Dear Stakeholders,

We are proud and happy to share with you the first sustainability report of STFA, which has achieved many firsts in the history of Turkish engineering in the past 75 years.

During the 2012-2013 period, which is the focus of our report, we have increased our operations and investments in the construction, energy and construction equipment sectors while playing an important role in our country’s development. In 2013, we recorded total revenue USD 1.3 billion from our domestic and overseas operations. Our projects have naturally contributed to growth of our social and environmental impacts. In this report, we aim to provide an account of how we manage our impacts with our good business practices.

At the strategy workshops conducted during the reporting period with the participation of the Group companies’ executives representing our core business areas, we identified the common triple impacts that our companies must manage with priority.

Our Economic Performance

Customer satisfaction is the foremost concern that has a direct economic impact on the performance of STFA Group companies. Re-serving almost all of our existing customers in different projects is a crucial indicator of customer satisfaction for our Group. With a proven half-century track record of delivering world-class projects across the globe based on the “Concrete must be beautiful, even underground” principle, our Construction Group acknowledges quality management as the most critical driver for increasing competitiveness in domestic and international markets.

At Enerya, which began operations in 2003, we distribute natural gas to over 750,000 subscribers in 11 cities across Turkey. We aim to reach a turnover of TRY 3 billion, by the end of 2018 at Enerya whose objective is to become one of the top three biggest players in the Turkish energy sector. Security of energy supply is an issue of great importance for our country, in terms of business continuity and social prosperity. Turkey has the second fastest energy demand growth in the world, and its current 250 billion kilowatt-hours consumption is expected to rise up to 500 billion kilowatt-hours by 2023. As STFA Investment Holding, we believe that the future lies in energy and we increase our investments in this direction.

In 2013, we started our first renewable energy investment in electricity generation by acquiring 50% share in Evrencik Rüzgar Enerjisinden Elektrik Üretim Ltd. Şti. to build a 120 MW wind farm in Vize province of Kırklareli. We aim to increase our wind and solar energy investments in the coming years.

With the selection of diverse products offered at our SİF Construction Equipment and Universal Handlers companies, we are able to offer solutions tailored to the individual needs of our customers in the construction, industry and agriculture sectors, among many others. The construction equipment used in the public and private sectors play an important role in our country’s reconstruction and development.

Our Social Performance

In achieving our Group’s strategic goals, our most valuable asset is our workforce, which builds our company’s culture and core values.

We build teams of employees who allocate their expertise to achieve our strategic goals, and provide them with training courses for personal and technical skills development in line with their management levels. Our workforce grew at a rate of 140% from 2012 to 2013. At STFA Holding, 1,474 individuals have received an average of 14 hours of technical and personal development training in 2013.

At STFA, the health and safety of our employees is a pre-requisite in everything we do, and occupational health and safety is the primary concern that we manage in the most systematic way. We are happy that our Group companies have not reported any fatalities resulting from accidents in the reporting period, and we continue to operate safely with our goal of zero-accidents.

As the majority of our construction operations take place overseas, 72% of our employees in the Construction Group are foreign nationals. For the rest of our companies we have a 100% local employment rate.

In 2013, we invited our employees to “Explore the Future” as part of our people and innovation-themed 75th anniversary celebrations. At such a milestone for our Group, we also launched infrastructure and communication efforts to stimulate the production and implementation of innovative ideas in our companies. IDEA, which was started by our Construction Group, and Big Ideas Action, which was begun at SİF Construction Equipment in October 2013, are just some of these initiatives.

Khan Academy Türkçe, the new project of the Foundation for the Translation of Scientific and Technical Publications, which was founded in 1992, has become prominent as a social responsibility project with its many unique features. We at STFA are proud to be leading this educational innovation in Turkey, and to present the world’s largest free education platform Khan Academy in the Turkish language. We expect that 240 million Turkish speakers worldwide will benefit from the free education content available at Khan Academy Türkçe.

Our Environmental Performance

Waste management and energy efficiency are the primary environmental issues managed by all of our Group companies. During the reporting period, our environmental protection and energy efficiency investments in SİF green building and Enerya have reached a total of TRY 7.5 million.

Esteemed Stakeholders,

For the coming periods, our objective will be to improve our existing communication platforms, and to shape our goals and actions of improvement, along with our strategic sustainability focus areas, based on the feedback we receive from you. Our goal is to ensure sustainable growth while generating more value for our stakeholders. Your questions and recommendations about the content of this report will enable us to create more value for you.