TURKEY’S LEADING ENERGY COMPANY
2012 ANNUAL REPORT Since 1960 we at Kazancı Holding have been striving to deliver superior-quality products and dependable services.
Every company that is a member of the Kazancı Group works on the basis of this shared awareness and constantly renews and develops itself with a focus on achieving unconditional customer satisfaction.
The enduring confidence that those customers who choose our products and services have in the Aksa name is our greatest motivation as we continue to raise the standards, by which our efforts are judged, to even higher levels.
This motivating force is also the source of inspiration for the investments we undertake as a team and which further reinforce our market leadership.
Ali Metin Kazancı Kazancı Holding Chairman
Contents
2 Corporate Profile 4 Financial and Operational Indicators 6 Kazancı Group 8 Aksa Energy’s Sustainable Growth Strategy 14 Chairman’s Message 16 CEO’s Assessment of 2012 18 Aksa Energy’s Production Capacity 28 Aksa Energy Board of Directors 29 Aksa Energy Management Team 30 Economic and Sectoral Outlook 38 Assessment of Activities in 2012 45 Human Resources at Aksa Energy 47 Health and Safety at Aksa Energy 48 Corporate Governance Principles Compliance Report 59 Summary of Auditor’s Report 60 Financial Statements and Independent Audit’s Report
Aksa Energy is a member of.
2 AKSA ENERJİ 2012 FAALİYET RAPORU In today’s energy sector, power generation and distribution companies need to provide high-quality services in an environment of perfect competition. Privatization and liberalization have radically changed the outlook of the electricity sector.
A redefinition in the sectoral realities which have come hand sector, offers unique potential for both the national private in hand with the rapid growth in energy needs have rendered capital and international capital. power generation, transmission and distribution as diverse functions, entailing specialization in each of these areas. Aksa Energy continues to lead the sector as a respected participant, set trends in the sector and generate added As one of the most rapidly growing economic powers of value for its stakeholders with its installed capacity, efficiency, the world and in the region, Turkey also stands out with the capacity utilization and ambitious growth strategy. rapid growth in its demand for electricity. Our country, which is undergoing the final stage of liberalization in its electricity
AKSA ENERGY 2012 ANNUAL REPORT 1 Corporate Profile
Aksa Energy is Turkey’s leading energy company. Founded in 1997, Aksa Energy is Turkey’s leading independent power producer with 2,048 MW of installed capacity as of the end of 2012.
A diverse and wide production portfolio Operating in line with its mission of supplying high quality, continuous power to its customers, Aksa Energy carries out production at a total of 15 power plants. Aksa Energy’s production portfolio comprises of plants that generate power by using a range of energy resources, including natural gas, fuel oil (combined cycle thermal resources), the wind and hydroelectric energy.
Accounting for 10% of the total installed capacity of independent producers in Turkey, Aksa Energy commands a 13% share of the total electricity generated by independent producers. With its power plant in the Turkish Republic of Northern Cyprus (TRNC), Aksa Energy also helps Cyprus meet its electricity needs.
A producer that offers all the advantages of the energy value chain Aksa Energy’s field of expertise is the production and sale of energy. With the synergy of the vertical and horizontal integration that it has built with the other companies of its parent, Kazancı Group, Aksa Energy operates in each and every ring of the energy value chain from production to distribution. The Company holistically meets all required services and solutions in-house during the installation and operational cycles of the power plants that are included in its production portfolio. This strengthens Aksa Energy’s position and competitive edge in the sector in terms of efficiency, effectiveness and productivity.
Involved in energy in all of Turkey’s regions Having recently attached special importance on its investments in domestic and renewable resources, Aksa Energy, with its 4 wind farms and one hydroelectric power plant in its portfolio, has one of the largest renewable energy capacities of any company in Turkey.
With five projects still under construction, three projects that await EMRA (Energy Market Regulatory Authority) approval and 16 licensed and pre-licensed projects in its portfolio, in addition to the 15 power plants in its production portfolio, Aksa Energy is involved in energy in all of Turkey’s regions, with a focus on sustainable growth.
Targeting around 4,000 MW in installed capacity by 2017 Making a difference in its sector with its robust technical equipment, infrastructure and competent human resources, Aksa Energy aims to raise its installed capacity to 4,000 MW by 2017.
The shares in Aksa Energy, a subsidiary of Kazancı Holding, are traded in the ISE National Market under the AKSEN ticker. At the end of 2012, the Company’s total turnover and EBITDA had reached TL 1,841 billion and TL 323 million, respectively.
2 AKSA ENERGY 2012 ANNUAL REPORT A value chain from production to distribution
AKSA ENERGY 2012 ANNUAL REPORT 3 Financial and Operational Indicators
Maintaining its organic growth in a reliable manner, Aksa Energy once again demonstrated a successful financial and operational performance in 2012.
Consolidated (TL million) 2008 2009 2010 2011 2012 Net sales 425 878 911 1,315 1,841 Net profit for the period 4 83 59 (122) 219 EBITDA 70 227 190 300 323 EBITDA margin (%) 17 26 21 22 18 Total assets 1,379 1,902 2,385 2,832 2,617 Shareholders' equity 374 472 824 796 1,203 Total investments 561 269 417 330 130
Aksa Energy Shareholding Structure
(31.12.2012) (June, 2013) Kazancı Holding A.Ş. Kazancı Holding A.Ş. 81.54% 61.91%
Goldman Sachs Goldman Sachs International International 13.30% 16.62%
Public Float 5.15% Public Float Other 21.46% 0.01% Other 0.01%
4 AKSA ENERGY 2012 ANNUAL REPORT Financial and Operational Indicators
A tripling in its capacity in the last 5 years. Aksa Energy undertook more than TL 1.7 billion in investments With its investments, Aksa Energy raised its installed capacity in 2012. from 690 MW in 2008 to 2,048 MW in 2012.
In parallel with the increase in its installed capacity over the last 5 years, Aksa Energy has steadily raised its electricity production, which reached 9,784 GWh in 2012.
Total Installed Capacity (MW) Electricity Production (GWh) Total Investments (TL million)
2,036 2,048 9,784 561
1,542 417 1,342 6,181 330 269 4,227 690 3,053 130
1,018
08 09 10 11 12 08 09 10 11 12 08 09 10 11 12
In order to reach its installed capacity target by Aksa Energy aims to 2017, Aksa Energy plans to buy three power plants (Kapıdağ Wind Farm - 34.85 MW, the Akköy Hydroelectric Farm- increase its installed capacity 13.4 MW and the Siirt fuel oil power plant - 24 MW) and to complete its wind farm projects with new investments in Belen to 4,000 MW (30 MW) and Kıyıköy (27 MW) and a capacity increase in by 2017. Sebenoba (30 MW).
Aksa Energy also plans to complete and commission a variety of power plants between 2014 and 2017 428 1,041 134 270 MW of MW of MW of MW of hydroelectric natural gas wind lignite based energy capacity based capacity energy capacity power capacity
AKSA ENERGY 2012 ANNUAL REPORT 5 Kazancı Group
Production-Distribution-Technical Support/Service in every ring of the energy value chain
Kazancı Group is Turkey’s leading integrated energy Aksa Power Generation group. The foundations of Kazancı Holding were As one of the leading players in the global generator market, laid down during the 1960’s. The Group started the Aksa Power Generation is also one of Turkey’s top 200 industrial corporations and exporters. Exporting more than 50% of its production of generators in the 1980’s and completed production, the Company has production plants in Turkey and its integrated organizational structure on schedule China. With 12 offices located in Asia, Europe and Africa, the within the scope of the energy value chain. Company is one of the world’s top 10 companies in this sector. www.aksa.com.tr Engaged in the installation of power plants and power generation since the 1990’s and natural gas distribution activities since Aksa Service & Rental the year 2000, the Holding has progressed to new phases With Turkey’s largest fleet of generators for rent, Aksa Service in its vertical and horizontal restructuring in the energy sector. & Rental meets its domestic and foreign customers’ needs for The Group has evolved into a fully integrated energy holding generators through leasing at its offices in Dubai and Istanbul. by engaging in each and every ring of the energy value chain Providing uninterrupted service throughout Turkey 24 hours a day through its power distribution activities that were launched back in through its service network, Aksa Service & Rental works to resolve 2010. all types of technical problems that its customers may encounter through an experienced staff and modern service vehicles. Kazancı Holding owns four more energy companies in addition to www.aksaservis.com.tr Aksa Energy:
Aksa Natural Gas Distribution Regions
Çatalca-Hadımköy Zonguldak* Samsun*** Düzce Rize Amasya Ordu Giresun Trabzon Bolu Gümüşhane Çanakkale Bursa** Tokat Bilecik Bayburt Balıkesir**** Sivas
Manisa Afyon Malatya Elazığ Van
Adana Osmaniye Şanlıurfa Mersin
Hatay
* Ereğli ** Gemlik, Karacabey, Mustafa Kemal Paşa *** Çarşamba, Terme **** Bandırma, Susurluk Aksa Natural Gas Distribution Regions
6 AKSA ENERGY 2012 ANNUAL REPORT Kazancı Holding-Turkey’s largest energy group-offers unique growth potential.
Aksa Natural Gas Kazancı Holding has completed its vertical and horizontal Operating in 20 of Turkey’s 62 license regions, Aksa Natural Gas integration in the following areas: is Turkey’s largest private natural gas distributor. The Company is - Electricity generation a major player in the market, serving nearly 2.5 million potential - Electricity distribution and sales customers in the regions included in the Company’s distribution - Natural gas distribution, sales and wholesale network with a total population of 9.7 million. Aksa Natural Gas Leading the competition in the energy business line with its increased its total distribution network to 12,073 km in 2012. expertise, Kazancı Holding aims to grow in the energy sector with www.aksadogalgaz.com.tr a long-term strategic focus and to strengthen its leading position.
Aksa Electricity Selling about 5.6 TWh of electricity per year to 1.9 million subscribers in the Çoruh and Fırat electricity distribution regions, Aksa Electricity relies on the Aksa Group’s production capacity to provide electricity to consumers at reasonable pricing within the scope of its wholesale activities. www.aksaelektrik.com.tr
With energy as its primary field of activity, Kazancı Holding also has subsidiaries in the agriculture and tourism sectors which contribute to the Holding’s turnover.
Aksa Electricity Distribution Regions
Artvin Rize Giresun Trabzon Gümüşhane
Bingöl Tunceli
Malatya Elazığ
Çoruh Electricity Distribution Company Fırat Electricity Distribution Company
AKSA ENERGY 2012 ANNUAL REPORT 7 From local resources to international markets
8 AKSA ENERGY 2012 ANNUAL REPORT AKSA ENERGY 2012 ANNUAL REPORT 9 Aksa Energy’s Sustainable Growth Strategy
Aksa Energy is focused on growth and creating value by carefully making use of its production strengths and competitive advantages in the Turkish energy market, which had successfully completed its privatization process by January 1st, 2013.
Foundations of our strategies Our achievements and corporate targets Succeed
Efficient, young production fleet Capacity increases and new projects Licenses on renewables
Peak shaving Capacity utilization Increase in base load sales
Lignite and natural gas-based fuels Fuel diversity Renewable energy resources roadmap
Fuel procurement BOTAŞ Our strategic
Sales to BSM (Balancing&Settlement Market) Customer access Sales to free customers through bilateral agreements Export
Turkey Geographical expansion Cyprus
10 AKSA ENERGY 2012 ANNUAL REPORT Aksa Energy has identified six tactical landmarks as defining its sustainable growth roadmap.
The objective of Aksa Energy’s long-term strategy is to further entrench its market leadership and ensure that it achieves consistent, solid growth.
Our strategic roadmap Our short-term objectives Our long-term objectives Aksa Energy: Capacity and efficiency increases Undertaking and operating hydroelectric Plans to maintain its leadership in the through combined-cycle conversions and lignite-fired power plants independent power producers market through new and efficient renewable Increase in production of renewable To capitalize on business opportunities energy-based power plants energy presented by privatizations in Turkey and peripheral countries
Creation of a continuous load profile and Development of relations for base load Aims to develop a customer portfolio which increase in base load sales sales to customers through long-term covers all categories, within the framework contracts of horizontal and vertical harmonization that it has established with the energy companies of the Kazancı Group Development of wind and hydroelectric Increasing renewable energy production Aims to create the most economical and resources efficient fuel mix from all available fuel Utilization of domestic local resources such types Conversion from oil based generation to as lignite natural gas based generation Development of facilities for the direct To commence fuel production and enter Aims to achieve low production costs acquisition of fuel from manufacturers long-term contracts with manufacturers and to secure fuel procurement by (neighboring countries, LNG) developing efficient and long-term relations with fuel suppliers Improvement and diversification of Increasing the number of bilateral Aims to guarantee and increase sales relations with free customers agreements and expansion of the free through long-term sales contracts and an customer mass served expanding client portfolio Improvement of cross-selling facilities of the power distribution companies of the Utilization of export opportunities Kazancı Group Utilization of opportunities for exporting Development of activities in international Exploits electricity energy export facilities to peripheral countries markets and power plant investments in countries in the region where there is a high energy need
AKSA ENERGY 2012 ANNUAL REPORT 11 The Foundations Supporting Aksa Energy’s Sustainable Growth Strategy
The low level of per capita electricity consumption when compared to developed countries and the projected CAGR of 6.4% in electricity consumption until 2020 indicate the significant development and investment potential for the Turkish energy sector. In terms of macroeconomic and sectoral aspects: A rapidly growing sector The low level of per capita electricity consumption, when Substantial growth potential for the Turkish compared to developed countries, and the projected CAGR of economy 6.4% in electricity consumption until 2020 indicate the significant Having differentiated itself by demonstrating steady growth after development and investment potential for the Turkish energy sector. the global financial crisis in 2008, Turkey’s credit rating was raised by Fitch to investment grade in 2012. Having completed the liberalization of its electricity market by January 1st, 2013, Turkey is on course to maintain the most The Turkish economy, which grew by 2.2% in 2012, is on rapid rate of growth in electricity consumption among European course to notch up one of the highest growth rates in the world countries during this period. for the foreseeable future, thanks to not only its demographic characteristics and level of industrialization, but also the trading opportunities to be found in the neighboring region.
12 AKSA ENERGY 2012 ANNUAL REPORT Aksa Energy generates electricity by optimally utilizing its natural gas and fuel oil based combined cycle thermal resources as well as its wind and hydroelectric resources.
In terms of the company: Backed by many years of experience in the sector, Aksa Energy’s senior management and technical Aksa Energy is Turkey’s leading independent staff have always worked with a strong team ethic. power producer. Aksa Energy carries out its operations with a strong team spirit. Aksa Energy is a leading company that accurately foresaw the Members of the senior management have an average of 15 years liberalization of the Turkish electricity sector successfully achieved of experience in the sector. Likewise, Aksa Energy has a strong its targets. As the sector leader in terms of installed capacity, Aksa and professional team of technical staff, which represents the most Energy differentiates itself and steps up its value production through competent labor force in the sector. the horizontal and vertical integration which it has established with other Kazancı Group companies. Striving for operational excellence in all of its activities A project portfolio geared towards sustainable Striving for operational excellence in all of its activities growth Aksa Energy’s competent and experienced project development With six projects still under construction, three projects awaiting and operating teams play a key role in maintaining operational approval from EMRA (Energy Market Regulatory Authority) and excellence. Aksa Energy boasts the lowest production, 21 licensed projects in its portfolio, Aksa Energy is active in all of maintenance and operating costs in the sector, providing a Turkey’s regions, with a focus on sustainable growth. very valuable foundation for the Company’s productivity and profitability. A strong portfolio of power plants Aksa Energy generates electricity by optimally utilizing its natural Operating under predictable demand conditions gas and fuel oil based combined cycle thermal resources as well The predictability of demand conditions in electricity sales brings as its wind and hydroelectric resources. Always incorporating a significant competitive advantage for the Company. Such the latest technology in its electricity generation processes, Aksa predictability is supported by a variety of key factors, such as the Energy’s production portfolio comprised of 15 power plants Company’s production activities in the TRNC, its strong presence located throughout Turkey at the end of 2012. throughout Turkey and Kazancı Group’s wide client portfolio in electricity distribution activities.
A horizontal and vertical group organization. Actively engaged in electricity and natural gas markets, Kazancı Group’s vertically and horizontally integrated structure provides Aksa Energy with extremely valuable cross-business facilities in the areas of fuel supply, marketing and sales.
AKSA ENERGY 2012 ANNUAL REPORT 13 Chairman’s Message
Cemil Kazancı Chairman of the Board of Directors
As we leave behind 2012, we reflect that it was a year in this time period, global energy consumption is projected to which global economic growth lost momentum and the debt grow by 50%. All these simple facts necessitate the creation crisis in Europe deepened. of a fully competitive market. In other words, the liberalization Having started 2012 with in a lackluster state, the (privatization) of the energy market must be completed and the world economy was subject to volatility and unexpected public sector will need to transfer its investor - operator position developments throughout the year. However, as the central to the private sector. In any part of the world, governments banks of developed countries started to support national must supervise and regulate the energy sector, while energy economies from the middle of the year, there was some degree production and distribution are performed by strong private of relief for the world economy. sector players.
Such support was mostly geared towards the alleviation of the A successful completion of the liberalization of the Turkish problems in the financial sector, while consumers could not energy market benefit from this as it was not turned into loans. As a result, the As we leave behind the year 2012, we recognize that Turkey global economy grew by a mere 3.2% - notably lower than has successfully completed its energy market liberalization projections and the global potential.* program, which it has been conducting over a considerable period of time. As one of the world’s 20 largest economies, Turkey was able to maintain its steady growth performance under these The completion of the process of liberalization in the market negative circumstances by optimally adjusting the composition represents a very important step, coming at a time of increasing of its economic growth. Despite the contraction in domestic demand for energy, which is one of the most important driving demand, the decline of the current account deficit - which forces in the prosperity of the developing Turkish economy. represents an Achilles Heel for our economy - and the positive The energy sector has gained a competitive structure and all results achieved in other economic parameters set the stage for stakeholders, particularly consumers, are protected by the Turkey’s credit rating to be raised to investment grade for the regulations introduced by the government. first time in many years. The government added momentum to the privatization of A steady increase in the importance of energy power generation plants in 2012. In addition to Seyitömer Under such a fragile global economic conjuncture marked by and Kangal thermal power plants, that generate electricity from frequent transitions and transformations, it is extremely important domestic lignite resources, Hamitabat - Turkey’s first natural to ensure the security of energy supply and improve investment gas based power plant - was privatized. The tenders called opportunities in order to maintain sustainable economic growth. for the privatization of electricity distribution companies were For this reason, enabling cost-efficient procurement and efficient completed with the sale of the remaining 4 regions in the first use of high-quality energy is of paramount importance in quarter of 2013. maximizing competition, both within the energy market and between the energy market and other markets, and in raising The decline of the free consumer limit from 25,000 KWh to the competitive strengths of sectors. 5,000 KWh has granted 80% of the players in the market the freedom to choose their own suppliers. The private sector According to OECD calculations, global demand for energy accounts for 31% of the electricity produced in Turkey in 2012 in 2030 will stand almost 35% higher than in 2005. During and we expect this rate to increase over time. *IMF, World Economic Outlook.
14 AKSA ENERGY 2012 ANNUAL REPORT In 2012, Aksa Energy, as Turkey’s leading independent energy producer and a member of Kazancı Holding, continued to meet the increase in demand and undertook intensive and continuous efforts to become a global company with its experience, know-how and quality.
Turkey has recorded the second sharpest rise in energy power plant in Göynük, Bolu, which is planned to have an demand among OECD countries in the last decade. As installed capacity of 270 MW, will generate electricity from energy needs increase with each passing year, Turkey’s role lignite coal in the region. Moreover, construction work is still in meeting this demand is becoming more crucial, given its under way on our Belen and Kıyıköy wind farms, which will location on a crossroads of international energy distribution add 57 MW of additional capacity, while there will also be networks between the Middle East, the Caucasus and a 30 MW capacity increase at the Sebenoba wind farm. We Europe. In parallel with its growing economy, Turkey’s energy aim to commission these plants in 2013. With the completion consumption increased by 5% YoY in 2012 to reach 242 of these projects, the share of renewable resources within our billion KW. portfolio will reach 14%.
As part of its plans for the year 2023 - the 100th anniversary As part of the achievable targets which we, as Kazancı Group, of the Turkish Republic - Turkey has set ambitious targets for the have determined for the coming periods, we will work with energy sector. Accordingly, Turkey aims to increase its installed determination to reflect our potential to meet Turkey’s electricity capacity to a total of 125,000 MW, to commission 8 nuclear demand to our performance. reactors with a total capacity of 10,000 MW, to raise the share of renewables to around 30%, to increase electricity Accordingly, our most reliable characteristics, our competent production from coal and water, to raise its installed capacity human resources, experience and strong infrastructure are in wind power from 1,694 MW in 2010 to 20,000 MW by reflected in such a performance in the energy market, where 2023 and to establish the power exchange market. the liberalization efforts have been completed.
Generating value for its stakeholders as a responsible leader As a producer aware of its responsibilities, we continue to As Turkey’s leading independent energy producer and a work in all processes of the energy value chain; we carry member of Kazancı Holding, Aksa Energy continued to meet Aksa Energy’s strengths to the future and create added value the increase in demand in 2012 and undertook intensive by using our know-how in the appropriate manner. Together and continuous efforts to become a global company with its with our employees, who help us create such value, and experience, know-how and quality. our stakeholders, with whom we share this value, Aksa will maintain its leadership in Turkey and continue to carve out a Having achieved all of its investment targets for 2012, our name for itself in the international arena as well. Company has also maximized its financial and operational performance and maintained its position as the leading On my behalf of myself and our Board of Directors, I would corporation in the energy market by strengthening the like to take this opportunity to extend my gratitude to all of deeply rooted and reputable Aksa brand with its strengths our stakeholders, who have believed in and trusted the Aksa in production, high quality standards, responsibility to the brand, and who prefer to walk with us in our journey to the environment and the community, devotion to ethical standards future. and ethical business principles and competence to unstintingly generate added value for the economy and the community. Cemil Kazancı Chairman of the Board of Directors In another important development in 2012, Aksa Energy adopted the target of increasing the share of domestic and renewable energy resources within our portfolio. The thermal
AKSA ENERGY 2012 ANNUAL REPORT 15 CEO’s Assessment of 2012
Serdar Nişli CEO
Esteemed stakeholders, million in 2011 to TL 323 million in 2012. As energy demand and spot prices were lower than expectations, particularly In what has been the final year of the transformation process in in the last quarter of 2012, the Company’s EBITDA margin the sector and the year 2012 marked a period in which Aksa narrowed by 4 percentage points from 22% in 2011 to 18% Energy was; in 2012. Aksa Energy completed 2012 with a net profit of ••concentrated on increasing its installed capacity in domestic TL 219 million. and renewable resources, ••effected improvements - particularly in marketing ales The peripheral service contracts which Aksa Energy signed with processes within the scope of the energy value chain, TEİAŞ (Turkish Electricity Transmission Company) throughout ••undertook a variety of efforts in parallel with the liberalization the year for Primary and Secondary Frequency Control systems process in an effort to reinforce its leading position in the provided an additional flow of income. sector, ••and strongly demonstrated the positive impact of the The Company successfully continued its production activities in investments it undertook in previous periods in its turnover. the TRNC throughout the year, while the contract that stipulates the export of 2 TWh of electricity to Syria per year was Backed by its increasing installed capacity and capacity extended for one year. However, because of the worsening utilization rate political situation and technical problems in Syria, the Backed by its increasing installed capacity and capacity Company did not sell any electricity to Syria in the last quarter utilization rate, Aksa Energy generated a high turnover in of 2012. 2012. Aided also by its capacity increase and improvement investments, the Company raised its installed capacity to Another important development that took place in 2012 was 2,048 MW in 2012. The total amount of electricity generated the commissioning of the power plants in Kazancı Holding’s by Aksa Energy rose by 58% from 6,181 GWh in 2011 to electricity production license portfolio. These power plants will 9,784 MW in 2012. be transferred to Aksa Energy to the account of Aksa Energy’s receivables from the Holding. This operation will be completed With this level of production, Aksa Energy accounted for with no cash outflow and Aksa Energy will add 3 new licenses 12% of the total electricity generated by Turkish independent with a planned total installed capacity of 72 MW to its producers, maintaining its leadership. In the same period, portfolio. Aksa Energy sold 39% of the electricity that it produced to the Balancing & Settlement Market (spot market) while at the same We focus on domestic and renewable resources in our new time the number of its free industrial, commercial and residential investments. customers to which it sold energy within the framework of Within our strategy to expand our installed capacity portfolio, bilateral agreements was doubled. Aksa Energy, which had we attach priority to domestic and renewable resources in our only sold 14% of its total production volume in 2010, raised new investments. Still under construction, our thermal power this ratio to 61% in the space of just 2 years, thanks to its plant in Göynük, Bolu will generate electricity from lignite effective marketing activities. coal reserves in the region. Within the scope of our efforts to expand our wind farm, the ongoing wind energy investments In 2012, the Company realized a 60% capacity utilization in Belen and Kıyıköy and the work on increasing capacities rate, while its net sales grew by 41% to reach TL 1.84 billion. conducted at the Sebenoba Wind Farm will further increase Similarly, the Company’s EBITDA rose by 11% from TL 300 our installed renewable resource capacity.
16 AKSA ENERGY 2012 ANNUAL REPORT From 2013, we are ready to step up the pace of our investments, which will raise our Company’s installed capacity to a new level and have already conducted preliminary efforts to this end. We completed the year 2012 as a period in which we geared up our production and trade cycles, in accordance with our targets.
All these efforts, which also serve Turkey’s “Year 2023” vision, 2017, we will be generating about 6 billion KWh of electricity represent valuable and significant steps taken to protect the with very low production costs, thanks to our renewable energy environment in our world, which has been tackling climate portfolio that will reach 1,008 MW in total capacity. This will change for a very long time. strengthen our Company’s competitive edge and contribute to its EBITDA figure. Our power plant investments based on domestic and renewable resources also contribute to decreasing Turkey’s We will continue to grow and increase our efficiency. current account deficit. According to our projections, the Turkish economy will enjoy more positive circumstances in 2013. During this period, we We maintain our efforts towards our target of increasing our will focus on raising our sales within the scope of bilateral installed capacity to 4,600 MW by 2017 through the licenses agreements and stepping up our marketing activities. We have in Aksa Energy’s portfolio. In addition to our investments based already guaranteed 60% of our sales target for 2013 through on domestic and renewable resources as summarized above, existing bilateral agreements. Our other target is to maintain we will concentrate, within the scope of our strategic investment our currently high capacity utilization rate. plan, to complete the 862 MW portion of our hydroelectric power plant projects and to expand our installed natural gas In an environment where liberal market conditions are fully capacity by 1,040 MW beginning by 2013. provided, Aksa Energy is determined to demonstrate a high performance as a leading company. In 2013 we aim to add around 160 MW in additional capacity and generate 10,000 GWh of electricity. We plan By making use of the opportunities for horizontal and vertical to add a total of 160 MW of extra capacity to our production integration offered to us by Kazancı Holding, which we are a volume through various mergers and acquisitions in 2013. member of, we would like to reach more customers and share Our year-end target is to raise our total installed capacity to the added value we produce with our residential, commercial 2,207 MW. We also plan to generate 10,000 GWh of and industrial customers throughout Turkey under the most electricity in 2013 by maintaining our capacity utilization rate feasible conditions. around 60%. We are aware that energy is a basic input for a sustainable In 2013 we will add an extra 135 MW of capacity to our and prosperous world. We are determined to take the installed capacity of renewable resources. With this addition, responsibility as imposed by such awareness. the total capacity of our renewable energy production portfolio will reach 310 MW. Our target for 2017 is to raise the share I would like to thank and extend my respect to all who have of renewable resources within our entire portfolio to over 25%. contributed to our performance in 2012.
By the way, I would like to talk to you about a subject that Serdar Nişli closely affects the productivity of lignite-based power plants, CEO hydroelectric power plants and wind farms. The most important feature of the production activities carried out at these plants is that sources under our control, such as lignite and water, do not impose any input cost. According to our projections, by
AKSA ENERGY 2012 ANNUAL REPORT 17 Uninterrupted and high-quality energy
18 AKSA ENERGY 2012 ANNUAL REPORT AKSA ENERGY 2012 ANNUAL REPORT 19 Aksa Energy Projects and Licenses
ÇORUM İNCESU HEPP KIYIKÖY - 27 MW Capacity: 15 MW
SIRAKAYALAR - 12 MW PAZARKÖY - 26.4 MW TOR - 120 MW GÖYNÜK - 270 MW
AYRES WEPP Capacity: 5 MW
EMET - 21 MW BALIKESİR ŞAMLI WEPP TATLAR - 59 MW Capacity: 114 MW İNDERE - 30 MW
MANİSA KARAKURT WEPP Capacity: 11 MW YAMANLI - 24 MW
MANİSA NGCC Capacity: 115 MW EFRENK - 20 MW
KUZEY KIBRIS HFO Capacity: 120 MW
ANTALYA NGCC HATAY SEBENOBA WEPP Capacity: 1,150 MW Capacity: 30 MW
Wind Farms Natural Gas Power Plants Fuel-Oil Power Plants Lignite 20 AKSA ENERGY(WEPP) 2012 ANNUAL REPORT (NGCC) (HFO) Power Plants Operating and Under Construction PP’s
Licensed and Granted Licensed PP’s
Çoruh Aksa Electricity Distribution Region
Fırat Aksa Electricity Distribution Region SAMSUN NGCC Capacity: 131 MW
KORU - 15 MW
ŞAHİNKAYA - 85 MW KULETAŞI - 30 MW KOZBÜKÜ - 62 MW SANSA - 85 MW OLUR - 60 MW
KAZAN - 20 MW
NARLI - 89 MW
AYŞEHATUN - 82 MW
AVLUCA - 40 MW KOR - 47 MW
VAN NGCC Capacity: 115 MW
HAKKARİ HFO Capacity: 24 MW
DİPNİ - 29 MW İDİL HFO Capacity: 24 MW
BELEN - 30 MW
KIBLEKAYASI - 15 MW
YURTTEPE - 13.5 MW MARDİN - 1 HFO Capacity: 33 MW ŞANLIURFA NG MARDİN - 2 HFO Capacity: 129 MW Capacity: 32 MW
Hydroelectric Licensed Licensed Power Plants (HEPP) Hydroelectric PP’s Wind Farms AKSA ENERGY 2012 ANNUAL REPORT 21 Aksa Energy’s Power Plants (Production Capacity)
Ali Metin Kazancı Antalya Natural Gas Combined-Cycle Power Plant
1,150 MW natural gas combined-cycle power plant The Ali Metin Kazancı Antalya Natural Gas Combined-Cycle Power Plant was established in 2008 to meet the need for constant and high-quality energy in the Western Mediterranean region, an area which has gained prominence with its development of tourism.
As of the end of 2011, the plant had reached a total installed capacity of 1,150 MW, including two Siemens SGT5-4000F gas turbines (300 MW each), one Siemens SST5-5000F steam turbine (300 MW), four GE LM6000 gas turbines (50 MW each) and two GE Thermodyne steam turbines (each with a capacity of 25 MW).
It is Turkey’s most efficient independent power plant among combined-cycle plants with a thermal efficiency of 59%.
22 AKSA ENERGY 2012 ANNUAL REPORT Manisa Natural Gas Combined-Cycle Power Plant
115 MW natural gas combined- cycle power plant The Manisa Natural Gas Combined-Cycle Power Plant was established in 2008 to meet the increasing energy needs of Manisa, which has taken firm steps towards being a key industrial heartland in the Aegean region.
At the end of 2011, the plant had reached a total installed capacity of 115 MW, including 12 gas- fired WARTSILA generating sets (8.7 MW each) and AALBORG boilers, and one DRESSER-RAND steam turbine (10.5 MW). The plant is Turkey’s first engine driven gas-powered combined-cycle power plant.
Van Natural Gas Combined-Cycle Power Plant
115 MW natural gas combined- cycle power plant The Van Natural Gas Combined- Cycle Power Plant was established in 2009 to meet the increasing energy needs of Van and nearby cities.
By the end of 2011, the plant had reached a total installed capacity of 115 MW, including 12 gas-powered WARTSILA generating sets (8.7 MW each) and AALBORG boilers and one DRESSER-RAND steam turbine (10.5 MW). Maintaining production without interruption without interruption during and after the earthquake in 2011, the plant proved its importance for the region. The plant includes a state-of-the-art carbon-monoxide oxidation system.
AKSA ENERGY 2012 ANNUAL REPORT 23 Aksa Energy’s Power Plants (Production Capacity)
Samsun Natural Gas Combined-Cycle Power Plant
131 MW natural gas combined- cycle power plant Conversion of the engines of Samsun Fuel-oil Combined-Cycle Power Plant to natural gas was completed and commissioned. The plant has a total installed capacity of 131 MW, including 7 WARTSILA engines (18.5 MW each) and AALBORG boilers, and one Siemens steam turbine (8.5 MW). Operating to meet the region’s increasing energy needs, the power plant has the second largest installed capacity in our power plant portfolio.
Şanlıurfa Natural Gas Power Plant
120 MW natural gas power plant The Şanlıurfa Natural Gas Power Plant was established in 2011 to meet the increasing energy needs of Şanlıurfa and nearby cities.
By the end of 2011, the plant had a total installed capacity of 120 MW, including 12 gas- powered WARTSILA generating sets (9.7 MW each).
1 DRESSER-RAND steam turbine (11.5 MW) was commissioned in the second half of 2012.
24 AKSA ENERGY 2012 ANNUAL REPORT Northern Cyprus (Kalecik) Power Plant
120 MW fuel oil fired power plant 130 MW fuel oil fired power plant 6 WARTSILA 18V46 diesel engines (17.8 MW each)
The original 5-year agreement with KIB-TEK that ended in 2008 was extended on a 15+3-year basis. The plant has a DeSOx emissions control system installed.
The plant’s combined-cycle conversion was completed in the third quarter of 2011. 6 x AALBORG boilers and 1 DRESSER-RAND turbine (13.5 MW) were commissioned.
Mardin Power Plant
63 MW fuel oil power plant 3 WARTSILA 18V38 diesel engines (11 MW each)
3 more WARTSILA 18V38 diesel engines were commissioned in the first half of 2011.
Hakkari Power Plant
24 MW fuel oil power plant 4 WARTSILA 18V32LN diesel engines (6 MW each)
The plant has a DeSOx emissions control system installed. The plant was commissioned in 2001 and has been meeting local electricity requirements since then.
AKSA ENERGY 2012 ANNUAL REPORT 25 Aksa Energy’s Power Plants (Production Capacity)
İdil Power Plant
24 MW fuel oil power plant 4 WARTSILA 18V32LN diesel engines (6 MW each)
The plant was commissioned in 2001. The plant has a DeSOx emissions control system installed.
Şamlı Wind Farm
114 MW capacity wind farm located in the Şamlı district of the Balıkesir province The wind farm has thirty 80 m-tall Vestas V90 wind turbines (each with a 3 MW capacity), ten Vestas V90 wind turbines (1.8 MW each) and three Vestas V90 wind turbines (2 MW each).
With a total installed capacity of 114 MW, the Şamlı wind farm has one of the biggest installed capacities of any wind farm in Turkey. An application has been submitted for the plant’s Gold Standard Certification. It operates on a 95% readiness basis under a 5-year operation and maintenance contract with Vestas.
Sebenoba Wind Farm
A 30 MW capacity wind farm located in the Sebenoba district of the Hatay province The plant has fifteen 67 m-tall Vestas V80 wind turbines (2 MW each).
The wind farm was awarded with the VER+ Standard Voluntary Emission Certification in view of its low carbon emissions. It operates on a 95% readiness basis under a 3-year operation and maintenance contract with Vestas.
26 AKSA ENERGY 2012 ANNUAL REPORT Karakurt Wind Farm
10.8 MW capacity wind farm located in the Karakurt district of Manisa province The wind farm has six 80 m-tall Vestas V90 wind turbines (1.8 MW each).
The wind farm was the first in Turkey to be awarded the VCS+ Standard Voluntary Emission Certification. It was commissioned in 2007.
Ayres Wind Farm
5 MW capacity wind farm located in the Ayvacık district of the Çanakkale province The wind farm has three 80 m-tall Vestas V90 wind turbines (1.8 MW each). It was commissioned in 2011.
İncesu Hydroelectric Power Plant
15 MW river type power plant located on the Çekerek River in the Çorum province The power plant consists of the Kazankaya regulator and the İncesu hydroelectric power plant. It includes three VATECH Francis hydro-turbine generators (each with a capacity of 5 MW). It was commissioned in 2011. The İncesu HPP was the first hydroelectric power plant to be added to Aksa Energy’s production portfolio.
AKSA ENERGY 2012 ANNUAL REPORT 27 Aksa Energy Board of Directors
L-R: Yavuz İşbakan, Yağmur Şatana, Serdar Nişli, Cemil Kazancı, Tülay Kazancı, Çetin Yalçın
Cemil KAZANCI Çetin YALÇIN Chairman Board Member (1961) Cemil Kazancı began his career working in the Kazancı (1949) Çetin Yalçın graduated with a bachelor’s degree from the Group. His first management position was in generator production Faculty of Law at Istanbul University in 1971. In addition to his seat on and sales. He subsequently played an active role in the formation of Aksa Energy’s Board of Directors and his law practice, Mr. Yalçın also Aksa Energy, which was set up to expand the group’s operations in serves as a legal adviser for Kazancı Holding. the energy industry and to generate electricity, and which commenced operation in 1997. In addition to being chairman of Aksa Energy, Yavuz İŞBAKAN Mr. Kazancı is a member of the boards of directors of Kazancı Holding Independent Board Member and a number of other group companies. Cemil Kazancı is married and has one child. (1942) Yavuz İşbakan retired from his position as assistant general manager for Türkiye Sınai Kalkınma Bankası in 2004. Currently Mr. İşbakan is an independent board member of Aksa Energy and Serdar NİŞLİ previously he served of a number of other companies. Board Member and CEO (1954) Serdar Nişli graduated from the Middle East Technical Yağmur ŞATANA University (Department of Mechanical Engineering) with bachelor and Board Member master’s degrees. Following his education, he began his career at the TEK Çayırhan Thermal Power Plant and worked in a variety of private (1963) Yağmur Şatana began his 22-year banking and finance career sector positions for 18 years prior to joining Kazancı Holding in 1996. at İktisatbank in 1987. He joined Finansbank in 1989, where he In addition to being a member of the Aksa Energy Board of Directors, served at various management positions until 2008. He served as the Serdar Nişli is also the company’s general manager. chairman and board member in 16 companies operating under Fiba Holding and joined Kazancı Holding in 2012. Mr. Şatana is married Tülay KAZANCI and has one child. Board Member (1959) Tülay Kazancı has been a member of the Aksa Energy Board of Directors since April 2010. She also holds a seat on the Kazancı Holding Board of Directors as well as seats on the boards of ATK Sigorta Aracılık Hizmetleri and Aksa Anadolu Yakası Makine Satış ve Servis.
28 AKSA ENERGY 2012 ANNUAL REPORT Aksa Energy Organizational Chart
CEO
CFO General Manager of Energy Sales
Energy Trade Director
Investor Relations Electricity Wholesale Manager Assistant General Manager, Operation Assistant General Manager, Projects Director
Electricity Foreign Trade Energy Accounting Subsidiaries Head Office Engineering Project Site Coordinator Director Manager
••Antalya Power Plant ••Power Plants Electricity Wholesale ••Manisa Power Plant ••Diesel Power Plants WEPP Sites Coordinator Manager of HEPP Project Accounting Manager ••Van Power Plant ••Natural Gas Plants ••Ş.Urfa Power Plant ••Antalya WEPP Plants ••Samsun Power Plant ••Occupational Help, Quality Budget and Reporting ••TRNC Power Plant ••Logistics, Sap, Insurance Manager ••Environmental Engineering ••Sebenova WEPP ••Payments ••Alenka WEPP ••Mardin Power Plant ••Inventory Control ••Mobile Power Plant Corporate Financing ••Hakkari Power Plant ••Documentation ••Cyprus Power Plant Manager ••Siirt Power Plant ••İdil Power Plant ••Şamlı WEPP Manager of Electricity Projects Manager of Mechanical Project Cash Management ••Karakurt WEPP (Treasury) Manager ••Ayvacık WEPP ••İncesu HEPP ••Automation ••CC Power Plant Business Development ••Göynük Coal Plan ••LV-MV ••Urfa CC HEPP ••Coal Power Plant
••WEPP Urfa Gas Fired CC ••Map Engineer Aksa Energy Management Team ••HEPP
Cüneyt UYGUN Aslı SU ATA CFO Investor Relations Manager A graduate of the Saint Joseph French High School, Cüneyt Uygun Aslı Su Ata joined Kazancı Holding in 2010. She graduated with graduated with a bachelor’s degree in mathematics and a master’s bachelor and master’s degrees from the Department of Business degree in economics from the Boğaziçi University. He joined Kazancı Administration, Istanbul University. She has also completed an MBA Holding in 2010. After undertaking a variety of management from the University of Leeds (UK). Before joining Kazancı Holding, Mrs. positions at Türkiye Sınai Kalkınma Bankası, Efes İçecek, and Turkcell, Ata undertook a variety of management positions at Osmanlı Bank, Mr. Uygun served as the chief financial officer for Turkcell’s operations Garanti Bank, Oyak Yatırım, Turkcell, and Tekstilbank. in Ukraine. Handan BÜYÜKKARDEŞ Şenol İNAN Budget & Reporting Manager Assistant General Manager for Operations Handan Büyükkardeş graduated from the Department of Economics Şenol İnan graduated with a bachelor’s degree in electrical and at the Middle East Technical University. Before joining Kazancı electronic engineering from Yıldız Technical University. He joined Holding, she served at Akbank and KPMG Mali Müşavirlik (a Kazancı Holding in 1997 and is responsible for the operation of the financial consultant firm). Working at Aksa Energy since 2005, she group’s power plants. was appointed in various positions in Project Finance and Budget & Reporting departments. Ms. Büyükkardeş also holds an independent Kaan GÖRENEK accountancy and financial advisor certificate. Assistant General Manager for Projects Kaan Görenek graduated from the Department of Mechanical Aylin KIRHAN Engineering at Kocaeli University. Before he started working for the Corporate Finance Manager Kazancı Group as a project manager in 2001, Mr. Görenek served Aylin Kırhan graduated from the Department of Economics in English as a project engineer at a number of other private-sector firms. at Istanbul University. Before joining Kazancı Holding, she worked at KPMG Mali Müşavirlik. Working at Aksa Energy since 2006, she has Nermin AKPINAR been appointed in various positions in the Project Finance department. Director of Energy Trade Ms. Kırhan also holds an independent accountancy and financial Nermin Akpınar graduated from the Department of Electrical and advisor certificate. Electronic Engineering at the East Mediterranean University. Before joining Kazancı Holding in 2007, she worked at Doğa Energy in the Ersan DEVREZ energy trade field. Accounting Manager Ersan Devrez graduated from the Department of Economics, Faculty Mutlu SEVİMLİ of Political Sciences, Istanbul University. He joined Kazancı Holding Director of Electricity Wholesales in 2006. Mr. Devrez also holds an independent accountancy and Mutlu Sevimli graduated from the Department of International Business financial advisor certificate and the CMB Independent Audit License. Administration and Finance at Southern New Hampshire University. He joined Kazancı Holding in 2001. After working as the General Fatma UTAN Manager of Aksa Nigeria, he joined his current position as the Director Finance Director for Business Development at Kazancı Holding and the Director for Fatma Utan graduated from the Department of Economics at Marmara Electricity Wholesales at Aksa Energy. University. She began her banking career at Töbank in 1989 as an assistant inspector. Before joining Kazancı Holding in 2010, she served as an inspector, budget & reporting and financial audit officer, manager of the loans & marketing department and then as the corporate branch manager at Türkbank, Demirbank, Interbank and Halkbank, respectively.
AKSA ENERGY 2012 ANNUAL REPORT 29 Economic and Sectoral Outlook
While global economic growth lost momentum in 2012, the Turkish economy has successfully managed the soft- landing process.
The developments experienced in the Eurozone in 2012 have Besides the monetary expansion policies applied in Europe, negatively affected the global economy. the European Central Bank (ECB) announced a short-term In general, the growth rates declined in developed and bill-bond purchase program for highly indebted countries. developing countries and fluctuations were observed in the Subsequently, the ECB was able to prevent a further increase global risk appetite throughout the year. The primary issues in the borrowing costs of the Spanish and Italian economies that were discussed in the global were the inability to increase through such purchases. Efforts shown by the ECB to protect the employment in USA and the fiscal cliff that was on the agenda Euro at all costs and the EU’s efforts to ensure the survival of the by the end of the year; high public debt stocks, problems European banking sector played a key role in the alleviation of in the banking sector and lack of trust in the economy in concerns. the Eurozone; the new Japanese government that attaches priority to growth and monetary expansion coming into force; The new government that came to power in Japan preferred and generally, the monetary expansion policies currently to apply a monetary expansion policy and raised the inflation implemented on a global scale. target to 2% in 2012. Japan also declared that it would buy a specific amount of assets every month with no time restriction The FED not only announced the 3rd quantitative easing beginning by 2014. package, but also declared that it would continue similar practices going forward. Despite relatively positive growth rates Another year of lower growth rates for developing economies in the US economy, the FED had to announce a 3rd quantitative in 2012 easing package as the housing and employment markets still Inflation concerns and exchange rate based risks have gained failed to exhibit the desired level of growth. prominent in developing countries. The downward trend in the growth rate of China, the world’s second biggest economy that Attention in the USA in 2012 was mostly concentrated on the provides the largest contribution to the growth of developing presidential elections. economies, continued in 2012. Having closed 2012 with a As soon as the election campaign, which saw Obama returned 7.8% growth rate, China entered a recovery trend towards to power, was over, the US economy had to face the situation the end of the year. Leading indicators show that China will known to the markets as the ‘fiscal cliff’, which anticipates maintain its strong growth in the periods to come, but at a rate the removal of tax breaks provided in previous periods and a below the average trend. lowering public spending. This caused considerable unease in the markets but gave way to an eleventh hour consensus The IMF projects that global GDP will grow by 3.2% in 2012, reached in the first days of 2013, postponing the fiscal with this rate increasing to 3.5% in 2013. According to IMF’s cliff and temporarily alleviating concerns related to the US projections, developing economies will maintain their rapid economy. growth, posting 5.5% growth in 2013. Again, according to IMF’s projections, developed countries will grow at an average A continuation of the monetary expansion policies rate of 1.4% in 2013. Central banks of developed countries continued to loosen their monetary policies and support their economies in 2012.
30 AKSA ENERGY 2012 ANNUAL REPORT Launched in 2011 in line with CBRT’s policy preferences, the optimization process of the Turkish economy became more effective in 2012.
At the start of 2013, it was apparent that the problems The inflation rate fell from 10.45% in 2011 to 6.16% in 2012 affecting the real economy continued in many countries, that - this is the lowest year-end inflation rate ever recorded since confidence had yet to be fully restored in the markets and that 2005. The lowering in the inflation target was mostly a result the problems concerning employment and investments had of the positive trend in prices of unprocessed foods, the policies not yet been resolved. In view of this, it is envisaged that the applied and the removal of the base effect from the previous first half of 2013, in particular, will be similar to 2012 with year. a possible recovery getting underway in the second half and gaining momentum in after 2014. The extremely positive results achieved in 2012 in macroeconomic indicators, particularly the current account Turkey underwent an economic optimization process in 2012 deficit as well as the fact that Fitch Ratings - an international that was appropriate for its sound and sustainable growth credit rating agency - raised Turkey’s long-term credit rating to target. investment grade, increased short-term capital inflows to our Launched in 2011 in line with CBRT’s policy preferences, the country. optimization process of the Turkish economy became more effective in 2012. Tight monetary policies applied by the The role of the CBRT CBRT paved the way for a slowdown in economic activity. The CBRT fell back upon monetary tightening at specific Moreover, Turkey witnessed historically low levels of inflation. intervals between the last quarter of 2011 and the middle There was also some improvement in the current account deficit of 2012 because of the fluctuations in risk appetite and risks throughout the year. related to the inflation outlook. The Bank began to gradually decrease the funding costs by increasing the liquidity injected The economic recession affecting Europe was a clear factor into the market in line with the improvements observed in global limiting Turkey’s foreign demand in 2012. The share of risk appetite from June 2012. The CBRT also paid attention to exports made by Turkey to European countries declined, while securing financial stability in addition to price stability through Turkey continued to vigorously seek alternative markets. Sales multi-purpose and multi-tool policies throughout the year and to countries in the Middle East and Africa, which have been played an effective role in the markets by making use of such assuming a gradually increasing share of Turkey’s exports, instruments as interest rate corridor, required reserves, reserve contributed strongly to the growth in net exports. The current options mechanism with a proactive approach. account deficit continued to narrow in 2012 in line with the slowdown in domestic demand. The current account deficit/ GDP ratio fell from 10% at the end of 2011 to around 7% at the end of 2012.
AKSA ENERGY 2012 ANNUAL REPORT 31 Economic and Sectoral Outlook
The share of renewables in electricity production is rising rapidly. By 2035, hydroelectric, wind and solar based electricity production will account for almost one third of world’s total electricity.
Overview of the Electricity Sector The rising demand for oil in growing Asian economies has shifted the focus of the international oil trade from the Middle Megatrends in the Global Energy Sector East towards Asia, and, as a result, the safety of routes The rapid rise in standards of living in developing countries heading toward Asia has gained strategic importance. has paved the way for such countries commanding a higher share in global energy demand. This situation has allowed Iraq is still one of the countries contributing most towards developing economies to shape and direct energy markets in a meeting increasing global demand for oil. As a result of the more potent manner. rapid increase in oil production in the country, Iraq’s cumulative revenues from oil exports are expected to reach US$ 5 trillion The growth in non-conventional oil and gas production in the by 2035. This development will help lift Iraq’s welfare level as USA has begun to have a marked impact on international well as having a pronounced effect on global energy trade. markets. This will play a role in reshaping the global energy market and energy trade. The share of renewables in electricity production is rising rapidly. By 2035, hydroelectric, wind and solar based The launch of shale gas production in the USA has served as electricity production will account for almost one third of an especially important development and is expected to have world’s total electricity. far-reaching impact on the outlook for the global energy sector going forward.
World electricity generation by source of energy (TWh)
25,000
20,000
15,000
10,000
5,000
0
1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Cool Oil Natural gas Nuclear Hydro Other
Source: Internaional Energy Agency
32 AKSA ENERGY 2012 ANNUAL REPORT The soft-landing of the Turkish economy and the relative decline in the share of domestic demand in Turkey’s growth in 2012 has also affected electricity consumption.
Energy efficiency is expected to be one of the most important Turkey exhibiting one of the most rapid rates of growth in issues on the agenda in the coming period. Policies geared demand for power towards energy efficiency are extremely important, particularly The soft-landing of the Turkish economy and the relative in terms of keeping the extent of global warming to within 2°C. decline in the share of domestic demand in Turkey’s growth in 2012 has also affected electricity consumption. Following It is estimated that the amount of water required during energy the increase in demand in the first three quarters of the year, generation activities will increase at a rate more than double electricity demand fell by 1.5% in the last quarter. In the light the rate of increase in energy demand. This will put pressure on of these developments, Turkey’s total electricity consumption already scarce water resources that continue to be depleted. grew by around 5% to reach 241.9 TWh. On the other hand, Turkey’s total installed capacity rose by 7% to 57.1 GW in Demand for power is increasing throughout the world, in 2012. parallel with economic development. According to OECD data, global demand for power has In Turkey, electricity is produced through three increased rapidly in the last 25 years. basic resources: ••Thermal (oil, natural gas, coal) Despite regional variations, rapid industrialization and rapidly ••Hydroelectric rising standards of living are generally the fundamental reasons ••Wind and geothermal behind this increase in demand for power. The breakdown of electricity production was as follows: 71% of the total electricity was produced from thermal resources, As can be seen in the graph on page 32, prepared based on 24% from hydroelectric and 5% from wind and geothermal OECD data, global electricity production leveled out just after resources in 2012. the global financial crisis in 2008, largely due to the relative decline in the growth rate of the world economy. Power plants operating with renewable resources generate at an average capacity utilization rate of 35%, and comprise However, leading indicators show that global demand for 40% of Turkey’s total installed capacity; renewable energy power increased between 2009 and 2012, as developing furthermore accounted for 67% of the increase in Turkey’s total economies - particularly China and India - returned to a trend installed capacity in the last two years. of rapid growth. Electricity prices were higher for much of 2012 than in 2011. In Europe, which was so deeply affected by the global The average weighted unit electricity price rose from 134 TL/ financial crisis and the subsequent volatility in the markets, MWh in 2011 to 155 TL/MWh in 2012. demand for electricity continues to decline. Electricity consumption has fallen by an average rate of 1.2% per year Natural gas tariffs were raised by 10.4% with effect from since 2008. A similar trend has also been seen in the USA, October 1st, 2012, while electricity tariffs were raised by which was also deeply affected by the global crisis, with 12.7% for residential use, 4.5-9.6% for industrial organizations electricity consumption having declined since the crisis in and 10.1-13.0% for non-industrial corporations. 2008. For 2013, TEİAŞ (Turkish Electricity Transmission Company) According to OECD sources, it is estimated that electricity will estimates that Turkey’s total electricity consumption will increase be the most rapidly growing end-user energy resource until by 7% to reach 259 TWh. Moreover, according to projections 2035, with its share in energy consumption reaching 23% by by independent consultancy firms, power demand in Turkey is 2035. set to grow by 6% in 2013, with supply increasing by 7%.
AKSA ENERGY 2012 ANNUAL REPORT 33 Economic and Sectoral Outlook
The liberalization process of the Turkish electricity market was completed on January 1st, 2013, while Turkey has stepped up its efforts to complete the final phase of the privatization program.
With a CAGR of 6.2% in demand for energy between 2002- Privatization of power plants with a total installed capacity of 2012, Turkey has recorded the greatest growth in demand 16,000 MW: for energy of any country in the EMEA (Europe, Middle East ••Privatization of the Seyitömer Thermal Power Plant with a and Africa) region. Research studies indicate that Turkey will total installed capacity of 600 MW completed in December maintain this strong growth performance and post a CAGR of 2012 (contract price: US$ 2.25 billion) 6.8% in demand for energy between 2009 and 2018. ••Privatization of the Kangal Thermal Power Plant with a total installed capacity of 457 MW completed at the beginning According to figures provided by the Ministry of Energy and of 2013 (contract price: US$ 985 million) Natural Resources, Turkey’s electricity production, electricity ••Privatization of the Hamitabat Thermal Power Plant with a consumption, electricity export and electricity import increased total installed capacity of 1,120 MW completed in the first by 77%, 74%, 738% and 27%, respectively between 2002 quarter of 2013 (contract price: US$ 105 million) and 2012. According to the same source, electricity producers in the private sector, which account for 54% of Turkey’s Electricity Consumption (TWh) total installed capacity, were generating 60% of the power 300 generated in Turkey as of the end of 2011.
241.9 Privatizations in the electricity market gain momentum again 250 230.3 The liberalization process in the Turkish electricity market was 210.4 completed by January 1st, 2013, while Turkey has stepped 200 5% up its efforts to complete the final phase of the privatization 9% program. Information concerning the developments that took 150 place and the tenders completed during the period, when we were preparing our annual report, are summarized as follows: 100
50
0 2010 2011 2012 Lignite/coal&other Hydro Natural gas
Total Installed Capacity and Annual Increases (GW) Electricity Prices (BSM Average, TL/MWh) 57.1 Annual averages 53.1 (TL/MWh) 210 49.5 6.0 7% 190 7% 5.0 4.8 170 4.2
150 4.0 3.4 130 3.0
110 2.0 90
1.0 70 JULY Annual Increases in Installed Capacity (GW) MAY APRIL JUNE 0 MARCH JANUARY
AUGUST 2010 2011 2012 FEBRUARY OCTOBER DECEMBER SEPTEMBER NOVEMBER 2011 2012 Thermal Renewable Total Installed Capacity
34 AKSA ENERGY 2012 ANNUAL REPORT 2012 marked the final year of the transformation process in the Turkish electricity market.
A tender was called in March 2013 for the privatization of With these new practices, almost 80% of the market is free TEDAŞ’s (Turkish Electricity Distribution Corporation) 100% to select their own suppliers. The Electricity Market Law was share in the electricity distribution companies (regions), Istanbul enacted on March 15th, 2013. Approved by the Turkish Anatolian Side, Toros Mountains, Lake Van and Dicle regions. Grand National Assembly on March 15th, 2013, the Electricity The government collected US$ 3.5 billion in revenue from Market Law arranges and regulates electricity production, these privatizations. transmission, distribution, wholesale or retail sale, import and export processes and the operation of the electricity market, as 2012 was marked as being the final year of the transformation well as the powers and liabilities of all real and legal bodies process in the Turkish electricity market. EÜAŞ’s (Electricity with respect to such activities. Generation Company) contracts with distribution companies expired on December 31st, 2012, while the liberalization According to the Law, an energy exchange will be set up of the Turkish electricity market was completed through such in Turkey, while attention will be paid on preventing the transformations and the transfer of distribution companies to the emergence of conditions which could disrupt competition private sector and Turkey switched to a liberal system in the during the granting of licenses. In the New Electricity Market, electricity market. the Energy Market Regulatory Authority is responsible for taking the necessary measures in the event of the termination In a market of perfect competition, distribution companies or cancellation of licenses, such that consumers are protected are at liberty to buy 40% of the energy they would sell from and market activities in the market remain uninterrupted. their desired electricity producer. On the other hand, the According to the regulations stipulated in the Law, corporations independent consumer limit was lowered from 25,000 KWh/ dealing with market activities will receive, before beginning year to 5,000 KWh/year. their operations, separate licenses for each activity and for each plant if such activities are to be carried out at more than one plant. Licenses will be effective for a maximum period of 49 years. The minimum duration that applies to production, transmission and distribution licenses was determined as 10 years. Turkish Electricity Market – Primary indicators 2011 2012 Annual change Total Production (TWh) 228 239 5% Total Consumption (TWh) 229 242 5% Independent Producers' Share in Total Production 27% 31% +4 points PMUM (Market Financial Settlement Center) SGÖF (Day 134 155 16% Ahead System Price) Average Weighted Price (TL/MWh) Average Price in Peak Demand (TL/MWh) 145 163 13% Import (TWh) 4.7 5.8 23% Export (TWh) 3.8 3.0 -21%
AKSA ENERGY 2012 ANNUAL REPORT 35 Assessment of Activities in 2012
36 AKSA ENERGY 2012 ANNUAL REPORT AKSA ENERGY 2012 ANNUAL REPORT 37 Assessment of Activities in 2012
In 2012, Aksa Energy generated 9.8 TWh of electricity, thereby meeting 12% of the total power generated by independent producers in Turkey.
Aksa Energy continues to undertake new investments and In 2012 Aksa Energy succeeded in significantly increasing capacity increases in order to take advantage of the growth its net sales, gross profit, operating profit and EBITDA when potential offered by the Turkish market. compared to 2011. In 2012, the Company achieved a 40% increase in its net sales, 4% growth in gross profit, a 4% jump In 2012 Aksa Energy successfully achieved its performance in operating profit and an 7% rise in EBITDA. targets. Having completed the first phase of its strategic investment plan in 2011, Aksa Energy raised the effectiveness The Company demonstrated an extremely strong operational of its marketing activities and increased the capacity utilization performance in 2012, reaching a capacity utilization rate rate in its production in 2012. of 60% and increasing its total electricity production by 58% to 9.8 TWh. Aksa Energy accounted for 12% of the total electricity generated by Turkish independent producers, supporting its position as the largest private sector electricity producer.
Net Sales & EBITDA (TL million) Operating Income & Net income (TL million)
1,841 236 22.9% 228 20.7%
1,315 17.5% 208
117 911
59 300 323 190
2010 2011 2012 2010 2011 2012
-122
Net sales EBITDA EBITDA Margin Operating Income Net Income
38 AKSA ENERGY 2012 ANNUAL REPORT In 2012 Aksa Energy reached a capacity utilization rate of 60% and increased its total electricity production by 58% to 9.8 TWh.
Production and Capacity by Fuel Type
Installed Capacity Total Production (MW) (GWh)
c.4,500 MW 4,500 25,000
4,000 20,000 3,500
3,000 15,000 2,500 c.2,204 MW 2,036 MW 2,045 MW 2,000 10,000 1,542 MW 9,784 1,500 1,342 MW
6,181 1,000 690 MW 4,227 5,000 3,053 500 318 MW 1.4 MW 1,018 944 0 0 1997 2007 2008 2009 2010 2011 2012 2013E 2017E
42% 36% 42% 44% 51% 60% E: 60% E: 60% Capacity utilisation
Fuel-oil Natural gas Wind Hydro Bio-gas Lignite Total generation
AKSA ENERGY 2012 ANNUAL REPORT 39 Assessment of Activities in 2012
In 2012 Aksa Energy, as a base load supplier, conducted 53% of its sales within the scope of bilateral agreements (including exports).
Aksa Energy strengthened its position as a base load Aksa Energy’s portfolio of customers, who are classified as free producer in the space of just two years. 78% of the electricity consumers, has an extremely balanced structure and covers produced by the Company was sold to the Balancing & Turkey’s leading organized industrial zones, as well as iron Settlement Market (DUY) in 2010. Thanks to its intensive and steel producers, cement and textile factories and many and systematic marketing activities in these two years, Aksa business offices. Most of the Company’s sales are comprised of Energy demonstrated an extremely successful performance contracted sales with pre-determined prices and a predictable and transformed its client portfolio in a way to support free load profile and power draw. This balance helps protect the competition in the market. Company’s financial and operational performance against possible fluctuations in the spot market. In 2012 the Company sold 40% of the electricity it generated to free consumers through bilateral agreements; the share of Aksa Electricity Wholesales Inc. received a license from the electricity sold to the Balancing & Settlement Market (DUY) was Energy Market Regulatory Authority in 2004 and began to 30%; and the share of electricity which it sold through exports sell electricity. In addition to wholesales, Aksa Electricity offers amounted to 13%. When exports are included, it is observed the electricity that it obtains directly to free consumers. Serving that 53% of the Company’s total sales were performed through its customers through its customer satisfaction-oriented sales bilateral agreements. Analyzing the Company’s total sales strategy and its specialized personnel, Aksa Electricity utilizes portfolio from a general point of view, it is found that the share Aksa Energy’s production strength to sell electricity to end-users of all “contracted sales”, which include bilateral agreements, at the best possible price. sales made to the TRNC and to sister distribution companies, and exports, to the Company’s total sales rose from 14% in Besides its customer-oriented service approach, Aksa Electricity 2010 to 61% in 2012. is especially a popular choice because of Aksa Energy’s production capacity and sectoral leadership, as well as At the end of 2012, Aksa Energy had a total of 1,275 its ability to generate energy from environmentally friendly customers, who were classified as free consumers. renewable energy resources, its broad experience in the energy business and the continuity of its supply.
Bilateral Agreements Number of GWh/Year Customers 3,500 2,000
1,800 3,000 1,600 2,500 1,400
2,000 1,200 1,000 1,500 800
1,000 600
400 500 200
0 0 2010 2011 2012
Sales volume Number of customers
40 AKSA ENERGY 2012 ANNUAL REPORT At the end of 2012, Aksa Energy had a total of 1,275 customers, who were classified as free consumers.
Customer Mix and Sales (2010-2012)
Total sales volume: 4.2 TWh Total sales volume: 6.2 TWh
Balancing&settlement market (BSM) 78% Bilateral agreements&export 51% Northern Cyprus 12% BSM 29% Renewable market 4% Northern Cyprus 10% Regional sales 4% Affiliated DisCos 3% Bilateral agreements 2% Renewable market 3% 2010 Regional sales 1% 2011
Total sales volume*: 9.8 TWh
Bilateral agreements; 40% BSM 30% Exports 13% Northern Cyprus; 6% Regional sales 5% Renewable market 4% Affiliated DisCos 2%2012 * 2012 sales volume includes sales derived from TEIAŞ’s Load Rejection Order
AKSA ENERGY 2012 ANNUAL REPORT 41 Assessment of Activities in 2012
Having successfully reflected the growth potential offered by the Turkish electricity market to its performance, Aksa Energy’s total investment expenditures reached TL 1.7 billion between 2008-2012.
Aksa Energy’s investments and organic growth under a global Fuel oil power plants conjuncture dominated by the global financial crisis do more Aksa Energy’s power plants in Mardin, İdil, the TRNC and than demonstrate the Company’s corporate strength. Hakkari, which produce electricity from fuel oil, have a total installed capacity of 233 MW. The Company’s fuel oil-fired Having successfully reflected the growth potential offered by power plants generated a total of 739 GWh of electricity in the Turkish electricity market to its performance, Aksa Energy’s 2012. total investment expenditures reached TL 1.7 billion between 2008-2012. Wind farms Aksa Energy has four wind farms located in Balıkesir, Hatay, Of this total, 30% was financed by the Company’s own Manisa and Ayvacık. The total installed capacity of these wind resources, with the remaining 70% financed through medium- farms is 160 MW, representing one of the largest production and long-term foreign resources. At the end of 2012, the capacities of any wind power portfolio in Turkey today. Company’s net financial debt amounted to TL 1,280 million Aksa Energy’s wind farms generated a total of 423 GWh of with a net financial debt/EBITDA ratio of 3.9. electricity in 2012.
With its high capacity utilization rate and level of effectiveness, Still under construction, the wind farms in Belen (30 MW) and Aksa Energy optimally manages its operating costs. Thanks Kıyıköy (27 MW), along with additional capacity at the wind to the financial results it achieves, Aksa Energy is a company farm in Sebenoba (30 MW) are planned to enter production able to produce added value for its stakeholders, even during in 2013. investment periods. Hydroelectric power plants Developments concerning the capacities and İncesu was the first hydroelectric power plant to be included in production activities of the power plants in 2012 Aksa Energy’s production portfolio. The plant is located on the Çekerek River in Çorum with a capacity of 15 MW. The plant Natural gas power plants generated 35 GWh of electricity in 2012. As one of the free producers in Turkey to generate electricity from natural gas and to possess the highest capacity, Aksa Aksa Energy aims to commission its second hydroelectric Energy has natural gas power plants operating in Antalya, power plant (62 MW) in Kozbükü by 2015 after undertaking Manisa, Şanlıurfa and Van. These power plants, with a total the necessary investments. installed capacity of 1,640 MW, generated a total of 8,597 GWh of electricity in 2012.
42 AKSA ENERGY 2012 ANNUAL REPORT In 2012, Aksa Energy maximized the reliability and availability of its power plants.
Lignite fired power plants Strong relations established with suppliers contribute to Aksa Aksa Energy’s first lignite fired power plant (270 MW) in Energy’s production efficiency. Göynük, Bolu will be completed and commence electricity The Company works in synergic cooperation with leading production between 2014 and 2015. international companies, which are its primary suppliers. The Company works in close cooperation and coordination with its Aksa Energy operates the power plants in its production international business partners, contributing to the quality and portfolio. continuity of its energy production. With its deeply rooted knowledge base, experience and competence in the field of plant operation and maintenance Within the framework of the service and maintenance services, the Company performs all maintenance and repair agreements which it has entered into with its primary and work for its plants through its own highly-trained and competent auxiliary suppliers, the Company obtains maintenance spare personnel. parts, backups, and servicing labor at the most favorable terms. Within the scope of the cooperation that the Company It is Aksa Energy’s permanent target to maintain the reliability has entered into with leading firms such as Siemens, GE, and availability of the power plants in its portfolio at the highest WARTSILA, Vestas and Vatech, Aksa Energy conducts all level possible. Also always seeking to be in full compliance of its operations, maintenance, and repair activities with its with the requirements of the law and its contractual obligations own trained personnel under the supervision of the original with respect to power plant operation, maintenance, and manufacturers. repairs, Aksa Energy goes to great lengths to fulfill all licensing, authorization and similar official procedures necessary for All of the technical personnel employed in the operation, the operation of power plants. The Company also regularly maintenance and repair of Aksa Energy’s power plants are complies with the periodic reporting requirements stipulated by trained and certified by contracted manufacturers. These official bodies. personnel also undergo periodic training on a continuous basis as required by laws and regulations.
AKSA ENERGY 2012 ANNUAL REPORT 43 Assessment of Activities in 2012
Employing highly competent project teams, Aksa Energy has the ability to undertake and deliver thermal plants, hydroelectric power plans and wind farms in the shortest period of time.
An Investment Policy That Aims to Maximize Because of the tremendous importance it attaches to plant Production, Quality and Efficiency quality, Aksa Energy works with sector leaders on the basis Designed in accordance with the Company’s strategic of long-term agreements in order to procure electrical power investment plan, Aksa Energy’s investment policy envisages all generation equipment under the best possible conditions from types of efforts aimed at maximizing: such manufacturers as: ••production ••Siemens, GE, Dresser-Rand, and Thermodyne (gas and ••quality and steam turbines) ••efficiency ••WARTSILA (diesel and gas engines) Aksa Energy’s investment expenditures in 2012 totaled TL 130 ••Vestas (wind turbines) million. Some of the major investments undertaken by the ••Vatech (hydroelectric turbines) Company in 2012 are summarized below. The Company also works with a number of national and Our Investment Strengths international auxiliary equipment suppliers such as ABB, From wind and water flow measurements to feasibility studies, Schneider, Nooter/Eriksen, Aalborg, and Best as well as with the projects undertaken by Aksa Energy to generate electricity engineering, construction and installation firms. from renewable resources are developed in-house by the Company itself. The Company also develops thermal power Employing highly competent project teams, Aksa Energy has plant projects in which full consideration is given to the issues the ability to undertake and deliver thermal plants, hydroelectric of fuel procurement, energy transmission, access, location and power plants and wind farms in the shortest period of time. their environmental impact. Aksa Energy handles all the licensing, authorization and permit formalities of a project itself. Employing its own appropriately qualified technical and administrative personnel, it carries out the project development, engineering, procurement, logistics, control, installation and commissioning phases of the investments that it undertakes. In this respect, it is able to minimize costs by keeping them under control.
44 AKSA ENERGY 2012 ANNUAL REPORT Aksa Energy regards diversity as a valuable element of its organizational structure and an essential feature of the human resources that make up its intellectual capital.
Human Resources at Aksa Energy Aksa Energy’s Human Resources Structure The Kazancı Group approach of “Our most precious capital As of December 31st, 2012, Aksa Energy had 591 people is our human resources” also lies at the foundation of Aksa on its payroll. 9% of the Company’s personnel work in the Energy’s own policies on human resources. headquarters units while the remaining 91% are employed at plants and construction sites. Some 34% of the Company’s Aksa Energy’s Human Resources Policy personnel are white-collar and 66% are blue-collar employees. Aksa Energy sees human resources as its strategic advantage, because it is human resources that are responsible for the In every activity it is engaged in, Aksa Energy always goes to management of all of its resources. Employee satisfaction and great lengths to ensure full compliance with the requirements of loyalty are indispensable elements of Aksa Energy’s Human all laws and regulations governing human rights and working Resources Vision. life in Turkey.
Aksa Energy aims to install human resources systems, in The Company develops policies as necessary to raise coordination with those units involved, which support all of the employee satisfaction and implements these policies in all of Company’s management and its employees in order to achieve its workplaces. Aksa Energy regards diversity as a valuable continuity in a team whose members are creative, dynamic, element of its organizational structure and an essential feature knowledgeable, motivated, effective and productive. of the human resources that make up its intellectual capital.
In this context, Aksa Energy’s approach to its human resources Based on this foundation, the Company encourages its is based on such values and principles as “the right person employees to think multi-dimensionally and to develop their for the right job”, a pay system based on performance and individual abilities. Ensuring equality of opportunity among all competencies, diversity, equality of opportunity and personal employees is a matter to which attention is given in all human development. resources policies, processes, and practices at Aksa Energy.
Aksa Energy’s employees are its most important asset and what Recruitment and Career at Aksa Energy are behind its sustainable and global competitive edge. To this Aksa Energy’s unaltered target is to recruit such people, who end, training is provided to enable individuals to improve all of will produce added value and who are open to development the technical, professional, and personal skills which they need and have ethics. When it is necessary to recruit for a new to be equipped for their roles in the units in which they work. position in the Company, Aksa Energy evaluates all internal and external resources also by taking the job definition and the specifications required by the open position into account.
Personnel: Basic Demographic Information 2009 2010 2011 2012 Total number of employees 482 580 660 611 Men 411 503 434 559 Women 71 77 15 32 Average age 32 32 34 34
Educational Background 2009 2010 2011 2012 University (Bachelor's, Master's, Doctorate degrees) 124 168 96 135 Vocational college 53 55 60 108 Vocational high school, general high school or below 305 357 293 348
AKSA ENERGY 2012 ANNUAL REPORT 45 Assessment of Activities in 2012
Competency Development and Training The training methods used at Aksa Energy consist of on-the-job Aksa Energy supports the professional and individual training, extramural training, and training conferences. development of its employees through a variety of training and development programs. The basic and common purpose of Highlights from the Training Programs Held in these training and development programs is to maintain Aksa 2012 Energy’s effectiveness and efficiency at the highest possible In 2012 a total of 5,390 working hours of technical and level and to ensure employee satisfaction is permanent. professional training programs were held at Aksa Energy. Details regarding the training programs that were held under Aksa Energy provides all of its employees with a variety of 12 different headings are presented below. training opportunities in line with their career progression and personal development needs, with its own changing requirements, and with the goals and strategies of the Kazancı Group; and undertakes systematic efforts aimed to develop its employees’ performance and individual competencies through professional training and development programs.
External Training Programs Training Number of Program Total Man Hour Time (Hours) Participants Fire training 40 174 984 First aid training 36 5 90 Insurance training 2 6 12 Elevator maintenance training 16 6 96 Training on the Maintenance of and Failure Search in Hydraulic Systems 24 18 288 Training on Low Voltage Systems 16 19 304 Trainings for dangers and risk analysis 3 27 81 Training on Raising Environmental Awareness 12 144 576 Training on Working at Heights and Rescue in Wind Turbines 18 12 216 External Training Programs - Total Man Hours 2,647 In-House Training Programs Training Number of Program Total Man Hour Time (Hours) Participants OHS Basic Training 41 313 1,399 SAP Training - General 40 28 1,120 SAP Training - SAP and Warehouse 36 30 224 In-House Training Programs - Total Man Hours 2,743 Grand Total 5,390
46 AKSA ENERGY 2012 ANNUAL REPORT Health and Safety at Aksa Energy Aksa Energy has fulfilled the requirements of Aksa Energy is a corporation which places the utmost and has been awarded the following standard importance on the health and safety of its employees in certifications: the workplace and has adopted this principle in its human 9001:2008 - Quality Management System resources policies and practices. 14001:2008 - Environmental Management System OHSAS 18001-2007 - Occupational Health & Safety Aksa Energy ensures that it is in full compliance with all Management System currently applicable laws and regulations pertaining to occupational health and safety both in its headquarters in Ensuring continuity of these standards, Aksa Energy is a Istanbul and in all of its plants throughout Turkey. The Company corporate organization that has successfully adopted all three also undertakes projects that take account of the world’s systems. most up-to-date workplace health and safety practices, also placing itself at the leading edge of its sector in this area as well. In the conduct of its activities, Aksa Energy is committed to ensuring that occupational health and safety measures, which continuously safeguard the wellbeing of employees, contractors, and visitors, are adopted by the parties with which it has direct business relationships.
To this end, Aksa Energy: ••Fulfills the requirements of applicable national and international laws and regulations while also identifying the sector’s best health and safety practices and integrating them into its own operations; ••Seeks to define and assess activity-related threats and risks, to classify them, and to minimize their potential impact as much as possible. It performs risk analyses for this purpose; ••Ensures that all precautions related to occupational health and safety are adopted for its own personnel, for contractors, and for visitors in the conduct of all of its operations and periodically reviews their effectiveness; ••Has formulated and effectively deploys plans to deal with any and all possible emergencies and accidents at all of its facilities; ••Takes fire-prevention measures and has installed automatic firefighting systems at all of its power plants.
AKSA ENERGY 2012 ANNUAL REPORT 47 Corporate Governance Principles Compliance Report
1. Statement of Compliance with Corporate Governance Principles
In the context of “Corporate Governance Principles” publicly issued by Capital Markets Board, Compliance Report of Aksa Enerji Üretim A.Ş. (shall be referred to as Company or Aksa Enerji hereinafter) is presented below regarding the minimum elements requested by Capital Markets Board to be included in company activity reports on compliance pertaining to activity period ending on 31.12.2012.
Our Company considers compliance with requirements of Corporate Governance Principles as a strategic goal. Activities for implementation of what these principles require in compliance with company’s own dynamics and for improvement of current management systems in the context of the said principles are still in progress. Although it is possible for our company to comply with some of these changes immediately, establishment of the necessary infrastructure and adjustments for compliance with the rest of the changes necessitate a longer process. In the forthcoming periods, to the extent that the characteristics of the energy industry in which the company operates would allow, work to ensure compliance with the requirements of the Corporate Governance Principles that we have not yet been able to address, will continue.
SECTION I-SHAREHOLDERS
2. Shareholder Relations Unit
Relations with shareholders at Aksa Enerji have been carried out by Investor Relations Department that has become operational on 21st of May, 2010 when the shares of the company first started to be traded at Istanbul Stock Exchange (ISE).
Developments with regard to company’s strategies and activities, sectors in which the activities are carried, as well as the legal regulations that the company is subject to are being communicated to analysts and investors pursuant to the legislation by means of the meetings organized, while participation in the investor conferences are being organized by the brokerage houses located both in the country and abroad are ensured. Furthermore, teleconferences are organized quarterly following the announcement of the financial results so that investors and analysts are informed in regards to the operational and financial developments. Investor Relations Department, to be able to provide correct, explicit and reliable information flow, prepares presentations in relation to the quarterly announced financial results, and shares these presentations with investors and analysts through emails and also makes this information known to the investment circles by means of live teleconferences. Questions addressed to Investor Relations Department orally and/or in writing are to be responded orally and/or in writing as soon as possible within the framework of the information disclosed to the public. Material Disclosures are duly carried out pursuant to Disclosure Policy of the Company in coordination with the Investor Relations Department.
In the year 2012, approximately 110 one-to-one meetings and teleconferences were held with the analysts and investors by means of conferences participated and direct visits were made both in the country and abroad. Again in this period, approximately 450 requests for information were directed to the Investor Relations Department; as such these inquiries were answered via e-mail or telephone within the scope of the information disclosed to the public. Additionally, to keep the investors and analysts informed, three teleconferences were organized on quarterly basis, following the announcement of financial results in each quarter and following in the steps of the announcement made regarding the year-end results a meeting was organized with the participation of analysts and investors.
Investor Relations Manager: Aslı SU ATA Investor Relations Contact Details: Tel: +90 212 478 66 66 Fax: +90 212 655 61 25 E-Mail: [email protected] [email protected] E-Posta: [email protected] Web: http://www.aksaenerji.com.tr
48 AKSA ENERJİ 2012 ANNUAL REPORT 3. Exercise of Shareholders’ Right to Obtain Information
Care is exercised to present equal information and evaluation opportunities to shareholders, and as such information other than of trade secret nature is shared with shareholders.
Approximately 450 information requests were directed to the Investor Relations Department during the period. The Investor Relations Department responded to all the inquiries made mostly in regards to the subjects such as Company’s strategy, activities and financial performance, on-going and planned investments, sector developments etc. Although to a lesser extent, inquiries regarding requests about share performance and dividend plans have also been made.
In order to provide to the Shareholders the easy and equal access to information regarding the Company, all information publicly disclosed is presented for perusal of shareholders in Investor Relations section of corporate internet website (www. aksaenerji.com.tr).
Appointment of a private auditor is an issue that has not been arranged in the articles of incorporation of the company. No requests for the appointment of a private auditor have been received within the period.
4. General Assembly Meetings
During 2012, Meeting of the year 2011 Ordinary General Assembly was held on the 17th of February 2012 followed by an Extraordinary General Meeting that was held on 31.05.2012 in relation to the Appointment of the Members of the Board of Directors and determination of their term of duty within the framework of article 7 of Articles of Incorporation of the Company.
General Assembly meeting for the year 2012 will be held on 16.09.2013.
In regards to the convocation to the meetings of the General assembly, related provisions of the Turkish Commercial Code and Capital Markets Law are applied.
As required by the applicable law, General assembly meetings are notified to the Ministry of Customs and Trade, Energy Market Regulatory Board, Capital Markets Board and Istanbul Stock Exchange.
The following is included in the notices of General Assembly:
• Date and time of the meeting, • Place of meeting announced to eliminate any uncertainties, • Agenda, • Information needed regarding the items to be discussed in the agenda, • If there is an amendment to the articles of incorporation in the agenda, former and new forms of amended article/articles as given permission by related institutions, • The body issuing the convocation, • Upon postponement of the first meeting for whatsoever reason, the reason of postponement of the first meeting as well as the quorum necessary for this meeting if the General Assembly is to convene again,
In the announcements of Ordinary Meetings of the General Assembly, care must be taken to indicate the address at which the annual report and financial statements as well as other General Assembly documentation may be examined.
As required by the law and our articles of incorporation, ordinary General Assembly meetings should be held within 3 months from the end of the fiscal period. Ordinary General Assembly meeting should be held as soon as possible but not later than the three months following the end of the fiscal period.
AKSA ENERJİ 2012 ANNUAL REPORT 49 Corporate Governance Principles Compliance Report
Starting from the date that the convocation to the meeting of the Ordinary General Assembly is issued, financial statements and reports including annual report, dividend distribution Proposal, information documentation prepared in regards to the General Assembly agenda items as necessary and other documentation upon which agenda items are based, together with the final version of articles of Incorporation as well as any amendments to the articles of incorporation along with underlying justifications are made available for the examinations of Shareholders in the headquarters building.
As required by articles of incorporation, General Assembly meetings are held at the place the Company headquarters is located or at a suitable location in the city in which the head office of the company is located.
Minutes of the General Assembly meeting can be reached at any time in written form or in electronic format through internet site of the company at www.aksaenerji.com.tr.
In General assembly meetings, shareholders may have themselves represented through other shareholders or an externally appointed proxy. Proxies in representation of Shareholders are authorized to use the votes owned by shareholder they represent in addition to their own votes. The Board of Directors determines and announces the format of authorization documents by taking into consideration the related regulations of Capital Markets Board.
5. Voting Rights and Minority Rights
As per the articles of incorporation, each share of 1 TL nominal value owns one voting right.
Company’s shares are classified into two groups as A and B groups; Group A shares are preferred shares. 5 members of the Board of Directors composed of 7 people are selected from among candidates nominated by Group A shareholders.
There is no arrangement in Company’s articles of incorporation that foresees use of voting rights within a specific period of time after date of acquisition or complicates use of voting rights.
There are no provisions in the articles of incorporation preventing individuals, who are not shareholders from casting their votes as representatives by proxy.
Cumulative voting method is not included in articles of incorporation.
6. Dividend Entitlement
By decision of Board of Directors on 04.04.2011, dividend policy is decided to be arranged according to the provisions of Serial: IV, No: 27 numbered “Notification for Guidelines to be Complied by Public Co-operations Subject to Capital Markets Law in Dividend and Dividend Advance Sharing” titled Communiqué of Capital Markets Board (CMB) and provisions of article 15 of 2499 numbered Capital Markets Law and in amount corresponding to the minimum dividend ratio determined by CMB for the related fiscal period.
Principles about dividend payment are regulated in article 16 of Company’s articles of incorporation. Form and timing of dividend payment are decided by General Assembly upon a proposal made by the Board of Directors regarding the subject.
50 AKSA ENERJİ 2012 ANNUAL REPORT 7. Share Transfers
Each time a share transfer results in change of control in cooperation structure of legal entity independently from the designated share acquisitions by exceeding or staying below ratios determined in regulations of Energy Market Regulatory Authority for direct or indirect transfer of company shares and voting rights, approval of Energy Market Regulatory Authority is required.
Even though there is no share transfer under consideration, removing preference on current shares is also subject to the approval of Energy Market Regulatory Board without taking into consideration the proportional limits set in relation to share transfers.
SECTION II- PUBLIC DISCLOSURE AND TRANSPARENCY
8. Public Disclosure Policy
Company Information Disclosure Policy has been established and approved under 04.04.2011 dated decision of the Board of Directors before being announced to the public.
Within the framework of the provisions of Capital Markets Law, Company’s Disclosure Policy is established to share necessary information and explanations that are not of trade secret nature with local and foreign shareholders, investors, brokerage houses, capital markets experts, all related parties and financial intermediaries in a simultaneous, fair, complete, clear, true, understandable and easily accessible manner.
For public information, the law of Capital Markets, ISE regulations, and Capital Markets Board Corporate Governance Principles are taken into account, while effective, active, and transparent communication with investment community circles is aimed.
Disclosure policy includes information that is composed of any kind of information, document, electronic record and data related to activities that are not of “Internal Information” and “Trade Secret” nature and is known by members of Board of Directors, high level executives, and employees and as such is not legally inconvenient to disclose.
The composition and improvement of Disclosure Policy is the responsibility of the Board of Directors, while its implementation and follow up is the responsibility of Financial Affairs Directorate.
Amendments to be made in the Disclosure Policy are published in company’s website following approval of the Board of Directors. These amendments are presented to shareholders for information in the first General Assembly to be held.
AKSA ENERJİ 2012 ANNUAL REPORT 51 Corporate Governance Principles Compliance Report
9. Company Internet Site and Contents
Company Web site at internet address www.aksaenerji.com.tr is effectively used in order to ensure access to announced current and past information while ensuring public enlightenment. Web site is prepared in the content and context required by CMB’s Corporate Governance Principles, in Turkish and English languages. The information indicated in article 2.2.2 Section II of CMB’s Corporate Governance Principles is included within the content of the web site.
Final version of company’s articles of incorporation, periodical financial statements and reports, prospectuses, public offering circulars and general assembly meeting agendas are published at the internet site. Website is regularly updated in order to reflect latest status of partnership and management structure. Company answers any information request made through internet site promptly and all explanations publicly made by the Company can be reached at the website.
10. Annual Report
Information indicated in article 2.3.2 Section II of CMB’s Corporate Governance Principles is included in the Annual Report.
SECTION III- STAKEHOLDERS
11. Providing Information to Stakeholders
Necessary arrangements at the website are made in order to inform interested parties and as such any and all kinds of information related to Company is presented to interested parties in line with Corporate Governance Principles.
In case of requests from investor and financial intermediaries, face to face or group meetings with these institutions are organized, participation to the investment conferences organized by brokerage houses in the country and abroad is provided and developments in relation to Aksa Enerji and the sector are communicated to investors. Furthermore, in order for investors and analysts to be informed about operational and financial developments, teleconferences are organized on quarterly basis after announcement of the financial results. Moreover, Investor Relations Department, in order to provide correct, explicit and reliable information flow, prepares presentations in relation to quarterly announced financial results and shares these presentations with investors and analysts through emails, besides making this information known by investment circles by means of live teleconferences. All kinds of questions and inquiries addressed to the Investor Relations Department by investors and analysts about company’s activities and developments in the sector are replied via email and telephone.
12. Stakeholders Participation in Management
Supportive mechanism and models to ensure participation of Company employees and stakeholders in Company management have not been developed within the Company’s structure.
52 AKSA ENERJİ 2012 ANNUAL REPORT 13. Human Resources Policy
Company prioritizes the employment of well educated, talented, and successful individuals, being aware of the fact that it would be able to achieve its desired targets by being in possession of the most qualified human power. Where employment is concerned, not only meeting current needs for personnel vacancies, but also long term company objectives are evaluated. As a rule, personnel requirement is met primarily from Company’s current human resources pool.
In order to fill vacancies that are not possible to be met by promotion and transfer from internal resources, external resources are tapped for the recruitment of new staff.
“Our most valuable capital is our human resources” approach as adopted by Company comprises the foundation of the Human Resources Policy.
Mission of human resources is to support all company management and employees for ensuring continuity of a creative, dynamic, motivated, effective, and efficient Company team and to establish human resources systems in coordination with related units. Company provides its employees every kind of opportunity for career development. Different training opportunities are provided to all employees in parallel to their career and personal development needs, requirements occurring in time, and Company’s targets and strategies. In this respect, training programs are provided to develop the technical, and occupational knowledge, and personal talents required by employees to be well-equipped in their roles in the units they work.
Human Resources Policy is also publicly announced at the website.
14. Ethical Rules and Social Responsibility
Generally accepted ethical rules have been put into effect by our Board of Directors to be applicable to all the employees of the company, personnel have been informed with regards to the subject.
Our company, which has been involved in and carried out varied applications until today within the context of social responsibility understanding, believes, as an institution aware of its social responsibility vis-à-vis the law and environmental values, in the necessity of leaving a habitable planet to future generations. Our company takes this approach into account and applies in each stage of its operations. Our company strives to take each and every measure to ensure protection of environmental and human health and in line with this objective, it has been entitled to receive the following certificates in return for its compliance with the requirements and achieving sustainability of 9001:2000 Quality Management System, 14001:2008 Environmental Management System and OHSAS 18001-2007 Worker Health and Occupational Safety Management System Standard within the company.
AKSA ENERJİ 2012 ANNUAL REPORT 53 Corporate Governance Principles Compliance Report
SECTION IV- BOARD OF DIRECTORS
15. Formation and Structure of the Board of Directors
The Board of Directors is composed of 7 members. 5 members out of the total of 7 are selected among candidates nominated by Group (A) shareholders with registered share in possession of the majority of the capital, other 2 members are selected by General Assembly from among candidates nominated in the General Assembly. In its meeting after each Ordinary General Assembly or each General Assembly in which the members of the Board of Directors are selected, Board of Directors appoints Chairman and Vice-Chairman from among members participating in representation of Group (A) Shareholders in possession of registered shares.
The Composition of the Board of Directors is as follows as of 31.12.2012:
Name Surname Title Whether operates with executive capacity Şaban Cemil Kazancı Chairman of the Board of Directors Yes Ahmet Serdar Nişli Member of the Board of Directors - General Manager Yes Tülay Kazancı Member of the Board of Directors No M. Çetin Yalçın Member of the Board of Directors No Yağmur Şatana Member of the Board of Directors No T. Yavuz İşbakan Member of the Board of Directors - Independent Member No
The Chairman of the Board of Directors and the General Manager of the Company are different people.
The Board of Directors in its meeting that was held on 25th of July 2012 reached the following decisions;
• To accept the resignation of N. Serdar Şeşen, a member of the Board of Directors, on the basis of the resignation letter submitted on 25 July 2012 and to have the duties and authorities assigned to him as a member of the Board of Directors rescinded. • As explained in the 25 July 2012 dated resignation letter of the member of the Board of Directors Yağmur ŞATANA, he has been elected to become a member of the Board of Directors at Kazanci Holding A.Ş. that is our company’s main partner, and his new position will render his independent member status invalid as per Serial No: IV No: 56 Communiqué of the Capital Markets Board on the Determination and Implementation of Corporate Governance Principles, and as such it has been decided to accept his resignation and have the duties and authorities assigned to him as an independent member of the Board of Directors rescinded. • In place of Yağmur ŞATANA, who resigned from his post as the independent member of the Board of Directors, and N. Serdar ŞEŞEN, as the member of the Board of Directors, it has been decided to make a nomination for Board membership for representation of Group A Shareholders, to be submitted for approval of the General Assembly in its first meeting as per article 363 of the Turkish Code of Commerce and to have the Corporate Governance Committee that has been performing the duties of the Company Board of Directors and Nominations Committee to continue and finalize in the shortest time possible the work to determine a new independent member of the Board of Directors to fill in the position vacated by Yağmur ŞATANA.
54 AKSA ENERJİ 2012 ANNUAL REPORT As per the decision reached by the Board of Directors on 17 May 2013, it was considered by the Board of Directors that the company requires two independent members of the Board within the framework of the Corporate Governance Communiqué and after evaluation of the report provided by the Corporate Governance Committee that has been performing the duties of the Company Board of Directors and Nominations Committee, it has been decided to appoint and submit for the approval of the general assembly in its first meeting as per article 363 of the Turkish Code of Commerce, Yaver Ugur Timurkan as the independent member to fill in the position vacated by Yağmur ŞATANA in the Board of Directors.
It has also been decided to appoint the independent Board members Tevfik Yavuz İşbakan and Yaver Uğur Timurkan as the committee members while Yaver Ugur Timurkan is appointed as the chairman of the Audit Committee that has been established as per the Capital Markets Law and the articles of incorporation of the company on the basis of the 04.04.2011 dated and 189 numbered decision of the Board of Directors.
Accordingly the number of the independent members was increased to two. The independent members are in possession of the independence criteria indicated in the Corporate Governance Principles Communiqué of CMB. Within this framework, the structure of the Board of Directors has been rendered compliant with the Serial: IV NO: 56 numbered Declaration on the Determination and Application of Corporate Governance Principles of CMB as of the date of this present report. Since it has been considered that including stipulations regarding the cumulative voting method in the Articles of Association in order for minority shareholders to send representatives to the Board of Directors will disrupt the harmonious management structure of the Company, no arrangements have been made in regards to this subject. Furthermore, as of the date of this report, no incidence has been reported that may render the independent status of the independent member invalid within the period under consideration.
In regards to the issue of whether other assignments being undertaken by the members of Board of Directors outside the company must be regulated on the basis of specific rules, the arrangements made in compliance with the Turkish Commercial Code and other related legislation are adopted
The structure of the Board of Directors is as follows as of the date this report is published:
Name Surname Title Whether operates in executive capacity Şaban Cemil Kazancı Chairman of the Board of Directors Yes Ahmet Serdar Nişli Member of the Board of Directors -General Manager Yes Tülay Kazancı Member of the Board of Directors No M. Çetin Yalçın Member of the Board of Directors No Yağmur Şatana Member of the Board of Directors No T. Yavuz İşbakan Member of the Board of Directors - Independent No Member Yaver Uğur Timurkan Member of the Board of Directors - Independent No Member
Cemil KAZANCI - Chairman of the Board of Directors
(1961) Cemil Kazancı started his professional career at group companies of the family. He was first appointed to executive positions in the field of generator production and sales followed by his active role in the foundation of Aksa Enerji that became operational in the year 1997 for purposes of developing the operations of the group in the energy field and generate electrical energy. Kazanci, besides his responsibilities as the Chairman of the Board of Directors of Aksa Enerji is also a member of the Board of Directors of Kazanci Holding and Group companies. He is married and has one child.
Serdar NİŞLİ - Member of the Board of Directors - General Manager
(1954) Serdar Nişli, graduated from Middle Technical University, Mechanical Engineering Department. He is in possession graduate and post-graduate mechanical engineering degrees. Following his graduation he has occupied different positions for a period of 18 years first at Çayırhan Thermal Power Station (TEK) and later on in the private sector. He became a part of Kazanci Holding in the year 1996. In addition to his membership position in the Board of Aksa Enerji he is also the General Manager of the Company.
AKSA ENERJİ 2012 ANNUAL REPORT 55 Corporate Governance Principles Compliance Report
Tülay Kazancı - Member of the Board of Directors:
(1959) Tülay Kazancı became a member of the Board of Directors of Aksa Enerji in April 2010. In addition to her membership status in the Board of Aksa Enerji, she is a member of the Board of Directors of Kazancı Holding and Shareholders’ Board member at ATK Insurance Intermediary Services and Aksa Anatolian Side Machinery Sales and Service Agency.
Çetin Yalçın - Member of the Board of Directors:
(1949) Yalçın, who graduated from Faculty of Law at Istanbul University in the year 1971 with a bachelor’s degree, is presently a member of the Board of Directors at Aksa Enerji. He additionally works as an independent attorney and legal consultant to Kazancı Holding A.Ş.
Yağmur Şatana - Member of the Board of Directors:
(1963) Şatana, who started his banking career of 22 years at Iktisatbank in the year 1987, joined Finans Bank in the year 1989 and worked at various executive positions at Finans Bank until 2008. He took on Chairman and membership positions at the Board of Directors 16 group companies of the Holding. Şatana started working for Demirören Holding in the year 2011. He is married with one child.
Yaver Uğur Timurkan - Member of the Board of Directors - Independent Member:
(1970) He graduated from Department of Economics at Istanbul University with bachelor’s degree and Management Economics Accounting and Auditing Department with a post-graduate degree. After working as a specialist in the treasury department of Tekfen Bank, he has undertaken various executive positions at Universal McCann Media Planning and Purchasing Company. His final position at the said company was Strategic Planning Director. Presently Yaver Uğur Timurkan is providing various training and advisory services in the fields of marketing, media purchasing and social media.
Yavuz İşbakan - Member of the Board of Directors - Independent Member:
(1942) He retired from his position as the Deputy General Manager at Turkish Sınaî Kalkınma Bank in the year 2004. In addition to his membership status at the Board of Directors of Aksa Enerji, he has been an independent member on the Boards of Directors of other companies.
16. Operating Principles of the Board of Directors
Draft agenda of the Board of Directors is prepared by General Manager and finalized in line with proposals of the Chairman and members of the Board of Directors.
The Board of Directors conducted 36 meetings from 1 January to 31 December 2012.
Convocation to Meetings is made at least seven days prior to the Board of Directors meeting. Convocation includes meeting agenda and documents related to agenda are attached to invitation. Invitation is firstly done by orally via phone, later on in written form. As required by articles of incorporation of the company, in case of participation of all members of the Board of Directors in the meeting, invitation would not be necessary. In case of a matter of urgency, invitation to meetings of the Board of Directors can also be made in good will, without seven day advance notice. In this case, sufficient time will be allowed for the members of Board of Directors to get ready for the meeting and to be present in the meeting.
Maximum care is exercised to ensure equal flow of information to the members of Board of Directors.
A secretariat has been established to provide information to and ensure communication with the members of the Board of Directors and Auditors.
56 AKSA ENERJİ 2012 ANNUAL REPORT It is deemed beneficial to have the justifications behind votes cast in reaching the Board decisions to be recorded and submitted to the Auditors.
In principle the members of the Board of Directors participate in each meeting. Furthermore, members of the Board take care to be present in the meetings that the important subjects pertaining to the operations of the company are discussed.
The first meeting of the Board of Directors is preferably held on the date the elections to the Board are made.
In the first meeting, the chairman and vice-chairman of the Board of Directors are elected and the members mutually decided whether they will distribute job responsibilities or not.
The Board of Directors meets regularly at least once every month as company business requires and planned beforehand. If necessary a meeting can be held earlier. If it is required by the chairman or five of the members, a meeting of the Board may be arranged.
Each member of the Board of Directors has one voting right regardless of his status and fields of duty.
As per the articles of incorporation of the company, the Board of Directors may meet with the participation of at least 5 members and the decisions are reached by the votes of the majority in attendance.
17. Number, Structure and Independency of the Committees established by the Board of Directors.
The Audit Committee
The Audit Committee, which is formed from a minimum of two members and all such members being selected from among independent members of the Board of Directors, acts to ensure that financial and operational activities of the Company are overseen in a healthy manner in line with the principles set forth in the capital markets legislation and committee duty and operating principles. The purpose of the Committee, which reports to the Board of Directors, is to ensure that the Company accounting system and financial information are publicly disclosed in a manner that complies with the Articles of Incorporation of the Company, and independent audit and internal control system operation and efficiency is supervised, and the Committee is also responsible for ensuring that all necessary measures are taken in order for any internal or independent audit is carried out in a sufficient and transparent manner.
As was explained in Yağmur Şatana’s letter of resignation dated 25 July 2012, the number of independent members of the board of directors had dropped to 1 and adequate number could not be reached with respect to the committee activities as of the date of 31.12.2012 due to the aforementioned person being selected for duty as a member of the board of directors of Kazanci Holding A.Ş., the main partner of our Company, and due to this new duty he has assumed at Kazanci Holding A.Ş. having lost his independent member qualification as per the Communiqué of the Capital Markets Board Serial: IV No. 56 Regarding Determining and Implementing Corporate Governance Principles upon the acceptance of the resignation of the said person.
Upon Yaver Uğur Timurkan being assigned to the Board of Directors as an independent member with the resolution of the Board of Directors taken on the date of 17.05.2013, the number of independent members rose to 2. It was decided to elect the independent members of the Board of Directors of our Company Tevfik Yavuz İşbakan and Yaver Uğur Timurkan as committee members to the Audit Committee and for Yaver Uğur Timurkan to chair the committee.
AKSA ENERJİ 2012 ANNUAL REPORT 57 Corporate Governance Principles Compliance Report
Corporate Governance Committee
The purpose of the Committee is to ensure that the Company complies with the corporate governance principles arranged by the Capital Markets Board’s Serial: IV No. 56 “Communiqué Regarding Determining and Implementation of Corporate Governance Principles”; to research the causes in case these principles are not applied to the Company and to determine any discrepancies that occur due to lack of full compliance and take improvement measures, and; to support the Board of Directors by performing works in the subjects of investor relations and public disclosure. Furthermore the Committee shall also undertake the duties stipulated in the Corporate Governance Principles for the Nomination Committee, Early Risk Determination Committee, and Compensation Committee.
According to the membership terms stipulated in the duty and work principles of Corporate Governance Committee, in case the Committee consists of 2 members, then both members, and in case it consists of more than 2 members then the condition that “these will be selected from among the members of the Board of Directors that are not assigned to execute the majority” could not be satisfied as of the date of 31.12.2012 upon Yağmur Şatana losing his independent criteria on in July 2012.
Early Risk Determination Committee
Within the framework of Serial IV No: 56 Communiqué Regarding Principles Pertaining to Determining and Implementing of Corporate Governance Principles, and our Articles of Incorporation, the Board of Directors that convened on the date of 17 May 2013 decided to establish the Early Risk Determination Committee under the Board of Directors; for Mr. Cüneyt Uygun, Mr. Yağmur Şatana and Mr. Yaver Uğur Timurkan to be elected as committee members to the committee and for Mr. Yaver Uğur Timurkan to chair that committee.
The committee performs works with the purpose of early determination of risks that may jeopardize the existence, growth, and continuity of the Company and implementation of necessary measures with respect to such risks determined, and the management of risk.
18. Risk Management and Internal Control Mechanism
Risk Management and Internal Control Mechanisms are under the responsibility and control of Company Management. Company Management reviews company’s risk management and internal control system regularly to ensure that the following objectives may be achieved:
• Protection of company assets; • Ensuring compliance with law, regulation, and agreements; • Efficiency in operations and effectiveness of operations; • Correctness and reliability of financial and operational information;
The extent, to which activities and operations, including risk factors previously determined and reported, will be controlled or avoided within the context of proposals accepted by management.
The extent, to which results of activities of companies meet the targets and determinations and reports related to risks that are faced, are evaluated in the meetings of the Board of Directors that are periodically held by participation of related managers.
19. Strategic Objectives of the Company
Aksa Enerji’s existing 2.048 MW installed capacity as of 31.12.2012 will reach 4.000 MW as of 2017 by converting on- going investments and licenses received into investments.
Privatizations in Turkish electricity sector are closely monitored.
Aksa targets to increase capacity utilization and profitability by selling electricity directly to free consumers and distribution companies.
Evaluation of electricity importation-exportation opportunities from/to nearby geographical regions is aimed.
20. Financial Rights
Other than the monthly participation fee, the members of the Board of Directors are not paid any remuneration.
The total of the fees and similar benefits paid to the members of the Board of Directors and senior management in 01.01.- 31.12.2012 fiscal period is 2.881.958 TL. (01.01-31.12.2011: 1.519.487 TL)
58 AKSA ENERJİ 2012 ANNUAL REPORT Summary of Auditor’s Report
TO THE GENERAL ASSEMBLY OF AKSA ENERJİ ÜRETİM A.Ş.
Name of the Company : AKSA ENERJİ ÜRETİM A.Ş. Center : Barbaros Bulvarı No: 99 Beşiktaş - İstanbul Paid in Capital : TL 613,169,118.00 Field of Activity : Stated in Articles of Association.
Auditors’names, term in office, being partner or company’s staff: Şeref ÖZÇELİK - 1 year - Emine Mahinur DENGİZ - 1 year not partner nor personnel.
Number of Board of Directors Meetings and Audit Committee Meetings Attended: 2012 Reporting Period - 1
The Result of the Audit of Company Accounts: Audits in every three months revealed that the Company’s records are in line with legislation and are grounded on confirmative documents.
The number and results of Treasury Counts in accordance with Turkish Trade Law’s 353rd article’s 1st anecdote’s 3rd definition: Treasury counts were made four times and it was resolved that stocks are in compliance with the records.
Audit dates and results that have been performed in accordance with Turkish Trade Law’s 353rd article’s 1st anecdote’s 4th definition: Monthly audits revealed that all negotiable instruments shown in the records were present.
Complaints or frauds perceived, and legal proceedings: There are no complaints or frauds perceived.
We have audited the accounts and transactions of Aksa Enerji Üretim A. Ş. at the period of 01.01.2012-31.12.2012 in accordance with Turkish Trade Law, The Company’s Articles of Association, other regulations and general accounting principles.
In our opinion, the attached balance sheet drawn up on 31 December 2011, the contents of which we acknowledge, fairly and accurately presents the Company’s financial status on the date, and the income statement for the period 01 January 2012 - 31 December 2012 fairly and accurately presents the operating results for the period.
We propose that the balance sheet and income statement be approved and that the members of the Board of Directors be acquitted of their fiduciary responsibilities.
Auditor Auditor Şeref ÖZÇELİK Emine Mahinur DENGİZ
AKSA ENERJİ 2012 ANNUAL REPORT 59 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Independent Auditor’s Report for the Year Ended 31 December 2012
To the Shareholders and Board of Directors of
Aksa Enerji Üretim A.Ş.
İstanbul
1. We have audited the accompanying consolidated financial statements of Aksa Enerji Üretim A.Ş. and its wholly owned subsidiaries (together referred to as the Group) listed under Note 1 to the financial statements comprise the consolidated balance sheets as at 31 December 2012, and the consolidated statements of income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.
Management’s Responsibility for the Financial Statements
2. Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
3. Our responsibility is to express an opinion on these 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 whether the financial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the 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 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 financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
5. In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Aksa Enerji Üretim A.Ş. and its wholly owned subsidiaries as of 31 December 2012 and their consolidated financial performance and their consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards.
Emphasis of Matter
6. The new shareholding structure and the capital increase amounting to TL 35.669.118 in November 2012 is not registered in the Turkish Trade Registry as of the report date (note 17).
EREN Bağımsız Denetim ve Yeminli Mali Müşavirlik A.Ş. Member Firm of GRANT THORNTON International
Nazım Hikmet Partner
Istanbul, 06 March 2013
60 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Consolidated Financial Statements Together with Independent Auditor’s Report as of 31 December 2012
Contents
Page CONSOLIDATED BALANCE SHEETS (TL) 62 CONSOLIDATED STATEMENTS OF INCOME (TL) 64 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (TL) 65 CONSOLIDATED STATEMENTS OF CASH FLOW (TL) 66 CONSOLIDATED BALANCE SHEETS (USD) 67 CONSOLIDATED STATEMENTS OF INCOME (USD) 68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 70-105 NOTE 1 ORGANIZATION AND NATURE OF ACTIVITIES 70 NOTE 2 BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS 74 NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 77 NOTE 4 CASH AND CASH EQUIVALENTS 81 NOTE 5 TRADE RECEIVABLES 81 NOTE 6 DUE FROM/TO RELATED PARTIES AND SHAREHOLDERS, NET 81 NOTE 7 INVENTORY 84 NOTE 8 OTHER CURRENT AND NON-CURRENT ASSETS 84 NOTE 9 INVESTMENTS 85 NOTE 10 PROPERTY, PLANT AND EQUIPMENT 86 NOTE 11 INTANGIBLE ASSETS, NET 88 NOTE 12 FINANCIAL LIABILITIES 89 NOTE 13 TRADE PAYABLES 91 NOTE 14 TAXATION PAYABLE ON INCOME 91 NOTE 15 OTHER PAYABLES AND ACCRUED LIABILITIES 92 NOTE 16 RETIREMENT PAY PROVISION 93 NOTE 17 SHARE CAPITAL 94 NOTE 18 GENERAL RESERVES 94 NOTE 19 NET SALES 95 NOTE 20 COST OF SALES 95 NOTE 21 RESEARCH AND DEVELOPMENT, MARKETING AND SELLING AND GENERAL ADMINISTRATIVE EXPENSES 96 NOTE 22 OTHER INCOME AND OTHER EXPENSES 97 NOTE 23 FINANCING INCOME AND FINANCING EXPENSES 97 NOTE 24 ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS 98 NOTE 25 COMMITMENTS AND CONTINGENCIES 99 NOTE 26 THE NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS 102 NOTE 27 ADDITIONAL INFORMATION 104 NOTE 28 SUBSEQUENT EVENTS 105 NOTE 29 CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS 105
AKSA ENERJİ 2012 ANNUAL REPORT 61 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Consolidated Balance Sheets as of 31.12.2012 and 31.12.2011 (Currency - Turkish Lira)
ASSETS Note 31.12.2012 31.12.2011
Current Assets
Cash and Cash Equivalents 4 40.569.510 110.146.953 Marketable Securities 345.577 383.292 Trade Receivables 5 245.916.937 261.469.390 Due from/to Related Parties and Shareholders, net 6 593.855.109 360.009.439 Inventory 7 135.537.555 121.520.019 Other Current Assets 8 84.572.714 77.303.403 1.100.797.402 930.832.496
Assets Held For Sale 24 - 13.444.193
Non-Current Assets
Investments 9 1.631.875 1.631.875 Property, Plant and Equipment 10 1.627.285.323 1.613.035.801 Goodwill 2 9.522.739 9.522.739 Intangible Assets 11 1.679.566 1.054.532 Other Non-Current Assets 8 87.012.756 43.389.684 Deferred Tax Asset 14 4.109.211 4.109.211
1.731.241.470 1.672.743.842
TOTAL ASSETS 2.832.038.872 2.617.020.531
The accompanying notes are an integral part of these consolidated financial statements.
62 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Consolidated Balance Sheets as of 31.12.2012 and 31.12.2011 (Currency - Turkish Lira)
LIABILITIES Note 31.12.2012 31.12.2011
Short Term Liabilities
Financial Liabilities 12 564.278.583 489.549.669 Trade Payables 13 284.736.320 359.498.367 Taxation Payable on Income 14 6.620.636 4.411.568 Other Payables and Accrued Liabilities 15 11.676.935 70.366.018
867.312.474 923.825.622
Long Term Liabilities
Financial Liabilities 12 756.366.842 891.450.641 Retirement Pay Provision 16 2.173.676 1.839.533 Deferred Tax Liability 14 2.936.550 2.936.550
761.477.068 896.226.724
Shareholders’ Equity
Share Capital 17 615.157.050 579.487.932 General Reserves 18 120.956.987 242.940.489 Share Premium 247.403.635 96.523.266 Net Profit / (Loss) for the Year 219.731.658 (121.983.502)
1.203.249.330 796.968.185
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 2.832.038.872 2.617.020.531
The accompanying notes are an integral part of these consolidated financial statements.
AKSA ENERJİ 2012 ANNUAL REPORT 63 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Consolidated Statements of Income for the Years Ended 31.12.2012 and 31.12.2011 (Currency - Turkish Lira)
01.01.- 01.01.- INCOME STATEMENT Note 31.12.2012 31.12.2011
Net Sales 19 1.840.637.761 1.315.389.404 Cost of Sales 20 (1.604.164.537) (1.088.025.556)
Gross Profit 236.473.224 227.363.848
Research and Development Expenses 21 - (18.468) Marketing and Selling Expenses 21 (2.133.093) (3.048.577) General Administrative Expenses 21 (16.699.473) (16.021.120)
Basic Operating Profit 217.640.658 208.275.683
Other Income 22 7.221.377 1.683.251 Other Expenses 22 (21.150.880) (52.953.876) Financing Income 23 221.103.442 108.080.638 Financing Expenses 23 (198.462.303) (381.605.696)
Profit / (Loss) Before Tax For The Year 226.352.294 (116.520.000)
Taxation on Profit - Current 14 (6.620.636) (5.453.222) - Deferred 14 - -
Profit / (Loss) After Tax For The Year 219.731.658 (121.973.222)
Discontinued Operations 24 - (10.280)
NET PROFIT / (LOSS) FOR THE YEAR 219.731.658 (121.983.502)
Earnings before interest, tax, depreciation and amortization (EBITDA) 3 322.960.834 300.768.899
The accompanying notes are an integral part of these consolidated financial statements.
64 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended 31.12.2012 and 31.12.2011 (Currency - Turkish Lira)
Net Profit / Share General Share (loss) SHAREHOLDERS’ EQUITY Capital Reserves Premium for the Year Total
Balance, 01.01.2011 579.487.932 173.652.620 95.999.686 69.427.025 918.567.263
Transfer to reserves - 69.427.025 - (69.427.025) - Effect of first time aggregation of Ayres Ayvacık Rüzgar Enerjisi (134.612) - - (134.612) Share premium - - 523.580 - 523.580 Dividend paid - (4.544) - - (4.544) Net loss for the year - - - (121.983.502) (121.983.502)
Balance, 31.12.2011 579.487.932 242.940.489 96.523.266 (121.983.502) 796.968.185
Increase in share capital - in cash 35.669.118 - - - 35.669.118 Share premium - - 150.880.369 - 150.880.369 Transfer to reserves - (121.983.502) - 121.983.502 - Net profit for the year - - - 219.731.658 219.731.658 Balance, 31.12.2012 615.157.050 120.956.987 247.403.635 219.731.658 1.203.249.330
The accompanying notes are an integral part of these consolidated financial statements.
AKSA ENERJİ 2012 ANNUAL REPORT 65 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Consolidated Statements of Cash Flow for the Years Ended 31.12.2012 and 31.12.2011 (Currency - Turkish Lira)
01.01.- 01.01.- CASH FLOWS FROM OPERATING ACTIVITIES Note 31.12.2012 31.12.2011 Net profit / (loss) for the year 219.731.658 (121.983.502) Adjustment for: Depreciation and amortization 10 105.320.176 92.545.581 Provision for employee termination benefits 16 365.226 531.785 Interest expense accruals on loans 12 (3.967.712) 5.087.288 Unrealized foreign exchange (gains) / losses on loans 12 (61.817.359) 228.166.957 Decrease in value of machinery and equipments 10 10.196.326 - Effect of first time aggregation of Ayres, Alenka and Aksa Göynük 18 - (134.612) Change in allowance for doubtful trade receivables 5 95.000 326 Discount on receivables / (payables), net 5-13 2.059.607 (1.352.331) Tax provision 14 6.620.636 4.411.568 Operating profit before working capital changes 278.603.558 207.273.060 Trade receivables 5 15.210.155 (148.550.812) Inventory 7 (14.017.536) (40.196.100) Other current assets 8 (7.269.311) (18.733.858) Other non current assets 8 (43.623.072) (23.117.808) Trade payables 13 (76.574.356) 163.327.086 Other payables and accrued liabilities 15 (58.689.083) 60.446.867 Retirement Pay Provision 16 (31.083) (24.164) Taxes paid 14 (4.411.568) (13.471.828) Net Cash Flows Generated From Operating Activities 89.197.704 186.952.443 CASH FLOWS FROM INVESTING ACTIVITIES Assets Held For Sale 24 13.444.193 (530.814) (Purchases) / Disposals of property, plant and equipment and intangible assets, net 10-11 (130.391.058) (330.244.025) Goodwill 2 - (3.498.840) Sales of marketable securities 37.715 (383.292) (Purchase) / Disposal of equity participations, net 9 - 16.937 Net Cash Flows Used In Investment Activities (116.909.150) (334.640.034) CASH FLOWS FROM FINANCING ACTIVITIES Financial liabilities 12 5.430.186 (68.867.914) Due from/to related parties and shareholders 6 (233.845.670) 247.859.824 Share Premium 150.880.369 523.580 Dividend Paid - (4.544) Share capital 17 35.669.118 - Net Cash Flows Generated From / (Used in) Financing Activities (41.865.997) 179.510.946 Net Increase / (Decrease) in Cash and Cash Equivalents (69.577.443) 31.823.355 Cash and Cash Equivalents at Beginning of the Year 110.146.953 78.323.598 Cash and Cash Equivalents at the End of the Year 40.569.510 110.146.953
The accompanying notes are an integral part of these consolidated financial statements.
66 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Consolidated Balance Sheets as of 31.12.2012 and 31.12.2011 (Currency - US Dollars)
ASSETS 31.12.2012 31.12.2011
Current Assets
Cash and Cash Equivalents 22.758.617 58.312.750 Marketable Securities 193.861 202.918 Trade Receivables 137.954.077 138.424.157 Due from/to Related Parties and Shareholders, net 333.139.857 190.592.111 Inventory 76.033.633 64.333.749 Other Current Assets 47.443.461 40.925.090
617.523.506 492.790.775
Assets Held For Sale - 7.117.472
Non-Current Assets
Investments 915.447 863.929 Property, Plant and Equipment 912.871.829 853.955.107 Goodwill 5.342.050 5.041.420 Intangible Assets 942.200 558.278 Other Non-Current Assets 48.812.272 22.970.874 Deferred Tax Asset 2.305.178 2.175.452
971.188.976 885.565.060
TOTAL ASSETS 1.588.712.482 1.385.473.307
The accompanying notes are an integral part of these consolidated financial statements.
AKSA ENERJİ 2012 ANNUAL REPORT 67 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Consolidated Balance Sheets as of 31.12.2012 and 31.12.2011 (Currency - US Dollars)
LIABILITIES 31.12.2012 31.12.2011
Short Term Liabilities
Financial Liabilities 316.548.066 259.171.830 Trade Payables 159.730.910 190.321.545 Taxation Payable on Income 3.714.033 2.335.522 Other Payables and Accrued Liabilities 6.550.508 37.252.378
486.543.517 489.081.275
Long Term Liabilities
Financial Liabilities 424.305.420 471.941.681 Retirement Pay Provision 1.219.385 973.865 Deferred Tax Liability 1.647.341 1.554.635
427.172.146 474.470.181
Shareholders’ Equity
Share Capital 345.089.785 306.785.924 General Reserves 67.854.251 128.614.796 Share Premium 138.788.082 51.100.252 Net Profit / (Loss) for the Year 123.264.701 (64.579.121)
674.996.819 421.921.851
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 1.588.712.482 1.385.473.307
The accompanying notes are an integral part of these consolidated financial statements.
68 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Consolidated Statements of Income for the Years Ended 31.12.2012 and 31.12.2011 (Currency - US Dollars)
01.01.- 01.01.- INCOME STATEMENT 31.12.2012 31.12.2011
Net Sales 1.032.557.927 696.378.529
Cost of Sales (899.901.569) (576.010.141)
Gross Profit 132.656.358 120.368.388
Research and Development Expenses - (9.777)
Marketing and Selling Expenses (1.196.619) (1.613.943)
General Administrative Expenses (9.368.043) (8.481.720)
Basic Operating Profit 122.091.696 110.262.948
Other Income 4.051.036 891.128 Other Expenses (11.865.186) (28.034.240)
Financing Income 124.034.243 57.218.825 Financing Expenses (111.333.055) (202.025.357)
Profit / (Loss) Before Tax For The Year 126.978.734 (61.686.696)
Taxation on Profit - Current (3.714.033) (2.886.983) - Deferred - -
Profit / (Loss) After Tax For The Year 123.264.701 (64.573.679)
Discontinued Operations - (5.442) NET PROFIT / (LOSS) FOR THE YEAR 123.264.701 (64.579.121)
Earnings before interest, tax, depreciation and amortization (EBITDA) 181.174.035 159.229.657
The accompanying notes are an integral part of these consolidated financial statements.
AKSA ENERJİ 2012 ANNUAL REPORT 69 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
1. ORGANIZATION AND NATURE OF ACTIVITIES
Aksa Enerji Üretim A.Ş. (The Company) was established on 12 March 1997 for production and sale of electricity. The shares of Company have been registered in the Turkish Capital Markets Board (CMB) in May 2010 and the shares are now publicly traded on the Istanbul Stock Exchange. The public portion of the shares is 5,15%, 0,26% of public shares part and 81,54% of the share capital is owned by Kazancı Holding A.Ş. and 13,30% of the share capital is owned by Goldman Sachs (note 17). As of 31 December 2012, the number of personnel employed by the Company is 254 (31.12.2011: 290) and the total number of personnel employed by the group is 611 (31.12.2011:660).
The subsidiaries included in the consolidation as of 31 December 2012 are as follows:
Effective Subsidiaries Subject of activity Country Ownership (%)
1. Aksa Enerji Üretim A.Ş.-Y.Ş. Electricity production Northern Cyprus 100,00 2. Rasa Elektrik Üretim A.Ş. Radiator and Electricity production Turkey 99,96 3. Deniz Elektrik Üretim Limited Şirketi Electricity production Turkey 99,99 4. Baki Elektrik Üretim Limited Şirketi Electricity production Turkey 95,00 5. Rasa Enerji Üretim A.Ş. Electricity production Turkey 99,99 6. İdil İki Enerji Sanayi ve Ticaret A.Ş. Electricity production Turkey 99,99 7. Ayres Ayvacık Rüzgar Enerjisinden Elektrik Üretim Santrali Ltd. Şti. Electricity production Turkey 99,00 8. Alenka Enerji Üretim ve Yatırım Ltd. Şti. Electricity production Turkey 90,45 9. Aksa Göynük Enerji Üretim A.Ş. Electricity production Turkey 99,99
1. Aksa Enerji Üretim A.Ş. - (Y.Ş.) (Northern Cyprus):
The power plant started electricity production in mid 2003 and all of its production is sold to Electricity Distribution Company of Turkish Northern Cyprus (KIB-TEK). The capacity of the power plant increased by 31 MW as of August 2011 and reached to 120 MW.
The revised contract between the Company and KIB-TEK which is currently available started in April 2009 and the contract period is 15+3 years starting from this date.
Company in Northern Cyprus, named Aksa Enerji Üretim A.Ş. (Y.Ş.), is the wholly owned subsidiary of the Company and its financial results have been consolidated in the accompanying financial statements.
As of 31 December 2012, the number of personnel employed by the Company is 65 (31.12.2011: 55).
2. Rasa Elektrik Üretim A.Ş.:
The Company located at Mardin established on January 1996 in order to meet the electricity needs of Mardin and surrounding areas. It sells its production to TEİAŞ (Turkish Electricity Transmission Company). As of 31 December 2012 the capacity of the fuel power plant is 33 MW.
The land over which the power plant is located in Mardin, has been leased from Koni İnşaat A.Ş. in 2002, to be renewed annually. The factory which the Company manufacture of radiators has been leased from Konis İnşaat A.Ş. until 31.12.2012, the factory land is the property of Aksa Enerji Üretim A.Ş.
Aksa Enerji Üretim A.Ş. have been acquired the Company’s 99,96% shares. As of 31 December 2012, the number of personnel employed by the Company is 109 (31.12.2011: 105).
70 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
3. Deniz Elektrik Üretim Limited Şirketi:
The Company was initially established in 1997 in Izmir with the name of “Deniz Rüzgar Enerjisi ve Cihazları Sanayi ve Ticaret Limited Şirketi”. In 2003, the Company changed its name to Deniz Elektrik Üretim Limited Şirketi.
In May 2004, Aksa Enerji Üretim A.Ş. acquired 95% of the shares of the Company. On 13.08.2010, Aksa Enerji Üretim A.Ş. has made the purchase of new shares participate in Deniz Elektrik Üretim Ltd. Şti. and raised its shares to 99.99%.
The Company established to produce electricity from wind energy. In 2004, the Company awarded two wind farm licences located in Sebenova/Hatay and Karakurt/Manisa, the production capacities of which are 30 MW and 10.8 MW respectively.
Karakurt/Manisa Wind Power Plant and Sebenova/Hatay Wind Power Plant became operational in June 2007 and April 2008, respectively. The Company sold its production to TEİAŞ and Aksa Elektrik Toptan Satış A.Ş. (related company).
The Company’s power generation plants are located in Karakurt/Manisa and Sebanova/Hatay are the property of the Company’s own land.
As of 31 December 2012, the number of personnel employed by the Company is 25 (31.12.2011: 50).
4. Baki Elektrik Üretim Limited Şirketi:
Baki Elektrik Üretim Ltd. Şti. (the Company) was established on 4 July 2003 in Ankara for the production and sale of wind power electricity.
In March 2004, Aksa Enerji Üretim A.Ş. acquired 95% of the shares of the Company.
As of 31 December 2012 the capacity of the plant is 114 Mw and the produced electricity is sold to TEİAŞ and Aksa Elektrik Toptan Satış A.Ş. (related Company).
The Company’s power generation plant is located in Şamlı/Balıkesir are the property of the Company’s own land.
As of 31 December 2012, the number of personnel employed by the Company is 21 (31.12.2011: 24).
5. Rasa Enerji Üretim A.Ş.:
Rasa Enerji Üretim A.Ş. (the Company) was established on 12.09.2000 for production and distribution of the electricity. The Company’s 99.99% shares have been acquired by Aksa Enerji Üretim A.Ş. at 05.03.2010 from one of the related parties of Koni İnşaat Sanayi A.Ş..
The Company has licence for a natural gas power plant in Van which has a 114,88 MW capacity. The total installed capacity of the Van plant was increased to 104 MW to 114,88 MW as combined cycle in the last quarter of 2010.
The Company has licence for natural gas power plant in Urfa which has a 120 MW capacity. The construction period is completed in August 2011 and the Company started to generate electricity.
Investment of these natural gas power plant waste-heat boilers and 11.7 MW steam turbine, and combined cycle investment completed and has been activated as of 08.10.2012.
As of 31 December 2012, the number of personnel employed by the Company is 83 (31.12.2011: 81).
AKSA ENERJİ 2012 ANNUAL REPORT 71 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
6. İdil İki Enerji Sanayi ve Ticaret A.Ş.:
İdil İki Enerji Sanayi ve Ticaret A.Ş. (the Company) was established in 2001. The Company owns Şırnak plant which is a fuel oil fired power plant with an installed capacity of 24 MW. The power plant became operational in 2001.
The Company’s 99.99% shares have been acquired by Aksa Enerji Üretim A.Ş. at 05.03.2010 from Koni İnşaat Sanayi A.Ş..
As of 31 December 2012, the number of personnel employed by the Company is 16 (31.12.2011: 21).
7. Ayres Ayvacık Rüzgar Enerjisinden Elektrik Üretim Santrali Ltd. Şti.:
The Company has a wind power plant in Çanakkale Ayvacık with a capacity of 5 MW. The Company’s 99.00% shares have been acquired by Aksa Enerji Üretim A.Ş. at 18.04.2011 from one of the related parties of Kazancı Holding.
As of 31 December 2012, the number of personnel employed by the Company is 4 (31.12.2011: 5).
8. Alenka Enerji Üretim ve Yatırım Ltd. Şti.:
As of 17.08.2011, Aksa Enerji Üretim A.Ş. has purchased the 81% stake of from the Alenka’s shareholders which has 67.5 MW of wind power plant with a total investment stage in Kırklareli-Kıyıköy, Kıblekayası-Hatay, Hatay-Yurttepe and Tekirdag- Sırakayalar. During 2012, as a result of the purchase of additional shares, the Group’s effective ownership increased to 90,45%.
As of 31 December 2012, there is no personnel employed by the Company (31.12.2011: none).
8. Aksa Göynük Enerji Üretim A.Ş.:
Aksa Göynük Enerji Üretim A.Ş. has signed royalty agreement with General Directorate of Turkish Coal for the use of coal in Bolu-Göynük reservoir by the same time Aksa Enerji Üretim A.Ş. has licence about the process of this coal in its power plant with 270 MW capacity.
As of 28.10.2011, Aksa Enerji Üretim A.Ş. purchased the 99.993% of the shares of the Company from Kazancı Holding. The Company is established to install, operate, taken over and hire electrical energy production facilities, produce and selling of electrical energy and dealing all kinds of oil, gas and mining goods.
The company targets to complete first phase of the energy power plant which has 135 MW capacity in 2014 and planning to produce 1 billion KWH of energy per year .
As of 31 December 2012, the number of personnel employed by the Company is 34 (31.12.2011: 29).
72 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
Electricity production licences held by the Group are as follows:
The capacity The capacity Licence Date of Licence Licence of the plant under operation Owner Area Type of Facility Started Duration (MWe) (MWe)
Aksa Enerji TRNC Fuel oil 120 120 Aksa Enerji Hakkari Fuel oil 18.10.2007 10 year 24 24 Aksa Enerji Antalya Natural Gas 13.11.2007 30 year 2.050 1.150 Aksa Enerji Manisa Natural Gas 21.02.2008 30 year 115 115 Aksa Enerji İncesu-Ortaköy-Çorum HPP 29.09.2005 40 year 15 15 Aksa Enerji Mardin Fuel oil 14.07.2011 49 year 30 30 Aksa Enerji Samsun Natural Gas 28.07.2011 49 year 130 130 Aksa Enerji Bolu (*) Thermal 25.03.2008 30 year 270 -- Aksa Enerji Erzincan (*) HPP 17.01.2008 49 year 85 -- Aksa Enerji Mersin (*) HPP 14.06.2007 49 year 20 -- Aksa Enerji Kayseri (*) HPP 17.01.2008 49 year 30 -- Aksa Enerji Pazarköy-Akyazı-Sakarya (*) HPP 10.02.2005 40 year 26 -- Aksa Enerji Gümüşhane İli, Kuletaşı Barajı (*) HPP 05.03.2009 49 year 30 -- Aksa Enerji Bitlis İli, Kor Barajı (*) HPP 30.10.2008 49 year 26 -- Aksa Enerji Koru Barajı (*) HPP 17.06.2009 49 year 15 -- Aksa Enerji Adana, Yamanlı 1 Reg. (*) HPP 20.05.2010 49 year 24 -- Aksa Enerji EğrikayaSırtı-Atikboynutepe- WPP 13.03.2008 49 year Atıkkayasıtepe-Alacıkkayatepe- Çardaklıtepe-İskenderun-Hatay (*) 30 -- Alenka Hatay-Yurttepe WPP 04.04.2007 20 year 14 - Alenka Hatay-Meydan Kıblekayası WPP 04.04.2007 20 year 15 - Alenka Tekirdağ-Sırakayalar WPP 04.04.2007 20 year 12 - Alenka Kırklareli-Kıyıköy WPP 04.04.2007 20 year 27 - Ayres Ayvacık WPP 01.11.2007 25 year 5 5 Baki Elektrik Merkez-Şamlı-Balıkesir WPP 06.04.2004 49 year 114 114 Deniz Elektrik Sebenoba-Gözene-Yayladağı- WPP 04.06.2004 49 year Samandağ-Hatay 60 30 Deniz Elektrik Karakurt-İlyaslar-Çakaltepe-Manisa WPP 05.12.2003 49 year 11 11 İdil İki Şırnak Thermal 22.03.2007 20 year 24 24 İdil İki Ordu (*) HPP 25.04.2008 49 year 62 -- İdil İki Erzurum (*) HPP 06.09.2007 49 year 60 -- Rasa Enerji Van Natural Gas 15.01.2009 49 year 115 115 Rasa Enerji Şanlıurfa Natural Gas 12.05.2011 49 year 270 129 Rasa Elektrik Mardin Fuel oil 22.03.2007 20 year 33 33
Total 3.862 2.045 (*) The licences for which the investments are being planned but not started yet.
AKSA ENERJİ 2012 ANNUAL REPORT 73 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS
The financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS), which comprise standards and interpretations approved by the International Accounting Standards Board and International Accounting Standards and Standing Interpretations Committee interpretations approved by the IASC that remain in effect.
Basis of Consolidation
The consolidated financial statements included the financial statements of Aksa Enerji Üretim A.Ş., Deniz Elektrik Üretim Limited Şirketi, Aksa Enerji Üretim Kıbrıs, Baki Elektrik Üretim Ltd. Şti., Rasa Elektrik Üretim A.Ş., Rasa Enerji Üretim A.Ş., İdil İki Enerji Sanayi ve Ticaret A.Ş., Ayres Ayvacık Rüzgar Enerjisinden Elektrik Üretim Santrali Ltd. Şti., Alenka Enerji Üretim ve Yatırım Ltd. Şti. and Aksa Göynük Enerji Üretim A.Ş.. The balance sheets and income statements of the consolidated entities are added on a line by line basis. All significant inter-company transactions and balances between the consolidated entities are eliminated on consolidation.
The subsidiaries which have been included in consolidation and their shareholding percentages at 31 December 2012 and 31 December 2011 are as follows:
Effective Rate of Ownership (%) Name of Consolidated Entity 31.12.2012 31.12.2011
1. Aksa Enerji Üretim Kıbrıs - Y.Ş. (Northern Cyprus) 100,00 100,00 2. Rasa Elektrik Üretim A.Ş. 99,96 99,96 3. Deniz Elektrik Üretim Limited Şirketi 99,99 99,99 4. Baki Elektrik Üretim Limited Şirketi 95,00 95,00 5. Rasa Enerji Üretim A.Ş. 99,99 99,99 6. İdil İki Enerji Sanayi ve Ticaret A.Ş. 99,99 99,99 7. Ayres Ayvacık Rüzgar Enerjisinden Elektrik Üretim Santrali Ltd. Şti. (*) 99,00 99,00 8. Alenka Enerji Üretim ve Yatırım Ltd. Şti. (**) 90,45 81,00 9. Aksa Göynük Enerji Üretim A.Ş. (***) 99,99 99,99 (*)Ayres Ayvacık Rüzgar Enerjisinden Elektrik Üretim Santrali Ltd. Şti. was acquired on 18.04.2011 and was consolidated in financial statements on 31.12.2011 with its respective balance sheet amount and last six months income statement amount. (**)Alenka Enerji Üretim ve Yatırım Ltd. Şti. was acquired on 17.08.2011 and was consolidated in financial statements on 31.12.2011 with its respective balance sheet amount and last three months income statement amount. (***)Aksa Göynük Enerji Üretim A.Ş. was acquired on 28.10.2011 and was consolidated in financial statements on 31.12.2011 with its respective balance sheet amount and last two months income statement amount.
All subsidiaries in the attached financial statements are fully consolidated and no minority interest is calculated because the companies are under the control of the Kazancı family.
The Group is incorporated in Turkey, maintains its books of account and prepares its statutory financial statements in accordance with the Turkish Commercial Code and Tax Legislation and the Uniform Chart of Accounts issued by the Ministry of Finance. The financial statements have been prepared from statutory financial statements of the Group and presented in Turkish Lira (TL) with adjustments and reclassifications for the purpose of fair presentation in accordance with IFRS.
Reporting currency
The currency used in these consolidated financial statements is Turkish Lira, which is denoted by the symbol TL.
Goodwill
Goodwill is taken into account at the consolidation stage. Goodwill is the difference of the realizable value and cost of a subsidiary. Goodwill is carried at cost as reduced by appropriate provisions for diminution in the value of goodwill (if one exists) in the accompanying financial statements.
74 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
Positive goodwill (included in the balance sheet):
Cost (Baki Elektrik)
Payment 180.258 (-) Positive/(Negative) Fair value of the asset acquired (43.725)
Goodwill 223.983
As of 24.05.2006 (from financial statements dated 31.12.2006), 95% of the shares of Baki Elektrik were acquired by the Group and TL 223.983 worth of positive goodwill arose. During 2012, as a result of additional payments amounting to TL 752.651 resulted in positive goodwill in income statement.
Cost (Idil iki)
Payment 18.000.000 (-) Positive/(Negative) Fair value of the asset acquired 14.650.644
Goodwill 3.349.356
As of 05.03.2010 (from financial statements dated 31.03.2010), 99.99% of the shares of İdil İki were acquired by the Group and TL 3.349.356 worth of positive goodwill arose.
Cost (Deniz Elektrik)
Payment 2.880.310 (-) Positive/(Negative) Fair value of the asset acquired 429.750
Goodwill 2.450.560
As of 13.08.2010, the Group acquired additional 4.99% and TL 2.450.560 worth of positive goodwill arose.
Cost (Ayres)
Payment 3.275.083 (-) Positive/(Negative) Fair value of the asset acquired (223.757)
Goodwill 3.498.840
As of 18.04.2011, Aksa Enerji has acquired 99,00% of the shares of Ayres Ayvacık Rüzgar Enerjisinden Elektrik Üretim Ltd. Şti. According to the valuation report prepared by a qualified institution as of 14.02.2011 and the balance sheet tests of the Company, TL 3.498.840 positive goodwill arose.
Positive goodwill (included in the income statement):
Cost (Alenka)
Payment 629.064 (-) Positive/(Negative) Fair value of the asset acquired 467.593
Goodwill 161.471
AKSA ENERJİ 2012 ANNUAL REPORT 75 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
As of 01.10.2011, 81% of the shares of Alenka Enerji Üretim ve Yatırım Ltd. Şti. were acquired by the Group and TL 161.471 positive goodwill arose in the income statements. During 2012, as a result of additional payments amounting to TL 2.243.456 resulted in positive goodwill in the income statement.
Cost (Aksa Göynük)
Payment 1.308.200 (-) Positive/(Negative) Fair value of the asset acquired 518.615
Goodwill 789.585
As of 28.10.2011, 99,99% of the shares of Aksa Göynük Enerji Üretim A.Ş. were acquired by the Group and TL 789.585 positive goodwill arose in the income statement.
Inflation accounting
The restatement for the changes in the general purchasing power of TL until 31 December 2005 is based on IAS 29 (“Financial Reporting in Hyperinflationary Economies”). As of 1 January 2006, it has been decided to discontinue the adjustment of financial statements for inflation after taking into account that the hyperinflation period has come to an end as indicated by existing objective criteria and, that other signs indicating the continuance of hyperinflation have largely disappeared.
Adoption of New and Revised International Financial Reporting Standards
The Group applied the revised standards and interpretations that are relevant to its operations, published by International Accounting Standards Board (IASB) and International Accounting Standards Committee (IASC) and effective for financial statement which belong the period of 31 December 2012:
IAS 24 (Revised), “Statements of Related Parties”
IAS32 (Amendment), “Financial Tools: Presentation”
IFRIC 14 (Amendment), “Advance Payment of Minimum Funding Requirement”
IFRIC 19 (Interpretation), “Payment of Financial Debts with Financial Tools Based on Equity Capital”
IFRS 3 (Amendment), “Business Combinations”
IFRS 7 (Improvement), “Financial Tools: Explanations”
IAS 1 (Improvement), “Presentation of Financial Statements”
IAS 27 (Improvement), “Consolidated and Non-consolidated Financial Statements”
IFRIC 13 (Improvement), “Customer Loyalty Programs”
IAS 34 (Improvement), “Intermediary Period Financial Reporting”
Standards, amendments and interpretations in issue but not yet effective and not early adopted by the Group:
76 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
Following standards and interpretations have published while this financial statements approving but it has not became effective yet:
IFRS 9, “Financial Instruments”
Effective from 01 January 2015
IFRS 10, “Consolidated Financial Statements”
Effective from 01 January 2013
IFRS 11, “Common Regulations”
Effective from 01 January 2013
IFRS 12, “Explanations Concerning the Shares in Other Operations”
Effective from 01 January 2013
IFRS 13, “Fair value Measurement”
Effective from 01 January 2013
IAS 19, “Employee Benefits”
Effective from 01 January 2013
IAS 27, “Consolidated and Separate Financial Statements”
Effective from 01 January 2013
IAS 28, “Investments in Associates and Joint Ventures”
Effective from 01 January 2013
IFRS 7 (Amendment), “Financial Instruments - Disclosures”
Effective from 01 January 2013
IAS 32 (Amendment), “Financial Instruments - Presentation: Offsetting Financial Assets and Financial Liabilities”
Effective from 01 January 2014
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed in the preparation of the accompanying consolidated financial statements are set forth below:
Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at cost. Cash and cash equivalents include all short-term, highly liquid investments that are readily convertible to known amounts of cash and near to maturity that they present an insignificant risk of changes in value because of changes in interest rates.
Trade receivables and allowance for doubtful receivables
Trade receivables and notes receivable are recognized at original invoice amount and discounted to present value less an allowance for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified. In case the provision decreases as a result of an event that occurs after write off, the amount is reflected on the income statement in the current period.
Based on an evaluation of its trade portfolio such as volume, character of outstanding loans, past loan experience and general economic conditions management provides a general reserve that it believes is adequate to cover possible losses and uncollectible amounts in the Group’s receivables, in addition to specific reserves provided for receivables in legal follow- up.
AKSA ENERJİ 2012 ANNUAL REPORT 77 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
Related parties
For the purpose of the accompanying financial statements, key personnel in management and board of directors, their family and controlled or dependent companies, participations and subsidiaries of the Group are referred to as related parties (Appendix 1).
Trade payables
Trade payables are stated at their nominal value, discounted to present value as appropriate.
Inventory
Inventory (including raw materials) are valued at the lower of cost and net realizable value. Cost is calculated using the average method. Net realizable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution.
Property, plant and equipment, intangible assets and related depreciation and amortization
Property, plant and equipment and intangible assets are stated at cost. Depreciation and amortization are provided on straight line basis. Repair and maintenance expenditure related to property, plant and equipment is expensed as incurred. The depreciation and amortization periods for property, plant, equipment and intangible assets which approximate the economic useful lives of such assets, are as follows:
Year Buildings 10-50 Machinery and equipment (*) 10-40 Furniture, fixtures and office equipment 5-15 Motor vehicles 5-8 Intangible assets 2-49 (*) The depreciation periods for power plants according to their types are as follows;
Year Wind Electricity Powerhouse 20 Natural Gas Power Plants 20 Fuel Oil Power Plants 15 Hydroelectric Power Plants 40
Financial liabilities
Interest bearing bank loans are recorded at the proceeds received, net of direct issue costs. Finance charges are accounted for on an accrual basis and shown in other liabilities and expense accruals to the extent they are not settled in the period in which they arise.
Aksa Enerji Üretim A.Ş. has an export credit premium payable in connection with its long term loans used to finance the wind electricity, natural gas and other energy plants. In statutory financial statements, the Company recorded these both at assets (Other current and noncurrent assets - Note 8) and liabilities (Financial liabilities- Note 12) until the time of payment. As of 31 December 2012, TL 42.659.093 (USD 16.174.271, EURO 5.879.508) and 31 December 2011, TL 47.138.486 (TL 104.874, USD 16.441.785 and EURO 6.537.258) of export credit premium is netted off from assets and liabilities.
Deniz Elektrik Üretim Ltd. Şti. has an export credit premium payable in connection with its long term loans used to finance the wind electricity plant. In statutory financial statements, the Company recorded these both at assets (Other current and noncurrent assets - Note 8) and liabilities (Financial liabilities - Note 12) until the time of payment. As of 31 December 2012, TL 4.264.427(USD 2.392.251) and 31 December 2011, TL 5.450.711 (USD 2.885.653) of export credit premium is netted off from assets and liabilities.
Baki Elektrik Üretim Ltd. Şti. has an export credit premium payable in connection with its long term loans used to finance the wind electricity plant. In statutory financial statements, the Company recorded these both at assets (Other current and noncurrent assets - Note 8) and liabilities (Financial liabilities - Note 12) until the time of payment. As of 31 December 2012, TL 27.781.943 (USD 11.985.161 and EURO 2.728.747)and 31 December 2011, TL 32.126.869 (USD 13.183.677 and EURO 2.956.142) of export credit premium is netted off from assets and liabilities.
78 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
Rasa Enerji Üretim A.Ş. has an export credit premium payable in connection with its long term loans used to finance the wind electricity plant. In statutory financial statements, the Company recorded these both at assets (Other current and noncurrent assets - Note 8) and liabilities (Financial liabilities - Note 12) until the time of payment. As of 31 December 2012, TL 9.152.949 (EURO 3.892.056) and 31 December 2011, TL 14.256.958 (TL 63.205, USD 1.017.917 and EURO 5.021.282) of export credit premium is netted off from assets and liabilities.
Impairment of assets
Assets that have indefinite useful lives, for example goodwill, are not subject to amortization and are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
Taxation and deferred income taxes
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax: The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax: Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Employee benefits/retirement pay provision
Under the Turkish Labor Law and union agreements, employee termination payments are made to employees retiring or involuntarily leaving the Group. Such payments are considered as being part of defined retirement benefit plan as per International Accounting Standard No: 19 (revised) “Employee Benefits” (“IAS 19”). The retirement benefit obligation recognized in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized actuarial gains and losses.
Operating expenses
Operating expenses are recognized in profit or loss upon utilization of the service or at the date of their origin. Expenditure for warranties is recognized and charged against the associated provision when the related revenue is recognized.
Revenue recognition
Revenue involves the goods and service sales invoiced value. Revenues are recognized on an accrual basis at the time deliveries of goods and services or acceptances are made, the transfer of risks and benefits related to good are realized, the amount of 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 the consideration received or receivable. The significant risks and benefits in sales are transferred when the goods are delivered or legal proprietorship is transferred to the customer. Interest income and expenses are recognized in the income statement on an accrual basis. Net sales represent the invoiced value of goods shipped less sales returns and commission and excluding sales taxes.
Research and development costs
Research expenditure is recognized as an expense as incurred. Costs incurred on development projects (relating to the design and testing of new or improved power plant equipments) are recognized as intangible assets to the extent that such expenditure is expected to generate future economic benefits. Development costs that have been capitalized are amortized over five years.
Segment reporting
In identifying its operating segments, management generally follows the Group’s service lines, which represent the main services provided by the Group. All the Group’s power plants (except 120 MW power plant in Northern Cyprus) and wind electricity powerhouses are located in Turkey (notes 19-20).
AKSA ENERJİ 2012 ANNUAL REPORT 79 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
Offsetting
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.
Foreign currency transactions and translation
Transactions in foreign currencies during the periods have been translated at the exchange rates prevailing at the dates of these transactions. Balance sheet items denominated in foreign currencies have been translated at the exchange rates prevailing at the balance sheet dates. The foreign exchange gains and losses are recognized in the income statement.
The year end rates used for USD, EURO, CHF, GBP and JPY are shown below:
Currency 31.12.2012 31.12.2011 USD 1,7826 1,8889 EURO 2,3517 2,4438 CHF 1,9430 2,0062 GBP 2,8708 2,9170 JPY 0,0207 0,0243
Provisions
A provision is recognized when, and only when an enterprise has a present obligation (legal or constructive) as a result of a past event and it is probable (i.e. more likely than not) that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
Commitments and contingencies
Transactions that may give rise to contingencies and commitments are those where the outcome and the performance of which will be ultimately confirmed only on the occurrence or non occurrence of certain future events, unless the expected performance is not very likely. Accordingly, contingent losses are recognized in the financial statements if a reasonable estimate of the amount of the resulting loss can be made. Contingent gains are reflected only if it is probable that the gain will be realized.
Use of estimates
The preparation of financial statements in conformity with IFRS 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 the 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.
Significant management judgment in applying accounting policies
The following are significant management judgments in applying the accounting policies of the Group that have the most significant effect on the financial statements:
Impairment: An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management makes assumptions about future events and circumstances.
Provisions: The Group is currently defending certain lawsuits where the actual outcome may vary from the amount recognized in the financial statements. None of the provisions will be discussed here in further detail so as not to seriously prejudice the Group’s position in the related disputes.
EBITDA
EBITDA is defined as earnings before interest expense, income tax expense (benefit), depreciation and amortization. This information should be read with the statements of cash flows contained in the accompanying consolidated financial statements.
80 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
4. CASH AND CASH EQUIVALENTS
31.12.2012 31.12.2011
Cash on hand 87.517 156.601 Cash at banks - Demand account 15.716.567 49.044.997 - Time deposits and repurchase agreements (*) 24.753.552 45.945.366 Other liquid assets (**) 11.874 14.999.989
40.569.510 110.146.953
(*)As of 31 December 2012, the average term of the TL time deposit is 2-18 days and the effective interest rate on TL time deposit is between 5,75%- 8,50% (31.12.2011: 1-4 days, interest rate is between 8,50%-9,50%). The average term of the USD time deposit is 4 days and the effective interest rate on USD time deposit is 2,75% and the average term of the EURO time deposit is 31-51 days and the effective interest rate on EURO time deposit is between 0,10%- 0,60%. (*)Included in time deposits, as of 31 December 2012 there is an amount of TL 18.036.843 (USD 6.000.000 and EURO 3.121.675) which is blocked as security for the financial liabilities of the Group (31.12.2011: TL 8.843.640 - USD 3.000.000 and EURO 1.300.000). (**) As of 31 December 2012, the amount consists of B type investment funds amounting to TL 11.874 (31.12.2011: TL 14.999.989).
5. TRADE RECEIVABLES
31.12.2012 31.12.2011
Customers’ current accounts (*) 126.962.372 60.658.042 Trade receivables from related parties (*) 120.036.663 201.389.840 Notes receivable 2.100.036 2.261.344 Unearned interest on trade receivable (-) (587.720) (340.422) Provision for doubtful receivables (-) (2.594.414) (2.499.414)
245.916.937 261.469.390
(*)The amount is detailed in note 6. (*) TL 29.141.127 (2011: TL 3.178.700) of trade receivables is assignable.
The movement of the allowance for doubtful trade receivables is as follows:
31.12.2012 31.12.2011
Opening balances at 1 January 2.499.414 2.499.088 Increase in provisions 120.937 326 Reversal of provisions and collections received (-) (25.937) -
Closing balance 2.594.414 2.499.414
6. DUE FROM/TO RELATED PARTIES AND SHAREHOLDERS, NET
On 01.03.2010, Kazancı Holding A.Ş. signed a protocol with Aksa Enerji which stated that the liability of Kazancı Holding A.Ş. (at an amount of TL 335.2 million as of 31.12.2009) to be paid within 2 years.
This time, on 08.03.2012 a new protocol has been signed which has extended the payment period for a further 3 years. The amount of total net receivables (trade and non trade) from Kazancı Holding A.Ş. and all related parties is TL 560.8 million as of 31.12.2011.
Aksa Enerji has receivables from Kazancı Holding A.Ş., Koni İnşaat A.Ş. and Aksa Jeneratör Sanayi A.Ş. at a total amount of TL 535.713.268 (31.12.2011: TL 353.053.438) Aksa Jeneratör business valuation report has been prepared by an independent expert and signed on 24.02.2012. The independent value of Aksa Jeneratör A.Ş. is established at TL 752 million. Aksa Jeneratör Sanayi A.Ş. is almost wholly owned by Kazancı Holding A.Ş. Kazancı Holding has given all of Aksa Jeneratör’s shares as guarantee in relation to Kazancı Holding, Koni İnşaat and Aksa Jeneratör liability to Aksa Enerji .
AKSA ENERJİ 2012 ANNUAL REPORT 81 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
As of 31 December 2012 and 31 December 2011 the breakdown of the related parties balances are as follows:
31.12.2012 31.12.2011 Due from related parties Trade Non-Trade Trade Non-Trade
Aksa Afyon Doğalgaz Dağıtım A.Ş. - 1.604.690 - 1.592 Aksa Elektrik Perakende Satış A.Ş. - 51.546.223 - 1.898.650 Aksa Elektrik Toptan Satış A.Ş. 110.477.751 22 162.507.595 22 Aksa Gaz Dağıtım A.S. 136.124 3.048 7.781.097 - Aksa International Ltd. - 1.556.942 399.442 1.827.741 Aksa Jeneratör Sanayi A.Ş. - 111.500.710 870.098 301.347 Aksa Power Generation Co. - 14.750 9.135.428 - Aksa Power Generation Fze. - - - 1.394.782 Aksa Satış Ve Pazarlama A.Ş. - 284.816 1.795 378.163 Anadolu Doğalgaz Dağıtım A.Ş. - 196 - 1.062.139 Aksa Balıkesir Doğal Gaz Dağıtım A.Ş. - - 721.382 1.092 Aksa Bandırma Doğal Gaz Dağıtım A.Ş. - - 105.058 165 Aksa Bilecik Bolu Doğal Gaz Dağıtım A.Ş. - 519.181 489.751 208 Ceka Enerji Üretim A.Ş. - 146.916 - 50.859 Aksa Çanakkale Doğalgaz Dağıtım A.Ş. - 205.973 431.227 1.526 Çoruh Elektrik Dağıtım A.Ş. 389.668 - 2.086.184 444 Aksa Düzce Ereğli Doğal Gaz Dağıtım A.Ş: - 153.029 3.247.248 6.046 Aksa Gemlik Doğal Gaz Dağıtım A.Ş. - 103.466 177.655 - Gesa Güç Sistemleri A.Ş. - 11.006 57.433 357.709 Aksa Gümüşhane Bayburt Doğalgaz Dağıtım A.Ş. - 3.998.326 2.293.523 1.060.963 Kapıdağ Rüzgar Enerjisi Elektrik Üretim Sanayi ve Ticaret A.Ş. 17.900 14.937.240 - 43.246 Aksa Karadeniz Doğalgaz Dağıtım A.Ş. - 283.405 - 47 Kazancı Holding A.Ş. - 395.640.245 - 351.877.959 Kazancı Teknik Cihazlar Yedek Parça A.Ş. - 2.853.876 - 1.949.572 Koni İnşaat Sanayi A.Ş. 8.987.631 19.584.682 - 4.034 Aksa Malatya Doğalgaz Dağıtım A.Ş - 281.869 1.884.712 69 Aksa Manisa Doğalgaz Dağıtım A.Ş. - 523.890 440
82 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
31.12.2012 31.12.2011 Due from related parties (continuing) Trade Non-Trade Trade Non-Trade
Aksa Mustafa Kemal Paşa Susurluk Doğalgaz Dağıtım A.Ş. - 316.827 - 480 Onan Enerji Üretim A.Ş. - 102.717 - 131.050 Aksa Ordu Giresun Doğalgaz Dağıtım A.Ş. - 461.002 1.856.725 1.065 Aksa Siirt Batman Doğalgaz Dağıtım A.Ş. - 6.274.588 1.924.936 458 Aksa Şanlıurfa Doğalgaz Dağıtım Ltd. Şti. - 807.774 881.439 2.989.577 Aksa Tokat Amasya Doğal Gaz Dağıtım A.Ş. - 3.144.443 - 5 Aksa Trakya Doğal Gaz Dağıtım A.Ş. - 19.878 418.287 290.098 Aksa Van Doğalgaz Dağıtım A.Ş. - 743.565 3.560.681 415.437 Other 53.070 488.932 34.254 1.127.884 Unearned interest on trade receivables from related parties (-) (25.481) - - -
Total 120.036.663 617.590.337 201.389.840 367.174.869
31.12.2012 31.12.2011 Due to related parties Trade Non-Trade Trade Non-Trade
Aksa Far East PTE Ltd. - 916.448 - 860.367 Aksa Havacılık A.Ş. 291.128 - 185.836 - Aksa Jeneratör Sanayi A.Ş 34.887 13.432.802 790 1.779 Fırat Aksa Elektrik Hizmetleri A.Ş. - 3.292 - 4.364.638 Fırat Elektrik Dağıtım A.Ş. - 6.753.320 Aksa Şanlıurfa Doğalgaz Dağıtım Ltd. Şti. 1.782.743 - - 102 Kapıdağ Rüzgar Enerjisi Elektrik Üretim Sanayi ve Ticaret A.Ş. 2.026 103.723 5.939 309 Kazancı Holding A.Ş. 59.979 498.492 - - Kazancı Teknik Cihazlar Yedek Parça A.Ş. 151.883 114.292 81.267 1.706 Koni İnşaat Sanayi A.Ş. 39.555 820.263 198.338 257.820 Aksa Manisa Doğalgaz Dağıtım A.Ş. 5.504.744 - - 3.000 Aksa Sivas Doğal Gaz Dağıtım A.Ş. - 450.008 - 632.732 Renk Transmisyon San. A.Ş. 233.077 27.345 Real Makina İthalat İhracat Ltd. 43.953 279.763 11.088 260.763 Aksa Van Doğalgaz Dağıtım A.Ş. 4.595.674 - - 40.500 Unearned interest on trade payables from related parties (-) (4.235) - - - Other 96.235 335.480 46.564 741.714
Total 12.831.649 23.735.228 529.822 7.165.430
Due from/to related parties, net 107.205.014 593.855.109 200.860.018 360.009.439
AKSA ENERJİ 2012 ANNUAL REPORT 83 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
7. INVENTORY
31.12.2012 31.12.2011
Raw materials (*) 110.881.084 96.062.742 Other inventory 15.578.946 10.728.879 Finished goods 7.856.807 1.932.647 Merchandise 1.340.327 13.030.001 Work in process 357.240 272.448 Provision for diminution in value of inventory (-) (**) (476.849) (506.698)
135.537.555 121.520.019
(*) Raw materials are mainly comprised of fuel oil which is purchased on the basis of CIF (Cost, Insurance, and Freight Inclusive). (**) The movement for allowance for decrease in value of inventories 31.12.2012 31.12.2011
Opening balance, 1 January 506.698 506.698 Cancelled (note 22) (29.849) --
At the end of the year 476.849 506.698
8. OTHER CURRENT AND NON-CURRENT ASSETS
Other Current Assets 31.12.2012 31.12.2011
Other VAT (*) 40.849.407 36.176.813 VAT carried forward 18.587.541 4.902.759 Prepaid taxes and funds 10.823.801 6.127.826 Advances given for inventories 8.975.465 22.183.857 Prepaid expenses 3.609.212 6.280.769 Other doubtful receivables 553.382 857.299 Provision for other sundry receivables (553.382) (857.299) Sundry debtors 1.727.288 1.631.379
84.572.714 77.303.403
(*)As of 31.12.2012 and 2011, other VAT is related to export registered sales to Aksa Elektrik Toptan Satış A.Ş. (a related party).
84 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
The movement of the allowance for doubtful receivables is as follows:
31.12.2012 31.12.2011
Opening balances at 1 January 857.299 2.353.312 Increase in provisions 3.978 14.832 Reversal of provisions and collections received (-) (198.260) (1.510.845) Write off uncollectable receivables (109.635) -
Closing balance 553.382 857.299
Other Non Current Assets 31.12.2012 31.12.2011
Advances given (*) 85.431.415 42.670.267 Deposits given (**) 1.542.022 704.347 Prepaid expenses 39.319 15.070
87.012.756 43.389.684
(*) As of 31 December 2012 and 31 December 2011, advances given is mainly related to Aksa Göynük thermal power plant and other energy production power plants (note 1). (**)As of 31 December 2012, the amount of TL 1.341.199 is related to collateral given to Takasbank in relation to receivables to be collected through TEİAŞ sales transactions.
9. INVESTMENTS
31.12.2012 31.12.2011
Rasa Radiator (Jiangyin) Co. Ltd. 1.512.300 1.512.300 Kapıdağ Rüzgar Enerjisi Elektrik Üretim Sanayi ve Ticaret A.Ş. 119.575 119.575 I.S.P. A.Ş. 42.108 42.108 Provision for impairment of I.S.P. A.Ş. (42.108) (42.108)
1.631.875 1.631.875
Rasa Radiator Co. Ltd. is established in Jiangyin, China. Rasa Radiator Co. Ltd. has been a dormant company with no financial results for the past few years.
AKSA ENERJİ 2012 ANNUAL REPORT 85 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
10. PROPERTY, PLANT AND EQUIPMENT
Transfers from Provision for diminution 01.01.2012 Additions Disposals Transfer Assets Held for Sales in value of machinery 31.12.2012
Cost
Land, land improvements and buildings 62.625.440 346.590 (354.471) - 632.657 - 63.250.216 Leasehold improvements 526.388 300.678 (572) - - 826.494 Machinery and equipment (*) 1.922.447.668 66.053.221 (10.698.895) 6.900.582 307.676 (10.196.326) 1.974.813.926 Motor vehicles 3.513.673 57.321 (456.552) - 2.500 - 3.116.942 Furniture, fixtures and office equipment 11.333.126 787.417 (186.554) - 174.698 - 12.108.687 Construction in progress (**) 30.175.848 52.487.847 - (6.900.582) 12.599.384 - 88.362.497
2.030.622.143 120.033.074 (11.697.044) - 13.716.915 (10.196.326) 2.142.478.762
Accumulated Depreciation
Land improvements and buildings 1.016.709 311.257 (21.573) - 14.741 - 1.321.134 Leasehold improvements 300.661 52.221 (10) - - 352.872 Machinery and equipment 407.770.315 103.213.894 (7.261.742) - 113.221 - 503.835.688 Motor vehicles 1.783.214 467.595 (295.977) - 2.208 - 1.957.040 Furniture, fixtures and office equipment 6.715.443 1.026.123 (157.413) - 142.552 - 7.726.705
417.586.342 105.071.090 (7.736.715) - 272.722 - 515.193.439
Net Book Value 1.613.035.801 14.961.984 (3.960.329) - 13.444.193 (10.196.326) 1.627.285.323
(*) The amount is related to provision calculated for damaged gas turbine of Antalya Power Plant (note 22).
01.01.2011 Additions Disposals Transfer Acquisition of Ayres, Alenka and Göynük 31.12.2011
Cost
Land, land improvements and buildings 61.757.220 903.073 (50.302) - 15.449 62.625.440 Leasehold improvements 430.328 96.060 - - - 526.388 Machinery and equipment 1.282.518.015 412.110.611 (13.804.057) 240.541.742 1.081.357 1.922.447.668 Motor vehicles 3.489.748 542.982 (619.021) - 99.964 3.513.673 Furniture, fixtures and office equipment 9.134.322 3.477.990 (1.287.422) - 8.236 11.333.126 Construction in progress 349.527.035 (91.859.240) - (240.541.742) 13.049.795 30.175.848
1.706.856.668 325.271.476 (15.760.802) - 14.254.801 2.030.622.143
Accumulated Depreciation
Land improvements and buildings 683.688 331.992 - - 1.029 1.016.709 Leasehold improvements 240.623 60.038 - - - 300.661 Machinery and equipment 322.689.400 90.588.166 (5.516.262) - 9.011 407.770.315 Motor vehicles 1.639.568 445.788 (313.804) - 11.662 1.783.214 Fixtures and fittings 5.863.650 943.709 (92.658) - 742 6.715.443
331.116.929 92.369.693 (5.922.724) - 22.444 417.586.342
Net Book Value 1.375.739.739 232.901.783 (9.838.078) - 14.232.357 1.613.035.801
86 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
10. PROPERTY, PLANT AND EQUIPMENT
Transfers from Provision for diminution 01.01.2012 Additions Disposals Transfer Assets Held for Sales in value of machinery 31.12.2012
Cost
Land, land improvements and buildings 62.625.440 346.590 (354.471) - 632.657 - 63.250.216 Leasehold improvements 526.388 300.678 (572) - - 826.494 Machinery and equipment (*) 1.922.447.668 66.053.221 (10.698.895) 6.900.582 307.676 (10.196.326) 1.974.813.926 Motor vehicles 3.513.673 57.321 (456.552) - 2.500 - 3.116.942 Furniture, fixtures and office equipment 11.333.126 787.417 (186.554) - 174.698 - 12.108.687 Construction in progress (**) 30.175.848 52.487.847 - (6.900.582) 12.599.384 - 88.362.497
2.030.622.143 120.033.074 (11.697.044) - 13.716.915 (10.196.326) 2.142.478.762
Accumulated Depreciation
Land improvements and buildings 1.016.709 311.257 (21.573) - 14.741 - 1.321.134 Leasehold improvements 300.661 52.221 (10) - - 352.872 Machinery and equipment 407.770.315 103.213.894 (7.261.742) - 113.221 - 503.835.688 Motor vehicles 1.783.214 467.595 (295.977) - 2.208 - 1.957.040 Furniture, fixtures and office equipment 6.715.443 1.026.123 (157.413) - 142.552 - 7.726.705
417.586.342 105.071.090 (7.736.715) - 272.722 - 515.193.439
Net Book Value 1.613.035.801 14.961.984 (3.960.329) - 13.444.193 (10.196.326) 1.627.285.323
(*) The amount is related to provision calculated for damaged gas turbine of Antalya Power Plant (note 22).
01.01.2011 Additions Disposals Transfer Acquisition of Ayres, Alenka and Göynük 31.12.2011
Cost
Land, land improvements and buildings 61.757.220 903.073 (50.302) - 15.449 62.625.440 Leasehold improvements 430.328 96.060 - - - 526.388 Machinery and equipment 1.282.518.015 412.110.611 (13.804.057) 240.541.742 1.081.357 1.922.447.668 Motor vehicles 3.489.748 542.982 (619.021) - 99.964 3.513.673 Furniture, fixtures and office equipment 9.134.322 3.477.990 (1.287.422) - 8.236 11.333.126 Construction in progress 349.527.035 (91.859.240) - (240.541.742) 13.049.795 30.175.848
1.706.856.668 325.271.476 (15.760.802) - 14.254.801 2.030.622.143
Accumulated Depreciation
Land improvements and buildings 683.688 331.992 - - 1.029 1.016.709 Leasehold improvements 240.623 60.038 - - - 300.661 Machinery and equipment 322.689.400 90.588.166 (5.516.262) - 9.011 407.770.315 Motor vehicles 1.639.568 445.788 (313.804) - 11.662 1.783.214 Fixtures and fittings 5.863.650 943.709 (92.658) - 742 6.715.443
331.116.929 92.369.693 (5.922.724) - 22.444 417.586.342
Net Book Value 1.375.739.739 232.901.783 (9.838.078) - 14.232.357 1.613.035.801
AKSA ENERJİ 2012 ANNUAL REPORT 87 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
As of 31 December 2012 the insurance amount on the Group’s property plant and equipment is EURO 401.831.067 and USD 243.521.025 (31 December 2011, EURO 268.048.799, USD 202.720.973 and TL 166.880.215).
During the year ended 31 December 2012, TL 8.573.194 (31 December 2011 TL 41.220.101) of interest expenses and foreign exchange losses has been capitalized.
(**) As of 31 December 2012, the breakdown of construction in progress are as follows:
Completion Project value
Bolu Göynük thermal power plant 39% 43.989.109 Cyprus Kalecik - Mobile PP 95% 13.287.716 Kıyıköy - Wind PP 22% 8.726.329 Sebenoba - Wind PP 23% 9.865.728 Other (*) - 12.493.615
88.362.497
(*) Other projects are related to HPP and WPP Projects as explained in note 1.
The allocation of current period depreciation and amortization expenses for the years ended 31 December 2012 and 2011 is as follows:
31.12.2012 31.12.2011
Cost of sales 104.420.522 92.143.684 General administrative expenses (note 21) 899.654 349.532 Discontinued operations - 52.365
105.320.176 92.545.581
11. INTANGIBLE ASSETS, NET
01.01.2012 Additions Disposals 31.12.2012
Cost
Rights 1.634.337 883.346 (181.040) 2.336.643 Other intangible assets - 149.539 - 149.539
1.634.337 1.032.885 (181.040) 2.486.182
Accumulated Depreciation
Rights 579.805 210.683 (22.275) 768.213 Other intangible assets - 38.403 - 38.403
579.805 249.086 (22.275) 806.616
Net Book Value 1.054.532 783.799 (158.765) 1.679.566
88 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
Acquisition of Ayres, Alenka 01.01.2011 Additions and Göynük 31.12.2011
Cost Rights 1.055.904 574.452 3.981 1.634.337
1.055.904 574.452 3.981 1.634.337
Accumulated Depreciation Rights 403.754 175.888 163 579.805
403.754 175.888 163 579.805
Net Book Value 652.150 398.564 3.818 1.054.532
12. FINANCIAL LIABILITIES
31.12.2012 31.12.2011
Short-term bank loans 236.093.416 174.963.109 Current portion of long-term bank loans 183.158.030 239.002.008 Factoring payables 91.182.338 26.800.114 Finance lease liabilities, net 40.660.813 31.632.740 Interest expense accruals 13.183.986 17.151.698
Total short-term financial liabilities 564.278.583 489.549.669
Long-term bank loans 665.692.578 769.181.009 Factoring payables 20.338.885 35.039.305 Finance lease liabilities, net 70.335.379 87.230.327
Total long -term financial liabilities 756.366.842 891.450.641
Total financial liabilities 1.320.645.425 1.381.000.310
As of 31 December 2012, the effective interest rate of the short term TL loans is between 9%-14,40% (2011: 7,65% - 18,62%), USD loans is between 4,30%-8,00%(2011: 3,65% - 8,25%) and EURO loans is between 3,65%-8,99% (2011: 2,70% - 7,12%) .
As of 31 December 2012, the effective interest rate of the long term TL loans is between 6,37%-14,40% (2011: 6,37% -14,40%), USD loans is between 0,60%-8,67% (2011: 0,60% - 8,66%) and EURO loans is between 1,99%-9,67% (2011: 2,32% - 6,24%).
Bank loans are guaranteed by Kazancı Holding A.Ş., Aksa Jeneratör Sanayi A.Ş. (a related party), personal guarantee of the Group’s shareholders, as well as several other securities (note 25-b).
As of 31 December 2012, total amounting of corporate guarantees provided by Aksa Group Companies and the Kazancı Family members for the Group’s bank borrowings is TL 2.695.941.844 (31 December 2011: TL 2.747.665.576)
AKSA ENERJİ 2012 ANNUAL REPORT 89 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
As of 31 December 2012, the repayment schedule of the short term and long term loans is as follows:
Payment Year EURO USD TL Total TL Equivalent
2013 28.975.233 182.135.073 26.436.411 419.251.446 2014 21.370.521 76.979.444 221.874 187.702.485 2015 18.097.511 41.094.308 - 115.814.630 2016 14.602.971 28.120.721 - 84.469.804 2017 14.100.054 25.657.675 - 78.896.468 2018 12.708.248 21.069.521 - 67.444.515 2019 9.123.132 20.139.711 - 57.355.919 2020 4.935.932 11.090.722 - 31.378.152 2021 3.489.142 6.238.971 - 19.327.005 2022 2.042.353 6.238.973 - 15.924.595 2023 1.592.757 - - 3.745.687 2024 1.544.975 - - 3.633.318
Total 132.582.829 418.765.119 26.658.285 1.084.944.024
Factoring Payables
As of 31 December 2012 and 31 December 2011, the breakdown of the factoring payables is as follows:
31.12.2012 31.12.2011 Short-term:
Yapı ve Kredi Faktoring A.Ş. (*) 29.182.338 26.800.114 Girişim Faktoring A.Ş. 37.000.000 Garanti Faktoring A.Ş. 25.000.000 -
Total short term 91.182.338 26.800.114
Long-term:
Yapı ve Kredi Faktoring A.Ş. (*) 20.338.885 35.039.305
Total long term 20.338.885 35.039.305
Total 111.521.223 61.839.419
(*)As of 31.12.2012, TL 49.521.223 (31.12.2011: TL 61.839.419) of total liabilities has occurred by the service purchase agreement signed via leasing between KIBTEK and the Group which is based on electricity receivable for the future periods by factoring. As of 31 December 2012, TL 13.907.457 (31.12.2011: TL 16.010.891) of KIBTEK receivables is netted off from assets and liabilities.
90 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
Lease Payables
The Group acquired machinery and equipment via financial leasing. As of 31 December 2012, the repayment schedule of leasing obligations is as follows:
Payment Year EURO USD Total TL Equivalent
2013 3.494.752 18.199.375 40.660.813 2014 3.042.527 12.864.562 30.087.479 2015 2.878.811 10.265.360 25.069.131 2016 1.968.451 3.805.719 11.413.281 2017 967.825 - 2.276.034 2018 633.354 - 1.489.454
Total 12.985.720 45.135.016 110.996.192
13. TRADE PAYABLES
31.12.2012 31.12.2011
Suppliers’ current accounts (*) 271.388.807 357.008.526 Trade payables to related parties (**) 12.831.649 529.822 Notes payable 486.350 - Unearned interest on trade payable (-) (201.731) (2.014.040) Other 231.245 3.974.059
284.736.320 359.498.367
(*) TL 186.073.238 (31.12.2011: TL 195.937.484) of the amount is related to letter of credits which are in relation to import of spare parts and small equipments for power plants. (**) The amount is detailed in note 6.
14. TAXATION PAYABLE ON INCOME
The corporation tax rate in Turkey on the profits for the calendar year 2012 is 20% (2011: 20%). Taxable profits are calculated by modifying accounting income for certain exclusions and allowances for tax purposes from the profit disclosed in the statutory income. No other taxes are paid unless profits are distributed. In Turkey, no taxes are withheld from undistributed profits, profits added to share capital (bonus shares) and dividends paid to other resident companies. Other than those, profits distributed in dividends to individuals and non-resident companies are subject to withholding at the rate of 15%.
The Turkish Tax Procedural Law does not include a procedure for formally agreeing tax assessments. Tax returns must be filed within three and a half months of the year-end and may be subject to investigation, together with their underlying accounting records, by the tax authorities at any stage during the following five years.
AKSA ENERJİ 2012 ANNUAL REPORT 91 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
The tax liabilities included in the accompanying financial statements comprised:
31.12.2012 31.12.2011 a) Included in the income statement: Current tax charge (6.620.636) (5.453.222)
31.12.2012 31.12.2011
b) Included in the balance sheet: Taxation payable on income (current) 6.620.636 4.411.568 Deferred tax assets 4.109.211 4.109.211 Deferred tax liabilities 2.936.550 2.936.550
Deferred taxes
As of 31 December 2012 and 31 December 2011, the Group does not have material timing differences which will be reversed in the foreseeable future. Accordingly, the Group does not create any provision for deferred taxation.
15. OTHER PAYABLES AND ACCRUED LIABILITIES
Current 31.12.2012 31.12.2011
Taxes and dues payable 5.354.940 4.620.937 Order advances received 2.340.728 175.946 Due to personnel 1.471.567 1.493.373 Deposits received 867.102 1.157.226 Social security premiums payable 520.976 976.614 Provision for lawsuits 423.900 24.150 Provision for payment to EÜAŞ regarding Samsun Power Plant (note 22) (*) - 54.572.496 Licence fee accrual to DSİ regarding Erzurum HPP(**) - 7.200.000 Other 697.722 145.276
11.676.935 70.366.018
(*) Regarding to Aksa Enerji Üretim A.Ş.’s Samsun Power Plant, the ongoing disputed status with EÜAŞ since 2003, has been terminated by peace between the parties in 2011 and on 11.04.2011, a protocol was signed for the cost of rent paid by EÜAŞ in prior periods will be repaid by Aksa Enerji Üretim A.Ş. According this protocol, the accrued liability is to be paid by the Group with monthly installments between the dates of 10.01.2012 - 10.10.2012. As of 31.12.2012, the liability has been fully paid. (**)A protocol was reached with DSİ (Public Water Works Administration) about HPP in Erzurum. According to this protocol, the liability to DSİ is to be paid by the Group with monthly installments (TL 600.000) in 2012. As of 31.12.2012, the liability has been fully paid.
92 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
16. RETIREMENT PAY PROVISION
Under the Turkish Labor Law, the Group is required to pay employment 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). The provision is made in respect of all eligible employees, at a rate of 30 days gross pay for each year of service. The rate of pay is that ruling at the respective balance sheet dates, subject to a maximum of TL 3.033,98 per year as of 31.12.2012 (31.12.2011 : TL 2.731,85 per year).
The liability is not funded, as there is no funding requirement.
As of 31 December 2012 and 31 December 2011 in the accompanying financial statements in accordance with revised IAS 19 (Employee Benefits) the Group reflected a liability for termination benefits based upon factors derived using their experience of personnel terminating their services and being eligible to receive retirement pay and discounted to present value at the balance sheet date by using average market yield, expected inflation rate (5,0%) and an appropriate discount rate (9,25%).
31.12.2012 31.12.2011
Balance at 1 January 1.839.533 1.331.912 Acquisition of new companies - 65.463 Increase in employment termination benefits during the year 365.226 531.785 Provision released (note 22) (31.083) (89.627)
Balance at end of the year 2.173.676 1.839.533
The allocation of the provision for employment termination benefits expenses in the income statement are as follows:
01.01- 01.01-
31.12.2012 31.12.2011
Cost of Sales 324.249 447.072 Marketing, selling and distribution expenses -- 25.375 General administrative expenses 40.977 59.338
365.226 531.785
AKSA ENERJİ 2012 ANNUAL REPORT 93 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
17. SHARE CAPITAL
The issued and paid up share capital of Aksa Enerji Üretim A.Ş. comprised 613.169.118 (31 December 2011: 577.500.000) shares of par value TL 1 each at 31 December 2012.
31.12.2012 % 31.12.2011 %
Kazancı Holding A.Ş. 500.005.330 81,54 545.865.624 94,52 Goldman Sachs 81.529.412 13,30 - - Public Share 31.600.000 5,15 31.600.000 5,47 Other 19.251 (*) 19.251 (*) Aksa Makina Sanayi A.Ş. 15.125 (*) 15.125 (*)
Historic share capital 613.169.118 100,00 577.500.000 100,00
Inflation adjustment to share capital 1.987.932 1.987.932
Inflation adjusted share capital 615.157.050 579.487.932
(*) Less than 0.01
Kazancı Holding A.Ş., being the Parent Company of Aksa Enerji, has secured 400 million USD long term credit facility arranged by Goldman Sachs, China Development Bank, Garanti Bankası and İş Bankası. Class B shares representing 65.54% of issued capital of Aksa Enerji are pledged as security of the credit facility to Garanti Bankası acting as Security Agent.
The new shareholding structure and the capital increase amounting to TL 35.669.118 in November 2012 is not registered in the Turkish Trade Registry as of the report date.
18. GENERAL RESERVES
General reserves comprise prior years’ undistributed income and legal reserves.
The legal reserves are appropriated in accordance with the Turkish Commercial Code. The first legal reserve is appropriated out of statutory profits at the rate of 5% per annum, until the total reserve reaches 20% of the paid-in share capital. The second legal reserve is appropriated at the rate of 10% per annum of all cash distributions in excess of 5% of the paid-in share capital. The legal reserves are not available for distribution unless they exceed 50% of the paid-in share capital but may be used to offset losses in the event that the general reserve is exhausted.
Undistributed retained earnings are available for distribution. However if this reserve is distributed as dividends, a further legal reserve is required to be provided equal to 10% of dividend declared.
94 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
19. NET SALES
01.01.- 01.01.- Total Sales - MWH/Unit 31.12.2012 31.12.2011
Energy sales - MWH (*) 9.783.624 6.181.436 Radiator sales - unit 9.623 10.091 Generator sales - unit - 502
01.01.- 01.01.- Total Sales - Amount 31.12.2012 31.12.2011
Electricity Sales 1.799.188.748 1.188.817.330 Natural Gas Equipments 20.799.985 89.293.198 Radiator Sales 8.871.231 10.379.485 Total Lignite Sales and Transportation Income 3.585.318 - Generator Sales - 18.327.654 Other 8.192.479 8.571.737
Total Sales 1.840.637.761 1.315.389.404
(*) In 2012, the Group have produced 8.808 Gwh electricity, in addition to the production, the Group have received from TEİAŞ’s Load Rejection Order (YAT: Yük Atma Talimatı) and therefore sold 976 Gwh additional electricity. Thereby, the total amount of electricity sales reached to 9.784 Gwh and according to the calculation made by considering the weighted averages the average selling price is 178 TL/mws . The Group’s average capacity utilization rate is 60%.
As of 31.12.2012, approximately 51% of the Group’s total net sales to TEİAŞ, 46% from related parties to Aksa Elektrik Toptan Satış A.Ş. and the remaining 3% were to the other related parties.
Total amount of balancing invoices issued by TEİAŞ in 01.01.-31.12.2012 is TL 52.788.091 (01.01.-31.12.2011: TL 92.315.108), which has been added to the cost of sales account.
20. COST OF SALES
01.01.- 01.01.- 31.12.2012 31.12.2011
Cost of Electricity Sales 1.565.844.898 1.003.261.977 Cost of Natural Gas Equipments Sales 20.237.371 60.467.808 Cost of Radiator Sales 7.358.548 8.265.287 Cost of Lignite Sales 4.493.697 - Cost of Generator Sales - 15.729.225 Cost of Other Sales 6.230.023 301.259
Total Cost Of Sales 1.604.164.537 1.088.025.556
AKSA ENERJİ 2012 ANNUAL REPORT 95 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
21. RESEARCH AND DEVELOPMENT, MARKETING AND SELLING AND GENERAL ADMINISTRATIVE EXPENSES
01.01- 01.01-
31.12.2012 31.12.2011
Research and development expenses - 18.468 Marketing, selling and distribution expenses 2.133.093 3.048.577 General administrative expenses 16.699.473 16.021.120
18.832.566 19.088.165
Breakdown of operating expenses are as follows:
01.01.- 01.01.- Marketing, selling and distribution expenses 31.12.2012 31.12.2011
Freight and freight insurance 1.424.814 2.452.752 Advertising expenses 170.030 78.151 Personnel salaries and bonus payments 132.290 113.703 Travelling expenses 20.873 11.823 Motor vehicle expenses 9.901 17.327 Repair and maintenance expenses 3.950 9.894 Other marketing expenses 371.235 364.927
2.133.093 3.048.577
01.01.- 01.01.- General administrative expenses 31.12.2012 31.12.2011
Personnel expenses 7.582.046 8.061.021 Traveling expenses 1.915.976 1.514.111 Taxes paid 1.685.492 480.248 Consultancy expenses 842.355 1.167.554 Depreciation and amortization expenses (note 10) 899.654 349.532 Repair and maintenance expenses 451.957 230.313 Provision for lawsuits (note 25.c) 399.750 21.000 Court and notary expenses 288.778 433.321 Fuel expenses 253.069 220.779 Rent expenses 206.108 131.564 Representation expenses 199.103 213.490 Communication expenses 188.185 438.410 Electricity and water expenses 175.682 41.010 Office expenses 137.597 109.087 Doubtful debts provision expense (note 5-8) 124.915 198.260 Insurance expenses 78.676 472.269 Motor vehicle expenses 65.613 817.361 Retirement pay provision expense (note 16) 40.977 59.338 Other 1.163.540 1.062.452
16.699.473 16.021.120
96 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
22. OTHER INCOME AND OTHER EXPENSES
01.01.- 01.01.- Other Income 31.12.2012 31.12.2011
Income on insurance claims 2.113.085 262.072 Tax provision released 1.565.897 - Profit on sale of fixed assets 637.656 558.545 Reversal of provision for doubtful receivables (note 5-8) 224.197 10.034 Reversal of retirement pay provision (note 16) 31.083 - Reversal of provision for inventory (note 7) 29.849 21.400 Other income 2.619.610 831.200
7.221.377 1.683.251
01.01.- 01.01.- Other Expenses 31.12.2012 31.12.2011
Decrease in value of machinery and equipments (note 10) (10.196.326) - Indemnity and penalty charges (3.567.435) - Positive goodwill (2.996.107) (951.056) Fee for licence cancellations (*) (1.727.580) - Loss on sale of fixed assets (378.592) (45.544) Donation and grants (328.261) - Provision for payment to EÜAŞ regarding Samsun Power Plant (note 15) - (50.392.062) Written off receivables from EÜAŞ due to the protocol with EÜAŞ - (1.007.665) Other expense (1.956.579) (557.549)
(21.150.880) (52.953.876)
(*) It is related to cancellation of Ayşe Hatun PP and Osmaneli PP project licence expenses.
23. FINANCING INCOME AND FINANCING EXPENSES
01.01.- 01.01.- Financing income 31.12.2012 31.12.2011
Foreign exchange gains 148.431.573 50.246.137 Interest income on receivables from Kazancı Group Companies 62.682.187 52.315.449 Interest income on time deposits at banks and interest income on other receivables 9.909.961 3.109.244 Discount on trade payable 79.721 2.409.808
221.103.442 108.080.638
01.01.- 01.01.- Financing expenses 31.12.2012 31.12.2011
Interest expense on bank loans (91.432.171) (73.596.572) Foreign exchange losses (85.268.829) (300.014.830) Letters of guarantee and bank commission expenses (13.076.391) (2.141.179) Interest expense on related parties (8.000.511) (4.319.256) Discount on trade receivable (638.677) (906.333) Other (45.724) (627.526)
(198.462.303) (381.605.696)
AKSA ENERJİ 2012 ANNUAL REPORT 97 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
24. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS
Aksa Enerji Üretim A.Ş., the parent Company of “Aksa Göynuk Branch” used to have a mutual agreement with the Turkish Coal Board to establish a thermal Power Plant in Bolu Göynük Region until the period determined in the given license. However, because of some managerial reasons the rights of the agreement, other than the license, was transferred to Kazancı Holding, which is the parent Company of the “Aksa Göynük Enerji Üretim A.Ş.”. Accordingly, the Branch in Aksa Göynük has ceased its operations on 27 October 2010.
In the meantime, Aksa Enerji Üretim A.Ş. and the Turkish Coal Board have reached a new agreement to transfer all the rights and the liabilities of the original agreement and its supplements to “Aksa Göynük Enerji Üretim A.Ş.” which is a 100% subsidiary of Aksa Enerji Üretim A.Ş.. Consequently, an application has been made to Energy Market Regulatory Authority to transfer the production license to “Aksa Göynük Enerji Üretim A.Ş.”. Accordingly, the assets under Aksa Enerji Bolu Göynük Branch will be sold to Aksa Göynük Enerji Üretim AŞ.
As of 31.12.2012, Aksa Göynük Enerji Üretim A.Ş. which was established in place of the branch has started coal sales, all fixed assets transferred to Aksa Göynük Enerji Üretim A.Ş, therefore the assets of the branch are included in the Group’s assets. As of 31.12.2011, details of the tangible assets which are held for sale in the Aksa Enerji Bolu Göynük Branch are as follows:
Assets Held For Sale by Aksa Enerji Bolu Göynük Branch:
31.12.2011
Land 339.878 Buildings 292.779 Machinery and equipment 307.676 Motor vehicles 2.500 Fixtures and fittings 174.698 Construction in progress 12.599.384 13.716.915
Depreciation and Amortization (-) (272.722)
Net Book Value 13.444.193
As of 31.12.2011, details of the discontinued operation of Aksa Enerji Bolu Göynük Branch are as follows:
Discontinued Operation of Aksa Enerji Bolu Göynük Branch:
01.01.-31.12.2011
Net Sales - Cost of Sales - Gross Profit -
General Administrative Expenses (178.392) Basic Operating Profit (178.392)
Other Income/(Expenses), net 181.007 Financing Income/(Expenses), net (12.895)
(10.280)
98 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
25. COMMITMENTS AND CONTINGENCIES a) Letters of guarantee given to:
Foreign Currency TL 31.12.2012 Currency Amount Equivalent Ankara 29. İcra TL -- 62.000 Beyoğlu 4.İcra TL -- 7.444 Boğaziçi Elektrik Dağıtım A.Ş. TL -- 69.120 Botaş - Petroleum Pipeline Corporation USD 11.084.184 19.758.666 Municipality of Bursa TL -- 780 Bursa Turkey Electricity Distribution Company TL -- 600 Commerzbank AG EUR 1.000.000 2.351.700 Public Waterworks Administration TL -- 3.076.000 Energy Market Regulatory Authority (EMRA) TL -- 76.457.122 Energy Market Regulatory Authority (EMRA) USD 1.000.000 1.782.600 Gediz Electricity TL -- 15.570 Customs administration EUR 250.000 587.925 İstanbul 11.İcra TL -- 600.000 İstanbul 10. Asliye Mahkemesi TL -- 1.500 Electricity Authority of KKTC USD 3.000.000 5.347.800 Özer Metal Sanayi A.Ş. TL -- 150.000 Sakarya Electricity Distribution Company TL -- 108.305 Samsun Turkey Electricity Distribution Company TL -- 26.862 Turkey Electricity Transmission Company (TEIAS) Research and Planning Department TL -- 421.008 Turkey Electricity Transmission Company (TEIAS) TL -- 11.070.930 Turkey Electricity Transmission Company (TEIAS) USD 3.454.290 6.157.617 Uludağ Electricity TL -- 425.000 Yeşilırmak Electricity TL -- 1.024.967 General Directorate of Turkish Coal TL -- 14.691.825 Manisa İl Özel İdaresi TL -- 39.646 Republic of Turkey Prime Ministry Privitization Administration USD 30.000.000 53.478.000 Tekirdağ Gümrük TL - 58.010
197.770.997
AKSA ENERJİ 2012 ANNUAL REPORT 99 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
Foreign Currency TL 31.12.2011 Currency Amount Equivalent Akdeniz Electricity Distribution Company TL 28.955 28.955 Ankara 29.İcra Müdürlüğü TL 62.000 62.000 Ankara Turkey Electricity Distribution Company TL 10.000 10.000 Beyoğlu 4. İcra Müdürlüğü TL 7.444 7.444 Boğaziçi Elektrik Dağıtım A.Ş. TL 69.120 69.120 Botaş - Petroleum Pipeline Corporation USD 2.641.000 4.988.585 Bursa Turkey Electricity Distribution Company TL 600 600 Municipality of Bursa TL 1.621 1.621 Commerzbank Ag EUR 1.000.000 2.443.800 Customs administration EUR 250.000 610.950 Electricity Authority of KKTC USD 3.000.000 5.666.700 Electricity Generation Co. Inc. (EÜAŞ) USD 28.989.873 54.758.971 Energy Market Regulatory Authority (EMRA) TL 85.342.154 85.342.154 Gediz Electricity TL 15.570 15.570 General Directorate of Turkish Coal TL 10.316.620 10.316.620 İstanbul 1.İcra TL 30.200 30.200 İstanbul 10. Asliye Ticaret Mahkemesi TL 1.500 1.500 Manisa İl Özel İdaresi TL 39.646 39.646 Özer Metal San. A.Ş. TL 150.000 150.000 Public Water Works Administration TL 3.076.000 3.076.000 Sakarya Electricity Distribution Company TL 98.305 98.305 Samsun Turkey Electricity Distribution Company TL 26.862 26.862 Turkey Electricity Transmission Company (TEIAS) TL 12.413.153 12.413.153 Turkey Electricity Transmission Company (TEIAS) USD 1.288.048 2.432.994 Research and Planning Department TL 421.008 421.008 Uludağ Electricity TL 425.000 425.000 Yeşilırmak Electricity Distribution Company TL 1.024.967 1.024.967
184.462.725
100 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
b) Guarantees given for the Group’s loans
Foreign Currency Guarantee Types - 31.12.2012 Currency Amount Total (TL)
Mortgage (*) EUR 12.000.000 28.220.400 Commercial Enterprise Pledge(**) USD 133.000.000 237.085.800 Machinery and Equipment Pledge EUR 24.914.673 58.591.836 Bank Deposit Blockage EUR 3.121.676 7.341.245 Bank Deposit Blockage USD 6.000.000 10.695.600 Surety Ship TL 399.539.500 399.539.500 Surety Ship USD 1.182.356.034 2.107.667.866 Surety Ship EUR 63.164.212 148.543.277 Surety Ship GBP 14.000.000 40.191.200 Assignment of Claim TL 436.800.000 436.800.000 Collateral Bond EUR 1.285.288 3.022.611
Total 3.477.699.335
(*) Mortgages have been established on Samsun power plant at amounts of EUR 12.000.000 on 30.06.2005. (**) The amount is related to Antalya power plant.
In relation to two bank loans from Commerzbank AG (total of EURO 97.292.148) 51% of Baki Elektrik’s shares have been pledged as security.
Kazancı Holding, being the Parent Company of Aksa Enerji, has secured 400 million USD long term credit facility arranged by Goldman Sachs, China Development Bank, Garanti Bankası and İş Bankası. Class B shares representing 65.54% of issued capital of Aksa Enerji are pledged as security of the credit facility to Garanti Bankası acting as Security Agent.
The Group has signed an assignment agreement total amounting to TL 839.000.000 in relation to the current financial debts. As of 31.12.2012, open risk amounted of assignment agreements is TL 436.800.000.
Foreign Currency Guarantee Types - 31.12.2011 Currency Amount Total (TL)
Mortgage EUR 12.000.000 29.325.600 Commercial Enterprise Pledge USD 133.000.000 251.223.700 Machinery and Equipment Pledge EUR 24.914.673 60.886.478 Bank Deposit Blockage EUR 1.300.000 3.176.940 Bank Deposit Blockage USD 3.000.000 5.666.700 Surety Ship TL 476.913.248 476.913.248 Surety Ship USD 1.079.926.159 2.039.872.522 Surety Ship EUR 94.475.737 230.879.806 Assignment of Claim TL 240.000.000 240.000.000
Total 3.337.944.994
AKSA ENERJİ 2012 ANNUAL REPORT 101 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
c) Guarantees given to related parties
As of 31 December 2012, the amount of corporate guarantees granted to Kazancı Group companies in relation to their bank loans is at TL 1.285.639.106 (31.12.2011: TL 1.768.177.063).
However, based on the Aksa Group’s management representation, not all of the guaranteed credit lines has been made use by Kazancı Group Companies and as of 31 December 2012, the risk exposure is only about TL 100.2 million (31.12.2011: TL 550.2 million).
As of 31 December 2012, there are 5 lawsuits pending in favor of the Group at the amount of TL 2.014.832 and there are 30 lawsuits pending against the Group at the amount of TL 8.766.241.
As of the report date, the management does not expect negative outcomes in relation to ongoing lawsuits in the short run therefore there is no allowance reflected to financial statements regarding to those lawsuits.
26. THE NATURE AND LEVEL OF RISKS ARISING FROM FINANCIAL INSTRUMENTS
The table below summarizes the foreign monetary position risk of the Group as of 31 December 2012 and 31 December 2011, the recorded amounts of the foreign monetary assets are kept by the Group and those of the payables in terms of total amounts and foreign exchange are as follows:
31.12.2012 USD EUR GBP OTHER TL Equivalent
Cash and cash equivalents 6.970.549 4.012.011 13.707 4.812 21.904.909 Trade receivables 138.117 201.948 - - 721.128 Due from related parties 882.746 - - - 1.573.583 Other non-current assets 234.325 29.156.075 - - 68.984.049
Total foreign currency assets 8.225.737 33.370.034 13.707 4.812 93.183.669
Financial liabilities 491.680.469 145.568.549 - - 1.218.803.157 Trade payables 66.150.394 31.619.270 50.144 - 192.422.683 Other current liabilities - 75.900 - - 178.494
Total foreign currency liabilities 557.830.863 177.263.719 50.144 - 1.411.404.334
Net foreign currency position (549.605.126) (143.893.685) (36.437) 4.812 (1.318.220.665) TL 31.12.2011 USD EUR CHF GBP JPY Equivalent
Cash and cash equivalents 10.144.173 2.523.815 65 4.048 53.451 25.342.264 Trade receivables 5 245.317 - - - 599.515 Due from related parties 5.712.395 234.253 - - - 11.362.610 Other current assets 261.088 1.091.995 - 2.626 - 3.169.447 Other non-current assets - 4.863 - - - 11.884
Total foreign currency assets 16.117.661 4.100.243 65 6.674 53.451 40.485.720
Financial liabilities 538.575.513 139.481.701 - - - 1.358.180.674 Trade payables 84.468.828 16.817.419 - - - 200.651.579 Other payables and accrued liabilities 28.989.872 - - - - 54.758.969
Total foreign currency liabilities 652.034.213 156.299.120 - - - 1.613.591.222
Net foreign currency position (635.916.552) (152.198.877) 65 6.674 53.451 (1.573.105.502)
102 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
Supplementary Disclosures on financial instruments
(a) Capital Management Policies and Procedures
The risk related with each of the capital class and group capital cost is considered by the top management of the Group.
The primary objective of the Group’s capital management objectives is to ensure that it maintains a healthy capital structure in order to support its business and maximize shareholder value. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions.
To maintain or adjust the capital structure, the Group may obtain new loans, repay existing loans; make cash and non cash (bonus shares) dividend payments to shareholders, issue new shares based on Management’s evaluation.
The Group manages the capital structure so as to ensure the Group’s ability to continue as a going concern; and maximize its profitability by maintaining an adequate capital to overall financing structure ratio.
The Group monitors capital using a gearing ratio, which is net debt divided by total financing used. The Group includes within net financial debt, borrowings, trade letters of credit, less cash and cash equivalents. Financing used is the sum of total equity and net financial debt.
The following table sets out the gearing ratios as of 31 December 2012 and 31 December 2011:
31.12.2012 31.12.2011
Total financial liabilities 1.320.645.425 1.381.000.310 Less: cash and cash equivalents (40.569.510) (110.146.953) Net financial debt 1.280.075.915 1.270.853.357 Total equity 1.203.249.330 796.968.185 Total financing used 2.483.325.245 2.067.821.542
Gearing ratio (net financial debt to overall financing used ratio) 52% 61%
(b) Financial instruments and categories
Financial assets Cash and cash equivalents 40.569.510 110.146.953 Trade receivables 245.916.937 261.469.390 286.486.447 371.616.343
Financial liabilities Financial payables 1.320.645.425 1.381.000.310 Trade payables 284.736.320 359.498.367 1.605.381.745 1.740.498.677
(c) Market risk
The Group is exposed to financial risks arising from changes in currency rate (paragraph d), interest rate (paragraph e) and price risk (paragraph f) which arise directly from its operations.
The market risks that the Group is exposed to are measured on the basis of sensitivity analysis.
The Group’s risk management policies and processes used to measure those risks have been similar to previous periods.
(d) Foreign currency risk
The Group does not have transactional currency exposure from foreign currency denominated transactions.
The Group is exposed to foreign currency risk arising from the translation of foreign currency denominated assets and liabilities to TL, the foreign currency denominated assets and liabilities mainly include bank deposits, bank borrowings and trade payables and trade receivables.
AKSA ENERJİ 2012 ANNUAL REPORT 103 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
(e) Interest rate risk management
The Group is exposed to interest rate risk through the impact of rate changes on interest bearing assets and liabilities. These exposures are managed by using natural hedges that arise from offsetting interest rate sensitive assets and liabilities. Certain parts of the interest rates related to borrowings are based on market interest rates; therefore the Group is exposed to interest rate fluctuations on domestic and international markets. The Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s debt obligations.
The majority of the Group’s financial obligations consist of fixed and variable interest rate borrowings.
(f) Price risk
Sales invoices to TEİAŞ and EÜAŞ are issued in Turkish Lira and sales unit prices are fixed, the management of the Group is carefully monitoring the costs, when needed appropriate measures are taken.
27. ADDITIONAL INFORMATION
a) The public disclosure made by the Company in Istanbul Stock Exchange (ISE) on 06.04.2012 concerning the negotiations for the loan use from Goldman Sachs, foreign-based financial institution, carried out by one of the Group’s related parties and shareholders Kazancı Holding A.Ş. are as follows:
On July 25, 2011, July 26, 2011, August 5, 2011 and 27 October 2011, we made certain disclosures to the public regarding a loan made to us of USD 192 million with a 1 year, 1 week term (“Bridge Facility”) and a proposed transaction with Goldman Sachs (“Proposed Transaction”).
During the course of discussions between the parties regarding the structure of the Proposed Transaction, a number of changes to the terms disclosed to the public on October 27, 2011 have been agreed and several agreements have today been signed by the relevant parties which will facilitate the
following transaction (the “Transaction”):
Goldman Sachs, Türkiye İş Bankası A.Ş. and Türkiye Garanti Bankası A.Ş. have arranged USD 400 million syndicated secured loan to Kazancı Holdings (the “New Loan Facility”). The New Loan Facility will provide additional financing and will also be used to repay the bridge facility (in part on initial utilization with the balance on final maturity of the bridge facility). In consideration for arranging the Transaction, Goldman Sachs will receive (i) a right to the equity upside on 13,30% of shares in Aksa Enerji at any time before the sixth anniversary of the date of utilization of the New Loan Facility, and (ii) downside protection, through a cash collateralized repurchase obligation of Kazancı Holdings at Goldman Sachs’ initial purchase price, on any shares in Aksa Enerji purchased by Goldman Sachs.
Further information about the Transaction is summarized below:
1. Simultaneously with the execution of the New Loan Facility, the board of directors of Aksa Enerji will initiate a process of capital increase through private placement under registered capital system by restricting the pre-emptive rights of current shareholders. Goldman Sachs has committed to subscribe for 35.669.118 shares with a nominal value of TL 1.00 each corresponding to circa 5,82% of the total issued share capital of Aksa Enerji (post money) for a total price of USD 105 million (to be converted into TL at an exchange rate determined by the parties). Aksa Enerji will adopt the necessary board resolutions and make the necessary approval applications to the Capital Markets Board of Turkey, Energy Market Regulatory Authority and other authorities for the registration of the shares that are subject to this capital increase.
2. In parallel to such private placement, Goldman Sachs has committed to purchase from us existing B-type Aksa Enerji shares representing circa 7,48% (post money) of the total issued share capital of Aksa Enerji for a total price of USD 135 million.
3. After the successful completion of the capital increase through private placement and share transfer, Goldman Sachs will, subject to the downside protection provided by Kazancı Holdings, own approximately 13,30% (post money) of the total issued share capital of Aksa Enerji. The total price to be paid by Goldman Sachs for those shares (“GS Shares”) will be USD 240 million which equates to a market price per share which will be different to the then exchange traded price.
4. Goldman Sachs will have the right to sell some or all of the GS Shares at any time before the sixth anniversary of the Transaction. Kazancı Holdings will retain voting rights over the GS Shares until such time as Goldman Sachs elects to sell the GS Shares to a third party. If Goldman Sachs sells the GS Shares to a third party prior to the maturity of the Transaction, it will repay to Kazancı Holdings a corresponding amount of the cash collateral initially posted to Goldman Sachs together with cash paid interest until such date under the loan and there will be a corresponding pay down of the New Loan Facility.
104 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
5. The New Loan Facility will be used, among other things, for general corporate purposes and to repay the bridge facility. It will have a 6 year tenor with a 3 years’ grace period and will be secured over 65,54% shares of Aksa Enerji. Upon completion of the equity purchase by Goldman Sachs described above, the GS Shares will be pledged as security for the New Loan Facility and a corresponding number of shares secured under the bridge facility will be released. Consequently, 52,24% of the Aksa Enerji shares pledged under the New Loan Facility will be provided by Kazancı Holdings and 13,30% will be GS Shares. The lenders will have no recourse to Goldman Sachs other than in respect of the GS Shares.
6. On the closing date of the New Loan Facility, Goldman Sachs will acquire the right to receive equity upside on Aksa Enerji shares through a call option granted by Kazancı Holdings to Goldman Sachs over 14,12% of the shares. The call option will terminate after the successful completion of the capital increase through the private placement and share transfer transactions (such that Goldman Sachs retains equity upside). Up until the six year anniversary of the Transaction, if there is equity upside, a portion of this upside will be shared by Goldman Sachs with syndicate members.
7. On the six year anniversary of the Transaction, Goldman Sachs will sell the remaining GS Shares back to Kazancı Holdings at a price per share equal to the initial purchase price. In order to secure this repurchase obligation of Kazancı Holdings, and in consideration for Goldman Sachs providing security over GS Shares, Kazancı Holdings will deliver cash collateral to Goldman Sachs in an amount equal to the total price of the Aksa Enerji shares acquired by Goldman Sachs.
As of 26.02.2013, the statement made with GS and Kazancı Holding agreed to increase “new loan” from USD 400 million to USD 500 million and GS will purchase 3,32% of Aksa Enerji’s capital through sale of partner for the USD 60 million from Kazancı Holding. Following the completion of this transaction, GS’s share on Aksa Enerji will increase from 13,30% to 16,62%. b) The ISE material disclosure made by the Company on 09.11.2012:
The electricity sale agreement made in 2011 between shareholders of the Group, Kazancı Holding A.Ş. ‘s subsidiary, related company Aksa Elektrik Toptan Satış A.Ş. and Syria extended for one year for the annual 2 billion kWh (+/- 25%) of energy exports to be made. Capacity of 500 MW in Syria than 1 year officially approvals are required for the export of energy. Requirements for Syria to export 500 MW energy for one more year are approved officially. Proportion of energy needs of Syria, as well as 2011 and 2012, starting from now, will continue to purchase one more year. Aksa Elektrik Toptan Satış A.Ş. will supply energy to export from Aksa Enerji Üretim A.Ş. and its subsidiaries. On the other side, the current contract obligations are secured by the parties and Aksa Elektrik Toptan Satış A.Ş. has no receivables that is not collected.
28. SUBSEQUENT EVENTS
The public disclosure announced by the Company in Istanbul Stock Exchange (ISE) on 01.03.2013. According to the disclosure; the Board of Directors of the Company decided to make application to get the required approval from EMRA (EPDK) in order to get Kazancı Holding A.Ş.’s 93% shares on Kapıdağ Wind power plant (TL 12.834.000 nominal value) to be purchased by board of the directors to the amount of TL 135.988.406.This purchase process will not cause any changes in the Group’s cash position and the Group’s receivables from Kazancı Holding will decrease in proportion to the amount of purchase price. Share transfer process will carry out after obtaining the approval required by EMRA.
The statement made by the parent company as follows; 16 MW of Kapıdağ wind power plant generation which has a 34,85 MW production license taken into commercial operations in January 2013, and the investment for the remaining portion is ongoing and it is planning to be operational within the current and next year gradually, so that number of the Group’s wind power plants increased from 4 to 5 and total capacity of wind energy will increase from 160 MW to 194,85 MW.
29. CONVENIENCE TRANSLATION OF FINANCIAL STATEMENTS
For the convenience of the reader, the accompanying consolidated financial statements have been translated from Turkish Lira to US$ with the Central Bank buying exchange rates at year-ends (31.12.2012: US$1 = TL1,7826, 31.12.2011: US$1 = TL1,8889). Such convenience translations are not intended to comply with the provisions of IAS 21 “The Effects of Changes in Foreign Exchange Rates” or Financial Accounting Standards Board No.52 “Foreign Currency Translations” for the translation of financial statements.
AKSA ENERJİ 2012 ANNUAL REPORT 105 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
Appendix 1
a) Related parties which are the shareholder of Kazancı Holding A.Ş.’s subsidiaries and affiliates:
1 Aksa Afyon Doğal Gaz Dağıtım A.Ş. Natural gas 2 Deriş İnşaat A.Ş. Construction 3 Aksa Balıkesir Doğal Gaz Dağıtım A.Ş. Natural gas 4 Aksa Bandırma Doğal Gaz Dağıtım A.Ş. Natural gas 5 Aksa Bilecik, Bolu Doğal Gaz Dağıtım A.Ş. Natural gas 6 Aksa CNG Sıkıştırılmış Doğal Gaz Dağ. İletim ve Satış A.Ş. Natural gas 7 Aksa Çanakkale Doğal Gaz Dağıtım A.Ş. Natural gas 8 Aksa Doğal Gaz Toptan Satış A.Ş. Natural gas 9 Aksa Doğal Gaz Dağıtım A.Ş. Natural gas 10 Aksa Elazığ Doğal Gaz Dağıtım A.Ş. Natural gas 11 Aksa Elektrik Perakende Satış A.Ş. Energy 12 Aksa Elektrik Toptan Satış A.Ş. Energy 13 Aksa Gaz Dağıtım A.Ş. Natural gas 14 Aksa Gemlik Doğal Gaz Dağıtım A.Ş. Natural gas 15 Aksa Gümüşhane Bayburt Naturalgas A.Ş. Natural gas 16 Aksa Havacılık A.Ş. Aviation 17 Aksa Jeneratör Sanayi A.Ş Generator 18 Aksa Karadeniz Doğal Gaz Dağıtım A.Ş. Natural gas 19 Aksa Makina Sanayi A.Ş. Machine 20 Aksa Malatya Doğal Gaz Dağıtım A.Ş Natural gas 21 Aksa Manisa Doğal Gaz Dağıtım A.Ş. Natural gas 22 Aksa Mustafa Kemal Paşa Susurluk Karacabey Doğalgaz Dağıtım A.Ş. Natural gas 23 Aksa Ordu Giresun Doğal Gaz Dağıtım A.Ş. Natural gas 24 Aksa Sivas Doğal Gaz Dağıtım A.Ş. Natural gas 25 Aksa Şanlıurfa Doğal Gaz Dağıtım Ltd. Şti. Natural gas 26 Aksa Televizyon Hizmetleri A.Ş. Media 27 Aksa Tokat Amasya Doğal Gaz Dağıtım A.Ş. Natural gas 28 Aksa Trakya Doğal Gaz Dağıtım A.Ş. Natural gas 29 Aksa Turizm İşletmeleri A.Ş. Tourism 30 Aksa Van Doğal Gaz Dağıtım A.Ş. Natural gas 31 Anadolu Doğal Gaz Dağıtım A.Ş. Natural gas 32 Anadolu Doğal Gaz Toptan Satış A.Ş. Natural gas 33 Atel Telekominikasyon A.Ş. Communication 34 Aksa Düzce Ereğli Doğal Gaz Dağıtım A.Ş. Natural gas 35 Kazancı Teknik Cihazlar Yedek Parça A.Ş. Transportation
106 AKSA ENERJİ 2012 ANNUAL REPORT Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
b) Related parties which are the shareholder of Kazancı Holding A.Ş.’s indirect subsidiaries and affiliates:
1 Aksa Far East Pte Ltd. Generator 2 Aksa International UK Ltd Generator 3 Aksa Power Generation (China) Co Ltd. Generator 4 Aksa Power Generation Fze. Generator 5 Aksa Servis ve Kiralama A.Ş. Generator 6 Eurl Aksa Generateurs Algeria Generator 7 Aksa Kazakhstan Ltd Generator 8 Aksa Middle East LLC (Dubai) Generator 9 Aksa Power Generation (Changzhou) Co. Ltd Generator 10 Jiangyin AKSA Electrical & Mechanical Co., Ltd Generator 11 OOO Aksa Russia Generator 12 Aksa USA Generator 13 Aksa Satış ve Pazarlama A.Ş. Marketing 14 Aksa Teknoloji A.Ş. Technology 15 Ceka Enerji Üretim A.Ş. Energy 16 Çoruh Aksa Elektrik Hizmetleri A.Ş. Energy 17 Çoruh Elektrik Dağıtım A.Ş. Energy 18 Fırat Aksa Elektrik Hizmetleri A.Ş. Energy 19 Fırat Elektrik Dağıtım A.Ş. Energy 20 Aksa Ankara Makina Satış ve Servis A.Ş. Machine 21 Vangölü Aksa Elektrik Hizmetleri A.Ş. Electricity 22 Çoruh Elektrik Perakende Satış A.Ş. Electricity 23 Fırat Elektrik Perakende Satış A.Ş. Electricity 24 Renk Transmisyon San A.Ş. Other 25 Real Makine Ithalat İhracat Sanayi Tic. Ltd. Şti. Other
AKSA ENERJİ 2012 ANNUAL REPORT 107 Aksa Enerji Üretim A.Ş. and Its Wholly Owned Subsidiaries Notes to the Consolidated Financial Statements as of 31 December 2012 and 2011 (Currency - Turkish Lira)
c) Related parties that the Group have no capital relationship but directors and managers are the same with the Group
1 Aksa Enerji Iraq Energy 2 Onan Enerji Üretim A.Ş. Energy 3 Normdata Bilişim Teknolojileri San. ve Tic. Ltd. Şti. Energy 4 Doust Company (Iraq) Generator 5 Siirt Batman Doğalgaz Dağıtım A.Ş Natural gas 6 Elektrik Altyapı Hizmetleri Ltd. Şti. Other 7 Gesa Güç Sistemleri A.Ş. Thermic 8 Kazancı Makina ve Motor Ltd. Şti. Machine 9 Koni İnşaat Sanayi A.Ş. Construction 10 Koni Tarım İşletmeleri A.Ş. Agriculture 11 Koni Tarımsal Yatırım A.Ş. Agriculture 12 Koni Turizm San. ve Ticaret A.Ş. Tourism
d) Related parties that the Group have no control power or provision of subsidiaries that are not consolidated
1 Kapıdağ Rüzgar Enerjisi Elektrik Üretim Sanayi ve Ticaret A.Ş. (*) Energy 2 Rasa Radiator (Jiangyin) Co. Ltd. Radiator (*) Also related with (a)
108 AKSA ENERJİ 2012 ANNUAL REPORT İletişim
Evren Mah. Cami Yolu Cad. No:5 Güneşli 34212 İstanbul / Türkiye T: + 90 212 478 66 66 F: + 90 212 657 55 16 [email protected] [email protected] www.aksaenerji.com.tr www.aksaenerji.com.tr