Contents

2 Corporate Profile
4 Financial Highlights
6 Milestones
8 Board of Directors
9 Executive Management
10 Chairman’s Message
12 Activities in 2011
13 Investments
14 Sales and Distribution Network
16 Human Resources Management
18 Quality Assurance and Environmental Investments
22 Social Responsibility
28 Corporate Governance Principles Compliance Report
35 31 December 2011 Independent Auditors’ Report
Banvit continues to pursue
sustainable growth and raise
the standard of quality...
2011 was a successful year for Banvit. We continued our
investments in our processing facilities in Bandırma and
Izmir as well as in feed manufacturing at a fast pace.
In red meat production, we increased the stock in
our feedlots to 26,283 head of cattle by the end of
the year.
While continuing to conduct our R&D activities,
we offered our delicatessen and ready-to-eat
products to international markets under the
Banquet brand.
At Banvit, as a company that operates fully integrated
production systems, we always strive to provide the
best for our customers and give great importance to
addressing public health and environmental issues. At
the same time we remain well aware of and always work
to fulfill our social responsibilities.
We are committed to moving forward together
with our employees and business partners,
adhering to our corporate philosophy of “joining
forces for a better and more prosperous future”
while continuing to pursue sound and sustainable
growth.
2 Banvİt ANNUAL REPORT 2011

Corporate Profile
Banvit is a well-established, innovative and leading food producer, that has
adopted as a corporate principle “moving forward together” with employees,
business partners, customers and consumers.

BANVIT IS A GOOD
CORPORATE CITIZEN OPERATING
FULLY INTEGRATED PRODUCTION
SYSTEMS AND FULFILLING ITS
SOCIAL RESPONSIBILITIES.

Celebrating its 43rd anniversary An innovative pioneer in the

in 2011, Banvit continues to industry, Banvit has proven itself
advance in the industry with its as a leader among food companies
contemporary, dynamic, innovative in Turkey. Together with its
and entrepreneurial organizational employees, business partners,
structure. wholesale and retail customers,
Banvit is looking forward to a
Operating fully integrated bright future.
facilities while, fulfilling its social
responsibilities and addressing
public health and environmental
issues, Banvit’s corporate
philosophy of “joining forces for
a better and more prosperous
future” has been put into action.
 3

Vision
To become one of Europe’s leading
food companies.

Mission
To turn customer expectations into reality through
quality, service and innovation, and to provide customers
the “best value”, while at the same time developing the
best working environment in the sector and maintaining
a high level of environmental awareness at all times.
Objectives
To become a leading food producer both in Turkey and Europe and to sustain
our investments in pursuit of that goal.

Core Values
Integrity, modesty and compassion, self-sufficiency, pursuit of excellence
and caring for our employees and the environment.

Quality Policy
Banvit, with a customer-oriented approach, aims to exceed its own high
standards. In accordance with its vision and objectives, Banvit is committed
to practicing good management, meeting the expectations of customers
and employees, monitoring its systems in order to ensure continuous
improvement, providing all necessary resources, complying with all legal
requirements and following the highest food safety standards in all its
production.

Environmental Policy
Banvit is an environmentally friendly company that strives to define the
environmental aspect and impacts of all its activities; protect and use
natural resources at an optimum level; classify and process waste while
minimizing the amount of waste in order to comply with legal regulations and
all other requirements; contribute to continuous improvement by defining
its environmental purposes and targets; organize training programs for all
its employees to raise the awareness of social responsibility; and control the
environmental impact of its products after they have been used.

Food Safety Policy

In white and red meat production and meat products, Banvit identifies and
controls all factors that may adversely affect human health. In all phases of
production, from the breeder farm to customer delivery, the Company meets
all food safety requirements and provides customer with products while fully
complying with all laws and regulations.
4 Banvİt ANNUAL REPORT 2011

Financial Highlights
Though due to market prices the profits were affected in 2011,
Banvit continued its growth momentum by increasing net sales
10.2% and expanding its export volume 36.7%.

2011 2010 2009

Liquidity Ratios
Current Ratio 1.23 1.71 1.26
Acid-Test Ratio 0.87 1.27 0.97
Cash Ratio 0.05 0.03 0.02

Operating Ratios
Asset Turnover 1.60 1.72 1.68
Receivables Turnover 0.12 0.13 0.14
Average Collection Time (Days) 46 47 57
Inventory Turnover 8.50 9.14 8.97
Working Capital Turnover 2.45 2.59 2.54
Net Working Capital Turnover 13.19 6.23 12.19

Financial Structure Ratios

Financial Liabilities/Equity Capital (%) 260.58 115.96 181.99
Shareholders’ Equity/Total Liabilities 0.28 0.59 0.37
Total Current Liabilities/Total Liabilities 0.53 0.39 0.52
Total Non-current Liabilities/Total Liabilities 0.25 0.24 0.20
Tangible Fixed Assets/Shareholders’ Equity 1.60 0.91 1.24
Tangible Fixed Assets/Total Non-current Liabilities 1.38 1.38 1.66

Profitability Ratios
Net Current Profit (Loss)/Total Assets (0.09) 0.10 0.09
Profit Before Tax (Loss)/Shareholders’ Equity (0.47) 0.35 0.45
Operating Profit (Loss) Margin 0.003 0.09 0.09
Gross Profit (Loss) Margin 0.12 0.21 0.22
Net Profit (Loss)/Net Sales (0.05) 0.06 0.06
Net Profit (Loss) Growth (%) (201.36) 33.49 203.71
 5

10%
Committed to increasing added value
every year, Banvit with its performance
Net Sales (TL)
11 1,116,294,969
10 1,002,379,302
in 2011, continued to be the leader in the
industry and increased net sales 10.2%. 09 791,600,038

37%
Banvit increased its export volume
36.7% in 2011.
Export Volume (TL)
11
10
09
86,472,596
54,739,160
32,911,020

5%
Banvit, as one of the leading
companies in the sector, grew its
Workforce
11
10
3,254
3,085
workforce 5.2% compared to the
preceding year. 09 2,654
6 Banvİt ANNUAL REPORT 2011
Milestones
1980’s
1968
Banvit began its operations as a feed
manufacturer.
1984
Starting broiler chicken production,
Banvit became the first company
in Turkey to introduce cleaned and
packaged fresh chicken to the
domestic market.
1988
A modern hatchery was completed
and became operational.
1990’s
1992
A modern processing factory
with a processing capacity of
6,000 chickens per hour became
operational.
Banvit’s IPO; Banvit became a publicly
traded company on the Istanbul
Stock Exchange.
1993
With the addition of another
production line, the capacity of
the new poultry-processing plant
increased to 12,000 chickens per
hour.
1997
Banvit began voluntarily implementing
HACCP, an essential quality program
for food safety, with a multinational
audit company.
1999
Banvit Aliment Romania S.R.L. was
established.
2000’s
2000
The Tadpi facility, located in Armutlu-
Izmir, was acquired. With additional
investments, this plant was upgraded
for the production of other various
poultry products.
ISO 9001 Quality Certification was
received.
2001
The further processing plant became
operational.
2003
Banvit received a “Poultry Diseases
Diagnostics Laboratory” license
following inspection and approval by
the Ministry of Agriculture’s Protection
and Control General Directorate.
Banvit became the first company that
received ISO 14001 Environmental
Management Systems Certification for
chicken production.

2004
The new feed mill with a production
capacity of 100 tons per hour became
operational.
2006
In addition to the calf farm operation
in Bandırma, construction of a
48,000-cattle feedlot and supporting
feed mill began.
2007
A hatchery with a capacity of 345,000
eggs per week was commissioned
in Romania, together with the
construction of new breeder farms.
The Armutlu-Izmir turkey processing
plant was modified for chicken
processing, increasing the total chicken
production capacity to 22,000 per hour.
Turkey production commenced in the
processing facilities with a capacity of
900 turkeys per hour.
2009
By increasing the capacity of processing
plants in Bandırma and Izmir, the total
broiler processing capacity of Banvit was
raised to 29,000 birds per hour.
The feed mill in Romania began
production.
A cattle slaughterhouse in Bandırma
was acquired and “Banvit Kırmızı” brand
products were launched to consumers.
2010
The Eskişehir cattle feed factory began
production.
7
2011
Bandırma and Izmir plants’ total
poultry, turkey, redmeat and further
processed meat production capacity
has reached 230,871 tons/year.
Bandırma, Izmir and Eskişehir plants’
total broiler chicken feed and cattle
feed production capacities have
reached 122 tons/hour and 133,000
tons/year, respectively.
Bandırma and Izmir facilities
with total domestic waste water
refinement and solid waste
treatment capacities of 8,500 m3/day
and 450 tons/day, respectively.
8 Banvİt ANNUAL REPORT 2011

Board of Directors

1 2 3

1- Ömer Görener
Chairman of the Board
2- Alan Perese
Vice-Chairman of the Board
3- Mohamed Badawy Al-Husseiny
Board Member
4- Erol Turgut Görener
Board Member
5- Esra Görener Christoffel
Board Member

4 5
 9

Executive Management

1 2 3

4 5 6

1- Ömer Görener
Chairman of the Board
2- Erol Turgut Görener
Board Member and General Manager
3- Zafer Bilgi
Live Operations Director
4- Mevlüt Solmaz
Logistics Director
5- Nerdin Alp
Sales and Marketing Director
6- Özkan Kılıç
Internal Audit Director
10 Banvİt ANNUAL REPORT 2011
Chairman’s Message
In the coming years, we aim to expand geographically
our export activities and increase our exports tonnage as
well as its share in total turnover.
Dear Banvit Members,
In 2011, we celebrated our 43rd
anniversary. It was a year that
will be remembered as a difficult
year for the agricultural and
stockbreeding sectors as well
as for Banvit. Difficulty existed
in obtaining raw materials
in our country and generally
throughout the world, exchange
rate fluctuations, increasing
production costs and unfair
competition induced by red meat
import policies on domestic
stockbreeders resulted in negative
numbers on our balance sheet for
the year. Liberating meat imports
while ignoring domestic red meat
production costs forced many
domestic producers to shut down
production while the merchants
from the import lobby seized their
opportunities. Fortunately, the
issue was quickly remedied, albeit
partially, but red meat costs still
remain at a level favorable for
imports.
But still we preserved our
optimistic attitude during this
period as we did in past sectoral
crises. We maintained our growth
and investments in line with our
revised objectives in an attempt
to minimize the effects during this
transition period. Production of
healthy food for our consumers
never waivered.
Our consolidated turnover
increased by 10% to TL 1,116 million
while total exports increased
by 46% to USD 51 million as
result of continuous efforts.
In the coming years, we aim to
expand geographically our export
activities and increase our exports
tonnage as well as its share in
total turnover. We still believe
that we can attain the greatest
increase in export volume when we
are able to export poultry products
to EU countries.
At the present time, great
importance is attached to food
production, especially animal
protein production. It has
become the main topic on the
public agenda. We believe that
the food issue will gain more
strategic importance in the near
future and become the number
one item on global agendas due
to continuously growing world
population and consumption
coupled with limited production
areas and elevating production
costs.
Today, the Turkish food sector has
attained European standards in
terms of production technology,
product quality and processes,
while being audit by both internal
and independent auditors and
public authorities. Important
steps have been taken by the
Ministry of Agriculture, Food and
Animal Husbandry, to achieve and
create its own brands that even
surpass European standards in
numerous fields. It is obvious
that the food sector will ride high
in coming years as a result of
ongoing efforts. However, despite
favorable developments both
for our sector and our country,
groundless statements made
by non-specialists, deliberately
or innocently, are not useful,
scientific facts based on analytical
examinations. The information
pollution and chaotic atmosphere
created by these individuals
are inflicting heavy damage on
our sector. Consequently, the
consumption of animal-originated
protein such as meat, milk, eggs
and fish in our country, are at very
low levels compared to those in
developed countries. Therefore
consumption of vital protein
resources by consumers, parents
and their children are lowered.

Consumers rights to investigate
the foodstuffs they purchase
and the brands they prefer is a
universal right, while the right
to seek out the origin of all
products purchased, not only food
products, is an everlasting right
and a requirement of democracy.
Setting aside legal sanctions,
accountability, auditability,
transparency, production
ethics, quality assurance and
environmental management
systems are the cornerstones of
our customer-oriented approach
and a requirement of our
sustainability principle. We are
always ready to satisfy any inquiry
in this respect.
In 2011, Banvit underwent an
important historical change. Aabar
Investments, an investment fund
from the Emirate of Abu Dhabi
acquired 16.32% of our shares
from our former main shareholder
Mr. Valid Faruk Ebubekir. We
consider this transaction
11
Ömer Görener
Chairman of the Board
significant for two reasons. First
of all, proper steps taken during
10%
our 43-year history have been
confirmed by this transaction.
Secondly, it indicates that the
national poultry sector and our
Company have a promising future
Our consolidated turnover
and is closely watched by investors increased by 10% to
abroad. TL 1,116 million.
In early March, we were saddened
by the untimely passing of Mr. Valid
Faruk Ebubekir, who had served
as a member of the Board of
Directors and Vice President of our
Company from 1984 until 2011. He
shall always by remembered with
respect. Our condolences go to his
immediate family and friends.
We wish to extend our gratitude
to our esteemed shareholders,
employees and business partners
for the substantial contributions
that have made, helping the
Company make 2011 a successful
year.
With our sincerest regards,
Ömer Görener
Chairman
12 Banvİt ANNUAL REPORT 2011

ACTIVITIES IN 2011
Banvit’s R&D activities are strategically focused, as the Company develops new as
well as refines and modifies existing products to attain the best possible results.

Production In line with customer demands,

In 2011, Banvit produced a total of
230,871 tons of poultry, turkey, red
meat, carcass meat and further
processed meat.
The Bandırma, Izmir and Eskişehir
feed mills produced 671,522 tons
of feed.
Research and Development
Banvit engages in R&D activities
in order to better satisfy all of the
expectations of consumers and its
loyal customers.
Banvit developed numerous new
products of which 17 were offered
for sale. Additionally, the Company
modified and refined other Banvit
products to attain the best results
for its customers.
Banvit carried out work on
products intended for export, with
meatball and coated products
being developed and introduced to
the international market under the
“Banquet” brand.

The Company’s R&D activities

in 2011 were based largely on
requests made by firms and major
retailers for which the Company
acts as a supplier.

INVESTMENTS
With new silos added to the feed factory in Romania in 2011, the facility’s feedstock
storage capacity expanded to 22,000 tons.
Turkey
In 2011, Banvit continued
its investments in red meat
production. With the new shelter
for calves added to the Badiş
breeding farm, its capacity
increased to 5,831 head of cattle.
The Company’s total number of
livestock increased to 26,283 at
the end of 2011, up from 20,800 a
year earlier, through the purchase
of additional livestock.
In 2011, Banvit continued its
investments in feed production. To
this end, the Company added 10
silos to the Doğruca Cattle Feed
factory in Bandırma and 7 silos to
the Eskişehir Cattle Feed factory,
thereby increasing the capacity of
both facilities.
The Company added a rendering
unit to the existing treatment
plants at the chicken
slaughterhouse in Armutlu-Izmir,
and increased the capacity of
the cold storage room through a
new compartment added to the
existing facility.
13
Romania
As part of its international
investment program, Banvit
continued to upgrade its facilities
in Romania in 2011. The Company
added new silos to its feed factory
and increased the feedstock
storage capacity to 22,000 tons.
In addition, the corn crib unit with
capacity of 70 tons/hour became
operational during the year.
In addition to the two existing
stud farms in Cotorga, Romania,
a third farm with a total area of
5,000 m2 was completed and went
into service.
14 Banvİt ANNUAL REPORT 2011

Sales and Distribution Network

In order to provide customers with the wide variety of healthy and safe products it
produces under uniform conditions, Banvit operates a fleet of 630 refrigerated trucks
and an efficient and widespread distribution network throughout the country.

Sales Areas

Branches
7
Adana, Ankara, Antalya, Ataşehir, Ayazağa,
Bodrum, Bursa, Çiğli, Esenboğa, Fethiye,
Hadımköy, Izmir, Izmit, Kadıköy, Kartal,
Kayseri, Mahmutbey, Mersin, Muğla,
Samsun, Sarnıç, Söke, Topkapı, Trakya.
2 2
Dealers
2
2
Adıyaman, Afyon, Ağrı, Alanya, Amasya, 2
Arnavutköy, Ayvacık, Balıkesir, Bandırma,
Batman, Beypazarı, Cizre, Çanakkale,
Çorum, Denizli, Diyarbakır, Elazığ, Elbistan,
Erzurum, Eskişehir, Gaziantep, Hatay,
Iğdır, Isparta, Inegöl, Kahramanmaraş,
Kars, Kastamonu, Kaş, Keşan, Konya,
3
Körfez, Malatya, Nevşehir, Ordu,
Orhangazi, Polatlı, Rize, Siirt, Sivas,
Şanlıurfa, Tatvan, Tavşanlı, Trabzon, Van,
Zonguldak.
* In provinces with more than one distribution outlet, the count is 3
given in numbers.

2
 15

2
16 Banvİt ANNUAL REPORT 2011
Human Resources Management
The Banvit training process starts with an on-the-job orientation,
followed by various training programs to foster professional and
personal development.
As of year-end 2011, Banvit has
3,254 employees. Of whom, 81% is
production staff, 37% are women
and 63% are men.
All employees who complete
five years of service within the
Company are offered private
health insurance. In 2011, 1,325
employees in total received
private health insurance coverage.
Similarly, life insurance policies
are provided to all employees with
three years of service; currently,
a total of 1,786 employees are
covered.
There are two “Performance
Management Systems” designed
and implemented separately for
the administrative and production
staff. Senior managers are also
assessed under this system.
Training Programs
The training process at Banvit
starts with all new recruits
receiving on-the-job orientation
in order to adapt to the work
environment. Additionally, technical
training, professional development,
communications training, quality
management training and training
in emergency procedures are
planned and implemented annually.
In 2011, Banvit conducted 25,381
hours of training via 78 training
programs for its administrative
staff; production staff received
12,795 hours of training via 30
training programs.
Social Life
Banvit provides its employees
with many social facilities.
Facilities made available for
Banvit employees include a
day-care center for 100 children
between the ages of 0-2 and 3-6,
basketball courts, soccer fields, a
gymnasium and a library featuring
contemporary books, classics,
periodicals and encyclopedias.
Other social benefits offered to
employees include health and
life insurance plans, meals and
transportation services.
 17

25,381
total training
hours conducted

Distribution of Average Age of

Women Men
Employees Personnel
2011 1,213 2,041 32
2010 1,122 1,963 32
2009 1,014 1,640 32

Number of Employees (Person)

2011 3,254
2010 3,085
2009 2,654

The Company also organizes social
activities for personnel including
culture and nature outings for
staff members and their families.
In addition, Banvit aims to
strengthen the dedication and
boost the motivation of employees
by distributing gifts and presents
related to social, cultural and
personal development.
New laws and developments
pertaining to occupational health
and safety are closely observed,
and employees are given relevant
training in these issues.
Employees are provided with Banvit’s Occupational Health and
personal protective wear and Safety Board is composed of
equipment for use against work safety experts, a workplace
physical, chemical and biological doctor, managers and worker
hazards that may arise within their representatives. In this way,
respective fields of work. Suitable representatives at all levels help
warning signs are prominently identify possible hazards and
displayed. develop suitable intervention
methods.
Emergency drills, which enable
employees to be well prepared
for emergency situations, are
conducted regularly. Employees
are also trained in how to respond
and act accordingly in these
situations.
18 Banvİt ANNUAL REPORT 2011
Quality Assurance and Environmental Investments
Providing consumers with foods produced under safe, wholesome and hygienic conditions,
Banvit engages in environmentally friendly activities at its production facilities and all
locations where it has operations.
Quality Certifications management system that was
Banvit has been making quality and
environment related investments at
an ever-increasing pace. In addition
to the HACCP program, ISO 22000
and ISO 9001 systems, the Company
has also received ISO 14001:2004
Environmental Management Systems
in poultry and turkey production, red
meat slaughterhouse.
Banvit’s quality assurance and food
safety system is based on the “from
the farm to the market” principle.
Banvit’s objective is to produce and
sell food products under safe, healthy
and hygienic conditions. To this end,
all critical points in the process are
identified, controlled and monitored.
Since 2007, Banvit has implemented
the ISO 22000:2005 Food Safety
Management System, which also
includes the HACCP system and the
recently issued standards that aim to
ensure a safe food supply throughout
the world. In 2009, Banvit added its
red meat processing factory to the
scope of its ISO 22000 certification.
Additionally, food safety controls
of the Company’s suppliers have
been incorporated into the quality
assurance processes.
Starting in 2011, auditing of our
suppliers on behalf of the Company is
conducted by an independent audit
firm.
In 2011, Banvit once again received
British Retail Consortium & Global
Standard for Food Safety (BRC & GFSI)
certification.
ISO 22000:2005 Food Safety
Management System Certification
is an HACCP-based food safety
designed to maintain common
food safety requirements to
be implemented by farmers,
transportation and storage operators,
retailers, restaurants and their
suppliers.
ISO 14001 Environmental
Management System
Banvit is an environmentally friendly
company that strives to define the
environmental aspect and impacts
of all of its activities; protect and
use natural resources at an optimum
level; classify and process waste while
minimizing the amount of waste to
comply with legal regulations and all
other requirements; contribute to
continuous improvement by defining
its environmental purposes and
targets; organize training programs
for all its employees to improve the
awareness of social responsibility;
and control the environmental impact
of its products after they have been
used.
Supplying consumers with foods
produced under conditions that
are safe, wholesome, and hygienic,
Banvit is also committed to engaging
in environment-friendly activities
wherever its operations are carried
out and its production facilities are
located.
Banvit is the first company in the
sector to have been successfully
awarded ISO 14001:2004
Environmental Management
System certification for having
integrated both its chicken and
turkey production activities with its
environmental investments.
The Company’s red meat
slaughterhouse received ISO
14001:2004 Environmental System
Certification on 16 August 2010.
Recycling Liquid Wastes
Banvit has been involved in
environment management system
activities since 2003. Through these
activities, the Company ensures that
the solid and liquid wastes generated
both by its production activities
and by its administrative units are
recycled more effectively.
To this end, the Company’s domestic
and industrial liquid effluents are
treated in separate biological waste
treatment plants.
Waste water treatment plants at
Bandırma and Izmir have a total
daily treatment capacity of 8,510
tons. (Of which, Bandırma’s Chicken
Slaughterhouse has a capacity of
5,160 tons and its the Red Meat
Slaughterhouse capacity is 250 tons;
Izmir’s Chicken Slaughterhouse has a
capacity of 2,500 tons and its Turkey
Slaughterhouse’s capacity is 600
tons.)
 19

Treated water is used to water the recovered. These recycled materials

Company’s landscaped areas and
to clean floors and ground surfaces
in the live reception area and the
rendering plant. The Bandırma and
Izmir complexes are also equipped
with domestic waste water treatment
plants whose combined capacity is
165 tons a day.
are sold.
Before any gases created during the
recycling process at rendering plants
are discharged into the atmosphere,
they are subjected to a double
chemical treatment to eliminate
odor-creating substances.

Through environment management Solid waste such as foam, trays,

system practices, environmental
objectives and targets are developed
on an individual production unit basis
to ensure that resources are used
efficiently. To this end, Banvit realizes
savings in the use of electricity,
water, natural gas, expendables, and
chemicals; additionally, the Company
expends efforts to prevent their
unnecessary use and their potentially
adverse impact on the environment.
While the average amount of water
consumed in the production of one
kilogram of chicken was 8.5 liters in
2008, that figure was reduced to 7.3
liters as part of a three-year initiative.
The total amount of waste water was
treated and recycled.
Recycling Solid Waste
Organic waste resulting from
production is processed in rendering
plants and is recycled. From the 267
tons/day of organic solid waste that
is generated by production activities
and processed in rendering plants,
87 tons of recyclable materials are
paper, and all forms of plastic
(including broken plastic crates) is
collected and turned over to licensed
recycling firms for processing.
Waste materials generated by
administrative units and classified
as potentially hazardous (e.g. toner,
storage cells, batteries, cartridges,
grease, filters, rags, absorbents,
laboratory test kits, and the like)
are stored in designated disposal
areas as prescribed by regulations.
Depending on their retention
periods and quantities, these waste
materials are sent, as appropriate, to
licensed recycling or disposal firms
aboard specially licensed vehicles.
Through such practices, Banvit
recycles or disposes of about 9 tons
of hazardous waste a year in an
environmentally friendly manner.
Recycling of Packaging Waste
Banvit Works with ÇEVKO
Under a regulatory-compliant
agreement signed in 2006 between
Banvit and the Environmental
Protection and Packaging Waste
Recovery and Recycling Trust (ÇEVKO),
the packaging waste (plastic and
cardboard packaging) from products
sold in the market by Banvit is
regularly collected by ÇEVKO and is
recycled or reused as appropriate.
As a result of this ongoing Banvit -
ÇEVKO collaboration, 5,144 tons of
waste packaging was collected and
recycled in 2011.
ISO 14001 Training and Improving
Environmental Awareness
One of the responsibilities of the
Banvit Quality Assurance Department
is to conduct training activities
related to the Company’s ISO 14001
Environmental Management System.
20 Banvİt ANNUAL REPORT 2011
Quality Assurance and Environmental Investments
Following the “from the farm to the market” concept in its quality assurance
and food safety practices, Banvit leads the sector in investments that
address environmental issues.
Every year, the Company’s
administrative and production
staff undergo the Department’s
environmental information and
awareness training.
This training is comprehensive and
covers a wide range of topics which
include the different types of solid,
liquid, gaseous, and hazardous waste;
waste management and separating
waste materials at their source;
waste disposal areas; the use of
natural resources; the Company’s
environmental objectives and targets,
environmental policies, and legal
accountabilities; and how to deal with
emergencies. Every training program
is completed with an examination
administered to employees to
measure the effectiveness of the
training.
Banvit conducted 93 training
programs related to the ISO 14001
Environmental Management System
in 2011.
Environmental Impact
Assessment
Banvit keeps a continuous and close
watch on the potential environmental
impact, not only of its existing
production activities in the localities
where they are taking place but
also of the new investments that
it is planning. The results of this
monitoring are evaluated, and based
on the Company’s findings, measures
are taken to prevent and/or correct
problems.
Environmental impact assessments
(EIA) are carried out to determine the
potential effects (whether negative
or positive) that a project in planning
may have on the environment. Such
assessments also involve identifying
measures that are to be taken to
prevent or at least minimize any
adverse effects; identifying and
evaluating site and technology
selection options; and monitoring
and controlling environmental impact
during the project implementation
stage.
With regard to ISO 14001
Environmental Management System
activities, Banvit conducts an annual
survey during which other concerns in
areas where its production complexes
are located are queried for their views
about the Company’s environmental
performance. The results of these
surveys are also taken into
account when determining Banvit’s
environmental impact.
As a result of such efforts by the
Company and of its fulfillment of
regulatory requirements, Banvit’s
compliance with EIA regulations
pertaining to “slaughterhouse and
advanced processing and rendering
operations” has been certified by the
Ministry of Environment and Forestry
(ruling # 835 dated 5 June 2003).
Ministry-approved Laboratory
The Banvit Live Operations Diagnosis
and Analysis Laboratory received
the Poultry Diseases Diagnostics
Laboratory license following the
inspection and approval by the
Ministry of Agriculture and Rural
Affairs’ General Directorate of
Protection and Control.
In order to minimize any risks that
may be caused by microbiological
factors during poultry meat
production processes, Banvit
implements all necessary control
measures. To this end, the Company’s
salmonella reduction program has
been continued; additionally, routine

controls and checks are carried
out in breeder, incubation, broiler,
feed and rendering units by the Live
Operations Diagnosis and Analysis
Laboratory. In addition, by taking
samples, salmonella controls of the
broiler flocks are finalized before their
processing.
Bio-security Measures
In 2011, Banvit continued to
implement bio-security measures
at the highest level for the hatchery
as well as for breeders, broilers and
turkey farms. Vehicle and human
disinfection efforts continued without
interruption at all facilities and farms,
and all unauthorized visits were
banned.
All farm owners and workers
employed at these farms attend
collective training sessions, twice a
year, during spring and autumn, to
ensure that the food safety measures
are applied in a more effective way.
In addition, the quick test procedure,
applied by the veterinary surgeon
before the transfer of chickens to the
slaughterhouse, continued in 2011 as
an additional link in the food safety
chain.
Traceability System
The principle of traceability, which
Banvit has been implementing since
2000, became a legal requirement in
Turkey in 2004 with new legislation,
“The Law on the Production,
Consumption and Inspection of Food”.
As a company that holds preliminary
export authorization for the EU, Banvit
is able to trace back all its products,
fresh or frozen. This retroactive
traceability is enabled by detailed
electronic records kept at every stage
of the production process.
21
All Banvit consumers may access
these records at www.banvit.com, and
monitor production details pertaining
to Banvit chicken, turkey, red meat
and ready-to-eat products.
Thanks to the traceability system, it is
also possible to trace the production
dates from all Banvit feed mills in
relation to the feed consumed by
chickens, turkeys and cattle during all
production periods, including related
laboratory Quality Assurance records.
Cold Chain Monitoring System
Originally introduced in 2006, Banvit’s
cold chain has been methodically
extended to allow monitoring of
system temperatures throughout all
of its delivery vehicles and storage
facilities.
It is critically important that
extremely heat-sensitive foods such
as poultry and red meat be supplied
safely and securely to consumers
without any interruption in the cold
chain.
Thanks to its cold chain monitoring
system, Banvit is able to achieve
100% control over the temperature system’s scope was substantially
of its products as they move through expanded to include the gathering
the distribution process. not just of temperature data but
also of location, humidity, and other
Because of this system, Banvit can information aboard vehicles at nearly
intervene immediately any time there 1,300 data collection points. With
is an adverse change in temperature these new additions to the monitoring
aboard any distribution vehicle. system, it is now possible for Banvit
to also track the movements of
In this way, it is possible for the feed, livestock, chicks, and
products to be transported and to eggs that are the critical inputs in
reach consumers in fresh, safe, and the integrated production of the
wholesome condition without the goods that the Company supplies to
slightest lapse in the cold chain. consumers. The Banvit Cold Chain and
Monitoring System is the first and
As a result of activities carried out largest fully integrated system of its
in 2010, the cold chain monitoring kind in Turkey.
22 Banvİt ANNUAL REPORT 2011
Social Responsibility
With its social responsibility initiatives in education, sports and health, Banvit not only
offers healthy products to consumers but also strives to add value to their lives.
Banvit’s Understanding of Social
Responsibility
Banvit not only produces healthy and
safe food for consumers but also
develops and undertakes various
projects, particularly in matters of
social concern involving education,
sports and health.
Smart and Healthy Meals
for Children
The “Akıllı Çocuk Sofrası” (Smart
and Healthy Meals for Children)
Project, launched by Banvit in 2008,
is a corporate social responsibility
project that aims to raise awareness
among primary school students
about the importance of adequate
and balanced nutrition.
Project Development
Inadequate and unbalanced
nutrition, an ever-increasing problem
among children, is the cause of many
health disorders, mainly those of a
developmental and obesity related
nature. Foods that are high-calorie
yet of low nutritious value are very
often and automatically consumed
by children at school, out of school
and at home. The unilateral nutrition
mode and excessive consumption of
so-called junk foods together with a
sedentary lifestyle adversely affect
the physical and mental development
of children. According to a report
issued by Turkey’s State Planning
Organization, the two main reasons
for unhealthy nutrition are a lack of
basic knowledge and education and
low socio-economic conditions.
Banvit’s Smart and Healthy Meals
for Children Project aims to remedy
the basic knowledge deficit and
lack of education about nutrition.
Producing healthy products for the
development of new generations,
Banvit, as a socially responsible
company, strives to raise awareness
of the importance of adequate and
balanced nutrition, primarily among
children.
First Phase Activities
The first phase of the project, which
was implemented in collaboration
with the Ministry of National
Education and with the consultation
of Hacettepe University’s Nutrition
and Dietetic Department, reached
some 862,080 students at 1,082
elementary schools in Adana, Ankara,
Antalya, Bursa, Istanbul and Izmir as
well as 23,207 teachers during the
2008-2009 academic year.
The project conducted training
sessions at select schools in the
referenced cities, facilitated by
40 professionally qualified Banvit
instructors and 550 teachers of the
Ministry of National Education. The
teachers received project trainer
certification upon completing the
training seminar.
The project adopted the “Nutrition
Pyramid” concept for the training
module. Instructors explained key
points to consider for good daily
nutrition including diet, food groups,
the importance of regular meals and
the formula to balance healthy foods
and fast foods. The training sessions
also informed students about the
importance of physical activity
and engaging in physical exercise
to live a healthy life; basic rules of
hygiene, germs, and contamination
and prophylactic methods were also
covered during the training sessions.
During the first phase activities,
Banvit worked in collaboration
with the Terakki Foundation
Schools to support the content of
the training program which was
organized with the consultation of
Hacettepe University, Nutrition and
Dietetic Department. As a result
of this collaboration, after a 16-
week working period, the cartoon
characters “Cem and Cemile” were
created by 44 elementary school
students of a Foundation school.
 23

The animation workshop of the

school created three different
animated videos: “Cem and Cemile
at Breakfast”, “Cem and Cemile are
Watching TV” and “Cem and Cemile
Meet Superben”. Cem and Cemile’s
adventures contained key messages
that supported the project contents.

At the approval of the educational

authorities, the animated videos
were presented at the “5th
International Istanbul Festival
of Children’s Films” and were well
received by the audiences. The
videos were also used and presented
effectively during training sessions
during the course of the project.

The project developed a website

for the two cartoon characters at
www.cemilecemile.com. The website
aims to provide outside-the-school
training, facilitate interactive
communication on the key issues,
improve access to good nutrition
related information and enable
mothers to benefit from training
together with their children. The
website includes project data,
training, animated films, production
phases, commercials with cartoon
characters and membership data;
the site is regularly refreshed with
new sections and content.
24 Banvİt ANNUAL REPORT 2011
Social Responsibility
The “Akıllı Çocuk Sofrası” (Smart and Healthy Meals for Children) Project
received the “Health Awareness-Raising” award designation by the
Turkish Association of Corporate Social Responsibility.
Second Phase Activities
The Smart and Healthy Meals for
Children Project re-launched during
the 2010-2011 school year in Istanbul
with refreshed and enriched content.
The revised project contained a
more entertaining and memorable
concept, a stage performance
and games to help the children
better understand and absorb
the information on adequate and
balanced nutrition.
Twenty-two professionally
qualified Banvit project instructors
participated in the trainings. The
instructors were trained at the
Hacettepe University, Department
of Child Development, where the
games used in the project were also
developed.
Training sessions in Istanbul
were held in three phases at the
designated schools. First, the
information provided by trained
instructors was conveyed through
performances and games. During
a second visit made to the same
schools two weeks later, the training
was quickly repeated through
different games to reinforce the
information.
After the second week training
program, a fantasy play was
performed for students at
schools with auditoriums. The play
emphasized the theme of learning
and provided visual instruction to
the students to improve their level of
comprehension.
One of the major innovations in
the second phase activities was
the fantasy children’s production
developed and performed through
the dedicated work of the Ekol
Drama Sanat Evi (Ekol Drama Art
House). The audiences enjoyed the
space age adventures of Cem and
Cemile that were rendered in a Additionally, the second phase
non-traditional way. The act called training program used a song “To
“Cem and Cemile in the Secret Eat, To Eat” to convey the project’s
Garden” aimed to entertain and key messages. The song was
educate children by stimulating their composed by the Banvit Çocukevi
imaginations. (Banvit Children’s Playhouse) and
presented a light-hearted summary
Adequate and balanced nutrition of the entire training while providing
means to consume all the foods students tips for balanced nutrition.
we need in sufficient portions. The
project used paper plates as training Final Results...
materials to convey this important Banvit reached 138,995 students
message. Paper plates were divided in 257 schools in Istanbul during
into segments for individual servings the 2010-2011 school year with
that the children should have at a the second phase activities of the
meal. The plates were then provided Smart and Healthy Meals for Children
to students who pictured the food Project.
included in the food groups of
the nutrition pyramid in the plate Smart and Healthy Meals for
segments. Using this creative Children Project during its first and
method, students learned about second phases raised awareness
balancing, or the grouping of the for adequate and balanced nutrition
healthy servings they should have at among some 1,001,075 students
one meal. in total through the direct training
conducted.

The success of the Smart and
Healthy Meals for Children Project
was recognized with the first
prize in the “Health Awareness
Activity” category of the “Corporate
Social Responsibility Solutions
Marketplace” program held by the
Turkish Association of Corporate
Social Responsibility at Kadir Has
University at the end of 2011.
Girls Go to School with Banvit
In Turkey, many young girls still have
difficulty accessing educational
opportunities or they lack them
completely. The Bandırma district
of Balıkesir is one area that suffers
from the problem of immigration due
to industrialization and the problem
of non-schooled girls.
25
In 2007, Banvit launched a Recognizing that families have a
scholarship program in collaboration strong influence on the educational
with the Bandırma Branch of process and progress of their
the Association in Support of children, the project also provides for
Contemporary Life in order to help communications with the parents
address this issue in Bandırma, of students to raise their awareness
where the Company’s main and improve their perceptions of
production facilities are located. In education.
2011, the “Girls Go to School with
Banvit” project, a school program for
girls, completed its fourth year.
The scholarship program provides
support to 100 girls of elementary
school age who encounter difficulties
accessing educational opportunities.
The project aims to assist girls
with education as well as with their
personal life, encouraging their
personal development through social
activities that are held.
26 Banvİt ANNUAL REPORT 2011

Social Responsibility
The Young Banviters Basketball Team, made up of junior players from
the Banvit Basketball Club, won the championship in the Turkish Men’s
Basketball Minor League, making the Company proud.

Banvit Basketball Team Bandırma Kırmızı Basketball Team

The Banvit Basketball Club
The Banvit Basketball Club, which has
been active for 18 years, first started
with games under the Company
umbrella and participated in local
tournaments. Subsequently, it joined
the Turkish Premier Basketball
League and played on EU basketball
courts, becoming a model among
corporate sports teams in Turkey.
Banvit Basketball Club has played
in the Turkish Men’s Basketball
Premier League for last eight years
and ranked second last season,
meeting Galatasaray Cafe Crown
in the semi-final game. In addition,
Banvit BC qualified to participate in
the playoffs in the Euro league, the
number one cup in Europe, during the
2011-2012 basketball season.
The Young Banviters Basketball Team
of the Banvit Basketball Club, made
up of junior players from the Club,
won the championship in the Turkish
Men’s Basketball Minor League,
making the whole Company proud.
The champion squad is currently
playing in the Premier League under
the name “Bandırma Red Basketball
Club”, along with Banvit BC.
Sports and Urban Life
The Banvit Basketball Club’s support
of basketball contributes not only to
the physical and mental well-being of
young people but also to their social
development. The Club stimulates
the economy of Bandırma and
revitalizes social interaction within
the community, while celebrating
the province abroad in domestic
and European cup matches. Having
constructed modern outdoor
basketball facilities for the counties
in the region in order to encourage
youth to participate in sports, the
Banvit Basketball Club provides
sporting opportunities for hundreds
of amateurs by means of the street
basketball tournaments it holds
during the summer.
The Banvit Basketball Club and
Basketball School has constructed
an ultra-modern indoor basketball
court that serves as a model
throughout Turkey and plays
a significant role in attracting
attention to this sport all year round.

Corporate Publications
Çocuğum ve Ben
The monthly magazine Çocuğum ve
Ben (My Child and I) is an educational
publication on child health and
development and has been published
for the last eight years. The
magazine is edited by the celebrity
doctor Hilal Mocan, M.D., professor of
pediatrics, with contributions from
an editorial board made up of many
professors and associate professors.
The publication is distributed on a
subscription basis.
Lezzet Güneşi
Lezzet Güneşi (Taste the Sun), a
food culture magazine that has
been in circulation for the last
nine years, publishes hundreds of
thoroughly tested recipes carefully
selected by the editorial board. The
magazine is distributed quarterly on
a subscription basis.
27
Birlikte Elele
This newsletter, initially published
in May 1990 to reinforce Banvit’s
relations with customers and
consumers, celebrated its 21st
year in 2011. With 13,500 copies
printed each month, “Hand in Hand
Together” shares important news
about the industry with Banviters,
focusing on institutional and social
activities, the latest developments
and investments. The newsletter is
delivered to Banvit employees and
customers free of charge.
2D
The 2D monthly magazine has been
published for Banvit employees for
15 years covering a wide range of
topics that include organizational
structure, efficiency, employee
performance and personal
development. The publication
provides Banvit’s workforce with
support in achieving personal
growth and increasing productivity.
The magazine also serves as an
internal communications tool for the
Company.
28 Banvİt ANNUAL REPORT 2011
Corporate Governance Principles
Compliance Report
SECTION I – SHAREHOLDERS
1. Shareholder Relations Unit
A separate unit has been set up
for shareholder relations. The
unit authorized Ömer Görener and
Şerefnur Baykal as executives.
2. Exercising of Shareholders’
Right to Information
For the 2010 Ordinary General
Meeting of Shareholders, a
material disclosure was sent to
the Istanbul Stock Exchange
(ISE) and to the Public Disclosure
Platform (KAP); shareholders
were notified of the meeting via
announcements in the press.
The above procedures were also
publicly announced through the
Company’s website. In 2010,
there were no requests for the
appointment of a special auditor.
The appointment of a special
auditor is not regarded as an
individual right in the Company’s
Articles of Association.
3. General Meeting of
Shareholders
One General Meeting of
Shareholders was held in 2011.
The Ordinary General Meeting
of Shareholders was attended
by shareholders representing
79.52% of the capital. The
meeting date was announced
to shareholders through the
Istanbul Stock Exchange
(ISE), the Turkish Commercial
Registration Gazette, a local
newspaper and a high-circulation
national newspaper. During the
General Meeting of Shareholders,
shareholders exercised their right
to ask questions, and all such
questions were duly answered. The
shareholders did not make any
proposals.
4. Voting Rights and Minority
Rights
There are no preferential voting
rights. Minority shareholders are
not represented on the Board of
Directors. The Company’s Articles
of Association do not contain
provisions for cumulative voting.
5. Dividend Policy and Timing of
Distributions
There are no preferential rights
regarding dividends. There are
no publicly announced dividend
policies, other than Article 23
of the Articles of Association,
concerning the determination and
distribution of dividends. Dividends
are distributed within the legally
specified time frame in compliance
with the limits specified by the
Capital Markets Board.
Article 5.1 of Communiqué Series
IV, No. 27 on the Principles
Governing the Distribution of
Dividends and Dividend Credits
by Public Joint Stock Companies
Subject to the Capital Market Law,
entitled “Amount of First Dividends
and Dividend Distribution in Public
Partnerships”, stipulates that at
least 20% of distributable profit
shall be distributed as dividends.
If distributable profit has
accumulated during the
accounting period in question,
the Company’s Board of Directors
may decide to propose a dividend
distribution in the amount
stipulated by the relevant
communiqué from the Capital
Markets Board, and shareholders
may vote to accept or reject this
proposal at the General Meeting of
Shareholders.
6. Transfer of Shares
The transfer of the Company’s
shares is not subject to any
restriction. All shares are bearer’s
shares; consequently, there are
no provisions in the Company’s
Articles of Association restricting
the transfer of shares.
SECTION II - PUBLIC
DISCLOSURES AND
TRANSPARENCY
7. Disclosure Policy
Information on the following
issues is announced through the
ISE in accordance with the Capital
Markets Board’s Communiqué on
Material Disclosures. Series: VIII
No.: 39:
• Issues such as profit distribution,
amendments to the Articles of
Association, and capital increases
which need to be decided upon
at the General Meeting of
Shareholders,
• Changes concerning shareholding
and control,
• Changing the independent audit
board,
• The results of chicken and turkey
contracts,
• Information concerning
investments,
• Other material changes.
8. Material Disclosures
In 2011, 29 material disclosures
were made in accordance with
the Capital Markets Board’s
Communiqué Series: VIII No.: 39.
The disclosures can be found
at www.kap.gov.tr. The Company
is not listed on overseas stock
exchanges.
No sanctions were imposed on the
Company in 2011 by the Capital
Markets Board as a result of a
material disclosure not being
made, or on time.

9. The Company’s Website and its Contents
The Company’s corporate website, found at www.banvitas.com,
offers the following content:
1. About Us Ministry of Environment and Urban
Milestones
Banvit Culture
Vision-Mission-Corporate Values
2. Production
Meat Production
Ready-to-Eat Production
Live Production
Feed Production
Quality Assurance
3. Sales and Distribution
Exports
Meat Sales and Distribution
Feed Sales and Distribution
Branch and Dealers
4. Investor Relations
Research Reports
Periodical Reports
Annual Reports
Real Time Stock Data
5. Sector Related Legislation
Ministry of Science, Industry and
Technology
Ministry of Forest and Water Affairs
Ministry of Health
9. Contact
Alongside the main menu tabs, the
website features special sections
such as “Banvit in the Press” and
“News from Banvit” featuring
Company news, the corporate
bulletin “Hand in Hand” and the
section for the online version of
the book “Still not the Boss” by
Vural Görener, the founder of the
Company.
The website also contains part
of the information mentioned in
Section II, Article 1.11.5 of the
Capital Markets Board’s Corporate
Governance Principles.
Planning
Ministry of Nutrient, Agriculture
and Livestock
6. Social Projects
Academy of Dreams
Girls Go to School with Banvit
Smart and Healthy Meals for
Children
For Wellness, for Health
The Educational Volunteers
Foundation of Turkey (TAG)
7. Human Resources
Job Opportunities
HR Approach
Careers at Banvit
Internships at Banvit
Training and Development
Social Opportunities
Daycare Center
8. Press Room
Press Releases
Press Statements
Banvit in Press
Logo and Visuals
10. Disclosure of Individual
Ultimate-Controlling
Shareholders
Since the Company’s shares
are bearer’s shares, only Board
Members who individually own
shares are disclosed in the
independent audit report as
ultimate-controlling shareholders,
after eliminating for indirect
shareholding and cross-
shareholding relations.
29
11. Disclosure of Individuals
who are in a Position to Acquire
Insider Information
The Board of Directors and the
Executive Board may have access
to insider information.
SECTION III – STAKEHOLDERS
12. Disclosures to Stakeholders
Stakeholders are notified of the
General Meetings of Shareholders
through invitations placed in
newspapers and notifications
made to the ISE. Fifteen days
prior to the General Meeting of
Shareholders, financial tables and
independent auditors’ reports are
made available to stakeholders
at the Company headquarters.
Additional information is made
available on the Company’s
website.
13. Stakeholder Participation in
Management
No studies have been made to
ensure stakeholder participation in
management.
14. Human Resources Policy
Banvit’s primary objective is to
recruit the right individual for the
right job, with a view to protecting
the interests of both the Company
and its employees.
The basic recruitment principle
is to provide equal employment
opportunities to individuals and
to work with young, dynamic,
well-educated people who are
open to change and possess good
communication and teamwork
skills.
30 Banvİt ANNUAL REPORT 2011
Corporate Governance Principles Compliance Report
The aim of training at Banvit
is to help individuals develop
themselves and adapt to
changes that will improve their
performance. Care is taken to
design training programs that
will help individuals develop the
competencies to enable them to
perform their job better and reach
their performance targets and
career objectives.
Banvit’s salary policy ensures
that all employees receive
remuneration commensurate
with their position and standard
of living. This policy has been
further supported by performance
management systems developed
separately for administrative and
production staff. The Company’s
intend is to meet employees’
career expectations and to create
a real difference in their lives after
joining the Banvit family.
15. Relations with Customers
and Suppliers
In accordance with its
commitment to maximize
customer satisfaction, Banvit
obtained the ISO 9001: 2008
Quality Management Systems
Certificate that requires products
and services, in compliance with
relevant laws, to be continuously
improved in response to changing
customer requirements.
Banvit holds the ISO 22000:
2005 Food Safety Management
Certificate, which concurrently
contains the HACCP Food Safety
System Certificate as well. This
demonstrates the reliability of the
Company’s products and ensures
that all necessary measures are
taken at critical points in the
production process with a view to
producing wholesome and reliable
food products.
In 2011, Banvit also obtained the
BRC (British Retail Consortium
Global Standard for Food Safety)
Food Safety Certificate.
Beginning from 2011, the audits of
our current suppliers, on behalf of
Banvit, are handled through audit
companies.
The Product Management
Department performs a customer
survey every year. According to the
results of this survey, problems are
identified and efforts are made to
resolve them.
The free customer hotline is
accessible around the clock
and complaints, problems and
suggestions are quickly addressed.
The sources of complaints,
suggestions and requests
reaching the Quality Assurance
Department, branches and dealers
are investigated, necessary
corrective action is taken, and
the relevant companies and
individuals receive prompt replies.
Also, on a regular basis our retail
and corporate clients inspect or
have third parties inspect Banvit
facilities with or without prior
notifications.
Marketing Department employees
responsible for customer relations
visit customers frequently,
attempt to solve problems swiftly,
and ensure that measures are
taken in response to customer
suggestions. In short, they do
their best to improve customer
loyalty. Our retailing and corporate
customers have the right to
perform both scheduled and
unscheduled inspections of Banvit
facilities themselves and to have
such inspections performed by
independent firms.
Production processes at all
suppliers’ premises are monitored
and problems are addressed.
Inspection reports are sent to
suppliers following inspections,
with the purpose of enabling
them to take the necessary
actions and implement the
necessary improvements. Food
safety standards are taken into
consideration and Hazard Analysis
Critical Control Points (HACCP),
ISO 22000 requirements are
followed up in the inspection of
the suppliers that produce food
or packaging material which may
come into contact with the food.
16. Social Responsibility
Please refer to the Social
Responsibility section of the
Annual Report.
17. Environmental Activities
Liquid Waste Household and
industrial liquid waste is treated
in separate biological treatment
facilities. Some 5,160 m3 tons of
industrial liquid waste is treated
daily.
Approximately 125 tons of
household liquid waste is treated
each day. As it relates to the
discharge of such waste and the
permit for such discharge, an
Environment Permit Certificate
was granted by the Provincial
Environment and Urbanism
Directorate in electronic
environment, with the Article dated
March 16, 2011 and no.: 10.

Solid Waste
Solid waste includes organic
waste sent for rendering (offal and
giblets, feathers, heads, blood,
hatched egg shells, etc.) and waste
from processes (polystyrene,
polyethylene, broken plastic,
crates, masks, bonnets, paper,
plastic bins, rubbish, etc.).
Organic waste materials sent for
rendering are then sold and used
as a feed additive.
In addition, the rendering
facility has a deodorizing unit,
which eliminates odor-forming
substances through two chemical
cleaning processes before
releasing the waste into the
atmosphere.
Processed waste is sent to
recycling companies, while all
other waste is sent to authorized
municipal storage areas.
Gaseous Waste
The Company uses natural
gas, which is a relatively clean
substance.
An Environment Permit Certificate
was granted by the Provincial
Environment and Urbanism
Directorate, in electronic
environment, with the Article dated
March 16, 2011 and no.: 10.
Hazardous Waste
Hazardous waste includes
batteries, fluorescent bulbs,
cartridges, waste oil, toners, car
batteries, lint, waste oil filters, and
the like.
Hazardous waste is stored
in the hazardous waste area
in conformity with relevant
legislation. Depending on storage
time and the amount stored, the
waste is dispatched to licensed
companies using licensed vehicles.
Noise Pollution
Outdoor and indoor noise
measurements and associated
hearing loss tests are performed
annually.
ISO 14001 Environmental
Management Systems
Certificate Works
The Environmental Management
Systems Certificate demonstrates
that the Company continuously
plans and undertakes its
activities without damaging the
environment. This certificate
is also a manifestation of the
confidence of management,
customers and employees.
ISO 14001 is an international
standard providing the necessary
structure to efficiently control
activities that may have an impact
on the environment.
Banvit received the ISO
14001:2004 Environmental
Management Systems Certificate
on September 15, 2003, and the
certificate was renewed on May
05, 2009 with an expanded scope.
Environmental Impact Assessment
Certificate
Environmental impact
assessment is an appraisal of the
possible positive and negative
environmental effects of proposed
projects. It determines measures
to be taken to prevent or minimize
the adverse environmental impact
of a project, considers alternative
locations and technologies,
and specifies the work to be
undertaken to monitor projects.
31
Within this context, the Company
was awarded the Positive
Environmental Impact Assessment
Certificate on June 05, 2003 with
the decision number 835, and on
October 07, 2008 with the decision
number 1585, by the Ministry of
Forest and Water Affairs, and was
issued Environmental Impact
Assessment Certificate Not
Required on September 09, 2008
with the decision numbers 200
and 202, with the decision number
157 on May 8, 2009 and Jun 10,
2009 by the City Directorate of
Environment and Urbanism.
SECTION IV - THE BOARD OF
DIRECTORS
18. The Structure of the Board
of Directors, its Composition
and Independent Members
As indicated in the Company’s
Articles of Association, the Board
of Directors is comprised of a
minimum of five and a maximum
of nine members. At present, the
Board of Directors consists of
five members, who are elected
at the General Meeting of
Shareholders. In the event of
a board membership vacancy
due to death or resignation, this
position is filled in an election to
be held by the Board in conformity
with Article 315 of the Turkish
Commercial Code.
Board Members
Ömer Görener
Chairman
Alan Perese
Deputy Chairman
Mohamed Badawy
Al-Husseiny
Member
Esra Görener Christoffel
Member
E. Turgut Görener
Member
32 Banvİt ANNUAL REPORT 2011
Corporate Governance Principles Compliance Report
There are no restrictions on Board
Members accepting other duties
outside the Company, and there
are no specific rules in this regard.
Furthermore, the Company’s
Articles of Association also do
not contain any provisions in this
respect. There are no independent
Board Members.
19. Qualifications of Board
Members
The qualifications for Board
Members are compatible with
the provisions of Articles 3.1.1,
3.1.2 and 3.1.5. of Part IV of the
Capital Markets Board’s Corporate
Governance Principles. These
qualifications are not included in
the Articles of Association.
20. Mission, Vision and
Strategic Objectives
Vision
The vision of Banvit is to become
one of Europe’s leading food
companies.
Mission
To turn customer expectations
into reality through quality,
services and innovation, and to
provide customers with the “best
value”, while improving the work
environment and maintaining
a high level of environmental
awareness at all times.
Strategic Objectives
The Company’s strategic
objectives are not publicly
announced in order to keep
them from becoming known by
competitors and to prevent the
Company from suffering the
adverse effects that might follow.
21. Risk Management and
Internal Audit
The Board of Directors has put
in place a risk management and
internal audit mechanism.
The Risk Management System
A management letter is prepared
and submitted to management
each year by an independent audit
firm. The letter discusses the
risks that the Company may be
faced with, together with pertinent
remedial action. In preparing the
management letter in subsequent
years, risks mentioned in
earlier letters are deleted if the
appropriate measures have been
taken.
The Internal Audit System
Internal audit at the Company
is performed by the Audit
Department, which is comprised
of 23 individuals. In general,
audits are made at branches,
feed factories and affiliates.
Operational audits are performed
in extraordinary circumstances.
Activities are monitored to see
whether they comply with the
Company’s policies, plans and
procedures. Efforts are made
to take all necessary action to
prevent abuse. Regulatory changes
and advances in technology are
closely monitored to ensure a
more effective internal audit,
and the necessary changes
and improvements are made to
the audit mechanism. Reports
prepared as a result of audit work
are submitted to the General
Manager and the Board of
Directors.
22. Duties and Obligations of
Board Members and Executives
Board Members and senior
executives are responsible for
achieving the objectives set forth
in the Company’s mission and
vision statements. The Company
is managed and represented by
the Board of Directors. The Board
of Directors is authorized to take
all action compatible with the
objectives and lines of activity of
the Company.
For any document prepared on
behalf of the Company to be valid,
it must be jointly signed by any
two persons, at least one of which
has first degree authorization to
sign documents, and a second
person having at least second
degree authorization to sign
documents on behalf of the
Company.

The Board of Directors may, in
accordance with Article 319 of
the Turkish Commercial Code,
delegate all or some of its
managerial and representational
authorities to managers who
are not shareholders. The Audit
Committee, formed in 2004, is
comprised of Deputy Chairman
Alan Perese and Board Member
Esra Görener Christoffel.
23. Activities of the Board of
Directors
The duties and responsibilities
of the Board of Directors are
specified in the Articles of
Association. The quorum for Board
meetings is four members, and
decisions require the favorable
vote of these members. Issues to
be discussed at Board meetings
are placed on an agenda that is
communicated to members prior
to each meeting. Decisions made
at meetings are recorded in the
minutes of the meeting.
The above-mentioned procedures
and related communications
are undertaken by a Secretariat
reporting to the General Manager.
24. Dealing and Competing with
the Company
During the reporting period, Board
Members were not prohibited from
dealing or competing with the
Company.
25. Rules of Ethics
The following rules of business
ethics have been specified
by the Board of Directors and
communicated to all employees:
33
• Integrity, 27. Remuneration of the Board
• Modesty and kindness, of Directors
• Self-sufficiency, Remuneration to be paid to Board
• The pursuit of excellence, Members is determined at the
• Caring for employees and the General Meeting of Shareholders.
environment, In accordance with the decision
• Protecting proprietary and at the General Meeting of
confidential information, Shareholders, Board Members
• Conforming to internal receive monthly salaries and an
procedures, annual share of the Company’s
• Ensuring that the Company profit for the period in question.
reaches its profit targets,
• Creating career development
opportunities for employees.
These rules have not been publicly
announced.
26. The Number, Structure and
Autonomy of Board Committees
The Audit Committee is comprised
of Deputy Chairman Alan Perese
and Board Member Esra Görener
Christoffel. The Company has also
formed an Executive Committee.
In 2011, the Executive Committee
was composed of:
Ömer Görener
Deputy Director – Finance
Turgut Görener
Deputy Director – Production
Zafer Bilgi
Director - Live Operations
Mevlüt Solmaz
Director – Logistics
Nerdin Alp
Director - Sales and Marketing
Özkan Kılıç
Director - Internal Audit
There is no Corporate Governance
Committee.
Banvit Bandırma Vitaminli Yem Sanayii
Anonim Şirketi and ıts Subsıdıarıes
31 December 2011
wıth Independent Audıtors’ Report
Consolıdated Fınancıal Statements
As at and for the Year Ended
36 Banvİt ANNUAL REPORT 2011
 37

Independent Auditors’ Report on Consolidated Financial Statements

Introduction

We have audited the accompanying consolidated financial statements of Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi and
its subsidiaries (“the Group”), which comprise the consolidated statement of financial position as at 31 December 2011, and the
consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising
a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with
International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit
in accordance with International Standards on Auditing. Those standards require that we comply with relevant ethical requirements
and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free of material
misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control
relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness
of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group
as at 31 December 2011, and of its consolidated financial performance and its consolidated cash flows for the year then ended in
accordance with International Financial Reporting Standards.

Istanbul, Turkey
30 March 2012
38 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Consolidated Statement of Financial Position
as at 31 December 2011
Currency: TL

Assets Notes 2011 2010

Property, plant and
equipment 13 217,788,504 176,820,241
Intangible assets 14 7,181,377 6,640,280
Deferred tax assets 12 11,152,892 --
Trade and other
receivables 17 7,336,408 13,714,736
Total non-current
assets 243,459,181 197,175,257

Inventories 16 131,611,816 99,604,858

Biological assets 15 117,670,169 106,720,678
Trade and other
receivables 17 188,200,217 173,414,882
Cash and cash
equivalents 18 17,824,971 6,811,318
Total current assets 455,307,173 386,551,736
Total assets 698,766,354 583,726,993

The accompanying notes are an integral part of these consolidated financial statements
 39

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Consolidated Statement of Comprehensive Income
for the Year Ended 31 December 2011
Currency: TL

Equity Notes 2011 2010

Share capital 19 110,296,826 110,296,826
Other reserves 19 4,588,170 4,588,170
Translation reserve 19 14,690,474 (1,316,252)
Retained earnings 19 23,278,416 102,494,527
Total equity attributable to equity holders of the Company 152,853,886 216,063,271

Non-controlling interest -- --

Total equity 19 152,853,886 216,063,271

Liabilities
Loans and borrowings 21 163,139,199 131,731,485
Derivative financial liabilities 22 1,772,605 2,295,162
Employee benefits 23 3,354,490 3,025,356
Deferred income 24 6,473,062 3,773,129
Deferred tax liabilities 12 -- 1,060,564
Provisions 25 1,034,676 845,074
Trade and other payables 26 472,931 122,996
Total non-current liabilities 176,246,963 142,853,766

Loans and borrowings 21 262,739,654 117,659,595

Trade and other payables 26 103,166,610 101,823,453
Provisions 25 3,717,362 5,307,996
Corporate tax payable 12 41,879 18,912
Total current liabilities 369,665,505 224,809,956
Total liabilities 545,912,468 367,663,722
Total equity and liabilities 698,766,354 583,726,993

The accompanying notes are an integral part of these consolidated financial statementsstatements
40 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Consolidated Statement of Compreshensive Income
for the Year Ended 31 December 2011
Currency: TL

Notes 2011 2010

Revenues 6 1,116,294,969 1,002,379,302
Cost of revenues 6 (982,172,344) (791,401,439)
Gross profit 134,122,625 210,977,863

Other income 10 6,644,990 4,688,841

Administrative expenses 8 (35,471,808) (27,159,650)
Selling, marketing and other distribution expenses 9 (99,239,288) (95,964,309)
Research and development expenses (212,043) (161,704)
Other expenses (2,689,868) (596,462)
Results from operating activities 3,154,608 91,784,579

Finance income 2,842,263 1,484,822

Finance expenses (77,243,595) (18,706,966)
Net finance costs 11 (74,401,332) (17,222,144)

Profit / (loss) before income tax (71,246,724) 74,562,435

Income tax benefit/(expense) 12 12,055,149 (15,864,944)

Profit / (loss) for the year (59,191,575) 58,697,491

Attributable to:
Owners of the Company (59,191,575) 58,697,491
Non-controlling interest -- --
Profit / (loss) for the year (59,191,575) 58,697,491

Other comprehensive income:

Foreign currency translation differences for foreign
operations 11 16,006,726 (450,954)
Other comprehensive income for the year, net of
income tax 16,006,726 (450,954)
Total comprehensive income for the year (43,184,849) 58,246,537

Total comprehensive income attributable to:

Owners of the Company (43,184,849) 58,246,537
Non-controlling interest -- --
(43,184,849) 58,246,537
Earnings/(loss) per share
Basic profit / (loss) per share (TL) 20 (0.592) 0.611

The accompanying notes are an integral part of these consolidated financial statements
 Currency Non- Total
Share Treasury Other Translation Retained controlling Shareholders
Capital Shares Reserves Differences Earnings Total interest Equity
Balance at 1 January 2010 110,296,826 (23,534,752) -- (865,298) 43,797,036 129,693,812 -- 129,693,812 Currency: TL
Transactions with owners, recorded
directly in equity
Sale of treasury shares -- 23,534,752 4,588,170 -- -- 28,122,922 -- 28,122,922
Total transactions with owners, recorded directly in
equity -- 23,534,752 4,588,170 -- -- 28,122,922 -- 28,122,922
Total comprehensive income for the year
Currency translation difference -- -- -- (450,954) -- (450,954) -- (450,954)
Profit for the year -- -- -- -- 58,697,491 58,697,491 -- 58,697,491
for the Year Ended 31 December 2011

Total comprehensive income -- -- -- (450,954) 58,697,491 58,246,537 -- 58,246,537

Balance at 31
December 2010 110,296,826 -- 4,588,170 (1,316,252) 102,494,527 216,063,271 -- 216,063,271
Consolidated Statement of Changes in Equity

Balance at 1
January 2011 110,296,826 -- 4,588,170 (1,316,252) 102,494,527 216,063,271 -- 216,063,271
Transactions with owners, recorded directly in equity
Dividend distribution -- -- -- -- (20,024,536) (20,024,536) -- (20,024,536)
Total transactions with owners, recorded directly in
equity -- -- -- -- (20,024,536) (20,024,536) -- (20,024,536)
Total comprehensive income for the year
Currency translation difference -- -- -- 16,006,726 -- 16,006,726 -- 16,006,726
Loss for the year -- -- -- -- (59,191,575) (59,191,575) -- (59,191,575)
Total comprehensive income -- -- -- 16,006,726 (59,191,575) (43,184,849) -- (43,184,849)
Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Balances as at 31 December 2011 110,296,826 -- 4,588,170 14,690,474 23,278,416 152,853,886 -- 152,853,886

The accompanying notes are an integral part of these consolidated financial statements
41
42 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Consolidated Statement of Cash Flows
for the year Ended 31 December 2011
Currency: TL

Cash flows from operating activities Notes 2011 2010

Profit /(loss) for the year (59,191,575) 58,697,491
Depreciation and amortization 6 43,017,930 36,549,760
(Gain)/loss arising from price changes of biological assets 15 (1,109,586) 6,949,509
Gain on disposal of property, plant, and equipment, net 10 (225,464) (133,496)
Impairment on property, plant and equipment 13 1,671,448 --
Allowance for inventory 16 2,226,142 (23,161)
Provision for employee benefits 23 3,402,551 3,730,316
Miscellaneous expense reversals (1,401,032) (4,545,883)
Allowance for doubtful receivables 27 3,395,165 863,570
Income from government grant 24 (2,207,785) (156,225)
Tax (benefit)/expense 12 (12,055,149) 15,864,944
Interest swap transaction 22 (522,557) 1,332,967
Interest expense 11 19,012,867 13,781,601
Interest income 11 (1,324,778) (887,992)
Rediscount income/(expense), net 11 1,183,804 53,903
Unrealized foreign currency loss 60,767,401 596,484
Operating income before working capital changes 56,639,382 132,673,788
Net change in:
Trade and other receivables (19,977,516) (12,036,797)
Inventories (34,233,100) (26,072,085)
Doubtful receivables collected 27 335,167 213,498
Trade and other receivables- non-current 6,656,373 (4,790,347)
Trade and other payables (630,508) 12,289,037
Trade and other payables-non-current 446,122 122,996
9,235,920 102,400,090
Interest paid (19,137,584) (10,686,958)
Employee benefits paid 23 (3,073,417) (2,979,686)
Income tax paid (116,428) (22,583,193)
Net cash (used in)/from operating activities (13,091,509) 66,150,253
Cash flows from investing activities
Acquisition of property, plant, equipment, and intangible
assets 13-14 (58,474,101) (52,442,560)
Proceeds from sale of property, plant, equipment and
intangible assets 13-14 1,210,605 1,348,599
Acquisition and physical change on biological assets (590,033,688) (565,817,660)
Proceeds from sale of biological assets 569,637,730 508,311,038
Interest received 1,324,778 887,992
Net cash used in investing activities (76,334,676) (107,712,591)
Cash flows from financing activities
Proceeds from bank borrowings 344,441,839 517,064,281
Repayment of bank borrowings (223,912,423) (500,772,988)
Payment of finance lease liabilities (76,686) (366,292)
Proceeds from sale of treasury shares -- 28,122,922
Dividend distribution 19 (20,024,536) --
Net cash from financing activities 100,428,194 44,047,923
Net foreign exchange gain/(loss) on cash and cash
equivalents 11,644 (1,117)
Net increase in cash and cash equivalents 11,002,009 2,485,585
Cash and cash equivalents at 1 January 6,811,318 4,326,850
Cash and cash equivalents at 31 December 18 17,824,971 6,811,318

The accompanying notes are an integral part of these consolidated financial statements
 43

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

Notes to the consolidated financial statements

Pages
1 Reporting entity 44
2 Basis of preparation 44
3 Significant accounting policies 45
4 Determination of fair values 55
5 Segment Reporting 55
6 Revenues and cost of revenues 56
7 Personnel expenses 56
8 Administrative expenses 57
9 Selling, marketing and other distribution expenses 57
10 Other income/(expense) 58
11 Net finance costs 58
12 Income tax expense 59
13 Property, plant and equipment 63
14 Intangible assets 65
15 Biological assets 66
16 Inventories 68
17 Trade and other receivables 68
18 Cash and cash equivalents 69
19 Capital and reserves 70
20 Earnings per share 71
21 Loans and borrowings 72
22 Derivative financial liabilities 74
23 Employee benefits 74
24 Deferred income 75
25 Provisions 76
26 Trade and other payables 77
27 Financial instruments 77
28 Commitments and contingencies 82
29 Related parties 83
30 Subsequent events 83
44 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

1 Reporting entity

Banvit Bandırma Vitaminli Yem Sanayi A.Ş. (the “Company”) was established in Bandırma in 1968. 20.45 % shares of Banvit are listed
on the İstanbul Stock Exchange. The address of Company’s registered office is Balıkesir Asfaltı 8. Km 10201 Bandırma/Turkey.

For the purpose of these consolidated financial statements, Company and its consolidated subsidiaries are referred to as the
“Group”.

The operations of Company consist of production, slaughtering and marketing of animal feed, breeding eggs, one-day-old chicks,
live turkeys, live chickens, processed turkeys, processed chickens, veal and red meat. Banvit expanded its product range by adding
salami, frankfurter, fagot and ham to cooked meatball, kebab, doner, burger and coated products.

At 31 December 2011, the Company has 3,238 employees (31 December 2010: 3,076).

2 Basis of Preparation

(a) Statement of compliance

The Company maintains its books of account and prepare its statutory financial statements in Turkish Lira (“TL”) in accordance
with Turkish commercial practice and tax regulations. The foreign subsidiaries maintain their books of account and prepare their
statutory financial statements in their local currencies and in accordance with the laws and regulations in force in the countries
where they are registered.

The accompanying consolidated financial statements are based on these statutory records with adjustments and reclassifications
for the purpose of fair presentation in accordance with International Financial Reporting Standards (“IFRS”). The consolidated
financial statements are approved by the management on 30 March 2012.

(b) Basis of measurement

The accompanying consolidated financial statements are prepared on the historical cost basis except that biological assets are
measured at fair value less point of sale costs.

(c) Functional and presentation currency

The accompanying consolidated financial statements are presented in TL which is the Company’s functional currency. All financial
information presented in full TL.

Local and Functional Currencies of Foreign Subsidiaries:

Local Currency Functiona Currency

Nutrinvestments B.V. Euro Euro

Banvit Foods S.R.L. (*) Rumanian ley (“RON”) RON
Agrafood S.R.L. (**) RON RON

(*) Banvit Foods S.R.L. represents the subsidiary of Nutrinvestments B.V. with a 100% of ownership.
(**) Agrafood S.R.L. represents the subsidiary of Nutrinvestments B.V. with a 99.99% of ownership.

(d) Use of estimates and judgements

The preparation of consolidated financial statements in conformity with IFRSs requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates.
 45

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

2 Basis of preparation (continued)

(d) Use of estimates and judgements (continued)

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the
most significant effect on the amounts recognised in the consolidated financial statements is included in the following notes:

Note 12- utilisation of tax losses

Note 13- property, plant and equipment
Note 14- intangible assets
Note 25- provisions

3 Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial
statements, and have been applied consistently by the Company. Certain comparative amounts have been reclassified to conform to
the current period’s presentation.

(a) Basis of consolidation

The consolidated financial statements include the accounts of Group on the basis set out in the section below:

• The financial statements of the subsidiary included in the consolidation have been prepared as of the date of the consolidated
financial statements in compliance with IFRS.

• Subsidiary is an enterprise that is controlled by the Company. Control exists when (a) Banvit holds more than 50% of the voting
power, directly or indirectly; or (b) Banvit holds shares less than 50% but still has the authorization and power to control the
enterprise’s financial and operational policies for the interest of the Company.

The subsidiaries included in consolidation and the companies’ shareholding percentages in them at 31 December are as follows:

Effective Shareholding and

Place of Incorporation Principal Activities Voting Rights %
2011 2010
Holding
Nutrinvestments B.V. Netherlands Company 100.00% 100.00%
Banvit Enerji ve Elektrik Üretim Holding
Ltd. Şti. (”Banvit Enerji”)* Turkey Company 99.95% 99.95%

* Banvit Enerji, getting the necessary licence from Energy Market Regulatory Authority (EMRA), was founded and set up on May
14th, 2009 for the purpose of establishing, commencing and renting manufacturing plants to have the energy sources turned
into electrical energy in those plants, producing electrical energy, selling the produced electrical energy and/or the capacity of the
produced energy to the customers. Since the transactions of Banvit Enerji related to the licenses are ongoing, only the expenses
related to the establishment of the Company has been reflected in the consolidated financial statements.
46 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

3 Significant accounting policies (continued)

(a) Basis of consolidation (continued)

• The statements of financial position and statements of comprehensive income are consolidated on a line-by-line basis. All inter-
company investments, receivables, payables, dividends received and paid and other inter-company transactions reflected in the
statements of financial position and statements of comprehensive income are eliminated in preparing the consolidated financial
statements. The results of the subsidiaries are included in or excluded from the consolidation from their effective dates of
acquisition or disposal, respectively.

• The equity and net income attributable to non-controlling interests are shown separately in the consolidated statement of financial
position and consolidated statement of comprehensive income, respectively.

(b) Accounting in hyperinflationary economies

2005 was a monitoring year for the inflation in Turkey. Due the decreasing trend in inflation rate and the sustained positive trends
in qualitative factors such as the economic growth for the last three years, financial and economic stabilization, and the decreasing
interest rates, Turkey is considered non-hyperinflationary economy under IAS 29 starting from 1 January 2006. Therefore, the
non monetary items of Banvit and its subsidiaries in the accompanying consolidated financial statements have been restated
for the effects of changes in the general purchasing power of Turkish Lira as of 31 December 2005 based on IAS 29, however, the
application of this standard has ceased in 2006.

(c) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated to TL at the foreign exchange rates ruling at the date of the transactions. Monetary
assets and liabilities denominated in foreign currencies at the reporting date are retranslated to TL at the foreign exchange
rates ruling at that date. Non-monetary assets and liabilities those are measured in terms of historical cost in a foreign currency
are translated using the exchange rate at the date of the transaction. Foreign exchange differences arising on translation are
recognized in profit or loss.
 47

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

3 Significant accounting policies (continued)

(c) Foreign currency (continued)

The assets and liabilities of foreign operations are translated into the reporting currency of Banvit at the rate of exchange ruling
at the reporting date. The income and expenses of foreign operations are translated into the reporting currency at the weighted
average exchange rates for the period. The foreign currency differences are recognized directly in equity, under “Foreign Currency
Translation Reserve”. When a foreign operation is disposed of, in part or in full, the relevant amount in the foreign currency
translation reserve is transferred to profit or loss.

Foreign currency translation rates used by the Company as of respective periods are as follows:
Dates USD / TL EUR / TL

31 December 2011 1.8889 2.4438

31 December 2010 1.5460 2.0491

(d) Financial instruments

i) Non-derivative financial assets:

The Group initially recognizes loans and receivables and deposits on the date that they are originated.

The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of
ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group
is recognized as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when,
the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the
liability simultaneously.

Non-derivative financial assets of the Group comprise loans, cash and cash equivalents and receivables.
Loans and receivables

Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets
are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and
receivables are measured at amortised cost using the effective interest method, less any impairment losses.

Loans and receivables comprise trade and other receivables.

Cash and cash equivalents comprise cash balances and call deposits with original maturities of six months or less.

ii) Non-derivative financial liabilities

The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other
financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date at
which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.
48 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

3 Significant accounting policies (continued)

ii) Non-derivative financial liabilities (continued)

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when,
the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the
liability simultaneously.

The Group has the following non-derivative financial liabilities: loans and borrowings and trade and other payables.

Such financial liabilities 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.

iii) Share capital:

Ordinary shares are classified as equity.

iv) Derivative financial instruments:

The derivative financial instruments of the Group consist of interest swap transactions. These derivative financial instruments, even
though providing effecting economic hedges under the Group risk management position, do not qualify for hedge accounting under
the requirements of IAS 39 “Financial Instruments : Recognition and Measurement”, and therefore accounted for as derivatives held
for trading in the consolidated financial statements.

(e) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. The costs
of items of property, plant and equipment purchased before 31 December 2005 are restated for the effects of inflation in TL unit
current at 31 December 2005 pursuant to IAS 29.

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for
its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased
software that is integral to the functionality of the related equipment is capitalized as part of the equipment. Borrowing costs
related to the acquisition or constructions of qualifying assets are capitalized during the period.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major
components) of property, plant and equipment.

(ii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably.
The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
 49

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

3 Significant accounting policies (continued)

(iii) Depreciation

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of
property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives. Land is not
depreciated.

The estimated useful lives for the current and comparative periods are as follows:

Description Year
Building 15 - 50
Land improvements 15 - 25
Machinery and equipment 2 - 15
Vehicles 4-5
Furniture and fixtures 3 - 15
Leasehold improvements 5 - 15

Leasehold improvements are amortized over the periods of the respective leases, also on a straight-line basis. Depreciation
methods, useful lives and residual values are reassessed at the reporting date.

(f) Intangible assets

(i) Goodwill

Goodwill represents the excess of the cost of the acquisition over the fair value of identifiable net assets of an acquired subsidiary
at the date of acquisition. Since 1 January 2005; goodwill is no longer amortised but is subject to annual impairment testing. Goodwill
is reflected at cost less accumulated impairment losses, if any.

(ii) Other intangible assets

Other intangible assets that are acquired by the Company, which have finite useful lives, are measured at cost less accumulated
amortization and accumulated impairment losses.

(iii) Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and
understanding, is recognized in profit or loss when incurred.

(iv) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it
relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss when
incurred.

(v) Amortization

Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than
goodwill, from the date that they are available for use. Intangible assets are amortized on a straight-line basis over their estimated
useful lives of 3-15 years.
50 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

3 Significant accounting policies (continued)

(g) Biological assets

The Company’s biological assets comprise of breeder chickens, calves, broiler daily chickens, broiler turkeys and breeder pullets.

Calves are measured at fair value less point-of-sale costs, with any change therein recognized in profit or loss. Point-of-sale costs
include all costs that would be necessary to sell the assets.

Breeder chickens (chickens kept for broiler breeding purposes), broiler daily chickens, broiler turkeys and breeder pullets are
measured at cost less any accumulated depreciation and accumulated impairment losses. There is no active market for these
biological assets. Breeder chicks are amortised in one year due to their economic useful lives.

(h) Leased assets

Leases in terms of which Company assumes substantially all the risks and rewards of ownership are classified as finance leases.
Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the
minimum lease payments. Subsequent to initial recognition the asset is accounted for in accordance with the accounting policy
applicable to that asset.

Other leases are operating leases and, the leased assets are not recognised on Company’s consolidated statement of financial
position.

(i) Inventories

Inventories are measured at the lower of the cost and net realizable value. The cost of inventory includes expenditures incurred in
acquiring the inventories and bringing them to their existing location. Unit cost of inventories is determined by the weighted average
method. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion
and selling expenses.

(j) Impairment

(i) Financial assets

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying
amount, and the present value of the estimated future cash flows discounted at the original effective interest rate.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed
collectively in groups that share similar credit risk characteristics.

All impairment losses are recognized in profit or loss.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was
recognized. For financial assets measured at amortized cost, the reversal is recognized in profit or loss.
 51

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

3 Significant accounting policies (continued)

(ii) Non-financial assets

The carrying amounts of the Company’s non-financial assets are reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated.

An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other
assets and groups. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of cash-generating
units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount
of the other assets in the unit (group of units) on a pro rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset.

In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications
that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been
recognized.

(k) Employee benefits

In accordance with existing social legislation in Turkey, the Company is required to make lump-sum payments to employees whose
employment is terminated due to retirement or for reasons other than resignation or misconduct. The computation of the liability
is based upon the retirement pay ceiling announced by the Government. Such payments are calculated on the basis of 30 days’
pay, (limited to a maximum of TL 2,732 at 31 December 2011) per year of employment at the rate of pay applicable at the date
of retirement or termination. Employee benefits represent the present value of the estimated future probable obligation of the
Company arising from the retirement of the employees and calculated in accordance with the Turkish Labour Law. It is computed
and reflected in the financial statements on an accrual basis as it is earned by serving employees.
The reserve has been calculated by estimating the present value of future probable obligation of the Company arising from the
retirement of the employees.
The Company pays contributions to the Social Security Institution of Turkey on a mandatory basis. The Company has no further
payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when
they are due.

(l) Provisions

A provision is recognized when the Company has a present obligation (legal or constructive) 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. Where the effect of the time value of money is material, the amount of a provision is
the present value of the expenditures expected to be required to settle the obligation.
52 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

3 Significant accounting policies (continued)

(m) Revenue

Goods sold

Revenue from the sale of goods is measured at the fair value of the consideration received on receivable, net of returns and
allowances, trade discounts and volume rebates. Revenue is recognized when the significant risk and rewards of ownership have
been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be
estimated reliably. Transfer of risks and rewards vary depending on the individual terms of the contract of sale.

Government grants

All government grants including the nonmonetary incentives that are carried at fair value are recognized in the consolidated financial
statements provided that the Company fulfills the necessary requirements to receive such incentives. Government grants related to
the assets are booked as deferred income in financial position.

(n) Lease payments

Payments made under operating leases are recognized in profit or loss on a straight-line basis over the terms of the lease. Lease
incentives received are recognized as an integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between finance expense and the reduction of the
outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate
of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease
payments over the remaining term of the lease when the lease adjustment is confirmed.

(o) Finance income and expense

Finance income comprises interest income on funds invested, unearned interest income and foreign currency gains. Interest income
is recognized as it accrues, using the effective interest method.
Finance expenses comprise interest and commission expenses on borrowings, unearned interest expense and foreign currency
losses. All borrowing costs are recognized in profit or loss using the effective interest method.

(p) Income tax expense

Income tax expense just comprises deferred tax, since any current year corporate tax has been recognized. Income tax expense is
recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in
equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of previous years.
 53

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

3 Significant accounting policies (continued)

(p) Income tax expense (continued)

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary
differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and
jointly controlled entities to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the
tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted
or substantively enacted by the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they
relate to income taxes levied by the same tax authority on the same taxable entity, or on different entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which
temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it
is no longer probable that the related tax benefit will be realized.

(q) Earnings per share

The Company presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or
loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during
the period.

(r) Related Party

For the purpose of the consolidated financial statements, the shareholders, key management personnel and the Board members,
and in each case, together with their families and companies controlled by/affiliated with them; investments and joint ventures are
considered and referred to as the related parties.

(s) Segment Reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses including revenues and expenses that relate to transactions with any of the Group’s other components. All operating
segments’ operating results are regularly reviewed by the Group management to make decisions about resources to be allocated to
the segment and assess its performance, and for which discrete financial information is available.

(t) New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations explained below are not yet effective as at 31 December
2011, and have not been applied in preparing these consolidated financial statements:

• The amendments to IAS 1 Presentation of Items of Other Comprehensive Income require that an entity present separately the
items of other comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from
those that would never be reclassified to profit or loss. The amendments are effective for annual periods beginning on or after 1 July
2012. The Group has not had an opportunity to consider the potential impact of the adoption of this standard.
54 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

3 Significant accounting policies (continued)

(t) New standards and interpretations not yet adopted (continued)

• The amendments to IAS 12 Deferred Tax: Recovery of Underlying Assets introduce an exception to the general measurement
requirements of IAS 12 Income Taxes in respect of investment properties measured at fair value. The amendments are effective for
annual periods beginning on or after 1 January 2012. The Group has not had an opportunity to consider the potential impact of the
adoption of this standard.

• IFRS 10 Consolidated Financial Statements supersedes IAS 27 (2008) and SIC-12 Consolidation—Special Purpose Entities and
becomes effective for annual periods beginning on or after 1 January 2013.

• IFRS 11 Joint Arrengements supersedes IAS 31 and SIC-13 Jointly Controlled Entities—Non-Monetary Contributions by Venturers and
becomes effective for annual periods beginning on or after 1 January 2013.

• IFRS 12 Disclosure of Interests in Other Entities contains the disclosure requirements for entities that have interests in
subsidiaries, joint arrangements, associates and/or unconsolidated structured entities and becomes effective for annual periods
beginning on or after 1 January 2013.

• IFRS 13 Fair Value Measurement replaces the fair value measurement guidance contained in individual IFRSs with a single source of
fair value measurement guidance and becomes effective for annual periods beginning on or after 1 January 2013. The Group has not
had an opportunity to consider the potential impact of the adoption of this standard.

• IAS 27 Separate Financial Statements (2011) supersedes IAS 27 (2008) and becomes effective for annual periods beginning on or
after 1 January 2013.

• IAS 28 Investments in Associates and Joint Ventures (2011) supersedes IAS 28 (2008) and becomes effective for annual periods
beginning on or after 1 January 2013.

• Amendments to IAS 19 Employee Benefits includes changes in the accounting of defined benefit plans. The amendments are
effective for annual periods beginning on or after 1 January 2013. The Group has not had an opportunity to consider the potential
impact of the adoption of this standard.

• IFRS 9 Financial Instruments could change the classification and measurement of financial assets and becomes effective for
annual periods beginning on or after 1 January 2015. The Group has not had an opportunity to consider the potential impact of the
adoption of this standard.
 55

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

4 Determination of fair values

A number of the Company’s accounting policies and disclosures require the determination of fair value, for both financial and
non-financial assets and liabilities. Fair values have been determined for measurement and / or disclosure purposes based on the
following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the
notes specific to that asset or liability.

(a) Property, plant and equipment

The fair value of property, plant and equipment is carried at cost and is considered to approximate its respective carrying amount.

(b) Biological assets

The fair value of calves is based on the market price of the calves of similar age and breed.

(c) Trade and other receivables

The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of
interest at the reporting date.

(d) Trade and other liabilities

The fair value of trade and other payables is estimated as the present value of future cash flows.

(e) Derivative financial liabilities

The fair value of interest rate swap is based on broker quotes. Those quotes are tested for reasonableness by discounting estimated
future cash flows based on the terms and maturity of the contract and using market interest rate for a similar instrument at the
measurement date. Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of
the Group entity and counterparty when appropriate.

5 Segment Reporting

The Company’s principal activity is made of production and sales of chicken, convenience and charcuterie, feed, veal and turkey.
The Company’s management follows the Group activities on the basis of the main product group and the domestic and overseas
activities. On the other hand, since the nature and the economic characteristics of the products of each main product group, sales
channels, customer needs and the classification of the customers according to their risks, the legislation affecting the Company’s
activities are the same and the activities of the Company other than Turkey do not have importance in the total activity, financial
information has not been reported through segment reporting.
56 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

6 Revenues and cost of revenues

For the years ended 31 December, revenues and cost of revenues are as follows:

Revenues 2011 2010

Domestic sales 1,175,129,433 1,106,647,742
Foreign sales 86,182,341 54,584,597
Other 696,909 596,199

Gross revenues 1,262,008,683 1,161,828,538

Returns and discounts (-) (145,713,714) (159,449,236)

Net revenues 1,116,294,969 1,002,379,302

Cost of revenues (-) (982,172,344) (791,401,439)

Gross profit 134,122,625 210,977,863

Depreciation and amortization expenses
2011 2010
Production 41,588,460 33,470,698
Operation 1,429,470 3,079,062
Total depreciation and amortization expenses 43,017,930 36,549,760

7 Personnel expenses

2011 2010
Wages and salaries 68,291,867 53,120,541
Compulsory social security contributions 11,677,573 15,315,799
Increase in reserve for employee severance indemnity 329,134 777,632
Total personnel expenses 80,298,574 69,213,972
 57

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

8 Administrative expenses

For the years ended 31 December, administrative expenses comprised the following:

2011 2010
Payroll expenses 14,175,589 11,198,015
Consultancy expenses 1,959,630 1,612,425
Outsourcing expenses 2,045,968 2,299,008
Bad debt allowance 3,059,998 205,094
Representation expenses 1,931,299 2,106,072
Depreciation and amortization expenses 698,780 1,456,153
Security expenses 1,383,767 1,111,203
Rent expenses 858,445 526288
Taxes and duties 1,142,200 1,456,153
Communication expenses 702,279 817,202
Maintenance expenses 490,079 330,487
Insurance expenses 439,676 410,171
Lawsuit expenses 489,960 -920,608
Vehicle expenses 358,693 730,178
Others 5,735,445 3,821,809
Total 35,471,808 27,159,650

9 Selling, marketing and other distribution expenses

For the years ended 31 December, selling, marketing and other distribution expenses comprised the following:

2011 2010
Transportation expenses 31,147,899 26,881,366
Sales commissions 19,379,993 17,507,415
Sponsorship expenses 14,356,254 11,836,273
Advertisement expenses 8,188,459 13,437,999
Rent expenses 3,564,021 1,750,399
Payroll expenses 10,586,748 9,262,129
Vehicle expenses 2,822,653 3,582,667
Export expenses 1,761,181 1,205,212
Depreciation and amortization expenses 730,689 1,622,909
Premiums for sales personnel 2,715,262 635,328
Personnel accommodation expenses 1,161,365 1,310,025
Electricity expenses 792,030 882,870
Others 2,032,734 6,049,717
Total 99,239,288 95,964,309
58 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

10 Other income/ (expense)

For the years ended 31 December, other income and expenses comprised the following:

2011 2010
Other income
Insurance claim income 1,887,178 1,933,986
Salvage income 626,192 199,462
Rent income 262,092 190,101
Gain on sale of fixed assets, net 225,464 133,496
Others 3,644,064 2,231,796
Other income 6,644,990 4,688,841

Other expense
Flood damage expenses (1,314,567) --
Reconciliation difference expenses (259,578) (270,493)
Others (1,115,723) (325,969)
Other expense (2,689,868) (596,462)

11 Finance income and costs

For the years ended 31 December, net finance costs comprised the following:

Recognised in profit or loss

2011 2010
Finance income
Rediscount income on financial liabilities 994,928 596,830
Interest income 1,324,778 887,992
Interest swap transaction fair value adjustment 522,557 --
Total finance income 2,842,263 1,484,822

2011 2010
Finance costs
Foreign exchange loss, net (55,003,916) (2,136,810)
Borrowing expenses (19,012,867) (13,781,601)
Rediscount expenses on financial assets (2,178,732) (650,733)
Interest swap transaction fair value adjustment -- (1,332,967)
Commissions and other expenses (1,048,080) (804,855)
Total finance cost (77,243,595) (18,706,966)
Net finance cost (74,401,332) (17,222,144)

Recognised directly in equity

2011 2010
Foreign currency translation differences for foreign operations 16,006,726 (450,954)
Finance income/(expense) recognised directly in equity 16,006,726 (450,954)
 59

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

12 Income taxes

In Turkey, corporate income tax is levied at the rate of 20% on the statutory corporate income tax base, which is determined by
modifying accounting income for certain exclusions and allowances for tax purposes.

There is also a withholding tax on the dividends paid and is accrued only at the time of such payments. The withholding tax rate
on the dividend payments other than the ones paid to the non-resident institutions generating income in Turkey through their
operations or permanent representatives and the resident institutions is 15 percent. In applying the withholding tax rates on
dividend payments to the non-resident institutions and the individuals, the withholding tax rates covered in the related Double Tax
Treaty Agreements are taken into account. Appropriation of retained earnings to capital is not considered as profit distribution and
therefore is not subject to withholding tax.

According to the Corporate Tax Law, 75% of the capital gains arising from the sale of tangible assets and investments in equity
shares owned for at least two years are exempted from corporate tax on the condition that such gains are reflected in the equity
with the intention to be utilised in a share capital increase within five years from the date of the sale. The remaining 25% of such
capital gains are subject to corporate tax.

The transfer pricing provisions have been stated under the Article 13 of Corporate Tax Law with the heading of “disguised profit
distribution via transfer pricing”. The General Communique on disguised profit distribution via transfer pricing dated 18 November
2007 sets details about implementation. If a tax payer enters into transactions regarding sale or purchase of goods and services
with related parties, where the prices are not set in accordance with arm’s length basis, then related profits are considered to be
distributed in a disguised manner through transfer pricing. Such disguised profit distributions through transfer pricing are not
accepted as a tax deductible for corporate income tax purposes.

The tax legislation does not permit a parent company and its subsidiaries to file a consolidated tax return. Therefore, provision for
taxes shown in the consolidated financial statements reflects the total amount of taxes calculated on each entity that are included
in the consolidation.

Tax losses can be carried forward to be offset against future taxable income for up to five years. Tax losses cannot be carried back.

There is no procedure for a final and definitive agreement on tax assessments. Companies file their tax returns within four months
following the close of the accounting year to which they relate. Tax returns are open for five years from the beginning of the year
that follows the date of filing during which time the tax authorities have the right to audit tax returns, and the related accounting
records on which they are based, and may issue re-assessments based on their findings.

The consolidated subsidiaries of Nutrinvestment B.V. in Romania, Banvit Foods S.R.L. and Agrafood S.R.L. are subject to income tax at
the rate of 16% (31 December 2010: 16%).
60 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

12 Income taxes (continued)

12.1 Income taxes in profit or loss

Total income tax benefit/(expense) recognized in the consolidated income statement is as follows:

2011 2010
Current tax expense (158,307) (18,269,527)
Deferred tax benefit 12,213,456 2,404,583
Income tax benefit / (expense) 12,055,149 (15,864,944)

The total taxation charge is different than the amount computed by applying the statutory tax rate to income before tax, as shown
in the following reconciliation for the period ended 31 December 2011 and 2010:
2011 2010

Profit/(loss) for the year (59,191,575) 58,697,491

Income tax (expense)/benefit 12,055,149 (15,864,944)
Profit/(loss) excluding income tax (71,246,724) 74,562,435
Income tax (expense)/benefit at 20% 14,249,345 (14,912,487)
Tax exempt income 218,227 66,521
Disallowable expenses (923,317) (440,572)
Permanent differences between IFRS and statutory books (475,352) 254,110
Effect of deferred tax valuation allowance (803,141) (461,644)
Effect of tax rates in foreign jurisdictions (210,613) (370,872)
Income tax (expense)/benefit 12,055,149 (15,864,944)

12.2 Taxes payable on income

In accordance with the tax legislation in Turkey, tax payments that are made in advance during the year are being deducted from the
total final tax liability of the fiscal year. Accordingly, the taxation charge on income is not equal to the final tax liability appearing on
the statement of financial position. Taxes payable on income at 31 December 2011 and 2010 comprised the following:

2011 2010
Taxes payable on income 158,307 18,269,527
Less: Corporation taxes paid in advance (116,428) (21,158,155)
Taxes payable/(prepaid tax) on income 41,879 (2,888,628)
12 Income taxes (continued)

12.3 Deferred tax assets and liabilities Currency: TL

The temporary differences and the resulting deferred tax assets/(liabilities) of the Group at 31 December 2011 and 2010 are as follows:

Assets Liabilities Net

31 December 31 December 31 December 31 December 31 December 31 December
2011 2010 2011 2010 2011 2010
Property, plant, equipment, and biological
assets -- -- (4,602,097) (3,479,196) (4,602,097) (3,479,196)
Employee benefits 670,898 605,071 -- -- 670,898 605,071
IAS 39 effect on trade payables, receivables
and loans 559,540 322,694 -- (42,042) 559,540 280,652
Bonus provision for sales personnel 300,000 614,797 -- -- 300,000 614,797
as at and for the Year Ended 31 December 2011
Notes to the Consolidated Financial Statements

Vacation pay 227,456 282,853 -- -- 227,456 282,853

Seniority pay liability 206,935 169,015 -- -- 206,935 169,015
Allowance for doubtful receivables 113,092 110,638 -- -- 113,092 110,638
Foreign currency valuation of advances given -- -- (106,518) (186,875) (106,518) (186,875)
Carried forward tax losses 12,951,396 -- -- -- 12,951,396 --
Provision for turnover premium 30,734 41,000 -- -- 30,734 41,000
Interest rate swap transaction fair value
adjustment 354,521 459,032 -- -- 354,521 459,032
Net realizable value adjustment on inventories 445,228 12,009 -- -- 445,228 12,009
Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Bonus provisions -- -- -- -- -- --
Other temporary differences 1,707 30,440 -- -- 1,707 30,440
Deferred tax assets/(liabilities) 15,861,507 2,647,549 (4,708,615) (3,708,113) 11,152,892 (1,060,564)
Set off tax (4,708,615) (2,647,549) 4,708,615 2,647,549 -- --
Net deferred tax assets/(liabilities) 11,152,892 -- -- (1,060,564) 11,152,892 (1,060,564)
61
12 Income tax expense (continued)

Currency: TL
12.3 Deferred tax assets and liabilities (continued)

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes
relate to the same fiscal authority.

Deferred tax assets amounting to TL 2,271,725 (31 December 2010: TL 1,468,584) have not been recognised because it is not probable that future taxable profit will be available
62 Banvİt ANNUAL REPORT 2011

against which Banvit Foods S.R.L. and Agrafood S.R.L. can utilise the benefits therefrom.

The Company recognized the deferred tax arising from the current year tax losses since it is probable that future taxable profit will be available to utilize the benefit therefrom.

Movement temporary differences during the year

as at and for the Year Ended 31 December 2011
Notes to the Consolidated Financial Statements

Balance Recognised Balance Recognised Balance

1 January in profit Recognised 31 December in profit Recognised 31 December
2010 or loss in equity 2010 or loss in equity 2011
Property, plant, equipment and biological assets (4,077,506) 598,310 -- (3,479,196) (1,122,901) -- (4,602,097)
Employee benefits 449,545 155,526 -- 605,071 65,827 -- 670,898
IAS 39 effect on trade payables, receivables and loans 118,771 161,881 -- 280,652 278,888 -- 559,540
Bonus provision for sales personnel 417,597 197,200 -- 614,797 (314,797) -- 300,000
Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Vacation pay 214,530 68,323 -- 282,853 (55,397) -- 227,456

Seniority pay liability 134,504 34,511 -- 169,015 37,920 -- 206,935
Allowance for doubtful receivables 108,322 2,316 -- 110,638 2,454 -- 113,092
Foreign currency valuation of advances given (651,986) 465,111 -- (186,875) 80,357 -- (106,518)
Carried forward tax losses -- -- -- -- 12,951,396 -- 12,951,396
Provision for turnover premium 32,942 8,058 -- 41,000 (10,266) -- 30,734
Insurance income accrual (491,177) 491,177 -- -- -- -- --
Interest swap transaction fair value adjustment 192,439 266,593 -- 459,032 (104,511) -- 354,521
Net realizable value adjustment on inventory 107,006 (94,997) -- 12,009 433,219 -- 445,228
Other temporary differences (20,134) 50,574 -- 30,440 (28,733) -- 1,707
(3,465,147) 2,404,583 -- (1,060,564) 12,213,456 -- 11,152,892
13 Property, plant and equipment
Currency: TL
Movements of property, plant and equipment and related accumulated depreciation at 31 December 2011 is as follows:

Land and Land Machinery and Furniture and Motor Leasehold Construction
Building Improvements Equipment Fixtures Vehicles Improvements in Progress Total
Cost
1 January 2011 101,629,843 17,907,561 221,424,761 16,868,322 4,226,331 22,764,929 6,844,110 391,665,857
Additions 11,589,433 1,242,850 23,044,582 1,352,379 1,061,250 969,541 17,689,282 56,949,317
Disposals (204,098) (16,542) (474,468) (293,249) (203,626) -- (106,304) (1,298,287)
Transfers 3,297,298 -- 17,231,701 -- -- 348,172 (20,877,171) --
Translation difference 5,354,581 (423,759) 2,570,335 536 234,222 41,545 1,456,110 9,233,570
as at and for the Year Ended 31 December 2011

31 December 2011 121,667,057 18,710,110 263,796,911 17,927,988 5,318,177 24,124,187 5,006,027 456,550,457
Notes to the Consolidated Financial Statements

Accumulated Depreciation
1 January 2011 (17,356,962) (2,573,708) (168,398,226) (14,061,073) (3,097,209) (9,358,438) -- (214,845,616)
Disposals 36,713 -- 91,741 91,095 203,626 -- -- 423,175
Depreciation for the year (2,921,488) (282,730) (17,012,011) (895,821) (481,746) (1,551,066) -- (23,144,862)
Impairment -- -- -- -- -- -- (1,671,448) (1,671,448)
Translation difference 216,264 (74,170) 340,072 71,806 (88,721) 11,548 -- 476,799

31 December 2011 (20,025,473) (2,930,608) (184,978,424) (14,793,993) (3,464,050) (10,897,956) (1,671,448) (238,761,952)
Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Net book value 31 December

2010 84,272,881 15,333,853 53,026,535 2,807,249 1,129,122 13,406,491 6,844,110 176,820,241

Net book value 31 December

2011 101,641,584 15,779,502 78,818,486 3,133,995 1,854,127 13,226,231 3,334,579 217,788,504

As at 31 December 2011, total insurance on property, plant and equipment is TL 550,008,016 (31 December 2010: TL 557,316,704).

The Company has mortgaged its property, plant and equipment at an amount of TL 113,334,000 (USD 60,000,000 equivalent) for IFC loan and loans received from a private bank (31
December 2010: TL 92,760,000; USD 60,000,000 equivalent).
63
13 Property, plant and equipment (continued)

Currency: TL
Movements of property, plant and equipment and related accumulated depreciation at 31 December 2010 is as follows:

Land and Land Machinery and Furniture and Motor Leasehold Construction
Building Improvements Equipment Fixtures Vehicles Improvements in Progress Total
Cost
64 Banvİt ANNUAL REPORT 2011

1 January 2010 86,270,983 15,093,591 197,570,752 16,133,793 3,869,967 21,674,934 4,173,622 344,787,642
Additions 4,623,609 2,959,554 14,574,464 1,446,411 425,190 438,030 26,264,643 50,731,901
Disposals -- -- (192,117) (711,882) (10,169) -- (70,973) (985,141)
Transfers 12,428,499 -- 10,200,305 -- -- 651,965 (23,280,769) --
Translation difference (1,693,248) (145,584) (728,643) -- (58,657) -- (242,413) (2,868,545)

31 December 2010 101,629,843 17,907,561 221,424,761 16,868,322 4,226,331 22,764,929 6,844,110 391,665,857
as at and for the Year Ended 31 December 2011
Notes to the Consolidated Financial Statements

Accumulated Depreciation
1 January 2010 (15,328,863) (2,335,756) (156,629,213) (13,227,629) (2,800,578) (7,844,945) -- (198,166,984)
Disposals -- -- 29,563 75,150 4,338 -- -- 109,051
Depreciation for the year (2,151,077) (237,952) (12,040,038) (908,594) (305,526) (1,513,493) -- (17,156,680)
Translation difference 122,978 -- 241,462 -- 4,557 -- -- 368,997

31 December 2010 (17,356,962) (2,573,708) (168,398,226) (14,061,073) (3,097,209) (9,358,438) -- (214,845,616)

Net book value 31 December 2009 70,942,120 12,757,835 40,941,539 2,906,164 1,069,389 13,829,989 4,173,622 146,620,658
Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Net book value 31 December 2010 84,272,881 15,333,853 53,026,535 2,807,249 1,129,122 13,406,491 6,844,110 176,820,241
 65

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

14 Intangible assets

Movements of intangible assets and related accumulated amortization 31 December 2011 and 2010 are as follows:

31 December 2011
Goodwill Software Licenses Total
Cost
1 January 2011 6,569,965 6,169,051 1,887,202 14,626,218
Additions -- 1,335,531 189,253 1,524,784

31 December 2011 6,569,965 7,504,582 2,076,455 16,151,002

Accumulated Amortization
1 January 2011 (2,463,736) (4,706,233) (815,969) (7,985,938)
Amortization for the year -- (870,836) (112,851) (983,687)

31 December 2011 (2,463,736) (5,577,069) (928,820) (8,969,625)

Net Book Value –

31 December 2010 4,106,229 1,462,818 1,071,233 6,640,280

Net Book Value –

31 December 2011 4,106,229 1,927,513 1,147,635 7,181,377

31 December 2010
Goodwill Software Licenses Total
Cost
1 January 2010 6,569,965 4,981,329 1,364,266 12,915,560
Additions -- 1,187,722 522,936 1,710,658

31 December 2010 6,569,965 6,169,051 1,887,202 14,626,218

Accumulated Amortization
1 January 2010 (2,463,736) (4,060,776) (745,116) (7,269,628)
Amortization for the year -- (645,457) (70,853) (716,310)

31 December 2010 (2,463,736) (4,706,233) (815,969) (7,985,938)

Net Book Value–

31 December 2009 4,106,229 920,552 619,151 5,645,932

Net Book Value–

31 December 2010 4,106,229 1,462,818 1,071,233 6,640,280

The Company acquired 99.99% shares of Tadpi in 2001 in order to benefit facilities of Tadpi for turkey production. Up to 31 December
2004, goodwill was amortized over a period of 10 years based on the management expectation on the economic value of the
goodwill. As from 1 January 2005, based on the transitional provisions of IFRS 3, goodwill is no longer amortised but is now subject
to annual impairment testing. At 31 December 2011, the goodwill recognized from the acquisition of Tadpi has been carried in the
consolidated financial statements with net book value of TL 4,106,229. In 2011, an impairment test has been implemented by the
Company and no impairment has been noted on the net book value of goodwill.
66 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

15 Biological assets

Breeder chickens those have useful life of 1 year, the calves that have useful life less than 1 year, broiler daily chickens, broiler turkeys
and breeder pullets are classified as biological assets.

At 31 December 2011 and 2010, biological assets comprised the following:

2011 2010
Calves 69,134,467 60,602,395
Broiler daily chickens 21,196,346 20,854,839
Breeder chickens 16,646,964 15,114,867
Breeder pullets 7,539,183 6,840,239
Broiler turkeys 3,153,209 3,308,338

Total biological assets 117,670,169 106,720,678

(i) Movements of calves at 31 December 2011 and 2010 are as follows:

2011 2010
Balance at 1 January 60,602,395 41,205,272
Additions 46,728,077 48,385,219
Change arising from physical changes(*) 42,967,408 115,941,992
Effect of price changes(*) 1,109,586 (6,949,509)
Calves transferred to inventory (82,272,999) (137,980,579)

Ending Balance 69,134,467 60,602,395

(*) Change arising from physical changes mainly composed of feed consumptions, raiser costs, medicine, care costs. Effect of price
changes derives from fair value increase and decreases.

(ii) Movements of broiler daily chickens at 31 December 2011 and 2010 are as follows:

2011 2010
Balance at 1 January 20,854,839 15,146,944
Additions 73,514,131 60,337,141
Change arising from physical changes(*) 384,451,207 294,388,044
Broiler daily chickens transferred to inventory (457,623,831) (349,017,290)

Ending Balance 21,196,346 20,854,839

(*) Change arising from physical changes mainly composed of feed consumptions, raiser costs, medicine, and care costs.
 67

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

15 Biological assets (continued)

(iii) Movements of breeder chickens at 31 December 2011 and 2010 are as follows:

31 December 2011
Accumulated Net carrying
Cost amortization amount

1 January 2011 32,243,089 (17,128,222) 15,114,867

Charge for the year -- (18,889,381) (18,889,381)
Transfers from breeder pullets 32,789,124 -- 32,789,124
Breeder chickens transferred to inventory (40,228,646) 28,922,767 (11,305,879)
Currency translation difference 667,107 (1,728,874) (1,061,767)
31 December 2011 25,470,674 (8,823,710) 16,646,964
31 December 2010
Accumulated Net carrying
Cost amortization amount
1 January 2010 22,273,168 (12,627,983) 9,645,185
Charge for the year -- (18,676,770) (18,676,770)
Transfers from breeder pullets 25,935,060 -- 25,935,060
Breeder chickens transferred to inventory (16,256,806) 14,155,540 (2,101,266)
Currency translation difference 291,667 20,991 312,658
31 December 2010 32,243,089 (17,128,222) 15,114,867

Six month old breeder pullets are transferred to breeder chickens since they start to lay eggs.

(iv) Movements of breeder pullets at 31 December 2011 and 2010 are as follows:
2011 2010
Balance at 1 January 6,840,239 6,369,675
Additions 7,638,584 8,694,664
Change arising from physical changes(*) 16,454,391 18,002,627
Currency translation difference 9,395,093 (291,667)
Transfers to breeder chickens (32,789,124) (25,935,060)
Ending Balance 7,539,183 6,840,239

(*) Change arising from physical changes mainly composed of feed consumptions, raiser costs, medicine, and care costs.

(v) Movements of broiler turkey at 31 December 2011 and 2010 are as follows:
2011 2010
Balance at 1 January 3,308,340 2,452,268
Additions 3,652,254 3,396,596
Change arising from physical changes(*) 14,627,636 16,671,377
Broiler turkeys transferred to inventory (18,435,021) (19,211,903)

Ending Balance 3,153,209 3,308,338

(*) Change arising from physical changes mainly composed of feed consumptions, raiser costs, medicine, and care costs.
68 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

15 Biological assets (continued)

The Group exposed to financial risks those are emanated from price changes resulted from competitive environment, disease risk
for biological assets, changes in consumer prices, input prices for feed production and other probable price changes in feed raw
materials resulted mainly from drought. Primarily, the Group holds decrease of market prices risk as experienced in the prior years as
a result of bird influenza for chickens and other various diseases for calves. In order to avoid the risks specified, the Group attempts
to keep up quality level of disinfection and provident care and insure the biological assets for these risks.

As at 31 December 2011; total insurance on biological assets is TL 77,289,811 (31 December 2010: TL 58,553,612).

16 Inventories

At 31 December 2011 and 2010, inventories comprised the following:

2011 2010
Raw materials and auxiliary items 99,293,513 65,886,645
Finished goods 34,040,299 32,615,007
Semi-finished goods 504,146 819,285
Goods in transit -- 361,125
Provision for inventory (2,226,142) (77,204)
Total 131,611,816 99,604,858

The raw materials and auxiliary items balance consists of animal feeds, medicine and other auxiliary items. The semi-finished goods
consist of broiler chickens. The finished goods balance consists of processed chickens, turkeys, veals ready for consumption and
feeds for cattles, chicks and turkeys.

As at 31 December 2011; total insurance on inventory is TL 111,089,226 (31 December 2010: TL 97,208,927).

17 Trade and other receivables

At 31 December 2011 and 2010, trade and other receivables comprised the following:

2011 2010
Trade receivables 142,231,047 130,499,591
Other receivables 45,969,170 42,912,674
Other receivables from related parties (Note 29) -- 2,617
Total current trade and other receivables(1) 188,200,217 173,414,882
Other non-current receivables 7,336,408 13,714,736
Total non-current trade and other receivables(2) 7,336,408 13,714,736
Total (1+2) 195,536,625 187,129,618
 69

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

17 Trade and other receivables (continued)

a) Trade receivables

At 31 December 2011 and 2010, trade receivables comprised the following:

Trade Receivables 2011 2010

Accounts receivables 117,714,418 108,821,616
Post-dated cheques and notes 33,667,995 26,769,362
Less: Allowance for doubtful receivables (7,319,551) (4,259,553)
Less: Rediscount expenses (1,831,815) (831,834)
Trade Receivables 142,231,047 130,499,591

The Group’s exposure to credit and currency risks related to trade and other receivables are disclosed in note 27.

b) Other Receivables

At 31 December 2011 and 2010, other receivables comprised the following:

2011 2010
Advances given(*) 17,430,536 24,367,113
VAT receivables 25,899,968 21,487,538
Income accruals 1,021,669 273,678
Prepaid expenses 5,173,428 3,001,244
Receivable from personnel 405,926 1,516,948
Other receivables 3,374,051 5,980,889
Total 53,305,578 56,627,410

Non-current 7,336,408 13,714,736

Current 45,969,170 42,912,674
Total 53,305,578 56,627,410

(*) At 31 December 2011 advances given are composed of advances given to suppliers for imported goods-in transit corn, soya and
derivatives of these products amounting to TL 4,340,154 (31 December 2010: TL 8,637,639), advances given to stockbreeders for
poultry farm construction amounting to TL 10,954,615 (31 December 2010: TL 11,469,952) and advances given to suppliers for the
purchase of property, plant and equipment amounting to TL 2,135,767 (31 December 2010: TL 4,259,522).

18 Cash and cash equivalents

At 31 December 2011 and 2010, cash and cash equivalents comprised the following:

2011 2010
Bank balances 13,475,527 3,968,595
Cheques 2,887,390 1,401,279
Cash on hand 1,462,054 1,441,444
Cash and cash equivalents 17,824,971 6,811,318

At 31 December 2011 and 2010 demand deposits constitute whole of the cash balance at banks. The maturity of the cheques that
are classified under cash and cash equivalents is 31 December 2011. The cheques whose maturity are after 31 December 2011, are
classified under trade receivables. The Company has no deposits under bank blockage at 31 December 2011 and 2010.
70 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

19 Capital and reserves

Share capital

At 31 December 2011 and 2010, the composition of shareholders and their respective % of ownership can be summarized as follows:

31 December 2011 31 December 2010

Shareholders TL % TL %
Vural Görener 24,874,255 24.86 24,600,309 24.59
Emine Okşan Koçman 19,013,198 19.01 19,013,198 19.01
Valid Faruk Ebubekir -- -- 16,320,756 16.32
Aabar Investments PJS 16,320,756 16.32 -- --
Emine Esra Cristoffel Görener 14,532,045 14.53 14,510,745 14.51
Fatma Makbule Görener 4,832,432 4.83 4,832,432 4.83
Publicly traded 20,450,893 20.45 20,746,139 20.74
100,023,579 100.00 100,023,579 100.00
Restatement effect 10,273,247 10,273,247
Total 110,296,826 110,296,826

20.45 % shares of Banvit are listed on the İstanbul Stock Exchange.

At 31 December 2011, the paid-in capital of the Company amounted to TL 110,296,826 (31 December 2010: TL 110,296,826) in the
consolidated financial statements.

The paid-in capital of the Company comprises 100,023,579 ordinary shares (31 December 2010: 100,023,579 ordinary shares) of TL 1
each. There are not any different types of share and no privileges are given to specific shareholders.

One of the shareholders of the Company, Valid Faruk Ebubekir sold his 16,320,757 shares to Aabar Investments Pjs with a value of TL
4.80 per share with a total amount of TL 78,339,629 on 8 August 2011.

Foreign currency translation reserve

The foreign currency translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations from their functional currencies to presentation currency.

Treasury shares

As at 31 December 2009, treasury shares comprised of the cost of the Company’s own shares held by the Company. On 25 October
2010, the Company wholly disposed of 4,750,293 Banvit treasury shares through block sales at TL 5.95 price per share to foreign
investors. At 31 December 2011 and 31 December 2010, the Company held no treasury shares (31 December 2009: TL 23,534,752).
Profit arising from the sale of treasury shares amounted to TL 4,588,170 net off commissions paid (amounted to TL 141,321) is
accounted as other reserves under equity.

The legal reserves consist of the first and second reserves, in accordance with the Turkish Commercial Code. The first legal reserve
is appropriated out of the statutory profit at the rate of 5% until the total reserve reaches a maximum of 20% of the Group’s paid-in
capital. The second legal reserve is appropriated at the rate of 10% of all distributions in excess of 5% of the Group’s share capital.
The first and second legal reserves are not available for distribution unless they exceed 50% of the share capital, however they can
be used to offset losses if there are no retained earnings. As at 31 December 2011, the legal reserve amounting to TL 14,379,816 is
included in retained earnings (31 December 2010: TL 9,517,458).
 71

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

19 Capital and reserves (continued)

Dividend Distribution

Quoted companies are subject to dividend requirements regulated by CMB as follows:

In accordance with the CMB Decision No:02/51 and dated 27 January 2010, concerning allocation basis of profit from operations of
2009, minimum profit distribution will not be applied for the year 2009 (31 December 2009: 20%). According to the Board’s decision
and Communique No. IV-27 issued by the CMB regarding the allocation basis of profit of publicly owned companies, the distribution
of the relevant amount may be realised as cash or as bonus shares or partly as cash and bonus shares; and in the event that the
first dividend amount to be specified is less than 5% of the paid-up capital, the relevant amount can be retained within the Company.
However, companies that made capital increases before distributing dividends related to prior period and whose shares are
therefore classified as “old” and “new” and that will distribute dividends from the profit made from 2008 operations are required to
distribute the initial amount in cash.

In addition, according to the aforementioned Board decision, who are required to prepare consolidated financial statements the
entities can provide the necessary amount from their statutory reserves, the distributable profit can be calculated based on the net
income declared at the publicly announced consolidated financial statements in accordance with Communique XI No. 29.

Accordingly, if the amount of dividend distributions calculated in accordance with the net distributable profit requirements of
the CMB does not exceed the statutory net distributable profit, the total amount of the statutory net distributable profit shall
be distributed. It is stated that dividend distributions should not be made if there is a loss in either the consolidated financial
statements prepared in accordance with CMB regulations or in statutory financial statements.

In the General Assembly dated 26 May 2011, it has been decided to distribute dividend amounting to TL 20,024,536. As at 31
December 2011, whole amount of the dividend has been paid.

20 Earnings per share

The calculation of basic earnings/(loss) per share at 31 December 2011 is based on the loss attributable to shareholders of the
owners of the Company amounting to TL 59,191,575 (31 December 2010: profit TL 58,697,491) and a weighted average number of
ordinary shares outstanding of 100,023,579 (31 December 2010: 96,140,490) calculated as follows:

2011 2010
(Loss) / profit attributable to ordinary shareholders (59,191,575) 58,697,491

Issued ordinary shares at 1 January 100,023,579 100,000,000

Effect of shares issued in January 2009 -- 18,801
Effect of own shares held -- (3,878,311)
Weighted average number of ordinary shares at
31 December 100,023,579 96,140,490
Earning / (loss) per share (0.592) 0.611
21 Loans and borrowings

2011 2010

Currency: TL
Annual
Original TL Interest Original Annual Interest
Currency Amount Equivalent Rate Currency Amount TL Equivalent Rate
Short term bank borrowings EURO 11,800,181 28,837,283 %5 EURO -- --
%13,20 -
72 Banvİt ANNUAL REPORT 2011

TL -- 75,025,000 %14,00 TL -- 16,960,000 %7.40 - %7.50

TL -- 1,853,691 0% TL -- 2,061,910 0%
105,715,974 -- 19,021,910
Short-term portion of long term bank borrowings
i) Short-term portion of General Sales Libor+%0.25 - Libor+%0.12 -
Management (GSM) bank borrowings USD 12,956,452 24,473,442 %0.50 USD 23,499,954 36,330,929 %0.50
ii) Short-term portion of International Finance
Corporation (IFC) bank borrowing USD 5,897,431 11,139,658 Libor+%3,10 USD 6,056,153 9,362,812 Libor+%2.9-%6.30
as at and for the Year Ended 31 December 2011
Notes to the Consolidated Financial Statements

Libor+%1.6 & Libor+%2.5 & %5.1-

iii) Short-term portion of other bank borrowings USD 44,717,050 84,466,037 %6.75 USD 15,143,662 23,412,101 5.15
EUR 5,337,967 13,044,924 %3-%7.5 EUR 3,199,974 6,557,066 %3.2
TL -- 23,898,684 %9.5 - %13 TL -- 22,897,156 %10.60- %11.40
157,022,745 98,560,064
Short term finance lease payables USD 495 935 USD 18,311 28,309
EUR -- -- EUR 24,065 49,312
935 77,621
Total short-term loans and borrowings 262,739,654 117,659,595
Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Libor+%0.12 -
v) Long-term GSM bank borrowings USD 3,967,093 7,493,443 Libor+%0.25 USD 9,335,716 14,433,017 %0.50
vi) Long-term International Finance Corporation
(IFC) bank borrowing USD 19,999,997 37,777,994 Libor+%3,10 USD 24,999,998 38,649,997 Libor+%3.1
Libor+%2.5
iv) Other long-term bank borrowings USD 42,359,976 80,013,758 %3.00- %6.75 USD 15,098,043
23,341,575 & %5.1-5.15
EUR 6,371,248 15,570,057 %3.00- %7.50 EUR 6,464,455 13,246,315 %3.2
TL -- 22,283,947 %9.50- %11.40 TL -- 42,060,581 %10.60- %11.40
163,139,199 131,731,485
Total long-term loans and borrowings 163,139,199 131,731,485
Total loans and borrowings 425,877,918 249,313,459
Total finance lease payables 935 77,621
Total loans and borrowings 425,878,853 249,391,080
 73

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

21 Loans and borrowings (continued)

2011 2010
Currency Interest Rate TL Interest Rate TL
Unsecured Export Loans USD 5.00% 28,837,283 %0 -
Unsecured Import Loans USD Libor+%1,30-%3,5 21,924,265 -- --
Unsecured Operating Loans EUR %3-%7.5 28,614,981 %0 19,803,381
Unsecured Operating Loans USD %3-%6.75 139,202,236 %3.60-%5.15 37,335,127
Unsecured Operating Loans TL 9.50%-11.40% 46,182,631 10.60%-11.40% 65,028,966
Secured Operating Loans USD Libor+%3.1 48,917,652 Libor+%3.10 48,012,809
Unsecured GSM Loans USD Libor+%0.25-%0.50 31,966,885 Libor+%0.12-0.30 50,763,946
Secured Investment Loans USD Libor+%2,50 3,353,294 Libor+%2.50 6,381,995
Unsecured Investment Loans USD -- -- Libor+%2.50 3,036,554
Unsecured Rotative Loans TL %13.20-%14.00 75,025,000 %7.40-%7.52 16,960,000
Non-interest bearing spot
loans TL 0% 1,853,691 %0 1,990,681
425,877,918 249,313,459

The repayment terms of the bank borrowings are as follows:

2011 2010
0-3 months 9,494,540 16,097,459
3-12 months 253,244,179 101,484,048
1-5 years 163,139,199 129,226,509
More than 5 years -- 2,505,443
Total 425,877,918 249,313,459

The content of the loan agreement with the International Finance Corporation (IFC) which was signed at 13 July 2000 is as follows:

Group utilized loan from IFC, amounting to USD 25,000,000 on 21 May 2007 and with the same agreement they agreed on USD
10,000,000 stand-by loan. Stand-by loan has been obtained after the activation request on 25 March 2008. This loan is obtained to
pay short term liabilities and related investments about the calves farming that is planned to be implemented in three years. The
repayment of loan amounted USD 25,000,000 will be started at 15 April 2010 and completed at 15 October 2015 with the interest
rate of LIBOR+3.1%. The principal will be paid with the amount of USD 2,083,334 semiannually. Stand-by loan will be repaid at the third
year of activation date by 12 equal installments, semiannually. The Company has mortgaged its tangible assets at an amount of USD
45,000,000 for the loan. The mortgage is valid until 15 October 2016. The libor variable of the loan amounting to USD 25,000,000 has
been fixed at 3.20% till the end of its maturity by the Interest Rate Swap Transaction signed on 3 June 2009 with Garanti Bankası
Malta Branch. The agreement is valid from 15 October 2009 till 15 October 2016.

GSM (General Sales Management) loans are provided to the customers of agriculture companies operating in United States of
America (USA) by the Treasury of USA. USA Ministry of Agriculture also provides this right to the customers of agriculture companies
operating in Turkey. GSM loans can only be used for the financing of import transactions and limited to specific product groups,
especially corn and soy bean. USA Ministry of Agriculture distributed the limits provided to Turkey between the banks operating in
Turkey. After the Company signed the loan agreement with the related bank in order to use the GSM loan, the Company agrees with
the best bidder company and purchases the products through letter of credit.
74 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

21 Loans and borrowings (continued)

The Bank makes the payment with an interest rate of LIBOR+%0.25 ile LIBOR+%0.50 (31 Aralık 2010 - LIBOR+%0.12 ile LIBOR+%0.50).
When using GSM loan, the Company pays 1% of the remaining capital of the loan to the bank as commission for each year. GSM loans
are for 3 years period and principal is paid annually and interest is paid semi-annually.

The GSM loans obtained by the Group at 31 December 2011 are summarized as below;

Loan amount
Bank name (in TL) Interest rate
Türkiye Garanti Bankası A.Ş 5,376,960 Libor+%0.17-0.30
Finans Bank A.Ş 10,130,806 Libor+%0.12-0.5
Halkbank A.Ş. 5,060,052 Libor+%0.12-0.25
Akbank T.A.Ş 6,176,255 Libor+%0.12
Türkiye Vakıflar Bankası T.A.O. 5,222,812 Libor+%0.25

The Group has obtained a long term loan amounting to USD 10,000,000 from ‘Türkiye Sınai Kalkınma Bankası (TSKB)’ on 9 August
2007. The repayment of the loan will be made through 5 years with Libor+2.5% interest rate. The principal will be repaid in 3 month
periods starting on 18 July 2008 and ending 18 July 2012. There will be 17 equal installments amounting to USD 588,235 for the
principal payment. Interest payments for the loan will be made in 3 month periods. The Company has mortgaged its tangible assets
at an amount of USD 15,000,000 for the loan. The mortgage is valid until 18 July 2012.

The Group’s finance lease payables at 31 December are detailed below:

2011 2010
Less than 1 year 935 77,621
Total 935 77,621

22 Derivative financial liabilities

The libor variable of the loan obtained from IFC through T.Garanti Bankası amounting to USD 25,000,000 has been fixed at 3.20% till
the end of its maturity by the Interest Rate Swap Transaction Agreement signed on 3 June 2009 with Garanti Bankası Malta Branch.
The agreement is valid from 15 October 2009 till 15 October 2015. At 31 December fair value of this interest swap transaction is TL
1,772,605 (31 December 2010: TL 2,295,162). A hedging relationship qualifies for hedge accounting if and only if all of the conditions
defined at IAS 39 paragraph 88 are met. However, since at the inception of the hedge there is not any formal designation and
documentation of the hedging relationship and the entity’s risk management objective and strategy for undertaking the hedge, the
Group did not apply hedge accounting. At 31 December 2011, this derivative financial instrument is accounted at fair value through
profit or loss.

23 Employee benefits

International Accounting Standard No 19 “Employee Benefit” requires actuarial valuation methods to be developed to estimate the
enterprise’s obligation under defined benefit plans. The principal actuarial assumptions used at 31 December 2011 and 2010, are as
follows:

2011 2010
Discount rate 3.90% 4.66%
Rate used to estimate the probability of retirement 96% 94%

 75

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

23 Employee benefits (continued)

Movement in the reserve for employee severance indemnity during the period is as follows:

2011 2010
Balance at 1 January 3,025,356 2,247,724
Interest cost 271,834 1,122,376
Service cost 691,197 718,563
Payment during the period (3,073,417) (2,979,685)
Actuarial difference 2,439,520 1,916,378
Balance at 31 December 3,354,490 3,025,356

24 Deferred income

As at 31 December 2011, the Group has long-term deferred income consisting of government grants amounting to TL 6,473,062 (31
December 2010: TL 3,773,129).

Agrafood S.R.L. has been awarded government grant for financing fixed asset purchases. This government incentive is provided
based on SAPARD program (Special Program of Pre-Accession for Agriculture and Rural Development), aiming to finance agricultural
and rural development of candidate countries before accession to European Union. Agrafood S.R.L. reflects the government grant as
income to the income statement based on the depreciation rate of the fixed asset purchased over the life of the fixed asset. Fixed
assets obtained with the incentive are presented with their net book values under provisions in the financial statements. For the
year ended 31 December 2011; TL 2,207,785 is reflected as income, and TL 3,767,406 is carried as deferred income as at 31 December
2011.

On 12 November 2009, the Company has obtained investment incentive certificate for the capacity increase and modernizations at
the chicken slaughterhouse addressed at Bandırma Asfaltı 8.Km Bandırma. Within the scope of this investment incentive certificate,
the slaughter capacity of the slaughterhouse is going to increase from 200,000 units/ day to 270,000 units/ day. The investment
incentive certificate is amounting to TL 10,586,880 and provides VAT exception, customs duty exemption, social security premium
payroll tax contribution for 3 years, and 60% corporate tax discount.

Furthermore, on 30 December 2009, the Company has obtained investment incentive certificate amounting to TL 29,000,000 for the
capacity increase and modernizations at the cattle stock farming and slaughterhouse facilities. Within the scope of this investment
incentive certificate, the current 18,000 units/ day cattle stockfarming capacity is going to increase by additional 30,000 units/ day
and current 150 units/ day cattle slaughter capacity is going to by additional 100 units/ day. The investment incentive certificate
provides VAT exception, customs duty exemption, social security premium payroll tax contribution for 3 years, and 60% corporate tax
discount.

According to this investments incentive certificates, at an investment amounting to TL 39,586,880;

• 30% of the investment amounting to TL 11,876,040 is going to be compensated by government

• Government is not going to pay this balance in cash, but the tax rate applied to the income generated from this investment is
going to be lower (8% instead of 20%). Since the corporate tax discount rate of the investment incentives is 60%, corporate tax
rate is going to be 8%. (20% (20%*60%=8%)
76 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

24 Deferred income (continued)

• Until the income generated from these investments reach to TL 148,450,500 (TL 11,876,040/ 8%), the discounted tax rate is going
to be applied and the Company is going to make tax savings amounting to TL 11,876,040.

As described at the related articles of the Announcement Regarding to the Applications of Arbitraments Concerning Government
Grants at Investments (Announcement No: 2009/1) and the special terms on the investment incentive certificates, for acceptance of
the inception of the investment, the Company have to invest at least 10% of the total investment amount defined at the certificate
and have to apply to the Undersecretariat of Treasury and register the investment amount to the investment incentive certificate.
The Company has realized that 10% special terms for the chicken slaughterhouse addressed at Bandırma Asfaltı 8.Km Bandırma.

At the 12th article of the announcement, it is specified that the inception date of the investment incentive certificates is the
receiving date of completion visa. The Company has not obtained the completion visas for both Bandırma Chicken Slaughterhouse
and cattle stockfarming and slaughterhouse facilities in 2009. Since the completion visas have not obtained in 2009, the Company
is not going to get any tax benefit as at 31 December 2009. The Company is going to receive the tax benefits from these investment
incentive certificates in the following periods starting from 2010.

As at 31 December 2011, total amount of investments of the Company through those investment incentive certificates were
realized as TL 9,733,865. As at 31 December 2011, uncollected portion of the government grant amounting to TL 2,705,656 has been
accounted under other non-current receivables and deferred income (31 December 2010: TL 2,582,020).

25 Provisions

a) Short term provisions

At 31 December 2011 and 2010, provisions comprised the following:

2011 2010
Bonus provision for sales personnel 1,500,000 3,073,983
Vacation pay liability 1,137,281 1,414,265
Lawsuit provision 153,672 614,748
Provision for turnover premium 926,409 205,000
Total 3,717,362 5,307,996

The movement in the provisions is during the period is as follows:

Bonus
Provision provision
Lawsuit for turnover for sales Vacation
provision premium personnel pay liability Total
Balance at 1 January 2011 614,748 205,000 3,073,983 1,414,265 5,307,996
Increase in provisions during the period 311,661 153,672 1,500,000 -- 1,965,333
Release of provisions -- (205,000) (3,073,983) (276,984) (3,555,967)
Balance at 31 December 2011 926,409 153,672 1,500,000 1,137,281 3,717,362

b) Long term provisions

At 31 December 2011, long term provisions comprised of seniority pay liability amounting TL 1,034,676 (31 December 2010: TL
845,074).
 77

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

26 Trade and other payables

At 31 December 2011 and 2010, trade and other payables comprised the following:

2011 2010
Trade payables 89,180,052 88,225,231
Other payables 10,323,615 11,493,472
Trade and other payables due to related parties (Note 29) 4,197,468 2,314,962
Less: Rediscount income (534,525) (210,212)
Total current trade and other payables(1) 103,166,610 101,823,453
Other payables 472,931 122,996
Total non-current trade and other payables(2) 472,931 122,996
Total(1+2) 103,639,541 101,946,449

Maturity of trade payables is less than a year.

Other trade payables at 31 December 2011 and 2010 comprised the following:

2011 2010
Payable to personnel 1,121,527 4,638,180
Expense accruals 3,004,467 3,621,453
Social security premiums payable 3,340,373 1,321,492
Witholding tax payable 1,687,557 1,373,424
Unearned revenue 116,453 116,453
VAT Payable 286,575 --
Other 1,239,594 545,466
Total 10,796,546 11,616,468

Non-current 472,931 122,996

Current 10,323,615 11,493,472
Total 10,796,546 11,616,468

Payable to personnel is the wages and salary accruals of 31 December 2011 and 2010.

Expense accruals mainly consist of breeding fee accruals for the invoices that are not received from chicken breeders at 31
December 2011 and 2010.

The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in note 27.

27 Financial instruments

The Group has exposure to the following risks from its use of financial instruments:

• Market risk
• Liquidity risk
• Credit risk

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The
management reviews and agrees on policies for managing each of these risks which are summarized below.
78 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

27 Financial instruments (continued)

27.1 Market risk

(i) Interest rate risk

The Group is exposed to interest rate due to the effect of fluctuating of interest rates on the assets and liabilities subject to
interest rate. The Group has made an interest rate swap transaction with T.Garanti Bankası Malta Branch in order to mitigate
interest rate risk on a certain portion of its loans and borrowings (note 22).

2011 2010
Fixed rate instruments

Financial assets -- --
Financial liabilities 308,261,539 141,189,384

Variable rate instruments

Financial assets -- --
Financial liabilities 117,616,379 98,776,755
Derivative financial liabilities 1,772,605 2,295,162

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points in interest rates at the reporting date would have decreased profit or loss by the amounts shown
below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed
on the same basis for 31 December 2011.

TL Net income
31 December 2011 1% Increase
Variable rate liabilities (721,884)
Cash flow sensitivity (net) (721,884)

31 December 2010
Variable rate liabilities (2,110,177)
Cash flow sensitivity (net) (2,110,177)

(ii) Currency risk

The Group is exposed to currency risk arising from various currency exposures primarily with respect to USD and Euro. The Company
also has transactional currency exposures. Such exposures arise from sales or purchases or borrowings by the Group in currencies
other than the Group’s measurement currency (TL).

The Group manages foreign currency risk by using natural hedges that arise from offsetting foreign currency denominated assets
and liabilities. Net foreign currency liabilities of the Group at 31 December 2011 and 2010 are TL 341,992,790 and TL 219,469,216,
respectively.
 79

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

27 Financial instruments (continued)

27.1 Market risk (continued)

31 December 2011 31 December 2010

Original TL Original TL
Currency Equivalent Currency Equivalent
Assets
Cash and cash equivalents USD 61,926 116,972 640 990
EURO 1,609 3,932 15,872 32,523
Other 7 19 117 279

Trade and other receivables USD 428,668 809,711 -- --

EURO 362,222 885,198 751,683 1,540,274
Total foreign currency assets 1,815,832 1,574,066
Liabilities
Borrowings USD (129,898,000) (245,364,332) (94,133,526) (145,530,431)
EURO (23,509,397) (57,452,264) (9,664,429) (19,803,382)

Trade and other payables USD (6,853,510) (12,945,595) (11,084,158) (16,236,108)

EURO (2,251,567) (5,502,379) (19,150,221) (39,240,718)
Other (10,781) (27,598) (93,113) (232,643)
Total foreign currency liabilities (321,292,168) (221,043,282)
Net foreign currency position (319,476,336) (219,469,216)

Sensitivity analysis

A 10 percent weakening of TL against the following currencies at 31 December 2011 would have decreased profit or loss by TL
34,199,279 (31 December 2010: TL 21,946,921) and a 10 percent strengthening of TL against the following currencies at 31 December
2010 would have had the equal but opposite effect on the amounts shown below. This analysis assumes that all other variables, in
particular interest rates, remain constant. The analysis is performed on the same basis for 31 December 2010.

TL 31 December 2011 31 December 2010

Equity Profit or loss Equity Profit or loss
USD (25,738,324) (25,738,324) (16,176,555) (16,176,555)
EURO (6,206,551) (6,206,551) (5,747,130) (5,747,130)
Other (2,759) (2,759) (23,236) (23,236)
Total (31,947,634) (31,947,634) (21,946,921) (21,946,921)
80 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

27 Financial instruments (continued)

27.2 Liquidity risk

Liquidity risk is the risk that an entity will be unable to meet its financial obligations as they fall due. The Group’s approach to
managing liquidity is by matching the cash in and out flow volume supported by committed lending limits from qualified credit
institutions.

The maturity profile of financial liabilities of the Group at 31 December 2011 is detailed below:

Carrying Contractual More than 5

amount cash flows 0-3 months 3-12 months 1-5 years years

Loans and borrowings 425,878,853 425,877,918 9,494,540 253,245,114 163,138,264 --

Derivative financial instruments 1,772,605 1,772,605 -- -- 1,772,605 --
Trade and other payables(*) 98,325,031 98,859,556 98,386,625 -- 472,931 --
Total financial liabilities 525,976,489 526,510,079 107,881,165 253,245,114 165,383,800
--
The maturity profile of total monetary liabilities of the Group at 31 December 2010 is detailed below:

Carrying Contractual More than 5

amount cash flows 0-3 months 3-12 months 1-5 years years

Loans and borrowings 249,391,080 249,391,080 16,175,548 101,484,048 129,226,041 2,505,443

Derivative financial instruments 2,295,162 2,295,162 -- -- 2,295,162 --
Trade and other payables(*) 99,012,085 99,222,297 99,099,308 -- 122,989 --
Total financial liabilities 350,698,327 350,908,539 115,274,856 101,484,048 131,644,192 2,505,443

(*) Non financial instruments such as VAT payables, withholding tax payable and social security premiums payable are excluded from
trade and other payables

27.3 Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s receivables from customers and investment securities.

The Group attempts to control credit risk by monitoring credit exposures, limiting transactions with specific counterparties, and
continually assessing the creditworthiness of the counterparties.

The Group also obtains security when appropriate.

At 31 December 2011 and 2010, the nature and amount of the commitments obtained as guarantee for notes and trade receivables
are summarized below:

31 December 2011 31 December 2010

Letters of guarantee 22,874,520 33,242,400
Mortgages 4,338,665 4,338,665
Total 27,213,185 37,581,065
 81

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

27 Financial instruments (continued)

27.3 Credit risk (continued)

Carrying value of financial assets depict minimum credit risk. At reporting date the minimum credit risk that the Group subject to is
shown below:

Note 2011 2010

Trade and other receivables(*) 17 147,032,693 138,271,106
Cash and cash equivalents(**) 18 16,362,917 5,369,874
Total credit risk 163,395,610 143,640,980

(*) Non financial instruments such as VAT receivables, advances given, prepaid expenses, prepaid taxes and deposits and guarantees
given are excluded from trade and other receivables.
(**) Cash on hand is excluded from cash and cash equivalents.

Movement in the allowance for doubtful receivables during the period ended 31 December 2011 and 2010 is as follows:

Allowance for doubtful receivables

2011 2010
Beginning balance (4,259,553) (3,609,481)
Increase during the year (3,395,165) (863,570)
Collection during the year 335,167 213,498
Ending balance (7,319,551) (4,259,553)

The maximum exposure to credit risk for trade receivables at the reporting date by type of customer was:

2011 2010
Direct sales points 79,289,710 68,804,781
Store chains 39,401,430 32,883,136
Vendors 23,539,907 28,811,674
Total 142,231,047 130,499,591

27.4 Fair values

The fair values of trade and other receivables, cash and cash equivalents, trade and other payables approximate to their carrying
amounts at 31 December 2011 and 2010 due to their short term nature.

The fair values of variable loans and borrowings approximate their carrying amounts at 31 December 2011 and 2010, since their rates
are adjusted periodically according to the changes in market conditions.

The fair values of fixed rate loans and borrowings approximate their carrying amounts since either they are short term or rotative.
82 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

27 Financial instruments (continued)

Fair value hierarchy:

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as
follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as
prices) or indirectly (i.e., derived from prices).

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

31 December 2011 Level 1 Level 2 Level 3

Derivative financial liabilities -- (1,772,605) --

-- (1,772,605) --

31 December 2010 Level 1 Level 2 Level 3

Derivative financial liabilities -- (2,295,162) --

-- (2,295,162) --

28 Commitments and contingencies

Commitments and contingencies, from which the management does not anticipate any significant losses or liabilities, are
summarized below:

31 December 2011 31 December 2010

Guarantees given
Mortgages 113,334,000 92,760,000
Letters of guarantee -- 11,881,739
Guarantee notes 12,796 12,797
Guarantees given for stockbreeders 25,983,534 --
Total 139,330,330 104,654,536

Letters of guarantee given comprise of letters given to TEDAŞ, Bandırma Natural Gas Distribution Agency, Gediz Electricity
Distribution Agency, in order to ensure electricity provision and to participate in chicken and turkey meat tenders of Ministry of
Defense.

Ömer Görener and Vural Görener have personal sureties for all the loans obtained by Group.

As at 31 December 2011, Group has obtained mortgages amounting to TL 24,247,000 for the guarantees given for stockbreeders.

Lawsuits against the Group

The Group is involved in various claims arising in the ordinary course of business. As at 31 December 2011, the Group has set
provision amounting to TL 926,409 for the expected exposure (31 December 2010: TL 614,748).

28 Commitments and contingencies (continued)

 83

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

Operating leases

Leases as lessee

Operating lease rentals are payable as follows:

31 December 2010 31 December 2011

Less than one year 4,072,300 2,659,380
Between one and five years 6,904,822 3,068,461
More than five years 3,198,905 791,456
Total 14,176,027 6,519,297

Leases as lessor

The future minimum lease payments are as follows:

31 December 2011 31 December 2010

Less than one year -- 36,884
Total -- 36,884

During the period ended 31 December 2011, TL 262,092 (31 December 2010, TL 191,301) was recognized as rental income in the
consolidated financial statements.

29 Related parties

A number of transactions are entered into with the related parties in the normal course of business. These transactions were carried
out on an arm’s-length basis during the normal course of business.

29.1 Transactions with key management personnel

For the period ended 31 December 2011, shareholders presented above and the executive members of the Company’s management
received aggregate compensation amounting to TL 5,468,768 (31 December 2010: TL 2,729,419).
84 Banvİt ANNUAL REPORT 2011

Banvit Bandırma Vitaminli Yem Sanayii Anonim Şirketi

Notes to the Consolidated Financial Statements
as at and for the Year Ended 31 December 2011
Currency: TL

29 Related parties (continued)

29.2 Related party balances and transactions

At 31 December, the Group had the following balances outstanding from its related parties:

Due from related parties 2011 2010

Shareholders and close family members
Seniha İlgi Görener -- 2,617
Total -- 2,617

Due to related parties

Suppliers
Bilgin Akaryakıt ve Ticaret A.Ş. 4,083,207 2,065,713
Shareholders and close family members
Celil Ömer Görener 125 40,792
Vural Görener 83,127 127,862
Seniha İlgi Görener 185 --
Emine Esra Cristoffel Görener 5,285 6,655
Others 7,809
General Manager
Erol Turgut Görener 17,730 68,072
Other -- 5,868
Total 114,261 249,249

Related party transactions: 2011 2010

Fuel expenses
Bilgin Akaryakıt ve Ticaret A.Ş. 3,002,736 1,772,422

30 Subsequent events

None.
36 Banvİt ANNUAL REPORT 2011

BANVİT BANDIRMA VİTAMİNLİ YEM SANAYİİ A.Ş.

Balıkesir Asfaltı 8. km. Bandırma, Balıkesir/Turkey
T +90 (266) 733 86 00 F +90 (266) 733 86 18
e-mail: bilgi@banvit.com