ANNUAL REPORT 2015

ANNUAL REPORT 2015

Corporate GovernanceCompany ProfileIndustry and EconomyInvestment Portfolio Financial DevelopmentCorporate Governance Principles Compliance ReportIndependent Audit Report

5194353596593

INDEX

CORPORATEGOVERNANCE

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BOARD OFDIRECTORS AND THEIR

BACKGROUNDINFORMATION

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Hüsnü AKHAN Chairman

Hüsnü AKHAN was born in Birecik/Şanlıurfa on the 23rd of January, 1953. He completed his primary and secondary education at Birecik High School. Hüsnü AKHAN is a graduate of Middle East Technical University, Department of Business Administration and earned his Master’s degree in Economics from University of Miami (USA). AKHAN served at various positions of the Central Bank of the Republic of Turkey. He served as Representative at London Office and Assistant General Manager at the Foreign Relations Department of the Central Bank of the Republic of Turkey. He joined Doğuş Group in 1994. After serving as the Executive VP responsible for Treasury, Operations and Foreign Relations at Garanti Bank, he was assigned as the General Manager of Körfezbank in 1998. AKHAN was a board member of Doğuş Holding and CFO during 2001-2005. Since January 2006, he has been a board member of Doğuş Holding and the CEO. Additionally, he currently serves as the Chairman of the Board for Doğuş Real Estate, Related Digital Marketing, Doğuş Photography, Doğuş Sports, Fashion and Media Services, Doğuş Energy, Doğuş Healthy Life, Körfez Aviation, Doğuş Planet Electronics & Informatics Services as Deputy Chairman for D Energy, and as a board member for TUVTURK, Doğuş Construction.

Ekrem Nevzat ÖZTANGUT Board Member

After graduating from the Department of Economics at Hacettepe University, ÖZTANGUT served as an Auditor and a Chief Auditor at the Enforcement Department of the Capital Markets Board between 1984 and 1994. ÖZTANGUT worked as an academic member at Marmara University between 1992 and 1994 and also worked as CEO at Garanti Investment Trust between 1994 and 2015. He is Chairman of D.ream Doğuş Restaurants Group of Companies, Doğuş SK Private Equity Company and Board Member at Garanti Pension, Doğuş Otomotiv, Doğuş Oto, Doğuş REIT, Doğuş Energy, Garanti Investment Trust Inc. Outside the Doğuş Group, he has also been an Independent Board Member at Goodyear Lastikleri Inc. and member of the TOBB (Turkish Union of Chambers and Commodity Exchanges) since 2011. ÖZTANGUT was Deputy Chairman of the Settlement & Custody Bank (Takas Bank) between 2000 and 2013, President of the Association of Capital Market Intermediary Institutions of Turkey between 2007 and 2011, and Chairman of the Genç Başarı (Junior Achievement Turkey) Education Foundation between 2011 and 2015.

Hayrullah Murat AKA Board Member

Murat AKA, got his bachelor’s degree from ODTÜ (METU), Department of Business Administration (1984) and master’s degree from Boğaziçi University, Department of Business Management (1987), completed Advanced Management Programme for Term 172 at Harvard Business School in 2007. He joined Doğuş Group in 1987. AKA is Member of Executive Board and Chairman of Auditing/Risk Committee in Doğuş Otomotiv Servis, Doğuş Oto Pazarlama and Vdf Financing, Factoring, Insurance, and Fleet Leasing companies. Murat AKA is also Deputy Chairman at Doğuş REIT, Doğuş Spor Yatırımları, Doğuş Sigorta Aracılık Hizmetleri A.Ş., and Board Member at DGS Koruma ve Özel Güvenlik Hizmetleri.

Mustafa DOĞRUSOYIndependent Member

He received bachelor’s degree in engineering from Yıldız Technical University in 1981, and then was graduated from the postgraduate education of Istanbul University’s Faculty of Business Administration with an MBA degree in 1983. He gives supports as the Management, Strategy and Investment Consultant on Corporate Management, Corporate Risk Management, Corporate Finance, Family Companies and Institutionalization and on the implementation process of the new Turkish Commercial Code in the companies and he is assigned in the projects of obtaining finance, partner and of performing merging and purchasing of the companies. Corporate Governance Association of Turkey Member of the Board. For many years, he has been undertaking the tasks of executive committee membership and Board Membership in some of esteemed Turkish companies. Since 2014 he has been executing his duty of the administrator at the executive board of Doğuş REIT. In addition, since 2012 he works as the Board Member at the company Doğus Group Garanti Investment Trust Inc.

Mustafa Ahmet ÜNAYDINIndependent Member

Mustafa Ahmet ÜNAYDIN was born in 1957 and graduated from the Department of Business Administration at Boğaziçi University in 1982. He was Export Manager in Intra Foreign Trade from 1982 to 1983, Office Manager in Jeddah at Enka Arabia Ltd. from 1983 to 1985. He served as auditor and manager at Coopers&Lybrand and PricewaterhouseCoopers from 1985 to 1999 and as manager and coordinator at STFA Construction Group from 1999 to 2006. Since 2009, ÜNAYDIN has been an Independent Board Member at Doğuş REIT.

Hasan Hüsnü GÜZELÖZBoard Member

Hasan Hüsnü GÜZELÖZ graduated from the Faculty of Law at İstanbul University in 1986. He worked as a self-employed lawyer and officiated as Legal Counsel at group companies until 1995. GÜZELGÖZ joined the Doğuş Group in 1996 when he was Legal Counsel at AGF Garanti Sigorta, Garanti Yatırım ve Ticaret Bankası, and Garanti Yatırım Menkul Kıymetler A.Ş. In June 1997, he conducted incorporation procedures for Garanti Portfolio Management. In addition to his office at Garanti Yatırım Menkul Kıymetler A.Ş. and Garanti Investment Trust Inc., he has also been Legal Counsel of this company since its establishment. He was the Board Member responsible for internal audit until December 31, 2015. He managed legal affairs at Tansaş Food Retailing as a Board Member. He is a Board Member at Doğuş Otomotiv Service and Trade, Chairman Adviser and General Legal Counsel. In addition to his memberships in committees established under the Capital Markets Board legislation, he is also appointed as the Disciplinary Committee President. He is also a Board Member at Doğuş Oto Pazarlama. He is a Board Member at Doğuş Publishing Group Companies and Doğuş REIT, President of the Disciplinary Committee art the Turkish Capital Markets Association. He is a faculty member at the Department of Law at the Kadir Has University, lecturing in Capital Market and Competition Law. In the same faculty, he is a member of the Advisory Committee on the Bologna Process for Higher Education Qualifications. He has CMB Advanced-Level and Corporate Governance Rating licenses. He has conducted studies on family-owned companies and corporate governance and published articles on various subjects, including Capital Market Legislation.

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SENIORMANAGEMENT

8

Çağan ERKANCEO

Çağan ERKAN graduated from the Management Engineering Faculty at Istanbul Technical University in 1991 and received his MBA degree in Department of Business Administration at St. John Fisher College in 1994. He started working at Garanti Investment Trust Inc. in 1994 and left the company in June 2015 as Deputy General Manager of Corporate Finance. ERKAN was appointed as CEO of Doğuş REIT on June 8, 2015.

Cem ENGİNDeputy General Manager of Corporate Communications and Marketing

Cem ENGİN graduated from Nottingham Trent University in the UK in International Business Management (BA Hons) and received an MBA in International Marketing Management at European School of Economics in London, UK. He worked for local and international Doğan Group companies at senior management positions from 1999 to 2005. ENGİN joined Doğuş Group in 2005 and served at Doğuş Group company, Strategic Planning, Business & Investment Relations, and at Doğuş Otomotiv Group companies (DOD, Porsche) as Director and Deputy General Manager. In June, 2007, he was transferred to Doğuş REIT as Deputy General Manager of Corporate Communications, Marketing, and Leasing.

Nazlı YILMAZDeputy General Manager of Financial Affairs

Nazlı YILMAZ graduated from the Department of Economics, Faculty of Economics and Administrative Sciences at Eskişehir Anadolu University in 1996. She served as Financial Affairs-Finance Executive at Ege Investment Securities from 1997 to 2003. In 2003, she moved to Yapı Kredi Portfolio Management as Financial Affairs & Finance Manager. YILMAZ had been Financial Affairs Director at Doğuş REIT from 2004 until January 1, 2014 when she was appointed as Deputy General Manager of Financial Affairs at the same company. YILMAZ is also an independent accountant and a financial adviser (2005) and holds surveyor’s certificates (2010-2012).

Ertan BARINDeputy General Manager of Project Management

Ertan BARIN graduated from the Department of Civil Engineering at Yıldız Technical University in 1994 and earned his master’s degree from the Department of Hydraulics, Faculty of Civil Engineering at the same university in 1998. He served as faculty member at the Department of Hydraulics at Yıldız Technical University from 1996 to 1998 and worked at various local and international infrastructure and superstructure construction projects. BARIN joined Doğuş Group in 2003 and served as project manager at Doğuş Building Industry from 2003 to 2005 and project management director at Doğuş REIT from 2005 to 2013. He has been Deputy General Manager of Project Management at Doğuş REIT since 2014.

Murat İNANBoard Advisor

Completing his undergraduate education in 1982 at the Department of Business Administration-Finance, the School of Economics, University of Istanbul, Murat İNAN worked as Chief Accountant, Vice Chairman of Istanbul Group and Vice Chairman of Accountants’ Association (HUD) at Ministry of Finance between 1984 and 1997. In 1993, he made tax-related studies on banking sector affiliated with Ministry of Finance in England and he quit working at his public duty in September 1997 and started at the private sector. Working as Chief Financial Consultant and Director of Financial Affairs Group in Vestel Corporate Group within the structure of Zorlu Holding in 1997, İNAN joined Doğuş Holding in 1998.

Murat İNAN, who continued the position of Head of the Department of Financial Affairs along with IT Section presidency in Doğuş Holding till the end of 2012 and he has become the Chairman and the General Manager of Doğuş REIT in May 2009. İNAN , who has got Certified Financial Advisor and Independent Auditor permits has left job at Doğuş Holding in 2012 as of the year end and resumed his work at Doğus REIT. As of March, 2013 he has transferred his duty of the chairman and at present he holds the position of Chairman of Executive Board and General Manager in Doğuş REIT as of 08.06.2015, Murat İNAN resigned from this duty and appointed as the Advisor to the Board of Members of Doğuş REIT which he still continues.

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MESSAGE FROM CEO

Dear Shareholders and Stakeholders,

As of the end of 2015, the value of the Company’s real estate portfolio (including Doğuş Center Maslak, Gebze Center and Antalya 2000 Plaza) was 768.5 million Turkish lira, with an asset size of 829.3 million Turkish lira and a market value of 817.9 million Turkish lira. In 2015, rental income from our real estate reached 54 million Turkish lira with steady growth, while our net profit was 77.6 million Turkish lira.

In line with the Company’s objective of developing its real estate portfolio, the “Gebze Center Expansion and Hotel” project is being carried out on the same land as Gebze Center. In addition to the shopping mall, the total construction site of 46,100 square meters includes a 156-room hotel, various commercial units, automotive showroom, and service areas. Following the receipt of a construction permit on February 20, 2015 and the development of project, earthworks and construction started on April 6, 2015. The foundations were laid on September 1, 2015. The investment will continue throughout 2016, the project being planned to end in 2017.

The Company aims to increase the value of its investment portfolio with steady growth in 2016 and ensure the highest benefits to its shareholders and stakeholders. As we continue to work without slowing down, I would like to thank all of our shareholders, stakeholders, and valued colleagues for their contributions to our Company.

Yours faithfully,

Çağan ERKANCEODoğuş REIT

Yours faithfully,

Çağan ERKAN

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DETAILS ON COMPANY

COMMITTEES

Number, Structure and Independence of Committees under the Board of Directors

Audit Committee, Corporate Governance Committee, and Early Risk Detection Committee are established in the Company to enable the Board of Directors to duly perform its duties and responsibilities.

As the “Nomination Committee” and “Remuneration Committee” cannot be established separately because of the actual structure of the Board of Directors, the duties of such committees are performed by the Corporate Governance Committee. The Audit Committee is composed of two members while Corporate Governance Committee and Early Risk Detection Committee have three members each. The Board of Directors ensures coordination and supervision necessary for effective and efficient functioning of committees. The sphere of activity, operating principles, and members of committees are specified and publicly announced by the Board of Directors.

All members of the Audit Committee are selected from among independent Board members while the president and most of members are from independent Board members in the Corporate Governance Committee and Early Risk Detection Committee. The CEO cannot take part in committees.

The Board of Members had not made any negative remarks on the functioning of committees from January 1 to December 31, 2015. The Board of Directors ensures coordination and supervision necessary for effective and efficient functioning of committees.

The activities of our committees are systematically recorded. Following the Ordinary General Meeting for 2014, held on March 26, 2015, and Board of Directors meeting held on April 09, 2015, the following members are selected for the committees: a) Audit Committee - Mustafa Ahmet ÜNAYDIN - President - Board Member (Independent Member) - Mustafa Sabri DOĞRUSOY - Board Member (Independent Member) b) Corporate Governance Committee - Mustafa Sabri DOĞRUSOY - President - Board Member (Independent Member) - Hasan Hüsnü GÜZELÖZ - Board Member (Executive) - Mustafa Ahmet ÜNAYDIN - Board Member (Independent Member) c) Early Risk Detection Committee - Mustafa Sabri DOĞRUSOY - President - Board Member (Independent Member) - Mustafa Ahmet ÜNAYDIN - Board Member (Independent Member) - Hasan Hüsnü GÜZELÖZ - Board Member (Executive)

Detailed information on activities and operating principles of Audit Committee, Corporate Governance Committee and Early Risk Detection Committee are available at the Company’s official website.

Audit Committee

The Audit Committee is composed of at least two members selected from among the independent members of the Company’s Board of Directors. The Committee President is selected from among the independent members of the Board of Directors. The CEO cannot take part in the Committee.

The Audit Committee is composed of at least two members selected from among the independent members of the Company’s Board of Directors. The Committee President is selected from among the independent members of the Board of Directors. The CEO cannot take part in the Committee.

The Committee also supervises the selection of the independent audit company, preparation of the independent audit contract, initiation of the audit, and activities of the independent audit company in each audit phase. The independent audit company and services to be received will be identified and submitted to the Board of Directors.

The Committee also examines and resolves complaints about the company’s accounting and internal control system, as well as independent audit.

It identifies methods and criteria for the evaluation of company employees’ notifications about the company’s accounting and independent audit under the principle of confidentiality.

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The Committee consults with the company’s related officers and independent auditors and submits in writing its own assessment about the accuracy and authenticity of annual and interim financial statements, as well as their compliance with accounting principles, before they are publicly disclosed.

The Committee convenes at least four times a year (quarterly) to ensure efficient functioning. They record and put all their activities in writing. They report all of their activity details and meeting results and submit any decisions to the Board of Directors.

In line with their duties and operating principles, the Audit Committee convened six (6) times from January 1, 2015 to December 31, 2015, they recorded meeting minutes in writing and submitted the report of meeting results to the Board of Directors. There were not any events requiring the Committee to submit suggestions or negative observations in writing to the Board of Directors in relation with its sphere of activity and responsibility from January 1, 2015 to December 31, 2015.

The Committee President and member were selected from among the independent Board members and were experienced in the Committee’s sphere of activity.

Corporate Governance Committee

The Committee monitors the compliance of the Company with the Corporate Governance Principles, establishing whether these principles are respected and identifying reason(s) of any non-compliance and any resulting conflict of interest to suggest improvements in corporate governance practices to the Board of Directors.

The Committee also supervise the activities of Investor Relations Department under the Capital Market legislation. It also performs the duties of Nomination Committee and Remuneration Committee as they cannot be established separately because of the actual structure of the Board of Directors.

The Committee is composed of at least two members selected from among the members of the Company’s Board of Directors. The Committee President is selected from among the independent Board members. The CEO cannot take part in the committee. If the Committee has two members, both should be non-executive Board members while in case of more than two members, the majority should comply with this rule. The Committee convenes twice a year or more frequently, when necessary.

The Committee establishes whether corporate governance principles are respected and identifies reason(s) of any non-compliance and any resulting conflict of interest to suggest improvements in corporate governance practices to the Board of Directors. It plays a leading role in ensuring efficient communication between the Company and shareholders and settling any disagreement. For this purpose, it supervises activities of the Investors Relations Division.

The Committee supports the preparation of “Corporate Governance Principles Compliance Report” to be publicly disclosed in the annual report, checking whether information included in the annual report are correct and consistent with information possessed by the Committee.

As specified in the Communiqué on the Corporate Governance, the Committee meticulously assesses independent member nominations, including Management and stakeholders, to identify whether candidates meet independence criteria according to Capital Marker legislation and submit the result of its assessment to the Board of Directors in a report.

Assuming the duty of Nomination Committee, the Corporate Governance Committee assesses meticulously independent member nominations, including Management and stakeholders, as specified in the Communiqué on the Corporate Governance, to identify whether candidates meet independence criteria according to Capital Marker legislation and submit the result of its assessment to the Board of Directors in a report. It also receives a written statement on the independence of the Board member candidate in accordance with the related legislation, Articles of Corporation, and Communiqué on Corporate Governance. Also assuming the duty of Remuneration Committee, the Corporate Governance Committee establishes and revises principles, criteria, and practices for the remuneration of Board members and managing directors in line with the Company’s long-term objectives. In addition, the Committee reports suggestions from Board members and top managers on remuneration principles and criteria to the Board of Directors for approval.

The Corporate Governance Committee convened twice (2) from January 1, 2015 to December 31, 2015 in line with its duties and operating principles, recorded its meeting minutes in writing, and reported results of these meetings to the Board of Directors.

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DETAILS ON COMPANY

COMMITTEES

Early Risk Detection Committee

The Committee is responsible for early detection of any risks which may endanger the existence, development and continuance of the Company, implementation of necessary measures against detected risks, and carry out risk management activities. The Early Risk Detection Committee is composed of at least two members selected by the Company’s Board of Directors from among its own members. The Committee President is selected by the Board of Directors from among its independent members.

The CEO cannot take part in the Committee. The Committee works on a meeting basis. The Committee convenes in the company’s head office as often as required for the efficiency of its activities.

The Committee members are re-elected annually in the first Board meeting following the Ordinary General Shareholders' Meeting. If a Committee member retires from office, a new member is appointed to complete the term of office of the retired member.

The Committee may invite any manager to take his/her opinion, if deemed necessary. The Committee may benefit from independent expert opinion in any subject related to its activities, if deemed necessary. The Company will defray costs of any consultancy services required by the Committee.

The Early Risk Detection Committee reports directly to the Board of Directors. The Board of Directors provides any resources and support required by the Committee to perform its duties.

The Committee is established to strive for the early detection of any risks which may endanger the existence, development and continuance of the Company, the implementation of necessary measures against detected risks, and the risk management and to revise the Company’s risk management systems at least once a year.

Main duties of the Committee include:a) Setting and preparing the Company’s risk management strategies and policies, submitting them to the Board of Directors for approval, monitoring their implementation,b) Offering suggestions to the Board of Directors for the determination of baseline risk limits and checking the compliance with these limits,c) Checking the risk detection, description, assessment and management procedures and providing necessary notifications,d) Monitoring the accuracy and reliability of risk measurement methods and results.

The Early Risk Detection Committee convened six (6) times from January 1, 2015 to December 31, 2015 in line with their duties and operating principles and reported the results of these meetings to the Board of Directors.

Investor Relations Department

The Company removed the Shareholder Relations Division (established to ensure communication between the Company and investors upon the Board of Directors Resolution No. 260 of March 12.03.2009) and established Investor Relations Department upon the Board of Directors Resolution No. 2014/387 of June 25, 2014 according to Article 11 of the Communiqué on Corporate Governance (II-17.1), which entered into force following its publication in Official Gazette No. 28871 of January 3, 2014. In compliance with the related article of the Communiqué, this division reports directly to the CEO and is supervised by the Corporate Governance Committee.

Hasan Hüsnü GÜZELÖZ is appointed as the manager of the Investor Relations Department and Nazlı YILMAZ as division staff. Investor Relations Department Manager Hasan Hüsnü GÜZELÖZ possesses “Capital Market Activities Level 3" and “Corporate Governance Rating” licenses and works for the Company as full-time manager.

The Investor Relations Department reports directly to the CEO. Its objective is to inform all stakeholders in compliance with related regulations and to ensure transparent public disclosures.

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The main duties of the Investor Relations Department include:

• Ensuring sound, secure and up-to-date recording of correspondence between investors and the company, as well as other information and documents,• Responding to written information requests from shareholders,• Drawing up of General Meeting documents required to be submitted to shareholders for review and taking necessary measures for the conduct of General Meeting in compliance with related regulations, Articles of Association, and other internal regulations,• Supervising and monitoring the fulfillment of any obligations under the Capital Market Legislation, including corporate governance and public disclosure issues,• Performing any duties related to shareholders in compliance with Capital Market Legislation and related communiqués, as well as any other laws and regulations used as a basis for activities,• Performing all procedures in compliance with the Communiqué on Public Disclosure (VII-128.6), which entered into force on January 1, 2014 following its publication in the Official Gazette No. 28864 of December 27, 2013,• Ensuring / Coordinating timely disclosure of activities in Public Disclosure Platform, Central Registry Agency, and corporate website in compliance with related regulations,• In compliance with Article 4.5.10, Appendix 1 of the Communiqué on Corporate Governance (II-17.1), enabling the Corporate Governance Committee to perform its supervision duty,• Reporting its activities in writing to the Board of Directors at least once a year,• Ensuring the preparation and public disclosure of annual and interim reports in compliance with related legislation.

In addition, its main duties include ensuring sound, secure and up-to-date recording of correspondence between investors and the company, as well as other information and documents; responding to written information requests from shareholders; serving as a bridge and ensuring the flow of information between shareholders and the Company’s senior management and Board of Directors; drawing up of General Meeting documents required to be submitted to shareholders for review and taking necessary measures for the conduct of General Meeting in compliance with related regulations, Articles of Association, and other internal regulations; and supervising and monitoring the fulfillment of any obligations under the Capital Market Legislation, including corporate governance and public disclosure issues.

The Corporate Governance Committee performs sensitively its duty of supervising the activities of Investor Relations Department in compliance with Article 4.5.10, Appendix 1 of the Communiqué on Corporate Governance (1I-17.1).

According to the Communiqué on Corporate Governance (II-17.1), which entered into force following its publication in Official Gazette No. 28871 of January 3, 2014, Investor Relations and Legislation Compliance Report 2015 was submitted to the Board of Directors and approved by the Board of Directors Resolution No. 2015/429 of December 28, 2015.

From January 1, 2015 to December 31, 2015, the Investor Relations Department received and answered 47 information requests from shareholders by phone, electronic mail, or website. In addition, website was regularly updated to enable investors to follow up-to-date information.

The director of the Investor Relations Department and the name, surname and contact information of the person who is employed at this department was announced at the Public Disclosure Platform (PDP) through a material event disclosure on June 25, 2014. Name, position, contact details, and license of the Investor Relations Department manager and staff are available in the Company’s General Information page in the Public Disclosure Platform. No change occurred in these data from January 1, 2015 to December 31, 2015.

Information on Transactions Performed by Board of Directors Members with the Company or on Behalf of Someone Else as Allowed by the General Meeting or Their Activities under the Non-Competition Clause:

The Ordinary General Shareholders' Meeting of March 26, 2015 negotiated and approved by a majority vote of shareholders that controlling shareholders, Board of Directors members, top managers and their spouses and relatives of up to second degree consanguinity or affinity could perform, personally or on behalf of someone else, any significant transactions which might cause conflict of interests with the Company and its affiliates, in compliance with Article 1.3.6 of the Capital Markets Board’s Communiqué on Corporate Governance (11-17.1) and Article 395 and 396 of the Turkish Commercial Code.

No such transaction was performed by the Board of Directors members and top managers from January 1, 2015 toDecember 31, 2015.

16

ŞİRKETKOMİTEBİLGİLERİ

GENELMÜDÜRʼÜN

MESAJI

GENELMÜDÜRʼÜN

MESAJI

GENELMÜDÜRʼÜN

MESAJI

GENELMÜDÜRʼÜN

MESAJI

GENELMÜDÜRʼÜN

MESAJI

STATEMENTS OF INDEPENDENCE

Statements of Independence from Independent Board Members

Independent Member Statements of Mustafa Sabri DOĞRUSOY and Mustafa Ahmet ÜNAYDIN, who are independent members in the Board of Directors of Doğuş REIT, were announces in the Public Disclosure Platform on February 27, 2015 and are available in the Company’s website.

Independence Statement

I announced my nomination for the Board of Directors as “Independent Member” at Doğuş REIT (the Company) according to criteria specified in the legislation, Articles of Association, and the Capital Markets Board Corporate Governance Principles defined in the Capital Markets Board’s Communiqué on Corporate Governance (II-17.1), which was entered into force following its publication in Official Gazette No. 28871 of January 3, 2014.Accordingly, I declare that:

a) There has been no employment relation at manager level with important duties and responsibilities between myself, my spouse, or my relatives with second degree of consanguinity and affinity and the Company’s controlling shareholders according to Turkish Financial Reporting Standards 10 or shareholders with management control or significant influence in the company or associates over which the company has significant influence according to Turkish Accounting Standards 28 for the last five years; I do not have, jointly or alone, more than 5 percent of capital or voting rights or preference shares; or I do not have any commercial relation of significance;b) I have not been a partner (5 percent and more) and/or have not worked as manager with significant duties and responsibilities and/or have not officiated as Board of Directors member at any companies from or to which the Company has provided significant services or products under a contract, including company audit (tax audit, legal audit, internal audit), rating and consultancy, while these products or services have been provided within the last five years;c) I have the education, knowledge, and experience required to perform any duties I will perform as an independent Board member;ç) I do not work / will not work upon my selection as Board member full time in any public bodies, except as a faculty member if compliant with the related regulations;d) I am a resident in Turkey according to Income Tax Law No. 193 of December 31, 1960;e) I have strong ethical standards, the professional reputation and the necessary experience to make significant contributions to the Company’s activities, to remain neutral in any conflict of interests between the Company and its shareholders, and to decide freely taking into consideration the rights of stakeholders;f) I will allocate enough time to the Company’s affairs and representative duties assigned by the Board of Directors in order to be able to follow the course of Company’s activities and to duly meet the requirements of duties I will assume;g) I have not been a member in the Company’s Board of Directors more than six years within the last ten years;ğ) I have not officiated as independent member in the Board of Directors at more than three companies over which the Company or the controlling shareholders of the Company has/have management control and more than five publicly-traded companies in total.I kindly submit to the Board of Directors, General Meeting, our shareholders, and all stakeholders for information.

February 26, 2015

Mustafa Sabri DOĞRUSOY

y ,

Independence Statement

I announced my nomination for the Board of Directors as “Independent Member” at Doğuş REIT (the Company) according to criteria specified in the legislation, Articles of Association, and the Capital Markets Board Corporate Governance Principles defined in the Capital Markets Board’s Communiqué on Corporate Governance (II-17.1), which was entered into force following its publication in Official Gazette No. 28871 of January 3, 2014

Accordingly, I declare that:a) There has been no employment relation at manager level with important duties and responsibilities between myself, my spouse, or my relatives with second degree of consanguinity and affinity and the Company’s controlling shareholders according to Turkish Financial Reporting Standards 10 or shareholders with management control or significant influence in the company or associates over which the company has significant influence according to Turkish Accounting Standards 28 for the last five years; I do not have, jointly or alone, more than 5 percent of capital or voting rights or preference shares; or I do not have any commercial relation of significance;b) I have not been a partner (5 percent and more) and/or have not worked as manager with significant duties and responsibilities and/or have not officiated as Board of Directors member at any companies from or to which the Company has provided significant services or products under a contract, including company audit (tax audit, legal audit, internal audit), rating and consultancy, while these products or services have been provided within the last five years;c) I have the education, knowledge, and experience required to perform any duties I will perform as an independent Board member;ç) I do not work / will not work upon my selection as Board member full time in any public bodies, except as a faculty member if compliant with the related regulations;d) I am a resident in Turkey according to Income Tax Law No. 193 of December 31, 1960;e) I have strong ethical standards, the professional reputation and the necessary experience to make significant contributions to the Company’s activities, to remain neutral in any conflict of interests between the Company and its shareholders, and to decide freely taking into consideration the rights of stakeholders;f) I will allocate enough time to the Company’s affairs and representative duties assigned by the Board of Directors in order to be able to follow the course of Company’s activities and to duly meet the requirements of duties I will assume;g) I have not been a member in the Company’s Board of Directors more than six years within the last ten years;ğ) I have not officiated as independent member in the Board of Directors at more than three companies over which the Company or the controlling shareholders of the Company has/have management control and more than five publicly-traded companies in total;h) I have experience of more than 5 years in finance. I kindly submit to the Board of Directors, General Meeting, our shareholders, and all stakeholders for information

February 26, 2015

Mustafa Ahmet ÜNAYDIN

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COMPANYPROFILE

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HISTORYDoğuş REIT launched operations on July 25, 1997, under the title of Osmanlı REIT and held its IPO on March 25, 1998, as the third real estate investment trust to be traded on the Istanbul Stock Exchange.

By the end of 2001, two Doğuş Group companies, Osmanlı Bank and Garanti Bank merged. With this transaction, 51 percent of the Osmanlı REIT shares were transferred to Garanti Bank and the company became a subsidiary of Garanti Bank under the title Garanti REIT.

Garanti REIT laid the foundations of its first residential project, EVIDEA, in November 2004. Developed on a 34,000 square meters of land plot, the EVIDEA Project featured a total construction area of 101,000 square meters, including a residential area of 73,000 square meters and social facilities of 24,500 square meters. All residential units within the Evidea Project were delivered to their owners by the year-end 2007, thanks to the combined experience of Garanti REIT and Yapı Kredi Koray in real estate development and financing.

In June 2005, Garanti REIT began constructing the Doğuş Center Maslak project in Maslak, Istanbul. Doğuş Center Maslak has a total area of 63,202 square meters, of which 47,398 square meters is rentable space. Doğuş Center Maslak was opened on November 9, 2006.

When Garanti Bank sold its shares in Garanti REIT to General Electric (GE) Capital Corporation and Doğuş Group, the company’s shareholder structure changed on December 1, 2006, as 25.5 percent Doğuş Group, 25.5 percent GE, and 49 percent public. Its new trade name was registered as Doğuş-GE REIT.

In January 2011, General Electric (GE) Capital Corporation sold all of its shares in Doğuş-GE REIT to Doğuş Group and the company’s shareholder structure became 51 percent Doğuş Group and 49 percent publicly-traded. On the same date, the company’s trade name was changed to Doğuş REIT.

On December 26, 2013, with a partial division transaction, the Gebze Center Shopping Mall was added to the real estate investment portfolio of Doğuş REIT. Doğuş Real Estate Investment Management Co. invested $180 million to construct the Gebze Center Shopping Mall from August 2008 until September 3, 2010. The Mall incorporates 59,054 square meters of rentable space and around 130 stores.

Upon the inclusion of Gebze Center Shopping Mall in Doğuş REIT’s real estate investment portfolio, a mixed living center concept was developed which entailed extension of the shopping mall and construction of additional buildings and also a hotel. The construction permit for the extension project was obtained on February 20, 2015. This project was built on a construction area of 46,100 square meters, to include a 156-room hotel, commercial units, an automotive showroom, and service facilities.

Head Office Address:Doğuş Center Maslak, Maslak Mahallesi Ahi Evran Caddesi,No: 4/23 Maslak/Sarıyer 34398 IstanbulPhone: +90 (212) 335 28 50Fax: +90 (212) 335 28 99Trade Registry No: 373764Mersis No: 0648-0081-4890-0019Website Address: www.dogusgyo.com.trEmail Address: info@dogusgyo.com.tr

COMPANYPROFILE

VISIONDoğuş REIT’s vision is to become a leading REIT in Turkey, empowered by the parent company Doğuş Group’s robust financial structure and global experience in real estate, construction, and finance.

MISSIONDoğuş REIT’s mission is to expand its real estate portfolio and improve its market value by assuring stable growth while being transparent and accountable, as well as respectful and responsive to its shareholders, stakeholders, customers, laws, corporate code of ethics, and the environment.

INVESTMENT STRATEGYDoğuş REIT’s investment strategy is to maximize shareholder value through dividend pay-out and stock value gain; expand its investment portfolio and improve market cap via real estate investments mainly in rentable commercial spaces.

CAPITAL AND SHAREHOLDER STRUCTUREAs of December 31, 2015, the shareholder structure of Doğuş REIT is as follows:

Company Capital, Shareholders with more than 5 percent and 10 percent of the capital:

As of December 31, 2015, the company’s registered capital ceiling and paid-in capital are 500,000,000 Turkish lira and 227,208,155 Turkish lira, respectively. Shareholders with more than 5 percent and 10 percent of the capital:

Doğuş Group: 93.77%Total : 93.77%

Subsidiaries and Affiliates:

The Company does not have any subsidiaries or affiliates as of December 31, 2015.

Name/Title of the Shareholder Group Type

Doğuş Group (Private) A Registered 0.83 0.83Doğuş Group (Private) B Bearer 15.43 15.43Doğuş Group (Public) B Bearer 58.24 58.24Doğuş Turizm Sağlık Yat. ve Işl. San. Tic. A.Ş,. (Public) B Bearer 0.48 0.48Publicly-traded Part B Bearer 25.02 25.02Total 100 100

December31, 2015 Share Rate (%)

December31, 2014 Share Rate (%)

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22

Voting Rights and Minority Rights

During General Meetings, votes are cast according to internal guidelines set by the Board of Directors in compliance with regulations by the Ministry of Customs and Trade. Shareholders who are not physically present at the meeting cast their votes in compliance with regulations on electronically held General Meetings.

The Company avoids any practices which may complicate the exercise of voting rights. Each shareholder is enabled to cast its voting right in the easiest and most appropriate manner. The Company shows ultimate attention to the exercise of minority rights. No criticism or complaints were received from minority shareholders from January 1, 2015 to December 31, 2015. The Company’s shareholders have the right for one vote for each share they hold. Non-preference shareholders with voting right may exercise this right either personally or through a third party which is not a shareholder. The Articles of Association do not include any provision preventing non-shareholding persons from voting by proxy as a representative. Candidates for Board of Directors are submitted to the General Meeting for review and are appointed by General Meeting resolution.

There is no mutual participation relationship in the Company’s capital.

Minority shares are not represented in the management and are not included in the Articles of Association. Notwithstanding special provisions in the legislation and Articles of Association, voting is made electronically by open ballot and show of hands during the General Meeting.

Information on Changes to the Company’s Capital and Shareholding Structure During the Related Accounting Period

No changes occurred in the Company’s capital and shareholding structure during the related accounting period. The Company did not issue any capital market instruments in 2015.

Changes to the Company’s Articles of Association During the Related Accounting Period

No changes occurred in the Company’s Articles of Association during the related accounting period.

Statements about Preference Shares and Their Voting Rights

The Company’s shares are divided into two as Groups A and B. In the Articles of Association, Group (A) shares have the privilege to nominate Board of Directors members. The Company’s shareholders have the right for one vote for each share they hold. Apart from this, the Company’s shareholders do not have any other privilege.

Voting Rights of

Preference / Non-

Total Voting Rights of Preference / Non-preference

Shares

Total Voting Rights of Preference / Non-preference

Shares (%)Name/Title of the Shareholder Group

Doğuş Holding A.Ş. A 1 1,874,849,75 0.83Doğuş Holding A.Ş. B 1 167,385,452.25 73.67Doğuş Turizm Sağ.Yat.İşl. San.A.Ş. B 1 1,095,653.00 0.48Publicly-traded Part B 1 56,852,200.00 25.02TOTAL 227,208,155.00 100.00

COMPANYPROFILE

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ORGANIZATION CHART 2015

DOĞUŞ REIT BOARD OF DIRECTORS

Audit Committee Early Risk DetectionCommittee

Corporate GovernanceCommittee

Hüsnü Akhan

Ekrem Nevzat Öztangut

Hayrullah Murat Aka

Hasan Hüsnü Güzelöz

Mustafa Doğrusoy

M. Ahmet Ünaydın

Chairman

Board Member

Board Member

Board Member

Independent Member

Independent Member

Murat İnanBoard Advisor

Corporate Communicationsand Marketing

Project Management Financial AffairsLaw

Cem EnginDeputy GeneralManager

Özgür ÇınarLegal Counsel

Şebnem CengizAssistant Manager

Zeynep KılıçcıSpecialist

Didem ÖzkaymazAssistant Specialist

İlhan HatipoğluSpecialist

Cüneyt GünerenManager

Ertan BarınDeputy General Manager

Nazlı YılmazDeputy General Manager

Investor Relations

Hasan Hüsnü GüzelözDivision Director

Nazlı YılmazDivision Staff

Çağan ErkanCEO

24

GENERAL INFORMATION

ON THE COMPANY

Financial Benefits for Board of Members and Top Managers Benefits

Including Attendance Fee, Remuneration, Premiums, and Dividends

The Company’s senior management is composed of Board members, a CEO, and Deputy Gene-ral Managers. The financial benefits include wage, premium, employer’s contribution for social security, employer’s unemployment contribution, private insurance (health, life, and manager liability) for senior management with administrative responsibility and attendance fee for independent Board members. From January 1, 2015 to December 31, 2015, the Company’s independent Board members and top managers with administrative responsibility were provided with 3,329,132 Turkish lira of financial benefits in total.

Assessment of the Period from January 1, 2015 to December 31, 2015

Doğuş REIT signed a contract on December 15, 2014 with Kobirate Uluslararası Kredi Derece-lendirme ve Kurumsal Yönetim Hizmetleri A.Ş. (which is officially authorized to perform rating procedures as per the Capital Markets Board’s Communiqué Series VIII No. 51 on Principles Regarding Ratings and Rating Agencies in Capital Market) to prepare the Corporate Governan-ce Compliance Rating Report.

The report for the validity period from July 7, 2015 to July 7, 2016 was published in July 7, 2015 and was announced on the Public Disclosure website at (www.kap.gov.tr).

Our first score for the Corporate Governance Compliance was 8.01.

July 7, 2015 Shareholders 89.68Public Disclosure and Transparency 78.54Stakeholders 72.76Board of Directors 77.43Scor 8.01

The Company’s Corporate Governance Compliance Rating report is available on the corporate website (www.dogusgyo.com.tr), in the Investment Corner - Corporate Governance Rating Reports section.

The contract with Kobirate Uluslararası Kredi Derecelendirme ve Kurumsal Yönetim Hizmetleri A.Ş. was renewed for one (1) year and this renewal was announced on the Public Disclosure Platform on December 15, 2015.

The Company held its Ordinary General Shareholders' Meeting for 2014 on March 26, 2015 in compliance with the provisions of the Capital Market Law and Turkish Commercial Code, all related regulations, and Corporate Governance Principles. The results of the General Meeting were registered on April 9, 2015. Following the meeting, results and related documents were publicly announced on the Public Disclosure Platform (PDP) in a timely manner. In addition, meeting minutes, list of participants, and other related information are available in the corporate website for shareholders’ review.

All decisions taken at the General Meeting were implemented in the related period.

The Board of Directors of Doğuş REIT rigorously follows whether all objectives were attained or not.

As a result of distribution of roles decided on April 09, 2015 by the Board of Directors selected during the General Meeting on March 26, 2015, Hüsnü AKHAN was selected as Chairman while Ekrem Nevzat ÖZTANGUT, Hayrullah Murat AKA, Hasan Hüsnü GÜZELÖZ, Mustafa Ahmet ÜNAYDIN (Independent Member), and Mustafa Sabri DOĞRUSOY (Independent Member) were selected Board members.

For the Company’s Audit Committee, Mustafa Ahmet ÜNAYDIN (President - Independent Member) and Mustafa Sabri DOĞRUSOY (Independent Member) were selected.

For the Company’s Early Risk Detection Committee, Mustafa Sabri DOĞRUSOY (President - Independent Member), Mustafa Ahmet ÜNAYDIN (Member - Independent Board Member), and Hasan Hüsnü GÜZELÖZ (Member - Board Member) were selected.

For the Company’s Corporate Governance Committee, Mustafa Sabri DOĞRUSOY (President - Independent Member), Mustafa Ahmet ÜNAYDIN (Member - Independent Member), and Hasan Hüsnü GÜZELÖZ (Member - Board Member) were selected.

The Company did not perform any research and development activities between January 1, 2015 and December 31, 2015.

No incentives were used for investments from January 1, 2015 to December 31, 2015.

From January 1, 2015 to December 31, 2015, the Board of Directors convened on February 17, 2015 and decide unanimously that:

In relation with the “Gebze Center Expansion and Hotel Project” which was developed on the Company-owned property located in the quarter of Sultanorhan, district of Gebze, and province of Kocaeli and registered at land registry office with sheet number G22B24C2A, block no 5678, and parcel no 22, construction permit would be obtained and related fees would be paid, “Yeni Teknik Yapı inşaat Taahhüt Sanayi ve Ticaret A.Ş.” would be appointed as main contractor and construction would be started.

In relation with the “Gebze Center Expansion and Hotel Project” which was developed on the Company-owned property located in the quarter of Sultanorhan, district of Gebze, and province of Kocaeli and registered at land registry office with sheet number G22B24C2A, block no 5678, and parcel no 22, construction permit (No.122) was obtained on February 20, 2015.

From January 1, 2015 to December 31, 2015, the Board of Directors convened on September 11, 2015 and decide unanimously that:In the Company’s property called “Doğuş Center Maslak,” as the rental fees were denominated in Turkish lira based on US dollars, exchange rate of an US dollar would be fixed at 2.70 Turkish lira exclusively for the trimester from October 01, 2015 to December 31, 2015;

In the Company’s property called “Gebze Center Shopping Mall,” as the rental fees were denominated in Turkish lira based on the Euro, the exchange rate of EURO 1 would be fixed at 3.00 Turkish lira exclusively for the trimester from October 1, 2015 to December 31, 2015;

Information on the Company’s Own Acquired Shares

The Company does not have any own acquired shared from January 1, 2015 to December 31, 2015.

Information on the Company’s Direct or Indirect Subsidiaries and Their Share Rates

The Company does not have any direct or indirect subsidiaries.

Statements on the Private and Public Audits in the Related Accounting Başaran Nas Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. (Auditor)

Opening balance sheet, dated January 1, 2013 as specified in Provisional Article 2, paragraph 2 in Turkish Commercial Code No. 6102 or issued on a later date within the related accounting period, is audited by an auditor selected as per the Turkish Commercial Code, in compliance with the same Code. Selected as per Article 339 in the Turkish Commercial Code No. 6102, the auditor performs the audit in compliance with related provisions of the same Code.

Upon the suggestion to the Board of Directors by the Audit Committee based on the decision taken during its meeting No. 2015/1 of January 28, 2015, Başaran Nas Bağımsız Denetim ve SMMM A.Ş. was selected as auditor for the fiscal year 2015 by the Board of Directors Resolution No. 2015/402 of February 3, 2015. The auditor was approved unanimously by the shareholders during the General Meeting on March 26, 2015.

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26

GENERAL INFORMATION

ON THE COMPANY

Statements on the Private and Public Audits in the Related Accounting Period The Company has its biannual interim and annual financial statements audited independently as per the Capital Markets Board’s regulations on financial reporting and independent audit.

The Company respects each shareholder’s right to demand information and to investigate. Accordingly, the Company’s management avoids any activity complicating the performance of a private audit in order to investigate special issues, provided that the right to demand information and to investigate has been previously exercised. The Company’s Articles of Association do not include any provisions about the appointment of a personal representative by shareholders. The Company considers the right to perform private audit as a part of the right to demand information.

No private audit request was received from January 1, 2015 to December 31, 2015.

Information on Actions brought against the Company, which May Affect the Company’s Financial Status and Activities and Their Possible Results

There was no action brought against the Company, which might affect the Company’s financial status and activities from January 1, 2015 to December 31, 2015.

There was no action brought against Board members and staff and therefore, no administrative or judicial sanctions for any violations of legislation from January 1, 2015 to December 31, 2015.

Information on Administrative or Judicial Sanctions Imposed on the Company and Board Members for Any Violations of Legislation

There were no administrative or judicial sanctions imposed on the Company or Board members for any violations of legislation from January 1, 2015 to December 31, 2015.

Information on Donations and Grants, as well as Expenditures related to Corporate Social Responsibility Projects within the Related Accounting Period.

Upon the proposal by the Company’s Board of Directors and as per Article 19 of the Capital Markets Law, the General Meeting decided by a majority of shareholders on March 26, 2015 to limit the total amount of Donations and Grants to 1million Turkish lira in 2015.

No donations and grants were provided from January 1, 2015 to December 31, 2015.

If A Company Affiliated to the Group of Companies, Legal Transactions with the Holding Company, A Company Affiliated to the Holding Company, on Behalf of the Holding Company or Any of Its Affiliated Companies as Guided by the Holding Company and All Other Measures Taken or Avoided on Behalf of the Holding Company or Any of Its Affiliated Companies in the Previous Year of Activity.

Transactions with holding company and its affiliated companies are usual commercial activities and there were no transactions performed on behalf of the holding company or any of its affiliated companies with or without the guidance of the holding company, and therefore, no measures taken or avoided. Accordingly, as there were no legal transactions, no counteractions were required, no measures were taken or avoided, and therefore, no damages occurred.

Information on Legislative Amendments that May Affect Significantly Company Activities

• The Capital Markets Board Communiqué No. (II-23.2.a) on Amendments to the Communiqué No. (II-23.2) on Mergers and Spin-offs, effective since its publication in the Official Gazette No. 29280 of February 27, 2015• The Capital Markets Board Communiqué No. (11-23.1.a) on Amendments to the Communiqué No. (II-23.1) on Common Principles Regarding Significant Transactions and the Right of Separation, effective since its publication in the Official Gazette No. 29280 of February 27, 2015• The Capital Markets Board Communiqué No. (VII-128.1.a) on Amendments to the Communiqué No. (VII-128.1) on Shares, effective since its publication in the Official Gazette No. 29280 of February 27, 2015• The Capital Markets Board Communiqué No. (II-26.1.a) on Amendments to the Communiqué No. (II-26.1) on Share Purchase, effective since its publication in the Official Gazette No. 29280 of February 27, 2015• The Capital Markets Board Communiqué No. (VII-128.7a) on Amendments to the Communiqué No. (VII-128.7) on Principles of the Licensing and Registration for Operators of Capital Markets, effective since its publication in the Official Gazette No. 29412 of July 10, 2015are taken into consideration when required as regulations that may affect the Company’s activities, in addition to legislative amendments in the previous periods.

Information on the Company’s Conflicts of Interest with Any Company Rendering Consultancy, Appraisal, and Rating Services and Measures Taken by the Company to Prevent Such Conflicts of Interest

No conflict of interest or dispute occurred with Taksim Kurumsal Gayrimenkul Değerleme ve Danışmanlık A.Ş., from which the Company received real estate appraisal services for Doğuş Center Maslak and Antalya 2000 Plaza from January 1, 2015 to December 31, 2015. Any conflict of interest is meticulously prevented by both agreements with service providers and internal working regulations. No conflict of interest or dispute occurred with Reel Gayrimenkul Değerleme A.Ş., from which the Company received real estate appraisal services for Gebze Center Shopping Mall from January 1, 2015 to December 31, 2015. Any conflict of interest is meticulously prevented by both agreements with service providers and internal working regulations.

No conflict of interest or dispute occurred with Elit Gayrimenkul Değerleme A.Ş., from which the Company received services for properties that might be included into to the portfolio and thus require appraisal in the accounting period 2015 from January 1, 2015 to December 31, 2015. Any conflict of interest is meticulously prevented by both agreements with service providers and internal working regulations.

No conflict of interest or dispute occurred with Kobirate Uluslararası Kredi Derecelendirme ve Kurumsal Yönetim Hizmetleri A.Ş. from which the Company received rating services from December 15, 2014 to December 15, 2015. Any conflict of interest is meticulously prevented by both agreements with service providers and internal working regulations.

The Company pays strict attention to confidentiality of information on customers and suppliers as a part of commercial secrets.

The Company does not receive investment consultancy services.

Information on Reciprocal Shareholding of More than Five Percent

The Company does not have such reciprocal shareholding.

Warrants, Pledges, Mortgages, and Guarantees

The Company did not provide any warrant, pledge, mortgage, and guarantee for third parties. Related statement was submitted to the shareholders for review during the General Meetings held on March 26, 2015.

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28

GENERAL INFORMATION

ON THE COMPANY

Information on Personnel and Workers’ Movements, Collective Agreement Practices, Rights and Benefits of Personnel and Workers, as well as Occupational Training

The Company has a “Human Resources and Training Policy” and “Personnel Succession Policy,” approved by the Company with decision No. 2015/421 of July 20, 2015. In addition, related practices of Doğuş Group are followed. The Company has a Personnel Indemnification Policy, approved during the Board Meeting No. 2014/400 of December 30, 2014. Related policies are updated when required.

In addition to wages and workplace cafeteria, employers are fully provided with other social benefits specified in the Labor Law. 13 of the employees are covered with company-provided health and life insurance.

The Company does not have collective agreement in place.

Right of association of employers is not restricted, provided that prior permission is obtained. As of December 31, 2015, the Company’s severance pay obligation was 244,449 Turkish lira according the legal records and 81,544 Turkish lira according financial statements prepared as per the financial reporting standards approved by the Capital Markets Board. 372,734 Turkish lira was allocated for accumulated leave.

The Company has a personnel succession policy.

Other Issues Beneficial to Users and Significant Events after the Closing of the Accounting Period

The Auditor Report of February 15, 2016 on Early Detection of Risks System and Committee was submitted by Başaran Nas Serbest Muhasebeci ve Mali Müşavirlik A.Ş. to the Board of Directors.

The number of Company employees reached 15 following the accounting period 2015.

AFFILIATION REPORT 2015General Information

Report Period : 2015Trade name : Doğuş REITMersis No : 0648-0081-4890-0019Head Office Address : Doğuş Center Maslak, Maslak Mah. Ahi Evran Cad. No:4/23 Maslak - Sarıyer / ISTANBUL

Contact Details Phone : +90 212 335 28 50Fax : +90 212 335 28 99Email Address : info@dogusgyo.com.trWebsite Address : www.dogusgyo.com.tr

Report Subject and Scope

The report was prepared according to Article 9 to 10 in the Communiqué No. II-17.1 on Corporate Governance.r.

As per Article 199 in the Turkish Commercial Code No. 6102, for a company affiliated to a group of companies, the Board of Directors should prepare a report on the relations between the holding company and the affiliated companies in the first three months of the year. The report gives account of all legal transactions performed by the company in the previous year of activity with the holding company, a company affiliated to the holding company, on behalf of the holding company or any of its affiliated companies as guided by the holding company and all other measures taken or avoided on behalf of the holding company or any of its affiliated companies in the previous year of activity. Statements about legal transactions should include actions and counteractions, while explanations on measures should include reasons, as well as benefits and damages to the Company. If damages were offset, the report should also include how this was actually accomplished within the year of activity or for which benefits was the right to demand granted.

As per Article 9 and 10 of the Capital Markets Board Communiqué No. II-17.1 on Corporate Governance, publicly-traded companies are required to prepare a report with respect to the common and continuous transactions between their related parties. This is done in cases where it is foreseen that a rate more than 10 percent may be achieved in respect of the rate of the transaction amount comparing to the total asset as per the latest financial statements disclosed to public or to the revenue amount as per the latest financial statements disclosed to public. This report or its result is also required to be disclosed on the Public Disclosure Platform.

Such a report was issued on the relations of Doğuş REIT with its holding company and its subsidiaries in accordance with principles of accurate and fair accountability, as per Article 199 in the Turkish Commercial Code No. 6102 and Articles 9 and 10 in the Capital Markets Board Communiqué No. 11-17.1 on Corporate Governance.

Information on the Holding Company and Its Affiliates

It continues to operate under Doğuş Group and the group of companies composed of its affiliates. Doğuş Group of Companies operates in eight industries, including finance, automotive, construction, media, tourism and services, real estate, energy, and catering.

Relations with Holding Company and Its Affiliates

The Company has mutual business relations with companies under Doğuş Group as per related laws and regulations. Transactions performed are priced according to Article 13 “Disguised profit distribution through transfer” in Corporate Tax Law No. 5520 of January 1, 2007.

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30

ŞİRKETKOMİTEBİLGİLERİ

GENELMÜDÜRʼÜN

MESAJI

GENELMÜDÜRʼÜN

MESAJI

GENELMÜDÜRʼÜN

MESAJI

GENELMÜDÜRʼÜN

MESAJI

GENELMÜDÜRʼÜN

MESAJI

AFFILIATION REPORT

2015

Transaction in 2015

Forty percent of the Company’s sales revenue come from transactions with companies affiliated to the main partner.

The Company’s balance amounts with related parties are as follows as from December 31, 2015 and December 31, 2014:

There are no warrants received from and/or given to related parties as from December 31, 2015 and December 31, 2014.

Trade receivables from related parties: December 31, 2015 December 31, 2014Doğuş Oto Pazarlama Tic. A.Ş. 7,694 58,842Türkiye Garanti Bankası A.Ş. - 47,920Doğuş Center Maslak Yöneticiliği - 16,294Doğuş Istanbul Sportif Faaliyetler Kulübü Derneği 6,195 6,195A Yapım Radyo ve Televizyon Yay. A.Ş. - 2,744Doğuş Yayın Grubu A.Ş. - 1,231

Doubtful trade receivables from related parties: Doğuş İstanbul Sportif Faaliyetler Kulübü Derneği (6,195) Total 7,694 133,226

Other receivables from related parties: Doğuş Center Maslak Yöneticiliği - 67,540Total - 67,540

31

Payables to related parties December 31, 2015 December 31, 2014Doğuş Real Estate Investment Management Co. 494,263 368,938Doğuş Group 267,824 286,990Antur Turizm A.Ş. 10,812 79,240Antalya 2000 Plaza - 35,594Leaseplan Automotive Service and Trade A.Ş. - 18,128Garanti Portföy Yönetimi A.Ş. - 16,043Doğuş Bilgi İşlem ve Teknoloji Hizmetleri A.Ş. 12,667 5,840Doğuş Avenu Dış Ticaret A.Ş. 8,128 -

Total 793,694 810,773

Other payables to related parties:Doğuş Real Estate Investment Management Co. - 128,935

Total - 128,935

The Company’s account balance at Türkiye Garanti Bankası A.Ş. is as follows as from December 31, 2015 and December 31, 2014:

December 31, 2015 December 31, 2014Banks - drawing accountTürkiye Garanti Bankası A.Ş. 48,958 30,338Garanti Portföy Yönetimi A.Ş. - 2,992

Banks - term deposit accountGaranti Portföy Yönetimi A.Ş.(*) - 13,087,049 Türkiye Garanti Bankası A.Ş. 7,557,014 7,018,464

Financial investmentsGaranti Portföy Yönetimi A.Ş.(*) - 8,150,121

(*) Garanti Portföy Yönetimi A.Ş. provides the Company with portfolio management services.

Transactions with related partiesTransactions performed by the Company with related parties are summarized below for years ending on December 31, 2015 and December 31, 2014:

Rental income Doğuş Oto Pazarlama Ticaret A.Ş. 12,876,223 8,568,371Doğuş Yayın Grubu A.Ş. 6,536,191 5,100,726A Yapım Radyo ve Televizyon Yapımcılığı A.Ş. 849,083 662,770Doğuş Spor Kompleksi Yatırım ve İşletme A.Ş. 514,778 1,741,314Türkiye Garanti Bankası A.Ş. 392,639 308,540Doğuş Real Estate Investment Management Co. - 88,859Garanti Emeklilik ve Hayat A.Ş. 33,854 31,708Garanti Finansal Kiralama A.Ş. 13,490 10,623Total 21,216,258 16,512,911

December 31, 2015 December 31, 2014

32

AFFILIATION REPORT

2015

Service Procurement, Service expenditures, and other expenditures

Doğuş Real Estate Investment Management Co. 2,504,531 2,128,935Doğuş Group 228,443 243,478 226,989 213,205Doğuş Oto Pazarlama Ticaret A.Ş. 170,724 --Kral Pop Medya Hizmetleri A.Ş. 136,500 -Antur Turizm A.Ş. 122,628 72,697Kraltv Radyo ve Televizyon Yayın A.Ş. 62,500 -Doğuş Bilgi işlem ve Teknoloji Hizmetleri A.Ş. 34,635 17,237LeasePlan Otomotiv Servis ve Ticaret A.Ş. * 30,778 189,854Garanti Portfolio Management 13,842 106,635Garanti Yatırım Menkul Kıymetler A.Ş. 5,250 5,250Türkiye Garanti Bankası A.Ş. 1,802 -Total 3,538,632 2,977,291

*LeasePlan Otomotiv Servis ve Ticaret A.Ş. A.Ş. lost its status as related company on February 15, 2015. So, the stated amount included transactions until February 15, 2015.

Interest income

Türkiye Garanti Bankası A.Ş. 581,288 298,590

In all of rental relations, the lower limit is the rent fixed by the Real Estate Appraisal Company authorized by the Capital Markets Board. This lower limit is respected in all actual rent relations.

The aforementioned transactions with the holding company and its affiliates were ordinary commercial transactions and their conditions were not specified under the guidance of the holding company or in favor of any other company. The pricing of such commercial transactions does not take into consideration whether the other party is the holding or affiliated company.

In order to comply with transfer pricing principles specified in Article 13 in the Corporate Tax Law No. 5520, the Company observed an arm’s length principle in its relations with the holding company and its affiliates, paying attention to performing the transactions with such companies in the same way with unrelated companies. The arm’s length principle requires that the price or consideration charged for the purchase or sale of goods or services between related parties should be the price or consideration which would have been occurred in the absence of such a relationship between them.

The arm’s length principle was observed in the pricing of transactions with holding company and its affiliates and the holding company did not use its holding capacity in such as a manner as to cause loss for the Company. In addition, the holding company and its affiliates did not prompt the Company to perform any business, asset, funds, personnel, debit and credit transfer, or legal transactions which might cause loss; to reduce or transfer its profit; to limit its assets to real or personal rights; to pledge, afford warrant or sign a surety; to make payments; to take decisions or measures which might affect negatively its efficiency or activity, including renovation of its facilities, restriction or interruption of its investments without any reason; or to avoid taking measures which might help the Company develop.

CONCLUSION

Transactions performed by Doğuş REIT with related parties defined in International Accounting Standard No. 24 (IAS 24), as per the Capital Market legislation, did not result against to the Company, provided that they did not fall under the term of commercial secret and its conditions were specified and compared with market conditions.

Transactions performed in 2015 by Doğuş REIT with holding company and its affiliated companies under the Group of Companies are usual commercial activities and there were no transactions performed in favor of the holding company and its affiliates in violation of the arm’s length principle in 2015. Therefore, no legal action was taken against the Company, which, in turn, did not have to take counteractions. So, there was no measure or loss compensation taken by the Company in relation with its transactions with the holding company and its affiliates as per Article 199 in the Turkish Commercial Code and Articles 9-10 in the Capital Markets Board Communiqué No. II-17.1 on Corporate Governance.

Detailed information on transactions performed by Doğuş REIT with related parties in 2015 are described in footnote 28 in the Company’s publicly-announced financial statements for 2015. This report is only an assessment of the compliance of purchases and sales exceeding 10 percent limit with market conditions

The transactions of the same nature are also expected to exceed the 10 percent limit specified in Article 10 in the Capital Markets Board Communiqué No. II.17.1 on the Corporate Governance in 2016 and transactions will be performed as per principles specified in this report.

INFORMATION ON TRANSACTIONS WITH RELATED PARTIES:

As per Articles 9-10, paragraph 1 in the Communiqué (II-17.1) on Corporate Governance, the scope and conditions of common and continuous transactions between Doğuş REIT and the related parties are determined by the Board of Directors and a compliance report is issued in compliance with Article 199 in the new Turkish Commercial Code No. 6102 which states that, “the Board of Directors of a company affiliated to group of companies is required to issue a report on transactions by the company with the holding company and its affiliates in the first three months of the accounting period.“ In case of any substantial amendments to the scope and conditions of such transactions, a decision by the Board of Directors is required.

Forty percent (December 31, 2014: 36 percent) of the Company’s sales revenue came from related companies.

Rental Income December 31, 2015 December 31, 2014

Doğuş Oto Pazarlama Ticaret A.Ş. 12.876.223 8.568.371Doğuş Yayın Grubu A.Ş. 6,536,191 5,100,726A Yapım Radyo ve Televizyon Yapımcılığı A.Ş. 849,083 662,770Doğuş Spor Kompleksi Yatırım ve İşletme A.Ş. 514,778 1,741,314Türkiye Garanti Bankası A.Ş. 392,639 308,540Doğuş Real Estate Investment Management Co. - 88,859Garanti Emeklilik ve Hayat A.Ş. 33,854 31,708Garanti Finansal Kiralama A.Ş. 13,490 10,623

Total 21.216.258 16.512.911

Service Procurement, Service expenditures, December 31, 2015 December 31, 2014and other expenditures Doğuş Real Estate Investment Management Co. 2,504,531 2,128,935Doğuş Group 228,443 243,478Doğuş Center Maslak Yöneticiliği 226,989 213,205Doğuş Oto Pazarlama Ticaret A.Ş. 170,724 -Kral Pop Medya Hizmetleri A.Ş. 136,500 -Antur Turizm A.Ş. 122,628 72,697Kraltv Radyo ve Televizyon Yayın A.Ş. 62,500 -Doğuş Bilgi işlem ve Teknoloji Hizmetleri A.Ş. 34,635 17,237Leaseplan Automotive Service and Trade A.Ş. 30,778 189,854Garanti Portfolio Management 13,842 106,635Garanti Yatırım Menkul Kıymetler A.Ş. 5,250 5,250Türkiye Garanti Bankası A.Ş. 1,802 -

Total 3,538,632 2,977,291

Interest incomeTürkiye Garanti Bankası A.Ş. 581,288 298,590

33

34

THE COMPANYʼS PROFIT

DISTRIBUTION POLICY

INFORMATION ON THE COMPANY’S PROFIT DISTRIBUTION POLICY AND PROFIT DISTRIBUTION IN 2015

Profit Distribution Policy

There are no privileges in dividend distribution. The Board of Directors sets the Dividend Distribution Policy, and submits it to the General Meeting for approval as per the Capital Market Regulations, Tax Legislation, and the Articles of Association. The matters on whether, how and when the dividend will be distributed are discussed and decided in the General Meeting, all notifications are performed within legal times in accordance with the regulations.

The company observes profit distribution and legal reserves regulations under the Turkish Commercial Code No. 6102 and Capital Market Legislation.

Net losses for the period and the previous year in the Company’s financial statements should be offset with appropriate equity items. However, previous year losses that were not set off due to the regulations or tax-related obligations, may be used regarding reductions in determining the distributable dividends.

Accordingly;

After the deduction of the Company’s overhead expenses and amounts that must be paid and allocated by the Company as per the general accounting principles such as miscellaneous depreciation expenses, as well as provisions for compulsory taxes and financial liabilities that must be paid by the corporate legal entity, from the revenues established at the end of the fiscal year, the remaining net profit seen in the annual balance sheet is distributed in the following order and as per the following principles, once the previous year’s losses, if any, are also deducted:

Primary Legal Reservea) Five percent (5 percent) of the remaining amount will be allocated as primary legal reserve until it amounts to 20 percent of the paid-in capital as per Article 519 of the Turkish Commercial Code.

First Dividendb) From the tax base which is calculated by adding donations granted within the related fiscal year, if any, to the remaining amount, the first dividend is distributed with the amount decided by the General Meeting as per the Company’s profit distribution policy, provided that it does not remain below the rate and amount specified by the Capital Markets Board.

Second Dividendc) After the deduction of items mentioned in paragraphs (a) and (b) from the net profit, the General Meeting is authorized to distribute the remaining portion partially or totally as second dividend, retain it as year-end profit in the balance sheet, add it to legal or voluntary reserves, or allocate it as extraordinary reserves.

Secondary Legal Reserved) As per Article 519, paragraph 2, sub-paragraph (c) in the Turkish Commercial Code, secondary legal reserve is allocated.

e) Unless necessary legal reserves are set aside as required by law and the first dividend is reserved for shareholders as specified in Articles of Association, the Company cannot decide to set aside any other reserves, to transfer them to the following year as profit, or to distribute dividends to members of the Board of Directors or officials, clerks, and workers, as much as dividends cannot be distributed to these people unless the allocated first dividend is paid.

f) As per Article 20 in the Capital Markets Law, advance dividends can be distributed to shareholders.

Profit Distribution Time

Upon the proposal of the Board of Directors, the distribution dates and method of the annual profit are decided by the General Meeting in compliance with the related regulations by the Capital Markets Board. Profits distributed as such cannot be withdrawn.

The Company’s dividends are paid within the legally-prescribed periods of time.

Dividends may be paid in equal or varying installments, as decided by the General Meeting. The payment of dividends in installments is performed in accordance with the Capital Market Law.

Dividends are distributed equally to all existing shares on the date of the dividend distribution, regardless of the date of issue or acquisition. Rights on dividend privileges are reserved. According to Article 20 of the Capital Markets Law, the total dividend advance to be provided in an accounting period cannot exceed half of the profit of the previous year. No decision shall be taken regarding giving additional dividend advances or distributing dividends before offsetting the dividend advances paid during the previous period.

The proposal of the Board of Directors on dividend distribution, or the resolution of the Board of Directors on distribution of dividend advances are announced to public together with the dividend distribution table or the dividend advance distribution table of which the method and the content is decided by the Board, in accordance with the Board’s regulatory guidelines on public disclosure of material events. It is mandatory to disclose the dividend distribution to public no later than the announcement date of the Ordinary General Meeting agenda.

Resolved in the General Meeting, the location and date of dividend distribution is announced to public via the corporate website and in a newspaper printed at the location area of the Company’s headquarters, as well as through a material event disclosure on Public Disclosure Platform.

The amount of dividend resolved by the General Meeting to be distributed to non-shareholders is paid proportionally with the installments of shareholder dividend payments and pursuant to the same principles and procedures.

In the event of a request for amendment in dividend distribution policy, the resolution of the Board of Directors and the reason for such amendment are announced to public in accordance with the Board’s regulatory guidelines on public disclosure of material events.

35

LEGAL ACTIONS IN WHICH THE

COMPANY IS INVOLVED

36

LEGAL ACTIONS IN WHICH THE COMPANY IS INVOLVED

As of December 2015, Doğuş REIT is involved in the following ongoing legal actions (pending or open.

Files in which the Company is Defendant or Plaintiff

1. As announced on the Public Disclosure Platform on August 11, 2014, the Company objected the 1/5000 scale Master Development Plan for Maslak and Surroundings, which included the location of Doğuş Center Maslak (an asset in the Company’s portfolio) and was finalized upon the approval by the Istanbul Metropolitan Municipality and announced on March 12, 2014, requesting its correction. Upon the rejection of this objection, the Company filed an action for nullity with the demand for suspension of enforcement. In this action filed for suspension and nullity of enforcement at the 2nd Administrative Court of Istanbul with file no 2014/1611 E, our demand for suspension of enforcement was rejected by the 2nd Administrative Court of Istanbul on June 11, 2015 and the court order was notified to the Company. The judicial process is in progress.

2. As announced on the Public Disclosure Platform on November 3, 2015, the Company filed, on November 3, 2015, a legal action for suspension and nullity of enforcement in the 11th Administrative Court of Istanbul with file no 2015/1166 E against the 1/1000 scale Master Development Plan for Maslak and Surroundings in the district of Sarıyer, which included the location of Doğuş Center Maslak (an asset in the Company’s portfolio) and was finalized upon the approval by the Sarıyer Municipality and announced on July 7, 2015 to August 7, 2015. As the legal action for nullity is related with file no 2014/1611 E in the 2nd Administrative Court of Istanbul, it was sent to the 2nd Administrative Court of Istanbul, which processed the file with file no2015/2177 E. The judicial process is in progress.

Files in which the Company is Creditor Doğuş Center Maslak

1. Enforcement proceedings were commenced against the debtor Murat Genç, a former tenant of Doğuş Center Maslak, in the 5th Directorate of Enforcement of Şişli with file No. 2008\17817 E.s. However, as the debtor does not have any assets covering the debt and requiring to incur expenses, the file will be attached to a proof of insolvency. (the total amount of enforcement proceedings is $9,223.)

2. Enforcement proceedings were commenced against the debtor Narbay Gıda Ltd. Co., a former tenant of Doğuş Center Maslak, in the 4th Directorate of Enforcement of Şişli with file No. 2009\1910 E.s. and following the exercise of right of retention, sales of movable properties was requested. However, the 4th Directorate of Enforcement of Şişli issued a writ to İş Leasing to identify whether or not the movable property was under lease. The response to the writ confirmed that the movable property belonged to İş Leasing. Despite negotiations, İş Leasing did not decide to take the property. As the debtor company was liquidated during the leasing term, the movable property that is currently in our care cannot be sold. (total amount of enforcement proceedings is $ 43,862.42)

3. Enforcement proceedings based on bill of exchange were commenced in the 22nd Directorate of Enforcement of Istanbul Anatolia with file No. 2014-25396 E.s against Emre Ceyhan, a former tenant of Antalya 2000 Plaza (a property of Doğuş REIT), for outstanding rent. At present, 2,262 Turkish lira has been collected and sent to the accounts of Doğuş REIT. The collection process is in progress.

37

Gebze Center Shopping Mall

1- BÜCÜRÜK TEXTILE INDUSTRY & TRADE A.Ş. (Bücürük)

The tenant was evicted from the leased property on February 31, 2014. Enforcement proceedings of 25,171.40 Turkish lira were commenced for the debt of the tenant in the 37th Directorate of Enforcement of Istanbul with file No. 2014/16907 E. Bankruptcy estate procedures are in progress.

2- İSTEKS TEKSTİL TUR. PAZ. İÇ VE DIŞ TİC. LTD. ŞTİ. (İ&D Lingerie)

Enforcement proceedings of € 29,605.16 were commenced against the tenant for other accrued debts in the 1st Directorate of Enforcement of Istanbul with file No. 2014/17480 E and the tenant was evicted. Enforcement proceedings of 85,616.84 Turkish lira were commenced against the tenant for other accrued debts in the 13th Directorate of Enforcement of Istanbul with file No. 2014/36784 E. As the debtor company subject to both of these enforcement proceedings does not have any foreclosable properties, procedures for certificate of insolvency are in progress.

3- CEM KOREŞ (PİDEYE and MANTI&MANTI)

As the tenant delayed the payment of rents, enforcement proceedings were commenced in the 1st Directorate of Enforcement of Istanbul with a demand for eviction for accrued debts of €18,347.92 with file No. 2014/17478 E. and of € 20,012.13 with file No. 2014/17479 E. The tenant made a partial payment of 25,000 Turkish lira after the commencement of enforcement proceedings. As the tenant continued to fail to pay rents during the legal actions for eviction, enforcement proceedings were commenced in the 13th Directorate of Enforcement of Istanbul for accrued debts of €18,800.99 with file No. 2014/36787 E. and of €19,363.84 with file No. 2014/36786 E. A court order for eviction was obtained for both of the tenant’s stores.

At this point, a new tenant took over one of the leased stores, 80,000 Turkish lira was paid from the debt for this store, and the remaining debt was restructured. The debtor was granted additional time for the eviction from the other store.

Enforcement proceedings of 140,431.38 Turkish lira were commenced against the tenant in the 31st Directorate of Enforcement of Istanbul with file No. 2015/37269 E for his accrued debts.

4- HACIOĞLU

As the tenant delayed the payment of rents, enforcement proceedings were commenced with the demand for eviction in the 13th Directorate of Enforcement of Istanbul for accrued debts of 64,433.34 Turkish lira with file No. 2014/36785 E. The tenant paid 50,000 Turkish lira of this debt.

Enforcement proceedings of 176,443.34 Turkish lira were commenced against the tenant in the 31st Directorate of Enforcement of Istanbul with file No. 2015/37269 E for his accrued debts.

5- AYŞE AKYOL

Enforcement proceedings of 143,647.67 Turkish lira were commenced in the 31st Directorate of Enforcement of Istanbul with file No. 2015/37267 E. against the tenant who had already been evicted from the released property and who had not paid his debt, despite negotiations for accrued debts.

6- KACEYKA GIDA TURIZM ENERJİ İNŞ. LTD. ŞTİ.

As the tenant delayed the payment of rents, enforcement proceedings were commenced in the 31st Directorate of Enforcement of Istanbul with file No. 2015/37268 E. with the demand for eviction for accrued debts of 74,508.13 Turkish lira.

38

ORDINARY GENERAL

MEETING AGENDA

DOĞUŞ REIT GENERAL MEETING AGENDA OF MARCH 24, 2016

1. Opening and determination of Chairman,2. Authorization of the Chairman to sign the minutes of the General Meeting,3. Reading, discussion and voting of Annual Report 2015 of the Board of Directors,4. Reading of the Independent Audit Report for fiscal year 2015,5. Reading, discussion, and voting of Financial Statements for the fiscal year 2015,6. Release of Board of Directors members for the Company’s activities in 2015,7. Discussion and voting of the suggestion from the Board of Directors on the dividend distribution for 2015 as elaborated as per the Company’s dividend distribution policy,8. Providing information on individuals who were nominated for the Board of Directors as per Appendix 1, Article 1.3.1.c in the Capital Markets Board Communiqué No. 11-17.1 on Corporate Governance Principles,9. Selection of Board members and determination of their term of office,10. Setting of the attendance fee of Board members,11. Providing information to shareholders on the “Remuneration Policy” and remunerations paid for the Board members and senior management as per the Corporate Governance Principles,12. Approval of Başaran Nas Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş., which was identified by the Board of Directors as auditor for the fiscal year 2016 as per the Turkish Commercial Code and Capital Markets Board regulations,13. As per Capital Markets Board regulations, informing the General Meeting on transactions performed with related parties in 2015,14. Informing the General Meeting on donations and financial aid granted in 2015 and determination of an upper limit for donations in 2016,15. As per Capital Markets Board regulations, informing the General Meeting on warrants, pledges, mortgages, and guarantees given by the Company and its affiliates to third parties, as well revenues and benefits earned, in 2015,16. As per Article 395 and 396 in the Turkish Commercial Code and Article 1.3.6 in the Capital Markets Board Communiqué No. (II-17.1) on Corporate Governance, informing the General Meeting on any material transaction by controlling shareholders, members of the Board of Directors, managers with administrative roles and responsibilities, as well as their spouses and relatives with second degree of consanguinity and affinity, which could potentially create a conflict of interest with the Company or any of its subsidiaries; any commercial business activity involving the operations of the Company and/or any of its subsidiaries, either on account of their own or any other third parties; or joining any other partnership involved in a similar line of commercial business as partners with unlimited liability.17. Wishes and suggestions.

DIVIDEND DISTRIBUTION TABLEAccording to the Company’s solo financial statements prepared for the fiscal year from January 1, 2015 to December 31, 2015 in mandatory formats specified by the Capital Markets Board and in compliance with the Turkish Accounting Standards / Turkish Financial Reporting Standards (TAS/TFRS) as per the Capital Markets Board Communiqué (II-14.1) on the Financial Reporting Principles in the Capital Market, the profit for the period was 77,601.516 Turkish lira from operations in 2015 while official records kept in compliance with the Tax Procedure Law indicated a profit for period of 24,119,336.70 Turkish lira.

As per the Capital Markets Board regulations and in compliance with the Company’s Articles of Associations, the General Legal Reserves for 2015 were calculated to be 1,205,966.84 Turkish lira. After the allocation of 1,205,966.84 Turkish lira as General Legal Reserves as per CMB regulations, net distributable profit was calculated to be 76,395,549.16 Turkish lira. Net distributable profit was calculated to be 22,913,369.86 Turkish lira in the legal records kept as per the Tax Procedure Law.

The Board of Directors decided unanimously on its meeting of March 1, 2016 to propose to the General Meeting not to distribute the net profit of the fiscal year 2015, transferring it to Extraordinary Reserves account, in line with the Company’s present investments and growth policies.

(*) The term of subsidiary is used to include subsidiaries, affiliates, and jointly controlled entities of the holding company.

Dividend Share Table of Doğuş REIT for 2015 (TL)

1. Paid-in / Issued Capital 227,208,155.002. General Legal Reserves (according to legal records) 245,372.00 If there is preference in the dividend distribution as per the Articles of Association, there is NO INFORMATION

According to CMB According to Legal Records (LR)3. Profit for the Period 77,601,516.00 24,119,336.704. Taxes (-) 0.00 0.005. Net Profit for the Period 77,601,516.00 24,119,336.706. Accumulated Losses (-) 0.00 0.007. General Legal Reserves (-) 1,205,966.84 1,205,966.848. Distributable Net Profit for the Period (=) 76,395,549.16 22,913,369.869. Donations (+) 0.0010. Distributable Net Profit for the Period including Donations 76,395,549.1611. First Dividend to Shareholders 0.00- Cash - Bonus - Total 12. Dividend Distributed to Preference Shareholders 0.0013. Other Distributed Dividends 0.00- Members of Board of Directors - Employees - Non-shareholding Persons 14. Dividend Distributed to the Redeemed Shareholders 0.0015. Second Dividend to Shareholders 0.0016. General Legal Reserves 0.0017. Statutory Reserves 0.0018. Special Reserves 0.0019. EXTRAORDINARY RESERVES 76,395,549.16 22,913,369.8620. Other Liabilities Available for Distribution 0.00 0.00

39

40

DIVIDENDDISTRIBUTION

TABLE

TABLE OF DIVIDEND RATES

GROUP TOTAL DISTRIBUTED TOTAL DISTRIBUTED DIVIDEND DIVIDEND DIVIDEND/NET CORRESPONDING TO A DISTRIBUTABLE SHARE OF 1 TL NOMINAL PROFIT FOR VALUE THE PERIOD CASH (TL) BONUS (TL) RATE (%) AMOUNT (TL) RATE (%)

NET A 0.00 0.00 0.00 0.00 0.00 B 0.00 0.00 0.00 0.00 0.00 TOTAL 0.00 0.00 0.00

The proposal of not to distributed dividend was submitted to the General Meeting

41

COMPANIES FROM WHICH AUDIT, CONSULTANCY, AND APPRAISAL SERVICES WERE RECEIVED

Tax AdvisorBaşaran Nas Yeminli Mali Müşavirlik A.Ş.

Independent Audit CompanyBaşaran Nas Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş.

Independent Appraisal CompanyElit Gayrimenkul Değerleme A.Ş.Reel Gayrimenkul Değerleme A.Ş.Taksim Kurumsal Gayrimenkul Değerleme ve Danışmanlık A.Ş.

Rating CompanyKobirate Uluslararası Kredi Derecelendirme ve Kurumsal Yönetim Hizmetleri A.Ş.

SEKTÖR VEEKONOMİ

INDUSTRY ANDECONOMY

INDUSTRY AND

ECONOMY

44

1. ECONOMIC OUTLOOK

a) World Economy in 2015

The IMF World Economic Outlook 2015 reports moderate but uneven growth prospects across the main countries and regions. The report indicates that global activity is projected to gather some pace in the short term with the support of developed countries but medium- and long-term growth is affected by various complex factors, including country- and region-based effects of the global crisis. The IMF lists the factors from developed countries as low inflation, aging populations, decreased total factor productivity, and decreased investments, indicating that factors in developing countries vary significantly.

The report states that global economy, which grew by 3.4 percent in 2014, is projected to remain below forecasts in 2015. According to the October 2015 issue of the IMF World Economic Outlook 2015 (prepared twice a year), with declining commodity prices and increasing financial market volatility, the downside risks have risen. Accordingly, global growth forecasts were revised downward from 3.3 to 3.1 percent for 2015 and from 3.8 to 3.6 percent for 2016.

Global economic growth was measured to be 4 percent from 1997 to 2007. The IMF forecasts that global economic growth will increase in 2016. World trade growth is forecast to be 3.2 percent in 2015 and 4.1 percent in 2016. The world trade grew by 6.8 percent in 10 years from 1997 to 2006.

In developed countries, economic growth is forecast to increase from 1.8 percent in 2014 to 2 percent in 2015 and 2.2 percent in 2016. In developed countries, namely in the US, economic growth of 2.4 percent in 2014 is forecast to be 1.5 percent in 2015 and 1.6 percent 2016. According to forecasts, in Eurozone, the economy will grow by 1.5 percent in 2015 and by 1.6 in 2016 while the Japanese economy will grow by 0.6 in 2015 and 1 percent in 2016.

In developing countries, economic growth of 4.6 percent in 2014 is forecast to be4 percent in 2015 and 4.5 percent in 2016.

Consideration of the world economy outlook also reveals that oil prices continued to decline in 2015. Oil prices are forecast to continue to further decline, especially following the lifting of embargoes against Iran in 2016. In 2015, high-risk geopolitical issues, originating especially in the Middle East, had significant implications worldwide.

A recovery was observed in the US economy. This recovery was especially driven by the Fed’s first interest rate hike in 2015. For the Russian economy, it was an especially tough year due to decreased oil prices. This weakening is forecast to continue in 2016. For Europe, it was a stationary year with no perceivable rise. This was despite the expansionary monetary policies of the European Central Bank. In China, it was not a productive year with downward acceleration in the economy. A similar situation occurred in Japan with no perceivable economic relief.

*Based on the Annual Economic Report of January 2016, issued by the Turkish Ministry of Finance. *Based on the Turkish Ministry of Development bulletin, “Latest Developments in the World Economy,” dated April-June 2015.

b) Turkish Economy in 2015

Overview of the Turkish Economy in 2015

In 2015, the Turkish economy grew by 2.5 percent in the first quarter and 3.8 percent in the second one. In the first 6 months, the Turkish economy achieved 3.2 percent growth. With its growth performance in the second quarter, Turkish economy was the fourth fast-growing economy in G-20, OECD, and Europe.

In the third quarter of 2015, economic growth was above market forecasts with 4 percent especially due to inventory variations and increased consumption. As a result of this Q3 growth above forecasts, economic growth was 3.4 percent in the first nine months.

Therefore, due to positive developments in the last quarter, the Turkish economy is forecast to grow by 3.5 to 4 percent at the end of 2015 in line with the mid-term program forecasts.

The Turkish economy achieved average annual growth of 4.9 percent from 2002 to 2014. Turkey achieved uninterrupted average growth of 5.8 percent in the last 19 quarters. Given the sustainable growth problems worldwide, the average quarterly growth rates of Turkey are highly successful.

In the last quarter of 2015, the general election results in the beginning of November resolved political uncertainty and confidence and stability in both consumers and real sector led to the continued growth. For instance, car sales decreased by 5.6 percent in November 2014 but increased by 4.5 percent in November 2015. Yet first-time house sales increased 13.6 percent in November 2014 and 5.9 percent in November 2015.

In September 2015, the monthly CPI increase was 0.89 percent while monthly Domestic PPI (D-PPI) increase was 1.53 percent. Annual CPI inflation was 7.95 percent in September. In the same month, annual D-PP inflation was 6.92 percent.

Considering the monetary policy implemented in the Turkish economy in 2015, the Monetary Policy Committee reduced one-week repo rate from 8.25 to 7.75 and then 7.5 percent. This was based on the positive trend in the energy and non-food inflation indicators and inflation forecasts.

The consideration of the inflation outlook 2015 reveals consumer prices increased by 8.8 percent. The inflation rate is forecast to be 7.5 percent towards the end of 2016 in line with the government’s fiscal policy.

With seasonally- and calendar-adjusted fixed prices, GNP increased by 1.3 percent compared with the first quarter of 2015 while household final consumption expenditures reached 329.236 billion Turkish lira at current prices and 21.39 billion Turkish lira at fixed prices in the second quarter of 2015 by a year-on-year increase of 12 percent and 5.6 percent, respectively.

*Based on the Annual Economic Report of January 2016, issued by the Turkish Ministry of Finance. *Based on the Economic Outlook Report of December 2015, issued by the Turkish Ministry of Economics. *Based on the Turkish Ministry of Development bulletin, “Latest Developments in the World Economy,” dated April-June 2015.

45

46

Turkish Construction Industry in 2015

In Turkey, the construction industry makes especially significant contributions to economic growth, having a substantial correlation with GDP growth rates.

In 2013, the construction industry owed its growth of 7.4 percent totally to the increase in the public construction expenditures as private sector expenditures shrank by 0.7 percent.

Production in the construction industry decreased significantly as from the second half of 2014 in parallel with the economic slowdown. Growth in the construction industry was 5.8 percent in the first quarter, 3.4 percent in the second quarter, 2 percent in the third quarter, and -2.0 percent in the last quarter, with 2 percent average growth for four quarters of 2014. In addition, real estate and business activities also grew by 2.6 percent in the same year.

In the first quarter of 2015, the Turkish economy grew by 2.5 percent while the construction industry followed a very low and weak trend by a reduction of -2.8 percent.

Having shrunk in the last quarter of 2014 and first quarter of 2015, the construction industry regained pace from the second quarter of 2015 in parallel with growth in the Turkish economy. The Turkish economy and construction industry grew by 3.8 percent and 2 percent, respectively.

2In the third quarter of 2015, the Turkish economy exceeded forecasts with 4 percent growth and this led to 8.3 percent growth in the construction industry.

In the first nine months of 2015, the construction materials industry shrank by 1.9 percent while the number of building licenses and residential building licenses decreased by 24.8 and 25.2 percent, respectively. In addition, number of flats in the residential building licenses also decreased by 23.6 percent.

In 2015, 43 Turkish contractors were in the top 250 global contractors list. This put Turkey in second place after China. The contributions of the construction industry to the economy include foreign exchange inflow, contributions to export, technology transfer, contributions to employment, impact on equipment pool, and impact on international expansion.

In Turkey, important projects have been undertaken, especially in recent years. These include the 3rd Bosporus Bridge, 3rd Istanbul Airport, Canal Istanbul, Istanbul Finance Center, Istanbul Subway, city hospitals, Eurasia Tunnel, high-speed train, and İzmit Bay Bridge.

*Based on statistical reports issued by Turkish Statistics Institute for 2015.*Based on quarterly reports issued by the Association of Real Estate & Real Estate Investment Companies (GYODER) for 2015

INDUSTRY AND

ECONOMY

Turkish Construction Industry in 2015

According to Turkish Statistics Institute data, a comparison of house sales in the first 3 months in 2014 and 2015 reveals that house sales decreased year-on-year by 1.7 percent to 86,167 units in January 2015. However, house sales achieved year-on-year growth in February and March 2015. House sales increased by 15 percent to 95,021 units in February and by 32.4 percent to 116,030 units in March 2015.

Out of 110,030 units sold in March 2015 across Turkey, 21,911 units were sold in Istanbul, 14,105 units in Ankara, and 6,845 units in Izmir.

Across Turkey, house sales decreased year-on-year by 20.1 percent to 92,483 units in September 2015. The highest house sales occurred in Istanbul with 15,994 units and a 17.3 percent share, followed by Ankara with 9,810 units and 10.6 percent and Izmir with 5,251 units and 5.7 percent The lowest house sales occurred in Hakkari with 11 units, followed by Şırnak with 16 units and Ardahan with 19 units.

Across Turkey, the number of first-time house sales decreased year-on-year by 18.3 percent to 43,333 units in September 2015. The share of first-time house sales was 46.9 percent in the total house sales. The highest first-time house sales occurred in Istanbul with 7,555 units and 17.4 percent share, followed by Ankara with 4,184 units and Izmir with 2,032 units.

Across Turkey, second-hand house sales also decreased year-on-year by 21.7 percent to 49,150 units in September 2015. The highest second-hand house sales occurred in Istanbul with 8,439 units and 17.2 percent share. In Istanbul, the share of second-hand sales was 52.8 percent in the total house sales. Ankara was second with 5,626 units, followed by Izmir with 3,219 units.

House sales to foreigners decreased year-on-year by 4.8 percent to 1,768 units in September 2015. In house sales to foreigners in September 2015, Istanbul had the highest number with 561, followed by Antalya with 440 units, Yalova with 126 units, Bursa with 112 units, Trabzon with 105 units, and Muğla with 85 units. In September 2015, Iraqis purchased 359 houses, followed by the citizens of Saudi Arabia with 204, Kuwaitis with 160, Russians with 115, and the British with 109 houses.

To summarize house sales in Turkey in general: According to TurkStat data, house sales achieved year-on-year increase of 10.6 percent and reached 1,289,320 units in 2015.

Istanbul had the highest share with 239,767 units sold. 74,032 houses were sold for the first time.

Foreigners purchased 22,380 houses. House sales to foreigners achieved a year-on-year increase of 20.4 percent in 2015 In house sales to foreigners, Istanbul ranked first with 7,493 units, followed by Antalya with 6,072 units, Bursa with 1,501, and Yalova with 1,425 units

By nationality, the highest number of house sales was made to Iraqis The ranking by nationality was: Iraqis with 4,228 units and an 18.5 percent share, Saudi Arabians with 2,704 units and a 11.8 percent share, and Kuwaitis with 2,130 units and a 9.3 percent share. They were followed by Russians with 2,036 units and the British with 1,054 units. House sales to foreigners generated $4 billion revenues in 2015. 774.874 men and 382.237 women acquired a house for the first time.

* Based on statistical reports issued by Turkish Statistics Institute for 2015.* Based on quarterly reports issued by the Association of Real Estate & Real Estate Investment Companies (GYODER) for 2015.

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48

Turkish Retailing Industry in 2015

The retailing industry achieved 9 percent average growth, especially in the last 5 years. Based on past data, turnover was 608 billion Turkish lira in 2014. Out of this, around 45 percent came from organized retailing with corporate firms and 55 percent from traditional retailing. The retailing industry employs around 2.5 million people.

Following year-on-year real growth of 9 percent in 2014, the industry was forecast to show a similar growth performance in 2015 with around 663 billion Turkish lira in turnover towards the end of 2015 according to industry representatives. In addition, based on the performance of the last 5 years, the retailing industry is resolutely forecast by the industry and association representatives to reach 880 billion Turkish lira in size by 2018 with 9 percent growth rate.

In 2015, Turkish retailing industry was still composed of traditional retailers with a 67 percent share and organized (modern) retailers with 33 percent share. Accounting for around 62 percent of total retailing sales, food sector had 77 percent share in traditional retailers at the end of 2015. In terms of markets and food chains, the industry had 29.000 points of sale and 270.000 employees in 2015.

In Q1 2015, total rentable space reached 10.2 million square meters in 350 shopping malls across Turkey. With 70 more under-construction shopping malls to be opened by 2018, Turkey is forecast to have 420 shopping malls with a total rentable space of 12.8 million square meters at the end of 2018. Out of these 70 under-construction shopping malls with a total rentable space of 2.6 million square meters, 31 are situated in Istanbul with a total rentable space of 1.4 million square meters. At the end of first semester of 2015, retail density, measured by rentable space/1000 persons, was 132 square meters in Turkey as general, with 271 square meters in Ankara and 265 square meters in Istanbul. With the opening of under-construction shopping malls, the average of Turkey is forecast to increase to 156 square meters at the end of 2018, with 303 square meters in Ankara and 330 square meters in Istanbul. The rental outlook in the retailing industry shows that euro-based rent per square meter remained the same year-on-year at 90 Euro in the first semester of 2015.

In May 2015, 19 cities did not have a shopping mall. Shopping malls are situated mostly in big cities such as Istanbul, Ankara, İzmir, and Antalya. Across Turkey, three big cities account for 60 percent of the total rentable space. Cities which still do not have shopping malls are: Bartın, Sinop, Çorum, Kırşehir, Yozgat, Sivas, Gümüşhane, Bayburt, Rize, Ardahan, Kars, Iğdır, Ağrı, Tunceli, Bingöl, Muş, Şırnak, Adıyaman, and Kilis.

Shopping mall turnover index, published by the Council of Shopping Centers, achieved 14 percent yearly increase to 182 points in 2015. An analysis by category shows that, in December 2015, the highest turnover growth was in hypermarkets with 18 percent and food with 16 percent. In shopping malls, the rentable space (in square meters) productivity increased by 14 percent to 705 Turkish lira in 2015. According to number of visitors index, number of shopping mall visitors increased year-on-year by 4 percent in 2015.

* Based on reports issued by the Turkish Council of Shopping Centers & Retailers (TCSCR).* Based on statistical reports issued by Turkish Statistics Institute for 2015.* Based on the JLL 2015 report.* Based on the Turnover Index report issued by the Council of Shopping Centers.

INDUSTRY AND

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Turkish Office Industry in 2015

Office inventory continued to increase in Istanbul office market in the first quarter of 2015. Especially in the first 6 months, expectations related to the general elections and increased foreign exchange rates led to corporate leases, which were mostly concentrated in locations smaller than 5,000 square meters.

In 2015, the total office inventory share was 41 percent in Levent in the Central Business District (CBD) and 18 percent in Kağıthane and Seyrantepe in the non-CBD Europe. They were followed by Ümraniye, Ataşehir, Kozyatağı, and Küçükyalı in the non-CBD Asia with 32 percent and Bomonti-Piyalepaşa, Kartal-Maltepe, and Western Ataşehir in developing office areas with 9 percent.

In the Istanbul office market, although rents are generally dollar-based there are also some investors who prefer Euro or Turkish lira.

In the Central Business District (CBD), the vacancy rate was 20.9 percent in Class A office buildings and 8.5 percent in Class B office buildings in the first quarter of 2015. In the CBD, average rent was 31.8 US dollars/square meter/month in Class A office buildings and 16.5 US dollars/square meter/month in Class B office buildings. In non-CBD Europe, the vacancy rate increased to 14.7 percent in Class A office buildings. Average rent was 18.7 US dollars/square meter/month in Class A office buildings.

In non-CBD Asia, vacancy rate increased to 16.9 percent in Class A office buildings with average rent of 21.5 US dollars/square meter/month. In the first quarter of 2015, the highest rent was in Levent, just as in the previous quarter. The highest rent was 50 US dollars/square meter/month.

In the second quarter of 2015, no variation was observed in the office inventory in Istanbul office markets. Just as in the first quarter, the total office inventory share was 41 percent in CBD, followed by non-CBD Asia with 32 percent, non-CBD Europe with 18 percent, and developing office areas with 9 percent.

In the Central Business District (CBD), vacancy rate was 20.3 percent in Class A office buildings and 10.3 percent in Class B office buildings in the second quarter of 2015. In the CBD, average rent was 32.1 US dollars/square meter/month in Class A office buildings and 16 US dollars/square meter/month in Class B office buildings. In non-CBD Europe, vacancy rate decreased to 12.3 percent in Class A office buildings. Average rent was 18.2 US dollars/square meter/month in Class A office buildings.

In non-CBD Asia, vacancy rate decreased to 16.4 percent in Class A office buildings with average rent of 21.9 US dollars/square meter/month. In the second quarter of 2015, the highest rent was in Beşiktaş-Balmumcu within the CBD. The highest rent was 55 US dollars/square meter/month.

In the third quarter of 2015, the Istanbul office market went through a stationary period. This stagnation was caused especially by the political uncertainty resulting from the failure to form a coalition government following the general elections in June 2015 and the subsequent decision to hold an early election, as well as increasing terrorist attacks. The third quarter was characterized by new office areas included in the inventory rather than corporate leases and purchases.

With continuing growth throughout 2015, Istanbul office inventory reached 4.2 million square meters at the end of 2015 As a result of increased supply and low demand, vacancy rate increased from 20.9 percent in Q1 to 25.6 percent in Q4 in CBD in the same period, despite increased office inventory, vacancy rate did not change much due to high demand and remained at 17.2 percent in non-CBD Asia. In Q4 2015, vacancy rate was 14.9 percent in non-CBD Europe.

* Based on the Q1, Q2, and Q3 2015 report issued by Propin* Based on quarterly reports issued by the Association of Real Estate & Real Estate Investment Companies (GYODER) for 2015.* Based on reports issued by Garanti Investment for 2015.

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2. EVOLUTION AND ACTIVITIES OF REITSIn Turkey, Real Estate Investment Trust (REIT) companies began to be traded on the exchange in 1997 following legal regulations by the Capital Markets Board in 1995.

Real Estate Investment Trust (REIT) is a capital market entity established to invest in real estate rights. Their history dating back 45 years, more than 300 REITs now operate in 35 countries. REITs are most common in the US.

There are three types of REIT. The first type is established to realize a particular type of projects, the second one is established for a definite or indefinite period of time to invest in particular areas, and the third one is established without limitation in their operating purpose or period. In Turkey REITs fall under the third category. In Europe and Far East, the most common type is the investing companies which provide finance for the real estate industry.

To be a REIT, companies must fulfill some legal obligations. The most important one is that they must offer publicly 25 percent of their issued capital at least in three months.

The communiqué on REITs was amended in July 28, 2011 and according to the this amended communiqué: To be a REIT, companies must fulfill some legal obligations.

The most important one is that they must offer publicly 25 percent of their issued capital at least in three months.

REITs must invest in real estate, real estate rights, and real estate projects with at least 51 percent of their total assets. They can also invest in money and capital market instruments with 49 percent of their total assets,

REITs can invest in foreign capital market instruments and foreign-based companies involved only in real estate with not more than 49 percent of their total assets,

The share of lands and plots which have not had any projects developed although 5 years have elapsed since their acquisition cannot exceed 20 percent of total assets,

Income generated by REITS from their activities are exempt from corporate income tax and their income tax withholding is 0 percent,

REITs cannot undertake construction works of their own real estate or acquire personnel or equipment for this purpose,

REITs must have real estate and rights in their portfolio appraised by real estate appraisal companies listed by the Capital Markets Board,

REITs do not have the obligation to distribute dividends. In 2004, substantial amendments were made in REIT-related provisions in the Capital Market Regulations to extend their areas of investment and to include provisions on the protection of investors and implementation of corporate governance principles.

INDUSTRY AND

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51

Corporate governance and taxation issues are also highly important for REITs. Following the corporate income tax exemption granted by Article 8/4 in the Corporate Income Tax Law to encourage corporate existence in the real estate industry, interest has rapidly increased in this financing model.

The Capital Markets Board published the Corporate Governance Principles for the first time in 2003 as a resolution. These principles were based on “Comply or Explain” approach.

In Turkey, the REIT market gained pace in 2010 with the public offering of Emlak Konut and Torunlar REIT. In 2013, Halk REIT, Servet REIT, Panora REIT, and Yeni Gimat REIT served as a model for public offerings. In addition, again in 2013, the second public offering of Emlak Konut REIT was one of the greatest public offerings with 3.25 billion Turkish lira. Other public offerings in 2013 included: Servet REIT in March 24, 2013, Panaroma REIT in May 23, 2013, and Yeni Gimat REIT in August 16, 2013. Körfez REIT, an affiliate of Kuveyt Turk Participation Bank, went public in April 2014.

In December 31, 2015, there were 31 REITs traded at Istanbul Stock Exchange (BIST) with a total market value of 21.5 billion Turkish lira. In the same date, REITs accounted for 4.0 percent of total market value of BIST. In 2015, BIST-100 index (XU100) depreciated by 16 percent yearly and closed at the level of 71,727 in December 31, 2015. In the same period, Real Estate Index (XGMYO) increased in value by 1 percent yearly and closed the year at the level of 37.751.

* Based on quarterly reports issued by the Association of Real Estate & Real Estate Investment Companies (GYODER) for 2015.* Based on reports issued by Garanti Investment for 2015.

INVESTMENTPORTFOLIO

INVESTMENT PORTFOLIO

İSTANBUL / MASLAK, SHOPPING MALL “DOĞUŞ CENTER MASLAK“Doğuş Center Maslak includes Doğuş Otomotiv brands, showrooms, and service areas, as well as Doğuş Media Group and brands and a food court. The shopping mall is situated in Maslak, a significant business and finance center in Istanbul. The center boasts a total area of 63,202 square meters, of which 47,398 square meters is rentable space. Doğuş Center Maslak was inaugurated in November 2006, immediately after the completion of construction.

The building is valued at 265.205 million Turkish lira based on the appraisal report dated December 29, 2015, by CMB-licensed Taksim Kurumsal Gayrimenkul Değerleme ve Danışmanlık A.Ş. This amount stands for the 34.51 percent of the company’s total real estate investment portfolio.

www.doguscentermaslak.com.tr

ANTALYA / SHOPPING MALL“ANTALYA 2000 PLAZA”Antalya 2000 Plaza renders 92 detached units with a mixed concept of offices, shops and also a movie theater in a total 9,000 square meters located on the famous Recep Peker Street, a highly frequented urban area with busy pedestrian and vehicle traffic.

This building has a value of 14.285 million Turkish lira based on the appraisal report dated December 29, 2015, by CMB-licensed Taksim Kurumsal Gayrimenkul Değerleme ve Danışmanlık A.Ş., which corresponds to 1.86 percent of the company’s total real estate investment portfolio.

KOCAELİ / GEBZE, SHOPPING MALL & ADDITIONAL PROJECTS “GEBZE CENTER SHOPPING MALL, EXPANSION & HOTEL PROJECT”

Gebze Center Shopping Mall

Gebze Center Shopping Mall was the first shopping and entertainment center to operate the region. Owing to its proximity to downtown Gebze, the shopping mall has quickly evolved into a social and entertainment hub of the neighborhood. Gebze Center boasts a 59,054 square meter rentable space, nearly 130 stores, a movie theater, a go-kart track, an ice skating rink, bowling lanes, a gym, and a children’s playground, all in one place. The center opened on September 3, 2010, with an investment budget of $180 million. It comfortably hosts over 9 million visitors annually.

www.gebzecenter.com.tr

Gebze Center Expansion and Hotel Project

Gebze Center offers a brand new experience to its visitors in Gebze, Kocaeli, for its shopping, fashion, entertainment, and catering areas and now transforms into a unique attraction for the region with the “Gebze Center Expansion and Hotel Project” rising just next door. Gebze Center will not only accommodate retailers but also the tourism and automotive industries and create fashionable living spaces that will add value to the lives of the local people. The project’s construction permit was obtained on February 20, 2015, and construction works started on the very same date.

Operational since September 3, 2010, with a total rentable area of 59,054 square meters and 130 stores, the shopping mall is planned to further extend its services and store mix after the completion of Gebze Center Expansion and Hotel Project.

The hotel to be built under the project will be a first in Turkey with its long-term accommodation concept. This hotel will have 156 rooms and offer a privileged accommodation experience with a swimming pool, fitness center, business center, lounge, and catering services.

Moreover, the project will include an auto showroom to exhibit premium car brands, a charm that will help turning Gebze into a regional attraction.

The Gebze Center Expansion and Hotel Project represents 63.63 percent of the total real estate investment portfolio of the company. It is valued at 489.002 million Turkish lira based on the appraisal report dated December 31, 2015, by the Capital Markets Board (CMB)-licensed Reel Gayrimenkul Değerleme A.Ş.

Note:In Gebze Center Shopping Mall, the monthly average rental income was based on the occupancy rate of 94.37 percent in 2015.In Doğuş Center Maslak, monthly average rental income was based on the occupancy rate of 98.75 percent in 2015.In Antalya 2000 Plaza, monthly average rental income was based on the occupancy rate of 52.72 percent in 2015.

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Information on Rental Assets Real Estate Monthly Average Rental Income (Turkish lira) Gebze Center Shopping Mall 2,620,809 Doğuş Center Maslak 1,820,674 Antalya 2000 Plaza 55,612

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MONEY AND CAPITAL MARKET INSTRUMENTS

31.12.2015 31.12.2014Foreign Exchange Assets 4,813,637 12.92% 3,677,735 6.75%Foreign Exchange Term 4,716,430 12.66% 3,653,715 6.70%Foreign Exchange Current 97,207 0.26% 24,020 0.04%Assets in Turkish lira 32,435,898 87.08% 50,842,222 93.25%Term Deposits in Turkish lira 32,399,567 86.98% 42,666,415 78.26%Current deposits in Turkish 36,331 0.10% 25,686 0.05%Financial Investments 0 0.00% 8,150,121 14.95%Grand Total 37,249,535 100.00% 54,519,957 100.00%

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APPRAISAL REPORTS IN SUMMARY

Appraised Property Doğuş Center MaslakRequest Date December 2015Prepared by Taksim Kurumsal Gayrimenkul Değerleme ve Danışmanlık A.Ş.Report Date & Report No. 29.12.2015 / DGYO 2015-1Title Deed Details Province of İstanbul, district of Sarıyer, İ. Ayazağa Mah., sheet number 2, block no. 1, parcel no. 131Final Value (VAT excluded) 265.205.000 TLInsurance Value 34.355.942 EU Appraised Property Antalya 2000 PlazaRequest Date December 2015Prepared by Taksim Kurumsal Gayrimenkul Değerleme ve Danışmanlık A.Ş. Report Date & Report No 29.12.2015/DGYO 2015-2Title Deed Details Registered at Province of Antalya, district of Muratpaşa, Haşimişcan Mah., block no. 10479, parcel no 1, places of business with independent section nos.1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48 and offices with independent section nos. 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92Final Value (VAT excluded) 14.285.000 TLInsurance Value 2.192.415 EU Appraised Property Gebze Center Shopping Mall, Expansion and Hotel ProjectRequest Date December 2015Prepared by Reel Gayrimenkul Değerleme A.Ş.Report Date & Report No 31.12.2015/DGS-1510001Title Deed Details Province of Kocaeli, district of Gebze, Sultanorhan Mah., sheet nos. G22B24C2A and G22B24B2A, block no. 5678, parcel no. 22 and 24Final Value (VAT excluded) 489,002,000 TLInsurance Value 91,077,144 EU

INVESTMENT PORTFOLIO

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LOCATIONS

DOĞUŞ CENTER MASLAK

ANTALYA 2000 PLAZA

DOĞUŞ CENTER MASLAK

ANTALYA 2000 PLAZA

GEBZE CENTER SHOPPING MALL, EXPANSION AND HOTEL PROJECT

GEBZE CENTER SHOPPING MALL, EXPANSION AND HOTEL PROJECT

FINANCIALDEVELOPMENT

FINANCIAL DEVELOPMENTThe Company prepared its financial statements for fiscal year ending on December 31, 2015 as per the Capital Markets Board Communiqué Serial: XI, No. 29.

TOTAL ASSETSThe Company’s size of assets grew by 9.6 percent to 829.3 million Turkish lira in 2015.

PORTFOLIO DISTRIBUTION

FINANCIAL DEVELOPMENT

60

829,3

Money and Capital Market Instruments

Total AssetsMillion TL

Doğuş Center Maslak

Gebze Center Shopping Mall

4,5%

Other Assets2,8%

Antalya 2000 Plaza1,7%

59%

32%

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NET PROFITIn the Company’s financial statements, prepared as per the Capital Markets Board Communiqué Serial XI, No: 29, the Company’s profit was 78 million Turkish lira on December 31, 2015.

INFORMATION ON THE COMPANYʼS SHARE PERFORMANCEOn December 31, 2015, the closing price of a DGGYO share was 3.60 Turkish lira with a market value of 817,949,358 Turkish lira.

Million TL

DGGYO BIST REIT Index

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Information on Financial Position, Profitability, and Solvency

Financial statements are prepared as per the Capital Markets Board Communiqué (II-14.1) on “Principles Regarding Financial Reporting in Capital Markets,” entered into force by being published on the Official Gazette No. 28676 dated June 13, 2013.

According to the financial statements dated December 31, 2015, the Company’s total assets were 829.35 million Turkish lira. Shareholder’s equity accounted for 88.49 percent of total assets.

Sales income was 53,965,158 million Turkish lira from January 1, 2015 to December 31, 2015. Total sales revenue does not include foreign sales.

The Company had a credit debt of € 27,183,734 million principal and proceeds on December 31, 2015.

The Company’s primary financial statements are provided for comparison below:

Board of Directors Analysis and Assessment on Financial Position and Operating Results, Realization Degree of Planned Operations, Company Position against the Strategic Objectives

The Company’s net profit was 77,601,516 Turkish lira in 2015 (December 31, 2014. 51,828,245 Turkish lira). The Company’s portfolio is managed as to keep the risk minimal.

Condensed Balance Sheet (Thousand Turkish Lira) 31.12.2015 31.12.2014Total Assets 829,353 756,620Equity 733,919 656,340Total Foreign Assets 95,434 100,280Total Foreign Assets / Total Assets 11.51% 13.25%Total Financial Liabilities 86,379 93,769Total Financial Liabilities / Total Assets 10.42% 12.39%

Condensed Income Statement (Thousand Turkish Lira) 31.12.2015 31.12.2014 Revenue 53,965 46,461Costs of Sales (8,102) (6,625)Gross Profit 45,863 39,836Operating Profit 88,286 53,155Total Comprehensive Income 77,578 51,830Gross Profit / Sales (%) 84.99% 85.74%Net Profit / Equity (%) 10.57% 7.90%

FINANCIAL DEVELOPMENT

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Identification of Whether the Company’s Capital is Uncovered or Not or the Company is Insolvent or Not and Assessments by the Board of Directors, as well as Measures (if any) Considered to Improve the Company’s Financial Structure: Statements on Assets and Rights in the Portfolio

There are not any cases of uncovered capital or insolvency for the Company or any measures considered to be taken to improve the Company’s financial structure

Statements on the Assets and Rights in the Portfolio:

The Company portfolio includes real estate, money and capital market instruments and other assets. The portfolio distribution was as follows on December 31, 2015.

Portfolio Distribution (thousand Turkish lira) 31.12.2015 31.12.2014

Total Real Estate 772,197 697,338Total Money and Capital Market Instruments 37,250 54,520Subsidiaries - -Other Assets 19,906 4,762

Total Portfolio Value 829,353 756,620

CORPORATEGOVERNANCECOMPLIANCE

REPORT

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CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT

SECTION I - CORPORATE GOVERNANCE COMPLIANCE STATEMENT

Published in 1999 for the first time, the OECD Corporate Governance Principles were reviewed in 2004 and 2015. The last review started in 2012, continuing in 2014 and 2015, and was approved by the OECD Council on July 8, 2015. The G20/OECD Corporate Governance Principles were approved in the G20 Finance Ministers and Central Bank Governors Meeting in Ankara on September 4-5, 2015 and in the G20 Leaders’ Summit in Antalya on September 15-16, 2015 The Capital Markets Board’s Corporate Governance Principles were published in Turkey upon decision no. 35/835 dated July 4, 2003 by the Capital Markets Board. To ensure harmonization with the OECD Corporate Governance Principles 2004, the Capital Markets Board updated its own principles. Then, taking international developments into consideration, the Capital Markets Board updated its Corporate Governance Principles again in 2005, 2010, and 2011. The CMB Communiqué Serial IV, No. 56 on the “Determination and Implementation of Corporate Governance Principles,” entered into force by being published on the Official Gazette no. 28158 dated December 30, 2011, was amended five times in 2012 and 2013. Finally, the Communiqué on Corporate Governance (II-17.1) entered into force by being published on the Official Gazette no. 28871 dated January 3, 2014. Following the Capital Markets Board decision no. 2/35 dated January 27, 2014, the Board Bulletin no. 2014/2 announced the new format for the Corporate Governance Principles Compliance Report be attached to annual reports as from 2014. The Company’s Corporate Governance Principles Compliance Report was presented in this new format for the fiscal year from January 1, 2015 to December 31, 2015. Following the recent review by the OECD in 2015, the Capital Markets Board has not updated its Principles yet.

Corporate Governance Compliance Rating

Doğuş REIT signed a contract on December 15, 2014 with Kobirate Uluslararası Kredi Derecelendirme ve Kurumsal Yönetim Hizmetleri A.Ş. (which is officially authorized to perform rating procedures as per the Capital Markets Board’s Communiqué Series VIII No. 51 on Principles Regarding Ratings and Rating Agencies in Capital Market) to prepare the Corporate Governance Compliance Rating Report.

The report for the validity period from July 7, 2015 to July 7, 2016 was published in July 7, 2015 and was announced on the Public Disclosure website at (www.kap.gov.tr).

Our first score for the Corporate Governance Compliance was 8.01.

The Company’s Corporate Governance Compliance Rating report is available on the corporate website (www.dogusgyo.com.tr), in the Investment Corner - Corporate Governance Rating Reports section.

CORPORATE GOVERNANCE

PRINCIPLES COMPLIANCE

REPORT

07.07.2015 Shareholders 89.68Public Disclosure and Transparency 78.54Stakeholders 72.76Board of Directors 77.43Score 8.01

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Corporate Governance Compliance

As announced on the Capital Markets Board Bulletin no. 2015/01 dated January 13, 2015 as per Article 5-(2) c) in the Corporate Governance Communiqué II-17.1, Doğuş REIT was in the third group on the BIST National Market in 2015.

In all its activities from January 1, 2015 to December 31, 2015, the Company fully complied with all obligatory principles as specified in the Corporate Governance Communiqué II-17.1, entered into force by being published on the Official Gazette no. 28871 dated January 3, 2014, also endeavoring to comply with most of the non-obligatory principles.

Doğuş REIT continuously develops and improves its internal corporate governance system to ensure full compliance with Corporate Governance Principles.

The Corporate Governance Committee will continue to work on completing internal adjustments within prescribed times as per the Communiqué (II-17.1) on the Corporate Governance, entered into force by being published on the Official Gazette no. 28871 dated January 3, 2014, taking into consideration the Capital Markets Law no. 6362, related Communiqués by the Capital Markets Board, Turkish Commercial Code No. 6102, and other related regulations to ensure compliance with Corporate Governance Principles.

As per Section II, Article 9 of the Capital Markets Board Communiqué (II-14.1) on “Principles Regarding Financial Reporting in Capital Markets,” entered into force by being published on the Official Gazette No. 28676 dated June 13, 2013, the Corporate Governance Committee announced on the Public Disclosure Platform the following on November 9, 2015: Statements of responsibility for financial reports and annual reports;

a) Review of financial statements and annual report;

b) To the best of their knowledge within the framework of their duties and responsibilities at the Company, the absence of any assertion in the financial statements and annual report that is untrue insofar as matters of material importance are concerned, or any omission that would lead to the conclusion that such assertions were misleading as of the date on which it was made;

c) That, to the best of their knowledge within the framework of their duties and responsibilities at the Company, the financial statements - including consolidated ones, if any - prepared in accordance with the related Communiqué honestly reflect the realities of the Company’s assets, liabilities, financial position, and profits and losses and that the annual report honestly reflects the development and performance of business, as well as the Company’s financial position, risks of material importance, and uncertainties - including consolidated ones, if any;

Financial reports for the period from January 1, 2015 to March 31, 2015 was announced at the Public Disclosure Platform on May 11, 2015; Financial reports for the period from January 1, 2015 to June 30, 2015, on August 7, 2015; and Financial reports for the period from January 1, 2015 to September 30, 2015, on November 9, 2015.

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Following the Board of Directors Resolution No. 2015/420 dated June 8, 2015 and as a part of the Company’s reorganization, Murat İnan, who had officiated as CEO since May 25, 2009, was appointed as Board of Directors Advisor and Çağan ERKAN was appointed as CEO. The appointment of CEO was announced on the Public Disclosure Platform on June 08, 2015 and following its registration on June 22, 2015, was published on the Turkish Trade Registry Gazette no. 8850 dated June 26, 2015. Çağan ERKAN has the authorities specified in related articles in the Turkish Commercial Code No. 6102, Article 18 in the Communiqué II 48.1 on Principles regarding the Real Estate Investment Trusts, and Article 17 in the Articles of Association.

Committees that were established as per the Corporate Governance Principles from January 1, 2015 to December 31, 2015 maintained effectively their activities, complying with obligatory principles specified in the Communiqué (II-17.1) on the Corporate Governance. We declare that there is not any conflict of interest among the management, stakeholders, and shareholders because of noncompliance with any of the corporate governance principles and that annual report and periodic financial statements fully reflect the Company’s financial position and the Company fully complies with the legislation.

We also declare that Doğuş REIT rigorously implements Corporate Governance Principles, Capital Markets Law, and any other related regulations in the management and execution; that the compliance with principles was further improved in 2015 in terms of operability of shareholders, stakeholders, Public Disclosure and Board of Directors; and that there was not any conflict of interest in relation with the Corporate Governance Principles.

We finally declare that the Corporate Governance Committee will rigorously continue to provide the Board of Directors with suggestions for improvement to make the Company’s corporate governance practices “best practices,” if appropriate; and that we will closely follow updates and amendments to regulations related to commercial life, in general, and Capital Markets Board, in particular.

Corporate Governance Committee

Mustafa Sabri DOĞRUSOY Mustafa Ahmet ÜNAYDIN Hasan Hüsnü GÜZELÖZPresident Member Member

CORPORATE GOVERNANCE

PRINCIPLES COMPLIANCE

REPORT

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SECTION II - SHAREHOLDERS

2.1. Investor Relations Department

2.1.1. Established for monitoring all the relations between the shareholders and the Company and for ensuring complete fulfillment of the shareholders’ right to information in compliance with the Capital Markets Legislation and the Capital Markets Board (CMB) regulations, the “Shareholder Relations Unit” was restructured in accordance with Article 11 in the Communiqué No. II-17.1 on Corporate Governance, and the “Investor Relations Department” was established according to the resolution of the Board of Directors No. 2014/387 dated July 25, 2014 and was disclosed on the Public Disclosure Platform.

In compliance with the related article of the Communiqué, this division reports directly to the CEO. The objective of the Investor Relations Department is to inform all stakeholders in compliance with related regulations and to ensure transparent public disclosures.

The responsibility of the Investor Relations Department is to ensure stakeholders to obtain more efficient and extensive information. Hasan Hüsnü GÜZELÖZ is the director of the Investor Relations Department and Nazlı YILMAZ is the division staff. 2.1.2. Investor Relations Department contact information; Hasan Hüsnü GÜZELÖZ - Division Director Phone: +90 212 335 2850 Fax: +90 212 335 2899 Email address: Hguzeloz@dogusgrubu.com.tr

Nazlı YILMAZ - Division Staff Phone: +90 212 335 2850 Fax: +90 212 335 2899 Email address: nazliyi@dogusgyo.com.tr

2.1.3. Investor Relations Department director Hasan Hüsnü GÜZELÖZ possesses “Capital Market Activities Level 3” and “Corporate Governance Rating” licenses and works for the Company as full-time manager.

2.1.4. According to the Communiqué on Corporate Governance (II-17.1), which entered into force following its publication in Official Gazette no. 28871 of January 3, 2014, Investor Relations and Legislation Compliance Report 2015 was submitted to and approved by the Board of Directors.

2.1.5. From January 1, 2015 to December 31, 2015, the Investor Relations Department received and answered 47 information requests from shareholders by phone, electronic mail, or website. In addition, the website was regularly updated to enable investors to follow up-to-date information.

2.1.6. Stakeholders rights are exercised in compliance with the applicable laws, the articles of association and other internal regulations of our Company and all necessary precautions to ensure the proper exercising of these rights are taken.

2.1.7. The utmost attention is paid to the relevant legislation and Articles of Association when fulfilling the requests of shareholders. In 2015, to the best of our knowledge Doğuş REIT did not receive any verbal or written complaints on the use of shareholder rights nor there were no administrative or legal proceedings regarding this issue.

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2.1.8. The main duties of the Investor Relations Department include:

• Ensuring sound, secure and up-to-date recording of correspondence between investors and the Company, as well as other information and documents,• Responding to written information requests from shareholders,• Drawing up of General Meeting documents required to be submitted to shareholders for review and taking necessary measures for the conduct of General Meeting in compliance with related regulations, Articles of Association, and other internal regulations,• Supervising and monitoring the fulfillment of any obligations under the Capital Market legislation, including corporate governance and public disclosure issues,• Performing any duties related to shareholders in compliance with Capital Market Legislation and related communiqués, as well as any other laws and regulations used as a basis for activities,• Performing all procedures in compliance with the Communiqué on Public Disclosure (VII-128.6), which entered into force on January 1, 2014 following its publication in the Official Gazette no. 28864 of December 27, 2013,• Ensuring timely disclosure of activities in Public Disclosure Platform, Central Registry Agency, and corporate website in compliance with related regulations,• In compliance with Article 4.5.10, Appendix 1 of the Communiqué on Corporate Governance (II-17.1), enabling the Corporate Governance Committee to perform its supervision duty,• Reporting its activities in writing to the Board of Directors at least once a year,• Ensuring the preparation and public disclosure of annual and interim reports in compliance with related legislation.• Ensuring sound, secure and up-to-date recording of correspondence between investors and the Company, as well as other information and documents,• Responding to written information requests from shareholders,• Serving as a bridge and ensuring the flow of information between shareholders and the Company’s senior management and Board of Directors,• Drawing up of General Meeting documents required to be submitted to shareholders for review and taking necessary measures for the conduct of General Meeting in compliance with related regulations, Articles of Association, and other internal regulations,• Supervising and monitoring the fulfillment of any obligations under the Capital Market Legislation, including corporate governance and public disclosure issues.

2.1.9. The Corporate Governance Committee performs sensitively its duty of supervising the activities of Investor Relations Department in compliance with Article 4.5.10, Appendix 1 of the Communiqué on Corporate Governance (1I-17.1).

2.2. Exercising Shareholders’ Right to Obtain Information2.2.1. Information requests of shareholders have been clearly and plainly responded with the exception of those related to trade secrets or undisclosed information under the Turkish Commercial Code and the Capital Markets Legislation. Material event disclosures are primarily announced on the Public Disclosure Platform system and are published on the corporate website the same day. The Company respects each shareholder’s right to demand information and to investigate and does not discriminate between shareholders.

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2.2.2. The majority of information requests throughput the year were handled by way of phone or emails. Information requests received by the Shareholder Relations Unit generally covered the following matters:

• Information on financial statements,• Information on potential investment decisions and present rent incomes of the Company,• Information on portfolio tables,• Information on material event disclosures,• Information on capital structure,• Information on the real estate units in the Company’s portfolio,• Questions regarding the price performance of Company’s shares in the stock market,• Questions regarding the potential impacts of group companies’ projects on our Company.

2.2.3. No information requests were received from universities and public institutions during the period. The Company’s website is regularly updated in order to provide accurate and actual information to all people and organizations who wish to have information on the activities and operations of the Company.

2.2.4. Appointment of a special auditor has not been stipulated in the Articles of Association of Doğuş REIT. Pursuant to Turkish Commercial Code Articles No. 438-443, each shareholder may request from the General Meeting the clarification of certain events with a special audit even if the issue is not on the agenda. There were no requests submitted by shareholders for a special audit in January 1, 2015, December 31, 2015 period. The Company’s activities are periodically audited by an Independent Auditor elected at the General Meeting.

2.2.5. The Company acted in complete prudence in responding investor’s requests to ensure full compliance with the regulations. There were no complaints filed with our Company regarding the exercise of shareholders’ rights in January 1, 2015, December 31, 2015 period. To the best of our knowledge, there were also no administrative or legal proceedings regarding this subject.

2.3. General Meetings

2.3.1. General Meetings are held taking into account the Turkish Commercial Code (TCC), Capital Market Legislation and the Corporate Governance Principles, and are organized to provide adequate information to the shareholders.

2.3.2. An information document on agenda items is arranged and announced to the public prior to the General Meeting

2.3.3. Matters such as invitation to the General Meeting, participation, methods to be implemented in the meeting, and announcements of General Meeting resolutions are carried out under the principles set out in corporate governance principles’ section entitled the right to participate in the general meeting, taking our Company’s free float rate into consideration, and in order to increase the participation of stakeholders, to provide the utmost benefit to shareholders, and to ensure consistence in the efficiency of management and operation. The Company acts in compliance with the Corporate Governance Principles of the Capital Markets Board and other legislation in all announcements.

2.3.4. The Ordinary General Meeting gathers within three months of the end of the Company’s operating period, and at least once every year, and decides on the matters of the agenda that is prepared by the Board of Directors pursuant to the relevant provisions of the Turkish Commercial Code. The Ordinary and Extraordinary General Shareholders’ Meetings and quorums are subject to the provisions of the Turkish Commercial Code, Capital Markets Law, and relevant regulations.

2.3.5. The location, date, time, agenda and power of attorney sample of the 2014 Ordinary General Shareholders’ Meeting were announced twenty-two (22) days prior to the meeting date in Turkish Trade Registry Gazette No. 8771 on March 4, 2015.

2.3.6. 2014 Ordinary General Shareholders’ Meeting was held at the Company headquarters on March 26, 2015 and with a quorum of 216,270,548.217. Our General Meeting was held under the supervision of a Ministry of Customs and Trade representative, and was open to the public including stakeholders and media without granting the right to speak, however none other than the shareholders have participated.

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2.3.7. The announcement of the 2014 Ordinary General Shareholders’ Meeting and its Information document was announced to shareholders and public through Public Disclosure Platform on February 27, 2015. Notifications on the General Meeting was published at the Electronic General Meeting system of the Central Registry Agency, and the Company’s website.

2.3.8. Prior to the 2014 Ordinary General Shareholders’ Meeting, the “information document” regarding the annual report, financial statement and financial tables, and the agenda of the General Meeting, other documents that form the basis of the agenda items, and the latest version of Articles of Association were made available for review by the shareholders at the Company website, and participation to the General Meeting was thus facilitated.

2.3.9. The titles of the General Meeting agenda were stated clearly and without room for interpretation.

2.3.10. No written agenda item request from shareholders was received by the Investor Relations Department.

2.3.11. Minutes of the General Meeting and the attendance list regarding the Ordinary General Meeting dated March 26, 2015 was announced on the Public Disclosure Platform on March 26, 2015. The same document can also be found on our website www.dogusgyo.com.tr.

2.3.12. As per the Communiqué on Attendance to General Meetings of Joint Stock Companies by Electronic Means, published in the Official Gazette No. 28396 dated August 28, 2012, our General Meetings are held open to public and in e-General Meeting system. Shareholders are able to monitor the General Meeting and their questions are responded with due diligence.

2.3.13. The Board of Directors decides on General Meeting Invitation in accordance with Turkish Commercial Law No. 6102, Capital Markets Law No.6362, and the provisions of the Articles of Association. Upon the resolution, public is notified by announcing the decision on the E-Company and Public Disclosure Platform of Central Registry Agency. Invitation, agenda, power of attorney samples and further notifications regarding the General Meeting were published in Turkish Trade Registry Gazette, and at least one newspaper sold at Company headquarters’ area in accordance with the times stated in Turkish Commercial Law, Corporate Governance Principles and Capital Market Regulations, and such document was also disclosed in the Company website at www.dogusgyo.com.tr address. Shareholders that are legal entities are sent a letter about the General Meeting.

2.3.14. Invitation to the General Meeting is announced using the methods prescribed by the legislation as well as employing other means enabling access to as many shareholders as possible including electronic communications, and at least twenty-one (21) days prior to the meeting, and is also published in Turkish Trade Registry Gazette.

The Company is obliged to act in compliance with the provisions of the Turkish Commercial Code, Capital Market Law, and relevant regulations regarding the times of invitations to the General Meetings.

Prior to the General Meeting, agenda items and necessary relevant documents are announced to the public within the legal times and in accordance with the regulations.

2.3.15. Pursuant to the agenda items of the General Meeting, the following documents are made available at the Company headquarters and website for the review of shareholders as of the date of announcement for the invitation to the General Meeting: year-end independent auditor’s report and legal auditor’s report, financial tables, annual report, Corporate Governance Principles Compliance Report, profit distribution policy, amendment proposals involving the original and the amended versions of the Articles of Association if subject to amendment, pre-authorizations received from CMB and the Ministry of Customs and Trade, shareholder and partnership structure, changes of members of the Board of Directors and information regarding candidates pursuant to the relevant regulation, information regarding company transactions that are deemed significant according to the regulation and agenda item requests by CMB, if any.

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2.3.16. Prior to the General Meeting, the Form for Voting by Proxy, and the Sample for Power of Attorney for Proxy Solicitation were presented to shareholders. Also prior to the General Meeting, information regarding independent candidates for the Board of Directors, and documents on whether or not a candidate is independent were made available for review of shareholders and public.

2.3.17. 2014 Ordinary General Shareholders’ Meeting was held on March 26, 2015, and was open to the public including stake holders and media without granting the right to speak, however none other than the shareholders have participated.

2.3.18. The matters included in the agenda of 2014 General Meeting were briefed objectively and in detail with a clear and understandable method. Shareholders were given the right to express their opinions and ask questions under equal terms, providing a platform for healthy debate. No questions regarding the meeting agenda were received from shareholders who attended the meeting in person or by electronic means.

2.3.19. Two members of the Board of Directors, CEO, Deputy General Manager Financial Affairs, Investor Relations Department Manager, Legal Counselor, other people in charge of disclosure on significant matters of the agenda, individuals responsible for the preparation of the financial tables, and auditors were present at the 2014 General Meeting on March 26, 2015, to give required information and to respond questions.

2.3.20. A representative of the Independent Auditor has read out the Independent Auditor’s Report concerning January 1, 2014 - December 31, 2014 period, in person, and informed the General Meeting.

2.3.21. As per Article 395 and 396 in the Turkish Commercial Code and Article 1.3.6 in the Capital Markets Board Communiqué No. 11-17.1 on Corporate Governance; It has been noted as a separate article in the agenda, notified in the General Meeting and recorded in the meeting minutes that the controlling shareholders, members of the Board of Directors, managers with administrative roles and responsibilities as well as their spouses and up to second degree blood relations and matrimonial relatives were not involved in any material transaction, which could potentially create a conflict of interest with the Company or any of its subsidiaries; and/or they were neither involved in a commercial business activity involving the operations of the Company and/or any of its subsidiaries, either on account of their own or any other third parties; nor did they join any other partnership involved in a similar line of commercial business as partners with unlimited liability.

2.3.22. As an agenda item of the 2014 Ordinary General Meeting, shareholders were briefed on the Donations and Grants of the Company granted with the purpose of social aid as per Board of Director’s resolutions in 2014 which are, 20,000 (twenty thousand) Turkish lira to the Gebze Security, Public Order and Traffic Services Support and Assistance Association, 25,000 (twenty-five thousand) Turkish lira to Sarıyer Sports Club Association.

2.3.23. Upon the proposal by the Company’s Board of Directors and as per Article 19 of the Capital Markets Law, the General Meeting decided by a majority of shareholders to limit the total amount of Donations and Grants to 1,000,000 (one million) Turkish lira in 2015.

2.3.24. The resolutions of the General Meeting were registered on April 9, 2015, and published in the Turkish Trade Registry Gazette No. 8801 dated April 15, 2015, and announced on Public Disclosure Platform on April 9, 2015.

2.3.25. Extraordinary General Shareholders’ Meeting was not held in the January 1, 2015 - December 31, 2015 period.

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2.3.26. Principles for General Meeting Participation;

Group A shares that hold 0.83 percent of the Company are registered shares, group B shares that hold 99.17 percent of the Company are bearer shares. Publicly Traded shares consist 83.74 percent of the total capital of the Company.

All shareholders included in the “List of Individuals Eligible to Attend the General Meeting” that will be prepared according to the “Chart of Shareholders” obtained from the Central Registry Agency (CRA) by the Board of Directors, may attend the General Meeting personally in physical environment or in electronic environment. Such shareholders may attend themselves in person and they are also allowed to participate in the meeting by means of their representatives.

To participate in the General Meeting, natural person shareholders are required to show their identity cards, representatives of legal person shareholders are required to present their identity cards and letters of authorization. Proxies of natural persons and legal persons are required to show their proxy letters. Shareholders, who participate in the General Meeting by proxy, must authorize their representatives by power of attorney prepared and certified by a notary, or a power of attorney prepared by the shareholder with a notarized signature circular of the shareholder. The participation in electronic environment, assigning delegates, offering suggestions and voting in the General Meetings of our listed Company whose shares are monitored in dematerialized form by CRA, will be handled over the Electronic General Meeting System (E-GEM) provided by CRA. Therefore, shareholders who will perform transactions in E-GEM must first register their contact information in the e-MKK Information Portal of the CRA and obtain a secure electronic signature. Shareholders or their representatives who want to attend the General Meeting by electronic means are required to notify their choice in E-GEM latest up to one day before the date of the General Meeting. Shareholders who are not able to participate in person, without prejudice to the rights and obligations of the shareholders who will participate electronically, are required to obtain a copy of the powers of attorney form from our Company Headquarters or from the corporate web site, and submit the Company their notarized proxy form by completing the requirements stipulated by Communiqué Serial II, No: 30.1 on Voting by Proxy and Proxy Solicitation published in Official Gazette No. 28861 dated December 24, 2013.

Participation in the General Meeting by proxy in electronic environment or in person, it is mandatory to register the identity information of the representative on E-GEM. Participation in the General Meeting by electronic means shall be possible with the electronic signatures of the shareholders or their representatives.

General Meetings are held at the Company headquarters.

The matters included in the agenda of General Meeting are briefed objectively and in detail with a clear and understandable method. Shareholders are given the right to express their opinions and ask questions under equal terms, providing a platform for healthy debate, and their suggestions are taken into consideration.

2.3.27. Meeting MinutesThe meeting minutes can be found on the corporate website on www.dogusgyo.com.tr address, and e-General Meeting part of the Electronic Information Portal of CRA. These minutes are also available for review of our shareholders in Company headquarters and are handed upon request.

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2.3.28. Special Decisions

Pursuant to the Communiqué on Principles Regarding Real Estate Investment Companies (III-48.1);Decisions of the board of directors pertaining to the transactions listed in this paragraph between the shares of which are offered to public on one side and the parties listed in this paragraph on the other side are required to be disclosed to public within the framework of regulations of the Board pertaining to public disclosure of material events, and in addition, if the decision is not taken in unanimity, it must be included in the agenda of the next meeting of the general meeting of shareholders, and the shareholders must be informed thereabout.

A- Partiesa) Partners holding shares equal to or more than 20 percent of capital or holding voting rights of the same percentage in the REIT,b) Partners holding shares granting the privilege of nomination to the board of directors in the REIT,c) Other companies where partners mentioned in the preceding subparagraphs (a) and (b) hold more than 20 percent of capital shares or voting rights of this percentage,d) Subsidiaries of the REIT,e) Companies providing business administration services to the REIT,f) Companies providing portfolio management services to the REIT,g) Companies providing consultancy to the REIT,h) Contractor chosen to provide construction services to the REIT,ı) Other partners of an ordinary partnership that is the subsidiary of the REIT,i) Related parties of the REIT,

B- Special Decisionsa) Decisions relating to purchase or leasing of assets for, or sale or leasing of assets from, portfolio of the REIT,b) Decisions relating to choice of companies for marketing of assets included in portfolio of the REIT,c) Decisions relating to establishment of credit relations,d) Decisions relating to determination of investment institutions giving purchasing commitments in public offering of shares of the REIT,e) Decisions relating to joint investments,f) Decisions relating to determination of natural persons or legal entities for provision of financial, legal or technical consulting and advice services to the REIT,g) Decisions relating to determination of natural persons or legal entities for provision of project development, supervision or contracting, business administration or portfolio management services to the REIT,h) Decisions relating to purchase of securities issued by legal entities listed in subparagraph (a) hereinabove for the portfolio of the REIT,a. Decisions relating to foundation of an ordinary partnership or termination of activities of an existing ordinary partnershipj) Decisions relating to transactions based on trading of goods and services between the REIT and its related parties,k) Decisions which are not included in any one of the subparagraphs hereinabove, but which may give results in favor of any one of the parties listed in subparagraph (a).The provisions of the corporate governance principles determined by the Board pertaining to transactions between REICs and their related parties are, however, reserved.In wholesale of assets not exceeding 75 percent of total assets of REICs, the provisions of subparagraph (f) of second paragraph of Article 408 of TCC and of Article 23 of the Law are not applicable.

2.4. Voting Rights and Minority Rights

2.4.1. During General Meetings, votes are cast according to internal guidelines set by the Board of Directors in compliance with regulations by the Ministry of Customs and Trade. Shareholders who are not physically present at the meeting cast their votes in compliance with regulations on electronically held General Meetings.

2.4.2. The Company avoids any practices which may complicate the exercise of voting rights. Each shareholder is enabled to cast its voting right in the easiest and most appropriate manner. The Company shows ultimate attention to the exercise of minority rights. No criticism or complaints were received from minority shareholders from January 1, 2015 to December 31, 2015. The Company’s shares are divided into two as Groups A and B. In the Articles of Association, Group (A) shares have the privilege to nominate Board of Directors members. The Company’s shareholders have the right for one vote for each

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share they hold. Apart from this, the Company’s shareholders do not have any other privilege. Non-preference shareholders with voting right may exercise this right either personally or through a third party which is not a shareholder. The Articles of Association do not include any provision preventing non-shareholding persons from voting by proxy as a representative. Candidates for Board of Directors are submitted to the General Meeting for review and are appointed by General Meeting resolution.

2.4.3. There is no mutual participation relationship in the Company’s capital.

2.4.4. Minority shares are not represented in the management and are not included in the Articles of Association.

2.4.5. Notwithstanding special provisions in the legislation and Articles of Association, voting is made electronically by open ballot and show of hands during the General Meeting.

2.5. Dividend Rights

2.5.1. Pursuant to the Corporate Governance Principles, Dividend Distribution Policy is provided at the corporate website for the information of shareholders. Dividend Distribution Policy is published on www.dogusgyo.com.tr address.

2.5.2. There are no privileges in dividend distribution among shares/shareholders. The Board of Directors sets the Dividend Distribution Policy, and submits it to the General Meeting for approval as per the Capital Market Regulations, Tax Legislation, and the provisions of the Articles of Association. The matters on whether, how and when the dividend will be distributed are discussed and decided in the General Meeting, all notifications are performed within legal times in accordance with the regulations. The company observes profit distribution and legal reserves regulations under the Turkish Commercial Code No. 6102 and Capital Market Legislation.

2.5.3. Net losses for the period and the previous year in Company’s financial tables should be set off with appropriate equity items. However, previous year losses that were not set off due to the regulations or tax-related obligations, may be used regarding reductions in determining the distributable dividends.

2.5.4. The resolution of the Board of Directors No. 2015/409 dated February 27, 2015 on dividend distribution were announce on PDP on February 27, 2015. The resolution was submitted for approval in the Ordinary General Shareholders’ Meeting on March 26, 2015, and was accepted by shareholders. The resolution is available on corporate website and the Annual Reports include the dividend distribution policy.

2.5.5. Upon suggestion by the Board of Directors regarding operating profits of 2014, it was unanimously accepted by shares with a nominal value of 216,270,548 (Two hundred and sixteen million, two hundred and seventy thousand, five hundred and forty-eight) Turkish lira, not to distribute and transfer the distributable net profit of the period of 27,657,767 (Twenty-seven million, six hundred and fifty-seven thousand, seven hundred and sixty-seven) Turkish lira to excess reserves account, in the General Meeting on March 26, 2015.

2.5.6. Upon the proposal of the Board of Directors, the dates and the distribution method of the annual profit to the shareholders are decided by the General Meeting in compliance with the provisions of the CMB. Profits distributed as such cannot be withdrawn.

2.5.7. The Company’s dividends are paid within the legally-prescribed periods of time.

2.5.8. Dividend may be paid in equal or varying installments provided that it is decided in the General Meeting. The payment of dividends in installments is performed in accordance with the Capital Market Law.

2.5.9. Dividends are distributed equally to all existing shares on the date of the dividend distribution, notwithstanding the date of issue or acquisition. Rights on dividend privileges are reserved. According to Article 20 of the Capital Markets Law, the total dividend advance to be provided in an accounting period cannot exceed half of the profit of the previous year. No decision shall be taken regarding giving additional dividend advances or distributing dividends before offsetting the dividend advances paid during the previous period.

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2.5.10. The proposal of the Board of Directors on dividend distribution, or the resolution of the Board of Directors on distribution of dividend advances are announced to public together with the dividend distribution table or the dividend advance distribution table of which the method and the content is decided by the Board, in accordance with the Board’s regulatory guidelines on public disclosure of material events. It is mandatory to disclose the dividend distribution to public no later than the announcement date of the Ordinary General Meeting agenda.

Resolved in the General Meeting, the location and date of dividend distribution is announced to public via the corporate website and in a newspaper printed at the location area of the Company’s headquarters, as well as through a material event disclosure on Public Disclosure Platform.

2.5.11. The amount of dividend resolved by the General Meeting to be distributed to non-shareholders is paid proportionally with the installments of shareholder dividend payments and pursuant to the same principles and procedures.

In the event of a request for amendment in dividend distribution policy, the resolution of the Board of Directors and the reason for such amendment are announced to public in accordance with the Board’s regulatory guidelines on public disclosure of material events.

2.5.12. 2014 Dividend DistributionDividend Distribution Tables of the Company are provided in the “2014 Dividend Distribution Table” included in the General Meeting Information under “Investor’s Corner” section on our website at www.dogusgyo.com.tr address.

It is decided in the Board of Directors meeting on February 27, 2015, not to distribute the net profit of the 2014 fiscal period and to transfer the amount to Excess Reserves account, in line with our Company’s present investments and growth policies. The relevant resolution was accepted in the Ordinary General Shareholders’ Meeting on March 26, 2015.

2.6. Transfer of SharesThere are no regulations in the Company’s Articles of Association restricting the transfer of shares.

SECTION III - PUBLIC DISCLOSURE AND TRANSPARENCY

3.1. Corporate Website and Its Content

3.1.1. The Company’s website is published at (www.dogusgyo.com.tr) address in accordance with article No. 1524 of the Turkish Commercial Code No. 6102 and the regulations of CMB, and includes the matters stated in Corporate Governance Principles on public disclosure. Our website was registered on October 7, 2013 and was published in the Turkish Trade Registry Gazette No.8424 dated October 11, 2013.

3.1.2. The address of the corporate website address is provided on the company letterhead and printed documents. The procedures about the management and content of the website are included in the Company’s “Disclosure Policy.” The information on the corporate website is regularly updated and are consistent with regulatory disclosures. The website currently provides the following content: information that is mandatory to disclose as per the regulations, corporate information, strategic objectives and principles, material event disclosures, independent auditor’s reports, information on the members of the board of directors and senior management, company organization and shareholding structure, trade registry information, material event disclosures on PDP system, information and graphics on shares and their performance, annual reports, disclosures and public offering circulars, the final form of the Company’s articles of association, the agendas of the General Meeting, attendance tables and minutes, proxy voting form, dividend policy, corporate governance principles compliance report, codes of conduct, remuneration policy, corporate social responsibility policy, and legal announcements. The Company ensures the investors to reach their questions and information requests with the “Contact Us” section.

3.1.3. The corporate website includes up-to-date information on the shareholding and partnership structure of the Company and privileged shares. There is no real person ultimate controlling shareholder who holds more than 5 percent of the shares among the Company’s partners.

3.1.4. The website content is prepared, updated and followed up by the Investor Relations Unit.

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3.1.5. In addition, according to the “Regulation Regarding the Websites of Capital Companies,” Article 1524/1 of the Turkish Commercial Code No. 6102, and the provision No.7 of the regulation that requires an area to be reserved for Information Society Services to make the legally required announcements at the website, the companies whose dematerialized shares are monitored get their Central Database Service Provider support from the Central Registry Agency (CRA), and the legally required announcements can be accessed over the e-Company: Companies Information Portal of CRA.

3.2. Annual Report

3.2.1. The Company’s quarterly and Annual Reports are prepared in sufficient detail so as to ensure that the shareholders and the public have access to complete and accurate information regarding the company activities. The Company shows the utmost attention for the information on the Annual Report to comply with Communiqué on Corporate Governance Principles.

3.2.2. While preparing the Corporate Annual Report, utmost care is shown for compliance with:• Communiqué on Corporate Governance (II-17.1), which entered into force following its publication in Official Gazette no. 28871 of January 3, 2014,• The Capital Markets Board Communiqué Serial II, No: 14.1 on “Principles Regarding Financial Reporting in Capital Markets” entered into force by being published on the Official Gazette No. 28676 dated June 13, 2013,• “The Regulation on Determination of the Minimum Content of Annual Reports of Companies,” published by the Ministry of Customs and Commerce in the Official Gazette dated August 28, 2012 and issue no. 28395,• The Turkish Commercial Code No.6102 dated January 13, 2011, that entered into force on July 1, 2012 after being published on the Official Gazette No. 27846 dated February 14, 2011,• The Law amending the Law on the Turkish Commercial Code and Implementation Procedure of the Turkish Commercial Code No. 6335 dated June 26, 2012 that entered into force on July 1, 2012 after being published on the Official Gazette No. 28339 dated June 30, 2012, and the relevant regulations of Capital Markets.

3.2.3. The Annual Report includes;

3.2.3.1. Information on members of the Board of Directors and executives about the positions held outside the company and independence statements by the independent board members,

3.2.3.2. Of the committees established within the Board of Directors, information on members, periods of meeting, working principles including committee’s activities, and the Board of Director’s evaluation of committees’ activities,

3.2.3.3. The number of Board of Director’s meetings in that year and information on participation of the members,

3.2.3.4. Information on legislative amendments that may affect significantly company activities,

3.2.3.5. Information on litigation against the company and potential impact,

3.2.3.6. Information on the company’s conflicts of interest with any company rendering investment consultancy, appraisal, and rating services and measures taken by the company to prevent such conflicts of interest,

3.2.3.7. Information on reciprocal shareholding of more than 5 percent,

3.2.3.8. Information on the social rights and occupational training of the employees, and corporate Corporate Social Responsibility activities with environmental impacts.

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3.2.4. The Board of Directors have taken Resolution No. 2015/418 dated May 11, 2015 for the quarterly report and financial statements of the period between January 1, 2015 and March 31, 2015, Resolution No. 2015/422 dated August 7, 2015 for the activity reports and financial statements of the period between January 1, 2015 and June 30, 2015, Resolution No. 2015/424 dated November 9, 2015 for the activity reports and financial statements of the period between January 1, 2015 and September 30, 2015.

SECTION IV - STAKEHOLDERS

4.1. Informing Stakeholders

4.1.1. The term stakeholder defines third party people in direct relationship with the Company. The Company shows the utmost care in its activities to protect the rights of its stakeholders that is protected by law and mutual arrangements and contracts and handles the proper notifications on such matters.

4.1.2. The stakeholders are notified on the corporate website about the Company policies and procedures on protecting their rights. The Company also notifies with the announcements on Public Display Platform.

4.1.3. The stakeholders are able to report illegal and unethical activities to the Corporate Governance Committee or the Audit Committee through Investor Relations Department.

4.1.4. There were no notifications reported by the stakeholders to the Investor Relations Division on illegal or unethical activities in the period of January 1, 2015 - December 31, 2015.

4.2. Stakeholders’ Participation in the Company Management

4.2.1. Taking the 83.75 percent free float rate of the Company into consideration, the Company keeps channels open for the contribution to the administration of the company of stakeholders including the employees, in a manner that will not disturb the company activities, in a transparent, honest and accountable managing approach.

4.2.2. The Company works on developing models for the contribution of stakeholders including the employees, in a manner that will not disturb the company activities, to the administration of the Company.

4.2.3. The suggestions of shareholders are submitted for evaluation of senior management, and are used for developing solutions and policies. Weekly coordination meetings of department managers are organized under the presidency of the CEO. The opinions and suggestions of the employees are also reviewed in these meetings.

4.2.4. The requests and issues of the real and legal persons with whom the Company is related with due to lease contracts, are forwarded to the senior management by the relevant department, and are resolved with a solution-oriented approach.

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4.3. Human Resources Policy

4.3.1. The Company has a “Human Resources and Training Policy” and “Personnel Succession Policy,” approved by the Company decision no. 2015/421 of July 20, 2015. In addition, related practices of Doğuş Group are followed. The Company has a Personnel Indemnification Policy, approved during the Board meeting no. 2014/400 of December 30, 2014. Related policies are updated when required.

4.3.2. Although the Company has a limited number of employees due to its definite field of activity;

4.3.2.1. Recruiting the candidate with qualifications and training necessary for the field forms the basis of the recruitment process.

4.3.2.2. The Company shows the utmost care to motivate and maintain the loyalty of the employees.

4.3.2.3. Training planning is carried out by researching training opportunities to develop the knowledge and skills of the employees. The Company creates required environment for training and self-development, treats all employees equally in terms of training and promotions, and ensures the participation of the employees in training programs to improve their knowledge, skills and abilities.

4.3.2.4. The Company provides all employees their rights in a fair manner, and places importance on training programs to improve their knowledge, and skills.

4.3.2.5. The careers of the employees are planned and developed in line with the needs of the organization.

4.3.2.6. The Company provides the employees their rights in a fair manner. The Company employs fair remuneration and rewarding policies.

4.3.2.7. The Company monitors, evaluates and honors the employee’s performances. Promotions of the employees are supported. Criticism is carried out with respect to personal rights.

4.3.2.8. The working environment is safe, comfortable, has state-of-the-art technological infrastructure, and is designed to ensure the highest efficiency.

4.3.2.9. The employees are notified on the Company’s financial state, salary, career, training, health, and other matters that may concern them.

4.3.2.10. Our employees are protected from risks by health and life insurance.

4.3.2.11. The Company does not discriminate between the employees depending on their race, religion, language, and sex, and treats everyone equally. No criticism or complaints were received by the Company’s management or Committees of the Board of Director on this matter in 2015.

4.3.2.12. The employees of the Company are not registered to a labor union due to their number, and thus the Company does not have any collective labor agreements. Right of association of employers is not restricted, provided that prior permission is obtained.

4.3.2.13. The Company carries out succession planning to determine the reassigned managers if a malfunction of administration is anticipated in the Company’s management.

4.3.2.14. The Corporate Governance Committee carries out the duty of Remuneration Committee, acts sensibly when submits proposals for increasing the wages to the Board of Director, reviews the industry averages and Doğuş Group wage increase ratios, and takes into consideration situations such as reassignments and promotions.

4.3.2.15. The Company has a personnel succession policy.

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4.4. Ethical Rules and Corporate Social Responsibility

4.4.1. The Company operates within the scope of codes of conduct stated in the corporate website. The Company is sensitive to its social responsibilities. The Company shows utmost attention in compliance with regulations on the environment, consumers, public health, and ethical rules. The Company also respects and supports the human rights.

The objective of the Company is to make the most of shareholders’ investments. The Company works to minimize investment risks.

All shareholders are valued equally without respect to the amount of shares owned.

Shareholders are notified clearly and regularly on Company’s financial status, present Company structure and amendments, commercial activities and performance.

The Company acts with due diligence to comply with the transparency principle in providing information to shareholders, stakeholders, and suppliers. The Company places importance in supporting the development of providing the accurate information in the shortest possible time.

With its employees and partners, the Company adopts the principles of transparency, honesty, and righteousness in operations.

The Company follows the legal rules of Turkey and all of the limitations of the relevant regulations, and respects the rights and freedom of all related people.

The Company provides all necessary basis for the employees to work in a safe, healthy and peaceful environment.

A common value is established for the employees to act in a team spirit and with a solidarity approach, and the objective is to maintain this order.

The aim is to create a structure in continuous development by considering the opinions of the employees.

The employees are expected to communicate honestly with shareholders, suppliers and clients. They are expected to avoid behavior that would bring the Company’s name into disrepute.

4.4.2. The company’s Code of Conduct is discussed and accepted by the Board at the Board of Director’s Resolution No. 2012/326 dated March 7,2012. 4.4.3.

4.4.3. The company’s Code of Conduct is available on the corporate website (www.dogusgyo.com.tr.)

4.4.4. Corporate Social Responsibility: Doğuş REIT, aims to contribute to the social, cultural, artistic and economic development of the regions of its projects, and conducts Corporate Social Responsibility projects accordingly. The Company operates all activities with an awareness on Corporate Social Responsibility and shows the utmost care to comply with the regulations and environmental values. There were no significant lawsuits filed against the Company for damages on the environment in the period.

Doğuş REIT, aims to contribute to the social, cultural, artistic and economic development of the regions of its projects, and conducts Corporate Social Responsibility projects accordingly.

In addition, plastic and paper waste collected and separated in the Company are regularly sent to the Ayhan Şahenk Foundation to minimize the negative impact on ecology.

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SECTION V - BOARD OF DIRECTORS

5.1. Structure and Establishment of the Board of Directors

5.1.1. The Board of Directors inform the public on the mission, vision, and strategic objectives of the Company through the corporate website and annual reports. The Company’s Board of Directors consists of six members. The structure of the Board of Directors with six members is formed to enable rapid and rational decision making, formation of committees the establishment of which are required according to the Corporate Governance Principles, and efficient operation. Executive as well as non-executive members serve in the Board of Directors. The Board of Directors is made up of mostly non-executive members. One member of the Board of Directors is executive and five members are non-executive. Two of the non-executive members are independent members. The members of the Board of Directors are elected by the General Meeting for a maximum of three (3) years. Presidents and the members of the Board’s committees are independent members. The members of the Board of Directors were elected for one (1) year in the Ordinary General Meeting on March 26, 2014.

5.1.2. Two of the Board members are independent of any direct or indirect relationship from the standpoint of employment, capital, or commercial interests with Doğuş Group and of any persons or entities from which our Company obtains service. Independent Members of the Board meet the independence criteria as per Appendix 1, Article 4.3.6 in the Capital Markets Board Communiqué No. 11-17.1 on Corporate Governance Principles. The candidates for the independent board membership submitted their written statements to the Nomination Committee at the time they were proposed as candidates, that they are independent within the framework of the law, articles of association and the principles. This document is present on corporate website and in our annual report. The independence statements of the independent members are announced on PDP on February 27, 2015, and were submitted to the General Meeting which elected them on March 26, 2015. During period of January 1, 2015 - December 31, 2015, no situations occurred that would impair their independence.

Name, Surname Title Executive Status Independent Member Committee Duty StatusHüsnü AKHAN Chairman Non-executive Ekrem Nevzat ÖZTANGUT Member Non-executive Hayrullah Murat AKA Member Non-executive Hasan Hüsnü GÜZELÖZ Member Executive Member of Corporate Governance Committee Member of Early Risk Detection Committee

Mustafa Sabri DOĞRUSOY Member Non-executive Independent Member President of Corporate Governance Committee President of Early Risk Detection Committee Member of Audit Committee

Mustafa Ahmet ÜNAYDIN Member Non-executive Independent Member President of Audit Committee Member of Corporate Governance Committee Member of Early Risk Detection Committee

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5.1.3. Assignment of Board Members at other institutions is restricted with the article 18 of the Company’s Articles of Association. The Company complies with the restrictive provisions of the CMB on the qualifications of the members.

5.1.4. The members of the Board of Directors were elected in the General Meeting on March 26, 2015 to serve until the Ordinary General Meeting where the activities pertaining to the year 2015 will be discussed, and possess the powers stated in Articles No. 374 and 375 of TCC No. 6102. They are also compliant with the article 17 of the Communiqué on Principles Regarding Real Estate Investment Companies (III-48.1).

5.1.5. The Board of Directors gather to determine the duties of the Chairman and the members following the General Meeting of their elections. Board members whose tenures have finished can be elected again. If for any reason a vacancy on the board arises, a qualified person who meets the requirements stated in TCC and CML, is selected by the Board of Directors to temporarily fill the position and presented for the approval of the general meeting in the upcoming meeting. The member selected by this way fills the tenure of the old member. The duties of the Board of Directors were distributed in the Board Meeting No. 2015/414 dated April 9, 2015, and published in the Turkish Trade Registry Gazette No. 8817 dated May 11, 2015.

5.1.6. The Board members should comply with conditions determined by the Turkish Commercial Code, the Capital Markets Legislation, other relevant regulations. The Board members should act in accordance with the provisions of CMB Communiqué on Principles of Real Estate Investment Companies (No: III-48.1), and the independent members should comply with the conditions stated in article 4.3.6 of the Capital Markets Board Communiqué No. 11-17.1 on Corporate Governance Principles. This matter is stated in the Article 12 of the Articles of Association.

5.1.7. The Ordinary General Shareholders’ Meeting of March 26, 2015 negotiated and approved by a majority vote of shareholders that controlling shareholders, Board of Directors members, top managers and their spouses and relatives of up to second degree consanguinity or affinity could perform, personally or on behalf of someone else, any significant transactions which might cause conflict of interests with the Company and its affiliates, in compliance with Article 1.3.6 of the Capital Markets Board’s Communiqué on Corporate Governance (11-17.1) and Article 395 and 396 of the Turkish Commercial Code. No such transaction was performed by the board members or senior managers.

5.1.8. Furthermore, the Independent Members have also complied with the following criteria:

5.1.8.1. There has been no employment relation at manager level with important duties and responsibilities between themselves, their spouses, and their relatives with second degree of consanguinity and affinity and the Doğuş REIT’s controlling shareholders or shareholders with management control or significant influence in the company or associates over which the company has significant influence for the last five years; They do not have, jointly or alone, more than 5 percent of capital or voting rights or preference shares; or they do not have any commercial relation of significance.

5.1.8.2. They have not worked as manager with significant duties and responsibilities and/or have not officiated as Board of Directors member at any companies from or to which Doğuş REIT has provided significant services or products under a contract, including company audit (tax audit, legal audit, internal audit), rating and consultancy, while these products or services have been provided.

5.1.8.3. They have the professional education, knowledge and experience required to perform any duties they will perform.

5.1.8.4. They do not work full time in public agencies and institutes.

5.1.8.5. They reside in Turkey.

5.1.8.6. They have strong ethical standards, professional reputation and experience to make significant contributions to the Company’s activities, to remain neutral in any conflict of interests between the Company and its shareholders, and to decide freely taking into consideration the rights of stakeholders.

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5.1.8.7. They can allocate enough time to the Company’s affairs in order to be able to follow the course of Company’s activities and to duly meet the requirements of duties they have assumed.

5.1.8.8. They have not been a member in the Doğuş REIT’s Board of Directors more than six years within the last ten years.

5.1.8.9. They comply with the condition of not being independent member in the Board of Directors at more than three companies over which the Company or the controlling shareholders of the Company has/have management control. One of the independent members is also an independent member of a Doğuş Group company’s Board of Directors.

5.1.8.10. They comply with the condition of not being an independent member of the board of directors at more than five publicly-traded companies in total.

5.1.9. The qualifications and tenures of the independent members are determined in accordance with the Corporate Governance Principles of the CMB and the Articles of Association. The independent Board member candidate handles a written statement on his/her independence within the framework of regulations, Articles of Association and required criteria.

5.1.10. If the independent member of the Board of Directors loses his independence before the end of his term or resigns for other reasons or becomes unable to fulfill his duties, the Board of Directors shall select new independent members to fill the vacancy, pursuant to the procedure stipulated in Capital Markets Board regulations to restore the minimum number of independent Board of Directors members.

5.1.11. During period of January 1, 2015 - December 31, 2015, no situations occurred that would impair the independence of our present independent Board members.

5.1.12. The Board members serve as managers and Board members in other companies, and provide consultancy services to other companies in a manner that will not cause conflict of interest. During the period of January 1, 2015 - December 31, 2015, a situation contrary to the Article 396 of TCC No.6102 on prohibition of competition did not occur. The duties of the Board members outside the Company are available in the information document submitted to the General Meeting, and their resumes in the annual reports and corporate website.

5.2. Operating Principles of the Board of Directors

5.2.1. The board formulates the most appropriate balance between growth and the issues of risk vs return in line with these objectives and, mindful of the Company’s long-term interests, defines the strategic objectives of the Company, inspects the performance of the management, and administers and represents the Company considering compliance of Company’s activities with the Articles of Association, internal regulations and policies.

5.2.2. The Board of Directors conducts its activities in line with the principles of transparency, accountability, fairness, and responsibility, taking the opinions of its internal committees into account, the Board devises internal control systems minimizing the adverse impact of risks, provides information on the effectiveness of the internal control system in the annual report, and ensures effective communication between the Company and its shareholder.

5.2.3. The operating principles of the Board of Directors are determined pursuant to the Turkish Commercial Code, the Capital Markets Law, and the regulations of the Capital Markets Board.

5.2.4. The Board of Directors shall when it is deemed necessary due to the company’s affairs upon the call of the Chairman or the Vice Chairman, and its secretariat is performed by the Company. Any of the Board members may request a Board meeting by applying in writing to the Chairman or the Vice Chairman. If the Chairman or the Vice Chairman still does not call for a Board meeting, then the members shall have the right to call for a meeting. Each member of the Board of Directors holds an equal right to vote. The agenda of the Board meetings are determined by the Chairman or the Vice Chairman. The agenda of the Board meeting are prepared and provided for the review of the members prior to the meeting. The agenda can be amended with a resolution of the Board of Directors.

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5.2.5. The Board of Directors conducts its activities in line with the Turkish Commercial Code and the provisions of the Articles of Association. During period of January 1, 2015 - December 31, 2015, the Board of Directors have held 19 meetings and have taken 26 resolutions.

5.2.6. The Board complies with Article 9 and 10 of the Capital Markets Board Communiqué No. 11-17.1 on Corporate Governance Principles and the relevant provision of the Articles of Association in activities, and common and continuous transactions between the Company and all kinds of related parties.

5.2.7. The minimum requirements of Board member candidates pertain to the Corporate Governance Principles of the CMB. The Chairman and the members of the Board of Directors possess the powers determined in the relevant articles of TCC No.6102, Article 17 of the Communiqué on Principles Regarding Real Estate Investment Companies (III-48.1), and Articles 11 to 15 of the Articles of Association. According to the provisions, the Company is administered and represented by the Board of Directors. The Board of Directors duly performs its duties as assigned by TCC No.6102, Capital Markets Law No.6362 and other relevant regulations.

5.2.8. Approval of the General Meeting should be sought in order for the Chairman and the members of the Board of Directors, directly or indirectly, to engage in the transactions covered by the scope of activities of the Company and to become shareholders in companies performing such transactions as per Articles 395 and 396 of the TCC 395. No problem has been faced within the period of January 1, 2015 - December 31, 2015 in relation to permissions given to members of the Board of Directors in this regard. There are no other restrictions in terms of the members of the Board to engage in another duty or duties outside the Company. Such a restriction is not required particularly because to the contribution of the independent members’ professional and industrial experience to the Board of Directors.

5.2.9. No loans were extended to any member of the Board or executive officer during the period January 1, 2015 - December 31, 2015, nor any personal loan, collateral or bill of guarantee was given on their behalf directly or through a third party.

5.2.10. Managers’ authorities and responsibilities are defined in their power of signature statements, and announced in the Turkish Trade Registry Gazette No. 8817 dated May 11, 2015.

5.2.11. The Chairman of the Board of Directors determines the agendas of the Board meetings by corresponding with other members and the Chief Executive Officer/CEO. When the administration requests for a matter to be discussed in the Board meetings, the matter is consolidated and forwarded by the Chief Financial Officer to the CEO. The Chairman reviews the matters handled by the CEO, and introduces the matters he/she deems necessary to the agenda of the Board meeting.

5.2.12. Board members take great care to attend every Board meeting and express their opinions. The necessary facility for the Board meeting to be held in electronic environment is provided.

5.2.13. The Board of Directors meetings are held in accordance with the Article 13 of the Articles of Association. An assistant to the CEO is assigned for the notification and communication with the members of the Board. The Article 13 of the Articles of Association also includes the significant information on unanimously resolving the Board resolutions. It is mandatory to inform the CMB and the stock market if a resolution is not taken unanimously. No such incident that requires public disclosure has been experienced yet.

5.2.14. Differences of opinion and grounds for opposing votes and specific questions raised by members of the Board of Directors at Board meetings are recorded in the Resolution Book. However, during the period January 1, 2015 - December 31, 2015 no such public disclosure was made as no opinion was announced at the meetings against any resolution by the Board Members.

5.2.15. Information and documents on agenda topics are provided for the review of the Board members prior to the Board meetings on the grounds of equal information flow.

The opinions of absent members who submitted their input in writing shall be presented to the members that are present in the meeting. No such incident occurred during the period January 1, 2015 - December 31, 2015.

5.2.16. In accordance with the Corporate Governance Principles, Board members in relation with the related party did not attend the resolutions on related party transactions during the period January 1, 2015 - December 31, 2015.Corporate Governance Principles Compliance Report.

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5.2.17. A quorum for the Board meetings is a simple majority of the total number of members and resolutions are passed by simple majority of attending members. Votes are cast in “in favor” or “against. “Abstention is considered as “against.” In the event of equal votes, the proposition is deemed rejected. The CMB’s mandatory Corporate Governance Principles are reserved in the resolution of the Board of Directors.

The Board members have not been granted weighted voting rights and/or veto rights in the Articles of Association. Each member is granted a single vote.

5.2.18. Members of the Board spare sufficient time for Company issues. The executive and non-executive members of the Board engaging in other companies as managers, members of the Board or provide them consultancy does not cause any conflict of interest.

5.2.19. The Company took out an insurance policy worth $25 million in order to guarantee compensation for damage that may be caused by Board Members or senior management while performing their duties in accordance with article 4.2.8 of the Capital Markets Board Communiqué No. 11-17.1 on Corporate Governance Principles. This incident is announced on PDP on February 26, 2015.

5.2.20. According to article 20 of the Communiqué on Principles Regarding Real Estate Investment Companies (III - 48.1) that regulates our activities, members of the board should notify the Board on such matters, when they are not independent from a party related to a resolution pertaining to Board’s criteria, and should have this matter recorded in the meeting minutes. Article 393 of the Turkish Commercial Code is reserved on such matters. Such matters are also covered in the Article 18 of the Articles of Association.

5.2.21. No incident about the Board members’ acting against the prohibition on doing business or competing with the Company was experienced during the period January 1, 2015 - December 31, 2015.

5.2.22. The Chairman and the CEO of the Company is not a single person as per Article 4.2.5 of Corporate Governance Principles, Communiqué No. 11-17.1 on Corporate Governance Principles.

5.2.23. The structure of the Board of Directors consists of members who complement each other. No disputes were experienced between the Board of Directors and executive administration of the Company during the period January 1, 2015 - December 31, 2015.

5.2.24. No agenda item requests were received from the independent Board members during the period January 1, 2015 - December 31, 2015.

5.2.25. In accordance with the statement, “Corporation shall determine a target rate provided that it is not less than 25 percent and a target time for membership of women in the board of directors and form a policy for this target. The Board of directors shall annually evaluate the progress in respect to achieving this target”, in Article 4.3.9 of the Capital Markets Board Communiqué No. 11-17.1 on Corporate Governance Principles that entered into force by being published in the Official Gazette No.28871 dated January 3, 2014, the efforts on determining a target rate of 25 percent for membership of women in the Board of Directors, a target time and forming a policy has initiated.

5.3. Number, Structure and Independence of Committees under the Board of Directors

5.3.1. Audit Committee, Corporate Governance Committee, and Early Risk Detection Committee are established in the Company to enable the Board of Directors to duly perform its duties and responsibilities.

As the “Nomination Committee” and “Remuneration Committee” cannot be established separately because of the actual structure of the Board of Directors, the duties of such committees are performed by the Corporate Governance Committee. The Audit Committee is composed of two members while Corporate Governance Committee and Early Risk Detection Committee have three members each. The Board of Directors ensures coordination and supervision necessary for effective and efficient functioning of committees.

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5.3.2. The sphere of activity, operating principles, and members of committees are specified and publicly announced by the Board of Directors.

5.3.3. All members of the Audit Committee are selected from among independent Board members while the president and most of members are from independent Board members in the Corporate Governance Committee and Early Risk Detection Committee.

5.3.4. The CEO cannot take part in committees.

5.3.5. The Audit Committee is composed of two members while Corporate Governance Committee and Early Risk Detection Committee have three members each.

5.3.6. The Board of Members had not made any negative remarks on the functioning of committees from January 1 to December 31, 2015.

5.3.7. The activities of our committees are systematically recorded.

5.3.8. Audit Committee- Mustafa Ahmet ÜNAYDIN - President (Board Member - Independent Member)- Mustafa Sabri DOĞRUSOY (Board Member - Independent Member)

5.3.8.1. The Audit Committee is composed of at least two members selected from among the independent members of the Company’s Board of Directors. The Committee President is selected from among the independent Board members. The CEO cannot take part in the committee.

5.3.8.2. The Committee performs duties as specified in the Capital Market Legislation for such committee. Within this purpose, the Committee is responsible for supervising the Company’s accounting system, public disclosure of financial data, independent audit, and functioning and effectiveness of internal control and audit system. The Committee also supervises the selection of the independent audit company, preparation of the independent audit contract, initiation of the audit, and activities of the independent audit company in each audit phase.

5.3.8.3. The independent audit company and services to be received have been identified and submitted to the Board of Directors. According to the resolution of the committee meeting No. 2015/01 dated January 28, 2015, Başaran Nas Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. has been approved for submission to the Board as the independent auditor for the audit of the January 1, 2015 - December 31, 2015 period as per article 398 of the TCC No. 6102.

5.3.8.4. Audit Committee has submitted to the Board of Director’s approval,

The independently audited financial tables and annual report for the period January 1, 2014-December 31, 2014,With committee resolutions No. 2015/2 dated February 13, 2015 and No 2015/3 dated February 25, 2015,The independently audited financial tables and activity report for the period January 1, 2015-March 31, 2015,With the committee resolution No. 2015/4dated May 11, 2015,The independently audited financial tables and activity report for the period January 1, 2015-June 30, 2015,With the committee resolution No. 2015/5dated August7, 2015,The independently audited financial tables and activity report for the period January 1, 2015-September 30, 2015,With the committee resolution No. 2015/6dated November 9, 2015,The independently audited financial tables for the January 1, 2015-December 31, 2015,With the committee resolution No. 2016/2 dated February 12, 2016.

5.3.8.5. The Committee examines and resolves complaints about the company’s accounting and internal control system, as well as independent audit, and identifies methods and criteria for the evaluation of company employees’ notifications about the company’s accounting and independent audit under the principle of confidentiality.

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5.3.8.6. The Audit Committee consults with the company’s related officers and independent auditors and submits in writing its own assessment about the accuracy and authenticity of annual and interim financial statements, as well as their compliance with accounting principles, before they are publicly disclosed.

5.3.8.7. There were not any events requiring the Committee to submit suggestions or negative observations in writing to the Board of Directors in relation with its sphere of activity and responsibility from January 1, 2015 to December 31, 2015.

5.3.8.8. The Audit Committee convenes at least four times a year, and more often if required; it records the meeting minutes and submits them to the Board of Directors.

5.3.8.9. The independent auditor’s report for January 1, 2015 - December 31, 2015, including the financial statements and the footnotes have been submitted for the approval of the Board of Directors.

5.3.8.10. The committee did not require the services of an independent consultant for its activities from January 1, 2015 to December 31, 2015.

5.3.8.11. The Audit Committee convened six (6) times from January 1, 2015 to December 31, 2015 in line with its duties and operating principles, recorded its meeting minutes in writing, and reported results of these meetings to the Board of Directors.

5.3.8.12. The Committee President and member were selected from among the independent Board members and were experienced in the Committee’s sphere of activity.

5.3.9. Corporate Governance Committee- Mustafa Sabri DOĞRUSOY - President (Board Member - Independent Member)- Hasan Hüsnü GÜZELÖZ - Board Member (Executive)- Mustafa Ahmet ÜNAYDIN (Board Member - Independent Member)

5.3.9.1. The Corporate Governance Committee establishes whether corporate governance principles are respected and identifies reason(s) of any non-compliance and any resulting conflict of interest to suggest improvements in corporate governance practices to the Board of Directors. The Committee also supervise the activities of Investor Relations Department under the Capital Market legislation. As the “Nomination Committee” and “Remuneration Committee” cannot be established separately because of the actual structure of the Board of Directors, the duties of such committees are performed by the Corporate Governance Committee.

5.3.9.2. The Committee is composed of at least two members selected from among the members of the Company’s Board of Directors. The CEO cannot take part in the Committee. If the Committee has two members, both should be non-executive Board members while in case of more than two members, the majority should comply with this rule. The president of the committee is an independent member of the Board.

5.3.9.3. The Committee convenes twice a year or more frequently, when necessary. The Corporate Governance Committee convened twice (2) from January 1, 2015 to December 31, 2015 in line with its duties and operating principles, recorded its meeting minutes in writing, and reported results of these meetings to the Board of Directors.

5.3.9.4. The Committee has taken the utmost care in performing its duty of monitoring the compliance of the Company with the Corporate Governance Principles, establishing whether these principles are respected and identifying reason(s) of any non-compliance and any resulting adverse effects. No significant deficiency was identified on this matter in 2015.

5.3.9.5. The Corporate Governance Committee plays a leading role in ensuring efficient communication between the Company and shareholders and settling any disagreement and monitors the activities of Investors Relations Division with this purpose.

5.3.9.6. The Committee supports the preparation of “Corporate Governance Principles Compliance Report” to be publicly disclosed in the annual report, checking whether information included in the annual report are correct and consistent with information possessed by the Committee.

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5.3.9.7. As specified in the Communiqué on the Corporate Governance, assuming the duty of nomination committee, the Corporate Governance Committee meticulously assesses independent member nominations, including Management and stakeholders, to identify whether candidates meet independence criteria according to Capital Marker legislation and submit the result of its assessment to the Board of Directors in a report. The committee receives a statement from the independent Board member candidate on his/her independence according to the criteria determined in relevant regulation, the Articles of Association, and the Communiqué on the Corporate Governance.

5.3.9.8. At the Board Meeting No. 2015/1 and dated February 26, 2015, The committee received written statements from the candidates for the independent board membership at the time they were proposed as candidates by the Board, evaluated their independence; determined that they meet with the independence criteria specified in Article 4.3.6 of CMB’s Corporate Governance Principles Communiqué No. 11-17.1 on Corporate Governance, and notified the Board of Directors on the matter.

5.3.9.9. Also assuming the duty of Remuneration Committee, the Corporate Governance Committee establishes and revises principles, criteria, and practices for the remuneration of Board members and managing directors in line with the Company’s long-term objectives. In addition, the Committee reports suggestions from Board members and top managers on remuneration principles and criteria to the Board of Directors for approval.

5.3.9.10. The committee did not require the services of an independent consultant for its activities from January 1, 2015 to December 31, 2015.

5.3.10. Early Risk Detection Committee- Mustafa Sabri DOĞRUSOY- President (Board Member - Independent Member)- Mustafa Ahmet ÜNAYDIN (Board Member - Independent Member)- Hasan Hüsnü GÜZELÖZ - Board Member (Executive)

5.3.10.1. The Committee is responsible for early detection of any risks which may endanger the existence, development and continuance of the Company, implementation of necessary measures against detected risks, and carry out risk management activities.

5.3.10.2. The Early Risk Detection Committee is composed of at least two members selected by the Company’s Board of Directors from among its own members. The Committee President is selected by the Board of Directors from among its independent members. The CEO cannot take part in the Committee.The Committee members are re-elected annually in the first Board meeting following the Ordinary General Shareholders’ Meeting. If a Committee member retires from office, a new member is appointed to complete the term of office of the retired member.

5.3.10.3. The Committee works on a meeting basis. The Committee convenes in the Company’s head office as often as required for the efficiency of its activities. All activities of the committee, and the decisions taken at the Committee meetings are put in writing, signed by Committee members and archived. The Committee submits its evaluations and recommendations about its operations and field of duty and responsibility in a written report to the Board of Directors.The Financial Affairs Department keeps the Early Risk Detection Committee’s meeting minutes, archives them and actively provides information to the Committee members.

5.3.10.4. Upon each Board meeting subsequent to committee’s meetings, the Committee President submits the meeting summary and a written report on the Committee’s activities to the Board of Directors. The Committee may invite any manager to take his/her opinion, if deemed necessary. The Committee may benefit from independent expert opinion in any subject related to its activities, if deemed necessary. The Company will defray costs of any consultancy services required by the Committee.

5.3.10.5. The Early Risk Detection Committee reports directly to the Board of Directors. The Board of Directors provides any resources and support required by the Committee to perform its duties. Amendment in the operation principles of the Early Risk Detection Committee is only possible with approval of the Board of Directors. The committee members are determined in accordance with Capital Market Legislation and relevant Communiqués. The Early Risk Detection Committee performs all duties within the committee’s responsibility as per the provisions of TCC and CMB’s Corporate Governance Principles.

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5.3.10.6. The Committee is established to strive for the early detection of any risks which may endanger the existence, development and continuance of the Company, the implementation of necessary measures against detected risks, and the risk management and to revise the Company’s risk management systems at least once a year.

5.3.10.7. Main duties of the Committee include:Setting and preparing the Company’s risk management strategies and policies, submitting them to the Board of Directors for approval, monitoring their implementation,

Offering suggestions to the Board of Directors for the determination of baseline risk limits and checking the compliance with these limits,

Checking the risk detection, description, assessment and management procedures and providing necessary notifications,

Monitoring the accuracy and reliability of risk measurement methods and results,

Presenting opinions to the Board concerning the change of risk policies.

5.3.10.8. The Early Risk Detection Committee convened six (6) times from January 1, 2015 to December 31, 2015 in line with their duties and operating principles and reported the results of these meetings to the Board of Directors.

5.4. Risk Management and Internal Control Mechanisms

5.4.1. The main risks of the Company are monitored under the titles of financial risks (loan, foreign exchange, liquidity and capital risks), operational risks and legal risks.

The Company has not established an Internal Control Unit yet, therefore the function is performed under the control of Financial Affairs Directorate. The Company is periodically audited by Doğuş Group Internal Control Unit, and the findings are reported to the Board of Directors.

The Company aims to create a balance between leasable real estate units and development projects and thus have a consistent cash flow, along with benefiting from high development profits and growth potential of the development projects. The Company’s portfolio is formed in line with efficiency and liquidity principles. The measures are taken to increase the incomes of inefficient real estate units in the portfolio, and possibility of selling is also considered if necessary. The liquidity is consistently maintained strong, the cash and securities portfolio is managed professionally. When investing, the Company always evaluates alternative investment opportunities and aims to gain an income over the source cost of the investment.

The periodical independent auditor’s reports of the Company includes detailed information on Company’s risks, and such information is disclosed to public and shared with the shareholders, and also published on the corporate website.

5.4.2. Credit RiskCredit risk is defined as the counterparty’s possibility of failing to fulfill its obligations on the terms set by the agreement partially or completely. Such risk is controlled by loan assessments and restricting the total risk from a single counterparty.

The Company has leased the majority of Doğuş Center Maslak real estate unit in its investment properties portfolio to its main shareholder and related companies. The Company has not encountered a major collection problem on its receivables. Included in Company’s portfolio by partial division on December 26, 2013, the occupancy rate of Gebze Center Shopping Mall is 94.4 percent and there haven’t been any major collection problems. Furthermore, the loan risk is restricted by receiving a letter of guarantee from the tenants.

CORPORATE GOVERNANCE

PRINCIPLES COMPLIANCE

REPORT

91

5.4.3. Liquidity RiskThe liquidity risk refers to the risk of encountering difficulties in providing funds to fulfill the Company’s liabilities regarding its financial loans.

The Company does not have any derivative financial liabilities as of December 31, 2015.

5.4.4. Market RiskThe market risk refers to the risk of variations in market prices such as interest rates, stock prices, foreign exchange rates, and credit expansions, impacting the income of the Company or the values of its financial instruments.

The total risk management program of the Company focuses on the unpredictability of the markets, and aims to minimize its possible adverse effects on Company’s financial performance.

5.4.5. Foreign Exchange RiskThe Company is subject to foreign exchange risk due to fluctuations in the exchange rates when exchanging its foreign currency assets and liabilities to Turkish lira.

The Company is liable for the euro based loan of Gebze Center Mall as the real estate unit was taken over by partial division. However, the lease contracts of the relevant real estate unit are also euro based which lowers the foreign exchange risk.

The lease contracts of Doğuş Center Maslak are US dollar based.

5.4.6. Interest Rate RiskThe Company is subject to interest rate risk due to the impact of changes in interest rate on its assets and liabilitiessensitive to interest.

Most of the Company’s receivables and payables are short-term thus the Company is not subject to an interest rate risk.The Company minimizes the risk of volatility in interest rates by using long-term and variable interest rate loans.

5.4.7. Capital ManagementThe Company strives to manage its capital by minimizing the investment risk through effective portfolio management. The Company’s aim is to ensure the continuity of the Company as a profitable company, to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital.

5.5. The Strategic Objectives of the Company

Doğuş REIT aims to improve its portfolio value by achieving consistent growth, creating value for stakeholders through stock dividends and increases in market value while also ensuring the highest level of customer satisfaction with the projects it develops.

5.6. Financial Benefits

The financial benefits of the Board members are resolved in the General Meeting, and are announced to public in General Meeting minutes, financial table footnotes, and corporate website.

Only the independent members of the Board receive payments. Accordingly, at the Ordinary General Shareholders’ Meeting on March 26, 2015, it was resolved to pay a monthly fee of 2,500(Two thousand five hundred) Turkish lira to the independent members of the Board of Directors. The Company has not been in any activities that may cause a conflict of interest such as lending money or giving loans to the members of the Board or to an executive.

The Company’s senior management is composed of Board members, a CEO, and Deputy General Managers. The financial benefits include wage, premium, employer’s contribution for social security, employer’s unemployment contribution, private insurance (health, life, and manager liability) for senior management with administrative responsibility and attendance fee for Board members. From January 1, 2015 to December 31, 2015, the Company’s independent Board members and top managers with administrative responsibility were provided with 3,329,132 (Three million, three hundred and twenty-nine thousand, one hundred and thirty-three) Turkish lira of financial benefits in total.

INDEPENDENTAUDITORʼS REPORT

INDEPENDENT AUDITORʼS REPORT ON FINANCIAL TABLES

Doğuş REIT to the Board of Directors

Report on Financial Tables

1. We have audited the accompanying financial tales dated December 31, 2015 of Doğuş REIT, and the related statement of income and statement of other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year-end as well as the summary of important accounting policies and other footnotes.

The Management’s Responsibility on Financial Tables

2. Company Management is responsible for preparing the financial statements in accordance with the Turkish Accounting Standards (TAS), presenting them fairly, and performing the internal audits it deems necessary so as to prepare the financial statements free of critical mistakes arising from errors or fraud.

Responsibility of the Independent Audit Company

3. We are responsible for presenting an opinion on these financial statements based on the independent audit we performed. We have performed the independent audit in compliance with the independent audit standards published by the CMB and with the Independent Audit Standards (“IAS”), a part of the Turkish Audit Standards, and published by the Public Oversight, Accounting and Auditing Standards Authority. These standards require that ethical principles be followed and that the independent audit be planned and executed so as to establish reasonable assurance on whether the financial statements contain critical mistakes.

An independent audit involves implementation of audit procedures with the goal of obtaining proof of audit on the financial statement figures and footnotes. Selection of these procedures is based on the independent auditor’s professional judgment, which includes an assessment of risks with regard to critical mistakes arising from errors or fraud. While assessing the risks, the independent auditor scrutinizes the company’s internal audit regarding the preparation of consolidated financial statements and their fair presentation, with the aim of determining suitable audit procedures for the conditions. Nevertheless, this assessment does not intend to provide an opinion with regard to the effectiveness of the company’s internal audit. An independent audit encompasses an assessment of the presentation of the financial statements as a whole, as well as whether the management’s accounting policies are suitable and the accounting projections reasonable.

We believe that the independent audit evidence we have obtained during the independent audit forms an adequate and proper basis to build our opinion.

Opinion

4. In our opinion, the attached financial statements fairly reflect the financial position of Doğuş REIT as of December 31, 2015 and its financial performance and its cash flows for the year then ended in accordance with TAS.

94

INDEPENDENTAUDITORʼS

REPORT

Report on Other Obligations Arising from the Regulation

5. On February 15, 2016, the Board of Directors of the company was presented the Audit Report on the Early Detection of Risk System and Committee, prepared pursuant to Article 398/4 of the Turkish Commercial Code (TCC) No. 6102.

6. Pursuant to Article 402/4 of the TCC, during the fiscal year January 1- December 31, 2015, no significant reservations were identified regarding compliance of the company’s bookkeeping and financial statements with the law and with the company’s Articles of Association on financial reporting.

7. Pursuant to Article 402 Paragraph 4 of the TCC, the Board of Directors has made the disclosures to us as required by the audit and has provided the requested documents.

Başaran Nas Bağımsız Denetim veSerbest Muhasebeci Mali Müşavirlik A.Ş.A member ofPwC

Engin Çubukçu, Certified Public AccountantCap Auditor

Istanbul, February 15, 2016

95

INDEX

STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) 97 STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 98 STATEMENT OF CHANGE IN EQUITY 99STATEMENT OF CASH FLOW 100 NOTES TO THE FINANCIAL STATEMENTS 101-147

NOTE 1 COMPANY’S ORGANIZATION AND NATURE OF OPERATIONS 101NOTE 2 BASIS OF PRESENTATION OF FINANCIAL STATEMENTS 102NOTE 3 CASH AND CASH EQUIVALENTS 116NOTE 4 FINANCIAL INVESTMENTS 117NOTE 5 FINANCIAL LIABILITIES 118NOTE 6 TRADE RECEIVABLES AND PAYABLES 119NOTE 7 OTHER RECEIVABLES AND PAYABLES 120NOTE 8 PREPAID EXPENSES AND DEFERRED INCOME 120NOTE 9 CURRENT INCOME TAX ASSETS 121NOTE 10 INVESTMENT PROPERTIES 121NOTE 11 TANGIBLE ASSETS 125NOTE 12 INTANGIBLE ASSETS 125NOTE 13 PROVISIONS, CONTINGENT ASSETS AND LIABILITIES 126NOTE 14 LIABILITIES FOR EMPLOYEE BENEFITS 127NOTE 15 PROVISION FOR EMPLOYEE BENEFITS 127NOTE 16 OTHER CURRENT/NON-CURRENT ASSETS AND SHORT/LONG TERM LIABILITIES 129NOTE 17 NON-CONTROLLING INTERESTS 129NOTE 18 SHAREHOLDER’S EQUITY 130NOTE 19 SALES AND COST OF SALES 131NOTE 20 GENERAL ADMINISTRATIVE EXPENSES 132NOTE 21 INCOME / EXPENSES FROM OPERATING ACTIVITIES 132NOTE 22 INCOME / EXPENSES FROM INVESTMENT OPERATIONS 133NOTE 23 FINANCIAL INCOME 133NOTE 24 FINANCIAL EXPENSES 133NOTE 25 DISCONTINUED OPERATIONS 134NOTE 26 TAX ASSETS AND LIABILITIES 134NOTE 27 EARNING PER SHARE 134NOTE 28 RELATED PARTY DISCLOSURES 134NOTE 29 NATURE AND LEVEL OF RISK ARISING FROM FINANCIAL INSTRUMENTS 137NOTE 30 FINANCIAL INSTRUMENTS 143NOTE 31 SUBSEQUENT EVENTS 145

SUPPLEMENTARY INFORMATION: COMPLIENCE CONTROL OF THE PORTFOLIO RESTRICTIONS 145-148 THE STATEMENT OF RESPONSIBILITY AS PER ARTICLE 9 OF SECOND SECTION OF THE CAPITAL 149-150MARKETS BOARD’S COMMUNIQUÉ

2496

INDEPENDENTAUDITORʼS

REPORT

Audited Audited December 31, 2015 December 31, 2014 CURRENT ASSETS 40,639,706 57,371,102

Cash and cash equivalents 3 37,249,535 46,369,836Financial investments 4 - 8,150,121Trade receivables - Trade receivables from related parties 6,28 7,694 133,226 - Trade receivables from third parties 6 3,103,930 2,215,523Other receivables - Other receivables from related parties 7,28 - 67,540 - Other receivables from third parties 7 1,126 278,076Prepaid expenses 8 108,860 104,225Current income tax assets 9 103,210 34,430Other current asset 16 65,351 18,125

NON-CURRENT ASSETS 788,713,660 699,248,913

Investment properties 10 772,197,424 697,337,714Tangible assets 11 1,017,630 1,338,931Intangible assets 12 167,216 165,125Prepaid expenses 8 15,319,686 395,439Other non-current assets 16 11,704 11,704

TOTAL ASSETS 829,353,366 756,620,015

LIABILITIESCURRENT LIABILITIES 29,278,536 24,896,112

Short-term portion of long-term financial liabilities 5 20,555,723 18,644,553Trade payables - Trade payables to related parties 6,28 793,694 810,773 - Trade payables to third parties 6 4,411,378 966,134Liabilities for employee benefits 14 38,360 30,449Other payables - Other payables to related parties 7,28 - 128,935 - Other payables to third parties 7 154,891 74,475Deferred income 8 349,700 214,697Short term provisions - Provisions for employee benefits 15 1,872,734 2,896,302 Other current liabilities 16 1,102,056 1,129,794

NON-CURRENT LIABILITIES 66,155,715 75,383,489

Financial liabilities 5 65,823,309 75,124,583Other payables 7 250,862 184,908Provision for employee termination benefits 15 81,544 73,998EQUITY 733,919,115 656,340,414Share capital 18 227,208,155 227,208,155Restricted reserves 245,372 245,372Share issue premium 223,452,917 223,452,917Remeasurement of employee benefits (2,189) 20,626Retained earnings 205,413,344 153,585,099Net profit for the period 77,601,516 51,828,245

TOTAL LIABILITIES 829,353,366 756,620,015

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.STATEMENT OF FINANCIAL POSITION (BALANCE SHEET)AS OF 31 DECEMBER 2015 (Amounts expressed in Turkish Lira (ʻʼTLʼʼ) unless otherwise stated.)

The accompanying notes form an integral part of these financial statements.

NotesASSETS

97

Audited Audited December 31, 2015 December 31, 2014 Revenue 19 53,965,158 46,461,603Cost of sales (-) 19 (8,102,009) (6,625,196)

Gross profit 45,863,149 39,836,407

General administrative expenses (-) 20 (5,446,862) (6,320,305)Net gain from fair valueadjustments on investment properties 48,023,077 20,396,094Other operating income 21 526,127 87,254Other operating expenses (-) 21 (679,131) (844,446)

Profit from operations 88,286,360 53,155,004

Income from investing activities 22 436,994 1,934,429Expenses from investing activities 22 (690,290) (3,428,927)Operating profit beforefinancial expenses 88,033,064 51,660,506

Financial income 23 11,657,149 9,400,301Financial expenses (-) 24 (22,088,697) (9,232,562)

Operating profit before tax 77,601,516 51,828,245

Tax income / (expenses) 26 - -

Profit for the period 77,601,516 51,828,245

Other comprehensive (loss) / income (22,815) 1,568

TOTAL COMPREHENSIVE INCOME 77,578,701 51,829,813

Earnings per share 27 0.3415 0.2281

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME AS OF 31 DECEMBER 2015 (Amounts expressed in Turkish Lira (ʻʼTLʼʼ) unless otherwise stated.)

The accompanying notes form an integral part of these financial statements.

Notes

2498

INDEPENDENTAUDITORʼS

REPORT

Remeasurement of employee Paid-in Share benefits Restricted Retained Net profit Total capital premium reserves reserves equity

Balance at 1 January 2014 227,208,155 223,452,917 19,058 245,372 131,669,832 21,915,267 604,510,601

Transfers - - - - 21,915,267 (21,915,267) -Total comprehensive income - - 1,568 - - 51,828,245 51,829,813

Balance at 31 December 2014 (Audited) 227,208,155 223,452,917 20,626 245,372 153,585,099 51,828,245 656,340,414

Balance at 1 January 2015 227,208,155 223,452,917 20,626 245,372 153,585,099 51,828,245 656,340,414

Transfers - - - - 51,828,245 (51,828,245) -Total comprehensive income - - (22,815) - - 77,601,516 77,578,701

Balance at 31 December 2015 (Audited) 227,208,155 223,452,917 (2,189) 245,372 205,413,344 77,601,516 733,919,115

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED 31 DECEMBER 2015 AND 2014 (Amount expressed in Turkish Lira (ʻʼTLʼʼ) unless otherwise stated.)

The accompanying notes form an integral part of these financial statements.

Accumulated profit

99

Audited Audited Notes December 31, 2015 December 31, 2014

Cash flows from operation activitiesNet profit for the period 77,601,516 51,828,245

Adjustments to:Depreciation expense for tangible assets 11 398,051 424,435Amortization expense for intangible assets 12 19,593 15,896Adjustments related with interest income and expenses 868,862 2,690,976Adjustments related with provisions 365,617 2,038,381Adjustments related with doubtful receivables (581,650) (755,001)Change in fair value of investment property (48,023,077) (20,396,094)Impairment on non-financial assets 690,290 3,431,398Unrealised exchange gain 8,769,626 (3,908,215)

Operating profit before the changes inworking capital 40,108,828 35,370,021

Decrease/(increase) in trade receivables (181,225) (1,318,144)Inrease in other current and non-current assets (14,700,398) (731,086)Increase in trade payables 3,428,165 1,577,952Increase in other liabilities 132,611 1,348,892Personnel premium paid (1,404,454) (1,301,591)

Net cash provided by operating activities 27,383,527 34,946,044

Cash flows from investing activities Purchase of investment properties 10 (27,526,923) (1,397,638)Financial investments 7,713,127 3,089,877Purchase of tangible assets 11 (78,680) (1,263,122)Proceeds from sale of tangible assets 1,930 -Purchase of intangible assets 12 (21,684) (55,441)Interest received 436,994 1,934,430

Net cash (used in)/provided by investing activities (19,475,236) 2,308,106

Cash flows from financing activitiesRepayment of bank borrowings (17,293,129) (17,182,375)Interest paid (4,345,179) (3,249,298)Interest received 3,724,164 2,439,026

Net cash used in financing activities (17,914,144) (17,992,647)

Net (increase) / decrease on cash and cash equivalentsbefore effect of foreign exchange rate (10,005,853) 19,261,503

Effect of foreign exchange rate on cash andcash equivalents 932,248 (58,650)(Decrease)/Increase in cash and cash equivalents (9,073,605) 19,202,853

Cash and cash equivalents at the beginning of the period 46,122,578 26,919,725

Cash and cash equivalents at the end of the period 3 37,048,973 46,122,578

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.STATEMENT OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2015 AND 2014(Amounts expressed as Turkish Lira (ʻʼTLʼʼ) unless otherwise stated)

The accompanying notes form an integral part of these financial statements. 24100

INDEPENDENTAUDITORʼS

REPORT

December 31, 2015 December 31, 2014 Shate rate Share rateShareholder Class Type (%) (%)

Doğuş Holding A.Ş. (Non-public) A Registered 0.83 0.83Doğuş Holding A.Ş. (Non-public) B Bearer 15.43 15.43Doğuş Holding A.Ş. (Public) B Bearer 58.24 58.24Doğuş Turizm Sağlık Yat. ve İşl. San. Tic. A.Ş. (Public) B Bearer 0.48 0.48Public B Bearer 25.02 25.02

Total 100 100

The number of personnel of the Company with respect to education level is as follows:

December 31, 2015 December 31, 2014

Post graduate 3 2Undergraduate 8 7Other 3 3

14 12

Approval of financial statements

The financial statements for the financial period of 31 December 2015 have been approved by the Board of Directors on 15 February 2016.

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

1. COMPANYʼS ORGANISATION AND NATURE OF OPERATIONSDoğuş Gayrimenkul Yatırım Ortaklığı A.Ş. (“Company”) has been incorporated in accordance with capital market law on 25 July 1997.

Doğuş Gayrimenkul Yatırım Ortaklığı A.Ş.’s (the “Company”) which is traded on the Borsa Istanbul, main activity is to invest in properties, create, manage, make the necessary changes in the portfolio, minimize the risk of variation in real estate; property related capital market instruments, invest and monitor continuously the real estate based projects and take the necessary measures to protect, also research to increase the value of the portfolio.

The headquarter of the Company is registered in Doğuş Center Maslak, Maslak Mahallesi Ahi Evran Cad. No:4/23 Maslak, Sarıyer-İstanbul.

The shareholders structure and information on their shares of the Company which is restricted on commercial register are as follows as of 31 December 2015 and 31 December 2014:

101

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTSThe principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1. Basis of preparation

a) Financial statements of preparation

The Company, the accounting records and the statutory financial statements in preparing the CMB issued by the principles and conditions of the Turkish Commercial Code ("TCC"), tax legislation and the Ministry of Finance issued by the Uniform Chart of Accounts complies with the requirements.The financial statements have been prepared in Turkish Liras on the basis of historical cost, to the legal records for the purpose of fair presentation in accordance with TAS adjustments and reclassifications are reflected.

The financial statements for the financial period of 31 December 2015 have been approved by the Board of Directors on 15 February 2016.

b) Financial Reporting Standards

The accompanying financial statements are prepared in accordance with Communiqué Serial II, No:14.1, “Principles of Financial Reporting in Capital Markets” (“the Communiqué”) published in the Official Gazette numbered 28676 on 13 June 2013. According to Article 5 of the Communiqué, consolidated financial statements are prepared in accordance with the Turkish Accounting Standards issued by Public Oversight Accounting and Auditing Standards Authority (“POAASA”). TAS contains Turkish Accounting Standards, Turkish Financial Reporting Standards (“TFRS”) and its addendum and interpretations (“IFRIC”).

Adjustment of financial statements in periods of high inflation

Inflation accounting application is terminated for the companies operating in Turkey and preparing their financial statements in accordance with the provisions of the CMB according to the decision taken by CMB dated on 17 March 2005 and numbered 11/367, to be effective from 1 January 2005. Accordingly, "Financial Reporting in Hyperinflationary Economies" Standard ("TAS 29") published by the Public Oversight Agency, did not apply as from 1 January 2005.

Functional and presentation currency

These financial statements are presented in Turkish Lira (“TL”), which is the Company’s functional currency. All financial information is presented in TL unless otherwise stated.

Offsetting

Financial assets and liabilities are offset, as is the net amount reported in the financial statements when there is a legally enforceable right to set-off the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

Going concern

Company's financial statements are prepared under the going concern assumption.

24102

INDEPENDENTAUDITORʼS

REPORT

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

Control of compliance with the portfolio limitations

As of 31 December 2015, presented information in: ‘Additional Note: control of compliance with the portfolio limitations’, in accordance with Capital Markets Board’s Communiqué Serial: II, No: 14.1 “Financial Reporting in Capital Markets” Amendment No: 16 comprised condensed information and prepared in accordance with Capital Markets Board’s Communiqué Serial: III, No: 48.1“Real Estate Investment Company” published in the Official Gazette dated 28 May 2013 numbered 28660 and Capital Markets Board’s Communiqué Serial: III, No: 48.1a“Amendment on Real Estate Investment Company” published in the Official Gazette dated 23 January 2014 numbered 28891.

The additional note for “Compliance control of the portfolio restrictions” is prepared according to the accomplying financial statements.

2.2. Critical accounting estimates, assumptions and judgments

The preparation of the financial statements in conformity with Communiqué serial: II, No: 14.1 requires the use of assumptions and estimates that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues expenses which are reported throughout the period. Even though, these assumptions and estimates rely on the best estimates of the Company management; the actual results might differ from them.

The basis of estimates and assumptions are reviewed continuously and the estimates update according to updates.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are outlined below as of 31 December 2015 and 31 December 2014:

The fair value measurement of investment property

In the financial statements, principal assumptions used in valuation reports during the finding fair values of real estates classified as investment property are explained below.

103

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

Antalya 2000 Plaza

Antalya 2000 Plaza is classified under investment property as of 31 December 2015 and 31 December 2014 in the financial statements. Antalya 2000 Shopping Mall located on the 1,135 m2 land, No.1 parcel, Muratpaşa district, Haşimişcan district, 10479 islands. Management of the Mall is conducted by Antalya 2000 Plaza Management. The company has started to work above Antalya 2000 Plaza’s sales on 13 May 2015 and the sales process of Antalya 2000 Plaza is continued as of 31 December 2015.

Based on Taksim Kurumsal Gayrimenkul Değerleme ve Danışmanlık A.Ş.’s valuation report in accordance with Capital Markets Board’s Serie: IV No:1 Communiqué, dated 29 December 2015 with the report number 2015-002 the aforementioned property’s fair value is TL 14,285,000 as at 31 December 2015 according to sales comparison method. (31 December 2014: TL 13,868,000).

Valuation Rent Valuation market report Valuation Discount increase Capitalization m2 valueDecember 31, 2015 date method rate(*) rate p.a rate in TL (full)

Antalya 2000 Shopping Mall 29 December 2015 Sale comparison - - - 2,047Gebze Center Shopping Mall and Additional BuildingProject(**) 31 December 2015 Cost method - - - -Maslak Doğuş Power Center 29 December 2015 Discounted cash flow 10.50% 3.00% 7.00% -

Valuation Rent Valuation market report Valuation Discount increase Capitalization m2 value31 December 2015 date method rate(*) rate p.a rate in TL (full)

Antalya 2000 Shopping Mall 29 December 2015 Sale comparison - - - 1,988Gebze Center 31 December 2015 Discounted cash flow 9.50% 6.00% 8.00% -Shopping Mall Hotel and Additional BuildingProject(**) 31 December 2015 Discounted cash flow 10.50% - - -Maslak Doğuş Power Center 29 December 2015 Discounted cash flow 10.50% 3.00% 7.00% -

(*) Discount rates are based on the currency in which the majority of cash flows are denominated for each investment property. In Turkey Euro and USD are commonly used in rent agreements.

(**) According to the valuation report prepared by Reel Gayrimenkul Değerleme A.Ş.,Gebze Shopping Mall, Hotel and Additional Buildings Project valuated together with the Gebze Shopping Mall according to cost method as of 31 December 2015. Gebze Center Shopping Mall couldn’t be separated with Gebze Center Shopping Mall, Hotel and Additional Buildings Project in valuation report as of 31 December 2015.

As of 31 December 2015 some significant estimations and assumptions that are stated on financial statements are below:

As of 31 December 2014 some significant estimations and assumptions that are stated on financial statements are below:

24104

INDEPENDENTAUDITORʼS

REPORT

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

Gebze Center Shopping Mall, Hotel and Additional Buildings Project

Gebze Center Shopping Mall, Hotel and Additional Building Project is classified under investment property as of 31 December 2015 and 31 December 2014 in the financial statements. Gebze Center Shopping Mall, Hotel and Additional Building Project located on the 60,865 m2 land, No.22 parcel, Province of Kocaeli, Gebze district, Sultanorhan district, 5678 islands. Management of the Mall is conducted by Pam Mülk Yönetim Hizmetleri Ltd.Şti.

Based on Reel Gayrimenkul Değerleme A.Ş.’s valuation report in accordance with Capital Markets Board’s Serie: IV No:1 Communiqué, dated 31 December 2015 with the report number DGS-1510001 the aforementioned property’s fair value is TL 489,002,000 as at 31 December 2015 according to cost method. (31 December 2014: TL 466,159,000).

Doğuş Center Maslak

Doğuş Center Maslak is classified under investment property as of 31 December 2015 and 31 December 2014 in the financial statements. Doğuş Center Maslak located in province of İstanbul, Sariyer district, Ayazağa district, 1 islands, total of 31,265 m2 on the No.131 parcel. Management of the Mall is conducted by Doğuş Center Maslak Management.

Based on Taksim Kurumsal Gayrimenkul Değerleme ve Danışmanlık A.Ş.’s valuation report in accordance with Capital Markets Board’s Serie: IV No:1 Communiqué, dated 29 December 2015 with the report number 2015-001 the aforementioned property’s fair value is TL 265,205,000 as at 31 December 2015 according to discounted cash flow. (31 December 2014: TL 213,465,000).

2.3. Changes in accounting policies

Company has been performed reviews in the current period which is issued by Turkey Accounting Standards Board (TASB) and TASB Turkey Financial Reporting Interpretations Committee (IFRIC) and is valid for the period of the year beginning on 31 December 2015 the new and revised TAS / TFRS on the amendments and interpretations of the Company 'in changes that impact on the financial statements.

2.3.1. Changes in standards and interpretations of Turkish Financial Reporting Standarts

a) The new standards, amendments and interpretations which are effective for the financial statements as of 31 December 2015:

• Amendment to TAS 19 regarding defined benefit plans, effective from annual periods beginning on or after 1 July 2014. These narrow scope amendments apply to contributions from employees or third parties to defined benefit plans. The objective of the amendments is to simplify the accounting for contributions that are independent of the number of years of employee service, for example, employee contributions that are calculated according to a fixed percentage of salary.

• Annual improvements 2012; effective from annual periods beginning on or after 1 July 2014. These amendments include changes from the 2010-12 cycle of the annual improvements project, that affect 7 standards:

• TFRS 2, ‘Share-based payment’• TFRS 3, ‘Business Combinations’• TFRS 8, ‘Operating segments’• TFRS 13, ‘Fair value measurement’• TAS 16, ‘Property, plant and equipment’ and TAS 38, ‘Intangible assets’• Consequential amendments to TFRS 9, ‘Financial instruments’, TAS 37, ‘Provisions, contingent liabilities and contingent assets’, and• TAS 39, Financial instruments - Recognition and measurement’

105

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

• Annual improvements 2013; effective from annual periods beginning on or after 1 July 2014. These amendments include changes from the 2011-12-13 cycle of the annual improvements project, that affect 4 standards:

• TFRS 1, ‘First time adoption’• TFRS 3, ‘Business combinations’• TFRS 13, ‘Fair value measurement’ and• TAS 40, ‘Investment property’.

b) The new standards, amendments and interpretations introduced to the prior financial statements as of 31 December 2015

• Amendment to TFRS 11, 'Joint arrangements' on acquisition of an interest in a joint operation, effective from annual periods beginning on or after 1 January 2016. This amendment adds new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business. The amendments specify the appropriate accounting treatment for such acquisitions.

• Amendments to TAS 16 ‘Property, plant and equipment’, and TAS 41, ‘Agriculture’, regarding bearer plants, effective from annual periods beginning on or after 1 January 2016. These amendments change the financial reporting for bearer plants, such as grape vines, rubber trees and oil palms. It has been decided that bearer plants should be accounted for in the same way as property, plant and equipment because their operation is similar to that of manufacturing. Consequently, the amendments include them within the scope of TAS 16, instead of TAS 41. The produce growing on bearer plants will remain within the scope of TAS 41.

• Amendment to TAS 16, 'Property, plant and equipment' and TAS 38, 'Intangible assets', on depreciation and amortisation, effective from annual periods beginning on or after 1 January 2016. In this amendment the it has clarified that the use of revenue based methods to calculate the depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset. It is also clarified that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset.

• TFRS 14 ‘Regulatory deferral accounts’, effective from annual periods beginning on or after 1 January 2016. TFRS 14, ‘Regulatory deferral accounts’ permits first–time adopters to continue to recognise amounts related to rate regulation in accordance with their previous GAAP requirements when they adopt TFRS. However, to enhance comparability with entities that already apply TFRS and do not recognise such amounts, the standard requires that the effect of rate regulation must be presented separately from other items.

• Amendments to TAS 27, ‘Separate financial statements’ on the equity method, effective from annual periods beginning on or after 1 January 2016. These amendments allow entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements.

• These amendments address an inconsistency between the requirements in TFRS 10 and those in TAS 28 in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognised when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognised when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary.

• Annual improvements 2014, effective from annual periods beginning on or after 1 January 2016. These set of amendments impacts 4 standards:

• TFRS 5, ‘Non-current assets held for sale and discontinued operations’ regarding methods of disposal,• TFRS 7, ‘Financial instruments: Disclosures’, (with consequential amendments to TFRS 1) regarding servicing contracts,• TAS 19, ‘Employee benefits’ regarding discount rates,• TAS 34, ‘Interim financial reporting’ regarding disclosure of information.

24106

INDEPENDENTAUDITORʼS

REPORT

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

• Amendment to TAS 1, ‘Presentation of financial statements’ on the disclosure initiative, effective from annual periods beginning on or after 1 January 2016, these amendments are as part of the TASB initiative to improve presentation and disclosure in financial reports.

• Amendment to TFRS 10 ‘Consolidated financial statements’ and TAS 28, ‘Investments in associates and joint ventures’, effective from annual periods beginning on or after 1 January 2016.These amendments clarify the application of the consolidation exception for investment entities and their subsidiaries.

• TFRS 15 ‘Revenue from contracts with customers’, effective from annual periods beginning on or after 1 January 2018. TFRS 15, ‘Revenue from contracts with customers’ is a converged standard from the TASB and FASB on revenue recognition. The standard will improve the financial reporting of revenue and improve comparability of the top line in financial statements globally.

• TFRS 9 ‘Financial instruments’, effective from annual periods beginning on or after 1 January 2018. This standard replaces the guidance in TAS 39. It includes requirements on the classification and measurement of financial assets and liabilities; it also includes an expected credit losses model that replaces the current incurred loss impairment model.

Above mentioned amendments to the standards effects to its operations will be evaluated by the Company and will be effective at validity date.

2.4. Turkish Financial Reporting Standards Change and Comperative information

2.4.1. Comperative information and reclassifications in the previous period’s financial statements

The Company’s financial statements have been prepared comparatively with the prior period in order to allow determination of the financial position and performance trends. Reclassifications can be made in comparative informations in order to conform with the presentation of the current period financial statements.

As of 31 December 2015 financial statements have been presented as comparative with prior period as of 31 December 2014.

2.5. Summary of significant accounting policies

Significant accounting policies applied during the preparation of the consolidated financial statements are summarised as follows:

2.5.1. Incomes and Expenses accounting

Sales Revenue

Revenue is rental income that have generated from investment property. Rental income is recognised in profit or loss on accrual basis.

Interest income

Interest income is recognised in profit or loss on accrual basis.

107

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

2.5.2. Investment Property

Investment Property

Investment properties comprise of operating investment properties and investment properties under development.

Operating investment properties

Investment properties are those which are held either to rent income or capital appreciation or for both. Operating investment property is represented to the financial statements at fair values by the determination of competent independent appraisal company. Gain or loss arising from changes in fair value of investment properties is included in the net profit / loss at current period.

Investment property under development

In accordance with the change TAS 40 that became effective after the periods starting from 1 January 2009; the construction in progresses are measured by their fair values if the fair value model is applied. In case the fair value of the construction in progress can not be reliably measured, the investment properties are measured by their cost until the fair value is reliably measured or the construction is completed.

2.5.3. Tangible Assets

Property and equipment are carried at cost less accumulated depreciation and provision for impairment, if any. Any directly attributable costs of setting the asset in working order for its intended use are included in the initial measurement.

Depreciation is calculated over of the cost of property and equipment using the straight-line method based on expected useful lives (Note 11).

The expected useful lives are stated below:

Subsequent costs incurred for tangible assets are included in the asset’s carrying amount or recognized as a separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of income during the financial period in which they were incurred.

Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down to its recoverable amount and the provision for impairment is charged to statement of income.

Gains and losses on the disposal of property and equipment are determined by deducting the net book value of the property and equipment from its sales and are included in the related income and expense accounts, as appropriate.

Expected useful AmortizationTangible assets life (year) rate (%)

Furniture and Fixture 4-15 6.67%-25%Leasehold improvements 5 20%

24108

INDEPENDENTAUDITORʼS

REPORT

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

2.5.4. Intangible assets

Intangible assets include computer software and other rights. They are recorded at acquisition cost. And from the date of acquisition over the estimated useful lives of 15 years are amortized using the straight-line method (Note: 12).

Estimated useful life and amortization method are reviewed at the end of each annual reporting period, with the effect of any changes in the estimate being accounted for on a prospective basis.

2.5.5. Borrowing costs

Borrowing costs directly attributable to the acquisition of a qualifying asset as part of the cost of that asset are capitalized over the respective assets. Other borrowing costs are recognized in the comprehensive income statement in the period they incur. 2.5.6. Financial instruments

Classification

The Company has the following financial assets, cash and cash equivalents and trade receivables; and has the following financial liability, trade payables.

i) Non-derivative financial assets

The company, its assets are recognized at the date they are incurred. All other financial assets, the transaction date that becomes a party to the conditions of the contract regarding the Company's financial instruments are recognized. When the company transferred the assets with the relevant contract in accordance with the resulting cash flows related rights expired or related rights of ownership of all of the risks and rewards associated with the assets in a purchase and sale transactions in question is to remove the financial asset register. All kinds created or retained financial assets transferred by the Company is recognized as a separate asset or liability.

Non-derivative financial assets that can be directly attributable to the statement of financial position and transaction costs are recognized at fair value. Subsequent to initial recognition, subsequent period of financial assets are measured as described below.

Cash and cash equivalents

Cash and cash equivalents are comprised of cash, bank deposits with maturity periods of less than three-months and other highly liquid short-term investments which are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value. The carrying values of these assets are close to their fair values.

109

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss is divided into three subgroups: “Financial assets held for trading”, “Financial assets at fair value through profit or loss” and “Derivative financial assets held for trading”.

Financial assets at fair value through profit or loss are generally acquired for the purpose of selling in the short term in order to acquire revenue from fluctuations in the market.

Financial assets at fair value through profit or loss are reflected to statement of financial position with their cost value and then measured at fair value. Difference between cost and fair values is included in profit/loss accounts.

Available for sale financial assets

Available for sale financial assets are the financial assets other than assets held for trading purposes, financial assets at fair value through profit or loss, held to maturity financial assets and loans and receivables.

Available-for-sale financial assets are subsequently measured at their fair values. Unrecognised gains or losses derived from the difference between their fair value and the discounted values calculated per effective interest rate method are recorded in “Fair value reserve” under shareholders’ equity. In case of sales, the realised gain or losses are recognised directly in the statement of operations. When equity investments are disposed of, any resulting gain or loss is recognised in profit or loss as the difference between the sales price and the carrying amount of the investment.

Investments held to maturity

Investments held to maturity are the investments, for which there is an intention of holding until maturity and the relevant conditions for fulfilment of such intention, including the funding ability, and for which there are fixed or determinable payments with fixed maturity; and which are recognized at fair value at initial recognition. Investments held to maturity with the initial recognition at fair value including transaction costs are subject to valuation with their discounted cost value by using the internal rate of return method less provision for any impairment, if any.

Interest income from investments held to maturity are recognized in the income statement as an interest income.

24110

INDEPENDENTAUDITORʼS

REPORT

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

Impairment of financial instruments

Financial assets at fair value through profit or loss, a financial asset or group of financial assets at the end of each reporting period whether there are indicators of impairment are assessed. After the initial recognition of a financial asset of one or more events to occur and where there is a financial asset or group of assets that can be reliably estimated as a result of the negative impact on the estimated future cash flows of the financial asset is impaired if there is objective evidence of impairment loss is recognized.

For receivables impairment, estimated future cash flows discounted at the financial asset's original effective interest rate is calculated by the difference between the carrying amount and the present value.

Carrying amount is reduced through the use of an allowance account all financial assets with the exception of trade receivables, impairment loss directly deducted from the carrying amount of the financial asset. Trade receivables can not be collected, the amount deducted from the reserve account will be deleted. Changes in the allowance account are recognized in profit or loss for the period.

The exception of available for sale equity equity instruments, in a subsequent period the impairment loss decreases and the decrease related to an event occurring after the impairment loss is recognized, the previously recognized impairment loss for the investment at the date the impairment is reversed if the impairment is recognized in no time to reach does not exceed the amortized cost of in the income statement will be cancelled.

Available-for-sale equity securities, any increase in fair value subsequent to an impairment loss recognized directly in equity.

Recognition and derecognition of financial assets and liabilities

The Company's financial assets and liabilities, is a party to the contractual provisions of the financial instrument if the statement of financial position reflects. All or part of the Company's financial assets, are subject only when it loses control over the contractual rights that removes records. The Company's financial liabilities are eliminated, but the obligation specified in the contract, cancelled or expires releases the records.

Trade receivables

Trade receivables are recognized as net invoice value after deduction of provisions for doubtful receivables are carried at. The carrying values of trade receivables net of allowance for doubtful receivables considered to approximate their fair values due to the short-term nature. The collection of the receivable is estimated for the provision for doubtful receivables is made when it is not possible. Provision is made for doubtful receivables have been identified.

24111

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

Due from related parties

Close relatives of members of the Board of Directors and Senior Executives, and organisations that Company can able to control directly or indirectly are defined as related parties. Book value of receivables from related parties, close to its fair value.

ii) Non-derivative financial liabilities

Loans and borrowings

Loans and borrowings are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.

Trade and other payable

Trade and other payable are recognised initially at fair value. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.

iii) Capital

Ordinary Shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction in equity after tax effects. 2.5.7. Foreign Currency Transactions

Transactions in foreign currencies are translated into TL at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to TL at the exchange rate at that date. Gains or losses on translation of foreign currency denominated transactions to TL are recognised in profit of loss.

The exchange rates used by the Company are as follows:

2.5.8 Offsetting

Financial assets and liabilities are offset and the net amount is reported in the statement of financial position when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously.

December 31, 2015 December 31, 2014

USD 2.9076 2.3189EURO 3.1776 2.8207

24112

INDEPENDENTAUDITORʼS

REPORT

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

2.5.9. Earning per share

Earnings per share are determined by dividing net comprehensive income by the weighted average number of shares that have been outstanding during the period concerned. Weighted average number of shares is number of ordinary shares at the beginning of the period and the number of shares issued during the period or taken back to a time-weight factor multiplied by the number of shares. The time-weight factor is the ratio of the number of days where a certain number of shares issued and total number of days in the period.

In Turkey, companies can increase their share capital by making a pro-rata distribution of their shares “bonus shares” to existing shareholders funded from retained earnings or other reserves. For the purpose of earnings per share computations, such bonus share issuances are regarded as issued shares for all periods presented and accordingly the weighted average number of shares used in earnings per share computations in prior periods is adjusted retroactively for the effects of these shares, issued without receiving cash or another consideration from shareholders.

2.5.10. Subsequent events

Subsequent events represent the events that occur against or on behalf of the Company between the reporting date and the date when reporting was authorised for the issue. There are two types of subsequent events:

• Those that provide evidence of conditions that existed as at reporting date (adjusting events after the reporting date); and

• Those that are indicative of conditions that arose after the reporting date (non-adjusting events after the reporting date).

If there is evidence of such events as of reporting date or if such events occur after reporting date and if adjustments are necessary, the Company’s financial statements are adjusted according to the new situation. The Company discloses the post-balance sheet events that are not adjusting events but material.

2.5.11. Provisions, contingent liabilities and contingent assets

A provision is recognised when the Company has a present implicit or legal obligation as a result of a past event and 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 specified criteria are not met, the Company discloses the related issues in the notes.

If the inflow of economic benefits is probable, contingent assets are disclosed in the notes to the financial statements. If the inflow of the economic benefit is more than likely to occur, such asset and income statement effect are recognised in the financial statements at the relevant period that income change effect occurs.

24113

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

2.5.12. Leases

Financial Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Fixed assets that are acquired through financial leasing are reflected at the statement through deducting the accumulated depreciation and impairment from the lowest version of the beginning of the lease discounted value of minimum lease payments at balance sheet date and the fair value of the goods subject to lease. Liabilities under finance leases, decreased by the payment of principal and interest payments are recorded as expense in the statement of comprehensive income.

Operational Leasing

Operational leasing transactions are recorded to comprehensive income statements in the period they have realized.

2.5.13. Related parties

(a) A person or a relative of the subject person is considered as related party of the Company in such situations that are described as follows:

If the subject person, i) Has a sole control or jointly control over the Company, ii) Has a significant impact on or the authority to effect the Company, iii) Has a title in a key management personnel of the main Company or a parent company.

(b) If any of the following conditions apply i) Entity and the company are the members of the same group, ii) Entity is the subsidiary or business partner of the other entity. iii) Both of the entities are the business partners of a third party. iv) One of the entities is a business partner of a third entity and the other entity is the subsidiary of the subject third party. v) Entity has utility plans for the personel of the Company or a related party of the Company after quitting the job, these sponsors are also considered as related party. vi) Entity is being controlled or jointly conrolled by a person that is specified in (a), vii) Entity is affected majorly by a person that has the characteristics specified in (a)(i).

Transaction between related parties is the transfers between the reserves, service or the obligations without considering if there is a compensation or not.

2.5.14. Segment reporting

Segment reporting is designed as to supply consistence on reporting to the competent authority on taking decisions about the activities of the group. The competent authority is responsible for evaluation of the departments’ performance and decision taking related to the resources which are to be allocated according to departments.

Since the Company operates only in the development of real estate, the Company does not prepare a segment reporting.

24114

INDEPENDENTAUDITORʼS

REPORT

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

2.5.15. Governments grants and incentives

As disclosed in Note 2.5.16, the Company which operates as a real estate investment trust, is exempt from corporate tax.

2.5.16. Taxation

According to Article 5/1(d) (4) of the New Corporate Tax Law No: 5520, the income of Real Estate Investment Trusts (“REIT”) is exempt from Corporate Income Tax in Turkey. This exemption is also applicable to Quarterly Advance Corporate Tax.

Since the Company is exempt from Corporate Income Tax in Turkey in accordance with Article 5 of the Corporate Tax Law, deferred tax is not recognised.

2.5.17. Provision for employee termination benefits

Provision for the employee termination benefits shows the present value of total liabilities resulting from retirement of personnel in the future for the company in accordance with Turkish Labor Law. Under the Turkish Labor Law, the Company is required to pay termination benefits to each employee who has completed at least one year of service and whose employment is terminated without due cause, is called up for military service, dies or who retires after completing 25 years of service (20 years for women) and achieves the retirement age (58 for women and 60 for men). Since the legislation was changed on 23 May 2002, there are certain transitional provisions relating to length of service prior to retirement. The amount payable consists of one month’s salary limited to a maximum of TL 3,828 in full TL amount as of 31 December 2015 (31 December 2014: TL 3,438).

Provision is related to fair value of defined benefit plan calculated with the method of estimated liability. All actuarial profit and losses are accounted under consolidate comprehensive income statement

Provision is related to fair value of defined benefit plan calculated with the method of estimated liability. All actuarial profit and losses are accounted under comprehensive income statement. TFRS requires actuarial valuation methods to be developed to estimate the enterprise’s obligation for such benefits. The liability for this unfunded plan recognized in the balance sheet is the full present value of the defined benefit obligation at the end of the reporting period, calculated using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows from the retirement of its employees using the long term TL interest rates.

The principal actuarial assumption is that the maximum liability will increase in line with inflation. Thus the effective discount rate applied represents the expected real interest rate after adjusting for the effects of future inflation. As the maximum liability amount is revised periodically by the authorities, the maximum amount of 4,093 full TL which is effective from 1 January 2016 has been taken into consideration when calculating the liability (1 January 2015: 3,541 full TL) as of 31 December 2015.

24115

December 31, 2015 December 31, 2014

Cash 1,129 11,327Banks - Demand deposits 132,409 38,379Banks - Time deposits 37,115,997 46,320,130

Cash and cash equivalents in the financial position 37,249,535 46,369,836

Interest income accruals on cash equivalents (200,562) (247,258)

Cash and cash equivalents in the statement of cash flows 37,048,973 46,122,578

Demand deposits

As of 31 December 2015 and 31 December 2014, the details of demand deposits at banks are as follows:

December 31, 2015 December 31, 2014

TL 132,409 38,379

Total 132,409 38,379 Time deposits

As of 31 December 2015 and 31 December 2014, the details of time deposits at banks are as follows:

NominalDecember 31, 2015 Amount (TL) interest rate (%) Maturity

TL 14,692,202 13.00 12 January 2016TL 12,036,006 13.00 12 January 2016USD 4,716,430 2.00 2 February 2016TL 2,840,584 7.50 4 January 2016TL 2,830,775 10.00 4 January 2016

Total 37,115,997

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

2.5.18. Statements of cash flow

The Company presents statement of cash flows as an integral part of other financial statements to inform the users of financial statements about the changes in its net assets, its financial structure and its ability to manage the amount and timing of its cash flows under new conditions.

3. CASH AND CASH EQUIVALENTSAs at 31 December 2015 and 31 December 2014, cash and cash equivalents are as follows:

24116

INDEPENDENTAUDITORʼS

REPORT

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

NominalDecember 31, 2014 Amount (TL) Interest rate (%) Maturity

TL 14,750,347 9.50 29 January 2015TL 10,730,110 10.10 7 January 2015TL 7,598,576 10.00 5 January 2015TL 5,488,473 7.50 2 January 2015USD 3,653,715 2.50 3 February 2015TL 2,000,548 10.00 3 February 2015TL 1,365,280 7.50 2 January 2015TL 733,081 7.50 2 January 2015

Total 46,320,130

4. FINANCIAL INVESTMENTSAs at 31 December 2015 and 31 December 2014, the Company’s financial investments are as follows:

Private sector bonds and government bonds held-for-trading as at 31 December 2014 having interest rate: 7.96%-12.18%.

The increase/ (decrease) in fair value of financial assets are accounted under the investment income/ (expenses).

24117

Fair CarryingDecember 31, 2015 Cost value value

Private sector bonds - - -Total - - -

Fair CarryingDecember 31, 2014 Cost value value

Private sector bonds 7,981,171 8,091,172 8,091,172Government sector bonds 58,360 58,949 58,949Total 8,039,531 8,150,121 8,150,121

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

5. FINANCIAL LIABILITIES

December 31, 2015 December 31, 2014

Short- term portion of long-term financial liabilities 20,555,723 18,644,553Short- term portion of long-term financial liabilities 20,555,723 18,644,553

Long- term financial liabilities 65,823,309 75,124,583Long -term financial liabilities 65,823,309 75,124,583

Total financial liabilities 86,379,032 93,769,136

Weighted average effective interest rate Original TLDecember 31, 2015 (%) Currency balance equivalent

Short term portionof long term financial liabilities Euribor+ 4.75% Euro 6,468,946 20,555,723Long termfinancial liabilities Euribor+4.75% Euro 20,714,788 65,823,309

86,379,032

Weighted average effective interest rate Original TLDecember 31, 2014 p.a (%) Currency balance equivalent

Short term portionof long term financial liabilities Euribor+ 4.75% Euro 6,609,903 18,644,553Long termfinancial liabilities Euribor+4.75% Euro 26,633,312 75,124,583

93,769,136

24118

INDEPENDENTAUDITORʼS

REPORT

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

6. TRADE RECEIVABLES AND PAYABLESAs at 31 December 2015 and 31 December 2014, trade receivables of the Company are as follows.

As at 31 December 2015 and 2014, provisions for doubtful receivables of the Company are as follows:

As at 31 December 2015 and 31 December 2014, trade payables of the Company are as follows:

(*) Other trade payables comprise of payables to suppliers TL 580,321 and payables to contractor company related to Gebze Additional Building Project TL 3,831,057.

Long term trade payables

As at 31 December 2015, the Company does not have long term trade payables (31 December 2014: None).

December 31, 2015 December 31, 2014

Trade receivables 4,225,012 3,185,940Due from related parties (Note 28) 13,889 133,226Provision for doubtful receivables (1,121,082) (970,417)Provision for doubtful receivables from related parties (Note 28) (6,195) -Balance at the end of the period 3,111,624 2,348,749

December 31, 2015 December 31, 2014

Balance at 1 January (970,417) (215,416)Additions (581,650) (755,001)Disposal 424,790 -Balance at the end of the period - 31 December (1,127,277) (970,417)

December 31, 2015 December 31, 2014

Other trade payables (*) 4,411,378 966,134Due to related parties (Note 29) 793,694 810,773Total 5,205,072 1,776,907

24119

7. OTHER RECEIVABLES AND PAYABLESAs at 31 December 2015, other receivables is TL 1,126 (31 December 2014: TL 278,076).

As at 31 December 2015, there is no other receivables from related parties (31 December 2014: TL 67,540).

As at 31 December 2015, other payables comprise of deposits and guarantee received TL 140,895 and other payables TL 13,996 (31 December 2014: TL 74,475).

As at 31 December 2015, there is no other payables to related parties (31 December 2014: TL 128,935).

As at 31 December 2015, other long term payables comprise of deposits and guarantee received TL 250,862 (31 December 2014: TL 184,908).

8. PREPAID EXPENSES AND DEFERRED INCOMEAs at 31 December 2015 and 31 December 2014, the details of prepaid expenses of the Company are as follows:

(*) Advances given represent advances given for company’s Gebze Center Shopping Mall, Expansion and Hotel Project.

As at 31 December 2015 and 31 December 2014, the details of deferred income of the Company are as follows:

(**) Short term deferred income consist of rent income received in advance.

December 31, 2015 December 31, 2014

Prepaid insurance expenses 96,869 96,869Prepaid commission expenses 11,991 7,356

Total 108,860 104,225

December 31, 2015 December 31, 2014

Advances given (*) 15,021,116 -

Prepaid commission expenses 298,570 395,439

Total 15,319,686 395,439

December 31, 2015 December 31, 2014

Short term deferred income (**) 349,700 214,697

Total 349,700 214,697

120

Short term prepaid expenses

Short term deferred income

Long term prepaid expenses

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

INDEPENDENTAUDITORʼS

REPORT

9. CURRENT INCOME TAX ASSETSAs at 31 December 2015 and 31 December 2014, the details of current income tax assets of the Company are as follows:

10. INVESTMENT PROPERTIESAs at 31 December 2015 and 31 December 2014, investment properties of the Company are as follows:

Operating investment propertyThe fair values of investment properties as at 31 December 2015 are as follows:

The fair values of investment properties as at 31 December 2014 are as follows:

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

December 31, 2015 December 31, 2014Operating investment properties 768,492,000 690,318,000Investment properties under development 3,705,424 7,019,714

Total 772,197,424 697,337,714

December 31, 2015 December 31, 2014

Prepaid taxes and funds 103,210 34,430

Total 103,210 34,430

121

Valuation Valuation FairDescription method report date valueAntalya 2000 Shopping Mall “Sale comparison” 29 December 2015 14,285,000Gebze Center Shopping Mall,Expansion and Hotel Project “Cost method” 31 December 2015 489,002,000Doğuş Center Maslak “Discounted cashflow” 29 December 2015 265,205,000

Total 768,492,000

Valuation Valuation FairDescription method report date valueAntalya 2000 Shopping Mall “Sale comparison ” 29 December 2014 13,868,000Gebze Center Shopping Mall “Discounted cashflow” 31 December 2014 462,985,000Doğuş Center Maslak “Discounted cashflow” 29 December 2014 213,465,000Total 690,318,000

As at 31 December 2015 and 2014, the movement of the investment properties are as follows:

(*) According to valuation report, Gebze Center Shopping Mall, Expansion and Hotel Project valuated together with the Gebze Shopping Mall as of 31 December 2015. Transfers in the amount of TL 29,688,635 are related with Gebze Center Shopping Mall, Expansion and Hotel Project that is transferred from investment properties under development to operating investment properties.

As at 31 December 2015 and 31 December 2014, insurance amount on investment properties are as follows:

(**) As of 31 December 2015, total TL equivalent of insurance on investment properties is TL 405,542,792(31 December 2014: TL 359,110,654).

There is no mortgage or lien on the investment properties.

Investment Properties Under Development

Investment properties under development measured at fair value

As of 31 December 2014, the fair value of the investments properties under development in the financial statements is as follows:

1 January - 1 January - December 31, 2015 December 31, 2014

Beginning of the period - 1 January 690,318,000 672,907,000Additions 462,288 188,906Transfers (*) 29,688,635 -Increase in fair value 48,023,077 17,222,094End of the period - 31 December 768,492,000 690,318,000

December 31, 2015 December 31, 2014

Gebze Center Shopping Mall Euro 91,077,144 91,077,144Doğuş Center Maslak Building Euro 34,355,942 34,043,042Antalya 2000 Plaza Euro 2,192,415 2,192,415

Total (**) 127,625,501 127,312,601

Valuation Valuation FairDescription method report date value

Gebze Land /Project “Discounted cashflow” December 31, 2014 3,174,000

Total 3,174,000

122

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

INDEPENDENTAUDITORʼS

REPORT

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

As at 31 December 2015 and 31 December 2014 the movement of investments properties under development is as follows:

(*) According to valuation report, Gebze Center Shopping Mall, Expansion and Hotel Project valuated together with the Gebze Shopping Mall as of 31 December 2015. Transfers in the amount of TL 29,688,635 are related with Gebze Center Shopping Mall, Expansion and Hotel Project that is transferred from investment properties under development to operating investment properties.

Investment properties under development measured at fair value

As at 1 January 2015 and 31 December 2015 the movement of investment properties under development are as follows:

As at 1 January 2014 and 31 December 2014 the movement of investment properties under development are as follows:

1 January 2015 Additions Disposal December 31, 2015

Investment properties 3,845,714 550,000 (690,290) 3,705,424

Total 3,845,714 550,000 (690,290) 3,705,424

1 January 2014 Additions Disposal (**) December 31, 2014

Investment properties 6,065,909 1,208,732 (3,428,927) 3,845,714

Total 6,065,909 1,208,732 (3,428,927) 3,845,714

1 January - 1 January - December 31, 2015 December 31, 2014

Beginning of the period - 1 January 3,174,000 -Additions 26,514,635 -Transfers (*) (29,688,635) 3.174.000End of the period - 31 December - 3,174,000

123

Due to reason that the comparable market transactions being infrequent and alternative reliable estimates of fair value (for example based on discounted cash flow projections) being not available, the fair value of the investment property under development, namely “Doğuş REIT Office Tower Project ” is deemed to be not reliably determinable. Therefore, the Company determines that the fair value of its investment property under development is not reliable determinable but expects the fair value of the property to be reliably determinable when construction is complete; it measures that investment property under development at cost until either its fair value becomes reliably determinable or construction is completed (whichever is earlier).

Investment property is composed of “Doğuş REIT Office Tower Project” which details is described below.

Doğuş GYO Office Tower Project

Istanbul province, Şişli district, Ayazağa district, address and the title of the two layouts, 1 island, 131 numbered following the finalization of development plans on registered real estate parcel, a "Business Project", it was decided to construct. According to the Board of Directors resolution dated 16 November 2012 and numbered 340, the Company has decided to receive service in scope of projection, related application to the governmental institutions and obtaining required permission and approvals in order to initiate the process of construction from Doğuş Gayrimenkul Yatırım ve İşletme A.Ş. through signing engagement letter of “Improvement of Project Construction” and then start to construct the project.

The company raised an objection to and demanded the correction of the Master Development Plan for Maslak and its surroundings, scaled 1/5000, which was finalised upon the approval of Istanbul Metropolitan Municipality and announced on 12 March 2014. Since the demand for correction was rejected, a lawsuit was filed on 11 August 2014 regarding the request of the cancellation and the stay of the execution for the said development plan. The İstanbul 2nd Administrative Court rejected the company's demand for stay of execution on 11 June 2015. The Company was filed a lawsuit on 3 November 2015 regarding the request of the cancellation and the stay of the execution to İstanbul Administrative Court. The judicial process continues. Accordingly, the Company would not be exposed to any damages as a result of the ongoing legal process. In this respect, no provision had been provided by the management regarding the outcome of the ongoing legal process in the accompanying consolidated financial statements.

Gebze Center Shopping Mall, Hotel and Additional Building Project

According to Board of Directors’ Decision No. 390 dated 9 July 2014, the Company has been performing research, evaluation, and planning activities regarding “Hotel construction (primarily) and the construction of additional buildings project’’ on the property whose title deed is registered at plot G22B24B2A, block 5678, and parcel number 22, located at Kocaeli, Gebze District, Sultanorhan District, Güneyyanyol, No:310. Construction permit of the related Project has been taken on 20 February 2015. Constructions works have been beginned.

The company raised an objection on 11 January 2016 and demanded cancelation of the Master Development Plan, scaled 1/5000, that was approved with the decision of Kocaeli Metropolitan Municipality Council’s 516 numbered meeting on 17 September 2015. Per the opinion of the lawyer, there is no effect of this objection on the construction permit that was taken for Gebze Center Hotel and Additional Buildings Project.

There is no mortgage or lien on investment properties.

124

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

INDEPENDENTAUDITORʼS

REPORT

11. TANGIBLE ASSETSThe movement schedule of tangible assets as of 31 December 2015 and 31 December 2014 are as follows:

There is no pledge on tangible assets as of 31 December 2015 and 31 December 2014.

12. INTANGIBLE ASSETSThe movement schedule of intangible assets as of 31 December 2015 and 31 December 2014 are as follows:

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

1 January 2015 Addition Disposal December 31, 2015

Furniture and fixture 2,818,389 78,680 (177,757) 2,719,312Accumulated depreciation (1,479,458) (398,051) 175,827 (1,701,682)

Net book value 1,338,931 1,017,630

1 January 2014 Addition Disposal December 31, 2014

Furniture and fixture 1,559,904 1,263,122 (4,637) 2,818,389Accumulated depreciation (1,057,189) (424,435) 2,166 (1,479,458)

Net book value 502,715 1,338,931

1 January 2015 Addition Disposal December 31, 2015

Rights 270,073 21,684 - 291,757Accumulated depreciation (104,948) (19,593) - (124,541)

Net book value 165,125 167,216

1 January 2014 Addition Disposal December 31, 2014

Furniture and fixture 214,632 55,441 - 270,073Accumulated depreciation (89,052) (15,896) - (104,948)

Net book value 125,580 165,125

125

13. PROVISIONS, CONTINGENT ASSETS AND LIABILITIESAccording to the decision of CMB’s 28/780 numbered meeting on 9 September 2009, related to the commitments of publicly owned companies given to the guarantee 3rd party’s debts, The commitments given;

For companies other than publicly owned associations and financial institutions;

i) For their own corporate identities, ii) In favor of fully consolidated associations, iii) In favor of 3rd parties to continue their operations will not be limited.

After the decision is published at the Platform of Public Enlightenment, publicly owned companies will not give commitments to real people or corporations other than mentioned at the bullets (i) and (ii) above or to third parties other than mentioned at the bullet (iii).

As at 31 December 2015 and 31 December 2014 commitments given are as follows:

December 31, 2015 December 31, 2014

A. CPM’s given for its own legal personality 268,125 197,972B. CPM’s given on half of fully consolidated companies - -C. CPM’s given for continuation of its economic activities on behalf on third parties - -D. Total amount of other CPM’s Total amount of CPM’s given to on behalf - - - The majority shareholder - - - Total amount of CPM’s given to on behalf of other group companies which are not in scope of B and C - - - Total amount of CPM’s given to on behalf of third parties which are not in scope of C - -

Total 268,125 197,972

The proportion of other CPM and Group’s equity is 0.04% as of 31 December 2015 (31 December 2014: 0.03%).

As of 31 December 2015, company has TL 889,195 contingent liabilities to related parties related to borrowing guarantees, which has been given by related parties (31 December 2014: None)

126

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

INDEPENDENTAUDITORʼS

REPORT

The details of guarantee received are below as of 31 December 2015 and 31 December 2014:

(*) As at 31 December 2015, the company has received amount of TL 31,500,000 letter of guarantee from the supplier for the construction activities within the scope of Gebze Center Shopping Mall, Expansion and Hotel Project.(**) The deposits and guarantees received from Gebze Center Shopping Center’s tenants.

14. LIABILITIES FOR EMPLOYEE BENEFITSAs at 31 December 2015 and 31 December 2014, the details of liabilities for employee benefits of the Company are as follows:

15. PROVISIONS FOR EMPLOYEE BENEFITSProvision for unused vacation

The undiscounted unused vacation provision liability is below:

The movement schedule of the unused vacation as of 31 December 2015 and 31 December 2014 is as follows:

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

December 31, 2015 December 31, 2014

Social security premiums payable 38,079 29,915Payables to personnel 281 534

Total 38,360 30,449

December 31, 2015 December 31, 2014

Provisions for employee benefits 1,500,000 2,500,000Unused vacation 372,734 396,302Total 1,872,734 2,896,302

December 31, 2015 December 31, 2014

Balance at the beginning of the period - 1 January 396,302 179,039Increase during the period (23,568) 217,263At the end of the period - 31 December 372,734 396,302

127

Original TL Original TL amount Equivalent amount Equivalent

TL (*) 31,775,509 31,775,509 176,000 176,000Euro (**) 2,024,639 6,433,494 1,390,885 3,923,269USD (**) 71,730 208,562 - -

38,417,565 4,099,269

December 31, 2015 December 31, 2014

Short term liabilities

As at 31 December 2015 and 31 December 2014, the provisions for employee benefits of the Company are as follows:

Provisions for severance payments represent the Companies’ liabilities that could be occur through retirements of its employees and the present value of calculated possible liabilities in accordance with Turkish Labour Law. Provisions for severance payments are calculated on an accrual basis as the employees deserve and reflected at financial statements. The computation of the liability is based upon the retirement pay ceiling announced by the Government. The applicable ceiling amount as of 1 January 2016 TL 4,093. (1 January 2015: TL 3,541)

In accordance with TAS 19 - Employee Benefits, the Company is required to use actuarial valuation methods in estimating the liability related with current retirement plans. As at 31 December 2015 and 31 December 2014, employee severance indemnity in the accompanying financial statements has been calculated using the following actuarial assumptions:

128

December 31, 2015 December 31, 2014

Beginning of the period - 1 January 2,500,000 2,000,000Payment in period (1,404,454) (1,301,591)Additions 404,454 1,801,591

End of the period - December 31, 1,500,000 2,500,000

December 31, 2015 December 31, 2014

Provision for employee termination benefit 81,544 73,998Total 81,544 73,998

Long term liabilities

December 31, 2015 December 31, 2014

Discount rate 4,72% 3,95%Expected salary / Rate of limit increase 6,00% 5,00%Estimated retirement turnover rate 98% 98% December 31, 2015 December 31, 2014

1 January 73,998 56,039Service cost 12,756 12,756Interest cost 6,771 6,771Actuarial loss/ (gain) 22,815 (1,568)Payments in period (34,796) - 81,544 73,998

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

INDEPENDENTAUDITORʼS

REPORT

16. OTHER CURRENT / NON-CURRENT ASSETS AND SHORT-TERM / LONG-TERM LIABILITIESOther current assets

As at 31 December 2015 and 31 December 2014, the details of other current assets are presented below:

17. NON-CONTROLLING INTEREST

None.

Other non-current assets

As at 31 December 2015, the other non-current assets amounting to TL 11,704 (31 December 2014: TL 11,704) consist of deposits and guarantees given.

Other short term liabilities

As of 31 December 2015 and 31 December 2014, the details of other short-term liabilities are presented below:

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

129

December 31, 2015 December 31, 2014

Job advances 65,351 11,565Other - 6,560

Total 65,351 18,125

December 31, 2015 December 31, 2014

Taxes payables and other duties 552,056 579,794Expense accrual 550,000 550,000

Total 1,102,056 1,129,794

18. SHAREHOLDERʼS EQUITY18.1. Paid in capital

As at 31 December 2015, The Company's paid in capital is TL 227,208,155 (31 December 2014: TL 227,208,155).

As at 31 December 2015 and 31 December 2014, The Company’s capital comprise of issued and each carries 1 TL nominal value shares.

As at 31 December 2015 and 31 December 2014, The Company’s capital structure shows below:

18.2. Restricted reserves

As at 31 December 2015 and 31 December 2014, restricted reserves are consist of legal reserves.

The legal reserves consist of first and second reserves, appropriated in accordance with the Turkish Commercial Code (“TCC”). The TCC stipulates that the first legal reserve is appropriated out of statutory profits at the rate of 5% per annum, until the total reserve balance reaches 20% of the Company’s paid-in share capital. The second legal reserve is appropriated at the rate of 10% per annum of all cash distributions in excess of 5% of the paid-in share capital. Under the TCC, the legal reserves can only be used to offset losses and are not available for any other usage unless they exceed 50% of paid-in share capital.

Capital Capital Capital CapitalDescription Class Type amount (TL) rate (%) amount (TL) rate (%)

Doğuş Holding A.Ş. (Non-public) A Registered 1,874,850 0.83 1,874,850 0.83Doğuş Holding A.Ş. (Non-public) B Bearer 35,052,950 15.43 35,052,950 15.43Doğuş Holding A.Ş. (Public) B Bearer 132,332,502 58.24 132,332,502 58.24Doğuş Turizm Sağlık Yat. ve İşl. San. Tic. A.Ş.(Public) B Bearer 1,095,653 0.48 1,095,653 0.48Public held B Bearer 56,852,200 25.02 56,852,200 25.02

Total 227,208,155 100 227,208,155 100

December 31, 2015 December 31, 2014

130

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

INDEPENDENTAUDITORʼS

REPORT

18.3. Dividend distribution

According to Communiqué Serial: IV, No: 27, regarding profit distribution obligation, it has been made possible that shares, issued in cash or through the addition of dividend to the capital upon the decision of the Company’s general assembly, can be distributed to the shareholders free of charge or that the distribution can be partly made in cash and partly through the free distribution of shares. It has been further made possible that initial dividend amount be left to the companies without distribution, if such amount is lower than the 5% of the existing paid-up/issued capital amount.

In this context; according to the decision of CMB, the net distributable profit that is calculated per CMB’s minimum profit distribution requirements will be wholly distributed if it is met by the net distributable profit of statutory records, if the amount per CMB is not met by statutory records, the amount to be distributed will be limited to the amount at the statutory records. If losses are incurred in either of CMB or statutory financial statements, no profit will be distributed.

18.4 Retained earnings

As at 31 December 2015, the Company’s statutory retained earnings and statutory net profit are TL 72,099,114 and TL 24,119,337 respectively.

18.5 Share premium

The difference between the nominal amount of the new shares amounting to TL 133,428,155 issued after the partially spin off and the net fair value of the acquired investment property amounting to TL 356,881,072 was recorded as shared premium as of 8 October 2013.

19. SALES AND COST OF SALESSales for the periods ended 31 December 2015 and 2014 are as follows:

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

131

Cost of the sales for the periods ended 31 December 2015 and 2014 are as follows:

December 31, 2015 December 31, 2014

Rent income 53,883,534 46,325,802Other income 81,624 135,801

Total 53,965,158 46,461,603

December 31, 2015 December 31, 2014

Common area expenses 4,897,758 3,046,031Real estate tax expenses 3,204,251 3,506,044Other expenses - 73,121

Total 8,102,009 6,625,196

132

20. GENERAL ADMINISTRATIVE EXPENSESGeneral administrative expenses for the periods ended 31 December 2015 and 2014 are as follows:

21. OTHER OPERATING INCOME/EXPENSESOther operating income for the periods ended 31 December 2015 and 2014 are as follows:

Other operating income for the periods ended 31 December 2015 and 2014 are as follows:

December 31, 2015 December 31, 2014

Personnel expenses 3,771,073 4,738,598Depreciation and amortization 417,644 440,331Travel and vehicle rent expenses 366,880 312,497Tax and other duties 315,017 333,291Head office expenses 159,058 156,898Consultancy expenses 101,099 78,340Istanbul Stock Exchange expenses 72,399 23,445Communication expenses 44,802 44,001Software expenses 43,555 21,256Membership and subscription expenses 12,517 22,239Other 142,818 149,409

Total 5,446,862 6,320,305

December 31, 2015 December 31, 2014

Provisions no longer required 424,790 -Foreign exchange gains 19,040 47,383Other 82,297 39,871

Total 526,127 87,254

December 31, 2015 December 31, 2014

Provision for doubtful receivables 581,650 755,001Foreign exchange losses 97,481 3,856Inventories recognised as expense - 70,848Other - 14,741

Total 679,131 844,446

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

INDEPENDENTAUDITORʼS

REPORT

22. INCOME AND EXPENSES FROM INVESTING ACTIVITIESIncome from investing activities for the periods ended 31 December 2014 and 2013 are as follows:

23. FINANCE INCOMEFinance income for the periods ended 31 December 2015 and 2014 are as follows

December 31, 2015 December 31, 2014

Interest income generated fromgovernment and private sector bonds 436,994 1,934,429Total 436,994 1,934,429

Expenses from investing activities for the periods ended 31 December 2015 and 2014 are as follows:

December 31, 2015 December 31, 2014

Expenses from investing activities 690,290 3,428,927Total 690,290 3,428,927

December 31, 2015 December 31, 2014

Foreign exchange gains 7,979,681 6,891,810Interest income 3,677,468 2,508,491Total 11,657,149 9,400,301

24. FINANCE EXPENSEFinance expense for the periods ended 31 December 2015 and 2014 are as follows:

December 31, 2015 December 31, 2014

Interest expenses 16,970,931 3,038,099Foreign exchange losses 4,546,330 5,331,727Commission expenses 564,665 739,050Other 6,771 123,686Total 22,088,697 9,232,562

133

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

134

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

INDEPENDENTAUDITORʼS

REPORT

25. DISCONTINUED OPERATIONSNone.

26. TAX ASSETS AND LIABILITIESIn accordance with the Corporate Tax Law, the income of the Company is exempted from taxation since it’s operations are related to real estate investment trust. Since the earnings of the Company are exempt from tax in accordance with the Corporate Income Tax Law, the Company does not any deferred tax assets and liabilities Earnings per share stated in statement of income are calculated by dividing net income for the period by the weighted average number of the Company’s shares for the period.

27. EARNINGS PER SHAREEarnings per share amounts, net income is calculated by the weighted average number of shares in the current period, the Company's shares.

28. RELATED PARTY DISCLOSURESDue to /from related parties

As at 31 December 2015 and 31 December 2014, the Company's related party balances are as follows;

December 31, 2015 December 31, 2014

Profit for the period 77,601,516 51,828,245Weighted average number of shares 227,208,155 227,208,155Earning per share 0.3415 0.2281

December 31, 2015 December 31, 2014

Trade receivables from related parties:

Doğuş Oto Pazarlama Tic. A.Ş. 7,694 58,842Doğuş İstanbul Sportif Faaliyetler Kulübü Derneği 6,195 6,195Türkiye Garanti Bankası A.Ş. - 47,920A Yapım Radyo ve Televizyon Yay. A.Ş. - 2,744Doğuş Center Maslak Yöneticiliği - 16,294Doğuş Yayın Grubu A.Ş. - 1,231

Provision for doubtful receivables from related partiesDoğuş İstanbul Sportif Faaliyetler Kulübü Derneği (6,195) -

Total 7,694 133,226

December 31, 2015 December 31, 2014

Other receivables from related parties:Doğuş Center Maslak Yöneticiliği - 67,540

Total - 67,540

135

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

As at 31 December 2015 and 31 December 2014, there is no guarantee given to/received from related parties.

As of 31 December 2015 and 31 December 2014, the Company's related company Türkiye Garanti Bankası A.Ş.’s balances are as follows:

(*) Garanti Portföy Yönetimi A.Ş. has given portfolio management services to the Company.

December 31, 2015 December 31, 2014 Banks - demand depositsTürkiye Garanti Bankası A.Ş. 48,958 30,338Garanti Portföy Yönetimi A.Ş. - 2,992

Banks - time depositsTürkiye Garanti Bankası A.Ş. 7,557,014 7,018,464Garanti Portföy Yönetimi A.Ş. (*) - 13,087,049

Financial investmentsGaranti Portföy Yönetimi A.Ş. (*) - 8,150,121

December 31, 2015 December 31, 2014

Trade payables to related parties:

Doğuş Gayrimenkul Yatırım ve İşletme A.Ş. 494,263 368,938Doğuş Holding A.Ş. 267,824 286,990Doğuş Bilgi işlem ve Teknoloji Hizmetleri A.Ş. 12,667 5,840Antur Turizm A.Ş. 10,812 79,240Doğuş Avenu Dış Ticaret A.Ş. 8,128 -Doğuş Center Maslak Yöneticiliği - -Antalya 2000 Plaza - 35,594Leaseplan Otomotiv Servis ve Tic. A.Ş. - 18,128Garanti Portföy Yönetimi A.Ş. - 16,043

Total 793,694 810,773 December 31, 2015 December 31, 2014

Other payables to related parties:

Doğuş Gayrimenkul Yatırım ve İşletme A.Ş. - 128,935

Total - 128,935

136

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

INDEPENDENTAUDITORʼS

REPORT

Related party transactions

As at 31 December 2015 and 2014, the Company's transactions with related parties’ summary is as follows:

As at 31 December 2015, 40% of the Company’s revenues were generated from the related parties of the Company (31 December 2014: 36%).

Employee benefits to key management:

Remuneration and fees paid to the key management personnel for 31 December 2015 is TL 3,329,132(31 December 2014: TL 2,960,724).

December 31, 2015 December 31, 2014

Rent income

Doğuş Oto Pazarlama Ticaret A.Ş. 12,876,223 8,568,371Doğuş Yayın Grubu A.Ş. 6,536,191 5,100,726A Yapım Radyo ve Televizyon Yapımcılığı A.Ş. 849,083 662,770Doğuş Spor Kompleksi Yatırım ve İşletme A.Ş. 514,778 1,741,314Türkiye Garanti Bankası A.Ş. 392,639 308,540Garanti Emeklilik ve Hayat A.Ş. 33,854 31,708Garanti Finansal Kiralama A.Ş. 13,490 10,623Doğuş Gayrimenkul Yatırım ve İşletme A.Ş. - 88,859

Total 21,216,258 16,512,911

Service and other expenses

Doğuş Holding A.Ş. 228,443 243,478Doğuş Center Maslak Yöneticiliği 226,989 213,205Doğuş Gayrimenkul Yatırım ve İşletme A.Ş. 226,968 2,128,935Doğuş Oto Pazarlama Ticaret A.Ş. 170,724 -Kral Pop Medya Hizmetleri A.Ş. 136,500 -Antur Turizm 122,628 72,697Kraltv Radyo Ve Televizyon Yayın A.Ş. 62,500 -Doğuş Bilgi İşlem ve Teknoloji Hizmetleri A.Ş. 34,635 17,237Leaseplan Otomotiv Servis ve Tic. A.Ş. 30,788 189,854Garanti Portfoy Yönetimi 13,842 106,635Garanti Yatırım Menkul Kıymetler A.Ş. 5,250 5,250Türkiye Garanti Bankası A.Ş. 1,802 -

Total 1,261,069 2,977,291

Service procurementDoğuş Gayrimenkul Yatırım ve İşletme A.Ş. 2,277,563 -

Total 2,277,563 -

Interest incomeTürkiye Garanti Bankası A.Ş. 581,288 298,590

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

137

29. NATURE AND LEVEL OF RISK ARISING FROM FINANCIAL INSTRUMENTS

This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk. The Company has exposure to the following risks from its operations:

• Credit risk• Liquidity risk• Market risk

29.1. Credit risk

The ownership of the financial assets brings the risk of not meeting the obligations of the agreement of the counter party. These risks are controlled by credit evaluations and restricting the maximum exposure to a counter party.

The Company leased out the majority of its investment property portfolio to the main shareholders, group companies and public institutions. Credit risk of other tenants is limited via letter of guarantee.

As at 31 December 2015, credit risk exposure of financial assets is as follows:

Related Other Related Other Deposits on FinancialDecember 31, 2015 party party party party banks investments

Exposure to maximum credit risk as ofreporting date (A+B+C+D+E) 7,694 3,103,930 - 1,126 37,248,406 -

A) Net book value of financial assets that are either not due or not impaired Secured portion by guarantees, etc. 7,694 3,103,930 - 1,126 37,248,406 -B) Financial assets with renegotiated - - - - - - Condition- Secured portion by guarantees, etc. C) Net book value of the expired - - - - - - but not impaired financial assets Secured portion by guarantees, etc. - - - - - -D) Net book value of impaired assets - - - - - - - Overdue (Gross book value) 6,195 1,121,082 - - - - - Impairment (-) 6,195 1,121,082 - - - - - Secured portion of the net value by guarantees, etc. - - - - - -E) Off balance sheet items with credit risks - - - - - -

Receivables Trade Other receivables receivables

138

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

INDEPENDENTAUDITORʼS

REPORT

Related Other Related Other Deposits on FinancialDecember 31, 2015 party party party party banks investments

Exposure to maximum credit risk as ofreporting date (A+B+C+D+E) 133,226 2,215,523 67,540 278,076 46,358,509 8,150,121

A) Net book value of financial assets that are either not due or not impaired Secured portion by guarantees, etc. 133,226 2,215,523 67,540 278,076 46,358,509 8,150,121

B) Financial assets with renegotiated - - - - - - Condition- Secured portion by guarantees, etc.

C) Net book value of the expired - - - - - - but not impaired financial assets Secured portion by guarantees, etc. - - - - - -

D) Net book value of impaired assets - - - - - - - Overdue (Gross book value) - 1,006,516 - - - - - Impairment (-) - 970,417 - - - - - Secured portion of the net value by guarantees, etc. - 36,099 - - - -

E) Off balance sheet items with credit risks - - - - - -

Receivables Trade Other receivables receivables

As at 31 December 2014, credit risk exposure of financial assets is as follows:

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

139

29.2. Liquidity risk

Liquidity risk is the inability of the Company to match the net funding requirements with sufficient liquidity.

The following table presents the Company’s financial liabilities including interest payments according to their remaining contractual maturities:

Contract terms

Contract terms

Total of More Carrying contractual Up to 3 3 months 1year to 5 than 5December 31, 2015 value cash flows months to 1 year years years

Short term financial liabilities (Non - derivative)Financial liabilities 20,555,723 22,805,305 11,503,813 11,301,492 - -Trade payables 5,205,072 5,205,072 5,205,072 - - -Other payables and liabilities 1,295,307 1,295,307 1,295,307 - - -Total 27,056,102 29,305,684 18,004,192 11,301,492 - -

Total of More Carrying contractual Up to 3 3 months 1year to 5 than 5December 31, 2015 value cash flows months to 1 year years years

Long term financial liabilities(Non - derivative)Financial liabilities 65,823,309 72,536,274 - - 72,536,274 -Other payables and liabilities 250,862 250,862 - - 250,862 -Total 66,074,171 72,787,136 - - 72,787,136 -

Total of More Carrying contractual Up to 3 3 months 1year to 5 than 5December 31, 2014 value cash flows months to 1 year years years

Short term financial liabilities (Non - derivative)Financial liabilities 18,644,553 21,069,003 10,656,590 10,412,413 - -Trade payables 1,776,907 1,776,907 1,776,907 - - -Other payables and liabilities 1,363,653 1,363,653 1,363,653 - - -Total 21,785,113 24,209,563 13,797,150 10,412,413 - - -

As at 31 December 2015 the Company does not have any derivative financial liabilities (31 December 2014: None).

29.3. Market Risk

The Company is exposed to various market risks, including the effects of changes in exchange rates, interest rates, equity prices and credit spreads.

The total risk management program of the Company focuses on the unpredictability of the financial markets and aims at reducing the potential negative effects on the Company’s financial performance.

Foreign currency risk

Exchange risk comprises the effects arising from exchange movements in the event foreign currency assets and liabilities.

Due to the fact that the Company signs rent agreements on USD and Euro, loans and borrowings has been made generally on Euro.

As at 31 December 2015 and 31 December 2014, the Company’s foreign currency assets and liabilities are as follows:

Total of More Carrying contractual Up to 3 3 months 1 year to 5 than 5December 31, 2014 value cash flows months to 1 year years years

Long termfinancial liabilities(Non - derivative)Financial liabilities 75,124,583 84,512,873 - - 75,955,747 8,557,126Other payables and liabilities 184,908 184,908 - - 184,908 -Total 75,309,491 84,697,781 - - 76,140,655 8,557,126

140

December 31, 2015 December 31, 2014 (TL amount) (TL amount)

Total assets in foreign currency 4,813,637 3,677,735Total liabilities in foreign currency (86,614,846) (93,990,260)Net position (81,801,209) (90,312,525)

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

INDEPENDENTAUDITORʼS

REPORT

Foreign currency sensitivity analysis table

Valuation of Devalution of foreign currency foreign currencyIn the case of US Dollar gaining %10 value against TL; 1- US Dollar net asset / liability 471,643 (471,643) 2- Hedged portion against US Dollar risk (-) - - 3- Net effect of US Dollar (1+2) 471,643 (471,643)

In the case of Euro gaining %10 value against TL; 1- Euro net asset / liability (8,651,764) 8,651,764 2- Hedged portion against Euro risk (-) - - 3- Net effect of Euro (1+2) (8,651,764) 8,651,764

Profit/(Loss)December 31, 2015

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

Foreign currency in details;

Currency Currency TL Currency Currency TL Type amount amount amount amount amountAssetsCash and cash USD 1,622,104 4,716,430 USD 1,575,624 3,653,715equivalents Euro 30,592 97,207 Euro 8,494 23,959 CZK - - CZK 600 61Total 4,813,637 3,677,735

LiabilitiesFinancial liabilities Euro (27,183,734) (86,379,032) Euro (33,243,215) (93,769,136)Trade payables Euro (74,211) (235,814) Euro (63,959) (180,408)Other payables USD - - USD (17,558) (40,716)

Total (86,614,846) (93,990,260)

Net position (81,801,209) (90,312,525)

December 31, 2015 December 31, 2014

141

Interest rate risk

The Company is exposed to interest rate risk due to interest bearing assets and liabilities.

The table below shows the financial instruments sensitive to interest rates as at 31 December 2015 and 31 December 2014:

December 31, 2015 December 31,2014

Financial instruments with fixed interest rates

Financial assets 37,115,997 54,470,251 Time deposits 37,115,997 46,320,130 Financial investments - 8,150,121

Weighted average interest rates which are applied to financial instruments as of 31 December 2015 and 31 December 2014 are as follows:

Valuation of Devalution of foreign currency foreign currency1- US Dollar net asset / liability 361,300 (361,300)2- Hedged portion against US Dollar risk (-) - -3- Net effect of US Dollar (1+2) 361,300 (361,300)

In the case of Euro gaining %10 value against TL;

1- Euro net asset / liability (9,392,558) 9,392,5582- Hedged portion against Euro risk (-) - -3- Net effect of Euro (1+2) (9,392,558) 9,392,558

Profit/(Loss)December 31, 2014

December 31, 2015 December 31, 2014

Financial instruments Time deposits - TL 7.50%-13.00% 7.50%-10.10%Time deposits - USD 2.00% 2.5%Financial liabilities - Euro Euribor + 4.75% Euribor + 4.75%Financial investments - TL - 7.96%-12.18%

142

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

INDEPENDENTAUDITORʼS

REPORT

Interest rate sensitivity:

The company's financial claims and debts are generally short term and there is no exposure to the risk of interest.

The company reduces interest risk of change by using variable-rate loans and loan term credit.

29.4. Capital management

The Company manages capital by using effective portfolio management to reduce the risk of investment. The main objectives of the Company are to continue operations with generating revenue, to secure the benefits of the shareholders, cost of capital and to continue the optimum level of net liabilities/equity and to achieve the efficient capital structure continuity.

30. FINANCIAL INSTRUMENTSThe fair value of an asset is the amount at which that asset could be bought or sold in a current transaction between willing parties.

The determination of fair value of company’s liabilities and obligations are required for both accounting policies and presentation of the notes.

Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

Following assumptions and methods are used to estimate fair value of financial instruments, if fair values are applicable.

Trade receivables

The Company assumes that the carrying values of the trade receivables are close to their fair value because of their short-term nature.

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

143

Financial assets

Financial assets comprise of government bonds and private sector bonds. These assets are measured at fair value in the financial statements.

Financial liabilities

Trade and other payables

The Company assumes that the carrying values of the trade payables are close to their fair value because of their short-term nature.

Fair Value of Financial Instruments

Financial value of financial instruments is calculated through reliable informations available in Turkey financial markets.

Fair values and carrying values of the EUR denominated loans with floating interest rates as of 31 December 2015 and 31 December 2014 are as follows:

Classification of Fair Value Measurement

TFRS 13 - Financial Instruments requires the classification of fair value measurements into a fair value hierarchy by reference to the observability and significance of the inputs used in measuring fair value of financial instruments measured at fair value to be disclosed. This classification basicly relies on whether the relevant inputs are observable or not. Observable inputs refer to the use of market data obtained from independent sources, whereas unobservable inputs refer to the use of predictions and assumptions about the market made by the Company.

This distinction brings about a fair value measurement classification generally as follows:

Level 1: Financial assets and financial liabilities with standard terms and conditions are valued with quoted market prices which are determined on active liquid markets.

Level 2: Financial assets and financial liabilities are valued by directly or indirectly observable market prices rather than the quoted market prices mentioned in first level of the regarding assets or liabilities.

Level 3: Financial assets and financial liabilities are valued by the inputs where there is no observable market data of the fair value of the regarding assets and liabilities.

Classification requires using observable market data if possible.

Carrying value Fair value

December 31, 2015 December 31, 2014 December 31, 2015 December 31,2014

86,379,032 93,769,136 86,527,155 94,588,726

144

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

INDEPENDENTAUDITORʼS

REPORT

December 31, 2015 Level 1 Level 2 Level 3 Total

Investment properties (*) - 14,285,000 757,912,424 772,197,424

Total - 14,285,000 757,912,424 772,197,424

December 31, 2014 Level 1 Level 2 Level 3 Total

Private sector bonds 8,091,172 - - 8,091,172

Government sector bonds 58,949 - - 58,949

Investment properties (*) - 13,868,000 683,469,714 697,337,714

Total 8,150,121 13,868,000 683,469,714 705,487,835

(*) The company’s investment properties under development amounting to TL 3,705,424 are carried by its cost value by assuming that the cost value of the investment properties under development is very close it fair value (31 December 2014: TL 3,845,714) (Note 10).

31. SUBSEQUENT EVENTSNone.

SUPPLEMENTARY INFORMATION: COMPLIENCE CONTROL OF THE PORTFOLIO RESTRICTIONS

Presented information, in accordance with Capital Markets Board’s Communiqué Serial: II, No: 14.1 “Financial Reporting in Capital Markets” Amendment No: 16 comprised condensed information and prepared in accordance with Capital Markets Board’s Communiqué Serial: III, No: 48.1“Real Estate Investment Company” published in the Official Gazette dated 28 May 2013 numbered 28660 Capital Markets Board’s Communiqué Serial: III, No: 48.1a“Amendment on Real Estate Investment Company” published in the Official Gazette dated 23 January 2014 numbered 28891.

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

145

In this context, classification of fair value of financial assets and liabilities measured at fair value are as follows:

Financial Statement Primary Accounts Items Related Regulations December 31, December 31, 2015 (TL) 2014 (TL)A Monetary and capital market instruments Serial III-48.1a, Art.24/(b) 37,249,535 54,519,957

B Real estates, projects based on real estates, rights based on real estates Serial III-48.1a, Art.24/(a) 772,197,424 697,337,714

C Subsidiaries Serial III-48.1a, Art.24/(b) - - Due from related parties ( non-trade) Serial III-48.1a, Art.23/(f) - 67,540 Other assets 19,906,407 4,694,804

D Total asset Serial III-48.1a, Art.3/(p) 829,353,366 756,620,015

E Financial liabilities Serial III-48.1a, Art.31 86,379,032 93,769,136

F Other financial liabilities Serial III-48.1a, Art.31 - -

G Financial leasing obligations Serial III-48.1a, Art.31 - -

H Due to related parties (non-trade) Serial III-48.1a, Art.23/(f) - 128,935

I Equity Serial III-48.1a, Art.31 733,919,115 656,340,414 Other liabilities 9,055,219 6,381,530

D Total liabilities Serial III-48.1, Art.3/(p) 829,353,366 756,620,015

146

As of 31 December 2015, the information in the table of “control of compliance with the portfolio limitations” is prepared in accordance with the provisions on the control of portfolio limitations of Communiqué Series:III No: 48.1a, and article 22 (e), article 24 (a,b,c,d) and article 28 and 31 “Principles Regarding Real Estate Investment Companies”, and the limitations are showed below:

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

INDEPENDENTAUDITORʼS

REPORT

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

Financial Information Related Regulations December 31, December 31, 2015 (TL) 2014 (TL)

A1 The portion of money and capital market instruments held for payables of properties for the following 3 years Serial III-48.1a, Art.24/(b) - -

A2 Time deposit/demand deposit/TL/Foreign currency Serial III-48.1a, Art.24/(b) 37,248,406 46,358,509

A3 Foreign capital market instruments Serial III-48.1a, Art.24/(d) - -

B1 Foreign properties, projects based on properties and rights based on properties Serial III-48.1a, Art.24/(d) - -

B2 Idle lands Serial III-48.1a, Art.24/(c) - -

C1 Foreign Subsidiaries Serial III-48.1a, Art.24/(d) - -

C2 Investments in affiliated operating companies Serial III-48.1a, Art.28/1/(a) - -

J Non-cash loans Serial III-48.1a, Art.31 268,125 197.972

K Mortgage amounts on lands that project to be developed and the ownership does not belong the partnership Serial III-48.1a, Art.22/(e) - -

L Total investments of monetary and capital market instruments at one company Serial III-48.1a, Art.22/(1) - -

147

Portfolio Restrictions Related Regulation Calculation Max/ December 31, 31December Min rate 2015 (TL) 2014 (TL)

1 Mortgage amounts on lands that project to be developed and the ownership does not belong the partnership Serial III-48.1a, Art.22/(e) K/D Max 10% - -

2 Real estates, projects based on real estates, rights based on real estates Serial III-48.1a, Art.24/(a),(b) (B+A1)/D Min 51% 93.11% 92.16%

3 Monetary and capital market instruments Serial III-48.1a, Art.24/(b) (A+C-A1)/D Max 49% 4.49% 7.21%

4 Foreign properties, projects based on properties rights based on properties affiliates capital, market instruments Serial III-48.1a, Art.24/(d) (A3+B1+C1)/D Max 49% - -

5 Idle lands Serial III-48.1a , Art.24/(c) B2/D Max 20% - -

6 Subsidiaries (operating companies) Serial III-48.1a , Art.28/1(a) C2/D Max 10% - -

7 Borrowing limit Serial III-48.1a , Art.31 (E+F+G+H+J)/İ Max 500% 11.81% 14.34%

8 TL and foreign currency time and demand deposits Serial III-48.1a , Art.24/(b) (A2-A1)/D Max 10% 4.49% 6.13%

9 Total investments of monetary and capital market instruments at one company Serial III-48.1a Art.22/(1) L/D Max 10% - -

148

DOĞUŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2015(Amounts expressed as Turkish Lira (“TLʼʼ) unless otherwise stated.)

INDEPENDENTAUDITORʼS

REPORT

THE STATEMENT OF RESPONSIBILITY AS PER ARTICLE 9 OF SECOND SECTION OF THE CAPITAL MARKETS BOARDʼS COMMUNIQUÉ NO. II-14.1

We hereby declare,a) We have examined the solo financial statements and footnotes prepared for the fiscal year from January 1, 2015 to December 31, 2015 as per the provisions of Capital Markets Board’s Communiqué No. II-14.1, that is deemed as proper to make public by the Board of Director’s resolution No. 2016/429 dated February 15, 2016,

b) That, to the best of our knowledge within the framework of our duties and responsibilities at our company, neither the financial statements nor the footnotes contain any assertion that is untrue insofar as matters of material importance are concerned, or any omission that would lead to the conclusion that such assertions were misleading as of the date on which they were made;

c) That, to the best of our knowledge within the framework of our duties and responsibilities at the company, these financial statements and footnotes prepared in accordance with current financial reporting standards honestly reflect the realities of our company’s assets, liabilities, financial standing, and profits and losses.

Yours faithfully,

Doğuş REIT

Mustafa Sabri DOĞRUSOY Mustafa Ahmet ÜNAYDINAudit Committee Member Audit Committee President

Nazlı YILMAZ Çağan ERKANDeputy General Manager CEO of Financial Affairs

149

THE BOARD RESOLUTION ON THE FINANCIAL TABLESDATE OF RESOLUTION: FEBRUARY 15, 2016RESOLUTION NO: 2016 / 429

150

STATE OFRESPONSIBILITY

THE STATEMENT OF RESPONSIBILITY AS PER ARTICLE 9 OF SECOND SECTION OF THE CAPITAL MARKETS BOARDʼS COMMUNIQUÉ ON FINANCIAL REPORTING NO. II-14.1

We hereby declare,a) We have examined the annual report prepared for the fiscal year from January 1, 2015 to December 31, 2015 as per the provisions of Capital Markets Board’s Communiqué No. II-14.1, that it is deemed as proper to make public by the Board of Director’s resolution No. 2016/431 dated February 26, 2016,

b) That, to the best of our knowledge within the framework of our duties and responsibilities at our company, the annual report contains any assertion that is untrue insofar as matters of material importance are concerned, or any omission that would lead to the conclusion that such assertions were misleading as of the date on which it was made;

c) That, to the best of our knowledge within the framework of our duties and responsibilities at the company, the annual report honestly reflects our company’s business and performance and honestly reflects our company’s financial standing along with any material risks and uncertainties that confront it.

Yours faithfully,Doğuş REIT

Mustafa Sabri DOĞRUSOY Mustafa Ahmet ÜNAYDINAudit Committee Member Audit Committee President

Nazlı YILMAZ Çağan ERKANDeputy General Manager CEO of Financial Affairs

THE STATEMENT OF RESPONSIBILITYDATE OF RESOLUTION: FEBRUARY 26, 2016 RESOLUTION NO: 2016/431

Doğuş Real Estate Investment TrustDoğuş Center Maslak, Maslak Mah. Ahi Evran Cad. No: 4/23 34398 Maslak-Sarıyer /İSTANBUL

Tel: +90 212 335 28 50 Fax: +90 212 335 28 99www.dogusgyo.com.tr