The global economic crisis that broke out in late 2008, and dramatically impacted the whole world in 2009, was restrained to a shorter period than projected, thanks to the radical and simultaneous economic and financial policies implemented in a range of fields. The policies adopted by developed countries and the relatively strong growth in emerging economies supported the global economic recovery in 2010, reducing the risk of a double dip recession. According to the IMF figures, the global economy recorded 5.25% growth in the first half of 2010. While the growth rate was relatively weak in developed economies, developing countries posted an average of 8% growth.

During this period, Turkey was one of the rapidly recovering countries. It weathered the recession, with recovery in 2010. The Turkish economy returned to its growth trend on the back of the strong growth in private consumption spending. While industrial production figures and capacity utilization rates pointed to sustainable economic growth, the deterioration in the quality of the financing of the current account deficit in the second half of 2010 became a matter which stands to need careful attention.

Against this backdrop, OYAK targeted 2010 as the year to compensate for the difficulties of 2009, and underwent a busy operating period in every aspect. After having protected our members and their savings in 2009, we successfully exploited the business opportunities offered by the markets in 2010 to maximize our members’ total benefits.

A total profit of TRY 1,421 million and a 13.1% rate of return in 2010

Having exceeded the corporate targets we had set out at the end of 2009, OYAK remained devoted to its primary functions and continued to develop and build upon its members’ savings, which amounted to TRY 12.2 billion in 2010.

Our total annual profit (the sum of actuarial profit and technical profit), which is the simplest indicator of our success, amounted to TRY 1,421 million. Given that the average USD/TRY exchange rate was 1.5004 in 2010, our total profit was close to USD 1 billion. This corresponded to a 13.1% rate of return, about double the rate of CPI inflation rate of 6.4% as announced by TURKSTAT, and one and a half times the rate of PPI inflation of 8.9%. As OYAK, we are once again pleased to have provided our members with a rate of return which exceeded the rate of inflation.

The “rate of return” refers to the added value (TRY 1,421million) which we generated with our operations using our members’ reserves (average TRY 10,824 million) in 2010.

A comparison of our rate of return in 2010 with that of comparable large Groups in the Country reveals that other groups of companies could only generate levels of profit or rates of return which were somewhat equal to or less than our figures. This result stands as a testament to OYAK’s efficiency and the effectiveness of its structure in terms of economic and commercial aspects.

Achieving this result in such a conjuncture, which has seen some global companies and even some countries in Europe dragged to the edge of bankruptcy, is especially valuable; not only for our members, but also in terms of OYAK’s contribution to the Turkish economy.

An ever strengthening contribution from our subsidiaries

Our portfolio of subsidiaries, which we had restructured as part of our strategy of preparations for the impending global storm, demonstrated a successful performance and offered a significant contribution to OYAK’s results in 2010.

Operating in the iron and steel sector, the ERDEMİR Group announced a total profit before tax of TRY 973 million in its consolidated balance sheet in 2010, an all time record. The net profit for the period, was TRY 766 million. ERDEMİR’s Board of Directors decided to distribute TRY 450 million as cash dividends. This was the highest cash dividend amount ever distributed in the Company’s history. In addition to this, ERDEMİR decided to distribute TRY 550 million in bonus shares. ATAER, the parent company of ERDEMİR, and OYAK also benefited from these decisions.

The OYAK Cement Group, composed of the leading companies in the Turkish cement industry, also notched up significant success in 2010, providing a significant contribution to OYAK Group’s assets by maintaining its robust financial performance. While contributing to OYAK’s profits, our

subsidiaries in the automotive sector strengthened their traditional leadership and their strong positions with the innovations they offered to the market. Liquidity and asset management, which became our priority in the global crisis environment of 2009, continued to top our agenda. Keeping a close view of the dynamics of both domestic and international money and capital markets, OYAK

succeeded in generating higher returns from its liquid assets than it had projected at the beginning of the year, even though interest rates around the world tested historically low levels. We are well aware that we now face a more challenging world. We have undergone an intensive transformation on both national and international scale. Change brings excitement, but it also presents challenges for the players in the markets. At OYAK we closely experienced such examples in various areas within Turkey’s developing and changing structure during 2010. In addition to our commercial activities, we spent time dealing with the problems peculiar to our country devoting a significant portion of our energy to such matters.

Continuing to exploit new investment opportunities

We are one of the most liquid corporations in our country thanks to our activities in the world of finance and in the real sector.

Our basic task is to divert our considerable financial strength to such fields which will support our ability to fulfill our long-term responsibilities to our members, who now number more than 260,000. The other important issue we must watch out for at all times while executing this task is our contribution to the Turkish economy.

OYAK overcome the global crisis in 2008 and 2009 by closely analyzing the opportunities offered by the markets, by taking the necessary measures proactively and by planning investments of the new post-crisis growth period. This period also opened a precious window of opportunity for us, enabling us to prepare for the new global and national market conditions. The energy segment, a business line which we have recently focused on, became one of the primary fields in which we

continued to develop our investments during 2010. We now control 100% of our subsidiary, AYAS Enerji, following the additional share purchase in January 2011. Our investment in AYAS Enerji will include the construction of a thermal power plant, which will have an installed capacity of 625 MW. Our efforts regarding this investment are still under way. Our initiatives, which aim to renew and restructure OYAK’s subsidiary portfolio, will continue in the period ahead. In line with our corporate mission and principles, we shall continue to streamline the resources under our management to fields in which we believe will contribute to our target of continuous expansion of our members’ savings. Under the changing circumstances being experienced both in Turkey and across the globe, OYAK will remain an exemplary group of companies, not only with the services and products that it offers its members, but also with its strong and efficient portfolio of subsidiaries, as well as its ethical values.

Preparing for our 50th anniversary

OYAK celebrates its 50th anniversary in 2011. Having witnessed different stages of our country’s economic history in its halfcentury of operation, OYAK has done a great deal of very precious work for Turkey during this period. Its foundation in 1961 marked a new era in Turkey as the country’s first private individual pension fund.

OYAK became a model company, recognized throughout the whole world, which enjoys credit ratings that are equal or higher than the country’s ratings. Always watching for the soundness of its actuarial balance, individual equality and fair use of resources as the main principles in all of its operations, OYAK enters its second 50-year period with a young and dynamic way of thinking, as it did on the first day of its foundation, predominantly concentrating on the world of tomorrow.

With its business being “to assure the tomorrows of its members”, OYAK is determined to preserve “members’ satisfaction” as its primary aim. The continuous support and trust of our members will provide us with the energy needed for our future.

I would like to take this opportunity to warmly extend my gratitude to our members, the members of the General Assembly, the Boards of Directors and Auditors and, of course, all the employees of the OYAK Group for their precious support.

Coşkun Ulusoy, Ph.D.

CEO