profits and losses are
eliminated. Consolidated financial statements are prepared using uniform accounting policies for like
transactions and other events in similar circumstances.
The acquisition method of accounting is used for acquired business. Subsidiaries, joint ventures or
investment in associates, acquired or disposed of during the year are included in the consolidated financial
statements from the date of acquisition or to the date of disposal.

2.7

Cash and Cash Equivalents


Cash and cash equivalents comprise of cash in hand, bank deposits and short-term investments, which can
easily be converted into cash for a known amount, has high liquidity with maturities of 3 months or less. The
amounts paid under the reverse repurchase agreements are included in the cash and cash equivalents.

2.8

Trade Receivables and Provision for Doubtful Receivables


Trade receivables that are originated by the Group by the way of providing goods or services generally have
5-90 day terms. Trade receivables are recognized and carried at original invoice amount less an allowance for
any uncollectible amounts.
The allowance for doubtful receivables is realized when there is objective evidence that receivable cannot be
collected and is charged as an expense in the consolidated financial statements. The allowance is the
difference between the carrying amount and the recoverable amount, being all cash flows, including amounts
recoverable from guarantees and collaterals.

(13)
F-116

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.9

Related Parties
Parties are considered to be related if one party directly or indirectly has the ability to control the other party
or exercise significant influence over the other party in making the financial and operating decisions or be the
associate of the group. Related parties also include individuals that are principle owners, management and
members of the Group's board of directors and their families. Due from and due to related parties are carried
at cost. Related party transactions are transfers of resources, services or obligations between related parties,
regardless of whether a price is charged.

2.10 Inventories
Inventories, including work-in-process are valued at the lower of cost and net realizable value, after provision
for obsolete items. Net realizable value is the selling price in the ordinary course of business, less the costs of
completion, marketing and distribution. Cost is determined primarily on the basis of weighted average cost
method. For processed inventories, cost includes direct materials, direct labor and the applicable allocation of
fixed and variable overhead costs based on a normal operating capacity. Unrealizable inventory has been
fully written off.
2.11 Biological assets
Biological assets of the Group consist of sewed fruit tree seedlings of Anadolu Etap. The seedlings that are
accounted for as biological assets are carried at cost due to immateriality and nonexistence of an active and
fair market according to IAS 41.
2.12 Financial Investments
The Group has classified its financial assets as available-for-sale in accordance with IAS 39 Financial
Instruments: Recognition and Measurement. Financial assets, intended to be held for an indefinite period of
time, which may be sold in response to needs for liquidity or changes in interest rates are classified as
available-for-sale. These financial assets are included in non-current assets unless management has the
intention of holding the investment for less than twelve months from the balance sheet date, or unless they
will need to be sold to raise working capital, in which case they are included in current assets. Management
determines the appropriate classification of its financial assets at the time of the purchase and re-evaluates
such designation on a regular basis.
All investments are initially carried at cost, being the fair value of the consideration given and including
acquisition changes associated with the investment. After initial recognition, investments which are classified
as available-for-sale are measured at fair value. For investments that are actively traded in organized financial
markets, fair value is determined by reference to stock exchange quoted market bid prices at the close of
business on the balance sheet date and positive or negative valuation differences of investments, which are
measured at fair value, have been recognized under comprehensive income statements as value increase in
available-for-sale securities in the consolidated financial statements.
Investments classified as available-for-sale investments, that do not have a quoted market price in an active
market and whose fair value cannot be reliably measured by alternative valuation methods, are measured at
cost. The carrying amounts of such investments are reviewed at each balance sheet date for impairment.
All the acquisitions and disposals of the available for sale securities are recorded to accounts at the date of
obligation of the Group for purchasing or selling the asset.

(14)
F-117

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.13 Property, Plant and Equipment
Property, plant and equipment (PP&E) are stated at cost less accumulated depreciation and any impairment
in value. Land is not depreciated. Depreciation is computed on straight-line method over the following
estimated useful lives:
Buildings and land improvements
Machinery and equipment
Leasehold improvements
Furniture and fixtures
Vehicles
Returnable bottles and cases
Other tangible assets

10-50 years
4-20 years
4-15 years
3-15 years
5-10 years
5-10 years
2-14 years

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the
carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written
down to their recoverable amount. The recoverable amount of property, plant and equipment is the greater of
net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. For an asset that does not generate largely independent cash
inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. The
increase in the carrying amount of an asset attributable to a reversal of an impairment loss shall not exceed
the carrying amount that would have been determined (net of amortization or depreciation) had no
impairment loss been recognized for the asset in prior years. The increase is recognized in the consolidated
income statement (Note 18).
The Group management accounts for returnable bottles under property, plant and equipment. Deposit
obligations relating to such returnable bottles are reflected in other payables. The Group sells its products
also in non-returnable bottles. For such sales, there is no deposit obligation of the Group.
Expenses for repair and maintenance of property, plant and equipment are normally charged to the income
statement. They are, however, capitalized and depreciated through the estimated useful life of the property,
plant and equipment in exceptional cases if they result in an enlargement or substantial improvement of the
respective assets.
2.14 Intangible Assets
Intangible assets acquired separately from a business are capitalized at cost.
Intangible assets acquired as part of an acquisition of a business are capitalized separately from goodwill, if
the fair value can be measured reliably. Intangible assets, excluding development costs, created within the
business are not capitalized and expenditure is charged against profits in the year in which it is incurred.
Supplies relating to promotion and marketing activities are incurred as expense when the right to reach these
supplies is recognized. Intangible assets are amortized on a straight-line basis over the best estimate of their
useful lives. Intangible assets with indefinite useful life formed in the financial statements in accordance with
purchase method, are not subject to amortization and the carrying amounts of such intangibles are reviewed
for impairment at least annually and whenever there is an indication of possible impairment.
a) Brands
The brands, which belong to International Beer Operations and which are acquired as part of a business
combination, are carried at their fair value and if it is acquired separately, carried at cost in the financial
statements. The Group expects that the brands will generate cash inflow indefinitely and therefore are not
amortised. The brands are tested for impairment annually.

(15)
F-118

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.14 Intangible Assets (continued)
b) Bottlers and Distribution Agreement
In the scope of consolidation, intangible assets identified in the fair value financial statements of
subsidiaries acquired by CC in 2005 and 2009, and joint venture acquired by CC in 2008 include the
Bottlers and Distribution Agreements that are signed with The Coca-Cola Company. Since the Group
management expects to renew these agreements without any additional costs after expiration, it is decided
that there are no definite useful lives of such assets. The intangible assets relating to the bottlers and
distribution agreements are therefore not amortized. Bottlers and distribution agreements are tested for
impairment annually.
c)

Rights
The rights acquired as part of a business combination is carried at their fair value and if it is acquired
separately, it is carried at cost in the financial statements. Rights in the consolidated financial statements
comprise mainly water sources usage rights and amortized on a straight-line basis over 10 to 40 years.

d) Software
The cost of acquisition of new software is capitalized and treated as an intangible asset if these costs are
not an integral part of the related hardware. Software is amortized on a straight-line basis over 1 to 5
years.
2.15 Business combinations and goodwill
A business combination is the bringing together of separate entities or business into one reporting entity.
The Group accounted business combinations occurred before January 1, 2010 using the purchase method
according to the IFRS 3 before revision. In this method, the cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of
exchange, plus costs directly attributable to the acquisition. When a business combination agreement provides
for an adjustment to the cost of the combination contingent on future events, the acquirer shall include the
amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable
and can be measured.
Goodwill is accounted in the consolidated financial statements being the excess of the cost of the business
combination over the Groups share is the net fair value of the acquirees identifiable assets, liabilities and
contingent liabilities.
Goodwill recognized in business combinations is tested for impairment annually (as of December 31) or more
frequently, if events or changes in circumstances indicate impairment, instead of amortization. Even though
these circumstances do not indicate impairment in the following periods, the impairment loss of goodwill
recognized in consolidated income statement is not subject to be reversed. During the impairment test,
goodwill relates to cash-generating units.
The excess of the Groups share in the net fair value of the identifiable assets, liabilities and contingent
liabilities over the cost of business combination is accounted for as an income in the related year (negative
goodwill).
In business combinations involving entities under common control, assets and liabilities subject to a business
combination are recognized at their carrying amounts in the consolidated financial statements. As a result of
these transactions, no goodwill or negative goodwill is directly accounted to the financial statements.

(16)
F-119

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.15 Business combinations and goodwill (continued)
For business combinations occurred after January 1, 2010, the Group applied revised IFRS 3 Business
Combination which is effective for the periods beginning on January 1, 2010.
IFRS 3 (Revised) introduces a number of changes in the accounting for business combinations which will
impact the amount of goodwill recognized, the reported profit or loss in the period that a business
combination occurs, and profit or loss of the future periods. Such changes include the expensing of
acquisition related costs and recognizing subsequent changes in fair value of contingent consideration in the
profit or loss (rather than by adjusting goodwill). However, as permitted by the revised standard in
accordance with the transition period application, the Group recognized subsequent changes in the fair value
of contingent consideration balances originated in previous periods before the effective date of IFRS 3
(Revised) by adjusting goodwill.
The Group applies a policy of treating transactions with minority interests as transactions with equity owners
of the Group. Accordingly, for share purchases from minority interests, the difference between any
consideration paid and the relevant share acquired of the carrying value of the net assets of the subsidiary is
accounted for as an equity transaction.
2.16 Borrowings
All borrowings are initially recognized at cost, being the fair value of the consideration received net of issue
costs associated with the borrowing. After initial recognition, borrowings are subsequently measured at
amortized cost using the effective interest rate method. Amortized cost is calculated by taking into account
any issue costs, and any discount or premium on settlement. Gains and losses are recognized in net profit or
loss when the obligations related with the borrowings are removed.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer the
settlement of the liability for at least 12 months after the balance sheet date.
a) Finance Lease
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership
of the leased item, are capitalized at the inception of the lease at the fair value of the leased property or, if
lower, at the present value of the minimum lease payments.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining balance of the liability. The initial direct costs
attributable for the finance lease are added to the amount recognized as an asset. Capitalized leased assets
are depreciated over the estimated useful life of the asset.
b) Operating Lease
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are
classified as operating leases. Operating lease payments are recognized as an expense in the income
statement on a straight-line basis over the lease term.

(17)
F-120

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.17 Current Income Tax and Deferred Tax
The tax expense for the year comprises current and deferred tax. Tax is recognized in the income statement,
except to the extent that it relates to items recognized directly in equity. In such case, the tax is also
recognized in equity.
The current income tax charge is calculated in accordance with the tax laws enacted or substantively enacted
at the balance sheet date in the countries where the subsidiaries and joint ventures of the Group operate.
Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax related to the equity
items is carried under the equity and not reflected to income statement. Deferred tax assets are recognized for
all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent
that it is probable that taxable profit will be available against which the deductible temporary differences,
carry-forward of unused tax assets and unused tax losses can be utilized. The carrying amount of deferred tax
assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Deferred
tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is
realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance sheet date.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to net off current
tax assets against current income tax liabilities and the deferred taxes relate to the same taxation authority.
2.18 Employee Benefits
a) Defined Benefit Plans
In accordance with existing social legislation in Turkey, the Group companies operating in Turkey are
required to make lump-sum termination indemnities to each employee who has completed over one year
of service with the Group and whose employment is terminated due to retirement or for reasons other
than resignation or misconduct. In the consolidated financial statements the Group has reflected a liability
using the Projected Unit Credit Method and based upon estimated inflation rates and factors derived using
the Group's experience of personnel terminating their services and being eligible to receive such benefits
and discounted by using the current market yield at the balance sheet date on government bonds.
b) Defined Contribution Plans
The Group pays contributions to the Social Security Institution of Turkey on a mandatory basis. The
Group has no further payment obligations once the contributions have been paid. The contributions are
recognized as employee benefit expense when they are paid.
c)

Long Term Incentive Plan


The Group provides a benefit to its employees over a certain seniority level under the name long term
incentive plan. Provision for long term incentive plan accrued in consolidated financial statements
reflects the discounted value of the estimated total provision of possible future liabilities until the
financial statement date.

2.19 Provisions, Contingent Assets and Liabilities


a) Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of
the time value of money is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due
to the passage of time is recognized as an interest expense.
(18)
F-121

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.19 Provisions, Contingent Assets and Liabilities (continued)
b) Contingent Assets and Liabilities
Contingent liabilities are not recognized in the consolidated financial statements, but are disclosed unless
the possibility of an outflow of resources embodying economic benefits is remote. A contingent asset is
not recognized in the consolidated financial statements, but disclosed when an inflow of economic
benefits is probable.
2.20 Foreign Currency Translations
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences
are taken to the income statement of the associated period, as foreign currency loss or gain. Foreign currency
translation rates announced by the Central Bank of the Republic of Turkey and used by the Groups
subsidiaries and joint ventures in Turkey as of respective year-ends are as follows:
Date
December 31, 2010
December 31, 2009

USD / TRL
(full)

EURO / TRL
(full)

1,5460
1,5057

2,0491
2,1603

The assets and liabilities of foreign subsidiaries and joint ventures are translated at the rate of exchange ruling
at the balance sheet date and the equity items are translated using the exchange rates at the date of the
transaction. The income statements of foreign subsidiaries and joint ventures are translated at average
exchange rates. Differences resulting from the deviation between the values of investment related to equity
accounts of consolidated subsidiaries and joint ventures and the appreciation of foreign currencies against the
Turkish Lira were taken to equity as currency translation differences.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and
liabilities of the acquiring company and are recorded at the exchange rate of balance sheet date. On disposal
of a foreign entity, currency translation differences are recognized in the income statement as a component of
the gain or loss on disposal.
2.21 Paid in Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as deduction, net of tax, from the proceeds.
2.22 Dividends Payable
Dividends payable are recognized as an appropriation of profit in the period in which they are declared.
2.23 Subsequent Events
The Group adjusts the amount recognized in its financial statements to reflect the adjusting events after the
balance sheet date. If non-adjusting events after the balance sheet date have material influence on the economic
decisions of users of the financial statements, they are disclosed in the notes to the consolidated financial
statements.

(19)
F-122

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.24 Revenue
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured. Revenues are stated net of discounts and returns, value added and sales
taxes. The following specific recognition criteria must also be met before revenue is recognized:
a) Sale of Goods
Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to
the buyer and the amount of revenue can be measured reliably.
b) Interest Income
Interest income is recognized as the interest accrues. Interest income is reflected under the financial
income in the consolidated income statement.
c)

Dividend Income
Dividend income is recognized when the right to collect the dividend is established.

2.25 Borrowing Costs


Borrowing costs include interest charges and other costs incurred in connection with the borrowing of funds.
Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are
capitalized. Borrowing costs other than these are expensed as incurred.
2.26 Segment Reporting
The Group management monitors the operating results of its three business units separately for the purpose of
making decisions about the resource allocation and performance assessment. The three operating segments
are Turkey Beer Operations (Turkey Beer) which is conducted by the Company, International Beer
Operations (International Beer) which is conducted by EBI and Soft Drinks Operations (Soft Drinks) which is
conducted by CC.
Segment performance is evaluated based on profit from operations before depreciation, amortization and noncash expenses (EBITDA). EBITDA has been determined as the optimum indicator by the Group management
for the evaluation of the performance of the operating segments by considering the comparability with the
entities in the same business (Note 5).
2.27 Earnings per Share
Earnings per share in the consolidated income statements are calculated by dividing the net profit for the year
attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding
during the year. In Turkey, companies can increase their share capital by making distribution of free shares to
existing shareholders from inflation adjustment to shareholders equity.
For the purpose of the earnings per share computations, the weighted average number of shares outstanding
during the year has been adjusted in respect of free shares issued without corresponding change in resources by
giving them retroactive effect for the period in which they were issued and each earlier period.
2.28 Reporting of Cash Flows
In the consolidated statement of cash flows, cash flows are classified and reported according to their operating,
investing and financing activities. Cash flows related with investing activities present the cash flows provided
from and used in the Groups investing activities and cash flows related with financing activities present the
proceeds and repayments of sources in the Groups financing activities.

(20)
F-123

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued)
2.29 Use of Estimates
The preparation of the financial statements requires management to make estimates and assumptions that
effect the reported amounts of assets and liabilities at the date of balance sheet date. Actual results may vary
from the current estimates. These estimates are reviewed periodically, and, as adjustments become necessary,
they are reported in income statement in the periods in which they become known. The source of the
estimates and assumptions which may cause to significant adjustments at assets and liabilities at following
periods as of balance sheet date are as follows:
a) Provision for doubtful receivables is an estimated amount that management believes to reflect for possible
future losses on existing receivables that have collection risk due to current economic conditions. During
the impairment test for the receivables, the debtors, other than the key accounts and related parties, are
assessed with their prior year performances, their credit risk in the current market, their performance after
the balance sheet date up to the issuing date of the financial statements; and also the renegotiation
conditions with these debtors are considered (Note 10).
b) During the assessment of the reserve for inventory obsolescence the following are considered; analyzing
the inventories physically and historically, considering the employment and usefulness of the inventories
respecting to the technical personnel view. Sales prices listed, average discount rates given for sale and
expected cost incurred to sell are used to determine the net realizable value of the inventories (Note 13).
c) The Group performs impairment test for tangible assets, intangible assets with indefinite useful life and
goodwill annually or when circumstances indicate that the carrying value may be impaired. As of
December 31, 2010, impairment test for the intangible assets with indefinite useful life and goodwill is
generated by comparing its carrying amount with the recoverable amount. The recoverable amount is the
higher of net selling price and value in use.
In these calculations, estimated free cash flows before tax from financial budgets covering a 3-year period
and approved by Board of Directors are used. Estimated free cash flows before tax after a 3-year period
are calculated for 5 10 years period by using expected growth rates. Estimated free cash flows before
tax are discounted to expected present value for future cash flows. Key assumptions such as country
specific market growth rates, GDP per capita and consumer price indices were derived from external
sources. Main estimates such as raw material and good prices, working capital requirements and capital
expenditures were based on the Groups key assumptions and historical operating data. The enterprise
value used as a base for the impairment test has been calculated using cash flow projections from the
strategic business plan approved by the Board of Directors and no impairment has been detected on
goodwill. Perpetuity growth rate used in impairment test in the operating units is between 1,00% and
3,00% (December 31, 2009 1,00 % - 3,00 %) and after tax discount rate is between 9,59% and 13,05%
(December 31, 2009 10,33% - 14,40%).
d) The discount rates related with retirement pay liability are actuarial assumptions determined with future
salary increase and the employees turnover rates (Note 24).
e) Deferred tax asset is only recorded if it is probable that a taxable income will be realized in the future.
Under the circumstances that a taxable income will be realized in the future, deferred tax is calculated
over the temporary differences by carrying forward the deferred tax asset in the previous years and the
accumulated losses. As of December 31, 2010, the estimations made to indicate that the company will
incur taxable profits in the future periods were reasonable and deferred tax asset was recorded (Note 35).
f) The Group has used the future market rates stated on December 31, 2010, in order to value the derivative
instruments as of the balance sheet date (Note 39). The fair value difference occurred due to using these
rates have been recorded in consolidated income statement.

(21)
F-124

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 3. BUSINESS COMBINATIONS
Transactions Related with 2010
Acquisitions
The Company acquired 11.219.811 EBI Global Depository Receipts (GDRs) representing approximately 26,53% of
the issued share capital of EBI from a group of shareholders at a price of USD 17,00 per GDR (each GDR
representing 5 EBI shares) for a total consideration of TRL290.456 during 2010. In accordance with IAS 27,
positive difference amounting to TRL5.041 between the net asset value of EBI and the acquisition cost has been
reflected to other reserves under the equity attributable to equity holders of the parent.
As a result of holding over 95% of the issued share capital of EBI, the Company intends to acquire the outstanding
EBI shares by means of a squeeze-out procedure in accordance with the article 2:92a of the Dutch Civil Code before
the Enterprise Chamber of the Court of Appeals in Amsterdam, the Netherlands. The writ that introduces the
squeeze-out procedure was issued in June 2010 and the squeeze-out process was completed in October 2010.
At the extraordinary general meeting of shareholders of EBI held in Amsterdam on June 2010, the resolution
approving the cancellation of the admission of the GDRs to the official list of the UK Listing Authority and to
trading on the London Stock Exchange's main market for listed securities was passed. In addition, amendment to the
deposit agreement between the Company and The Bank of New York Mellon dated October 20, 2004 to permit
such delisting was approved. As the amendment to the deposit agreement became effective following the date on
which the extraordinary general meeting of shareholders has been held, de-listing of the GDRs was completed as of
October 6, 2010.
In July 2010, EBI acquired 62,96% shares of OAO Knyaz Rurik, which owns 80,02% of Mutena Maltery shares,
from Specialized State-Owned Unitary Enterprise for Sale of Property of the City of Moscow through a public
auction process for a cash consideration of TRL18.608. After having the necessary approval from the competition
board in August 2010, Knyaz Rurik is included in the consolidation by using full consolidation method. The
difference between the cash consideration and the net assets calculated from the financial statements of Knyaz Rurik
based on fair value accounting prepared in conformity with IFRS 1, amounting to TRL1.373, and the fair value
difference amounting to (TRL1.580) arising from 19,98% shares on hand of Mutena Maltery, which was accounted
under non-current financial investments and currently is fully consolidated as subsidiary, are presented net under
the other operating income in the consolidated income statement.
The net asset value calculated from the financial statements of Knyaz Rurik based on fair value accounting as of the
acquisition date is as follows:
Fair Value
1.666
7.052
1.775
1.089
20.384
(3.722)
(461)
(6.683)
21.100

Cash and cash equivalents


Trade and other receivables
Inventories
Other assets
Property, plant and equipment
Deferred tax liability
Other liabilities
Minority interests
Fair value of net assets acquired
Total cash consideration
Groups share in net assets

18.608
(17.235)

Net book value of Mutena Maltery shares on hand


Fair value of Mutena Maltery shares on hand
Amount recognised in income statement

5.103
(6.683)
(207)

Total cash consideration


Cash in the subsidiary acquired (-)
Net cash outflow on acquisition

18.608
(1.666)
16.942
(22)
F-125

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 3. BUSINESS COMBINATIONS (continued)
Transactions Related with 2010 (continued)
Acquisitions (continued)
In November 2010, AETMC acquired 15,10% shares of OAO Knyaz Rurik, which owns 80,02% of Mutena
Maltery shares for a cash consideration of TRL5.786. The Group accounted the difference between the cash
consideration and the net assets of Knyaz Rurik amounting to TRL1.921 to other reserves under the equity
attributable to equity holders of the parent in accordance with IAS 27.
Transactions Related with 2009
Acquisitions
In January 2009, CC has increased its existing shareholding in Turkmenistan CC with the acquisition of 13,75%
shares of Turkmenistan CC which previously owned by The Coca-Cola Export Corporation (TCCEC) and 12,50%
shares from Day Investments Ltd. which had 25% shares in Turkmenistan CC, for a cash consideration of
TRL7.026. Following the completion of the acquisitions, CCs share in Turkmenistan CC reached to 59,5% and it
is included in consolidation by using the full consolidation method. The Group recorded TRL1.928 difference
between the fair value of the net assets of Turkmenistan CC and the acquisition cost as negative goodwill in other
operating income in the consolidated financial statements (Note 31).
In accordance with the change in the scope of consolidation and in conformity with IFRS 3, Groups share of fair
value difference amounting to TRL4.916 occurred from the financial statements of Turkmenistan CC prepared
according to fair value basis was recorded by the Group as fair value difference in consolidated comprehensive
income statement.
The total fair value of net assets of Turkmenistan CC as of the acquisition date is as follows:
Fair Value
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Property, plant and equipment
Intangible assets
Trade and other payables
Due to related parties
Other liabilities

Carrying Value

1.113
297
9.059
481
14.280
29.648
(10.087)
(3.407)
(4)

1.113
297
9.059
481
14.154
333
(10.087)
(3.407)
(4)

Fair value of net assets acquired

41.380

11.939

Total cash consideration, Groups share


Groups share in net assets

3.531
(5.459)

Negative goodwill arising from acquisition

(1.928)

Total cash consideration, Groups share


Cash in the subsidiary acquired, Groups share (-)

3.531
(559)

Net cash outflow on acquisition

2.972

(23)
F-126

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 3. BUSINESS COMBINATIONS (continued)
Transactions Related with 2009 (continued)
Acquisitions (continued)
According to the put and call option agreement signed with Day Investments Ltd., within three months from the
expiry of the three year period from the completion date of share transfer registration which is in January 2009, Day
Investments Ltd. shall have an option to offer (and CCI will have an obligation to buy) its remaining 12,5%
participatory shares in Turkmenistan CC and CCI shall have an option to buy (and Day Investments Ltd. will have
an obligation to sell) Day Investment Ltd.s 12,5% participatory shares in Turkmenistan CC with an amount of
USD 2.360 thousands (Note 23). The Group recorded TRL814 negative goodwill which is occurred from the
accounting of the buying obligation liability in accordance with IAS 32, to other operating income in the
consolidated income statement (Note 31).
In March 2009, CC has purchased certain real estates, movables, licenses and other assets related to the water
business of Sandras Su Gda Turizm Tamaclk naat A. (Sandras), natural water company of Kalkavan Grubu,
for an amount of TRL29.500. In accordance with IFRS 3 Business Combinations, tangible and intangible assets
identified in the acquisition of Sandras were recorded at their fair value amounting to TRL17.856. The Group
recorded TRL2.468 negative difference between the fair value of total assets acquired and the acquisition cost of the
Company amounting to TRL14.835 as negative goodwill to other operating income in the consolidated income
statement (Note 31).
In May 2009, CC acquired 9,96% minority shares of Azerbaijan CC for a cash consideration of TRL9.121 and
increased its shareholding percentage to 99,86%. The Group recorded the difference amounting to TRL1.404
between the net asset value of Azerbaijan CC and the acquisition cost of the Group, which is amounting to 4.584, as
goodwill to the consolidated financial statements (Note 20).
The put option, which had been granted by EBI to Tradex Partner Limited Co. (Tradex) and that was exercisable
between 2007 and 2010, has been exercised by purchasing the shares in KV Group by EBIs Russian operating
subsidiary Efes Moscow in August 2009 for a cash consideration of TRL44.916. Subsequent to purchase of option
shares, a further 0,43% of KV Group minority shares have been acquired with a cash consideration of TRL3.066.
The excess of the acquisition costs over the fair value of net assets acquired was TRL728 and recognized as
goodwill in the consolidated financial statements with the purchase of 0,43% minority shares, Efes Moscow
increased its shareholding in KV Group to 99,98% from 92,85% (Note 20).
In July 2009, the Company announced its firm intention to make a cash offer for the entire issued share capital of
EBI, not already owned by the Group. The aforementioned shares are held in the form of Global Depository
Receipts (GDRs), listed on the London Stock Exchange, held only by Qualified Institutional Buyers and represent
approximately 29,78% of the entire issued share capital of EBI. The Offer values EBI at US$ 11,10 in cash for each
GDR (representing five EBI ordinary shares). As of September 3, 2009, the Company acquired 6.872.085 shares of
EBI, representing 3,25% of EBIs issued capital, for a cash consideration TRL25.645 and increased its share in EBI
to 73,47%. Difference between the net asset value of EBI and the acquisition cost amounting to TRL8.923 has been
reflected as negative goodwill under other operating income in the Groups consolidated financial statements
(Note 31).

(24)
F-127

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 3. BUSINESS COMBINATIONS (continued)
Transactions Related with 2009 (continued)
Acquisitions (continued)
In November 2009, the Company acquired 33,33% of Anadolu Etap, a leading company that produces fruit juice
concentrates and purees in Turkey for a cash consideration of TRL18.311. Difference between the fair value of net
assets of Anadolu Etap and the acquisition cost amounting to TRL12.178 has been reflected as goodwill in the
Groups consolidated financial statements (Note 20).
The total fair value of net assets of Anadolu Etap as of the acquisition date is as follows:
Fair Value
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Property, plant and equipment and intangibles
Deferred tax assets
Financial liabilities
Trade and other payables
Due to related parties
Deferred tax liabilities
Other liabilities

Carrying Value

3.487
1.290
30.531
4.438
34.548
(17.238)
(6.697)
(2.727)
(4.002)
(25.233)

3.487
1.290
25.577
4.438
13.873
1.021
(17.238)
(6.697)
(2.727)
(25.233)

Fair value of net assets acquired

18.397

(2.209)

Total cash consideration


Groups share in net assets

18.311
(6.133)

Goodwill arising from acquisition

12.178

Total cash consideration


Cash in the subsidiary acquired, Groups share (-)

18.311
(1.162)

Net cash outflow on acquisition

17.149

NOTE 4. JOINT VENTURES


Summarized financial information about proportionally consolidated amounts included in the consolidated financial
statements before consolidation adjustments and reclassifications are as follows:

Current assets
Non-current assets
Total assets
Short-term liabilities
Long-term liabilities
Equity
Total liabilites
Net income

2010

2009

659.168
883.904
1.543.072
452.245
357.821
733.006
1.543.072

609.128
854.736
1.463.864
587.452
232.062
644.350
1.463.864

96.111

85.226

There are no commitments given by the Company on behalf of the joint ventures as of December 31, 2010 and
2009.

(25)
F-128

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 5. SEGMENT INFORMATION
The Group's segment reporting disclosed in accordance with IFRS 8 is disclosed as follows with respect to operating
segments as of December 31, 2010 and 2009.
Turkey International
Beer
Beer

Soft
Drinks

Other (1) and


Eliminations

Total

2010
Revenues
Inter-segment revenues
Total Sales
EBITDA
Depreciation and amortization
Provision for retirement pay liability
Other
Profit / (loss) for the year
Capital expenditures (Note 18, 19)

1.293.426
(10.821)

1.464.174 1.383.607
(188)
(38)

51.257
(12.624)

4.192.464
(23.671)

1.282.605

1.463.986 1.383.569

38.633

4.168.793

519.064

320.273

218.589

(38.922)

1.019.004

74.932
8.348
3.617

149.623
1.768

74.027
3.981
3.963

2.449
158
2.514

301.031
12.487
11.862

368.514

94.209

99.694

(43.976)

518.441

92.077

147.322

80.206

11.109

330.714

2009
Revenues
Inter-segment revenues
Total Sales

1.264.171
(9.046)

1.325.053 1.209.908
(349)
(49)

32.415
(11.036)

3.831.547
(20.480)

1.255.125

1.324.704 1.209.859

21.379

3.811.067

EBITDA
Depreciation and amortization
Provision for retirement pay liability
Negative goodwill
Other

502.959
68.967
4.820
2.276

Profit / (loss) for the year

363.056

Capital expenditures (Note 18, 19)

102.698

262.993
130.214
5.257
(360)
156.581

185.277
66.286
4.203
(5.210)
1.154

(34.615)
90
(8.293)
(1.131)

916.614
265.557
9.023
(13.503)
7.556

85.035

(25.459)

422.272

65.704

(7.332)

317.651

(1) Includes other subsidiaries included in the consolidation of Anadolu Efes and headquarters expenses.

(26)
F-129

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 5. SEGMENT INFORMATION (continued)
Segment assets and liabilities as of December 31, 2010 and 2009 is disclosed as follows:
Turkey International
Beer
Beer

Soft
Drinks

Other (1) and


Eliminations
(1.223.443)
4.590

Total

2010
Segment assets
Segment liabilities

3.002.585
851.663

2.294.972
1.124.038

1.514.717
793.535

21.441

2.463.934
502.454

2.449.692
1.390.927

1.439.099
800.882

45.356

Other disclosures
Investments in associates

5.588.831
2.773.826
21.441

2009
Segment assets
Segment liabilities
Other disclosures
Investments in associates

(922.684)
1.600
-

5.430.041
2.695.863
45.356

(1) Includes other subsidiaries included in the consolidation of Anadolu Efes.

Reconciliation of EBITDA to the consolidated profit before tax and its components as of December 31, 2010 and
2009 are explained in the following table:
2010
EBITDA
Depreciation and amortization expenses
Provision for retirement pay liability
Provision for vacation pay liability
(Impairment reversal) / impairment on property, plant and equipment, net
Provision for doubtful receivables, net
Provision for inventory, net
Negative goodwill
Other
Profit from Operations
Loss from Associates
Financial Income
Financial Expenses (-)
Profit Before Tax from Continuing Operations

(27)
F-130

2009

1.019.004
(301.031)
(12.487)
(3.124)
(2.079)
(1.064)
(941)
(4.654)

916.614
(265.557)
(9.023)
(25)
561
(1.498)
(3.409)
13.503
(3.185)

693.624

647.981

(17.910)
244.302
(261.464)

(10.925)
375.081
(468.383)

658.552

543.754

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 6. CASH AND CASH EQUIVALENTS

Cash on hand
Bank accounts
- Time deposits
- Demand deposits
Other
Cash and cash equivalents in cash flow statement
Interest income accrual

2010

2009

855

990

896.289
39.042
52
936.238

1.013.979
33.532
33
1.048.534

3.086
939.324

4.722
1.053.256

As of December 31, 2010, as the maturity of all time deposits is less than three months, annual interest rates of the
TRL denominated time deposits vary between 3,8% and 9,5% (December 31, 2009 - 4,5% - 10,8%) and annual
interest rates of the USD, EURO denominated and other time deposits vary between 0,1% and 5,4% (December 31,
2009 0,2% - 8,0%). As of December 31, 2010, there is no pledge over the Groups cash deposits at banks as
collateral for credit facilities (December 31, 2009 - TRL11.161).
NOTE 7. FINANCIAL INVESTMENTS
a) Current Investments

Time deposits with maturity more than three months


Investment funds
Government bonds

2010

2009

53.830
1.260
55.090

19.259
1.753
192
21.204

Investment funds and government bonds in the consolidated financial statements are valued with their market
value prevailing at the balance sheet date. Time deposits with maturities over three months were made for
periods varying between 3 to 8 months and earned interest is between 1,4% and 9,1% (December 31, 2009 for
5 months to 1 year; 5,0% - 8,0%).
b) Non-current Investments
Ownership

Alternatifbank A..
ZAO Mutena Maltery (Mutena Maltery)
Other

2010

2009

2010

2009

7,46%
-

7,46%
14,68%

36.702
786

34.240
5.075
786

37.488

40.101

Available for sale securities (except for Alternatifbank) are carried at cost, since these investments do not have
a quoted market price in an active market and its fair value cannot be reliably measured by alternative valuation
methods. Shares of Alternatifbank are traded on the ISE, and the Group carried the shares of Alternatifbank at
fair value as of December 31, 2010 in the consolidated financial statements.
As a result of the valuation of current investments and shares of Alternatifbank at their market value, a gain
amounting to TRL2.347 in 2010 is recognized under consolidated comprehensive income statement as value
increase in available for sale securities (December 31, 2009 TRL17.398). The deferred tax expense effect of
such gain amounting to TRL117 (December 31, 2009 TRL870) is also recognized under consolidated
comprehensive income statement.
The Group has increased its share in Mutena Maltery to 99,95% as a result of the step acquisition explained in
Note 3 and included Mutena Maltery in consolidation by using the full consolidation method.
(28)
F-131

Leasing obligations

Foreign currency denominated borrowings (USD)


Foreign currency denominated borrowings (EURO)
Foreign currency denominated borrowings (Other)

Borrowings

Long-term

Leasing obligations

TRL denominated borrowings


Foreign currency denominated borrowings (USD)
Foreign currency denominated borrowings (EURO)
Foreign currency denominated borrowings (Other)

Short-term portion of long term borrowings

TRL denominated borrowings


Foreign currency denominated borrowings (USD)
Foreign currency denominated borrowings (EURO)
Foreign currency denominated borrowings (Other)

Borrowings

Short-term

(29)

1.226

F-132

1.857.385

906.833

582.632
279.288
44.913

949.326

782

587.877

509.561
25.472
52.844

360.667

260.691
63.596
7.563
28.817

Amount

1.764.496

Libor + 1,00% - 2,80%


Euribor + 2,00%
-

Libor + 0,95% - 2,80%


Euribor + 1,00% - 2,00%
-

7,19% - 7,61%
Libor + 1,40%
Mosprime +1,00% - Kibor + 1,25%

Floating rate

908.059

3,45%- 7,20%

4, 90%
8,11%

3,45%- 7,20%

11,30%
4,90%
8,11%

7,20% -7,93%
2,80%
5,50%

December 31, 2010


Fixed rate

768.383

1.623

766.760

661.322
82.630
22.808

996.113

563

530.911

2.720
467.861
45.115
15.215

464.639

397.003
13.343
54.293

Amount

4,00% - 12,50%

8,11%

4,00% - 12,50%

8,11%

7,67%- 7,88%
4,00% - 5,40%
4,00%
-

December 31, 2009


Fixed rate

Libor + 0,75% - 6,00%


Euribor + 0,88% - 4,75%
Kibor + 0,75%

Libor + 0,75% - 6,00%


Euribor + 0,88% - 4,75%
Mosprime + 3,65%

6,67% - 15,75%
Libor + 0,95% - 4,00%
Kibor + 1,75% - 2,50%

Floating rate

As of December 31, 2010, total borrowings consist of principal (finance lease obligations included) amounting to TRL1.759.960 (2009 TRL1.852.556) and interest expense accrual
amounting to TRL4.536 (2009 TRL4.829). As of December 31, 2010 and 2009, total amount of borrowings and the effective interest rates are as follows:

NOTE 8. BORROWINGS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 8. BORROWINGS (continued)
Repayments of long-term borrowings are scheduled as follows (excluding finance lease obligation):

2011
2012
2013
2014 and thereafter

2010

2009

386.027
321.233
59.500

313.244
524.510
44.755
24.324

766.760

906.833

As of December 31, 2010, TRL1.560 (December 31, 2009 TRL44.328) of the total borrowings are secured by the
Group with the followings:
Related with CC, its subsidiaries and joint ventures;

Certain property, plant and equipment amounting to TRL22.350 (December 31, 2009 TRL13.701).
There is no cash collateral under the provision of loan agreements (December 31, 2009 TRL11.161).

Lessee - Finance Lease


Properties leased by the Group include buildings, machinery and equipment, motor vehicles and furniture and
fixtures. The most significant obligations assumed under the lease terms, other than rental payments, are the upkeep
of the facilities, insurance and property taxes. Lease terms generally range from 3 to 25 years with options to renew
at varying terms.
As of December 31, 2010 and 2009, the costs of the property plant and equipment obtained by finance lease are
TRL65.544 and TRL64.037, respectively whereas net book values are TRL7.387 and TRL9.086, respectively.
Lessee - Operating Lease
One of the production facilities of Efes Moscow and the production facility of Mutena Maltery are situated on a site
leased from the Moscow City Government under a 49-year lease contract. Furthermore, the Group has operational
leasing agreements with elik Motor Ticaret A.., a related party.
NOTE 9. OTHER FINANCIAL LIABILITIES
None (December 31, 2009 None).

(30)
F-133

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 10. TRADE RECEIVABLES AND PAYABLES
a) Short-Term Trade Receivables
2010
Trade receivables
Notes and cheques receivables
Provision for doubtful accounts (-)

2009

518.819
14.498
(15.066)

419.310
16.096
(13.867)

518.251

421.539

The movement of provision for doubtful accounts as of December 31, 2010 and 2009 is as follows:
2010

2009

Balance at January 1
Current year provision
Unused provisions
Write-offs from doubtful receivables
Currency translation differences

13.867
4.620
(3.556)
(127)
262

21.148
2.581
(1.083)
(8.538)
(241)

Balance at December 31

15.066

13.867

2010

2009

253.332

234.879

2010

2009

3.492
4.427

2.368
3.459

7.919

5.827

2010

2009

508
817

418
526

1.325

944

b) Short-Term Trade Payables

Trade payables
NOTE 11. OTHER RECEIVABLES AND PAYABLES
a) Other Current Receivables

Due from personnel


Other receivables

b) Other Non-Current Receivables

Deposits and guarantees given


Other

(31)
F-134

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 11. OTHER RECEIVABLES AND PAYABLES (continued)
c)

Other Current Payables

Taxes other than on income


Deposits and guarantees taken
Payables for goods in transit
Other

2010

2009

255.135
24.055
7.504
4.152

163.264
20.548
13.376
5.120

290.846

202.308

2010

2009

144.366

126.620

d) Other Non-Current Payables

Deposits and guarantees taken

NOTE 12. RECEIVABLES AND PAYABLES RELATED TO FINANCE SECTOR


None (December 31, 2009 - None).
NOTE 13. INVENTORIES
2010
Finished and trade goods
Work-in-process
Raw materials
Packaging materials
Supplies
Bottles and cases
Other
Reserve for obsolescence (-)

2009

95.975
50.426
187.762
36.339
58.515
30.264
21.056
(12.473)

97.281
47.382
147.776
35.075
49.628
29.424
17.180
(11.357)

467.864

412.389

The movement of reserve for obsolescence as of December 31, 2010 and 2009 is as below:
2010

2009

Balance at January 1
Current year provision
Inventories written off
Currency translation differences

11.357
4.205
(3.264)
175

8.495
5.740
(2.331)
(547)

Balance at December 31

12.473

11.357

(32)
F-135

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 14. BIOLOGICAL ASSETS
Sewed fruit tree seedlings carried at cost in accordance with IAS 41 are amounting to TRL1.512 as of December 31,
2010.
NOTE 15. RECEIVABLES AND DEFERRED INCOME FROM CONTINUING CONSTRUCTION
CONTRACTS
None (December 31, 2009 - None).
NOTE 16. INVESTMENTS IN ASSOCIATES

Ownership (%)

2010
Carrying value

28,00%

21.441

CEB
Total

2009
Ownership (%) Carrying value
20,57%

45.356
45.356

21.441

As of December 31, 2010 and 2009, total assets, liabilities and net loss for the year of CEB are shown as below:
2010

2009

Total Assets
Total Liabilities

49.586
28.145

68.838
23.482

Net Assets

21.441

45.356

(17.910)

(10.925)

Net Loss for the Year

The movement of investment in associates as of December 31, 2010 and 2009 is as below:
2010
Balance at January 1
Loss from associates
Change in scope of consolidation (Note 3)
Foreign currency translation
Balance at December 31

2009

45.356
(17.910)
(6.005)

54.911
(10.925)
(1.995)
3.365

21.441

45.356

In 2010, CEB recognized an impairment loss amounting to TRL11.371 on its property plant and equipment in its
financial statements.
NOTE 17. INVESTMENT PROPERTY
None (December 31, 2009 - None).

(33)
F-136

295.928

2.268.080

1.981.611

2.975
23.883
159.821
8.234
100.826
189

31.257
243.348
1.366.467
40.863
583.647
2.498

327.419

4.249.691

Additions

20.625
3.123
29.965
5.118
116.454
638
151.496

137.998
820.883
2.266.184
73.395
884.642
3.245
63.344

2009

Additions

2009

(*) There are transfers to intangible assets in 2010 amounting to TRL576.

Net book value

Land and land improvements


Buildings
Machinery and equipment
Vehicles
Furniture and fixtures
Leasehold improvements

Accumulated Depreciation (-)

Land and land improvements


Buildings
Machinery and equipment
Vehicles
Furniture and fixtures
Leasehold improvements
Construction in progress

Cost

18.408

219
2.200
12.154
699
3.115
21

2.079

1.517
562
-

Impairment /
(Impairment
reversal)

3.623
13.868
125.708
1.018
9.969
(154.762)

Addition Through
Business Foreign Currency
Combination
Translation

1.742
10.347
25.760
1.171
5.196
30
942

(576)

20.384

3.540
6.673
10.146
6
19
-

Transfers (*)

45.188

F-137

(34)

(58.348)

(278)
(14.783)
(4.728)
(38.512)
(47)

Disposals

(72.165)

(121)
(1.403)
(19.413)
(5.409)
(45.540)
(47)
(232)

Disposals

Addition Through
Business Foreign Currency
Combination
Translation

For the year ended December 31, 2010, the movements of property, plant and equipment are as follows:

NOTE 18. PROPERTY, PLANT AND EQUIPMENT

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi

2.043.794

2.526.147

34.451
269.153
1.525.176
45.068
649.638
2.661

2010

4.569.941

167.407
853.491
2.438.350
75.299
970.740
3.866
60.788

2010

(*) There are transfers to intangible assets in 2009 amounting to TRL189.

1.996.781

262.100

2.083.316

Net book value

2.633
20.885
144.982
7.941
85.516
143

29.209
227.325
1.255.525
37.635
531.222
2.400

Land and land improvements


Buildings
Machinery and equipment
Vehicles
Furniture and fixtures
Leasehold improvements

315.666

4.080.097

Additions

3.201
22.357
23.456
2.672
98.501
52
165.427

131.183
780.633
2.153.449
77.020
836.211
3.250
98.351

2008

Additions

2008

Accumulated Depreciation (-)

Land and land improvements


Buildings
Machinery and equipment
Vehicles
Furniture and fixtures
Leasehold improvements
Construction in progress

Cost

F-138

(35)

(44.526)

(87)
(1.396)
(15.772)
(3.549)
(23.715)
(7)

Disposals

(59.863)

(594)
(5.358)
(19.494)
(4.676)
(29.114)
(627)

Disposals

(32.249)

(498)
(3.466)
(17.637)
(1.164)
(9.446)
(38)

Foreign Currency
Translation

Addition Through
Business
Combination
-

(111.487)

(3.063)
(22.600)
(54.259)
(3.185)
(20.494)
(57)
(7.829)

Foreign Currency
Translation

25.467

2.623
11.264
9.624
746
691
519

Addition Through
Business
Combination

For the year ended December 31, 2009, the movements of property, plant and equipment are as follows:

NOTE 18. PROPERTY, PLANT AND EQUIPMENT (continued)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi

(561)

(631)
70
-

Impairment /
(Impairment
reversal)

(189)

4.648
34.587
153.408
818
(1.153)
(192.497)

Transfers (*)

1.981.611

2.268.080

31.257
243.348
1.366.467
40.863
583.647
2.498

2009

4.249.691

137.998
820.883
2.266.184
73.395
884.642
3.245
63.344

2009

Net book value

Bottling and distribution agreements


Brands
Rights
Other

Accumulated amortization (-)

Bottling and distribution agreements


Brands
Rights
Other

Cost

(36)
F-139

5.103

22.009
357.016

2.294
2.809

10.747
11.262

Additions

3.295

379.025

2009

614
2.681

Additions

175.359
159.141
26.219
18.306

2009

For the year ended December 31, 2010, movements of intangible assets are as follows:

NOTE 19. INTANGIBLE ASSETS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

(126)

(126)

Disposals

(135)

(135)

Disposals

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi

255

Impairment

Currency
translation
differences
5
250

576

576
-

Transfers

6.369

4.666
1.299
17
387

Currency
translation
differences

361.889

27.241

13.046
14.195

2010

389.130

180.025
160.440
27.426
21.239

2010

Net book value

Bottling and distribution agreements


Brands
Rights
Other

Accumulated amortization (-)

Bottling and distribution agreements


Brands
Rights
Other

Cost

3.457

18.902
341.186

1.954
1.503

8.888
10.014

Additions

1.985

360.088

2008

284
1.701

Additions

161.242
163.998
15.771
19.077

2008

F-140

(37)

(96)

(96)
-

Disposals

(2.929)

(1.111)
(1.818)

Disposals

For the year ended December 31, 2009, movements of intangible assets are as follows:

NOTE 19. INTANGIBLE ASSETS (continued)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))

(254)

1
(255)

Impairment

Currency
translation
differences

Addition Through
Business Combinations
-

189

189
-

Transfers

(6.289)

(752)
(4.857)
5
(685)

Currency
translation
differences

25.981

14.869
11.081
31

Addition Through
Business Combinations

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi

357.016

22.009

10.747
11.262

2009

379.025

175.359
159.141
26.219
18.306

2009

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 20. GOODWILL
Movement of the goodwill during the period is as follows:
2010

2009

At January 1
Additions (Note 3)
Put option fair value change (Note 23)
Currency translation differences

855.570
6.147
9.362

866.506
14.310
(8.273)
(16.973)

At December 31

871.079

855.570

As of December 31, 2010 and 2009, operating segment distributions of goodwill are presented below:
Turkey Beer International Beer
2010
2009

50.099
50.099

538.043
523.450

Soft Drinks

Other

Total

270.759
269.843

12.178
12.178

871.079
855.570

NOTE 21. GOVERMENT INCENTIVES AND GRANTS


As of December 31, 2010, the Group used an incentive for its investment amounting to TRL3.326 on Bursa mineral
water by generating a total tax advantage of TRL665. The tax advantage amounting to TRL38 was recognized
during 2010 (December 31, 2009 - None).

NOTE 22. PROVISIONS, CONTINGENT ASSETS AND LIABILITIES


As of December 31, 2010 and 2009, the movement of provisions is as follows:

Vacation pay liability


Management bonus accruals
Other

2010

2009

17.702
5.974
-

15.141
4.681
512

23.676

20.334

2010

2009

15.141
(765)
3.124
202

16.023
(593)
25
59
(373)

17.702

15.141

As of December 31, 2010 and 2009, movement of vacation pay liability is as follows:
Balance at January 1
Payments
Current year provision
Addition through acquisition
Currency translation differences

As of December 31, 2010 and 2009 movement of management bonus accruals is as follows:
2010
Balance at January 1
Payments
Current year provision
Currency translation differences

(38)
F-141

2009

4.681
(23.031)
24.258
66

1.698
(15.500)
18.541
(58)

5.974

4.681

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 23. COMMITMENTS AND CONTINGENCIES
Parent Company (Anadolu Efes) and Subsidiaries Included in Full Consolidation
As of December 31, 2010 and 2009 guarantees, pledges and mortgages (GPMs) given in favor of the parent
company and subsidiaries included in full consolidation are as follows:
2010

A. GPMs given on behalf of the Companys legal


personality
B. GPMs given in favor of subsidiaries included in full
consolidation
C. GPMs given by the Company for the liabilities of 3rd
parties in order to run ordinary course of business
D. Other GPMs
i. GPMs given in favor of parent company
ii. GPMs given in favor of group companies not in the
scope of B and C above
iii. GPMs given in favor of third party companies not in
the scope of C above
Total

Total TRL
Equivalent

Original
Currency
TRL

Original
Currency
Thousand
EUR

Original
Currency
Thousand
USD

Original
Currency
Thousand
KZT

Original
Currency
Thousand
RUR

60.423

13.035

895

8.381

314.003

493.954

673.948

358.629

40.000

3.625.311

359.524

48.381

734.371

Ratio of other GPMs over the Companys equity (%)

13.035

3.939.314

493.954
-

2009

A. GPMs given on behalf of the Companys legal


personality
B. GPMs given in favor of subsidiaries included in full
consolidation
C. GPMs given by the Company for the liabilities of 3rd
parties in order to run ordinary course of business
D. Other GPMs
i. GPMs given in favor of parent company
ii. GPMs given in favor of group companies not in the
scope of B and C above
iii. GPMs given in favor of third party companies not in
the scope of C above
Total
Ratio of other GPMs over the Companys equity (%)

Total TRL
Equivalent

Original
Currency
TRL

Original
Currency
Thousand
USD

Original
Currency
Thousand
EUR

Original
Currency
Thousand
KZT

Original
Currency
Thousand
RUR

Original
Currency
Thousand
GEL

62.424

12.548

5.925

5.606

129.178

452.846

5.492

1.013.936

458.202

107.000

4.659.097

950.000

1.076.360

12.548

464.127

112.606

4.788.275

1.402.846

5.492

GPM tables prepared as of December 31, 2010 and 2009 have been presented according to the CMB bulletin,
numbered 2010/45, which was published on October 28, 2010.
EBI and Its Subsidiaries
Put Options
The put option granted to European Bank for Reconstruction and Development (EBRD) by EBI that may be
exercisable between the 7th and the 10th anniversaries of the date of EBRDs first subscription in the share capital of
Efes Moscow has been restructured and the exercisable period of the put option has been revised as between 2011
and 2015. By such put option, EBRD will be entitled to sell its Efes Moscow shares to EBI at an option price
determined by an independent valuation. The liability for the put option has been measured by applying a weighting
of different valuation techniques based on best estimates currently available, and the fair value of liability for put
option amounting to TRL126.279 has been presented in other current liabilities in the consolidated balance sheet
(December 31, 2009 the fair value of liability for put option amounting to TRL90.425 has been presented in other
non-current liabilities in the consolidated balance sheet). The valuation difference between current year fair value
and prior year fair value amounting to TRL6.147 has been disclosed as put option fair value change in goodwill in
accordance with IFRS 3 (Revised) (December 31, 2009 (TRL10.532)).

(39)
F-142

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 23. COMMITMENTS AND CONTINGENCIES (continued)
CC, Its Subsidiaries and Joint Ventures
a) Put Options
A put option has been granted to Day Investments Ltd. by CC that may be exercisable in 2012. By such option,
Day Investments Ltd. will have right to sell its shares in Turkmenistan CC to CC at the price of USD2.360
thousand. Groups portion of the liability for the put option amounting to TRL1.834 has been presented in
other non-current liabilities (December 31, 2009 TRL1.785).
b) Letters of Guarantee
As of December 31, 2010, CCs letters of guarantee given to various enterprises are amounting to TRL63.901
(December 31, 2009 TRL56.013).
Operational Lease
As of December 31, 2010, Groups contingent liability for the following periods resulting from the non-cancellable
operational lease agreements is amounting to TRL14.681 (December 31, 2009 TRL14.642).
Tax and Legal Matters
Legislation and regulations regarding taxation and foreign currency transactions in most of the territories in which
the Group operates out of Turkey continue to evolve as a result of the transformation from command to marketoriented economy managed by the government. The various legislation and regulations are not always clearly
written and the interpretation related with the implementation of these regulations is subject to the opinions of the
local, regional and national tax authorities, the Central Bank and Ministry of Finance. Tax declarations, together
with other legal compliance areas (as examples, customs and currency control) are subject to review and
investigation by a number of authorities, who are enabled by law to impose significant fines, penalties and interest
charges. These facts create tax risks in the territories in which the Group operates substantially more so than
typically found in countries with more developed tax systems.
NOTE 24. EMPLOYEE BENEFITS
2010
Employment termination benefits
Long-term incentive plans

2009

39.010
12.327

30.103
10.045

51.337

40.148

In accordance with existing social legislation, the Groups companies incorporated in Turkey are required to make
lump-sum payments to employees whose employment is terminated due to retirement or for reasons other than
resignation or misconduct. Such payments are calculated on the basis of 30 days pay. The retirement pay liability
as at December 31, 2010 is subject to a ceiling of full TRL2.517 (December 31, 2009 full TRL2.365) (Retirement
pay liability ceiling has been increased to full TRL2.623 as of January 1, 2011). In the consolidated financial
statements as of December 31, 2010 and 2009, the Group reflected a liability calculated using the projected unit
credit method and based upon factors derived using their experience of personnel terminating their services and
being eligible to receive retirement pay and discounted by using the current market yield at the balance sheet date on
government bonds.
The principal actuarial assumptions used at the balance sheet dates are as follows:

Discount rate
Expected salary / limit increase rate
(40)
F-143

2010

2009

10,0%
5,1%

11,0%
4,8%

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 24. EMPLOYEE BENEFITS (continued)
Movement of provision for employment termination benefits represented in the consolidated financial statements is
as follows:

Balance at January 1
Payments
Interest cost
Current year provision
Addition through joint venture acquired
Currency translation differences

2010

2009

30.103
(3.580)
3.006
9.481
-

25.604
(4.583)
2.816
6.207
55
4

39.010

30.103

2010

2009

58.100
35.661
34.267
23.251
753

55.806
29.582
25.912
27.517
2.818

152.032

141.635

2010

2009

48.341
14.274
6.690
173

27.260
12.873
5.275
504

69.478

45.912

2010

2009

NOTE 25. PENSION PLANS


None (December 31, 2009 None).
NOTE 26. OTHER CURRENT / NON-CURRENT ASSETS AND LIABILITIES
a) Other Current Assets

Value Added Tax (VAT) deductible and VAT to be transferred


Prepayments
Advances given to suppliers
Prepaid taxes
Other

b) Other Non-Current Assets

Prepayments
Advances given
Deferred VAT and other taxes
Other

c)

Other Current Liabilities

Liability for put option (Note 23)


Expense accruals
Advances taken
Due to personnel
Other

(41)
F-144

126.279
24.418
12.185
5.169
1.239

29.005
15.587
3.514
2.187

169.290

50.293

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 26. OTHER CURRENT / NON-CURRENT ASSETS AND LIABILITIES (continued)
d) Other Non-Current Liabilities

Deferred VAT and other taxes


Liability for put option (Note 23)
Other

2010

2009

6.654
1.834
1.214

5.228
92.210
1.175

9.702

98.613

2010

2009

900.000
450.000

900.000
450.000

NOTE 27. EQUITY


a) Issued Capital and Adjustments to Share Capital and Equity Investments

Common shares 1 full TRL per value


Authorized capital
Issued capital

As of December 31, 2010 and 2009, the composition of shareholders and their respective percentage of
ownership can be summarized as follows:
2010
Amount

2009
Amount

Yazclar Holding A..


zilhan Snai Yatrm A..
Anadolu Endstri Holding A.. (AEH)
Publicly traded and other

139.251
78.937
35.292
196.520

30,94
17,54
7,84
43,68

139.251
78.937
35.292
196.520

30,94
17,54
7,84
43,68

Issued capital

450.000

100,00

450.000

100,00

Inflation correction adjustment

63.583

63.583

513.583

513.583

As of December 31, 2010 and 2009, there is not a privileged share representing the capital. According to the
articles of association, foundation shares that do not represent the share capital receives 2% of the profit that
remains after 10% of the paid in capital is deducted from the distributable profit. 5% of the remaining profit
after deducting the portion of the foundation shares is distributed to the members of the Board of Directors
equally.
b)

Restricted Reserves Allocated from Net Profit, Revaluation Fund and Accumulated Profits
The legal reserves consist of first and second legal reserves in accordance with the Turkish Commercial
Code. The first legal reserve is appropriated out of the statutory net income (inflation-restated income in
accordance with CMB) at the rate of 5%, until the total reserve reaches a maximum of 20% of the Companys
issued capital (inflation-restated issued capital in accordance with the communiqus and announcements of
CMB). The second legal reserve is appropriated at the rate of 10% of all distributions in excess of 5% of the
Companys issued capital (inflation-restated capital in accordance with CMB). The legal reserves are not
available for distribution unless they exceed 50% of the issued capital, other than that legal reserves cannot be
used.
Quoted companies are subject to dividend requirements regulated by the CMB as follows: Based on the CMB
Decree 1/6, dated January 9, companies that take their consolidated financial statements as basis for their
distributable profit, shall consider the profits of their subsidiaries, joint ventures and associates to the extent
that such profits do not exceed the amount recorded in the statutory financial statements of these companies
and without considering whether a profit distribution resolution is taken at their annual general meetings.
Such profits as reported in the financial statement as per Communiqu.
(42)
F-145

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 27. EQUITY (continued)
b)

Restricted Reserves Allocated from Net Profit, Revaluation Fund and Accumulated Profits (continued)
In accordance with the CMB decision dated January 27, 2010, its decided to remove the obligation related
with the minimum dividend distribution rate for publicly traded companies.
Inflation adjustment to shareholders' equity and carrying amount of extraordinary reserves can only be nettedoff against prior years' losses and used as an internal source for capital increase where extraordinary reserves
can be netted-off against prior years' loss and used in the distribution of bonus shares and dividends to
shareholders. However, when inflation adjustment to shareholders' equity is used for cash dividend
distribution, it is subject to income tax.
Net income for the year and other statutory resources treated for dividend distribution are TRL1.161.584 as of
December 31, 2010. (December 31, 2009 TRL1.055.588)
Anadolu Efes distributed dividend in 2010, related with the year ended as of December 31, 2009, for a gross
amount of full TRL0,32 per share, amounting to a total of TRL168.979 including the payments to founders
and members of board of directors (2009 gross amount full TRL0,258 per share, total amount TRL133.454
including the payments to founders and member of board of directors).
For December 31, 2010 and 2009, nominal amounts, equity restatement differences and restated value of
equity are as follows:
December 31, 2010
Issued capital
Legal reserves
Extraordinary reserves

Nominal
Amount

Equity Restatement
Differences

Restated
Amount

450.000
138.442
444.119

63.583
74.697
26.091

513.583
213.139
470.210

1.032.561

164.371

1.196.932

Fair value reserve


Currency translation differences
Other reserves
Accumulated profits (Including net income)

19.569
(4.085)
(5.736)
1.560.407

Equity attributable to equity holders of the parent

2.767.087

December 31, 2009

Nominal
Amount

Equity Restatement
Differences

Restated
Amount

Issued capital
Legal reserves
Extraordinary reserves

450.000
108.217
348.976

63.583
74.697
26.091

513.583
182.914
375.067

907.193

164.371

1.071.564

Fair value reserve


Currency translation differences
Other reserves
Accumulated profits (Including net income)

17.339
(18.016)
4.916
1.351.114

Equity attributable to equity holders of the parent

2.426.917

(43)
F-146

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 28. SALES AND COST OF SALES
2010

2009

Domestic revenues
Foreign revenues

2.361.655
1.807.138

2.193.184
1.617.883

Total Sales, net

4.168.793

3.811.067

Net change in inventory


Depreciation and amortisation expense on PP&E and intangible assets
Personnel expenses
Utility expenses
Provision for retirement pay liability
Other expenses

1.581.174
157.794
108.967
89.797
3.954
109.662

1.488.821
134.821
101.978
88.407
1.859
92.048

Total cost of sales

2.051.348

1.907.934

Gross Operating Profit

2.117.445

1.903.133

Revenues

Cost of Sales (-)

As of January 1- December 31, 2010 and 2009, the amount of excise tax accrued over beer sales by the Group in
Turkey are TRL1.470.821 and TRL1.042.193, respectively.
NOTE 29. OPERATING EXPENSES
a) Selling, Distribution and Marketing Expenses

Advertising, selling and marketing expenses


Personnel expenses
Transportation and distribution expenses
Depreciation and amortization expense on PP&E and intangible assets
Utilities and communication expenses
Rent expenses
Repair and maintenance expenses
Provision for retirement pay liability
Obsolete inventory provision, net
Other expenses

2010

2009

449.321
194.726
181.399
126.365
19.498
10.490
8.292
2.651
941
66.805

405.857
168.543
148.208
114.286
17.359
9.183
7.372
2.761
3.409
51.072

1.060.488

928.050

2010

2009

168.112
70.158
19.209
16.793
10.720
6.414
5.882
4.384
3.694
48.585

143.968
68.471
18.031
15.973
9.445
7.298
4.403
3.919
3.319
47.267

353.951

322.094

b) General and Administration Expenses

Personnel expenses
Services rendered from outside
Taxation (other than on income) expenses
Depreciation and amortization expense on PP&E and intangible assets
Utilities and communication expenses
Insurance expenses
Provision for retirement pay liability
Meeting and travel expenses
Repair and maintenance expenses
Other expenses

(44)
F-147

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 30. EXPENSES BY NATURE
a) Depreciation and Amortization Expenses
2010
Cost of sales
Marketing, selling and distribution expenses
General and administration expenses
Other operating expenses

2009

(157.794)
(126.365)
(16.793)
(79)

(134.821)
(114.286)
(15.973)
(477)

(301.031)

(265.557)

b) Personnel Expenses
2010
Cost of sales
Marketing, selling and distribution expenses
General and administration expenses

2009

(108.967)
(194.726)
(168.112)

(101.978)
(168.543)
(143.968)

(471.805)

(414.489)

NOTE 31. OTHER OPERATING INCOME / EXPENSE


a) Other Operating Income

Income from scrap and other materials


Rent income
Gain on sale of fixed assets
Insurance compensation income
Negative goodwill (Note 3)
Impairment reversal of fixed assets (Note 18)
Other income

2010

2009

5.398
2.444
1.999
1.106
14.075

4.980
2.633
3.733
5.977
13.503
631
10.013

25.022

41.470

2010

2009

b) Other Operating Expense

Donations
Impairment loss on fixed assets (Note 18)
Loss from fixed assets sales
Other expenses

(45)
F-148

(23.201)
(2.079)
(1.615)
(7.509)

(22.297)
(70)
(8.360)
(15.751)

(34.404)

(46.478)

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 32. FINANCIAL INCOME
2010
Foreign exchange gain
Interest income
Gain from derivative financial instruments

2009

171.740
71.669
893

315.852
59.209
20

244.302

375.081

NOTE 33. FINANCIAL EXPENSES

Foreign exchange loss


Interest expense
Syndication loan expense
Loss from derivative financial instruments
Other financial expenses

2010

2009

(168.047)
(77.534)
(10.073)
(1.117)
(4.693)

(375.748)
(84.007)
(3.604)
(607)
(4.417)

(261.464)

(468.383)

NOTE 34. NON-CURRENT ASSETS AVAILABLE FOR SALE AND DISCONTINUING OPERATIONS
None (December 31, 2009 - None).
NOTE 35. INCOME TAXES, DEFERRED TAX ASSETS AND LIABILITIES
The corporation tax rate for the fiscal year is 20% in Turkey (2009 - 20%). Corporate tax returns are required to be
filed until the twenty fifth of the fourth month following the fiscal year end and paid in full until the end of the same
month. The tax legislation provides for a provisional tax of 20% (2009 20%) to be calculated and paid based on
earnings generated for each quarter. The amounts thus calculated and paid are offset against the final corporate tax
liability for the fiscal year.
According to the Turkish Tax Law, corporate tax losses can be carried forward for a maximum period of five years
following the year in which the losses were incurred. The tax authorities can inspect tax returns and the related
accounting records for a retrospective maximum period of five years. In Turkey, the tax legislation does not permit
to file a consolidated tax return. Therefore, provision for taxes, as reflected in the consolidated financial statements,
has been calculated on a separate-entity basis.
The main components of tax income and expenses as of December 31, 2010 and 2009 are as follows:

Current period tax expense


Deferred tax income / (expense), net

(46)
F-149

2010

2009

(127.846)
(12.265)

(127.260)
5.778

(140.111)

(121.482)

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 35. INCOME TAXES, DEFERRED TAX ASSETS AND LIABILITIES (continued)
As of December 31, 2010 and 2009, the reconciliation of theoretical income tax calculated with the tax rates used in
the countries that Anadolu Efes operates in and total income tax is as follows:
2009

2010
Consolidated profit before tax
Enacted tax rate
Tax calculated at the parent company tax rate
Non-deductible expenses
Income excluded from tax bases
Impact of different tax rates
Other

658.552
20%
(131.710)
(5.978)
1.521
1.575
(5.519)
(140.111)

543.754
20%
(108.751)
(6.448)
2.426
2.722
(11.431)
(121.482)

As of December 31, 2010 and 2009 consolidated deferred tax assets calculated by using effective tax rates are
summarized as below:
Asset
2009
2010
PPE and intangible assets
Inventories
Carry forward losses
Retirement pay liability and other
employee benefits
Other (*)

2.198
52.684

3.923
57.149

13.736
23.677

11.018
18.734

92.295

90.824

Liability
2009
2010
(95.130)
-

(77.733)
-

(95.130)

(77.733)

Net
2010

2009

(95.130)
2.198
52.684

(77.733)
3.923
57.149

13.736
23.677

11.018
18.734

(2.835)

13.091

(*) Includes the income tax paid regarding the disputed tax receivable from tax authorities which was not recognized
as income.
As of December 31, 2010 and 2009, the movement of deferred tax liability is as follows:
2010
Balance at January 1,
Recorded to the consolidated income statement
Recognized in equity (Note 7)
Addition through company acquisition
Currency translation differences
Balance at December 31

2009

13.091
(12.265)
(117)
(3.722)
178

10.221
5.778
(870)
(1.699)
(339)

(2.835)

13.091

As a result of the Group managements assessment that sufficient taxable income will be generated and such assets
will be used in 9 years period, deferred tax asset amounting to TRL52.684 has been recognized.

(47)
F-150

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 36. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the net income for the year attributable to ordinary shareholders by
the weighted average number of ordinary shares outstanding during the period.
Following table illustrates the net income and share figures used in earnings per share calculation:
2010
Net income
Weighted average number of shares
Earnings per share (full TRL)

503.640
450.000.000
1,1192

2009
422.588
450.000.000
0,9391

There have been no other transactions involving ordinary shares or potential ordinary shares between the financial
statement date and the date of approval of these consolidated financial statements.
NOTE 37. RELATED PARTY BALANCES AND TRANSACTIONS
a) Balances with Related Parties
i)

Bank and Available-For-Sale Securities Balances With Related Parties

Alternatifbank (2) (4)


Alternatif Yatrm A.. (4)

ii)

2010

2009

202.200
1.260

218.315
1.945

203.460

220.260

2010

2009

337

127
683

337

810

2010
4.990
2.822
612
222
8.646

2009
4.553
313
1.088
8.248
794
14.996

Due from Related Parties

Anadolu Restoran letmeleri Ltd. ti. (4)


Other

iii) Due to Related Parties

Oyex Handels GmbH (4)


AEH (1) (3)
Anadolu Biliim Hizmetleri A.. (2) (4)
Mutena Maltery (5)
Other

(1)
(2)
(3)
(4)
(5)

Related party of Yazclar Holding A.., a shareholder


Non-current financial investment of the Group
The shareholder of the Group
Related party of AEH, a shareholder
Included in the consolidation by using the full consolidation method starting from August 2010.

(48)
F-151

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 37. RELATED PARTY BALANCES AND TRANSACTIONS (continued)
b) Transactions with Related Parties
i)

Purchases of Goods and Other Charges


Efes Pilsen Spor Kulb
Oyex Handels GmbH (4)
Anadolu Vakf
AEH (1) (3)
Anadolu Biliim Hizmetleri A.. (2) (4)
elik Motor Ticaret A.. (4)
Mutena Maltery (5)
Efes Turizm letmeleri A.. (4)
AEH Mnih (4)
Anadolu Isuzu Otomotiv Sanayi ve Ticaret A.. (1)
Other

2010

2009

42.000
26.729
23.128
15.828
12.642
11.123
5.321
5.203
3.557
1.142
2.906

33.000
26.932
22.261
12.824
12.673
10.060
7.727
3.452
4.476
1.145
2.894

149.579

137.444

2010

2009

ii) Financial Income / (Expense), Net


Alternatifbank (2) (4)
AEH (1) (3)
Other

7.384
22
(125)

12.839
1.183
-

7.281

14.022

2010

2009

237
210
193
393
1.033

263
65
80
580
988

iii) Other Income / (Expense), Net


Anadolu Biliim Hizmetleri A.. (2) (4)
Anadolu Restaurant l. Ltd. ti. (4)
Alternatifbank (2) (4)
Other
(1)
(2)
(3)
(4)
(5)

Related party of Yazclar Holding A.., a shareholder


Non-current financial investment of the Group
The shareholder of the Group
Related party of AEH, a shareholder
Included in the consolidation by using the full consolidation method starting from August 2010.

iv) Directors remuneration


Dividends paid to Board of Directors of Anadolu Efes are amounting to TRL17.739 and TRL12.324 as of
December 31, 2010 and 2009, respectively. Remuneration and similar benefits received by total executive
members of the Board of Directors and executive directors in the current year are as follows:
Short-term employee benefits
Post-employment benefits
Other long term benefits
Termination benefits
Share-based payments

(49)
F-152

2010

2009

12.269
449
733
-

10.688
316
1.130
-

13.451

12.134

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 38. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS
The Groups principal financial instruments comprise bank borrowings, finance leases, cash and short-term deposits.
The main purpose of these financial instruments is to raise funds for the Groups operations. Besides, The Group has
various other financial instruments such as trade debtors and trade creditors, which arise directly from its operations.
The main risks arising from the Groups financial instruments can be identified as foreign currency risk, credit risk,
interest rate risk, price risk and liquidity risk. The board/management reviews and agrees policies for managing each
of these risks. The Group also monitors the market price risk arising from all financial instruments. Related policies
can be summarized as follows:
a) Interest Rate Risk
The Group is exposed to interest rate risk through the impact of rate changes on interest bearing assets and
liabilities. The Group manages interest rate risk by using natural hedges that arise from offsetting interest rate of
assets and liabilities or derivative financial instruments.
The Group manages interest rate risk arising from the interest rate fluctuations on international markets, by using
interest rate swap (IRS) agreements. Total outstanding amount of IRS agreements was USD25,1 million as of
December 31, 2010 (December 31, 2009 USD25,1 million).
Certain parts of the interest rates related to borrowings are based on market interest rates; therefore the Group is
exposed to interest rate fluctuations on domestic and international markets. The Groups exposure to market risk
for changes in interest rates relates primarily to the Groups debt obligations.
The Groups financial instruments sensitive to interest rate risk is as follows:
Financial instruments with fixed interest rate
Financial assets
Financial assets at fair value through profit or loss
Financial liabilities
Financial instruments with floating interest rate
Financial liabilities

2010

2009

953.205
310.317

1.038.185
232.892

1.452.699

1.624.463

At December 31, 2010, if interest rate on the Groups foreign currency denominated borrowings would have
been 100 basis points higher / lower with all other variables held constant, then profit before tax and minority
interest for the period ended March 31, 2011, which is the following reporting period, would be:
2010

2009

Change in USD denominated borrowing interest rate


Change in EURO denominated borrowing interest rate
Change in Other denominated borrowing interest rate

2.815
318
104

2.685
754
285

Total

3.237

3.724

b) Foreign Currency Risk


Foreign currency risk arises from the EURO and USD denominated assets and liabilities of the Group. The
Group has transactional currency exposures. Such exposures arise from sales or purchases or borrowings by the
Group in currencies other than the Groups functional currency. The Group manages foreign currency risk by
using natural hedges that arise from offsetting foreign currency denominated assets and liabilities.

(50)
F-153

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 38. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS (continued)
b) Foreign Currency Risk (continued)
Net foreign currency exposure for the consolidated Group companies as of December 31, 2010 and 2009 are
presented below:
Foreign Currency Position Table
2010
Total TRL
Equivalent
(Functional
Thousand
Currency)
USD

TRL
Equivalent

Thousand
Euro

Other Foreign
Currency TRL
Equivalent

TRL
Equivalent

12.219
66.718
6.915
85.852
85.852
(75.043)
(505.118)
(4.982)
(585.143)
(436.370)
(1.833)
(438.203)
(1.023.346)
(937.494)
(944.409)

4.453
26.871
50
31.374
31.374
(3.750)
(297.179)
(706)
(301.635)
(227.759)
(1.186)
(228.945)
(530.580)
(499.206)
(499.256)

6.885
41.542
77
48.504
48.504
(5.798)
(459.439)
(1.092)
(466.329)
(352.116)
(1.833)
(353.949)
(820.278)
(771.774)
(771.851)

489
2.959
1.488
4.936
4.936
(32.280)
(22.292)
(276)
(54.848)
(41.118)
(41.118)
(95.966)
(91.030)
(92.518)

1.002
6.063
3.049
10.114
10.114
(66.145)
(45.679)
(565)
(112.389)
(84.254)
(84.254)
(196.643)
(186.529)
(189.578)

4.332
19.113
3.789
27.234
27.234
(3.100)
(3.325)
(6.425)
(6.425)
20.809
17.020

Foreign Currency Position Table


2009
Total TRL
Equivalent
(Functional
Thousand
Currency)
USD

TRL
Equivalent

Thousand
Euro

TRL
Equivalent

Other Foreign
Currency TRL
Equivalent

1. Trade Receivables and Due from Related Parties


2a. Monetary Financial Assets (Cash and cash equivalents included)
2b. Non- monetary Financial Assets
3. Other Current Assets and Receivables
4. Current Assets
5. Trade Receivables and Due from Related Parties
6a. Monetary Financial Assets
6b. Non-monetary Financial Assets
7. Other
8. Non-Current Assets
9. Total Assets
10.Trade Payables and Due to Related Parties
11.Short- term Borrowings and Current Portion of Long- term Borrowings
12a. Monetary Other Liabilities
12b. Non-monetary Other Liabilities
13. Current Liabilities
14. Trade Payables and Due to Related Parties
15. Long-Term Borrowings
16 a. Monetary Other Liabilities
16 b. Non-monetary Other Liabilities
17. Non-Current Liabilities
18. Total Liabilities
19. Off Balance Sheet Derivative Items Net Asset/(Liability) Position
19a. Total Hedged Assets
19b. Total Hedged Liabilities
20. Net Foreign Currency Asset / (Liability) Position
21. Monetary Items Net Foreign Currency Asset / (Liability) Position
22. Total Fair Value of Financial Instruments Used to Manage the Foreign
Currency Position
23.Total value of Hedged Foreign Currency Assets

1. Trade Receivables and Due from Related Parties


2a. Monetary Financial Assets (Cash and cash equivalents included)
2b. Non- monetary Financial Assets
3. Other Current Assets and Receivables
4. Current Assets
5. Trade Receivables and Due from Related Parties
6a. Monetary Financial Assets
6b. Non-monetary Financial Assets
7. Other
8. Non-Current Assets
9. Total Assets
10.Trade Payables and Due to Related Parties
11 Short- term Borrowings and Current Portion of Long- term Borrowings
12a. Monetary Other Liabilities
12b. Non-monetary Other Liabilities
13. Current Liabilities
14. Trade Payables and Due to Related Parties
15. Long-Term Borrowings
16 a. Monetary Other Liabilities
16 b. Non-monetary Other Liabilities
17. Non-Current Liabilities
18. Total Liabilities
19. Off Balance Sheet Derivative Items Net Asset/(Liability) Position
19a. Total Hedged Assets
19b. Total Hedged Liabilities
20. Net Foreign Currency Asset / (Liability) Position
21. Monetary Items Net Foreign Currency Asset / (Liability) Position
22. Total Fair Value of Financial Instruments Used to Manage the Foreign
Currency Position
23.Total value of Hedged Foreign Currency Assets

12.203
172.818
3.741
188.762
188.762
(76.315)
(512.407)
(4.393)
(593.115)
(933)
(595.039)
(595.972)
(1.189.087)
(1.000.325)
(1.004.066)

3.644
48.041
74
51.759
51.759
(5.642)
(317.936)
(604)
(324.182)
(209.343)
(209.343)
(533.525)
(481.766)
(481.840)

5.487
72.335
112
77.934
77.934
(8.495)
(478.716)
(910)
(488.121)
(315.208)
(315.208)
(803.329)
(725.395)
(725.507)

825
38.421
173
39.419
39.419
(30.586)
(15.596)
(362)
(46.544)
(432)
(129.533)
(129.965)
(176.509)
(137.090)
(137.263)

1.783
83.001
374
85.158
85.158
(66.075)
(33.691)
(783)
(100.549)
(933)
(279.831)
(280.764)
(381.313)
(296.155)
(296.529)

4.933
17.482
3.255
25.670
25.670
(1.745)
(2.700)
(4.445)
(4.445)
21.225
17.970

(51)
F-154

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 38. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS (continued)
b) Foreign Currency Risk (continued)
The information regarding the export and import figures realized as of December 31, 2010 and 2009 is as follows:
2010

2009

Total Export

115.196

98.606

Total Import

519.773

509.818

The following table demonstrates the sensitivity analysis of foreign currency as of December 31, 2010 and 2009:
Foreign Currency Position Sensitivity Analysis
2010
Income / (Loss)
Decrease of
Increase of
the foreign
the foreign
currency
currency
Increase / decrease in the USD against TRL by 10%:
USD denominated net asset / (liability)
USD denominated hedging instruments(-)
Net effect in USD
Increase / decrease in the EURO against TRL by 10%:
EURO denominated net asset / (liability)
EURO denominated hedging instruments(-)
Net effect in EURO
Increase / decrease in the other foreign currencies against
TRL by 10%:
Other foreign currency denominated net asset / (liability)
Other foreign currency hedging instruments(-)
Net effect in other foreign currency
TOTAL

Equity
Decrease of
Increase of
the foreign
the foreign
currency
currency

(77.177)
(77.177)

77.177
77.177

112.810
112.810

(112.810)
(112.810)

(18.653)
(18.653)

18.653
18.653

2.190
2.190

(2.190)
(2.190)

2.081
2.081

(2.081)
(2.081)

(93.749)

93.749

115.000

(115.000)

Foreign Currency Position Sensitivity Analysis


2009
Income / (Loss)
Increase of
Decrease of
the foreign
the foreign
currency
currency
Increase / decrease in the USD against TRL by 10%:
USD denominated net asset / (liability)
USD denominated hedging instruments(-)
Net effect in USD
Increase / decrease in the EURO against TRL by 10%:
EURO denominated net asset / (liability)
EURO denominated hedging instruments(-)
Net effect in EURO
Increase / decrease in the other foreign currencies against
TRL by 10%:
Other foreign currency denominated net asset / (liability)
Other foreign currency hedging instruments(-)
Net effect in other foreign currency
TOTAL

(52)
F-155

Increase of
the foreign
currency

Equity
Decrease of
the foreign
currency

(72.540)
(72.540)

72.540
72.540

105.876
105.876

(105.876)
(105.876)

(29.616)
(29.616)

29.616
29.616

2.130
2.130

(2.130)
(2.130)

2.123
2.123

(2.123)
(2.123)

(100.033)

100.033

108.006

(108.006)

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 38. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS (continued)
c) Liquidity Risk
Liquidity risk is the risk that an entity will be unable to meet its net funding requirements. The risk is mitigated
by matching the cash in and out flow volume supported by committed lending limits from qualified credit
institutions.
The table below summarizes the maturity profile of the Groups financial liabilities on the consolidated balance
sheet as of December 31, 2010 and 2009;

2010

Carrying
value

Contractual
undiscounted
payment
(=I+II+III+IV)

Less than
3month (I)

Between 3-12
month (II)

Between
1-5 year
(III)

More
than 5
year (IV)

Financial Liabilities
Trade Payable and due to related parties
Liability for put option

1.764.496
261.978
128.113

1.822.992
261.978
128.113

454.346
221.390
-

556.589
38.678
126.279

812.057
1.910
1.834

2.154.587

2.213.083

675.736

721.546

815.801

Carrying
value

Contractual
undiscounted
payment
(=I+II+III+IV)

Less than
3month (I)

Between 3-12
month (II)

Between
1-5 year
(III)

More
than 5
year
(IV)

1.857.385
249.875
92.210

1.939.770
249.902
92.210

689.223
203.607
-

270.582
41.152
-

979.965
5.143
92.210

2.199.470

2.281.882

892.830

311.734

1.077.318

2009
Financial Liabilities
Trade Payable and due to related parties
Liability for put option

d) Price Risk
This is a combination of currency, interest and market risks which the Group manages through natural hedges
that arise from offsetting the same currency receivables and payables, interest bearing assets and liabilities.
Market risk is closely monitored by the management using the available market information and appropriate
valuation methods.
e) Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the
other party to incur a financial loss. The Group attempts to control credit risk by limiting transactions with
specific counterparties and continually assessing the creditworthiness of the counterparties.
Concentrations of credit risk arise when a number of counterparties are engaged in similar business activities or
activities in the same geographic region, or have similar economic features that would cause their ability to meet
contractual obligations to be similarly affected by changes in economic, political or other conditions.
Concentrations of credit risk indicate the relative sensitivity of the Group's performance to developments
affecting a particular industry or geographic location.
The Group seeks to manage its credit risk exposure through diversification of sales activities to avoid undue
concentrations of risks with individuals or groups of customers in specific locations or businesses. The Group
also obtains guarantees from the customers when appropriate.

(53)
F-156

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 38. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS (continued)
e) Credit Risk (continued)
Maximum exposure to credit risk and aging of financial assets past due but not impaired as of December 31,
2010 and 2009 are disclosed as below:

Current Year
Maximum exposure to credit risk at the end of reporting
period
(A+B+C+D+E)
- Maximum credit risk secured by guarantees
A. Net carrying amount of financial assets that are neither past due
nor impaired
B. Carrying amount of financial assets whose term has been
renegotiated, otherwise past due or impaired
C. Net carrying amount of financial assets past due but not
impaired
- Under guarantee
D. Net carrying amount of financial assets impaired
- past due (gross carrying value)
- impaired (-)
- Net carrying amount of financial assets under guarantee
- not past due (gross carrying value)
- impaired (-)
- Net carrying amount of financial assets under guarantee
E. Off- balance sheet items which include credit risk

Current Year
Past due between 1-30 days
Past due between 1-3 months
Past due between 3-12 months
Past due for more than 1 year

Prior Year
Maximum exposure to credit risk at the end of reporting period
(A+B+C+D+E)
- Maximum credit risk secured by guarantees
A. Net carrying amount of financial assets that are neither past due
nor impaired
B. Carrying amount of financial assets whose term has been
renegotiated, otherwise past due or impaired
C. Net carrying amount of financial assets past due but not
impaired
- Under guarantee
D. Net carrying amount of financial assets impaired
- past due (gross carrying value)
- impaired (-)
- Net carrying amount of financial assets under guarantee
- not past due (gross carrying value)
- impaired (-)
- Net carrying amount of financial assets under guarantee
E. Off- balance sheet items which include credit risk

Prior Year
Past due between 1-30 days
Past due between 1-3 months
Past due between 3-12 months
Past due for more than 1 year

Receivables
Trade Receivables
Other Receivables
Due from
Due from
Due from
Due from
related
third
related
third
parties
parties
parties
parties

337
-

518.251
318.290

337
-

Deposits

Derivative
Instruments

Other

9.244
-

992.299
-

73.361
-

477.987

9.244

992.299

38.733
6.208
1.531
16.597
(15.066)
1.531
-

73.361

Trade Receivables

Other
Receivables

Deposits

Derivative
Instruments

Other

23.853
9.126
3.308
2.446

Receivables
Trade Receivables
Other Receivables
Due from
Due from
Due from
related
Due from
related
third
parties
third parties
parties
parties

Derivative
Instruments

Deposits

Other

810
-

421.539
245.455

6.771
74

1.071.525
-

65.750
-

810

371.686

6.771

1.071.525

48.007
6.908
1.846
15.713
(13.867)
1.846
-

65.750

Trade Receivables

Other
Receivables

Deposits

Derivative
Instruments

Other

21.425
13.411
6.901
6.270

f) Capital Risk Management


The Groups policy is to ensure that it maintains a strong credit rating and healthy capital ratios in order to
support its business and maximize shareholder value.

(54)
F-157

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 39. FINANCIAL INSTRUMENTS
Fair Value
Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable, willing
parties in an arm's length transaction. The optimum fair value of a financial instrument is the quoted market value, if
any.
The financial assets and liabilities which are denominated in foreign currencies are evaluated by the foreign
exchange rates prevailing on the date of balance sheet which approximate to market rates. The following methods
and assumptions were used to estimate the fair value of each class of financial instrument of the Group for which it
is practicable to estimate a fair value:
i) Financial Assets
The fair values of certain financial assets carried at cost in the consolidated financial statements, including
cash and cash equivalents plus the respective accrued interest and other financial assets are considered to
approximate their respective carrying values due to their short-term nature and negligible credit losses. The
carrying value of trade receivables along with the related allowance for unearned income and uncollectibility
are estimated to be their fair values.
ii) Financial Liabilities
Trade payables and other monetary liabilities are considered to approximate their respective carrying values
due to their short-term nature. The bank borrowings are stated at their amortized costs and transaction costs
are included in the initial measurement of loans and bank borrowings. The fair value of bank borrowings are
considered to state their respective carrying values since the interest rate applied to bank loans and
borrowings are updated periodically by the lender to reflect active market price quotations. The carrying
value of trade payables along with the related allowance for unrealized cost is estimated to be their fair
values.
Fair value hierarchy table
The Group classifies the fair value measurement of each class of financial instruments according to the source, using
the three-level hierarchy, as follows
Level 1: Market price valuation techniques for the determined financial instruments traded in markets
Level 2: Other valuation techniques includes direct or indirect observable inputs
Level 3: Valuation techniques does not contains observable market inputs
Current Year
Financial assets at fair value
Share certificates
Investment funds
Financial liabilities at fair value
Interest rate swap
Options
Prior Year
Financial assets at fair value
Share certificates
Investment funds
Financial liabilities at fair value
Interest rate swap
Options

(55)
F-158

Level 1

Level 2

Level 3

36.702
1.260

596
-

128.113

Level 1

Level 2

Level 3

34.240
1.753

5.075
-

1.488
-

90.425

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish
Anadolu Efes Biraclk ve Malt Sanayii Anonim irketi
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2010
(Currency Unless otherwise indicated thousands of Turkish Lira (TRL))
NOTE 39. FINANCIAL INSTRUMENTS (continued)
Derivative Financial Instruments, Risk Management Objectives and Policies
Derivative financial instruments are initially measured at cost. After initial recognition, derivatives are measured at
fair value. Structured forward buy-sell contracts and interest rate swap agreements are the main derivative financial
instruments of the Group, which are effective to avoid the occurrence of foreign currency and interest rate risks from
the operational and financial activities. Since the conditions for the hedge accounting in accordance with IAS 39
Financial Instruments: Recognition and Measurement are not met, hedge accounting is not applicable for these
derivative financial instruments.
The Group manages interest rate risk arising from the interest rate fluctuations on international markets, by using
interest rate swap (IRS) agreements. Total outstanding amount of IRS agreements was USD25,1 million as of
December 31, 2010 (December 31, 2009 USD25,1 million). The fair value difference related to the agreement
amounting to TRL224 (December 31, 2009 TRL587) has been recorded in consolidated income statement as loss
from derivative financial instruments.
NOTE 40. SUBSEQUENT EVENTS
a) In accordance with the amendment in the Articles of Association, in Extraordinary General Meeting of EBI held
on February 10, 2011, it has been decided to release each member of the Supervisory Board from his duties as
member of the Supervisory Board of EBI and to discharge each member of the Supervisory Board from his
respective liability for his supervision on the EBIs management.
b) CC has applied for the cancellation of the admission of its Global Depository Receipts to listing on the Official
List and trading on the London Stock Exchanges main market for listed securities due to limited trading
volumes in recent years. The last day of listing and trading will be April 1, 2011 and Global Depository Receipts
will continue to be traded on Over the Counter basis starting from April 2, 2011.
c) In January 2010, CCs Board of Directors approved the refinancing of USD360 million existing Club Loan
maturing in March 2013 and refinancing the maturing facilities of CC and its subsidiaries in 2011 as well as to
finance new borrowing needs by 3 year USD600 million financing, which has a bullet payment at maturity.
USD425 million of the loan will be utilised by CC and the remaining part will be utilised by CCs fully
consolidated subsidiaries, The Coca-Cola Bottling Company of Jordan Ltd, J.V. Coca-Cola Almaty Bottlers LLP
and CCI International Holland BV. CC will guarantee the subsidiary facilities.
d) CC's Board of Directors approved the purchase of 100% shares of SSG Investment Limited (SSG), who owns
40% shares of CC Beverage Limited (CCBL) that produces, sells and distributes Coca-Cola products in Northern
Iraq and 50% share of JV Dubai who owns 60% shares of CCBL from The Coca Cola Export Corporation
(TCCEC) by CCI Holland. In accordance with the regulations in relevant countries, upon payment of a total of
USD36.90 million, the referred SSG and JV Dubai shares have been registered to CCI Holland as of March 9,
2011. Consequently, the Groups share in JV Dubai and CCBL has been increased to 50,26%.
.

(56)
F-159

APPENDIX A
SUMMARY OF CERTAIN DIFFERENCES BETWEEN IFRS AND
CMB FINANCIAL REPORTING STANDARDS
The Consolidated Financial Statements in this Offering Circular have been prepared in accordance
with CMB Financial Reporting Standards which differ from the IFRS as described below.
Both the IAS Board and the CMB required the companies operating in relevant jurisdictions to apply
International Accounting Standards (IAS) 29 Financial Reporting in Hyperinflationary Economies
(IAS 29) for the year ended 31 December 2004. However, the IAS Board further extended the
application of IAS 29 for the year ended 31 December 2005. The CMB did not require the same for
companies listed on the Istanbul Stock Exchange.
Application of IAS 29 requires the restatement of non-monetary items and equity items in the balance
sheet. As a result of the non-application by the Group of IAS 29 for the year ended 31 December
2005 a permanent difference has emerged between IFRS and CMB Financial Reporting Standards.
Because of the changes in the general purchasing power of the currency of a hyperinflationary
economy as of 31 December 2004 (including Turkey), IAS 29 requires that financial statements
prepared in the currency of a hyperinflationary economy be stated in terms of the measuring unit
current at the balance sheet date and the corresponding figures for previous periods be restated in the
same terms. Index and conversion factors applied to the Lira as of 31 December 2004 for the
previous three year are as follows:
Date

Index

31 December 2002..............................................................................................
31 December 2003..............................................................................................
31 December 2004..............................................................................................

6,478.8
7,382.1
8,403.8

Conversion
Factor
1.29712
1.13840
1.00000

The main guidelines for the restatement of prior consolidated financial statements in accordance with
IAS 29 are as follows:
*

The consolidated financial statements as of 31 December 2004 which are presented for
comparative purposes, are restated with the purchasing power of the relevant currency at 31
December 2004, but the restatement is terminated with effect from 1 January 2005.

Non-monetary assets and liabilities and the components of shareholders equity including the
share capital in the consolidated balance sheet as of 31 December 2005, are presented with the
additions until 31 December 2004 expressed in terms of the purchasing power of the relevant
currency at 31 December 2004 and the additions after 31 December 2004 are carrying nominal
value.

Non-monetary assets and liabilities which are not carried at amounts current at the balance
sheet date and the components of shareholders equity including the share capital in the
consolidated balance sheet as at 31 December 2004 are restated by applying the relevant
conversion factors at current amounts prevailing as of 31 December 2004.

The effect of inflation on the net monetary position of a company is included in the income
statement for the year ended 31 December 2004 and presented as a monetary gain or loss.

The consolidated income statement for the year ended 31 December 2005 is presented with
historical values, except for depreciation and amortization charges, which are calculated over the
total of restated gross book value of property, plant and equipment and intangible assets
expressed in terms of the purchasing power of 31 December 2004 and nominal value of
additions after 1 January 2005, and gain and losses on disposal of these assets.

Conversion of prior years balance sheet and income statement accounts to current values by
multiplying with price index and related coefficients does not mean that a company could convert
these assets and liabilities to cash. Similarly, this situation does not mean that the increase in the
capital can be distributed to shareholders.
Effect of the CMB Financial Reporting Standards on the Consolidated Financial Statements
If the Group had prepared its Consolidated Financial Statements of 30 June 2012 in line with the
IAS 29 the following balance sheet line items would be different: Inflation Adjustment to Issued

c107169pu090Proof6:22.10.12_10:43B/LRevision:0OperatorHarS

A-1

Capital, Accumulated Profits, Property, Plant & Equipments (PPE) and Intangibles, Goodwill and
Deferred Tax Assets / Liabilities.
If the Group had prepared its Consolidated Financial Statements of 30 June 2012 in line with the
IAS 29 the following income statement items would be different: Depreciation and Amortization
Charge and Tax Charge / Income.
Management believes that the impact of this difference on its financial statements is decreasing over
time, as a number of its fixed assets were fully depreciated at the time IAS 29 was applied and as
such there would have been no depreciation charge of those fully depreciated restated assets in the
Groups income statement.

c107169pu090Proof6:22.10.12_10:43B/LRevision:0OperatorHarS

A-2

PRINCIPAL OFFICE OF THE ISSUER


Anadolu Efes Biraclk ve Malt Sanayii Anonim Sirketi
Esentepe Mah. Anadolu Cad. No: 1 Kartal 34870
Istanbul
Turkey
JOINT LEAD MANAGERS
HSBC Bank plc

J.P. Morgan Securities plc

8 Canada Square
London E14 5HQ
United Kingdom

25 Bank Street
Canary Wharf
London E14 5JP
United Kingdom

Merrill Lynch, Pierce, Fenner & Smith Incorporated

The Royal Bank of Scotland plc

One Bryant Park


New York, New York 10036
USA

135 Bishopsgate
London EC2M 3UR
United Kingdom

FISCAL AGENT, PAYING AGENT AND


TRANSFER AGENT
Citibank, N.A., London Branch
Citigroup Centre, 33 Canada Square
Canary Wharf, London E14 5LB
United Kingdom

REGISTRAR
Citigroup Global Markets Deutschland AG
Reuterweg 16
60323 Frankfurt am Main
Germany

LEGAL COUNSEL TO THE JOINT LEAD


MANAGERS AS TO ENGLISH AND UNITED
STATES LAW

LEGAL COUNSEL TO THE JOINT LEAD


MANAGERS AS TO TURKISH LAW AND
TURKISH TAX COUNSEL

Allen & Overy LLP

Paksoy Ortak Avukat Burosu

One Bishops Square


London E1 6AD
United Kingdom

Sun Plaza
Bilim Sokak No: 5 K:14
Maslak, 34398 Istanbul
Turkey

LEGAL COUNSEL TO THE COMPANY


AS TO ENGLISH AND UNITED STATES LAW
DLA Piper UK LLP

LEGAL COUNSEL TO THE COMPANY


AS TO TURKISH LAW
YukselKarknKucuk Avukatlk Ortaklg

3 Noble Street
London EC2V 7EE
United Kingdom

Buyukdere Caddesi No:127


Astoria A Kule Kat: 6-24-26-27
34394 Esentepe, Istanbul
Turkiye
INDEPENDENT AUDITORS OF THE COMPANY
Basaran Nas Bagmsz Denetim ve Serbest Muhasebeci Mali Musavirlik A.S.
a member of PricewaterhouseCoopers
BJK Plaza, Suleyman Seba Caddesi No: 48 B Blok Kat 9
Akaretler Besiktas 34357
Istanbul
Turkey
LISTING AGENT
Arthur Cox Listing Services Limited
Earlsfort Centre
Earlsfort Terrace
Dublin 2
Ireland
imprima C107169

You might also like