Mersin Uluslararası Liman İşletmeciliği Anonim Şirketi and its subsidiary Unaudited Condensed Consolidated Interim Financial Statements As at and for

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1 Mersin Uluslararası Liman İşletmeciliği Anonim Şirketi and its subsidiary Unaudited Condensed Consolidated Interim Financial Statements As at and for the Six Month Period Ended 19 September

2 Mersin Uluslararası Liman İşletmeciliği Anonim Şirketi and its subsidiary Table of Contents Unaudited Condensed Consolidated Interim Statement of Financial Position Unaudited Condensed Consolidated Interim Statement of Comprehensive Income Unaudited Condensed Consolidated Interim Statement of Changes in Equity Unaudited Condensed Consolidated Interim Statement of Cash Flows

3 Unaudited Condensed Consolidated Interim Statement of Financial Position As at Notes Assets Property and equipment 7 35,370 22,634 Intangible assets 8 690, ,318 Trade and other receivable 19,116 18,926 Non-current assets 744, ,878 Inventories 1,269 1,569 Trade and other receivables 12,464 13,254 Cash and cash equivalents , ,609 Current assets 149, ,432 Total assets 894, ,310 Equity Share capital 100, ,000 Legal reserve 16,356 16,356 Hedging reserve (39,351) (59,675) Retained earnings 157, ,624 Total equity 234, ,305 Liabilities Loans and borrowing , ,964 Derivatives 12 62,202 80,537 Employee benefits 2,191 2,064 Deferred tax liability 9 7, Non-current liabilities 436, ,193 Loans and borrowing , ,516 Trade and other payables 24,987 16,547 Income tax payable 6 4,599 3,749 Current liabilities 223, ,812 Total liabilities 659, ,005 Total equity and liabilities 894, ,310 The accompanying notes are an integral part of these condensed consolidated interim financial statements. 1

4 Unaudited Condensed Consolidated Interim Statement of Comprehensive Income For the Six Month Period Ended Notes Operating revenue 130, ,898 Construction revenue ,046 Cost of operating revenues (59,209) (57,320) Cost of construction 8 (689) (30,046) Gross profit 70,894 66,578 General administrative expense (5,984) (5,169) Results from operating activities 64,910 61,409 Finance income 5 2,240 3,621 Finance costs 5 (29,414) (20,157) Net finance costs (27,174) (16,536) Profit before tax 37,736 44,873 Tax expense 6 (10,753) (8,275) Profit for the period attributable to the investors of the Group 26,983 36,598 Other comprehensive income Effective portion of changes in fair value of cash flow hedges 25,405 (624) Income tax on other comprehensive income 6 (5,081) 125 Other comprehensive income for the period, net of tax 20,324 (499) Total comprehensive income for the period attributable to the investors of the Group 47,307 36,099 The accompanying notes are an integral part of these condensed consolidated interim financial statements. 2

5 Unaudited Condensed Consolidated Interim Statement of Changes in Shareholders Equity For the Six Month Period Ended Paid-in capital Legal reserve Hedging reserve Retained earnings Total equity Balances at 1 January 100, (62,544) 76, ,665 Total comprehensive income for the period Profit for the period ,598 36,598 Other comprehensive income for the period (499) -- (499) Total comprehensive income for the period (499) 36,598 36,099 Total transactions with owners of the Group Balances at 100, (63,043) 112, ,764 Balances at 1 January 100,000 16,356 (59,675) 130, ,305 Total comprehensive income for the period Profit for the period ,983 16,425 Other comprehensive income for the period , ,361 Total comprehensive income for the period ,324 26,983 47,307 Total transactions with owners of the Group Balances at 100,000 16,356 (39,351) 157, ,612 The accompanying notes are an integral part of these condensed consolidated interim financial statements. 3

6 Unaudited Condensed Consolidated Interim Statement of Cash Flows For the Six Month Period Ended Note Cash flows from operating activities Profit for the period 26,983 36,598 Adjustments for : Depreciation and amortization expense 15,103 13,184 Net finance costs 5 27,174 16,536 Current tax expense 6 8,634 6,244 Deferred tax expense 6 2,119 2,031 Provision for employee benefits Change in: 80,140 75,203 Trade and other receivables 599 1,991 Inventories 300 (74) Trade and other payables 7,622 7,613 Cash generated from operating activities 88,661 84,733 Taxes paid (7,784) (5,756) Net cash from operating activities 80,877 78,977 Cash flows from investing activities Interest received 2,240 2,563 Acquisition of property and equipment 7 (14,149) (6,532) Acquisition of intangible assets 8 (831) (30,013) Net cash used in investing activities (12,740) (33,982) Cash flows from financing activities Repayment of loans and borrowings and interest (68,366) (31,348) Change in project, reserves and fund accounts 36,003 16,058 Net cash from financing activities (32,363) (15,290) Net increase in cash and cash equivalents 35,774 29,705 Cash and cash equivalents at 1 January 47,728 24,923 Cash and cash equivalents at period end 10 83,502 54,628 The accompanying notes are an integral part of these condensed consolidated interim financial statements. 4

7 As at and For the Six Month Period Ended Pages 1 Reporting entity 6 2 Basis of preparation Significant accounting policies 7 4 New standards and interpretations not yet adopted 7 5 Net finance costs 7 6 Income tax Property and equipment 9 8 Intangible assets 10 9 Deferred tax assets and liabilities Cash and cash equivalents Loans and borrowings Derivatives Commitments and contingencies Subsequent events 13 5

8 As at and For the Six Month Period Ended 1 Reporting entity Mersin Uluslarararası Liman İşletmeciliği Anonim Şirketi ( the Company ) is a Company domiciled in Turkey. The address of the Group s registered office is Yenimahalle 101 Cad Sokak No Mersin, Turkey. The Condensed Consolidated interim financial statements of the Group as at and for the three months period ended comprise the Company and its subsidiary (together referred to as the Group ). The key operational activities of the Group are container handling, marine services, operation of multi-purpose terminals, warehousing and logistics related services, consultancy fees but excludes intra-group transactions. The Company has been registered on 4 May 2007 and started to operate on 11 May 2007, based on the Concession Agreement between the Group and the Turkish Privatization Administration. Mersin Port used to be operated by the Turkish Republic State Railways ( TCDD ) and included in the list for privatization for years. Turkish Privatization Administration had announced a bid for the privatization of Mersin Port on 14 August However, the bid could not be finalized until 11 May Full operational control over Mersin Port on the southeast coast has been transferred to the Company, a joint venture between PSA International Group and Akfen Altyapı Yatırımları Holding Anonim Şirketi ( Akfen Altyapı Yatırımları ) for the next 36 years on 11 May The shareholder of the Group, Akfen Altyapı Yatırımları has merged with its own shareholder, Akfen Holding Anonim Şirketi ( Akfen Holding ) on 23 July This merger was done under the name of Akfen Holding. As at and, the Company has one subsidiary called Mersin Denizcilik Faaliyetleri ve Ticaret Anonim Şirketi ( Mersin Denizcilik ), (referred to as the Group herein and after). Mersin Denizcilik acts as a subcontractor of the Company for marine business. As at and, detail of the subsidiary is as below: Name of Subsidiary Principal Activity Place of operation Ownership interest % Voting power held % Mersin Denizcilik Marine business Turkey The number of employees of the Group as at is 1,431 ( : 1,421). 2 Basis of preparation (a) Statement of compliance These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all the information required for a complete set of International Financial Reporting Standards ( IFRS ) financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group s financial position and performance since the last annual consolidated financial statements as at and for the year ended. The condensed consolidated interim financial statements of the Group as at and for the six months period ended were approved by the Company Management. 6

9 As at and For the Six Month Period Ended 2 Basis of preparation (continued) (b) Basis of measurement In preparing these condensed consolidated interim financial statements, Management makes judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. The significant judgments made by Management in applying the Group s accounting policies and key resources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ending. 3 Significant accounting policies The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied in the Group s consolidated financial statements as at and for the year ended. 4 New standards and interpretations not yet adopted A number of new standards, amendments to standards and interpretations are not yet effective as at, and have not been applied in preparing these condensed consolidated interim financial statements. Among those new standards, the following are expected to have effect on the condensed consolidated interim financial statements of the Group. IFRS 9 Financial Instruments could change the classification and measurement of financial assets and becomes effective for annual periods beginning on or after 1 January The Group does not plan to adopt these standards early and the extent of the impact has not been determined yet. 5 Net finance costs For the six month period ended, net finance costs comprised the following: Recognised in profit or loss Interest income on bank deposits 2,240 1,058 Foreign exchange gains, net -- 2,563 Finance income 2,240 3,621 Interest expense on bank borrowings (20,090) (19,977) Ineffective portion of changes in fair value of cash flow hedges (7,070) (180) Foreign exchange losses, net (2,254) -- Finance costs (29,414) (20,157) Net finance costs recognised in profit or loss (27,174) (16,536) 7

10 As at and For the Six Month Period Ended 6 Income tax In Turkey, corporate income tax is levied at the rate of 20% ( : 20%) on the statutory corporate income tax base, which is determined by modifying accounting income for certain exclusions and allowances for tax purposes. There is also a 15% withholding tax on the dividends paid and is accrued only at the time of such dividend payments. The withholding tax rate on the dividend payments other than the ones paid to the non-resident institutions generating income in Turkey through their operations or permanent representatives and the resident institutions. The transfer pricing provisions have been stated under the Article 13 of Corporate Tax Law with the heading of disguised profit distribution via transfer pricing. The General Communiqué on disguised profit distribution via transfer pricing, dated 18 November 2007 sets the implementation procedures of the law. If a tax payer enters into transactions regarding sale or purchase of goods and services with related parties, where the prices are not set in accordance with arms length principle, then related profits are considered to be distributed in a disguised manner through transfer pricing. Such disguised profit distributions through transfer pricing are not accepted as tax deductible items for corporate income tax purposes. Under the Turkish taxation system, tax losses can be carried forward to be offset against future taxable income for up to five years. Tax losses cannot be carried back. In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file their tax returns within four months following the close of the accounting year to which they relate. Tax returns are open for five years from the beginning of the year that follows the date of filing during which time the tax authorities have the right to audit tax returns, and the related accounting records on which they are based, and may issue re-assessments based on their findings. The Group believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. Tax recognised in profit or loss For the six month period ended income tax expense comprised the following items: Corporate tax expense Corporate tax expense 8,634 6,244 8,634 6,244 Deferred tax expense Originating and reversal of temporary differences 2,119 2,031 2,119 2,031 Total tax expense 10,753 8,275 8

11 As at and For the Six Month Period Ended 6 Income tax (continued) Advance payments during the period are being deducted from the final tax liability computed over current period operations in accordance with related regulation for prepaid taxes on income. Accordingly, the current tax expense charge on income computed is not equal to the final tax liability appearing on the condensed consolidated interim financial position. As at and income tax payable comprised the following: Provision for current tax payable on income 8,634 12,683 Prepaid taxes (4,035) (8,934) Income tax payable 4,599 3,749 Reconciliation of effective tax rate The reported taxation charge for the six month period ended is different than the amounts computed by applying statutory tax rate to loss before tax as shown in the following reconciliation: Profit for the period 26,983 36,598 Total income tax 10,753 8,275 Profit before income tax 37,736 44,873 Income tax using the Group's domestic tax rate (7,547) (8,975) Disallowable expenses (189) (143) Effect of foreign currency translation (3,017) 843 Tax expense (10,753) (8,275) Income tax recognised directly in other comprehensive income: Derivatives (5,081) 125 Total income tax recognised directly in other comprehensive income (5,081) 125 There are no unrecognised deferred tax assets and liabilities in the accompanying Condensed Consolidated interim financial statements. 7 Property and equipment During the six months ended, the Group acquired assets with a cost of USD 14,149 (six months ended : USD 6,532). The additions in are mainly for yard cranes. The additions in are mainly for mobile harbor cranes. During the six months ended, the Group has not entered a significant capital commitment. 9

12 As at and For the Six Month Period Ended 8 Intangible assets During the six months ended, the Group acquired assets with a cost of USD 831 (six months ended : USD 30,013). The additions in are mainly equipment purchases to fulfill the obligation on increase in capacity according to the concession agreement. The Group recognised an intangible asset amounting to USD 755,000 to the extent that it received a port operation right from TCDD to charge users of Mersin International Port. Additionally, during the period, cumulative cost of improvement and upgrading of existing infrastructure of TCDD beared by the Group is recognised at its fair value as an intangible asset amounting to USD 689 ( : USD 30,046). As at, there is no change in contractual obligations of the Company regarding to the Concession Agreement compared to. 9 Deferred tax assets and liabilities Recognised deferred tax assets and liabilities Deferred tax assets and deferred tax liabilities as at and are attributable to the items detailed in the table below: Assets Liabilities Assets Liabilities Net Net Property and equipment -- (2,436) -- (1,033) (2,436) (1,033) Intangible assets -- (20,169) -- (17,202) (20,169) (17,202) Loans and borrowings -- (1,489) -- (1,702) (1,489) (1,702) Derivatives 12, , ,440 16,107 Trade and other receivables -- (442) 1, (442) 1,460 Trade and other payables 3, , ,830 1,322 Others (224) Deferred tax asset / (liability) 16,708 (24,536) 19,533 (20,161) (7,828) (628) Movement in temporary differences during the six month period ended : Recognised in other 2011 comprehensive income Recognised in profit or loss Property and equipment (1,120) -- (108) (1,228) Intangible assets (12,779) -- (2,139) (14,918) Loans and borrowings (1,973) (1,810) Derivatives 16, ,943 Trade and other receivables 1, (1,014) -- Trade and other payables 1, ,947 Others (34) , (2,031) 1,250 10

13 As at and For the Six Month Period Ended 9 Deferred tax assets and liabilities (continued) Recognised in other comprehensive income Recognised in profit or loss Property and equipment (1,033) -- (1,403) (2,436) Intangible assets (17,202) -- (2,967) (20,169) Loans and borrowings (1,702) (1,489) Derivatives 16,107 (5,081) 1,414 12,440 Trade and other receivables 1, (1,902) (442) Trade and other payables 1, ,508 3,830 Others (628) (5,081) (2,119) (7,828) 10 Cash and cash equivalents Cash and cash equivalents as at and is as follows: Cash at banks 135, ,598 Time deposits 135, ,518 Demand deposits Cash on hand Cash and cash equivalents 135, ,609 Project, reserve and fund accounts (51,878) (87,881) Cash and cash equivalents in the statement of cash flows 83,502 47,728 As at, the interest rate on TL time deposit is between 5.80% and 9.00% (31 December : between 5.00% and 7.50%) and USD deposits are between 0.75% and 3.25% (31 December : between 0.25% and 2.50%). As at, the Group has Project and Reserve accounts amounting to USD 51,878 (31 December : USD 87,881), regarding the agreements made with banks, in order to fund their projects and loan repayments. These accounts can only be used for the purposes which are mentioned in terms and conditions of the agreements. 11

14 As at and For the Six Month Period Ended 11 Loans and borrowings At and loans and borrowings are as follows: Non-current: Secured bank loans 363, , , ,964 Current: Current portion of secured bank loans 193, , , ,516 Terms and conditions of outstanding loans whereas follows: Years of maturity 12 Face value Carrying amount Face value Carrying amount Currency Secured bank loans (Senior Debt Loan) USD , , , ,134 Secured bank loans (Mezanine Loan) USD , , , , , , , ,480 The Group has obtained two bank borrowings namely Senior Debt Loan and Mezzanine Loan amounting to USD 600,000 and USD 100,000, respectively, in order to finance the payment regarding the right received from TCDD to charge users of Mersin International Port. Senior Debt Loan with the maturity on 2019 is stated net of transaction costs amounting to USD 7,447 ( : USD 8,505). According to the share pledge agreement signed on 7 May 2007 with Bayerishe Hypo-und Vereinsbank AG (now Unicredit Bank AG) on behalf of the Syndication Banks, the shares of the Group have been given as collateral for Senior Debt Loan to these banks. Mezzanine loan was a rotative loan and until repayment date of 8 May, interest costs are added to the principal in every six month period. On 8 May, the Company repaid its Mezzanine loan amounting to USD 117,981 and obtained a new Mezzaine Loan from DBS Bank Ltd. amounting to USD 154,608 with a maturity of one year. Mezzanine loan is secured by PSA International Group. 12 Derivatives At and derivatives are as follows: Interest rate swap 62,202 80,537 62,202 80,537 The Group uses interest rate swap to manage its exposure to interest rate movements on 75% of its Senior Debt Loan from Bayerische Hypo-und Vereisbank AG and ABN Amro Bank (now Unicredit Bank AG and RBS Plc). Two contracts with these banks with nominal values of USD 300,000 and USD 150,000 each has fixed interest receipts at both 5.27%.

15 As at and For the Six Month Period Ended 13 Commitments and contingencies The details of commitments and contingent liabilities arising in the ordinary course of business for the Group as at and, is as follows: Letters of guarantees given Given to TCDD 7,500 7,500 Others ,980 8,354 Letters of bank guarantees ( LoG ) obtained LoG received from customers 7,040 6,370 LoG received from suppliers 1,981 8,802 LoG received from sub-contractors 1,729 1,600 Other ,764 16,787 According to the share pledge agreement signed on 7 May 2007 with Syndication Banks, the shares of the Group have been given as collateral for Senior Debt Loan to these banks. 14 Subsequent events On 12 August, the Company has issued a 7 year bond with per annum yield of 5.95% and issue price of % at the rate of 5.875% per annum, paying semi-annually coupons on 12 February and 12 August each year. On the same day, the Company repaid its Senior Loan and accrued interest fully. With the full repayment of the Senior Loan, the pledge on the shares of the Company and the project reserve accounts on the Company s cash and cash equivalents have been released. 13

Mersin Uluslararası Liman İşletmeciliği Anonim Şirketi and its subsidiary Unaudited Condensed Consolidated Interim Financial Statements As at and for

Mersin Uluslararası Liman İşletmeciliği Anonim Şirketi and its subsidiary Unaudited Condensed Consolidated Interim Financial Statements As at and for the Six Month Period Ended 20 August Mersin Uluslararası