Deferred tax assets and liabilities (continued) Movement in temporary differences during the year

Movements in deferred tax assets / (liabilities) were as follows:

Balance 1 Jan 06

Recognised in profit or loss

Recognised in equity

Balance 31 Dec 06

Recognised in profit or loss

Recognised in equity

Balance 31 Dec 07

Revaluation on land and building -- -- (21,728) (21,728) -- (24,019) (45,747)

Provisions 72,856 (54,700) -- 18,156 (39) -- 18,117

Effect of percentage of completion method 31,146 (32,901) -- (1,755) 14,440 -- 12,685

Employee severance indemnity 4,194 3,070 -- 7,264 2,376 -- 9,640

Pro-rata basis depreciation expense (3,964) (4,455) -- (8,419) (1,181) -- (9,600) Amortised cost effect and fair value difference

on financial assets and liabilities 2,177 5,242 (7,630) (211) (20,659) 21,559 689

Other temporary differences (99,695) 98,218 -- (1,477) 8,450 6,973

Carried forward tax losses 132,404 (91,005) -- 41,399 18,655 -- 60,054

Total deferred tax assets/(liabilities) 139,118 (76,531) (29,358) 33,229 22,042 (2,460) 52,811

56

Cost 1 January Additions Disposals

Transfer to

Land and buildings 2,169,453 148,433 (20,312) (179,222) 17,980 72,985 (1,490) 96,617 2,304,444 Furniture and equipment 731,481 103,383 (61,106) -- 2,852 63,889 (424) -- 840,075

Leasehold improvements 144,406 28,207 (22,670) -- 30,885 11,244 (187) -- 191,885

Motor vehicles 80,429 12,856 (9,319) -- -- 2,492 45 -- 86,503

Construction in progress 18,945 137,350 (2,591) -- (45,845) 441 (28) -- 108,272

Others 15,575 16,697 (639) -- (5,872) -- -- -- 25,761

Total cost 3,160,289 446,926 (116,637) (179,222) -- 151,051 (2,084) 96,617 3,556,940

Less: Accumulated depreciation 1 January

Current

Buildings 365,226 37,985 (11,602) -- -- 7,799 (135) 17,620 416,893

Furniture and equipment 543,826 71,266 (57,596) -- (6) 34,830 (245) -- 592,075

Leasehold improvements 54,547 17,151 (21,429) -- -- 5,811 -- -- 56,080

Motor vehicles 33,009 7,867 (8,616) -- 6 987 14 -- 33,267

Others 9,822 85 (373) -- -- -- -- -- 9,534

Total accumulated depreciation 1,006,430 134,354 (99,616) -- -- 49,427 (366) 17,620 1,107,849 Net book value 2,153,859 312,572 (17,021) (179,222) 101,624 (1,718) 78,997 2,449,091

Less: Impairment in value (187,617) (13,003) -- -- -- (8,269) -- -- (208,889)

Net carrying value 1,966,242 299,569 (17,021) (179,222) -- 93,355 (1,718) 78,997 2,240,202 The Group’s land and buildings are revalued for the purpose of the consolidated financial statements. Independent third party appraisers conduct the appraisals periodically on the basis of fair market value. As of 31 December 2007, the revaluation surplus, net of minority interest and deferred taxes, amounting to YTL 826,603 thousand including the fair value differences of investment property and land and buildings (2006: 376,789 YTL thousand) was credited to “revaluation surplus” account in the equity. Had there been no revaluation on land and buildings, the balances of land and buildings as of 31 December would have been as follows:

Historical cost Accumulated depreciation Net Book Value

31 December 2007 874,788 (266,555) 608,233

57

Movements of property and equipment and related accumulated depreciation during the year ended 31 December 2006 were as follows:

Cost 1 January Additions Disposals*

Transfer to investment

property Transfers

Adjustment for currency translation

Net revaluation

increase 31 December

Land and buildings 1,793,460 280,103 (23,913) (35,335) -- 2,116 153,022 2,169,453

Furniture and equipment 885,888 29,337 (184,296) -- -- 552 -- 731,481

Leasehold improvements 121,877 18,363 (8,432) -- 12,391 207 -- 144,406

Motor vehicles 108,210 5,726 (33,509) -- -- 2 -- 80,429

Construction in progress 11,231 25,975 (5,870) -- (12,391) -- -- 18,945

Others 16,214 1,951 (2,590) -- -- -- -- 15,575

Total cost 2,936,880 361,455 (258,610) (35,335) -- 2,877 153,022 3,160,289

Less: Accumulated depreciation

1 January

Current year

charge Disposals*

Transfer to investment

property Transfers

Adjustment for currency translation

Net revaluation

increase 31 December

Buildings 292,036 46,440 (44,629) -- -- 107 71,272 365,226

Furniture and equipment 612,807 58,924 (128,213) -- -- 308 -- 543,826

Leasehold improvements 45,682 9,939 (1,074) -- -- -- -- 54,547

Motor vehicles 77,660 6,678 (51,312) -- -- (17) -- 33,009

Others 9,921 425 (524) -- -- -- -- 9,822

Total accumulated depreciation 1,038,106 122,406 (225,752) -- -- 398 71,272 1,006,430 Net book value 1,898,774 239,049 (32,858) (35,335) -- 2,479 81,750 2,153,859

Less: Impairment in value (190,500) (10,288) 13,171 -- -- -- -- (187,617)

Net carrying value 1,708,274 228,761 (19,687) (35,335) -- 2,479 81,750 1,966,242 (*) The disposal amounts include disposals during the year and the effect of change in ownership of interest in joint ventures

At 31 December, intangible assets comprised the following:

2007 2006

Goodwill 739,777 147,976

Concession rights (a) 242,718

--Other intangible assets, net 23,381 21,965

1,005,876 169,941

(a) The partnership established by the Group, Akfen Holding Anonim Şirketi and TÜV-SÜD Teknik Güvenlik ve Kalite Denetim Ticaret Limited Şirketi, obtained the right to tender vehicle inspection services for 20 years as of 20 December 2004. Following the completion of taking the advice of 1st Circuit of State, the Concession Agreement, regarding the privatisation of vehicle inspection services with the Privatisation Administration is signed on 15 August 2007.

TÜVTÜRK Kuzey and TÜVTÜRK Güney have started their operations. Beginning from sign off date, 189 stable and 38 mobile stations will be operational countrywide within 18 months.

At 31 December, goodwill comprised the following:

Company Type of

*The name of the company has changed from A Yapım Televizyon Programcılık Anonim Şirketi to NTV Radyo ve Televizyon Yayın Anonim Şirketi (“NTV”).

**The Capital Market Board of Turkey has approved the merger document submitted in relation to merger of the legal entities DOAŞ and Katalonya Oto on 22 August 2007. On 5 September 2007, the Board of Directors of DOAŞ made a call to shareholders for Extraordinary General Assembly to be held on 25 September 2007 in relation to the legal merger. The merger is registered on 28 September 2007 at the Trade Registry.

Movements in goodwill during the years ended 31 December were as follows:

2007 2006

Balance at the beginning of the year 147,976 117,258

Additions during the year 590,529 30,718

Balance at the end of the year 738,505 147,976

At 31 December, debt securities available-for-sale and held-to-maturity comprised the following: Debt and other instruments available-for-sale:

Government bonds at floating rates 1,101,096 1,202,103 18-22 2014 971,039 Discounted government bonds in YTL 1,026,630 885,984 16-17 2009 441,185 Government bonds in YTL 785,440 800,683 14-17 2012 13,825 Euro bonds 474,357 521,814 5-12 2036 362,441

Bonds issued by corporations (a) 414,167 413,350 5-18 2017 274,164 Government bonds in foreign currency 149,254 153,989 7 2010 405,798

Bonds issued by financial institutions 45,368 45,399 5-12 2014 46,971 Government bonds indexed to consumer

price index 32,179 36,362 10 2012 -

Bonds issued by foreign governments 8,335 8,335 6-13 2028 12,904

Others (b) 22,250 11,398

Total securities available-for-sale 4,090,269 2,539,725 Debt and other instruments held-to-maturity:

Government bonds at floating rates 815,618 857,531 (c) 2011 711,435 Euro bonds 188,250 202,208 9-12 2030 240,688 Government bonds in YTL 147,302 141,653 14-17 2011 145,211 Bonds issued by foreign governments 35,055 35,242 3 2008 36,048 Discounted government bonds in YTL 905 905 7 2008 105,386 Bonds issued by financial institutions 523 519 7-8 2014 5,693

Others 6,818 11,799

Total held-to-maturity portfolio 1,244,876 1,256,260

Accrued interest income 54,691 66,381

Total held-to-maturity portfolio 1,299,567 1,322,641

Total 5,389,836 3,862,366

(a) Bonds issued by corporations include credit linked notes with face value amounting to YTL 306,733 thousand (2006: YTL 222,938 thousand) and carrying value amounting to YTL 314,114 thousand (2006: YTL 229,366 thousand) that are linked to the default risk of the Turkish Government. All bonds issued by corporations are valued at amortised cost since these financial assets are not quoted in an active market.The consolidated factoring subsidiary’s “financial assets available-for-sale” portfolio in the banking and finance segment also includes private sector bonds with “credit linked bonds” at a total face value of USD 10,833,870 and Euro 755,500 (2006:nil) and a total carrying value of YTL 9,257 thousands (2006: nil).

(b) In 2006, Garanti Bank recorded 128,181 shares of MasterCard Incorporated at a total nominal value of USD 12.82 acquired free of charge for its credit card marketing activities on MasterCard. As of 27 July 2006, Garanti Bank sold 75,627 shares of MasterCard Incorporated at a total nominal value of USD 7.56 amounting to USD 2,326,627. As of 31 December 2006, Garanti Bank recorded 44,468 shares of MasterCard Incorporated at a nominal value of USD 5.26 and one share of Visa Europe Limited at a nominal value of Euro 10 acquired free of charge for its credit card marketing activities, in its investment securities available-for-sale portfolio.

(c) The interest rates applied on these securities are floating quarterly based on interest ownership of government bond bids of the government.

Interest income on debt and other fixed or floating-income instruments is reflected in interest on securities whereas gains and losses arising from changes in the fair value of cash flow hedges and available-for-sale assets are deferred as a separate component of equity.

Government bonds and treasury bills include securities pledged under repurchase agreements with customers amounting to YTL 2,936,975 thousand (2006: YTL 1,551,078 thousand).

In 2006, Garanti Bank reclassified certain security investments, previously classified in its securities available-for-sale portfolio, amounting to YTL 765,508 thousand with total face value of YTL 750,764 thousand to its securities held-to-maturity portfolio. Such securities are included in the securities held-to-maturity portfolio above at their fair values of YTL 794,960 thousand as of their reclassification dates. The value increases of such securities amounting to YTL 5,902 thousand are recorded under equity and amortised through the profit or loss up to their maturities as earned.

The following table summarizes securities that were deposited as collaterals with respect to various banking transactions: Deposited at Istanbul Stock Exchange 2,246,685 2,313,043 1,062,451 1,034,384 Collateralised to foreign banks 772,666 835,871 640,176 700,779 Deposited at CBT for interbank

transactions 156,117 162,349 151,899 157,395

Deposited at CBT for foreign currency

money market transactions 58,143 64,233 3,567 3,699

Deposited at Clearing Bank 29,412 29,884 10,796 10,644

Deposited at CBT for repurchase

transactions 23,998 23,097 21,365 20,087

Others -- 11,364 -- 11,622

3,439,841 1,938,610