OYAK in 2002

Even during so difficult a year as 2002 proved to be, OYAK maintained its record for uninterrupted service to its members.

We continued our efforts to achieve results that were the best possible as much for Turkey as for OYAK itself and in those efforts, we never once lost our faith either in our country or in its people.

OYAK’s strategy for 2002 combined proactive investment and expansion with sound retrenchment and restructuring. Above all, we have put in place the structures best designed to take advantage of the coming economic upturn. Ongoing projects continued to flourish and we began a number of new ventures. OYAK succeeded in maintaining our actuarial balance whilst at the same time allocating funds for high-return (above inflation) investments. Over the year I am pleased to announce that we balanced prudence with expansion.

A year of achievements

We continued to search out and discover new investment opportunities to ensure that OYAK continued giving its membership a good return on their investment. We set up two new companies: OYAK Konut, whose purpose is to manage the ongoing OYAK Ça¤dafl Evler (OYAK Contemporary Houses) project, while also developing new housing projects; and OYAK Enerji, an energy production and distribution company that will be supplying the needs of both group companies and the market at large. We also began preparations for the formation of OYAK Emeklilik, a private pension fund company that will be putting our 41 years of experience in this field to work in the business of individual retirement plans. We completed the formalities of OYAK Emeklilik’s incorporation in early 2003.

As well as new investments, our subsidiaries also restructured a number of ongoing investments to bring them into line with current economic conditions. YADAŞ, a software house that joined the Group as a Sümerbank subsidiary in 2001, was reorganized under the name OYAK Teknoloji, and given the task of supplying OYAK Bank and OYAK subsidiaries with the technology, consultation, and operations services that they require.

We incorporated OB Menkul Değerler, a brokerage house belonging to OYAK Bank, into OYAK Menkul Değerler and we renamed the resulting company OYAK Yatırım Menkul Değerler. We increased our minority stake in Adana Kağıt Torba, a paper sack manufacturer, to 75%. That company now operates under the name OYKA Kağıt Ambalaj.

While investing in new areas and restructuring our existing investments, we also withdrew from areas of business that we did not consider to be profitable enough. At an extraordinary shareholders meeting of OYAK, the commercial activities of that company (OYPA) were suspended. We have also disposed of our stake in SELYAK and sold our shares to TOTAL FINA-ELF.

Concerning the future…

Underlying everything we do is our goal of making OYAK one of the top three corporate groups in Turkey. We believe that we possess everything necessary to accomplish this. During 2002, we have worked hard on building the infrastructure that is vital to achieve this, on building up our cash position and on striking out in new directions.

We believe that 2003 will be a year for more aggressive investment. Turkey’s economic upturn will allow us to move into what we consider key areas of expansion: energy, telecommunications, transportation and mining. Along with our investments in the financial sectors, we believe that industry will reward us with high, long-term returns.

Now, in the early months of 2003, we are at what the world will remember as one of history’s turning points. There is no doubt that the ramifications will be felt very strongly in Turkey and in the world at large. We, at OYAK, are very mindful of these developments and believe that we have shaped a strategy that can combine prudence with risk, that allows us both to restructure and rationalize and to invest and speculate. What will guide us through all this change will be OYAK’s vision and its shared values.

With my respects,

Şerif Coşkun Ulusoy, Ph.D.

Chief Executive Officer