Anadolu Efest Prospecuts

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 SIRKETIUS$500,000,000 3.375% Notes due 2022

Anadolu Efes Biracılık ve Malt Sanayii Anonim Sirketi, a public joint stock company (the ‘‘Company’’ or ‘‘Issuer’’), isissuing US$500,000,000 3.375% Notes due 2022 (the ‘‘Notes’’). The Notes have not been and will not be registeredunder the United States Securities Act of 1933, as amended (the ‘‘Securities Act’’), or the securities or ‘‘blue sky’’ lawsof 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 non-US persons outside the United States (the ‘‘International Offering’’ and, with the US Offering, the ‘‘Offering’’) inreliance upon Regulation S under the Securities Act (‘‘Regulation S’’). For a description of certain restrictions on saleand 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 THEFACTORS 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 dateis not a Business Day (as defined below), then such payment will be made on the next Business Day. Principal of theNotes is scheduled to be paid on 1 November 2022, but may be paid earlier under certain circumstances as furtherdescribed herein. The Notes initially will be sold to investors at a price equal to 98.761% of the principal amountthereof. 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 competentauthority under Directive 2003/71/EC (the ‘‘Prospectus Directive’’) as amended (which includes the amendments made byDirective 2010/73/EU to the extent that such amendments have been implemented in a relevant Member State of theEuropean Economic Area). The Central Bank of Ireland only approves this Offering Circular as meeting therequirements imposed under Irish and EU law pursuant to the Prospectus Directive. Application has been made to theIrish 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 regulatedmarket for the purposes of Directive 2004/39/EC and/or which are to be offered to the public in any Member State ofthe European Economic Area. References in this Offering Circular to the Notes being ‘‘listed’’ (and all relatedreferences) will mean that the Notes have been admitted to the Official List and have been admitted to trading on theMain 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 competentauthority under Law No. 2499 of the Republic of Turkey (‘‘Turkey’’) relating to capital markets (the ‘‘Capital MarketsLaw’’) 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 tothe 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 Moody’s Investors Services Ltd. (‘‘Moody’s’’) and ‘‘BBB-’’by Standard & Poor’s Credit Market Services Europe Limited, a division of the McGraw Hill Companies, Inc. (‘‘S&P’’and, together with Moody’s, the ‘‘Rating Agencies’’). The Rating Agencies have also issued ratings in respect of theTurkish government, as set out on page 18 of this Offering Circular. A rating is not a recommendation to buy, sell orhold securities and may be subject to revision, suspension or withdrawal at any time by the assigning ratingorganisation. As of the date of this Offering Circular, each of the Rating Agencies is established in the European Unionand 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 Securitiesplc, Merrill Lynch, Pierce, Fenner & Smith Incorporated and The Royal Bank of Scotland plc (each, a ‘‘Joint LeadManager’’ and, collectively, the ‘‘Joint Lead Managers’’), subject to their acceptance and right to reject orders in wholeor in part.

The Notes will initially be represented by two global certificates in registered form (the ‘‘Global Certificates’’), one ofwhich 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 otherof 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 forEuroclear Bank S A/N V (‘‘Euroclear’’) and Clearstream Banking, societe anonyme (‘‘Clearstream, Luxembourg’’). It isexpected 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 ‘‘IssueDate’’ 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 Group’s Consolidated Financial Statements

(as defined in ‘‘Presentation of Information—Presentation 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 beneficialinterests 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 onoffers, 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 Group’s 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 thesame. 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 Notesmust 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,

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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 investor’s 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 foreconomic, 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 securitiesor ‘‘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 theNotes 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 (orbeneficial 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 itis 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 Certificateswill 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.

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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 (orpersons 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 over-

allotment 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 USSecurities 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 orsolicitation 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 Biracılık 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 Company’s board of

directors and statements as to the Company’s or Group’s beliefs, expectations, estimates and options

are to those of the Company’s 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, thewebsite of the Central Bank of Turkey (Turkiye Cumhuriyeti Merkez Bankası) (the ‘‘Central Bank’’) at

www.tcmb.gov.tr or the Turkish Treasury’s 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, andconsequently 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 Company’s 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 shouldnot 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 off-

trade, 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 periodsJanuary 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 RetailAudit, 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 FORA 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 HASPASSED 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.

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’’.

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TABLE OF CONTENTS

OVERVIEW OF THE ISSUER ........................................................................................................ 1

RISK FACTORS ............................................................................................................................... 3

OVERVIEW OF THE NOTES ......................................................................................................... 23

SUMMARY FINANCIAL INFORMATION.................................................................................. 26

PRESENTATION OF INFORMATION ......................................................................................... 29

FORWARD-LOOKING STATEMENTS......................................................................................... 32

USE OF PROCEEDS ........................................................................................................................ 33

EXCHANGE RATES ........................................................................................................................ 34

CAPITALISATION OF THE GROUP ............................................................................................ 35

SELECTED FINANCIAL INFORMATION................................................................................... 36

PRO-FORMA FINANCIAL INFORMATION............................................................................... 39

OPERATING AND FINANCIAL REVIEW................................................................................... 44

THE GROUP AND ITS BUSINESS ................................................................................................ 85

REGULATION.................................................................................................................................. 111

MANAGEMENT............................................................................................................................... 117

OWNERSHIP..................................................................................................................................... 124

CONDITIONS OF THE NOTES...................................................................................................... 127

THE GLOBAL CERTIFICATES ..................................................................................................... 141

BOOK-ENTRY CLEARANCE SYSTEMS...................................................................................... 143

TAXATION ....................................................................................................................................... 145

PLAN OF DISTRIBUTION ............................................................................................................. 149

SELLING RESTRICTIONS.............................................................................................................. 151

TRANSFER RESTRICTIONS ......................................................................................................... 153

ENFORCEMENT OF JUDGMENTS AND SERVICE OF PROCESS......................................... 157

LEGAL MATTERS ........................................................................................................................... 158

OTHER GENERAL INFORMATION ............................................................................................ 159

INDEX OF TERMS .......................................................................................................................... 161

FINANCIAL STATEMENTS........................................................................................................... F-1

APPENDIX A SUMMARY OF CERTAIN DIFFERENCES BETWEEN IFRS AND CMB

FINANCIAL REPORTING STANDARDS................................................................................ A-1

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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 itssoft drinks activities. Based on publicly available information, management estimates that the Groupis Europe’s fifth largest brewer and Canadean Global Beer Trends 2011 reports that the Group wasthe world’s 12th largest beer-maker in 2010, each as measured by sales volume. CCI is the sixthlargest bottler in the Coca-Cola system, as measured by sales volume, according to informationprovided to CCI by The Coca-Cola Company (‘‘TCCC’’). The Group operates 18 breweries, sevenmalteries and 22 bottling plants, and its products and services are supplied to more than 600 millionconsumers across 16 principal markets.

The Group is Turkey’s largest beer maker, with a share of 84% of the Turkish beer market asmeasured by sales volume for the six months ended 30 June 2012, according to Nielsen. It is also thesecond 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 beerbrands, which includes the Efes Pilsener international brand, as well as a number of premium andlocal mainstream beer brands, many of which hold leading positions in their respective marketsegments, 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 hopsprocessing plant in six markets and has sales operations in a further three countries. As of 30 June2012, the Group had an annual production capacity of approximately 43.7 million hectolitres of beerand approximately 290,000 tons of malt.

In March 2012, in connection with its strategic alliance with SABMiller, the Group acquired theRussian and Ukrainian brewing operations of SABMiller and is in the process of integrating theseoperations. In 2011, prior to their acquisition by the Group, SABMiller Russia had a 7.1% marketshare by sales volume in Russia and Miller Brands Ukraine (‘‘MBU’’) was the number four player inthe 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, itsjoint 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 suchas fruit juice, bottled water, energy and sports drinks, tea and iced tea. CCI and its subsidiaries andjoint ventures operate 22 bottling plants across 8 markets and have sales operations in two othercountries, giving CCI a presence in 10 markets, and as of 30 June 2012 had an annual bottlingcapacity of approximately 1,154 million unit cases. Based on information from Nielsen and CCIestimates, management believes that, as measured by sales volume, CCI ranks first, or in certain casessecond, in all of the markets in which it has production activities. In Turkey, CCI is the leadingsparkling soft drinks bottler, with a share of 70% of the Turkish sparkling soft drinks market, asmeasured by sales volume for 2011, according to Nielsen.

The Group has two business lines, beer and soft drinks, and reports these business lines in threesegments, Turkey Beer, International Beer and Soft Drinks. The following table sets forth theGroup’s net sales by segment for the six months ended 30 June 2012 and 2011 and for the yearsended 31 December 2011, 2010 and 2009:

Six months ended30 June Year ended 31 December

2012 2012 2011 Change 2011 2011 2010 2009

CAGR1/1/09

-31/12/11

Segment(1)(TRL

millions) (%)(TRL

millions) (%)(TRL

millions) (%) (TRL millions) (%)Turkey Beer ............................ 846.1 26.4 707.1 19.7 1,390.8 29.2 1,293.4 1,264.2 4.9International Beer................... 1,387.0 43.3 785.6 76.6 1,630.7 34.2 1,464.2 1,325.1 10.9

Beer Group Combined ......... 2,233.1 69.7 1,492.7 49.6 3,021.5 63.4 2,757.6 2,589.2 8.0Soft Drinks(2).......................... 960.4 30.0 781.4 22.9 1,713.0 36.0 1,383.6 1,209.9 19.0Other and Eliminations .......... 12.3 0.4 7.9 55.7 26.7 0.6 27.6 11.9 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 Group’s share of 50.3% of revenues from CCI.

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The following table sets forth certain information regarding the Group’s 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 For the Year Ended 31 December

2012 2011 Change 2011 2010

Change2011 v2010 2009

Change2010 v2009

CAGR1/1/09 -31/12/11

Segment (%) (%) (%) (%)Turkey Beer (mn litres)................. 451.4 426.5 5.8 842.2 849.3 (0.8) 851.8 (0.3) (0.6)International Beer (mn litres)....... 1,031.9 753.1 37.0 1,463.3 1,568.6 (6.7) 1,361.6 15.2 3.7

Beer Group Combined(mn litres) ................................. 1,483.3 1,179.6 25.7 2,305.5 2,417.8 (4.6) 2,213.3 9.2 2.1

Soft Drinks(1) (mn unit cases(2)) .. 198.3 179.2 10.7 382.8 334.4 14.5 294.7 13.4 14.0Total (mn litres(3)) ....................... 2,609.4 2,195.2 18.9 4,476.6 4,315.7 3.7 3,886.1 11.0 7.3

(1) Reflects the Group’s share of 50.3% of CCI’s 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.

* 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 Group’s 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 increasingprofitability. 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, createbrand 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, CCI’s goal (and the Group’s 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 toEBI. 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.

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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 Group’s Business

Economic conditions in Turkey, Russia, the CIS and other countries in which the Group operates and globallycan 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 Groupoperates can have a material impact on the Group’s 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 incomelevels 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 Group’s 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 adisadvantage 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 Group’s beer and soft drinks

products, while economic cycles may lead to supply and demand imbalances in the countries in whichthe Group operates and globally, and these factors can have a material adverse effect on the Group’s

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 thesemarkets.

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, whichmay 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 Group’s total sales revenue for the period. The Group’s 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;

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* 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 Group’s 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, financialcondition and results of operations.

Demand for the Group’s 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 andattitudes 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 Group’s marketsand 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 consumerpreferences 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 arecent 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 CCI’s 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 Group’s business, financial condition and results of operations.

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Seasonal consumption cycles, weather conditions and the timing of Ramadan may adversely affect demand forthe Group’s products.

Demand for the Group’s products may be affected by seasonal consumption cycles and adverseweather 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 inthe 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 Group’s


The Group faces competition in the markets in which it operates and may face increased competition in itsmarkets, 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 thecountries 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 Group’s 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 Group’s competitors, or other

changes in the competitive environment in its markets may cause a reduction in the consumption of

the Group’s soft drinks products or its market share.

Consolidation in the international brewers’ industry has significantly increased the geographic reach of

the Group’s 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 Group’s acquisition of Lion Nathan National Foods in 2009 and the Schincariol Group in2011, SABMiller’s acquisition of Fosters in 2011, Molson Coors’ acquisition of StarBev in 2012 and

ABInBev’s acquisition of the remaining shares in Grupo Modelo in 2012.

In most of the Group’s 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 Group’s competitors mayhave 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 Group’s 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 Group’s business, financial condition and results of

operations.

CCI and its Bottlers’ agreements with The Coca-Cola Company (TCCC) are critical to the Group’s business.

CCI and its Bottlers’ agreements with TCCC are critical to the Group’s business. Sales revenue of the

Group’s Soft Drinks segment represented 30.0% and 36.0% of the Group’s total sales revenue for thesix months ended 30 June 2012 and the year ended 31 December 2011, respectively. The Group

produces, sells and distributes TCCC’s trademarked beverages pursuant to standard bottlers

agreements with TCCC covering each of its territories. The bottlers agreements include limitations on

the Group’s 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.

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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

TCCC’s discretion. Accordingly, the Group’s business is dependent on TCCC’s willingness to renewthe 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 Business—Business Lines—

Soft Drinks—Relationship 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 Group’s business, financial condition and results of operations. See ‘‘—Risks Related to

the Notes and the Group’s Capital Structure—Claims of Noteholders under the Notes are effectively

subordinated to those of certain other creditors and liabilities of the Company’s 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

CCI’s subsidiaries’’.

The Group may be impacted by changes in the availability or price of raw materials and packaging.

A significant portion of the Group’s 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 softdrinks, 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 Group’s 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 affectinggrowth 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 Group’s 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 end-

product price increases in the future will not affect the Group’s 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 Group’s sales and/or profits may decrease,

which could have a material adverse effect on the Group’s business, financial condition and results of

operations.

The Group relies on a limited number of suppliers for certain raw materials and packaging materials used inthe 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 Group’s 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

6


suppliers (and potentially increase the prices the Group pays). Any interruptions in the operations of

the Group’s 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 Group’s products, or require the Group to make purchases fromalternative suppliers at potentially higher prices, any of which could have a material adverse effect on

the Group’s business, financial condition and results of operations.

CCI and its Bottlers’ agreements with The Coca-Cola Company restrict sources of supply for some rawmaterials, which could increase the Group’s 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 itsBottlers 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 canbe no assurance that TCCC’s objectives with the exercise of its rights under the bottlers’ agreements

will in all cases be fully aligned with CCI’s or the Group’s business objectives. TCCC’s right to set

concentrate prices could give TCCC considerable influence over CCI’s results of operations and thus

have a material adverse effect on the Group’s business, financial condition and results of operations.

Interruptions in supply or significant increases in the prices of water and energy can affect the Group’soperating and financial performance.

The Group’s production processes require consumption of large amounts of water, including duringthe 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 Group’s 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 Group’s manufacturing costs.

Furthermore, interruptions in the supply of energy or significant energy price increases could also

have an adverse effect on the Group’s 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 havebeen 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 Group’s 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

Group’s 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 Group’s products, while

exclusivity is not permitted for the Group’s arrangements with retailers. There can be no assurance

that independent dealers and distributors (who often act both for the Group and its competitors) andretailers will not give higher priority to competitors’ brands, purchase less of the Group’s products or

purchase at lower prices, devote inadequate promotional support to the Group’s products or

otherwise reduce their efforts to sell the Group’s 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.

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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 Business—Business Lines—Beer—Turkey Beer—Marketing, 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 Group’s 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


operations.

Excise taxes have significantly increased in Turkey and Russia and the beer and beverage industry may besubject to further adverse changes in taxation.

Taxation on the Group’s beer products in the countries in which it operates comprises different taxes

specific to the Group’s 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 Group’s sales of beer in these countries, which could adversely affect the Group’s

sales volumes, sales revenues and profit margins from its beer operations. Currently, excise tax onalcoholic 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 theRussian 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 ‘‘Operating and Financial Review—Factors Affecting the Group’s Financial and

Operating Performance—Changes in Taxes’’.

Increases in excise and other indirect taxes applicable to the Group’s products, either on an absolute

basis or relative to the levels applicable to other beverages, tend to adversely affect sales, both byreducing 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 Group’s products

and its profitability.

In addition, there is no assurance that the operations of the Group’s 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 Group’s cash flow.

Adverse changes in taxation, whether on the Group’s products or otherwise affecting its operations,


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 Group’s ability to execute further acquisitions or investments is subjectto a number of risks, including:

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

terms;

8


* 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 availabilityof 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 Group’s 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 management’s attention from other business concerns and potential disruption

to the Group’s 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 Group’s


The integration process for the Group’s newly acquired businesses in Russia and Ukraine is not yet completeand is subject to uncertainties, including the ability to realise anticipated cost synergies and negotiatingfavorable 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 newly-

issued shares of the Company, representing an interest of 24%. See ‘‘The Group and Its Business-

Strategic 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 orkey accounts, which could have an adverse impact on sales volumes, sales revenues and profit

margins of the Group’s 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 Group’s 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 Group’s business, financial condition and results of operations.

Certain of the Group’s operations, including its soft drinks operations through CCI, are conducted throughjointly controlled affiliates and ventures.

Certain of the Group’s 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

Business—Business Lines—Soft Drinks—Relationships with The Coca Cola Company’’. Accordingly, the

Group’s ability to exercise control over its joint venture operations is limited. The success of the

Group’s 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

9


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 couldin turn have a material adverse effect on the Group’s business, financial condition and results of

operations.

The Group’s 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 Group’s leading market share in certain of these jurisdictions, any future acquisitionsin the relevant product markets by the Group may be subject to closer scrutiny by the relevant anti-

trust 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 Group’s 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 endsellers 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 Group’s ability to expand through

acquisitions or to impose fines or other sanctions as a result of the Group’s market position and

practices could have a material adverse effect on the Group’s business, financial condition and results

of operations.

Restrictions on beer advertising, sales or consumption may adversely affect the Group’s business.

Existing or additional restrictions on, or prohibition of, beer advertising in the mass media or certain

sales channels in the Group’s key markets can have a material adverse effect on its sales andoperating and financial results. In Turkey, one of the Group’s 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 ‘‘Regulation—Turkey’’.

Russia, the Group’s 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 packagingand new labelling and health warning requirements. See ‘‘Regulation—Russia’’. 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 Group’s 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 Group’s business, financial condition

and results of operations.

Intensifying pressures against alcohol consumption or promotion in Turkey may adversely affect demand forthe Group’s 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

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 inrelation 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 Group’s business’’ and

‘‘Regulation—Turkey’’. 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 Group’s two most important markets in terms of

sales volumes and revenues, which could have a material adverse effect on the Group’s 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 Group’s

International Beer operations, has adopted the US dollar as its functional currency. See note 2.2 ofthe 2011 Audited Consolidated Financial Statements for information about the functional currency of

certain of the Group’s 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 Group’s consolidated financial statements. In the case of the

Group’s 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 EBI’s 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 Group’s

borrowings are in currencies other than the Lira, principally the US dollar. As of 30 June 2012, 96%

and 3% of the Group’s long-term borrowings (including the current portion thereof) were

denominated in US dollars and Euros, respectively. Moreover, 84% of the Group’s 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 weredenominated 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 Group’s

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 Group’s 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 Group’s products.

Rising inflation in the markets in which the Group operates may have an adverse effect on demand

for the Group’s 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 December2011 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 Review—Factors Affecting the Group’s Financial and Operating Performance—Macroeconomic

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 Group’s 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 Group’s 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 Group’s business, financial condition andresults of operations.

The Group is effectively controlled by the Ozilhan and Yazıcı families, whose interests (along with the interestsof SABMiller Anadolu Efes Ltd., another significant shareholder) may conflict with the interests of the holdersof the Notes.

The Ozilhan and Yazıcı families directly and indirectly together hold 43% of the Company’s

outstanding share capital, including through their ownership of Anadolu Endustri Holding, which

holds 6% of the Company’s share capital. The Ozilhan and Yazıcı families have significant influence

over the Group’s business and operations, matters decided by the board of directors (the currentChairman is a member of the Ozilhan family), as well as the outcome of all or substantially all

matters decided by a vote of shareholders, including the election of directors and approving mergers

or sales of the Group’s assets. Furthermore, SABMiller Anadolu Efes Ltd. holds 24% of the

Company’s outstanding share capital. It is possible that the interests of the Ozilhan and Yazıcı

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

Business—Strategic Alliance with SABMiller’’ and ‘‘Ownership’’ for information about certaincorporate 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 Group’s

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, orthat once issued such registrations will not be challenged or circumvented by competitors. In

connection with the Group’s 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 Group’s business. In addition, if the

Group fails to ensure the relevance and attractiveness of its brands, including Coca-Cola trademarkedproducts, 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 Group’s


CCI’s and its Bottlers’ success depends in part on The Coca-Cola Company’s 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 growthof CCI and its Bottlers’ soft drinks brands depends in part on TCCC’s consumer marketing activities,

including TCCC’s discretionary contributions to CCI’s annual marketing plan. If TCCC were to

reduce its marketing activities, the level of its contributions to CCI’s 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

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


If any of the Group’s products are found to contain contaminants, the Group may be subject to product recallsor 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

Group’s final products. The Group has established procedures to correct problems detected but doesnot 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


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 Beck’s 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 Group’s licensors may decide to terminate such arrangements with

the Group and potentially license to one of the Group’s competitors, or renegotiate the licenses underterms 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 Group’s

markets could have a material adverse effect on the Group’s business, financial condition and results

of operations.

A number of the Group’s production facilities in Turkey are located in high-risk earthquake zones.

Almost 45% of Turkey’s 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 Group’s 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 Elazıg and, in October 2011, the eastern part ofthe country was struck by an earthquake measuring 7.2 on the Richter scale, causing significant

property damage and loss of life.

The Company’s headquarters and the Group’s 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 Corlu and Bursa, which are located in firstdegree 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 Group’s 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 Group’s business,financial condition and results of operations.

The Group is exposed to operational risks, including mechanical and technical failures that could adverselyaffect its business.

The Group is exposed to operational risks, including the risk of unanticipated equipment breakdownor 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 Group’s

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

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 itmaintains 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 Group’s 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 Group’s business, financial condition


Disruption to, or increased cost of, railway transportation of raw materials and beverages in Russia and otherCIS countries could adversely affect the Group’s business.

Railway transportation is the principal means of transporting raw materials to the Group’s

production facilities and finished products to customers in Russia and, to a lesser degree, other CIS

countries. The Group’s 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 ultimatelycontrolled 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 Group’s raw materials or finished products due to accidents or other

infrastructure issues, this could have a material adverse effect on the Group’s business, financialcondition and results of operations.

The Group’s failure to attract and retain key personnel could adversely affect its business.

The Group’s 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 Group’soperations. 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 Group’s inability to attract and

retain key personnel could have a material adverse effect on the Group’s business, financial condition


The Group does not carry the types of insurance coverage customary in western jurisdictions for a business ofits type and size.

The Group’s 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 yetavailable, 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 ofparticular 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

Group’s business, financial condition and results of operations.

14


Risks Related to Turkey

Economic developments in Turkey, as well as global economic conditions generally, may have a materialadverse effect on the Group’s 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 and2001.

In 2001, Turkey implemented a macroeconomic programme designed to improve the Turkish

economy’s 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 through2007, Turkey’s 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

Turkey’s economy, these continue to have a significant effect on many of the world’s largest

economies. If there is a significant decline in the economic growth of any of Turkey’s 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 Turkey’sbalance 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 Group’s business strategies and have a

material adverse effect on the Group’s 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 Group’sbusiness, 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 ofinflation. 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

Group’s Business—Increases in inflation could adversely affect demand for the Group’s 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.

Turkey’s 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

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, thecurrent account deficit decreased by US$15.7 billion compared to same period in 2011 according to

data published by the Turkish Central Bank. Given Turkey’s 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 Turkey’s 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 Group’s interests will

not occur in the future.

The Turkish foreign exchange markets have historically been volatile, which could adversely affect Turkey’sgeneral economy as well as the Group’s business, financial condition and results of operations.

The Lira has been subject to significant volatility in the years since the financial crisis of 2000 to2002, 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 ofthe 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 Group’s business, financial

condition and results of operations.

Political developments in Turkey may have a material adverse effect on the Group’s 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 People’s 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 affectthe stability of the Turkish economy and, in turn, the Group’s business, financial condition and

results of operations.

The market for Turkish securities is subject to a high degree of volatility due to developments and perceptionsof 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 Company’s 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,

16


may have a material adverse effect on the Group’s business, financial condition and results of

operations’’.

Uncertainties relating to Turkey’s proposed accession to the European Union may adversely affect the Turkishfinancial 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 Turkey’s 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 TurkishCommercial 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 Turkey’s 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

Turkey’s EU membership, that Turkey will maintain an open approach to EU membership or thatTurkey 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 Turkey’s proposed accession to the EU may have a

negative effect on Turkey’s economy in general, and Turkey’s economic performance and credit

ratings in particular, and could, as a result, have a material adverse effect on the Group’s 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 theTurkish 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 Group’s 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 andnearby countries, including Syria, may have a material adverse effect on the Group’s business, financialcondition 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 potentialrisks 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 theTurkish 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.

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, theMiddle East is subject to tensions that could result in economic and/or diplomatic sanctions being

imposed on one or more of Turkey’s neighbours, particularly Iran, which could lead to military

action that could have a negative impact on Turkey’s 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 People’s 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, morerecently, 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 Group’s business, financial conditions


The Company’s credit ratings may not reflect all risks, and changes to Turkey’s credit ratings may affect theCompany’s 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 Moody’s on issue. Any ratingsof 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 Company’s ratings or outlooks, which could

materially adversely affect the trading values of the Notes and the Company’s ability to finance its

operations, which could materially adversely affect the Group’s business, financial conditions and

results of operations. Moreover, a downgrade or potential downgrade of the Turkish sovereign rating

(rated Ba1 (positive outlook) by Moody’s and BB (stable outlook) by S&P) could negatively affectthe Company’s 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 Government’s influence over the Turkish economy could negatively impact the Group’s 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 Government’s privatisation programme, continue to represent a significant portionof 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 forinvestments in companies in the United States, the United Kingdom, the EU and other more-

developed markets.

Risks Related to the Notes and the Group’s Capital Structure

The Notes will constitute unsecured obligations of the Company.

The Company’s 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’’.

18


Claims of Noteholders under the Notes are effectively subordinated to those of certain other creditors andliabilities of the Company’s subsidiaries. Noteholders will also not have the benefit of the negative pledge orcertain of the events of default under the Notes in respect of CCI and neither the negative pledge nor any of theevents of default will apply to any of CCI’s subsidiaries.

The Notes are unsecured and unsubordinated obligations of the Company. The Notes will rank

equally with all of the Company’s other unsecured and unsubordinated indebtedness; however, the

Notes will be effectively subordinated to the Company’s 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 Company’s subsidiaries are entitled to

payment of their claims from the assets of such subsidiaries before these assets are made available fordistribution to the Company, as direct or indirect shareholder. Any debt that the Company’s

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 CCI’s 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 CCI’s 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 sustainedin the future.

There is no active trading market for investments in the Notes. If investments in the Notes are tradedafter 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

Company’s 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 Company’s 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 Company’s 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

19


investor interest in securities of Turkish issuers, including the Company’s, 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 Moody’s 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. Similarratings on different types of notes do not necessarily mean the same thing. The initial ratings by

Moody’s 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 theNotes 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 andClearstream, 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 bedeposited 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 receivepayments 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.

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 forthe 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 ofjudgments. 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 itssubsidiaries.

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 Company’s 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 whichits subsidiaries are or may become subject. As a result of the above, the Company’s ability to service

cash interest payments or other cash needs may be restricted. If the Company’s 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 caseof 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 withholdingsystem 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.

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 theoutstanding 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 ofForeign Assets Control of the US Department of Treasury as a result of the Company’s investments in andbusiness 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 personsfrom 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.

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

Interest and Interest PaymentDates: .............................................. 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$1,000principal 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 theCompany, 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 AdditionalAmounts:.......................................... All payments in respect of the Notes by or on behalf of the

Company shall be made without withholding or deduction for, oron 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 respectiveamounts 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 Notes—Condition 8’’

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) as a result of any change in, or amendment to, the laws orregulations 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 RelevantJurisdiction beyond the prevailing applicable rates on

23 October 2012, and

(b) the requirement cannot be avoided by the Company taking

reasonable measures available to it.

Redemption at the Option of theHolders upon a Change ofControl: .......................................... If a Change of Control Put Event occurs (as defined in

Condition 7.3), each Noteholder will have a right, at such

Noteholder’s option, to require the Company to redeem in whole

(but not in part) such Noteholder’s Notes at 101% of their principalamount together with interest accrued to the date of redemption, as

further described in Condition 7.3.

Events of Default: ........................... 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, cross-

acceleration and certain events related to disposals, bankruptcy and

insolvency, all as further described in Condition 10. See ‘‘Conditions

of the Notes—Condition 10’’.

Form, Transfer andDenominations: ................................ 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 Notes—Condition 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 andClearstream, 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.

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 onthe 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 registrationrequirements 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 Moody’s and ‘‘BBB-’’ by S&P.

Fiscal Agent, Paying Agent, andTransfer Agent: ............................... Citibank, N.A., London Branch

Registrar: ......................................... Citigroup Global Markets Deutschland AG

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 FinancialStatements, 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


2012 2011 2011 2010 2009

(TRL millions)Sales .......................................................................... 3,205.8 2,281.9 4,761.3 4,168.8 3,811.1Cost of Sales ............................................................. (1,598.9) (1,158.3) (2,479.6) (2,051.3) (1,907.9)

Gross Profit from Operations ................................... 1,606.9 1,123.6 2,281.7 2,117.4 1,903.1Marketing, Selling and Distribution Expenses ......... (857.9) (579.1) (1,262.8) (1,060.5) (928.1)General and Administration Expenses...................... (321.6) (201.0) (414.8) (354.0) (322.1)Other Operating Income ........................................... 24.4 17.1 43.1 25.0 41.5Other Operating Expenses ........................................ (20.1) (21.0) (42.1) (34.4) (46.5)

Profit from Operations .............................................. 431.7 339.6 605.1 693.6 648.0Loss from Associates ................................................ (4.5) (3.3) (6.8) (17.9) (10.9)Financial Income....................................................... 203.4 119.6 240.7 244.3 375.1Financial Expenses.................................................... (193.5) (127.5) (374.0) (261.5) (468.4)

Profit Before Tax From Continuing Operations ........ 437.1 328.4 465.0 658.6 543.8Current Period Tax Expense..................................... (123.6) (84.6) (117.5) (127.8) (127.3)Deferred Tax Income/(Expense) ............................... 34.7 6.0 12.0 (12.3) 5.8

Profit for the Year ..................................................... 348.1 249.8 359.5 518.4 422.3Other Comprehensive Income:Currency Translation Differences ............................. (388.8) 204.4 303.2 25.2 (57.8)Revaluation Due to Change in Scope ofConsolidation ............................................................ — — — — 4.9Value Increase/(Decrease) in Available-for-SaleSecurities ................................................................... (3.3) (3.5) (12.4) 2.3 17.4Tax Income /(Expense) on Other ComprehensiveIncome....................................................................... 0.2 0.2 0.6 (0.1) (0.9)

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

26


Summary Consolidated Balance Sheet Data

As at 30 June As at 31 December

2012 2011 2011 2010 2009

(TRL millions)AssetsCurrent AssetsCash and Cash Equivalents ...................................... 983.2 656.7 917.6 939.3 1,053.3Financial Investments ............................................... 2.4 17.8 22.6 55.1 21.2Trade Receivables ..................................................... 1,238.0 883.0 578.4 518.3 421.5Due from Related Parties ......................................... 0.0 0.1 0.1 0.3 0.8Other Receivables...................................................... 25.1 18.1 16.9 7.9 5.8Inventories................................................................. 690.0 653.5 561.5 467.9 412.4Other Current Assets ................................................ 325.8 219.8 246.1 152.0 141.6

Total Current Assets.................................................. 3,264.5 2,449.1 2,343.3 2,140.8 2,056.7

Non-Current AssetsOther Receivables...................................................... 1.9 1.2 1.6 1.3 0.9Financial Investments .............................................. 21.6 33.9 25.2 37.5 40.1Investments in Associates ......................................... 13.5 20.9 18.4 21.4 45.4Biological Assets ....................................................... 8.1 3.3 6.5 1.5 —Property, Plant and Equipment ................................ 3,415.9 2,366.4 2,510.3 2,043.8 1,981.6Intangible Assets ....................................................... 592.8 403.7 447.0 361.9 357.0Goodwill.................................................................... 2,891.5 955.6 912.6 871.1 855.6Deferred Tax Asset ................................................... 74.0 51.5 62.4 40.0 46.9Other Non-Current Assets ........................................ 146.4 85.4 93.4 69.5 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

LiabilitiesCurrent LiabilitiesBorrowings ................................................................ 837.7 712.5 795.6 996.1 949.3Trade Payables .......................................................... 563.9 461.5 307.6 253.3 234.9Due to Related Parties.............................................. 67.4 11.1 9.2 8.6 15.0Other Payables .......................................................... 663.3 482.0 342.8 290.8 202.3Provision for Corporate Tax .................................... 63.5 38.6 9.4 15.3 16.5Provision ................................................................... 64.9 50.9 28.0 23.7 20.3Other Current Liabilities........................................... 224.1 214.2 136.0 169.3 50.3

Total Current Liabilities ............................................ 2,484.7 1,970.7 1,628.6 1,757.2 1,488.6

Non-Current LiabilitiesBorrowings ................................................................ 1,377.6 1,117.3 1,303.8 768.4 908.1Other Payables .......................................................... 191.9 159.5 165.7 144.4 126.6Provision for Employee Benefits ............................... 58.7 51.7 54.0 51.3 40.1Deferred Tax Liability .............................................. 68.2 49.9 52.3 42.8 33.8Other Non-Current Liabilities .................................. 27.8 14.7 9.3 9.7 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

EquityIssued Capital............................................................ 592.1 450.0 450.0 450.0 450.0Inflation Adjustment to Issued Capital .................... 63.6 63.6 63.6 63.6 63.6Share Premium.......................................................... 3,137.7 — — — —Fair Value Reserve.................................................... 4.7 16.2 7.8 19.6 17.3Currency Translation Differences ............................. (95.9) 197.0 289.8 (4.1) (18.0)Restricted Reserves Allocated from Net Income...... 209.6 177.0 177.0 138.4 108.2Other Reserves .......................................................... (5.7) (5.7) (5.7) (5.7) 4.9Accumulated Profits.................................................. 1,908.0 1,820.2 1,820.2 1,601.7 1,378.3Net Income .............................................................. 335.7 241.5 341.2 503.6 422.6

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

27


Summary Consolidated Cash Flow Data

Six monthsended 30 June Year ended 31 December

2012 2011 2011 2010 2009

(TRL millions)Cash flow from operating activities .......................... 477.5 240.1 663.9 809.2 937.7Net cash used in investing activities ......................... (341.5) (307.9) (539.6) (631.2) (417.3)Net cash used financing activities ............................. (30.2) (237.1) (242.6) (297.6) (129.6)Currency translation differences on cash and cashtransactions ............................................................... (39.9) 23.4 95.2 7.3 (29.5)Net increase in cash and cash equivalents ................ 105.8 (304.9) (118.2) (119.6) 390.9Cash and cash equivalents at the beginning of theperiod ........................................................................ 913.2 936.2 936.2 1,048.5 687.1Cash and cash equivalents at the end of the period. 979.0 654.7 913.2 936.2 1,048.5

28


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

A—Summary 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 Group’s consolidated financial statements include:

* the Group’s 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 Group’s audited annual consolidated financial statements as at and for the year ended31 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 Group’s 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 theAudited 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 Group’s results of

operations might have looked like had the acquisition of SABMiller Russia occurred as of 1 January2011, as the Group believes this provides a more meaningful discussion of its business post-

acquisition. 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 Group’s 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 thefuture. See ‘‘Pro Forma Financial Information’’. See also ‘‘The Group and Its Business—Strategic

Alliance with SABMiller’’ for information about the acquisition of SABMiller Russia.

Basaran Nas Bagımsız Denetim ve Serbest Muhasebeci Mali Musavirlik A.S (‘‘PwC Turkey’’), a

member of PricewaterhouseCoopers (‘‘PwC’’), audited and issued auditor’s 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 condensedconsolidated 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.

29


Guney Basımsız Denetim ve Serbest Muhasebeci Mali Musavirlik A.S., an affiliated firm of Ernst &

Young International (‘‘E&Y’’), audited and issued an auditor’s report with respect to the annual

consolidated financial statements as at and for the years ended 31 December 2009. The Company’s

Board of Directors, in accordance with provisions on the mandatory rotation of auditors in force atsuch 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 Company’s interest in the joint venture. In particular, the results of CCI and

Anadolu Etap are proportionately consolidated in accordance with the Company’s 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 CCI’s 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 Group’s

share of the fair value increase amounting to TRL 3.0 million arising from the fair value of netassets, 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 auditor’s report on the 2010 Audited Consolidated Financial Statements contains an ‘‘other

matter’’ paragraph, noting that the Group’s 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 financialand 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 EuropeanCommunity, 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

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.

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 Group’s financial position, business strategy, plans and objectives of management for

future operations (including development plans and objectives relating to the Group’s 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 Group’s 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 Group’s 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 Group’s 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 Group’s 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 Group’s results or the accuracy of forward-

looking statements in this Offering Circular. Therefore, potential investors should not consider thefactors 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.

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.

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 thepreparation of the Company’s 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 Low Average(1)Period

end(2)

October 2012 (through 19 October 2012) ............. 1.8126 1.7886 1.8001 1.7933September 2012...................................................... 1.8151 1.7820 1.7956 1.7820

August 2012........................................................... 1.8285 1.7752 1.7968 1.8182

July 2012................................................................ 1.8162 1.7925 1.8049 1.8011

January to June 2012............................................. 1.8889 1.7340 1.7942 1.8153

2011 ....................................................................... 1.9065 1.4955 1.6700 1.8889

2010 ....................................................................... 1.5978 1.3884 1.5004 1.5460

2009 ....................................................................... 1.7958 1.4365 1.5471 1.5057

2008 ....................................................................... 1.6956 1.1449 1.2929 1.51232007 ....................................................................... 1.4498 1.1626 1.3015 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 exchangerates determined by the Central Bank for the relevant period, which monthly averages were computed by calculating the averageof the daily TRL/US$ dollar exchange rates on the business days of each month during the relevant period. For the months (orperiods) of 2012, this represents the monthly (or period) averages of the TRL/US$ dollar exchange rates determined by the CentralBank 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 lastworking 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.

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

(TRL millions)

Cash and Cash Equivalents .............................................................................................. 983.2

Financial Investments(1) .................................................................................................... 24.0

Total Current Borrowings(2) ............................................................................................. 837.7

Total Non-Current Borrowings(3) ..................................................................................... 1,377.6Equity

Equity Attributable to Equity Holders of the Parent....................................................... 6,149.7

Minority Interests ............................................................................................................ 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 threemonths and investment funds held and non-current financial investments such as the Alternatifbank A.S. shares held by theGroup.

(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.

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 FinancialStatements, 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


2012 2011 2011 2010 2009

(TRL millions)Sales .......................................................................... 3,205.8 2,281.9 4,761.3 4,168.8 3,811.1Cost of Sales ............................................................. (1,598.9) (1,158.3) (2,479.6) (2,051.3) (1,907.9)

Gross Profit from Operations ................................... 1,606.9 1,123.6 2,281.7 2,117.4 1,903.1Marketing, Selling and Distribution Expenses ......... (857.9) (579.1) (1,262.8) (1,060.5) (928.1)General and Administration Expenses...................... (321.6) (201.0) (414.8) (354.0) (322.1)Other Operating Income ........................................... 24.4 17.1 43.1 25.0 41.5Other Operating Expenses ........................................ (20.1) (21.0) (42.1) (34.4) (46.5)

Profit from Operations .............................................. 431.7 339.6 605.1 693.6 648.0Loss from Associates ................................................ (4.5) (3.3) (6.8) (17.9) (10.9)Financial Income....................................................... 203.4 119.6 240.7 244.3 375.1Financial Expenses.................................................... (193.5) (127.5) (374.0) (261.5) (468.4)

Profit Before Tax From Continuing Operations ........ 437.1 328.4 465.0 658.6 543.8Current Period Tax Expense..................................... (123.6) (84.6) (117.5) (127.8) (127.3)Deferred Tax Income/(Expense) ............................... 34.7 6.0 12.0 (12.3) 5.8

Profit for the Year ..................................................... 348.1 249.8 359.5 518.4 422.3Other Comprehensive Income:Currency Translation Differences ............................. (388.8) 204.4 303.2 25.2 (57.8)Revaluation Due to Change in Scope ofConsolidation ............................................................ — — — — 4.9Value Increase/(Decrease) in Available-for-SaleSecurities ................................................................... (3.3) (3.5) (12.4) 2.3 17.4Tax Income /(Expense) on Other ComprehensiveIncome....................................................................... 0.2 0.2 0.6 (0.1) (0.9)

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

36


Selected Consolidated Balance Sheet Data


2012 2011 2011 2010 2009

(TRL millions)AssetsCurrent AssetsCash and Cash Equivalents ...................................... 983.2 656.7 917.6 939.3 1,053.3Financial Investments ............................................... 2.4 17.8 22.6 55.1 21.2Trade Receivables ..................................................... 1,238.0 883.0 578.4 518.3 421.5Due from Related Parties ......................................... 0.0 0.1 0.1 0.3 0.8Other Receivables...................................................... 25.1 18.1 16.9 7.9 5.8Inventories................................................................. 690.0 653.5 561.5 467.9 412.4Other Current Assets ................................................ 325.8 219.8 246.1 152.0 141.6

Total Current Assets.................................................. 3,264.5 2,449.1 2,343.3 2,140.8 2,056.7

Non-Current AssetsOther Receivables...................................................... 1.9 1.2 1.6 1.3 0.9Financial Investments ............................................... 21.6 33.9 25.2 37.5 40.1Investments in Associates ......................................... 13.5 20.9 18.4 21.4 45.4Biological Assets ....................................................... 8.1 3.3 6.5 1.5 —Property, Plant and Equipment ................................ 3,415.9 2,366.4 2,510.3 2,043.8 1,981.6Intangible Assets ....................................................... 592.8 403.7 447.0 361.9 357.0Goodwill.................................................................... 2,891.5 955.6 912.6 871.1 855.6Deferred Tax Asset ................................................... 74.0 51.5 62.4 40.0 46.9Other Non-Current Assets ........................................ 146.4 85.4 93.4 69.5 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

LiabilitiesCurrent LiabilitiesBorrowings ................................................................ 837.7 712.5 795.6 996.1 949.3Trade Payables .......................................................... 563.9 461.5 307.6 253.3 234.9Due to Related Parties.............................................. 67.4 11.1 9.2 8.6 15.0Other Payables .......................................................... 663.3 482.0 342.8 290.8 202.3Provision for Corporate Tax .................................... 63.5 38.6 9.4 15.3 16.5Provision ................................................................... 64.9 50.9 28.0 23.7 20.3Other Current Liabilities........................................... 224.1 214.2 136.0 169.3 50.3

Total Current Liabilities ............................................ 2,484.7 1,970.7 1,628.6 1,757.2 1,488.6

Non-Current LiabilitiesBorrowings ................................................................ 1,377.6 1,117.3 1,303.8 768.4 908.1Other Payables .......................................................... 191.9 159.5 165.7 144.4 126.6Provision for Employee Benefits ............................... 58.7 51.7 54.0 51.3 40.1Deferred Tax Liability .............................................. 68.2 49.9 52.3 42.8 33.8Other Non-Current Liabilities .................................. 27.8 14.7 9.3 9.7 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

EquityIssued Capital............................................................ 592.1 450.0 450.0 450.0 450.0Inflation Adjustment to Issued Capital .................... 63.6 63.6 63.6 63.6 63.6Share Premium.......................................................... 3,137.7 — — — —Fair Value Reserve.................................................... 4.7 16.2 7.8 19.6 17.3Currency Translation Differences ............................. (95.9) 197.0 289.8 (4.1) (18.0)Restricted Reserves Allocated from Net Income...... 209.6 177.0 177.0 138.4 108.2Other Reserves .......................................................... (5.7) (5.7) (5.7) (5.7) 4.9Accumulated Profits.................................................. 1,908.0 1,820.2 1,820.2 1,601.7 1,378.3Net Income .............................................................. 335.7 241.5 341.2 503.6 422.6

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

37


Selected Consolidated Cash Flow Data


2012 2011 2011 2010 2009

(TRL millions)Cash flow from operating activities .......................... 477.5 240.1 663.9 809.2 937.7Net cash used in investing activities ......................... (341.5) (307.9) (539.6) (631.2) (417.3)Net cash used financing activities ............................. (30.2) (237.1) (242.6) (297.6) (129.6)Currency translation differences on cash and cashtransactions ............................................................... (39.9) 23.4 95.2 7.3 (29.5)Net increase in cash and cash equivalents ................ 105.8 (304.9) (118.2) (119.6) 390.9Cash and cash equivalents at the beginning of theperiod ........................................................................ 913.2 936.2 936.2 1,048.5 687.1Cash and cash equivalents at the end of the period. 979.0 654.7 913.2 936.2 1,048.5

38


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 Group’s 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 Group’s 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 andthe 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

Group’s 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 Russia’s internal reporting according tothe 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 Russia’s 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 intothe 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 Group’s 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 ofthe 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 isdependent 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

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 differencesmay have a material impact on the accompanying unaudited pro forma financial information and the

Group’s 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 limitedto only those adjustments that are directly attributable to the transaction, factually supportable and

expected to have a continuing impact on the Group’s 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 GroupSABMiller

RussiaPro FormaAdjustments Pro Forma

(TRL million, except as noted)

Sales .................................................................. 4,761.3 1,057.7 — 5,818.9

Cost of Sales ..................................................... (2,479.6) (469.9) — (2,949.4)

Gross Profit from Operations ............................ 2,281.7 587.8 — 2,869.5

Marketing, Selling and Distribution

Expenses ........................................................ (1,262.8) (241.9) — (1,504.7)General and Administration Expenses .......... (414.8) (171.5) 38.5 (547.9)

Other Income/Expenses ................................. 1.0 (5.2) — (4.2)

Profit from Operations ................................... 605.1 169.1 38.5 812.7

Loss from Associates..................................... (6.8) — — (6.8)

Financial Income/Expenses ........................... (133.4) (2.0) — (135.4)

Profit Before Tax from Continuing

Operations...................................................... 465.0 167.1 38.5 670.5

Tax Income /(Expense), net(1) ....................... (105.5) 106.0 — 0.5Profit For The Year ....................................... 359.5 273.1 38.5 671.0

Attributable to:

Non controlling interests ............................... 18.3 — — 18.3

Equity holders of the parent ......................... 341.2 273.1 38.5 652.7

Weighted average number of shares(2) .......... 450,000,000 592,105,263

Earnings per share (TRL) ............................. 0.7582 1.1024

(1) Tax income at SABMiller Russia includes tax income relating to a reversal of tax provision recognized during the fiscal year ended31 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 weightedaverage number of ordinary shares outstanding during the year.

40


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

The Group

SABMiller

Russia(1)Pro Forma

Adjustments Pro Forma

(TRL million, except as noted)

Sales .................................................................. 3,205.8 128.6 — 3,334.4

Cost of Sales ..................................................... (1,598.9) (59.6) — (1,658.5)

Gross Profit from Operations ............................ 1,606.9 69.0 — 1,675.9


Expenses ........................................................ (857.9) (27.9) — (885.8)

General and Administration Expenses .......... (321.6) (29.7) 3.2 (348.1)

Other Income/Expenses ................................. 4.2 0.4 — 4.6

Profit from Operations ...................................... 431.7 11.7 3.2 446.6Loss from Associates..................................... (4.5) — — (4.5)

Financial Income/Expenses ........................... 9.9 (0.3) — 9.6

Profit Before Tax from Continuing Operations . 437.1 11.4 3.2 451.7

Tax Income /(Expense), net........................... (88.9) 0.8 — (88.1)

Profit For The Year........................................... 348.1 12.2 3.2 363.5

Attributable to:

Non controlling interests ............................... 12.5 — — 12.5

Equity holders of the parent ......................... 335.7 12.2 3.2 351.1

Weighted average number of shares(2) .......... 540,572,585 592,105,263Earnings per share (TRL) ............................. 0.6209 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 weightedaverage 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 SABMiller’s beer operations in Ukraine and Russia were

transferred to the Group (see ‘‘The Group and Its Business—Strategic Alliance with SABMiller’’).SABMiller’s Russian operations are in the process of being integrated with the Group’s existing

Russian operations and continued to operate immediately following the acquisition. In order to

finance the acquisition, EBI’s 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-Asien’s 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 millionand 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 Company’s 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 EfesLimited (‘‘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.

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 havebeen 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

(TRL millions)

Total Consideration transferred........................................................................................ 3,103.0

Cash acquired.................................................................................................................... (41.8)

Net Consideration Transferred ........................................................................................... 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 Russia’s financial statements in

accordance with IFRS 3 ‘‘Business Combinations’’. As such, the difference between totalconsideration of the business combination and the Group’s share in the carrying value of SABMiller

Russia’s identifiable assets, liabilities and contingent liabilities is temporarily recorded as goodwill.

SABMiller

Russia

(TRL million)

Cash and cash equivalents ................................................................................................ 41.8

Trade and other receivables .............................................................................................. 101.9

Due from related parties ................................................................................................... 3.3

Inventories......................................................................................................................... 75.4Other assets ....................................................................................................................... 37.3

Property, plant and equipment ......................................................................................... 911.9

Intangible assets ................................................................................................................ 165.2

Financial liabilities ............................................................................................................ (30.5)

Trade payables .................................................................................................................. (119.8)

Due to related parties........................................................................................................ (11.0)

Other liabilities .................................................................................................................. (69.2)

Deferred tax liability ......................................................................................................... (34.8)Carrying value of net assets acquired ............................................................................... 1,071.6

Total consideration............................................................................................................. 3,103.0

Group’s 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 Group’s

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 brandsaccording 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 Group’s 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 aresubject 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 Group’s 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.

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 Group’s

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 Group’s future sales revenues, operating results and expectations that have not been

audited and involve risks and uncertainties. The Group’s 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 connectionwith 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 theCompany and of joint ventures that are proportionately consolidated with the results of the Company

in accordance with the Company’s interest in the joint venture. In particular, the results of CCI and

Anadolu Etap are proportionately consolidated in accordance with the Company’s 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 A—Summary 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 temporarilyrecognised goodwill. In March 2011, CCI’s 30% indirect share in CCBL increased to 100% (see ‘‘—

Factors Affecting Comparability of the Group’s Results—CCI 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

44


with the change in the scope of consolidation, the Group’s 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.

See also ‘‘—Factors Affecting Comparability of the Group’s Results—Strategic 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 Group’s 2012 Interim Financial Statements. See also ‘‘Pro Forma Financial

Information’’.

The auditor’s report on the 2010 Audited Consolidated Financial Statements contains an ‘‘other

matter’’ paragraph, noting that the Group’s 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 Breweryback 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 Group’s Results

Key factors affecting the comparability of the Group’s results of operations include:

SABMiller Strategic Alliance

The Group has entered into a strategic alliance with SABMiller pursuant to which Anadolu Efes willbe 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 Company’s 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 Company’s stock was TRL 20.60 the day prior to the initial announcement of the

transaction.

The Group acquired SABMiller’s Russian and Ukrainian beer operations as of 6 March 2012, but

such operations were consolidated into the Group’s results as of 1 March 2012. See ‘‘The Group and

Its Business—Strategic 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 Group’s pro forma consolidated income statement, for the six months ended30 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 EBI’s share capital werelisted 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

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 owns80.02% of ZAO Mutena Maltery (‘‘Mutena Maltery’’), for cash consideration of TRL 18.6 million.

Knyaz Rurik and Mutena Maltery are part of the Group’s 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 ‘‘non-

current 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, whichwas 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, CCI’s 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 Group’s Financial and Operating Performance

The Group’s performance and results of operations have been and continue to be affected by a

number of factors, including sales volume, prices for the Group’s 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 Group’s results have been in the past, and future results are likely to be, affected by theeconomic 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 deterioratingeconomic 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 2007 2008 2009 2010 2011 H1 2012

GDP growth (real)(1)..... 6.9% 4.7% 0.7% (4.8)% 9.2% 8.5% 3.1%(2)

Producer price index(1) .. 11.6% 5.9% 8.1% 5.9% 8.9% 13.3% 6.4%(2)

Consumer price index(1) 9.7% 8.4% 10.1% 6.5% 6.4% 10.5% 8.9%(2)

(1) As published by TurkStat.

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

46


The following table presents certain data regarding Russia:

2006 2007 2008 2009 2010 2011 H1 2012

GDP growth (real)(1)..... 8.9% 9.2% (1.3)% (2.6)% 4.9% 4.8% 4%(2)

Producer price index(1) .. 10.4% 25.1% (7)% 13.9% 16.7% 12% 4.1%(2)

Consumer price index(1) 9% 11.9% 13.3% 8.8% 8.8% 6.1% 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 anddemand 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 Group’s results of operations are affected by its sales volume in each given period.




2012 2011 Change 2011 2010

Change2011 v2010 2009

Change2010 v2009

(%) (%) (%)SegmentTurkey Beer (mn litres) .......... 451.4 426.5 5.8 842.2 849.3 (0.8) 851.8 (0.3)International Beer (mn litres) . 1,031.9 753.1 37.0 1,463.3 1,568.6 (6.7) 1,361.6 15.2

Beer Group Combined (mnlitres) ................................... 1,483.3 1,179.6 25.7 2,305.5 2,417.8 (4.6) 2,213.3 9.2

Soft Drinks(1) (mn unitcases(2)) .................................. 198.3 179.2 10.7 382.8 334.4 14.5 294.8 13.4Total (mn litres(3)) ................. 2,609.4 2,195.2 18.9 4,476.6 4,315.7 3.7 3,886.1 11.0




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 Group’s key markets and ‘‘—Prices for the

Group’s Products’’ below for a discussion of the Group’s 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 salesvolume 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

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 negativelyimpacted by these factors in the second half of 2012 as the integration process continues. See ‘‘Risk

Factors—Risks Related to the Group’s Business—The integration process of the Group’s 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 operationsincreased 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 Group’s 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 ofsoft 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 Group’s 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 notaccurately reflect or are reverse to the trends of actual products prices in their local currency.

The following table sets forth certain information regarding the Group’s 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:


2012 2011 Change 2011 2010

Change2011 v2010 2009

Change2010 v2009

(TRL) (%) (TRL) (%) (TRL) (%)SegmentTurkey Beer (TRL per litre)... 1.87 1.66 13.1 1.65 1.52 8.4 1.48 2.6International Beer (TRL perlitre) ........................................ 1.34 1.04 28.9 1.11 0.93 19.4 0.97 (4.1)

Beer Group Combined (TRLper litre)............................... 1.51 1.27 19.0 1.31 1.14 14.9 1.17 (2.5)

Soft Drinks (TRL per unitcase(1)) ..................................... 4.84 4.36 11.1 4.47 4.14 8.2 4.10 0.8Group Consolidated(2) (TRLper litre) .................................. 1.23 1.04 18.3 1.06 0.97 10.1 0.98 (1.5)


(2) For purposes of calculation of consolidated net average per unit sales prices, unit cases have been converted to litres at the ratio of5.678 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 Group’s average sales prices.

Beer brands are classified into different market segments (such as premium, mainstream and

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 brandscomprise mainly local brands, particularly in Russia and the CIS countries.

The Group’s 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 Group’s 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 inTurkey 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 SABMiller’s operations in Russia, which were

acquired in March 2012, partially offset by the adverse impact of the US dollar strengthening againstthe Ruble. Prior to the SABMiller transaction, the Group’s 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 otherinternational 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

Group’s soft drinks, is linked to the product’s end price, as for sparkling beverages CCI and itsBottlers buy concentrate and beverage bases from The Coca-Cola Company, or its authorised

suppliers, at prices established by TCCC. See ‘‘The Group and Its Business—Business lines—Soft

drinks—Relationship 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 to2009, 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.

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 coverdemand 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:

Brewery Installed Capacity

Average Capacity

Utilised, 2011

(million hectolitres) (%)

Turkey ..................................................................................... 10.4 87

Russia ...................................................................................... 26.0 63

Kazakhstan.............................................................................. 2.6 85

Moldova .................................................................................. 1.3 71

Ukraine.................................................................................... 2.3 71

Georgia.................................................................................... 1.14 51

Processing Facility Type

Installed

Capacity

Average

Capacity

Utilised, 2011

(tonnes) (%)

Turkey ............................................................... Maltery 117,680 94

Turkey ............................................................... Hops Processing 1,200 63

Russia................................................................ Maltery 175,976 85

Bottling Facility Installed Capacity

Average Capacity

Utilised, 2011

(mn unit cases) (%)

Turkey ..................................................................................... 717 67

Kazakhstan.............................................................................. 75 71Kyrgyzstan .............................................................................. 19 56

Azerbaijan ............................................................................... 46 66

Iraq(1)....................................................................................... 24 75

Jordan...................................................................................... 25 47

Turkmenistan .......................................................................... 42 34

Pakistan................................................................................... 206 65

(1) Two additional bottling facilities were acquired in connection with CCI’s acquisition of an effective interest of 65% of Al Waha forSoft Drinks, Mineral Water and Juices LLC. See ‘‘—Recent Developments’’.

Seasonal Consumption Cycles, Weather Conditions and Timing of Ramadan

Demand for the Group’s 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).

50


Changes in the Availability or Price of Raw Materials and Packaging

A significant portion of the Group’s 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 ofbeer 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 Group’s 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

Group’s 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 Group’s 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 casessecure 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 Group’s 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 futureaffect the Group’s 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 Group’s 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 Group’s operating and financial

performance. The Group uses material amounts of electricity, natural gas and other energy sources tooperate 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 Group’s

operating income and could potentially challenge the Group’s profitability in certain markets.

In recent years, in most of the key markets in which the Group operates, price increases for waterand energy have, with limited exceptions, been broadly in line with inflation.

Changes in taxes

Taxation on the Group’s beer products in the countries in which it operates comprises different taxes

specific to the Group’s products in each jurisdiction, such as excise and other indirect taxes, in

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 increasein 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 Group’s sales of

beer in these countries, which could adversely affect the Group’s 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 theEuropean 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 Factors—Risks Related to the Group’s 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 Group’s 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 Group’s 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 venturesoutside 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 Group’s

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 Group’s 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 Group’s consolidated financial statements. In the case of the

Group’s International Beer operations, the results of operations of those entities, and particularly EfesRussia, are subject to a double translation as their results are first translated from their local currency

into US dollars (for consolidation within EBI’s results), and then from US dollars into Lira.

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) USD / TRL USD / RUR

Period Average

Period

End Average

Period

End Average

Period

End

Year ended 31 December

2008................................ — 19.31 — — — 29.39

2009................................ 20.52 20.09 1.55 1.51 31.72 30.24

2010................................ 20.28 19.71 1.50 1.55 30.37 30.48

2011................................ 17.63 17.04 1.67 1.89 29.39 32.20

Six months ended 30 June

2011................................ 18.31 17.22 1.56 1.63 28.62 28.08

2012................................ 17.08 18.17 1.79 1.81 30.64 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 Group’s 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 Group’s borrowings are in currencies other than the Lira, principally the US dollar. As of 30June 2012, 96% and 3% of the Group’s long-term borrowings (including the current portion thereof)

were denominated in US dollars and Euros, respectively. Moreover, 84% of the Group’s 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 Group’s 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 Group’s 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 on-

and 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 ‘‘Regulation—Turkey’’ and ‘‘Risk Factors—Risks Related to the Group’s

Business—Restrictions on beer advertising, sales or consumption may adversely affect the Group’s

business’’). Russia, the Group’s 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 ‘‘Regulation—Russia’’. Ukraine is also

considering restrictions, including a ban in beer advertising and certain sales and consumptionlimitations. 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 Group’s results of operations.

53


Explanation of Key Consolidated Income Statement Items

Sales

Sales represents net sales after deducting excise tax and certain deductions and discounts (mainly fordealers, distributors and key accounts) from the Group’s 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 fromTurkey 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 intercompanyeliminations.

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 Group’s 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, pensionpayments 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

Company’s 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 relateto the Group’s selling, distribution and marketing facilities and those personnel that are associated

with the Group’s 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, salespremiums 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.


expense on PP&E and intangible assets includes straight line depreciation and amortization charges

for tangible and intangible assets.

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 andintangible 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 Company’s 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.


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 whoown shares in CCBL. See ‘‘—Factors Affecting Comparability of the Groups Results—CCI 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 Factors—Risks Related to the Group’s Business—The Group’s

operations may be limited by anti-monopoly regulations’’.

Loss from Associates

Loss from associates reflects the loss on the Company’s 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 Group’s 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.

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 Group’s 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 Group’s 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 Year ended 31 December

2012 2011 Change 2011 2010Change

2011 v 2010 2009Change

2010 v 2009

(TRL millions) % (TRL millions) %(TRL

millions) %Continuing OperationsSales ...................................................... 3,205.8 2,281.9 40.5 4,761.3 4,168.8 14.2 3,811.1 9.4Cost of Sales ......................................... (1,598.9) (1,158.3) 38.0 (2,479.6) (2,051.3) 20.9 (1,907.9) 7.5

Gross Profit from Operations ................ 1,606.9 1,123.6 43.0 2,281.7 2,117.4 7.8 1,903.1 11.3Marketing, Selling and DistributionExpenses................................................ (857.9) (579.1) 48.1 (1,262.8) (1,060.5) 19.1 (928.1) 14.3General and Administration Expenses . (321.6) (201.0) 60.0 (414.8) (354.0) 17.2 (322.1) 9.9Other Operating Income ....................... 24.4 17.1 42.3 43.1 25.0 72.1 41.5 (39.7)Other Operating Expenses .................... (20.1) (21.0) (4.2) (42.1) (34.4) 22.2 (46.5) (26.0)

Profit from Operations .......................... 431.7 339.6 27.1 605.1 693.6 (12.8) 648.0 7.0Loss from Associates ............................ (4.5) (3.3) 37.2 (6.8) (17.9) (62.1) (10.9) 63.9Financial Income .................................. 203.4 119.6 70.0 240.7 244.3 (1.5) 375.1 (34.9)Financial Expenses................................ (193.5) (127.5) 51.8 (374.0) (261.5) 43.1 (468.4) (44.2)

Profit Before Tax From ContinuingOperations ............................................. 437.1 328.4 33.1 465.0 658.6 (29.4) 543.8 21.1Current Period Tax Expense................. (123.6) (84.6) 46.2 (117.5) (127.8) (8.1) (127.3) 0.59Deferred Tax Income/(Expense) ........... 34.7 6.0 481.3 12.0 (12.3) (197.6) 5.8 (312.3)

Profit for the Period .............................. 348.1 249.8 39.3 359.5 518.4 (30.7) 422.3 22.8Other Comprehensive Income:Currency Translation Differences ......... (388.8) 204.4 (290.2) 303.2 25.2 1103.2 (57.8) (143.6)Revaluation due to change in scope ofconsolidation ......................................... — — — — — — 4.9 (100.0)Value Increase/(Decrease) in Available-for-Sale Securities.................................. (3.3) (3.5) (5.0) (12.4) 2.3 (626.8) 17.4 (86.5)Tax Income /(Expense) on OtherComprehensive Income......................... 0.2 0.2 (4.6) 0.6 (0.1) (628.2) (0.9) (86.6)

Other Comprehensive Income, (Net ofTaxes).................................................... (392.0) 201.1 (294.9) 291.5 27.4 962.6 (36.3) (175.5)

Total Comprehensive Income ................. (43.9) 450.9 (109.7) 651.0 545.9 19.3 385.9 41.4

56


The following table sets forth the Group’s 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:


2012 2011 Change 2011 2010Change

2011 v 2010 2009Change

2010 v 2009

(TRL millions) % (TRL millions) %(TRL

millions) %Segment(1)

Turkey Beer........................................... 846.1 707.1 19.7 1,390.8 1,293.4 7.5 1,264.2 2.3International Beer ................................. 1,387.0 785.6 76.6 1,630.7 1,464.2 11.4 1,325.1 10.5

Beer Group Combined ........................ 2,233.1 1,492.7 49.6 3,021.5 2,757.6 9.6 2,589.2 6.5Soft Drinks(2) ........................................ 960.4 781.4 22.9 1,713.0 1,383.6 23.8 1,209.9 14.4Other and Eliminations......................... 12.3 7.9 55.7 26.7 27.6 (3.3) 11.9 131.9

Total 3,205.8 2,281.9 40.5 4,761.3 4,168.8 14.2 3,811.1 9.4



Results of Operations for the Six Months Ended 30 June 2012 and 2011

The following table sets forth the Group’s results of operations for the six months ended 30 June

2012 and 2011, derived from the 2012 Interim Financial Statements:


2012 2011 Change

(TRL millions) (%)

Continuing Operations

Sales ............................................................................................. 3,205.8 2,281.9 40.5

Cost of Sales ................................................................................ (1,598.9) (1,158.3) 38.0

Gross Profit from Operations ....................................................... 1,606.9 1,123.6 43.0

Marketing, Selling and Distribution Expenses ............................ (857.9) (579.1) 48.1General and Administration Expenses ........................................ (321.6) (201.0) 60.0

Other Operating Income.............................................................. 24.4 17.1 42.3

Other Operating Expenses ........................................................... (20.1) (21.0) (4.2)

Profit from Operations ................................................................. 431.7 339.6 27.1

Loss from Associates ................................................................... (4.5) (3.3) 37.2

Financial Income ......................................................................... 203.4 119.6 70.0

Financial Expenses ...................................................................... (193.5) (127.5) 51.8

Profit Before Tax From Continuing Operations ........................... 437.1 328.4 33.1

Current Period Tax Expense ....................................................... (123.6) (84.6) 46.2

Deferred Tax Income/(Expense) .................................................. 34.7 6.0 481.3

Profit for the Period ..................................................................... 348.1 249.8 39.3

Other Comprehensive Income:

Currency Translation Differences................................................ (388.8) 204.4 (290.2)

Value Increase/(Decrease) in Available-for-Sale Securities ......... (3.3) (3.5) (5.0)

Tax Income /(Expense) on Other Comprehensive Income.......... 0.2 0.2 (4.6)

Other Comprehensive Income, (Net of Taxes).............................. (392.0) 201.1 (294.9)

Total Comprehensive Income........................................................ (43.9) 450.9 (109.7)

57


Sales

The Group’s 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 of40% (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 Group’s 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 revenuesfrom International Beer and Turkey Beer revenues derived from exports.

The following table sets forth the breakdown of the Group’s sales revenue by segment for the periodsindicated:


2012 2011 Change

(TRL millions) (%)

Segment(1)

Turkey Beer ................................................................................. 846.1 707.1 19.7

International Beer........................................................................ 1,387.0 785.6 76.6

Beer Group Combined............................................................... 2,233.1 1,492.7 49.6

Soft Drinks(2) ............................................................................... 960.4 781.4 22.9Other and Eliminations ............................................................... 12.3 7.9 55.7

Total............................................................................................. 3,205.8 2,281.9 40.5


(2) Reflects the Group’s share of 50.3% of CCI’s revenues.


the periods indicated:


2012 2011 Change

(%)

Segment

Turkey Beer (million litres) .......................................................... 451.4 426.5 5.8

International Beer (million litres)................................................. 1,031.9 753.1 37.0

Beer Group Combined (million litres) ...................................... 1,483.3 1,179.6 25.7

Soft Drinks(1) (million unit cases(2)) ............................................. 198.3 179.2 10.7

Total (million litres(3)) .................................................................. 2,609.4 2,195.2 18.9



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

58


The following table sets forth certain information regarding the Group’s average net sale prices per

litre of beer and per unit case of soft drinks for the periods shown:


2012 2011 Change

(TRL) (%)

Segment

Turkey Beer (TRL per litre) ........................................................ 1.87 1.66 13.1

International Beer (TRL per litre) ............................................... 1.34 1.04 28.9

Beer Group Combined (TRL per litre) .................................... 1.51 1.27 19.0

Soft Drinks (TRL per unit case(1))............................................... 4.84 4.36 11.1

Group Consolidated(2) (TRL per litre) ........................................ 1.23 1.04 18.3


(2) For purposes of calculation of consolidated net average per unit sales prices, unit cases have been converted to litres at the ratio of5.678 litres one unit case.

Turkey Beer. The Group’s 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 Group’s 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 volumesand 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 Group’s sales revenue from soft drinks was TRL 960.4 million for the six months


representing an increase of 23% (or TRL 179.0 million). The increase in revenue from the Group’s

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 dollaragainst the Lira on non-Lira-denominated sales of soft drinks.

Other and eliminations. The Group’s sales revenue from other and eliminations was TRL 12.3 millionfor 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 Group’s 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 newly-

acquired beer operations of SABMiller in Russia and Ukraine, as well as increases in input pricesacross the Group’s operations.

59


The following table sets forth the breakdown of the Group’s cost of sales for the periods indicated:


2012 2011 Change

(TRL millions) (%)

Cost of SalesNet change in inventory 1,245.0 900.7 38.2

Depreciation and amortisation expense on PP&E and intangible

assets ............................................................................................ 106.3 77.7 36.8

Personnel expenses....................................................................... 84.7 63.0 34.5

Utility expenses............................................................................ 70.3 50.8 38.4

Provision for retirement pay liability .......................................... 1.5 1.1 34.8

Other expenses ............................................................................. 91.2 65.1 40.1

Total............................................................................................. 1,598.9 1,158.3 38.0

The following table sets forth the Group’s cost of sales by segment for the periods shown:


2012 2011 Change

(TRL millions) (%)

Segment(1)

Turkey Beer ................................................................................. 255.8 210.5 21.5

International Beer........................................................................ 744.1 444.0 67.6

Beer Group Combined............................................................... 999.8 654.5 52.8

Soft Drinks(2) ............................................................................... 587.1 496.9 18.2

Other and Eliminations ............................................................... 12.0 6.9 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 Group’s share of 50.3% of CCI’s cost of sales.

The following table sets forth the Group’s cost of sales on a per unit basis for the periods shown:


2012 2011 Change

(TRL) (%)

Segment

Turkey Beer ................................................................................. 0.57 0.49 14.8

International Beer........................................................................ 0.72 0.59 22.3

Beer Group Combined............................................................... 0.67 0.55 21.5

Soft Drinks .................................................................................. 2.96 2.77 6.8

Net change in inventory. The Group’s 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

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 Group’s 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 Group’s personnel expenses were TRL 84.7 million for the six months ended30 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 Group’s 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 ofSABMiller in Russia and Ukraine and increases in cost of electricity, gas and water approximately in

line with inflation.

Other expenses. The Group’s 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 Group’s 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.


The Group’s marketing, selling and distribution expenses were TRL 857.9 million for the six months


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 Group’s marketing, selling and distributionexpenses for the periods indicated:


2012 2011 Change

(TRL millions) (%)Marketing, Selling and Distribution ExpensesAdvertising, selling and marketing expenses ............................... 364.5 231.8 57.2Personnel expenses....................................................................... 157.8 114.4 37.9Transportation and distribution expenses ................................... 166.1 111.0 49.7Depreciation and amortization expense on PP&E and intangibleassets ............................................................................................ 96.3 71.9 33.8Utilities and communication expenses......................................... 12.3 10.4 18.7Rent expenses .............................................................................. 5.7 5.0 14.5Repair and maintenance expenses ............................................... 3.9 4.5 (14.0)Provision for retirement pay liability 2.2 1.6 39.8Other expenses ............................................................................. 49.1 28.5 72.3

Total............................................................................................. 857.9 579.1 48.1

61


Advertising, selling and marketing expenses. The Group’s 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 Group’sproduct 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 Group’s personnel expenses were TRL 157.8 million for the six months ended


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 Russiaand Ukraine in March 2012, as well as salary increases in line with the inflation as of January 2012.

Transportation and distribution expenses. The Group’s 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.




an increase of 34% (or TRL 24.4 million), mainly due to new investments aimed at increasingproduction 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.


The Group’s general and administration expenses were TRL 321.6 million for the six months ended


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 Group’s general and administration expenses forthe periods indicated:


2012 2011 Change

(TRL millions) (%)


Personnel expenses....................................................................... 144.6 101.4 42.6

Consulting, auditing and legal consulting expenses .................... 77.6 38.0 104.2

Taxation (other than on income) expenses ................................. 15.6 10.8 45.1

Depreciation and amortisation expense on PP&E and intangibleassets ............................................................................................ 13.9 8.9 55.2

Utilities and communication expenses......................................... 6.5 5.5 18.5

Meeting and travel expenses........................................................ 3.6 3.0 18.3

Insurance expenses....................................................................... 4.9 2.8 74.5

Provision for retirement pay liability .......................................... 3.7 2.5 47.1

Repair and maintenance expenses ............................................... 2.3 1.8 30.3

Other expenses ............................................................................. 48.9 26.2 86.4

Total............................................................................................. 321.6 201.0 60.0

Personnel expenses. The Group’s personnel expenses were TRL 144.6 million for the six months ended


an increase of 43% (or TRL 43.2 million) mainly due to the growth in headcount resulting from the

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 Group’s 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 theacquisition and integration of SABMiller operations in Russia and Ukraine.

Taxation (other than on income) expenses. The Group’s taxation (other than on income) expenseswere 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.




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.


The Group’s 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 forexports.


The Group’s 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 of4% (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 Factors—Risks Related to the Group’s Business—the Group’s operations may be limited by anti-

monopoly regulations’’.

Profit from Operations

As a result of the foregoing factors, the Group’s 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 andUkraine in March 2012.


The Group’s 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 Group’s associate in Serbia.

Financial Income

The Group’s financial income was TRL 203.4 million for the six months ended 30 June 2012, ascompared 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 Group’s 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.

63



The Group’s 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 anincrease 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 Group’s 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 Group’s 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 June2011, representing an increase of 39% (or TRL 98.3 million), mainly reflecting higher net financial

income in the six months ended 30 June 2012.


The Group’s 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) ofTRL 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.

64


Results of Operations for the Years ended 31 December 2011, 2010 and 2009

The following table sets forth the Group’s results of operations for the years ended 31 December

2011, 2010 and 2009, derived from the Audited Consolidated Financial Statements unless otherwiseindicated:

For the Year Ended 31 December

2011 2010

Change

2011 v

2010 2009

Change

2010 v

2009

(TRL millions) (%)

(TRL

millions) (%)


Sales................................................. 4,761.3 4,168.8 14.2 3,811.1 9.4

Cost of Sales.................................... (2,479.6) (2,051.3) 20.9 (1,907.9) 7.5

Gross Profit from Operations........... 2,281.7 2,117.4 7.8 1,903.1 11.3


Expenses .......................................... (1,262.8) (1,060.5) 19.1 (928.1) 14.3

General and Administration

Expenses .......................................... (414.8) (354.0) 17.2 (322.1) 9.9

Other Operating Income ................. 43.1 25.0 72.1 41.5 (39.7)

Other Operating Expenses............... (42.1) (34.4) 22.2 (46.5) (26.0)

Profit from Operations ..................... 605.1 693.6 (12.8) 648.0 7.0

Loss from Associates....................... (6.8) (17.9) (62.1) (10.9) 63.9

Financial Income............................. 240.7 244.3 (1.5) 375.1 (34.9)

Financial Expenses .......................... (374.0) (261.5) 43.1 (468.4) (44.2)

Profit Before Tax From Continuing

Operations........................................ 465.0 658.6 (29.4) 543.8 21.1

Current Period Tax Expense ........... (117.5) (127.8) (8.1) (127.3) 0.5

Deferred Tax Income/(Expense)...... 12.0 (12.3) (197.6) 5.8 (312.3)

Profit for the Period......................... 359.5 518.4 (30.7) 422.3 22.8


Currency Translation Differences ... 303.2 25.2 1103.2 (57.8) (143.6)

Revaluation due to change in scope

of consolidation............................... — — — 4.9 (100.0)

Value Increase/(Decrease) in

Available-for-Sale Securities............ (12.4) 2.3 (626.8) 17.4 (86.5)

Tax Income /(Expense) on Other

Comprehensive Income ................... 0.6 (0.1) (628.2) (0.9) (86.6)

Other Comprehensive Income, (Net

of Taxes).......................................... 291.5 27.4 962.6 (36.3) (175.5)

Total Comprehensive Income ........... 651.0 545.9 19.3 385.9 41.4

Sales

The Group’s 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 comparedto 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.

65


The following table sets forth the breakdown of the Group’s revenue by segment for the years

indicated:


2011 2010

Change2011 v

2010 2009

Change2010 v

2009

(TRL millions) (%)

(TRL

millions) (%)

Segment(1)

Turkey Beer ..................................... 1,390.8 1,293.4 7.5 1,264.2 2.3

International Beer............................ 1,630.7 1,464.2 11.4 1,325.1 10.5

Beer Group Combined .................. 3,021.5 2,757.6 9.6 2,589.2 6.5

Soft Drinks(2)................................... 1,713.0 1,383.6 23.8 1,209.9 14.4

Other and Eliminations ................... 26.7 27.6 (3.3) 11.9 131.9

Total ................................................ 4,761.3 4,168.8 14.2 3,811.1 9.4


(2) Reflects the Group’s share of 50.3% of CCI’s revenues.


the years indicated:


2011 2010

Change

2011 v

2010 2009

Change

2010 v

2009

(%) (%)

SegmentTurkey Beer (million litres).............. 842.2 849.3 (0.8) 851.8 (0.3)

International Beer (million litres) .... 1,463.3 1,568.6 (6.7) 1,361.6 15.2

Beer Group Combined (million

litres) ........................................... 2,305.5 2,417.8 (4.6) 2,213.3 9.2

Soft Drinks(1) (million unit cases(2)) . 382.8 334.4 14.5 294.7 13.4

Total (million litres(3)) ...................... 4,476.6 4,315.7 3.7 3,886.1 11.0



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

66


The following table sets forth certain information regarding the Group’s average net sale prices per

litre of beer and per unit case of soft drinks for the years indicated:


2011 2010

Change2011 v

2010 2009

Change2010 v

2009

(TRL) (%) (TRL) (%)

Segment

Turkey Beer (TRL per litre) ............ 1.65 1.52 8.4 1.48 2.6

International Beer (TRL per litre)... 1.11 0.93 19.4 0.97 (4.1)

Beer Group Combined (TRL per

litre)................................................. 1.31 1.14 14.9 1.17 (2.5)

Soft Drinks(1) (TRL per unit case(2)) 4.47 4.14 8.2 4.10 0.8

Group Consolidated(3) (TRL per

litre) ................................................. 1.06 0.97 10.1 0.98 (1.5)



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

Turkey Beer. The Group’s 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 97.4million) 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 Group’s continuing marketing efforts to increase beer availability, beer

culture and consumption in Turkey.

International Beer. The Group’s 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 forthe 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 anapplied price increase that was less than the excise tax increase in Russia).

Soft Drinks. The Group’s 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 Group’s revenue from other and eliminations was TRL 26.7 million forthe 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 Etap’s sales

revenue. The 131.9% increase in 2010 was principally due to the proportionate consolidation of

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 Group’s cost of sales was TRL 2,479.6 million for the year ended 31 December 2011, ascompared 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 Group’s cost of sales for the years indicated:


2011 2010

Change

2011 v

2010 2009

Change

2010 v

2009

(TRL millions) (%)

(TRL

millions) (%)

Cost of Sales

Net change in inventory .................. 1,939.9 1,581.2 22.7 1,488.8 6.2

Depreciation and amortisation

expense on PP&E and intangible

assets................................................ 166.5 157.8 5.5 134.8 17.0

Personnel expenses .......................... 127.0 109.0 16.6 102.0 6.9Utility expenses................................ 102.8 89.8 14.5 88.4 1.6

Provision for retirement pay liability 2.1 4.0 (46.7) 1.9 112.7

Other expenses................................. 141.2 109.7 28.8 92.0 19.1

Total ................................................ 2,479.6 2,051.3 20.9 1,907.9 7.5

The following table sets forth the breakdown of the Group’s cost of sales by segment for the periods

indicated:


2011 2010

Change

2011 v

2010 2009

Change

2010 v

2009

(TRL millions) (%)

(TRL

millions) (%)

Segment(1)

Turkey Beer ..................................... 429.6 403.8 6.4 424.0 (4.8)

International Beer............................ 944.5 762.2 23.9 703.5 8.3Beer Group Combined ..................... 1,374.1 1,166.0 17.8 1,127.4 3.4

Soft Drinks(2)................................... 1.078.4 865.2 24.6 773.4 11.9

Other and Eliminations ................... 27.1 20.1 34.8 7.1 183.1

Total 2,479.6 2,051.3 20.9 1,907.9 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 Group’s share of 50.3% of CCI’s cost of sales.

68


The following table sets forth the Group’s cost of sales on a per unit basis for the periods shown.


2011 2010

Change

2011 v2010 2009

Change

2010 v2009

(TRL) (%) (TRL) (%)

Segment

Turkey Beer ..................................... 0.51 0.48 7.3 0.50 (4.5)

International Beer............................ 0.65 0.49 32.8 0.52 (6.0)

Beer Group Combined .................. 0.60 0.48 23.6 0.51 (5.3)

Soft Drinks ...................................... 2.82 2.59 8.9 2.62 (1.4)

Net change in inventory. The Group’s 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 foreignoperations 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%.


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 31December 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 Group’s

international operations.

Personnel expenses. The Group’s 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 31December 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 Group’s 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 31December 2010 and 2009, respectively, representing an increase of 15% (or TRL 13.0 million) in 2011


increase in 2011 was principally due to the increase in prices of energy raw materials such as oil for

the Group’s international operations. The increase in 2010 was principally due to tariff changes.

Other expenses. The Group’s 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 Group’s 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%

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.


The Group’s marketing, selling and distribution expenses were TRL 1,262.8 million for the yearended 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


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 Group’s marketing, selling and distribution

expenses for the years indicated:


2011 2010

Change2011 v

2010 2009

Change2010 v

2009

(TRL millions) (%)

(TRL

millions) (%)


Expenses

Advertising, selling and marketing

expenses ........................................... 539.4 449.3 20.1 405.9 10.7Personnel expenses .......................... 238.8 194.7 22.6 168.5 15.5

Transportation and distribution

expenses ........................................... 227.1 181.4 25.2 148.2 22.4

Depreciation and amortization


assets................................................ 147.7 126.4 16.8 114.3 10.6

Utilities and communication

expenses ........................................... 24.4 19.5 25.0 17.4 12.3Rent expenses .................................. 10.1 10.5 (3.8) 9.2 14.2

Repair and maintenance expenses... 8.1 8.3 (1.9) 7.4 12.5

Provision for retirement pay liability 2.9 2.7 8.2 2.8 (4.0)

Other expenses................................. 64.3 67.7 (5.0) 54.5 24.3

Total ................................................ 1,262.8 1,060.5 19.1 928.1 14.3

Advertising, selling and marketing expenses. The Group’s advertising, selling and marketing expenses

were TRL 539.4 million for the year ended 31 December 2011, as compared to TRL 449.3 millionand 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 Group’s personnel expenses were TRL 238.8 million for the year ended 31December 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

70


principally due to salary increases and higher bonus payments to personnel due to better

performance.

Transportation and distribution expenses. The Group’s 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.


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


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 andInternational 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.


The Group’s 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 2011as 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 Group’s general and administration expenses for

the years indicated:


2011 2010

Change

2011 v

2010 2009

Change

2010 v

2009

(TRL millions) (%)

(TRL

millions) (%)

General and Administration

ExpensesPersonnel expenses .......................... 193.6 168.1 15.2 144.0 16.8

Consulting, auditing and legal

consulting expenses.......................... 86.2 70.2 22.9 68.5 2.5

Taxation (other than on income)

expenses ........................................... 23.5 19.2 22.1 18.0 6.5

Depreciation and amortisation


assets................................................ 20.0 16.8 19.3 16.0 5.1Utilities and communication

expenses ........................................... 12.5 10.7 17.0 9.4 13.5

Meeting and travel expenses............ 6.5 4.4 48.7 3.9 11.9

Insurance expenses .......................... 5.7 6.4 (11.0) 7.3 (12.1)

Provision for retirement pay liability 5.4 5.9 (8.6) 4.4 33.6

Repair and maintenance expenses... 4.6 3.7 25.3 3.3 11.3

Other expenses................................. 56.7 48.6 16.8 47.3 2.8

Total ................................................ 414.8 354.0 17.2 322.1 9.9

71


Personnel expenses. The Group’s 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) in2010 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


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 Group’s 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


increase of 22% (or TRL 4.3 million) in 2011 as compared to 2010, and an increase of 7% (or TRL1.2 million) in 2010 as compared to 2009.


amortisation expense on PP&E and intangible assets was TRL 20.0 million for the year ended 31December 2011, as compared to TRL 16.8 million and TRL 16.0 million for the years ended 31



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.


The Group’s 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 Group’s 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 dueto the existence of negative goodwill related to the acquisition of EBI’s 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.


The Group’s 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 and2009, 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 Group’s profit from operations was TRL 605.1 million forthe 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


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.

72



The Group’s 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 and2009, 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 Group’s associate in Serbia, in 2010.

Financial Income

The Group’s financial income was TRL 240.7 million for the year ended 31 December 2011, as


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 foreignexchange 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 Group’s financial expenses were TRL 374.0 million for the year ended 31 December 2011, as


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.


The Group’s current period tax expense was TRL 117.5 million for the year ended 31 December2011, 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 Group’s 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 Group’s profit for the year was TRL 359.5 million for theyear 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


compared to 2009.


The Group’s 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 wasprincipally 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 year’s 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 Group’s 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

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 Group’s holding of shares

in Alternatif Bank.

Tax Income/(Expense) on Other Comprehensive Income

The Group’s 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 Group’s holding of shares in Alternatif Bank.

Total Comprehensive Income

As a result of the foregoing factors, the Group’s total comprehensive income was TRL 651.0 millionfor 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 Group’s 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 itsliquidity 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 Group’s

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 anticipateproviding any such loans. See also ‘‘The Group and Its Business—Business Lines—Soft 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 Group’s 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 Group’s cash flows for the periods indicated:


2012 2011 2011 2010 2009

(TRL millions)

Cash flow from operating activities.. 477.5 240.1 663.9 809.2 937.7

Net cash used in investing activities.. (341.5) (307.9) (539.6) (631.2) (417.3)

Net cash used financing activities.... (30.2) (237.1) (242.6) (297.6) (129.6)

Currency translation differences oncash and cash transactions .............. (39.9) 23.4 95.2 7.3 (29.5)

Net increase in cash and cash

equivalents ....................................... 105.8 (304.9) (118.2) (119.6) 390.9

Cash and cash equivalents at the

beginning of the period ................... 913.2 936.2 936.2 1,048.5 687.1

Cash and cash equivalents at the

end of the period ............................. 979.0 654.7 913.2 936.2 1,048.5

Cash flow from operating activities

The Group’s 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

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 incontinuing 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 sixmonths 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 Group’s 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 netchanges 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: TRL97.9 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 Group’s 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 netchanges 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 Group’s 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 cashpayments 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

75


TRL 320.9 million, which mainly related to technical and marketing related investments of the

Group.

The Group’s 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 proceedsfrom 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 purchaseof 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 Group’s (the ‘‘KV Group’’) minority shares

by ZAO Moscow-Efes Brewery (‘‘MEB’’), EBI’s minority shares by the Company and CCAzerbaijan’s 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 Group’s 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 adecrease 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 Group’s 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 10.5million 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 long-

term 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.

76


Borrowings

As at 30 June 2012, the Group’s outstanding loans and borrowings were TRL 2,215.2 million

including TRL 836.6 million in current loans and borrowings. The following table sets forthinformation about certain of the Group’s material long-term loans and borrowings as at the dates

indicated:

Date ofsignature Duration

Outstanding PrincipalAmount of Loan

(as of 30 June 2012)

Amount duethrough 30June 2013

Amount dueafter 30 June

2013 Total

(months) (TRL millions)Anadolu Efes – Rabobank Loan 1 ..... 23.02.2012 36 US$150,000,000 54,195,000 216,780,000 270,975,000Anadolu Efes – Rabobank Loan 2 ..... 19.03.2012 36 US$50,000,000 18,065,000 72,260,000 90,325,000Anadolu Efes – Rabobank Loan 3 ..... 31.05.2011 36 US$80,000,000 72,260,000 72,260,000 144,520,000Anadolu Efes – S. Generale ................ 24.06.2011 36 US$26,667,000 24,086,065 24,087,871 48,173,936EBI – Rabobank Loan 4..................... 29.08.2011 36 US$100,000,000 72,260,000 108,390,000 180,650,000EBI – Akbank ..................................... 19.10.2010 24 US$100,000,000 180,650,000 0 180,650,000MEB – HSBC Loan ............................ 10.05.2011 36 US$67,500,000 40,646,250 81,292,500 121,938,750EKB – EBRD Loan 1......................... 29.05.2012 72 KZT2,184,000,000(1) 17,603,159 8,801,579 26,404,738EKB – EBRD Loan 2......................... 09.06.2008 72 US$28,000,000 20,232,800 30,349,200 50,582,000Vitanta – EBRD Loan 3 ..................... 01.10.2008 72 US$12,600,000 9,104,760 13,657,140 22,761,900Lomisi – EBRD Loan 4...................... 20.07.2010 60 US$13,094,000 3,311,604 20,342,707 23,654,311CCI – BoA Club Loan........................ 22.09.2011 36 US$150.000.000 0 270,975,000 270,975,000CCI-BNP Club Loan (USD portion).. 07.03.2011 36 US$538,000,000 0 971,897,000 971,897,000CCI-BNP Club Loan (EUR portion) . 07.03.2011 36 EUR46,824,193 0 106,487,580 106,487,580

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

The Group’s 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 Group’s Euro-denominated loans

have fixed interest rates of 5.75% and floating interest rates for LIBOR plus 1.80%. The Group’s

loans in currencies other than Lira, US dollar or Euro have fixed interest rates of 8.11% and floatinginterest rates ranging from LIBOR plus 0.40% to 0.50%. The Group’s leasing agreements have fixed

interest rates ranging from 3.45% to 8%.

The following table sets forth the Group’s gross indebtedness for the periods indicated:


2012 2011 2011 2010 2009

(TRL millions)

Bank overdrafts and short term loans.. 836.6 711.7 794.8 995.6 948.5

Short-term payables to other lenders.... — — — — —

Other short-term payables .................... 1.0 0.8 0.9 0.6 0.8

Current financial debts........................... 837.7 712.58 795.6 996.1 949.3

Long-term bank loans........................... 1,375.3 1,145.1 1,301.7 766.8 906.8Non-current payables to other lenders . — — — — —

Other long-term payables...................... 2.2 2.2 2.1 1.6 1.2

Non-current financial debts .................... 1,377.6 1,117.3 1,303.8 768.4 908.1

Total Gross Financial Debt ................... 2,215.2 1,829.3 2,099.5 1,764.5 1,857.4

The majority of the Group’s 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 subsidiariesand 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 bank’s

discretion.

For a description of certain of the Group’s 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 Group’s borrowings.

77


Capital Expenditures

In the three years ended 31 December 2011 and in the six months ended 30 June 2012, the Group’s

principal investments in an aggregate amount of TRL 1,473.2 million (excluding biological assetpurchases) related primarily to the Group’s 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 Group’s share of 50.3%

of CCI’s capital expenditures over the period. As CCI is an independent business from the Group’s

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 medium-

term 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 Group’s beer operations. As noted above, CCI is responsible for

meeting its own capital expenditure and other working capital needs.

The Group’s actual capital expenditures may vary significantly from its estimates and depend on a

variety of factors, including market conditions, levels of demand for the Group’s products, the

availability of funding, operating cash flow and other factors fully or partially outside the Group’scontrol.

Contractual Obligations and Commitments

The table below sets forth the amount of the Group’s contractual obligations and commitments, as at

30 June 2012, based on contractual undiscounted payments:

Total

Less than

1 year 1-2 years 2-5 years

More than

5 years

(TRL millions)

Loans and borrowings..................... 2,212.0 836.6 998.4 376.5 0.4

Leases .............................................. 3.3 3.3 — — —

Put option........................................ 86.2 86.2 — — —

Total ................................................ 2,301.5 926.1 998.4 376.5 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 InterimFinancial 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’’) enteredinto 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 EBRD’s 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.

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 Group’s risk management policies are established to identify and analyse the risks faced bythe Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.

The Group’s 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 Group’s related risk policies can be summarised

as follows:

Interest Rate Risk

The Group’s exposure to interest rate risk relates primarily to the Group’s debt obligations. Certain

of the interest rates on the Group’s 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 Group’s 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 Group’s exposure to foreign currency risk for the periods indicated is set forth in the table

below:

USD-denominated

2011

EUR-denominated

2011

Other-denominated

2011

USD-denominated

2010

EUR-denominated

2010

Other-denominated

2010

USD-denominated

2009

EUR-denominated

2009

Other-denominated

2009

(TRL millions)Current assets ...................... 249.9 34.5 30.2 48.5 10.1 27.2 77.9 85.2 25.7Non-current assets ............... 0.4 0.9 0.5 — — — — — —Total assets .......................... 250.3 35.4 30.7 48.5 10.1 27.2 77.9 85.2 25.7Current liabilities ................. (310.9) (155.3) (20.0) (466.3) (112.4) (6.4) (488.1) (100.5) (4.4)Non-current liabilities.......... (882.9) (54.3) — (353.9) (84.3) — (315.2) (280.8) —Total liabilities ..................... (1,193.8) (209.6) (20.0) (820.3) (196.6) (6.4) (803.3) (381.3) (4.4)

Net exposure ........................ (943.5) (174.2) 10.7 (771.9) (186.5) 20.8 (725.4) (296.2) 21.2

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) ......................................................................... (94.4) 151.3

EUR (10% strengthening)......................................................................... (17.4) 2.3

2010USD (10% strengthening) ......................................................................... (77.1) 112.8


2009

USD (10% strengthening) ......................................................................... (72.5) 105.9


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.

79


Liquidity Risk

Liquidity risk is the risk that an entity will be unable to meet its net funding requirements. The

Group’s approach to managing liquidity is to match the cash in and out flow volume supported bycommitted lending limits from qualified credit institutions. For information about the contractual

maturities of the Group’s 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 Group’s maximum exposure to credit risk was

TRL 1,757.5 million as at 31 December 2011. For more detail about the Group’s maximum exposure

to credit risk, see Note 38(e) of the 2011 Audited Consolidated Financial Statements.

The aging of the Group’s trade receivables for the periods indicated was:

As of

31 December

2011

As of

31 December

2010

As of

31 December

2009

(TRL millions)

Past due 1-30 days ............................................................... 41.8 23.9 21.4

Past due 1-3 months ............................................................ 8.8 9.1 13.4

Past due 3-12 months........................................................... 1.9 3.3 6.9Past due more than 1 year................................................... 3.2 2.4 6.3

Total ..................................................................................... 55.7 38.7 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 Group’s

business and results of operations. The following accounting policies are both important to the

portrayal of the Group’s reported amounts of expenses, assets, liabilities and the disclosure of

contingent liabilities at the reporting date and require the Company’s management’s most subjective

or complex judgments, often as a result of the need to estimate the effects of matters that areinherently uncertain. The Company’s 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 thepossible 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

80


debtors are considered. For information on the Group’s 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 Group’s 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 athree-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 Group’s 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 inthe 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 Statementsand ‘‘—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

Group’s 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 Group’s deferred tax assets andliabilities, 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 asof 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 Group’s 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.

81


Description of Certain Indebtedness

The following summary of certain provisions of the Group’s material indebtedness does not purport

to be complete and is subject to, and qualified in its entirety by references to the underlyingdocuments.

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 andrepresentations 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 RabobankLoan 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


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 financialratios: consolidated EBITDA to consolidated net finance charges and consolidated total net debt to


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 includescustomary 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 Raiffeisen-

Boerenleenbank 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 LIBORplus 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


financial covenants. Rabobank Loan 4 requires the EBI to maintain the following financial ratios:

82


consolidated EBITDA to consolidated net finance charges and consolidated total net debt to


Loan 4 are guaranteed by the Company.

EBI – Akbank. On 19 October 2010, EBI, as borrower and the Company, as the surety and AkbankT.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 toUS$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 Loan1 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 andrepresentations 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 currentinterest 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


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 BoAClub 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

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 withrespect 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. TheBNP 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.

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 itssoft drinks activities. Based on publicly available information, management estimates that the Groupis Europe’s fifth largest brewer and Canadean Global Beer Trends 2011 reports that the Group wasthe world’s 12th largest beer-maker in 2010, each as measured by sales volume. CCI is the sixthlargest bottler in the Coca-Cola system, as measured by sales volume, according to informationprovided to CCI by The Coca-Cola Company. The Group operates 18 breweries, seven malteries and22 bottling plants, and its products and services are supplied to more than 600 million consumersacross 16 principal markets.

The Group is Turkey’s largest beer maker, with a share of 84% of the Turkish beer market asmeasured by sales volume for the six months ended 30 June 2012, according to Nielsen. It is also thesecond 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 beerbrands, which includes the Efes Pilsener international brand, as well as a number of premium andlocal mainstream beer brands, many of which hold leading positions in their respective marketsegments, 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 hopsprocessing plant in six markets and has sales operations in a further three countries. As of 30 June2012, the Group had an annual production capacity of approximately 43.7 million hectolitres of beerand approximately 290,000 tons of malt.

In March 2012, in connection with its strategic alliance with SABMiller, the Group acquired theRussian and Ukrainian brewing operations of SABMiller and is in the process of integrating theseoperations. In 2011, prior to their acquisition by the Group, SABMiller Russia had a 7.1% marketshare by sales volume in Russia and Miller Brands Ukraine (‘‘MBU’’) was the number four player inthe 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, itsjoint 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 suchas fruit juice, bottled water, energy and sports drinks, tea and iced tea. CCI and its subsidiaries andjoint ventures operate 22 bottling plants across 8 markets and have sales operations in two othercountries, giving CCI a presence in 10 markets, and as of 30 June 2012 had an annual bottlingcapacity of approximately 1,154 million unit cases. Based on information from Nielson and CCIestimates, management believes that, as measured by sales volume, CCI ranks first, or in certain casessecond, in all of the markets in which it has production activities. In Turkey, CCI is the leadingsparkling soft drinks bottler, with a share of 70% of the Turkish sparkling soft drinks market, asmeasured by sales volume for 2011, according to Nielsen.

The Group has two business lines, beer and soft drinks, and reports these business lines in threesegments, Turkey Beer, International Beer and Soft Drinks. The following table sets forth theGroup’s net sales by segment for the six months ended 30 June 2012 and 2011 and for the yearsended 31 December 2011, 2010 and 2009:


2012 2012 2011 Change 2011 2011 2010 2009

CAGR1/1/09-

31/12/11

(TRLmillions) (%)

(TRLmillions) (%)

(TRLmillions) (%) (TRL millions) (%)

Segment(1)

Turkey Beer.................... 846.1 26.4 707.1 19.7 1,390.8 29.2 1,293.4 1,264.2 4.9International Beer .......... 1,387.0 43.3 785.6 76.6 1,630.7 34.2 1,464.2 1,325.1 10.9

Beer Group Combined . 2,233.1 69.7 1,492.7 49.6 3,021.5 63.4 2,757.6 2,589.2 8.0Soft Drinks(2) ................. 960.4 30.0 781.4 22.9 1,713.0 36.0 1,383.6 1,209.9 19.0Other and Eliminations.. 12.3 0.4 7.9 55.7 26.7 0.6 27.6 11.9 49.8

Total .............................. 3,205.8 100 2,281.9 40.5 4,761.3 100 4,168.8 3,811.1 11.8



85





2012 2011 Change 2011 2010

Change

2011 v

2010 2009

Change

2010 v

2009

CAGR

1/1/09-

31/12/11

(%) (%) (%) (%)

Segment

Turkey Beer (mn litres) ......... 451.4 426.5 5.8 842.2 849.3 (0.8) 851.8 (0.3) (0.6)

International Beer (mn litres) 1,031.9 753.1 37.0 1,463.3 1,568.6 (6.7) 1,361.6 15.2 3.7

Beer Group Combined (mn

litres)................................... 1,483.3 1,179.6 25.7 2,305.5 2,417.8 (4.6) 2,213.3 9.2 2.1

Soft Drinks(1) (mn unit

cases(2)) .................................. 198.3 179.2 10.7 382.8 334.4 14.5 294.7 13.4 14.0

Total (mn litres(3))................. 2,609.4 2,195.2 18.9 4,476.6 4,315.7 3.7 3,886.1 11.0 7.3




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 leadingpositions 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 inalcohol and soft drinks consumption in the markets in which it operates. Furthermore, management

believes that the Group’s 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 Group’s 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 Group’s

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 Group’s portfoliospans 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 nowthe 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.

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 CCI’s soft drink operations. See

‘‘—Business Lines—Soft Drinks’’. Management believes that this partnership with one of the world’s

leading soft drink companies brings significant benefits to the Group, including but not limited torights 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 trackrecord 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 Group’s markets. Key

management personnel in the Group’s 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 Group’s

work with local farmers and extends to its strong sales and marketing team that works with retailersand entrepreneurs to grow the beer market and expand the beer culture. See ‘‘—Research and

Development’’ and ‘‘—Business Lines—Beer—Turkey Beer—Marketing, 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 Group’s 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 integrationprovides 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.

87


Beer

In its beer business, the Group’s 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 brandloyalty 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 Group’s strategy is focused on:

o growing the overall beer market and expanding the beer culture;

o 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 Lines—Beer—Turkey Beer—Marketing, sales and distribution’’);

and

o increasing its product innovation and product variety, while maintaining its differentiation

and profitability.

* Russia: in Russia, the Group’s focus is on:

o completing the integration of SABMiller Russia into the Group’s existing operations

expediently and efficiently in order to achieve the expected synergies as soon as practicable;

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

o 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

o 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 Group’s 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, CCI’s goal (and the Group’s 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 themanagement 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 Turkey’s leading conglomerates. The foundations

of the Anadolu Group were laid in the early 1950s by members of the Ozilhan and Yazıcı families in

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 theinformatics, 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

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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 Group’s 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 Group’s 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 Group’s operations in Kazakhstan and Russia

were also expanded through the commencement of production at new breweries in Kazakhstan andRussia and the acquisition of an additional brewery in Russia. In 2006, the Group acquired the then-

seventh largest brewer in Russia, the KV Group, which at that time was the Group’s largest

acquisition. The KV Group acquisition added two new breweries, four new malteries and one ‘‘pre-

form’’ (or PET bottle) production facility to the Group’s 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 Group’s strategic alliance with SABMiller formally commenced inMarch 2012, and as part of those arrangements, the Group has acquired all of SABMiller’s 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 Sınai 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 Coca-

Cola bottling companies that accounted for approximately 80% of Coca-Cola’s Turkish operationsfrom TCCC. In 1998 the Turkish Coca-Cola bottling operations were merged and Turkey’s exclusive

bottler was set up, in which the Group’s 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 Group’s international soft drinks

operations through Efes Invest and Turkey soft drink operations through CCI were reorganised under

CCI, and CCI’s 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 bottlingcompany). 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 Group’s 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 EBIacquired 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 SABMiller’s Kazakh beer operations.

In connection with the Group’s 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, resultingin an indicative Company share price of TRL 23.08. The closing price of the Company’s 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

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Holding A.S (‘‘Yazicilar’’), Ozilhan Sinai Yatirim A.S (‘‘Ozilhan’’) and AEH (AEH together with

Yazicilar and Ozilhan, the ‘‘AE Company Group’’). The Relationship Agreement governs the

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 AEArea SABMiller has a right of first refusal over certain geographic markets.

The Relationship Agreement also sets forth how SABMiller and the AE Company Group willappoint directors to the Company and its Russian and Ukrainian subsidiaries, and voting inconnection with certain matters. See ‘‘Ownership—Certain Arrangements with SABMiller—RelationshipAgreement’’.

As part of the strategic alliance, AEH was issued one share in SABMiller AEL. All other shares inSABMiller AEL are owned by SABMiller Holdings Europe Limited (‘‘SABMiller HE’’), a subsidiaryof 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 holdand conduct transactions in relation to its shares in the Company. The Shareholders’ Agreementaddresses the appointment of directors of SABMiller AEL, voting in connection with certain mattersand how the rights of SABMiller AEL and the AE Company Group over the Company’s share areto be exercised. The Shareholders’ Agreement also sets forth certain restrictions on the transfer ofshares in the Company and SABMiller AEL. See ‘‘Ownership—Certain Arrangements withSABMiller—Shareholders’ Agreement’’.

Corporate Structure

The following chart shows the principal subsidiaries and joint ventures of the Group:

99.9%72.0%

(1) An additional 4% of CCI is held by Ozgorkey Holding.

(2) TCCC (The Coca-Cola Company, through The Coca-Cola Export Corporation).

(3) 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.

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See ‘‘—Strategic Alliance with SABMiller’’ and ‘‘Ownership—Certain Arrangements with SABMiller’’for information about certain agreements between the Company and SABMiller. See ‘‘—BusinessLines—Soft Drinks—Relationship with The Coca-Cola Company’’ for information about certainshareholding and corporate governance matters contained in CCI’s 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 Group’s 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 andAzerbaijan. See ‘‘—Marketing, sales and distribution’’ below.

Raw materials procurement

The principal raw materials used in the Group’s 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 Group’s 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 Cumra. 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 176,000tonnes. Management believes that the Group’s 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 Group’s 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 Group’s brewing operations are located are among the leading grainproducers 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 Group’s 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. InTurkey, a substantial proportion of the Group’s 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 Group’s 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 Group’s 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 weatherconditions, 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 end-

product 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

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base. See ‘‘Risk Factors — Risks Relating to the Group’s 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 brewer’s 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 cooltemperatures 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 Group’s 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 ‘‘helpingpeople 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 anexisting 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 Group’s 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 Group’s 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

Group’s 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 Group’s operating subsidiaries funds all marketing activities within its market both inrespect of the Efes Pilsener brand and their respective local and other licensed brands.

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The following table sets forth the Group’s 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

Kırrmızı, Gusta, Mariachi, Miller Genuine Draft, Becks, Peroni

Russia ............................ 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, Redd’s, Zwei Meister,

Kazakhstan .................... Efes Pilsener, Karagandinskoe, Beliy Medved, Kruzhka Svezhego, Gold Mine

Beer, Lyubitelskoe, Bavaria, Amsterdam Navigator, Zhigilevskoe, Tyan Shan

Moldova......................... Efes Pilsener, Chisinau, Stary Melnik, Beliy Medved, Miller Genuine Draft,Velkopopovicky Kozel

Ukraine .......................... Sarmat, Zhigulevskoe, Miller Genuine Draft, Zolotaya Bochka,

Velkopopovicky Kozel, Amsterdam Mariner

Georgia .......................... Efes Pilsener, Natakhtari, Mtieli, Miller Genuine Draft, Kaiser

The Group’s 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 groupand 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 beeradvertising. 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 Factors—Risks Relating to the Group’s Business—Restrictions on

beer advertising, sales or consumption may adversely affect the Group’s 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 Group’s

brands given their well-established position in the Turkish market and the Group’s 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 marketingactivities 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 high-

density population areas, such as Istanbul, Ankara, Moscow, Rostov, St. Petersburg, Almaty,

Chisinau and Tbilisi, the Group uses a hybrid system whereby the Group’s 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 bydealers, 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.

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Turkey Beer

The Group’s beer operations in Turkey are overseen by the Company. The Company owns the

breweries and malteries in Turkey. Its wholly-owned subsidiary, EFPA, is responsible for the conductof the Group’s sales, marketing and distribution activities in Turkey. Another of the Company’s

subsidiaries, Tarbes, produces a substantial amount of the hops needed for the Group’s Turkish beer

production.

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 30June 2011. Including exports, the total sales volume generated by the Group’s 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 Group’s domestic sales volume

was approximately 7.9 million hectolitres of beer in each on 2011 and 2010. Including exports, the

Group’s 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 Group’s 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, Group’s 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 theCompany), as a large proportion of the population do not drink alcoholic beverages.

The Group is Turkey’s 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 Company’s

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 sellsCarlsberg’s 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

Group’s 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:

Facility Type

Installed

Capacity

Average

Capacity

Utilised, 2011(1) Principal Brands Produced

(million

hectolitres)

(%)

Izmir .............. Brewery 3.3 79 Efes Pilsen, Efes Xtra, Marmara

Kırrmızı, Marmara Gold, Stary Melnik

Istanbul ......... Brewery 1.6 95 Efes Pilsen, Beck’s, Efes Xtra, Bomonti

Ankara .......... Brewery 3.0 95 Efes Pilsen, Miller, Efes Dark, Gusta,

Mariachi, Efes Light, Efes Xtra,

Marmara KırrmızıAdana............ Brewery 1.6 84 Efes Pilsen, Efes Xtra, Marmara

Kırrmızı, Efes Alkolsuz, Marmara Gold

Luleburgaz..... Brewery 0.9 81 Efes Pilsen, Mojo Mix, Satsu Mix, Efes

Xtra, Marmara Kırrmızı, Marmara

Gold

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

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Facility Type Installed Capacity

Average Capacity

Utilised, 2011(1)

(tonnes) (%)

Cumra ............................ Maltery 85,680 92

Afyon ............................. Maltery 32,000 100

Bilecik ............................ Hops Processing 1,200 63


Each of the Group’s brewing facilities in Turkey have adjacent warehouse space.

Products

The Group’s 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 Kırrmızı, M34 and Marmara Gold, as well as Miller Genuine

Draft and Beck’s, 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-FlavoredDraft, 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 .............. PeroniPremium......................... Efes Dark Brown, Miller Genuine Draft, Gusta, Mariachi, Mariachi Black,

Beck’s, Satsu Mix, Mojo Mix

Mainstream.................... Efes Pilsen, Efes Light, Efes Dark, Efes Xtra, Efes Pilsen Unfiltered, Bomonti,

Marmara Kırrmızı, Stary Melnik

Economy........................ Marmara Gold

Non-alcoholic beer......... Efes Alkolsuz

For the six months ended 30 June 2012, Efes Pilsen accounted for approximately 89% of the Group’ssales volume in Turkey, Efes Xtra for approximately 6%, and Miller Genuine Draft for approximately

2%. The Group’s products in Turkey are currently packaged in cans, kegs and 33 and 50 centilitre

glass bottles.


The Group’s 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 beer’s 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 creatingnew beer selling outlets and increasing sales. The Group also works with entrepreneurs to develop on-

premise 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.

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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 totalnumber of championships won in the Turkish basketball league. The Group’s 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

Group’s 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 Turkey’s largest cities, including Istanbul, Ankara and Izmir.

International Beer

The Group’s 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 5malteries 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 EBI’s 28% shareholding inCEB to Heineken and transferring Heineken’s 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 Heineken’s 28% shareholding in Efes Kazakhstan are expected to come from the

Group’s existing cash resources.

During the six months ended 30 June 2012, the Group’s International Beer operations soldapproximately 10.3 million hectolitres of beer, as compared to 7.5 million hectolitres during the six

months ended 30 June 2011. In 2011, the Group’s 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 Group’s 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, Group’s

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 toencompass 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 Factors—Risks Related to the Group’s Business—The integration process of

the Group’s 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 SABMiller’s international brands such as MillerGenuine Draft, Velkopopovicky Kozel and Pilsner Urquell. The acquisition of SABMiller Russia has

significantly enhanced the Group’s 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’’.

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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

world’s fourth largest beer market in 2011 by consumption.

Efes Russia, which comprises the Group’s 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) Brands Produced

(million

hectolitres)

(%)

Moscow............................. 3.99 63 Efes Pilsener, Beliy Medved, Gold Mine

Beer, Stary Melnik, Green Beer,

Zhigulevskoe, Warsteiner, Bavaria

Rostov ............................... 0.99 67 Gold Mine Beer, Beliy Medved, Green

Beer, Stary Melnik, Zhigulevskoe

Ufa .................................... 3.49 69 Efes Pilsener, Beliy Medved, Gold Mine

Beer, Stary Melnik, Bavaria, Green Beer,Sokol, Zhigulevskoe

Kazan ................................ 4.94 62 Beliy Medved, Gold Mine Beer, Stary

Melnik, Green Beer, Zhigulevskoe

Novosibirsk ....................... 2.65 66 Beliy Medved, Gold Mine Beer, Stary

Melnik, Bavaria, Green Beer, Sokol,

Zhigulevskoe

Kaluga............................... 5.93 64 Zolotaya Bochka, Tri Bogatyrya, Moya

Kaluga, V. Kozel, Miller Genuine Draft,Pilsner Urquell, Grolsch Premium Lager,

Zwei Meister, AmberWeiss, ESSA P.G.,

Redd’s, Simbirskoe Light, Amsterdam

Navigator

Ulyanovsk ......................... 3.25 42 Zolotaya Bochka, V. Kozel, Miller

Genuine Draft, Tri Bogatyrya, Zwei

Meister, Simbirskoe, Moya Kaluga

Vladivostok ....................... 0.73 100 Matushkin Kvass, Vladpivo, Studuonoe,Zhigulevskoe, Rytzar Primorja, Zolotaya

Bochka, V. Kozel


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Maltery Production Capacity

Average Capacity

Utilised, 2011(1)

(tonnes) (%)

Kazan (4 malteries) ............................................... 130,081(2) 80(2)

Moscow ................................................................. 45,895 100


(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 ‘‘pre-

form’’ (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:


High premium................ Warsteiner, Miller Genuine Draft, Redd’s, Peroni

Mid premium................. Essa, Grolsch, Amberweiss, Pilsner Urquell

Low premium ................ Efes Pilsener, Bavaria, V. Kozel, Amsterdam Navigator

Upper mainstream ......... Stary Melnik, Sokol, Zwei Meister, Zolotoya Bochka

Lower mainstream ......... Beliy Medved, Zhigulovskoe, Moya Kaluga, Green Beer, Gold Mine, PolnyNokaut, Tribo, Rytsar Primorya, Simbirskoe, Studenoe, Vladpivo

Discount......................... Matushkin Kvass, Nash Vkus

For the six months ended 30 June 2012, Beliy Medved accounted for approximately 29% of the

Group’s sales volume in Russia, Gold Mine for approximately 15%, and Stary Melnik for

approximately 11%. The Group’s products in Russia are currently packaged in cans, kegs, glass

bottles and PET containers.


The Group’s 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 hasbeen 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 Group’s 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 orother 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 througha 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.

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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 consumptionof 35 litres in 2011.

Efes Kazakhstan ranks first in terms of market share by volume in Kazakhstan, with 53% share forthe six months ended 30 June 2012, according to Nielsen. The Group’s 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

Average Capacity

Utilised, 2011(1) Brands Produced

(million hectolitres) (%)

Karaganda. ....... 1.1 95 Kruzhka Svezhego, Karagandinskoe,

Beliy Medved, Zhigulevskoe, EfesPilsener, Lyubitelskoe, Sokol, Tian-Shan

Almaty .............. 1.5 78 Kruzhka Svezhego, Karagandinskoe,

Beliy Medved, Efes Pilsener, Sokol, Tyan

Shan, Amsterdam Navigator, Bavaria,

Lyubitelskoe


Products

The following table sets forth the beer brands sold by Efes Kazakhstan in Kazakhstan by market

segment:


Premium......................... Efes Pilsener, Bavaria, Amsterdam Navigator, Heineken

Upper Mainstream......... Kruzhka Svezhego, Sokol, Gold MineLower Mainstream ........ Beliy Medved, Karagandinskoe, Zhigulevskoe, Tyan Shan

Economy........................ Lyubitelskoe

For the six months ended 30 June 2012, Beliy Medved accounted for approximately 38% of the

Group’s sales volume in Kazakhstan, Kruzhka Svezhego for approximately 27%, and Karagandinskoe

for approximately 19%. The Group’s 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 inbottles, cans and kegs.


The Group’s 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 typicallytake 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

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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 GlobalBeer 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 Moldova’s

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 andABInBev.

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:


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

Kozel

Premium......................... Stary Melnik, Sokol

Mainstream.................... Chisinau

Economy........................ Beliy Medved

For the six months ended 30 June 2012, Chisinau accounted for approximately 67% of the Group’s

sales volume in Moldova, Beliy Medved for approximately 23% and Stary Melnik for approximately

4%. The Group’s products in Moldova are currently packaged in glass bottles, kegs and PET

containers.


The Group’s 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 createincentives 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

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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 themarket 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:


Super Premium .............. Redd’s, Miller Genuine DraftPremium......................... Zolotaya Bochka, V. Kozel

Mainstream.................... Amsterdam Mariner

Economy........................ Sarmat, Zhigulivske

For the six months ended 30 June 2012, Zhigulevskoe accounted for approximately 47% of the

Group’s sales volume in Ukraine, Sarmat for approximately 34% and Zolotaya Bochka for

approximately 11%. MBU’s products are currently packaged in cans, kegs, 33 and 50 centilitre glass

bottles and PET containers.


The Group’s 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 suchas 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 authoriseddealers.

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 monthsended 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.

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Facilities

Efes Georgia’s 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:


Super premium .............. Miller Genuine Draft

Premium......................... Efes Pilsener

Mainstream.................... Natakhtari, Mtieli, Kaiser

For the six months ended 30 June 2012, Natakhtari accounted for approximately 70% of the Group’s

sales volume in Georgia, Mtieli for approximately 27% and Efes Pilsener for approximately 3%. TheGroup’s products are currently packaged in cans, kegs, 33 and 50 centilitre glass bottles and PET

containers.


The Group’s 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 withCoca-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, CCI’s 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 Group’s

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 30June 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 Company’s board meetings to discuss CCI’s results.

Relationship with The Coca-Cola Company

Bottler’s agreement

CCI and its subsidiaries and joint ventures (CCI’s ‘‘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 businessrelationship with TCCC is mainly governed by a bottler’s agreement (and a distribution agreement, if

any) with respect to each country in which CCI has soft drinks operations.

A bottler’s 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

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 ofauthorised 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, orauthorise 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 bottler’s agreement may, with 60 days’ written notice to the other parties,

terminate the bottler’s 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 bottler’s 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 TCCC’s discretion; CCI does not have an automatic right ofrenewal. See ‘‘Risk Factors—Risks Related to the Group’s Business—CCI and its Bottlers’ agreements

with The Coca-Cola Company are critical to the Group’s business’’.

Certain shareholding arrangements

CCI has three classes of shares: the Company and EFPA hold the A Group registered shares (‘‘AShares’’); 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 Sharescan appoint seven and the majority of holders of B Shares can appoint one, out of twelve directors

of CCI. CCI’s 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 CCI’s 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 TurkishCapital 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 non-

selling shareholder has ninety days to accept the offer to purchase CCI’s shares from the other

shareholder(s). There are no restrictions on the transfer of C Shares.

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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 Bottler’s 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 Bottler’s Agreement other

than as allowed by the Bottler’s 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 efforts with respect to CCI’s products are divided into two types of marketing:

* consumer marketing, which targets the individuals who ultimately consume CCI’s 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 CCI’s 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 tobuild a strong presence in the marketplace.

CCI’s sales and marketing strategy is to drive profitable volume growth by creating and supplyingdemand 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.

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The following table sets forth the principal brands in each of CCI’s markets:

Market Principal Brands

Turkey............................ Coca-Cola, Coca-Cola Zero, Coca-Cola Light, Fanta, Sprite, Cappy,

Schweppes, Sensun, Burn, Fuse tea, Damla, Damla Minera, GladiatorKazakhstan .................... Coca-Cola, Coca-Cola Light, Coca-Cola Zero, Fanta, Sprite, Schweppes,

Burn, Piko, Bonaqua, Fuse Tea

Kyrgyzstan..................... Coca-Cola, Coca-Cola Light, Coca-Cola Zero, Fanta, Sprite, Schweppes,

Burn, Piko, Bonaqua, Fuse Tea

Azerbaijan...................... Coca-Cola, Coca-Cola Light, Coca-Cola Zero, Fanta, Sprite, Cappy,

Bonaqua, Fuse Tea

Iraq ................................ Coca-Cola, Coca-Cola Light, Fanta, Sprite, Cappy

Jordan ............................ Coca-Cola, Coca-Cola Light, Coca-Cola Zero, Fanta, Sprite, Sprite Light,Burn, Cappy, Riwa

Tajikistan ....................... Coca-Cola, Fanta, Sprite

Turkmenistan................. Coca-Cola, Coca-Cola Zero, Fanta, Sprite, Bonaqua, Fuse Tea

Pakistan ......................... Coca-Cola, Coca-Cola Light, Fanta, Sprite, Sprite Zero, Sprite 3G, Minute

Maid, Kinley

Syria............................... 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 CCI’s 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 isin 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, CCI’s 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

beverage companies such as the Ulker Group in Turkey. In particular, CCI faces price competition

from local non-premium brand producers and distributors, which typically produce, market and sell

sparkling and still beverages at prices lower than CCI’s, 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 Group’s 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.

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Facilities

CCI owns and operates eight bottling facilities, in Turkey. The following table sets forth certain

information about CCI’s bottling facilities:

FacilityInstalled Capacity

(2011)Average Capacity

Utilised, 2011 Brands Produced

(mn unit cases) (%)

Ankara.............. 79.3 87 Coca-Cola, Coca-Cola Light, Coca-Cola

Zero, Fanta, Sprite, Sensun, Schweppes

Corlu................. 137.9 71 Coca-Cola, Coca-Cola Light, Coca-Cola

Zero, Fanta, Sprite, Sensun

SchweppesCappy, Fuse Tea, Powerade

Izmir ................. 98.6 72 Coca-Cola, Coca-Cola Light, Coca-ColaZero, Fanta, Sprite, Sensun, Schweppes

Bursa................. 154.7 56 Coca-Cola, Coca-Cola Light, Coca-Cola

Zero, Fanta, Sprite, Sensun, Cappy, Fuse

Tea, Burn, Gladiator, Damla, Damla

Minera

Mersin............... 78.4 73 Coca-Cola, Coca-Cola Light, Coca-Cola

Zero, Fanta, Sprite, Sensun, Schweppes,

Cappy, FuseTeaElazıg ................ 69.8 52 Coca-Cola, Coca-Cola Light, Coca-Cola

Zero, Fanta, Sensun

Mahmudiye....... 59.0 79 Damla

Koycegiz ........... 38.7 50 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 ...................... 1964 —

Sensun............................ 1971 —

Fanta.............................. 1985 Orange, Lemon, MandarinCoca-Cola light.............. 1986 —

Sprite.............................. 1987 —

Schweppes ...................... 1990(1) Bitter Lemon, Mandarin, Tonic, Soda Water

Burn ............................... 2003 Blue, Berry

Coca-Cola zero .............. 2008 —

Still Beverages

Cappy............................. 1994 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, FruitBeats, Lemonade

Powerade........................ 2002 Ice Blast, Citrus Charge, Sun Rush

Damla water .................. 2007 —

Damla Minera ............... 2008 Strawberry, Apple, Lemon, Sour cherry

Gladiator........................ 2011 —

Fuse Tea ........................ 2012 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 CCI’s bottler’s agreement

for Turkey, then Schweppes has the right to terminate its agreement.

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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 itsTurkish plants; however, CCI has received special authorisation under its bottler’s agreement to sell

products to a subsidiary of TCCC in Turkey for resale in the Turkish Republic of Northern Cyprus.

CCI’s 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.

CCI’s 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

CCI’s range of beverages offered in Turkey. This is partly attributable to changing consumerpreferences as well as CCI’s increased emphasis on offering a wider variety of alcohol-free beverages.

CCI’s 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 CCI’s total unit case sales

volume in Turkey.

In Turkey, CCI’s 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. CCI’s 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.

CCI’s 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 CCI’sfleet and the remainder were owned or leased by independent distributors.

International bottling operations

The Group’s international soft drinks operations, which are located in Central Asia and the Middle

East, are conducted through CCI’s 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 bottlingoperations in Pakistan (‘‘CC Pakistan’’) and Syria, in which it has a 49% and 50% interest,

respectively. Kazakhstan and Pakistan are CCI’s two largest international markets.

International bottling operations encompass 12 bottling plants with an annual production capacity ofapproximately 539.5 million unit cases. During the six months ended 30 June 2012, CCI’s

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, CCI’s international

bottling operations produced approximately 275.9 million unit cases, as compared to 236.5 million

unit case in 2010.

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The following table sets for certain information about CCI’s international markets and production

operations:

Country

Production

Capacity

Market Share

(2011)

Number of

Facilities

(30 June

2012)

Percentage of

Soft DrinksSegment

Sales Volume

(six months

ended 30 June

2012)

Products

Produced

(mn unit

cases) (%) (%) (a of SKUs)

Kyrgyzstan ................ 19 n.a.(1) 1 1.4 76

Azerbaijan ................. 46 57(2) 1 4.3 66

Jordan........................ 25 11(2) 1 1.5 66

Turkmenistan ............ 42 n.a.(1) 1 2.2 32

Iraq............................ 24 n.a.(1) 1(3) 3.7 34

Pakistan ..................... 206 28(2) 6 10.6 34

Kazakhstan................ 75 36(2) 1 8.2 89

(1) No independent source available.

(2) Source: Nielsen.

(3) Two additional bottling facilities were acquired in connection with CCI’s acquisition of an effective interest of 65% of Al Waha forSoft Drinks, Mineral Water and Juices LLC. See ‘‘Operating and Financial Review—Recent 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%.


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 Pakistan’s total sales were approximately 86.5 million unit cases, as compared to 69.1million 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%.

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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 throughapproximately 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 reinforcethe 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 Beck’s. All the trademarks owned by the Groupthat 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

Factors—Risks Related to the Group’s Business—The Group is reliant on the reputation of its brands

and the protection of its intellectual property rights’’.

In connection with the Group’s 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 TCCC’s

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 Group’s 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 Groupevaluates 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 Group’s brewing companies share technical know-how through the Efes technical

directorate. The Efes technical directorate oversees all of the design, implementation and developmentwork of the Company’s 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 Group’s 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 Group’s markets feature restrictions on advertising and other communications to

customers. For further information about the regulatory environment in the Group’s key markets of

Turkey and Russia, see ‘‘Regulation’’. Moreover, the Group’s operates in a number of emerging

markets, and the regulatory framework in these jurisdictions can be subject to frequent amendment,

often becoming more stringent.

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Employees

The following table sets forth the distribution of the Group’s full-time employees by segment as of

the dates indicated:

As of30 June As of 31 December

2012 2011 2010 2009

Segment

Turkey Beer ........................................................... 1,846 1,781 1,777 1,757

International Beer.................................................. 7,105 4,359 4,446 4,548

Soft Drinks ............................................................ 10,031 9,244 8,628 8,451

Headquarters and other......................................... 111 108 104 96

Total ...................................................................... 19,093 15,492 14,955 14,852

Management estimates that approximately 40% of the Group’s 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 Group’s 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. TheGroup 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 Russia’s operations with the Group’s 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 Factors—Risks

Related to the Group’s Business—The Group’s 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 Factors—Risks Related to

the Group’s Business—The 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 Factors—Risks Related to the Group’s Business—The Group’s operations

may be limited by anti-trust regulations’’. However, the Group has not been involved in anygovernmental, 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 Group’s financial position or profitability.

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REGULATION

As with other participants in the alcoholic beverage and soft drinks industry in Turkey, Russia and

other countries, the Group’s 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 Factors—Risk Related to the Group’s Business—Restrictions on beer advertising, sales or

consumption may adversely affect the Group’s 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 Factors—Risks Related to the Group’s Business—Excise 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 invarious jurisdictions in which it operates and may be subject to regulatory scrutiny in certain of these

jurisdictions. See ‘‘Risk Factors—Risks Related to the Group’s Business—The Group’s 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 Group’s 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 statemonopoly 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 onproduction 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

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issues among others. Finally, any transfer of the ownership of the facility is subject to TAPDK’s

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 CertificationCenter 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 towholesalers, 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 TAPDK’s website. As part of this monitoring system, TAPDKregularly 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 andbottle 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 (kıraathane/kahvehane) and

patisseries is forbidden. Furthermore, alcoholic beverages may be sold at events such as festivals and

fairs with TAPDK’s 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

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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 onshelf 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 mediais 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 facility’s activities on the environment ismade 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.

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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 productionfacilities 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 on1 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 anti-

trust 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 company’s 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 areprohibited: 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).

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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 theseamendments, 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 TechnicalRegulation’’ 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 tolicensing 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 ofincreased 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 FederalLaw ‘‘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.

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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 anddistributors 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 WelfareAgency. All information and documents that these authorities may request of manufacturers, sellers

and importers regarding a product’s quality and safety must be provided.

If a product violates mandatory standards and technical regulations, rendering it a potential risk toconsumers, 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 manufacturer’s 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.

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MANAGEMENT

Board of Directors

The Board of Directors is responsible for the management of the Company’s operations. It is vested

with the broadest powers to take any actions necessary or useful to fulfil the Company’s corporate

purpose, with the exception of actions reserved by Turkish law or the Company’s 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 Company’s articles of association. Allmembers 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 director’s 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 meetingagenda, 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 Age Position

Year of

Appointment

Expiration of

term of office

Tuncay Ozilhan.................................... 65 Chairman 2012 2013

Ernest Arthur Graham Mackay .......... 63 Vice Chairman 2012 2013

Salih Metin Ecevit ............................... 66 Member 2012 2013

Recep Yılmaz Arguden........................ 54 Member 2012 2013

Mehmet Cem Kozlu ............................ 66 Member 2012 2013Mehmet Hursit Zorlu .......................... 53 Member 2012 2013

Alejandro Jimenez Fonseca ................. 62 Member 2012 2013

Ahmet Dorduncu ................................. 59 Independent Member 2012 2013

Omer Bozer.......................................... 54 Independent Member 2012 2013

Mehmet Mete Basol............................. 55 Independent Member 2012 2013

Christos-Alexis Komninos ................... 69 Independent Member 2012 2013

Ege Cansen .......................................... 73 Advisor 2012 2013

Ahmet Boyacıoglu ............................... 66 Advisor 2012 2013

The business address of Mr. Tuncay Ozilhan, Mr. Salih Metin Ecevit, Mr. Mehmet Hursit Zorlu and

Mr. Ahmet Boyacıoglu 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.

Mr. Tuncay Ozilhan, Chairman. Born in 1947, Tuncay Ozilhan graduated from Saint Joseph HighSchool 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 Biracılık (brewery); he later became Coordinator of Anadolu Endustri Holding

Beer Group and General Coordinator of Anadolu Endustri Holding until his appointment as CEO of

the Anadolu Group in 1984. In 2007, Mr. Ozilhan was appointed Chairman of Anadolu Group and

still continues to serve in this position. He also serves as the Chairman of several Anadolu Group

companies. Mr. Ozilhan also serves as the Vice-President of TUSIAD (Turkish Industry and Business

Association) High Advisory Council, President of Anadolu Efes Sports Club, Estonian HonoraryConsulate 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

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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 master’s 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 Distributorsin 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 Yazıcılar Holding A.S.

Mr. Recep Yılmaz Arguden, Member. Dr. Yılmaz Arguden graduated from Bogazi ei 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 largestTurkish steel company, Erdemir from 1997 to 1999. He also serves as the Chairman of Rothschild

Turkey, one of world’s 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 bachelor’s degree from Denison University, an MBA

from Stanford University and a PhD from Bogazi ei University. Dr. Kozlu lectured International

Marketing and Export Administration at Bogazi ei 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. Kozlualso serves as member of the Boards of Directors of Istanbul-based TAV Havalimanları Holding

A.S., Coca-Cola I eecek A.S., Evyap Sabun, Yag ve Gliserin Sanayii ve Ticaret A.S., Anadolu

Endustri Holding, Kamil Yazıcı Yonetim ve Danısmanlık A.S., The Marmara Hotels & Residences

and the Foreign Economic Relations Board and as member of the Boards of Trustees of Anadolu-

Johns Hopkins Saglık Merkezi (Anadolu-Johns Hopkins Health Center) and Istanbul Modern

Sanatlar Vakfı (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,

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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 andKOTEDER.

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, thelargest 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 Cukurova College and holds a bachelor’s degree from Cukurova University and amasters degree from Mannheim University. Starting his professional career in Germany in 1981, he

joined Sabancı Group in 1987 and worked in several management positions. Between 1999-2004, he

served Chairman and Managing Director positions in Group’s various companies. In 2004, he was

appointed as Sabancı 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

Dorduncu is also the Chairman of TUSIAD Energy Working Group, Member of Endeavor Turkiye

and Founding Member of National Innovation Initiative.

Mr. Omer Bozer, Independent Member. Born in 1958, in Istanbul, Omer Bozer holds a bachelor’sdegree 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, heworked 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 Isbank’s 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 joinedHellenic 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 manufacturingcompany) 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

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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 ashareholder of Cansen & Cansen Management Consultancy.

Mr. Ahmet Boyacıoglu, Advisor. Ahmet Boyacıoglu, born in 1946, holds a bachelor’s degree inBusiness Administration from the Middle East Technical University. Mr. Boyacıoglu 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

Biracılık ve Malt San. A.S. General Manager, Guney Biracılık ve Malt San. A.S. General Manager,

Ege Biracılık ve Malt San. A.S. Sales Manager and Regional Sales Manager for the Bursa Region.

Mr. Boyacıoglu 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 onthe 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 suitableinternal controls are in place and appropriate to the Company’s 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, Yılmaz 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 tothe 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

The Committee for Early Detection of Risks is composed of five directors, Omer Bozer, Cem Kozlu,

Metin Ecevit, Hursit Zorlu and Jamie Wilson. Mr. Bozer serves as Chairman of the Committee forEarly 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.

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Key Executives

In the opinion of the Company the following persons are the most important for the management of

the Group’s operations (the ‘‘Key Executives’’):

Name Age Position

Alejandro Jimenez Fonseca ................. 62 Efes Beer Group President

Damian Paul Gammell ........................ 42 Efes Soft Drinks Group President

Can Caka(1).......................................... 40 Anadolu Efes Finance and Investor Relations Director

Altug Aksoy......................................... 41 Efes Turkey Managing Director

Tugrul Agırbas..................................... 44 Efes Russia Managing Director

Yuksel Gokbulut ................................. 50 Eastern Europe and CIS Group Managing Director

Cem Guner .......................................... 47

Efes Beer Group Market Development Director and

Acting Commercial DirectorKenan Ozcelik...................................... 53 Efes Beer Group Supply Chain Director

Saltuk Ertop......................................... 47

Efes Beer Group Corporate and Regulatory Affairs

Director

Ahmet Ozturk ...................................... 40 Efes Beer Group Internal Audit Director

(1) Can Caka 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 Caka’s responsibilities in Anadolu Efes will be assumed by Mr Onur Cevikel.

The business address of each of the Key Executives other than Mr. Damian Paul Gammell and Mr.

Tugrul Agırbas is Esentepe Mah. Anadolu Cad. No: 1, Kartal 34870, Istanbul, Turkey. The business

address of Mr. Gammell is Esenkent Mah. Deniz Feneri Sk. No:4 Umraniye 34776, Istanbul, Turkey.

The business address of Mr. Agırbas 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 hisappointment 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-Cola’s 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-Cola’s largest marketsworldwide, for 6 years until taking up the post as CCI’s CEO.

Can Caka, Anadolu Efes Finance and Investor Relations Director. Mr. Can Caka 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. Caka 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 (andsubsequently Director) of Efes Beer Group. Mr. Caka 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 Caka is expected to be promoted to Chief Financial Officer of AEH effective as

of 1 January 2013.

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Altug Aksoy, Efes Turkey Managing Director. Mr Altug Aksoy received his bachelor’s 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 andMarketing 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 Agırbas, Efes Russia Managing Director. Mr Tugrul Agırbas received his bachelor’s degree in

Business Administration from Istanbul University and joined Efes Beverage Group in 1990. From

1990 to 2001. Mr. Agırbas worked as Project Development Specialist, Marketing Specialist, IstanbulRegion Sales Supervisor, New Product Development Supervisor, Group Product Manager, Sales

Manager of Marmara Region and Marketing Manager of Miller. Mr. Agırbas 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. Agırbas was appointed

Managing Director of Efes Russia in November 2011.

Yuksel Gokbulut, Eastern Europe and CIS Group Managing Director. Mr Yuksel Gokbulut received his

bachelor’s 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 Biracılık 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. CemGuner holds a bachelor’s 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.

Kenan Ozcelik, Efes Beer Group Supply Chain Director. Mr. Kenan Ozcelik received his bachelor’sdegree 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,

Mr. Ozcelik began his career as a Systems Programmer at Siemens in 1986, and worked freelance

from 1987 to 1994 before joining the Group. Mr. Ozcelik began his career with the Group as a

Filling Engineer at Erciyas Biracılık 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

as the Technical Director of MEB in 2006, Mr. Ozcelik also served as Technical Director of the

Turkey Beer Group from 2006 to 2009. Mr. Ozcelik was appointed as Efes Moldova ManagingDirector 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 Caylıgil & 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 from1993 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.

Ahmet Ozturk, Efes Beer Group Internal Audit Director. Mr. Ahmet Ozturk graduated from the

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

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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 operationsfrom 1999 to 2007. Mr. Ozturk assumed responsibility for internal audit activities of international

operations in 2007. Mr. Ozturk has been the Internal Audit Director at Efes Beer Group since

January 2011.

Onur Cevikel, Anadolu Efes Finance and Investor Relations Director (effective 1 January 2013). Mr.

Onur Cevikel has been appointed as the Anadolu Efes Finance and Investor Relations Director

effective as of 1 January 2013 upon the promotion of Mr Can Caka. Mr. Cevikel holds a bachelor’s

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 thestrategic 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

The Ozilhan and Yazıcı families directly and indirectly together hold 43% of the Company’s

outstanding share capital, including through their ownership of Anadolu Endustri Holding, whichholds 6% of the Company’s share capital, and the current Chairman of the Board is a member of the

Ozilhan family. SAB Miller Anadolu Efes Ltd. holds 24% of the Company’s outstanding share

capital, and Mr. Mackay, Vice-Chairman of the Board, is the CEO of SABMiller. Save as set out

above and in ‘‘Risk Factors—Risk Related to the Group’s Business—The Group is effectively controlled

by the Ozilhan and Yazıcı 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 andduties or obligations to the Company.

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OWNERSHIP

Set forth in the table below is the Company’s shareholding structure as at the date of this Offering

Circular:

Holder

Percentage

Holding

Yazıcılar Holding A.S.............................................................................................................. 23.6Ozilhan Sınai Yatırım A.S. ...................................................................................................... 13.5

Anadolu Endustri Holding A.S.(1) ........................................................................................... 6.0

SAB Miller Anadolu Efes Ltd. ................................................................................................ 24.0

Public and miscellaneous ......................................................................................................... 32.9

100.0

(1) AEH is owned by the Ozilhan and Yazıcı families, with Ozilhan Sınai Yatırım A.S. holding 32% of the share capital of AEH andYazıcılar Holding A.S. holding 68%. See ‘‘Risk Factors—Risk Related to the Group’s Business—The Group is effectively controlledby the Ozilhan and Yazıcı families, whose interests (along with the interests of SABMiller Anadolu Efes Ltd., another significantshareholder) 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 mattersincluding 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 company’s board of directors if a majority

of the independent directors also voted in favour of such transaction. However, if a company’s 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 assemblyconvened for the approval of the relevant material transaction.

Moreover, if the material transaction is also considered to be a related party transactions, suchrelated 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 non-

executive 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. Independentdirectors 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.

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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 andAEH have also entered into the Shareholders’ Agreement with respect to SABMiller AEL as part of

the strategic alliance. See ‘‘The Group and Its Business—Strategic 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 additionSABMiller 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 Company’s 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 Group’s 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; andissuing or agreeing to issue any securities convertible into or exchangeable for the Company’s 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 relevantsubsidiary; 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 AEHhas the right to nominate one of the five directors of SABMiller AEL. Under the Shareholders’

Agreement, if a matter arises with respect to SABMiller AEL’s 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 AEL’s 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 AEL’s directors.

Exercise of SABMiller AEL’s rights over the Company’s shares

SABMiller AEL’s rights with respect to the Company’s 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

of the Ozilhan and Yazıcılar families (as described in the Shareholders’ Agreement).

If any of the AE Company Group decides to transfer any of their respective shares in the Companyor SABMiller HE decides to transfer its shares in SABMiller AEL (each, otherwise than permitted

pursuant to the Shareholder’s 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

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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.

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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 Biracılık 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 thebenefit 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 therelevant 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.

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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 suchholder 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. Theregulations 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 ofthe 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 (eacha 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:

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(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 ofa 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 anysubsequent 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 principalaccounting 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 CMB’s ‘‘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;

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(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 suchRestricted 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 underCondition 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 leasedby 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 Propertywhich 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

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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 theIssuer 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 inrespect 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 indebtednesswhich 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. INTEREST

5.1 Interest Rate and Interest Payment Dates

The Notes bear interest from and including 30 October 2012 at the rate of 3.375 per cent. perannum, 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:

(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 suchNotes 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.

5.3 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 30days.

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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 holdershown 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 Noteholder’s 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 Noteholder’sregistered 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 tothe 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 anAgent.

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 whichcommercial 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, theRegistrar 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 theseConditions. 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;

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(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. REDEMPTION AND PURCHASE

7.1 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 RelevantJurisdiction (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 onthe 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 RedemptionAmount) 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 ofControl 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

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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 ofredemption, 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 Condition7.3 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:

Anadolu Group means Yazıcılar Holding A.S., Ozilhan Sınai Yatırım A. S. and/or Anadolu

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 (whetherdirectly 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 Dateand 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 orbetter 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;

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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 relationto Moody’s, 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, inrelation to Moody’s, 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 & Poor’s Credit Market Services Europe Limited, a division of

the McGraw Hill Companies, Inc. (S&P), Fitch Ratings Ltd. (Fitch) or Moody’s Investors

Service Ltd. (Moody’s), 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 RelevantPotential 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 shallbe 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 therespective 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

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(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 requiredto 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 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 politicalsubdivision 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.

8.3 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 Notesor 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)

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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 otherperson, 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 Coca-

Cola 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 orpursuant 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 anencumbrancer 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 possessionor 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 anarrangement 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):

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(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 consolidatedaccounts 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 Subsidiariesrelate, 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 ceaseto 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 thetransferee 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 immediatelyfollowing 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 havebeen 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.

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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 PrincipalSubsidiary, 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. Anynotice 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 aclearing 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 ExtraordinaryResolution 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, ofthe 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 purposeof 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.

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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 theNotes, 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 Lawof 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 whichexists or is available apart from that Act.

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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 andbinding 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 represented by a Global Certificate will be

made upon presentation or, if no further payment falls to be made in respect of the Notes, againstpresentation and surrender of such Global Certificate to or to the order of the Fiscal Agent or such

other Agent as shall have been notified to the holders of 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 system’s 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 system’s operational procedures and otherwise in such manner as the Fiscal Agent and the

applicable clearing system may approve for this purpose.

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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 inCondition 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 Noteholder’s 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 orbecoming 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’’.

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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 LeadManagers 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 acrosswhich 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 inNotes 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, Luxembourgand 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

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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 Certificates—Registration of Title’’, holders of Notes

represented by those individual Certificates. The Fiscal Agent will be responsible for ensuring thatpayments 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 participantsacting 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 DTC’s 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 theirrespective 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. Book-

entry 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 continueto 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.

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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 thisOffering 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 investor’s 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 ofTurkey 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 BASEDUPON 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 andtraders 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 itspartners 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.

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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 USInternal 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 Holder’s 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 federalincome 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 USHolder’s tax basis in the Note. A US Holder’s 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 identificationnumber, 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.

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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 appliesto 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 permanentestablishment 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 forthe 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 inTurkey 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 principal is invested in Turkey.

Capital gain derived from trading income is considered sourced in Turkey when the activity or

transaction generating such income is performed or accounted for in Turkey. The term ‘‘accounted

for’’ means that a payment is made in Turkey, or if the payment is made abroad, it is recorded in

the books in Turkey.

Any withholding tax levied on income derived by a non-resident person is the final tax for the non-

resident 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.

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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 taxis 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 toits 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 non-

resident 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 taxrate 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. Inthe 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 ofanother 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.

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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, andthe Company has agreed to sell to each of the Joint Lead Managers, the principal amount of the

Notes set forth opposite each Joint Lead Manager’s name below.

Joint Lead Managers

Principal

Amount of

Notes

HSBC Bank plc............................................................................................................... 125,000,000

J.P. Morgan Securities plc. ............................................................................................. 125,000,000

Merrill Lynch, Pierce, Fenner & Smith Incorporated. ................................................... 125,000,000

The Royal Bank of Scotland plc .................................................................................... 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 totrading 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 (orbeneficial 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

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 orretarding 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 expresslyagree 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 theymay 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 shortpositions 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.

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 undertakenthat 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) exceptpursuant 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 HASAUTHORISED 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 SALEAND 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 ANYOF 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

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 theFSMA 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.

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 marketlegislation.

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) exceptpursuant 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 securitieslaw, 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 Company’s or any such affiliate’s 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 aspermitted 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

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 RegulationS 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 OTHERWISEDISPOSED 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 DEFINEDIN 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 THESECURITIES 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 EFFECTIVEUNDER 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 OUTSIDETHE 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

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 THEDELIVERY 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 TOPURCHASE 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 OTHERSECURITIES 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 the United States within the

meaning of Regulation S, such investor acknowledges that until the expiration of the ‘‘40-day

distribution compliance period’’ within the meaning of Rule 903 of Regulation S, any offer or

sale of the Notes will not be made by such investor to a US person or for the account or

benefit of a US person within the meaning of Rule 902 under the Securities Act.

(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 investor’s 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


(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 purposeis required. Consequently, any transfer of the Notes will be subject to the selling restrictions set

forth under this ‘‘Transfer Restrictions’’ section and ‘‘Selling Restrictions’’.

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 uponsuch 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 Turkey’s

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 theability 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 defendant’s fundamental proceduralrights were not observed,

(b) the judgment in question was rendered with respect to a matter within the exclusive jurisdictionof the courts of Turkey,

(c) the judgment is incompatible with a judgment of a court in Turkey between the same partiesand 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.

157


LEGAL MATTERS

Certain matters as to United States law will be passed upon for the Company by DLA Piper UK

LLP and by YukselKarkınKucuk Avukatlık Ortaklıgı 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 Turkishlaw will be passed upon for the Joint Lead Managers by Paksoy Ortak Avukat Burosu (who will also

pass upon matters of Turkish tax law).

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 theNotes.

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 DTC’s 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 theCompany since 30 June 2012, being the end of the last financial period for which the Group’s

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 Biracılık 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 auditor’s reports appearing herein.

The unaudited condensed consolidated interim financial statements of Anadolu Efes Biracılık 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 Biracılık ve Malt Sanayii Anonim

Sirketi as of and for the years ended 31 December 2009 have been audited by Guney Bagımsız

Denetim ve Serbest Muhasebeci Mali Musavirlik A.S (‘‘Guney’’) an affiliate firm of E&Y. The

Company’s 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 Biracılık 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 Company’s 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 semi-

annual interim financial statements. Copies (with English translations where the documents at issue

are not in English) of the Company’s 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 Koparır Cad. No:434180 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 ascribedto them under applicable law.

160


INDEX OF TERMS

As used in this Offering Circular:

Definition Meaning

‘‘2010 Audited Consolidated Financial

Statements’’ .............................................. means the Group’s audited annual consolidated financial

statements as at and for the year ended 31 December 2010,

which includes comparative financial information as at andfor the year ended 31 December 2009

‘‘2011 Audited Consolidated Financial

Statements’’ .............................................. the Group’s audited annual consolidated financial statements

as at and for the year ended 31 December 2011, which

includes comparative financial information as at and for theyear ended 31 December 2010

‘‘2012 Interim Financial Statements’’........ means the Group’s 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 Exchange’s Main Securities

Market

‘‘AEH’’ ..................................................... means Anadolu Endustri Holding A.S

‘‘Affiliate’’ ................................................. means ‘‘Affiliate’’ as defined in Rule 144 under the Securities

Act

‘‘Agency Agreement’’ ................................ means the agreement dated 30 October 2012 betweenCitibank, N.A. and the Company

‘‘Anadolu Etap’’ ........................................ means Anadolu Etap Tarim ve Gida Urunleri San. ve Tic. A.S

‘‘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 FinancialStatements

‘‘BBH’’...................................................... means Baltic Beverages Holding, a subsidiary of Carlsberg

‘‘Board’’ and ‘‘Board of Directors’’........... means the executive and non-executive members of the

Company’s 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 companyconducting 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 Coca-

Cola production, bottling, distribution and selling operations

in Iraq

161


Definition Meaning

‘‘CCI’’ ....................................................... means Coca-Cola Icecek A.S.

‘‘CCI and its Bottlers’’.............................. 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 Biracılık 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 theGroup’s 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 ofbeer 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 theUnrestricted 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 Exchange’s Main Securities Market

‘‘MBU’’..................................................... means PJSC Miller Brands Ukraine

‘‘MEB’’ ..................................................... means ZAO Moscow-Efes Brewery

‘‘mhl’’ ........................................................ means million hectolitres

‘‘Moody’s’’ ................................................ means Moody’s 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 USDepartment 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 Moody’s

‘‘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

163


Definition Meaning

‘‘Rule 144A Notes’’ ................................... means the Notes offered and sold in reliance on Rule 144A

‘‘S&P’’ ...................................................... means Standard & Poor’s Credit Market Services Europe

Limited, a division of the McGraw Hill Companies, Inc.

‘‘SABMiller’’............................................. means SABMiller plc

‘‘SABMiller Russia’’ ................................. means SABMiller RUS LLC and its successor SABMiller

RUS CJSC

‘‘Securities Act’’ ....................................... means the United States Securities Act of 1933, as amended

‘‘SSG’’ ...................................................... means SSG Investment Limited, an investment company of

CCI

‘‘Stabilising Manager’’ .............................. means Merrill Lynch, Pierce, Fenner & Smith Incorporated

‘‘Subscription Agreement’’ ........................ means the agreement dated 23 October 2012 between the Joint

Lead Managers and the Company

‘‘Tarbes’’ ................................................... means Tarbes Tarim Urunleri ve Besicilik San. Tic. A.S., a

subsidiary of the Company that produces hops

‘‘TCCC’’ ................................................... means The Coca-Cola Company

‘‘Turkey’’ .................................................. 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 inthe Official Gazette dated 14 February 2011 under No.27846

‘‘Turkish Law on the Protection of

Competition’’............................................. means the law numbered 4054 published at the Official

Gazette dated 13 December 1994 under No. 22140

‘‘Unrestricted Global Certificate’’ or

‘‘Unrestricted Certificate’’ ......................... means the certificate in registered form issued in respect of the

Regulation S Notes

‘‘US’’ or ‘‘United States’’.......................... means the United States of America

‘‘US$’’, ‘‘USD’’ and ‘‘US dollars’’ ............ 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

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 ended31 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

F-1


Convenience Translation of Financial Statements Originally Issued in Turkish

Anadolu Efes Biracılık ve Malt Sanayii Anonim Şirketi Interim Condensed Consolidated Financial Statements as of June 30, 2012 Together with Independent Auditor’s Review Report

F-2

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F-4

Anadolu Efes Biracılık ve Malt Sanayii Anonim Şirketi 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 Group’s Organization and Nature of Activities ................................................................................ 6-8 Note 2 Basis of Presentation of Consolidated Financial Statements .......................................................... 9-12 Note 3 Business Combinations ................................................................................................................. 13-15 Note 4 Segment Information ..................................................................................................................... 16-17 Note 5 Cash and Cash Equivalents ................................................................................................................ 18 Note 6 Borrowings .................................................................................................................................... 19-20 Note 7 Other Receivables and Payables ................................................................................................... 20-21 Note 8 Property, Plant and Equipment .......................................................................................................... 21 Note 9 Intangible Assets ................................................................................................................................ 21 Note 10 Goodwill ............................................................................................................................................ 22 Note 11 Equity ............................................................................................................................................ 22-23 Note 12 Commitments and Contingencies ................................................................................................. 24-25 Note 13 Other Assets and Liabilities .......................................................................................................... 25-26 Note 14 Other Operating Income / Expenses................................................................................................... 26 Note 15 Financial Income ................................................................................................................................ 27 Note 16 Financial Expenses ............................................................................................................................. 27 Note 17 Income Taxes, Deferred Tax Assets and Liabilities ........................................................................... 27 Note 18 Earnings per Share ............................................................................................................................. 28 Note 19 Dividends Paid ................................................................................................................................... 28 Note 20 Related Party Balances and Transactions ...................................................................................... 28-30 Note 21 Nature and Level of Risks Arising From Financial Instruments ................................................... 30-33 Note 22 Financial Instruments .................................................................................................................... 33-34 Note 23 Subsequent Events ............................................................................................................................. 34

F-5

Convenience Translation of Financial Statements Originally Issued in Turkish Anadolu Efes Biracılık ve Malt Sanayii Anonim Şirketi

CONSOLIDATED INTERIM BALANCE SHEET As at June 30, 2012 (Currency– Unless otherwise indicated thousands of Turkish Lira (TRL))

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

(1)

Reviewed Audited Notes June 30, 2012 December 31, 2011 ASSETS Current Assets 3.264.477 2.343.252Cash and Cash Equivalents 5 983.194 917.629Financial Investments 2.354 22.602Trade Receivables 1.238.007 578.428Due from Related Parties 20 39 100Other Receivables 7 25.051 16.877Inventories 689.988 561.479Other Current Assets 13 325.844 246.137

Non-Current Assets 7.165.887 4.077.457Other Receivables 7 1.944 1.610Financial Investments 21.599 25.180Investments In Associates 13.507 18.447Biological Assets 8.110 6.457Property, Plant and Equipment 8 3.415.915 2.510.259Intangible Assets 9 592.797 447.045Goodwill 10 2.891.543 912.645Deferred Tax Asset 17 74.030 62.425Other Non-Current Assets 13 146.442 93.389

TOTAL ASSETS 10.430.364 6.420.709 LIABILITIES Current Liabilities 2.484.728 1.628.590Borrowings 6 837.653 795.644Trade Payables 563.921 307.569Due to Related Parties 20 67.436 9.174Other Payables 7 663.290 342.768Provision for Corporate Tax 63.478 9.415Provisions 64.862 28.040Other Current Liabilities 13 224.088 135.980

Non-Current Liabilities 1.724.099 1.585.239Borrowings 6 1.377.588 1.303.833Other Payables 7 191.901 165.742Provision for Employee Benefits 58.668 54.033Deferred Tax Liability 17 68.166 52.290Other Non-Current Liabilities 13 27.776 9.341

Equity 6.221.537 3.206.880Equity Attributable to Equity Holders of the Parent 6.149.676 3.143.921Issued Capital 11 592.105 450.000Inflation Adjustment to Issued Capital 11 63.583 63.583Share Premium 11 3.137.684 -Fair Value Reserve 11 4.655 7.822Currency Translation Differences 11 (95.861) 289.853Restricted Reserves Allocated from Net Income 11 209.643 176.995Other Reserves 11 (5.736) (5.736)Accumulated Profits 1.907.953 1.820.229Net Income 335.650 341.175

Minority Interests 71.861 62.959

TOTAL LIABILITIES 10.430.364 6.420.709

F-6

Convenience Translation of Financial Statements Originally Issued in Turkish Anadolu Efes Biracılık ve Malt Sanayii Anonim Şirketi CONSOLIDATED INTERIM INCOME STATEMENT For the six-month period ended June 30, 2012 (Currency– Unless otherwise indicated thousands of Turkish Lira (TRL))


(2)

Restated Reviewed Reviewed

NotesJanuary 1 -

June 30, 2012

April 1 - June 30,

2012

January1 - June 30,

2011

April 1 - June 30,

2011 Continuing Operations

Sales 4 3.205.827 2.086.261 2.281.899 1.423.974Cost of Sales (-) (1.598.945) (1.007.624) (1.158.346) (713.531)

Gross Profit From Operations 1.606.882 1.078.637 1.123.553 710.443

Marketing, Selling and Distribution Expenses (-) (857.850) (541.904) (579.096) (332.947)General and Administrative Expenses (-) (321.606) (173.181) (200.950) (101.455)Other Operating Income 14 24.372 14.951 17.125 3.948Other Operating Expenses (-) 14 (20.126) (13.523) (21.018) (14.426)

Profit From Operations 431.672 364.980 339.614 265.563

Loss from Associates (4.462) (1.954) (3.253) (1.141)Financial Income 15 203.375 55.836 119.603 54.153Financial Expenses (-) 16 (193.525) (121.062) (127.521) (76.191)

Profit Before Tax From Continuing Operations 437.060 297.800 328.443 242.384

Continuing Operations Tax Income / (Expense) Current Period Tax Expense (-) (123.618) (85.894) (84.571) (51.681)Deferred Tax Income 34.689 30.599 5.967 639

Profit For The Period 348.131 242.505 249.839 191.342

Attributable to Minority interests 12.481 9.225 8.349 6.554Equity holders of the parent 335.650 233.280 241.490 184.788

Earnings Per Share (Full TRL) 18 0,6209 0,3940 0,5366 0,4106

F-7

Convenience Translation of Financial Statements Originally Issued in Turkish Anadolu Efes Biracılık ve Malt Sanayii Anonim Şirketi CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME For the six-month period ended June 30, 2012 (Currency– Unless otherwise indicated thousands of Turkish Lira (TRL))


(3)

Restated Reviewed Reviewed

January 1 -

June 30, 2012

April 1 – June 30,

2012

January 1 - June 30,

2011

April 1 –June 30,

2011 Profit for the Period 348.131 242.505 249.839 191.342

Other Comprehensive Income: Currency Translation Differences (388.825) (349.922) 204.413 109.874Value Increase / (Decrease) in Available for Sale

Securities (3.334) (7.807) (3.508) 2.251

Tax Income / (Expense) on Other Comprehensive Income / (Loss) 167 391 175 (113)

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 9.370 9.695 11.643 7.254Equity Holders of the Parent (53.231) (124.528) 439.276 296.100

F-8

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F-9

Convenience Translation of Financial Statements Originally Issued in Turkish Anadolu Efes Biracılık ve Malt Sanayii Anonim Şirketi CONSOLIDATED INTERIM STATEMENT OF CASH FLOW For the six-month period ended June 30, 2012 (Currency– Unless otherwise indicated thousands of Turkish Lira (TRL))


(5)

Reviewed Restated

NotesJune 30,

2012 June 30,

2011

Cash flows from operating activities Continuing operations profit before tax 437.060 328.443Adjustments for: Depreciation and amortization expenses 4 217.288 158.864(Gain)/loss on sale of property, plant and equipment and intangible assets, net 14 (2.307) (2.428)Provision for retirement pay liability 4 7.363 5.176Provision for vacation pay liability 4 6.690 5.106Provision /(reversal of provision) for inventory obsolescence, net 4 2.528 (3.843)Provision/(reversal of provision) for doubtful receivables, net 4 (620) (526)Provision for long term incentive plan 5.677 4.258Impairment/(reversal of impairment) on property, plant and equipment, net 4 511 1.639Foreign exchange (gain) /loss raised from loans, net (18.839) 17.847Interest expense 16 35.549 34.864Interest income 15 (35.510) (32.843)(Gain)/loss from derivative financial instruments, net 15,16 (481) 25Syndication loan expense 16 708 83Fair value increase related to change in scope of consolidation 3,4,14 - (2.957)Loss from associates 4 4.462 3.253Other (income) / expense, net 254 8

Operating profit before changes in operating assets and liabilities 660.333 516.969

Change in trade receivables (545.857) (404.621)Change in due from related parties 61 204Change in inventories (41.736) (179.491)Change in other assets, other liabilities and provisions 306.955 157.629Change in trade payables 128.287 207.984Change in due to related parties 18.249 2.192Vacation pay, retirement pay liability and long term incentive plan paid (9.210) (9.209)Taxes paid (39.613) (51.523)

Cash flows from operating activities 477.469 240.134

Investing activities Purchase of property, plant and equipment and intangible assets 4,8,9 (271.390) (320.901)Proceeds from sale of property, plant and equipment and intangible assets 7.416 14.749Biological asset investments (1.653) (1.740)Acquisition of subsidiary, net of cash acquired 3 (75.887) -

Net cash used in investing activities (341.514) (307.892)

Financing activities Dividends paid 19 (221.024) (246.532)Capital increase in subsidiaries by minority shareholders - 2Proceeds from short-term and long-term debt 750.424 1.584.199Repayment of short-term and long-term debt (581.141) (1.612.301)Interest paid (34.015) (33.448)Interest received 35.688 33.685Change in time deposits with maturity more than three months 19.899 37.259Cash flows from financing activities (30.169) (237.136)

Currency translation differences on cash transactions (39.949) 23.378

Net increase / (decrease) in cash and cash equivalents 105.786 (304.894)

Cash and cash equivalents at the beginning of the period 5 913.198 936.238Cash and cash equivalents at the end of the period 5 979.035 654.722

F-10


Anadolu Efes Biracılık ve Malt Sanayii Anonim Şirketi

CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS As at June 30, 2012 (Currency– Unless otherwise indicated thousands of Turkish Lira (TRL))

(6)

NOTE 1. GROUP’S ORGANIZATION AND NATURE OF ACTIVITIES General Anadolu Efes Biracılık ve Malt Sanayii A.Ş. (a Turkish corporation, Anadolu Efes, the Company) was established in İstanbul in 1966. Certain shares of Anadolu Efes are listed on the İstanbul Stock Exchange (ISE). The registered office of the Company is located at the address “Bahçelievler Mahallesi Şehit İbrahim Koparır Caddesi No: 4 Bahçelievler – İstanbul”. 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 Coca- Cola 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 İçecek A.Ş. (CCİ), 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 Tarım ve Gıda Ürünleri San. ve Tic. A.Ş., 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:

June 30, 2012 December 31, 2011 Amount % Amount %

Yazıcılar Holding A.Ş. 139.787 23,61 139.787 31,06Özilhan Sınai Yatırım A.Ş. 79.813 13,48 79.813 17,74Anadolu Endüstri Holding A.Ş. (AEH) 35.292 5,96 35.292 7,84SABMiller Anadolu Efes Limited (SABMiller AEL) 142.105 24,00 - - Publicly traded and other 195.108 32,95 195.108 43,36

592.105 100,00 450.000 100,00 Capital structure of AEH, the shareholder of the Company, comprises of Yazıcılar Holding A.Ş. (68%) and Özilhan Sınai Yatırım A.Ş. (32%); consequently, as of June 30, 2012 Yazıcılar Holding A.Ş. and Özilhan Sınai Yatırım A.Ş. 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 Company’s 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 İstanbul Stock Exchange-Wholesale Market on March 14, 2012.

F-11



CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued) As at June 30, 2012 (Currency– Unless otherwise indicated thousands of Turkish Lira (TRL))

(7)

NOTE 1. GROUP’S 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

Effective Shareholding and Voting Rights %

June30, 2012

December 31, 2011

Efes Breweries International N.V. (EBI) The Netherlands Facilitating foreign investments in breweries International Beer 100,00 100,00

ZAO Moscow-Efes Brewery (Efes Moscow) Russia Production and marketing of beer International Beer 90,96 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 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 carbonated soft drink International Beer 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 Dağıtım Ticaret A.Ş. (Ef-Pa) (3) Turkey Marketing and distribution company of the Group in Turkey Turkey Beer 100,00 100,00

Tarbes Tarım Ürünleri ve Besicilik Sanayi Ticaret A.Ş. (Tarbes) (3) Turkey Providing hops (major ingredient of beer) to

the breweries of the Group Turkey Beer 99,75 99,75

Anadolu Efes Dış Ticaret A.Ş. (Aefes Dış Ticaret) Turkey Foreign trade Other 99,82 99,82

Cypex Co. Ltd. (Cypex) Turkish Republic of Northern Cyprus Marketing and distribution of beer Other 99,99 99,99

Anadolu Efes Technical and Management Consultancy N.V. (AETMC)

The Netherlands Antilles Providing technical assistance Other 99,75 99,75

Efes Holland Technical Management Consultancy B.V. (EHTMC) The Netherlands Providing technical assistance Other 99,75 99,75

Efes Deutschland GmbH (Efes Germany) Germany Marketing and distribution of beer Other 100,00 100,00

(1) Subsidiaries of Efes Moscow. (2) 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, Group’s shareholding rate has been increased to 99,92% as a result of purchase of MBU minority shares by EBI.

(3) Company’s beer operations in Turkey form the Turkey Beer Operations together with Ef-Pa and Tarbes.

F-12




(8)

NOTE 1. GROUP’S 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:

Joint Venture Country Principal Activity Segment

Effective Shareholding and Voting Rights % June 30,

2012December 31,

2011

Coca-Cola İçecek A.Ş. (CCİ) (1) Turkey Production, bottling of Coca-Cola products Soft Drinks 50,26 50,26

Coca-Cola Satış Dağıtım A.Ş. (CCSD) Turkey Distribution and selling of Coca-Cola, Doğadan and Mahmudiye products Soft Drinks 50,25 50,25

Mahmudiye Kaynak Suyu Ltd. Şti. (Mahmudiye) Turkey Filling of natural spring water Soft Drinks 50,25 50,25

Efes Sınai Dış Ticaret A.Ş. (EST) 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 CCİ Soft Drinks 47,33 47,33

Azerbaijan Coca-Cola Bottlers LLC (Azerbaijan CC) Azerbaijan Production, bottling, distribution and selling of Coca-Cola products Soft Drinks 50,19 50,19

Coca-Cola Bishkek Bottlers Closed Joint Stock Company (Bishkek CC) Kyrgyzstan Production, bottling, distribution and selling of

Coca-Cola products Soft Drinks 50,26 50,26

CCI International Holland B.V. (CCI Holland) The Netherlands Investment company of CCİ Soft Drinks 50,26 50,26

The Coca-Cola Bottling Company of Iraq FZCO (CCBI) (3)

United Arabic Emirates Investment company of CCİ 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 CCİ Soft Drinks - 50,26

The Coca-Cola Bottling Company of Jordan Ltd. (Jordan CC) Jordan Production, bottling, distribution and selling of


Syrian Soft Drink Sales and Distribution L.L.C. (Syrian SD) Syria Distribution and selling of Coca-Cola products Soft Drinks 25,13 25,13

Coca-Cola Beverages Pakistan Ltd (CCBPL) Pakistan Production, bottling, distribution and selling of Coca-Cola products Soft Drinks 24,82 24,82

Turkmenistan Coca-Cola Bottlers Ltd. (Turkmenistan CC) Turkmenistan Production, bottling, distribution and selling of


Waha Beverages B.V. (2) The Netherlands Investment company of CCİ Soft Drink 38,39 50,26

Coca-Cola Beverages Tajikistan Ltd. (4) Tajikistan Distribution and selling of Coca-Cola products Soft Drink 50,26 -

Anadolu Etap Tarım ve Gıda Ürünleri San. ve Tic. A.Ş. (Anadolu Etap) Turkey Production and sales of fruit juice concentrate and

puree Other 33,33 33,33

(1) Shares of CCİ are currently traded on ISE. (2) 23,60% shares of Waha Beverages B.V, which was incorporated as a subsidiary 100% owned by CCİ with an initial capital amounting to

EUR18.000, were sold in February 2012 (Note 3). (3) In accordance with CCİ’s Board of Directors decision it’s 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 CCİ with it’s 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 CCİ, representing the Company and other shareholders, take decisions mutually in the board of directors meetings; the financial statements of CCİ 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 Group’s 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.

F-13




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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 Group’s 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 "Communiqué on Financial Reporting in Capital Market" Serial XI, No:29 (Communiqué), 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 Communiqué. The financial statements and explanatory notes are presented using the compulsory standard formats as published by the Communiqué.

In accordance with the Communiqué, 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 Communiqué and announcements regarding the explanations of the Communiqué, 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 management’s existing incidents and operations, they may differ from the actual results.

F-14




(10)

NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued) 2.4 Restatements on Financial Statements

In March, 2011 CCİ’s 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, Group’s 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 CCİ, 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.

F-15




(11)

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 entity’s 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 entity’s 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.

F-16




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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.

F-17




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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, SABMiller’s 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 Asien’s 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 SABMiller’s Russian and Ukrainian beer businesses transfer, EBI and Euro Asien has fulfilled the commitment of USD1.933 million including post-acqusition costs. On March 6, 2012, it has been resolved to increase the Company’s 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 İstanbul 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 SABMiller’s 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. MBU’s 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 MBU’s 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 Group’s share in the carrying value of acquiree’s 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).

F-18




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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 MBU

Cash and cash equivalents 41.787 16.426Trade and other receivables 101.942 10.626Due from related parties 3.263 - Inventories 75.411 13.484Other assets 37.270 3.266Property, plant and equipment 911.925 122.343Intangible assets 165.200 628Financial liabilities (30.475) (175.760)Trade payables (119.809) (8.254)Due to related parties (10.961) (3.146)Other liabilities (69.206) (13.128)Deferred tax liability (34.771) (5.782)

Carrying value of net assets acquired 1.071.576 (39.297)

Total consideration 3.103.044 132.338Group’s share in net assets (1.071.576) 39.261

Goodwill arising from acquisition 2.031.468 171.599

Total consideration 3.103.044 132.338Cash in the subsidiary acquired (41.787) (16.426)

Net consideration related with acquisition 3.061.257 115.912 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 CCİ, was sold for purchase price of EURO4.248 to European Refreshments (ER), a 100% subsidiary of The Coca-Cola Company. The Group’s 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”.

F-19




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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, CCİ’s indirect shareholding rate in CCBL has reached to 100% from 30%. Accordingly, CCİ included SSG, CCBI and CCBL in consolidation by using full consolidation method. Regarding to the consolidation of aforementioned subsidiaries, the Group’s 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 Group’s 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

Cash and cash equivalents 1.445 1.445 643 643Trade and other receivables 781 781 520 520Inventories 4.797 4.797 3.198 3.198Other assets 1.863 1.863 1.296 1.296Property, plant and equipment 39.738 38.474 26.492 25.649Intangible assets 10.564 59 7.042 40Trade and other payables (271) (271) (180) (180)Due to related parties (51.534) (51.534) (21.550) (21.550)Other liabilities (536) (536) (159) (159)

Carrying value of net assets acquired 6.847 (4.922) 17.302 9.457

Total cash consideration, Group’s share 5.141 12.658 Group’s share in net assets (1.720) (8.695)

Goodwill arising from acquisition 3.421 3.963

Total cash consideration, Group’s share 5.141 12.658 Cash in the subsidiary acquired, Group’s share (-) (363) (323)

Net cash outflow on acquisition 4.778 12.335

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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 CCİ. 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 846.093 1.387.009 960.399 37.344 3.230.845 Inter-segment revenues (6.635) (105) (5) (18.273) (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

Capital expenditures (Note 8, 9) 65.655 126.218 77.076 2.441 271.390 April 1 - June 30, 2012

Revenues 508.932 953.968 616.610 24.455 2.103.965 Inter-segment revenues (4.291) (37) (1) (13.375) (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


Capital expenditures 39.352 75.363 50.574 1.756 167.045

January 1 - June 30, 2011

Revenues 707.053 785.604 781.352 21.897 2.295.906 Inter-segment revenues (6.162) (2.548) (22) (5.275) (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


Capital expenditures (Note 8, 9) 46.132 138.934 133.682 2.153 320.901

April 1 - June 30, 2011

Revenues 424.697 508.542 486.199 13.529 1.432.967 Inter-segment revenues (2.656) (2.487) (22) (3.828) (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


Capital expenditures 23.917 64.576 105.977 1.666 196.136

(1) Includes other subsidiaries included in the consolidation of Anadolu Efes and headquarter expenses.

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NOTE 4. SEGMENT INFORMATION (continued)

Turkey Beer

International Beer

Soft Drink

Other(1) andEliminations Total

June 30, 2012

Segment assets 6.844.319 6.245.939 2.055.042 (4.714.936) 10.430.364Segment liabilities 1.342.993 1.675.052 1.174.537 16.245 4.208.827

Other disclosures Investments in associates - 13.507 - - 13.507

December 31, 2011

Segment assets 3.094.136 2.829.313 1.903.453 (1.406.193) 6.420.709Segment liabilities 871.460 1.258.990 1.064.143 19.236 3.213.829


(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, 2012

April 1 – June 30, 2012


April 1 – June 30, 2011

EBITDA 667.903 491.851 505.510 347.719

Depreciation and amortization expenses (217.288) (116.155) (158.864) (79.956)Provision for retirement pay liability (7.363) (4.693) (5.176) (3.039)Provision for vacation pay liability (6.690) (2.068) (5.106) (1.026)(Impairment) / impairment reversal on

property, plant and equipment, net (511) (463) (1.639) 160(Provision) / reversal of provision for

inventory, net (2.528) (2.243) 3.843 2.526Fair value increase related to change in

scope of consolidation - - 2.957 -(Provision) / reversal of provision for doubtful

receivables, net 620 (590) 526 126Other (2.471) (659) (2.437) (947)

Profit from Operations 431.672 364.980 339.614 265.563

Loss from Associates (4.462) (1.954) (3.253) (1.141)Financial Income 203.375 55.836 119.603 54.153Financial Expenses (-) (193.525) (121.062) (127.521) (76.191)

Profit Before Tax from Continuing Operations 437.060 297.800 328.443 242.384

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NOTE 5. CASH AND CASH EQUIVALENTS

June 30, 2012 December 31, 2011

Cash on hand 3.913 1.466Bank accounts

- Time deposits 868.261 843.873- Demand deposits 106.807 67.859

Other 54 -

Cash and cash equivalents in cash flow statement 979.035 913.198

Interest income accrual 4.159 4.431 983.194 917.629

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).

F-23

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F-24




(20)

NOTE 6. BORROWINGS (continued) Repayments of long-term borrowings are scheduled as follows (excluding finance lease obligation):

June 30, 2012 December 31, 2011

2013 220.241 326.8322014 1.053.592 944.3262015 98.471 27.3712016 and thereafter 3.041 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 CCİ, 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 Çelik Motor Ticaret A.Ş., a related party of the Group. NOTE 7. OTHER RECEIVABLES AND PAYABLES a) Other Current Receivables

June 30, 2012 December 31, 2011

Due from personnel 7.660 4.006Other receivables 17.391 12.871

25.051 16.877

b) Other Non-Current Receivables

June 30, 2012 December 31, 2011

Deposits and guarantees given 1.423 1.252Other 521 358

1.944 1.610

c) Other Current Payables

June 30, 2012 December 31, 2011

Taxes other than on income 564.120 307.762Deposits and guarantees taken 71.502 29.967Payables for goods in transit 15.552 1.599Other 12.116 3.440

663.290 342.768

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NOTE 7. OTHER RECEIVABLES AND PAYABLES (continued) d) Other Non-Current Payables

June 30, 2012 December 31, 2011

Deposits and guarantees taken 191.901 165.742

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:

Additions

Addition Through Business Combination Transfers Disposals (net)

June 30, 2012

Land and land improvements 1.423 2.903 1.037 (72) Buildings 3.527 224.547 4.979 (47) Machinery and equipment 43.273 601.110 55.004 (2.750) Vehicles 6.462 20.424 66 (646) Furniture and fixtures 123.607 129.483 15.608 (1.592) Leasehold improvements 28 - - - Construction in progress 90.556 55.801 (77.710) (2)

268.876 1.034.268 (1.016) (5.109)

June 30, 2011

Land and land improvements 460 10.124 645 (80) Buildings 1.543 - 12.845 (3.775) Machinery and equipment 12.456 9.185 57.057 (4.617) Vehicles 3.803 430 2.376 (1.778) Furniture and fixtures 110.072 3.440 11.397 (2.052) Leasehold improvements 9 - 573 - Construction in progress 190.084 438 (84.893) (19)

318.427 23.617 - (12.321) (*) 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:

Additions

Addition Through Business Combination Transfers Disposals (net)

June 30, 2012

Rights 524 7.841 - - Brands - 152.453 - - Other intangible assets 1.990 5.534 1.016 -

2.514 165.828 1.016 -

June 30, 2011

Bottling and distribution agreements - 8.798 - - Rights 545 - - - Other intangible assets 1.929 34 - -

2.474 8.832 - -

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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 1 912.645 871.079Additions (Note 3) 2.203.067 7.384Currency translation differences (224.169) 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 Company’s issued capital (inflation-restated issued capital in accordance with the communiqués and announcements of CMB). The second legal reserve is appropriated at the rate of 10% of all distributions in excess of 5% of the Company’s 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 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 Communiqué shall be subject to distributable dividend computations. In accordance with the CMB decision dated January 27, 2010, it’s 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.

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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: June 30, 2012 Nominal

AmountEquity Restatement

Differences RestatedAmount

Issued capital 592.105 63.583 655.688 Legal reserves 209.643 74.697 284.340 Extraordinary reserves 466.134 26.091 492.225

1.267.882 164.371 1.432.253

Share premium 3.137.684 Value increase funds 4.655 Currency translation differences (95.861)Other reserves (5.736)Accumulated profits (Including net income) 1.676.681

Equity attributable to equity holders of the parent 6.149.676 December 31, 2011 Nominal

AmountEquity Restatement

Differences RestatedAmount

Issued capital 450.000 63.583 513.583 Legal reserves 176.995 74.697 251.692 Extraordinary reserves 464.805 26.091 490.896

1.091.800 164.371 1.256.171

Value increase funds 7.822 Currency translation differences 289.853 Other reserves (5.736)Accumulated profits (Including net income) 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 Company’s 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.

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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

Total TRL Equivalent

Original Currency

TRL

Original Currency Thousand

USD


EUR


KZT


RUR


UAH A. GPMs given on behalf of the Company’s legal

personality 107.667 26.882 7.471 7.441 - 553.780 87.962 B. GPMs given in favor of subsidiaries included in full

consolidation (1) 723.976 - 386.145 - 2.184.000 - - 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 831.643 26.882 393.616 7.441 2.184.000 553.780 87.962

Ratio of other GPMs over the Company’s equity (%) - - - - - - -

December 31, 2011


Original Currency

TRL

Original CurrencyThousand

USD


EUR


KZT


RUR

A. GPMs given on behalf of the Company’s legal personality 57.831 11.712 18.424 3.482 16.564 49.879

B. GPMs given in favor of subsidiaries included in full consolidation (1) 819.437 - 364.428 40.000 2.177.325 160.000

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 877.268 11.712 382.852 43.482 2.193.889 209.879

Ratio of other GPMs over the Company’s equity (%) - - - - - -

(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 EBRD’s 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). CCİ, Its Subsidiaries and Joint Ventures a) Put Option A put option has been granted to Day Investments Ltd. by CCİ that may be exercisable in 2012. By such option, Day Investments Ltd. will have right to sell its shares in Turkmenistan CC to CCİ at the price of USD2.360 thousand. Group’s portion of the liability for the put option amounting to TRL2.143 has been presented in “other current liabilities” (December 31, 2011 – TRL2.240).

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NOTE 12. COMMITMENTS AND CONTINGENCIES (continued) CCİ, Its Subsidiaries and Joint Ventures (continued) b) Letters of Guarantee As of June 30, 2012, CCİ’s letters of guarantee given to various enterprises are amounting to TRL218.104 (December 31, 2011 – TRL212.285). Operational Lease As of June 30, 2012, Group’s 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 market-oriented 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

June 30, 2012 December 31, 2011

Prepayments 154.923 79.482 Advances given to suppliers 91.592 54.990 Value Added Tax (VAT) deductible or VAT to be transferred 68.961 87.373 Prepaid taxes 7.193 22.453 Other 3.175 1.839

325.844 246.137 b) Other Non-Current Assets

June 30, 2012 December 31, 2011

Prepayments 98.358 71.234Deferred VAT and other taxes 27.116 8.549Advances given to suppliers 18.043 13.508Other 2.925 98

146.442 93.389

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NOTE 13. OTHER ASSETS AND LIABILITIES (continued) c) Other Current Liabilities June 30, 2012 December 31, 2011

Expense accruals 99.964 20.108Liability for put option (Note 12) 86.168 90.099Advances taken 23.112 18.770Due to personnel 14.443 6.458Other 401 545

224.088 135.980 d) Other Non-Current Liabilities June 30, 2012 December 31, 2011

Deferred VAT and other taxes 27.058 8.505Other 718 836

27.776 9.341 NOTE 14. OTHER OPERATING INCOME / EXPENSES a) Other Operating Income


April 1 – June 30, 2012


April 1 – June 30, 2011

Gain on sale of fixed assets 3.728 1.008 4.165 213Rent income 1.984 1.022 984 596Income from scrap and other materials 1.967 1.176 1.424 868Insurance income 1.494 797 831 630Fair value increase related to change in

the scope of consolidation - - 2.957 -Other income 15.199 10.948 6.764 1.641

24.372 14.951 17.125 3.948 b) Other Operating Expenses


April 1 – June 30, 2012


April 1 – June 30, 2011

Donations (12.618) (8.029) (10.292) (6.601)Loss from fixed assets sales (1.421) (1.226) (1.737) (1.601)Competition Board provision - - (6.064) (6.064)Other expenses (6.087) (4.268) (2.925) (160)

(20.126) (13.523) (21.018) (14.426)

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NOTE 15. FINANCIAL INCOME


April 1 – June 30, 2012


April 1 –June 30, 2011

Foreign exchange gain 167.384 38.983 86.155 40.493 Interest income 35.510 16.771 32.843 13.333 Gain from derivative financial instruments 481 82 605 327

203.375 55.836 119.603 54.153 NOTE 16. FINANCIAL EXPENSES


April 1 – June 30, 2012


April 1 –June 30, 2011

Foreign exchange loss (155.251) (101.929) (89.962) (59.010)Interest expense (35.549) (18.178) (34.864) (15.678)Loss from derivative financial instruments - - (630) (304)Syndication loan expense (708) (372) (83) -Other financial expenses (2.017) (583) (1.982) (1.199)

(193.525) (121.062) (127.521) (76.191) 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 Liabilities Net

June 30,

2012 December 31,

2011June 30,

2012 December 31,

2011 June 30,

2012 December

31, 2011

PPE and intangible assets - - (204.444) (133.991) (204.444) (133.991)Inventories 19.852 5.329 - - 19.852 5.329Carry forward losses 95.432 100.710 - - 95.432 100.710Retirement pay liability and

other employee benefits 16.125 14.965 - - 16.125 14.965Other provisions 34.231 2.487 - - 34.231 2.487Other (*) 44.668 20.635 - - 44.668 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.

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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:


April 1– June 30, 2012


April 1 – June 30, 2011

Net income 335.650 233.280 241.490 184.788Weighted average number of shares 540.572.585 592.105.263 450.000.000 450.000.000Earnings per share (full TRL) 0,6209 0,3940 0,5366 0,4106

Number of shares, which was 450.000.000 as of December 31, 2011, has been increased with the Group’s 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) 162.383 338.679Alternatif Yatırım A.Ş. (4) 1.441 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) Related party of Yazıcılar Holding A.Ş. (a shareholder) (2) Non-current financial investment of the Group (3) The shareholder of the Group (4) Related party of AEH (a shareholder) (5) Related parties of SABMiller AEL (a shareholder)

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NOTE 20. RELATED PARTY BALANCES AND TRANSACTIONS (continued)

a) Balances with Related Parties (Continued)

Due from Related Parties

June 30, 2012 December 31, 2011

Anadolu Restoran İşletmeleri Ltd. Şti. (4) 17 14Diğer 22 86

39 100

Due to Related Parties

June 30, 2012 December 31, 2011

Anadolu Efes Spor Kulübü 29.168 -SABMiller Group Companies (5) 27.322 -Oyex Handels GmbH (4) 6.476 2.133Anadolu Bilişim Hizmetleri A.Ş. (2) (4) 1.590 860AEH (1) (3) 1.492 3.846Efes Turizm İşletmeleri A.Ş.(4) 691 445Çelik Motor Ticaret A.Ş. (4) 121 636Anadolu Vakfı - 925Diğer 576 329

67.436 9.174

b) Transactions with Related Parties

Purchases of Goods, Services and Donations

Nature of transaction

January 1 –June 30,

2012

April 1 –June 30,

2012


2011

April 1 –June 30,

2011

Anadolu Efes Spor Kulübü (6) Service 33.045 15.545 22.500 -

SABMiller Group Companies (5) Service and purchase of finished goods 26.034 20.488 - -

Oyex Handels GmbH (4) Purchase of materials and fixed asset 17.808 10.453 16.528 12.796

Anadolu Vakfı Donations 12.515 7.952 10.277 6.586AEH (1) (3) Consultancy service 8.342 4.225 8.056 4.166Çelik Motor Ticaret A.Ş. (4) Rent a car 7.756 3.860 6.713 3.940

Efes Turizm İşletmeleri A.Ş. (4) Travel and accomodation 4.458 2.232 2.929 1.911

Anadolu Bilişim Hizmetleri A.Ş. (2) (4) Information service 4.201 1.934 6.088 3.055

AEH Münih(4) Purchase of materials and fixed asset 3.141 686 3.025 1.645

Anadolu Isuzu Otomotiv San. ve Tic. A.Ş. (1) Rent expense 605 300 512 267Other 302 141 278 159

118.207 67.816 76.906 34.525

Financial Income / (Expense), Net



2012

April 1–June 30,

2012


2011

April 1 –June 30,

2011

Alternatifbank(2) (4) Interest gain / (loss), net 18.355 9.058 8.446 5.532Other (115) (115) (82) (40)

18.240 8.943 8.364 5.492 (1) Related party of Yazıcılar Holding A.Ş. (a shareholder) (2) Non-current financial investment of the Group (3) The shareholder of the Group (4) Related party of AEH (a shareholder) (5) Related parties of SABMiller AEL (a shareholder)

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NOTE 20. RELATED PARTY BALANCES AND TRANSACTIONS (continued) b) Transactions with Related Parties (continued)

Other Income / (Expense), Net


January 1 – June 30,

2012

April 1– June 30,

2012


2011

April 1 –June 30,

2011

Alternatifbank (2) (4) Rent income 57 25 51 23Anadolu Efes Spor Klübü Rent income 40 20 42 21Anadolu Restoran İşl. Ltd. Şti. (4) Scrap sales - - 116 63Diğer 58 10 51 37

155 55 260 144 (1) Related party of Yazıcılar Holding A.Ş. (a shareholder) (2) Non-current financial investment of the Group (3) The shareholder of the Group (4) Related party of AEH (a shareholder) (5) Related parties of SABMiller AEL (a shareholder) Director’s 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:


2012


2012


2011


2011

Short-term employee benefits 6.285 2.050 6.547 3.283Post-employment benefits - - - -Other long term benefits 4.750 4.127 1.258 -Termination benefits - - - -Share-based payments - - - -

11.035 6.177 7.805 3.283

NOTE 21. NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS The Group’s 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 Group’s 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 Group’s 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 Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s debt obligations.

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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 Group’s 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


(Functional Currency)

Thousand USD

TRL Equivalent

Thousand EURO

TRL Equivalent

Other Foreign Currency TRL

Equivalent

1. Trade Receivables and Due from Related Parties 31.550 9.721 17.561 789 1.795 12.194 2a. Monetary Financial Assets (Cash and cash equivalents included) 444.968 215.796 389.836 9.884 22.478 32.654 2b. Non- monetary Financial Assets - - - - - - 3. Other Current Assets and Receivables 15.974 2 3 243 552 15.419 4. Current Assets 492.492 225.519 407.400 10.916 24.825 60.267 5. Trade Receivables and Due from Related Parties - - - - - - 6a. Monetary Financial Assets - - - - - - 6b. Non-monetary Financial Assets - - - - - - 7. Other 819 8 15 152 346 458 8. Non-Current Assets 819 8 15 152 346 458 9. Total Assets 493.311 225.527 407.415 11.068 25.171 60.725 10.Trade Payables and Due to Related Parties (123.979) (22.059) (39.850) (28.381) (64.545) (19.584) 11.Short- term Borrowings and Current Portion of Long- term Borrowings (451.419) (249.330) (450.415) (441) (1.004) - 12a. Monetary Other Liabilities (14.670) (1.186) (2.143) (132) (301) (12.226) 12b. Non-monetary Other Liabilities - - - - - - 13. Current Liabilities (590.068) (272.575) (492.408) (28.954) (65.850) (31.810) 14. Trade Payables and Due to Related Parties - - - - - - 15. Long-Term Borrowings (1.068.280) (560.659) (1.012.830) (24.382) (55.450) - 16 a. Monetary Other Liabilities - - - - - - 16 b. Non-monetary Other Liabilities - - - - - - 17. Non-Current Liabilities (1.068.280) (560.659) (1.012.830) (24.382) (55.450) - 18. Total Liabilities (1.658.348) (833.234) (1.505.238) (53.336) (121.300) (31.810) 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 (1.165.037) (607.707) (1.097.823) (42.268) (96.129) 28.915 21. Monetary Items Net Foreign Currency Asset / (Liability) Position (1.181.830) (607.717) (1.097.841) (42.663) (97.027) 13.038 22. Total Fair Value of Financial Instruments Used to Manage the

Foreign Currency Position - - - - - - 23.Total value of Hedged Foreign Currency Assets - - - - - -

Foreign Currency Position Table December 31, 2011



Thousand USD

TRL Equivalent

Thousand EURO

TRL Equivalent


Equivalent

1. Trade Receivables and Due from Related Parties 18.802 4.768 9.007 589 1.383 8.412 2a. Monetary Financial Assets (Cash and cash equivalents included) 283.009 127.522 240.877 13.953 32.779 9.353 2b. Non- monetary Financial Assets - - - - - - 3. Other Current Assets and Receivables 12.798 6 11 146 342 12.445 4. Current Assets 314.609 132.296 249.895 14.688 34.504 30.210 5. Trade Receivables and Due from Related Parties - - - - - - 6a. Monetary Financial Assets - - - - - - 6b. Non-monetary Financial Assets - - - - - - 7. Other 1.818 226 426 369 867 525 8. Non-Current Assets 1.818 226 426 369 867 525 9. Total Assets 316.427 132.522 250.321 15.057 35.371 30.735 10.Trade Payables and Due to Related Parties (76.392) (4.744) (8.961) (23.588) (55.412) (12.019) 11.Short- term Borrowings and Current Portion of Long- term Borrowings (399.256) (158.675) (299.722) (42.369) (99.534) - 12a. Monetary Other Liabilities (10.532) (1.186) (2.241) (134) (314) (7.977) 12b. Non-monetary Other Liabilities - - - - - - 13. Current Liabilities (486.180) (164.605) (310.924) (66.091) (155.260) (19.996) 14. Trade Payables and Due to Related Parties - - - - - - 15. Long-Term Borrowings (937.221) (467.422) (882.913) (23.118) (54.308) - 16 a. Monetary Other Liabilities - - - - - - 16 b. Non-monetary Other Liabilities - - - - - - 17. Non-Current Liabilities (937.221) (467.422) (882.913) (23.118) (54.308) - 18. Total Liabilities (1.423.401) (632.027) (1.193.837) (89.209) (209.568) (19.996) 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 (1.106.974) (499.505) (943.516) (74.152) (174.197) 10.739 21. Monetary Items Net Foreign Currency Asset / (Liability) Position (1.121.590) (499.737) (943.953) (74.667) (175.406) (2.231) 22. Total Fair Value of Financial Instruments Used to Manage the Foreign

Currency Position - - - - - - 23.Total value of Hedged Foreign Currency Assets - - - - - -

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b) Foreign Currency Risk (continued) The information regarding the export and import figures realized as of June 30, 2012 and 2011 is as follows:

January 1 –June 30, 2012

April 1 – June 30, 2012


April 1 – June 30, 2011

Total Export 93.044 60.197 66.654 41.214Total Import 435.974 251.702 414.651 252.096

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

Increase of the foreign

currency

Decrease of the foreign

currency


currency


currency Increase / decrease in USD by 10%: USD denominated net asset / (liability) (109.782) 109.782 450.539 (450.539) USD denominated hedging instruments(-) - - - - Net effect in USD (109.782) 109.782 450.539 (450.539) Increase / decrease in EURO by 10%: EURO denominated net asset / (liability) (9.613) 9.613 3.494 (3.494) EURO denominated hedging instruments(-) - - - - Net effect in EURO (9.613) 9.613 3.494 (3.494) Increase / decrease in other foreign currencies by 10%: Other foreign currency denominated net asset / (liability) 2.892 (2.892) - - Other foreign currency hedging instruments(-) - - - - Net effect in other foreign currency 2.892 (2.892) - - TOTAL (116.503) 116.503 454.033 (454.033)

Foreign Currency Position Sensitivity Analysis June 30, 2011 Income / (Loss) Equity


currency


currency


currency


currency Increase / decrease in USD by 10%: USD denominated net asset / (liability) (78.814) 78.814 132.531 (132.531) USD denominated hedging instruments(-) - - - - Net effect in USD (78.814) 78.814 132.531 (132.531) Increase / decrease in EURO by 10%: EURO denominated net asset / (liability) (25.456) 25.456 2.780 (2.780) EURO denominated hedging instruments(-) - - - - Net effect in EURO (25.456) 25.456 2.780 (2.780) Increase / decrease in other foreign currencies by 10%: Other foreign currency denominated net asset / (liability) 2.023 (2.023) - - Other foreign currency hedging instruments(-) - - - - Net effect in other foreign currency 2.023 (2.023) - -

TOTAL (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.

F-37




(33)

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 Group’s 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.

F-38




(34)

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. Group’s 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.

................................

F-39

CONVENIENCE TRANSLATION INTO ENGLISH OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ANADOLU EFES BİRACILIK VE MALT SANAYİİ ANONİM ŞİRKETİ CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2011 TOGETHER WITH INDEPENDENT AUDITOR’S REPORT

F-40

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F-42

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish Anadolu Efes Biracılık ve Malt Sanayii Anonim Şirketi 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 Group’s Organization and Nature of Activities ............................................................................ 6-8 Note 2 Basis of Presentation of Consolidated Financial Statements ...................................................... 9-23 Note 3 Business Combinations ............................................................................................................. 24-25 Note 4 Joint Ventures ................................................................................................................................. 26 Note 5 Segment Information ................................................................................................................. 26-27 Note 6 Cash and Cash Equivalents ............................................................................................................. 28 Note 7 Financial Investments ..................................................................................................................... 28 Note 8 Borrowings ................................................................................................................................ 29-30 Note 9 Other Financial Liabilities .............................................................................................................. 30 Note 10 Trade Receivables and Payables ..................................................................................................... 31 Note 11 Other Receivables and Payables ............................................................................................... 31-32 Note 12 Receivables and Payables Related to Finance Sector...................................................................... 32 Note 13 Inventories....................................................................................................................................... 32 Note 14 Biological Assets ............................................................................................................................ 33 Note 15 Receivables and Deferred Income from Continuing Construction Contracts ................................. 33 Note 16 Investments in Associates. .............................................................................................................. 33 Note 17 Investment Property ........................................................................................................................ 33 Note 18 Property, Plant and Equipment ................................................................................................. 34-35 Note 19 Intangible Assets ....................................................................................................................... 36-37 Note 20 Goodwill ......................................................................................................................................... 38 Note 21 Government Incentives and Grants ................................................................................................. 38 Note 22 Provisions, Contingent Assets and Liabilities ................................................................................. 38 Note 23 Commitments and Contingencies ............................................................................................. 39-40 Note 24 Employee Benefits .................................................................................................................... 40-41 Note 25 Pension Plans .................................................................................................................................. 41 Note 26 Other Assets and Liabilities ...................................................................................................... 41-42 Note 27 Equity ........................................................................................................................................ 42-43 Note 28 Sales and Cost of Sales ................................................................................................................... 44 Note 29 Operating Expenses......................................................................................................................... 44 Note 30 Expenses by Nature ......................................................................................................................... 45 Note 31 Other Operating Income / Expenses................................................................................................ 45 Note 32 Financial Income ............................................................................................................................. 46 Note 33 Financial Expenses .......................................................................................................................... 46 Note 34 Non-Current Assets Available For Sale and Discontinuing Operations ........................................ 46 Note 35 Income Taxes, Deferred Tax Assets and Liabilities .................................................................. 46-47 Note 36 Earnings per Share .......................................................................................................................... 48 Note 37 Related Party Balances and Transactions .................................................................................. 48-49 Note 38 Nature and Level of Risks Arising From Financial Instruments ............................................... 50-54 Note 39 Financial Instruments ................................................................................................................ 55-56 Note 40 Subsequent Events .......................................................................................................................... 56

F-43

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish Anadolu Efes Biracılık ve Malt Sanayii Anonim Şirketi

CONSOLIDATED BALANCE SHEET As at December 31, 2011 (Currency– Unless otherwise indicated thousands of Turkish Lira (TRL))

The accompanying notes form an integral part of these consolidated financial statements.

(1)

Audited Notes 2011 2010 ASSETS Current Assets 2.343.252 2.140.817Cash and Cash Equivalents 6 917.629 939.324Financial Investments 7 22.602 55.090Trade Receivables 10 578.428 518.251Due from Related Parties 37 100 337Other Receivables 11 16.877 7.919Inventories 13 561.479 467.864Other Current Assets 26 246.137 152.032

Non-Current Assets 4.077.457 3.448.014Other Receivables 11 1.610 1.325Financial Investments 7 25.180 37.488Investments in Associates 16 18.447 21.441Biological Assets 14 6.457 1.512Property, Plant and Equipment 18 2.510.259 2.043.794Intangible Assets 19 447.045 361.889Goodwill 20 912.645 871.079Deferred Tax Assets 35 62.425 40.008Other Non-Current Assets 26 93.389 69.478

Total Assets 6.420.709 5.588.831 LIABILITIES Current Liabilities 1.628.590 1.757.195Borrowings 8 795.644 996.113Trade Payables 10 307.569 253.332Due to Related Parties 37 9.174 8.646Other Payables 11 342.768 290.846Provision for Corporate Tax 9.415 15.292Provisions 22 28.040 23.676Other Current Liabilities 26 135.980 169.290

Non-Current Liabilities 1.585.239 1.016.631Borrowings 8 1.303.833 768.383Other Payables 11 165.742 144.366Provision for Employee Benefits 24 54.033 51.337Deferred Tax Liabilities 35 52.290 42.843Other Non-Current Liabilities 26 9.341 9.702

Equity 3.206.880 2.815.005Equity Attributable to Equity Holders of the Parent 3.143.921 2.767.087Issued Capital 27 450.000 450.000Inflation Adjustment to Issued Capital 27 63.583 63.583Fair Value Reserve 27 7.822 19.569Currency Translation Differences 27 289.853 (4.085)Restricted Reserves Allocated from Net Income 27 176.995 138.442Other Reserves 27 (5.736) (5.736)Accumulated Profits 27 1.820.229 1.601.674Net Income 341.175 503.640


Total Liabilities 6.420.709 5.588.831.

F-44


CONSOLIDATED INCOME STATEMENT For the year ended December 31, 2011 (Currency– Unless otherwise indicated thousands of Turkish Lira (TRL))


(2)

Audited Notes 2011 2010


Sales 5, 28 4.761.266 4.168.793Cost of Sales (-) 28 (2.479.550) (2.051.348)

Gross Profit From Operations 2.281.716 2.117.445

Marketing, Selling and Distribution Expenses (-) 29 (1.262.777) (1.060.488)General and Administration Expenses (-) 29 (414.838) (353.951)Other Operating Income 31 43.074 25.022Other Operating Expenses (-) 31 (42.055) (34.404)

Profit From Operations 605.120 693.624

Loss from Associates 16 (6.785) (17.910)Financial Income 32 240.686 244.302Financial Expenses (-) 33 (374.040) (261.464)

Profit Before Tax From Continuing Operations 464.981 658.552

Continuing Operations Tax Income / (Expense) Current Period Tax Expense (-) 35 (117.476) (127.846)Deferred Tax Income / (Expense) 35 11.967 (12.265)

Profit For The Year 359.472 518.441

Attributable to: Minority interests 18.297 14.801Equity holders of the parent 341.175 503.640

Earnings per share (Full TRL) 36 0,7582 1,1192

F-45


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended December 31, 2011 (Currency– Unless otherwise indicated thousands of Turkish Lira (TRL))


(3)

Audited Notes 2011 2010 Profit for the Year 359.472 518.441


Currency Translation Differences 303.231 25.202Value Increase / (Decrease) in Available-for-Sale Securities 7 (12.365) 2.347Tax Income / (Expense) on Other Comprehensive Income 7 618 (117)

Other Comprehensive Income, (Net of Taxes) 291.484 27.432 Total Comprehensive Income 650.956 545.873 Attributable to: Minority Interests 27.590 26.072 Equity Holders of the Parent 623.366 519.801

F-46

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F-47


CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended December 31, 2011 (Currency– Unless otherwise indicated thousands of Turkish Lira (TRL))


(5)


Cash flows from operating activities Continuing operations profit before tax 464.981 658.552Adjustments for: Depreciation and amortization expenses 5, 18, 19, 30 335.607 301.031(Gain)/loss on sale of property, plant and equipment and intangible assets, net 31 (3.640) (384)Provision for retirement pay liability 5, 24, 28, 29 10.353 12.487Provision for vacation pay liability 5, 22 3.258 3.124Provision / (reversal of provision) for inventory obsolescence, net 5, 13 (4.104) 941Provision / (reversal of provision) for doubtful receivables, net 5, 10 494 1.064Provision for long term incentive plan 7.261 7.241(Impairment reversal) / impairment on property, plant and equipment, net 5, 18, 31 1.374 2.079Foreign exchange (gain) / loss raised from loans, net 157.471 (5.442)Interest expense 33 64.934 77.534Interest income 32 (59.286) (71.669)(Gain) / loss from derivative financial instruments 32, 33 71 224Syndication loan expense 33 886 10.073Fair value increase related to change in scope of consolidation 3, 5, 31 (2.957) -Loss from associates 5, 16 6.785 17.910Other (income) / expense, net (216) (211)

Operating profit before changes in operating assets and liabilities 983.272 1.014.554

Change in trade receivables (102.086) (97.863)Change in due from related parties 237 473Change in inventories (87.955) (54.818)Change in other assets, other liabilities and provisions (46.239) 68.399Change in trade payables 54.079 18.452Change in due to related parties 245 695Vacation pay, retirement pay liability and long term incentive plan paid 22, 24 (15.398) (9.304)Taxes paid (122.210) (131.345)

Cash flows from operating activities 663.945 809.243

Investing activities Purchase of property, plant and equipment and intangible assets 5, 18, 19 (553.399) (330.714)Proceeds from sale of property, plant and equipment and intangible assets 18.771 14.210Biological asset investments (4.945) (1.512)Acquisition of subsidiaries and joint venture, net of cash acquired 3 - (22.728)Cash payment for acquired minority shares 3 - (290.456)

Net cash used in investing activities (539.573) (631.200)

Financing activities Dividends paid 27 (246.532) (168.979)Dividends paid to minority shareholders (12.320) -Capital increase in subsidiaries by minority shareholders 2 26.920Proceeds from short-term and long-term debt 2.468.815 1.255.225Repayment of short-term and long-term debt (2.479.263) (1.370.278)Interest paid (63.552) (78.629)Interest received 57.504 72.980Change in time deposits with maturity more than three months 32.771 (34.851)

Cash flow from financing activities (242.575) (297.612)

Currency translation differences on cash and cash transactions 95.163 7.273

Net decrease in cash and cash equivalents (118.203) (119.569)

Cash and cash equivalents at the beginning of the year 6 936.238 1.048.534

Cash and cash equivalents at the end of the year 6 913.198 936.238

F-48


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at December 31, 2011 (Currency– Unless otherwise indicated thousands of Turkish Lira (TRL))

(6)

NOTE 1. GROUP’S ORGANIZATION AND NATURE OF ACTIVITIES General Anadolu Efes Biracılık ve Malt Sanayii A.Ş. (a Turkish corporation, Anadolu Efes, the Company) was established in İstanbul in 1966. Certain shares of Anadolu Efes are listed on the İstanbul Stock Exchange (ISE). The registered office of the Company is located at the adress “Bahçelievler Mahallesi Şehit İbrahim Koparır Caddesi No: 4 Bahçelievler – İstanbul”. 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 Coca- Cola 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 İçecek A.Ş. (CCİ), 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 Tarım ve Gıda Ürünleri San. ve Tic. A.Ş., 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 2010 Amount % Amount %

Yazıcılar Holding A.Ş. 139.787 31,06 139.251 30,94 Özilhan Sınai Yatırım A.Ş. 79.813 17,74 78.937 17,54 Anadolu Endüstri Holding A.Ş. (AEH) 35.292 7,84 35.292 7,84 Publicly traded and other 195.108 43,36 196.520 43,68

450.000 100,00 450.000 100,00 Capital structure of AEH, the shareholder of the Company, comprises of Yazıcılar Holding A.Ş. (68%) and Özilhan Sınai Yatırım A.Ş. (32%); consequently, Yazıcılar Holding A.Ş. and Özilhan Sınai Yatırım A.Ş. 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 Company’s 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).

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NOTE 1. GROUP’S 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


December 31, 2011

December 31, 2010

Efes Breweries International N.V. (EBI) The Netherlands Facilitating foreign investments in breweries International Beer 100,00 100,00

ZAO Moscow-Efes Brewery (Efes Moscow) Russia Production and marketing of beer International Beer 90,96 90,97

OOO Stary Melnik (Stary Melnik) (2) Russia Service sector International Beer - 90,96

ZAO Efes Entertainment (Efes Entertainment) (2) 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


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




Anadolu Efes Dış Ticaret A.Ş. (Aefes Dış Ticaret) (6) Turkey Foreign trade Other 99,82 99,62

Cypex Co. Ltd. (Cypex) Turkish Republic of Northern Cyprus Marketing and distribution of beer Other 99,99 99,99




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

(1) Subsidiaries of Efes Moscow. (2) 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.

(3) Group’s share in Efes Moldova has raised to 96,83% through the capital increase from EBI. (4) 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. (5) Company’s beer operations in Turkey form the Turkey Beer Operations together with Ef-Pa and Tarbes. (6) Group’s share in Aefes Dış Ticaret has raised to 99,82% through the capital increase from the Company. (7) In 2011, Caspian Marketing Ltd. was sold after capital reduction.

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NOTE 1. GROUP’S 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:

Joint Venture Country Principal Activity Segment


December 31,2011

December 31,2010

Coca-Cola İçecek A.Ş. (CCİ) (1) Turkey Production, bottling of Coca-Cola products Soft Drinks 50,26 50,26

Coca-Cola Satış Dağıtım A.Ş. (CCSD) Turkey Distribution and selling of Coca-Cola products Soft Drinks 50,25 50,25

Mahmudiye Kaynak Suyu Ltd. Şti. (Mahmudiye) Turkey Filling and selling of natural spring water Soft Drinks 50,25 50,25

Efes Sınai Dış Ticaret A.Ş. (EST) (4) 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 CCİ Soft Drinks 47,33 47,33

Azerbaijan Coca-Cola Bottlers LLC (Azerbaijan CC) Azerbaijan Production, bottling, distribution and selling of Coca-Cola products Soft Drinks 50,19 50,19

Coca-Cola Bishkek Bottlers Closed Joint Stock Company (Bishkek CC) Kyrgyzstan Production, bottling, distribution and selling of



The Coca-Cola Bottling Company of Iraq FZCO (CCBI) (2)


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 CCİ Soft Drinks 50,26 -




Coca-Cola Beverages Pakistan Ltd (CCBPL) Pakistan Production, bottling, distribution and selling of Coca-Cola products Soft Drinks 24,82 24,73

Turkmenistan Coca-Cola Bottlers Ltd. (Turkmenistan CC) Turkmenistan Production, bottling, distribution and selling of


Waha Beverages B.V. (3) The Netherlands Investment company of CCİ Soft Drink 50,26 -

Anadolu Etap Tarım ve Gıda Ürünleri San. ve Tic. A.Ş. (Anadolu Etap) Turkey Production and sales of fruit juice concentrate and

puree Other 33,33 33,33

(1) Shares of CCİ 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 CCİ with an initial capital

amounting to EUR18.000, was completed in 2011. (4) EST’s share capital has been increased by CCİ in 2011, therefore Group’s shareholding rate has diluted. Although the Company represents and controls more than half of CCİ’s voting rights, since the members of the board of directors of CCİ, representing the Company and other shareholders, take decisions mutually in the board of directors meetings; the financial statements of CCİ 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 Group’s 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.

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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 Group’s 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 "Communiqué on Financial Reporting in Capital Market" Serial XI, No:29 (Communiqué), 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 Communiqué. The financial statements and explanatory notes are presented using the compulsory standard formats as published by the Communiqué.

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 Functional Currency

2011 2010

EBI EURO USD USD Efes Moscow Russian Ruble (RUR) RUR RUR Efes Karaganda Kazakh Tenge (KZT) KZT KZT Efes Vitanta Moldovan Leu (MDL) MDL MDL Efes Georgia Georgian Lari (GEL) GEL GEL CCI Holland EURO USD USD Almaty CC KZT USD USD Azerbaijan CC Azerbaijan Manat (AZN) USD USD Bishkek CC Kirghiz Som (KGS) USD USD CCBPL Pakistan Rupee (PKR) PKR PKR Jordan CC Jordanian Dinar (JOD) USD USD AETMC EURO EURO EURO EHTMC EURO EURO EURO Efes Germany EURO EURO EURO Knyaz Rurik RUR RUR RUR

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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.

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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 re-measurement 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 entity’s net assets, in the event of liquidation, shall be measured either at fair value or at the present ownership instruments’ proportionate share of the acquiree’s 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 acquiree’s 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.

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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,

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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 entity’s 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 entity’s 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.

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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.

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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 Group’s 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 Group’s 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 Group’s share of net assets of the associates, less any impairment in value. The consolidated income statement reflects the Group’s 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.

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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-for-sale 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.

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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 10-50 years Machinery and equipment 4-20 years Leasehold improvements 4-15 years Furniture and fixtures 3-15 years Vehicles 5-10 years Returnable bottles and cases 5-10 years Other tangible assets 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.

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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 CCİ in 2005 and 2009, acquired through change in scope of consolidation in 2011 and joint venture acquired by CCİ 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 Group’s share is the net fair value of the acquiree’s 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 Group’s 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.

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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.

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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.

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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 Group’s subsidiaries and joint ventures in Turkey as of respective year-ends are as follows:

Date USD / TRL (full)

EURO / TRL (full)

December 31, 2011 1,8889 2,4438 December 31, 2010 1,5460 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.

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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 CCİ.

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 (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 Group’s investing activities and cash flows related with financing activities present the proceeds and repayments of sources in the Group’s financing activities.

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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 Group’s 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 Group’s 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 employee’s 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).

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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, CCİ’s indirect shareholding rate in CCBL has reached to 100% from 30%. Accordingly, CCİ included SSG, CCBI and CCBL in consolidation by using full consolidation method. Regarding to the consolidation of aforementioned subsidiaries, the Group’s 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 Group’s 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

Cash and cash equivalents 1.445 1.445 643 643Trade and other receivables 781 781 520 520Inventories 4.797 4.797 3.198 3.198Other assets 1.863 1.863 1.296 1.296Property, plant and equipment 39.738 38.474 26.492 25.649Intangible assets 10.564 59 7.042 40Trade and other payables (271) (271) (180) (180)Due to related parties (51.534) (51.534) (21.550) (21.550)Other liabilities (536) (536) (159) (159)

Carrying value of net assets acquired 6.847 (4.922) 17.302 9.457

Total cash consideration, Group’s share 5.141 12.658 Group’s share in net assets (1.720) (8.695)

Goodwill arising from acquisition 3.421 3.963

Total cash consideration, Group’s share 5.141 12.658 Cash in the subsidiary acquired, Group’s share (-) (363) (323)

Net cash outflow on acquisition 4.778 12.335 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.

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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 1.666 Trade and other receivables 7.052 Inventories 1.775 Other assets 1.089 Property, plant and equipment and intangible assets 20.384 Deferred tax liability (3.722)Other liabilities (461)Minority interests (6.683)

Fair value of net assets acquired 21.100

Total cash consideration 18.608 Group’s share in net assets (17.235)

Net book value of Mutena Maltery shares on hand 5.103 Fair value of Mutena Maltery shares on hand (6.683)

Amount recognised in income statement (207)

Total cash consideration 18.608 Net cash acquired with the subsidiary (-) (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.

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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: 2011 2010

Current assets 742.893 659.168 Non-current assets 1.200.033 883.904

Total assets 1.942.926 1.543.072 Short-term liabilities 278.899 452.245 Long-term liabilities 811.667 357.821 Equity 852.360 733.006

Total liabilities 1.942.926 1.543.072

Net income 66.208 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 Beer

International Beer

Soft Drinks

Other (1) andEliminations Total

2011

Revenues 1.390.840 1.630.697 1.712.991 58.496 4.793.024 Inter-segment revenues (11.069) (4.362) (43) (16.284) (31.758)

Total Sales 1.379.771 1.626.335 1.712.948 42.212 4.761.266

EBITDA 519.881 238.961 244.703 (50.129) 953.416

Depreciation and amortization 80.426 175.424 77.283 2.474 335.607 Provision for retirement pay liability 7.039 - 3.249 65 10.353 Fair value increase related to change

in scope of consolidation - - (2.957) - (2.957)

Other 4.862 2.942 2.138 (4.649) 5.293

Profit / (loss) for the year 336.516 4.473 71.098 (52.615) 359.472

Capital expenditures (Note 18, 19) 94.984 205.702 249.391 3.322 553.399 2010

Revenues 1.293.426 1.464.174 1.383.607 51.257 4.192.464 Inter-segment revenues (10.821) (188) (38) (12.624) (23.671)

Total Sales 1.282.605 1.463.986 1.383.569 38.633 4.168.793 EBITDA 519.064 320.273 218.589 (38.922) 1.019.004

Depreciation and amortization 74.932 149.623 74.027 2.449 301.031 Provision for retirement pay liability 8.348 - 3.981 158 12.487 Other 3.617 1.768 3.963 2.514 11.862

Profit / (loss) for the year 368.514 94.209 99.694 (43.976) 518.441 Capital expenditures (Note 18, 19) 92.077 147.322 80.206 11.109 330.714 (1) Includes other subsidiaries included in the consolidation of Anadolu Efes and headquarters expenses.

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NOTE 5. SEGMENT INFORMATION (continued) Segment assets and liabilities as of December 31, 2011 and 2010 is disclosed as follows:

Turkey

BeerInternational

BeerSoft

DrinksOther (1) andEliminations Total

2011

Segment assets 3.094.136 2.829.313 1.903.453 (1.406.193) 6.420.709 Segment liabilities 871.460 1.258.990 1.064.143 19.236 3.213.829

Other disclosures

Investments in associates - 18.447 - - 18.447 2010

Segment assets 3.002.585 2.294.972 1.514.717 (1.223.443) 5.588.831Segment liabilities 851.663 1.124.038 793.535 4.590 2.773.826


(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 2010

EBITDA 953.416 1.019.004Depreciation and amortization expenses (335.607) (301.031)Provision for retirement pay liability (10.353) (12.487)Provision for vacation pay liability (3.258) (3.124)(Impairment reversal) / impairment on property, plant and equipment, net (1.374) (2.079)Provision / (reversal of provision) for doubtful receivables, net (494) (1.064)Provision / (reversal of provision) for inventory obsolescence, net 4.104 (941)Fair value increase related to change in scope of consolidation 2.957 -Other (4.271) (4.654)

Profit from Operations 605.120 693.624

Loss from Associates (6.785) (17.910)Financial Income 240.686 244.302Financial Expenses (-) (374.040) (261.464)

Profit Before Tax from Continuing Operations 464.981 658.552

F-70



(28)


2011 2010

Cash on hand 1.466 855Bank accounts

- Time deposits 843.873 896.289- Demand deposits 67.859 39.042

Other - 52Cash and cash equivalents in cash flow statement 913.198 936.238

Interest income accrual 4.431 3.086 917.629 939.324

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

2011 2010

Time deposits with maturity more than three months 21.395 53.830Investment funds 1.207 1.260 22.602 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 2011 2010 2011 2010

Alternatifbank A.Ş. 7,46% 7,46% 24.394 36.702Other 786 786

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.

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F-72



(30)


2011 2010

2012 - 386.0272013 326.832 321.2332014 944.326 41.8722015 and thereafter 30.560 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 CCİ, 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 Çelik Motor Ticaret A.Ş., a related party of the Group. NOTE 9. OTHER FINANCIAL LIABILITIES None (December 31, 2010 – None).

F-73



(31)

NOTE 10. TRADE RECEIVABLES AND PAYABLES a) Short-Term Trade Receivables

2011 2010 Trade receivables 580.143 518.819 Notes and cheques receivables 13.137 14.498 Provision for doubtful accounts (-) (14.852) (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 15.066 13.867Current year provision 4.153 4.620Unused provisions (3.659) (3.556)Write-offs from doubtful receivables (1.527) (127)Disposals through liquidation (297) -Currency translation differences 1.116 262

Balance at December 31 14.852 15.066 b) Short-Term Trade Payables

2011 2010

Trade payables 307.569 253.332 NOTE 11. OTHER RECEIVABLES AND PAYABLES a) Other Current Receivables

2011 2010


16.877 7.919 b) Other Non-Current Receivables

2011 2010

Deposits and guarantees given 1.252 508Other 358 817

1.610 1.325

F-74



(32)

NOTE 11. OTHER RECEIVABLES AND PAYABLES (continued) c) Other Current Payables

2011 2010


342.768 290.846 d) Other Non-Current Payables

2011 2010


NOTE 12. RECEIVABLES AND PAYABLES RELATED TO FINANCE SECTOR None (December 31, 2010 - None). NOTE 13. INVENTORIES 2011 2010

Finished and trade goods 105.425 95.975Work-in-process 67.819 50.426Raw materials 239.088 187.762Packaging materials 35.265 36.339Supplies 69.708 58.515Bottles and cases 29.042 30.264Other 21.905 21.056Reserve for obsolescence (-) (6.773) (12.473)

561.479 467.864 The movement of reserve for obsolescence as of December 31, 2011 and 2010 is as below: 2011 2010

Balance at January 1 12.473 11.357Current year provision 3.261 4.205Inventories written off (7.365) (3.264)Disposals through liquidation (2.855) -Currency translation differences 1.259 175

Balance at December 31 6.773 12.473

F-75



(33)

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

2011 2010 Ownership (%) Carrying value Ownership (%) Carrying value

CEB 28,00% 18.447 28,00% 21.441

Total 18.447 21.441 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 60.122 49.586 Total Liabilities 41.675 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 21.441 45.356Loss from associates (6.785) (17.910)Foreign currency translation 3.791 (6.005)

Balance at December 31 18.447 21.441 NOTE 17. INVESTMENT PROPERTY None (December 31, 2010 - None).

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F-80



(38)

NOTE 20. GOODWILL Movement of the goodwill during the period is as follows: 2011 2010

At January 1 871.079 855.570 Additions (Note 3) 7.384 - Put option fair value change (Note 23) (58.759) 6.147 Currency translation differences 92.941 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 Soft Drinks Other Total

2011 50.099 563.041 287.327 12.178 912.645 2010 50.099 538.043 270.759 12.178 871.079

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 Elazığ, Köyceğiz 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:

2011 2010

Vacation pay liability 22.134 17.702 Management bonus accruals 5.294 5.974 Other 612 -

28.040 23.676

As of December 31, 2011 and 2010, movement of vacation pay liability is as follows:

2011 2010

Balance at January 1 17.702 15.141 Payments (480) (765)Current year provision 3.258 3.124 Currency translation differences 1.654 202

22.134 17.702

As of December 31, 2011 and 2010 movement of management bonus accruals is as follows:

2011 2010

Balance at January 1 5.974 4.681 Payments (28.776) (23.031)Current year provision 27.706 24.258 Currency translation differences 390 66

5.294 5.974

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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


Original Currency

TRL


USD


EUR


KZT


RUR

A. GPMs given on behalf of the Company’s legal personality 57.831 11.712 18.424 3.482 16.564 49.879 B. GPMs given in favor of subsidiaries included in full consolidation (1) 819.437 - 364.428 40.000 2.177.325 160.000 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 877.268 11.712 382.852 43.482 2.193.889 209.879


2010


Original Currency

TRL


USD


EUR

Original Currency

Thousand KZT


RUR

A. GPMs given on behalf of the Company’s legal personality 60.423 13.035 895 8.381 314.003 493.954 B. GPMs given in favor of subsidiaries included in full consolidation 673.948 - 358.629 40.000 3.625.311 - 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



Total 734.371 13.035 359.524 48.381 3.939.314 493.954

Ratio of other GPMs over the Company’s equity (%) - - - - - - (1) 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 EBRD’s 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). CCİ, Its Subsidiaries and Joint Ventures a) Put Options A put option has been granted to Day Investments Ltd. by CCİ that may be exercisable in 2012. By such option, Day Investments Ltd. will have right to sell its shares in Turkmenistan CC to CCİ at the price of USD2.360 thousand. Group’s 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”).

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NOTE 23. COMMITMENTS AND CONTINGENCIES (continued) CCİ, Its Subsidiaries and Joint Ventures (continued) b) Letters of Guarantee

As of December 31, 2011, CCİ’s letters of guarantee given to various enterprises are amounting to TRL212.285 (December 31, 2010 – TRL63.901).

Operational Lease As of December 31, 2011, Group’s 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 market-oriented 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 Finance’s 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 2011 2010

Employment termination benefits 43.522 39.010Long-term incentive plans 10.511 12.327

54.033 51.337 In accordance with existing social legislation, the Group’s 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: 2011 2010

Balance at January 1 39.010 30.103Payments (5.841) (3.580)Interest cost 3.776 3.006Current year provision 6.577 9.481

43.522 39.010

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NOTE 24. EMPLOYEE BENEFITS (continued) Movement of provision for long-term incentive plan represented in the consolidated financial statements is as follows: 2011 2010

Balance at January 1 12.327 10.045Payments (9.077) (4.959)Interest cost 780 693Current year provision 6.481 6.548

10.511 12.327 NOTE 25. PENSION PLANS None (December 31, 2010 – None). NOTE 26. OTHER ASSETS AND LIABILITIES a) Other Current Assets

2011 2010

Value Added Tax (VAT) deductible or transferred 87.373 58.100Prepayments 79.482 35.661Advances given to suppliers 54.990 34.267Prepaid taxes 22.453 23.251Other 1.839 753

246.137 152.032

b) Other Non-Current Assets

2011 2010

Prepayments 71.234 48.341Advances given 13.508 14.274Deferred VAT and other taxes 8.549 6.690Other 98 173

93.389 69.478

c) Other Current Liabilities

2011 2010

Liability for put option (Note 23) 90.099 126.279Expense accruals 20.108 24.418Advances taken 18.770 12.185Due to personnel 6.458 5.169Other 545 1.239

135.980 169.290

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NOTE 26. OTHER ASSETS AND LIABILITIES (continued) d) Other Non-Current Liabilities

2011 2010

Deferred VAT and other taxes 8.505 6.654Liability for put option (Note 23) - 1.834Other 836 1.214

9.341 9.702 NOTE 27. EQUITY a) Issued Capital and Adjustments to Share Capital and Equity Investments

2011 2010

Common shares 1 full TRL per value Authorized capital 900.000 900.000 Issued capital 450.000 450.000

As of December 31, 2011 and 2010, the composition of shareholders and their respective percentage of ownership can be summarized as follows:



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 Company’s issued capital (inflation-restated issued capital in accordance with the communiqués and announcements of CMB). The second legal reserve is appropriated at the rate of 10% of all distributions in excess of 5% of the Company’s 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.

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(43)

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 Communiqué. In accordance with the CMB decision dated January 27, 2010, it’s 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 netted-off 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 Nominal Amount

Equity Restatement Differences

RestatedAmount

Issued capital 450.000 63.583 513.583Legal reserves 176.995 74.697 251.692Extraordinary reserves 464.805 26.091 490.896

1.091.800 164.371 1.256.171

Fair value reserve 7.822Currency translation differences 289.853Other reserves (5.736)Accumulated profits (Including net income) 1.595.811

Equity attributable to equity holders of the parent 3.143.921



RestatedAmount


1.032.561 164.371 1.196.932

Fair value reserve 19.569Currency translation differences (4.085)Other reserves (5.736)Accumulated profits (Including net income) 1.560.407


F-86



(44)

NOTE 28. SALES AND COST OF SALES Revenues 2011 2010

Domestic revenues 2.625.332 2.361.655Foreign revenues 2.135.934 1.807.138

Total Sales, net 4.761.266 4.168.793

Cost of Sales (-)

Net change in inventory 1.939.872 1.581.174Depreciation and amortisation expense on PP&E and intangible assets 166.465 157.794Personnel expenses 127.043 108.967Utility expenses 102.847 89.797Provision for retirement pay liability 2.107 3.954Other expenses 141.216 109.662

Total cost of sales 2.479.550 2.051.348

Gross Operating Profit 2.281.716 2.117.445 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

2011 2010

Advertising, selling and marketing expenses 539.413 449.321Personnel expenses 238.758 194.726Transportation and distribution expenses 227.137 181.399Depreciation and amortization expense on PP&E and intangible assets 147.651 126.365Utilities and communication expenses 24.377 19.498Rent expenses 10.089 10.490Repair and maintenance expenses 8.137 8.292Provision for retirement pay liability 2.868 2.651Other expenses 64.347 67.746

1.262.777 1.060.488 b) General and Administration Expenses

2011 2010

Personnel expenses 193.637 168.112Services rendered from outside 86.206 70.158Taxation (other than on income) expenses 23.454 19.209Depreciation and amortization expense on PP&E and intangible assets 20.032 16.793Utilities and communication expenses 12.544 10.720Meeting and travel expenses 6.521 4.384Insurance expenses 5.707 6.414Provision for retirement pay liability 5.378 5.882Repair and maintenance expenses 4.627 3.694Other expenses 56.732 48.585

414.838 353.951

F-87



(45)

NOTE 30. EXPENSES BY NATURE a) Depreciation and Amortization Expenses

2011 2010

Cost of sales (166.465) (157.794)Marketing, selling and distribution expenses (147.651) (126.365)General and administration expenses (20.032) (16.793)Other operating expenses (1.459) (79)

(335.607) (301.031) b) Personnel Expenses

2011 2010

Cost of sales (127.043) (108.967)Marketing, selling and distribution expenses (238.758) (194.726)General and administration expenses (193.637) (168.112)

(559.438) (471.805)

NOTE 31. OTHER OPERATING INCOME / EXPENSE a) Other Operating Income

2011 2010

Gain on sale of fixed assets 9.335 1.999Income from scrap and other materials 4.302 5.398Rent income 3.117 2.444Fair value difference related to change in scope of consolidation (Note 3) 2.957 -Insurance compensation income 2.230 1.106Impairment reversal of fixed assets (Note 18) 1.446 -Other income 19.687 14.075 43.074 25.022

b) Other Operating Expenses

2011 2010

Donations (19.443) (23.201)Competition Board Penalty (6.064) -Loss from fixed assets sales (5.695) (1.615) Impairment loss on fixed assets (Note 18) (2.820) (2.079)Other expenses (8.033) (7.509)

(42.055) (34.404)

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(46)

NOTE 32. FINANCIAL INCOME 2011 2010

Foreign exchange gain 180.795 171.740Interest income 59.286 71.669Gain from derivative financial instruments 605 893

240.686 244.302 NOTE 33. FINANCIAL EXPENSES 2011 2010

Foreign exchange loss (302.842) (168.047)Interest expense (64.934) (77.534)Loss from derivative financial instruments (676) (1.117)Syndication loan expense (886) (10.073)Other financial expenses (4.702) (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 2010

Current period tax expense (117.476) (127.846)Deferred tax income / (expense), net 11.967 (12.265)

(105.509) (140.111)

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(47)

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: 2011 2010

Consolidated profit before tax 464.981 658.552Enacted tax rate %20 20%Tax calculated at the parent company tax rate (92.996) (131.710)Impact of tax paid via tax base increase regarding law no 6111 (8.504) -Non-deductible expenses (2.444) (5.978)Income excluded from tax bases 7.218 1.521Impact of different tax rates 1.481 1.575Other (10.264) (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 Liability Net 2011 2010 2011 2010 2011 2010

PPE and intangible assets - - (133.991) (95.130) (133.991) (95.130)Inventories 5.329 2.198 - - 5.329 2.198Carry forward losses 100.710 52.684 - - 100.710 52.684Retirement pay liability and other

employee benefits 14.965 13.736 - - 14.965 13.736Other (*) 23.122 23.677 - - 23.122 23.677

144.126 92.295 (133.991) (95.130) 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, (2.835) 13.091Recorded to the consolidated income statement 11.967 (12.265)Recognized in other comprehensive income (Note 7) 618 (117)Addition through company acquisition - (3.722)Currency translation differences 385 178

Balance at December 31 10.135 (2.835) As a result of the Group management’s 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.

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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: 2011 2010

Net income 341.175 503.640Weighted average number of shares 450.000.000 450.000.000Earnings per share (full TRL) 0,7582 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

2011 2010


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

2011 2010

Anadolu Restoran İşletmeleri Ltd. Şti. (4) 14 -Other 86 337

100 337

iii) Due to Related Parties

2011 2010

AEH (1) (3) 3.846 2.822Oyex Handels GmbH (4) 2.133 4.990Anadolu Vakfı 925 -Anadolu Bilişim Hizmetleri A.Ş. (2) (4) 860 612Çelik Motor Ticaret A.Ş. (4) 636 11Other 774 211

9.174 8.646

(1) Related party of Yazıcılar Holding A.Ş., a shareholder (2) Non-current financial investment of the Group (3) The shareholder of the Group (4) Related party of AEH, a shareholder

F-91



(49)

NOTE 37. RELATED PARTY BALANCES AND TRANSACTIONS (continued) b) Transactions with Related Parties

i) Purchases of Goods and Other Charges

Nature of transaction 2011 2010

Anadolu Efes Spor Kulübü Service 49.000 42.000Oyex Handels GmbH (4) Purchase of materials and fixed asset 27.427 26.729Anadolu Vakfı Donations 19.243 23.128AEH (1) (3) Consultancy service 17.971 15.828Çelik Motor Ticaret A.Ş. (4) Vehicle leasing 14.499 11.123Anadolu Bilişim Hizmetleri A.Ş. (2) (4) Information service 12.946 12.642Efes Turizm İşletmeleri A.Ş. (4) Travel and accomodation 6.515 5.203AEH Münih (4) Purchase of materials and fixed asset 3.573 3.557Anadolu Isuzu Otomotiv San. ve Tic. A.Ş. (1) Rent expense 1.065 1.142Mutena Maltery (5) Purchase of raw material - 5.321Other 612 2.906 152.851 149.579

ii) Financial Income / (Expense), Net


Alternatifbank (2) (4) Interest income / (expense), net 16.156 7.384Other (185) (103)

15.971 7.281

iii) Other Income / (Expense), Net


Anadolu Restoran İşletmeleri Ltd. Şti. (4) Sale of by-product 121 210Alternatifbank (2) (4) Rent income 97 193Anadolu Bilişim Hizmetleri A.Ş. (2) (4) Rent income 14 237Other 119 393 351 1.033

(1) Related party of Yazıcılar Holding A.Ş., a shareholder (2) Non-current financial investment of the Group (3) The shareholder of the Group (4) Related party of AEH, a shareholder (5) Included in the consolidation by using the full consolidation method starting from August 2010.

iv) Director’s 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:

2011 2010

Short-term employee benefits 12.759 12.269 Post-employment benefits - 449 Other long term benefits 1.921 733 Termination benefits - - Share-based payments - -

14.680 13.451

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The main risks arising from the Group’s 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 Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s debt obligations. The Group’s financial instruments sensitive to interest rate risk is as follows: 2011 2010 Financial instruments with fixed interest rate Financial assets

Financial assets at fair value through profit or loss 869.699 953.205 Financial liabilities 137.391 310.317 Financial instruments with floating interest rate Financial liabilities 1.961.783 1.452.699

At December 31, 2011, if interest rate on the Group’s 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 4.318 2.815 Change in EURO denominated borrowing interest rate 376 318 Change in Other denominated borrowing interest rate 183 104

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 Group’s functional currency. The Group manages foreign currency risk by using natural hedges that arise from offsetting foreign currency denominated assets and liabilities.

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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



Thousand USD

TRL Equivalent

Thousand Euro

TRL Equivalent


Equivalent 1. Trade Receivables and Due from Related Parties 18.802 4.768 9.007 589 1.383 8.412 2a. Monetary Financial Assets (Cash and cash equivalents included) 283.009 127.522 240.877 13.953 32.779 9.353 2b. Non- monetary Financial Assets - - - - - - 3. Other Current Assets and Receivables 12.798 6 11 146 342 12.445 4. Current Assets 314.609 132.296 249.895 14.688 34.504 30.210 5. Trade Receivables and Due from Related Parties - - - - - - 6a. Monetary Financial Assets - - - - - - 6b. Non-monetary Financial Assets - - - - - - 7. Other 1.818 226 426 369 867 525 8. Non-Current Assets 1.818 226 426 369 867 525 9. Total Assets 316.427 132.522 250.321 15.057 35.371 30.735 10.Trade Payables and Due to Related Parties (76.392) (4.744) (8.961) (23.588) (55.412) (12.019) 11.Short- term Borrowings and Current Portion of Long- term Borrowings (399.256) (158.675) (299.722) (42.369) (99.534) - 12a. Monetary Other Liabilities (10.532) (1.186) (2.241) (134) (314) (7.977) 12b. Non-monetary Other Liabilities - - - - - - 13. Current Liabilities (486.180) (164.605) (310.924) (66.091) (155.260) (19.996) 14. Trade Payables and Due to Related Parties - - - - - - 15. Long-Term Borrowings (937.221) (467.422) (882.913) (23.118) (54.308) - 16 a. Monetary Other Liabilities - - - - - - 16 b. Non-monetary Other Liabilities - - - - - - 17. Non-Current Liabilities (937.221) (467.422) (882.913) (23.118) (54.308) - 18. Total Liabilities (1.423.401) (632.027) (1.193.837) (89.209) (209.568) (19.996) 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 (1.106.974) (499.505) (943.516) (74.152) (174.197) 10.739 21. Monetary Items Net Foreign Currency Asset / (Liability) Position (1.121.590) (499.737) (943.953) (74.667) (175.406) (2.231) 22. Total Fair Value of Financial Instruments Used to Manage the Foreign


Foreign Currency Position Table

2010



Thousand USD

TRL Equivalent

Thousand Euro

TRL Equivalent


Equivalent 1. Trade Receivables and Due from Related Parties 12.219 4.453 6.885 489 1.002 4.332 2a. Monetary Financial Assets (Cash and cash equivalents included) 66.718 26.871 41.542 2.959 6.063 19.113 2b. Non- monetary Financial Assets - - - - - - 3. Other Current Assets and Receivables 6.915 50 77 1.488 3.049 3.789 4. Current Assets 85.852 31.374 48.504 4.936 10.114 27.234 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 85.852 31.374 48.504 4.936 10.114 27.234 10.Trade Payables and Due to Related Parties (75.043) (3.750) (5.798) (32.280) (66.145) (3.100) 11 Short- term Borrowings and Current Portion of Long- term Borrowings (505.118) (297.179) (459.439) (22.292) (45.679) - 12a. Monetary Other Liabilities (4.982) (706) (1.092) (276) (565) (3.325) 12b. Non-monetary Other Liabilities - - - - - - 13. Current Liabilities (585.143) (301.635) (466.329) (54.848) (112.389) (6.425) 14. Trade Payables and Due to Related Parties - - - - - - 15. Long-Term Borrowings (436.370) (227.759) (352.116) (41.118) (84.254) - 16 a. Monetary Other Liabilities (1.833) (1.186) (1.833) - - - 16 b. Non-monetary Other Liabilities - - - - - - 17. Non-Current Liabilities (438.203) (228.945) (353.949) (41.118) (84.254) - 18. Total Liabilities (1.023.346) (530.580) (820.278) (95.966) (196.643) (6.425) 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 (937.494) (499.206) (771.774) (91.030) (186.529) 20.809 21. Monetary Items Net Foreign Currency Asset / (Liability) Position (944.409) (499.256) (771.851) (92.518) (189.578) 17.020 22. Total Fair Value of Financial Instruments Used to Manage the Foreign


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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 139.269 115.196Total 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) Equity


currency


currency


currency


currency Increase / decrease in the USD by 10%: USD denominated net asset / (liability) (94.352) 94.352 151.274 (151.274) USD denominated hedging instruments(-) - - - - Net effect in USD (94.352) 94.352 151.274 (151.274) Increase / decrease in the EURO by 10%: EURO denominated net asset / (liability) (17.420) 17.420 2.292 (2.292) EURO denominated hedging instruments(-) - - - - Net effect in EURO (17.420) 17.420 2.292 (2.292) Increase / decrease in the other foreign currencies by 10%: Other foreign currency denominated net asset / (liability) 1.074 (1.074) - - Other foreign currency hedging instruments(-) - - - - Net effect in other foreign currency 1.074 (1.074) - - TOTAL (110.698) 110.698 153.566 (153.566)



currency


currency


currency


currency Increase / decrease in the USD by 10%: USD denominated net asset / (liability) (77.177) 77.177 112.810 (112.810) USD denominated hedging instruments(-) - - - - Net effect in USD (77.177) 77.177 112.810 (112.810) Increase / decrease in the EURO by 10%: EURO denominated net asset / (liability) (18.653) 18.653 2.190 (2.190) EURO denominated hedging instruments(-) - - - - Net effect in EURO (18.653) 18.653 2.190 (2.190) Increase / decrease in the other foreign currencies by 10%: Other foreign currency denominated net asset / (liability) 2.081 (2.081) - - Other foreign currency hedging instruments(-) - - - - Net effect in other foreign currency 2.081 (2.081) - - TOTAL (93.749) 93.749 115.000 (115.000)

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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 Group’s 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 2.099.477 2.174.993 195.704 619.986 1.359.048 255 Trade Payable and due to related parties 316.743 316.743 262.035 48.700 6.008 - Liability for put option 90.099 90.099 - 90.099 - - 2.506.319 2.581.835 457.739 758.785 1.365.056 255

2010 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 1.764.496 1.822.992 454.346 556.589 812.057 - Trade Payable and due to related parties 261.978 261.978 221.390 38.678 1.910 - Liability for put option 128.113 128.113 - 126.279 1.834 - 2.154.587 2.213.083 675.736 721.546 815.801 -

d) Price Risk


e) Credit Risk


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.

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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

Receivables

Deposits Derivative

Instruments Other

Trade Receivables Other Receivables Due from

related parties

Due from third

parties

Due from related parties

Due from third

parties Maximum exposure to credit risk at the end of reporting period (A+B+C+D+E) 100 578.428 - 18.487 937.558 - 222.948- Maximum credit risk secured by guarantees - 372.786 - - - - - A. Net carrying amount of financial assets that are neither past due

nor impaired 100 520.833 - 18.487 937.558 - -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 - 55.712 - - - - -- Under guarantee - 21.566 - - - - -D. Net carrying amount of financial assets impaired - 1.883 - - - - -- past due (gross carrying value) - 16.735 - - - - -

- impaired (-) - (14.852) - - - - -- Net carrying amount of financial assets under guarantee - 1.883 - - - - -

- not past due (gross carrying value) - - - - - - -- impaired (-) - - - - - - -- Net carrying amount of financial assets under guarantee - - - - - - -

E. Off- balance sheet items which include credit risk - - - - - - 222.948

Current Year Trade Receivables Other Receivables Deposits Derivative Instruments Other

Past due between 1-30 days 41.798 - - - - Past due between 1-3 months 8.808 - - - - Past due between 3-12 months 1.934 - - - - Past due for more than 1 year 3.172 - - - -

Prior Year

Receivables

Deposits Derivative

Instruments Other


related parties

Due from third parties


Due from third

parties Maximum exposure to credit risk at the end of reporting period (A+B+C+D+E) 337 518.251 - 9.244 992.299 - 73.361 - Maximum credit risk secured by guarantees - 318.290 - - - - - A. Net carrying amount of financial assets that are neither past due

nor impaired 337 477.987 - 9.244 992.299 - - 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 - 38.733 - - - - - - Under guarantee - 6.208 - - - - - D. Net carrying amount of financial assets impaired - 1.531 - - - - - - past due (gross carrying value) - 16.597 - - - - -

- impaired (-) - (15.066) - - - - - - Net carrying amount of financial assets under guarantee - 1.531 - - - - -

- not past due (gross carrying value) - - - - - - - - impaired (-) - - - - - - - - Net carrying amount of financial assets under guarantee - - - - - - -


Prior Year Trade Receivables Other Receivables Deposits Derivative

Instruments Other

Past due between 1-30 days 23.853 - - - -Past due between 1-3 months 9.126 - - - -Past due between 3-12 months 3.308 - - - -Past due for more than 1 year 2.446 - - - -


The Group’s 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.

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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


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 Level 1 Level 2 Level 3 Financial assets at fair value

Share certificates 24.394 - - Investment funds 1.207 - -

Financial liabilities at fair value Interest rate swap - - - Options (Note 23) - - 90.099

Prior Year Level 1 Level 2 Level 3 Financial assets at fair value


Financial liabilities at fair value Interest rate swap - 596 - Options (Note 23) - - 128.113

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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 Yazıcılar Holding A.Ş., Özilhan Sınai

Yatırım A.Ş and Anadolu Endüstri Holding A.Ş 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, SABMiller’s

Russian and Ukrainian beer businesses have been transferred to EBI and Euro Asien.Within the scope of this transaction, EBI and Euro Asien’s 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 Company’s 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) Company’s final shareholding structure after the sales of newly issued shares to SABMiller’s subsidiary

SABMiller Anadolu Efes Limited (SABMiller AEL) in return for increased capital on March 14, 2012 is as follows:

Sermaye Artışı Sonrası 31 Aralık 2011 Tutar % Tutar %

Yazıcılar Holding A.Ş. 139.787 23,61 139.787 31,06 Özilhan Sınai Yatırım A.Ş. 79.813 13,48 79.813 17,74 Anadolu Endüstri Holding A.Ş. (AEH) 35.292 5,96 35.292 7,84 SABMiller AEL 142.105 24,00 - - Halka açık ve diğer 195.108 32,95 195.108 43,36

592.105 100,00 450.000 100,00 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.

…………………………………….

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CONVENIENCE TRANSLATION INTO ENGLISH OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH ANADOLU EFES BİRACILIK VE MALT SANAYİİ ANONİM ŞİRKETİ CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2010 TOGETHER WITH INDEPENDENT AUDITOR’S REPORT

F-100

CONVENIENCE TRANSLATION INTO ENGLISH OF INDEPENDENT AUDITOR’S REPORT ORIGINALLY ISSUED IN TURKISH

INDEPENDENT AUDITOR’S REPORT

To the Board of Directos of Anadolu Efes Biracılık ve Malt Sanayii A.Ş. 1. We have audited the accompanying consolidated financial statements of Anadolu Efes Biracılık ve

Malt Sanayii A.Ş., 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.

Management’s 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.

Auditor’s Responsibility 3. Our responsibility is to express an opinion on these consolidated financial statements based on our

audit. We conducted our audit in accordance with 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 auditor’s 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 entity’s 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Opinion 4. In our opinion, the accompanying consolidated financial statements present fairly, in all material

respects, the financial position of Anadolu Efes Biracılık ve Malt Sanayii A.Ş. 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.

Başaran Nas Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. a member of PricewaterhouseCoopers Burak Özpoyraz, SMMM Partner Istanbul, 29 March 2011

F-102

Convenience Translation into English of Consolidated Financial Statements Originally Issued in Turkish Anadolu Efes Biracılık ve Malt Sanayii Anonim Şirketi 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 Group’s Organization and Nature of Activities ............................................................................ 6-8 Note 2 Basis of Presentation of Consolidated Financial Statements ...................................................... 9-21 Note 3 Business Combinations ............................................................................................................. 22-25 Note 4 Joint Ventures ................................................................................................................................. 25 Note 5 Segment Information ................................................................................................................. 26-27 Note 6 Cash and Cash Equivalents ............................................................................................................. 28 Note 7 Financial Investments ..................................................................................................................... 28 Note 8 Borrowings ................................................................................................................................ 29-30 Note 9 Other Financial Liabilities .............................................................................................................. 30 Note 10 Trade Receivables and Payables ..................................................................................................... 31 Note 11 Other Receivables and Payables ............................................................................................... 31-32 Note 12 Receivables and Payables Related to Finance Sector...................................................................... 32 Note 13 Inventories....................................................................................................................................... 32 Note 14 Biological Assets ............................................................................................................................ 33 Note 15 Receivables and Deferred Income from Continuing Construction Contracts ................................. 33 Note 16 Investments in Associates. .............................................................................................................. 33 Note 17 Investment Property ........................................................................................................................ 33 Note 18 Property, Plant and Equipment ................................................................................................. 34-35 Note 19 Intangible Assets ....................................................................................................................... 36-37 Note 20 Goodwill ......................................................................................................................................... 38 Note 21 Government Incentives and Grants ................................................................................................. 38 Note 22 Provisions, Contingent Assets and Liabilities ................................................................................. 38 Note 23 Commitments and Contingencies ............................................................................................. 39-40 Note 24 Employee Benefits .................................................................................................................... 40-41 Note 25 Pension Plans .................................................................................................................................. 41 Note 26 Other Current / Non-Current Assets and Liabilities .................................................................. 41-42 Note 27 Equity ........................................................................................................................................ 42-43 Note 28 Sales and Cost of Sales ................................................................................................................... 44 Note 29 Operating Expenses......................................................................................................................... 44 Note 30 Expenses by Nature ......................................................................................................................... 45 Note 31 Other Operating Income / Expense ................................................................................................. 45 Note 32 Financial Income ............................................................................................................................. 46 Note 33 Financial Expenses .......................................................................................................................... 46 Note 34 Non-Current Assets Available For Sale and Discontinuing Operations ........................................ 46 Note 35 Income Taxes, Deferred Tax Assets and Liabilities .................................................................. 46-47 Note 36 Earnings per Share .......................................................................................................................... 48 Note 37 Related Party Balances and Transactions .................................................................................. 48-49 Note 38 Nature and Level of Risks Arising From Financial Instruments ............................................... 50-54 Note 39 Financial Instruments ................................................................................................................ 55-56 Note 40 Subsequent Events .......................................................................................................................... 56

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CONSOLIDATED BALANCE SHEET As at December 31, 2010 (Currency– Unless otherwise indicated thousands of Turkish Lira (TRL))

The accompanying notes form an integral part of these consolidated financial statements

(1)

Audited Notes 2010 2009 ASSETS Current Assets 2.140.817 2.056.660Cash and Cash Equivalents 6 939.324 1.053.256Financial Investments 7 55.090 21.204Trade Receivables 10 518.251 421.539Due from Related Parties 37 337 810Other Receivables 11 7.919 5.827Inventories 13 467.864 412.389Other Current Assets 26 152.032 141.635

Non-Current Assets 3.448.014 3.373.381Other Receivables 11 1.325 944Financial Investments 7 37.488 40.101Investments In Associates 16 21.441 45.356Biological Assets 14 1.512 -Property, Plant and Equipment 18 2.043.794 1.981.611Intangible Assets 19 361.889 357.016Goodwill 20 871.079 855.570Deferred Tax Assets 35 40.008 46.871Other Non-Current Assets 26 69.478 45.912

Total Assets 5.588.831 5.430.041 LIABILITIES Current Liabilities 1.757.195 1.488.643Borrowings 8 996.113 949.326Trade Payables 10 253.332 234.879Due to Related Parties 37 8.646 14.996Other Payables 11 290.846 202.308Provision for Corporate Tax 15.292 16.507Provisions 22 23.676 20.334Other Current Liabilities 26 169.290 50.293

Non-Current Liabilities 1.016.631 1.207.220Borrowings 8 768.383 908.059Other Payables 11 144.366 126.620Provision for Employee Benefits 24 51.337 40.148Deferred Tax Liability 35 42.843 33.780Other Non-Current Liabilities 26 9.702 98.613

EQUITY Equity Attributable to Equity Holders of the Parent 2.767.087 2.426.917Issued Capital 27 450.000 450.000Inflation Adjustment to Issued Capital 27 63.583 63.583Fair Value Reserve 27 19.569 17.339Currency Translation Differences 27 (4.085) (18.016)Restricted Reserves Allocated from Net Income 27 138.442 108.217Other Reserves 27 (5.736) 4.916Accumulated Profits 27 1.601.674 1.378.290Net Income 503.640 422.588


Total Liabilities 5.588.831 5.430.041.

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CONSOLIDATED INCOME STATEMENT For the year ended December 31, 2010 (Currency– Unless otherwise indicated thousands of Turkish Lira (TRL))


(2)



Sales 5, 28 4.168.793 3.811.067Cost of Sales (-) 28 (2.051.348) (1.907.934)

Gross Profit From Operations 2.117.445 1.903.133

Marketing, Selling and Distribution Expenses (-) 29 (1.060.488) (928.050)General and Administration Expenses (-) 29 (353.951) (322.094)Other Operating Income 31 25.022 41.470Other Operating Expense (-) 31 (34.404) (46.478)

Profit From Operations 693.624 647.981

Loss from Associates 16 (17.910) (10.925)Financial Income 32 244.302 375.081Financial Expenses (-) 33 (261.464) (468.383)

Profit Before Tax From Continuing Operations 658.552 543.754

Continuing Operations Tax Income / (Expense) Current Period Tax Expense (-) 35 (127.846) (127.260)Deferred Tax Income / (Expense) 35 (12.265) 5.778

Profit For The Year 518.441 422.272

Attributable to: Minority interests 14.801 (316)Equity holders of the parent 503.640 422.588

Earnings per share (Full TRL) 36 1,1192 0,9391

F-105


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended December 31, 2010 (Currency– Unless otherwise indicated thousands of Turkish Lira (TRL))


(3)

Audited Notes 2010 2009 Profit for the Year 518.441 422.272

Other Comprehensive Income / (Loss):

Currency Translation Differences 25.202 (57.786)Fair Value Difference 3 - 4.916Value Increase / (Decrease) in Available-for-Sale Securities 7 2.347 17.398Tax Income / (Expense) on Other Comprehensive Income / (Loss) 7 (117) (870)

Other Comprehensive Income / (Loss), (Net of Taxes) 27.432 (36.342) Total Comprehensive Income 545.873 385.930 Attributable to: Minority Interests 26.072 (20.295)Equity Holders of the Parent 519.801 406.225

F-106

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F-10

7


CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended December 31, 2010 (Currency– Unless otherwise indicated thousands of Turkish Lira (TRL))


(5)


Cash flows from operating activities Continuing operations profit before tax 658.552 543.754Adjustments for: Depreciation and amortization expenses 5, 18, 19, 30 301.031 265.557(Gain)/loss on sale of property, plant and equipment and intangible assets, net 31 (384) 4.627Provision for retirement pay liability 5, 24 12.487 9.023Provision for vacation pay liability 5, 22 3.124 25Provision / (reversal of provision) for inventory obsolescence, net 5, 13 941 3.409Provision / (reversal of provision) for doubtful receivables, net 5, 10 1.064 1.498Provision for long term incentive plan 7.241 4.484(Impairment reversal) / impairment on property, plant and equipment, net 5, 18, 31 2.079 (561)Foreign exchange (gain) / loss raised from loans, net (5.442) 36.571Interest expense 33 77.534 84.007Interest income 32 (71.669) (59.209)(Gain) / loss from derivative financial instruments 32, 33 224 587Syndication loan expense 33 10.073 2.966Negative goodwill 3, 5, 31 - (13.503)Loss from associates 5, 16 17.910 10.925Other (income) / expense, net (211) (511)

Operating profit before changes in operating assets and liabilities 1.014.554 893.649

Change in trade receivables (97.863) (361)Change in due from related parties 473 3.063Change in inventories (54.818) 90.115Change in other assets, other liabilities and provisions 68.681 65.218Change in trade payables 18.452 24.156Change in due to related parties 695 (4.258)Vacation pay, retirement pay liability and long term incentive plan paid (9.586) (10.556)Taxes paid (131.345) (123.297)Net cash flows from operating activities 809.243 937.729

Cash flows used in investing activities Purchase of property, plant and equipment and intangible assets 5, 18, 19 (330.714) (317.651)Water source business investment 3 - (14.835)Proceeds from sale of property, plant and equipment and intangible assets 14.210 13.543Purchase of biological assets (1.512) -Acquisition of subsidiaries and joint venture, net of cash acquired 3 (22.728) (20.121)Cash payment for acquired minority shares 3 (290.456) (78.211)Net cash used in investing activities (631.200) (417.275)

Cash flows from financing activities Dividends paid 27 (168.979) (133.454)Dividends paid to minority shareholders - (37)Capital increase in subsidiaries by minority shareholders 26.920 -Proceeds from short-term and long-term debt 1.255.225 944.482Repayment of short-term and long-term debt (1.370.278) (889.875)Interest paid (78.629) (86.849)Interest received 72.980 55.422Change in time deposits with maturity more than three months (34.851) (19.259)Net cash used in financing activities (297.612) (129.570)

Currency translation differences on cash and cash transactions 7.273 (29.488)

Net increase /(decrease) in cash and cash equivalents (119.569) 390.884

Cash and cash equivalents at the beginning of the year 6 1.048.534 687.138

Cash and cash equivalents at the end of the year 6 936.238 1.048.534

F-108



(6)

NOTE 1. GROUP’S ORGANIZATION AND NATURE OF ACTIVITIES General Anadolu Efes Biracılık ve Malt Sanayii A.Ş. (a Turkish corporation, Anadolu Efes, the Company) was established in İstanbul in 1966. Certain shares of Anadolu Efes are listed on the İstanbul Stock Exchange (ISE). The registered office address of the Company is located at Bahçelievler Mahallesi Şehit İbrahim Koparır Caddesi No: 4 Bahçelievler - İstanbul. 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 Coca- Cola 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 İçecek A.Ş. (CCİ), 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 Tarım ve Gıda Ürünleri San. ve Tic. A.Ş., 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:



450.000 100,00 450.000 100,00

F-109



(7)

NOTE 1. GROUP’S 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 Segment Effective Shareholding and Voting Rights %

2010 2009 Efes Breweries International N.V. (EBI) (1) (6) The Netherlands Facilitating foreign investments in breweries International Beer 100,00 73,47 ZAO Moscow-Efes Brewery (Efes Moscow) Russia Production and marketing of beer International Beer 90,97 66,75 OAO Amstar (Amstar) (2) Russia Production of beer International Beer - 66,75 Rostov Beverages C.J.S.C. (Efes Rostov) (2) Russia Lease International Beer - 66,75 OOO Stary Melnik (Stary Melnik) (3) Russia Service sector International Beer 90,96 66,75 ZAO Efes Entertainment (Efes Entertainment) (3) Russia Service sector International Beer 90,97 66,75 OAO Krasny Vostok Solodovpivo (KV Group) (3) Russia Production of beer International Beer 90,96 66,73 ZAO Siberian Brewery Company (2) Russia Production and marketing of beer International Beer - 66,74 OAO Knyaz Rurik (Knyaz Rurik) (9) Russia Investment company of EBI International Beer 99,95 - ZAO Mutena Maltery (Mutena Maltery) (10) Russia Production of malt International Beer 99,95 - OOO Vostok Solod (4) Russia Production of malt International Beer 90,96 66,73OOO KV-Invest (4) Russia Finance International Beer 90,96 66,73OOO T'sentralny Torgovy Dom (4) Russia Sales company International Beer 90,96 66,73 ZAO Moskovskii Torgovyii Dom (4) Russia Sales company International Beer 90,96 66,73ZAO Samarskii Torgovyii Dom (8) Russia Sales company International Beer - 66,73ZAO Saratovskii Torgovyii Dom (8) Russia Sales company International Beer - 66,73OOO Volgogradskii Torgovyii Dom (8) Russia Sales company International Beer - 66,73OOO Kurskii Torgovyii Dom (8) Russia Sales company International Beer - 66,73OOO Nizhegorodskii Torgovyii Dom (8) Russia Sales company International Beer - 66,73J.S.C. Efes Karaganda Brewery (Efes Karaganda) Kazakhstan Production and marketing of beer International Beer 72,00 52,90 Dinal LLP (Dinal) Kazakhstan Distribution of beer International Beer 72,00 52,90

Efes Vitanta Moldova Brewery S.A. (Efes Moldova) Moldova Production and marketing of beer, and low alcoholic drinks International Beer 96,50 70,90

Efes Romania Industrie Si Comert S.A. (ERIC) (7) Romania Distribution of beer International Beer 100,00 73,46 Euro-Asian Brauerein Holding GmbH (Euro-Asian) Germany Investment company of EBI International Beer 100,00 73,47


Central Asian Beverages B.V. (Central Asian) The Netherlands Investment company of EBI International Beer 60,00 44,08 Efes Trade BY FLLC (Efes Belarus) Belarus Market development International Beer 100,00 73,47




Anadolu Efes Dış Ticaret A.Ş. (Aefes Dış Ticaret) Turkey Foreign trade Other 99,62 99,62

Cypex Co. Ltd. (Cypex) Turkish Republic of Northern Cyprus

Marketing and distribution of beer Other 99,99 99,99




Caspian Marketing Ltd. Azerbaijan Marketing and distribution of beer Other 100,00 100,00 Efes Deutschland GmbH (Efes Germany) Germany Marketing and distribution of beer Other 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) Company’s 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).

F-110



(8)

NOTE 1. GROUP’S 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 Country Principal Activity Segment Effective Shareholding

and Voting Rights %2010 2009

Coca-Cola İçecek A.Ş. (CCİ) (1) Turkey Production, bottling of Coca-Cola products Soft Drinks 50,26 50,26Coca-Cola Satış Dağıtım A.Ş. (CCSD) Turkey Distribution and selling of Coca-Cola products Soft Drinks 50,25 50,25Mahmudiye Kaynak Suyu Ltd. Şti. (Mahmudiye) Turkey Filling and selling of natural spring water Soft Drinks 50,25 50,25Efes Sınai Dış Ticaret A.Ş. (EST) Turkey Foreign trade Soft Drinks 50,50 50,50J.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 CCİ Soft Drinks 47,33 47,33Azerbaijan Coca-Cola Bottlers LLC

(Azerbaijan CC) Azerbaijan Production, bottling, distribution and selling of Coca-Cola products


Coca-Cola Bishkek Bottlers Closed Joint Stock Company (Bishkek CC) Kyrgyzstan

Production, bottling, distribution and selling of Coca-Cola products and distributions of Efes products



The Coca-Cola Bottling Company of Iraq FZCO (JV Dubai)


CC Beverage Limited Iraq Production, bottling, distribution and selling of Coca-Cola products





Coca-Cola Beverages Pakistan Ltd (CCBPL) Pakistan Production, bottling, distribution and selling of Coca-Cola products


Turkmenistan Coca-Cola Bottlers Ltd. (Turkmenistan CC) Türkmenistan Production, bottling, distribution and selling of


Anadolu Etap Tarım ve Gıda Ürünleri San. ve Tic. A.Ş. (Anadolu Etap) Turkey Production and sales of fruit juice concentrate

and puree Other 33,33 33,33

(1) Shares of CCİ are currently traded on ISE. Although the Company has been representing and controlling more than 50% of voting rights of CCİ, since the members of the board of directors of CCİ, representing the Company and other shareholders, take decisions mutually in the board of directors meetings; the financial statements of CCİ 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.

F-111



(9)

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 Group’s 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 "Communiqué on Financial Reporting in Capital Market" Serial XI, No:29 (Communiqué), 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 Communiqué. The financial statements and explanatory notes are presented using the compulsory standard formats as published by the Communiqué.

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 Functional Currency

2010 2009

EBI EURO USD USD Efes Moscow Russian Ruble (RUR) RUR RUR KV Group RUR RUR RUR Efes Karaganda Kazakh Tenge (KZT) KZT KZT Efes Vitanta Moldovan Leu (MDL) MDL MDL Efes Georgia Georgian Lari (GEL) GEL GEL CCI Holland EURO USD USD Almaty CC KZT USD USD Azerbaijan CC Azerbaijan Manat (AZN) USD USD Bishkek CC Kirghiz Som (KGS) USD USD CCBPL Pakistan Rupee (PKR) PKR PKR Jordan CC Jordanian Dinar (JOD) USD USD AETMC EURO EURO EURO EHTMC EURO EURO EURO Efes Germany EURO EURO EURO Knyaz Rurik RUR RUR RUR

F-112



(10)

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 first-time 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.

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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.

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Adoption of new and revised International Financial Reporting Standards (continued)

The impact of the improvement to IFRS’s 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 entity’s net assets, in the event of liquidation, shall be measured either at fair value or at the present ownership instruments’ proportionate share of the acquiree’s 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 acquiree’s 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.

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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 Group’s 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 Group’s 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 Group’s share of net assets of the associates, less any impairment in value. The consolidated income statement reflects the Group’s 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.

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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.

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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 10-50 years Machinery and equipment 4-20 years Leasehold improvements 4-15 years Furniture and fixtures 3-15 years Vehicles 5-10 years Returnable bottles and cases 5-10 years Other tangible assets 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.

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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 CCİ in 2005 and 2009, and joint venture acquired by CCİ 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 Group’s share is the net fair value of the acquiree’s 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 Group’s 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.

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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.

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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.

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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 Group’s subsidiaries and joint ventures in Turkey as of respective year-ends are as follows:

Date USD / TRL (full)

EURO / TRL (full)

December 31, 2010 1,5460 2,0491 December 31, 2009 1,5057 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.

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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 CCİ.

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 (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 Group’s investing activities and cash flows related with financing activities present the proceeds and repayments of sources in the Group’s financing activities.

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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 Group’s 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 employee’s 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.

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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 Cash and cash equivalents 1.666 Trade and other receivables 7.052 Inventories 1.775 Other assets 1.089 Property, plant and equipment 20.384 Deferred tax liability (3.722)Other liabilities (461)Minority interests (6.683)Fair value of net assets acquired 21.100


Net book value of Mutena Maltery shares on hand 5.103 Fair value of Mutena Maltery shares on hand (6.683)Amount recognised in income statement (207)

Total cash consideration 18.608 Cash in the subsidiary acquired (-) (1.666)Net cash outflow on acquisition 16.942

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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, CCİ 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, CCİ’s 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, Group’s 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 Carrying Value

Cash and cash equivalents 1.113 1.113 Trade and other receivables 297 297 Inventories 9.059 9.059 Other assets 481 481 Property, plant and equipment 14.280 14.154 Intangible assets 29.648 333 Trade and other payables (10.087) (10.087)Due to related parties (3.407) (3.407)Other liabilities (4) (4)

Fair value of net assets acquired 41.380 11.939

Total cash consideration, Group’s share 3.531 Group’s share in net assets (5.459)

Negative goodwill arising from acquisition (1.928)

Total cash consideration, Group’s share 3.531 Cash in the subsidiary acquired, Group’s share (-) (559)

Net cash outflow on acquisition 2.972

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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, CCİ has purchased certain real estates, movables, licenses and other assets related to the water business of Sandras Su Gıda Turizm Taşımacılık İnşaat A.Ş (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, CCİ 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 EBI’s 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 EBI’s 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 Group’s consolidated financial statements (Note 31).

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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 Group’s 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 Carrying Value

Cash and cash equivalents 3.487 3.487 Trade and other receivables 1.290 1.290 Inventories 30.531 25.577 Other assets 4.438 4.438 Property, plant and equipment and intangibles 34.548 13.873 Deferred tax assets - 1.021 Financial liabilities (17.238) (17.238)Trade and other payables (6.697) (6.697)Due to related parties (2.727) (2.727)Deferred tax liabilities (4.002) - Other liabilities (25.233) (25.233)

Fair value of net assets acquired 18.397 (2.209)


Goodwill arising from acquisition 12.178

Total cash consideration 18.311 Cash in the subsidiary acquired, Group’s share (-) (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: 2010 2009

Current assets 659.168 609.128 Non-current assets 883.904 854.736

Total assets 1.543.072 1.463.864 Short-term liabilities 452.245 587.452 Long-term liabilities 357.821 232.062 Equity 733.006 644.350

Total liabilites 1.543.072 1.463.864

Net income 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.

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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 Beer

International Beer

Soft Drinks

Other (1) andEliminations Total

2010


Total Sales 1.282.605 1.463.986 1.383.569 38.633 4.168.793 EBITDA 519.064 320.273 218.589 (38.922) 1.019.004

Depreciation and amortization 74.932 149.623 74.027 2.449 301.031 Provision for retirement pay liability 8.348 - 3.981 158 12.487 Other 3.617 1.768 3.963 2.514 11.862

Profit / (loss) for the year 368.514 94.209 99.694 (43.976) 518.441 Capital expenditures (Note 18, 19) 92.077 147.322 80.206 11.109 330.714 2009


Total Sales 1.255.125 1.324.704 1.209.859 21.379 3.811.067 EBITDA 502.959 262.993 185.277 (34.615) 916.614

Depreciation and amortization 68.967 130.214 66.286 90 265.557 Provision for retirement pay liability 4.820 - 4.203 - 9.023 Negative goodwill - - (5.210) (8.293) (13.503)Other 2.276 5.257 1.154 (1.131) 7.556

Profit / (loss) for the year 363.056 (360) 85.035 (25.459) 422.272 Capital expenditures (Note 18, 19) 102.698 156.581 65.704 (7.332) 317.651 (1) Includes other subsidiaries included in the consolidation of Anadolu Efes and headquarters expenses.

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NOTE 5. SEGMENT INFORMATION (continued) Segment assets and liabilities as of December 31, 2010 and 2009 is disclosed as follows:

Turkey

BeerInternational

BeerSoft

DrinksOther (1) andEliminations Total

2010

Segment assets 3.002.585 2.294.972 1.514.717 (1.223.443) 5.588.831Segment liabilities 851.663 1.124.038 793.535 4.590 2.773.826


2009

Segment assets 2.463.934 2.449.692 1.439.099 (922.684) 5.430.041Segment liabilities 502.454 1.390.927 800.882 1.600 2.695.863


(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 2009

EBITDA 1.019.004 916.614Depreciation and amortization expenses (301.031) (265.557)Provision for retirement pay liability (12.487) (9.023)Provision for vacation pay liability (3.124) (25)(Impairment reversal) / impairment on property, plant and equipment, net (2.079) 561Provision for doubtful receivables, net (1.064) (1.498)Provision for inventory, net (941) (3.409)Negative goodwill - 13.503Other (4.654) (3.185)

Profit from Operations 693.624 647.981

Loss from Associates (17.910) (10.925)Financial Income 244.302 375.081Financial Expenses (-) (261.464) (468.383)

Profit Before Tax from Continuing Operations 658.552 543.754

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2010 2009

Cash on hand 855 990Bank accounts

- Time deposits 896.289 1.013.979- Demand deposits 39.042 33.532

Other 52 33Cash and cash equivalents in cash flow statement 936.238 1.048.534

Interest income accrual 3.086 4.722 939.324 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 Group’s cash deposits at banks as collateral for credit facilities (December 31, 2009 - TRL11.161). NOTE 7. FINANCIAL INVESTMENTS a) Current Investments

2010 2009

Time deposits with maturity more than three months 53.830 19.259Investment funds 1.260 1.753Government bonds - 192 55.090 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 2010 2009 2010 2009

Alternatifbank A.Ş. 7,46% 7,46% 36.702 34.240ZAO Mutena Maltery (Mutena Maltery) - 14,68% - 5.075Other 786 786

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.

F-131

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2010 2009

2011 - 313.2442012 386.027 524.5102013 321.233 44.7552014 and thereafter 59.500 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 CCİ, 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 Çelik Motor Ticaret A.Ş., a related party. NOTE 9. OTHER FINANCIAL LIABILITIES None (December 31, 2009 – None).

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NOTE 10. TRADE RECEIVABLES AND PAYABLES a) Short-Term Trade Receivables

2010 2009 Trade receivables 518.819 419.310Notes and cheques receivables 14.498 16.096Provision for doubtful accounts (-) (15.066) (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 13.867 21.148Current year provision 4.620 2.581Unused provisions (3.556) (1.083)Write-offs from doubtful receivables (127) (8.538)Currency translation differences 262 (241)

Balance at December 31 15.066 13.867 b) Short-Term Trade Payables

2010 2009

Trade payables 253.332 234.879 NOTE 11. OTHER RECEIVABLES AND PAYABLES a) Other Current Receivables

2010 2009


7.919 5.827 b) Other Non-Current Receivables

2010 2009

Deposits and guarantees given 508 418Other 817 526

1.325 944

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NOTE 11. OTHER RECEIVABLES AND PAYABLES (continued) c) Other Current Payables

2010 2009


290.846 202.308 d) Other Non-Current Payables

2010 2009


NOTE 12. RECEIVABLES AND PAYABLES RELATED TO FINANCE SECTOR None (December 31, 2009 - None). NOTE 13. INVENTORIES 2010 2009

Finished and trade goods 95.975 97.281Work-in-process 50.426 47.382Raw materials 187.762 147.776Packaging materials 36.339 35.075Supplies 58.515 49.628Bottles and cases 30.264 29.424Other 21.056 17.180Reserve for obsolescence (-) (12.473) (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 11.357 8.495Current year provision 4.205 5.740Inventories written off (3.264) (2.331)Currency translation differences 175 (547)

Balance at December 31 12.473 11.357

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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

2010 2009 Ownership (%) Carrying value Ownership (%) Carrying value

CEB 28,00% 21.441 20,57% 45.356

Total 21.441 45.356 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 49.586 68.838Total Liabilities 28.145 23.482

Net Assets 21.441 45.356

Net Loss for the Year (17.910) (10.925) The movement of investment in associates as of December 31, 2010 and 2009 is as below: 2010 2009

Balance at January 1 45.356 54.911Loss from associates (17.910) (10.925)Change in scope of consolidation (Note 3) - (1.995)Foreign currency translation (6.005) 3.365

Balance at December 31 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).

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F-14

0



(38)

NOTE 20. GOODWILL Movement of the goodwill during the period is as follows: 2010 2009

At January 1 855.570 866.506 Additions (Note 3) - 14.310 Put option fair value change (Note 23) 6.147 (8.273)Currency translation differences 9.362 (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 Soft Drinks Other Total

2010 50.099 538.043 270.759 12.178 871.079 2009 50.099 523.450 269.843 12.178 855.570

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:

2010 2009

Vacation pay liability 17.702 15.141 Management bonus accruals 5.974 4.681 Other - 512

23.676 20.334

As of December 31, 2010 and 2009, movement of vacation pay liability is as follows:

2010 2009

Balance at January 1 15.141 16.023 Payments (765) (593)Current year provision 3.124 25 Addition through acquisition - 59 Currency translation differences 202 (373)

17.702 15.141

As of December 31, 2010 and 2009 movement of management bonus accruals is as follows:

2010 2009

Balance at January 1 4.681 1.698 Payments (23.031) (15.500)Current year provision 24.258 18.541 Currency translation differences 66 (58)

5.974 4.681

F-141



(39)

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


Original Currency

TRL


USD


EUR


KZT


RUR

A. GPMs given on behalf of the Company’s legal personality 60.423 13.035 895 8.381 314.003 493.954 B. GPMs given in favor of subsidiaries included in full consolidation 673.948 - 358.629 40.000 3.625.311 - 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



Total 734.371 13.035 359.524 48.381 3.939.314 493.954


2009


Original Currency

TRL


USD


EUR


KZT


RUR


GEL

A. GPMs given on behalf of the Company’s legal personality 62.424 12.548 5.925 5.606 129.178 452.846 5.492 B. GPMs given in favor of subsidiaries included in full consolidation 1.013.936 - 458.202 107.000 4.659.097 950.000 - 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 1.076.360 12.548 464.127 112.606 4.788.275 1.402.846 5.492

Ratio of other GPMs over the Company’s equity (%) - - - - - - -

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 EBRD’s 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)).

F-142



(40)

NOTE 23. COMMITMENTS AND CONTINGENCIES (continued) CCİ, Its Subsidiaries and Joint Ventures a) Put Options

A put option has been granted to Day Investments Ltd. by CCİ that may be exercisable in 2012. By such option, Day Investments Ltd. will have right to sell its shares in Turkmenistan CC to CCİ at the price of USD2.360 thousand. Group’s 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, CCİ’s letters of guarantee given to various enterprises are amounting to TRL63.901 (December 31, 2009 – TRL56.013).

Operational Lease

As of December 31, 2010, Group’s 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 market-oriented 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 2009

Employment termination benefits 39.010 30.103Long-term incentive plans 12.327 10.045

51.337 40.148 In accordance with existing social legislation, the Group’s 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: 2010 2009

Discount rate 10,0% 11,0%Expected salary / limit increase rate 5,1% 4,8%

F-143



(41)

NOTE 24. EMPLOYEE BENEFITS (continued) Movement of provision for employment termination benefits represented in the consolidated financial statements is as follows: 2010 2009

Balance at January 1 30.103 25.604Payments (3.580) (4.583)Interest cost 3.006 2.816Current year provision 9.481 6.207Addition through joint venture acquired - 55Currency translation differences - 4

39.010 30.103 NOTE 25. PENSION PLANS None (December 31, 2009 – None). NOTE 26. OTHER CURRENT / NON-CURRENT ASSETS AND LIABILITIES a) Other Current Assets

2010 2009

Value Added Tax (VAT) deductible and VAT to be transferred 58.100 55.806Prepayments 35.661 29.582Advances given to suppliers 34.267 25.912Prepaid taxes 23.251 27.517Other 753 2.818

152.032 141.635

b) Other Non-Current Assets

2010 2009

Prepayments 48.341 27.260Advances given 14.274 12.873Deferred VAT and other taxes 6.690 5.275Other 173 504

69.478 45.912

c) Other Current Liabilities

2010 2009

Liability for put option (Note 23) 126.279 -Expense accruals 24.418 29.005Advances taken 12.185 15.587Due to personnel 5.169 3.514Other 1.239 2.187

169.290 50.293

F-144



(42)

NOTE 26. OTHER CURRENT / NON-CURRENT ASSETS AND LIABILITIES (continued) d) Other Non-Current Liabilities

2010 2009

Deferred VAT and other taxes 6.654 5.228Liability for put option (Note 23) 1.834 92.210Other 1.214 1.175

9.702 98.613 NOTE 27. EQUITY a) Issued Capital and Adjustments to Share Capital and Equity Investments

2010 2009

Common shares 1 full TRL per value Authorized capital 900.000 900.000 Issued capital 450.000 450.000

As of December 31, 2010 and 2009, the composition of shareholders and their respective percentage of ownership can be summarized as follows:



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 Company’s issued capital (inflation-restated issued capital in accordance with the communiqués and announcements of CMB). The second legal reserve is appropriated at the rate of 10% of all distributions in excess of 5% of the Company’s 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 Communiqué.

F-145



(43)

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, it’s 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 netted-off 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:



RestatedAmount


1.032.561 164.371 1.196.932

Fair value reserve 19.569Currency translation differences (4.085)Other reserves (5.736)Accumulated profits (Including net income) 1.560.407




RestatedAmount


907.193 164.371 1.071.564

Fair value reserve 17.339Currency translation differences (18.016)Other reserves 4.916Accumulated profits (Including net income) 1.351.114


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NOTE 28. SALES AND COST OF SALES Revenues 2010 2009

Domestic revenues 2.361.655 2.193.184Foreign revenues 1.807.138 1.617.883

Total Sales, net 4.168.793 3.811.067

Cost of Sales (-)

Net change in inventory 1.581.174 1.488.821Depreciation and amortisation expense on PP&E and intangible assets 157.794 134.821Personnel expenses 108.967 101.978Utility expenses 89.797 88.407Provision for retirement pay liability 3.954 1.859Other expenses 109.662 92.048

Total cost of sales 2.051.348 1.907.934

Gross Operating Profit 2.117.445 1.903.133 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

2010 2009

Advertising, selling and marketing expenses 449.321 405.857Personnel expenses 194.726 168.543Transportation and distribution expenses 181.399 148.208Depreciation and amortization expense on PP&E and intangible assets 126.365 114.286Utilities and communication expenses 19.498 17.359Rent expenses 10.490 9.183Repair and maintenance expenses 8.292 7.372Provision for retirement pay liability 2.651 2.761Obsolete inventory provision, net 941 3.409Other expenses 66.805 51.072

1.060.488 928.050

b) General and Administration Expenses

2010 2009

Personnel expenses 168.112 143.968Services rendered from outside 70.158 68.471Taxation (other than on income) expenses 19.209 18.031Depreciation and amortization expense on PP&E and intangible assets 16.793 15.973Utilities and communication expenses 10.720 9.445Insurance expenses 6.414 7.298Provision for retirement pay liability 5.882 4.403Meeting and travel expenses 4.384 3.919Repair and maintenance expenses 3.694 3.319Other expenses 48.585 47.267

353.951 322.094

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NOTE 30. EXPENSES BY NATURE a) Depreciation and Amortization Expenses

2010 2009

Cost of sales (157.794) (134.821)Marketing, selling and distribution expenses (126.365) (114.286)General and administration expenses (16.793) (15.973)Other operating expenses (79) (477)

(301.031) (265.557) b) Personnel Expenses

2010 2009

Cost of sales (108.967) (101.978)Marketing, selling and distribution expenses (194.726) (168.543)General and administration expenses (168.112) (143.968)

(471.805) (414.489)

NOTE 31. OTHER OPERATING INCOME / EXPENSE a) Other Operating Income

2010 2009

Income from scrap and other materials 5.398 4.980Rent income 2.444 2.633Gain on sale of fixed assets 1.999 3.733Insurance compensation income 1.106 5.977Negative goodwill (Note 3) - 13.503Impairment reversal of fixed assets (Note 18) - 631Other income 14.075 10.013

25.022 41.470 b) Other Operating Expense

2010 2009

Donations (23.201) (22.297)Impairment loss on fixed assets (Note 18) (2.079) (70)Loss from fixed assets sales (1.615) (8.360)Other expenses (7.509) (15.751)

(34.404) (46.478)

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NOTE 32. FINANCIAL INCOME 2010 2009

Foreign exchange gain 171.740 315.852Interest income 71.669 59.209Gain from derivative financial instruments 893 20

244.302 375.081 NOTE 33. FINANCIAL EXPENSES 2010 2009

Foreign exchange loss (168.047) (375.748)Interest expense (77.534) (84.007)Syndication loan expense (10.073) (3.604)Loss from derivative financial instruments (1.117) (607)Other financial expenses (4.693) (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: 2010 2009

Current period tax expense (127.846) (127.260)Deferred tax income / (expense), net (12.265) 5.778

(140.111) (121.482)

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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: 2010 2009

Consolidated profit before tax 658.552 543.754Enacted tax rate 20% 20%Tax calculated at the parent company tax rate (131.710) (108.751)Non-deductible expenses (5.978) (6.448)Income excluded from tax bases 1.521 2.426Impact of different tax rates 1.575 2.722Other (5.519) (11.431)

(140.111) (121.482) As of December 31, 2010 and 2009 consolidated deferred tax assets calculated by using effective tax rates are summarized as below:

Asset Liability Net 2010 2009 2010 2009 2010 2009

PPE and intangible assets - - (95.130) (77.733) (95.130) (77.733)Inventories 2.198 3.923 - - 2.198 3.923Carry forward losses 52.684 57.149 - - 52.684 57.149Retirement pay liability and other

employee benefits 13.736 11.018 - - 13.736 11.018Other (*) 23.677 18.734 - - 23.677 18.734

92.295 90.824 (95.130) (77.733) (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 2009

Balance at January 1, 13.091 10.221Recorded to the consolidated income statement (12.265) 5.778Recognized in equity (Note 7) (117) (870)Addition through company acquisition (3.722) (1.699)Currency translation differences 178 (339)

Balance at December 31 (2.835) 13.091 As a result of the Group management’s 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.

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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 2009

Net income 503.640 422.588Weighted average number of shares 450.000.000 450.000.000Earnings per share (full TRL) 1,1192 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

2010 2009


203.460 220.260

ii) Due from Related Parties

2010 2009

Anadolu Restoran İşletmeleri Ltd. Şti. (4) - 127Other 337 683

337 810

iii) Due to Related Parties

2010 2009

Oyex Handels GmbH (4) 4.990 4.553AEH (1) (3) 2.822 313Anadolu Bilişim Hizmetleri A.Ş. (2) (4) 612 1.088Mutena Maltery (5) - 8.248Other 222 794

8.646 14.996


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NOTE 37. RELATED PARTY BALANCES AND TRANSACTIONS (continued) b) Transactions with Related Parties

i) Purchases of Goods and Other Charges

2010 2009

Efes Pilsen Spor Kulübü 42.000 33.000Oyex Handels GmbH (4) 26.729 26.932Anadolu Vakfı 23.128 22.261AEH (1) (3) 15.828 12.824Anadolu Bilişim Hizmetleri A.Ş. (2) (4) 12.642 12.673Çelik Motor Ticaret A.Ş. (4) 11.123 10.060Mutena Maltery (5) 5.321 7.727Efes Turizm İşletmeleri A.Ş. (4) 5.203 3.452AEH Münih (4) 3.557 4.476Anadolu Isuzu Otomotiv Sanayi ve Ticaret A.Ş. (1) 1.142 1.145Other 2.906 2.894

149.579 137.444

ii) Financial Income / (Expense), Net

2010 2009

Alternatifbank (2) (4) 7.384 12.839AEH (1) (3) 22 1.183Other (125) -

7.281 14.022

iii) Other Income / (Expense), Net

2010 2009

Anadolu Bilişim Hizmetleri A.Ş. (2) (4) 237 263Anadolu Restaurant İşl. Ltd. Şti. (4) 210 65Alternatifbank (2) (4) 193 80Other 393 580

1.033 988


iv) Director’s 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:

2010 2009

Short-term employee benefits 12.269 10.688 Post-employment benefits 449 316 Other long term benefits 733 1.130 Termination benefits - - Share-based payments - -

13.451 12.134

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The main risks arising from the Group’s 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 Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s debt obligations. The Group’s financial instruments sensitive to interest rate risk is as follows: 2010 2009 Financial instruments with fixed interest rate Financial assets

Financial assets at fair value through profit or loss 953.205 1.038.185 Financial liabilities 310.317 232.892 Financial instruments with floating interest rate Financial liabilities 1.452.699 1.624.463

At December 31, 2010, if interest rate on the Group’s 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 2.815 2.685 Change in EURO denominated borrowing interest rate 318 754 Change in Other denominated borrowing interest rate 104 285

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 Group’s functional currency. The Group manages foreign currency risk by using natural hedges that arise from offsetting foreign currency denominated assets and liabilities.

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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



Thousand USD

TRL Equivalent

Thousand Euro

TRL Equivalent


Equivalent 1. Trade Receivables and Due from Related Parties 12.219 4.453 6.885 489 1.002 4.332 2a. Monetary Financial Assets (Cash and cash equivalents included) 66.718 26.871 41.542 2.959 6.063 19.113 2b. Non- monetary Financial Assets - - - - - - 3. Other Current Assets and Receivables 6.915 50 77 1.488 3.049 3.789 4. Current Assets 85.852 31.374 48.504 4.936 10.114 27.234 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 85.852 31.374 48.504 4.936 10.114 27.234 10.Trade Payables and Due to Related Parties (75.043) (3.750) (5.798) (32.280) (66.145) (3.100) 11.Short- term Borrowings and Current Portion of Long- term Borrowings (505.118) (297.179) (459.439) (22.292) (45.679) - 12a. Monetary Other Liabilities (4.982) (706) (1.092) (276) (565) (3.325) 12b. Non-monetary Other Liabilities - - - - - - 13. Current Liabilities (585.143) (301.635) (466.329) (54.848) (112.389) (6.425) 14. Trade Payables and Due to Related Parties - - - - - - 15. Long-Term Borrowings (436.370) (227.759) (352.116) (41.118) (84.254) - 16 a. Monetary Other Liabilities (1.833) (1.186) (1.833) - - - 16 b. Non-monetary Other Liabilities - - - - - - 17. Non-Current Liabilities (438.203) (228.945) (353.949) (41.118) (84.254) - 18. Total Liabilities (1.023.346) (530.580) (820.278) (95.966) (196.643) (6.425) 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 (937.494) (499.206) (771.774) (91.030) (186.529) 20.809 21. Monetary Items Net Foreign Currency Asset / (Liability) Position (944.409) (499.256) (771.851) (92.518) (189.578) 17.020 22. Total Fair Value of Financial Instruments Used to Manage the Foreign


Foreign Currency Position Table

2009



Thousand USD

TRL Equivalent

Thousand Euro

TRL Equivalent


Equivalent 1. Trade Receivables and Due from Related Parties 12.203 3.644 5.487 825 1.783 4.933 2a. Monetary Financial Assets (Cash and cash equivalents included) 172.818 48.041 72.335 38.421 83.001 17.482 2b. Non- monetary Financial Assets - - - - - - 3. Other Current Assets and Receivables 3.741 74 112 173 374 3.255 4. Current Assets 188.762 51.759 77.934 39.419 85.158 25.670 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 188.762 51.759 77.934 39.419 85.158 25.670 10.Trade Payables and Due to Related Parties (76.315) (5.642) (8.495) (30.586) (66.075) (1.745) 11 Short- term Borrowings and Current Portion of Long- term Borrowings (512.407) (317.936) (478.716) (15.596) (33.691) - 12a. Monetary Other Liabilities (4.393) (604) (910) (362) (783) (2.700) 12b. Non-monetary Other Liabilities - - - - - - 13. Current Liabilities (593.115) (324.182) (488.121) (46.544) (100.549) (4.445) 14. Trade Payables and Due to Related Parties (933) - - (432) (933) - 15. Long-Term Borrowings (595.039) (209.343) (315.208) (129.533) (279.831) - 16 a. Monetary Other Liabilities - - - - - - 16 b. Non-monetary Other Liabilities - - - - - - 17. Non-Current Liabilities (595.972) (209.343) (315.208) (129.965) (280.764) - 18. Total Liabilities (1.189.087) (533.525) (803.329) (176.509) (381.313) (4.445) 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 (1.000.325) (481.766) (725.395) (137.090) (296.155) 21.225 21. Monetary Items Net Foreign Currency Asset / (Liability) Position (1.004.066) (481.840) (725.507) (137.263) (296.529) 17.970 22. Total Fair Value of Financial Instruments Used to Manage the Foreign


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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 98.606Total Import 519.773 509.818

The following table demonstrates the sensitivity analysis of foreign currency as of December 31, 2010 and 2009:



currency


currency


currency


currency Increase / decrease in the USD against TRL by 10%: USD denominated net asset / (liability) (77.177) 77.177 112.810 (112.810) USD denominated hedging instruments(-) - - - - Net effect in USD (77.177) 77.177 112.810 (112.810) Increase / decrease in the EURO against TRL by 10%: EURO denominated net asset / (liability) (18.653) 18.653 2.190 (2.190) EURO denominated hedging instruments(-) - - - - Net effect in EURO (18.653) 18.653 2.190 (2.190) Increase / decrease in the other foreign currencies against TRL by 10%:

Other foreign currency denominated net asset / (liability) 2.081 (2.081) - - Other foreign currency hedging instruments(-) - - - - Net effect in other foreign currency 2.081 (2.081) - - TOTAL (93.749) 93.749 115.000 (115.000)



currency


currency


currency


currency Increase / decrease in the USD against TRL by 10%: USD denominated net asset / (liability) (72.540) 72.540 105.876 (105.876) USD denominated hedging instruments(-) - - - - Net effect in USD (72.540) 72.540 105.876 (105.876) Increase / decrease in the EURO against TRL by 10%: EURO denominated net asset / (liability) (29.616) 29.616 2.130 (2.130) EURO denominated hedging instruments(-) - - - - Net effect in EURO (29.616) 29.616 2.130 (2.130) Increase / decrease in the other foreign currencies against TRL by 10%:

Other foreign currency denominated net asset / (liability) 2.123 (2.123) - - Other foreign currency hedging instruments(-) - - - - Net effect in other foreign currency 2.123 (2.123) - - TOTAL (100.033) 100.033 108.006 (108.006)

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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 Group’s 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 1.764.496 1.822.992 454.346 556.589 812.057 - Trade Payable and due to related parties 261.978 261.978 221.390 38.678 1.910 - Liability for put option 128.113 128.113 - 126.279 1.834 - 2.154.587 2.213.083 675.736 721.546 815.801 -

2009 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 1.857.385 1.939.770 689.223 270.582 979.965 - Trade Payable and due to related parties 249.875 249.902 203.607 41.152 5.143 - Liability for put option 92.210 92.210 - - 92.210 - 2.199.470 2.281.882 892.830 311.734 1.077.318 -

d) Price Risk


e) Credit Risk


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.

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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

Receivables

Deposits Derivative

Instruments Other


related parties

Due from third

parties


Due from third

parties Maximum exposure to credit risk at the end of reporting period (A+B+C+D+E) 337 518.251 - 9.244 992.299 - 73.361 - Maximum credit risk secured by guarantees - 318.290 - - - - - A. Net carrying amount of financial assets that are neither past due

nor impaired 337 477.987 - 9.244 992.299 - - B. Carrying amount of financial assets whose term has been


impaired - 38.733 - - - - - - Under guarantee - 6.208 - - - - - D. Net carrying amount of financial assets impaired - 1.531 - - - - - - past due (gross carrying value) - 16.597 - - - - -




Current Year Trade Receivables Other Receivables Deposits Derivative

Instruments Other


Prior Year

Receivables

Deposits Derivative

Instruments Other


related parties

Due from third parties


Due from third

parties Maximum exposure to credit risk at the end of reporting period (A+B+C+D+E) 810 421.539 - 6.771 1.071.525 - 65.750 - Maximum credit risk secured by guarantees - 245.455 - 74 - - - A. Net carrying amount of financial assets that are neither past due

nor impaired 810 371.686 - 6.771 1.071.525 - - B. Carrying amount of financial assets whose term has been


impaired - 48.007 - - - - - - Under guarantee 6.908 - - - - - D. Net carrying amount of financial assets impaired - 1.846 - - - - - - past due (gross carrying value) - 15.713 - - - - -




Prior Year Trade Receivables Other Receivables Deposits Derivative

Instruments Other



The Group’s 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.

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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


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 Level 1 Level 2 Level 3 Financial assets at fair value


Financial liabilities at fair value Interest rate swap - 596 - Options - - 128.113

Prior Year Level 1 Level 2 Level 3 Financial assets at fair value

Share certificates 34.240 - 5.075 Investment funds 1.753 - -

Financial liabilities at fair value Interest rate swap - 1.488 - Options - - 90.425

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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 EBI’s management.

b) CCİ 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 Exchange’s 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, CCİ’s Board of Directors approved the refinancing of USD360 million existing Club Loan

maturing in March 2013 and refinancing the maturing facilities of CCİ 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 CCİ and the remaining part will be utilised by CCİ’s fully consolidated subsidiaries, The Coca-Cola Bottling Company of Jordan Ltd, J.V. Coca-Cola Almaty Bottlers LLP and CCI International Holland BV. CCİ will guarantee the subsidiary facilities.

d) CCİ'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 Group’s share in JV Dubai and CCBL has been increased to 50,26%.

…………………………………….

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APPENDIX A

SUMMARY OF CERTAIN DIFFERENCES BETWEEN IFRS ANDCMB FINANCIAL REPORTING STANDARDS

The Consolidated Financial Statements in this Offering Circular have been prepared in accordancewith 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

Conversion

Factor

31 December 2002.............................................................................................. 6,478.8 1.29712

31 December 2003.............................................................................................. 7,382.1 1.1384031 December 2004.............................................................................................. 8,403.8 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 ofadditions 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 convertthese 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

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 theGroup’s income statement.

A-2


PRINCIPAL OFFICE OF THE ISSUER

Anadolu Efes Biracılık ve Malt Sanayii Anonim Sirketi

Esentepe Mah. Anadolu Cad. No: 1 Kartal 34870

Istanbul

Turkey

JOINT LEAD MANAGERS

HSBC Bank plc

8 Canada Square

London E14 5HQUnited Kingdom

J.P. Morgan Securities plc

25 Bank Street

Canary WharfLondon E14 5JP

United Kingdom

Merrill Lynch, Pierce, Fenner & Smith Incorporated

One Bryant Park

New York, New York 10036USA

The Royal Bank of Scotland plc

135 Bishopsgate

London EC2M 3URUnited 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 UNITEDSTATES LAW

Allen & Overy LLP

One Bishops Square

London E1 6ADUnited Kingdom

LEGAL COUNSEL TO THE JOINT LEAD

MANAGERS AS TO TURKISH LAW ANDTURKISH TAX COUNSEL

Paksoy Ortak Avukat Burosu

Sun Plaza

Bilim Sokak No: 5 K:14Maslak, 34398 Istanbul

Turkey

LEGAL COUNSEL TO THE COMPANY

AS TO ENGLISH AND UNITED STATES LAW

DLA Piper UK LLP

3 Noble Street

London EC2V 7EE

United Kingdom

LEGAL COUNSEL TO THE COMPANY

AS TO TURKISH LAW

YukselKarkınKucuk Avukatlık Ortaklıgı

Buyukdere Caddesi No:127

Astoria A Kule Kat: 6-24-26-27

34394 Esentepe, Istanbul

Turkiye

INDEPENDENT AUDITORS OF THE COMPANY

Basaran Nas Bagımsız Denetim ve Serbest Muhasebeci Mali Musavirlik A.S.a member of PricewaterhouseCoopers

BJK Plaza, Su‘‘leyman 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