1 $ = TL 1.222.950 (for the year 2001)

Mr. M. Gürbüz TÜMAY, the principal shareholder in the Company and a prominent figure with a vast experience in the banking sector is a pioneer in factoring sector. Mr Tumay being one of the founders of the first Turkish factoring company in 1990 played a major role in ensuring that alternative sources of financing including factoring and leasing has become full-fledged business means in Turkey.

Pro-active marketing policy sustained resulted in a trade volume reaching around TL 80.000 billion ($ 65 million) in 2001, which, in turn, led to an increase of 32 % in pre-tax income from TL 541 billion ($ 868 thousand) in 2000 to TL 1.404 billion ($1.148 million) by the end of 2001. Operational achievements boosted up the net profit by 150 % in TL terms to TL 885 billion ($ 724 thousand) in 2001 from TL 356 billion ($ 530 thousand) in 2000.

While focusing on operating profits and trade volume Ekspo Factoring also gave priority to strengthening its capital base over the year. Admirable results of the year 2001 contributed much to the shareholders equity by bringing the total figure up to TL 2,328 billion ($ 1.617 thousand), demonstrating a jump of nearly 70 % in TL terms from the prior year's TL 1,374 billion ($ 2.046 thousand). Although this represented a decline of 21 % in dollar terms it can be considered as a major success for a factor with two years history operating in a sector where most of the companies lost its entire capital base. As a general corporate policy, management wishes not to distribute any dividend to shareholders, and thus it aims at boosting up its equity further by retaining its 2001 profit so as to attain TL 5 .000 billion at the end of 2002.

Ekspo Factoring also contributed much to the national economy with paid taxes totalling TL 1.000 billion in 2001, including corporate tax, withholding tax and other taxes. During the fiscal year excluding other taxes, corporate tax by itself amounted TL 472 billion ($ 328.000).

As of December 31 capital base comprised;

Ekspo Factoring assumes, via assignment, its customer's accounts receivables under domestic and international sales and provide financing to its clients through the following steps:

• Ekspo Factoring assumes the task of debt collection;
  
  
• Considering that the party may not service its debt Ekspo Factoring gets the receivables insured by a fourth party after giving a payment guarantee to its customer;
  
  
• It pays its customer a certain portion of the receivable without waiting for the maturity. Ekspo Factoring's loan analysis involves a systematic evaluation of the purchaser as well as the seller, sector risk and the terms of collateral offered by the customer. The rating scale resulting from this evaluation ranges from a high of A1 (high credit quality, excellent collateral) to D4 (low credit quality, poor support). Credit limits are determined independently at the regular meetings of the Credit Committee. Two board members and Ekspo Factoring's General Manager attend this meeting, which is held once a week.

As other alternative sources of financing the Factor also offers "forfaiting" and "foreign loan" services to its customers with reference to its Articles of Association.

Ekspo Factoring pursues a dynamic marketing policy with its sufficiently experienced staff members speaking fluent foreign languages and fully authorised to extend credit facilities so as to promptly meet the needs of present or prospective customers through a non-bureaucratic course.

Elif Özgür, Credit Marketing-Manager

As per this frame, the corporate marketing policy is summarized as follows.

• Instant solution provision after outlining the needs of its customers by means of vis-à-vis communication;
• Market researches, and sharing the results with customers;
• High quality service and product variety, in order to meet customer requirements;
• Competitive pricing

Having achieved a fast-paced and stable growth since its start-up, Ekspo Factoring contributed much to its customers and, consequently, to national economy, with a trade volume amounting to TL 80.000 billion ($ 65 million), Ekspo Factoring will sustain its solid relations with its customers for the present and in future.

Ekspo Factoring works with various firms operating in a wide range of business fields, including food, textile, transportation, chemistry and pharmaceuticals, contracting services, electric and electronic, machinery and spare parts, rubbery and plastics, steel and iron works, cement, leather and leather products, automotive and tourism industries. Moreover, through dynamic marketing means Ekspo Factoring aims to initiate new relations with new firms in those fields.

Sectoral distribution of transactions as of December 31^st 2001

As of December 31^st, 2000 and 2001 factoring receivables comprised of:

Özkut Ünver - Marketing Manager

Ekspo Factoring keeps an alert eye on the markets and economy through its expert staff on financial analysis and project assessment, and thus pursues a dynamic research management so as to pre-diagnose any potential risk for both itself and its customers

Through its efficient information-gathering approach, Ekspo Factoring assesses customer solvency, production capacity, dilution and circulation rate of its receivables as well as its collection competency. Main objective is to identify the needs thus prevent any customer from undergoing an unnecessary financing burden.

Past customer performance and management skills are evaluated, measuring future expectations and survivability. Results are shared and future investments are guided.

Through deep research, purchaser's financial condition and solvency are identified and customers, in return, are fed with information, thus helping them avoid unnecessary risks.

Rasih OKTAY, Research -Manager

Ekspo Factoring believes that a solid operation management should function as the vital ingredient for ensuring customer satisfaction and service quality.

In line of this view 2001 was a major automation investment for Ekspo. The firm has set up a sophisticated computer infrastructure supported by a solidly designed software program. The hardware selected for this network is the most advanced in the market and will be the base for the new client-server architecture and the new software systems to be implemented over the next year.

This technological competency enables the Factor to monitor and collect the receivables under its assets without any error and to provide its customers with prompt reporting.

Checks, bonds and other liquid securities are reconciled in reports sent to customers by the end of each month. Furthermore, monthly account statements and invoices sent to customers to keep correct accounting records.

Abdullah AYDIN, Audit

Abdullah AYDIN, İç Denetim Müdürü