41 YEARS OF RELIABLE TECHNOLOGY 2016 ASELSAN is a company of Turkish Armed Forces Foundation. ANNUAL REPORT CONTENT ASELSAN at a Glance Financial Information Shareholding Structure Consolidated Statement of Financial Position Summary Financials Consolidated Statement of Financial Profit or Loss Local Affiliates Consolidated Statement of Financial Comprehensive Income Global Affiliates Consolidated Statement of Changes in Equity Facilities in Turkey Consolidated Statement of Cash Flow Organization Main Financial Indicators Human Resources Management Abbreviations Management Contact Chairman’s Message Members of the Board of Directors Corporate Governance CEO’s Message Members of the Execution Board In 2016 TO access the dıgıtal report Strategy and Business Development www.aselsan.com.tr Marketing Activities Research Center Human Resources at ASELSAN ASELSAN 2016 Annual Report ASELSAN Academy Integrated Logistic Support (ELD) Highlights in 2016 Awards in 2016 Field of Activities Communications and Information Technologies Business Sector Defense System Technologies Business Sector Microelectronics, Guidance and Electro-Optics Business Sector Radar and Electronic Warfare Systems Business Sector Transportation, Security, Energy and Automation Systems Business Sector Our Vision Being a national technology company that maintains its sustainable growth by creating value in the global market; preferred due to its competitiveness, trusted as a strategic partner, and caring for the environment and people. Our Mission By focusing primarily on the needs of the Turkish Armed Forces; to provide high-value-added, innovative and reliable products and solutions to both local and foreign customers in the fields of electronic technologies and system integration; continuing activities in line with global targets as well as increasing brand awareness and contributing to the technological independence of Turkey. Our Values National consciousness Corporate loyalty Honesty and trustworthiness Research and entrepreneurial spirit Customer oriented Objective driven ASELSAN 2016 Annual Report Respect to people and nature Team spirit and solidarity Innovation and creativeness Work discipline Modesty Cost consciousness 1 ASELSAN AT A GLANCE SHAREHOLDING STRUCTURE Our Shareholders % Our Shareholders Share Amount (TL) Share (%) TAFF 845,825,624.46 84.58 Quoted on the BIST 153,018,684.64 15.30 84.58 AXA Insurance Inc. 1,155,690.90 0.12 Total 1,000,000,000.00 100 2 ASELSAN is a joint stock company and one of the subsidiaries of the Turkish Armed Forces Foundation (TAFF). As the main shareholder, TAFF owns 84.58% of the shares and 15.30% of the shares are listed on Borsa İstanbul (BIST). TAFF ASELSAN 2016 Annual Report 0.12 15.30 AXA Insurance Inc. Quoted on the BIST SUMMARY FINANCIALS Sales % 35 13 52 Public and Exports* Turkish Armed Forces* Private Institutions* *As a percentage of total sales ASELSAN realized 52% of its TL 3,768 million in total sales to the TAF ASELSAN’s share price varied from a minimum of TL 8.38 and a with private companies and other corporate customers accounting for maximum of TL 12.71, posting a gain more than 50% and ASELSAN’s ASELSAN 2016 Annual Report 35% of sales. Exports accounted for 13% of sales. market capitalization ended the year 2016 at USD 3.6 billion. 3 ASELSAN signed contracts/orders amounting to TL 9,499 million in 2016 and our backlog reached to USD 6.2 billion at the end of the year. ASELSAN AT A GLANCE Local Affiliates Represents ASELSAN facilities or affiliates. ASELSANNET Electronic and Communication Mikroelektronik R&D Design Systems Industry, Trade, Construction and and Trading Ltd. Co. Contracting Ltd. Co. Mikroelektronik was established in ASELSANNET was established in 2006 to meet the needs of civilian İstanbul to design and develop integrated companies and institutions for electronic and communication circuit and electronic systems. The devices. Its operations have also included communication system partnership with this Company was infrastructure turn-key deliveries and installation work since 2009. established through the purchase of 85% ASELSAN is the 100% shareholder in this company. of the shares in 2010. 4 ROKETSAN Rocket Industry ASELSAN Precision ASELSAN Bilkent Micro Nano and Trade Inc. Optics Industry and Trade Inc. Technologies Industry and Trade Inc. ROKETSAN was established in Ankara in ASELSAN PRECISION OPTICS was established in 1988 to manufacture all types of missiles, Sivas in 2014 to conduct research and development ASELSAN BİLKENT MICRO NANO rockets, rocket launchers and rocket fuel studies for optics, optical sets and optical devices TECHNOLOGIES was established in and their engines, warheads and other in relation to ultraviolet, visible and near infrared Ankara, Bilkent in 2014 to conduct ASELSAN 2016 Annual Report components, while also undertaking the bandwidths and to manufacture and sell these research and development studies manufacture, marketing and sales of all optical devices. ASELSAN holds 50% of the shares related to all types of semi-conductors types of military and civilian products in this company. and similar applications for technological that require high level and sensitive materials and to manufacture and sell technology. ASELSAN holds a 14.897% micro- and nano- scaled devices which share in the Company. include these materials. ASELSAN holds 50% of the shares of the company. Local Subsidiaries, Affiliates and Marketable Securities Subsidiaries, Affiliates and Marketable Securities Share Amount Share (%) ASELSANNET Elektronik ve Haberleşme Sistemleri Sanayi Tic. İnşaat ve Taahüt Ltd. Şti. 3,300,000.00 TL 100.00 Mikroelektronik Ar-Ge Tasarım ve Tic. Ltd. Şti. 55,250.00 TL 85.00 ASELSAN Hassas Optik San. ve Tic. A.Ş. 6,500,000.00 TL 50.00 ASELSAN BİLKENT Mikro Nano Tek. San. ve Tic. A.Ş. 9,000,000.00 TL 50.00 ROKETSAN Roket San. ve Tic. A.Ş. 21,906,222.86 TL 14.897 ASPİLSAN Askeri Pil San. Tic. A.Ş. 56,000.00 TL 1,00 Global Affiliates Represents ASELSAN facilities or affiliates. ASELSAN Baku Company Kazakhstan ASELSAN ASELSAN Middle East (Baku - Azerbaijan) Engineering LLP. Psc. Ltd. (Astana - Kazakhstan) (Amman - Jordan) The Company, 100% owned by ASELSAN, was established in 1998 The Company was established in The Company was established as a to carry out the publicity/marketing Kazakhstan in 2011 to carry out the joint venture company to meet the and sales activities of military and manufacturing, development and night vision needs of the Jordanian civilian communication devices. maintenance-repair of electronic Military Force with the KADDB devices and systems to meet military Investment Group (KIG) holding a and civilian needs in a partnership 51% share in the Company and between ASELSAN 49%, the ASELSAN holding 49% of the Undersecretariat for Defense Industries shares. (UDI) 1% and Kazakhstan Engineering 50%. IGG ASELSAN Integrated ASELSAN South Africa / ASA SADEC LLC. - Saudi Defense Systems LLC. (Pretoria - Republic Electronics Company (Abu Dhabi - UAE) of South Africa) (Riyadh - Saudi Arabia) IGG ASELSAN Integrated Systems This Company is the branch we SADEC LLC was established on 2016 in a partnership was established with the aim established to operate in the fields between ASELSAN and TAQNIA DST., both holding of manufacturing, testing, and of design of optical systems and 50% stake, to carry out manufacturing, development, integrating ASELSAN’s products in introduction and marketing of and maintenance-repair work of electronic devices and ASELSAN 2016 Annual Report the UAE and selling and providing ASELSAN’s products in South Africa and systems, in order to meet radar, electronic warfare and after-sales support in Gulf countries, nearby countries in 2011. electro-optic systems needs of Saudi Arabia. and the UAE in particular, in 2011 5 in a partnership between ASELSAN 49% and IGG 51%. Global Subsidiaries, Affiliates and Marketable Securities Subsidiaries, Affiliates and Marketable Securities Share Amount Share (%) ASELSAN Bakü Şirketi 1,735,212.00 US Dollar 100.00 SADEC LLC. (Saudi Defense Electronics Company) 11,250.000 Saudi Arabian Riyal 50.00 ASELSAN Middle East PSC. Ltd. 1,225,000.00 Jordanian Dinar 49.00 IGG ASELSAN Integrated Systems LLC 98,000.00 UAE Dirham 49.00 Kazakhstan ASELSAN Engineering LLP 3,464,300,000.00 Kazakhstan Tenge 49.00 ASELSAN AT A GLANCE Facilities in Turkey Macunköy Facility The Macunköy Facility was established over a total area of 186,000 m2, of which 110,000 m2 is closed. ASELSAN Macunköy Facility is home to the CEO, Communications and Information Technologies Business Sector and Defense System Technologies Business Sector and Transportation, Security Energy and Automation Business Sector. 6 Akyurt Facility The Akyurt Facility was established on a total area of 231,000 m2 of which 54,000 m2 is closed. The Microelectronics Guidance and Electro-Optic Business Sector is located in the ASELSAN Akyurt Facility. ASELSAN 2016 Annual Report Gölbaşı Facility The Facility was established in the Gölbaşı district of Ankara, and houses production plants for radar and electronic warfare systems for land, air, sea, space and unmanned platforms. This Facility was established on a total area of 350,000 m2, of which 75,000 m2 is closed. The Facility of which construction began in 2013, was inaugurated in 2015. Organization Board of Directors Board of Directors Planning and Internal Audit Coordination Management CEO Legal Affairs Corporate Services Financial Management Vice Presidency Vice Presidency Technology & Strategy Human Resources Management