The right energy in the right place
ZORLU ENERJİ 2013 ANNUAL REPORT
Contents
Major Operational and Financial Highlights
2013: A year of major achievements for Zorlu Enerji
Chairman’s Message
Board of Directors
General Manager’s Message
Senior Management
About Zorlu Enerji
Zorlu Energy Group’s fields of activity
Zorlu Enerji’s Installed Capacity and Ongoing/Planned
Investments in Turkey
29 Zorlu Enerji’s International Operations
30 Zorlu Group
Review of the Year 2013
Introduction
4
6
8
12
14
20
22
24
26
34
37
38
The Energy Sector in Turkey in 2013
Strengths of Zorlu Enerji
Zorlu Enerji in 2013
38 Zorlu Enerji’s Investments & Electricity Generation and Sales
39 Zorlu Enerji’s domestic and renewable energy investments
42 Zorlu Enerji’s International Investments
With our strategy, which can be summarized as 'The right
energy in the right place’, we are focusing on domestic and
renewable resources and efficient use of resources with a high
awareness of the need for a sustainable future and supply
security.
45%
the share of domestic and
renewable resources in our
installed capacity
Zorlu Enerji 2013 Annual Report
54 Risk Management
56 Internal Audit Department and its Operations
57 Board of Directors’ Resolution
58 Corporate Governance Principles Compliance Report
74 Dividend Distribution Proposal
75 Conclusion of the Affiliation Report
77 Independent Auditor’s Report
152 Investor Information
We trust in Turkey’s energy. We continuously move further
in our aim of utilizing our country’s resources and increasing
our renewable energy investments, particularly in geothermal
energy.
877 MW
Our total installed capacity
2,283.6
million kWh
Our electricity generation in 2013
Introduction
Financial Information and Reports
Sustainability
46Sustainability
46 Zorlu Enerji and Sustainability
48 Human Resources
50 Occupational Health and Safety
51 The Environment
52 Corporate Social Responsibility
1
Zorlu Enerji 2013 Annual Report
2
We add more to Turkey’s
energy with our strengths in
production and competition,
as well as our innovative
and high-quality solutions.
Thanks to its high-capacity production power,
well qualified human resources, balanced
portfolio, diversified resources and capabilities
to develop unique and innovative solutions,
Zorlu Energy invests in projects that support
security and the sustainability of energy supply.
Zorlu Enerji 2013 Annual Report
3
Introduction
Zorlu Enerji 2013 Annual Report
4
Introduction
Major Operational and Financial Highlights
Zorlu Enerji continued its investments in 2013 on the back of
its funding abilities and managed to maintain its production
and sales volumes, despite the difficulties in the operating
environment.
Summary Balance Sheet*
(TL thousand)
Current Assets
31/12/2013
31/12/2012
586,365
581,471
Non-Current Assets
5,767,605
3,944,507
Total Assets
6,353,970
4,525,978
Current Liabilities
1,685,479
1,491,185
Non-Current Liabilities
3,897,566
2,843,196
Equity
770,925
191,597
Total Liabilities
6,353,970
4,525,978
Gross Debt **
3,030,361
2,399,125
Net Debt **
2,816,528
2,211,746
31/12/2013
31/12/2012
636,237
575,678
(5,491)
762,389
112,884
69,709
(309,171)
598,585
2.3%
0.8%
17.7%
12.1%
Summary Profit/Loss Table*
(TL thousand
Revenues
Operating Income/(Loss)
EBITDA***
Net Income/(Loss) for the Year****
Gross Profit margin
EBITDA Margin
* Based on CMB Financials
* *A long term receivable from Rosmiks BV, amounting to TL 2,360,880 (31.12.2012: TL 1,847,075) is considered in the gross debt calculation by deducting it from
the total debt amount, since it was considered as a part of the financing obtained from banks and financial institutions, led by HSBC Bank PLC which is recorded as
financial debt.
***Other income and expenses from operations are not included.
****Net income/(loss) attributable to equity holders of the parent.
Zorlu Enerji 2013 Annual Report
5
Zorlu Enerji Elektrik Üretim A.Ş.
Shareholding Structure
17.7%
Zorlu Holding A.Ş. 45.7%
Korteks Mensucat Sanayi ve Ticaret A.Ş. 17.5%
2013
2012
113
70
Introduction
EBITDA and EBITDA margin
Publicly held 32.0%
17.7%
Other 4.8%
12.1%
EBITDA (TL million)
EBITDA Margin (%)
Generation
Electricity (kWh)*
Steam (tons)
2013
2012
2,283,593,323
2,289,334,429
675,946
604,710
Sales
2013
2012
Electricity (generation) (kWh)*
2,165,441,547
2,187,246,182
Electricity (commercial) (kWh)
1,218,571,147
1,085,982,640
675,946
604,710
4,628,303
14,229,039
Steam (tons)
Utility and Cooling Water, CO₂ (m )
3
*As Rosmiks LLC, which generated and sold 718,294,536 kWh of electricity and 53,973 GKcal of heat in 2012, was transferred to Zorlu Holding on December 28,
2012, its generation and sales volume were excluded from the above figures. Additionally, Zorlu Doğal Elektrik Üretim A.Ş.’s 468,177,128 kWh of electricity sales,
14,229,039 m3 of utility and cooling water and carbon dioxide sales and 473,100,678 kWh of electricity generation in the year ending December 31, 2012 are
included in the above tables as necessary amendments were made in the financial statements dated December 31, 2012 within the context of the “Recognition
of Mergers of Jointly Controlled Entities” which was published in the Official Gazette on 21st July, 2013 by the Public Oversight Accounting and Auditing Standards
Authority.
Share Price Summary (TL)
2013
Number of Shares
500,000,000
Number of Shares (Free Float)
159,905,814
Highest Share Price During the Year
1.68
Lowest Share Price During the Year
0.97
Year-End Price
1.04
Market Capitalization **
** As of 31.12.2013
520,000,000
Zorlu Enerji’s market
capitalization stood at
TL 520 million at the
end of 2013.
Zorlu Enerji 2013 Annual Report
6
Introduction
2013: A year of major achievements for Zorlu Enerji
Kızıldere II geothermal power plant with an installed capacity
of 80 MW, and the 56.4 MW wind farm in Pakistan were
commissioned during the year.
Commissioning of the Kızıldere II
Geothermal Power Plant
The Kızıldere II Geothermal Power Plant,
which is located in Sarayköy/Denizli,
was brought online in two stages with
a total investment of US$ 250 million.
Kızıldere II is Turkey’s largest geothermal
power plant and one of the world’s 10
leading geothermal power plants with an
installed capacity of 80 MW.
In addition to the existing 15 MW
Kızıldere I Geothermal Power Plant,
which was acquired via the privatization
of ADÜAŞ back in 2008, we reached
a total installed capacity of 95 MW
at Kızıldere, which offers some of the
greatest geothermal potential in Turkey,
with the completion of the Kızıldere
II Geothermal Power Plant in 2013.
Kızıldere power plant is a first for Turkey
with its integrated use as a power plant,
a greenhouse and a source of domestic
heating and geothermal energy.
Pakistan Wind Farm comes on-stream
The wind farm, with a capacity of 56.4
MW, was constructed in Jhimpir with
a US$ 151 million investment by Zorlu
Enerji Pakistan, which is 100% owned by
Zorlu Enerji. The plant began commercial
sales of electricity on 26th July, 2013. It is
Pakistan’s first wind farm and is planned
to generate 159 million kWh of electricity
per year. The power plant, which is
located in the Gharo – Keti – Bandar –
Hyderabad wind corridor, will contribute
significantly to the growth of Pakistan’s
renewable capacity and the easing of the
country’s increasing dependence on oil
imports for electricity generation.
Zorlu Enerji Pakistan has an option to
increase the plant’s installed capacity up
to 300 MW. The plant will provide energy
to 350,000 residences over a period of 20
years. The plant was rewarded with the
“The Best Renewable Energy Financing
in the Middle East” award by the Project
Finance magazine in 2011.
Zorlu Enerji’s Dorad Natural Gas
Combined-Cycle Power Plant in Israel
was connected to the transmission
grid.
Works at the 840 MW capacity Dorad
Natural Gas Combined-Cycle Power Plant,
which is 25% owned by Zorlu Enerji,
continue in the Ashkelon region of Israel.
The plant was connected to the country’s
national grid in July 2013 and is expected
to go into commercial operation during
2014.
Zorlu Doğal applied to EMRA to
construct a new geothermal power
plant in Sarayköy/Denizli.
Following the company’s exploration
activities in Sarayköy/Denizli, Zorlu
Doğal Elektrik Üretimi A.Ş. (Zorlu Doğal),
owned 100% by Zorlu Enerji, applied to
the Energy Market Regulatory Authority
(EMRA) for a 100 MW generation license
to construct a new geothermal power
plant in the region.
Nemrut Geothermal Electricity
Generation A.Ş. was founded with the
purpose of utilizing the geothermal
resources in Bitlis and the surrounding
regions in electricity generation.
“Nemrut Geothermal Electricity
Generation A.Ş.” was founded as a
75%/25% owned JV of Zorlu Enerji and
Rarik-Turkison Enerji İnşaat Maden Proje
Ltd. to utilize geothermal resources
in Bitlis and the surrounding regions
in energy generation. The company
obtained a “Geothermal Resources
and Natural Mineral Water Operating
License”, valid for a period of 30
years, and a “Geothermal and Natural
Resources Exploration License”, which is
valid until 3rd June, 2014.
Zorlu Enerji 2013 Annual Report
7
Introduction
With its first corporate bond issues,
Zorlu Enerji raised funding for its
investments and diversified its
financing sources.
Zorlu Enerji raised a total TL 356.2
million of new funding via two separate
corporate bond issues, which were
privately placed to qualified investors,
during 2013. The bond issues helped
extend the maturity of the debt, diversify
funding sources and create new funds for
the upcoming investments.
Zorlu Enerji received the “Best
Corporate Governance Award” by
World Finance.
Zorlu Enerji received the “Best Corporate
Governance Award” by World Finance,
which is one of the world’s leading
publications. Zorlu Enerji was selected
as Turkey’s best company in corporate
governance practices in the voting
conducted.
Zorlu Doğal, which is 100% owned by
Zorlu Enerji, received Turkey’s Climate
Performance Leaders Award.
Zorlu Doğal, which transparently shares
its risk management strategies on
greenhouse gas emissions and climate
change with the public, is the only
energy company to conduct voluntary
reporting and to be ranked among the
top companies in the Carbon Disclosure
Project. In 2013, Zorlu Doğal was ranked
in group B, the second highest group in
the performance rating for companies
which announce their climate change
strategies by using the Carbon Disclosure
Project (CDP) platform. The company
therefore received Turkey’s Climate
Performance Leaders Award.
Zorlu Enerji received the highest score
among the four energy companies
which conduct CDP reporting.
Zorlu Enerji received the highest score
among the four energy companies which
are included within the Borsa İstanbul 100 (BIST 100) index and which conduct
CDP reporting. The Company was also
the first energy company to receive
Turkey’s Carbon Disclosure Leaders
Award in 2011.
Zorlu Enerji received the title of
“National Champion” within the scope
of the 2013 – 2014 European Business
Awards.
With its projects in sustainability and
corporate responsibility, Zorlu Enerji
received the title of “National Champion”
as part of the European Business Awards
- which is one of the most prestigious
prizes of the business world.
Under the European Business Awards,
companies from various sectors which
recorded important achievements in
Europe are evaluated on the basis of
different categories such as innovation,
leadership, social responsibility,
marketing, growth strategy and process
management. Zorlu Enerji was one of
the 40 companies which were selected
as a “National Champion” from Turkey
in the “Environmental and Corporate
Sustainability” category.
Gökçedağ Wind Farm adds another
prize to its international prize portfolio.
Zorlu Enerji was rewarded for
its Gökçedağ Wind Farm with
the “Sustainability Prize” by the
European Bank for Reconstruction
and Development (EBRD) in the
“Environmental and Social Performance”
category at the Sustainability Awards.
Sustainability Awards granted by
the EBRD reward successful and
sustainable projects in the fields of social,
environmental, energy efficiency and
climate.
Zorlu Enerji was ranked the third in the
“Leadership” category at the European
Corporate Social Responsibility
Award Turkey Competition which
was organized the by European
Commission.
Zorlu Enerji participated in the
Competition with the “Energy Drama”
project which was conducted with
the collaboration of TOÇEV (Tuvana
Education Foundation for Children). The
Company came to the forefront among
the 50 companies and 62 projects in the
Competition. The Energy drama project
aims to educate children about the
energy resources and the importance of
sustainable energy through an interactive
story. Turkey’s first energy education
project to be conducted by an energy
company reached 15,170 children
through a total of 247 events organized
at 60 schools over a period of 6 months.
Zorlu Enerji won the MerComm Galaxy
Golden Prize for the second time with
its 2012 annual report.
Zorlu Enerji was rewarded with the
Golden Prize for its 2012 annual report in
the categories of “Energy” and “Design”
at the Competition organized by
Mercomm.
Zorlu Enerji prepared its 2012 annual
report with the theme of “Our energy
is Turkey’s energy”, emphasizing the
domestic and renewable resources, from
which the Company draws its strength.
Zorlu Enerji 2013 Annual Report
8
Introduction
Chairman’s Message | Our country has significant
opportunities to become a regional power in the energy sector
with its geopolitical position and energy potential.
Zeki Zorlu
Chairman
Zorlu Enerji 2013 Annual Report
9
Introduction
The recovery trend in the global
economy became more visible in
2013.
While the year 2013 marked the
passage of 5 years since the breakout
of the global crisis, the recovery in the
global economy has gradually become
more visible. In 2013, global growth
picked up with a shift in favor of
developed countries, while economic
growth in developing countries started
to lose momentum. US economy
returned to a growth cycle while Japan
started to emerge from its long lasting
deflation and recession. Meanwhile,
there were some signs of nascent,
albeit limited, recovery from the
Eurozone.
Developed markets remained strong
in response to FED’s decision to
taper bond purchases, in what can
be considered the first step towards
exiting expansionary monetary policies.
On the other hand, financial volatility
increased significantly in developing
markets, especially in those having
internal fragilities such as political
instability, high inflation and current
account deficit.
Turkey, which succeeded in
maintaining its sustainable growth
path, recorded 4% GDP growth in
2013. Although two rating agencies
raised Turkey’s credit rating to
investment grade, the impact of
cyclical conditions on capital flows
and an increasing foreign trade deficit
continued to keep the current account
deficit in place as the soft belly of the
country. The Turkish Central Bank’s
(CBT) gradually tightening monetary
policy, and the high levels of interest
rates together with the depreciation of
TL, had negative impact on economic
activity and the companies’ balance
sheets.
We believe that our country, which
has successfully overcome challenging
macroeconomic conditions, will
continue its steady growth and
maintain its position in the long run as
an attractive country for investments
thanks to its strong characteristics,
such as a young population, a large
and dynamic domestic market and its
strategic geographic location.
While global balances are being
re-established, energy demand is
steadily increasing.
In this period, which is marked by a
rebalancing of the world’s balances,
demand for energy and, accordingly,
energy investments are steadily
increasing on a global scale while there
is a general shift in energy demand
from the West to the East.
Developments in the world energy
market have elevated our country
to a geostrategic position. Turkey
is expected to become one of the
world’s most important energy hubs
within the next five years thanks to the
Trans Anatolian Natural Gas Pipeline
project, strengthening of the relations
with Iraq in terms of gas and oil
trade and improvement of economic
relations with Israel, which has recently
discovered vast quantities of off shore
gas reserves. As the Nabucco project
has been dropped, the Trans Anatolian
Natural Gas Pipeline, the Trans Adriatic
Natural Gas Pipeline and the projects
to transport Israeli and Cypriot gas to
Europe via Turkey will introduce new
resources to the market apart from
the Russian gas and enhance Turkey’s
power in the region.
Zorlu Enerji 2013 Annual Report
10
Introduction
Zorlu Enerji, which has been carrying out projects both in
Turkey and abroad, completed the first private sector energy
investment in Pakistan and constructed Pakistan’s first wind
farm, which began commercial operations in 2013.
Kızıldere II
We added Kızıldere II, which
is the biggest geothermal
power plant in Turkey and
one of the leading in the
world, to our portfolio.
Facilitating private investments is
one of the most important steps in
reducing dependence on foreign
resources.
Our country has important
opportunities to become a regional
power in the energy sector by virtue of
its geopolitical position and its energy
potential. The greatest macroeconomic
threat that our sector faces in this
process is our high dependence
on foreign resources for energy
production. In 2013, natural gas had
a 44% share in electricity generation
while coal and hydro each had a 25%
share and wind 3%. Approximately
98% of the country’s natural gas and
92% of oil needs are imported.
As clearly indicated by these figures,
in order to lower our dependence on
foreign resources we should diversify
our energy sources and complete the
pending legislation and regulations in
the sector as soon as possible.
Turkey had achieved significant
progress in the area of regulations and
resource diversification in 2013. The
Energy Market Regulatory Authority
collected the applications for the
country’s first solar power licenses in
June. The applications from various
market players including our Company
had reached 8,900 MW for the total
600 MW licenses to be tendered.
Another important development in
2013 was the reduction in the eligible
consumer limit to 5,000 kWh. The limit
was further lowered to 4,500 kWh at
the beginning of 2014, in line with
EMRA’s decision. Reducing this limit
can be seen as an indicator that the
electricity market in Turkey will become
more competitive in the coming
period.
On the other hand, steps taken
towards establishing an Energy
Exchange represented a positive
development towards the ongoing
liberalization of the Turkish electricity
market.
The Natural Gas Market Law will
complement the regulations related to
the electricity market and the Energy
Exchange. Within this context, the
pending new Natural Gas Market Law
is expected to be supportive for the
electricity market.
These developments are expected to
pave the way for the formation of a
market structure where pricing will be
cost based with greater transparency,
predictability and equality together
with the elimination of cross subsidies
and where private sector will assume a
more active role.
Zorlu Enerji 2013 Annual Report
11
We put our stamp on leading
projects in the domestic market and
abroad.
We crowned 2013 with successes
which were worthy of our Group’s 60th
anniversary.
With our new investment at Kızıldere,
we took a major step forward in
geothermal energy, which we see
as a strategic growth area for our
Company. The Kızıldere II Geothermal
Power Plant, which is Turkey’s largest
and one of the world’s leading
geothermal power plants, was added
to our portfolio during 2013. We
continue to look for further investment
opportunities in this field.
Zorlu Enerji which is committed to
undertaking leading projects both in
Turkey and abroad, has completed
Pakistan’s first private sector energy
investment in 2013 by constructing
the country’s first wind farm. The
Dorad Natural Gas Combined-Cycle
Power Plant in Israel, in which we have
a 25% stake, was connected to the
national grid during 2013. In addition
to this plant, which we plan to bring
online in 2014, we have two other
ongoing projects in Israel. We expect to
become one of Israel’s leading private
sector electricity producers once these
projects are completed.
In line with our growth strategy,
we will continue to invest in new
geothermal, hydroelectric, and wind
power projects in order to increase the
share of renewables in our generation
portfolio, which currently comprise
45% of our installed capacity.
For a sustainable energy future,
we will continue to invest in
environmentally friendly projects
which utilize domestic and
renewable resources.
As Zorlu Enerji, we aim to contribute to
the sustainability of both our industry
and our world via our corporate social
responsibility projects. In line with
this understanding, we determined
environment and education as our
fields of corporate responsibility.
Accordingly, we try to design our
projects in a manner to ensure that
they will contribute to the local
people’s social and economic lives in
the regions where we have operations.
Zorlu Enerji, which has adopted
sustainability as a business approach,
has become one of the pioneering
and important players in the sector
with its strong corporate and
financial structure. Our Company will
continue to further contribute to the
sustainable development of the Turkish
economy by investing in domestic and
renewable resources, as a responsive,
responsible and pioneering company.
We trust in Turkey’s energy and we
work hard to provide sustainable
energy. I would like to take this
opportunity to thank all of our
employees for their efforts and our
shareholders and stakeholders for their
support.
Zeki Zorlu
Chairman
Introduction
We crowned 2013 with
successes which were
worthy of our Group’s 60th
anniversary.
Zorlu Enerji 2013 Annual Report
12
Introduction
Board of Directors
Zeki Zorlu
Chairman
Ali Akın TARI
Vice Chairman
Olgun Zorlu
Board Member
Selen Zorlu Melik
Board Member
(1939 - Denizli) Zeki Zorlu began
his professional career in a family
owned textiles company in
Babadağ, Denizli. Opened his
first textiles store in Trabzon,
Zeki Zorlu established Korteks
Mensucat Sanayi ve Ticaret
A.Ş. in 1976. In addition to
its textiles sector investments,
Zorlu Group entered the energy
sector in 1993; subsequently,
the electronics and white goods
sector with Vestel, which the
Group acquired in 1994; and
the real estate sector in 2006.
Today, Zorlu Group has 25,000
employees and 60 companies
under its roof. Mr. Zorlu serves as
the Co-Chairman of the Board
of Directors at Zorlu Holding
as well as the Chairman of the
Group companies operating in
the textiles and energy sectors.
(1943 - Koruköy) Ali Akın Tarı
graduated from Istanbul Law
Faculty before starting his career
as a Tax Inspector in 1972 at
the Ministry of Finance, where
he went on to serve as Chief
Tax Inspector, Vice-President of
the Tax Inspectors Board and
Group Head of the Istanbul
Tax Inspectors Board. He was
appointed as a Board Member
of the Banking Regulation
and Supervision Agency in
2001 and also elected as a
Board Member of the Saving
Deposits Insurance Fund in the
same year. He left the Banking
Regulation and Supervision
Agency when his period of
duty expired in 2004, and was
appointed as a Consultant for
the Ministry of Finance. Mr.
Tarı became a member of the
Board of Directors and the
Audit Committee of Dilerbank
in 2008 and has continued to
serve as a member of the Board
of Directors of Dilerbank since
2011. Mr. Tarı, who also holds
the titles of Certified Public
Accountant and Independent
Auditor, serves as the Vice
Chairman of the Board of
Directors of Zorlu Enerji Elektrik
Üretim A.Ş., in addition to his
positions as a Board Member
at Vestel Elektronik and Vestel
Beyaz Eşya.
(1965 - Trabzon) After
completing his higher education
in the United Kingdom, Olgun
Zorlu began his professional
career in 1986, gaining
management experience in
the textiles companies of the
Zorlu Group. In 1998, he began
serving as Board Member at
Zorlu Holding. In addition to his
current responsibilities as Board
Member at Zorlu Enerji Elektrik
Üretim A.Ş., Mr. Zorlu also serves
as Board Member at Zorlu
Holding and its subsidiaries.
(1975 - Trabzon) Selen Zorlu
Melik graduated from Uludağ
University, Faculty of Economics
and Administrative Sciences,
Department of Business
Administration. She began
her professional career at
Denizbank in 1998. Following
her internship at Denizbank
Bursa Branch, she joined the
Management Trainee Program
at the same bank in 1999.
After working in a number
of positions at Denizbank
headquarters, Mrs. Zorlu Melik
attended a Marketing Certificate
Program at the University of
California, Berkeley (USA) in
2001. Subsequently, she started
to work at Korteks Yarn Plant
in 2002, and became a Board
Member at the same Company
in 2004. She has been serving as
Vice President at Zorlu Energy
Group, Board Member at Zorlu
Enerji Elektrik Üretim A.Ş.,
and also as Board Member at
several Zorlu Group companies
since 2005. As of April 2012,
Mrs. Zorlu Melik acts as Deputy
President of Zorlu Energy Group.
Zorlu Enerji 2013 Annual Report
13
Introduction
Bekir Cem KÖKSAL
Board Member
Hacı Ahmet KILIÇOĞLU
Board Member
Burak İ. Okay
Board Member
(1967 - Ankara) Bekir Cem
Köksal graduated from the
Department of Mechanical
Engineering at Boğaziçi
University in 1988, and
obtained a master’s degree
from Bilkent University in 1990.
He subsequently worked in
the banking industry between
1990 and 2001. In 1997, he
was appointed as the Assistant
General Manager at Denizbank,
and in 2002 he joined Vestel
as Chief Financial Officer. Mr.
Köksal currently serves as an
Executive Board Member in
charge of Finance at Vestel and
also serves as the Board Member
at Zorlu Enerji Elektrik Üretim
A.Ş..
(1956 - Giresun) Hacı Ahmet
Kılıçoğlu graduated with a
Bachelor’s degree and Master’s
degree in Economics from the
University of Essex. He started
his professional career in 1979
at the Ministry of Industry and
Technology. In 1980 he became
an Assistant Specialist at Türkiye
İş Bankası, and after working in
the private sector for a couple
of years, Mr. Kılıçoğlu assumed
administrative positions at the
United Nations Development
Program (UNDP) and the F-16
project. He then took office
at Türk Eximbank where he
worked in various positions. He
later served as the CEO of the
bank and as a Board Member
between 1998 and 2010. He
has been serving as a Board
Member at the Turkish Banks
Association for 12 years and was
also elected as the President
of the World EximBanks
Union (The Berne Union). He
also served as Consultant to
the President at the Islamic
Development Bank and Vice
Chairman at Denizbank. Having
been appointed as Board
Member at Zorlu Enerji Elektrik
Üretim A.Ş. in 2013, Mr. Kılıçoğlu
also serves as Board Member at
Vestel Elektronik, Vestel Beyaz
Eşya and Doğan Yayın Holding
in addition to his Vice Presidency
position at the Turkish Education
Association.
(1967 - Ankara) Burak İ. Okay
graduated from the Faculty
of Law at Ankara University
in 1990. After completing an
International Law Certificate
Program in New York, he
embarked on his professional
career at Türkiye İş Bankası,
Department of Legal
Consultancy. He later worked
at Garanti Bankası, MNG Bank
and Nortel Networks Netaş,
respectively, before joining
Bener Law Firm as an executive.
Mr. Okay joined Zorlu Group
in 2006 and played an active
role in the structuring of the
legal department that serves all
Group companies. He continues
to work as the Legal Coordinator
for Zorlu Group and has been a
Board Member at Zorlu Enerji
Elektrik Üretim A.Ş. since 2007.
14
Zorlu Enerji 2013 Annual Report
Introduction
General Manager’s Message | Turkish energy sector is
focused on meeting energy demand, reducing dependence
on foreign sources and diversification and efficient use of
resources.
İbrahim Sinan Ak
General Manager
Zorlu Enerji 2013 Annual Report
15
One of the significant causes of the
current account deficit in Turkey
is our dependence on imported
resources in energy production.
The change in FED’s monetary policy
in May 2013 triggered capital outflows
from the developing countries, which
led to a spike in interest rates and steep
declines in stock prices and national
currencies. This switched the spotlight
to Turkey’s current account deficit.
According to analyses conducted
by the Economist Magazine and
JP Morgan, Turkey has one of the
world’s largest current account deficits
and external financing needs when
compared to its national income and
international reserves. This mainly
stems from Turkey’s high energy
import bill. Turkey’s high dependence
on imported resources for energy
production highlights the need to
invest in domestic and renewable
energy sources.
In order to meet the increasing
energy demand, private sector’s role
and renewable energy investments
need to increase.
In parallel to Turkey’s economic
development, electricity demand has
increased at a CAGR of 7% over the
last 30 years. As such, the priority for
the Turkish energy sector, which had
an installed capacity of 64,044 MW
as of the end of 2013, has been to
meet the energy demand while at
the same time reducing dependence
on energy imports, diversifying its
energy resources and using energy
more efficiently. Accordingly, Turkey
has to take the necessary measures as
soon as possible and continue with
new investments in the energy sector.
Although a target of 100,000 MW
of installed capacity has been set for
2023, the current market conditions
are not conducive for the private
sector to undertake the required
investments. In order to pave the
way for private sector investments,
the state’s involvement in the sector
should be gradually reduced, necessary
regulations be put in place and
remaining privatizations be completed.
Figures set out in the 2014 Investment
Program, prepared by the Ministry of
Development, also support our views.
According to the program, resources
set aside by the state for energy sector
investments will be cut by 20% in 2014
compared to the previous year. Parallel
to this, the state’s share in the energy
sector is expected to drop further.
In the meantime, a foreseeable free
market structure and a competitive
market environment should be
established if private investments in
the sector are to gain speed.
The Energy Exchange, which is in
the process of being established, will
represent an important step in the
sector’s liberalization process. The
Energy Exchange will facilitate new
investments in the sector thanks to the
establishment of a more predictable,
transparent and efficient pricing
mechanism. The Energy Exchange will
also help the financing of the total
US$ 120-130 billion investments, which
are required by the sector until 2023.
As a reflection of these positive
developments, we had quite an
active year for energy privatizations
in 2013. The privatization of the
three thermal power plants, out of
a total of 46 plants, 28 being hydro
and 18 thermal, owned by the Turkish
Electricity Generation Company (EÜAŞ)
and included in the privatization
portfolio of 16,000 MW, have been
finalized during 2013. The tenders for
the remaining generation assets are
planned to be completed by 2016. On
the distribution side, with the transfer
of the remaining 8 distribution regions
to the private sector during 2013 all
the 21 distribution regions have been
completely privatized.
With the establishment of a fully liberal
energy market in Turkey, private sector
investments will gain further pace.
Introduction
The Energy Exchange (EPİAŞ),
which is currently at the
establishment stage, will
represent an important step in
the liberalization process.
Zorlu Enerji 2013 Annual Report
16
Introduction
We completed 2013 successfully, a year in which Zorlu Group
celebrated its 60th anniversary and Zorlu Energy Group its 20th
anniversary, thanks to our investments and projects.
45%
Renewable energy resources
accounted for 45% of our
installed capacity as of the end
of 2013.
Our sustainability approach leads
our investments.
In order to ensure sustainable
economic development, secure and
sustainable energy supply should
be pursued with an approach that
safeguards environmental and cultural
values. At this point, Turkey has also
started to shift its focus to domestic
and renewable energy resources in line
with the global trend. The “Electricity
Energy Market and Supply Security
Strategy Document”, published by the
State Planning Organization, states
that the primary objective in the sector
is to increase the share of the domestic
and renewable energy resources to
at least 30% by 2023. This aim is of
considerable importance in leading the
sector.
As an important player in the energy
sector, we are leading our investments
with an awareness of our responsibility
to future generations and natural
resources. Zorlu Enerji focuses on
sustainability and internalizes this
approach at all levels of its operations.
Electricity generation from domestic
and renewable energy resources,
secure and reliable supply of energy,
economical and balanced use of
natural resources and energy efficiency
are the main pillars of our operations.
As a result of our increased endeavors
towards utilizing Turkey’s rich
renewable energy resources, the share
of renewable energy reached 45% of
our total installed capacity by the end
of 2013.
Our newly commissioned power
plants began to contribute to
profitability in 2013, which marked a
milestone for Zorlu Enerji in terms of
investments.
We had a successful year in 2013,
which was also Zorlu Group’s
60th anniversary and Zorlu Energy
Group’s 20th anniversary, thanks
to the completion of our ongoing
investments and the progress we made
towards new projects.
Our revenues increased by 11% from
TL 576 million in 2012 to TL 636 million
in 2013 while total capex reached
US$ 191 million.
Following the transfer of the Russian
investments to Zorlu Holding as part of
the restructuring process undertaken
at the end of 2012, we had attained a
more profitable generation portfolio
and increased the share of renewable
energy further thanks to the new
plants commissioned during 2013.
Although the new plants contributed
only partially to our financial results
in 2013, the change in the portfolio
mix reflected positively to our
Zorlu Enerji 2013 Annual Report
17
Introduction
operating margins. In line with this,
our EBITDA increased from TL 70
million in 2012 to TL 113 million in
2013 while EBITDA margin improved
from 12.1% to 17.7%. We expect the
newly commissioned power plants to
contribute further to profitability in
2014, which will be their first full year
of operations.
Another important achievement in
2013 was the diversification of our
funding sources and raising of new
funds for our investments via our first
corporate bond issues. We obtained
a total TL 356.2 million of new funds
through these issues which were
privately placed to qualified investors.
Our installed capacity reached 877
MW following the commissioning of
our new power plants in 2013.
Today, we have an installed capacity
of 821 MW in Turkey, comprising 7
hydroelectric power plants (in Tokat,
Eskişehir, Kars, Rize, Erzurum, Tunceli,
Erzincan), one wind farm (OsmaniyeGökçedağ), two geothermal plants
(Denizli-Kızıldere) and five natural gas
plants in Yalova, Bursa, Lüleburgaz,
Kayseri and Ankara. Including the wind
farm in Pakistan, which has an installed
capacity of 56.4 MW, our total installed
capacity reaches 877 MW.
Geothermal energy is our strategic
priority.
Geothermal resources, which we
deem indispensable in our growth
map, have strategic importance for
Zorlu Enerji. We plan to account for
half of our country’s 2023 geothermal
capacity target by 2020. To this end,
in addition to our existing 15 MW
geothermal power plant in Kızıldere,
which is Turkey’s biggest geothermal
region, we constructed a second
power plant with a capacity of 80 MW
and brought it into operation in 2013.
By commissioning Turkey’s largest
geothermal power plant, we reached
an installed capacity of 95 MW in
geothermal energy.
100 MW license to construct a new
geothermal power plant. We are also
conducting exploration activities in
Bitlis and its surroundings to utilize
geothermic resources in the region in
electricity generation.
The new Kızıldere II (80 MW) plant will
sell its output at a guaranteed price
of USc 10.5 per kWh for the next ten
years within the context of YEKDEM.
Sales to YEKDEM under this scope
started in 2014.
We made pre-license applications
to EMRA for two imported coal fired
power plants; in Akçakoca (Düzce)
and Soma (Manisa), and two natural
gas power plants; in Aliağa (İzmir) and
in Kıyıköy (Kırklareli), respectively. In
addition, we applied for licenses for 5
solar power plants with a total installed
capacity of 80 MW.
We commenced activities for new
geothermal investments in 2013.
Within this context, we continue our
drilling activities in the Manisa-Alaşehir
geothermal area. We aim to bring our
new plant - which will have an installed
capacity of 45 MW - into operation by
the end of 2015. In addition, based
on the positive findings from our
exploration activities in Karataş region
in Sarayköy, Denizli we applied for a
Within the context of our hydroelectric
investment strategy, we increased our
focus on the Sami Soydan Hydroelectric
Power Plant Project (124 MW) to be
realized on the Dalaman River and the
Tirebolu Hydroelectric Power Plant
Project (30 MW) to be built on the
Harşit River. Additionally, we stepped
up our works for constructing two
more wind farms in the Osmaniye
region.
We are also investing to become a
preeminent player in the Asian and
Middle Eastern energy markets.
We use all opportunities to become a
regional power in Asia and the Middle
East, where energy demand is rapidly
increasing. In this sense, 2013 was a
year of significant achievement for us.
Zorlu Enerji 2013 Annual Report
18
Introduction
At Zorlu Group, we are aware of our responsibility to our world
and its resources, while carrying out our activities both in the
domestic and international markets.
Zorlu Doğal voluntarily
participated in the Carbon
Disclosure Project and became
the only energy company to be
ranked in 2013.
Our sustainability report was
the first report to achieve the
GRI A level in the sector and
the third in Turkey.
Zorlu Enerji brought Pakistan’s first
wind farm into operation in 2013.
With 56.4 MW of installed capacity,
the plant started to sell commercial
electricity to the National Transmission
& Dispatch Company in July 2013. We
hold the option to raise the plant’s
installed capacity up to 300 MW. Our
plant located in Jhimpir will supply
power to 350,000 residences in
Pakistan for a period of 20 years.
The Dorad combined-cycle natural gas
power plant in Israel, with an installed
capacity of 840 MW, in which we have
a 25% stake, was connected to the
400 KV switching plant transmission
grid in 2013, and is planned to start
production at full capacity in the
second quarter of 2014. In Israel, we
also continue the construction of two
other natural gas power plant projects,
namely Ashdod and Ramat Negev,
with a total capacity of 175 MW, jointly
with our local partners. In addition, we
continue our studies for the financing
of the Solad natural gas power plant
project, which will also be realized in
this market.
We transparently disclose our
sustainability work to the public.
At Zorlu Group, we bear in mind
that we are responsible for our
world and its resources and we act
with this awareness both in Turkey
and abroad. In this context, we
transparently disclose our greenhouse
gas emission and climate change risk
management strategies to the public.
In 2013, our subsidiary, Zorlu Doğal
participated in the Carbon Disclosure
Project voluntarily, and became the
only energy company to be ranked.
Zorlu Doğal was included in Group
B, which is ranked the second in the
Performance Evaluation performed
among the companies which disclosed
their climate change strategies through
the Carbon Disclosure Project (CDP)
platform in 2013, and the company
was deemed worthy of Turkey’s
Climate Performance Leaders Award.
We presented our sustainability work
to our stakeholders in our second
Sustainability Report. Our report,
which conveys our sustainability
performance, our perspective on
energy and sustainability management
and our plans and goals for the
future, was approved by the Global
Reporting Initiative (GRI), the corporate
reporting standard for companies
operating in the international arena.
Our sustainability report was the first
sustainability report in the energy
sector and the third in Turkey to be
granted the GRI A Level.
Zorlu Enerji 2013 Annual Report
19
We teach energy resources and
their efficient use to our children, to
whom we will leave our future.
As a Company also working to leave
energy resources for the future, we
have developed projects intended
for children who will use, protect
and manage the resources after us.
We developed a social responsibility
project entitled “Our Energy is for
Children” to provide them with the
necessary information and education
in this area. The project entitled “Our
Energy is for Children” is the only
energy training project to be rolled out
on a national scale. We met more than
120,000 children between 6 and 12
years of age through this project.
As another step in these educational
activities, we organized Turkey’s
first “performance on energy” in
collaboration with TOÇEV. Through
our interactive game, we went on tour
in Turkey, visiting the 15 provinces
where we undertook investments and
reached more than 15,000 children.
We told them about the importance
and necessity of clean energy for the
environment. Through the impact
of our drama on energy, we earned
the third prize in the “Leadership”
category in the European Corporate
Social Responsibility Award Turkey
Competition, which was organized by
the European Commission.
By reaching our children from every
channel, we used social media to
teach them about “energy”. While
children are obtaining information
by watching videos related to the
work of inventors who have played
important role in the field of energy,
our “www.enerjisitemiz.com” website,
which we have prepared for children,
offers a wealth of resources for their
projects and homework on the subject
of energy. Besides, they are also able
to learn how to use energy efficiently
while playing the entertaining “Energy
Hunters” game.
The other pillar of “Our Energy is
for Children” project includes books
about energy, which are prepared for
children. Until today, children have
been introduced to the “Wind power
with Zorlu”, “Natural gas with Zorlu”,
Geothermal power with Zorlu”, “Water
energy with Zorlu” and “Carbon
footprint” books, whose narration
and design have proven popular with
children.
We will maintain our steady growth
in 2014.
After 2013, a year in which we planted
the seeds of our investments, while
also reaping the fruits of our labors
and in which we entered a trend of
operational growth, we will continue
to grow steadily in 2014, as well.
By focusing on domestic and
renewable resources with the purpose
of contributing to Turkey’s resource
diversification, we, as Zorlu Enerji, will
continue to develop value-added and
sustainable projects which will also
contribute to employment.
I would like to express my gratitude to
all of our employees, to our Board of
Directors, shareholders, and all other
stakeholders whose support we have
always appreciated and who have
greatly contributed to Zorlu Enerji in
stepping forward to be the pioneer in
its sector and increasing its competitive
power, both in the domestic and
international sphere.
İbrahim Sinan Ak
General Manager
Introduction
We continue to progress
towards becoming the
pioneer in the sector in
Turkey and strengthening
our competitiveness in
international markets.
Zorlu Enerji 2013 Annual Report
20
Introduction
Senior Management
İ. Sinan Ak
General Manager
Hüseyin Morkoyun
Director, Financial Affairs
Ali Kındap
Assistant General Manager
A. Yağmur Özdemir
Assistant General Manager
(1971 - Ankara) İ. Sinan Ak
graduated from the Department
of Management Engineering at
Istanbul Technical University in
1995. He began his professional
career as an investment
specialist at Evgin Securities.
He later completed his MBA
at Old Dominion University
in the US. After working as a
Finance Supervisor at Vestel
Communications from 2000 to
2002, and as a Finance Manager
at Vestel White Goods between
2002 and 2006, Mr. Ak joined
Zorlu Energy Group in 2006.
He served as Assistant General
Manager responsible for
Financial Affairs at Zorlu Enerji
Elektrik Üretim A.Ş. until 2012; in
January 2012, he was appointed
as the General Manager of Zorlu
Enerji.
(1962 - Istanbul) Hüseyin
Morkoyun began his
professional career in the
Finance Department of Halis
Toprak Holding. From 1987
to 1996, he assumed various
positions in the Financial Affairs
Department at Hürriyet Ofset
Gazetecilik ve Matbaa A.Ş. and
subsequently was promoted to
Accounting Manager position
at the same company. Mr.
Morkoyun served as Finance
Manager at Vestel Marketing
between 1996 and 2006
and later worked as Assistant
General Manager responsible
for Financial Affairs at Zorlu
Energy Natural Gas Group.
On March 15, 2012, he was
appointed as the Director of
Financial Affairs at Zorlu Enerji
Elektrik Üretim A.Ş.
(1968 - Çankırı) Ali Kındap
graduated from the Department
of Mechanical Engineering
at Middle East Technical
University in 1990. He began
his professional career at
Gama and later worked at
Meteksan A.Ş. and Güriş İnşaat
ve Mühendislik A.Ş. In 2008,
he joined Zorlu Energy Group
as Assistant General Manager
of Zorlu Endüstriyel ve Enerji
Tesisleri İnşaat Ticaret A.Ş. Mr.
Kındap has served as Assistant
General Manager responsible
for Thermal Investments at Zorlu
Enerji Elektrik Üretim A.Ş. since
2011.
(1978 - Ankara) A. Yağmur
Özdemir graduated from
Eastern Mediterranean
University, Department of
Economics in 2000. He then
received his master’s degree
in Business Law from Bilgi
University, and completed
the Executive MBA and
British Law post graduate
programs at the University of
Karachi. Mr. Özdemir began
his professional career as
Auditor at Arthur Andersen
in 2000. From 2002 to 2004,
he worked at Ernst&Young,
and between 2004 and
2007 he served as Financial
Controller at Vestel Electronics.
He joined Zorlu Enerji Elektrik
Üretim A.Ş. in 2007 as Project
Finance Manager; in 2012, he
was promoted to Manager
of Investments and Project
Finance at the same company.
Mr. Özdemir has been serving
as Assistant General Manager
responsible for Investments
and Project Finance at Zorlu
Enerji Elektrik Üretim A.Ş. since
October 2012.
Zorlu Enerji 2013 Annual Report
21
Introduction
Aydın Akat
Assistant General Manager
İnanç SALMAN
Assistant General Manager
Öniz SAYIT
Director, Human Resources
(1970 - Erzincan) Aydın Akat
received his associate degree
from Middle East Technical
University, Construction
Department in 1990, and
graduated from Istanbul
University, Department of
Civil Engineering in 1996. He
began his professional career
at Cevahirler İnşaat in 1990,
and from 1996 to 2005 he
worked at various projects of
Tekfen İnşaat. Mr. Akat joined
Zorlu Energy Group in 2005,
working as Project Manager
at Zorlu Endüstriyel ve Enerji
Tesisleri İnşaat Ticaret A.Ş.
Between 2008 and 2011, he
held the position of Engineering
Manager at the same company.
Mr. Akat has been serving as
the Assistant General Manager
responsible for Projects at Zorlu
Enerji Elektrik Üretim A.Ş. since
October 2011.
(1981 - İstanbul) İnanç Salman
graduated from the Faculty of
Business Administration at the
İstanbul Technical University
and holds a PhD in Industrial
Engineering from the same
university. Having joined Zorlu
Group in 2004, Mr. Salman
was employed at the Human
Resources Department of Zorlu
Holding between 2004 and
2007. Joining Zorlu Energy
Group in 2007, he served as
Project Engineer, Organizational
Development Manager and
then as Director. İnanç Salman
has been serving as the Assistant
General Manager responsible
for Energy Trade and Planning
at Zorlu Energy Group since
October 2013.
(1979 - İzmir) Öniz Sayıt
graduated from the Faculty of
Communication at the İstanbul
University in 2001 before going
on to complete a Human
Resources Certificate Program
at the Boğaziçi University
and an MBA degree from the
Yıldız Technical University. She
worked at the Human Resources
department at Akkök Group
between 2000 and 2005, and
at Tofaş Türk Otomobil Fabrikası
A.Ş. from 2005 to 2007. Joining
Zorlu Energy Group in 2007,
Öniz Sayıt has been appointed
as the Director of Human
Resources at Zorlu Energy Group
since October 2013.
Zorlu Enerji 2013 Annual Report
22
Introduction
About Zorlu Enerji | Zorlu Enerji is one of the leading
companies in the sector with its well-balanced portfolio in
Turkey and abroad, its experience and strong market position.
Zorlu Enerji in Brief
Zorlu Enerji, which was founded as
Zorlu Group’s first energy company
in 1993, is one of the leading
companies in the sector thanks to its
well-balanced portfolio in Turkey and
abroad, its experience and strong
position in the market.
Zorlu Enerji continues its international
investments to meet the increasing
energy demand and to tap the growth
potential in the Asian and Middle
Eastern markets which are heavily in
need of such investments.
Zorlu Enerji’s total installed capacity
stood at 877 MW at the end of 2013.
The Company’s generation portfolio
is comprised of 7 hydroelectric power
plants, one wind farm, two geothermal
power plants and five natural gas
energy plants located in Turkey, and a
wind farm located in Pakistan.
The wind farm built in Pakistan’s
Jhimpir region was the first wind
farm in Pakistan to be constructed by
foreign investment. The investment
was made through Zorlu Enerji
Pakistan Limited, which is a 100%
owned subsidiary of Zorlu Enerji.
Zorlu Enerji, which is one of the few
private sector energy companies
operating in Israel, has 3 ongoing
power plant projects in this country.
Zorlu Enerji holds a 25% share in the
Dorad Natural Gas Power Plant, which
is being developed in the Ashkelon
region. The plant, which will have
840 MW of installed capacity, was
connected to the national grid in July
2013. The Construction of the Ashdod
and Ramat Negev natural gas cogeneration power plants, which will
have a combined capacity of 175 MW
and in which Zorlu Enerji has a 42.15%
stake, is still in progress.
In accordance with Zorlu Enerji’s vision
of leaving behind a “sustainable”
and “livable” world, domestic and
renewable energy projects take a
significant share in the Company’s
portfolio.
Zorlu Enerji continues to contribute to
our country’s resource diversification
target by undertaking projects
which are value accretive, support
employment and contribute to
sustainability.
Zorlu Enerji 2013 Annual Report
23
Introduction
ISO 14064-1
The only energy company to
hold the ISO 14064-1
Greenhouse Emission
Standard certificate.
We continue to support
our country’s target to
create new sources of
renewable energy.
The Company has increased the share
of renewables in its installed capacity
to 45% thanks to the hydro and
geothermal power plants acquired via
privatization and its new renewable
energy investments. The Company
is committed to increasing this ratio
further in the coming period.
Zorlu Enerji also focuses on utilizing our
country’s rich geothermal resources
and has taken an important step
towards this aim via its geothermal
power plant investments at Kızıldere,
which have reached a total 95 MW of
installed capacity.
Zorlu Enerji undertakes investments
as part of its commitment to being
a company which contributes and
acts responsibly for the future of the
world. While Zorlu Enerji differentiates
itself through its supply security and
sustainability approach, it complies
with all the domestic and international
standards in all of its investments and
aims to minimize the adverse effects of
its operations on human life and the
environment.
All of the Company’s power plants are
equipped with a water injection system
which assures NOx emissions to remain
below the threshold values set forth by
the World Bank. Thanks to this system,
waste heat is used to produce steam
and this diverts the energy production
process away from atmospheric
heating and towards the production of
environmentally friendly energy.
Zorlu Enerji, which was the first auto
producer company to obtain quality
certification holds the TS/EN ISO
9001-2000, OHSAS 18001 and ISO
14001 certificates and Integrated
Management System. Besides, it is the
only energy company to hold the ISO
14064-1 Greenhouse Gas Emission
Standard certificate.
20% of Zorlu Enerji’s shares were
offered to public in 2000. Today, 32%
of its shares are listed on Borsa Istanbul.
Zorlu Enerji was the first publicly listed
energy company in Turkey and is
the only listed company of the Zorlu
Energy Group.
Zorlu Enerji 2013 Annual Report
24
Introduction
Zorlu Energy Group’s fields of activity | With its
operations in different fields in the energy sector, Zorlu Energy
Group has the competence of providing an integrated service.
Sale and Trade of
Electricity
In addition to the electricity and steam
generation and sales activities carried
out by Zorlu Enerji Elektrik Üretim A.Ş.,
the Group’s only listed company,
Zorlu Energy Group is also actively
engaged in:
• Sale and trade of electricity
• Turnkey construction of power
plants including the project
development process
• Long term maintenance, repair and
operation of power plants
• Sale and trade of natural gas
thanks to its competence of providing
an integrated service.
Sale and Trade of Electricity
Zorlu Elektrik Enerjisi İthalat İhracat ve
Toptan Ticaret A.Ş. (Zorlu Elektrik) was
founded in 2000 to sell the electricity
obtained from the domestic market
and free zones on a wholesale or
direct basis in the domestic market
or via exports to foreign countries. Its
fields of activity include demand and
price forecasts, production, planning,
pricing, sales, risk and portfolio
management and reconciliation and
invoicing. Zorlu Elektrik makes direct
sales to individuals and corporations
that qualify as eligible consumers.
Construction of Power
Plants
Construction of Power Plants
Through the operations of Zorlu
Endüstriyel ve Enerji Tesisleri İnşaat
Ticaret A.Ş. (Zorlu Endüstriyel) in Turkey
and abroad, Zorlu Energy Group is
engaged in the turnkey construction of
power plants by providing feasibility,
engineering, construction and
installation services. The company
undertakes the EPC (Engineering,
Procurement, Construction) works of
Zorlu Enerji 2013 Annual Report
25
Introduction
Maintenance, Repair and
Operation Services
Zorlu Enerji’s power plants. Having
delivered the turnkey installation of
Gökçedağ Wind Power Plant, Zorlu
Endüstriyel is also the EPC contractor
of the natural gas power plants in
Russia and Lüleburgaz. Through Zorlu
Industrial Pakistan Ltd., which is its fully
owned subsidiary, Zorlu Endüstriyel
completed the installation of Zorlu
Enerji’s wind power plant in Jhimpir,
Pakistan.
Maintenance, Repair and Operation
Services
Zorlu O&M Enerji Tesisleri İşletme ve
Bakım Hizmetleri A.Ş. (Zorlu O&M),
another Group company, provides
operation and maintenance services
for a variety of co-generation and
combined cycle power plants as well
as for hydroelectric, wind power and
geothermal power plants in Turkey
and abroad. Zorlu O&M, which has
undertaken several important projects
abroad, also provides maintenance
services for all the publicly owned LM
series gas turbines in Greece.
Zorlu Enerji 2013 Annual Report
26
Introduction
Zorlu Enerji’s Installed Capacity and Ongoing/
Planned Investments in Turkey | Having a total 877 MW
of installed capacity, Zorlu Enerji carries out its investments in
accordance with its growth plans.
Zorlu Enerji’s Installed Capacity in Turkey
Power Plant
Region
Type of Power Plant
Electricity
Generation
Capacity
(MW)
Steam
Generation
Capacity
(Tons/hour)
Stake (%)
Lüleburgaz
Lüleburgaz
Natural Gas Co-generation Power Plant
133.19
239
100
Bursa
Bursa Organized
Industrial Zone
Natural Gas Combined-Cycle Power Plant
90
100
Kayseri
Kayseri Organized Natural Gas Combined-Cycle Power Plant
Industrial Zone
188.5
100
Yalova
Altınova
Ankara*
Ankara Organized Natural Gas Combined-Cycle Power Plant
Industrial Zone
Van Engil**
Van
Natural Gas
Natural Gas Co-generation Power Plant
15.9
30
100
50.3
100
Diesel
15
100
Osmaniye
Wind
135
100
Tercan
Erzincan
Hydroelectric
15
100
Kuzgun
Erzurum
Hydroelectric
20.9
100
Wind
Gökçedağ
Hydroelectric
Ataköy
Tokat
Hydroelectric
5.5
100
Mercan
Tunceli
Hydroelectric
20.4
100
Çıldır
Kars
Hydroelectric
15.4
100
İkizdere
Rize
Hydroelectric
18.6
100
Beyköy
Eskişehir
Hydroelectric
16.8
100
Denizli
Geothermal
95
100
Geothermal
Kızıldere I
Kızıldere II
*The company applied to the Energy Markets Regulatory Authority for the termination of the plant’s generation license in 2013.
** Operations at the plant were ceased as of March 2014 due to its high production and fixed costs and the completion of its economic life.
Zorlu Enerji 2013 Annual Report
27
The investment process for a 124 MW
hydroelectric power plant and a 45 MW
geothermal power plant is on-going
821 MW
Total installed
capacity in Turkey
Lüleburgaz
Erzincan
Ankara
Yalova
Bursa
Rize
Kars
Tokat
Eskişehir
Erzurum
Kayseri
Tunceli
Osmaniye
Denizli
Hydroelectric
Geothermal
Natural Gas
Wind
Introduction
169 MW
Zorlu Enerji 2013 Annual Report
28
Introduction
110 MW
License for a 110 MW wind
farm in Sarıtepe-Demirciler
Projects in construction and financing stage
Project
Region
Type of Power Plant
Electricity Generation
Capacity (MW)
Stake (%)
Manisa
Geothermal
45
100
Denizli
Hydroelectric
124
100
Electricity Generation
Capacity (MW)
Stake (%)
110
100
-
75
Electricity Generation
Capacity (MW)
Stake (%)
1,100
100
1,080
100
1,220
1,220
100
100
16
15
18
18
13
100
100
100
100
100
Under construction
Alaşehir
In financing stage
Sami Soydam
Existing Licenses and Permits
Project
Region
Wind Licence
Rotor II
Sarıtepe-Demirciler
Geothermal Exploration and Operation Licenses
Bitlis
Tatvan/Bitlis
Type of Power Plant
Wind
Geothermal
License Applications
Project
Region
Natural Gas Power Plant
Kırklareli
Kırklareli
Aliağa
Coal Power Plant
Akçakoca
Soma
Solar Power Plant
Niğde
Mersin
Karaman
Konya
Antalya
İzmir
Type of Power Plant
Natural Gas CombinedCycle Power Plant
Natural Gas CombinedCycle Power Plant
Düzce
Manisa
Imported Coal
Imported Coal
Niğde
Mersin
Konya
Konya
Antalya
Solar
Solar
Solar
Solar
Solar
Zorlu Enerji 2013 Annual Report
29
Zorlu Enerji’s Installed Capacity and Ongoing/Planned Investments Abroad
Project
Region
In operation
Jhimpir
Pakistan
Under construction
Dorad
Israel
Ashdod
Israel
Ramat Negev
Israel
Planned
Solad
Israel
Type of Power Plant
Electricity Generation Steam Generation
Capacity (MW)
Capacity (Tons/
hour)
Stake (%)
Wind
56.4
100
Natural Gas Combined-Cycle Power Plant
Natural Gas Co-generation Power Plant
Natural Gas Co-generation Power Plant
840
55
120
40
70
25
42.15
42.15
Natural Gas Co-generation Power Plant
100
70
42.15
1,115 MW
4 Projects in Israel planned to
have a total installed capacity
of 1,115 MW
Pakistan
Israel
Hydroelectric
Geothermal
Natural Gas
Wind
Introduction
Zorlu Enerji’s International Operations | Zorlu Enerji
continues its international investments with a view to meet the
increasing energy demand and to tap the growth potential in
the Asian and Middle Eastern markets, which are in need of
such investments.
Zorlu Enerji 2013 Annual Report
30
Introduction
Zorlu Group | Zorlu Group is focused on creating increasing
added value for Turkey through its companies, all of which are
among the leading players in their sectors.
Home Textiles
Korteks
Zorluteks
• The largest integrated manufacturer
and exporter of polyester yarn in
Europe and the Middle East
• Europe’s leading home textiles
company
Electronics, Information
Technologies and Consumer
Durables
Energy
Vestel
• One of the rising players in the
domestic market with 821 MW of
installed capacity
• A 56.4 MW wind farm in Pakistan
and ongoing investments in Israel
• Competence in providing integrated
services, which comprise generation,
sale and trade of electricity, “turnkey”
installation of power plants,
including the project development
process, long term operation,
maintenance and repair of power
plants and natural gas sales and
trading
• One of the leading ODM suppliers of
televisions, white goods and digital
products for the European Market
• One of the major players in the
European LCD TV market
• Production facilities in Turkey and
Russia
• One of the top 3 players in the
domestic TV and white goods
market through its well-known
Vestel brand
Zorlu Energy Group
Zorlu Enerji 2013 Annual Report
31
Introduction
Real Estate
Mining
Factoring
Zorlu Real Estate Development and
Investment
Meta Nikel Kobalt
Zorlu Factoring
• Aiming to become a major regional
supplier of nickel and cobalt
• Nickel-cobalt investment projects in
Gördes, Eskişehir and Uşak
• A US$ 350 million investment is
planned in the Gördes project, which
has 300,000 tonnes (contents of
nickel metal) of proven reserves.
• Established in 2012 to offer domestic
and international factoring services.
• Zorlu Factoring aims to extend its
factoring products and services
throughout Turkey by focusing on
medium and large size firms, as well
as on leading companies with a wide
supplier and dealer network.
• Zorlu Real Estate Group was
established in 2006 to develop,
sell, lease and operate high quality
residential and office complexes,
business centers, shopping malls,
hospitals, hotels or mixed-use real
estate projects in prime locations,
both in Turkey and abroad.
• Turkey’s first mixed-use real estate
development project with five
different functions, the Zorlu
Center was completed at the end
of 2013. The Zorlu Center includes
a performing arts center, a hotel,
offices, a shopping mall and
residences.
• The Group’s other major ongoing
investments is Levent 199, located
on İstanbul’s Büyükdere Avenue. The
project, which is planned entirely as
offices, consists of A+ office space in
a 40 storey block on a 122,000 m²
construction area.
Zorlu Enerji 2013 Annual Report
32
Maintaining our
efforts to achieve
maximum efficiency
in geothermal power
Utilizing Turkey's rich geothermal resources
in electricity generation represents the most
important step in our strategic growth plan.
Zorlu Enerji 2013 Annual Report
33
Review of the Year 2013
Zorlu Enerji 2013 Annual Report
34
Review of the Year 2013
The Energy Sector in Turkey in 2013 | Turkey is a rich
country in terms of renewable energy resources thanks to its
geographic positioning and geopolitical structure. Utilization
of these resources to the maximum will make a significant
contribution to the country’s energy supply security.
245,502 GWh
Demand for electricity
reached 245,502 GWh in
2013.
Electricity generation in 2013
Natural Gas 44%
Hydroelectric 25%
Coal and Lignite 25%
Wind 3%
Geothermal 0.5%
Electricity consumption in Turkey
has grown at an average 7% per
year for the past 20 years driven by
the country’s high rates of economic
growth. However, due to the
slowdown in industrial production
and extraordinary weather conditions,
electricity demand increased by a
mere 1.3% to 245,502 GWh in 2013 as
compared to 2012.
Electricity generation remained
flat with 2012 in 2013. Natural gas
accounted for 44% of the total
electricity generated, followed by
hydroelectric sources (25%), coal
and lignite (25%), wind power (3%)
and geothermal sources (0.5%). The
remainder was generated from other
resources.
Turkey’s total installed capacity
increased by approximately 7,000 MW
from 57,060 MW in 2012 to 64,044
MW in 2013. Of the total installed
capacity, natural gas accounted for
39%, followed by hydroelectric (35%),
coal & lignite (19%) and wind (4%)
while other resources made up the
remaining 4% as of the end of 2013.
EÜAŞ and its affiliates’ share in total
installed capacity fell from 43% to
37% in 2013 due to new investments
undertaken by the private sector
as well as the ongoing generation
privatizations.
Electricity prices in the PMUM
(spot market) market operated by
TEİAŞ remained relatively low in
the first quarter of 2013, due to the
extraordinary mild winter conditions
and the slowdown in electricity
demand. On the other hand, electricity
prices recovered in the second quarter
of the year, reflecting both the
improving demand and the decreasing
share of hydro output in overall
generation. While electricity prices
increased qoq in the third quarter of
2013 due to seasonality, pressure from
the new capacities coming online
and the cooler than normal summer
weather led electricity prices to remain
lower than in the same period of the
previous year. In the last quarter of
2013, electricity prices rose sharply,
especially in December, owing to
the natural gas supply disruptions.
As a result of this price spike, annual
average electricity price for 2013
slightly exceeded the average price for
the previous year.
Due to its geographical position and
geological structure, Turkey is a rich
country in terms of renewable energy
resources. Utilizing these resources
to the maximum will both contribute
to energy supply security and
employment.
Zorlu Enerji 2013 Annual Report
35
The installed capacity of renewable
power plants had reached 25,596 MW
at the end of 2013. The generation
of electricity through renewable
resources increased by 5% to reach 68
billion kWh in 2013.
The total installed capacity of new
renewable energy power plants which
were commissioned in 2013 reached
3,406 MW, consisting of:
• Wind power (499 MW),
• Hydroelectric power (2,680 MW),
• Geothermal power (148.6 MW),
• Landfill gas, biomass, and waste heat
power plants (78.4 MW).
Installed capacity of hydroelectric
power plants reached 22,289 MW;
with wind power capacity reaching
2,760 MW and geothermal capacity
311 MW as of the end of 2013.
There are plans to maximize the use
of solar energy within the scope of
increasing the share of renewable
energy resources in total energy
supply. Accordingly, following
the completion of the legal and
technical arrangements for solar
power generation, a total of 496
applications for nearly 9,000 MW of
installed capacity were submitted to
EMRA during June10-14, 2013. One
of the main issues concerning supply
security and the future of the system
concerns the realization of the required
generation investments and increasing
the share of domestic and renewable
resources in those investments.
As stated in the “Electricity Energy
Market and Supply Security Strategy
Document” published by the State
Planning Organization, the primary
objective is to raise the share of
domestic resources in new investments
and increase the share of renewable
resources to at least 30% in total
installed capacity.
The report sets out the following
targets for 2023:
• Fully utilize the existing domestic
lignite and hard coal resources,
• Increase the share of nuclear power
to at least 5%,
• Fully exploit the hydroelectric power
potential,
• Increase installed wind power
capacity to 20,000 MW, and
• Commission all of the existing
geothermal potential of 600 MW.
Within this framework, the
amendment to the Law on the
Utilization of Renewable Energy
Resources for Electricity Generation,
which aims to promote the generation
of electricity from renewable
resources, was enacted on 4th
January, 2011. The Law provides a
price guarantee for a period of 10
Review of the Year 2013
Installed capacity of hydroelectric power
plants reached 22,289 MW; with wind
power capacity reaching 2,760 MW and
geothermal capacity 311 MW as of the end
of 2013.
years to generation license holders
subject to the renewable energy
resource (RES) support mechanism.
The Law also aims to encourage the
use of local technology by providing
additional incentives for the use
of local components at renewable
power plants. Pursuant to the efforts
to increase the share of domestic
resources in total electricity generation,
power plants that use domestic coal
and lignite were also included in the
incentive package, in accordance
with the Resolution of the Council of
Ministers, promulgated in the Official
Gazette on 15th February, 2013.
Additionally, in line with the decision
taken by the Council of Ministers
dated 5th December 2013, incentives
for renewable energy investments
commissioned until the end of 2015
were extended to until 2020-end. In
line with the ongoing liberalization
process in the market, the new
“Electricity Market Law” was enacted in
March 2013. The purpose of this Law is
to establish a financially robust, stable
and transparent market structure that
will operate in accordance with the
special legal provisions in a competitive
environment, so that consumers are
provided with an adequate, high
quality, uninterrupted, low cost and
environmentally friendly supply of
electricity.
Zorlu Enerji 2013 Annual Report
36
Review of the Year 2013
In 2013, the transfer of the remaining 8 distribution grids was
completed, and all of the 21 electricity distribution regions in
Turkey have now been fully privatized.
Providing a competitive environment
in the energy sector, establishing
financially strong, transparent and
stable energy markets and regulating
and supervising these markets
are crucial in the development of
the energy sector in Turkey and in
enhancing its competitive advantages
on a global level. To this end, the
following progress has been achieved
on the privatization side:
Generation Privatizations:
The privatization process of the power
plants owned by the Turkish Electricity
Generation Company (EÜAŞ), which
commenced in 2009, is still in progress.
According to EÜAŞ’s 2012 annual
report, out of the total 56 run-ofthe-river small hydroelectric power
plants, which were included in the
privatization program, the transfer
of 28 HEPPs has been finalized, the
tenders for 7 HEPPs were cancelled due
to the unwillingness of the winning
bidders to take over while the transfer
process for the remaining 18 HEPPs is
still pending.
Additionally, the privatization process
for EÜAŞ’s 46 power plants (18 thermal
and 28 hydro plants) with a total
capacity of approximately 16,000 MW
was initiated. With the aim of finalizing
the privatization tenders by 2016,
the plants scheduled for privatization
were bundled into 9 separate portfolio
groups. The target was to complete
the privatization of four thermal power
plants (Hamitabat, Soma A-B, Kangal
and Seyitömer) separately in the first
stage, and then start the privatization
of the nine portfolio groups that
comprise both hydroelectric and
thermal power plants. Within this
context, the privatization tenders
for the Seyitömer and Kangal power
plants were completed through a
“Transfer of Operating Rights” on
28 December, 2012 and 8 February,
2013, respectively. The tender process
for the block sale of the Hamitabat
Power Plant was also completed on
6 March, 2013. The share transfers of
the Seyitömer, Hamitabat and Kangal
Power Plants were finalized on 17th
June 2013, 1st August 2013 and 14th
August 2013, respectively.
In addition, the privatization tenders
for the Çatalağzı, Kemerköy, Yeniköy
and Yatağan Thermal Power Plants are
planned to be held in April 2014.
Distribution Privatizations:
The share transfer of the remaining 8
distribution regions was completed
in 2013. As a result, all the 21
electricity distribution grids have been
transferred to the private sector as of
2013.
The “Medium Term Program
(2010-2012)” prepared by the
Undersecretariat of the State Planning
Organization stated that parallel to
the privatization of the distribution
grids, the eligible consumer limit
would be continuously lowered in
order to improve the degree of market
transparency, and by the end of 2015,
all consumers would become eligible.
Within this context, the eligibility limit
for 2014 was lowered to 4,500 kWh in
line with EMRA’s decision taken at its
meeting dated 24th January 2014.
3,406 MW
The installed capacity of the
renewable energy plants
which were commissioned in
2013 totaled 3,406 MW.
Zorlu Enerji 2013 Annual Report
37
Zorlu Enerji adopts an
integral sustainability
approach in the areas of
environmental protection,
stakeholder participation,
responsible business conduct,
contribution to social and
cultural life, well-functioning
corporate governance and
quality human-resources.
Corporate Development
Production, employment, financial and
competitive power, market reputation,
long standing experience and
corporate values are the main pillars of
Zorlu Enerji’s sustainable growth and
success.
Operational Power
High production capacity, a qualified
work force, a balanced portfolio,
diverse resources and ability to develop
innovative solutions place Zorlu Enerji
at the forefront of the industry in terms
of competition.
Integrated Sustainability Approach
Zorlu Enerji adopts an integral
sustainability approach centered on
environmental protection, stakeholder
participation, responsible business
conduct, contribution to social and
cultural life, well-functioning corporate
governance and qualified humanresources.
Domestic and Renewable Energy
Investments
When Zorlu Enerji was founded, the
Company was generating all of its
production from natural gas. Following
the acquisition of power plants via
privatization and new investments,
the Company increased the ratio of
domestic and renewable resources in
its installed capacity to 45%.
Review of the Year 2013
Strengths of Zorlu Enerji | With its experience, corporate
competences, vision and financial power Zorlu Enerji is an
indispensable player in the energy sector.
Zorlu Enerji 2013 Annual Report
38
Review of the Year 2013
Zorlu Enerji in 2013 | TL 285.7 million was spent for the
new 80 MW Kızıldere geothermal power plant investment
undertaken in Denizli.
363.4
Zorlu Enerji’s total capital
expenditures amounted to TL
363.4 million in 2013.
Zorlu Enerji’s Investments &
Electricity Generation and
Sales
Zorlu Enerji’s total installed capacity
reached 877 MW by the end of 2013,
in which the share of domestic and
renewable resources rose to 45%.
Zorlu Enerji’s total capital expenditures
amounted to TL 363.4 million in 2013.
Out of this, the lion’s share (TL 285.7
million) belonged to the Kızıldere
geothermal power plant, which was
completed in 2013. The plant, located
in Kızıldere, Denizli and belonging to
Zorlu Doğal, has an installed capacity
of 80 MW.
Investment spending for the second
phase of the wind farm investment in
Pakistan’s Jhimpir region, which has
50.4 MW of installed capacity, totaled
TL 45.8 million. The wind farm also
came on stream in 2013.
Generation
Electricity (kWh)*
Steam (tons)
2013
2012
2,283,593,323
2,289,334,429
675,946
604,710
Sales
2013
2012
Electricity (generation) (kWh)*
2,165,441,547
2,187,246,182
Electricity (commercial) (kWh)
1,218,571,147
1,085,982,640
Steam (tons)
Utility and Cooling Water, CO₂
(m3)
675,946
604,710
4,628,303
14,229,039
*As Rosmiks LLC, which generated and sold 718,294,536 kWh of electricity and 53,973 GKcal of heat
in 2012, was transferred to Zorlu Holding on December 28, 2012, its generation and sales volume were
excluded from the above figures. Additionally, Zorlu Doğal Elektrik Üretim A.Ş.’s 468,177,128 kWh of
electricity sales, 14,229,039 m3 of utility and cooling water and carbon dioxide sales and 473,100,678
kWh of electricity generation in the year ending December 31, 2012 are included in the above tables
as necessary amendments were made in the financial statements dated December 31, 2012 within the
context of the “Recognition of Mergers of Jointly Controlled Entities” which was published in the Official
Gazette on 21st July, 2013 by the Public Oversight Accounting and Auditing Standards Authority.
Zorlu Enerji 2013 Annual Report
39
95 MW
With the completion of
Kızıldere II investment,
Zorlu Enerji’s total installed
capacity in geothermal
energy reached 95 MW.
Zorlu Enerji’s domestic
and renewable energy
investments
Expansion in geothermal energy
Turkey is located in a major geothermal
zone; yet, geothermal energy remains
an underused asset despite Turkey’s
accommodating more than 1,300
geothermal resources, and being
ranked in the top 10 hotspots in
the world in terms of geothermal
potential.
Making use of geothermal energy
among renewable resources is at the
heart of Zorlu Enerji’s growth plans.
The high capacity factor in geothermal
energy and the US$ 10.5/kWh price
guarantee provided by the state serve
as an incentive for Zorlu Enerji to place
priority on this strategically important
field. To this end Zorlu Enerji maintains
its exploration and development
activities at the potentially most
Review of the Year 2013
Zorlu Enerji continues its activities at what
are potentially the most productive fields
in the Aegean Region, which accounts for
87% of Turkey’s total geothermal resources.
productive fields in the Aegean
Region, which account for 87% of
Turkey’s total geothermal resources.
By bringing its investment projects
into operation in the coming years
and reaching an installed capacity of
approximately 300 MW, Zorlu Enerji
aims to single-handedly account for
half of Turkey’s targeted 600 MW of
installed geothermal capacity by 2023.
In addition to the 15 MW Denizli
Kızıldere I power plant - which was
Zorlu Enerji’s first step in the area
of geothermal energy - the 80 MW
Kızıldere II plant was completed in
2013, bringing the total installed
capacity of the Company to 95 MW at
the Kızıldere field.
The first phase (60 MW) of the
Kızıldere II plant came on stream on
31st August, 2013 and the second
phase, with a 20 MW capacity, on 31st
October, 2013, when the plant became
fully operational.
In order to render geothermal energy
sustainable, various improvement
activities, including re-injection were
carried out as part of this investment.
Additionally, with integrated use of
geothermal energy in greenhouse and
residential heating besides electricity
production, the investment marks the
first of its kind in Turkey.
Zorlu Enerji 2013 Annual Report
40
Review of the Year 2013
Zorlu Enerji aims to raise its geothermal installed capacity to
approximately 300 MW with its new geothermal investments
in the coming years.
Kızıldere II - the largest geothermal
plant of Turkey - is also among the
world’s 10 largest geothermal plants.
Being realized with a US$ 250 million
investment, this plant is expected to
replace 79 million tonnes of fuel oil
per year, or the equivalent of US$ 86
million in energy imports.
Following the positive results from its
exploration activities in the Karataş
district - located in Denizli, Sarayköy,
within the context of its No:18 and
19 “Geothermal Resources Operating
License” Zorlu Doğal, a fully owned
subsidiary of Zorlu Enerji, applied to
EMRA for a generation license on
17th June, 2013 to construct a new
geothermal power plant in this field
with a 100 MW of installed capacity.
Zorlu Jeotermal Enerji Elektrik Üretim
A.Ş. continues its drilling works in
the geothermal field in ManisaAlaşehir - potentially one of the
richest geothermal fields in Turkey
- where it holds a generation license
valid until 2040. US$ 113 million of
project finance for the plant, which is
planned to have 45 MW of installed
capacity, was secured in November
2013. Currently, pre-construction
mobilization works are being carried
out for the plant.
In addition to the afore-mentioned
geothermal power plant project
in Manisa’s Alaşehir district, Zorlu
Jeotermal also applied to EMRA for a
licence to build a another geothermal
plant in this region with a 24.9 MW
capacity.
Within the context of its activities
in geothermal energy, Zorlu Enerji
established a new company in August
2013, where it is the major shareholder
with a 75% stake (the remaining
25% of the shares are held by RarikTurkison Enerji İnşaat Maden Proje Ltd.
Şti.) in order to explore and develop
geothermal resources in Bitlis and the
neighboring regions. The company,
Nemrut Jeotermal Elektrik Üretimi
A.Ş., continues its seismic works in the
region in accordance with the permits
it has received which are valid in Bitlis
and Tatvan.
Hydroelectric Energy
In the hydroelectric energy segment,
studies regarding the 124 MW Sami
Soydam Hydroelectric Power Plant,
which will be built on the Dalaman
River, and the 30 MW Tirebolu
Hydroelectric Power Plant, which
will be built on the Harşit River, are
underway.
Pre-investment works for the Sami
Soydam Hydroelectric Power Plant,
which belongs to Zorlu Hidroelektrik
Enerji Üretim A.Ş.* are ongoing. The
plan is to initiate the construction
works following the completion of
the financing activities in the second
quarter of 2014.
*At its meeting held on 30th July 2013 (No: 2013/6) the Board of Directors of Zorlu Hidroelektrik Enerji
Üretim A.Ş., which is 100% owned by Zorlu Enerji, decided to transfer the electricity generation license
for the Sami Soydam-Sandalcık Dam and Hydroelectric Power Plant project (Date: 7th June 2012, Number:
EU/3870-3/2348) to another 100% owned Zorlu Enerji company, Zorlu Doğal. The application for the
above-mentioned transaction has been submitted to the Energy Market Regulatory Authority.
Zorlu Enerji 2013 Annual Report
41
135 MW
The Gökçedağ Wind Farm,
Zorlu Enerji’s sole wind
farm in the domestic
market, is one of the three
largest wind farms in
Turkey with an installed
capacity of 135 MW.
The Sami Soydam Hydroelectric Power
Plant will have a reservoir able to store
up to 6 months of water, which is
expected to bring flexibility to the plant
to operate at times of peak electricity
demand and higher electricity prices.
On the other hand, the water usage
right fee to be paid to the General
Directorate of State Hydraulic Works
will be lower in this project than in
other hydroelectric projects.
Within the framework of the preinvestment studies, the Environmental
Impact Assessment Report and
biodiversity research are completed.
Social impact studies regarding the
project are expected to be completed
during 2014.
The Company plans to undertake the
related social impact and biodiversity
works for the Tirebolu Hydroelectric
Power Plant, which is currently at the
licensing and feasibility stage.
Review of the Year 2013
The Group has two wind farm licenses in
the Osmaniye region with a total installed
capacity of 110 MW, in Sarıtepe (50 MW)
and Demirciler (60 MW), respectively.
Wind Power
The Gökçedağ Wind Farm, Zorlu
Enerji’s sole wind farm in the domestic
market, is one of the three largest wind
power plants in Turkey with 135 MW
of installed capacity. The Gökçedağ
Wind Farm was awarded the Gold
Standard thanks to its low greenhouse
gas emissions and contribution to
sustainable development. Additionally,
the wind farm won the Sustainability
Award in the “Environmental and
Social Performance” category given
by the European Reconstruction and
Development Bank in 2013.
The Group has two wind farm licenses
in the Osmaniye region with a total
installed capacity of 110 MW, in
Sarıtepe (50 MW) and Demirciler (60
MW), respectively. Pre-investment
studies for these plants are currently in
progress.
Zorlu Enerji 2013 Annual Report
42
Review of the Year 2013
Zorlu Enerji’s 56.4 MW wind farm in Jhimpir, Pakistan, started
commercial operations in 2013 with the completion of the US$
151 million investment.
159,000 MWh
The plant, which is planned
to generate 159,000 MWh
of electricity per year, will
provide electricity to 350,000
residences over a period of
20 years.
Zorlu Enerji’s International
Investments
Wind Farm in Pakistan
The 56.4 MW wind farm, undertaken
with a US$151m investment by
Zorlu Enerji Pakistan, which is 100%
owned by Zorlu Enerji, entered into
commercial operation in 2013. As
the first wind farm to be realized via
foreign investment, the plant will
supply power to 350,000 homes for a
period of 20 years.
The plant, which is expected to
generate 159,000 MWh of electricity
per year, will contribute to the growth
of Pakistan’s renewable capacity
and to the lowering of the country’s
dependence on imported energy
sources.
Pakistan is ranked the second among
the best wind corridors in the world.
The wind corridor, on which the project
is located, is known as the Gharo-Kheti
Bandar-Hyderabad corridor and is
regarded as one of the most efficient
wind corridors in the region, which is
windy for twelve months of the year.
Studies conducted in the region show
that the region has a wind potential
of 60,000 MW. Zorlu Enerji Pakistan
has the option to expand the plant’s
installed capacity up to 300 MW.
A sales and implementation
agreement for the plant was signed
with Pakistan National Transmission
and Dispatch Company and Pakistan
Alternative Energy Development
Board. In accordance with this
agreement, Zorlu Enerji secured a 20year power purchase guarantee from
the Pakistani government, as well as a
guarantee against any risks related to a
change in legislation or wind speed.
The plant received the award for “The
Best Renewable Energy Financing in
the Middle East” by the Project Finance
Journal in 2011.
Zorlu Enerji 2013 Annual Report
43
840 MW
Upon completion, the
840 MW Dorad Natural Gas
Combined-Cycle Power Plant,
located in the Ashkelon
region will be Israel’s largest
power plant built by the
private sector.
Projects in Israel
As one of the first private companies
to enter the Israeli electricity market,
Zorlu Enerji is poised to become
an important player in this market
through a series of upcoming projects
which will be undertaken jointly with
its local partners.
The Company has four projects in
Israel, involving the construction of
combined cycle and co-generation
power plants, which will have a total
capacity of 1,115 MW of electricity and
180 tonnes/hour of steam.
The largest of these four projects is
the Dorad Combined Cycle Natural
Gas Power Plant with an 840 MW of
installed capacity, which is currently
being constructed in the Ashkelon
region. The investment is being
undertaken by Dorad Energy Ltd.,
which is 25% owned by Zorlu Enerji.
Upon completion, Dorad will be the
largest privately owned power plant
in Israel.
In 2013, the Dorad Power Plant was
connected to the 400 KV switching
plant transmission network. Activation
and testing operations for the six
gas turbines, each with an installed
Review of the Year 2013
Zorlu Enerji has four natural gas power plant
projects in Israel which will have a total
installed capacity of 1,115 MW.
capacity of 48 MW, were initiated
and the power plant was activated
as a simple cycle on 26th July, 2013.
After the completion of combined
cycle confirmation tests for the entire
plant, the plant is planned to reach
full capacity and start commercial
production with the steam turbines
during the second quarter of 2014.
The construction of the Ashdod and
Ramat Negev co-generation power
plants, which started in September
2012, is expected to be completed in
late 2014. The plants will have a total
installed capacity of 175 MW.
Financing and feasibility studies for
the Solad co-generation power plant,
another project in Israel, are currently
in progress.
A gas supply agreement was signed
with the Delek Group and Noble
Energy for the Dorad, Ashdod and
Ramat Negev power plants.
Zorlu Enerji 2013 Annual Report
44
We attach
importance to
renewable resources
for a cleaner world.
Acting upon its vision and efforts to leave a
“livable” and “sustainable” world, Zorlu Enerji
attaches importance to renewable energy
resources in its generation portfolio.
Zorlu Enerji 2013 Annual Report
45
Sustainability
Zorlu Enerji 2013 Annual Report
46
Sustainability | While Zorlu Enerji provides a safe and
reliable energy supply, it also strives to leave natural resources
and cultural values to future generations.
Zorlu Enerji and Sustainability
Supporting a low carbon
economy is one of the
fundamentals of Zorlu
Enerji’s sustainability
strategy.
Zorlu Enerji believes that sustainability
is the key for economic development.
At the same time, this statement is a
summary of Zorlu Enerji’s sustainability
strategy.
Zorlu Enerji has a responsibility for
the sustainable future of the world
as well as for Turkey’s. To this end,
the Company contributes through its
investments, which will help protect
the environment and reduce the
impact of climate change within the
framework of energy generation.
Zorlu Enerji is focused on working with
business partners with whom it shares
its target of contributing to Turkey’s
sustainable economic development.
The Company works interactively
with its stakeholders, principally its
business partners and suppliers and
aims to create increasing value for
the society in addition to managing
environmental and social risks in the
most appropriate manner.
Supporting a low carbon economy
is one of the fundamentals of Zorlu
Enerji’s sustainability strategy.
Zorlu Enerji sets its priorities on the
following axes:
• the environment and the generation
of sustainable energy,
• ensuring stakeholder participation,
• conducting business responsibly,
• corporate governance and
compliance,
• qualified human resources,
• social contribution.
The Company believes these priorities
will help pave the way for the sector
to gain a real understanding of
sustainability.
Zorlu Enerji built its sustainability
strategies in parallel with the following
targets:
• supporting Turkey’s sustainable
development model,
• partake in the battle against climate
change,
• contributing to our country’s
transition to a structure which is
based on low carbon economy.
Zorlu Enerji defines its understanding
of sustainability, which the Company
has integrated into all its management
processes and operational stages,
as “the guiding star for managing
economic, environmental and social
factors and risks in this area, in order
to create long term value”. While the
Company provides a safe and reliable
energy supply, it also works to leave
natural resources and cultural values to
the future.
Zorlu Enerji 2013 Annual Report
47
Zorlu Enerji shares its economic, social
and environmental performance
as well as its targets in these areas
through Sustainability Reports.
After having published Turkey’s first
sustainability report in the energy
sector in 2011, the Company published
a second report in 2012. The Company
was ranked among the world’s top
24 energy companies thanks to this
report, which was prepared to the GRI
A level. Zorlu Enerji is also among the
three Turkish companies and the first
energy company in Turkey to prepare
the report at this level.
Climate change, environment and
sustainability
Climate change is the biggest threat
facing our planet. Zorlu Enerji is
focused on ensuring a safe and reliable
energy supply as well as generating
electricity with domestic and
renewable resources. The Company’s
investments are concentrated on these
areas.
The report evaluates the sustainability
performance in the areas of the
environment, employees, stakeholders
in the widest sense and social
responsibility. It was prepared in light
of Zorlu Enerji’s systematic activities
that are open to international audit
within the context of interviews and
studies with the upper and mid-level
managers, as well as stakeholders’
evaluations.
We are building our future, our
target is 2023
Zorlu Enerji strongly shares its parent,
Zorlu Holding’s vision of providing
a higher quality of life for the future
generations by investing in sustainable
development, which can be summed
up in the motto of “ We are building
our future, our target is 2023”.
Zorlu Enerji’s approach to sustainability
is guided by the principles of engaging
in responsible business conduct in
compliance with corporate governance
principles, ensuring the satisfaction,
health and safety of employees,
protecting the environment and
natural resources and contributing to
social and cultural life by maintaining
open and regular communication with
the stakeholders.
The Sustainability Report is available on
the www.zorluenerji.com.tr website in
Turkish and English.
The Company takes initiatives and
carries out extensive projects in order
to systematically reduce its indirect and
direct impacts on the environment.
Sustainability
The Company takes initiatives to
systematically reduce its indirect and direct
impacts on the environment, and also
carries out extensive projects in this regard.
Zorlu Enerji aims to spread its concept
of “The Right Energy” to the entire
sector. The Company aims to position
itself in the sector as a company that
generates the right energy from
the right resources using the right
technology.
The share of domestic and renewable
power plants in Zorlu Enerji’s installed
capacity had increased to 45% as
of the end of 2013. The Company
plans to maintain its investments in
geothermal, hydroelectric, wind and
solar energy in the coming year as well.
The Global Compact and Zorlu
Energy Group
In all its activities and operations, Zorlu
Energy Group takes into consideration
the principles stated in the United
Nations Global Compact, which has
been signed by Zorlu Holding and
binds all the Group companies.
Zorlu Enerji 2013 Annual Report
48
Sustainability
Zorlu Enerji is determined to maintain its march towards its
sustainability targets with the support of its employees, who
are visionary, viewed as models in the market with their
vocational specialization and who are open to development.
Human Resources
Human resources and workplace
environment at Zorlu Enerji
Zorlu Enerji’s corporate goal and
priority is to maintain a modern and
participatory workplace environment
which fully complies with the principles
of human rights. While a participatory
workplace environment promotes the
personal development of employees; it
also helps unlock the value created by
the social and cultural diversity of Zorlu
Enerji’s human resources. Zorlu Enerji
foresees to sustain a safe workplace
environment which rewards success,
promotes personal development and
initiative taking.
Zorlu Enerji resolutely maintains its
progress towards its sustainability
targets together with its employees,
who have broad visions, who are cited
as models in the market and who are
open to development. The Company’s
personnel differentiates itself from
those of the peers in the sector with
the quality of their education, their
specializations and loyalty to the
Company. Zorlu Enerji believes that its
biggest resource to reach its targets is
its human resources. In developing its
human resources policy, Zorlu Enerji
primarily aims to be responsible to its
companies, responsive to its employees
and respectful to all of its stakeholders
which the Company interacts with.
The Human Resources Policy was
prepared in a written form which sets
out the policies on hiring, promotion,
expulsion, training, performance
evaluation and compensation system.
Job descriptions, the distribution,
performance and rewarding criteria
are communicated to the employees
through the human resources policy
document.
• All details concerning the hiring
process are written in the “Hiring
Procedure”. Each candidate involved
in the hiring process is hired under
the same method.
• The career and promotion system
includes “Succession Plans”. In the
event of managers leaving their
positions, eligible candidates are
selected internally and assigned
accordingly.
• There is no assigned representative
in charge of regulating the
relations with the employees. The
representation of employees in the
management is conducted by two
independent members of the Board
of Directors.
• Training activities are structured
to support employees’ vocational
and personal development.
Employees have the opportunity
to select training programs which
are in line with their needs with
Training Cards. A training portal,
which was prepared to monitor
all training activities in accordance
with the career planning objectives,
is available to all employees from
inside and outside of the Company.
• An employee pay policy is
determined on an updated scale,
considering the averages of domestic
and international companies.
• Job descriptions for company
employees are available in a
personnel database. Employees have
access to this database.
• All decisions and developments
related to employees are shared
over the corporate portal, internal
informing e-mails and meetings.
• Employees are treated equally
without any discrimination on the
basis of training, career setting or
promotion, or any other form of
discrimination. No complaints were
received from employees regarding
discrimination.
Zorlu Energy Group’s number of
personnel stood at 896 at the end of
2013, while the number of personnel
at Zorlu Enerji, the Group’s flagship,
stood at 194. Major indicators
regarding Zorlu Energy Group’s human
resources are presented on page 49.
Zorlu Enerji 2013 Annual Report
49
An average of 20.4 hours of
training was provided per
employee in 2013.
Zorlu Energy Group Main HR Indicators – As of End of 2013
Number of personnel
896
Persons
Total
896
Female
142
15.85%
Male
754
84.15%
Average Seniority
Zorlu Energy Group had
a total of 896 personnel
at the end of 2013, while
Zorlu Enerji - the Group’s
flagship company - had 194
personnel.
5.77 years
Breakdown of Senior Management based
on Gender
Female
Male
General Manager
2
Deputy General Managers (including
Directors)
2
7
Mid-Level Management (Managers)
5
42
Breakdown of Personnel based on
Education Level
Female
Male
33
12
University graduate
248
72
Vocational high school graduate
211
31
High school graduate
227
25
PhD
2
Master's degree
Others (Secondary school-Elementary school)
Total
33
2
752
144
Zorlu Energy Group HR Education Indicators – 2013
Number of personnel by category
Total training time by category
Average training time per employee
Senior Management Other Employees
(Excluding
Administrative
Personnel)
Total training
hours (Senior
Management)
Total training
hours (Other
Employees)
Average training time Average training
per Senior Manager
time per other
(hour)
employee (hour)
58
367.5
17,109.83
6.33
838
20.41
Sustainability
20.4 hours
Zorlu Enerji 2013 Annual Report
50
Sustainability
As a reflection of the value the Company attaches to its human
resources, Zorlu Energy Group won the Respect for People
Prize, given by Kariyer.net, for a 3rd time.
Zorlu Enerji Performance
Management System
Zorlu Enerji’s competency and target
based Performance Management
System is comprised of the following
processes:
• setting and rating of competencies,
• conveying corporate targets to
employees,
• one-to-one interviews,
• preparation of personal
development plans.
The performance evaluation system,
which is focused on employee
competency, is carried out annually
for all personnel who have completed
their sixth month of employment
at the Company. The results of the
performance evaluation are reflected
in the salaries of the employees and
are also used to determine career plans
and development activities.
• conducted a fresh graduate hiring
process for future employment. A
total of 15 management trainees
from 3,000 applicants joined Zorlu
Enerji.
• held training and organizing
activities to encourage all employees
to participate in social volunteering
projects as part of the “Zorlu Energy
Group Volunteers”, which is the
Company’s corporate volunteering
body.
• won the Respect For People Prize
for a 3rd time, which is awarded by
Kariyer.net.
Priority is given to the internal training
of managers who will hold positions
of responsibility at Zorlu Enerji.
Accordingly, employees are trained in
technical and behavioral areas in career
development through management
training at different levels.
Zorlu Energy Group won the Respect
For People Prize for a 3rd time, which
was awarded by Kariyer.net for the
twelfth time in 2013.
As a reflection of the value that Zorlu
Energy Group attaches to human
resources, the Group manages
the evaluation process for all job
applications in a detailed manner
and places tremendous importance
on communication. The Company
won the Respect For People Prize for
its prompt response to 100% of the
144,150 job applications that it had
received in 2012.
As part of the HR activities in 2013; the
Company
Occupational Health and
Safety
• participated in career days.
• conducted benchmark studies with
companies from the energy sector.
• conducted an employee satisfaction
survey and organized field meetings
with employees.
Zorlu Enerji unwaveringly maintains
its aim of having “a workplace
environment which meets world
standards for safety”.
Zorlu Enerji places the utmost
importance on its employees’ health
and safety. The Company is a corporate
citizen which adopts these matters
in its human resources policies and
applications. The Company ensures
full compliance with the applicable
occupational health and safety
legislation at its headquarters in
Istanbul, as well as at its plants and
other units in Turkey and abroad. In
addition, the Company implements a
policy which recognizes and targets
to comply with modern workplace
health and safety applications that are
accepted in the global energy sector.
As part of the workplace safety
applications, the physical conditions
and technical infrastructure at the
Company’s various facilities are
periodically reviewed and necessary
actions for improvement are taken.
Zorlu Enerji has developed informing
and alarm systems for different
emergency cases whereby necessary
measures and intervention processes
are established through detection of
the potential problem areas.
Zorlu Enerji periodically conducts
emergency drills at locations
determined as part of the Emergency
Case Management and Intervention
Procedure. Corrective and preventative
actions are planned in areas
determined to require improvement as
a result of the drills.
Zorlu Enerji 2013 Annual Report
51
A work permit system was created in
2013, which determines dangerous
tasks, the required precautions that
must be taken before starting these
tasks and ensuring that the tasks
are carried out under full control.
This system aims for the realization
of dangerous activities such as offsystem field works, energy isolation,
working at heights, elevation operation
applications, welding operations and
contractor activities, without any
problem.
A target of sustaining a “zero
accident” rate in the workplace
Zorlu Enerji’s corporate aim is to sustain
a “zero accident” rate at the workplace.
Operating within the framework of the
ISO 18001 Occupational Safety and
Employee Health System, Zorlu Enerji
works with consultants and service
providers who are specialized in their
areas to ensure the highest levels of
health and safety at the workplace.
One of the Company’s key principles is
to only start work once the necessary
occupational safety precautions
have been taken. All fieldworkers
are informed of occupational health
and safety guidelines before they
commence work.
The Environment
Zorlu Enerji’s projects treat the
environment as a trust which will be
transferred to next generations. The
Company operates within the scope of
a management system which is based
on improving environmental awareness
and protecting the environment and
natural resources to create a more
sustainable world by force of social
responsibility.
In line with this approach, Zorlu Enerji
meets the following criteria in all of its
activities:
• selecting materials and technology
which minimize the adverse impacts
on the environment.
• providing the most efficient use of
energy and natural resources.
• developing systems that will prevent
pollution at its origin before it
manifests itself.
• controlling wastes (solid, liquid or
gas) and disposing of them without
harming the environment.
• complying with national and
international laws and regulations
regarding the environment.
• training employees and
subcontractors in order to raise their
environmental awareness.
• conducting impact analysis which
also takes environment into
consideration in new investments.
• monitoring and managing
greenhouse gas emissions in order to
reduce the impacts of global climate
change.
In its investments, Zorlu Enerji aims
to devise projects which contribute
to production, provide employment,
ensure continuity of energy supply and
respect the environment.
Zorlu Enerji has been calculating
the carbon footprints of its activities
since 2012 within the scope of its
environmental protection projects.
At the same time, the Company has
initiated forestation projects around
Turkey, planting a total of 15,000
saplings during the 2012-2013 period.
As a responsible corporate citizen
which cares for the sustainability of the
environment and energy resources,
Zorlu Enerji will maintain its role model
projects in the future with the steps
it has taken in its energy efficiency
projects, its efforts to reduce carbon
dioxide emissions and in sustainable
management.
The Carbon Disclosure Project and
the “Turkey Carbon Disclosure
Leadership” Award
Zorlu Enerji, which continues to
calculate its carbon footprint, was the
first energy company to participate
in the CDP-Carbon Disclosure Project
and hold an ISO 14064-1 Greenhouse
Emission Standard license. Zorlu Enerji
won the “Turkey Carbon Disclosure
Leadership” Award in 2011 as part of
the CDP and was ranked the fourth
in Turkey’s Leaders ranking with its
carbon transparency performance in
2012. Additionally, Zorlu Enerji received
the highest performance score among
the four energy companies which are
included in the BIST-100 index and carry
out reporting.
Sustainability
Zorlu Enerji received the
highest performance score
among the four energy
companies included in
the BIST- 100 index which
conduct reporting.
Zorlu Enerji 2013 Annual Report
52
Sustainability
Zorlu Enerji was awarded the “Sustainability Prize” in the
“Environmental and Social Performance” category at the
EBRD’s Sustainability Awards organized for the 6th time in
2013, for its Gökçedağ wind farm.
Climate Performance Leaders Award
Zorlu Doğal, which transparently
shares its risk management strategies
on greenhouse gas emissions and
climate change with the public, is
the only energy company to conduct
voluntary reporting and to be ranked
among the top companies in the
Carbon Disclosure Project. In 2013,
Zorlu Doğal was ranked in group B,
which is the second highest group in
the performance rating of companies
which announce their climate change
strategies through the Carbon
Disclosure Project (CDP) platform.
Accordingly, it received Turkey’s
Climate Performance Leaders Award.
A National Champion
Zorlu Enerji received the title of
“National Champion” within the
context of the 2013 - 2014 European
Business Awards. Zorlu Enerji is
determined to compete for the
coveted Ruban d’Honneur prize in the
next stage.
As part of the European Business
Awards, companies from various
sectors which have recorded important
achievements in Europe are evaluated
in the following categories: innovation,
leadership, social responsibility,
marketing, growth strategy and
process management.
The Gökçedağ wind farm adds
another prize to its international
award portfolio
Zorlu Enerji received the “Sustainability
Prize” for the Gökçedağ wind farm
in the “Environmental and Social
Performance” category in the
Sustainability Awards, which was
organized for the 6th time in 2013 by
EBRD.
Working in harmony with the
environment
Zorlu Enerji carried out the following
projects in connection with the
Gökçedağ Wind Farm, located
in Osmaniye; a memorial forest
which comprised of 3,000 saplings,
forestation with 25,000 saplings,
applications of seeding implantation
and erosion control with a “habitat
restoration project”, which was applied
over an area of 14 hectares. The
forestation project aims to beautify
the construction fields around the
wind turbines by addressing any
disturbances to the environment
caused by the plant road, protecting
soil in inclined, sloping surfaces of the
field and creating a source of income
for the villagers in the region through
the trees, which have economic value.
While forestation activities were
continuing, another meeting was held
with the local people in the villages,
especially where husbandry is the
main means of sustenance. Meetings
concentrated on efforts to prevent
livestock from damaging saplings and
the ways of utilizing the saplings which
have economic value.
Corporate Social
Responsibility
As a responsible citizen of the world,
Zorlu Enerji has taken its place in
today’s globalizing world by setting
fundamental principles in the four
main areas; human rights, business
life, environment and battle against
corruption. The Company implements
projects that add value to society, the
environment and, in particular, to
children with its social responsibility
projects.
Being a part of the region in which
the Company operates - stakeholder
participation
Zorlu Enerji is focused on establishing
a warm dialogue with and creating
value for the local people in the regions
where the Company operates. As part
of such efforts, the Company organizes
“stakeholder participation activities”
to allow local people, living in areas
where the Company is operating or in
new investment regions, to evaluate
the environmental and social impacts
of their operations and to share their
ideas and recommendations. To this
end, informative visits and meetings
are conducted before projects are
initiated.
The best example of this was exhibited
in the Gökçedağ Wind Farm project,
with such efforts being conducted over
a period of 4 years. Within this context,
a widely participated informative
meeting was held before the start
of the construction, where detailed
information concerning the plant was
provided and local community’s views
and expectations were gathered. In
the Bahçe and Hasanbeyli districts
where the plant is located, and in
Zorlu Enerji 2013 Annual Report
53
the 21 villages near the plant, the
community’s socio-economic situation
was examined in detail with the
Social Case Research and Manpower
Research study and the results were
shared with the community. Education
scholarships were provided to 155
university students residing in the
region.
Additionally, research studies
are carried out to determine the
community’s social and economic
situation and the impacts of the
projects on the environment and social
life at the investment stages. Examples
of this were the İkizdere Stakeholder
Participation Plan and the Alaşehir
Social Impact Evaluation.
Zorlu Enerji regularly monitors the
potential impacts of the construction
activities and operations related to
its plants on the environment and
the health of the community. The
Company cooperates with the national
and international institutions in its
projects and prepares systematic
reporting in the following areas:
soil conservation; noise, dust and
vibration; water quality; solid
waste management; visual impact;
occupational safety; interaction with
wildlife; and the natural habitat.
Communication with our children
Zorlu Enerji believes that today’s
children who will be equipped
with proper information about the
environment and energy will be in a
position to solve the many problems
regarding our planet in the future. In
line with this, Zorlu Enerji conducts
systematic projects aimed at enhancing
the children’s knowledge and
awareness about energy.
Our Energy Is For Children
Zorlu Enerji continued its education
project in 2013 which is organized to
raise the awareness of energy among
children, who will protect and manage
natural resources in the future.
Zorlu Enerji published the following
books as part of the project;
• “Wind Power with Zorlu” in 2009,
• “Geothermal Power with Zorlu” and
“Natural Gas with Zorlu” in 2011,
• “Water Energy with Zorlu” in 2012,
• “The Carbon footprint with Zorlu” in
2013
The “Our Energy is For Children”
project, which is Turkey’s first national
education project in energy to be
conducted by an energy company,
reached 165,000 children over a period
of 4 years.
Another project which was started
in 2012 and which continued during
2013 was “The Future Is Yours, Don’t
Waste Your Energy” project which
was developed together with the Şişli
Municipality Science Centre. A visual
world was created with this project
to enable children to understand
the notion of energy in different
dimensions. As part of this project,
Turkey’s first “clean energy model”,
measuring 140x210 cm and having a
topographic structure, was set up in
the Şişli Municipality Science Centre,
and opened for children to visit.
Through this cooperation with the Şişli
Municipality Science Centre, which was
developed as part of the “Our Energy
Is For Children” project, the number of
visitors to the Centre, which includes
Turkey’s first moving model explaining
the country’s energy resources,
increased to nearly 65,000 in one year.
Sustainability
The Energy drama which is jointly prepared
by Zorlu Enerji and TOÇEV, reached 15,500
children and conveyed the necessity of
clean energy.
Turkey’s first energy drama
Zorlu Enerji prepared Turkey’s first
energy drama in the final months of
2012 together with TOÇEV.
“Blue” and “Green” characters, whose
names are taken from the colors of
natural life, are included in this play
which was fictionalized interactively.
As part of the Turkey tour undertaken
by Zorlu Enerji, the drama reached
15,500 children between October
2012 and March 2013 in the 15 cities
where the Company has investments
and the need for clean energy was
explained to children. Enerji drama
won the third prize in the “Leadership”
category at the European Corporate
Social Responsibility Award Turkey
Competition.
www.enerjisitemiz.com
Zorlu Enerji aims to comprehensively
inform children about energy, by
using all channels to reach them,
including the digital media. Children
can watch videos of energy resources
and important inventions in the field of
energy at the www.enerjisitemiz.com
website.
The web page plans to assist children
in their homework and school projects
related to energy. The “Energy
Hunters” game in the website teaches
children about energy saving in an
entertaining and competitive way.
Meanwhile, the Green Dragon - a
mascot in Zorlu Enerji’s training continued to interact with children on
the Facebook page.
Zorlu Enerji 2013 Annual Report
54
Risk Management
In order to identify potential risks that may threaten Zorlu Enerji’s existence, development and continuity, and to
implement and manage the necessary measures against such risks, Zorlu Holding established an Enterprise Risk
Management Department which started up operations in first quarter 2012 as a support function for the Company.
Risk management activities carried out by this Department include the assessment of financial risks as well as nonfinancial risks, such as operational, environmental, technology related risks, among others.
An outline of critical risk types identified during the analysis of current and potential risks, which may hinder the
Company from achieving its targets, and the actions taken against these risks, are as follows:
Risk Type
Liquidity Risk
Financing Risk
Financial Risks
Currency/Interest Rate
Risks
Customer Credit Risk
Market Risk
Economic Risks
Definition
Liquidity risk is the inability to provide sufficient cash or securities to maintain business
continuity, or obtain sufficient financing to balance cash flow, or a weakened ability to close
open positions. The Company carries out periodic analyses in order to manage the liquidity
risks it may be exposed to.
Zorlu Enerji makes long-term investments as per the nature of its activities. The Company
finances these investments by liquid assets. Financing risk occurs when the Company cannot
obtain funding on agreeable terms to finance its projects, or when there is a maturity
mismatch between existing debt and assets, or when there is not an optimum balance
between assets and resources. Such risks are closely monitored by the Company.
Zorlu Enerji mostly uses foreign currencies for financing its investments. Therefore, the
Company is exposed to currency risk emerging from the exchange of its debts or receivables
which are mainly denominated in US dollars. As a method of protection against this risk, the
Company implements certain protection policies such as using various derivative products.
Additionally, Zorlu Enerji also has exposure to interest rate risk due to fluctuating interest
rates in domestic and international markets because it obtains funds for its investments from
various financial resources. As the Company’s investments are mainly financed by non-capital
resources, an increase in interest rates becomes a critical risk factor. In order to minimize this
risk, the Company uses interest rate swaps.
In order to eliminate potential risks in the collection of trade receivables, customer credit risks
are closely monitored by drawing on the past experience of the Company’s management. The
Company manages credit risk through credit control procedures, credit rating systems, and
internal control policies.
Market risks, defined as fluctuations in electricity prices, changes in electricity demand,
instable raw material (resources) prices, and the government’s ongoing intervention in the
electricity market, have been increasing in recent years, are considered important, and are
closely monitored.
Economic risks include economic instability (stagnation, crisis, recession, devaluation and the
like), fluctuations in currency and interest rates; these risks are considered important especially
during investment and operation stages.
Zorlu Enerji 2013 Annual Report
Non-financial Risks
Definition
Zorlu Enerji has combined-cycle natural gas and wind power plants in its portfolio, and
therefore places great importance on feasibility studies, as the Company’s main objective is to
grow with profitable investments. Accordingly, the potential effects of all internal and external
risk factors on planned investments are identified and relevant scenarios are analyzed.
Project Risk
Zorlu Enerji conducts technical feasibility studies at the most optimum level possible, in all
stages of its projects, for which the investment decision has been made. These feasibility
studies cover construction works, procurement of electromagnetic equipment, transmission
lines, engineering, operation, and the like.
The Company also takes into consideration financial feasibility, including macroeconomic
growth, inflation rate, currency rates, sales volume, market impact, prices, and monitors these
factors periodically. The profitability of a project is determined by calculating the internal
productivity ratio, profitability index, and capital cost.
During the project development stage, the Company closely monitors progress through the
use project management tools.
Operational Risks
Operational risks are defined as operational defaults resulting from system malfunctioning
in energy production and distribution lines due to environmental factors (natural disasters,
terrorism, and the like) or operator/user errors, mechanical malfunctions, or theft. The
Company minimizes such risks by tackling operational problems in a timely manner.
Additionally, the effects of such damages are kept at a minimum thanks to comprehensive
insurance coverage.
Competition Risk
Through privatizations and a new regulatory framework, a more liberal and competitive
market is being formed to replace the public monopoly in the energy sector, leading to
increased competition. Therefore, Zorlu Enerji manages competitive risk by implementing
innovative sales and marketing strategies. As a result, portfolio diversification will continue to
be on the Company’s agenda in the coming period as well.
Human Resources Risks Zorlu Enerji values its workforce as one of the Company’s most important assets in achieving
corporate targets. Therefore, the Company monitors the performance of its employees
regularly, carries out personnel satisfaction surveys, takes the necessary actions to improve
performance, and motivates staff members to participate in management.
In order to prevent large-scale strikes and employee demonstrations, especially at
production facilities, the Company regularly organizes training programs and interactive
informational sessions.
Legal/Political Risks
Legal and political risks, defined as changes in regulations, delays in obtaining project permits,
licenses or expropriation permits from public authorities, compliance with tender contract
conditions, and political relations, are considered natural risks in the energy sector. The
Company keeps such risks under control through close monitoring and timely actions.
Country Risks
Legal, political and similar risks related to the Company’s investments in foreign countries are
assessed by using consultancy services before and after the investment is made.
Technology Risks
As technological developments, newer and more efficient energy production systems, at the
same or lower cost, continue to emerge every day, Zorlu Enerji may potentially experience
weakening competitive power in terms of profitability. Therefore, the Company makes shortterm upgrades to integrate these new technologies.
Environment/Health/ At its production facilities, Zorlu Enerji implements strict policy and procedural guidelines to
Safety Related Risks
ensure compliance with legal standards related to environmental protection, stakeholder
safety and health; the Company also tries to take the necessary measures against adverse
geographic and climatic conditions. In addition, risks related to natural disasters or terrorism
are managed via insurance coverage.
Financial Information and Reports
Risk Type
Investment Risk
55
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Zorlu Enerji 2013 Annual Report
Internal Audit Department and its Operations
At Zorlu Enerji Elektrik Üretim A.Ş. and other Zorlu Group companies, since 2000, the internal audit function is under the
responsibility of the Internal Audit Department of Zorlu Holding. The Internal Audit Department conducts audit activities
based on International Internal Audit Standards in accordance with audit programs pursuant to legal requirements and
approved by the senior management. The Department shares the audit reports issued after conducting each audit, as
well as annual reports on the audit results for the entire year, with the Holding’s Board of Directors, if any, the Audit
Committees of companies and the Sector Heads. In addition to the Internal Audit Department, the Financial Audit and
Taxation Department was established in 2011 in order to conduct financial audits across all Group companies and it
started audit activities in 2012. Additionally, in the last quarter of 2013, Internal Audit Department and Financial and Tax
Audit Departments were gathered under the umbrella of Zorlu Holding Audit and Internal Control General Directorate.
The objective, authority, responsibilities, operating principles and structure of the internal audit function are outlined in
the “Internal Audit Regulation” and “Internal Audit Operating Principles” documents, which have been approved by the
Board of Directors and shared with the individual companies.
Under the risk-based annual audit program approved by the Board of Directors, Audit Committee and Sector Heads,
process audits are conducted to ascertain the efficient and productive use of resources, compliance with applicable
laws, regulations, in-house policies and rules, as well as information accuracy, reliability and security. Whenever deemed
necessary, at the start of each audit, the Department meets with the Senior Management to make risk assessments;
the companies’ targets and the risks that could jeopardize these targets are analyzed and positioned in the risk matrix
according to their effects and probabilities. During the audit field work, tests are carried out to evaluate the internal
controls which manage risks with significant effects and high probabilities. The results of observations are shared with
the company management as a draft report; and then a final report, including the opinions of the management, is sent
to the Senior Management. As a result, the Department offers consultancy services with a reasonable assurance level,
and at the same time capitalizes on group synergy to highlight the best practices. One month after the issue of the final
report, the actions taken are shared with the Board of Directors, in line with the 4T approach (Treat, Terminate, Transfer
and Tolerate).
Two Audit Committee meetings were held during the year, on 26.09.2013 and 11.12.2013, respectively. During these
meetings, where two Board members also participated upon invitation, information was given regarding the audits
which were planned and performed in 2013 and the findings of the audit reports which were shared with the Board of
Directors.
Zorlu Group supports and promotes Zorlu Group Internal Audit Team, consisting of 14 people, in the areas of getting
training in order to improve and enhance their existing knowledge, skills and other qualifications, becoming a member
of related associations (e.g. The Institute of Internal Auditors, Turkey -TIA) and obtaining international certificates
related with their occupation. Internal Audit team includes 3 CIA (Certified Internal Auditor), 1 CPA (Certified
Public Accountant), 1 CFE (Certified Fraud Examiners), 1 CISA (Certified Information Systems Auditor) and 7 CRMA
(Certification in Risk Management Assurance).
Zorlu Enerji 2013 Annual Report
57
RESOLUTION DATE
: 14.03.2014
RESOLUTION NO.
: 2014/5
Financial Information and Reports
Board of Directors’ Resolution
PARTICIPANTS: Zeki Zorlu
Ali Akın Tarı
Olgun Zorlu
Selen Zorlu Melik
Bekir Cem Köksal
Hacı Ahmet Kılıçoğlu
Burak İsmail Okay
AGENDA: Financial Statements of for Zorlu Enerji Elektrik Üretim A.Ş the period ending 31.12.2013
The Board of Directors of ZORLU ENERJİ ELEKTRİK ÜRETİM ANONİM ŞİRKETİ convened at the Company’s
headquarters, presided by Mr. Zeki Zorlu;
The Board UNANIMOUSLY resolved to approve the consolidated balance sheet of ZORLU ENERJİ ELEKTRİK ÜRETİM
ANONİM ŞİRKETİ as of 31.12.2013 and the Company’s consolidated income statement for the period ending on the
date, as well as other financial statements and the Board of Directors’ Annual Report, and to post them on the Public
Disclosure Platform.
BOARD OF DIRECTORS
Zeki Zorlu
Ali Akın Tarı
Olgun Zorlu
Chairman
Vice Chairman
Board Member
Selen Zorlu Melik
Bekir Cem Köksal
Hacı Ahmet Kılıçoğlu
Burak İsmail Okay
Board Member
Board Member
Board Member
Board Member
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Zorlu Enerji 2013 Annual Report
Corporate Governance Principles Compliance Report
CONTENTS
1. Statement of Compliance with Corporate Governance Principles
PART I- SHAREHOLDERS
2. Investor Relations Department
3. Shareholders’ Exercise of Their Right to Obtain Information
4. General Assembly Meetings
5. Voting Rights and Minority Rights
6. Dividend Rights
7. Transfer of Shares
PART II- PUBLIC DISCLOSURE AND TRANSPARENCY
8. Disclosure Policy
9. Corporate Website and its Contents
10. Annual Report
PART III- STAKEHOLDERS
11. Informing of Stakeholders
12. Participation of Stakeholders in Management
13. Human Resources Policy
14. Code of Ethics and Social Responsibility
PART IV- BOARD OF DIRECTORS
15. Structure and Composition of the Board of Directors
16. Working Principles of the Board of Directors
17. Number, Structure and Independence of the Committees Established by the Board of Directors
18. Risk Management and Internal Control Mechanisms
19. Company’s Strategic Targets
20. Financial Benefits
Zorlu Enerji 2013 Annual Report
59
As per the decision dated 27.01.2014 and numbered 2/35 of the Capital Markets Board (CMB), Zorlu Enerji Elektrik
Üretim A.Ş.’s Corporate Governance Principles Compliance Report for 2013 is prepared in compliance with the format
announced in the Capital Markets Board’s Bulletin dated 01.02.2013 and numbered 2013/4, as stated in the Board’s
Bulletin numbered 2014/2.
Corporate governance activities at Zorlu Enerji Elektrik Üretim A.Ş. were initiated in 2005. In the initial phase, a series
of amendments were made to the Company’s Articles of Association in order to offer an equitable, accountable,
responsible and transparent structure to shareholders. While these amendments served to grant the rights envisaged by
the Corporate Governance Principles to minority shareholders, radical changes were made to the management structure
in pursuit of “better governance.” Following the revisions made to the Articles of Association, corporate governance
practices continued with the establishment of corporate governance mechanisms at the Company. While the Board of
Directors was made more efficient with the addition of independent members, the committees set up under the Board
of Directors aimed to further increase management effectiveness. Additionally, the Company’s disclosure policy was put
in writing and submitted to the General Assembly of shareholders. A Company website was created to keep the public
informed in the most rapid, simultaneous, accurate and complete manner possible, in accordance with the Corporate
Governance Principles.
Activities undertaken in 2013 to further increase the compliance of the Company with Corporate Governance Principles
are summarized below:
• Company’s Articles of Association were revised in parallel with the CMB and Turkish Commercial Code (TCC)
legislations, and submitted to the approval of shareholders at the Ordinary General Assembly Meeting for 2012.
• In line with the Corporate Governance Principles, with the Board of Directors’ decision dated 19.02.2013, Early
Detection of Risk Committee was established and working principles of the Committee were submitted to the
information of the shareholders via the Public Disclosure Platform and the Company website.
• Limit of the donations to be made in 2013 pursuant to article 19 of the Capital Market Law numbered 6362 was
determined; such limit was submitted to the approval of the General Assembly and was approved by the General
Assembly.
• “Internal Directive on the Principles and Procedures of Operation of the General Assembly” prepared pursuant to
the “Regulation on the Procedures and Principles of General Assembly Meetings of Joint Stock Companies and the
Representatives of the Ministry of Customs and Trade who will be Present at These Meetings”, as published in the
Official Gazette dated 28.11.2012, was approved at the Extraordinary General Assembly held on 28.03.2013.
• In parallel with its good corporate governance practices, the Company has received the “Best Corporate Governance,
Turkey 2013” award by World Finance.
In the implementation of Corporate Governance Principles, certain principles that do not conform to the Company’s
structure and that are regarded as potential obstacles against its activities were excluded. These principles and the
reasons for opting not to comply therewith are summarized below:
• Transfer of Shares: The Company operates in a regulated market; therefore, in order to comply with the requirements
of the laws and regulations imposed by the Energy Market Regulatory Authority (“EMRA”), Article 21 of the
Company’s Articles of Association states, “Any transfer of at least 5% of the company’s registered shares requires the
consent of the EMRA, pursuant to Article 6 of these Articles of Association and in line with EMRA regulations.” And,
“The transfer of the Company’s shares is unrestricted, provided that it complies with the provisions set forth in the
Turkish Commercial Code, the Capital Market Law, EMRA regulations, as well as these Articles of Association.”
Financial Information and Reports
1. Statement of Compliance with Corporate Governance Principles
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Corporate Governance Principles Compliance Report
Stipulation of the appointment of a special auditor in the Company’s Articles of Association as an individual right: Article
14 contained in the Company’s Articles of Association regarding the appointment of a special auditor, which stated
that; “Any shareholder representing one-twentieth of the Company’s issued capital who asserts an incident of abuse
in connection with the formation or management operations of the Company or a flagrant violation of the provisions
of the applicable law and Articles of Association within the last two years, may request from the General Assembly to
appoint a special auditor to verify these assertions or the accuracy of the balance sheet. If such request is rejected by the
General Assembly, shareholders representing at least one-twentieth of the Company’s issued capital shall have the right
to request the relevant court to appoint a special auditor to investigate the case.”, was amended within the scope of the
amendments made to the Articles of Association at the Ordinary General Assembly meeting for 2012, held on May 30,
2013, so as to provide; “Relevant provisions of the Turkish Commercial Code and the Capital Market Law shall apply to
the audit of the Company and other matters stipulated in the legislations”.
The Company hereby espouses a transparent and equitable management style and aims to establish an approach to
management that is responsible and accountable to all shareholders, without exception.
PART I- SHAREHOLDERS
2. Investor Relations Department
• The Company carries out its relations with shareholders through the Zorlu Group of Companies Investor Relations
Directorate. Information for this Directorate is given below:
Department Director : Serap Mutlu
Department Manager: Başak Dalga
Phone
: (212) 282 28 10
E-mail
:[email protected]
The main activities carried out by the Investor Relations Directorate on behalf of the Company in 2013 are summarized
below:
• The Directorate participated in 2 conferences organized by various brokerage firms and 2 roadshows;
• Nearly 50 one-on-one meetings were held with the investors and analysts.
• During the relevant period, nearly 70 questions were received via e-mail and about 40 by phone.
3. Shareholders’ Exercise of Their Right to Obtain Information
• During the year 2013, the Company has received information on various topics from the shareholders. These queries
were responded to either verbally or in writing, by phone, e-mail or mail in line with each investor’s request. Clear and
detailed responses were provided to the queries received in accordance with the Company’s public disclosure policy,
and all questions, apart from those relating to trade secrets, were answered to the satisfaction of the investors.
• During the period of 2013, developments that might have an impact on the shareholders’ exercise of their rights were
disclosed to the investors through the material event disclosures made via the Public Disclosure Platform (PDP) and the
Company’s website.
• In order to facilitate the exercise of the shareholders’ right to obtain information, one of the most essential rights
of shareholders, the Company included all the information required by the Corporate Governance Principles on the
corporate website. The Investor Relations Directorate is responsible for updating and monitoring the website.
Zorlu Enerji 2013 Annual Report
61
4. General Assembly Meetings
• The Company held its Ordinary General Assembly Meeting for 2012 on May 30, 2013 at 2:00 PM, at the address of
Organized Industrial Zone Sarı Cad. No: 29 Bursa.
• Invitation for the meeting was made in due time as set out in the Law and the Company’s Articles of Association, by
being published in the Turkish Trade Registry Gazette issue 8316 dated May 09, 2013, in Dünya newspaper dated May
09, 2013 and in Bursa Hakimiyet Newspaper dated May 09, 2013, and also posted on the Public Disclosure Platform,
E-General Assembly System of Merkezi Kayıt Kuruluşu A.Ş. as well as on the Company’s website at (www.zorluenerji.
com.tr), by announcing the day and agenda of the meeting. In order to facilitate attendance to the General Meeting,
announcements were published in two Turkish newspapers with high circulation and access to any and all information
concerning the Ordinary General Assembly, including the meeting invitation, was ensured by being posted on the
Company’s website.
• The annual report, financial statements, the Articles of Association, and the General Assembly Information
Document prepared in accordance with the Capital Markets Board regulations were made available for the review of
shareholders prior to the General Assembly Meeting, at the Company’s headquarters and at the address of Zorlu Plaza
34310 Avcılar/Istanbul. All this information was also published on the corporate website together with the General
Assembly Meeting announcement and the agenda.
• Neither the shareholders, the Capital Markets Board nor any related public companies and institutions proposed items
to be included in the agenda prior to the General Assembly Meeting.
• In accordance with the “Communiqué Regarding the Electronic General Assembly System to be Implemented in
the General Assembly Meetings of Joint Stock Companies”, published in the Official Gazette dated 29.08.2012 and
numbered 28396, shareholders were granted the right to attend and cast vote at the General Assembly through an
electronic medium.
• Out of 50,000,000,000 shares corresponding to the Company’s total share capital of TL 500,000,000; 308,945
shares representing TL 3,089.45 in capital were present in person, and 41,337,954,391 shares representing TL
413,379,543.91 in capital were represented in proxy at the General Assembly Meeting. Accordingly, the meeting
quorum as set forth by law and the Company’s Articles of Association was present.
• The Company’s Articles of Association contain no provisions regarding the participation of stakeholders and media
members at the General Assembly. However, their participation is allowed as long as the Company is notified in
advance. No stakeholders or media members attended the Company’s 2012 Ordinary General Assembly Meeting.
• It was ensured that Board members who were related to the significant agenda items of the General Assembly, other
related persons, officers who had responsibility in the preparation of financial statements and auditors were present
at the General Assembly Meeting so that they can provide necessary information and answer questions.
Financial Information and Reports
• Article 14 contained in the Company’s Articles of Association regarding the appointment of a special auditor, which
stated that; “Any shareholder representing one-twentieth of the Company’s issued capital who asserts an incident
of abuse in connection with the formation or management operations of the Company or a flagrant violation of the
provisions of the applicable law and Articles of Association within the last two years, may request from the General
Assembly to appoint a special auditor to verify these assertions or the accuracy of the balance sheet. If such request is
rejected by the General Assembly, shareholders representing at least one-twentieth of the Company’s issued capital
shall have the right to request the relevant court to appoint a special auditor to investigate the case.”, was amended
within the scope of the amendments made to the Articles of Association at the Ordinary General Assembly meeting
for 2012, held on May 30, 2013, so as to provide; “Relevant provisions of the Turkish Commercial Code and the Capital
Market Law shall apply to the audit of Company and other matters stipulated in the legislations” and to this date, the
Company has not received any request for the appointment of a special auditor.
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Corporate Governance Principles Compliance Report
• Shareholders were allowed to express their opinions and pose questions under equal conditions at the General
Assembly Meeting, and all questions posed by shareholders were answered in detail. Shareholders introduced no
motions during the meeting.
• At the General Assembly, the shareholders were informed about the donations and charities, amounting to TL
971,096.81 in total, made to Mehmet Zorlu Foundation and various institutions in 2013.
• Limit of the donations to be made in 2013 pursuant to article 19 of the Capital Market Law numbered 6362 was
determined and submitted to the approval of the General Assembly.
• Minutes of the General Assembly are made available for the review of shareholders at the Company’s own
headquarters and at the address Zorlu Plaza 34310 Avcılar/Istanbul. Additionally, all announcements, documents, and
other materials related to General Assembly meetings are accessible to shareholders and to all other stakeholders on
the Company’s website.
• Company’s Extraordinary General Assembly Meeting was held on 28.03.2013, at 2:00 PM, at the address of Organized
Industrial Zone Sarı Cadde No:29 Bursa.
• Invitation for the meeting including the agenda was made in due time as set out in the Law and the Company’s
Articles of Association, by being published in the Turkish Trade Registry Gazette issue 8272 dated March 06, 2013
and in Bursa Hakimiyet newspaper’s issue dated March 06, 2013, Dünya newspaper’s issue dated March 06, 2013
and also posted on the Public Disclosure Platform, E-General Assembly System of Merkezi Kayıt Kuruluşu A.Ş. as well
as the Company’s website at “www.zorluenerji.com.tr”, by announcing the day and agenda of the meeting. In order
to facilitate attendance to the General Meeting, announcements were published in one Turkish newspaper with
high circulation and access to any and all information concerning the Extraordinary General Assembly, including the
meeting invitation, was ensured by being posted on the Company’s website.
• Out of 50,000,000,000 shares corresponding to the Company’s total share capital of TL 500,000,000; 308,945
shares representing TL 3,089.45 in capital were present in person, and 41,337,954,391 shares representing TL
413,379,543.91 in capital were represented in proxy at the General Assembly Meeting. Accordingly, the meeting
quorum as set forth by law and the Company’s Articles of Association was present.
• At the meeting, it was decided to elect Başaran Nas Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş.
for the audit of both the accounts and operations of 2013 and to conduct the audit under Capital Market Law and
the relevant legislations and the Turkish Commercial Code and the relevant legislations; and to accept the “Internal
Directive on the Working Principles and Procedures of Zorlu Enerji Elektrik Üretim A.Ş.’s General Assembly”, which was
announced on the Company’s website at www.zorlunenerji.com.tr, the Public Disclosure Platform and the E-General
Assembly System of Merkezi Kayıt Kuruluşu A.Ş. and submitted to the approval of the shareholders.
5. Voting Rights and Minority Rights
• Each share entitles the holder to one (1) voting right at the Ordinary and Extraordinary General Assembly meetings.
• There are no cross-ownership relationships in the Company’s share capital.
• Minority shareholders and stakeholders are not represented in management. However, two independent members
serve on the Board of Directors to ensure equal representation of minority shareholders primarily, and of all the
shareholders and stakeholders.
6. Dividend Right
• The Company’s shares provide no privileges concerning the distribution of profits. Each share is entitled to an equal
dividend.
• The Company’s Dividend Distribution Policy is presented to the shareholders each year as a separate agenda item
at the General Assembly Meeting, and also announced to the public on the Company website as well as in annual
reports.
Zorlu Enerji 2013 Annual Report
63
7. Transfer of Shares
• The Company operates in a regulated market; therefore, in order to comply with the requirements of the laws and
regulations imposed by EMRA, Article 21 of the Company’s Articles of Association states, “Any transfer of at least
5% of the company’s registered shares requires the consent of the Energy Market Regulatory Authority, pursuant
to Article 6 of these Articles of Association and in line with EMRA regulations.” And, “The transfer of the company’s
shares is unrestricted, provided that it complies with the provisions set forth in the Turkish Commercial Code, the
Capital Market Law, EMRA regulations, as well as these Articles of Association.”
• Article 6, subparagraph 9 of the Articles of Association states: “Approval will be obtained from the Energy Market
Regulatory Authority for and whenever any real person or legal entity directly or indirectly acquires shares
representing five percent or more of the Company’s capital, resulting in the share of any shareholder to exceed
five percent of the share capital and/or transactions causing the share of any stockholder to drop below the
aforementioned rates or share transfers that result in a change of control in the shareholding structure of the legal
entity, independently from the aforementioned acquisitions of shares. This provision also applies to voting right
acquisition.”
PART II- PUBLIC DISCLOSURE AND TRANSPARENCY
8. Disclosure Policy
• The Company’s public disclosure policy was formulated in 2005 in accordance with the CMB’s Corporate Governance
Principles. The disclosure policy was revised and publicly disclosed on August 25, 2009 by being published in the
Istanbul Stock Exchange Daily Bulletin and on the Company’s website (www.zorluenerji.com.tr).
• The issues addressed by the Company’s public disclosure policy are outlined below:
-Ensuring that public disclosures are made in a complete, fair, accurate, timely, comprehensible manner and are made
equally and easily accessible to all;
-Designation of the individuals authorized to manage the development, implementation and improvement of the
disclosure policy, and the authorized persons for making public disclosures;
-Determination of the methods and tools of disclosure;
-Public disclosure of financial reports and designation of authorized individuals;
Financial Information and Reports
• In relation to dividend distribution policy, at the Ordinary General Assembly Meeting for 2012, which has convened
on May 30, 2013, the shareholders were informed that the Company will continue to implement the dividend
distribution policy set out by the Board of Directors’ decision dated May 7, 2007 and numbered 2007/9 that reads as
follows: “The Company shall distribute dividends that are equal to minimum twenty-five percent of the distributable
profit in cash or in the form of bonus shares to shareholders in year 2007 and in subsequent years, in line with the
provisions of the Articles of Association. The amount of dividends to be distributed shall be proposed depending on
the domestic and global economic conditions and the Company’s growth plan by the Board of Directors each year at
the General Assembly Meeting.”
• Even though the Company had reported a net profit in its 2012 Consolidated Financial Statements prepared in
accordance with the “Communiqué Serial XI No: 29 on the Principles of Financial Reporting in Capital Markets”, due
to the fact that there were accumulated losses from previous years and that no distributable profit was left after the
deduction of the 2012 net profit 2012 from the previous years’ losses, and the Company had reported a net loss in
its statutory financial statements prepared in accordance with the Tax Procedure Law, it was decided at the 2012
Ordinary General Assembly Meeting that no profit shall be distributed; hence, no dividend distribution took place.
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Corporate Governance Principles Compliance Report
-Public disclosure of material events and designation of authorized individuals;
-Written/verbal statements-press releases/conferences and designation of authorized persons to make public
disclosures;
-Disclosure of forward-looking information;
-Prohibited disclosure/silent period;
-The website;
-Following up on news, rumors, and speculations;
-Establishing the criteria used in the designation of individuals with administrative responsibility;
-Confidentiality protection procedure for insider information.
• The Board of Directors is responsible for the implementation, development and oversight of the Company’s Disclosure
Policy. The monitoring and follow-up of all issues relating to public disclosure is under the responsibility of the
executives in charge of financial management and reporting, and the Investor Relations Directorate. These executives
perform their duties in close cooperation with Corporate Governance Committee, Audit Committee and Board of
Directors.
9. Corporate Website and Its Content
• The Company has an easily accessible and active website. The website was created to inform shareholders,
stakeholders, and the public in general in a clear, comprehensible and timely manner. The information on the
Company’s website is regularly updated.
• The website covers the main information listed in the CMB’s Corporate Governance Principles.
• There is also an English language version of the website for the use of foreign investors.
• The corporate website is accessible at the address www.zorluenerji.com.tr. Furthermore, pursuant to the “Regulation
on Websites to be Launched by Joint Stock Companies” and the 1st paragraph of article 1524 of the TCC, in accordance
with the principles and procedures regarding the launching of a website, allocation of a section of this website to
publishing the announcements that are required to be made by the company under the law and information society
services, our Company procures Central Database Service Provider support services from Merkezi Kayıt Kuruluşu A.Ş.
(CRA) and announcements that are required to be made by the Company by law is accessible through the e-Company
Information Portal of the CRA.
10. Annual Report
• The annual report covers the main information listed in the CMB’s Corporate Governance Principles. Moreover,
Board of Directors’ Annual Report was prepared in accordance with the provisions of the “Regulation Regarding the
Determination of the Minimum Contents of the Companies’ Annual Reports”, published in the Official Gazette dated
28.08.2012 and numbered 28395.
PART III- STAKEHOLDERS
11. Informing of Stakeholders
• The Company regularly informs stakeholders on matters that concern them in line with its disclosure policy.
• In addition, the Company has an intranet system to keep employees informed, where Company-related information
can be accessed subject to limits of authorization. All types of information of interest to and related to employees are
provided in detail on the intranet.
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• Stakeholders may submit to the Corporate Governance Committee, the Audit Committee or the Investor Relations
Department, any company transactions they deem either unethical or contrary to regulations by contacting them via
phone and/or e-mail.
12. Participation of Stakeholders in Management
• The Company has not developed a separate model in which stakeholders participate in management. However,
the representation of shareholders and other stakeholders in the management is achieved by the presence of two
independent members on the Board of Directors.
• In making decisions that may have a significant impact on stakeholders, executive managers are invited to Board
meetings to offer their opinions on behalf of stakeholders. Additionally, the Company places importance on ensuring
the participation of employees in Board meetings periodically in order to offer personnel the opportunity to voice
their opinions directly.
13. Human Resources Policy
• The Company’s human resources policy is prepared in writing and involves recruitment, promotion, dismissal,
training, performance appraisal and compensation systems. Employees are kept informed about job descriptions, job
distribution as well as performance and rewarding criteria.
• No representative has been appointed to manage Company-employee relations. The representation of employees in
management is achieved by the presence of two independent members on the Board of Directors.
• The training activities carried out to support the professional and personal development of employees are structured;
a Training Catalogue was prepared which offers personnel the opportunity to choose training programs in line with
their needs. Designed to monitor all the training activities in parallel with career plans, the Training Portal is accessible
by all Company staff members both internally and externally.
• Employees are treated equally and without any discrimination whatsoever in all matters involving training,
career development, promotion, and the like. No complaints have been received from the employees regarding
discrimination.
14. Code of Ethics and Social Responsibility
• In all of its activities, the Company carefully takes into consideration the principles stated in the United Nations Global
Compact, which has been signed by Zorlu Holding and binds all the Group companies.
• The Company’s Code of Ethics has been put in writing and communicated to the employees. Utmost care is taken
to ensure compliance with the Code of Ethics that is formulated for the Board of Directors, the Company and its
employees.
• The Company’s “Corporate Principles Guide” is published in both Turkish and English on the corporate website.
• During 2013, the Company had all the necessary legal inspections carried out concerning environmental impact of
all its facilities and projects. The environmental impact of all projects is reviewed. According to environmental impact
reports, no violations of environmental protection have been detected to date and all of the Company’s practices
are carried out in compliance with the requirements of domestic environmental policies as well as international
agreements, and in line with environmental awareness.
Financial Information and Reports
• With respect to keeping customers and suppliers informed, the Company organizes informational meetings when it
receives such requests.
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• In addition, environmental and social impacts are monitored in all activities, and actions are taken to develop projects
that enhance the quality of life of local residents. For example, the Company regularly monitors the environmental
impact of Gökçedağ Wind Power Plant, follows up on bird migrations, and undertakes various social responsibility
initiatives for the local population. Scholarships were given to 155 students residing in the region and attending
university. In addition to planting a memorial forest consisting of 3,000 saplings, the Company implemented a
forestation effort to plant 25,000 saplings in the area. Also, the Company carried out a habitat restoration project on
an area of 14 hectares through seed planting and erosion controls.
• Zorlu Enerji places priority on raising energy awareness among children; to this end, the Company started publishing
a series of youth-oriented publications. After the publication of the books entitled “Zorlu ile Rüzgâr Enerjisi” (Wind
Power with Zorlu), “Zorlu ile Jeotermal Enerji” (Geothermal Energy with Zorlu), and “Zorlu ile Doğal Gaz” (Natural Gas
with Zorlu) in 2012, the book entitled “Zorlu ile Su Enerjisi” (Hydro Energy with Zorlu) and in 2013, the book entitled
“Zorlu ile Karbon Ayak İzi” (Carbon Footprint with Zorlu) were published. In addition, the Company has conducted
training for 135,000 children under the social responsibility initiative “Our Energy is for Children,” which seeks to
educate the elementary school students on renewable energy sources, energy efficiency and energy saving, and
raising their awareness on these topics. This project is being further developed. “The Future Is Yours, Don’t Waste Your
Energy” educational project was developed within the framework of the “Our Energy is for Children” initiative and in
collaboration with Şişli Municipality Science Center. This project has reached out to nearly 65,000 visitors in the first
year on the topics of clean energy and Turkey’s energy resources, by means of a moving model. Furthermore, within
the scope of another project launched in 2012 in collaboration with TOÇEV (Tüvana Children’s Education Foundation)
and the Ministry of Education, which told the story of energy to children aged between 9 to 12, with Turkey’s first
energy-related drama play, 15,500 students were reached.
• The Company places utmost importance on making sure that its projects become an integral part of the locality and
are embraced by the local people. To achieve this, the Company organizes gatherings and informative meetings with
the local residents in relevant regions before launching its projects.
• During the investment phase of its projects, the Company conducts research to identify the socio-economic status
of the area population as well as to assess the potential impacts of the projects on the environment and social life.
Examples of this approach include the Socio-Economic Structure Research carried out in Gökçedağ, the Stakeholder
Participation Plan in İkizdere, the Informational Meeting in Simav and Alaşehir Environmental Impact Evaluation.
• Zorlu Enerji began efforts to calculate its carbon footprint and has become the first energy company in Turkey to
participate in the Carbon Disclosure Project and to obtain ISO 14064-1 Greenhouse Emission Standard Certification. In
2011, the Company received the “Carbon Disclosure Leadership Award” for Turkey; and with its performance in 2012,
it ranked the fourth among the top Carbon Disclosure Leaders in Turkey.
• The Company also holds ISO 14001 Environmental Management System, ISO 9001:2000 Quality Management System,
and OHSAS 18001 Occupational Health and Safety System certifications related to the protection of the environment.
• Zorlu Energy Group was the first in the energy sector to prepare a Sustainability Report in 2011. The second
Sustainability Report, issued by the Group in 2012, earned a ‘Level A’ rating from GRI, a first in Turkey’s energy sector.
Zorlu Enerji’s report was among the 24 ‘Level A’ reports from energy companies around the world.
• Evaluating the sustainability performance on the main axes of the environment, employees, stakeholders in the most
general sense, and social responsibility, the Company’s Sustainability Report was written based on the interviews
and studies conducted with senior and mid-level managers as well as the assessments of stakeholders, in light of the
systematic and internationally audited activities carried out at Zorlu Energy Group.
• The Sustainability Report, available in Turkish and English versions, is posted on the website at www.zorluenerji.com.tr.
• Another development in 2012 relating to corporate social responsibility was the “Zorlu Energy Group Volunteers”
initiative, the corporate volunteer organization of the Company. In 2013, the Company has undertaken efforts to train
and organize employee volunteers to develop social responsibility projects.
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Financial Information and Reports
PART IV- BOARD OF DIRECTORS
15. Structure and Composition of the Board of Directors
Member
Zeki Zorlu
Ali Akın Tarı
Olgun Zorlu
Selen Zorlu Melik
Bekir Cem Köksal
Hacı Ahmet Kılıçoğlu
Burak İsmail Okay
Duty
Chairman
Vice Chairman
Member
Member
Member
Member
Member
Term of Office
1 year
1 year
1 year
1 year
1 year
1 year
1 year
Type of Membership
Non-executive member
Independent member
Non-executive member
Non-executive member
Non-executive member
Independent member
Non-executive member
Zeki Zorlu - Chairman
(1939 - Denizli) Zeki Zorlu began his professional career in a family owned textiles company in Babadağ, Denizli. Opened
his first textiles store in Trabzon, Zeki Zorlu established Korteks Mensucat Sanayi ve Ticaret A.Ş. in 1976. In addition to
its textiles sector investments, Zorlu Group entered the energy sector in 1993; subsequently, the electronics and white
goods sector with Vestel, which the Group acquired in 1994; and the real estate sector in 2006. Today, Zorlu Group has
25,000 employees and 60 companies under its roof. Mr. Zorlu serves as the Co-Chairman of the Board of Directors at
Zorlu Holding as well as the Chairman of the Group companies operating in the textiles and energy sectors.
Ali Akın TARI - Vice Chairman
(1943 - Koruköy) Ali Akın Tarı graduated from Istanbul Law Faculty before starting his career as a Tax Inspector in 1972 at
the Ministry of Finance, where he went on to serve as Chief Tax Inspector, Vice-President of the Tax Inspectors Board and
Group Head of the Istanbul Tax Inspectors Board. He was appointed as a Board Member of the Banking Regulation and
Supervision Agency in 2001 and also elected as a Board Member of the Saving Deposits Insurance Fund in the same year.
He left the Banking Regulation and Supervision Agency when his period of duty expired in 2004, and was appointed as
a Consultant for the Ministry of Finance. Mr. Tarı became a member of the Board of Directors and the Audit Committee
of Dilerbank in 2008 and has continued to serve as a member of the Board of Directors of Dilerbank since 2011. Mr. Tarı,
who also holds the titles of Certified Public Accountant and Independent Auditor, serves as the Vice Chairman of the
Board of Directors of Zorlu Enerji Elektrik Üretim A.Ş., in addition to his positions as a Board Member at Vestel Elektronik
and Vestel Beyaz Eşya.
Olgun Zorlu - Board Member
(1965 - Trabzon) After completing his higher education in the United Kingdom, Olgun Zorlu began his professional
career in 1986, gaining management experience in the textiles companies of the Zorlu Group. In 1998, he began serving
as Board Member at Zorlu Holding. In addition to his current responsibilities as Board Member at Zorlu Enerji Elektrik
Üretim A.Ş., Mr. Zorlu also serves as Board Member at Zorlu Holding and its subsidiaries.
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Selen Zorlu Melik - Board Member
(1975 - Trabzon) Selen Zorlu Melik graduated from Uludağ University, Faculty of Economics and Administrative
Sciences, Department of Business Administration. She began her professional career at Denizbank in 1998. Following
her internship at Denizbank Bursa Branch, she joined the Management Trainee Program at the same bank in 1999.
After working in a number of positions at Denizbank headquarters, Mrs. Zorlu Melik attended a Marketing Certificate
Program at the University of California, Berkeley (USA) in 2001. Subsequently, she started to work at Korteks Yarn Plant
in 2002, and became a Board Member at the same Company in 2004. She has been serving as Vice President at Zorlu
Energy Group, Board Member at Zorlu Enerji Elektrik Üretim A.Ş., and also as Board Member at several Zorlu Group
companies since 2005. As of April 2012, Mrs. Zorlu Melik acts as Deputy President of Zorlu Energy Group.
Bekir Cem KÖKSAL - Board Member
(1967 - Ankara) Bekir Cem Köksal graduated from the Department of Mechanical Engineering at Boğaziçi University in
1988, and obtained a master’s degree from Bilkent University in 1990. He subsequently worked in the banking industry
between 1990 and 2001. In 1997, he was appointed as the Assistant General Manager at Denizbank, and in 2002 he
joined Vestel as Chief Financial Officer. Mr. Köksal currently serves as an Executive Board Member in charge of Finance at
Vestel and also serves as the Board Member at Zorlu Enerji Elektrik Üretim A.Ş..
Hacı Ahmet KILIÇOĞLU - Board Member
(1956 - Giresun) Hacı Ahmet Kılıçoğlu graduated with a Bachelor’s degree and Master’s degree in Economics from
the University of Essex. He started his professional career in 1979 at the Ministry of Industry and Technology. In 1980
he became an Assistant Specialist at Türkiye İş Bankası, and after working in the private sector for a couple of years,
Mr. Kılıçoğlu assumed administrative positions at the United Nations Development Program (UNDP) and the F-16
project. He then took office at Türk Eximbank where he worked in various positions. He later served as the CEO of the
bank and as a Board Member between 1998 and 2010. He has been serving as a Board Member at the Turkish Banks
Association for 12 years and was also elected as the President of the World EximBanks Union (The Berne Union). He also
served as Consultant to the President at the Islamic Development Bank and Vice Chairman at Denizbank. Having been
appointed as Board Member at Zorlu Enerji Elektrik Üretim A.Ş. in 2013, Mr. Kılıçoğlu also serves as Board Member at
Vestel Elektronik, Vestel Beyaz Eşya and Doğan Yayın Holding in addition to his Vice Presidency position at the Turkish
Education Association.
Burak İ. Okay - Board Member
(1967 - Ankara) Burak İ. Okay graduated from the Faculty of Law at Ankara University in 1990. After completing an
International Law Certificate Program in New York, he embarked on his professional career at Türkiye İş Bankası,
Department of Legal Consultancy. He later worked at Garanti Bankası, MNG Bank and Nortel Networks Netaş,
respectively, before joining Bener Law Firm as an executive. Mr. Okay joined Zorlu Group in 2006 and played an active
role in the structuring of the legal department that serves all Group companies. He continues to work as the Legal
Coordinator for Zorlu Group and has been a Board Member at Zorlu Enerji Elektrik Üretim A.Ş. since 2007.
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• The posts of the Chairman of the Board of Directors and the Chairman of the Executive Committee are held by two
separate individuals. The Chairman of the Board is Mr. Zeki Zorlu. The Chairman of the Executive Committee, Mr.
Murat Sungur Bursa, resigned from his duties on April 1, 2012; Mrs. Selen Zorlu Melik is currently acting as the Deputy
Chairman of the Executive Committee.
• Two independent Board member candidates were presented to the Nomination Committee prior to the 2012 General
Assembly Meeting. The report dated May 7, 2013, on whether the candidates fulfill the independence criteria was
presented to the Board of Directors; and as per the Board of Directors’ resolution numbered 2013/22, dated May 8,
2013, the Board decided to propose Mr. Ali Akın Tarı and Mr. Hacı Ahmet Kılıçoğlu to be elected as independent Board
members, for the approval of the shareholders at the General Assembly Meeting. Thereafter, at the Ordinary General
Assembly meeting for 2012, held on May 30, 2013, proposal for such memberships was accepted by the shareholders.
Declarations of independence of the candidates are provided hereinbelow:
“I hereby accept, undertake and declare that I have read and understood the Capital Markets Board’s Corporate
Governance Principles contained in the Communiqué Serial: IV, No: 56 regarding the Determination and
Implementation of Corporate Governance Principles of the Capital Markets Board, and that, in accordance with the
said legislation, I carry all of the criteria for Independent Board Membership, as listed in this principle and enclosed
hereto.”
• Board members Mr. Ali Akın Tarı and Mr. Hacı Ahmet Kılıçoğlu are independent members who meet the
independence criteria stated in the CMB’s Corporate Governance Principles. No circumstances occurred during the
reporting period to change the independence of the independent members.
• No restrictions are imposed on Board members’ undertaking one or more duties outside the Company.
16. Working Principles of the Board of Directors
• Agendas for Board meetings are set by the Chairman of the Board following his discussions with other Board
members, the CEO and/or the Chairman of the Executive Committee. Requests received from executive managers are
taken into consideration in setting the agenda items.
• During 2013, the Board of Directors convened for 56 meetings; of 56 total Board decisions, 5 were passed
unanimously, while 21 were passed with the unanimous consent of the meeting attendees.
• The Board of Directors convenes as frequently as required by the Company’s activities and at the call of either the
Chairman or the Vice Chairman, and makes decisions regarding the items on the agenda. Each Board member has one
vote at the Board meetings.
• In line with the Corporate Governance Principles, the Company has set up a secretariat under the Board of Directors.
The secretariat is responsible for keeping the minutes of the Board meetings and archiving them. The secretariat also
keeps Board members informed in a timely and simultaneous manner and delivers the agenda, related information
and pertinent reports to Board members at least one week in advance of each meeting.
• Detailed and plausible justifications for dissenting votes of Board members relating to differences in opinion that
may be voiced at Board meetings are entered into the record. In addition, justifications for dissenting votes cast by
independent members due to differences in opinion are disclosed to the public. However, to date, there has never
been an instance of differences in opinion voiced by either independent members or other members.
Financial Information and Reports
• The Company’s Board of Directors is composed of seven members in total. Three of the seven Board members are nonexecutive members, two are independent members and two are executive members.
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• No Board member, including the chairman, has weighted voting and/or vetoing rights. Each member, including the
Chairman, possesses an equal vote.
• Pursuant to the resolutions of the Board of Directors of Zorlu Enerji Elektrik Üretim A.Ş., No: 2012/34, dated October 1,
2012 and No: 2013/12, dated March 6, 2013, the significance threshold, which may require the approval of the Board
of Directors, and pertains to continuous and common transfer transactions of assets, services, and liabilities between
the Company and its related parties, has been set as either 0.5% of total assets or 3% of total sales revenue in the
last 12 months, as reported in the Company’s latest publicly disclosed financial statements, in accordance with CMB
regulations. All transactions exceeding this limit have been approved.
• During the accounting period ending on December 31, 2013, there have not been any related party transactions that
fall outside the scope of the Board of Directors’ resolutions No: 2012/34, dated October 1, 2012 and No: 2013/12,
dated March 6, 2013, and/or any important transactions within the scope of the Article 1.3.10 of the Corporate
Governance Principles.
17. Number, Structure and Independence of the Committees Established by the Board of Directors
• In line with the CMB’s Corporate Governance Principles, the Company has set up a Corporate Governance Committee,
Early Detection of Risk Committee and Audit Committee, which directly report to the Board. The duties of the
Nomination and Remuneration Committees are undertaken by the Corporate Governance Committee.
• Committee members Mr. Ali Akın Tarı and Mr. Hacı Ahmet Kılıçoğlu serve on more than one committee due to the
number of the Board members and committee structure requirements pursuant to CMB’s Corporate Governance
Principles.
Audit Committee
• The Audit Committee was set up pursuant to Article 3 of CMB’s Communiqué Serial X, No: 19, and is responsible
for the effective oversight of the Company’s financial and operational activities. The Committee operates under the
Board of Directors and its duties include the auditing of the Company’s accounting and reporting system, the auditing
and public disclosure of financial statements and overseeing the operation and the efficiency of the internal control
system.
• In accordance with the CMB’s Communiqué on Determination and Application of Corporate Governance Principles,
the Working Principles of the Audit Committee were revised and approved at the Board of Directors’ meeting on June
29, 2012. The revised principles were disclosed to shareholders via the Public Disclosure Platform and the Company
website.
• The Audit Committee is structured in accordance with the CMB’s Corporate Governance Principles and consists of at
least two members.
• The Chairman of the Committee has been selected from among the Company’s independent Board members
and attention has been given to the chair meeting specific qualifications. When appointing the Audit Committee
Chairman, care is paid to select an individual who has previously served in a similar position, has the knowledge and
experience needed to analyze financial statements, is versed in accounting standards, and is highly qualified.
• Both members of the Committee have been selected from among the Company’s independent Board members. The
Chairman of the Audit Committee is Mr. Ali Akın Tarı, and the other member is Mr. Hacı Ahmet Kılıçoğlu.
• In principle, the Audit Committee must meet at least four times a year, being at least once in each quarter.
• The management secretariat is responsible for keeping and archiving the minutes and the resolutions of the Audit
Committee meetings.
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71
-monitored the Company’s financial and operational activities;
-monitored existing and potential risks;
-monitored the accuracy, legal compliance and transparency of financial statements and approved them;
-followed-up on the efficiency and performance of the independent audit activity;
-supervised the internal audit function and its effectiveness;
-held meetings with independent auditors;
-monitored the effectiveness and adequacy of the internal control system;
-assessed the findings obtained on the internal control system and reported to the Board of Directors;
-reviewed and approved internal control and internal audit reports.
Corporate Governance Committee
• The Corporate Governance Committee has been set up in line with the CMB’s Communiqué on the Corporate
Governance Principles. The Committee is responsible for monitoring the Company’s compliance with Corporate
Governance Principles, making the necessary improvements for compliance and for offering its recommendations to
the Board of Directors in this area.
• Pursuant to CMB’s Communiqué on Determination and Implementation of Corporate Governance Principles, the
“Working Principles of the Corporate Governance Committee” were revised and approved at the Board of Directors’
meeting on June 29, 2012. The revised principles were disclosed to shareholders via the Public Disclosure Platform and
the Company’s website.
• The Committee consists of at least two members selected from among the Company’s non-executive Board members.
The Chairman of the Corporate Governance Committee is Mr. Ali Akın Tarı, who has been elected from among
independent members; the other Committee member is Mr. Burak İsmail Okay.
• In principle, the Corporate Governance Committee shall meet at least three times a year.
• In line with the working principles put into writing in detail, the Corporate Governance Committee has performed the
following activities in 2013:
-Within the scope of the Communiqué on the Determination and Application of Corporate Governance Principles,
determined the compliance studies to be implemented by the Company and supervision of such studies;
-reviewed the activities of the Investor Relations Department and presented recommendations in this context;
-determined and evaluated the candidates suitable for the Board of Directors;
-presented recommendations pertaining to the structure and effectiveness of the Board of Directors;
-assessed the performances of Board members and senior executives.
Early Detection of Risk Committee
• Pursuant to the Board of Directors’ resolution dated February 19, 2013, the Early Detection of Risk Committee was
set up in order to identify and manage potential risks that may threaten the Company’s existence, development and
continuity, and to implement the necessary measures against such risks, in accordance with the CMB’s Communiqué
on Determination and Application of Corporate Governance Principles, Turkish Commercial Code and the Company’s
Articles of Association.
Financial Information and Reports
• The Committee carries out its activities in line with the working principles put into writing in detail. In 2013, the Audit
Committee has carried out the following activities:
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• The working principles of the Committee were disclosed to shareholders via the Public Disclosure Platform and the
Company’s website.
• The Early Detection of Risk Committee consists of at least two members of the Board of Directors. If the Committee
comprises two members, then both members must be selected from among the Company’s non-executive Board
members; if it comprises more than two members, then the majority of the members must be selected from among
the Board’s non-executive members. The Chairman of the Early Detection of Risk Committee is Mr. Hacı Ahmet
Kılıçoğlu, who has been elected from among independent members; the other Committee member is Mr. Olgun Zorlu.
-In principle, Early Detection of Risk Committee shall meet at least 3 times a year.
-The activities carried out by the Committee in 2013, in line with the working principles put into writing in detail, are
presented below:
-As a result of the risk inventory and risk management researches, risk reports were prepared and submitted to the
Committee in order to ensure early detection of risks that may jeopardize the Company’s existence, development
and continuity, adoption of necessary measures regarding the detected risks and management of risk.
-Sector and company based risks contained in the risk reports were grouped under 9 main risk headings (External
Environment, Operational, Authorization, Information Technology and Technology, Honesty/Integrity, Financial,
Process/Operational, Reporting and Strategic) according to COSO (The Committee of Sponsoring Organizations of
the Treadway Commission) risk taxonomy.
-Risks are evaluated in two different ways, namely, with (residual risk) and without (natural risk) taking into account
the efficiency performance of the existing control and precaution activities.
-Natural and residual risks contained in risk reports are evaluated based on a 4-tier scale (Acceptable, Acceptable with
Control, Undesired, Unacceptable).
-As a result of these assessments, it was seen that risks were generally gathered under the main headings of External
Environment, Operational, Financial and Strategic.
18. Risk Management and Internal Control Mechanism
• The Risk Management Department was established within Zorlu Holding in order to identify and manage potential
risks that may threaten the Company’s existence, development and continuity, and to implement the necessary
measures against such risks. The Company’s Board of Directors has given authority and responsibility to the Risk
Management Department for identifying existing and potential risks, and for determining the necessary policies to
manage such risks.
• The Company uses the SAP system for the purposes of internal control. The SAP system enables running/recording
of all integrated work processes on computer systems at the Company, thus increasing the Company’s speed and
productivity. The system also gives employees and managers access to all kinds of information and reports that
concern them in line with their respective authorization level. In addition, a program has been created on the
Company’s intranet system to monitor problems related to internal control, which is effectively operated. Any issue
that arises at any level is referred to the relevant manager and resolved.
• The Company’s internal control systems are evaluated through a risk-based approach by taking into consideration risks
that emerge during risk management analysis and/or internal audit activities as well as the actions for risk reduction.
The risk management system is used to identify financial, operational and compliance related risks, to measure risks
at regular intervals, and to assess the level of risks, while the internal control mechanism is used for the management
of risks. The Internal Audit Department regularly reviews the efficacy and efficiency of these systems in line with the
approved annual plans, and then reports any required actions to the Board of Directors.
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73
• The Board of Directors takes special care to obtain the opinions and suggestions of relevant departments while setting
the Company’s strategic goals. Suggestions relating to strategic goals are reported to the Board of Directors and work
is undertaken to implement these goals as soon as possible. The extent to which the Company’s goals are attained is
measured during the quarterly and year-end reporting periods by monitoring the results on the basis of operations.
• Once a year, the Board of Directors conducts an annual review of the degree to which the Company has accomplished
its objectives, as well as its activities and past performance.
20. Financial Benefits
• In accordance with Corporate Governance Principles, the Company’s “Remuneration Policy” relating to Board
members and senior executives was put into writing and approved by the Board of Directors’ decision dated May 9,
2012 and numbered 2012/15 and the policy was then disclosed to shareholders at the Ordinary General Assembly
Meeting for 2011 dated May 31, 2012 as well as via the Company’s website.
• Attendance fees that are paid to Board members are determined at the annual General Assembly Meeting. The
attendance fees of Board members are determined by taking into consideration whether they are independent
members, executive or non-executive members, the level of responsibility taken in decision making, level of
knowledge, skills, competency and experience that they must have, and the amount of time they spare for the
Company. Additionally, the fees paid to Board members of similar companies in the sector are referred to for
benchmarking purposes.
• The Company paid its Board members a total gross sum of TL 90,000 in attendance fees in 2013, commensurate with
the practices of peer companies in the sector. The amounts for 2014 will be decided at the 2013 Ordinary General
Assembly Meeting. No other benefits are provided to Board members.
• Board members are not entitled to any kind of performance based rewards.
• The salaries of the Company’s senior executives are determined and approved by the Board of Directors. In addition,
senior executives may be entitled to bonus payments at year-end, in line with the Company’s financial performance
and their respective contribution to this performance. The amounts of such bonus payments are determined by the
Board of Directors. In determining the “Remuneration Policy for Senior Executives,” several factors are taken into
consideration, including the structure of the sector the Company operates in, competition, salary surveys, ongoing
production and sales activities, extensiveness of operations, international operations, the structure of subsidiaries and
their weight in total operations, the level of knowledge required to sustain operations, and the number of employees.
• The financial benefits paid to the Chairman and members of the Company’s Board of Directors, CEO, general
coordinators and assistant general managers, are included in the footnotes to financial statements. The Company’s
salaries and benefits paid during the fiscal year which ended on December 31, 2013, amounted to TL 1,367 thousand.
(January 1-December 31, 2012: TL 2,164 thousand).
• During 2013, the Company has extended no loans or credit to any Board member or manager, nor has it lent money
under the name of personal loans through a third party or given any guarantees such as suretyship in their favor.
Financial Information and Reports
19. Company’s Strategic Goals
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Dividend Distribution Proposal
Due to the TL 305,699,000 loss realized in the financial statements prepared as per the Capital Market Law and related
Communiqués and the TL 111,390,000 loss realized in the financial statements prepared as per the Turkish Commercial
Code and Tax Procedure Law, the Board of Directors of Zorlu Enerji Elektrik Üretim A.Ş. decided to propose no dividend
payment for the fiscal year 2013 in the Annual General Assembly meeting.
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In accordance with the Turkish Commercial Code (TCC) provisions, our Company is an affiliated Company of Zorlu
Holding A.Ş. Group of Companies for the operating year 2013. Pursuant to the Article 199 of TCC, Board of Directors
of our Company gave the following declaration regarding the Affiliation Report it prepared on its relations with the
controlling company or an affiliated company of the controlling company.
Within the scope of the conditions and circumstances known to us about all the transactions conducted between
January 1 and December 31, 2013, we have evaluated our Company’s legal transactions on behalf of the controlling
company or its affiliates and all measures taken or avoided to benefit the controlling company or its affiliates under
Zorlu Holding A.Ş.’s direction during the accounting year 2013. As a result of this evaluation, we hereby declare that the
Company did not suffer any losses due to such transactions in the accounting year 2013, and that there are no measures
required to be taken in this regard.
Financial Information and Reports
Conclusion of the Affiliation Report
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Zorlu Enerji Elektrik Üretim A.Ş.
Consolidated Financial Statements for the
Period 1 January - 31 December 2013
Together with Auditor’s Report
Zorlu Enerji 2013 Annual Report
Zorlu Enerji 2013 Annual Report
77
To the Board of Directors of Zorlu Enerji Elektrik Üretim A.Ş.
1. We have audited the accompanying consolidated financial statements of Zorlu Enerji Elektrik Üretim A.Ş. and
its subsidiaries, which comprise the consolidated balance sheet as at 31 December 2013 and the consolidated
statements of income, comprehensive income, changes in equity and cash flows for the year then ended, and notes,
comprising a summary of significant accounting policies and other explanatory information.
Management’s responsibility for the consolidated financial statements
2. Management is responsible for the preparation and fair presentation of these consolidated financial statements in
accordance International Financial Reporting Standards and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor’s responsibility
3. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We
conducted our audit in accordance with International Standards on Auditing. Those standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and
fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Financial Information and Reports
Independent Auditor’s Report
78
Zorlu Enerji 2013 Annual Report
Independent Auditor’s Report
Opinion
4. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
financial position of Zorlu Enerji Elektrik Üretim A.Ş. and its subsidiaries as at 31 December 2013, and their financial
performance and cash flows for the year then ended in accordance with International Financial Reporting Standards.
Başaran Nas Bağımsız Denetim ve
Serbest Muhasebeci Mali Müşavirlik A.Ş.
a member of
PricewaterhouseCoopers
Ediz Günsel, SMMM Partner
Istanbul, 14 March 2014
Başaran Nas Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. a member of PricewaterhouseCoopers
BJK Plaza, Süleyman Seba Caddesi No: 48 B Blok Kat 9 Akaretler Beşiktaş 34357 İstanbul - Turkey
www.pwc.com/tr Telephone: +90 (212) 326 6060 Facsimile: +90 (212) 326 6050
Zorlu Enerji 2013 Annual Report
79
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
ORGANISATION AND NATURE OF OPERATIONS
NOTE 2
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
NOTE 3
SEGMENT REPORTING
NOTE 4
CASH AND CASH EQUIVALENTS
NOTE 5
FINANCIAL LIABILITIES
NOTE 6
TRADE RECEIVABLES AND PAYABLES
NOTE 7
OTHER RECEIVABLES AND PAYABLES NOTE 8
OTHER ASSETS AND LIABILITIES
NOTE 9
FINANCIAL ASSETS
NOTE 10
ASSOCIATES
NOTE 11
PROPERTY, PLANT AND EQUIPMENT NOTE 12
INTANGIBLE ASSETS
NOTE 13
PROVISIONS, COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES NOTE 14
DERIVATIVE FINANCIAL INSTRUMENTS
NOTE 15
PROVISIONS FOR EMPLOYMENT BENEFITS NOTE 16
EQUITY
NOTE 17
TAXES ON INCOME
NOTE 18
REVENUE AND COST OF SALES
NOTE 19
EXPENSES BY NATURE
NOTE 20
OTHER OPERATING INCOME AND EXPENSE
NOTE 21
SHARE OF PROFIT OF ASSOCIATES
NOTE 22
FINANCIAL INCOME AND EXPENSES
NOTE 23
TRANSACTIONS AND BALANCES WITH RELATED PARTIES
NOTE 24
EARNING/(LOSS) PER SHARE
NOTE 25
DISCONTINUED OPERATIONS
NOTE 26
EVENTS OCCURRING AFTER THE REPORTING PERIOD
PAGE
80
82
83
84
86
87-151
87
89
112
114
115
118
120
121
122
122
123
125
126
130
131
132
134
137
138
139
140
140
141
147
147
151
Financial Information and Reports
Index to the Consolidated Financial Statements
Zorlu Enerji 2013 Annual Report
80
Zorlu Enerji Elektrik Üretim A.Ş.
Consolidated Balance Sheets
at 31 December 2013 and 2012
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Notes
31 December 2013
31 December 2012
213,833
187,379
6, 23
44,569
71,564
6,515
29,361
7
7, 23
14
8
4,178
173,514
78,707
6,458
288,652
1,588
61,518
586,365
581,471
2,566,830
8,591
94,800
2,963,100
14,634
83,131
1,241
30,583
2,112,562
8,591
42,894
2,061,254
14,028
100,667
25,067
30,479
Total Non-Current Assets
5,762,910
4,395,542
Total Assets
6,349,275
4,977,013
ASSETS
Current Assets:
Cash and cash equivalents
Trade receivables
- Other trade receivables
- Due from related parties
Other receivables
- Other receivables
- Due from related parties
Derivative financial instruments
Other current assets
4
6
Total Current Assets
Non-Current Assets:
Long term other trade receivables from related parties
Financial assets
Associates
Property, plant and equipment
Intangible assets
Goodwill
Deferred tax asset
Other non-current assets
7, 23
9
10
11
12
17
8
The accompanying notes form an integral part of these consolidated financial statements.
Zorlu Enerji 2013 Annual Report
81
Consolidated Balance Sheets
at 31 December 2013 and 2012
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Notes
31 December 2013
31 December 2012
1,408,135
3,006
890,114
2,358
134,976
73,348
470
278,711
19,452
-
582
56,475
733
7,754
5,261
220,459
70,678
602
3,550
1,685,479
1,491,185
5
5
2,404,051
643
1,771,987
2,858
23
7, 23
17
15
1,112
1,366,500
102,512
1,303
2,381
1,056,768
76,997
1,179
Total Non-Current Liabilities
3,875,009
2,913,282
Total Liabilities
5,560,488
4,404,467
610,948
546,954
67
(6,514)
149
48,391
(23,788)
(394,128)
610,948
67
(4,822)
23,797
(63,361)
782,079
566,629
6,708
5,917
788,787
572,546
6,349,275
4,977,013
LIABILITIES
Current Liabilities:
Financial liabilities
- Bank borrowings
- Finance lease liabilities
Trade payables
- Other trade payables
- Due to related parties
Taxes on income
Other payables
- Other payables
- Other payables to related parties
Derivative financial instruments
Provisions
Other current liabilities
5
5
6
6, 23
7, 23
14
13
8
Total Current Liabilities
Non-Current Liabilities:
Financial liabilities
-Bank borrowings
-Finance lease liabilities
Trade payables
- Other trade payables
- Due to related parties
Other payables to related parties
Deferred tax liability
Provisions for employment benefits
EQUITY
Share capital
Revaluation fund
Share premium
Hedge reserves
Actuarial gain
Currency translation adjustment
Other reserves
Accumulated deficit
16
16
Equity attributable to equity holders of the parent
Non-Controlling Interests
Total Equity
Total Liabilities and Equity
Provisions, contingent assets and liabilities
13
The accompanying notes form an integral part of these consolidated financial statements.
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Zorlu Enerji 2013 Annual Report
82
Zorlu Enerji Elektrik Üretim A.Ş.
Consolidated Statements of Income
for the Years Ended 31 December 2013 and 2012
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Notes
2013
2012
18
18, 19
636,237
(632,891)
504,703
(519,813)
3,346
(15,110)
(24,677)
(1,608)
29,581
(31,197)
(39,231)
(398)
804,242
(187)
(24,555)
(749,316)
(3,128)
229,371
(617,108)
117,430
(264,039)
(415,420)
602,707
(1,235)
88,276
(19)
(7,230)
(328,379)
595,458
-
(23,000)
(328,379)
572,458
(330,767)
2,388
588,103
(15,645)
(328,379)
572,458
(0,0066)
0,0115
(0,0066)
-
1,1909
(0,046)
CONTINUING OPERATIONS
Revenue
Cost of sales (-)
GROSS PROFIT/(LOSS)
General administrative expenses (-)
Marketing and selling expenses (-)
Other operating income
Other operating expense (-)
19
19
20
20
OPERATING (LOSS)
Share of loss of associates
Financial income
Financial expenses (-)
21
22
22
(LOSS)/INCOME BEFORE INCOME TAX
Current income tax expense
Deferred tax income/(expense)
17
17
PROFIT/(LOSS) FROM CONTINUING OPERATIONS FOR THE YEAR
Discontinued operations
Loss from discontinued operations (net of income tax)
25
NET (LOSS)/INCOME FOR THE YEAR
Net (loss)/income attributable to:
Equity holders of the parent
Non-controlling interests
(Losses)/earnings per 1,000 shares
(Losses)/earnings from continuing operations
(Losses)/earnings from discontinued operations
24
The accompanying notes form an integral part of these consolidated financial statements.
Zorlu Enerji 2013 Annual Report
83
Consolidated Statements of Comprehensive Income
for the Years Ended 31 December 2013 and 2012
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Notes
2013
2012
(328,379)
572,458
683,693
186
(2,115)
24,594
(136,353)
(6,069)
(76,389)
1,214
Other comprehensive loss/(income) (after tax)
570,005
(81,244)
Total comprehensive income
241,626
491,214
Equity holders of the parent
Non-controlling interests
239,238
2,388
506,892
(15,678)
Total comprehensive income
241,626
491,214
239,238
-
529,892
(23,000)
239,238
506,892
(Loss)/income for the year
Revaluation fund
Changes in actuarial gains on employment benefit obligations
Hedge reserves
Changes in currency translation adjustments
Deferred income tax related to other comprehensive income
2.6
Total comprehensive (loss)/income attributable to:
Total comprehensive (loss)/income attributable to shareholders
arises from:
Continuing operations
Discontinued operations
Total comprehensive (loss)/income
25
The accompanying notes form an integral part of these consolidated financial statements.
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Zorlu Enerji 2013 Annual Report
84
Zorlu Enerji Elektrik Üretim A.Ş.
Consolidated Statements of Changes in Equity
for the Years Ended 31 December 2013 and 2012
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Attributable to equity holders of the parent
Share capital
Share
premium
Hedge
reserve
Actuarial
gains
Currency
translation
adjustment
1 January 2012
392,613
-
-
-
100,186
Cash increase
Cash increase in subsidiaries share capital
Share premium
Changes in minority interest
Total comprehensive income
218,335
-
67
-
(4,822)
-
111,363
31 December 2012
610,948
67
(4,822)
-
211,549
1 January 2013 (previously reported)
610,948
67
(4,822)
-
211,549
-
-
-
-
(187,752)
610,948
67
(4,822)
-
23,797
-
-
(1,692)
149
24,594
610,948
67
(6,514)
149
48,391
Effect of restatements (*)
1 January 2013
Change in non-controlling interest
Transaction with minority interest (**)
Total comprehensive loss
31 December 2013
(*)
Refer to Note 2.4.
The transaction relates to acquisitions of shares of Zorlu Jeotermal Enerji Elektrik Üretim A.Ş. ve Zorlu Hidroelektrik Enerji Üretim A.Ş which are
subsidiaries of the Group. (Note 1)
(**)
(***)
Note 2.6
The accompanying notes form an integral part of these consolidated financial statements.
Zorlu Enerji 2013 Annual Report
85
Financial Information and Reports
Attributable to equity holders of the parent
Other reserves
Revaluation fund (***)
Accumulated deficit
Non- controlling
interests
Total equity
-
-
(636,029)
6,159
(137,071)
-
-
(15,435)
400,351
1
15,435
(15,678)
218,335
1
67
491,214
-
-
(251,113)
5,917
572,546
-
-
(251,113)
5,917
572,546
-
-
187,752
-
-
-
-
(63,361)
5,917
572,546
(23,788)
-
546,954
(330,767)
(1,597)
2,388
(1,597)
(23,788)
241,626
(23,788)
546,954
(394,128)
6,708
788,787
Zorlu Enerji 2013 Annual Report
86
Zorlu Enerji Elektrik Üretim A.Ş.
Consolidated Statements of Cash Flows
for the Years Ended 31 December 2013 and 2012
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Notes
31 December 2013
31 December 2012
(415,420)
-
602,707
(46,158)
135,823
(217,168)
330,502
7,937
660,401
(12,022)
653
131
17,536
(2,307)
(1,597)
6,585
511,054
132,987
(31,907)
232,823
774
(205,089)
1,042
345
(4)
(209)
(7,267)
(756,016)
(1,484)
195,235
117,779
(88,375)
(187,465)
(17,293)
(93,151)
89,772
4,204
(593)
(765)
(380)
3,940
72,757
(60,291)
(34,223)
(220,459)
169,058
(15,446)
(1,603)
217,008
31,512
(363,417)
29,150
(51,906)
-
(199,396)
2,587
39,748
(5,261)
(334,267)
(202,070)
356,224
2,053,862
(1,875,465)
(1,692)
(23,788)
43,889
(356,845)
218,335
1
67
565,155
(441,251)
31,907
(211,928)
196,185
162,286
27,020
29,498
31,476
-
Cash flows from operating activities:
Profit/(Loss) before taxation from continuing operations
Profit/(Loss) before taxation from discontinued operations
Depreciation and amortisation
Interest income
Interest expense
Uneraned credit finance expense
Unrealized foreign exchange losses on loans
Income from financial derivative instruments
Change in provision for employment termination benefits
Other provisions
Impairment on assets
Profit from sale of tangible fixed assets
Provision released from unconsolidated subsidiaries
Profit on sale of subsidiaries
Provisions (release) for doubtful receivables
Currency translation differences
Net cash generated from operating activities before changes in operating assets and liabilities
19
22
22
22
Changes in trade receivables
Changes in other receivables
Changes in other assets
Changes in trade payables
Changes in other liabilities
Changes in other payables
Changes in derivative instruments
Taxes paid
Termination benefits paid
Net cash generated from operating activities
Cash flows from investing activities:
Purchase of property plant and equipment and intangible assets
Proceeds from sale of property, plant and equipment and intangible assets
Changes in financial investments
Cash outflow from sale of subsidiaries
Net cash used in investing activities
Cash flows from financing activities:
Cash increase in share capital
Cash increase in subsidiaries share capital
Proceeds from issue of share capital (share premium)
Proceeds from bond issue
Proceeds from bank borrowings
Repayment of bank borrowings
Changes in hedging reserve
Transaction with non-controlling interest
Interest received
Interest paid
Net cash generated from financing activities
Net increase in cash and cash equivalents
Change in restricted cash
Cash and cash equivalents at the beginning of the period
4
107,903
68,469
Cash and cash equivalents at the end of the period
4
164,421
99,945
The accompanying notes form an integral part of these consolidated financial statements.
Zorlu Enerji 2013 Annual Report
87
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
NOTE 1 - ORGANISATION AND NATURE OF OPERATIONS
Zorlu Enerji Elektrik Üretim A.Ş. (“the Company” or “Zorlu Enerji”) and its subsidiaries (collectively referred to as the
“Group”) is engaged in establishing, renting and operating facilities of electrical energy production plant, producing
electricity and trading electricity to the customers. The Company was established by Zorlu Holding A.Ş. and Korteks
Mensucat Sanayi ve Ticaret A.Ş. in 1993.
The Company is registered in Turkey and its registered address is as follows;
Nilüfer Organize Sanayi Bölgesi, Pembe Caddesi, No: 13 Bursa/Turkey
The Company is registered to the Capital Markets Board (“CMB”), and its shares are publicly traded in Borsa Istanbul A.Ş.
(“BIST”) since 2000. As of 31 December 2013, 32% of its shares are open for trading (31 December 2012: 32 %).
The subsidiaries of the Company, their nature of business and registered addresses are presented as below (Zorlu Enerji
and its subsidiaries and associates are called as “Group”).
Subsidiaries
Nature of business
Registered address
Rotor Elektrik Üretim A.Ş. (“Rotor”)
Zorlu Hidroelektrik Enerji Üretim A.Ş.(“Zorlu Hidroelektrik”)
Zorlu Jeotermal Enerji Elektrik Üretimi A.Ş.(“Zorlu Jeotermal”)
Zorlu Enerji Pakistan Ltd. (“Zorlu Enerji Pakistan”)
Zorlu Rüzgar Enerjisi Elektrik Üretimi A.Ş. (“Zorlu Rüzgar”)
Zorlu Doğal Elektrik Üretimi A.Ş. (“Zorlu Doğal”)
Nemrut Jeotermal Elektrik Üretimi A.Ş. (“Nemrut”)
Zorlu Kumpınar Enerji Üretim A.Ş. (“Kumpınar”)
Zorlu Aliağa Enerji Üretim A.Ş. (“Aliağa”)
Zorlu Kıyıköy Enerji Üretim A.Ş. (“Kıyıköy”)
Zorlu Soma Enerji Üretim A.Ş. (“Soma”)
Electricity production
Electricity production
Electricity production
Electricity production
Electricity production
Electricity production
Electricity production
Electricity production
Electricity production
Electricity production
Electricity production
Avcılar/Turkey
Avcılar/Turkey
Avcılar/Turkey
Pakistan
Avcılar/Turkey
Avcılar/Turkey
Avcılar/Turkey
Avcılar/Turkey
Avcılar/Turkey
Avcılar/Turkey
Avcılar/Turkey
Associates
Nature of business
Registered address
Solad Energy Ltd.
Dorad Energy Ltd.
Ezotech Ltd.
Electricity production
Electricity production
Electricity trading
Israel
Israel
Israel
In accordance with the Board of Directors meeting dated 1 March 2013, Bundoran and ICFS are to be liquidated and
these transactions will be in accordance with the laws of the countries to which they are subject. Liquidation of ICFS and
Bundoran has been completed on 30 April 2013 and 15 August 2013, respectively.
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
88
Zorlu Enerji 2013 Annual Report
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
EMRA (“Energy Market Regulatory Authority”) approved the capital contribution of Zorlu Doğal, in which the Group has
%100 shareholding, from TL 220,000,000 to TL 260,000,000 where the capital contribution will be paid by converting
current account receivable into equity as of 17 May 2013.
A joint stock company titled “Nemrut Jeotermal Elektrik Üretimi Anonim Şirketi” which has a total capital of TL
50,000 and in which the Group has 75% shareholding and Rarik-Turkison Enerji İnşaat Maden Proje Ltd. Şti. has 25%
shareholding, has been incorporated on 2 August 2013.
EMRA has approved the purchase of the shares of Zorlu O&M Enerji Tesisleri İşletme ve Bakım Hizmetleri A.Ş., Zorlu
Endüstriyel ve Enerji Tesisleri İşletme ve Bakım Hizmetleri A.Ş., Zorlu Elektrik Enerjisi İthalat İhracat ve Toptan Ticaret A.Ş.
ve Zorlu Doğal Gaz İthalat İhracat ve Toptan Ticaret A.Ş. in Zorlu Jeotermal Enerji Elektrik Üretimi A.Ş., in which the Group
had 73% shareholding, by the Group. Share transfer is realized pursuant to this approval and Zorlu Enerji Elektrik Üretim
A.Ş. has become the sole shareholder of Zorlu Jeotermal Enerji Elektrik Üretim A.Ş.
Bitlis Special Provincial Administration has given to Nemrut Jeotermal Elektrik Üretimi A.Ş., in which the Company has 75
% shareholding, the “Geothermal Resources and Natural Mineral Waters Operating License” for a period of 30 years and
the “Geothermal and Natural Resources Exploration Licence” until the date of 3 June 2014 to be valid in the boundaries
of Tatvan district of Bitlis. Relevant licenses have entered into force on 23 September 2013.
With regard to the Board of Directors Resolution dated 18 September 2013, it has been agreed unanimously that all of
3,270,000 shares with the nominal value of TL 3,270,000 belonging to Zorlu Holding A.Ş. and all of 3,270,000 shares
with the nominal value of TL 3,270,000 belonging to Zorlu O/M Enerji Tesisleri İşletme ve Bakım Hizmetleri A.Ş. and all of
3,270,000 shares with the nominal value of TL 3,270,000 belonging to Zorlu Endüstriyel ve Enerji Tesisleri İnşaat Ticaret
A.Ş. and all of 6,540 shares with the nominal value of TL 6,540 belonging to Zorlu Dış Ticaret A.Ş. in Rotor, one of the
subsidiaries of the Group, will be taken over from the other shareholders and the relevant transactions will be made for
such transfer.
Pursuant to the material disclosure dated 1 November 2013, performance and security tests of the second and last
phase having a capacity of 20 MW of the fully constructed Kızıldere II project with the installed capacity of 80 MW which
has been built in Sarayköy district of Denizli by Zorlu Doğal Elektrik Üretimi A.Ş., the Group’s 100% subsidiary, has been
successfully completed and after official acceptance of the Ministry the power plant started being operated with full
capacity as of 31 October 2013.
Pursuant to the material disclosure dated 8 November 2013, Zorlu Hidroelektrik Enerji Üretim A.Ş, one of the Group’s
subsidiaries, has applied to the tender for the investment to Altıparmak Dam and Hidroelectric Power Plant (“HEPP”)
Project located in Yusufeli district of Artvin on 8 November 2013. The power plant with the installed capacity of 74.75
MW is planned to generate 255,760,000 kWh energy and construction period is determined as 3 years. The tender is
organized by State Hydrolic “SHW”) for issuance of licence valid for 49 years.
Following the material disclosure dated 28 November 2013, four joint stock company titled “Zorlu Kıyıköy Enerji Üretim
Anonim Şirketi”, “Zorlu Aliağa Enerji Üretim Anonim Şirketi”, “Zorlu Kumpınar Enerji Üretim Anonim Şirketi”, “Zorlu
Soma Enerji Üretim Anonim Şirketi” which have an each total capital of TL 50,000 and in which our company has 100 %
shareholding, have been incorporated and said joint stock companies have been registered and recorded respectively
on 22 November 2013 with a trade registry number of 891360; on 21 November 2013 with a trade registry number of
891234; on 21 November 2013 with a trade registry number of 891316 and on 22 November 2013 with a trade registry
number of 891375.
Zorlu Enerji 2013 Annual Report
89
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
2.1 Financial Reporting Standards
Principles Governing the Preparation of Consolidated Financial Statements
These consolidated financial statements of the Company have been prepared in accordance with International
Financial Reporting Standards (“IFRS”). IFRS comprise accounting standards issued by the International Accounting
Standards Board (“IASB”) and its predecessor body and interpretations issued by the International Financial Reporting
Interpretations Committee (“IFRIC”) and its predecessor body. The consolidated financial statements are based on the
historical cost.
The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise judgment in the process of applying the Group’s accounting policies. The areas
involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the
consolidated financial statements are disclosed in Note 2.6.
The Group has also issued the consolidated financial statements prepared in accordance with Communiqué Serial II,
No:14.1, “Principles of Financial Reporting in Capital Markets” (“the CMB consolidated financial statements”) published
in the Official Gazette numbered 28676 on 13 June 2013. These consolidated financial statements differ from the CMB
consolidated financial statements with respect to the accounting method of combination of entities under common
control and the presentation differences due to CMB reporting format requirements.
2.2 Basis of Consolidation
a) The consolidated financial statements include the accounts of the parent company, Zorlu Enerji, and its Subsidiaries
and associates on the basis set out in sections (b) to (c) below. The financial statements of the companies included in
the scope of consolidation have been prepared at the date of the consolidated financial statements and have been
prepared in accordance with IFRS by applying uniform accounting policies and presentation. The results of operations of
Subsidiaries are included or excluded from their effective dates of acquisition or disposal respectively.
b) Subsidiaries are companies in which Zorlu Enerji has the power to control the financial and operating policies for
the benefit of itself, either (1) through the power to exercise more than 50% of voting rights related to shares in the
companies as a result of shares owned directly and/or indirectly by itself or (2) although not having the power to
exercise more than 50% of the voting rights, through the exercise of actual dominant influence over the financial and
operating policies.
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Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The table below sets out all Subsidiaries and demonstrates the proportion of ownership interest as of 31 December
2013 and 31 December 2012:
Subsidiary
Direct and indirect ownership interest
by the Company and its Subsidiaries (%)
31 December 2013
31 December 2012
Zorlu Hidroelektrik (1)
Zorlu Jeotermal (1)
Zorlu Enerji Pakistan (1)
Zorlu Rüzgar (1)
Zorlu Doğal (1)
Kumpınar (1)
Aliağa (1)
Kıyıköy (1)
Soma (1)
Rotor (1)
Yeni Gürsöğüt Enerji Elektrik Üretim A.Ş. (2)
Nemrut (1)
Bundoran (3)
ICFS (3)
(1)
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
96.73
89.00
75.00
-
99.99
73.00
100.00
85.00
100.00
96.73
89.00
100.00
100.00
The financial statements of subsidiaries are consolidated on a line-by-line basis.
Although the Company has the power to exercise more than 50% of the voting rights, the Subsidiaries are excluded from the scope of consolidation on
the grounds of materiality. These subsidiaries have been classified and accounted for as financial assets in the consolidated financial statements with a
carrying value of their initial acquisition costs less impairment, if any.
(2)
(3)
Liquidation of Bundoran and ICFS has been completed on 30 April 2013 and 15 August 2013, respectively.
Subsidiaries are consolidated from the date on which the control is transferred to the Group and are deconsolidated
from the date that the control ceases. Where necessary, accounting policies for subsidiaries have been changed to
ensure consistency with the policies adopted by the Group.
Carrying values of the subsidiaries’ shares held by the Company are eliminated against the related equity of subsidiaries.
Intercompany transactions and balances between Zorlu Enerji and its subsidiaries are eliminated on consolidation.
Dividends arising from shares held by the Company in its subsidiaries are eliminated from income for the period and
equity, respectively.
c) Associates are all entities over which the Group has significant influence but not control, generally accompanying
a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the
equity method of accounting.
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Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The table below sets out all associates and demonstrates the proportion of ownership interest as of 31 December 2013
and 2012:
Associates
Direct and indirect ownership interest
by the Company and its Associates (%)
31 December 2013
31 December 2012
Solad Energy Ltd. (2)
Dorad Energy Ltd. (1)
Ezotech Ltd. (2)
(1)
42.15
25.00
42.15
42.15
25.00
42.15
Financial statements of the Company are consolidated with the method of equity accounting (Note 10).
Despite the fact that the Group has a major voting right (but no control) in such associates, that do not have importance on consolidated financial
statements, are carried at cost less any provision for impairment (Note 9).
(2)
d) The minority shareholders’ share in the net assets and results of subsidiaries for the year are separately classified as
minority interest in the consolidated balance sheets and statements of comprehensive income.
2.3 Significant Accounting Policies
(a) Standards, amendments and interpretations effective from 1 January 2013 that are relevant and applied to the
financial statements of the Group:
• IAS 1 (amendment), “Presentation of financial statements”, regarding other comprehensive income is effective for
annual periods beginning on or after 1 July 2012. The main change resulting from these amendments is a requirement
for entities to group items presented in ‘other comprehensive income’ (OCI) on the basis of whether they are
potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendments do not address
which items are presented in OCI.
• IAS 19 (amendment), “Employee benefits”, is effective for annual periods beginning on or after 1 January 2013. These
amendments eliminate the corridor approach and calculate finance costs on a net funding basis.
• IFRS 10, “Consolidated financial statements”, is effective for annual periods beginning on or after 1 January 2013.
This standard builds on existing principles by identifying the concept of control as the determining factor in whether
an entity should be included within the consolidated financial statements. It defines the principle of control, and
establishes controls as the basis for consolidation. It sets out how to apply the principle of control to identify
whether an investor controls an investee and therefore must consolidate the investee. It also sets out the accounting
requirements for the preparation of consolidated financial statements.
• IFRS 12, “Disclosures of interests in other entities”, is effective for annual periods beginning on or after 1 January
2013. This standard includes the disclosure requirements for all forms of interests in other entities, including joint
arrangements, associates, special purpose vehicles and other off-balance-sheet vehicles.
• IFRS 10, 11 and 12 on transition guidance (amendment), is effective for annual periods beginning on or after 1
January 2013. The amendment also provide additional transition relief in IFRS 10, 11 and 12, limiting the requirement
to provide adjusted comparative information to only the preceding comparative period. For disclosure related to
unconsolidated structured entities, the amendments will remove the requirement to present comparative information
for the periods before IFRS 12 is applied.
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Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
• IFRS 13, “Fair value measurement”, is effective for annual periods beginning on or after 1 January 2013. The standard
aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source
of fair value measurement and disclosure requirements for use across IFRSs.
• IAS 28 (revised), “Associates and joint ventures”, is effective for annual periods beginning on or after 1 January 2013.
The standard includes the requirements for joint ventures, as well as associates, to be equity accounted following the
issue of IFRS 11.
• IFRS 7 (amendment), “Financial instruments: Disclosures”, is effective for annual periods beginning on or after 1
January 2013.
• Annual Improvements to IFRSs 2011 is effective for annual periods beginning on or after 1 January 2013.
Amendments effect five standards: IFRS 1, IAS 1, IAS 16, IAS 32 and IAS 34.
(b) Standards, amendments and interpretations effective from 1 January 2013 that are not relevant to the financial
statements of the Group:
• IFRS 11, “Joint arrangements”, is effective for annual periods beginning on or after 1 January 2013.
• IAS 27 (revised), “Separate financial statements”, is effective for annual periods beginning on or after 1 January 2013.
• IFRIC 20, “Stripping costs in the production phase of a surface mine”, is effective for annual periods beginning on or
after 1 January 2013.
(c) Standards, amendment and interpretations that are not effective and not early adopted by the Group:
• IFRS 9, “Financial Instruments” - classification and measurement, will be effective for annual periods beginning on or
after 1 January 2015.
• IAS 32 (amendment), “Financial instruments: Presentation”, will be effective for annual periods beginning on or after 1
January 2014.
• IFRS 1 (amendment), “First-time adoption of IFRS”, is effective for annual periods beginning on or after 1 January 2014.
• IFRS 10 (amendment), 12 and IAS 27 on consolidation for investment entities is effective for annual periods beginning
on or after 1 January 2014. These amendments mean that many funds and similar entities will be exempt from
consolidating most of their subsidiaries. Instead, they will measure them at fair value through profit or loss. The
amendments give an exception to entities that meet an ‘investment entity’ definition and which display particular
characteristics. Changes have also been made IFRS 12 to introduce disclosures that an investment entity needs to
make.
• IAS 36 (amendment), ‘Impairment of assets’ on recoverable amount disclosures is effective for annual periods
beginning on or after 1 January 2014. This amendment addresses the disclosure of information about the recoverable
amount of impaired assets if that amount is based on fair value less costs of disposal.
• IAS 39 (amendment) ‘Financial Instruments: Recognition and Measurement’ - ‘Novation of derivatives is effective
for annual periods beginning on or after 1 January 2014. This amendment provides relief from discontinuing hedge
accounting when novation of a hedging instrument to a central counterparty meets specified criteria.
• IFRIC 21, ‘Levies’ is effective for annual periods beginning on or after 1 January 2014. This is an interpretation of IAS
37, ‘Provisions, contingent liabilities and contingent assets’. IAS 37 sets out criteria for the recognition of a liability,
one of which is the requirement for the entity to have a present obligation as a result of a past event (known as an
obligating event). The interpretation clarifies that the obligating event that gives rise to a liability to pay a levy is the
activity described in the relevant legislation that triggers the payment of the levy.
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Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
• IFRS 9 (amendment), ‘Financial instruments’, regarding general hedge. These amendments to IFRS 9, ‘Financial
instruments’, bring into effect a substantial overhaul of hedge accounting that will allow entities to better reflect their
risk management activities in the financial statements.
• IAS 19 (amendment) regarding defined benefit plans; is effective for annual periods beginning on or after 1 July 2014.
These narrow scope amendments apply to contributions from employees or third parties to defined benefit plans. The
objective of the amendments is to simplify the accounting for contributions that are independent of the number of
years of employee service, for example, employee contributions that are calculated according to a fixed percentage of
salary.
• Annual improvements 2012; is effective for annual periods beginning on or after 1 July 2014. These amendments
include changes from the 2010-12 cycle of the annual improvements project, that affect 7 standards: IFRS 2, IFRS 3,
IFRS 8, IFRS 13, IAS 16, IAS 38, IFRS 9, IAS 37 and IAS 39.
• Annual improvements 2013; is effective for annual periods beginning on or after 1 July 2014. The amendments
include changes from the 2011, 2012 and 2013 cycle of the annual improvements project that affect 4 standards: IFRS
1, IFRS 3, IFRS 13 and IAS 40.
The change in standards and interpretations does not have a material effect on the consolidated financial statements.
2.4 Comparatives and restatement of prior year financial statements
The Group prepares comparative financial statements, to enable readers to determine financial position and
performance trends. For the purposes of effective comparison, comparative financial statements can be reclassified
when deemed necessary by the Group, where descriptions on significant differences are disclosed.
The consolidated balance sheet of the Group at 31 December 2013 has been provided with the comparative balance
sheet of 31 December 2012 and the consolidated statements of income and comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the year ended 31 December 2013
have been provided with the comparative financial statements, for the year ended 31 December 2012.
Where necessary, comparative figures are reclassified to conform to changes in presentation in the current year and
material differences are disclosed.
The Group has performed reclassifications in the consolidated financial statements as of 31 December 2012 and
consolidated financial statements as of 31 December 2012 in order to conform to presentation of consolidated financial
statements as of 31 December 2013.
i) The time deposits amounting to TL52,482 classified in “financial investments” in consolidated balance sheet as of 31
December 2012, is reclassified under “cash and cash equivalents”.
ii) The difference of TL100,667, which is recognized at the purchase of Zorlu Doğal, classified in “intangible assets” in the
consolidated balance sheet as of 31 December 2012, is reclassified as “goodwill”.
iii) System usage fee and loss and theft costs amounting TL20,524 classified in “sales and marketing expenses” in the
consolidated statement of income as of 31 December 2012, are reclassified under “revenue”.
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Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
iv) Dorad Energy Ltd, one of the associates of the Group amounting to TL42,894, was classified in “financial assets” in
the consolidated balance sheet as of 31 December 2012, is reclassified under “investments accounted through equity
method” in Associates.
v) Rosmiks BV share sales currency differences amounting TL187,752 accounted in “currency translation adjustment” in
the consolidated balance sheet as of 31 December 2012 is reclassified under “retained earnings” in accordance with “IAS
8 - Accounting Policies, Changes in Accounting Estimates and Errors”.
vi) Rights amounting to TL857,116 classified in “intangible assets” in consolidated balance sheets as of 31 December
2012, is reclassified under “property, plant and equipment” as it is considered as financial lease which is accounted in
accordance with IFRIC 4 and IAS 17.
vii) Advances given amounting to TL23,574 classified in “other non current assets” in the consolidated balance sheet as
of 31 December 2012, is reclassified under “property, plant and equipment”.
2.5 Summary of significant accounting policies
a) Revenue Recognition
Revenues are recognized on an accrual basis when the electricity is delivered (risk and rewards are transferred), the
amount of the revenue can be measured reliably and it is probable that the economic benefits associated with the
transaction will flow to the Group, at the fair value of consideration received or receivable. Net sales represent the
invoiced value of electricity delivered less sales returns and commission. Transmission revenue is netted off with its
related costs in consolidated financial statements. Interest income is recognised on a time proportion basis that takes
into account the effective yield on the asset.
b) Trade Receivables and Impairment
Trade receivables that are created by the Group by way of providing services (i.e. supplying electricity) directly to a
debtor are recognised initially at fair value and subsequently measured using the effective interest method less provision
for impairment. Short term receivables with no stated interest rate are measured at original invoice amount unless the
effect of imputing interest is significant.
A credit risk provision for impairment of trade receivables is established if there is objective evidence that the Group
will not be able to collect all amounts due. The amount of the provision is the difference between the carrying amount
and the recoverable amount, being the present value of all cash flows, including amounts recoverable from guarantees
and collateral, discounted based on the original effective interest rate of the originated receivables at inception. If the
amount of the impairment subsequently decreases due to an event occurring after the write-down, the release of the
provision is credited to other income.
c) Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts (Note 4).
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Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
d) Related parties
If one of the below listed criteria exists the party is regarded as related with the Group:
a) Directly, or indirectly through one or more intermediaries, the party:
i) controls, is controlled by, or is under common control with, the Group (this includes parents, subsidiaries and fellow
subsidiaries);
ii) has an interest in the Group that gives it significant influence over the Group; or
iii)has joint control over the Group;
b) The party is an associate of the Group;
c) The party is a joint venture in which the Group is a venture;
d) The party is member of the key management personnel of the Group or its parent;
e) The party is a close member of the family of any individual referred to in (a) or (d);
f) The party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant voting
power in such entity resides with, directly or indirectly, any individual referred to In (d) or (e); or
g) The party has a post-employment benefit plan for the benefit of employees of the Group, or of an entity that is a
related party of the Group.
Related party transactions are transfer of resources or obligations between related parties, regardless of whether a price
is charged. A number of transactions are entered into with related parties in the normal course of business (Note 23).
e) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements
are presented in TL, which is the functional currency of Group and the presentation currency of the Group.
Foreign consolidated subsidiaries are regarded as foreign entities since they are financially, economically and
organizationally autonomous. Their reporting currencies are the respective local currencies. Financial statements
of foreign consolidated subsidiaries are translated at year-end exchange rates with respect to the financial position
and at exchange rates at the dates of the transactions with respect to the income statement. All resulting translation
differences between the closing balances and opening balances due to the difference in inflation and devaluation are
included in currency translation adjustment in equity.
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Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
f) Property, plant and equipment
Property, plant and equipment acquired before 1 January 2005 are carried at restated cost in purchasing power of TL as
at 31 December 2004 less accumulated depreciation and impairment losses. Property, plant and equipment acquired
after 1 January 2005 are carried at cost less accumulated depreciation and impairment losses (Note 6). Land is not
depreciated as it is deemed to have an indefinite life. Depreciation is provided on restated costs of property, plant and
equipment using the straight-line method based on the estimated useful lives of the assets. The mentioned asset’s
useful lives are presented below:
Useful life
Land improvements
Buildings
Plant and machinery
Motor vehicles
Furniture and fixtures
5 - 40
16 -28
5 - 28
5 - 10
2 - 50
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
Expenses for the repair of property, plant and equipment are normally charged as expense. They are, however,
capitalised if they result in an enlargement or substantial improvement of the respective assets.
Gains or losses on disposals of property, plant and equipment which are calculated as the difference between net
carrying value and the collections made are included in the related income and expense accounts, as appropriate.
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately
to its recoverable amount.
Explanations for revaluation method and fair value measurement
Zorlu Enerji has chosen revaluation method among application methods mentioned under IAS 16 for lands, land
improvements, buildings, machinery and equipments belonging to its powerplants commencing from 31 December
2013. Revaluation studies for domestic subsidiaries of the Group have been performed by Standart Gayrimenkul
Değerleme Uygulamaları A.Ş., a CMB accredited professional valuation Company. Revaluation study for the Group’s
powerplant in Pakistan has been carried out by MYK Associates (Pvt.) Ltd. which is located in Pakistan.
The fair value of lands, land improvements, buildings, machinery and equipments belonging to Ankara, Kayseri, Bursa,
Lüleburgaz, Yalova power plants recognised under Zorlu Enerji and Osmaniye wind energy powerplant recognised
under Rotor Elektrik Üretim A.Ş. is determined by using “market approach” in the valuation reports prepared by Standart
Gayrimenkul Değerleme Uygulamaları A.Ş. on 6 March 2014.
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Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The fair value of the lands, land improvements, buildings, machinery and equipments belonging to the powerplants of
Zorlu Doğal Elektrik Üretimi A.Ş., of which, the operating rights are obtained for 30 years from privatization tender of
Ankara Doğal Elektrik Üretim ve Ticaret A.Ş. (“ADÜAŞ”) on 5 March 2008, is determined by using “income approach discounted cash flow analysis” in the valuation reports prepared by Standart Gayrimenkul Değerleme Uygulamaları A.Ş.
on 6 March 2014. The assumptions used in the discounted cash flow analysis are;
• discount rate: 9%
• growth rate: 3%
• electricity sales price: TL0.153 which has been announced by EMRA for the year 2014.
As a result of valuation reports, TL683,692 thousand net improvement is determined. Net book value of revalued assets
are converted into revalued amount and TL683,692 additional value has been booked as TL546,954 on revaluation fund
by offsetting its deferred tax effect (Note 11). Goodwill impairment amounted to TL17,537 is determined and accounted
to the statement of profit or loss (Note 20).
Finance lease
Assets held under finance leases are recognized as assets of the Company at their fair value at the date of acquisition
under property, plant and equipment. Finance costs are charged to the income statement over the term of the relevant
lease so as to produce a constant periodic rate of interest on the remaining balance of the liability for each accounting
period.
g) Intangible assets
Intangible assets acquired before 1 January 2005 are carried at restated cost in purchasing power of TL as at 31
December 2004 less accumulated depreciation and impairment losses. Intangible assets acquired after 1 January
2005 are carried at cost less accumulated depreciation and impairment losses. Intangible assets comprise licenses and
computer softwares (Note 12).
Licenses
Licenses are recorded at acquisition cost and amortised on a straight-line basis over their estimated useful lives of 15- 49
years. Where an indication of impairment exists, the carrying amount of any intangible assets is assessed and written
down immediately to its recoverable amount.
Computer softwares
Computer softwares are recorded at acquisition cost and amortised on a straight-line basis over their estimated useful
lives of 3- 22 years. Where an indication of impairment exists, the carrying amount of any intangible assets is assessed
and written down immediately to its recoverable amount.
h) Impairment of non-financial assets
All assets are reviewed for impairment losses including property, plant and equipment and intangible assets whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss
is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount, which
is the higher of an asset’s net selling price and value in use. Impairment losses are recognised in the statement of
comprehensive income.
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Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Impairment losses on assets can be reversed, to the extent of previously recorded impairment losses, in cases where
increases in the recoverable value of the asset can be associated with events that occur subsequent to the period when
the impairment loss was recorded.
i) Borrowing costs and financial liabilities
Borrowings are recognised initially at fair value, net of transaction costs incurred. In subsequent periods, borrowings are
stated at amortised cost using the effective yield method; any difference between proceeds (net of transaction costs)
and the redemption value is recognised in the statement of income over the period of the borrowings. Borrowings
are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at
least 12 months after the balance sheet date. The long-term portion of the borrowing of the Group can be included in
the short-term liabilities unless the necessary covenants, which cause the recall of the borrowing given by the related
financial institute (event of default exercises), are not met about the borrowing taken on and before the balance sheet
date.
The Group capitalizes borrowing costs as part of the cost of the qualifying asset in the period in which the asset is
prepared for its intended use or sale. All other borrowing costs are charged to the statement of comprehensive income
when they are incurred.
j) Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method.
k) Provisions, contingent liabilities, contingent assets
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can
be made.
Possible assets or obligations that arise from past events and whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Group are not included in
financial tables and are treated as contingent assets or liabilities (Note 13).
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow
of economic benefits to the entity. Contingent assets are not recognized in the financial statements since this may result
in the recognition of income that may never be realized. A contingent asset is disclosed where an inflow of economic
benefit is probable. Contingent assets are assessed continually to ensure that developments are appropriately reflected
in the financial statements. If it has become virtually certain that an inflow of economic benefits will arise, the asset and
the related income are recognized in the financial statements of the period in which the change occurs.
l) Employment termination benefits
Under the Turkish Labour Law, the Group is required to pay termination benefits to each employee who has completed
one year of service and whose employment is terminated without due cause, or who is called up for military service, dies
or retires after completing 25 years of service (20 years for women) and achieves the retirement age (58 for women and
60 for men).
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Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Under the Turkish Labour Law, the provision has been calculated by estimating the present value of the future probable
obligation of the Group arising from the retirement of the employees (Note 15).
m) Earnings per share
Earnings per share are determined by dividing net gain by the weighted average number of shares that have been
outstanding during the related year concerned. In Turkey, companies can increase their share capital by making a prorata distribution of shares (“bonus shares”) to existing shareholders from retained earnings and allowable reserves.
For the purpose of earnings per share computations, the weighted average number of shares outstanding during the
year has been adjusted in respect of bonus shares issues without a corresponding change in resources, by giving them
retroactive effect for the year in which they were issued and each earlier year (Note 24).
n) Current and deferred income tax
Taxes include current period income taxes and deferred income taxes. Current year tax liability consists tax liability on
period income calculated based on currently enacted tax rates as of balance sheet date and according to tax legislation
in force and includes adjustments related to previous years’ tax liabilities.
Deferred income tax is provided, using the liability method, for temporary differences arising between the tax bases of
assets and liabilities and their carrying values for financial reporting purposes. Tax bases of assets and liabilities comprise
of the amounts that will impact taxable income in future periods based on the tax legislation. Currently enacted tax
rates, which are expected to be effective during the periods when the deferred income tax assets will be utilised or
deferred income tax liabilities will be settled, are used to determine deferred income tax.
Deferred income tax assets and liabilities are recognised to the extent that they will impact taxes to be paid in the
periods that temporary differences will disappear. Deferred income tax liabilities are recognised for all taxable temporary
differences, where deferred income tax assets resulting from deductible temporary differences are recognised to the
extent that it is probable that future taxable profit will be available against which the deductible temporary difference
can be utilised. Carrying value of deferred income tax assets are decreased to the extent necessary, if future taxable
profits are not expected to be available to utilize deferred income tax assets partially or fully.
Deferred income tax assets and deferred income tax liabilities related to income taxes levied by the same taxation
authority are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities
(Note 17).
o) Reporting of cash flows
In the consolidated statement of cash flows, cash flows during the year are classified under operating, investing or
financing activities.
The cash flows raised from operating activities indicate cash flows due to the Group’s operations.
The cash flows due to investing activities indicate the Group cash flows that are used for and obtained from investments
(investments in property, plant and equipment and financial investments).
The cash flows due to financing activities indicate the cash obtained from financial arrangements and used in their
repayment.
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Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Cash and cash equivalents comprise cash on hand and bank deposits and short-term, highly liquid investments that are
readily convertible to known amounts of cash with maturities equal or less than 3 months and which are subject to an
insignificant risk of changes in value (Note 3).
p) Subsequent events
Subsequent events consist of all events between balance sheet date and date of authorization for validity, even if they
have been existed after public explanation of an announcement about profit or other financial information. In the case
that events requiring an adjustment to the financial statements occur subsequent to the balance sheet date, the Group
makes the necessary corrections on the financial statements (Note 26).
r) Capital and dividends
Ordinary shares are classified as equity. Dividends on ordinary shares are calculated by reducing retained earnings in the
period in which they are declared (Note 16).
s) Share premium
Share premium represents differences resulting from the sale of the Group’s Subsidiaries’ and Associates’ shares at a
price exceeding the face value of those shares or differences between the face value and the fair value of shares issued
for acquired companies (Note 16).
t) Derivative financial instruments
The derivative financial instruments are firstly recorded at their acquisition costs. But in subsequent periods, they are
recorded at their fair values. The derivative financial liabilities of the Group comprise of interest rate swaps and forward
foreign exchange contracts.
The fair value of over-the-counter forward foreign exchange contracts is determined based on the comparison of the
original forward rate with the forward rate calculated in reference to the market interest rates of the related currency
for the remaining period of the contract, discounted to 31 December 2013. All derivatives are carried as assets when
the fair value is positive and as liabilities when the fair value is negative. The changes in fair value of the forward foreign
exchange contracts are recognized in income statement.
The effective portion of changes in the fair value of derivative financial instruments is recognized in other
comprehensive income.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting any
cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction
is ultimately recognized in the statement of income (Note 14).
u) Offsetting
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally
enforceable right to set off the recognised amounts and there is an intention to settle on a net basis, or realise the asset
and settle the liability simultaneously.
Zorlu Enerji 2013 Annual Report
101
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
v) Financial assets
Financial assets within the scope of IAS 39 “Financial instruments: Recognition and measurements” are classified as
financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-forsale financial assets, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus,
in the case of investments not at fair value through profit or loss, directly attributable transaction costs.
The Group determines the classification of its financial assets on initial recognition and, where allowed and appropriate,
re-evaluates this designation at each financial year end.
All regular way purchases and sales of financial assets are recognised on the trade date, which is the date that the Group
commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets that require
delivery of assets within the period generally established by regulation or convention in the market place.
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. After initial measurement loans and receivables are carried at amortised cost using the effective
interest method less any allowance for impairment. Gains and losses are recognised in profit or loss when the loans and
receivables are derecognised or impaired, as well as through the amortisation process.
y) Going concern assumption
The Group has prepared its consolidated financial statements on a going concern basis in a foreseeable future. The
Group is at investment stage and majority of its investments are financed through borrowings. The Group has TL394,128
of accumulated deficit, TL24,555 of operating loss and TL328,379 of net loss as of and for the year ending 31 December
2013. Besides, The Group’s short term liabilities exceeds its current assets with TL1,099,114 (2012: TL909,714).
The Group is expecting an improvement in its current ratio and profitability as soon as the power plants that are under
construction are brought into operation in the forthcoming years. These under construction projects are stated below:
The 840 MW capacity combined cycle power plant of Dorad Energy Limited, 25% owned subsidiary of Zorlu Enerji, is
expected to start its commercial operation in the first half of 2014. The power plants of the Group’s subsidiaries Ashdod
Energy Limited and Ramat Negev Energy Limited with approximately 55 MW electric generation and 40 tones/h steam
capacity and 120 MW electric generation and 70 tones/h steam capacity, respectively, are expected to start commercial
operation by the end of fourth quarter of 2014.
The wind farm with the installed capacity of 56.4 MW being constructed in Jhimpir area of Pakistan by the Group’s
100% subsidiary Zorlu Enerji Pakistan Ltd. started commercial electric energy sales to Pakistan national Transmission and
Distribution Company (“NTDC”) on 26 July 2013.
Additionally, performance and security tests of the first phase of fully constructed Kızıldere II project of Zorlu Doğal
Elektrik Üretimi A.Ş. with the installed capacity of 60 MW has been successfully completed. After the official acceptance
of the Ministry, the power plant started to sell commercial electricity commencing from 31 August 2013. The official
acceptance of the second and last phase with the capacity of 20 MW is completed on 31 October 2013 and, since then
the power plant started to operate with full capacity.
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
102
Zorlu Enerji 2013 Annual Report
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The capacity increase from 30 MW to 45 MW of geothermal powerplant that will be established in Alaşehir, Manisa by
Zorlu Jeotermal Enerji Elektrik Üretimi A.Ş., %100 owned subsidiary of Zorlu Enerji, is approved by the Energy Market
Regulatory Authority (EMRA). The 14 year term loan agreement has been signed on 25 November 2013 with Yapı
Kredi A.Ş which will provide a fund up to USD113,000,000 in order to finance the project. The plant is planned to start
operation by 2015 year end.
The Group forecasts an increase in its profitability through the aforementioned projects and plans to decrease its
financial liabilities with the cash generated from such projects which will also improve the Group’s current ratio.
The Group’s operational, investing and financing decisions are taken based on the future positive cash flows and
profitability.
The Group’s ultimate parent company, Zorlu Holding A.Ş. has declared its intend to provide necessary support to the
Group to continue on a going concern basis, in the support letter dated 3 January 2014.
Consequently, the Group management does not foresee any risk regarding going concern and has prepared these
consolidated financial statements on the assumption that the Group will continue its operations on a going concern
basis in a foreseeable future.
2.6 Critical accounting estimates, assumptions and judgments
The preparation of consolidated financial statements in conformity with IAS 34 requires management to make estimates
and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of financial statements, and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates. These estimates are reviewed periodically, and as adjustments become
necessary, they are reported in earnings in the periods in which they become known. The key assumption concerning
the future and other key sources of estimation uncertainty at the balance sheet date and the significant judgments are
set out below:
Deferred tax asset on cumulative tax losses
Deferred tax assets are accounted for only where it is likely that related temporary differences and accumulated losses
will be recovered through expected future profits. When accounting for deferred tax assets it is necessary to make
critical estimations and evaluations with regard to taxable profits in the future periods. As of 31 December 2013, the
Group has carry forward tax losses amounting to TL356,370 (31 December 2012: TL43,989) which are expected to be
deducted from future profits and did not recognize deferred tax assets for the carry forward tax losses amounting to
TL451,314 (31 December 2012: TL375,607) for which the Group believes it will not utilize in the future (Note 17).
Fair value of interest rate swaps and forward foreign exchange contracts
The fair value of forward contracts calculated by calculating forward exchange rate, for remainder of agreement
related foreign currency’s prevailed market interest rate, and comparing it to reporting date forward exchange rate.
All derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. The
changes in fair value of the forward foreign exchange contracts are recognized in income statement. The effective
portion of changes in the fair value of derivative financial instruments such as interest rate swaps, is recognized in other
comprehensive income.
Zorlu Enerji 2013 Annual Report
103
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Explanations for revaluation method and fair value measurement
Zorlu Enerji has chosen revaluation method among application methods mentioned under IAS 16 for lands, land
improvements, buildings, machinery and equipments belonging its powerplants commencing from 31 December 2013
(Note 2.5). The assumptions used in the discounted cash flow analysis are;
• discount rate: 9%
• growth rate: 3%
• electricity sales price: TL0.153 which has been announced by EMRA for the year 2014.
Goodwill impairment
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the
Group’s interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the
fair value of the non-controlling interest in the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash
generating units (“CGUs”), or groups of CGUs, that is expected to benefit from the synergies of the combination.
Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which
the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate
a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher
of value in use and the fair value less costs to sell. Any impairment is recognised immediately as an expense and is not
subsequently reversed (Note 20). An impairment loss is allocated to reduce the carrying amount of assets of the CGUs
in an order of; first to reduce the carrying amount of any goodwill allocated to CGU and then, to the other assets of the
unit pro rata on the basis of carrying amount of each asset in the unit.
The carrying value of goodwill is compared to the recoverable amount, which is the fair value of the power plants
of Zorlu Doğal Elektrik Üretimi A.Ş. determined based on the valuation reports prepared by Standart Gayrimenkul
Değerleme Uygulamaları A.Ş. on 6 March 2014 by using “income approach - discounted cash flow analysis”. Goodwill
impairment amounted to TL17,537 is accounted to the statement of profit or loss (Note 20) as of 31 December 2013
(2012: None).
2.7 Financial Risk Management
Financial risk management objectives and policies
The Group is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk
and certain other price risks, which result both from its operating and investing activities. The Group’s risk management is
coordinated at its headquarters, in close co-operation with the board of directors, and focuses on actively securing the Group’s
short to medium term cash flows by minimizing the exposure to financial markets. Long term financial investments are managed
to generate lasting returns.
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Zorlu Enerji 2013 Annual Report
104
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The Group does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most
significant financial risks to which the Group is exposed to are described below.
(a) Liquidity risk
Liquidity risk comprises the risk that the Group becomes unable to find its payment requirements.
The Group manages its liquidity needs by carefully monitoring scheduled debt servicing payments for long-term financial
liabilities as well as cash-outflows due in day-to-day business. Liquidity needs are monitored in various time bands, on a day-today and week-to-week basis, as well as on the basis of a rolling 30 day projection. Long-term liquidity needs for a 180 day and
360 day lookout period are identified monthly.
The breakdown of liabilities according to their contractual maturity is based on the maturity dates from the date of the financial
position is given below:
Non derivative financial liabilities (1) (2):
2013
Financial liabilities
Trade payables
Other payables and short term liabilities
2012
Financial liabilities
Trade payables
Other payables and short term liabilities
(1)
Book Total cash
value out flow
Within 3
months
1 to 5
years
Over 5
years
3,815,835 4,392,853
208,324
213,914
1,374,836 1,374,836
428,157 1,006,823 2,162,318
104,496
109,418
8,336
- 1,074,730
795,555
291,770
5,398,995 5,981,603
540,989 1,116,241 3,237,048 1,087,325
Book Total cash
value out flow
Within 3
months
2,667,317 3,013,844
301,656
308,408
1,286,038 1,286,038
4,255,011 4,608,290
3 to 12
months
3 to 12
months
1 to 5
years
Over 5
years
222,337
182,929
229,270
684,962 1,546,413
123,137
2,342
805,493
560,132
251,275
634,536
808,099 2,354,248
811,407
Maturity analyse has been applied on financial instruments and this analyse does not include legal liabilities.
Amounts above are cash flows which has not been discounted belongs to contracts. Since discounted amounts are on immaterial level, balances with
maturity less than 3 months are equivalent to their book value.
(2)
Zorlu Enerji 2013 Annual Report
105
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Derivative financial liabilities:
2013
Cash outflow
2012
Cash outflow/(inflow)
Book
value
Within 3
months
3 to 12
months
1 to 5
years
Over 5
years
56,475
-
56,475
-
-
Book
value
Within 3
months
3 to 12
months
1 to 5
years
Over 5
years
69,090
(525)
69,615
-
-
(b) Market risk
Interest rate risk
Interest rate risk arises because changes in interest rates may affect profitability as disclosed in financial statements.
The Group is subject to interest rate risk as a result of differences in balancing off the dates or timing differences related
to assets and liabilities maturing or to be subjected to price revision. The Group manages its interest rate risk by applying
risk management strategies whereby its strives to balance off the dates of changes in interest rates related to assets and
liabilities.
The Group’s interest rate position is as of 31 December 2013 and 2012 as follows:
2013
2012
90,637
2,740,334
1,366,500
1,172,472
56,475
91,939
2,401,214
1,056,768
2,081,895
69,090
2,643,363
-
585,422
-
Fixed interest rate financial instruments
Cash and cash equivalents
Other receivables
Other payables
Financial liabilities
Derivative financial instruments
Variable interest rate financial instruments
Financial liabilities
Derivative financial instruments
As of 31 December 2013, if the variable interest rates of bank borrowing increased or decreased of +1% and -1% and
if all other variables are held constant the result before tax would have been influenced favorably or unfavorably by TL
2,844 (2012: TL 2,187) for an increase and for a decrease in value of TL.
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Zorlu Enerji 2013 Annual Report
106
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Foreign exchange risk
The Group is exposed to foreign exchange risks due to foreign currency transactions. Foreign exchange risk results
from the commercial activities and foreign currency denominated assets and liabilities. The Group controls that risk in a
natural manner through netting off the foreign currency denominated assets and liabilities. The management limits the
foreign currency position of the Group through analyzing it.
The details of the foreign currency assets and liabilities as of 31 December 2013 and 2012 are as follows:
31 December 2013
31 December 2012
Assets
Liabilities
3,021,131
(4,418,364)
2,598,846
(3,529,550)
Net foreign currency position
(1,397,233)
(930,704)
TL equivalent of assets and liabilities denominated in foreign currency held by the Group at 31 December 2013 and
2012 are as follows:
31 December 2013
Other*
US Dollar
Euro
Other*
277
123
1,910
602,908
306,087
-
2,281,672
16,221
300,953
1,232,644
9,085
168,828
597
11
-
180,939
-
1,371,615
2,310
908,995
2,598,846
1,410,557
608
180,939
31,873
972,880
1,275,675
2,081,305
56,631
11,671
352,732
419,457
760,444
23,069
1,676
73,880
129,354
148,527
2,516
99,181
154,078
28,916
1,101,497
-
137,863
647,037
1,774,845
969,805
37,635
314,322
765,388
381,000
29,976
35,822
169,269
123,583
14,970
135,451
675,363
202
4,418,364
1,567,373
355,953
1,383,672
3,529,550
1,498,345
358,650
825,986
(195,758) (353,643)
(474,677)
(930,704)
US Dollar
Euro
Cash and cash equivalents
Trade receivables
Other receivables
Other assets
2,949,857
30,856
40,418
1,343,899
11,405
16,311
Total Assets
3,021,131
Trade payables
Short term financial liabilities
Due to related parties
Long term financial liabilities
Other liabilities
Total Liabilities
Net Foreign Currency
Position
(*)
31 December 2012
TL
Equivalent
TL
Equivalent
(1,397,233)
Other currencies comprise of GBP, CHF, PKR (Pakistan Rupi) and NIS (New Israel Shekel).
(87,788) (358,042) (645,047)
Zorlu Enerji 2013 Annual Report
107
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The Group is mainly exposed to foreign exchange risk through the impact of rate changes in the translation of USD, EUR
and other currencies denominated assets and liabilities to local currency. As of 31 December 2013 and 31 December
2012, had the TL appreciated or depreciated by 10% against USD, EUR and other currencies with all other variables held
constant, the effect over current period consolidated net income would be as follows:
31 December 2013
Appreciation of Profit/(Loss) Depreciation
Foreign currency
of Foreign currency
10% increase/decrease in US Dollar exchange rate
Income/(Expense)
(41,781)
41,781
US Dollar Net Effect
(41,781)
41,781
10% increase/decrease in Euro exchange rate
Income/(Expense)
(103,847)
103,847
Euro Net Effect
(103,847)
103,847
10% increase/decrease in other exchange rates
Income/(Expense)
5,905
(5,905)
Other Currencies Net Effect
5,905
(5,905)
(139,723)
139,723
Total Net Effect
31 December 2012
Appreciation of Profit/(Loss) Depreciation
Foreign currency
of Foreign currency
10% increase/decrease in US Dollar exchange rate
(Expense)/income
(15,649)
15,649
US Dollar Net Effect
(15,649)
15,649
10% increase/decrease in Euro exchange rate
(Expense)/income
(84,201)
84,201
Euro Net Effect
(84,201)
84,201
10% increase/decrease in other exchange rates
Income/(expense)
6,780
(6,780)
Other Currencies Net Effect
6,780
(6,780)
(93,070)
93,070
Total Net Effect
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Zorlu Enerji 2013 Annual Report
108
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
(c) Funding risk
The funding risk of the current and future debt requirements is managed through rendering the availability of the
qualified lenders. The Group’s bank loans are provided by various financially strong financial institutions.
(d) Capital risk management
The Group’s capital management objectives are:
• ensure the Group’s ability to continue as a going concern; and
• to provide an adequate return to shareholders,
by pricing products and services commensurately with the level of risk
The Group monitors capital on the basis of the carrying amount of equity plus its total of current and non current borrowings
(net debt) less cash and cash equivalents as presented on the face of the consolidated financial position.
The Group sets the amounts of capital in proportion to its overall financing structure i.e. equity and financial liabilities. The
Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or adjust the capital structure the Group may adjust the amount of
dividends paid the shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
As of 31 December 2013 and 2012, net debt to equity ratio is as follows:
2013
2012
Total financial liabilities
Trade payables
Other liabilities/(receivables), net (*)
3,815,835
208,324
(993,798)
2,667,317
301,656
(569,848)
Total liabilities
Less: Cash and cash equivalents (Note 4)
3,030,361
(213,833)
2,399,125
(187,379)
Net debt
2,816,528
2,211,746
788,787
572,546
%357
%386
Total equity
Net debt to equity ratio
Since TL2,360,880 long term other receivable from Rosmiks BV (31 December 2012: TL1,847,075) is considered as a part of funding which is stated in
financial liabilities and provided from banks and finance institutions consortium under the leadership of HSBC Bank PLC, it is deducted from total liability
amount.
(*)
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Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
(e) Credit risk
The Group’s exposure to credit risk is limited to the carrying amount of financial assets recognized at the financial position date.
Credit risk concerns the risk that a loss will be suffered by a party due to the reason that the other party to the transaction is
unable to meet its obligations.
The Group continuously monitors defaults of customers and other counterparties, identified either individually or by group,
and incorporate this information into its credit risk controls. Where available at reasonable cost, external credit ratings and/
or reports on customers and other counterparties are obtained and used. The Group’s policy is to deal only with creditworthy
counterparties.
The Group management considers that all the financial assets shown above under paragraph liquidity risk that are not impaired
for each of the reporting dates under review are of good credit quality.
In respect of trade and other receivables, the Group is not exposed to any significant credit risk exposure to any single
counterparty or any group of counterparties having similar characteristics. The credit risk for liquid funds and other short-term
financial assets is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.
As of 31 December 2013, the Group’s exposure to credit risk is as summarised below:
2013
Maximum credit risk as of reporting date
- Secured portion of maximum credit risk
with collateral
Trade receivables
Related
party
Other
71,564
44,569
Other receivables
Related
party
Other
2,740,344
4,178
Deposits in bank
Related
party
Other
213,805
-
-
-
-
71,564
44,569
2,740,344
4,178
-
-
-
-
-
-
- Overdue (gross carrying amount)
-
7,988
-
-
-
-
- Impairment (-)
-
(7,988)
-
-
-
-
- Secured portion with collateral
-
-
-
-
-
-
Carrying amount of financial assets that are
not overdue and not impaired
-
-
213,805
Carrying amount of assets that are overdue
but not impaired
- Carrying amount secured with collateral
Carrying amount of assets that are impaired
Zorlu Enerji 2013 Annual Report
110
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
As of 31 December 2012, the Group’s exposure to credit risk is as summarised below:
2013
Maximum credit risk as of reporting date
- Secured portion of maximum credit risk
with collateral
Trade receivables
Related
party
Other
Other receivables
Related
party
Other
Deposits in bank
Related
party
Other
29,361
6,515
2,401,214
6,458
-
187,338
-
-
-
-
-
-
29,361
6,515
2,401,214
6,458
-
187,338
-
-
-
-
-
-
- Overdue (gross carrying amount)
-
8,302
-
-
-
-
- Impairment (-)
-
(8,302)
-
-
-
-
- Secured portion with collateral
-
-
-
-
-
-
Carrying amount of financial assets that are
not overdue and not impaired
Carrying amount of assets that are overdue
but not impaired
- Carrying amount secured with collateral
Carrying amount of assets that are impaired
Fair value of financial instruments
Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties,
other than in a forced sale or liquidation, and is best evidenced by a quoted market price, if one exists.
The estimated fair values of financial instruments have been determined by the Group using available market information,
management’s judgment and appropriate valuation methodologies. The following disclosure of the estimated fair value of
financial instruments is made with the requirements of IAS 32. To the extent relevant and reliable information is available from
the financial markets in Turkey; the fair value of the financial instruments of the Group is based on such market data. The fair
values of the remaining financial instruments of the Group can only be estimated. The estimates presented herein are not
necessarily indicative of the amounts the Group could realize in a current market exchange.
The following methods and assumptions were used to estimate the fair value of the Group’s financial instruments:
Financial assets
Monetary assets for which fair value approximates carrying value:
• Balances denominated in foreign currencies are translated at year-end exchange rates. The fair value of certain
financial assets carried at cost, including cash and due from banks, marketable securities plus the respective accrued
interest are considered to approximate their respective carrying values.
Zorlu Enerji 2013 Annual Report
111
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
• The carrying value of the trade receivables net of provisions for uncollectible are considered to approximate their fair
values.
Financial liabilities
Monetary liabilities for which fair value approximates carrying value:
• The fair values of short-term bank loans and other monetary liabilities are considered to approximate their respective
carrying values due to their short-term nature.
• The fair values of long-term bank borrowings which are denominated in foreign currencies and translated at year-end
exchange rates are considered to approximate their carrying values.
Fair value estimation:
Effective from 1 January 2009, the Group adopted the amendment to TFRS 7 for financial instruments that are measured
in the balance sheet at fair value; this requires disclosure of fair value measurements by level of the following fair value
measurement hierarchy:
Level 1: Quoted prices in active markets for identical assets or liabilities
Level 2: Inputs other than quoted market prices included within level 1 that are observable for the asset or liability, either
directly or indirectly.
Level 3: Inputs for the asset or liability that are not based on observable market data.
Trade receivables and payables are valued at amortized cost using the effective interest method. Trade receivables and
payables are considered to approximate to their fair values (level 2).
The fair value of financial instruments that are not traded in an active market is determined by using valuation
techniques. These valuation techniques maximize the use of observable market data where it is available and rely as
little as possible on entity specific estimates. If all significant inputs required to estimate the fair value an instrument are
observable, the instrument is included in level 2.
As of 31 December 2013 and 2012, assets and liabilities measured at fair value are as follows:
Derivative financial instruments
Level 1
Level 2
Level 3
2013
2012
56,475
-
69,090
-
56,475
69,090
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Zorlu Enerji 2013 Annual Report
112
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
NOTE 3 - SEGMENT REPORTING
The Company’s geographic operating segments are Turkey, Pakistan and other countries. No industrial operating
segments have been reported as the Company’s product range is the same in all countries.
The segment information in country basis is presented below. Earnings before interest, taxes, depreciation and
amortization (EBIDTA) is considered on evaluation of countries’ performance. Decision making authority of the Group
considers EBITDA as the most appropriate method for comparability with other companies within the same industry.
99.99% (2012: 90.3%) of sales are generated in Turkey.
31 December 2013
Revenue from external customers
EBITDA
Financial income
Financial expenses
Amortization and depreciation expenses
Expense from associates
Purchase of tangible and intangible assets
31 December 2012
Revenue from external customers
EBITDA
Profit on sale of subsidiaries
Financial income
Financial expenses
Amortization and depreciation expenses
Purchase of tangible and intangible assets
Turkey
Pakistan
Other (*)
Total
621,918
114,886
227,572
(602,814)
(128,328)
(3,128)
363,417
14,319
5,681
1,799
(14,294)
(7,495)
45,803
(58)
-
636,237
120,509
229,371
(617,108)
(135,823)
(3,128)
409,220
Turkey
Pakistan
Other (*)
Total
504,282
75,109
756,016
117,430
(261,395)
(75,644)
72,113
421
(4,747)
(2,644)
(1,418)
29,312
153,118
504,703
70,362
756,016
117,430
(264,039)
(77,062)
254,543
Zorlu Enerji 2013 Annual Report
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Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The Group has recognized 16% of its sales to Türkiye Elektrik İletim A.Ş. (“TEİAŞ”), 79% to Zorlu Holding Group
companies and remaining 5% to third parties.
31 December 2013
Segment Assets
Associates
Segment Liabilities
Turkey
Pakistan
Other
Eliminations
Total
6,356,902
94,800
5,652,747
296,404
225,724
-
(298,164)
(297,850)
6,355,142
94,800
5,580,621
Turkey
Pakistan
Other (*)
Eliminations
Total
4,803,004
42,894
4,415,806
258,021
168,718
1,505
1,505
(128,411)
(181,562)
4,934,119
42,894
4,404,467
31 December 2012
Segment Assets
Associates
Segment Liabilities
(*)
Other segment consists of activities of ICFS and Bundoran.
Reconciliation between reportable segment income, EBITDA, assets and liabilities and other significant items are as
follows:
31 December 2013 31 December 2012
Income
Segment revenue
636,237
504,703
Consolidated income
636,237
504,703
31 December 31 December 2012
EBITDA
Profit on sale of subsidiaries
Financial income
Financial expense
Share of loss of associates
Amortization and depreciation
120,509
229,371
(617,108)
(3,128)
(135,823)
70,362
756,016
117,430
(264,039)
(77,062)
Consolidated (loss)/income before tax
(406,179)
602,707
Zorlu Enerji 2013 Annual Report
114
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
NOTE 4 - CASH AND CASH EQUIVALENTS
31 December 2013 31 December 2012
Cash
Banks
- demand deposits
- time deposits
28
41
123,168
90,637
95,399
91,939
213,833
187,379
41,225
44,076
5,336
14,419
36,274
36,682
4,564
90,637
91,939
The redemption schedule of the time deposits of the cash and cash equivalents are below:
Less than 3 months
3 months - 1 year
1-2 years
More than 5 years
The average effective interest rates for time deposits as of 31 December 2013 and 2012 are as follows:
31 December 2013 31 December 2012
USD
6.47%
7.25%
Zorlu Enerji 2013 Annual Report
115
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The details of cash and cash equivalents include the following for the purpose of the statements of cash flows as of 31
December 2013 and 2012:
31 December 2013 31 December 2012
Cash and cash equivalents
Less: Interest accruals
Less: Restricted cash
213,833
(1,390)
(48,022)
187,379
(1,956)
(77,520)
164,421
107,903
As of 31 December 2013 the Group has restricted cash amounted to TL48,022 (31 December 2012: TL77,520). This
restricted cash amount is related with the loans used by the Group.
NOTE 5 - FINANCIAL LIABILITIES
The details of financial liabilities of the Group as of 31 December 2013 and 2012 are as follows:
31 December 2013 31 December 2012
Short-term bank borrowings
Short-term portion of long-term bank borrowings
Finance lease liabilities
500,177
907,958
3,006
208,452
681,662
2,358
Total short-term financial liabilities
1,411,141
892,472
Long-term bank borrowings
Finance lease liabilities
2,404,051
643
1,771,987
2,858
Total long-term financial liabilities
2,404,694
1,774,845
Total financial liabilities
3,815,835
2,667,317
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Zorlu Enerji 2013 Annual Report
116
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The details of short-term bank borrowings of the Group as of 31 December 2013 and 31 December 2012 are as follows:
Original Currency
2013
USD
Euro
TL
28,347
41,399
318,107
2012
20,581
171,763
Weighted average effective
interest rate per annum (%)
2013
2012
5.73
7.50
12.53
6.69
13.48
TL equivalent
2013
2012
60,501
121,569
318,107
36,689
171,763
500,177
208,452
As of 31 December 2013 the accrued interest expense on short-term and long-term bank borrowings is TL45,620 (31
December 2012: TL90,600).
The detail of short-term portion of long-term bank borrowings of the Group as of 31 December 2013 and 2012 is as
follows:
Original Currency
2013
Euro
USD
TL
Other
32,480
322,977
120,153
154,078
2012
35,822
292,418
73,671
135,451
Weighted average effective
interest rate per annum (%
2013
2012
6.09
5.60
12.17
12.37
6.90
5.24
10.90
15.06
TL equivalent
2013
2012
95,378
689,329
120,153
3,098
84,242
521,264
73,671
2,485
907,958
681,662
The detail of long-term bank borrowings of the Group as of 31 December 2013 and 31 December 2012 is as follows:
Original Currency
2013
Euro
USD
TL
Other
148,527
760,143
323,389
1,101,497
2012
169,269
763,785
675,363
Weighted average effective
interest rate per annum (%)
2013
2012
6.09
5.60
12.17
12.37
6.90
5.24
15.06
TL equivalent
2013
2012
436,149
1,622,373
323,389
22,140
398,070
1,361,525
12,392
2,404,051
1,771,987
Letters of guarantee given, pledges and mortgages related to financial liabilities are explained in Note 13.
Zorlu Enerji 2013 Annual Report
117
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The redemption schedule of the borrowings as of 31 December 2013 and 2012 is as follows:
Up to 1 year
Up to 1 to 2 years
Up to 2 to 3 years
Up to 3 to 4 years
Up to 4 to 5 years
More than 5 years
2013
2012
1,411,141
824,770
495,159
371,670
151,032
562,063
892,472
408,418
356,200
296,015
266,859
447,353
3,815,835
2,667,317
The book value and fair value of the borrowings as of 31 December 2013 and 2012 is as follows:
2013
Book Value
Fair Value
2012
Book Value
Fair value
USD
Euro
TL
Other
2,372,204
653,096
761,649
25,237
2,378,525
657,887
753,368
25,446
1,919,476
482,313
245,435
14,877
1,924,326
482,640
245,435
14,923
Total
3,812,186
3,815,226
2,662,101
2,667,324
The Group has completed sale transaction of the floating rate bonds, with a due date of 728 days and a nominal value
of TL93,000,000 and with a due date of 1,092 days and a nominal value of TL82,000,000 on 23 August 2013. Also,
pursuant to the material disclosure dated 1 November 2013, issuance of debentures having due date of 728 days with
the nominal value of TL156,879,000 and the debentures having due date of 1,092 days with the nominal value of
TL24,345,000 has been completed as of 1 November 2013.
Rotor, one of the subsidiaries of the Group, has signed a long term loan agreement as of 8 May 2009 with the
consortium of a group of financial institutions related to the 135 MW electricity production power plant located in
Osmaniye.
As of 2 December 2011, the Group obtained a loan from a syndication led by HSBC Bank Plc amounting to USD 435
million and EUR 70 million, for refinancing its entire syndication loan of USD 500 million obtained on 20 May 2008 led
by Standard Bank PLC and for partial refinancing of its other loans. The maturity of the loan is six years with a nonrepayable period of two years. As of 31 December 2013, based on the loan agreement, USD 435 million and EUR 70
million was drawn down.
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
118
Zorlu Enerji 2013 Annual Report
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
As of 26 October 2011, Zorlu Enerji Pakistan Ltd. subsidiary of Zorlu Enerji, signed a long term loan agreement with
International Finance Corporation (IFC), the Asian Development Bank (ADB), Eco Trade and Development Bank (ECO)
and local consortium leader Habib Bank Limited (HBL) amounting to USD 111,160,000 with a maturity of up to 12 years
for financing of its wind energy power plant with a capacity of 56.4 MW in Pakistan/Jhimpir established in Jhimpir, the
Sindh region of Pakistan. As of 31 December 2013, based on the loan agreement, USD 87.3 million and RUPI 1,271.2
million was drawn down.
Zorlu Doğal has purchased the operation rights of Tercan, Kuzgun, Mercan, İkizdere, Çıldır, Beyköy and Ataköy
hydro electrical power plants for Engil Gas Turbines and Denizli Geothermal Power Plant from Turkish Privatization
Administration for 30 years in auction for as of 5 March 2008. As of 31 December 2013, in the extent of this purchase
and investment, Zorlu Doğal has obtained USD440.6 million and TL15 million in two parts as, USD220.3 million and
TL7.5 million from Akbank T.A.Ş. and USD220.3 million and TL7.5 million from Türkiye Garanti Bankası A.Ş. Last payment
of related bank loans has been settled as March 2022.
NOTE 6 - TRADE RECEIVABLES AND PAYABLES
a) Trade Receivables
Trade receivables from related parties (Note 23)
Less: Unearned interest on receivables (Note 23)
Other trade receivables
Notes receivables and cheques
Less: Allowance for doubtful receivables
Less: Unearned interest on receivables
2013
2012
71,716
(152)
29,381
(20)
71,564
29,361
50,690
1,908
(7,988)
(41)
13,186
1,639
(8,302)
(8)
44,569
6,515
As of 31 December 2013, the average maturity of trade receivables is 15 days and are discounted with an average rate
annual interest rate of 8.6% (31 December 2012: 5.8%).
Movement for allowance of doubtful receivables is as follows:
2013
2012
1 January
Reversal
8,302
(314)
9,786
(1,484)
Ending balance, 31 December
7,988
8,302
Zorlu Enerji 2013 Annual Report
119
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The aging list of receivables that are overdue and impaired is as follows:
More than 12 months
2013
2012
7,988
8,302
7,988
8,302
Past experience of the Group at collecting its receivables is considered in providing doubtful receivable provisions. The
Group believes that no other trade receivable collection risk is present.
The Group has no receivable that is not considered as doubtful receivable and overdue.
b) Short term other trade payables:
Other payables to related parties (Note 23)
Less: Unrecognized credit finance expenses (Note 23)
Other trade payables
Less: Unrecognized credit finance expenses
2013
2012
73,354
(6)
19,528
(76)
73,348
19,452
135,232
(256)
279,079
(368)
134,976
278,711
As of 31 December 2013, the average maturity of trade payables is 30 days and are discounted with an average annual
interest rate of 9.1% (31 December 2012: 5.8%).
c) Long term other trade payables:
Trade payables to related parties (Note 23)
Other trade payables
2013
2012
-
2,381
1,112
-
3,493
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Zorlu Enerji 2013 Annual Report
120
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
NOTE 7 - OTHER RECEIVABLES AND PAYABLES
a) Short term other receivables:
Other receivables from related parties (Note 23)
Other short term receivables
2013
2012
173,514
4,178
288,652
6,458
177,692
295,110
2013
2012
2,566,830
2,112,562
2013
2012
582
-
220,459
5,261
582
225,720
2013
2012
1,366,500
1,056,768
b) Long term other receivables:
Other receivables from related parties (Note 23)
c) Short term other payables:
Other payables to related parties (Note 23)
Other payables
d) Long term other payables:
Other payables to related parties (Note 23)
Zorlu Enerji 2013 Annual Report
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Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
NOTE 8 - OTHER ASSETS AND LIABILITIES
a) Other current assets:
VAT receivable
Prepaid expenses
Advances given
Income accruals
Prepaid tax
Other
2013
2012
49,086
16,358
9,571
765
2,927
26,964
14,462
7,131
8,507
19
4,435
78,707
61,518
2013
2012
23,627
6,952
4
30,479
-
30,583
30,479
2013
2012
5,928
1,549
277
3,354
196
7,754
3,550
b) Other non-current assets:
Prepaid expenses
VAT receivable
Other
c) Other liabilities:
Deferred income
Income tax and social security premiums payable
Provisions for employment benefits
Zorlu Enerji 2013 Annual Report
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
NOTE 9 - FINANCIAL ASSETS
As of 31 December 2013 and 2012, subsidiaries, percentage of ownership and amounts are summarized as follows:
Company
Solad Energy Ltd.
Ezotech Electric Ltd.
Share %
2013
2012
42.15%
42.15%
2,553
6,038
2,553
6,038
8,591
8,591
In case the fair value is not measurable due to fact that there is no active market for financial assets and other fair value
calculation methods are not suitable for the calculation, fair value is carried at cost less any provision for impairment.
NOTE 10 - ASSOCIATES
Movement of associates as of 31 December 2013 and 31 December 2012 is as follows:
2013
2012
1 January
Capital increase in associates
42,894
51,906
22,072
20,822
31 December
94,800
42,894
As of 31 December 2013, Dorad Energy Ltd has been accounted for using the equity method of accounting by using
25% ownership rate and net asset value. Accordingly, impairment in value amounts to TL3,128 has been presented on
“share of loss of associates”
The information of associates’ financial tables is summarized as follows:
2013
Dorad Energy Ltd.
Assets
Liabilities
2,624,068
2,246,911
Revenue Net period loss
-
Ownership
rate (%)
(12,510)
25
Revenue Net period loss
Ownership
rate (%)
2012
Dorad Energy Ltd.
Assets
Liabilities
1,558,901
1,381,675
-
(5,153)
25
Zorlu Enerji 2013 Annual Report
123
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
NOTE 11 - PROPERTY, PLANT AND EQUIPMENT
1 January 2013 Additions (*)
Cost:
Land
Land improvements
Buildings
Plant and machinery
Motor vehicles
Furniture and fixtures
Construction work in
progress
Advances given
Accumulated
depreciation:
Land improvements
Buildings
Plant and machinery
Motor vehicles
Furniture and fixtures
Net book value
Transfers (**) Disposals
Translation Revaluation
Reserve
fund (***) 31 December 2013
7,318
26,364
42,938
2,218,825
447
8,645
3,149
111
2,242
166
1,254
588,108
266
(4,924)
(19)
3,481
9
300
35,360
11,340
635,958
734
10,767
61,835
54,278
3,443,690
613
10,889
289,692
23,574
354,457
-
(588,374)
-
(1,676)
(23,574)
15,058
-
-
69,157
-
2,617,803
361,379
-
(30,193)
18,548
683,692
3,651,229
9,985
7,119
534,111
268
5,066
3,127
964
129,053
102
1,145
-
(3,332)
(18)
535
4
-
13,112
8,083
660,367
370
6,197
556,549
134,391
-
(3,350)
539
-
688,129
2,061,254
2,963,100
Construction work in progress of Zorlu Hidroelektrik, Zorlu Jeotermal, Zorlu Pakistan and Zorlu Doğal amounts to TL12,089, TL14,778, TL45,798 and
TL281,791 on 2013 respectively.
(*)
As of 31 December 2013, construction work in progress belongs to Zorlu Pakistan and Zorlu Doğal TL243,688 and TL344,686 has been transferred to
plant and machinery and furniture and fixtures.
(**)
(***)
Note 2.6
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Zorlu Enerji 2013 Annual Report
124
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
1 January 2012 Additions Disposals
Cost:
Land
Land improvements
Buildings
Plant and machinery
Motor vehicles
Furniture and fixtures
Construction work in
progress
Advances given
Accumulated
depreciation:
Land improvements
Buildings
Plant and machinery
Motor vehicles
Furniture and fixtures
Net book value
(*)
Translation Consolidated
reserve (*) subsidiary (**)
Disposal of
subsidiaries
(***)
(151,867)
679,863)
(359)
(1,942)
Transfers 31 December 2012
5,738
26,317
44,003
1,320,533
522
7,746
1,410
37
469
155
471
(1,968)
(7)
(192)
(48)
(9)
(6,943)
(4)
(29)
170
1,092,915
325
2,447
1,968
10
150,811
491,721
-
7,318
26,364
42,938
2,218,825
447
8,645
1,427,654
-
196,946
23,574
(268)
-
(17,572)
-
85,930
-
(758,361) (644,637)
-
289,692
23,574
2,832,513
223,062
(2,483)
(24,557)
1,181,787
(1,592,392)
(127)
2,617,803
6,681
6,843
351,737
359
4,401
3,304
5,778
122,029
73
590
(2)
(94)
(9)
(7)
(581)
(3)
(11)
114,288
240
1,064
(5,495)
(53,360)
(307)
(969)
-
9,985
7,119
534,111
268
5,066
370,021
131,774
(105)
(602)
115,592
(60,131)
-
556,549
2,462,492
Translation reserves consist of exchange of Zorlu Enerji Pakistan and Rosmiks LLC’s property, plant and properties to TL currency.
(**)
Consolidated subsidiary consists of Zorlu Doğal’s property, plant and equipments.
(***)
Disposal of subsidiaries consist of Rosmiks LLC’s property, plant and equipments.
2,061,254
Zorlu Enerji 2013 Annual Report
125
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
As of 31 December 2013, the movement for revaluation fund of machinery and equipment is as follows:
2013
1 January
Revaluation of lands
Revaluation of land improvements
Revaluation of buildings
Revaluation of plant, machinery, furnitures and fixtures
Deferred tax liability on revaluation of machinery and equipment
300
35,360
11,340
636,692
(136,738)
31 December
546,954
As of 31 December 2013, borrowing cost in respect of construction in progress amounts to TL31,407 has been classified
to the cost of related asset (31 December 2012: TL9,123).
There are no commitments and contingencies on property, plant and equipments.
Breakdown of depreciation and amortization expenses based on cost of sales and operating expense has been
presented on Note 19.
NOTE 12 - INTANGIBLE ASSETS
Cost
Rights
Licenses
Accumulated depreciation
Rights
Licenses
Net book value
Translation
reserve 31 December 2013
1 January 2013
Additions
18,261
536
1,963
75
-
20,224
611
18,797
2,038
-
20,835
4,237
532
1,413
19
-
5,650
551
4,769
1,432
-
6,201
14,028
14,634
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Zorlu Enerji 2013 Annual Report
126
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Cost
Rights
Licenses
Accumulated
depreciation
Rights
Licenses
Net book value
1 January 2012
Additions
Consolidated
subsidiary
Translation
reserve 31 December 2012
18,261
401
28
111
(4)
18,261
536
18,662
28
111
(4)
18,797
3,041
516
1,196
17
-
(1)
4,237
532
3,557
1,213
-
(1)
4,769
15,105
14,028
Breakdown of depreciation and amortization expenses based on cost of sales and operating expense has been
presented on Note 19. The depreciation expense amounted to TL55,925 which was presented on Note 19 is related to
discontinued operations.
NOTE 13 - PROVISIONS, COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES
13.1 Provisions
As of 31 December 2013, there are various lawsuits against or in favor of the Group. The majority of these lawsuits are
consisting of administrative or labor lawsuits. The Group management estimates the outcomes of these lawsuits and
the financial effects thereof, and the required provisions are accounted for based on these estimates. The amount of
provisions for the lawsuits as of 31 December 2013 is TL258 (31 December 2012: TL258).
Provision for TRT fund
Provisions for lawsuits
2013
2012
475
258
344
258
733
602
Zorlu Enerji 2013 Annual Report
127
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The movement of TRT fund provision is as follows:
2013
2012
1 January
Current period provision
344
131
315
29
31 December
475
344
2013
2012
1 January
Released provisions
258
-
291
(33)
31 December
258
258
The movement of provision for lawsuits is as follows:
13.2 Contingent Liabilities
Letters of guarantee given
The commitments and contingent liabilities of the Group that are not expected to result in material loss or liability is
summarized as follows:
Currency
Guarantees given
Guarantees given
Guarantees given
Guarantees given
TL
USD
Euro
Other
2013
Original
currency
87,843
14,068
13,971
6,563
TL
equivalent
87,843
30,025
41,026
4,032
162,926
2012
Original
currency
43,723
17,447
13,971
6,563
TL
equivalent
43,723
31,101
32,855
3,151
110,830
Letters of guarantees given generally consist of letters given to government agencies for the electricity transmission
and distribution (mainly to “EMRA”) and government agencies providing electricity transmission and distribution) and
natural gas suppliers for the procurement of natural gas.
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Zorlu Enerji 2013 Annual Report
128
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
As of 2 December 2011, the Group obtained a loan from a syndication headed by HSBC Bank PLC amounting to
USD435 million and EUR70 million, for refinancing all of its syndication loan of USD 500 million obtained on 20 May
2008 led by Standard Bank PLC and for partial refinancing of its other loans. The maturity of the loan is six years with
a non-repayable period of two years. Zorlu Holding has been appointed as guarantor for this loan. In addition to that
Zorlu Holding is also guarantor for Zorlu Doğal’s investment loan from Akbank T.A.Ş. and Türkiye Garanti Bankası A.Ş.
amounting USD440.6 million and TL15 million.
As of 31 December 2013, the Group gave letters of guarantees on behalf of its associates operating in Israel which have
planned to complete four natural gas combined cycle electricity power plant stations amounting to USD3,991,600,
EUR542,500 and NIS6,562,500 in respect of the license for electricity production, EPC contract and other expenses
incurred during the construction phase.
13.3 Contingent Assets
Currency
Guarantees obtained
Guarantees obtained
Guarantees obtained
Cheques received
Cheques received
TL
USD
Euro
TL
USD
2013
Original
amount
15,522
22,136
687
1,171
111
TL
equivalent
15,522
47,245
2,017
1,171
237
66,192
2012
Original
amount
3,419
20,767
1,806
1,480
-
TL
equivalent
3,419
37,019
4,247
1,480
46,165
Guarantee letters received consists of the letters, cheques and notes received from customers in relation to the Group’s
operations.
Zorlu Enerji 2013 Annual Report
129
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The Group’s guarantees, pledges and mortgage (“GPM”) positions in TL as of 31 December 2013 and 2012 are as follows:
Original
currency
GPM’s given for companies’
own legal entity
Total amount of GPM given
for the subsidiaries and
associates in the scope of
consolidation
Total amount of GPM
given for the purpose of
maintaining operating
activities
Total other GPM’s given
2013
Original
amount
TL
amount
2012
Original
amount
TL
amount
USD
EURO
TL
76
13,428
80,053
162
39,431
80,053
304
13,428
35,932
542
31,578
35,932
USD
TL
10,000
7,790
21,343
7,790
10,000
7,791
17,826
7,791
3,992
543
6,563
-
8,520
1,595
4,032
-
7,143
543
6,563
-
12,733
1,277
3,151
-
USD
EURO
Other
-
162,926
110,830
Financial Information and Reports
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130
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
NOTE 14 - DERIVATIVE FINANCIAL INSTRUMENTS
2013
Fair value
Interest rate swap agreements (*)
Interest rate swap agreements
held for hedging
Held for trading
Foreign currency forward
agreements
(*)
2012
Fair value
Contract
amount
Asset
Liability
Contract
amount
Asset
Liability
175,000
-
(7,317)
-
-
-
2,043,844
-
(38,258)
1,686,826
-
(70,678)
152,852
-
(10,900)
54,262
1,588
-
2,371,696
-
(56,475)
1,741,088
1,588
(70,678)
As of 31 December 2013, the transaction relates to interest swap agreements regarding issued bonds amount to TL175,000.
Derivative financial instruments are initially recognised in the consolidated balance sheet at cost and subsequently
are re-measured at their fair value. The derivative instruments of the Group consist of interest rate swap and foreign
currency forward contracts.
On the date a derivative contract is entered into, the Group designates certain derivatives as either a hedge of the fair
value of a recognised asset or liability (“fair value hedge”), or a hedge of a forecasted transaction or a firm commitment
(“cash flow hedge”).
Interest rate swap transactions provide effective economic hedges under the Group risk management position and
qualify for hedge accounting under the specific rules and are therefore treated as derivatives held for hedging. Changes
in the fair value of derivatives that are designated as being and qualify as cash flow hedges and are highly effective, are
recognised in equity as “hedge reserves”.
When a hedging instrument expire s or is sold, or when a hedge no longer meets the criteria for hedge accounting,
or when a committed or forecasted transaction is no longer expected to occur, the cumulative gain or loss that was
reported in equity is immediately transferred to the consolidated statement of income.
The Group has TL144,343 purchase commitments in exchange for forward sale commitments amounting USD71,617 as
of 31 December 2013.
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131
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Movement of interest rate swap transactions is as follows:
2013
2012
70,678
17,047
(27,218)
47,562
2,115
6,069
45,575
70,678
2013
2012
1,303
1,179
1,303
1,179
2013
2012
1 January
1,179
3,204
Service cost
Interest cost
Termination benefits paid
Actuarial loss
192
126
(380)
186
(422)
(1,603)
-
31 December
1,303
1,179
1 January
Related to income statement
- Financial (loss)/income
Related to comprehensive income
- Hedge reserves
31 December
NOTE 15 - PROVISIONS FOR EMPLOYMENT BENEFITS
Provision for employment benefits
Movement of provision for employment benefits is as follows:
Provisions for employment termination benefits are allocated in accordance with the disclosures given below:
Under the Turkish Labour Law, companies are required to pay termination benefits to each employee who has completed
one year of service and whose employment is terminated without due cause, is called up for military service, dies or who
retires after completing 25 years of service (20 years for women) and achieves the retirement age (58 for women and 60 for
men). Since the legislation was changed on 23 May 2002, there are certain transitional provisions relating to the length of
service prior to retirement. The amount payable consists of one month’s salary limited to a maximum of TL3,254.44 for each
year of service as of 31 December 2013 (31 December 2012: TL3,033.98).
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132
Zorlu Enerji 2013 Annual Report
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Termination benefits liability is not dependent on any funding legally and any funding requirement does not exist.
The provision has been calculated by estimating the present value of the future probable obligation of the Group arising
from the retirement of employees.
IAS 19 requires actuarial valuation methods to be developed to estimate the enterprise’s obligation under defined benefit
plans. Accordingly, the following actuarial assumptions were used in the calculation of the total liability:
Discount rate (%)
Probability of retirement (%)
2013
2012
3.49
92.43
2.76
92.43
The principal assumption is that the maximum liability for each year of service will increase parallel with inflation. Thus, the
discount rate applied represents the expected real rate after adjusting for the anticipated effects of future inflation. The
amount payable consists of one month’s salary limited to a maximum of TL3,129 for each period of service as of 1 January
2013 (1 January 2012: TL2,917). The maximum liability is revised semi annually
NOTE 16 - EQUITY
Share capital
Zorlu Enerji adopted the registered capital system applicable to the companies registered on the CMB and defined a
limit to its registered capital for shares whose nominal value is Kr1 (“Kuruş”). As of 31 December 2013 and 2012 the
share capital held is as follows:
Limit on registered share capital (historical)
Issued capital
2013
2012
500,000
500,000
500,000
500,000
Zorlu Enerji 2013 Annual Report
133
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The Company’s shareholders and shareholding structure as of 31 December 2013 and 2012 are as follows:
Share % 31 December 2013
Zorlu Holding A.Ş.
Korteks Mensucat Sanayi ve
Ticaret A.Ş.
Publicly held
Other
Share % 31 December 2012
45.7
228,666
45.7
228,666
17.5
32.0
4.8
87,737
159,906
23,691
17.5
32.0
4.8
87,737
159,906
23,691
100.0
500,000
100.0
500,000
Adjustment to share capital
110,948
110,948
Total paid-in capital
610,948
610,948
Share Premium
Share premium
2013
2012
67
67
67
67
Share premiums presented in the consolidated financial statements represent the excess of the amount of shares issued
during the capital increases to their nominal values.
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Zorlu Enerji 2013 Annual Report
134
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
NOTE 17 - TAXES ON INCOME
31 December 2013 31 December 2012
Corporate and income taxes payable
Less: Prepaid taxes
1,235
(765)
19
(19)
470
-
Deferred tax assets
Deferred tax liabilities
242,694
(343,965)
65,795
(117,725)
Deferred tax liabilities, net
(101,271)
(51,930)
Taxes on Income
Turkish tax legislation does not allow for the submission of tax returns over consolidated financial statements
prepared by the parent company, which include its subsidiaries and affiliates. Accordingly tax considerations reflected
in these consolidated financial statements have calculated separately for each of the companies in the scope of the
consolidation.
In Turkey, corporation tax is payable at a rate of 20% for the years 2013 and 2012.
Corporations are required to pay advance corporation tax quarterly at the rate of 20% on their corporate income. Advance
tax is declared by the 14th and paid by the 17th of the second month following each calendar quarter end. Advance tax
paid by corporations is credited against the annual corporation tax liability. If, despite offsetting, there remains a paid
advance tax amount, it may be refunded or offset against other liabilities to the government.
The taxation on income for the Group for the three months period ended 31 December is summarised as follows:
Current period tax expense
Deferred tax income
2013
2012
(1,235)
88,276
(19)
(7,230)
87,041
(7,249)
Zorlu Enerji 2013 Annual Report
135
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The reconciliation of taxation on income for the year ended 31 December 2013 and 31 December 2012 as follows:
Income/(expense) before tax
Tax amount (over 20% tax rate)
Deductions and exemptions
Disallowable expenses
Tax incentive
Carry forward tax losses not utilized
Other
Deferred income taxes
2013
2012
(415,420)
83,084
10,790
(11,340)
7,460
(4,999)
2,046
602,707
(120,541)
3,573
(5,995)
4,925
(8,798)
119,587
87,041
(7,249)
Deferred Taxes
The Group recognizes deferred income tax based on all temporary differences arising between their financial statements as
reported for IFRS and its statutory tax financial statements. The currently enacted tax rate for temporary differences is 20%
(31 December 2012: 20 %).
The breakdown of cumulative temporary differences and the resulting deferred income tax assets/(liabilities) at 31
December 2013 and 31 December 2012 are as follows:
Temporary differences
2013
2012
Carry forward tax losses
Derivative financial instruments
Investment incentive
Provision for doubtful receivables
Unearned credit finance expense
Provision for employment termination benefit
Property, plant and equipment
Impairment for property, plant and equipment
Revaluation of property, plant and equipment
Loan commissions
Provisions for lawsuits
Other
Deferred tax liabilities, net
(356,370)
(50,521)
(37,302)
Deferred tax
assets/(liabilities)
2013
71,274
10,104
7,460
2012
10,348
(1,299)
229,725
(17,536)
683,693
45,615
(43,989)
(70,678)
(7,340)
9,135
(1,179)
337,835
37,220
(257)
(1,095)
(2,070)
260
(45,945)
3,507
(136,738)
(9,123)
8,798
14,136
1,468
(1,827)
236
(67,567)
(7,444)
51
219
506,353
259,652
(101,271)
(51,930)
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Zorlu Enerji 2013 Annual Report
136
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The movement of deferred tax assets and liabilities as of 31 December 2013 and 2012 is as follows:
1 January
2013
2012
(51,930)
(52,057)
Charged to income statement - financial income/(financial expense)
Charged to comprehensive income statement
- Hedge fund (net)
- Actuarial gain
- Revaluation fund
88,273
2,593
(914)
38
(136,738)
(2,466)
-
31 January
(101,271)
(51,930)
2013
2012
242,694
-
65,795
-
242,694
65,795
2013
2012
(343,965)
-
(117,725)
-
(343,965)
(117,725)
Analyze of deferred tax assets and liabilities is as follows:
Deferred tax assets:
- will be used over 12 months
- will be used less than 12 months
Deferred tax liabilities:
- will be used over 12 months
- will be used less than 12 months
As of 31 December 2013, The Group has investment incentive exemption amounting to TL306,362. TL37,302 of the
exemption can be fully deducted from income and for the remaining amount withholding tax will be collected at
utilization.
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137
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
As of 31 December 2013, the Group has carry forward tax losses amounting to TL356,370 (31 December 2012:
TL43,989) to be deducted from future profits and did not recognize deferred tax assets for the carry forward tax losses
amounting to TL451,314 (31 December 2012: TL375,607) for which the Group believes it will not utilize in the future.
The expiration dates of recognized carry forward tax losses are as follows:
Due Date
Losses
2014
2015
2016
2017
62,378
68,991
76,485
148,516
356,370
The expiration dates of unrecognized carry-forward tax losses are as follows:
Due Date
Losses
2014
2015
2016
2017
2018
20,274
60,461
179,290
36,724
154,565
451,314
NOTE 18 - REVENUE AND COST OF SALES
2013
2012
Revenue
Sales discount (-)
639,007
(2,770)
507,379
(2,676)
Net Profit
636,237
504,703
(632,891)
(519,813)
3,346
(15,110)
Cost of sales (-)
Gross profit
Financial Information and Reports
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
NOTE 19 - EXPENSES BY NATURE
Direct materials and merchandise expenses
Depreciation and amortization (*)
Repair and maintenance expenses
Energy expenses
Outsourcing expenses
Employee and personnel expenses (**)
Consultancy expenses
Other
(*)
2013
2012
427,568
135,823
36,190
12,536
10,664
7,129
5,916
23,350
393,885
77,062
15,759
6,726
4,866
11,228
17,549
32,367
659,176
559,442
Depreciation and amortization expenses for current period has been allocated to accounts of income statement as follows:
31 December 2013 31 December 2012
Cost of sales
Operating expenses
Discontinued operations
135,420
403
74,667
2,395
135,823
77,062
-
55,925
135,823
132,987
TL4,216 and TL2,913 TL of employee and personnel expenses has been recognized under operating expenses and cost of sales, respectively (31
December 2012 TL10,511 and TL7,510 respectively)
(**)
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Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
NOTE 20 - OTHER OPERATING INCOME AND EXPENSE
a) Other operating income
Project commission income (*)
Profit on sale of property, plant and equipment
Inventory count differences
Insurance gain
Provisions released
Tax income resulting from investment incentives
Release from provision for subsidiaries
Profit on sale of subsidiaries
Release from provision for inventories
Other
(*)
2013
2012
15,745
3,161
1,737
1,511
775
6,652
13,387
296
1,466
3,092
11,041
7,267
756,016
6,262
5,415
29,581
804,242
The balance consist of commission income received from foreign subsidiaries due to construction and procurement works.
b) Other operating expenses
Impairment of goodwill
Project cost
Compensation for project
Expense for relocated of turbine
Loss on sale of property, plant and equipment
Other
2013
2012
17,536
4,778
4,297
2,775
854
957
87
100
31,197
187
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
NOTE 21 - SHARE OF PROFIT OF ASSOCIATES
Profit share in associates
2013
2012
3,128
-
3,128
-
NOTE 22 - FINANCIAL INCOME AND EXPENSES
a) Financial income:
31 December 2013 31 December 2012
Interest income
Profit on derivative instruments
Unearned credit finance income
Foreign exchange gains
217,168
12,022
181
-
31,907
711
84,812
229,371
117,430
b) Financial expense:
31 December 2013 31 December 2012
Interest expenses
Foreign exchange losses
Unearned credit finance expense
Loss on derivative instruments
Other
330,502
238,736
8,118
39,752
232,823
1,485
1,042
28,689
617,108
264,039
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Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
NOTE 23 - TRANSACTIONS AND BALANCES WITH RELATED PARTIES
i) Related party balances:
a) Short term trade receivables from related parties
Zorlu Elektrik Enerjisi İhracat ve Toptan Ticaret A.Ş. (“Zorlu Elektrik Toptan”) (*)
Zorlu Holding A.Ş. (“Zorlu Holding”)
Korteks Mensucat Sanayi ve Ticaret A.Ş. (“Korteks”) (*)
Zorluteks Tekstil Ticaret ve Sanayi A.Ş. (“Zorluteks”) (*)
Other
Less: Unearned credit finance income (-)
(*)
2013
2012
37,961
23,753
5,605
3,233
1,164
5,177
15,797
4,801
3,048
558
(152)
(20)
71,564
29,361
The Group sells electricity to Korteks, Zorluteks ve Zorlu Elektrik Toptan.
Maturity of trade receivables from related parties is approximately 20 days and discounted with an average annual
interest rate for USD, EURO and TL balances of 6.5%, 6.5% ve 10.2%, respectively (31 December 2012: USD and Euro
6.5%, TL :10.2%).
b) Short term other receivables from the related parties
Zorlu Endüstriyel ve Enerji Tesisleri İnşaat Ticaret A.Ş. (“Zorlu Endüstriyel”) (*)
Zorlu O/M Enerji Tesisleri İşletme ve Bakım Hizmetleri A.Ş. (“Zorlu O/M”)
Zorlu Enerji İnşaat A.Ş.
Zorlu Elektrik Toptan
Other
2013
2012
88,377
79,850
4,853
434
252,164
20,510
4,871
11,037
70
173,514
288,652
The balance is related with the short term other receivable from Zorlu Endüstriyel regarding the construction of Kızıldere investment of Zorlu Doğal
mostly.
(*)
The maturity of the short term other receivables is less than a year and applied interest rate for TL balances is 10.2%,
USD and EURO balances is 6.5% (31 December 2012:TL balances: 10.2%, USD and EURO balances: 6.5%).
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
c) Long-term other receivables from related parties
Rosmiks International B.V. (*)
Dorad Energy Ltd. (“Dorad”) (**)
Edeltech Ltd. (“Edeltech”) (***)
Ezotech Ltd. (Ezotech”) (***)
Edelcom Ltd. (“Edelcom”) (***)
Solad Energy Ltd. (“Solad”) (***)
2013
2012
2,360,880
74,329
58,392
55,083
14,029
4,117
1,847,075
89,953
62,272
46,008
65,087
2,167
2,566,830
2,112,562
The receivable from Rosmiks BV amounting to USD1,106,061 will be due on 31 December 2026 and total amount will be repaid in 50 installments
including the first installment due on 30 September 2014. The interest rate is 6.5% per annum. In accordance with the agreement executed on 31
December 2013, an amount of USD551,488,436 from Rosmiks International BV’s (of whom Zorlu Holding A.Ş.. is 100% shareholder) debt to Zorlu Enerji
Elektrik Üretim A.Ş. which is USD1,106,161,309 in total including the accrued interest is assigned to Rosmiks Netherlands BV (BV’s (of whom Zorlu Holding
A.Ş.. is 100% shareholder) with a 6.5% compound interest rate and maturity date as 31 December 2026.
(*)
(**)
The receivable from Dorad is related to the payments guaranteed under the Dorad project.
Receivables from Edeltech, Edelcom, Ezotech and Solad consist of advances given for the power plants which have been planned to be constructed in
Israel.
(***)
d) Short-term trade payables to related parties
Zorlu Faktoring A.Ş.(“Zorlu Faktoring”) (*)
Zorlu Holding A.Ş.
Zorlu O/M
Zorlu Doğalgaz İthalat İhracat ve Toptan Ticaret A.Ş. (“Zorlu Doğalgaz”)
Zorlu Elektrik Toptan
Deniz Destek Oto Kiralama Temizlik Hizmetleri ve İnşaat A.Ş. (“Deniz
Destek”)
Other
Less: Unearned credit finance expense (-)
(*)
This amount is related with factoring activity between Zorlu Enerji and Zorlu Toptan.
2013
2012
60,000
8,297
1,454
152
4
6,123
5,503
2,296
2,366
35
3,412
2,296
944
(6)
(76)
73,348
19,452
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143
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Short term trade payables from related parties consist of general administrative expenses charged to Zorlu Enerji.
Maturity of short term trade payables from related parties is 30 days and applied annual interest rate for USD, EUR and
TL is 6.5%, 6.5% and 10.2% respectively (31 December 2012: For USD and EUR: 6.5%, for TL:10.2%).
e) Other payables to related parties
Zorlu Holding
Other
2013
2012
582
220,459
-
582
220,459
TL220,459 of payable arising from the purchase of shares of Zorlu Doğal from Zorlu Holding, was paid on 28 January
2013.
f) Long-term trade payables to the related parties
Zorlu Endüstriyel
2013
2012
-
2,381
2013
2012
882,044
291,770
64,521
61,372
52,933
9,389
3,901
570
756,157
251,275
10,514
25,138
9,496
3,898
290
1,366,500
1,056,768
g) Long-term other payables to the related parties
Zorlu Holding (*)
Z.F.S. Financial Services Ireland (“ZFS”) (**)
Zorlu Endüstriyel (***)
Zorlu Elektrik Toptan
Zorlu O/M
Korteks
Zorluteks
Other
As of 31 December 2013, the interest rate of the USD, Euro and TL denominated long term payable to Zorlu Holding are 6.5%, 6.5% and 10.2%,
respectively (31 December 2012: USD and Euro 6.5%, TL: 10.2%).
(*)
(**)
Due date of the liability which is obtained from Z.F.S. by Zorlu Doğal is 26 June 2023 and interest rate is 5%.
(***)
The interest rate of this payable, which has obtained on 25 January 2013 for financing purpose from Zorlu Endüstriyel, is 6.5%
Financial Information and Reports
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
ii) Transactions carried out with related parties for the period 1 January-31 December 2013 and 2012 are as follows:
Other
income/
(expense)
Financial
income/
(expense)
Sales
Purchases
Operating
expenses
378,789
53,517
31,152
826
-
29,216
41,821
17
65
1
2,528
4
98
96
2
212
2,243
575
1,007
2
367
695
64
43
(178)
3,494
260
25
16
148
(13,744)
12,538
(192,808)
512,861
(36,885)
27,304
13,748
13,392
21,762
10,706
1,682
464,284
73,652
5,297
3,872
370,556
1 January - 31 December 2013
Zorlu Elektrik Toptan
Korteks
Zorluteks
Zorlu O/M
Zorlu Holding
Rosmiks B.V
Zorlu Doğalgaz
ABH
ZFS
Trakya Bölgesi Doğalgaz Dağıtım A.Ş.
Zorlu Endüstriyel
Edeltech
Edelcom
Dorad
Ezotech
Other
Zorlu Enerji 2013 Annual Report
145
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Other
income/
(expense)
Financial
income/
(expense)
Sales
Purchases
Operating
expenses
206,275
47,119
26,203
324
65
40
9,645
15
18
26,493
12,067
19
75
120
3,504
485
2
353
12
40
13,387
90
33
504
19
272
425
695
(1,768)
(866)
(24,848)
(7,719)
(53)
10,958
(333)
(2,316)
588
(2,526)
1,586
280,026
48,257
4,539
14,782
(26,602)
1 January- 31 December 2012
Zorlu Elektrik Toptan
Korteks
Zorluteks
Zorlu Holding
Zorlu O/M
Trakya Bölgesi Doğalgaz Dağıtım A.Ş.
Zorlu Doğalgaz
Zorlu Endüstriyel
Edeltech
Edelcom
Dorad
Ezotech
Other
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
146
Zorlu Enerji 2013 Annual Report
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
The sales to the related parties consist of electricity sales.
The financial income is related with the interest and the foreign exchange gains of long term receivable Rosmiks BV
amounting to TL2,360,880.
Purchases of Zorlu O&M are related to cost of repair and maintenance. Other purchase amounts are related to expenses
charged to general administrative expenses.
Purchases from Zorlu O&M consists of cost of maintenance services and other purchases consists of charges to the
Group for general administrative expenses.
Operating expenses to Zorlu Holding, Zorluteks, Zorlu Elektrik Toptan and other related parties are related to the general
administrative expenses allocated to them.
Financing income and expenses from/to Zorlu Holding consisted of interest and foreign exchange differences regarding
short term trade payables and long term other payables.
Financing income and expenses from/to ZFS consisted of interest and foreign exchange differences regarding long term
other payables.
Financing income and expenses from/to Zorlu O&M consisted of interest and foreign exchange differences regarding short
term trade payables and long term other payables.
Financing income and expenses from Zorlu Endüstriyel consisted of interest and foreign exchange differences resulted
from advances given for the construction of Kızıldere.
Financing income and expense from Dorad, Edeltech, Edelcom, and Solad are related to the interest and foreign exchange
gains/losses on the advances given regarding the construction in progress in Israel.
Financing income and expenses from Zorlu Elektrik Toptan and other related parties consisted of interest and foreign
exchange differences regarding the other receivables and payables.
Zorlu Enerji 2013 Annual Report
147
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
iii) Key management compensations for the periods between 1 January - 31 December 2013 and 2012 are as follows:
For the purpose of these consolidated financial statements, key management compensation consists of the payments
made to Group shareholders and top management (General Manager and Vice General Managers and directors).
Salaries
2013
2012
1,277
2,164
NOTE 24 - EARNING/(LOSS) PER SHARE
Earnings per share disclosed in the accompanying statement of income are determined by dividing net income by the
weighted average number of shares in existence during the year concerned.
2013
2012
(323,374)
588,103
(0,0066)
0,0115
Nature of business
Country
Financial services
Electricity production
Holland
Russia
Net period (loss)/income for equity holders of the Company
(Loss)/income per 1,000 share
Nominal value of each of the issued share as of 31 December 2013 and 2012 is 1 Kr.
NOTE 25 - DISCONTINUED OPERATIONS
Company
Rosmiks International B.V.
Rosmiks LLC
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
148
Zorlu Enerji 2013 Annual Report
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
Rosmiks International B.V. (“Rosmiks BV”)
This company was established in 2006 for the purpose of providing financial support to two energy plant projects in Russia with
a capacity of 340 MW of electricity and 2.500.000 Gcal/year of steam and owns 100% of Rosmiks LLC.
Rosmiks LLC
Rosmiks LLC, which is a 75..5% subsidiary of Zorlu Energy, was established for the purpose of building and operating two energy
plants respectively in “Kojuhovo” and “Tereshkovo” regions in Russia with a capacity of 340 MW of electricity and 2.500.000 Gcal/
year of steam each.
Tereshkovo Power Plant was constructed with an investment of USD 500 million approximately; its construction which
incorporates a planned capacity 340 MW of electricity and 150 gcal/hour of steam has been undertaken by Zorlu Endüstriyel
ve Enerji Tesisleri İnşaat Ticaret A.Ş.. First phase of Tereshkovo power plant, involving capacities of 170 MW of electricity and
150 gcal/hour of steam has been completed. Tereshkovo power plant has commenced production as from 14 November
2011. As of 14.03.2012, district heating, hot water and combined-cycle power generation system has also been commissioned
by Tereshkovo natural gas combined cycle plant’s first phase in addition to 170 MW of electricity and 150 gcal/hour of steam
production units.
ICFS International LLC, indirect owner of Rosmiks LLC in the percentage of %100 which was established to operate the
Tereshkovo ve Kojuhovo Projects that are conducted in Russian Federation; sold all its shares in Rosmiks International BV, direct
shareholder of Rosmiks LLC in the percentage of %100, to Zorlu Holding A.Ş. on 28.12.2012 over a price of USD 25.061. As a
result of this share transfer, Zorlu Holding A.Ş., has become direct and indirect shareholder in the percentage of %100 in Rosmiks
International BV and Rosmiks LLC respectively.
Zorlu Enerji 2013 Annual Report
149
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
a) Income/(loss) from discontinued operations
1 January - 31 December 2012
Discontinued operations
Revenue
Cost of sales (-)
54,934
(107,827)
Gross loss for discontinued operations
(52,893)
Marketing and selling expenses (-)
General and administrative expenses (-)
Other income
Other expense (-)
(4)
(22,210)
2,972
-
Operating loss for discontinued operations
(72,135)
Financing income
Financing expense (-)
53,285
(27,308)
Loss profit before taxation for discontinued operations
(46,158)
Current income tax expense (-)
Deferred tax income
Period loss for discontinued operations
23,158
(23,000)
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
Zorlu Enerji 2013 Annual Report
150
Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
b) Cash flow information for discontinued operations
1 January - 31 December 2012
Net cash generated from operating activities
Net cash generated from investing activities
Net cash used in financing activities
105,398
41,703
(203,010)
(55,909)
c) Information for sales income of discontinued operations
31 December
Rosmiks BV
Rosmiks LLC
Total
Cash and cash equivalents
Trade receivables
Receivables from related parties
Other current assets
Property, plant and equipment
Borrowings
Trade payables
Other payables
Deferred tax liabilities, net
Translation reserve
23
371,220
1,322,582
1
(1,847,075)
(15,410)
(513)
5,271
1,844
29,191
1,532,261
(1,521,965)
(568,041)
(9,935)
(12,535)
5,294
373,064
1,322,582
29,192
1,532,261
(3,369,040)
(583,451)
(9,935)
(13,048)
(42,902)
Net assets and liabilities
Less : Cash received
Income from sale of financial asset
(755,983)
(33)
756,016
Cash received
Proceed of cash and cash equivalents (-)
33
(5,294)
Net proceed
(5,261)
Zorlu Enerji 2013 Annual Report
151
Notes to Consolidated Financial Statements
for the Year Ended 31 December 2013
(Amounts expressed in thousands Turkish Lira (“TL”), unless otherwise indicated.)
NOTE 26 - EVENTS OCCURRING AFTER THE REPORTING PERIOD
Pursuant to the material disclosure dated 30 January 2014, the interest rate regarding 2. Coupon Payment Period of the
debenture bond (which is sold by the Company to the off-exchange investors on the dates 28-30-31 October 2013 with
a nominal value of TL156,879,000 and maturity date of 728 days) is ensured to be 3.5952%.
With reference to material disclosure dated January 31,2014, as per 31 January 2014 an interest payment at the amount
of TL4,479,836.61 and TL725,553.99 respectively has been paid as the first coupon payment of the TRSZORNE1512
ISIN and TRSZORNE1611 ISIN numbered bonds issued by the company with a nominal value of TL156,879,000 and
TL24,345,000 respectively.
In accordance with the material disclosure dated November 26, 2013, our Company has been notified that our
application with regard to the amendment of the generation license has been approved by EMRA on February 17, 2014
and the installed capacity of the Alaşehir Geothermal Power Plant has been increased from 30 MW to 45MW.
As per the material disclosure dated 20 February 2014, the interest payment rates of third coupon payment of the
bonds, issued by Zorlu Enerji Elektrik Üretim A.Ş., on 20-21/08/2013 with a nominal value of TL93,000,000 and 728
days term, numbered TRSZORN81517 ISIN and with a nominal value of TL82,000,000 and 1092 days term, numbered
TRSZORN81616 ISIN; which is sold to qualified investors over the counter, has been finalized as %3 and %3.7403
respectively.
With reference to material disclosure dated February 21,2014, as per 21 February 2014 an interest payment at the
amount of TL2,924,756.95 TL and TL2,681,071.99 respectively, has been paid as the second coupon payment of the
bonds numbered TRSZORN81517 ISIN and TRSZORN81616 ISIN, issued by the company with a nominal value of
TL93,000,000 and TL82,000,000 respectively.
Financial Information and Reports
Zorlu Enerji Elektrik Üretim A.Ş.
152
Zorlu Enerji 2013 Annual Report
Investor Information
Independent Auditor
Başaran Nas Bağımsız Denetim ve
Serbest Muhasebeci Mali Müşavirlik A.Ş.
A member of PricewaterhouseCoopers
Süleyman Seba Caddesi, BJK Plaza, No: 48 B Blok,
Kat 9 Akaretler Beşiktaş 34357 İstanbul - Turkey
Telephone: +90 (212) 326 6060
Fax: +90 (212) 326 6050
Financial Data and Company News
Financial statements, auditor reports, material disclosures and annual reports of Zorlu Enerji are available on the
Company’s website at http://www.zorluenerji.com.
Additionally, requests for information can be submitted to the Investor Relations Department of Zorlu Group of
Companies via phone and e-mail.
Investor Relations
Serap Mutlu
Investor Relations Director
Zorlu Plaza 34310 Avcılar-Istanbul
Phone: +90 (212) 456 23 00
[email protected]
Başak Dalga
Investor Relations Manager
Zorlu Plaza 34310 Avcılar-Istanbul
Phone: +90 (212) 456 23 00
[email protected]
Directory
ZORLU ENERJİ ELEKTRİK ÜRETİM A.Ş.
ZORLU DOĞAL ELEKTRİK ÜRETİMİ A.Ş.
İstanbul: Zorlu Plaza 34310
Avcılar - İstanbul
T: +90 (212) 456 23 00
F: +90 (212) 422 00 99
İstanbul: Zorlu Plaza 34310
Avcılar - İstanbul
T: +90 (212) 456 23 00
F: +90 (212) 422 00 99
Bursa (Merkez): Organize Sanayi Bölgesi,
Pembe Cad. No:13, 16159 Bursa
T: +90 (224) 242 56 16
F: +90 (224) 242 56 11
Erzincan (Tercan Santrali): Atatürk Mah.
Erzurum Yolu 2. Km Tercan - Erzincan
T: +90 (446) 441 30 75
F: +90 (446) 441 30 41
Kırklareli: Yenimahelle D100 Karayolu 17\F,
Lüleburgaz - Kırklareli
T: +90 (288) 427 31 17
F: +90 (288) 427 31 77
Rize (İkizdere Santrali): İkizdere HES
İşletme Müdürlüğü İkizdere -Rize
T: +90 (464) 416 12 06
F: +90 (464) 416 10 05
Ankara: ASO 1. Organize Sanayi Bölgesi
Büyük Selçuklu Cad. No: 1 06935
Sincan - Ankara
T: +90 (312) 267 19 29
F: +90 (312) 267 19 39
Eskişehir (Beyköy Santrali): Sarıcakaya
İlçesine 16 Km mesafede, 26870
Sarıcakaya - Eskişehir
T: +90 (222) 663 73 81
F: +90 (222) 663 73 81
Kayseri: Organize Sanayi Bölgesi 6. Cad. No:
21 Melikgazi - Kayseri
T: +90 (352) 321 24 20
F: +90 (352) 321 29 18
Kars (Çıldır Santrali): O&M Enerji Tesisleri
İ.Ş.A.Ş.T. Çıldır HES Arpaçay - Kars
T: +90 (474) 281 24 30
F: +90 (474) 281 23 52
Yalova: İpek Kağıt Fabrikası, Zorlu Enerji
Tesisleri, Tokmakköyü 77700 Altınova - Yalova
T: +90 (226) 462 89 00
F: +90 (226) 462 88 99
Tokat (Ataköy Santrali): Almus ilçesine
7 Km mesafede Almus - Tokat
T: +90 (356) 411 34 66
F: +90 (356) 411 30 70
ROTOR ELEKTRİK ÜRETİM A.Ş.
Tunceli (Mercan Santrali): Ovacık İlçesi’ne
13 Km mesafede Ovacık - Tunceli
T: +90 (428) 511 24 92
İstanbul: Zorlu Plaza 34310
Avcılar - İstanbul
T: +90 (212) 456 23 00
F: +90 (212) 422 00 99
Osmaniye (RES İşletme Müdürlüğü)
Gökçedağ Mevkii 8. Km Yönetim Binası
Bahçe - Osmaniye
T: +90 (328) 861 30 01
F: +90 (328) 861 30 07
This report is printed on recycled paper
ZORLU JEOTERMAL ENERJİ ELEKTRİK
ÜRETİMİ A.Ş.
İstanbul: Zorlu Plaza 34310
Avcılar - İstanbul
T: +90 (212) 456 23 00
F: +90 (212) 422 00 99
ZORLU HİDROELEKTRİK ENERJİ ÜRETİM A.Ş.
İstanbul: Zorlu Plaza 34310
Avcılar - İstanbul
T: +90 (212) 456 23 00
F: +90 (212) 422 00 99
ZORLU RÜZGAR ENERJİSİ ELEKTRİK
ÜRETİMİ A.Ş.
İstanbul: Zorlu Plaza 34310
Avcılar - İstanbul
T: +90 (212) 456 23 00
F: +90 (212) 422 00 99
ZORLU ENERJİ PAKİSTAN LIMITED
Pakistan: House No. C-117, Blok-2 Clifton
Kehkashan Scheme Karachi - PAKİSTAN
T: +92 21 777 97 06
F: +92 21 529 16 81
Erzurum (Kuzgun Santrali): İspir Yolu 56.
Km Ilıca - Erzurum
T: +90 (442) 645 20 76
F: +90 (442) 645 20 86
Denizli (Sarayköy Santrali): Denizli İzmir
Karayoluna 1 Km mesafede Sarayköy - Denizli
T: +90 (258) 429 11 00
F: +90 (258) 429 11 48
Produced by Tayburn
Tel: (90 212) 227 04 36
www.tayburnkurumsal.com
www.zorluenerji.com.tr

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