2. www.desa.uk.com
contents
Message from The President 02
Company Profile 04
Company History 06
Board of Directors
08
Our Mission
09
Benefits of 2011
10
Showrooms and Offices
14
Boutiques
16
Financial Performance
18
Share Performance
20
Board of Directors Activity Report
23
Financial Statements and Independent
Audit Report
33

3. Chairman’s Message www.desa.uk.com
Our responsibility to strengthen human resources and invest in staff is particularly important for our design unit. DESA’s design
director is Graeme Black, an important member of the DESA family, and a designer who has worked with such global giants
as John Galliano, Giorgio Armani, and Salvatore Ferragamo. His design team have revealed the DESA difference and given the
brand increased strength through design.
The year 2011 was witness to DESA’s many successful steps in entering the world of international fashion.
In Los Angeles, in December 2011, internationally- renowned fashion photographer Koray Birand shot DESA’s Spring/Summer
2012 collection. For us, this photo shoot was an important event whose excellent results captured the concept of DESA quality
visually. More success in international design was noted when our Covent Garden, London store was selected as one of the
Melih CELET
world’s best stores in the VMSD international store decor competition, a competition amongst brands from all around the world.
Ceo
Our entering the competition book as one of the best Retail Spaces/Small Stores gave us great pride as a Turkish brand.
Dear Stakeholders,
02 To these positive developments of 2011 must be added the risks. Over 2011, the risks of geography became more sharply de- 03
Over the past year, 2011, the DESA family, including DESA and Samsonite brands, experienced 29% growth in retail based on fined; this is a risk whose uncertainties must be managed to make 2012 the year of opportunities. We will continue to follow the
turnover, and, with a 21% increase in the number of stores, our total retain area reached 15,694 square meters. During this period, social unrest in our important neighboring nation of Syria, and the potentially negative developments that are likely to occur in
we made no concessions in our goal to become a global brand, and the positive results of measures and investments undertaken our regional neighbors such as Iran and Iraq. We must also always keep in mind the range of structural fragilities in the Turkish
in 2011 are reflected in our 2011 performance, which is sure to please all our stakeholders. economy, and their possible effects on the year 2012. DESA exports 90% of its export products to Western Europe, a region now
One key issue that is very important for DESA is the proportional growth of sales on our website www.desa.com.tr with sales in experiencing economically difficult times. Although this is one of the risks that must be properly managed in 2012, we believe
our stores. We are aware of the ever-increasing importance of digital media channels, and in 2011 we expanded and improved that in the coming year we will see the positive reflections of turnover from our activities in domestic as well as Western markets.
both sales and promotion accordingly. In 2011, the company took great steps towards ever more efficient management, made investments in production, retailing,
According to the Leather and Leather Products Exporters’ Association, the body with experience championing the Turkish export and branding. These measures prepared the infrastructure to carry the momentum in turnover, and prepared the company to
industry for the past two years, going beyond traditional markets and entering new markets in the Far East is a new achievement assess the best opportunities for 2012. The team’s spirits are high and we believe we can and will accomplish our goals. In the
to add to the long list of 2011’s achievements. This year, our tannery’s participation in international fairs drew intense interest, coming year, our main objective is to find the opportunities to place DESA brand products in the best international department
highlighting DESA’s forty years of success. Our objectives require qualified personnel, and in line with our goals our workforce stores. Additionally, we will continue our efforts to have the participation of an active international commercial director within
is now over 2,000 people and increasing every day. Our investments in human resources and in other necessary areas are set to our organization, and we will convert one floor of our London office into a showroom. We will have pop-up showrooms during
expand even more. The wholesale figures of our DESA-branded products in Russia increased exponentially, and it is clear that Fashion Week in Paris and Milan, and increase the awareness of our brand in global markets by focusing on PR activities abroad.
that the investments realized with the Turquality vision have begun to bring about the desired results. Within this scope, we are organizing press days in London as well as other activities that will create opportunities for DESA prod-
ucts, and increase the prestige and value of our brand.
In addition, our strategic investments in the retail sector allow all DESA family employees to interact with the products, thanks
to our specially-designed office and showroom which carry our retail infrastructure to a whole new level. Our DESA stores are I would like to take this opportunity to thank our workers for their contributions to our success, our investors for believing in us,
arranged as workshops, allowing each category of product increased dominance and offering better opportunities to apply new our suppliers for helping us to produce our products, and our customers for appreciating our products. And again, I express my
ideas and make necessary changes. faith in our continued success in 2012.
In 2011 we also expanded our design team and started to offer our collections with the seasons of the international fashion
calendar. Now, we have achieved the necessary infrastructure to be able to attend and draw interest at international fashion
weeks and market weeks. As a logical continuation of the pledge made at the establishment of our company to always apply the
best measures for the best infrastructure, in 2011 we set out to implement SAP software in all units of the company. I strongly
believe that as we complete the investment in our brand with SAP software, our operational efficiency and the value created for
our investors will without a doubt be increased. As a publicly traded company, the acquisition of the ability to access information With my best regards,
immediately is important for the transparent and accurate disclosure of our corporate management structure. Melih Celet

4. Company Profile www.desa.uk.com
Founded as a general partnership by brothers Mehmet,
Melih and Semih Çelet in 1972, DESA holds an important
position in the leather industry as a family company. DESA
has become one of the most important players in the in-
dustry, starting with the manufacture of simple leather
bags, and now offering a full range of leather goods, in-
cluding ready-made clothing, bags, luggage, accessories
like belts and wallets as well as a wide variety of products
including seats for airplanes. DESA has 68 stores in 19 dif-
ferent cities in Turkey, as well as international boutiques
in London’s Covent Garden and Hampstead, and the first Company shares were offered to the public the 29th
DESA franchise store in Jeddah. and 30th of April, 2004 and 30% entered trade at the Is-
tanbul Stock Exchange (ISE) from the sixth of May, 2004.
DESA LEATHER MANUFACTURE AND TRADE, INC. was
founded 29 January, 1982 to be the manufacturer of DE- DESA makes a major contribution to the Turkey’s econ-
SA-brand ready-made garments, bags, wallets, belts, and omy by creating employment opportunities as well as
accessories for home and office. Since 2003, DESA has been by exporting its goods. DESA distinguishes itself by con-
the Turkey distributor of Aerosols-brand shoes, and in trolling all stages of services and processes offered to its
04 2007, after being the company’s distributor in Turkey in 28 customers, including production facilities, leather gar- 05
years, it signed a partnership agreement with Samsonite. ments and bag production capabilities, and retail sales
points.
In 1990, DESA inaugurated its 15,000 square meter facility
in Sefaköy. Now, the company’s processing is housed in a DESA, the production, export, and retail leader in its in-
fully-integrated, 35,000 square meter leather processing fa- dustry, is always working to improve customer satisfac-
cility in Çorlu. Opened in 2006, the factory in Düzce covers tion with its trendy,
a 20,000 square meter area. Since 1991, leather production high quality products and its perfectionist understand-
has been undertaken in Desna’s own tannery. ing of service by making significant investments in de-
sign, R&D, human resources, and education.
In 2011, the company sold 323,000 bags, 329,000 leather
crafts, 63,000ready-made garments and 279 ,000 pairs of
shoes. Adding to its 82 stores and 7 franchise stores in Tur-
key, DESA took its first steps towards being a leading inter-
national fashion retailer in foreign markets as well, opening
two retail stores in England in 2010. The company contin-
ues to see appropriate candidates for foreign franchises in
the region.
DESA operates in accordance with ETI and GSP Social As-
surance Standards and has ISO 9001 quality certification.

5. Company History www.desa.uk.com
1972 - DESA founded. 2008 - DESA store was opened in the second biggest shopping center of Europe in the central London.
1974 - First DESA store opened on Istanbul’s Bağdat Caddesi. 2008 - Corlu Factory Building was purchased with its all land and fixed assets.
1982 - DESA becomes an incorporated company. 2008 - DESA, 449 in the Fortune 500 list took place.
1983 - DESA becomes distributor of the internationally-renown Samsonite-brand travel products in Turkey. 2008 - The first Samsonite franchise store within the scope of DESA was opened in Ankara Ankamall SC.
1989 - Leather processing facility was founded in Corlu. 2008 - 5 new stores were opened and the number of stores reached 68.
1990 - 15,000 m2 Sefaköy facility opened. 2009 - The first overseas franchise store was opened in Jeddah.
1999 - DESA takes 937th place in ISO 1000. 2009 - Our magazine DESAMAG was put into practice.
1999 - A new tannery opened in Corlu. 2009 - 1 new Samsonite store was opened.
2001 - DESA U.K. office opened in London 2009 - DESA climbed to 471st place in Fortune 500 list.
2002 - DESA receives ISO 9001:2000 Quality Certificate. 2009 - 5 new DESA stores were opened.
2002 - DESA takes 250th place in ISO 500 and first place in its industry. 2009 - DESA took 355th place in the second 500 biggest industrial company list of Istanbul Chamber of
2002 - The first DESA Concept store was opened. Industry in 2009.
2003 - Became Turkey distributor of Aerosoles shoes. 2010 - 9 new DESA stores were opened.
2004 - Listed on Istanbul Stock Exchange in April. 2010 - DESA, climbed to 499th place in Fortune 500 list.
06 2004 - First DESA franchise store is opened. 2010 - 3 new Samsonite stores were opened. 07
2004 - Received investment incentive certificate for investment project in Düzce Organized Industrial Zone. 2010 - 2 more DESA stores were opened in London.
2004- The website of DESA ,desa.com.tr, was opened. 2010 - DESA UK online sales store came into service.
2005 - DESA accepted into Superbrands. 2010 - In order to give better service to our customers, the infrastructure of our online DESA sales store was
2006 - DESA shareholder Melih Celet transfers a portion of his shares to Çelet Holding, a newly-founded company developed by renewing.
with the same capital. 2010 - DESA Leather and Leather Products has become Export Champion in Turkey by far according to figures of
2006 - 3.2 million TL, 20,000 m2 investment in Düzce Factory completed, improving production capacity by 60%. Exporters Union (42.9 million TL)
2006 - DESA joins Turquality Project. 2010 - DESA took 210th place in the second 500 biggest industrial companies list of Istanbul Chamber of
2006 - DESA’s first overseas sales point launched inside Debenhams department store on Oxford Street. Commerce in 210.
2006 - DESA introduces Turkey’s first collection of waterproof leather garments. 2011 - 9 new stores were added to DESA stores.
2006 - nternational Limited Retailing Company DESA founded in England. 2011 - 6 new Samsonite stores were opened.
2007 - DESA’s 60% share of United Travel Products Inc. sold to Samsonite Europe. Seven DESA stores transferred to 2011 - The new office and showroom of DESA were completed and put into service.
Samsonite. 2011- DESA design team ,as an extension of the importance given to design by DESA, was extended.
2007 - The first Aerosoles store in Turkey opens in Ankara’s Cepa Shopping Center. 2011 - DESA carried its first place in the export sector in 2010 to 2011 as well.
2007 - DESA works with British consulting firm Genex to improve its branding. 2011 - DESA’s fashion news and design oriented blog, blog.desa.com.tr, was opened.
2007 - DESA men’s apparel products offered for sale in ten Debenhams stores across England. 2011 - DESA store in Covent Garden, London was selected one of the world’s top 60 stores in International Store
2007 - Total of 14 new DESA stores were opened. Design Contest in which brands around the world compete. At the end of the contest, DESA also took
2008 - Significant changes were made regarding to logo, corporate identity and store concepts in accordance with place in the book “Retail Spaces/ Small Stores”.
being a global brand.

6. Board of Directors Our Mission www.desa.uk.com
Melih CELET
CEO
1968 Ankara College Our Business
1974 Istanbul University, Faculty of Pharmacy
1972 founded DESA DESA’s aim is to deliver Turkey’s best leathers enhanced
Proficient in English. by the brand’s design elegance and dedication to tradi-
tional hand-working techniques at affordable prices to
its customers around the world primarily through its own
sales points. DESA distinguishes itself by controlling all
stages of services and processes offered to its customers,
Burak CELET including production facilities, leather garments and bag
General Engineer production capabilities, and retail sales points.
1999 Bosphorus University, BA, Mechanical Engineering
2001 Wisconsin University Madison, MBA, Finance and Investment
2002 Northampton College, M.Sc., Leather Technology
Vice President of the Board of Directors, United Brands Association
Our Goals Our Ethical Values
Board Member, Istanbul Leather and Leather Products Exporters’ Association Profitability is the main resource that DESA uses to lev-
Member, Turquality Workgroup, Istanbul Textile and Apparel Exporters’ Association DESA’s ethical values are our most important principles,
erage financing for new investments and research and
Proficient in English and German. giving us strength to achieve success and reach our ob-
development activities. Therefore, the most important
jectives.
criterion in evaluating the company’s performance is
Nihal CELET
08 Vice Chairman, Board of Directors
long-term profitability. Our goal is not just growing, but We believe: 09
growing with profit in the long term and becoming the
Assistant General Manager, Exports
leader in all areas of our operation. Family unity is the source of community unity. With this
1974 Istanbul University, Faculty of Pharmacy awareness, we consider our employees, customers, sup-
1972 founded DESA pliers, shareholders and our community members of our
Proficient in English. family.
Customer Satisfaction
For us, unconditionally fair and honest behavior with eve-
DESA is not only part of the manufacturing industry but ryone we come into contact with and a work ethic based
also part of the service industry. DESA aims to provide un- on respect are very important values.
Geza Umit ERVIN DOLOGH conditional customer satisfaction, both pre and post sale,
Board Member
offering high quality products and a service ethic based Our customers reflect our business. Our greatest goals are
1967 Ataturk University, Zootechnics Department on a principle of perfectionism. to always be “the best” and to create “happy customers.”
Advisor to the Chairman, Board of Directors, Arkas Holding
Director, Board of Directors, Deniz Board of Trade Izmir Branch Our employees’ social security is of utmost importance to
Board Member, Turkey Volleyball Association us. We provide all our employees protection under the um-
Board Member, Izmir Development Agency, Board of Development brella of social security.
Leading Board Member, Expo 2015 Quality
Proficient in English, German and French. We are a part of the society we live in. We take from society
DESA’s most important assets are the sense of quality that and we give back to society. Always with this awareness in
Burcak CELET we offer to our consumers, our tradition of handicraft, our mind, with our work, we aim to contribute meaningfully
Board Member modern and functional designs and our brand. We are not to society.
only offering our customers clothing products and leather
1999 Yıldız TeknikUniversity, BA, Industrial Engineering accessories but also a distinct style, an understanding and
1999 - 2001 Planning Manager, Toys”R”Us a way of life.
2002 University of Surrey, M.Sc., Retail Management
2003 - 2004 Joker - Maxitoys – Category Manager
Proficient in English, French, and Italian.

7. Developments in 2011 www.desa.uk.com
Where Leather Meets Design
DESA produces its own leathers in its own tannery facility, processing the raw materials in accordance with tra-
ditional handcraftsmanship techniques. DESA products reflect the contemporary design, combining the best
of traditional techniques with modern style. DESA is often cited in the retail industry for its innovative nature,
and the company continues to rejuvenate itself. Since 2008, its position as a world brand adding value to in-
ternational design has only strengthened. The London design office, under the leadership of Italian Fred Tutino
and his creative team, was established in that year, the same year that the brand’s logo and store concept were
refreshed. It was also the landmark year of the rejuvenated 2008 Spring/Summer collection. DESA is more that
just a leather brand; DESA offers a coherent and fashionable style from head to toe, and has taken its rightful
place as a go-to brand for the fashion conscious.
In 2009, a new textile collection featuring designs combining stunning fabrics and leather was added to DESA’s
design roster.
The next year, in 2010, DESA took its designs a step further with a partnership with Italian designer Davide
Gatto, putting the company’s signature on a collection that strengthened the brand’s fashion image.
The timeless style of the minimalist bags and shoes, with luxury in all the details, in the 2010 collection attracted
great attention.
In 2011, DESA began working on plans to feature the tradition of craftsmanship - which distinguishes the brand
from others in the industry - by combining the styles and design languages of several different designers within
its expanded design team, bringing together a wide range of products representing many different styles and
10 the various tastes of DESA’s consumers. 11

8. Developments in 2011 www.desa.uk.com
Technology & Traditional Leather Processing
In 2006, DESA launched a new approach to leather garments with its waterproofing technology, and the company is continuing
to invest in this technological advance in traditional leather processing. DESA’s products let consumers feel the elegance and the
comforting feeling of leather. The company continues to invest in R & D in all the leather making processes, from tanning to design,
while at the same time lending to each of its products the unique craftsmanship that is the signature of DESA. DESA takes advan-
tage of its total control over each stage of production, always differentiating the brand from its competitors.
DESA transforms all its leathers in its own tannery, creating unique waterproof products perfect for use in summer and winter alike.
12 13

9. DESA Showrooms & Offices www.desa.uk.com
14 15

10. Desa Stores www.desa.uk.com
New DESA Stores in 2011
DESA opened nine new DESA stores and six new Samsonite stores
in Turkey in 2011 . The year saw new DESA stores in Istanbul
at Marmara Forum, Istanbul Arenapark and Istanbul Akbatı, and
elsewhere in Turkey at Kayseri Forum, Bolu Highway Outlet Center,
Bursa Anatolium, Bilecik Bozuyuk Sarar Shopping Center, and An-
kara’s Kızılay Shopping Center. Samsonite stores opened in Istan-
bul’s Palladium, in Göztepe, Akbatı, City’s, and elsewhere in Turkey
in Gaziantep’s Sankopark, Ankara’s Kızılay Shopping Center.
As a mark of its continued responsibility to its investors, DESA
decided to close its store in Kuşadası, Aydın, due to economical
performance that was not up to the desired level.
At the end of 2011, the total area of all DESA stores measured
15,671.54 m2.
16 17
13.958
m2 12.657
12.724 13.538
11.727
8.282
6.378
3.524 4.772
2.726
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010

11. Financial Performance www.desa.uk.com
SHAREHOLDERS’ GROSS SALES NUMBER OF
TOTAL ASSETS NET SALES DOMESTIC SALES EXPORT NUMBER OF STAFF
EQUITY PROFIT STORES
2004 75.652.568 57.463.790 81.553.206 42.354.028 44.181.946 26.536.573 32 831
2005 86.512.984 63.207.242 74.522.153 54.368.742 25.443.285 21.515.341 41 843
2006 93.482.459 59.662.177 82.927.902 66.572.720 22.861.807 32.406.838 51 1.246
2007 93.497.492 65.752.117 103.742.532 78.408.817 31.468.020 17.269.584 57 1.507
2008 104.529.813 62.214.816 102.505.025 66.916.888 40.762.593 31.322.556 62 1.694
2009 109.819.977 56.206.978 95.911.950 63.536.099 37.616.800 31.014.146 63 1.659
2010 114.587.450 56.754.260 127.417.987 67.268.941 64.785.082 38.190.550 68 1893
2011 129.651.827 58.018.748 175.258.719 81.119.974 94.139.145 69.636.367 83 2020
1-Total assets at end of 2011 was129,651,827 TL. Shareholders’ Equity 58,018,748 TL; Net Sales 175,258,719 TL; Domestic Sales 81,119,974
TL; Gross Profit 69,636,367 TL .
2-By the end of 2012, the number of stores had increased from 68 to 83. In response to increasing sales, the number of employees
increased by 127 persons, reaching 2,020 by the end of 2010. At the end of 2012, number of employees is estimated to be 2200- 2250.
4-Annual sales increased 37.55%. First quarter increase 50%; second quarter increase 60.34%; third quarter increase 37.03%; fourth
quarter increase 17.58%.
18 5- The company’s domestic/foreign sales were recorded at a ratio of 53.71% / 46.28 %. Sales are expected to be at a similar ratio in 2012. 19
3- Total assets at end of 2011 was 129.651.827TL. Total assets at end of 2010 was 114,587,450 TL.
6-Gross Profit reached 69,636,367 TL by the end of 2011. Gross Profit was 38,190,550 TL in 2010. Gross profit in 2011 showed a increase
Between the end of 2010 and the end of 2011, total assets increased 13.14%.
of 31,445,817 TL, or 82.33%, over the previous year.

12. Share Performance www.desa.uk.com
20 21

13. www.desa.uk.com
22 23
BOARD OF DIRECTOR’S REPORT

14. 8. Personal Assets Issued Within Period
I – INTRODUCTION No capital market instruments were tendered.
www.desa.uk.com
1. Term of Report 9. Sector of Activity and Place Within the Sector
This report covers the period 01.01.2011 – 31.12.2011 of Desa Leather Industry and Trade Inc. Leather was one of the first materials used by mankind to meet their basic needs. In the most primitive ages, leather was primar-
ily used as a covering, but in later ages it was used in times of war as stirrups and quivers, and thus was the material of strategic
equipment. According to some sources, the Turks started working with leather some 600 years ago, while other sources place
2. Titleof Partnership
the Turkic people beginning leather making some 2,000 years ago. Despite a difference of opinion about the early history of
Desa Leather Industry and Trade Inc.
Turks and leather, it is clear that after Fatih Sultan Mehmet conquered Constantinople, the Ottoman Turks began working in the
leather trade in Istanbul. Thus, the leather trade has been an important sector of the Turkish economy since the 15th century, a
3. Board in Charge During Report Period legacy that continues today.
The leather sector provides net foreign currency income because of its significant operation in the export and tourist markets. As
Board of Directors
leather is a handcrafted product, it has potential to create employment opportunities on a large scale.
In accordance with the General Assembly Meeting held on 31.03.2011, the following were elected to perform duties as the
Board of Directors for a period of two (2) years: CEO Mr. Melih Çelet, Vice Chairman of the Executive Board Mr. Burak Çelet,
Between January and December, 2011, Turkey’s total exports amounted to $134,6 billion , representing an 18.2% increase. In the
and Board Members Ms. Nihal Çelet, Ms. Burçak Çelet and Mr. Geza Ümit Erwin Dologh.
same period, exports of leather and leather products amounted to $1,440 billion, an increase of 8.5%. Leather is the 10th largest
Name End of Term Experience (years) sector in the industrial sectors, with 1.52 % share of the total industrial sectors employment . The Turkish leather sector has a
leather production capacity of 400,000 tons of leather, and represents 1,200 companies in the sector. During the period between
Melih CELET 31.03.2013 39 January and December, 2011, leather and leather products exports amounted to $1,440,411, representing 1.07% of Turkey’s
Nihal CELET 31.03.2013 31 total exports.
Burak CELET 31.03.2013 19 DESA’s January -December export rates represent an increase of 57% over the previous year’s calendar year. Export rates of DESA
Geza Umit ErwinDologh 31.03.2013 27 leather goods are as follows:
BurçakCELET 31.03.2013 12 EXPORT FIGURES USD 2009 2010 2011
Auditors DESA LEATHER IND AND TRADE INC 24.583.658,35 42.921.159,22 56.209.293,75
Hasan Kalyoncu and Ferhan İhsan Bozdoğan, chosen as auditors for FY 2010, performed their duties until the General Assembly
Meeting of 31.03.2011. In said General Assembly Meeting, Fevzi Sen and Ferhan İhsan Bozdoğan were chosen to perform duties The Turkish leather industry enjoys 22% of the worldwide leather production capacity, second only to Italy. In Turkey, many of the
as auditors for the period of one (1) year. firms in the sector are Sibs. In terms of recorded exports, Turkey exports 6.02% of the worldwide total of exported agricultural-
based processed products, which is the second highest foreign exchange-earning sector after textiles. In exports, it is the second
Name End of Term
24 best foreign exchange earning sector after textile. According to official figures, the nations that export the most leather and 25
Fevzi Sen 31.03.2012 leather products are Russia, Germany and Italy. Following these countries are France, Iraq, England, Kazakhstan, Ukraine, Hong
Kong and China. DESA exports most of its foreign-bound goods to Italy, England, Spain, Russia, China and Saudi Arabia. In Turkey,
Ferhan İhsan Bozdogan 31.03.2012
the import of leather is mostly to meet the raw leather needs of the ready-to-wear garments sector.
Board of Auditors The Company was built as a limited-liability company in 1972 and became a corporation in 1982. The Company is at a notable
position within the Turkish leather trade with revenues in 2011 of 175,258,719 TL and an expert staff of 2020.
Non-executive Members of the Board of Directors of the Company Geza Ümit Erwin Dologh and Burçak Çelet DESA is in a prominent position both in Turkey and in export countries, playing a lead role with its unique concepts of design,
will perform duties as Members of the Audit Committee from 31.03.2011 and for the duration of FY 2011, until production and DESA store.
the next General Assembly Meeting.
According to 2010 data, DESA is amongst Turkey’s Fortune500 companies. In addition, DESA places at 210 in the Second Biggest
4. Amendments in Core Contract within the Term
500 Companies listing of the Istanbul Chamber of Industry.
Between the dates 01.01.2011 – 31.12.2011 no amendment was made in the core contract of the company.
5. Changes in the Capital of Firm Within the Term II Business Performance
There was no change of capital in the Company between the dates 01.01.2011 – 31.12.2011.
1. Main factors affecting business performance and financial activities:
Company’s value chain, and the resulting effects on its performance, beginning with the processing of raw leather, and ranging
6. Distribution of Profit Margin
from domestic to international wholesale and retail sales points, are as follows:
No distribution was made within the term. • Competing international manufacturers and associated pricing strategies
• Cost of capital in Turkey, and staying above international standards
7. Shareholders of the Company and Share Rates • Global economic crisis and the exchange rate policy, combined with the decrease in demand overseas for wholesale exports
and political support for increased exports
31 December 2011 31 December 2010 • Increases in energy prices and volatility, disallowing the creation of a consistent cost strategy
Share Rate Share Amount Share Rate Share Amount • Obligation to reformulate prices for raw material prices, and the resulting currency exchange rate effects of the new price ac-
cording to price levels
Melih CELET % 14,92 7.343.918 % 14,92 7.343.918
• National production and industrial policies, lack of character of support for domestic manufacturers with high tax rates
Celet Holding A.S % 54,28 26.717.682 % 54,28 26.717.682 • In the national market, the reduction of wallet shares of our target customer mass due to
14.766.591 14.766.591 the attractive conditions of purchases in other sectors
Public Shares % 30,00 % 30,00
• Becoming widespread in the shopping centers across Turkey that are crucial in retail investment, and the effect of the cost
Other % 0,80 393.779 % 0,80 393.779 structure of these sales channels on the competitive market
49.221.970 49.221.970 • The increased interest and investment of international ready-made clothing brands in Turkey and the finding place of these
Total % 100 % 100
low-cost, low-quality products in the market

15. www.desa.uk.com
2. Management, Investment and Dividend Policies: d. %50 of expenses of brand consultancy ,
e. 50% of expenses of advertising- publicity and catalog,
• Investment Policy: Facing these developments, in order for investments in domestic retail investments to yield the best results, f. 50% of expenses of law, consulting etc,
our management continues to implement the following policies: g. 50% of expenses of quality certificates total expenditures on quality certificates
a. Education for Employees: High quality educational programs are applied.
b. Retail Investments: The development of new concept stores is ongoing. All DESA stores, including Istanbul Galleria, Nişantaşı Prorate, supports without upper monetary limit. In this respect, brand design consultancy contracts and expenses undertaken in
Abdi İpekçi, Kadıköy Nautilus, İzmir Agora, Mersin Forum and Ankara Cepa, have been refurnished to include the sale of DESA brand Britain, the amounts of periodic expenses to prepare catalog is funded %50 by Turquality Program.
textiles, which have brought in high sales figures over the past twelve month period. Düzce plant provides operating subsidies, is located in the region, numbered 5084 on the promotion of investment and employ-
Dividend policy: Beginning in 2008, continuing through 2009 and 2010, and ever supported by the Company’s comprehensive pro- ment is covered by the law. In our relevant factory;
gram and Turquality, in 2011, and the ongoing growth and expansion of the target field of retail investments, the DESA brand showed
growth, development, in line with the Company’s goal to be a strong, worldwide brand with a powerful financial structure, always h. Energy Price Discount Support,
taking into consideration the interests of partners and of the Company itself. The Company acts with balanced and sober judgment in ı. Personnel Income Tax and Social Security Employer’s contribution support is taken.
accordance with the General Assembly to monitor the dividend distribution policy, and the Company will continue to assess the value
added productive investment. 5. Predictions on the Development of the Business
3. Financial Resources and Risk Management Policies DESA’s main objective is to distance itself from its producer identity and to become a multinational retailer known for its unique
brand identity. DESA will implement the following strategies to achieve this goal:
Our business activities provide its finances in two different channels for the twelve month period of FY 2011 :
• Growth Strategy:
• Internal Resources: Financial Activities In five years, and starting with the opening of stores in England, the vision is to open flagship DESA stores in major fashion cent-
• External Resources: Financial Sector ers, and after widening the geography of the brand and positioning it worldwide, the goal is to expand to corners and select retail
According to our financial resources, our Risk Management Policies are as follows: outlets.
In line with this target, two flagship stores have already been opened in England. DESA has two central London branches, in Hamp-
• Internal Resources: Economical Activities stead and Covent Branches.
a. Retail Sales: • Growth Strategy:
The majority of our sales pass over retail banking system. Therefore, at the risk of actualization of the sale, the finance sector In five years, and starting with the opening of stores in England, the vision is to open flagship DESA stores in major fashion cent-
passes. Our business with appropriate discount rates, removes this risk is by the fees charged the next day. ers, and after widening the geography of the brand and positioning it worldwide, the goal is to expand to corners and select retail
outlets.
In line with this target, two flagship stores have already been opened in England. DESA has two central London branches, in Hamp-
26 b. Wholesales: 27
We have risk a control model with letter of guarantee in our domestic wholesales. In addition our wholesale prices connected over stead and Covent Branches.
with promissory notes such as checks and valuable documents.
• Brand Strategy:
c. Procurement Policies DESA aims to capture foreign markets by realizing a strengthen brand position:
As a result of purchasing, the payment term policy is applied to minimize the duration of the difference between the sales delays.
In this way, working capital requirements are minimized a. Brand definition and creation of brand identity
b. Identification of brand strategies and expansion of the brand
d. Foreign currency liabilities: c. Development of in-store customer experience and branded communications
AIn order for domestic and sales goods and services not to bear the currency risk of foreign exchange liabilities, trying to keep
export alive and providing the removal of the risk in this way. • Strategy for Efficiency/Flexibility
Additionally, the risk is eliminated by forward transactions during the terms in which the coverage ratio is low. In order to create a cost advantage in the upcoming period, DESA will emphasize vertical integration to increase manufacturing
efficiency and flexibility.
• Outside Resources:
6. Investments and Incentives:
e. Long-term investments have been established for the long-term resources. Appropriately for investment loans received a total
of 2 years of grace period is taken under the condition of being amortized over 7 years 6 months maturity. 3 payment of aforesaid Developments in investments:
investment credit was paid and it continues like this regularly. In the field of retailing, new store openings in 2011 were evaluated in beginning of the year. In the first quarter of 2011, Palladium
Samsonite and Marmara Forum DESA Stores were opened. In the second quarter, four new stores were opened: Anatolium Bursa,
f. In the use of short term resources, they are directed in a way to cover export registered credits and the cost of export at the due Eskişehir Armada, Malatya Park Mall Outlet and Bilecik Bozuyuk Sarar. In the third quarter, five more stores were put into operation:
date. Göztepe Samsonite, Bolu Highway Shopping Center, Akbatı Arenapark Shopping Center DESA, and Samsonite Akbatı DESA. In
the 4th quarter, stores opened were: City’s Nişantaşı Samsonite, Sankopark Gaziantep, Kayseri Forum, Kızılay Ankara DESA, Ankara
4. Other Considerations That Are not Shown in Financial Tables but will be Beneficial To Users: Kızılay Samsonite. By the end of 2011, DESA had 83 stores in operation.
• Desa brand owned by our business, was determined as to be supported brand under the Treasury and the under Incentives and Usage:
secretariat of Foreign Trade Turquality Program • Encouraging Investments and Employment Law number 5084 / Düzce
• 2006/4 dated branding of Turkish Products Abroad, Turquality Image of Turkish Products Placement and Support
a. 50% of investments in store decoration,
b. 50% of Shop rents Pertaining to:
c. 50% of total expenditures on design and model, • Trade Fairs ITO
• Export subsidies

16. www.desa.uk.com
Sales Amounts:
PERIOD 31.12.2011 31.12.2010
INCENTIVE TYPE TL TL Product Name Product Name Product Name Product Name Product Name
(Unit of Measure) (Unit of Measure) (Unit of Measure) (Unit of Measure) (Unit of Measure)
EMPLOYMENT INCENTIVE 2.346.223 1.950,507
Year / Category Bag (TL/Number) Leathercraft (TL/Number) Ready Made (TL/Number) Shoes(TL/Pair) Textile (TL/Number)
TURQUALİTY 1.394.290 633.048 2011 4.Quarter 81.164.536 35.138.947 23.109.199 28.215.796 1.685.669
İTKİB FAIR INCENTIVE -- - 2010 4.Quarter 64.709.154 11.035.508 22.363.180 23.794.716 0
USD USD Year / Category Sheep Nappa Sheep Nappa Cow Vidala Wool (Kg)
Leather(Feet) Leather(Feet) Suede (Feet)
INCENTIVE-BASED IMPORT 33.141.500 23.544.661 2011 4.Quarter 0 0 0 0
2010 4.Quarter 0 0 0 0
7. Developments Regarding to Good and Service Production Sales Prices:
Qualifications of Production Units: Product Name Product Name Product Name Product Name Product Name
• Corlu Factory: (Unit of Measure) (Unit of Measure) (Unit of Measure) (Unit of Measure) (Unit of Measure)
The Corlu Factory is referred to as the leather tannery in Company literature. Year / Category Bag (TL/Number) Leathercraft (TL/Number) Ready Made (TL/Number) Shoes(TL/Pair) Textile (TL/Number)
This facility processes rawhide and produces leather, and also has machine and equipment capabilities. 2011 4.Quarter 251 107 431 101 164
• Istanbul Halkali Factory: 2010 4.Quarter 201 47 306 92 0
This facility has machinery and equipment with the capacity to produce ready-made clothing and crafted goods from pro- Year / Category Sheep Nappa Sheep Nappa Cow Vidala Wool (Kg)
cessed leather. Leather(Feet) Leather(Feet) Suede (Feet)
• Duzce Organized Industry Region Factory: 2011 4.Quarter 0 0 0 0
The facility has machinery and equipment with the capacity to produce ready-made clothing and crafted goods from pro- 2010 4.Quarter 0 0 0 0
cessed leather.
Developments in Production: 8. Financial Structure Information
a. Financial Table Summaries and Basic Rates
28 Capacity Usage Rates: Financial statements audited independently and basic ratios with regard to financial status, profitability and sol- 29
vency calculated on the basis of information are as follows:
Product % K.K.O Product Name % K.K.O Product Name % K.K.O Product % K.K.O
Name (C.U.R.) (Unit of (C.U.R.) (Unit of Measure) (C.U.R.) Name (C.U.R.)
Financial Table Summary Rates
Year / Category Bag (Number) % K.K.O. Leathcraft (Number) % K.K.0. Ready made (Number) % K.K.O. Textile (Number) % K.K.O.
2011 4.Quater 291.847 %38 238.837 %74 41.811 %14.7 2.047 %32 TL 2010-4. Term 2011-4. Term
2010 4.Quater 252.683 %32,52 219.938 %78,31 10.522 %3,69 0 %0 Total Assets 114.587.450 129.651.827
Year / Category Sheep % K.K.O. Sheep Fur % K.K.O. Cow Leather % K.K.O.
Shareholders’ equity 56.754.260 58.018.748
Leather(Feet) Leather (Feet) (Feet)
2011 4.Quater 2.780,189 %18 207.154 20 1.243.567 %35 Net Sales 127.417.987 175.258.719
2010 4.Quater 1.998.024 %13,37 0 0 201.207 %5,65 Domestic Sales 63.015.730 81.119.974
Export 64.402.257 94.139.145
Net Term Profit 547.753 1.264.488
Sales Amounts:
The number of stores 68 83
Product Name Product Name Product Name Product Name Product Name The number of staff 1.893 2.020
(Unit of Measure) (Unit of Measure) (Unit of Measure) (Unit of Measure) (Unit of Measure)
Year / Category Bag (Number) Leathercraft (Number) Ready made (Number) Shoes (Number) Textile (Number)
329.874 53.626 Financial Rates
2011 4.Quarter 323.543 279.710 10.250
2010 4.Quarter 321.003 233.796 73.075 256.799 Rates 2010-4. Term 2011-4. Term
Year / Category Sheep Nappa Sheep Fur Cow Vidala Wool (Kg) Current Rate 1,74 1,53
Leather(Feet) Leather (Feet) Suede (Feet)
2011 4.Quarter 0 0 0 0 Active Collection Rate of Total Liabilities 50% 55%
2010 4.Quarter 0 0 0 0 Active Collection Rate of Shareholders’ Equity 50% 45%
Main Operating Profits 31% 33%

17. www.desa.uk.com
b. Intended Actions, Predictions and Applicable Strategies to Improve the Financial Structure of the Business III MANAGEMENT WORKS
The competitiveness of the Company was increased from the income of the public offering in 2004, as well as with the 2006
investment in the completion of the Düzce factory. The purchase of the Çorlu Tannery Factory in the last quarter of 2008 also 1. Senior Works
strengthened the value chain also of the business.
The purchase of the plant and the purchase of raw materials were enacted using competitive borrowing rates, as per estab-
lished public debt policy, to minimize risks.
Title Name- Surname Job Experience (year)
The evaluation of cash within the Company and risk management using derivative instruments are underway.
General Manager Burak Çelet 19
The year 2010 was certainly a year that tests the durability of the real sector and our own sector. With our works to improve
Assistant General Manager (Exports) Nihal Çelet 31
costs and our effectiveness, by providing improvements in the application of sales revenue and market share, we tried to
reach our goals. Assistant General Manager (Sales and Marketing) Alpaslan Karayalçın 32
Use of in-house resources and information to increase the speed and efficiency of all processes, high value-added informa- Assistant General Manager (Financial Affairs) Burhan Çamlıca 18
tion, which feeds the data stream, Enterprise Resource Planning System (ERP), preparatory work, license procurement and
Corlu Factory Manager Nuri Katkat 20
consulting contracts were all undertaken.
Duzce Factory Manager Gürsu Altıoklar 15
We anticipate that with developments in the manufacturing countries in the Far East and elsewhere due to their terms of
ethics, and with more local price increases, the major international brands especially will continue to weaken our competi- Accounting Manager Ahmet Aslan Özünlü 41
tive advantages, stable quality, production line, but do not change the orientation of our country. As a reflection of this Finance Manager Ayşe Mısırlı 19
issue, we will also continue negotiations with major global brands.
Human Resources Manager Hamdi Paramyok 20
As a result of global warming and changes in consumption in our own country, the world’s livestock sector is expected to
continue to be adversely affected in subsequent years. The recovery after the economic crisis related to these develop- Information Technology Manager Dr. Ahmet Taşdelen 25
ments, especially in the retail sector, we saw a contraction in the supply of rawhides , while an increase in demand has CRM and E-commerce Manager Burçak Çelet 12
caused prices to increase dramatically. In the Company this is reflected in the increase of our stock prices as the cost of raw Advertising and Public Relations Manager Ahu Polatoğlu 9
leather also increases.
Investor Relations Specialist Pınar Kaya 5
DESA is following the biggest markets in Italy and England, and also, in accordance with Turkey’s foreign policy to improve
relations with its neighboring countries, the Company will also concentrate on the markets in Iraq, Cyprus, Syria and Azer-
2. Staff Increase
30 baijan to achieve our target market strategies in 2012. 31
As of 31 December 2011, staff working in the Company totaled 2,020 persons.
Priorities for FY 2012 include a goal of balancing export and domestic sales to a ratio of 50-50%, and attaining the operating (31 December 2010 : 1,893.)
capital to support the cash to open DESA stores in the world’s fashion centers. Also, with own planned investments, we aim
to increase market share and revenues. 3. Collective Bargaining Agreement
We believe that by applying the planned strategies to the Company’s financial structure to increase our market share we will Our Company has no collective bargaining agreement. Staff relations are carried out within the framework of Labor Law.
support our planned goals, as well as added value to the Company.
4. Severance Pays
However, with the competition in the retail market, the elasticity of price in the management of demand must be in retained As of 31.12.2011, employees’ severance pay entitlement was 1,465,699 TL. In comparison, the reserve in 2011 was 1,328,328 TL.
in the Company’s market power. A strategy more precise than ever - our ‘Price-Worth Strategy’ - is more important than ever.
To carry this out successfully, we will create a product structure and size specifications to meet customer demand. This will 5.Employee Benefits
be one of our most important tools to support our Price-Worth Strategy. Our employees are provided with all the rights specified in Labor Law and in relevant legislation.
In addition to these rights, our employees receive:
9. Activities carried out in Research and Development
• In cooperation with an ongoing partnership with TUBITAK, damaged leather surfaces repaired and improved In addition;
• Design stage of Green Leather Production Project • Shuttle Service to workplaces,
• Lunch,
10. Donations Made in this Period • Vehicle Allocation
The Company donated 119,556 TL between the dates 01.01.2011 – 31.12.2011. • Personal Accident Insurance for the staff who has vehicle allocation
• Right to limited use mobile phones

18. 1. General Board Information: www.desa.uk.com
On the 31.03.2011, within the period of this report, the Ordinary General Assembly for FY 2010 was held and in which public
disclosure of relevant information to the public was required, according to CMB legislation, and was communicated to them
through the press. Registered owners of registered shares are not disclosed for a specific period of time, but have been com-
plied within the provisions of the Turkish Commercial Code.
Before the General Assembly, the 2010 Annual Report was presented to shareholders at Company headquarters. In order to
facilitate participation, Company headquarters were selected as the meeting place, and the General Board’s announcement
was published via the Turkey Trade Registry Newspaper, a newspaper published nationwide, and the bulletin of the İSMB
(Istanbul Stock Exchange).
1. Special Situations
Within the twelve-month period of 2011, 18 special situation statements were made, and pursuant to this statement, no ad-
ditional statement was requested. All special situation statements were made on time, and no sanction was imposed on the
Company.
2. Basis of Activity of the Board of Directors
Within the twelve- month period of 2011, 35 Board meetings were held with agendas were determined in advance.
The dates of Ordinary Assemblies of the Board of Directors are determined in advance. The secretariat of the Board of Direc-
tors has been made available.
CEO GENERAL MANAGER
MELİH CELET BURAK CELET
32 33
IV - Activities undertaken after close of FY and before General Assembly
After the close of the period between 01.01.2011 – 31.12.2011, and before 31.01.2012, the Ankara Esenboğa Samsonite
store and one DESA store were opened. On 01.03.2012, after an evaluation of productivity, it was deemed appropriate to
close the store at the Gebze Center Shopping and Wellness Center.d.
V – PROFIT DISTRIBUTION PROPOSAL AND CONCLUSION
According to the CMB profit distribution table our Company, DESA Leather Manufacture and Trade, Inc., prepared in ac-
cordance with the notifications of the Capital Market Board Resolution number 09/ 2012 dated 15/03/2012;
The General Assembly was informed for its approval of the decision to put the remaining Net Profit of FY 2011, after all due
taxes and other expenses, into Extraordinary Reserves.
CONFORMANCE STATEMENTS OF CORPORATE GOVERNANCE PRINCIPLES
Desa Leather Company adopts 56, Series IV published by the CMB Corporate Governance Principles and the Communiqué
on the Implementation of the principles of Determination. Corporate Governance Compliance statement governs pre-
pared within the framework of the aforementioned Communiqué will be announced separately.
Annual Corporate Governance Principles Compliance Report of the varying parts of the invariant sections are as described
below and did not reiterate.

19. STOP, THINK TWICE. www.desa.uk.com
WE THINK TWICE.
WE THINK TWICE ABOUT THE HEALTH OF
HUMANITY AND THE ENVIRONMENT.
WE PRODUCE FOR THE FASHION WORLD IN
100% TURKISH LEATHER.
BECAUSE THIS IS WHAT YOU ARE
WORTH.
BEFORE YOU CHANGE
YOUR LEATHER,
THINK TWICE.
BEFORE YOU BUY THAT LEATHER JACKET,
Think. THINK ABOUT THE QUALITY OF THE
DYE, OF THE LEATHER. THINK ABOUT THE
34 CONDITIONS IT WAS PRODUCED UNDER. 35
DOES YOUR LEATHER CARE ABOUT THE
HEALTH OF HUMANITY, OF THE WORLD?
“STOP AND THINK TWICE”
DESA LEATHER MANUFACTURE AND TRADE, INC.
FINANCIAL STATEMENTS AND INDEPENDENT AUDIT REPORT FOR THE PERIOD
1 JANUARY - 31 DECEMBER 2011
SHOP ONLINE WWW.DESA.UK.COM