Dear Shareholders,

The destructive effects of the prevailing global economic crisis on the global finance system and on the real sector seem to have subsided for now, thanks to the unprecedented coordination and concerted interventions displayed by economic managements. The world economy that contracted for the first time since the World War II in 2009, is expected to resume growth in 2010, led by the emerging market economies. Nevertheless, the transferring of debt from the private to public sector which arose as a consequence of the measures taken to save the world economy from collapse, has started to pose a major threat to the international financial and economic systems by reaching such proportions as country defaults. Also, it should be noted that the debt levels reaching unprecedented levels in developed economies will certainly bring up economic austerity measures which will inevitably stifle global growth expectations substantially.

The Turkish economy was naturally affected by the global crisis, as well. Significant losses in production and employment were experienced in both the financial and real sectors. While the drying up of foreign capital flows interrupted the economic growth in our savings deficient economy, strong economic contraction in our main trade partners, mainly the EU, caused exports to drop dramatically. In a year when economic activity shrank by 4.7%, further contraction was restrained by swift interest rate cuts orchestrated by the central bank and the fiscal measures taken by the government. The 6% economic growth of the last quarter of 2009 helped raise hopes that the prevailing low interest rates policy will support growth in 208.

While serious problems were faced in the banking sectors of developed economies and those of the East European countries which are considered in the same category as Turkey, the Turkish banking sector was able to weather the crisis with little damage thanks to its strong capital base. In an environment where foreign capital flows contracted substantially, the Turkish financial sector was able to stand sound thanks to its strong capital base and effective risk management that were achieved through a closely monitored system brought in following the 2001 financial crisis. Recent developments showed that the concerns held at the beginning of the year over the rollover of the syndicated loans of the banking sector and over the surge in non-performing loans proved to be baseless to a large extent.

At GSD Holding, we focused on keeping away from speculative expectations, maintaining our financial soundness and holding strong liquidity in a year of high uncertainties. Tekstilbank strengthened its capital base and maintained its high level of liquidity thanks to its commonsense, prudent policies and its high proficiency in risk management. We implemented rigorously our priorities that we had set ourselves and in so doing maintained our equity and asset quality, while effectively controlling our costs. We raised the level of efficiency by restructuring the number of branches and staff.

Loans generated from our banking, leasing and factoring subsidiaries displayed a mild increase to TL 1.8 billion in 2009. Our exports rose by 21% to USD 744 million in a year where Turkish exports retracted significantly. By strengthening the financial soundness and liquidity of our companies, we strongly believe that we have positioned ourselves in the best possible way for the next phase of the economy in which we expect competition to intensify considerably. In these difficult times, I thank all my colleagues for their unrelenting efforts and perseverance and also our esteemed shareholders for their keen support.

Sincerely,

M. Turgut Yılmaz
Chairman and Managing Director