Increasing our energy... - Zorlu Enerji

Increasing
our energy...
Zorlu Energy 2009 Annual Report

Contents
2 Zorlu Energy Group
4 Zorlu Group in Brief
5 Zorlu Energy Electricity Generation Inc.
7 Zorlu Energy Electricity Generation Inc.: Milestones
8 Financial Highlights
10 Zorlu Energy Electricity Generation Inc.’s Power Plants
12 Chairman’s Message
14 Zorlu Energy Group CEO’s Assessment
18 Board of Directors
20 Senior Management
22 Management’s Assessment and Analysis of Operational Results
32 Zorlu Energy Group, People and the Environment
36 Corporate Governance Principles Compliance Report
47 Profit Distribution Policy
48 Statutory Auditor’s Report Summary
49 Resolution of the Board of Directors
50 Independent Auditor’s Report
108 Investor Information

Increasing our energy...
We, as Zorlu Energy, seek to return to the Earth that
which it takes from the Earth as energy. We keep growing
and adding power to Turkey with our investments which
reflect all technological developments for efficient and
high-quality energy generation and which are based on
local and renewable energy resources.
...we add power to Turkey.
Page 1
Zorlu Energy 2009 Annual Report

Zorlu Energy Group
Zorlu Energy Group is one of the strongest
player in energy sector with its integrated
operations backed up its strategy of
diversifying resources and services.
Zorlu Energy Group: Diversity in resources and services…
The foundations of Zorlu Energy Group were laid down in 1993 with
Zorlu Energy Electricity Generation Inc. The Group has strengthened
its presence in various fields of the energy sector thanks to its
integrated operations including electricity generation and sales,
natural gas generation, distribution and sales, project development
to “turnkey” delivery of power plants and long-term maintenance
and operation agreements.
With:
• 5 natural gas fired power plants,
• 7 hydroelectric power plants,
• 1 geothermal power plant,
• 1 wind power plant,
• 1 fuel-oil power plant
Zorlu Energy Group had a total installed capacity of 660 MW
at the end of 2009. Our Group’s total installed capacity should
reach 738 MW once the Gökçedağ wind power plant (135 MW)
becomes fully operational in June 2010.
The energy generated at Group’s power plants provides high-quality
and continuous energy to the DUY (Stabilization & Reconciliation)
system, as well as industrial and commercial companies.
Zorlu Energy Group, aiming to become a regional player, takes pains
to make use of opportunities in markets in Europe, Asia and the
Middle East, in addition to the Turkish market, where demand for
energy and privatization efforts are intensifying. Projects carried out
in Russia, Pakistan and Israel are important steps taken by the Group
in reaching this goal.
Besides electricity generation, the Group continues its natural gas
exploration, drilling and generation activities in the Thrace region,
while also distributes natural gas in Gaziantep and the Thrace
regions.
Zorlu Energy Group, acting upon the principle of earning with the
community, pays attention that its investments do not give damage
to the environment and social life and cares for the development of
regions where it operates
Zorlu Energy Group’s competencies and competitive
strengths
Zorlu Energy Group has well utilized the advantage of being one
of the first companies penetrating the sector, anticipated the most
proper way the opportunities offered by the market thanks to its
vision and leading identity, and turned the potential into success.
Taking firm steps towards being a global energy power, Zorlu Energy
Group
• diversifies its portfolio with renewable energy resources such as
hydro, wind and geothermal energy by best utilizing the renewable
energy potential;
• distributes risks in the most appropriate manner possible, both by
resource and by country level; maintains its competitive position by
adapting well to changing market dynamics;
• uses the latest technologies at its plants, which raise energy
efficiency economically and environmentally, while popularizing
these practices throughout the sector;
• sustains its operations to ensure security of energy supply through
environment-friendly and sustainable-preserving methods by making
use of national resources in the most efficient manner;
• expands its operations by keeping a close view of developments
in the field of energy in target countries outside of Turkey where
energy demand is high;
• reflects its achievements in terms of cost-efficiency, productivity
and quality to its projects and services.
Zorlu Energy Group shapes its strategies around two central pivots
in order to solidify its strength on both national and international
platforms:
Efficient service in various fields of the energy sector
With its currently increasing capacity, Zorlu Energy Group also
covers the electricity and steam needs of industrial and commercial
corporations in addition to those of the Zorlu Group. Through
its companies, each specialized in their own field, the Group
also operates in a wide array of business lines such as natural
gas exploration, generation and wholesale, geothermal energy
exploration and drilling, turnkey power plant installation services for
industrial corporations, natural gas sales and distribution services
aiming to meet the natural gas needs of enterprises and homes, and
maintenance and operation services for industrial corporations which
operate power plants.
In line with its strategy of diversifying resources and services,
Zorlu Energy Group also keeps view of electricity generation and
distribution tenders within the scope of privatization, wind power
plant and natural gas contract transfer tenders.
Projects carried out in a wide geographical area
Having participated in partnerships in power plant projects to be
built by the private sector for the first time in Moscow, Zorlu Energy
Group is also interested in projects in other developing markets.
Projects in Pakistan (a 50 MW wind power plant) and Israel (4 natural
gas cogeneration power plants with a total capacity of 1,085 MW),
which are currently at the project finance stage, reflect the Group’s
vision to transfer its existing know-how and experience to different
regions.
Page 2
Zorlu Energy 2009 Annual Report

Zorlu Energy in Turkey
Natural gas power plants Hydroelectric power plants Wind power plant
Geothermal power plant Natural gas distribution Natural gas production
Lüleburgaz
Trakya Region
Marmara Region
Yalova
Rize
Bursa
Ankara
Tokat
Erzurum
Kars
Eskişehir
Erzincan
Tunceli
Kayseri
Van
Denizli
Osmaniye
Gaziantep
Zorlu Energy Group
Zorlu Energy Electricity
Generation Inc.
(Listed on the ISE).
Zorlu Natural Electricity
Generation Inc.
(142.6 MW)
Others
Natural Gas Distribution
Companies
Turkey
Electricity Generation
(517.5 MW)
100% 5 Natural Gas Power Plants
83.7% Rotor Electric Power
Production Inc.
83.7% Zorlu Hydroelectric Power
Production Inc.
7 Hydroelectric Power Plants
1 Geothermal Power Plant
1 Fuel-oil Power Plant
Zorlu Industrial
Zorlu O&M
Zorlu Electricity Energy Import,
Export and Wholesale Trade
Zorlu Natural Gas Import, Export
and Wholesale Trade
Gazdaş Gaziantep Natural Gas
Distribution
Thrace Region Natural Gas
Distribution
73% Zorlu Geothermal Energy
Electricity Generation Inc.
83.7% Zorlu Wind Energy
Electricity Generation
Natural Gas Exploration
+ Generation
73% Zorlu Petrogas
100% Amity Oil
International
51% Rosmiks LLC
100% Zorlu Energy Pakistan
25% Dorad Energy
51% Ashdod Energy
51% Ramat Negev Energy
27% Solad Energy
100% Bundoran Financial
Corporation
Page 3
Zorlu Energy 2009 Annual Report

Zorlu Group in Brief
With 23,000 employees and over TL 10 billion
in total assets, the Zorlu Group continues to
grow, raising the popularity of its “Zorlu” name
in the global arena, and raises trust in its
brand in line with the philosophy of “We will
go furthest in the direction we are going; we
will climb to the top of where we go; we will be
the best at what we do…”
Home textile Consumer durables Energy Real Estate
Korteks
Zorluteks
The biggest fully integrated
producer of polyester yarn in
Turkey
Vestel Zorlu Energy Group Zorlu Real Estate
The leading OEM/ODM provider
of TVs, white goods, and digital
products for the European market
One of the primary players in the
domestic market with an installed
capacity of 660 MW at the end
of 2009
Became operational in 2006
The largest home textile
manufacturer in Europe
Among the top three players of
the European LCD market with a
market share of 15% in the last
quarter of 2009
Accounted for nearly 6.4% of
the total electricity generated
by the private sector in Turkey
(excluding BOO, BOT & TOR)
Aims to develop & invest in
high quality residential, office,
shopping centre and hotel
projects at prime locations in
Turkey & abroad.
Production bases in Turkey and
Russia
Ongoing investments in Russia,
projects at the project finance
stage in Pakistan and Israel
Its ongoing project: Zorlu Center
- Zincirlikuyu, Istanbul: a mixed
used real estate development
project
Among the top three players in
the domestic market with the
Vestel brand
Also active in natural gas
production, trading and
distribution
Page 4
Zorlu Energy 2009 Annual Report

Zorlu Energy Electricity Generation Inc.
Zorlu Energy Electricity
Generation Inc.: The flagship
of the Zorlu Energy Group
Zorlu Energy Electricity Generation Inc. (Zorlu Energy),
the original company from which Zorlu Energy Group was
formed, was set up as an auto producer to generate the
electricity and steam needed by Zorlu Group textile factories.
Over time, the Company began supplying electricity and
steam to non-group industrial concerns as well. At the end
of 2009, the Company’s five thermal power plants had
an aggregate installed capacity of 460 MW and a steam
manufacturing capacity of 192 tons/hour.
Zorlu Energy Electricity Generation Inc. achieved significant
ground in its renewable energy investments in 2009. The
Company aims to attain an installed capacity of 135 MW by
bringing 54 turbines into operation at the Gökçedağ wind
power plant by June 2010.
Zorlu Energy Electricity Generation Inc. is one of the most
rapidly growing energy companies in Europe, while also
drawing attention in the global arena. Zorlu Energy Electricity
Generation Inc., ranked 138th in the list of the top 500
companies published annually by the Istanbul Chamber of
Industry in 2007, improved its rank to 100th in 2008.
A company mindful of environmental, natural and social
values
As a company mindful of the environmental, natural, and
social values in which it operates, Zorlu Energy Electricity
Generation Inc., has equipped all its power generation
plants with water injection systems which ensure that NOX
emissions are within the limits prescribed by the World Bank.
In this way, waste heat is used to produce steam instead of
being discharged into the atmosphere, resulting
in more environmentally friendly power generation while
helping prevent global warming. Zorlu Energy Electricity
Generation Inc., the first auto producer in Turkey to have
been awarded full quality certification, boasts an integrated
management system and holds TS/EN ISO 9001: 2000,
OHSAS 18001, and ISO 14001 certificates.
Zorlu Energy Electricity Generation Inc. first completed a
public offering of 20% of its shares in 2000. Currently, 32%
of the Company’s shares are traded on the Istanbul Stock
Exchange. As the first energy company in Turkey whose
shares are publicly traded, Zorlu Energy Electricity Generation
Inc. is also the only publicly-traded member of Zorlu Energy
Group.
Zorlu Energy Electricity Generation Inc.
boasts an integrated management system
with TS/EN ISO 9001: 2000, OHSAS 18001,
and ISO 14001 certificates.
Page 5
Zorlu Energy 2009 Annual Report

Zorlu Energy
Shareholding Structure (%)
Korteks 18%
41% Zorlu Holding
Other 9%
Publicly Held 32%
Zorlu Energy Electricity Generation Inc.
Turkey
Electricity Generation
(517.5 MW)
100% 5 Natural Gas Power Plants
83.7% Rotor Electric Power
Production Inc.
83.7% Zorlu Hydroelectric Power
Production Inc.
73% Zorlu Geothermal Energy
Electricity Generation Inc.
83.7% Zorlu Wind Energy
Electricity Generation
Natural Gas Exploration
+ Generation
International
51% Rosmiks LLC
100% Zorlu Energy Pakistan
25% Dorad Energy
51% Ashdod Energy
51% Ramat Negev Energy
27% Solad Energy
100% Bundoran Financial
Corporation
73% Zorlu Petrogas
100% Amity Oil
Ranked 100th among top 500 companies
Zorlu Energy Electricity Generation Inc., ranked 138th in
the list of the top 500 companies published annually by the
Istanbul Chamber of Industry in 2007, improved its rank to
100th in 2008.
Page 6
Zorlu Energy 2009 Annual Report

Zorlu Energy Electricity Generation Inc.: Milestones
1993
Zorlu Enerji Elektrik Üretim A.Ş. (Zorlu Energy Electricity Generation Inc.) is
set up to provide the electricity and steam needs of Zorlu Group’s industrial
concerns.
1997
Auto producer agreements are signed with the Ministry of Energy and
Natural Resources. Construction work begins on two energy plants in
Lüleburgaz and Bursa.
The Company’s first plant, generating 7 MW electricity and 20 tons/hour
steam, is commissioned in Lüleburgaz.
1998
The LM2500 unit, with an installed capacity of 26 MW in combined-cycle
power plant in Bursa is brought on stream on a simple-cycle basis. With the
commissioning of a 9 MW steam turbine, its combined-cycle production
capacity reached 35 MW. With the completion of these investments, Zorlu
Energy is now able to fulfill all of the electricity needs of the Zorlu Group.
1999
Combined-cycle power plants with 43 MW of capacity are completed by
the Zorlu Energy Power Plant Construction Group in Bursa and Lüleburgaz
and commissioned on simple-cycle basis. Total production capacity reached
135 MW.
With an electrical switching plant being installed in Bursa, the Company
is now in a position to sell up to half of the electricity it generates to
non-group companies.
2000
Zorlu Endüstriyel ve Enerji Tesisleri İnşaat Ticaret A.Ş. (Zorlu Industrial and
Energy Facilities Construction & Trade Inc.) is set up.
Total production capacity reached 156 MW of electricity and 150 tons/
hour of steam. With as much as 70% of capacity now being sold outside
the Zorlu Group, Zorlu Energy has firmly established its position in Turkey’s
energy market.
Zorlu Energy undertook its initial public offering and shares representing
20% of the Company’s paid-in capital are listed on the Istanbul Stock
Exchange.
Zorlu O&M Enerji Tesisleri İşletme ve Bakım Hizmetleri A.Ş. (Zorlu O&M
Power Plant Operation and Maintenance Services Inc.) is set up.
Zorlu Petrogas Petrol, Gaz ve Petrokimya Ürünleri İnşaat Sanayii ve
Ticaret A.Ş. (Zorlu Petrogas Petroleum, Gas, and Petrochemical Products
Construction, Industry & Trade Inc.) is set up.
2001
Zorlu Energy is awarded the ISO 9001/2000 Quality Management System
certification.
The number of non-Zorlu customers approaches 200.
2003
Zorlu Elektrik Enerjisi İthalat, İhracat ve Toptan Ticaret A.Ş. (Zorlu Electricity
Energy Import, Export and Wholesale Trade Inc.) is established.
2004
Zorlu Energy and Zorlu O&M receive their OHSAS 18001 Occupational
Health & Safety Assessment Series and ISO 14001 Environmental
Management System certifications.
2005
A decision is taken to participate with a 25% stake in Dorad Energy Ltd, with
a planned installed capacity of 800 MW, in Israel.
A contract is signed for the first privately-owned electrical power plant
project in Moscow and the plant’s foundations are laid.
Zorlu Petrogas received natural gas exploration license and won natural gas
distribution tenders for Gaziantep-Kilis and for Kırklareli-Tekirdağ-Edirne.
Zorlu Energy joins the ranks of Europe’s 100 fastest-growing companies.
The Kayseri Power Plant enters operation on a simple-cycle basis. Trade
Finance Magazine hails Zorlu Energy’s Kayseri power plant project as “the
year’s most successful financing project”.
2006
An electricity generation agreement covering a 20-year period is signed with
Pakistan’s Alternative Energy Development Board to set up of a wind power
plant in Pakistan.
Zorlu Energy wins the tender to build two hydroelectric power plants on
the Dalaman River in Muğla at Sandalcık-Sami Soydam (124 MW) and Narlı
(80 MW). Feasibility studies begin immediately.
2007
Takeover of the wind power plant license of Rotor Elektrik Üretim A.Ş.
Work begins in Osmaniye to construct a wind power plant which, with an
installed capacity of 135 MW, is planned to be the biggest facility of its kind
at a single location in Turkey.
Zorlu Energy won the tender of the General Directorate of State Hydraulic
Works for the planned construction of a 60MW hydroelectric power plant in
Tirebolu in the province of Giresun.
The Zorlu Group signs the United Nations Global Compact.
2008
Zorlu Energy signs a Carbon Emission Sales Contract with EcoSecurities for
the 135 MW wind power plant in Osmaniye.
In addition to its 135 MW wind power plant investment in Osmaniye, Rotor
Elektrik Üretim A.Ş., receives two more production licenses from the Energy
Market Regulatory Authority for 60 MW and 50 MW wind power plants in
the same region.
Zorlu Energy won the privatization tender related to nine power plants with
a total installed capacity of 141 MW altogether owned by Ankara Doğal
Elektrik Üretim ve Ticaret A.Ş. (ADÜAŞ), submitting a winning bid of
US$ 510 million in the tender.
In addition to the Lüleburgaz Natural Gas Combined-Cycle Power Plant,
work begins for the establishment of the 75 MW combined-cycle power
plant.
Zorlu Energy receives 100% stake of Amity Oil International Inc.
2009
The capacity of the Lüleburgaz Power Plant rises to 115.3 MW.
Within the framework of restructuring efforts carried out within the Zorlu
Energy Group, stakes held by Zorlu Energy Electricity Generation Inc. in
the following companies were transferred to Zorlu Holding Inc. and other
Zorlu Group companies in June: Zorlu Doğal Elektrik Üretim A.Ş. (ADÜAŞ’s
assets), Trakya Bölgesi Doğal Gaz Dağıtım A.Ş. (Thrace Region Natural
Gas Distribution Inc.), Gazdaş Gaziantep Doğal Gaz Dağıtım A.Ş. (Gazdaş
Gaziantep Natural Gas Distribution Inc.), Zorlu Doğal Gaz İthalat İhracat ve
Toptan Ticaret A.Ş. (Zorlu Natural Gas Import, Export and Wholesale Inc.),
Zorlu Endüstriyel ve Enerji Tesisleri İnşaat Ticaret A.Ş. (Zorlu Industrial and
Energy Facilities Construction & Trade Inc.), Zorlu O&M Enerji Tesisleri
İşletme ve Bakım Hizmetleri A.Ş. (Zorlu O&M Power Plant Operation and
Maintenance Services Inc.) and Zorlu Elektrik Enerjisi İthalat İhracat ve
Toptan Ticaret A.Ş. (Zorlu Electricity Energy Import, Export and Wholesale
Trade Inc.), and Zorlu Enerji ve İnşaat Sanayi ve Ticaret A.Ş. (Zorlu Energy
and Construction Industry and Trade Inc.)
With the cash capital increase, the Company’s capital was raised from
TL 81,665,350 to TL 281,665,350.
23 turbines with a total capacity of 57.5 MW were brought into operation
at the Gökçedağ wind power plant by the end of 2009.
Page 7
Zorlu Energy 2009 Annual Report

Financial Highlights
(US$ million) 2009 2008*
Revenues 353.8 410.9
Gross Profit 83.0 82.1
Operating Profit 173.0 35.8
EBITDA 201.3 64.0
Net Income/Loss 63.3 (260.1)
Total Assets 1,603.5 1,714.6
Shareholders’ Equity 152.3 (0.2)
Net Financial Debt 888.2 1,177.9
Gross Profit Margin (%) 23.5% 20.0%
EBITDA Margin (%) 56.9% 15.6%
CMB based financials
* The Company undertook affiliate sales in 23.06.2009 accordingly financial indicators for the year 2009 shown in the table above covers the results for the continuing
operations. For the compatibility of the current financial statements, 2008 financial statements are classified.
EBITDA and EBITDA Margin*
(US$ million)
100
80
60
40
20
64
16%
85
30%
1,000
24% 888
20% 800
10%
Net Financial Debt
(US$ million)
1,200
600
400
200
1,178
Shareholders’ Equity
(US$ million)
175
150
125
100
75
50
25
0.24
152
0
2008 2009* 0% 0 2008 2009 0 2008
2009
* Excluding the revenues that were obtained through
participation sales carried out on 23.06.2009.
+33%
The Company’s EBITDA rose by 33% to
US$ 85 million, excluding income from
participation sales.
Page 8
Zorlu Energy 2009 Annual Report

Zorlu Energy Electricity
Generation Inc.
Share Information (US$) 2009
Number of Shares 281,665,350
Number of Shares (Free Float) 90,076,579
Maximum share price during year 2.24
Minimum share price during year 0.43
Year-end Price 2.08
Annual Return 279%
Average Annual Volume 6,605,536
As of the end of 2009,
Zorlu Energy Electricity Generation
Inc. was quoted on the following
stock exchange indices:
> ISE-100
> ISE-ALL
> ISE-National-Services
> ISE-Electricity
Market Capitalization 586,841,998
Market Capitalization
(US$ million)
Comparative Share Performance
(US$)
ZOREN
ISE
700
600
500
400
300
200
100
0
15/01/09 18/06/09 17/12/09
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
01/01/09
01/06/09 01/12/09
Annual return on shares
in US$ terms: 279%
While the ISE100 index rose by 100% in US$ terms in 2009,
Zorlu Energy Electricity Generation Inc. shares notched up a
279% return in US$ terms.
Page 9
Zorlu Energy 2009 Annual Report

Zorlu Energy Electricity Generation Inc.’s Power Plants*
Lüleburgaz Power Plant
Type
Natural Gas Cogeneration Power Plant
Capacity
115.3 MW Electricity + 162 tons/hour steam
Bursa Power Plant
(Organized Industrial Zone)
Type
Natural Gas Combined-Cycle Power Plant
Capacity
90 MW Electricity
Kayseri Power Plant
(Organized Industrial Zone)
Type
Natural Gas Combined-Cycle Power Plant
Capacity
188.5 MW Electricity
Page 10
Zorlu Energy 2009 Annual Report

Yalova Power Plant
(İpek Kağıt - Altınova)
Type
Natural Gas Cogeneration Power Plant
Capacity
15.9 MW Electricity + 30 tons/hours steam
Ankara Power Plant
(Organized Industrial Zone)
Type
Natural Gas Combined-Cycle Power Plant
Capacity
50.3 MW Electricity
Wind Power Plant
Gökçedağ Wind Power Plant
(Osmaniye)
Type
Renewable Wind Power Plant
Capacity
57.5 MW Electricity
* As of the end of 2009
Page 11
Zorlu Energy 2009 Annual Report

Chairman’s Message
Ensuring energy supply security and sustainable
development
The security of energy supply and sustainable
development have been the leading items on the
agenda both in the world and in our country. Factors
such as rising energy prices, continuing dependence on
conventional energy resources in the near future, the
failure to use renewable energy resources effectively
despite increasing global energy demand and the fact
that developments on new energy-related technologies
remain unable to meet increasing demand all raise
countries’ concerns on the security of energy supply.
Moreover, while the impacts of the economic crisis, which began in
the USA in 2008, on global demand have precipitated a significant
fall in industrial manufacturing, new investments almost ground to
a halt. The negative impacts of these developments are also seen
on ongoing projects, as well as the projects that are in the planning
stage.
The 2.3% fall in energy demand in 2009 was the first fall ever
experienced since 1981. Following this period of decline, it is clear
that energy consumption will begin to recover from 2010. According
to projections set out by the International Energy Agency (IEA),
assuming that current energy policies are pursued, global energy
demand in 2030 will be 40% higher than its 2007 level, representing
an increase at a CAGR of 1.5%. During this period, coal and natural
gas are still expected to remain the most important resources in
electricity generation, while the share of oil will drop.
The share of use of renewable energy resources in electricity
generation is projected to rise from the current 18% to 22% by
2030. Wind power will make the biggest contribution to the increase
in use of renewable resources.
Reducing the environmental impacts of production activities in
the energy sector will continue to stand before us as an important
phenomenon in the coming periods as well in tackling global
warming and climate change. Elimination of these negative impacts
again depends on the deliberate and decisive efforts of energy sector
players, as it is calculated that energy sector based greenhouse gas
emissions will increase from their current 28.8 billion tons to 40.2
billion tons by 2030.
To ensure supply security...
Applying sustainable energy policies in a disciplined manner, which
primarily aim to diversify energy resources and maximize the
utilization of Turkey’s domestic resources, as well as tending to use
renewable resources, principally wind energy, will play a key role in
ensuring supply security.
Page 12
Zorlu Energy 2009 Annual Report

Improvements in parallel with technological developments,
principally energy efficiency, the increasing use of nuclear energy
and renewable energy resources - which are alternative to fossil
fuels - and R&D activities (carbon capture and storage and clean coal
technologies) focused on minimizing environmental impacts are the
most fundamental measures being taken to reduce gas emissions.
Turkey’s picture in the field of energy and Zorlu Energy
According to 2009 figures, in Turkey, which has 44,500 MW total
installed capacity and a consumption amount of 200 billion kWh/
year, domestic resources are not employed effective enough
and natural gas is still responsible for nearly 50% of electricity
generation. In accordance with projections based on a base-demand
scenario prepared by the Turkish Electricity Transmission Company
(TEİAŞ), Turkey’s electricity demand and total installed capacity
should double by 2017.
The Electricity Energy Market and Supply Security Paper published
in 2009 sets out aims to utilize Turkey’s entire domestic coal and
hydroelectric potential and to increase the total installed wind
power capacity to 20,000 MW and total installed geothermal power
capacity to 600 MW by 2023. The report also envisages that 5%
of Turkey’s electricity generation should be provided from nuclear
energy by 2020.
Applying sustainable energy policies in a disciplined manner, which
primarily aims to ensure resource diversity and maximum utilization
of Turkey’s domestic resources as well as tending to use renewable
resources, especially wind power, will play a key role in providing
supply security.
Another vital issue is to employ rapid decision-making mechanisms,
always bearing in mind that any delay in investment could give
rise to energy bottlenecks, and that energy investments must be
considered in a medium and long-term perspective.
Taking significant steps to utilize Turkey’s existing potential and
to meet the country’s rising energy needs, Zorlu Energy Group is a
strong and leading participant in the sector with its domestic and
international investments.
As well as generating electricity, Zorlu Energy Group also carries out
natural gas exploration, drilling, generation and distribution activities
to discover and process our country’s resources. Our ultimate goal
is to be one of the determinant and indispensable players in our
country’s energy growth.
Sustainability is the primary target.
Earth, air and water - the basic resources of energy – face serious
threats from developing technology and the rapidly rising population
in the 21st century. Both organizations and individuals have
significant responsibilities with respect to efficient and sustainable
use of natural resources.
Aware of its own responsibility, Zorlu Energy Group accomplishes
permanent projects that prioritize use of domestic resources and
create sustainable economic values.
The Group also carries out activities to assess the environmental
impacts as well as the social impacts of its investments, while
expanding the scope of its social responsibility approach by putting
effort into contributing to such ultimate targets as economic and
social development of regions of its presence and maximization of
public welfare.
The United Nations Global Compact (UN Global Compact), of
which Zorlu Group is a member of, represents an important guide
in implementing these practices that are based on multi-directional
social responsibilities.
After Zorlu Holding signed the Global Impact in 2007, Zorlu Holding
published its first Progress Report in 2009, in which it set out the
practices related to sustainability. Efforts aimed at sustainability
and practices carried out by the Zorlu Energy Group in light of the
Global Compact are presented herein for the information of our
stakeholders.
A last few lines…
As we always mention, we steadfastly stick to the self-sacrificing
and responsible model that the sector requires of us, which never
neglects the fact that we provide a public service in the energy
sector. The Zorlu Energy Group seeks to return to the Earth that
which it takes from the Earth as energy.
Our Group will continue to grow and add power to Turkey with its
investments based on domestic and renewable energy resources,
which also reflect the technological developments with respect to
efficient and high-quality energy generation.
I, as a member of the Zorlu Energy Group family, extend my
sincerest wishes to everyone, especially our social stakeholders.
Zeki Zorlu
Chairman of the Board of Directors
Curbing the environmental
impacts of production activities
in the energy sector stands as an
important challenge in the coming
periods, along with tackling global
warming and climate change.
Page 13
Zorlu Energy 2009 Annual Report

Zorlu Energy Group CEO’s Assessment
Despite the challenging impacts of the crisis and the
adverse investment environment in 2009, the Zorlu
Energy Group pressed ahead with its investments,
increasing its installed capacity and proving once again
that it is one of the strongest players in the energy sector.
Our Group met 6.4% of total electricity produced by
private producers in Turkey, generating 2.8 billion kWh
of electricity (2.3 billion kWh of which was generated
by Zorlu Energy Electricity Generation Inc.) in 2009
predominantly through natural gas fired power plants.
Industrial production and electricity consumption, which
diminished as the global crisis precipitated a recession in
the real sector, naturally paved the way for a decline in
electricity generation. However, thanks to our effective
marketing and sales activities, we managed to close the
year with an increase in revenues.
We give priority to renewable and domestic energy
resources, to prevent energy shortages.
Despite being highly dependent on foreign countries for its energy,
due to the lack of oil and natural gas reserves, Turkey does offer
significant advantages thanks to the alternative energy resources,
which it has recently been investing in, as well as its existing
potential.
In 2009, Turkey was a net importer of energy resources. 74% of
Turkey’s total energy supply was met through imports, with more
than 90% in oil and natural gas, and 20% of its coal.
The share of renewable resources in electricity generation remains
quite limited; hydroelectric power accounted to 18.5% of electricity
generation in 2009. Turkey offers 48,000 MW in wind energy
potential, about 20% of which is deemed extremely efficient.
However, the share of wind energy in national electricity production
remains below 1%, while only 0.3% of geothermal resources are
being used.
We must make more use of the wind energy.
Our country offers a wind energy potential of 48,000 MW, around 20% of
which is extremely efficient. However, wind energy still only accounts for
less than 1% of national electricity generation.
Page 14
Zorlu Energy 2009 Annual Report

This reveals the importance of canalizing an ever increasing level of
“domestic and renewable” resources in energy production, in which
our Group bases and shapes its strategies. The Zorlu Energy Group
believes that the most important way to overcome the energy
bottleneck facing Turkey is to invest in domestic and renewable
resources.
Production activities and investments to go on…
Zorlu Energy Electricity Generation Inc. had reached a total installed
capacity of 517.5 MW by the end of 2009 at its five natural gas
power plants located in Ankara, Yalova, Bursa, Lüleburgaz and
Kayseri and the Gökçedağ wind power plant, which was partially
brought into operation by August 2009. When other eight renewable
energy plants of the Zorlu Energy Group, under which Zorlu Energy
Electricity Generation Inc. operates, are taken into account, the total
capacity of the Group reaches 660 MW.
Besides improvements in existing power plants, with an additional
investment at Lüleburgaz Plant, the capacity was further increased
by 50 MW at firsthand in 2009. With the capacity increase more
than 80%, the plant’s total installed capacity has reached 115.3 MW.
Provision of finance and pre-investment efforts as well as the
Environmental Impact Evaluation process are currently under way
for the 124 MW capacity Sami Soydam hydroelectric power plant
located on the Dalaman River and the Narlı hydroelectric power
plant, with a capacity of 80 MW.
Efforts to obtain a license for a 29MW capacity hydroelectric power
plant in Tirebolu, Giresun are under way.
Work is rapidly progressing on the Tereshkovo and Kojukhovo
natural gas power plant investments (each 340MW) in Russia. We
have invested nearly US$ 700 million in these power plants. The
first phase (170 MW) of the Tereshkovo plant is planned to enter
operation in the first half of 2010, while the first phase (170 MW)
of the Kojukhovo plant is planned to become operational in the last
quarter of 2010.
In Israel, we are in the final stages to start a 800MW capacity
power plant project. In addition, three more power plant projects’
investment agreements have been signed. These three projects
that have planned capacities of 55 MW, 110 MW and 120 MW are
currently at project financing stage.
Putting priority on geothermal energy
The Zorlu Energy Group considers stepping up investments in
geothermal energy as one of its high-priority fields of activity in
Turkey, which ranked 6th globally in geothermal energy. The Group
carries out exploration, drilling and reservoir-locating efforts in
Kızıldere, Denizli, Alaşehir, Manisa, and Simav, Kütahya. In addition
to our existing plant, we have started pre-construction work of
a new 60MW capacity geothermal power plant in Kızıldere after
having received the necessary license.
The Kızıldere geothermal plant in Denizli is the most important
geothermal energy project carried out by the Zorlu Energy Group
and is located in the richest region of Turkey in terms of capacity.
The reinjection system at the plant was brought into operation
in 2009 in what was one of our most significant achievements
this year, as this system had been inoperable since the plant
was founded. This system, that maintains water levels and the
sustainability of the reservoir, allows all of the used geothermal
water, which remains after energy production, to be injected back to
the wells.
We completed Turkey’s biggest wind power plant.
We covered significant ground in 2009, particularly renewable
energy investments. We aim to reach a total installed capacity of
135 MW by June 2010, by bringing 54 turbines into operation at the
Gökçedağ wind power plant.
We plan to raise our total installed capacity in Osmaniye to
245 MW with two new wind power plants, which we plan to build
with two licenses of 50 MW and 60 MW capacities, respectively.
The project finance process still continues with respect to the 50
MW capacity wind power investment in Jhimpir, in the city of Thatta
in southern Pakistan.
The Gökçedağ wind power plant
met all the criteria related to
the Gold Standard and became
the world’s biggest project to
have been awarded with the
Gold Standard in the Voluntary
Emission Reduction market.
Page 15
Zorlu Energy 2009 Annual Report

Zorlu Energy Group CEO’s Assessment
We crown our achievements with awards.
Within two years following the signing of the Carbon Emission Sales
Contract, the Gökçedağ wind power plant met all the criteria related
to the Gold Standard and became the world’s biggest project which
has been awarded with the Gold Standard in the Voluntary Emission
Reduction market.
While our project’s contribution to sustainable development was
approved at the highest level, it is also deemed worthy of an award
by NGOs as an investment that is mindful of environmental and
natural values as well as animal rights.
Moreover, the EUR 130 million loan contract signed with the
Institute of International Finance, European Bank for Reconstruction
and Development, European Investment Bank, Deniz Bank and HSBC
for the financing of the Gökçedağ wind power plant was awarded
as the “Best Wind Power Plant Project Finance in 2009” within the
scope of Euromoney Project Finance Awards.
Towards a low carbon economy
Expressions such as “reduction of carbon emission to the
atmosphere” and “erasing carbon footprints”, which were added
to our agenda within the framework of reducing the impacts of
economic activity on global warming, are on the verge of coming
into focus of all manufacturing activities.
The Carbon Emission Sales Contract, which the Zorlu Energy Group
signed with EcoSecurities with respect to the Gökçedağ wind power
plant, is a first in Turkey in this field. The Gökçedağ wind power
plant should generate nearly 500,000 MWh of electricity per year
with zero CO 2
emissions.
After the verification process which will be carried out when the
plant reaches full capacity, carbon certificates will be traded in
the voluntary carbon market. We have granted EcoSecurities, all
the rights of the project related to annual carbon emission and
authorization to trade in voluntary markets until 2012 within the
framework of the agreement reached.
In line with its environment-friendly approach and sense of
corporate responsibility, the Zorlu Energy Group plans to participate
actively in the carbon market in 2010 by conducting emission
calculations at all its power plants. As all countries have revealed
their targets with respect to the reduction of carbon emissions, the
carbon market is expected to become more active and gradually gain
importance in the coming periods.
We erase our carbon footprints
According to 2007 figures, Turkey’s total greenhouse gas emissions
were estimated to be equivalent to 372.6 million tons of CO 2
.
Energy-based emissions have the biggest share in the total CO 2
-
equivalent emission with a 77% share.
The Zorlu Energy Group prevents nearly 600,000 tons of CO 2
gas
emissions at its power plants which operate with renewable energy
such as wind and hydroelectric. When calculated over 5 tons per
capita, emission of about 120,000 people in Turkey is erased. In
other words, Zorlu Group is able to erase the footprints of all its
employees including their families.
We conduct alternative projects for clean energy.
The Zorlu Energy Group conducts various active business
development and demonstration projects in respect to alternative
energy resources such as solar energy, which promise a big potential
but are not yet widespread. The Group also carries out R&D
activities for clean energy generation with methods such as coal
gasification. Our Group performs R&D studies on the “Solar Thermal
Energy” technology in cooperation with Hitit Solar, a company
operating under Zorlu Holding. This system, which is based on the
principle of generating electricity with steam provided from solar
energy, has successfully passed the testing stage, while improvement
work is still under way.
R&D studies regarding another project titled “electricity generation
based on the coal gasification technology” aim to minimize the
harmful damage of coal to the environment.
We must reduce carbon emissions.
The Zorlu Energy Group prevents nearly 600,000 tons of CO 2
emissions at its power plants operating with renewable energy,
such as wind and hydroelectric energy.
Page 16
Zorlu Energy 2009 Annual Report

The energy generation pilot plant based on the coal gasification
technology which will be established with the cooperation
between the Zorlu Energy Group and TÜBİTAK (The Scientific and
Technological Research Council of Turkey) – TEYDEB (Technology
and Innovation Funding Programs Directorate) is a project which
will pioneer other studies to be carried out with respect to the
efficient use of energy by removing the damage given by coal to the
environment. The plant is planned to become operational by the end
of 2011.
We strive to make a difference for the regions where we
invest
The Zorlu Energy Group attaches particular importance to
conducting research on the social and environmental impacts of
its investments, taking measures which will minimize the negative
impacts as much as possible and continuously monitoring such
effects.
Research on the environmental and social circumstances of the
region was initiated as soon as a decision was taken to build the
Gökçedağ wind power plant in Osmaniye. A ‘Research Study on
the Existing Social Circumstances’ was conducted in order to
anticipate the socioeconomic circumstances of the region and
detailed socioeconomic research was carried out to get information
on the average education level of people and to understand the
capabilities of their manpower living in 21 towns. We began to
award scholarships acting upon the findings of these researches, and
we are very proud to report that we supported the education of 82
university and college students in 2009 through the Mehmet Zorlu
Foundation.
Our Group believes in the importance of people in the region
laying claim to these energy investments, conducting the necessary
research to ensure that investors function as a leverage in
development efforts in the region and implementing development
projects with the participation and cooperation of people.
We increase our energy for the future
We put effort into fulfilling our liabilities with respect to preparing
a better future for our country and our world with an increasing
amount of energy each year.
Our ongoing investments and the projects we have designed
represent important steps in terms of security of energy supply in
and after 2011, by which time we project that the economy will gain
sustainability and demand for electricity will rapidly increase. We
try to realize our aim to rapidly increase the number of renewable
energy resources and plants in our portfolio in coming years, with
excitement and with firm steps.
In closing, I would like to extend my sincerest thanks to our Board of
Directors for their continuous support and contributions that help us
reach our targets, to our employees and to all our stakeholders.
Murat Sungur Bursa
Energy Group CEO and Member of the Board of Directors
Within the scope of the ‘Environmental Impact Research’, migration
periods of the birds were observed and a research study was
conducted to understand how the power plant would affect such
migration, considering the fact that the region is on the migration
path of birds.
This approach appears before us as an indispensible phenomenon
which we will apply in our new projects and investments though it is
quite new for our country.
Our ongoing investments and the
projects we have designed represent
important steps in securing energy
supply in and beyond 2011, by
which time we envisage that
economy will gain sustainability,
paving the way for rapid growth in
demand for electricity.
Page 17
Zorlu Energy 2009 Annual Report

Board of Directors
Zeki ZORLU
Chairman of the Board of
Directors
(1939 - Denizli) Zeki Zorlu began his
career in a family company operating
in the textiles sector and opened
his first textiles store in Trabzon.
Having founded Korteks in 1976,
which was established in Babadağ,
Denizli and which continued in
Istanbul, Zeki Zorlu laid down the
foundations of Zorlu Holding which
today has 25,000 employees and 60
companies. In addition to its new
investments in the textiles sector,
Zorlu Group entered the electronics
and white goods sector with Vestel,
which was acquired in 1994, the
energy sector in 1996 and the real
estate sector in 2006. As well as
serving as the Co-Chairman of the
Board of Directors of Zorlu Holding,
Zeki Zorlu is also serving as the
Chairman of the Group companies
operating in the textiles and energy
sectors.
Melih E. ARAZ
Vice Chairman
(1948 - Istanbul) Melih E. Araz
graduated from the Faculty
of Political Sciences at Ankara
University in 1972. After having
completed an MBA at the Kelley
School of Business within the
University of Indiana, he continued
his education at the Harvard
Business School in the field of “Top
Level Management”. Commencing
his career at the Citibank N.A.’s
organization in Turkey, Mr. Araz
assumed top level duties in a variety
of units in the Istanbul, Izmir,
Bahrain, Athens and New York
branches and took on important
responsibilities in the foundation and
expansion of the Citibank
organization. Later, being appointed
as the CEO/General Manager at
Interbank A.Ş., Mr. Araz played a
leading role in bringing Interbank
to a respected position in the
corporate and investment banking
fields in Turkey. Mr. Araz now serves
as a consultant for a variety of
companies in the fields of finance
and strategic management, and is
also the Vice Chairman of the Board
of Directors of Zorlu Energy Inc., the
Managing Director at Ata Yatırım
A.Ş., and a Board Member at Şenocak
Holding A.Ş., Klimasan A.Ş., Izmir
Enternasyonel Otelcilik A.Ş. and
Entegre A.Ş.
Olgun ZORLU
Board Member
Having graduated from university in
the UK, Olgun Zorlu began his career
in 1986 and gained managerial
experience in the Zorlu Group’s
textiles companies. He started to
serve as a Board Member for Zorlu
Holding in 1998. In addition to being
a member of the Zorlu Energy Board
of Directors, Mr. Zorlu also serves
on the boards of Zorlu Holding and
other group companies.
Page 18
Zorlu Energy 2009 Annual Report

Murat Sungur BURSA
Board Member
Burak İ. OKAY
Board Member
Selen ZORLU MELİK
Board Member
(1975 - Trabzon) Selen Zorlu
Melik graduated from the Faculty
of Economics and Administrative
Sciences in the Department of
Business Administration at Uludağ
University. She started her career
in Deniz Bank in 1998. Following
her internship at DenizBank Bursa
Branch, she joined Management
Trainee Program in 1999 at the
same bank. Having served in several
positions at the Deniz Bank’s Head
Quarter, she attended Marketing
Certificate Program at the University
of California Berkley (USA) in 2001.
In 2002 she started to work in
Korteks, the textile manufacturing
and trade company of Zorlu Group
and became a Member of the Board
at the same company in 2004. She
joined Zorlu Energy Group as a
Vice-President and a Board Member
in 2005.
(1954 - Mersin) Murat Sungur
Bursa graduated from the Middle
East Technical University in
1977. Following his education in
American Hobart School of Welding
Technology, he completed an MBA
in Business Administration-Product
Management at Gazi University.
He began his career in Industrial
Training and Development Centre as
a mechanical engineer in 1977.
Having served several positions
in the public sector between
1986-1991, Mr. Bursa served
as the General Manager of the
Environmental Impact Assessment
and Planning Department at the
Ministry of Environment between
1991-1994. Between 1995-1998,
he was appointed as Deputy
Undersecretary at the Ministry
of Environment, and then as an
Undersecretary at the Ministry.
In 2003 he started to work as
Director in Prime Ministry’s Project
Implementation Unit. He joined
Zorlu Energy Group in 2006 as CEO
and as a Board Member.
Prof Dr. A. Can TUNCAY
Board Member
(1944 - Ankara) Prof Dr. A. Can
Tuncay graduated from the Faculty
of Law at Ankara University in 1966.
After completing his advocacy
internship, he was admitted to
the Faculty of Law at the Istanbul
University in 1968 as an assistant
lecturer. He was awarded a PhD
in law in 1975 and became an
assistant professor of law in
1980. Having been promoted as
a professor in 1988, Mr. Tuncay
lectured in the Department of Law
on Occupational and Social Security
at the Istanbul Faculty of Law for
32 years. He retired from his post
at Istanbul University in 2000. He
was appointed as a Board Member
of Zorlu Energy Group in 2006, and
has been working at Bahçeşehir
University as a lecturer at the
Department of Law on Occupational
and Social Security since 2003. He
was appointed the dean of the same
department in October 2009. Mr. A.
Can Tuncay is also a legal advisor at
a number of domestic and foreign
companies.
(1967 - Ankara) Burak İ. Okay
graduated from the Faculty of Law
at the Ankara University in 1990.
After completing the international
law certificate program in New
York, he started his career at the
Department of Legal Consultancy in
İşbank. He later went on to work in
Garanti Bank, MNG Bank and Nortel
Networks Netaş respectively and
then served at the Bener Law Firm as
an executive. Joining Zorlu Group in
2006, he played an active role in the
configuration of the law department
serving all the Group companies.
Mr. Okay still serves as the Law
Coordinator of the Zorlu Group
and is a Board Member of the Zorlu
Energy Group since 2007.
Page 19
Zorlu Energy 2009 Annual Report

Senior Management
Murat Sungur BURSA
CEO of the Zorlu Energy Group,
Board Member
Please refer to page 19 for the CV of
Murat Sungur Bursa.
Selen Zorlu MELİK
Deputy CEO of the Zorlu Energy
Group, Board Member
Please refer to page 19 for the CV of
Selen Zorlu Melik.
İ. Sinan AK
Assistant General Manager,
Finance
(1971 - Ankara) İ. Sinan Ak has
graduated from Istanbul Technical
University with a BSc degree in
Engineering Management. He
began his career as a bond dealer
in Evgin Securities in 1996. He
completed an MBA course from Old
Dominion University (USA) with a
concentration on finance. He then
joined Zorlu Group in June 2000.
He served in various positions and
companies within the Zorlu Group
as follows: between 2000-2002 in
Vestel Communications as finance
chief; between 2002-2006 in Vestel
White Goods as finance manager
and since 2006 in Zorlu Energy
as Assistant General Manager. He
is currently the Assistant General
Manager responsible for finance at
Zorlu Energy Electricity Generation
Inc.
Serhat ŞİMŞEK
Assistant General Manager,
Production and Trade
(1968 - Elazığ) Serhat Şimşek
graduated from the Electrical
Engineering Department at Yıldız
Technical University in 1990. He
started his career in Tekfen as an
engineer and undertook a number
of managerial positions in Temel
Su, Shell and Trakya İplik. He joined
Zorlu Energy in February 2001 and
has served as an Assistant General
Manager responsible for production
and trade in Zorlu Energy Electricity
Generation Inc. since 2007.
Page 20
Zorlu Energy 2009 Annual Report

Gökmen TOPUZ
Assistant General Manager,
Investments
(1972 - Istanbul) Gökmen Topuz
has graduated from the Department
of Electrical Engineering at Istanbul
Technical University in 1995. He
got his MBA degree at Yeditepe
University. He started his career as a
Project Manager in MAN Desentrale
Energie Systeme. He served in
various managerial positions in
Wartsila-Enpa, Kale Energy, Piramit
Energy between 1998-2007. He
has been serving at Zorlu Energy
Electricity Generation Inc. since
2007 as Assistant General Manager
responsible for investments.
Bülent ÇİLİNGİR
Director, Procurement and
Logistics
(1963 - Ankara) Bülent Çilingir
has graduated from Middle East
Technical University Department of
Civil Engineering and completed an
MSc degree at the same university
in 1985. He started his career as
a Project Manager in Kutlutaş
Construction in 1985. Between
1989-2003 he has undertaken
several managerial positions
in Bayındır Holding, Bayındır
Construction, Erel Technology Group.
In 2003 he started to work as a
consultant in the energy field and he
joined Zorlu Energy as Procurement
and Logistics Director in 2006.
A. Tansel VARAN
Director, Human Resources and
Corporate Communications
(1970 - Istanbul) A. Tansel Varan
graduated from the Faculty of
Economics and Finance Istanbul
University and completed an MA
degree in economics from the
University of Vienna in 1996. He
attended a Business English and
Internet Certificate
Program at the University of
California Berkley (USA) in 1997
before joining Anadolu Group as
a Management Trainee later in
1997, going on to serve in various
managerial positions within the
Group. He worked as a Human
Resources Manager in Doğan Group
and Ak-Al Tekstil between 2002-
2005 and joined Zorlu Energy in
December 2005 as Human Resources
and Corporate Communications
Director.
Page 21
Zorlu Energy 2009 Annual Report

We are growing stronger
in Turkey and in the
international arena.
Page 22
Zorlu Energy 2009 Annual Report

Management’s Assessment and Analysis of Operational Results
Developments in the Turkish Electricity Sector
Consumption of electricity in Turkey declined by 2.3% in 2009
compared to 2008, and fell to 193,472 million kWh, parallel to the
effects of the global crisis.
Electricity demand in Turkey has grown at an annual compound
rate of 7.2% since 1985 in line with economic development,
industrialization and urbanization. The economic recession that
affected the whole world in 2009 in line with the global crisis, and
also led to a drop in demand for electricity in Turkey as well. Turkey,
which had a total installed capacity of 44,556 MW at the end of
2009, is set to at least double its current capacity within the next
decade, in line with the projected increase in electricity demand.
Although the contraction in demand, caused by the crisis, postponed
fears of a supply bottleneck, Turkey is still expected to encounter
electricity shortages by 2014 under a scenario of high demand, or
by 2015 in a scenario of low demand, according to the report titled
“Turkish Electrical Energy 10-Year Generation Capacity Projection”
published by TEİAŞ (Turkey Electricity Transmission Corporation).
Also taking into account the minimum 3 or 4-year investment
period required for energy investments and the additional capacity
needs which are expected to arise in the coming periods, measures
must be taken and investments must be started immediately in
order to stave off a supply shortage in the coming year.
Efforts are underway to liberalize the sector, aimed at creating a
more favorable investment environment to meet the electricity
demand in the coming period and to raise efficiency. The State
Planning Organization published the “Electricity Energy Market and
Supply Security Strategy Paper” on May 21st, 2009 in order to guide
this process. The document covers the following:
• stages of the targeted market structure in the sector,
• privatization,
• targets with respect to resources to be used in electricity supply in
mid- and long-term, and
• steps to be taken to ensure supply security.
During this liberalization process, the following developments took
place in 2009 on the privatization side:
Production:
The Strategy Document published by the SPO sets out plans to
group the production plants to be privatized under various portfolios,
and to reevaluate and finalize existing portfolio groups. Parallel
to this objective, the privatization process of production plants
got underway in 2009. Within this framework, the Privatization
Administration called for tenders with respect to the privatization
of 52 hydroelectric power plants, belonging to the Electricity
Generation Company, under 19 different portfolio groups through
the method of “transfer of operating rights”, and decided that
companies participating in tenders may apply for preliminary
qualification until February 19th, 2010 at the latest.
Distribution:
The Privatization of the Başkent, Meram and Sakarya Electricity
Distribution electricity distribution grids, which all belong to the
Turkish Electricity Distribution Company, was completed and
their share transfers were completed. Final negotiations were
also completed in the privatization procedure of the Aras, Çoruh,
Osmangazi and Yeşilırmak Electricity Distribution grids; however,
shares of these companies have not yet been transferred. The
tenders for the Çamlıbel, Fırat, Uludağ and Vangölü Electricity
distribution grids were called by the Privatization Administration,
while a total of 43 investors had applied for preliminary qualification
as of December 16th, 2009.
The privatization procedure regarding other distribution grids
belonging to the Turkish Electricity Distribution Company, which
were included within the framework of the privatization program by
the Privatization Administration, is expected to begin in due course.
The SPO’s Strategy Document set out that the privatization of all
distribution grids targeted to be completed by the end of 2010.
Within the same framework, the “Medium Term Program (2010-
2012)” report, prepared by the Undersecretariat of State Planning
Organization and published in the official gazette dated September
16th, 2009, stated that privatizations would be completed,
with priority given to distribution grids, and that private sector
investments would be supported consistently as part of efforts
to establish a liberalized electricity market. The report also stated
that work on nuclear power plants would begin to support resource
diversity and supply security, the usage of domestic and renewable
resources in electricity generation would be accelerated in order
Consumption of electricity in Turkey declined by 2.3% in
2009, falling to 193,472 million kWh.
Page 23
Zorlu Energy 2009 Annual Report

Management’s Assessment and Analysis of Operational Results
to reduce Turkey’s excessive import dependency on natural gas,
The report also proposed the establishment of effective application
mechanisms aimed at increasing energy efficiency.
In April 2009, the Energy Market Regulatory Authority (EMRA)
amended the respective regulation on determining electricity
production and consumption prices on an hourly basis, and set
out the cash-based responsibilities of system participants during
this period. The aim was to improve the current system within the
scope of the Stabilization & Reconciliation (DUY), which was put
in practice in August 2006 in order to ensure security of supply,
encourage competition and provide some degree of easing to the
private sector. The amendment took effect as of
December 1st, 2009.
Developments in the Turkish Natural Gas Sector
Since 1987 when natural gas was presented as an alternative energy
resource to meet Turkey’s rapidly growing demand for energy,
demand for natural gas has grown very rapidly. Consumption of
natural gas in Turkey grew at a compounded annual rate of 21%
during this period, up from 0.5 billion m 3 in 1987 to 32 billion m 3 in
2009.
Demand for natural gas is determined by electricity production and
household and industrial consumption. As a result of the ongoing
global crisis, consumption of natural gas declined by 11% year-onyear
in 2009. EMRA projected natural gas consumption of 37 billion
m 3 for 2010.
460 MW
Zorlu Energy Electricity Generation Inc.’s
natural gas power plant has a combined
installed capacity of 460 MW and 192 tons/
hour of steam.
Four new companies entered the natural gas market in 2008 and
2009. These companies import natural gas based on the contracts
that they took over from BOTAŞ (Petrolium Pipeline Corporation).
Moreover, gas imports in the form of spot LNG began in 2009
through the privately owned Aliağa LNG terminal.
Activities in Turkey
Electricity Production
Natural Gas Power Plants
Zorlu Energy Electricity Generation Inc.’s electricity power plants
located in Lüleburgaz, Bursa, Ankara, Kayseri, and Yalova supply
electricity and steam to a customer base consisting of industrial
concerns. These plants have a total installed capacity of 460 MW of
electricity and 192 tons/hour of steam.
Within the framework of the capacity increase project at the
Lüleburgaz Power Plant, an additional capacity of 50 MW became
operational in 2009 on a simple-cycle basis with the additional
investment initiated in 2008 and the power plant’s total installed
capacity has reached 115.3 MW with new additions.
The biggest wind power project in Turkey: The Gökçedağ wind
power plant
The Gökçedağ wind power plant in Osmaniye, the biggest project
reflecting Zorlu Energy Electricity Generation Inc.’s vision regarding
renewable and alternative energy resources, is also the biggest wind
power project in Turkey.
An additional capacity increase of
50 MW was initially provided at
the natural gas cogeneration plant
in Lüleburgaz with the additional
investment made in the plant, bringing
the total installed capacity of the power
plant to 115.3 MW.
Page 24
Zorlu Energy 2009 Annual Report

Rotor Elektrik Üretim A.Ş., a Group company, holds an electricity
production license for a period of 25 years for the 135MW capacity
Osmaniye Power Plant. The Company also received two further
production licenses from the Energy Market Regulatory Authority for
wind power projects with 60 MW and 50 MW capacities in the same
region.
Project and engineering work at Gökçedağ wind power plant,
which will be developed by Rotor on the license area and which is
planned to have a capacity of 135 MW in the first phase. Within the
framework of the contract signed with GE Energy, 54 wind turbines,
each with a capacity of 2.5 MW, should be brought into operation as
of June 2010, raising the plant’s total installed capacity to 135 MW.
The second phase investments, with an additional capacity of 110
MW, are planned to be undertaken in the coming periods. With two
new plants to be constructed in Sarıtepe (50 MW) and Demirciler
(60 MW), the Group aims to reach a total installed capacity of 245
MW in Osmaniye.
Carbon Market, Turkey and the Gökçedağ wind power plant
Zorlu Energy Electricity Generation Inc. carried out the first
carbon emission project of Turkey at the Gökçedağ wind
power plant owned by Rotor Elektrik Üretimi A.Ş. The first
eight turbines at the Gökçedağ wind power plant were brought
into operation in August 2009; with 23 turbines becoming
operational by year-end 2009, total capacity reached 57.5
MW. This represented a total reduction of 13,000 tons in
CO 2
emissions under the Gold Standard. The annual emission
reduction amount expected from the Gökçedağ wind power
plant, with its total installed capacity of 135 MW, is equivalent
to 302,675 tons of CO 2
. Carbon certificates will be traded in
voluntary markets following the verification process. All the
rights with respect to annual carbon emission specific to the
project were assigned to EcoSecurities PLC which is authorized
to trade such certificates in voluntary markets and which was
purchased by JP Morgan in September 2009. EcoSecurities
PLC was assigned the right to trade carbon certificates until
2012 within the framework of the VERPA (Voluntary Emission
Reduction Purchase Agreement) which was signed in 2008.
About the Gökçedağ wind power plant
Once it reaches full capacity, the Gökçedağ wind power plant is
expected to generate nearly 500 million kWh of electricity per
year. If this amount of electricity were produced by thermal
power plants, approximately 300,000 tons of CO 2
would be
emitted into the atmosphere, while the Gökçedağ wind power
plant will generate the same amount of electricity with no CO 2
emissions. Given that a tree in a tropical region absorbs 20-22
kg of CO 2
per year, the Gökçedağ wind power plant would
therefore reduce CO 2
emissions by the amount equal to an
average of 14.5 million trees per year; taking into the climate
and dominant vegetation type in Turkey, the number of trees
in question may rise to as much as 200 million.
Each wind turbine is 85 meters tall, as tall as a 30-storey
building.
The blades of the wind turbines are 50 meters long. Their overall
diameter of 100 meters is equal to that of a football field.
Each turbine weighs 356 tons.
The service road connecting the turbines is 40 km long, longer
than Bosporus Bridge in Istanbul which is 32 km.
The turbines are installed on foundations located 960-1,620
meters above sea level; the highest spot where the turbines are
located is equal to one third of the height of the Mount Ağrı.
Each turbine will generate 9.3 million kWh of energy per year.
The wind power plant’s annual energy production capacity will
be enough to provide lighting to nearly 170,000 homes.
Zorlu Energy Electricity Generation Inc. demonstrated its
environmental awareness with the ground breaking signing of a
Carbon Emission Sale Contract with the Ireland-based EcoSecurities
Group PLC at the beginning of 2008. The contract covers energy
production without carbon emission at the power plant and will be
effective until the end of 2012.
300.000
The Gökçedağ wind power plant will
prevent 300,000 tons of CO 2
from being
emitted into the atmosphere.
The Gökçedağ wind power plant in
Osmaniye, Zorlu Energy Electricity
Generation Inc.’s biggest project
in its vision for renewable and
alternative energy, is also Turkey’s
biggest wind power plant project.
Page 25
Zorlu Energy 2009 Annual Report

Management’s Assessment and Analysis of Operational Results
The Gökçedağ wind power plant is the biggest project in the
world to receive the Gold Standard.
The Gökçedağ wind power plant met all the criteria related to
the Gold Standard within two years following the signing of the
Carbon Emission Sale Contract and was awarded the Gold Standard
in the Voluntary Emission Reduction market. The Gold Standard,
which is based on such requirements as “sustainable development”,
“environmental awareness”, “being accepted by local stakeholders”,
etc., necessitates a process composed of the following phases for the
approval of projects: social and environmental impact analysis of the
project, evaluation of these impacts and project-related expectations
together with local stakeholders and approval of the project by an
independent institution. The Gökçedağ wind power plant is the
world’s biggest project to have been awarded the Gold Standard.
The award for “investments which demonstrate care for
environmental and natural values, and animal rights”
The Gökçedağ wind power plant Farm won acclaim from prominent
NGOs in the environment field, due to its sensitivity on the
preservation of the social and ecological environment. In 2009, the
power plant was handed the environmental award in the category of
“investments that are mindful of environmental and natural values,
and animal rights” by the Association of Friends for Nature and the
Istanbul Environmental Council, which the association is a member of.
The Gökçedağ wind power plant was awarded as “Best Wind
Power Project Finance in 2009” in Europe
Project Finance, a publication owned by Euromoney, has been
issuing “Project Finance Awards” for 11 years, with awards based
on criteria such as financing of industrial projects, innovation, best
application, solution capability, repeatability, duration of use, etc.
In this year’s evaluation, the EUR130 million loan contract signed
with the Institute of International Finance, European Bank for
Reconstruction and Development, the European Investment Bank,
Deniz Bank and HSBC for the financing of the Gökçedağ wind power
plant was awarded the “Best Wind Power Project Finance in 2009”
as part of the Euromoney Project Finance Awards.
Natural Gas Exploration and Production
Zorlu Energy Electricity Generation Inc.’s oil and gas exploration
activities are carried out by group companies Zorlu Petrogas and
Amity Oil. These companies carry out natural gas exploration,
drilling and production activities in 19 regions throughout Turkey for
which they hold licenses, predominantly in Thrace.
Although Zorlu Petrogas has been undertaking exploration and
drilling activities, no natural gas reserves have yet been found and as
yet there is no natural gas production. The Company also received a
wholesale license on 26 September, 2009 and began to trade natural
gas over the national transmission grid in 2010 within the scope of
the rights granted by this license.
Amity Oil International had nearly 294 million m 3 of natural gas
reserves at the end of 2009.
EUR 130
million
The EUR 130 million loan contract, signed
for the financing of the Gökçedağ wind
power plant was awarded as the “Best
Wind Power Plant Project Finance in 2009”
in Europe.
Page 26
Zorlu Energy 2009 Annual Report

International Operations
Electricity Production
Natural Gas Power Plants
Projects in Russia
Zorlu Energy Electricity Generation Inc. is currently building two
natural gas power plants in Moscow:
• Tereshkovo (340 MW & 150 Gcal heat)
• Kojukhovo (340 MW & 270 Gcal heat)
Rosmiks Ltd., which Zorlu Energy became a partner of with a
51% stake to carry out energy power plant projects in Russia, was
awarded Moscow municipality contracts to build two electricity and
city heating plants: Tereshkovo (340 MW) and Kojukhovo (340 MW).
Construction work began in 2006.
By the end of 2009, the first phase investments (170 MW for
Tereshkovo and 170 MW for Kojukhovo) of both natural gas power
plants had largely been completed. Testing and commissioning
activities began at the Tereshkovo plant, which is targeted to be
brought into operation on a simple-cycle basis in the first half of
2010.
Zorlu Energy is currently involved in investments in Russia,
Israel and Pakistan. The energy sectors of these countries
offer many characteristics which resemble the situation
which prevails in Turkey:
• Strong demand which is growing at rates above the global
average
• Substantial need for investments considering expected supply
shortages in the coming years
• Regulated markets with state control on both electricity
generation and distribution
• Liberalization process already started, indicating an upward
adjustment on the pricing side given strong demand and supply
shortage.
Because of the changes occurring in lines outside the Kojukhovo
power plant area, the construction schedule was revised, and the
plant is now targeted to be brought into operation by Q4/2010,
according to the new schedule. Work on the second phase
investments is planned to get underway once the first phase
investments have been completed.
Engineering services for both Russian plants are being provided by
Zorlu Industrial while operation and maintenance services are under
the responsibility of Zorlu O&M.
Russian Electricity Sector
Russia, the world’s fourth largest consumer of electricity after
the USA, China and Japan, must now step up its investments
in energy generation and transmission, as its infrastructure is
becoming insufficient to meet demand for electricity.
Nearly 63% of the electricity generated in Russia is provided
from thermal power plants, 21% from hydroelectric power
plants and 16% from nuclear power plants. According to
projections, in addition to its current installed capacity of 220
GW, Russia may need an additional 130 GW capacity by 2030,
in parallel with growing demand for electricity.
In Moscow, where Zorlu Energy Electricity Generation Inc. is
undertaking investment, demand for electricity is growing at
rates above the national growth levels due to the high rates
of urbanization and industrial development. While demand for
electricity grew by 1.9% nationally in 2008, the rate was 3.1%
for Moscow.
The government of the Russian Federation is effecting
a gradual transition from regulated bilateral production
agreements to freely-negotiated ones by 2011. As of July
2009, the regulated market has accounted for 50% of the
total market. This liberalization is expected to lead to an
overall rise in electricity prices, having a positive impact on the
profitability of the market players.
At the end of 2009, first phase investments (170 MW for
Tereshkovo and 170 MW for Kojukhovo) of both natural
gas power plants had largely been completed.
By the end of 2009, the first
phase investments (170 MW
for Tereshkovo and 170 MW for
Kojukhovo) of both natural gas
power plants had largely been
completed.
Page 27
Zorlu Energy 2009 Annual Report

Management’s Assessment and Analysis of Operational Results
Projects in Israel
Zorlu Energy Electricity Generation Inc. is one of the first private
sector firms to undertake electricity production in Israel. The
Company has four cogeneration power plant projects in Israel
with a total installed capacity of 1,085 MW. These projects are to
be undertaken by joint ventures that the Company enters into.
The projects are currently at the final stage of obtaining project
financing.
Dorad Project
The largest undertaking in Israel in this category is the Dorad project,
which involves the construction of an 800 MW combined-cycle
natural gas power plant at Ashkelon by Dorad Energy Ltd, a company
in which Zorlu Energy Electricity Generation Inc holds a 25% stake.
Once it is completed, the power plant should boast the largest
privately-owned installed capacity in Israel, contributing about 8%
to the country’s total installed capacity.
A 17-year natural gas procurement agreement has been signed
with EMG, an Egyptian firm, in late 2007, which will be in effect as
of 2011. All agreements, permits and licenses with regards to the
project have been completed, with the exception of the electricity
connection contract, which is expected to be signed before financerelated
procedures are completed.
Together with its Israeli partner, Edeltech Holding Ltd, Zorlu Energy
Electricity Generation Inc. has three other projects which include the
construction of natural gas-fired cogeneration power plants that will
supply electricity and steam to industrial concerns in Israel.
Ashdod Project
Ashdod Energy Ltd, in which Zorlu Energy Electricity Generation Inc.
controls a 51% stake, plans to carry out a cogeneration power plant
investment with production capacities of approximately 55 MW of
electricity and 20 tons/hour of steam.
Ramat Negev Project
Energy Ltd, which plans to undertake an investment in a cogeneration
power plant in Israel with a production capacity of approximately 120
MW of electricity and 17 tons/hour of steam.
Solad Project
Zorlu Energy Electricity Generation Inc. also controls a 26.5% stake
in Solad Energy Ltd, which plans to undertake an investment in a
cogeneration power plant in Israel with production capacities of
approximately 110 MW of electricity and 100 tons/hour of steam.
Engineering services for the Group’s investments in Israel are being
provided by Zorlu Industrial while operation and maintenance
services are under the responsibility of Zorlu O&M.
Israel’s Electricity Sector
Per-capita electricity consumption in Israel is 6,380 kWh - very
close to the European average of 6,440 kWh. According to
2008 figures, the total installed capacity of the country stands
at 11,600 MW, while the market is almost entirely dominated
by a single state-owned company, the Israel Electricity
Corporation (IEC), with a 98.5% share in annual electricity
consumption. Zorlu Energy Electricity Generation Inc. is one of
the first private sector firms to undertake electricity production
in Israel.
1.085 MW
4 natural gas power plants which will have a
total production capacity of 1,085 MW.
Zorlu Energy is conducting four
projects to build cogeneration
power plants which will operate
with natural gas in order to
provide the electricity and steam
needed by the industrial concerns
in Israel.
Page 28
Zorlu Energy 2009 Annual Report

Renewable Energy Power Plants
Pakistan Wind Power Plant Project
In 2006 Zorlu Energy Electricity Generation Inc. signed an agreement
with Pakistan’s Alternative Energy Development Board (AEDB) to
set up a wind power plant in Pakistan. Under this agreement, AEDB
granted Zorlu Energy a license in the wind energy development zone
in Thatta in the Jimphir region. The Company will develop a wind
power plant here and operate it for a period of 20 years. The first
phase of the project is a 49.5 MW plant with an option to increase
its capacity to 300 MW.
As in Zorlu Energy Electricity Generation Inc.’s other investments,
EPC services for this project are being provided by Zorlu Industrial
while long-term operation and maintenance services are under the
responsibility of Zorlu O&M.
Pakistan’s Electricity Sector
According to the most recent data, a total of 98,350 GWh of
electricity was generated in Pakistan in 2006. However, total
electricity consumption in the country was only 72,712 GWh.
The discrepancy is attributed to a dilapidated transmission and
distribution infrastructure, as well as to a significant level of
“informal” use.
Despite the considerable potential for electrical power sources,
Pakistan suffers from a serious supply-side shortage. As matters
currently stand, only 65-70% of the country’s 162 million
people have access to electricity at all, a fact which points to a
potentially massive increase in future demand.
According to publicly-available figures, a projected CAGR of
6-7% in electricity consumption will result in a supply-side
shortfall of 14,000 MW in Pakistan by 2020.
Pakistan offers plentiful renewable energy resources as yet
largely unused, and is therefore a market ripe for renewable
energy production investments. In its report published in 2006,
the Pakistani Government declared that the massive potential
for hydroelectric, solar and wind energy resources was not
sufficiently used, and that the government would encourage
investment in these fields.
Innovative Power, Renewable
and Clean Energy
Solar Thermal Energy
Zorlu Energy Electricity Generation Inc. performs R&D studies
on “Solar Thermal Energy” technology in cooperation with Hitit
Solar, a company operating under Zorlu Holding.
This technology, which is based on the principle of solar focusing
through parabolic mirrored panels, produces hot steam which
turns turbines, thus generating electricity. The evidence is that
this technology offers better results for bigger power plants.
Within the framework of the R&D activities, research was
conducted into the technologies currently employed in USA
and Spain and potentials of improvement were determined.
Engineering studies were conducted in line with the data
gathered, as well as new designs were developed and
international patents were received. In order to perform applied
tests, the Denizli Pilot Project with a theoretical capacity of 200
kWe was started. While tests resulted as planned, efforts are
under way on some of the potential improvements identified.
Electricity Production Pilot Plant based on the Coal
Gasification Technology
The pilot power plant based on the coal gasification technology
is a project that will pioneer other efforts with respect to the
efficient use of energy by eliminating the damage given by coal
to the environment.
R&D activities carried out with regards to electricity production
based on the coal gasification technology aim to minimize the
harmful impact of coal on the environment. By means of R&D
activities to be performed at the plants, coal will be gasified
through partial combustion and toxic substances and particles
in the gas will be confined by cleaning the gas. The coal gas
generated with this method will be clean and environmentfriendly
just like natural gas.
The plant will be established with the cooperation between Zorlu
Energy Electricity Generation Inc. and TÜBİTAK (The Scientific
and Technological Research Council of Turkey) – TEYDEB
(Technology and Innovation Funding Programs Directorate).
Within the framework of this cooperation, TEYDEB provides the
Group TL 1.5 million worth funding and research support with
zero interest for the R&D activities to be carried out at the plant
(the plant has a value of 8 million TL).
Electricity generation based on the coal gasification technology
is a method particularly popular in the USA, Germany, Japan,
Austria, Denmark and the Netherlands. The construction of the
plant is planned to begin by the end of 2010, and it is expected
to be operational by the end of 2011.
The first phase of the Pakistan
Wind Power Plant Project, which is
still at the financing stage, is a 49.5
MW plant with an option to expand
its capacity to 300 MW.
Page 29
Zorlu Energy 2009 Annual Report

Management’s Assessment and Analysis of Operational Results
Developments in Production
2009 production performances
Zorlu Energy Electricity Generation Inc.’s current production
accounts for 5.4% of all the electricity produced by privately-owned
concerns in Turkey today.
Production December 2008 December 2009
ELECTRICITY (kWh) 2,687,512,200 2,266,935,686
STEAM (ton) 745,677 576,138
NATURAL GAS (sm 3 ) (*) 67,071,262 66,942,245
* Our natural gas production company is Amity Oil International Pty.Ltd.
In line with the ongoing global crisis, reduced industrial activity and
consumption levels were reflected as 16% and 23% YoY respective
declines in electricity and steam production in 2009, while natural
gas production was close to its previous year level.
Assessment of Sales and Financial Situation
In 2009, Zorlu Energy Electricity Generation Inc. sold a total of
2,655 GWh of electricity, 81% of which was supplied to Turkey’s
“DUY” (“Stabilization & Reconciliation”) market, while 14% of it was
purchased by other Zorlu companies and 5% by non-group industrial
and commercial companies within the framework of bilateral
agreements.
Sales December 2008 December 2009
ELECTRICITY (Production) (kWh) 22,622,383,748 2,202,214,479
ELECTRICITY (Commercial) (kWh) 116,727,400 453,160,950
STEAM (ton) 745,677 576,138
NATURAL GAS (Production) (sm 3 ) (*) 64,071,262 66,942,245
NATURAL GAS (Commercial) (sm 3 ) (*) 24,259,395 28,895,308
* Natural gas sales are made by Amity Oil International Pty.Ltd.
Electricity Sales (kWh) 2008 Share 2009 Share
DUY 2,062,445,798 75% 2,137,967,029 81%
OTHERS 676,665,350 25% 517,408,400 19%
TOTAL SALES 2,739,111,148 100% 2,655,375,429 100%
Zorlu Energy Electricity Generation Inc. recorded operating profit
of US$ 173 million in 2009, including a one-off US$ 116 million
(TL 180 million) net gains from participation sales realized in June
2009. The Company’s EBITDA (excluding one of participation sales
gains) was up 33% YoY to US$ 85 million. The company’s EBITDA
margin increased from 15.6% in 2008 to 24% in 2009.
The participation sales and the cash capital increase of TL
200 million, carried out in June within the framework of the
“restructuring plan”, aim to pave the way for new investments in
the balance sheet in line with simplifying the Company’s subsidiary
structure, as well as strengthening its equity base and decreasing
debt level. Accordingly, net financial debt declined to US$ 888
million with shareholders equity improving to US$152 million at end
of 2009.
Investment Expenditures
Total investment expenditures in 2009 amounted to US$
470 million, a large part of which was allocated to first-phase
investments on two natural gas combined-cycle power plants (170
MW x 2) in Russia and to the Gökçedağ wind power plant (135 MW)
in Bahçe, Osmaniye. Work on adding a 75 MW combined-cycle
plant to the existing natural gas plant at Lüleburgaz, which started in
2008, continued in 2009 and the first phase investment (50 MW) of
this power plant was commissioned on a simple-cycle basis in 2009.
Other investments carried out during the reporting period involved
exploration expenses jointly performed by Amity Oil and Zorlu
Petrogas for natural gas wells opened in Marmara and Southeastern
Anatolian regions.
With regards to the ongoing first phase investments comprising
of two natural gas power plants (170 MW Tereshkovo + 170 MW
Kojukhovo) in Moscow, Russia, Tereshkovo plant is expected to
become operational on a simple-cycle basis in the first half of 2010,
while Kojukhovo plant is expected to come on stream in Q4/2010.
In the wind power plant investment, currently being built by Rotor
Electric Power Generation Inc. in Osmaniye, a total of 57.5 MW of
the capacity became operational by the end of 2009, and the wind
power plant is expected to be in operation with its entire installed
capacity of 135 MW by June 2010, operating with 54 wind turbines,
each with 2.5 MW capacity.
In 2009, Zorlu Energy Electricity Generation Inc.
sold a total of 2,655 GWh of electricity, 81% of which
was supplied to Turkey’s “DUY” (“Stabilization
& Reconciliation”) market, while 14% of it was
purchased by other Zorlu companies and 5% by
non-group industrial and commercial companies
within the framework of bilateral agreements.
Page 30
Zorlu Energy 2009 Annual Report

We strive for
sustainability...
Page 31
Zorlu Energy 2009 Annual Report

Zorlu Energy Group, People and the Environment
Zorlu Energy Group specifies and complies with standards whose
aims are to improve employee health and safety and to minimize
the environmental impact of its operations. These standards are
themselves manifestations of the total quality philosophy which lies
at the heart of the Group’s corporate culture, and which is reflected
in its Integrated Management System.
The Integrated Management System is intended to increase
productivity, to ensure that employees at every level personally
identify with their work, and to fulfill social responsibilities while
continuously striving to make additional progress in all these areas. A
corporate intranet and system application product (SAP) applications
are extensively used to encourage and support integrated
management system practices among all employees.
Zorlu Energy carries out its operation within the framework of ISO
9001: 2000 Quality Management System, ISO 14001 Environmental
Management System, and OHSAS 18001 Occupational Health &
Safety Assessment Series certifications.
Zorlu Energy was the first auto producer in Turkey to receive quality
certification. The Company’s quality system was first certified for
full compliance with all criteria in 2001 by S&Q Mart-CERT with the
issuance of its TS/EN ISO 9001: 2000 Quality Management System
certificate. Zorlu Energy received its OHSAS 18001 Occupational
Health & Safety Assessment Series certificate and its ISO 14001
Environmental Management System certificate, both from BVQI in
2004.
Zorlu Energy Group Environment Policy
Zorlu Energy Group regards the environment as an asset that it
holds in trust for future generations. As a concomitant of its sense
of social responsibility, the Group engages in activities to foster
environmental awareness in order to create a more livable world.
It conducts its activities within the framework of an environment
management system whose basis is the conservation of natural
resources and the environment.
In line with this and in the conduct of all of Zorlu Energy Group’s
activities:
• Materials and technologies are chosen on the basis of their ability
to minimize the adverse effects of their environmental impact.
• Energy and natural resources are used in the most productive
manner possible.
• Systems are developed to prevent pollution from occurring at its
potential sources.
• All forms of waste and effluent (solid, liquid, gas) are kept under
control and disposed of in ways that will not cause environmental
harm.
• National and international environmentally related laws and
regulations are strictly complied with.
• Group and subcontractor personnel are trained to increase their
environmental awareness.
• New investments are considered and analyzed from the
standpoint of their environmental impact.
• Greenhouse gas emissions are continuously followed and managed
in order to minimize the impacts of global climate change.
Zorlu Energy also demonstrates its environmental awareness
through the advanced technological infrastructure that it employs
and its activities aimed at promoting energy efficiency:
• Zorlu Energy has equipped all its power generation plants
with water injection systems which ensure that nitrogen oxide
(NOX) emissions are below prescribed limits. This system, which
prevents thermal pollution of the atmosphere by transforming
waste heat into steam, is just one example of the Company’s
approach to environmentally friendly energy generation.
Although the legally prescribed emission discharge limit for gas
turbines is 80 mg/m 3 , Zorlu Energy’s power plants are fitted
with infrastructure which may reduce this to as low as 20 mg/
m 3 . Even though all of the measurements conducted at Zorlu
Energy power plants exhibit values below the legally prescribed
minimums, continuous efforts are undertaken to further reduce
these numbers to lower levels.
• A project was carried out at the Bursa Power Plant to make use
of the heat contained in water released through the cooling
system’s evaporation units and prevent it from being discharged
into the atmosphere. As a result of this project, the first of its
kind undertaken in Turkey, the plant generates an additional 1.5-
2 MW of electricity. The technological infrastructure installed at
the Bursa power plant enables the measurement and monitoring
of the plant’s emissions from anywhere in Turkey over the
internet.
• Zorlu Energy’s thermal power plants will begin to employ
online flue gas measurement and monitoring systems with
environmentally friendly technologies, which are new to the
energy sector.
Zorlu Energy Group Occupational Health and Safety Policy
The question of the health and safety of the Group’s personnel is
one of the fundamental issues to which Zorlu Energy Group attaches
priority to in the conduct of all of its activities. Zorlu Energy has
formulated and implemented both environment assessment and
threat identification and risk assessment plans with respect to
environmental and occupational safety wherever it is engaged in
activities.
Zorlu Energy also demonstrates
its environmental awareness
through the advanced technology
infrastructure that it employs
and its measures aimed at energy
efficiency.
Page 32
Zorlu Energy 2009 Annual Report

The fundamental tenets of Zorlu Energy Group’s occupational
health and safety policy are to prevent accidents in the conduct of
operation, construction and maintenance activities, to cause no harm
to people or to installations, and to take any measures necessary to
meet these requirements. To this end, group companies:
• Always identify dangers in advance and take measures with the
participation of all employees against the risks of loss, accident, or
damage in line with health and safety principles.
• In order to reduce the adverse impact that their activities may
have on human health, ensure that all employees, contractors,
subcontractors and customers are aware of health and safety
issues, and to this end, support them through training, cooperate
with all organizations that are on the lookout for public interests.
• Ensure that incidents and accidents are reported truthfully and that
lessons are learned so as to prevent recurrences and to improve
performance on such issues.
• Reward those who make contributions to improvements in health
and safety issues.
• Ensure that the Emergency Management Plan is capable of
operating at the highest level of performance.
• Comply with the requirements of all current laws and regulations
applicable to health and safety issues.
• Check, review and improve occupational health and safety
management system practices continuously and on a regular basis.
• Consider occupational disorder and working safety factors of new
plants and processes at the project stage.
All Zorlu Energy employees are aware of providing occupational
health and safety and raising the Group’s performance in this field.
Executives commissioned at all workplaces belonging to Zorlu
Energy are responsible for ensuring that this policy is applied within
their own units, and for taking necessary action with respect to their
own operations.
Corporate Social Responsibility
The Zorlu Energy Group addresses the matter of social responsibility
along two axes: corporate responsibility and corporate social
responsibility.
The domain of corporate responsibility consists of all issues which
involve the principles of corporate behavior, human rights, business
conduct, the environment, and combating corruption and which are
of direct concern to the Group’s activities. In this context, the UN
Global Compact - to which Zorlu Holding is a signatory – is given
utmost consideration in all of the Zorlu Energy Group’s activities.
In 2009, the Zorlu Energy Group published its first Progress Report
within the framework of the United Nations Global Compact. The
report sets out efforts aimed at sustainability and practices carried
out by the companies under the Zorlu Energy Group.
The Zorlu Energy Group aims to ensure its back office operations are
as green as possible. Having placed our concerns related to climate
change as an integral part of all aspects of our corporate culture, we
take measures to conserve energy and water, while also reducing the
use of expendables such as paper. As well as reducing consumption,
our Group also extensively practices recycling.
Under the heading of corporate social responsibility, the Group seeks
to create added value for society through solutions to environmental
and social problems. Always keeping the public good firmly in sight
in the fulfillment of our social responsibilities, we act as society
expects us to, supporting projects which conform to the Group social
responsibility strategy and which are based on models successfully
employed in other countries.
Given that energy efficiency and energy conservation are of the
utmost concern to the Zorlu Energy Group in the area of social
responsibility, the Group ensures such issues are a component of its
environmentally related training and education activities. The Zorlu
Energy Group contributes to education through the Mehmet Zorlu
Foundation, awarding scholarship to 82 university students from
disadvantaged economic backgrounds.
Zorlu Energy planted 25,000 saplings and established a memorial
forest of 3,000 trees in Osmaniye.
The Zorlu Energy Group always takes the potential environmental
and social impact of its activities into account wherever it invests.
When formulating environmental and developmental projects,
it seeks to give priority to places in which investments are to be
undertaken. Projects to inform the general public are conducted,
dealing with such issues as renewable energy, energy efficiency,
energy conservation, environmental awareness and the preservation
of natural assets. Under the heading of corporate communication
activities, attention is paid to projects with substantial, enduring, and
quantifiable social benefits.
Children’s Communication Project
Aware of its responsibilities and duties with respect to leaving a
habitable and sustainable world for future generations, Zorlu Energy
always stresses the importance of energy generation based on
renewable energy resources and strives to raise social awareness in
this area.
The Group developed the “Children’s Communication Project”
in order to ensure that elementary students view energy as part
of their daily lives, and to draw their attention to their individual
responsibilities with respect to the efficient and effective use of
energy by teaching them about energy resources.
The “Green Dragon” was created to help ensure children learn to
respect nature and to raise their awareness of the world’s energy
bottleneck, by informing them of renewable energy resources,
their importance and the advantage of energy produced by means
of wind, and the book titled ‘Wind Energy with Zorlu’ which
tells the story of entertaining cartoon characters and addresses
elementary students. It is an initial step of Zorlu Energy’s Children
Communication Project.
In 2009, the Zorlu Group published
its first Progress Report within the
framework of the United Nations
Global Compact. The report sets out
the efforts being undertaken by the
Zorlu Energy Group which are aimed
at sustainability.
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Zorlu Energy Group, People and the Environment
The aim of the energy concept, which is explained from the
perspective of the mascot standing for energy, is to simplify
children’s anticipation of the issue and to adopt the idea.
Corporate Communication Strategy
The essential elements of Zorlu Energy Group’s corporate
communication strategy are as follows:
• Build on the Group’s corporate reputation.
• Strengthen existing perceptions to bring them in line with desired
perceptions and take action to ensure that they remain so.
• Strengthen communication with all stakeholders.
• Foster identification with corporate values, continuously
strengthening the communication and sharing.
• Undertake and meet social responsibilities in designated areas.
• Engage in communication on a planned and continuous basis.
In the public mind, Zorlu Energy Group enjoys a reputation for
reliability, strength, and courage that comes from the Zorlu name.
The Group further strengthens this reputation by pointing to the
social dimensions inherent in energy in the conduct of its business,
in its communication activities, and by emphasizing that it is an
organization which is widely trusted and recognized as an authority
in the formulation and implementation of the national energy policy.
Taking the ultimate objective in corporate communication activities
beyond any existing positive perceptions, the Zorlu Energy Group
ensures that it is recognized as
an organization which is
• Knowledgeable and experienced,
• Pioneering, specialized and a point of reference in the sector,
• Preferred,
• Transparent, well managed and has corporate and social
responsibilities; and a business partner which is
• Respectful of the environment,
• Trusted around the world; and an employer which
• Attaches importance to the happiness of its employees in their
public and private lives,
• Contributes to the betterment and career progression of its
personnel.
Human Resources
Believing that superior performance is a natural outcome of
employee satisfaction, the Zorlu Energy Group bases its human
resources policies on the tenets of:
• Recruiting and hiring people with the qualities and talents needed
to make effective use of developments in the energy sector in line
with the Group’s aims,
• Creating national and international career progression
opportunities for its employees that will enable them to fully use
their potential, develop their creativity and competency and improve
their individual and team performance,
• Support the work environment through effective communication
and motivation.
Within the framework of these principles, the Zorlu Energy Group
strives to create a nimble, proactive organizational structure that will
allow all group companies to achieve their goals and to formulate
and implement human resources policies which are supported
by feedback, thereby enhancing employee competency and
productivity.
These efforts are supported by a fair and competitive evaluation and
compensation system which is based on the competencies required
by the position, the qualities of the individual, job accountability
as well as training and experience, and which seeks to achieve high
levels of performance. At the same time, both professional and
personal training sessions are provided with the aim of supporting
the individual growth and development of our employees.
The Zorlu Energy Group has 202 employees, 107 of whom hold
university level and graduate degrees.
Pursuing planned growth in line with its vision and goals, the Zorlu
Energy Group consistently diversifies and develops its corporate
human resources practices in line with its growth. The Group plans
to accelerate its efforts to implement the project “each director is a
HR executive” in which company executives will also be included, to
improve recruitment instruments and to broaden the scope of the
management system so as to cover all group personnel by means
of targets that have been regularly achieved since 2008, and to
integrate these efforts into the performance management system, in
order to increase the number of Human Resources Practices moved
over to an electronic environment. The Group will also implement
the individual rewarding system and internalize human resources
processes.
Planned communication activities, satisfaction surveys and
evaluation interviews are conducted in order to increase employee
communication and to foster an awareness of corporate citizenship
among them. The Group believes that an awareness of corporate
aims and of management decisions and practices is important
in raising employee loyalty and supporting job performance. For
this reason, all management decisions are disseminated among
all employees through the Company’s internal communication
channels.
In the public mind, Zorlu Energy
Group enjoys a reputation for
reliability, strength, and courage
that stems from the Zorlu name.
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Corporate Governance
Principles Compliance Report
and Financial Information
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Statement of Compliance with Corporate Governance Principles
In parallel with the activities related to Corporate Governance commenced in 2005 at Zorlu Energy Electricity Generation, corporate
governance mechanisms were started to be run across the Company. In the first phase of these activities, a series of amendments were made
to the Company’s articles of incorporation so as to be able to offer an egalitarian, accountable, responsible and transparent structure to the
shareholders. While these amendments served to grant the rights envisaged by the Corporate Governance Principles to minority shareholders,
radical changes were made to the management structure in pursuance of “better governance”. Following the revisions made to the articles of
incorporation, Corporate Governance practices were carried on with the establishment of Corporate Governance mechanisms at the Company.
While the Board of Directors was vested in greater efficiency with independent members, it was aimed to further increase the efficacy in
management by the Audit Committee set up under the Board of Directors.
Activities undertaken in 2009 with a view to further increasing the compliance of Zorlu Energy Electricity Generation are summarized below:
• Investor Relations website has been further improved in line with the CMB Corporate Governance Principles.
• From 01 January 2009, a “Follow-up” process has been introduced in Internal Audit reports in order to monitor the risks that were shared
with the Board of Directors, During the process that was also approved by the Audit Committee, process owners were expected to follow up
the risks indicated on the basis of the 4T approach; i.e.”Terminate”, “Tolerate”, “Treat”, and “Transfer”, using one or more of these elements in
combination. Risk management approaches adopted and implemented accordingly have been regularly shared with the Board of Directors at
appropriate intervals using follow-up reports.
• “Corporate Principles Guide” which is prepared in order to establish the working principles for the directors and employees of Zorlu Energy
Group of Companies, and of third parties with which the company cooperates, is at the stage of printing.
In the implementation of Corporate Governance Principles, certain principles that do not conform to the Company’s structure and that are
regarded as potential obstacles against its activities were excluded. These principles and the reasons for opting not to comply therewith are
summarized below:
• Cumulative voting: The Company does not implement cumulative voting method.
However, the representation to be provided by cumulative voting on the Board of Directors is achieved by the presence of independent
members on the Board.
• The Company’s articles of incorporation contain no provisions stipulating that material decisions such as “demergers and share exchanges,
buying, selling, or leasing substantial amounts of tangible/intangible assets, or donations and grants, or giving guarantees such as surety ship,
mortgage in favor of third parties” are required to be taken at a general meeting. The underlying reason is that the nature of the sector in which
the Company is active requires it to buy, sell, or lease quite frequently. Having to hold a general meeting every time such a transaction takes
place is considered to be impossible and thus, no such article has been included in the articles of incorporation. This matter is not applied in
order to ensure that deals are made quickly and to prevent opportunities from being missed.
Zorlu Energy hereby espouses a transparent and open management style and aims to establish its approach to management that is responsible
and accountable towards all of its shareholders in general and to its minority shareholders in particular.
The new steps to be taken in time in keeping with Corporate Governance Principles will be publicly disclosed on the Company’s website.
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PART I- SHAREHOLDERS
1.1 Investor Relations Unit
Zorlu Energy Electricity Generation carries out its relations with shareholders through Zorlu Group of Companies Investor Relations and
Corporate Finance Department. Information for this department which carries out Zorlu Energy’s relations with shareholders is as follows:
Figen Çevik serves as the director of Corporate Finance and Investor Relations Unit.
The Corporate Finance and Investor Relations Unit can be reached via the Company’s website; also it can be contacted at the phone number 0
212 422 01 07 or by sending an email to yatirimci@zoren.com.tr. The direct phone line of the Corporate Finance and Investor Relations Unit also
provides a continual means of access.
The principal activities carried out by the Unit in 2009 are summarized below:
TEB Investment, Investors Conference, Frankfurt
TEB Investment, Investors Conference, London
Ata Investment, Investors Conference, New York
In addition to the above, about 30 one-on-one meetings.
During the reporting period, the Unit received about 90 queries by e-mail and about 120 by telephone. All these queries were carefully
responded to verbally and/or in writing within the framework of the Company’s public disclosure policy and in such a way so as not to reveal any
trade secrets.
1.2 Shareholder’s exercise of their right to obtain information
During 2009, Zorlu Energy Investor Relations Department received 210 queries from investors, all of which have been responded to in detail. The
breakdown of these queries is presented below:
Query by
Number
E-mail 90
Fax -
Letter -
Phone 120
Total 210
The Investor Relations Unit provided detailed responses to all 210 queries received in 2009. Of the queries received by the Unit, 70% was related
to operational and financial performance, 10% to share price, and the remaining 20% to various topics including investments, information on
general meeting, etc.
Zorlu Energy website and material event disclosures were the tools used in 2009 for the disclosure of developments that might have an impact
on the shareholders’ exercise of their rights. Efforts have been completed in the first quarter of 2008, which were aimed at revamping the
Company’s website so as to be able to communicate maximum amount of information in the shortest time possible and on the principles of
timeliness, accuracy, completeness, and in a quick and intelligible manner. In these efforts, care has been paid to ensure that the website covers
all of the considerations stated in the CMB’s Corporate Governance Principles.
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During 2006 annual general meeting, an article regarding the appointment of a special auditor in the form of an amendment to the articles of
incorporation has been presented to the shareholders. The said article read “Shareholders representing five percent of the Company’s publiclyheld
shares may demand appointment of a special auditor for specific auditing of a certain material event. In the event such demand is rejected
by the general assembly, shareholders representing at least one twentieth of the Company’s capitalization shall be entitled to request the
appointment of a special auditor from a competent court for the examination and clarification of the predicament.” No request was made during
the reporting period for the appointment of a special auditor.
1.3 Information on general meetings
Zorlu Energy Electricity Generation held its 2008 annual general meeting on 28 May 2009 at 13:30 at the address Organized Industrial Zone
Pembe Cad. No: 13 Bursa.
The invitation for the meeting including the meeting agenda has been made within due time as set out in the law and the Company’s articles of
incorporation by being published in the Turkish Trade Registry Gazette issue 7305 dated 06 May 2009 and in the Dünya newspaper and Bursa
Hakimiyet newspaper, both dated 05May 2009, for publicly- and privately-held shares, and also posted on the Company website accessible at
www.zoren.com.tr.
While the general meeting is open to the participation of stakeholders and the media, neither stakeholders nor the media representatives
attended the meeting.
Out of 8,166,535,000 shares corresponding to the Company’s total capitalization of TL 81,665,350; 5,310,550,437 shares representing TL
53,105,504.37 in capital were present in person and 10,394,900 shares representing TL 103,949 in capital were present in proxy at the meeting.
Accordingly, the meeting quorum set forth by the law and the Company’s articles of incorporation was secured.
To facilitate participation of the holders of registered shares in the general meeting, no deadlines are set for registration in the shareholders’
register.
Prior to the general meeting, the annual report, financial statements, and the articles of incorporation were made available for the inspection of
shareholders at the Company’s headquarters and at the address Zorlu Plaza 34310 Avcılar/İstanbul. All this information was also published on
the corporate website together with the general meeting announcement and agenda.
Shareholders were allowed to direct questions during the general meeting. All questions posed by shareholders were answered in detail by the
related company managers.
Shareholders introduced no motions during the meeting.
The Company’s articles of incorporation contain no provisions requiring material decisions such as “demergers or buying, selling, or leasing
substantial amounts of assets and property” to be taken at a general meeting. The reason for this is the fact that the nature of the sector in which
the Company is active requires it to buy, sell, and lease quite frequently, and having to hold a general meeting every time such a transaction takes
place is not deemed to be possible. Hence, it has been refrained from including such an article in the articles of incorporation.
The minutes of the general meetings are made available for the examination of shareholders at the Company’s own headquarters and at the
address Zorlu Plaza 34310 Avcılar/İstanbul. Additionally, all announcements, documents, and other materials related to general meetings are
accessible to shareholders and to all other stakeholders on the Company’s website.
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1.4 Voting rights and minority rights
All of the shares of Zorlu Energy Electricity Generation entail equal rights with respect to voting rights. There are no privileges with respect to
voting rights or participation in dividends.
Zorlu Petrogas Petroleum, Gas and Petrochemical Products, Construction, Industry and Trade Inc., Rotor Electric Power Production Inc., Zorlu
Hydroelectric Power Production Inc., Zorlu Geothermal Energy Electricity Generation Inc., Amity Oil International Pty. Ltd., Solbar Energy Ltd.,
Dorad Energy Ltd., Zorlu Energy Pakistan Limited, ICFS International LLC, Ashdod Energy Ltd., and Ramat Negev Energy Ltd., which are the
investments of Zorlu Energy Electricity Generation, do not have a stake in the Company.
Due to the fact that the independent members on the Board of Directors have the capability to perform their duties without yielding to any
influence, they equally protect and represent the rights of all shareholders including those of minority shareholders at the Board of Directors.
The Company does not implement cumulative voting method.
1.5 Dividend distribution policy and timing
The Company’s shares provide no privileges concerning distribution of profits. Each share of stock is entitled to an equal dividend.
The proposal for distribution of profits earned in 2008 covered in item 8 of the Company’s general meeting agenda was explained to the
participants and was ratified at the General Meeting by majority of votes against one abstention.
No dividend distribution was made due to the fact that the financial statements showed loss, which were drawn up according to the Capital
Market Law, the Communiqué Serial: XI No: 25 concerning “Accounting Standards in the Capital Markets”, and the tax laws.
At the 2008 General Meeting convened on 28 May 2009, the shareholders have been informed that the Company will continue to implement
the dividend distribution policy set out by the Board of Directors decision dated 07 May 2007 and numbered 2007/9 that reads as follows
pursuant to Article 5 of the CMB Communiqué Serial: IV, No: 27: “The Company will distribute dividends that are equal to minimum 25% of the
attributable profit in cash or in the form of bonus shares to the shareholders in 2007 and in subsequent years, in line with the provisions of the
articles of incorporation. The amount of dividends to be distributed shall be proposed depending on national and global economic conditions and
the Company’s growth plan by the Board of Directors each year at the general meeting.”
1.6 Transfer of shares
The Company’s articles of incorporation contain provisions restricting the transfer of shareholding interests.
Article 21 of the articles of incorporation reads “Shares in the Company may be freely transferred without prejudice to the provisions of the
Turkish Commercial Code, CMB Legislation, EMRA Legislation, and these articles of incorporation”.
Article 6, subparagraph 9 of the articles of incorporation reads “The approval of the EMRA will be obtained each time in case of share
acquisitions which are concluded with acquiring the shares which represent five percent or more of the company capital by a real person or legal
entity either directly or indirectly and exceeding five percent of the legal entity capital by the shares which belong to a shareholder and/or the
share transfers which are concluded with decreasing the shares which belong to a shareholder below the above-stated rates or in similar other
cases. This provision is also valid in case of pledging the shares by acquiring the voting right.”
Article 21, subparagraph 4 of the articles of incorporation reads “Any transfer of at least 5% of the company’s registered shares requires the
consent of the Energy Market Regulatory Authority (EMRA), pursuant to Article 6 of these articles of association and in line with EMRA
regulations.”
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PART II- PUBLIC DISCLOSURE AND TRANSPARENCY
2.1 Company disclosure policy
Zorlu Energy Electricity Generation’s disclosure policy has been formulated in 2005 in line with the CMB’s Corporate Governance Principles. The
disclosure policy has been revised and publicly disclosed on 25 August 2009 by being published in the İstanbul Stock Exchange Daily Bulletin
and the Company’s website (www.zoren.com.tr).
The issues addressed by the Company’s public disclosure policy are summarized below:
• The clarity, timeliness, and truthfulness of public disclosures
• The contents of public disclosures
• The frequency and the ways in which information may be publicly disclosed
• Disclosure tools
• Individuals authorized to make disclosures
• Relations of Board members and executives with the media
• Meetings with investors
• Disclosures to be made to the press and media
• Disclosure of Future-Oriented Information
• Prohibited Disclosure / Quiet Period
• Effectiveness of the website
• Follow-up news, rumors and speculations
• Designating individuals with administrative responsibility
• Maintaining confidentiality of insider information
The disclosure policy has been approved by the board of directors. The Board of Directors is responsible for monitoring, reviewing and improving
the disclosure policy. The Investor Relations Unit, which is planned to be set up, will be responsible for the supervision and monitoring of the
disclosure policy.
2.2 Disclosure of material events
During 2009, the Company made a total of 55 material event disclosures, which were sent to the CMB and the ISE. Additional information
was requested by the ISE for two of the disclosures made and by the CMB for three others, upon which necessary explications were provided
forthwith. The Investor Relations Unit is responsible for the disclosure of material events.
Since the Company is not quoted on any overseas stock exchange, the disclosures made were limited to Turkey.
2.3 The corporate website and its content
The Company has an easily accessible and active website. The website covers all of the information listed in Article 1.11.5 of Section II of the
CMB’s Corporate Governance Principles, as well as information which are not addressed in Section II but are of significance with respect to
Corporate Governance Principles.
The corporate website is accessible at the address www.zoren.com.tr and its content is kept up-to-date.
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2.4 Disclosure of the Company’s ultimate controlling shareholder(s)
The shareholding structure of Zorlu Energy Electricity Generation Co. Inc. is presented below:
SHAREHOLDERS SHAREHOLDING INTEREST (%) NOMINAL SHARE VALUE (TL‘000)
Zorlu Holding A.Ş. 41.2 115,898
Korteks 17.5 49,425
Publicly held 32.0 90,080
Others 9.3 26,262
Total 100.0 281,665
The shareholding structure of the parent company, Zorlu Holding Co. Inc., is presented below
SHAREHOLDERS SHAREHOLDING INTEREST (%) NOMINAL SHARE VALUE (TL‘000)
Ahmet Nazif Zorlu 47 1,482,850
Olgun Zorlu 32 1,009,600
Zeki Zorlu 15 473,250
Türkan Zorlu 1 31,550
Zülal Zorlu 1 31,550
Selen Zorlu Melik 1 31,550
Fatma Şehenaz Çapkınoğlu 1 31,550
Şehminur Aydın 1 31,550
Mehmet Emre Zorlu 1 31,550
Total 100 3,155,000
2.5 Public disclosure of those who may have access to insider information
• Zorlu Energy Electricity Generation formulated a policy on insider trading to be enforced internally, as well as for achieving compliance with the
Capital Market Law and applicable legislation.
• The list of the personnel with regular access to internal data is prepared by the Investor Relations Directorate pursuant to CMB’s Communique
Serial VIII No.54 and updated whenever there is a change. The individuals recorded in the list are re-notified in writing by obtaining their
signature on the subject of obligations defined in the relevant legislation and the sanctions applicable in case of abusive use and improper
distribution of such data. The individuals in the list are not authorized to disclose the internal data to other parties, including their family
members, before its official release to public; they cannot make comments and declare opinion on the undisclosed internal data relating to
Company’s shares. If an opinion is declared or disclosure is made to the third parties about the internal data, the Company shall immediately
make a material event disclosure on the subject.
PART III- STAKEHOLDERS
3.1 Keeping stakeholders informed
Zorlu Energy Electricity Generation redesigned its website so as to keep stakeholders informed on matters concerning them, and made available
all kinds of information relating to the Company in line with the Corporate Governance Principles. In addition, the Company has the intranet
system to keep employees informed, whereby the information on the Company can be accessed subject to limits of authorization. All kinds of
information geared towards employees are provided in detail on the intranet.
With respect to keeping customers and suppliers informed, informative meetings are organized as and when such requests are received from
them.
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One-to-one or collective meetings are held with investors and brokers, if so requested thereby.
3.2 Stakeholder participation in management
Stakeholders do not participate in the management. However, importance is attached to ensure participation of employees in the Board meetings
at certain intervals, so as to offer them the chance to voice their opinions directly. There is no model designed to involve other stakeholders in the
management.
3.3 Human resources policy
The HR policy is devised to cover the recruitment, promotion, dismissal, training, performance appraisal and compensation systems.
The training activities to be carried out for the purpose of supporting professional and personal development of employees are structured;
the Training Catalogue was prepared which offers the employees the chance to choose training programs in line with their needs. Designed to
monitor all the training activities in parallel with career plans, the training portal went live.
There is no representative assigned to conduct the Company-employee relationships. Upon appointment, independent members will represent
employees along with all other stakeholders in the Board of Directors.
The employees are treated equally and without any discrimination whatsoever in all matters involving training, career development, promotion,
etc. No complaints have been received from the employees regarding discrimination.
3.4 Relations with customers and suppliers
Zorlu Energy Electricity Generation gives utmost importance to customer satisfaction. The requests of customers are responded to within the
shortest time possible, and all resources are put into immediate action for resolution of problems forthwith.
Also the Customer Care Unit has been set up to ensure customer satisfaction. The Unit mostly extends technical and financial support.
Intermediary services are also offered in relation to the problems the customers experience with the regulatory authorities such as the EMRA and
the Treasury. In line with the EMRA regulation, the customers’ counters have been replaced by the Company and modems have been installed to
enable remote monitoring of counters.
Because the Company is not in direct relationship with its customers, customer satisfaction is predominantly related to the high level of discount
rates.
3.5 Social responsibility
In all of its activities, Zorlu Energy carefully takes into consideration the United Nations Global Compact which is signed by Zorlu Holding and
which covers all Group companies.
During 2009, the Company had all necessary legal examinations carried out concerning environmental impact of all its establishments and
projects. Environmental impact of all projects is reviewed. According to environmental impact reports, no violations of environmental protection
have been established to date and all of the Company’s practices are carried out with a keen eye on the environment factor.
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In addition, environmental and social impacts are monitored in all activities, and efforts are spent to develop projects aimed at enhancing the
quality of life of the local people. For example, with respect to its environmental impact Gökçedağ Wind Power Plant is regularly monitored, bird
migrations are followed-up, and various projects involving the local people are launched. Mehmet Zorlu Foundation granted scholarships to 82
local students attending university. In addition to a memorial forest of 3000 saplings, a forestation effort for planting 25,000 saplings was put in
place in the field.
Zorlu Energy gives priority to raise energy awareness among the children and parallel to it the Company started publishing a series of children’s
books. The initial book titled Zorlu ile Rüzgar Enerjisi (Wind Energy with Zorlu) will be followed by other books related to renewable energy
sources. In addition, the Company will commence educational activities in order to educate the local elementary school students on renewable
energy sources, energy efficiency and saving, and raising their awareness on these topics.
Zorlu Energy places much importance on making sure that its projects become an integral part of the locality and are owned by the local people.
To achieve this, the Company organizes gatherings and meetings to inform the local people in relevant regions before launching the projects.
During the meeting held for Gökçedağ Wind Power Plant, detailed information has been provided to the local people, while their opinions and
expectations were also found out.
During the investment phase, two broad-based surveys were conducted in the region by research companies. The Social Status Survey and
Manpower Survey were conducted which provided insight into the socio-economic status of the people in Bahçe and Hasanbeyli districts and
21 villages affiliated, where the power plant is located. The results from the surveys were shared with the public in meetings organized by the
Environment Foundation of Turkey. Attended by the NGO, academics, scientists, local administrators and a large local crowd, the meeting served
as a platform for discussion of the types of projects that would respond to the real needs of the people.
In this frame, Zorlu Energy Electricity Generation has completed the accreditation for ISO 14001 environmental management system certificate.
The company proactively takes environmental aspects into consideration in all of its activities.
The Company also holds ISO 14001 Environmental Management System, ISO 9001:2000 Quality Management System and OHSAS 18001
Occupational Health and Safety System certificates relating to the protection of the environment.
In 2009, the Company caused no harm to the environment and no lawsuits were lodged against the Company on account of environmental
damage.
PART IV- BOARD OF DIRECTORS
4.1 Structure and composition of the Board of Directors and independent members
The Board of Directors of Zorlu Energy Electricity Generation is composed of seven members. Almost all of the Board members are nonexecutive
members.
Zeki Zorlu, the chairman of the Board, serves as a non-executive member.
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The chairman of the Board and chief executive officer are different individuals.
Member Position Classification
Zeki Zorlu Chairman of the Board of Directors Non-executive
Elmas Melih Araz Vice Chairman of the Board of Directors Non-executive
Murat Sungur Bursa Member Executive
Olgun Zorlu Member Non-executive
Selen Zorlu Melik Member Executive
Aziz Can Tuncay Member Non-executive
Burak İsmail Okay Member Non-executive
In keeping with Corporate Governance, two independent members have been elected to the Board of Directors which is composed of seven
members in total.
Independent members satisfy the independence criteria set forth in the CMB’s Corporate Governance Principles Communiqué.
No restrictions are imposed on Board members’ undertaking one or more duties outside the Company.
4.2 Qualifications of Board members
As a result of the amendment made to the articles of incorporation, minimum qualifications required of the Board members are now incorporated
in the articles of incorporation. Qualifications that are included in the articles of incorporation fully coincide with those stipulated in articles 3.1.1,
3.1.2 and 3.1.5 of Section IV of the CMB’s Corporate Governance Principles.
4.3 Mission, vision and strategic goals of the Company
The mission and vision of the Company have been spelled out and publicly disclosed by the Board of Directors.
Mission: Be the leading power in Turkey and a regional power in the world in all segments of the energy sector.
Vision: Generate and distribute safe, quality, environmentally-compatible and sustainable energy; create value for our shareholders, customers
and employees based on effective, market- and customer-focused activities.
The Board of Directors approves the strategic goals formulated by executives.
The Board of Directors of Zorlu Energy Electricity Generation takes care to obtain the opinions and suggestions of the relevant units while setting
the strategic goals. Suggestions relating to strategic goals are reported to the Board of Directors and work is undertaken so as to implement
these goals as soon as possible. The extent to which the goals are attained is measured by monitoring the results on the basis of activities
quarterly when financial statements are drawn up and at year-end. Once a year, the Board of Directors conducts an annual review of the degree
to which the Company has accomplished its objectives, as well as its activities and past performance.
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4.4 Risk management and internal control mechanism
Zorlu Energy Electricity Generation Board of Directors uses the SAP system at the Company for purposes of risk management and internal
control. The SAP system enables running/recording of all integrated work processes on computer systems at the establishments, thus increasing
the speed and productivity of the relevant establishment. The system also gives employees and managers access to all kinds of information and
reports that concern them in line with the scopes of their authorizations.
In addition, a program has been created on the Company’s intranet system for monitoring problems related to internal control, which is
effectively operated. Any issue that arises at any level is referred to the relevant manager and resolved.
The Board of Directors of Zorlu Energy Electricity Generation defined existing and potential risks and formulated the policies in relation to the
same.
4.5 Authorities and responsibilities of Board members and executives
The authorities and responsibilities of Board members are defined in the articles of incorporation.
The authorities and responsibilities of the Board of Directors, which are also covered in the articles of incorporation, are stated below:
• Defining and publicly disclosing the Company’s mission and vision, and monitoring and supervising the accomplishment of the targets set;
• Representing the Company before shareholders and third parties, formulating the Company principles therefore;
• Approving the Company’s annual budget and business plans;
• Observing the compliance of the Company’s activities to applicable legislation, articles of incorporation and internal regulations;
• Ensuring that the Company books are duly kept;
• Drawing up the Company’s balance sheet and profit and loss statements, preparing the annual report, and making the same available for
examination by shareholders prior to the general meeting;
• Submitting a proposal to the general assembly concerning the distribution of profit;
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• Summoning the general assembly for ordinary or extraordinary meeting and satisfying the procedure related to general meetings;
• Overseeing that the decisions passed by shareholders at general meetings are enforced;
• Setting the rules to be complied with by the Company employees, including the code of ethics;
• Formulating and publicly disclosing the Company’s public disclosure policy;
• Setting up the committees that will function under the Board of Directors, electing their members, defining their operating principles, and
ensuring that they operate effectively and productively;
• Taking into consideration the recommendations of the Corporate Governance Committee in relation to the Company’s senior executives.
4.6 Operating principles of the Board of Directors
Agendas for Board meetings are determined by the chairman and the members of the Board of Directors. Requests received from executives are
taken into consideration in determining the agenda items.
During 2009, the Board of Directors met 29 times, and all decisions were passed unanimously.
In line with Corporate Governance Principles, a secretariat has been set up under the Board of Directors at the Company. The secretariat is
responsible for keeping the minutes of the Board meetings and archiving them. The secretariat also keeps the Board members informed in
a timely and simultaneous manner and delivers the agenda and related information and reports to the Board members at least one week in
advance of each meeting.
It has been decided that difference of opinions that may be voiced at Board meetings and detailed justifications for dissenting votes must be
entered into the record and forwarded to statutory auditors in written form; however, to date there has never been such an instance. Upon
approval of the articles of incorporation at the general meeting, justifications for dissenting votes cast by independent members by reason of
difference of opinions will be publicly disclosed on the corporate website.
It is made sure that the Board members are personally present at Board meetings that will vote on the issues stipulated in article 2.17.4 of Section
IV of the CMB’s Corporate Governance Principles as requiring the actual attendance of Board members at meetings.
No Board members, including the chairman, have weighted voting and/or vetoing rights. Each member, including the chairman, possesses an
equal vote.
4.7 Prohibition on doing business or competing with the Company
The agenda item concerning Zorlu Energy Electricity Generation Board members’ doing business or competing with the Company is laid down for
the approval of shareholders each year at the general meetings.
No board member did any business or competed with the Company during the year.
If any event occurs relating to the prohibition of doing business and competing with the Company, any conflict of interest that might arise there
from will be publicly disclosed within the frame of Corporate Governance Principles.
4.8 Code of Ethics
The Company’s code of ethics has been spelled out in writing and made known to the employees. Utmost care is given to ensure compliance with
the code of ethics that is formulated for the Board of Directors, the Company and its employees.
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Zorlu Enerji Elektrik Üretim A.Ş.
Corporate Governance Principles Compliance Report
4.9 Number, structure and independence of the committees established by the Board of Directors
Pursuant to article 3 of the CMB Communiqué Serial: X, No: 19, the Board of Directors established the Audit Committee so as to ensure healthy
oversight of financial and operational activities. The Corporate Governance Committee has not been set up as yet. However, with the election
of independent members to the seats on the Board of Directors, it is planned to establish the Corporate Governance Committee chaired by an
independent head in line with the CMB’s Corporate Governance Principles. Within the frame of this plan, the detailed operating principles of the
Committee are formulated in writing.
The detailed work plans of the Audit Committee and the Corporate Governance Committee are put into writing.
The Audit Committee is composed of two individuals: Melih E. Araz and Olgun Zorlu. Melih E. Araz, who is an independent Board member,
serves as the head of the Audit Committee.
The articles of incorporation stipulate that the Audit Committee must meet at least four times a year (once in each quarter). The Board
secretariat is responsible for recording the decisions made, and keeping the minutes of the meetings held by the Audit Committee.
The Committee carries out its activities in accord with the detailed operating principles put into writing.
4.10 Financial benefits provided to the Board of Directors
The attendance fees to be paid to the members of the Board of Directors are determined at the general meeting. In 2009, the members of the
Zorlu Energy Electricity Generation Board of Directors were paid TL 60,000 in total, which is commensurate with precedents in the sector. The
statutory auditors were paid TL 2,580 a year each.
There is no performance measurement for the Board members. No rewarding system reflecting the Company’s performance has been set up.
The Company has extended no loans or credits to any Board member or manager.
Profit Distribution Policy
Under a resolution passed at a meeting of the Board of Directors of Zorlu Energy Electricity Generation held at the Company headquarters on 7
May 2007, it has been decided to distribute at least 25% of the Company’s net distributable profits, including 2007 profits, to shareholders in
accordance with the dividend policy specified by the Board as cash payments or in the form of shares of stock. At the Ordinary General Meeting
convened on 28 May 2009, the General Assembly has been informed that the said decision of 07 May 2007 concerning profit distribution
policy will continue to be implemented as it is. The amount of dividend to be paid is to be recommended by the Board of Directors at the ordinary
general meeting of shareholders that is held every year on the basis of national and international economic conditions and the company’s growth
plans.
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Statutory Auditor’s Report Summary
TO THE GENERAL ASSEMBLY OF ZORLU ENERJİ ELEKTRİK ÜRETİM A.Ş.
Title of Association
Zorlu Enerji Elektrik Üretim A.Ş.
Center
Organize Sanayi Bölgesi Pembe Cad. No: 13 Bursa
Capital TL 281,665,350
Field of Activity
Electricity and steam production
Auditor(s) name, period in office,
being partner or company’s personnel
Şerif Arı – 1 Year Hakan Eştürk– 1 Year
not partner nor personnel
Number of Board Meetings 4-6
and Audit Commission meetings
Content of audit, audit dates and result
Number and results of counting’s which has been
performed on association’s cashier desk in
accordance with Turkish Trade Law’s 353rd
article’s 1st anecdote’s 3rd definition
Audit dates and results that has been performed in
accordance with Turkish Trade Law’s 353rd
article’s 1st anecdote’s 4th definition
Complaints or frauds perceived, and
legal proceedings
In the audits made on the legal books and documents of the company, it has
been concluded that records are kept fairly and accurately in compliance with
accounting rules and principles.
Cashier’s desk counting was made four times and it was resolved that stocks are
in compliance with the records.
There are no securities delivered by mortgage or guarantee or bailment to
company according to the monthly audits
There are no complaints or frauds perceived.
We have audited the accounts and transactions of Zorlu Enerji Elektrik Üretim A.Ş. at the period of 01.01.2009-31.12.2009 in accordance with
Turkish Trade Law, association’s primary agreement, other regulations and general accounting principles.
In our opinion, the financial statements present fairly, in all material respects, the financial position of association as of 31 December 2009 and
the dividend distribution proposal is in accordance with general laws and association’s primary agreement. We present approval of the Balance
Sheet and the Income Statement and acquittance of Board of Directors.
Şerif ARI
Auditor
Hakan EŞTÜRK
Auditor
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Resolution of the Board of Directors
RESOLUTION DATE : 07.05.2010
RESOLUTION NO : 2010/12
PARTICIPANTS
MEETING AGENDA
: Zeki Zorlu
Elmas Melih Araz
Olgun Zorlu
Selen Zorlu Melik
Murat Sungur Bursa
Aziz Can Tuncay
Burak İsmail Okay
: approval of the 2009 annual report
The Board of Directors of Zorlu Enerji Elektrik Üretim Anonim Şirketi convened at the company’s headquarters under the chairmanship of Mr.
Zeki Zorlu and discussed the subjects on the agenda and adopted the below-mentioned resolutions.
The Board of Directors who convened for the meeting decided unanimously to accept the 2009 Annual Report, which has been presented to the
Board of Directors and is attached hereto, and to make the report available to shareholders.
BOARD OF DIRECTORS
Zeki Zorlu Elmas Melih Araz Olgun Zorlu Selen Zorlu Melik
Chairman Vice Chairman Board Member Board Member
Murat Sungur Bursa Aziz Can Tuncay Burak İsmail Okay
Board Member Board Member Board Member
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Zorlu Enerji Elektrik Üretim A.Ş.
Independent Auditor’s Report
To The Shareholders and Board of Directors of
Zorlu Enerji Elektrik Üretim A.Ş.
We have audited the accompanying statement of consolidated financial position of Zorlu Enerji Elektrik Üretim A.Ş. (the “Company”) and its
subsidiaries listed under note 1 (the “Group”), as at 31 December 2009, and the consolidated statements of income, the consolidated statements
of comprehensive income, changes in equity and cash flow for the year then ended and a summary of significant accounting policies and other
explanatory notes.
Management’s responsibility for the financial statements
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
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.
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.
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Zorlu Enerji Elektrik Üretim A.Ş.
Independent Auditor’s Report
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion the consolidated financial statements present fairly in all material respects, the consolidated financial position of the Group as
at 31 December 2009 and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with
International Financial Reporting Standards.
EREN Bağımsız Denetim ve Yeminli Mali Müşavirlik A.Ş.
Member Firm of GRANT THORNTON International
Aykut Halit
Partner
Istanbul, 08.04.2010
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Statements of Consolidated Financial Position at 31 December 2009 and 2008
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Assets Note 2009 2008
Current assets
Cash and cash equivalents 7 43.191 7.574
Trade receivables 8 192.562 122.447
Inventories 9 6.948 39.162
Other assets 10 103.236 148.852
Total current assets 345.937 318.035
Non-current assets
Financial assets 11 830 7.626
Exploration and evaluation assets 12 27.981 22.426
Property, plant and equipment 13 1.977.641 1.574.056
Intangible assets 14 36.523 635.725
Other assets 167 --
Deferred tax asset 19 18.803 30.654
Total non-current assets 2.061.945 2.270.487
Total assets 2.407.882 2.588.522
The accompanying notes are an integral part of these consolidated financial statements.
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Zorlu Enerji Elektrik Üretim A.Ş.
Statements of Consolidated Financial Position at 31 December 2009 and 2008
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Liabilities and equity Note 2009 2008
Current liabilities
Borrowings 15 532.087 337.769
Trade payables 16 176.512 147.369
Taxation on income 19 990 9.389
Provision for expenses 17 1.175 2.696
Other liabilities 18 10.712 12.742
Total current liabilities 721.476 509.965
Non-current liabilities
Borrowings 15 849.352 1.458.787
Trade payables 16 126.181 56.089
Employee termination benefits 20 1.251 2.388
Other liabilities 18 428.554 527.337
Deferred tax liability 19 57.446 34.054
Total non-current liabilities 1.462.784 2.078.655
Equity
Share capital 21 392.613 192.613
Translation reserve (18.988) (28.654)
General reserves (163.432) (247.491)
Equity attributable to owners of the parent 210.193 (83.532)
Minority interest 13.429 83.434
Total equity 223.622 (98)
Commitments and contingencies 22 -- --
Total liabilities and equity 2.407.882 2.588.522
The accompanying notes are an integral part of these consolidated financial statements.
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Zorlu Enerji Elektrik Üretim A.Ş.
Statements of Consolidated Income for the Years Ended 31 December 2009 and 2008
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Note 2009 2008
Continuing operations
Revenue 547.389 531.291
Cost of sales (419.710) (426.951)
Gross profit 127.679 104.340
Selling expenses (-) (6.570) (7.477)
General and administrative expenses (-) (30.588) (41.759)
Other income 24 186.031 2.679
Other expense (-) 24 (14.525) (12.408)
Operating profit 262.027 45.375
Financing income 25 394.349 427.547
Financing expense (-) 25 (515.626) (551.449)
Profit (loss) before taxation 140.750 (78.527)
Taxation on income (-) 19 (6.461) (41.691)
Profit (loss) from continuing operations for the year 134.289 (120.218)
Discontinued operations
Loss from discontinued operations (net of income tax) 27 (37.463) (152.191)
Net profit (loss) for the year 96.826 (272.409)
Net profit (loss) attributable to:
Equity holders of the Company 89.595 (333.186)
Minority interest 7.231 60.777
Earnings (loss) per share (TL, full) 6 0,01 (0,04)
The accompanying notes are an integral part of these consolidated financial statements.
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Zorlu Enerji Elektrik Üretim A.Ş.
Statements of Consolidated Comprehensive Income for the Years Ended 31.12.2009 and 2008
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
2009 2008
Profit (loss) for the year 96.826 (272.409)
Translation differences 12.470 (44.416)
Other comprehensive income (loss) 12.470 (44.416)
Total comprehensive income (loss) for the year 109.296 (316.825)
Attributable to:
Equity holders of the Company 99.261 (361.045)
Minority interest 10.035 44.220
The accompanying notes are an integral part of these consolidated financial statements.
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Zorlu Enerji Elektrik Üretim A.Ş.
Statements of Consolidated Changes in Equity for the Years Ended 31.12.2009 and 2008
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Share Translation General Total attributable to Minority Total
capital reserve reserves owners of parent interest equity
Balance at 01 January 2008 192.613 (795) 76.511 268.329 47.487 315.816
Changes in minority interest -- -- 9.184 9.184 (9.184) --
Cash increase in subsidiaries share capital -- -- -- -- 911 911
Transactions with owners 192.613 (795) 85.695 277.513 39.214 316.727
Net loss for the year -- -- (333.186) (333.186) 60.777 (272.409)
Other comprehensive loss:
Translation differences -- (27.859) -- (27.859) (16.557) (44.416)
Total comprehensive loss for the year -- (27.859) -- (27.859) (16.557) (44.416)
Balance at 31 December 2008 192.613 (28.654) (247.491) (83.532) 83.434 (98)
Cash increase in share capital 200.000 -- -- 200.000 -- 200.000
Changes in minority interest -- -- (1.894) (1.894) 1.894 --
Cash increase in subsidiaries share capital -- -- -- -- 1.346 1.346
Disposal of subsidiaries -- -- -- -- (83.318) (83.318)
Consolidated subsidiary as from 01 January-1.2 -- -- (3.642) (3.642) 38 (3.604)
Transactions with owners 392.613 (28.654) (253.027) 110.932 3.394 114.326
Net profit for the year -- -- 89.595 89.595 7.231 96.826
Other comprehensive income:
Translation differences -- 9.666 -- 9.666 2.804 12.470
Total comprehensive income for the year -- 9.666 -- 9.666 2.804 12.470
Balance at 31 December 2009 392.613 (18.988) (163.432) 210.193 13.429 223.622
The accompanying notes are an integral part of these consolidated financial statements.
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Statements of Consolidated Cash Flows for the Years Ended 31.12.2009 and 2008
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Note 2009 2008
Profit (loss) before taxation from continuing operations 140.750 (78.527)
Loss before taxation from continued operations (36.314) (169.089)
Adjustment to reconcile profit (loss) before taxation to net
cash provided from operating activities: 29 706 137.702
Operating profit (loss) before changes in working capital 105.142 (109.914)
Changes in operating assets and liabilities
Trade receivables (220.562) (107.628)
Inventories (3.751) (5.360)
Other assets (2.761) (89.114)
Trade payables 288.311 133.666
Other liabilities 109.014 234.953
Payments of employee termination benefits (1.144) (375)
Net cash provided by operating activities 274.249 56.228
Cash flows from investing activities
Purchases of property, plant and equipment 13 (717.602) (735.842)
Proceeds from sale of property, plant and equipments 1.391 415
Purchases of intangible assets 14 (1.644) (603.018)
Purchases of exploration and evaluation assets 12 (9.884) (8.377)
Natural gas drilling expenses 1.356 2.761
Net cash used in investing activities (726.383) (1.344.061)
Cash flows from financing activities
Cash increase in share capital 200.000 --
Changes in financial assets (12.060) 14.462
Proceeds from sale of subsidiaries 85.281 --
Cash increase in subsidiaries share capital 1.346 911
Proceeds from borrowings 530.174 1.731.783
Repayments of borrowings (265.187) (382.437)
Interest paid (123.590) (24.133)
Interest received 33.111 2.378
Net cash provided by financing activities 449.075 1.342.964
Translation differences 39.189 (58.209)
Net increase (decrease) in cash and cash equivalents 36.130 (3.078)
Cash and cash equivalents at beginning of year 7 7.061 10.139
Cash and cash equivalents at end of year 7 43.191 7.061
The accompanying notes are an integral part of these consolidated financial statements.
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
1. ORGANISATION AND NATURE OF ACTIVITIES
Zorlu Enerji Elektrik Üretim A.Ş. (the “Company” or “Zorlu Enerji”) is a member of the Zorlu Group of Companies which is under the control
of the Zorlu Family. The Company and its subsidiaries were established to meet the energy requirements of Zorlu Group and other industrial
companies.
The Company is registered with Capital Market Board and its shares have been quoted at the Istanbul Stock Exchange (“ISE”) since 2000. As of
31.12.2009, the composition of shareholders and their respective percentage ownership are summarized as follows:
Shareholding %
Zorlu Holding A.Ş. 41,2
Korteks Mensucat Sanayi ve Ticaret A.Ş. 17,5
Shares open to the public (ISE) 32,0
Other shareholders 9,3
The registered office address of the Company is Nilüfer Organize Sanayi Bölgesi, Pembe Caddesi, No: 13 Bursa/Turkey.
Zorlu Enerji Group of companies; their field of activities and countries of operation are listed below:
Company Field of activity Country
Electricity, steam production and maintenance services
Zorlu Enerji Elektrik Üretim A.Ş. Production of electricity and steam Turkey
Rosmiks International B.V. Financial services Holland
Rosmiks LLC Production of electricity Russia
ICFS International LLC Financial services USA
Rotor Elektrik Üretim A.Ş. Production of electricity Turkey
Zorlu Hidroelektrik Enerji Üretim A.Ş. Production of electricity Turkey
Zorlu Jeotermal Elektrik Üretim A.Ş. Production of electricity Turkey
Zorlu Enerji Pakistan Ltd. Production of electricity Pakistan
Bundoran Financial Corporation Financial services BVI
Zorlu Rüzgar Enerjisi Elektrik Üretim A.Ş. Production of electricity Turkey
Natural gas extraction and distribution services
Amity Oil International Pty. Ltd. Natural gas drilling and exploration Turkey
Zorlu Petrogas, Petrol, Gaz ve Petrokimya Ürünleri İnşaat Sanayii A.Ş. Natural gas drilling and exploration Turkey
As of 31 December 2009, the number of personnel employed was 328 (31.12.2008: 891).
The financial statements for the year ended 31 December 2009 (including comparatives) were approved by the board of directors on
08.04.2010.
100,0
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
1.1. ELECTRICITY SEGMENT
Zorlu Enerji Elektrik Üretim A.Ş. (Bursa/Turkey) – Zorlu Energy was established in 1993 for the purpose of generating electricity and steam. The
total capacity of the Company’s four natural gas combined cycle plants and two cogeneration plants are as follows:
Type of License Validity Steam Electricity Production capacity
Field of Activity power plant start date of license production capacity production/power per year KW/Hour
Bursa Natural gas 07.09.2004 25 years -- 90,0 MW 756.864.000
Ankara Natural gas 07.09.2004 25 years -- 50,3 MW 423.003.000
Kayseri Natural gas 07.09.2004 25 years -- 188,5 MW 1.585.210.000
Kırklareli Natural gas 07.09.2004 25 years 162 t/s 115,3 MW 856.000.000
Yalova Natural gas 21.07.2005 15 years 30 t/s 15,9 MW 133.713.000
Total 192 t/s 460 MW 3.754.790.000
The Company sells 74% of its products to Türkiye Elektrik Dağıtım A.Ş. (“TEDAŞ”), 21% to group companies (note 26) and remaining 5% to
third parties.
On 20 June 2007, The Company acquired two hydroelectric power plant licenses from EPDK, construction of these two plants has not yet
started, in Denizli and Muğla regions with capacities of 127,8 MW and 82,5 MW respectively for 49 years.
Rosmiks International B.V. (“Holland”) - This company was established in 2006 for the purpose of providing financial support to two energy plant
projects in Russia with a capacity of 340 MW and 2.500.00 Gcal/year and owns 100% of Rosmiks LLC.
Rosmiks LLC (“Russia”) - Rosmiks LLC was established for the purpose of building and operating two energy plants respectively in “Kozukhovo”
and “Tereskhova” regions in Russia with a capacity of 340 MW and 2.500.000 Gcal/year each. Rosmiks LLC started these projects around mid
2007 and plans to complete them in year 2010 and operate them thereafter.
ICFS International LLC (“The United States of America”) - ICFS was established in the USA in 2005 and owns 100% of Rosmiks International BV
established in Holland.
Rotor Elektrik Üretim A.Ş. (“Istanbul/Turkey”) - Rotor was established for the purpose of building wind power plants and was acquired by Zorlu
Energy Group in 2007.
Rotor has obtained “Wind Energy Power Plant License” from EMRA for the construction of a wind power plant (52 wind turbines) with a 135 MW
capacity in Osmaniye and commenced its construction in July 2008. As of the balance sheet date, 23 wind turbines with a capacity of 57,5 MW
and as of 31 March 2010 additional 15 wind turbines with a capacity of 37,5 MW have started electricity production. The management plans to
complete the remaining 16 wind turbines with a capacity of 40 MW by 30 April 2010.
In accordance with the Board of Directors decision dated 16.11.2009 and numbered 2009/9 Rotor has transferred to Zorlu Rüzgar Enerjisi
Elektrik Üretim A.Ş. its license which was obtained for 25 years for the construction of two wind energy power plants in different regions of
Osmaniye with a capacity of 50 MW and 60 MW.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Zorlu Hidroelektrik Enerji Üretim A.Ş. (“Istanbul/Turkey”) - Zorlu Hidroelektrik was established in 2007 for the purpose of building hydroelectric
power plants and other power plants based on renewable energy sources.
Zorlu Jeotermal Elektrik Üretim A.Ş. (“Istanbul/Turkey”) – Zorlu Jeotermal was established in 2008 to develop projects for energy power plants,
especially hydroelectric and thermal power plants based on all forms of renewable energy sources to produce energy, steam and heat.
Zorlu Jeotermal has taken over of Zorlu Petrogas Alaşehir Geothermal license on 30 July 2009.
Zorlu Enerji Pakistan Ltd. (“Karachi/Pakistan”) Zorlu Enerji Pakistan Limited was incorporated on 13 September 2007 as an unlisted public
limited company. The sole object for establishment of the company is to set up a project for electric power generation through wind. The
principal activity of the company is to generate and sell electric power. Power generation plant is situated at Nooriabad Jhimpir Link Road, near
HESCO Grid Station, Jhimpir, with a capacity of 1,2 MW of each 5 and 1,5 MW of each 29 wind energy power plants. Three wind energy power
plants of the first phase have started production.
Zorlu Rüzgar Enerjisi Elektrik Üretim A.Ş., (“Zorlu Rüzgar”)
Zorlu Rüzgar was established in 2009 to develop projects for energy power plants, based especially on wind power and other forms of renewable
energy sources to produce electricity, steam and heat.
1.2. NATURAL GAS SEGMENT
Amity Oil International Pty. Ltd. (“Istanbul/Turkey”) - Amity Oil is a company established in Australia but is solely engaged in petroleum and
natural gas exploration and production through its only branch in Turkey.
Amity Oil has continued its exploration, drilling and production activities with 4 exploration licenses and 1 operation license in the Thrace region
in 50% - 50% partnership with Türkiye Petrolleri Anonim Ortaklığı (“TPAO”). Amity Oil also has 1 fully owned exploration licenses in the Thrace
region and 1 in Adana region.
Amity Oil sells all of its natural gas to Trakya Doğal Gaz produced in 24 wells licensed in the region (Göçerler, Çayırdere, Adatepe, Doğu Adatepe,
Velimeşe, Batı Velimeşe, Eskitaşlı, Reisdere and Dikilitaş) with TPAO and the other 3 wells’ natural gas to TPAO.
Zorlu Petrogas, Petrol, Gaz ve Petrokimya Ürünleri İnşaat Sanayi ve Ticaret A.Ş. (“Istanbul/Turkey”) – Zorlu Petrogas, Petroleum, Gas and
Petrochemical Products, Construction Company was established in 2000 to engage in natural gas distribution, petroleum and petrochemical
production as well as marketing of petroleum and natural gas.
Zorlu Petrogas has seven exploration licenses in the Marmara Petroleum Region two of which are owned in partnership with companies named
Çalık Enerji Sanayi ve Ticaret A.Ş. “Çalık” and Maya Petrol Gaz Sanayi ve Ticaret A.Ş. “Maya”; the partnership shares of the two licenses are 25%,
25% and 50% respectively for Çalık, Maya and the Company. In addition Zorlu Petrogas has three exploration licenses in the İzmir Petroleum
Region nr: XVII and two exploration licenses in the Muğla Petroleum Region nr: XVIII, thus bringing the total number of licenses to twelve.
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”) as developed
and published by the International Accounting Standards Board (“IASB”).
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
The Company, which is quoted at the Istanbul Stock Exchange, maintains its books of account and prepares its statutory financial statements
in accordance with the Turkish Commercial Code, accounting policies prescribed by the Turkish Capital Markets Board and tax legislation and
since 1994 has adopted the Uniform Chart of Accounts issued by the Ministry of Finance (collectively “Turkish Practices”). Its subsidiaries
which are incorporated in Turkey maintain their books of account and prepare their 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 foreign subsidiaries
maintain their books of account and prepare their statutory financial statements in their local currencies and in accordance with the regulations
of the countries in which they operate. The financial statements of overseas subsidiaries are converted into Turkish Lira (TL) by closing rate
method. The consolidated financial statements have been prepared from statutory financial statements of the Company and its subsidiaries
and presented in Turkish Lira (TL) with adjustments and reclassifications for the purpose of fair presentation in accordance with IFRS. Such
adjustments mainly comprise deferred taxation, employee termination benefits, fixed assets and borrowing costs, receivables, interest expense
accruals on bank loans.
Measurement currency and reporting currency
The financial statements have been prepared under the historical cost convention, other than financial assets which are stated at fair value.
According to the law numbered 5083 related to the currency of Republic of Turkey and the decision of the Council of Ministers dated
04.04.2007 numbered 2007/11963 the expression of “new” has been cancelled on New Turkish Lira and New Kurush effective from 01.01.2009.
After this conversion 1 New Turkish Lira is held equal to 1 Turkish Lira and 1 New Kurush is held equal to 1 Kurush. All laws, legislations,
administrative and legal transactions, court decisions, commercial papers and all kind of documents referencing New Turkish Lira will be
considered in Turkish Lira with the conversion rate mentioned above. Beginning from 01.01.2009, in the presentation of financial statements
New Turkish Lira has been replaced by Turkish Lira. In the attached financial statements, this conversion has been made retrospectively for
convenience purposes.
Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the Company
At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have
been published but are not yet effective, and have not been adopted early by the Company.
a) Standards, amendments and interpretations effective in July 2009:
• IAS 27, (Amendments) “Consolidated and Separate Financial Statements”
• IAS 28, “Investments in Associates”
• IAS 31, “Interest in Joint Ventures” “Application of the Purchase Method”
• IAS 38, (Amendments) “Intangible Assets”
• IFRS 3, (Revised) “Business Combinations”
• IFRIC 17, “Distributions of Non-cash Assets to Owners”
b) Standards, amendments and interpretations effective in January 2010 but not early adopted by the Company:
• IAS 1, (Amendments) “Presentation of Financial Statements”
• IAS 24, “Related Party Disclosures”
• IFRS 2, (Amendments) “Share Based Payment”
• IFRS 5, (Amendments) “Non-Current Assets Held For Sale And Discontinued Operations”
• IFRS 9, “Financial Instruments: Classification and Measurement”
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Management of the Group anticipates that all of the pronouncements detailed in (a) and (b) above will be adopted in the Group’s accounting
policy for the first period beginning after the effective date of the pronouncement. Management of the Group has decided that these new
standards and interpretations have been issued but are not expected to have a material impact on the Company’s financial statements.
Comparable financial information and reclassification of prior period financial statements
The balance sheets with the accompanying notes as of 31.12.2009 and 31.12.2008 and statement of income, cash flow and changes in equity
with the accompanying notes for the year ended 31.12.2009 and 31.12.2008 are presented as comparatively.
As of 31.12.2008, Group’s statement of income and its related notes are restated for the accounting and presentation of IFRS 5 “Non current
Assets Held for Sale and Discontinued Operations”.
Critical accounting estimates, assumptions and judgments
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.
The key assumption concerning the future and other key sources of estimation uncertainty at the balance sheet date and the significant
judgments are set out below:
- Allowance for doubtful debts reflect the amount set aside for the losses in the future related to receivables which exist the balance sheet
date but which, in the opinion of the management carry the risk of collection due to current economic conditions. When evaluating whether
receivables has suffered a loss in value the past performance of the debtors, their credibility in the market and their performance between the
balance sheet date and report date together with changed circumstances are taken in the considerations. In addition the collaterals existing
at balance sheet date together with new collaterals obtained between the balance date and report date are also taken into consideration. The
allowance for doubtful receivables as of the balance sheet dates are explained under note 8.
-When setting aside the provision for legal claims the probability of losing the related case and the results expected to be suffered in the event
that the legal counsel of the Group and management of the Group make their best estimates to calculate the provision required.
- Property, plant and equipment and intangible assets held for use in the production or supply of goods or services, or for administrative
purposes, are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment
losses. The Group estimates that the useful lives of tangible and intangible assets. Depreciation is charged using the straight line basis over the
useful lives which depend on the best estimation of the management. Useful lives of property, plant and equipment and intangible assets are
reviewed at each balance sheet dates and make changes if necessary.
- As explained in note 3 Natural gas exploration/evaluation expenses are costs directly associated with exploration are capitalized under
“Exploration and evaluation assets” until the reserves are evaluated. If it is determined that commercial discovery has not been achieved, these
costs are charged to expense. Once commercial reserves are found, exploration and evaluation assets are tested for impairment and transferred
to “Natural gas drilling cost” account and depreciation and/or amortization is charged during the exploration and evaluation phase. Depreciation
is charged using the straight line basis over the useful lives using the unit-of-production method which depend on the best estimation of the
management. Useful lives of natural gas reserves are reviewed at each balance sheet date and changes are made if necessary.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
- Deferred tax assets are accounted for only where it is likely that related temporary differences and accumulated losses will be recovered
through expected future profits. When accounting for deferred tax losses it is necessary to make important estimations and evaluations with
regard to taxable profits in the future periods. As mentioned under note 19 the related companies of the Group included in the consolidated
statements have taxable losses of TL 74.796 (2008: TL 134.314) carried forward to future periods and deferred tax assets have been calculated
on basis of the expectation that taxable profits will be created in future periods.
Offsetting
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to set off the
recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed in the preparation of the accompanying financial statements are summarized below:
Basis of consolidation
The consolidated financial statements incorporate the financial statements of Zorlu Enerji and entities controlled by Zorlu Enerji. Control is
achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
For the purpose of consolidated financial statements Zorlu Enerji and its subsidiaries will be referred to collectively as the “Group”.
2009 2008
Ownership Economic Ownership Economic
Consolidated companies interest (%) interest (%) interest(%) interest (%)
Zorlu O/M Enerji Tesisleri İşletme ve Bakım Hizmetleri A.Ş. -- -- 40,0 24,0
Zorlu Doğal Elektrik Enerji Üretim A.Ş. -- -- 99,0 97,2
Zorlu Endüstriyel ve Enerji Tesisleri İnşaat Ticaret A.Ş. -- -- 20,0 20,0
Zorlu Petrogas, Petrol, Gaz, Petrokimya Ürünleri İnşaat Sanayii ve Ticaret A.Ş. 73,0 73,0 100,0 78,2
Zorlu Elektrik Enerjisi İthalat İhracat ve Toptan Ticaret A.Ş. -- -- 3,0 2,2
Zorlu Doğalgaz İthalat İhracat ve Toptan Ticaret A.Ş. -- -- 3,0 2,2
Trakya Bölgesi Doğalgaz Dağıtım A.Ş. -- -- 30,0 10,2
Gazdaş Gaziantep Doğalgaz Dağıtım A.Ş. -- -- 30,0 10,2
Amity Oil International Pty. Ltd. 100,0 100,0 100,0 100,0
Rosmiks International B.V. 100,0 51,0 100,0 51,0
Rosmiks LLC 100,0 51,0 100,0 51,0
ICFS International LLC 51,0 51,0 51,0 51,0
Rotor Elektrik Üretim A.Ş. 85,0 83,7 95,0 86,1
Zorlu Hidroelektrik Enerji Üretim A.Ş. 85,0 83,7 95,0 86,1
Zorlu Jeotermal Elektrik Üretim A.Ş. 73,0 73,0 100,0 78,2
Bundoran Financial Corporation 100,0 100,0 100,0 100,0
Zorlu Enerji Pakistan Ltd. 100,0 100,0 -- --
Zorlu Rüzgar Enerjisi Elektrik Üretim A.Ş. 85,0 83,7 -- --
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
In accordance with the Board of Directors decision dated on 23.06.2009 and numbered 2009/15, the management of Group had decided to
sell its shares of Zorlu O/M Enerji Tesisleri İşletme ve Bakım Hizmetleri A.Ş., Zorlu Doğal Elektrik Enerji Üretim A.Ş., Zorlu Endüstriyel ve Enerji
Tesisleri İnşaat Ticaret A.Ş., Zorlu Elektrik Enerji İthalat İhracat A.Ş., Zorlu Doğalgaz İthalat İhracat A.Ş., Trakya Bölgesi Doğalgaz Dağıtım A.Ş. and
Gazdaş Gaziantep Doğalgaz Dağıtım A.Ş.. Therefore, IFRS 5 has been applied in the presentation of these companies as of the dates on which the
effective control ceased (note 27).
The balance sheet and income statement of the subsidiaries are consolidated on a line by line basis, and the carrying value of the investment
held by the Company is eliminated against related equity and reserves accounts.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of
acquisition or up to the effective date of disposal as appropriate.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein. Minority interests
consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the
date of the combination. Losses applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against the
interests of the Group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the
losses.
The Company has always exercised effective control over the management of each of the companies included in the group consolidation.
Business combinations
The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair
values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for
control of the acquire, plus any costs directly attributable to the business combination. The acquirer’s identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3 are recognized at their fair values at the acquisition date.
Goodwill arising on acquisition is recognized as an asset and initially measured at cost, being the excess of the cost of the business combination
over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognized. If, after reassessment,
the Group’s interest in the net fair value of the acquirer’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business
combination, the excess is recognized immediately in profit or loss.
The interest of minority shareholders in the acquire is initially measured at the minority’s proportion of the net fair value of the assets, liabilities
and contingent liabilities recognized.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Foreign currency translations
Foreign currency transactions and translation - Transactions in foreign currencies during the period have been translated into TL at the exchange
rates prevailing at dates of these transactions. Balance sheet items denominated in foreign currencies have been translated at the exchange
rates prevailing at the balance sheet dates. Exchange gains or losses arising from settlement and translation of foreign currency items have been
included in the income or expense accounts as appropriate.
The foreign exchange rates used by the Company are as follows:
2009 2008
US Dollar 1,5057 1,5123
EUR 2,1603 2,1408
Foreign entities - Foreign consolidated subsidiaries are regarded as foreign entities since they are financially, economically and organizationally
autonomous. Their reporting currencies are the respective local currencies. Financial statements of foreign consolidated subsidiaries are
translated at year-end exchange rates with respect to the balance sheet and at exchange rates at the dates of the transactions with respect to the
income statement. All resulting translation differences between the closing balances and opening balances due to the difference in inflation and
devaluation are included in currency translation adjustment in equity.
Property, plant and equipment
Property, plant and equipment held for use in the production or supply of goods or services, or for administrative purposes, are stated in the
balance sheet at cost, restated in equivalent purchasing power at 31 December 2005 less any subsequent accumulated depreciation and
subsequent accumulated impairment losses.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying
value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or
cash-generating units are written down to their recoverable amount. The recoverable amount of property, plant and equipment is the greater of
net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not
generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
Property, plant and equipment in the course of construction for production, rental or administrative purposes, or for purposes not yet determined,
are carried at cost, less any identified impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalized in
accordance with the Company’s accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when
the assets are ready for their intended use.
Depreciation is charged so as to write off the cost or valuation of assets, other than land and properties under construction, over their estimated
useful lives, using the straight line basis over the following years stated below:
Useful life
Land improvements 25 – 30
Buildings 25 – 30
Leasehold improvements 3 – 5
Plant and machinery 17 – 25
Motor vehicles 3 – 5
Furniture and fixtures 3 – 10
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term
of the relevant lease. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognized in income.
Leases
Finance lease - Assets held under finance leases are recognized as assets of the Company at their fair value at the date of acquisition. The
corresponding liability to the Company is included in the balance sheet as a finance lease obligation. Finance costs, which represent the
difference between the total leasing commitments and the fair value of the assets acquired, are charged to the income statement over the term
of the relevant lease so as to produce a constant periodic rate of interest on the remaining balance of the liability for each accounting period.
Operating lease - Leases of assets under which all the risks and rewards of ownership are effectively retained by the lessor are classified as
operating leases. Lease payments on operating lease are recognized as an expense on a straight-line basis over the lease term.
Intangible assets
Purchased intangible assets - Intangible assets acquired separately are reported at cost less accumulated amortisation and accumulated
impairment loss. Amortisation is charged on as straight line basis over their useful live. The estimated useful life and amortisation method are
reviewed at the end of each annual reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
The useful lives of intangible assets are as follows:
Useful life
Wind energy production rights 25
Natural gas drilling rights 20
Hydroelectric energy production rights 30
Thermal energy production rights 29
Other intangible assets- Other intangible assets including information systems, development expense of information systems and other
determinable rights, are capitalized and amortized on a straight line basis over their estimated useful lives, not exceeding a period of 5 years.
Impairment of intangible assets – Where an indication of impairment exists, the carrying amount of any intangible asset is assessed and written
down immediately to its recoverable amount.
Natural gas exploration expenses
Exploration and evaluation assets - Costs directly associated with exploration are capitalized until the evaluation of reserves. If it is determined
that commercial discovery has not been achieved, these costs are charged to expense (note 12).
Capitalisation is made within property, plant and equipment or intangible assets according to the nature of the expenditure. Once commercial
reserves are found, exploration and evaluation assets are tested for impairment and transferred to development tangible and intangible assets
and depreciation and/or amortization is charged during the exploration and evaluation phase.
Development tangible and intangible assets- Expenditure on the construction, installation or completion of infrastructure facilities, such as
platforms, pipelines and the drilling of commercially proven development wells, is capitalized within tangible and intangible assets according
to nature. When development is completed on a specific field, it is transferred to property, plant and equipment and/or intangible assets.
Depreciation and/or amortization are charged during the exploration and evaluation phase.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Depreciation/amortization - Natural gas properties/intangible assets related to commercially proven development wells are depreciated/
amortized using the unit-of-production method. Unit-of-production rates are based on proved developed reserves, which are oil, gas and other
mineral reserves estimated to be recovered from existing facilities using current operating methods.
Impairment – exploration and evaluation assets - An impairment loss is recognized for the amount by which the exploration and evaluation
assets’ carrying amount exceeds their recoverable amount. The recoverable amount is the higher of the exploration and evaluation assets’ fair
value less costs to sell and their value in use.
Inventories
Inventories are stated at the lower of cost and net realizable value. Costs comprise direct materials and, where applicable, direct labour costs
and those overheads that have been incurred in bringing the inventories to their present location and condition but excludes borrowing cost.
Cost is calculated by using the weighted 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.
Impairment
The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether any indication of impairment exists. If
any such indication exists, the asset’s recoverable amount is estimated and an impairment loss is recognised in the income statement whenever
the carrying amount of the asset exceeds its recoverable amount.
Related parties
Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party
in making the financial and operating decisions. For the purpose of these financial statements shareholders are referred to as related parties.
Related parties also include individuals that are principle owners, management and members of the Group’s Board of Directors and their families.
Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably
measured. Revenue is shown net of value added and sales taxes, discounts and returns. Revenue from the rendering of services is recognized by
reference to the stage of completion of the transaction when the following conditions are met:
• the amount of revenue can be measured reliably,
• the flow of economic benefits to the entity is probable,
• the stage of completion at the period end can be measured reliably and
• the costs incurred to date can be measured reliably.
Revenue for services provided initially is measured at the fair value of the consideration receivable. Expenses is included in operating expenses
at cost unless the expense was permitted or required to be included in the financial statements on another basis. Cost is the fair value of the
consideration given for the materials or services used in the production of goods or provision of services. Cost of sales is presented as a separate
line item on the face of the income statement for the functional analysis of expenditures is chosen for the format of the income statement.
Other revenues earned by the Group are recognized on the following bases:
Rental income – on an accrual basis.
Interest income – on an effective yield basis.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Borrowing cost
Borrowing cost directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take
a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale. Borrowing costs of qualifying assets are not added to the cost of those assets for the period
during which construction to get them ready for their intended use or sale is suspended. Investment income earned on the temporary investment
of specific borrowings pending their expenditure on qualifying assets is deducted from the cost of those assets. Other borrowing costs are
expensed in the period in which they are incurred and reported in “financing expense”.
Bank borrowings
Interest-bearing bank loans and overdrafts are recognized at fair value at initial recognition which equate to the proceeds received, net of direct
issue costs. Finance charges, including premiums payable on settlement or redemption, are accounted for on an accruals basis and are added to
the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
Discontinued operations and non current assets held for sale
Discontinued operation is a major line of business or geographical area of operations that is part of a single co-ordinated plan to dispose of or is
held for sale.
Net assets related to the discontinued operations are measured at fair value less cost to sell. A single amount on the face of the income
statements comprising the total of the post-tax profit or loss of discontinued operations and post-tax gain or loss recognised on the disposal
of the assets constituting the discontinued operation is disclosed. Also, the net cash flows of the discontinued operations associated with the
operating, investment and financing activities are disclosed in note 27.
Group of assets and liabilities are classified as held for sale if their carrying amount will be recovered principally through a sale transaction, not
through continuing use. Liabilities directly associated with those assets are also classified similarly. Disposal group assets are measured at the
lower of its carrying amount after deduction of the liabilities directly associated with those assets and its fair value less costs to sell.
Income taxes
Tax expense (income) is the aggregate amount included in the determination of net profit or loss for the period in respect of current and deferred
tax.
Deferred income 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. Deferred income tax liabilities are recognized for all taxable
temporary differences.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the
liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
Employee termination benefits
Under Turkish labour law, the Group and its Turkish subsidiaries are required to pay termination benefits to each employee who has completed
one year of service and whose employment is terminated without due cause, or who retires in accordance with social insurance regulations or is
called up for military service or dies.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable 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. Where the Group expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as
a separate asset but only when the reimbursement is virtually certain.
Financial assets
Financial assets other than hedging instruments are divided into the following categories:
• available-for-sale financial assets
• held-to-maturity investments.
Financial assets are assigned to the different categories on initial recognition, depending on the characteristics of the instrument and its purpose.
A financial instrument’s category is relevant for the way it is measured and whether any resulting income and expenses is recognized in profit or
loss or directly in equity.
Generally, the Group recognizes all financial assets using settlement day accounting. An assessment of whether a financial asset is impaired
is made at least at each reporting date. All income and expense relating to financial assets are recognized in the income statement line item
“finance costs” or “finance income”, respectively.
Available-for-sale financial assets are non-derivative financial assets that do not qualify for inclusion in any of the other categories of financial
assets. The Group’s available-for-sale financial assets include unconsolidated investments. Unconsolidated investments which are not quoted at
any stock exchange are reported at cost less any impairment charges, as its fair value can currently not be reliably estimated.
Gains and losses arising from financial instruments classified as available-for-sale are only recognized in profit or loss when they are sold or
when the investment is impaired. In the case of impairment, any loss previously recognized in equity is transferred to the income statement.
Losses recognized in the income statement on equity instruments are not reversed through the income statement but charged to equity. Losses
recognized in prior period consolidated income statements resulting from the impairment of debt securities are reversed through the income
statement, if the subsequent increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss.
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity. Investments are
classified as held-to-maturity if it is the intention of the Group’s management to hold them until maturity. The Group currently holds time
deposits that fall into this category.
Held-to-maturity investments are subsequently measured at amortized cost using the effective interest method. In addition, if there is objective
evidence that the investment has been impaired, the financial asset is measured at the present value of estimated cash flows. Any changes to the
carrying amount of the investment are recognized in profit or loss.
Trade receivables
Trade receivables are measured at initial recognition at fair value and are subsequently measured at amortized cost using the effective interest
rate method to set an allowance for unearned interest. Appropriate allowances for estimated irrecoverable amounts are recognized in profit or
loss when there is objective evidence that the asset is impaired. The allowance recognized is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Trade payables
Trade payables are initially measured at fair value and are subsequently measured at amortized cost using the effective interest rate method to
set an allowance for unearned interest.
Recognition and derecognition of financial instruments
The Company recognizes a financial asset or financial liability in its balance sheet when and only when it becomes a party to the contractual
provisions of the instrument. The Company derecognizes a financial asset or a portion of a financial asset when and only when it loses control of
the contractual rights that comprise the financial asset or a portion of a financial asset or when a financial asset or a portion of a financial asset
expires. The Company derecognizes a financial liability when and only when a liability is extinguished and that is when the obligation specified in
the contract is discharged, cancelled and expires.
Earnings per share
Earnings per share (“EPS”) disclosed in the income statements are determined by dividing net income by the weighted average number of
shares that have been outstanding during the related year or period and taking into account bonus issues and right issues. There is no difference
between basic and diluted earnings per share for any class of shares for any of the years.
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 recognised 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.
Cash and cash equivalents
For the purpose of cash flow statement, cash and cash equivalents comprise cash in hand; deposits with banks and other financial institutions
with the original maturity of three months or less.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
4. BUSINESS COMBINATIONS
Consolidated subsidiaries as from 01 January 2009
In the preceding financial statements for the year ended 31.12.2008, Zorlu Enerji Pakistan Ltd., was not consolidated due to the fact that it was
deemed to be immaterial individually and in aggregate to the results and financial position of Group. In the current year financial statements the
Group consolidated Zorlu Enerji Pakistan Ltd. on the grounds that it became active and material individually and in aggregate to the results and
financial position of Group. As the effect of not consolidating Zorlu Enerji Pakistan Ltd. in the comparative financial statements was not material,
the Group did not restate prior year financial statements and presented the cumulative effect thousand of TL 3.642 on the opening general
reserve on 01.01.2009 in the statement of equity. The balance sheet items of Zorlu Enerji Pakistan Ltd. as of 31.12.2008 are set out below for
further disclosure purposes:
31.12.2008
Cash and cash equivalents 41
Inventories 12
Property, plant and equipment 27.944
Intangible assets 14
Other assets 854
Total assets 28.865
Total liabilities 30.785
Paid in capital 331
Reserves 1.391
Accumulated deficit (3.642)
Total equity (1.920)
Total liabilities and equity 28.865
Zorlu Rüzgar Enerjisi Elektrik Üretim A.Ş. was established on 09.11.2009 and was consolidated to the accompanying consolidated financial
statements as of 31.12.2009.
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Zorlu Energy 2009 Annual Report

Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
5. SEGMENT INFORMATION
The Group is currently organized into two major product divisions. The basis on which the group reports its primary and secondary segment
information is as follows:
Electricity, steam production and maintenance services (Electricity segment):
Production and sales by Zorlu Enerji - Turkey
Production and sales by Rosmiks LLC (under construction) - Russia
Production and sales by Rotor (under construction) - Turkey
Production and sales by Zorlu Enerji Pakistan Ltd - Pakistan
Production and sales by Zorlu Hidroelektrik (under construction) - Turkey
Production and sales by Zorlu Jeotermal - Turkey
Financial services to energy segment by ICFS, Rosmiks International and Bundoran – USA, Holland and BVI
Production and sales by Zorlu Rüzgar - Turkey
Natural gas extraction and distribution services (Natural gas segment):
Production and sales by Amity Oil - Turkey
Production and sales by Zorlu Petrogas - Turkey
A. Business segments 2009 2008
Revenue
Electricity 486.327 474.083
Natural gas 61.062 57.208
547.389 531.291
Gross profit
Electricity 95.960 72.790
Natural gas 31.719 31.550
127.679 104.340
Operating profit
Electricity 243.577 28.837
Natural gas 18.450 16.538
262.027 45.375
Capital expenditure
Electricity 705.948 1.294.912
Natural gas 23.182 52.325
729.130 1.347.237
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Zorlu Energy 2009 Annual Report

Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
2009 2008
Segment assets
Electricity 2.274.042 2.435.852
Natural gas 133.840 152.670
2.407.882 2.588.522
Depreciation and amortisation charge
Continuing operations
Electricity and steam 39.606 33.071
Natural gas 3.964 4.315
43.570 37.386
Discontinued operations
Electricity and steam 9.488 7.265
Natural gas 1.936 1.947
B. Geographical segments
11.424 9.212
54.994 46.598
Segment assets
Turkey 1.173.364 1.681.637
Russia 1.205.814 904.444
Rest of the world 28.704 2.441
2.407.882 2.588.522
Capital expenditure
Turkey 406.590 712.436
Russia (construction in progress) 293.863 634.801
Other 28.677 --
Revenue
More than 98% (2008: 97%) of sales are generated in Turkey.
729.130 1.347.237
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Zorlu Energy 2009 Annual Report

Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
6. EARNINGS PER SHARE
2009 2008
Earnings (loss) per share from continuing operations:
Profit (loss) from continuing operations 134.289 (120.218)
Profit (loss) from continuing operations attributable to minority interest 5.037 (60.777)
Profit (loss) from continuing operations attributable to
equity holders of the parent 139.326 (180.995)
Weighted average number of shares 12.440.507.603 8.166.535.000
Earnings (loss) per share from continuing operations – (TL, full) 0,01 (0,02)
Loss per share from discontinued operations:
Loss from discontinued operations (37.463) (152.191)
Loss from discontinued operations attributable to minority interest (12.268) --
Loss from discontinued operations attributable to equity holders of the parent (49.731) (152.191)
Weighted average number of shares 12.440.507.603 8.166.535.000
Loss per share from continuing operations – (TL, full) (0,00) (0,02)
Earnings (loss) per share:
Profit (loss) for the year 96.826 (272.409)
Loss attributable to minority interest (7.231) (60.777)
Profit (loss) from attributable to equity holders of the parent 89.595 (333.186)
Weighted average number of ordinary shares in issue 12.440.507.603 8.166.535.000
Earnings (loss) per share, - (TL, full) 0,01 (0,04)
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Zorlu Energy 2009 Annual Report

Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
7. CASH AND CASH EQUIVALENTS
2009 2008
Cash in hand 56 92
Demand deposit at banks 9.414 5.852
Time deposit at banks 33.721 1.630
Cash and cash equivalents 43.191 7.574
Bank overdrafts (-) -- (513)
Cash and cash equivalents presented in cash flow statement 43.191 7.061
As of 31.12.2009, the maturity of time deposits vary between 04.01.2010 and 11.01.2010 (2008: 02.01.2009).
8. TRADE RECEIVABLES
Current accounts
- Third parties 105.526 89.601
- Related parties, note 26 96.856 26.439
Notes receivable
- Third parties 874 15.672
- Related parties, note 26 -- 1.951
203.256 133.663
Unearned interest on receivables (-) (348) (1.108)
Allowance for doubtful receivables (-) (10.346) (10.108)
Movement in the allowance for doubtful receivables is as follows:
192.562 122.447
Opening balance, 01.01 10.108 3.589
Charge for the year 238 6.519
Ending balance, 31.12 10.346 10.108
The allowance for doubtful trade receivables were set against the receivables aged as follows:
0-3 months 1.301 2.053
3-6 months 1.265 2.067
Over 6 months 7.780 5.988
10.346 10.108
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Zorlu Energy 2009 Annual Report

Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
9. INVENTORIES
2009 2008
Raw materials 2.529 3.462
Spare parts 4.032 35.654
Merchandise 1.509 1.332
8.070 40.448
Allowance for diminution in value (-) (1.122) (1.286)
Allowance for diminution in value of inventories is as follows:
6.948 39.162
Raw materials 1.122 1.122
Merchandise -- 164
Movement of allowance for diminution in value of inventories is as follows:
1.122 1.286
Opening balance, 01.01 1.286 1.090
Charge for the year -- 196
Disposal (-) (164) --
Ending balance, 31.12 1.122 1.286
10. OTHER ASSETS
Current
Prepaid expenses 4.839 4.601
Income accruals 17.432 38.646
VAT receivable 48.932 38.492
Work advances 248 187
Due from personnel 20 61
Prepaid taxes 837 48.052
Advances given 1.229 2.670
Due from related parties (note 26) 26.407 9.190
Other 3.292 6.953
103.236 148.852
Income accruals relate to natural gas and electricity provided to customers up to the balance sheet date but invoiced in the following month.
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
11. FINANCIAL ASSETS
Unquoted investments whose fair value cannot be measured reliably are carried at cost and classified as available-for-sale financial assets.
2009 2008
Long term financial assets
Equity investments 764 800
Unconsolidated investments 66 6.826
830 7.626
Share %
Amount
Entity Country 2009 2008 2009 2008
Equity investment
Solbar Energy Ltd. Israel 27% 27% 764 764
Dorad Energy Ltd. Israel 25% 25% 36 36
Allowance for unconsolidated investments (-)
Dorad Energy Ltd. Israel (36) --
764 800
Unconsolidated subsidiaries
Ramat Negev Energy Ltd. Israel 51% 51% 1.412 1.412
Ashdod Energy Ltd. Israel 51% 51% 3.387 3.387
Zorlu Intergas GMBH Austria 100% 100% 66 66
Zorlu Enerji Pakistan Ltd. Pakistan -- 100% -- 12.328
Zorlu Enerji ve İnşaat Sanayi ve Ticaret A.Ş. Turkey -- 80% -- 951
Yeni Gürsöğüt Enerji Elektrik Üretim A.Ş. Turkey 89% 89% 45 45
Allowance for unconsolidated subsidiaries (-)
Ramat Negev Energy Ltd. Israel (1.412) --
Ashdod Energy Ltd. Israel (3.387) --
Capital commitments (-)
Zorlu Enerji Pakistan Ltd. Pakistan -- (10.606)
Zorlu Enerji ve İnşaat Sanayi ve Ticaret A.Ş. Turkey -- (712)
Yeni Gürsöğüt Enerji Elektrik Üretim A.Ş. Turkey (45) (45)
66 6.826
830 7.626
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Zorlu Energy 2009 Annual Report

Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Zorlu Enerji Pakistan Ltd. was consolidated to the accompanying consolidated financial statements as from 01.01.2009 (note 4).
As of the balance sheet dates, the companies listed under “equity investments” and “unconsolidated investments” in which the Company has
controlling interest or significant influence are not consolidated or equity accounted as they are immaterial individually and in aggregate to the
results and financial position of the Group.
The movement of equity investment is given below:
2009 2008
Opening balance, 01.01 800 800
Allowance for equity investment (-) (36) --
Ending balance, 31.12 764 800
The movement of unconsolidated subsidiaries is given below:
Opening balance, 01.01 6.826 4.982
Increase (decrease) in fair value, net -- 1.857
Disposals (-) (239) (13)
Allowance for equity investment (-) (4.799) --
Consolidated subsidiaries (-) (1.722) --
Ending balance, 31.12 66 6.826
12. EXPLORATION AND EVALUATION ASSETS
Amount
Balance at, 01 January 2008 18.743
Additions 8.377
Expensed drilling costs (2.761)
Transfer to natural gas drilling costs (1.933)
Balance at, 31 December 2008 22.426
Additions 9.884
Expensed drilling costs (1.356)
Transfer to natural gas drilling costs (2.973)
Balance at, 31 December 2009 27.981
Costs directly associated with exploration well are capitalised until the evaluation of reserves. If it is determined that commercial viability has not
been achieved these costs are charged to expense; if determined as commercially viable these costs are transferred to “natural gas drilling costs”
under “Property, plant and equipment”.
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Expensed exploration wells that commercial discovery has not been achieved are as follows:
2009 2008
Diyarbakır (Çınar and Ovabağ wells) -- 659
Gaziantep (Yavuzeli well) -- 10
Gaziantep (Keysun well) -- 155
Tekmeşe (first well) -- 460
Enez (İpsala well) -- 1.477
Siirt (İdil well) 115 --
Doğubeyciler (second well) 458 --
Taşpınar well 15 --
Banarlı well 768 --
13. PROPERTY, PLANT AND EQUIPMENT
1.356 2.761
Translation Consolidated Disposal of
2008 Additions Disposals reserve subsidiary subsidiaries Transfers 2009
Cost
Land 6.071 -- -- -- -- (477) -- 5.594
Land improvements 78.841 467 (675) -- -- (91.692) 26.603 13.544
Buildings 24.016 2.643 -- (31) -- (707) 572 26.493
Leasehold improvements 130 29 -- -- -- (123) -- 36
Plant and machinery 531.973 21.701 (499) -- -- (3.988) 241.709 790.896
Motor vehicles 1.115 92 (90) (19) -- (201) -- 897
Furniture and fixtures 10.237 2.038 (419) (49) 47 (4.329) 1.065 8.590
Natural gas drilling cost 14.123 -- -- -- -- -- 2.973 17.096
Construction work in progress 1.120.573 690.632 -- (26.500) 27.900 (177.851) (272.967) 1.361.787
1.787.079 717.602 (1.683) (26.599) 27.947 (279.368) (45) 2.224.933
Accumulated depreciation
Land improvements 10.430 1.197 (2) -- -- (3.321) -- 8.304
Buildings 4.252 813 -- (10) -- (9) -- 5.046
Leasehold improvements 36 16 -- -- -- (29) -- 23
Plant and machinery 185.950 38.030 (114) (6) -- (3.084) -- 220.776
Motor vehicles 469 165 (52) (19) -- (110) -- 453
Furniture and fixtures 4.383 1.233 (35) -- 2 (1.467) -- 4.116
Natural gas drilling cost 7.503 1.071 -- -- -- -- -- 8.574
213.023 42.525 (203) (35) 2 (8.020) -- 247.292
Net book value 1.574.056 1.977.641
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Translation
2007 Additions Disposals reserve Transfers 2008
Cost
Land 5.955 39 -- -- 77 6.071
Land improvements 23.960 3.780 (247) -- 51.348 78.841
Buildings 23.781 -- -- 74 161 24.016
Leasehold improvements 49 80 -- -- 1 130
Plant and machinery 529.729 116 -- -- 2.128 531.973
Motor vehicles 961 138 (21) 37 -- 1.115
Furniture and fixtures 7.055 3.004 (6) 41 143 10.237
Natural gas drilling cost 12.190 -- -- -- 1.933 14.123
Construction in progress 432.223 728.685 -- 13.524 (53.859) 1.120.573
1.035.903 735.842 (274) 13.676 1.932 1.787.079
Accumulated depreciation
Land improvements 8.230 2.214 (14) -- -- 10.430
Buildings 3.424 818 -- 10 -- 4.252
Leasehold improvements 21 15 -- -- -- 36
Plant and machinery 153.984 31.960 -- 6 -- 185.950
Motor vehicles 309 175 (21) 6 -- 469
Furniture and fixtures 3.105 999 -- 279 -- 4.383
Natural gas drilling cost 6.284 1.219 -- -- -- 7.503
175.357 37.400 (35) 301 -- 213.023
Net book value 860.546 1.574.056
The Group’s policy is to trace all material and significant fixed asset additions under construction in progress and transfer to the related fixed
asset accounts when the construction process is completed. As of 31.12.2009 “Construction in Progress” account for new investments in tangible
fixed assets amounted to TL 1.361.787 (2008: TL 1.120.573) which was broken down as follows:
Construction of two 340 MW energy power plants by Rosmiks LLC in Russia amounting to TL 1.063.978 (2008: TL 898.072).
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Investments by Zorlu Energy Pakistan in Pakistan wind energy power plants with a capacity of 49,5 MW amounting to TL 36.152.
Investments in progress by Zorlu Energy comprising gas turbine of 42 MW and generator assembly in Lüleburgaz, Turkey, amounting to TL 4.447
(2008: TL 44.279), energy investments in Israel amounting to TL 32.280 (2008: TL 23.137) and investments in hydroelectric power stations
amounting to TL 6.232 (2008: TL 1.192).
Investment by Rotor at Osmaniye Turkey comprising 54 wind turbines with total capacity of 135 MW amounting to TL 218.633 (2008: TL
127.555) and other investments totalled TL 65 (2008: TL 6.157).
As of 31.12.2008 investments for installation of natural gas pipelines in Lüleburgaz, Edirne, Çerkezköy, Kırklareli and Tekirdağ and investment by
Trakya Gaz and in Gaziantep by Gaziantep Gaz totalling TL 20.181.
The financing expenses capitalized under construction in progress during 2009 totalled TL 41.388 (2008: TL 128.876).
Guarantees given to secure bank loans are set out in note 22.
14. INTANGIBLE ASSETS
Disposal of Consolidated
2008 Additions subsidiaries subsidiary Transfer 2009
Cost
Wind energy production rights 16.709 -- -- 15 45 16.769
Natural gas drilling rights 24.596 -- (9) -- -- 24.587
Hydroelectric energy production rights 493.919 -- (493.919) -- -- --
Thermal energy production rights 108.799 -- (108.799) -- -- --
Other intangible assets 7.534 1.644 (3.866) -- -- 5.312
651.557 1.644 (606.593) 15 45 46.668
Accumulated amortization
Wind energy production rights 1.170 668 (1.255) 1 -- 584
Natural gas drilling rights 4.039 1.230 -- -- -- 5.269
Hydroelectric energy production rights 5.488 8.232 (13.720) -- -- --
Thermal energy production rights 1.209 1.813 (3.022) -- -- --
Other intangible assets 3.926 526 (160) -- -- 4.292
15.832 12.469 (18.157) 1 -- 10.145
Net book value 635.725 36.523
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
2007 Additions 2008
Cost
Wind energy production rights 16.709 -- 16.709
Natural gas drilling rights 24.596 -- 24.596
Hydroelectric energy production rights -- 493.919 493.919
Thermal energy production rights -- 108.799 108.799
Other intangible assets 7.234 300 7.534
48.539 603.018 651.557
Accumulated amortization
Wind energy production rights 502 668 1.170
Natural gas drilling rights 2.809 1.230 4.039
Hydroelectric energy production rights -- 5.488 5.488
Thermal energy production rights -- 1.209 1.209
Other intangible assets 3.323 603 3.926
6.634 9.198 15.832
Net book value 41.905 635.725
During 2008 the Group won the tender for the operating license of Tercan, Kuzgun, Mercan, İkizdere, Çıldır, Beyköy and Ataköy Hydroelectric
power plants and the thermal power plant in Denizli for a period of 30 years and for acquisition of the ownership of natural gas power plant
located in Van for total of USD 510 million equivalent to TL 602.718 which has been reflected to intangible assets as “Hydroelectric energy
rights” and “Thermal energy rights”.
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Zorlu Energy 2009 Annual Report

Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
15. BORROWINGS
2009 2008
Current
Bank borrowings 149.017 134.008
Finance lease liabilities, net -- 45
149.017 134.053
Current portion of long term borrowings
Bank borrowings 383.070 203.716
Non-current
Bank borrowings 849.352 1.458.787
On 08 May 2009, the Company had signed a loan agreement with International Finance Corporation, European Bank for Reconstruction and
Development, European Investment Bank, HSBC Bank Plc and Denizbank A.Ş. Bahrain Branch amounting to EUR 130 million with a maturity of 10
to 12 years for financing its investments in Osmaniye/Turkey. As of 31.12.2009, Rotor had obtained EUR 85 million loan in accordance with the
above mentioned agreement.
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Zorlu Energy 2009 Annual Report

Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Summary maturity schedule of bank loans is given below:
2009 EUR (‘000) USD (‘000) TL TL equivalent
Due in one year 14.185 239.668 140.575 532.087
One to two years 13.023 203.142 -- 334.004
Two to three years 11.583 144.647 -- 242.818
Three to four years 8.836 69.949 -- 124.411
Four to five years 8.212 9.156 -- 31.527
Five and over five years 45.730 11.824 -- 116.592
Total bank borrowings 101.569 678.386 140.575 1.381.439
2008 EUR USD TL TL equivalent
Due in one year 6.827 186.375 41.254 337.724
One to two years 6.106 216.633 -- 340.686
Two to three years 9.748 398.748 -- 623.894
Three to four years 2.322 112.509 -- 175.117
Four to five years 2.095 49.033 -- 78.638
Five and over five years 5.279 151.525 -- 240.452
Total bank borrowings 32.377 1.114.823 41.254 1.796.511
Group had given various letters of guarantee to financial institutions for obtained bank loans (note 22).
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Zorlu Energy 2009 Annual Report

Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
16. TRADE PAYABLES
2009 2008
Current
Current accounts
- Third parties 163.456 136.616
- Related parties, note 26 13.417 11.741
176.873 148.357
Unearned interest on payables (-) (361) (988)
176.512 147.369
Non-current
Trade payables
- Third parties 65.732 56.089
- Related parties, note 26 60.449 --
126.181 56.089
17. PROVISION FOR EXPENSES
Current
Provision for share of TRT 411 320
Legal claims and other provisions 764 2.376
Movement of provision for expenses is as follows:
1.175 2.696
Legal claims
Provision for share of TRT
Opening balance, 01.01 2.376 320
Additions -- 91
Payment (-) (1.612) --
Ending balance, 31.12 764 411
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
18. OTHER LIABILITIES
2009 2008
Current
Income tax and social security premiums payable 9.676 3.886
Advances received 106 6.946
Due to personnel 295 867
Due to related parties, note 26 -- 224
Other 635 819
10.712 12.742
Non-current
Deposits and guarantees received -- 2.896
Due to related parties, note 26 428.554 524.441
19. TAXATION ON INCOME
a) Current taxation
428.554 527.337
Profit (loss) before tax 140.750 (78.527)
Domestic tax rate 20% 20%
Tax calculated at domestic tax rates applicable to profits in the respective countries (28.150) 15.705
Taxable losses -- (10.258)
Tax exemption 10.695 20.100
Disallowable expenses (4.250) (41.984)
Unused investment allowances -- (34.877)
Tax rate effect of foreign countries -- 487
Income not subject to tax 15.244 9.136
(6.461) (41.691)
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
The Group’s taxation on income is as follows:
Current tax charge 4.440 5.402
Deferred tax charge 2.021 36.289
6.461 41.691
In Turkey, the corporation tax rate on the profits for the calendar year 2009 is 20% (2008: 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 dividend to individuals and non-resident companies are subject to withholding at the rate of
15%.
In Turkey, the tax legislation does not permit a parent company and its affiliates to file a consolidated tax return. Therefore, provision for taxation
charge, as reflected in the accompanying consolidated financial information, has been calculated on a separate-entity basis.
The exemption period granted on profits from the sale of investment shares and immovable property by Corporation Tax Law transitory articles
No. 28 and 29 expired on 31 December 2004. However this exemption was re-enacted by Law No. 5281 on permanent basis in effect from 1
January 2005. Accordingly, 75% of profits from the sale of investments and immovable’s held for a minimum of two years will be tax exempt
provided the sale proceeds are collected within two years and 75% of the profit is added to share capital or is kept in a special reserve account
for a minimum of five years
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
In Turkey companies were allowed to deduct 40% of the value of fixed assets (exceeding TL 6.000) purchased after 24 April 2003 (investment
allowances) from their taxable profits as investment incentive. Such investment deduction is also not subject to income tax withholding. The
investment deductions not used in any year because of insufficient profits may be carried to future periods. Investment allowances related to
fixed assets purchased or to be purchased under Investment Incentive Certificates granted or applied for before 24 April 2003, may be based
on up to 100% of the investment value in fixed assets, but these are subject to tax at 19.8%. Investment allowances have been cancelled as from
1 January 2006 but investment allowances earned prior to this date may be used up to 31 December 2008; any balance unused after this date
may not be carried forward; if this option is exercised the balance of taxable profit after deduction of investment allowances is to be taxed at
30%.
Tax losses that are reported in the Corporation Tax in Turkey return may be carried forward and deducted from the corporation tax base for a
maximum of five consecutive years.
The Turkish Tax Procedural Law does not include a procedure for formally agreeing tax assessments. Tax returns must be filed within three and
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.
Taxes included in the balance sheet are shown below:
2009 2008
Corporation and income taxes 4.436 21.861
Prepaid taxes (-) (3.446) (12.472)
990 9.389
Deferred taxation
The Group recognizes deferred tax assets and liabilities based upon temporary differences between its financial statements as reported for
IFRS purposes and its statutory tax financial statements. These differences usually result in the recognition of revenue and expenses in different
reporting periods for IFRS and tax purposes.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
The composition of cumulative temporary differences and the related deferred tax assets/liabilities in respect of items for which deferred tax has
been provided at the balance sheet dates using the expected future tax rates were as follows:
Cumulative temporary difference
Deferred tax
2009 2008 2009 2008
Deferred tax asset
Employee termination benefits 1.251 2.388 250 478
Provision for expenses 1.945 1.533 389 307
Doubtful debts provision expense 9.385 9.386 1.877 1.877
Taxable loss carried forward 74.796 134.314 14.959 26.863
Other 6.638 5.643 1.328 1.129
18.803 30.654
Deferred tax liability
Temporary differences arising
from restating non-monetary assets 285.668 163.495 57.134 31.875
Unearned interest on payables 427 9.715 85 1.943
Other 1.135 1.179 227 236
Movement of deferred tax liability is given below:
57.446 34.054
38.643 3.400
2009 2008
Opening balance, 01.01 3.400 887
Deferred tax effect of unconsolidated subsidiaries 39.943 --
Translation differences 85 (419)
Deferred tax charge 2.021 36.289
Deferred tax effect of discontinued operations (6.806) (33.357)
Ending balance, 31.12 38.643 3.400
20. EMPLOYEE TERMINATION BENEFITS
In accordance with existing social legislation in Turkey, the Group is required to make lump-sum termination indemnities to each eligible
employee who has completed one year of service with the Group, and whose employment is terminated due to retirement or for reasons other
than resignation or misconduct.
The amount of indemnity is the equivalent of one month’s salary for each year of service subject to a ceiling which is TL 2.365,16 as of 31.12.2009
(2008: TL 2.173,19) on historical cost basis).
The Company has no other obligation for employee termination other than the retirement pay above.
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
In the accompanying consolidated financial statements, 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 rates and an appropriate discount rate.
Movement of reserve for retirement pay is given below:
2009 2008
Opening balance, 01.01 2.388 1.366
Unconsolidated subsidiaries (1.651) --
Additions 1.658 1.397
Disposals (1.144) (375)
Ending balance, 31.12 1.251 2.388
Personnel cost:
Key personnel salaries and other short term benefits 2.207 2.533
Number of personnel at period end: 328 891
21. SHARE CAPITAL
As a result of raising the share capital of Zorlu Enerji from TL 81.665 to TL 281.665 the newly issued shares with total nominal value of TL
200.000 have been sold by using preferential right between 18.09.2009 and 02.10.2009. The number of 89.002 and 100.601 shares on which
the preferential right had not been used, with a totally nominal value TL 189.603 were sold in primary market by public offerings on 09.10.2009
and 12.10.2009, respectively.
The Company has increased its share capital ceiling from TL 190.000 to TL 500.000 based on the Board of Directors decision dated 23.12.2008.
The authorized share capital of the Company comprised 50.000.000.000 shares (2008: 19.000.000.000 shares) and the issued and paid up
share capital comprised 28.166.535.000 shares (2008: 8.166.535.000 shares) of par value Kurush 1 each as of the balance sheet dates.
The Group’s new capital structure is as follows:
As of 31.12.2008 As of 31.12.2009
before share capital increase
after share capital increase
Shareholding Cash Shareholding
Shareholding % amount increase Shareholding % amount
Zorlu Holding A.Ş. 43,2% 35.288 80.610 41,2% 115.898
Korteks Mensucat Sanayi ve Ticaret A.Ş. 17,5% 14.330 35.095 17,5% 49.425
Shares held by public 29,4% 24.016 66.064 32,0% 90.080
Other 9,9% 8.031 18.231 9,3% 26.262
100,0% 81.665 200.000 100,0% 281.665
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
As of the balance sheet dates, the shareholders of the Company and their percentage shareholdings were as follows:
Shareholding % Shareholding amount
2009 2008 2009 2008
Zorlu Holding A.Ş. 41,2% 43,2% 115.898 35.288
Korteks Mensucat Sanayi ve Ticaret A.Ş. 17,5% 17,5% 49.425 14.330
Shares held by public 32,0% 29,4% 90.080 24.016
Other shareholders 9,3% 9,9% 26.262 8.031
Share capital 100,0% 100,0% 281.665 81.665
Inflation adjustment of share capital 110.948 110.948
392.613 192.613
The ultimate parent of the Company is Zorlu Holding A.Ş. which is located at Ambarlı, Petrol Ofisi Dolum Tesisleri Yolu, Zorlu Plaza, Avcılar/
Istanbul- Turkey.
22. COMMITMENTS AND CONTINGENCIES
Contingent assets
2009 2008
a. Obtained from customers and suppliers
Letters of guarantee 56.932 137.539
Checks and notes 4.892 8.025
Contingent liabilities
a. Letters of guarantee, checks and notes given
On behalf of incorporated body 61.295 48.775
On behalf of consolidated subsidiaries 5.597 32.842
On behalf of other Zorlu Group of companies 15.373 --
82.265 81.617
b. Court cases started by the Group and pending as of 31.12.2009 amounted to TL 25.015 (2008: TL 24.695) and as of the same date court cases
started and pending against the Group amounted to TL 566 (2008: TL 430).
c. Zorlu Holding A.Ş. guaranteed the bank loans amounting to USD 750 million which were obtained on 29.08.2008 and 06.06.2008.
d. As of 31.12.2009, the Group mortgaged its property, plant and equipment to the extent of USD 60.000.000 and USD 1.150.000. Additionally,
Zorlu Holding A.Ş. was guarantor for the loans obtained for long term investments by the Group.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
e. As of 31.12.2009, Zorlu Petrogas, Petrol, Gas ve Petrokimya Ürünleri İnşaat Sanayi ve Ticaret A.Ş., a subsidiary of the Company, has signed
natural gas purchase agreement with Enerco Enerji Sanayi ve Ticaret A.Ş. to purchase natural gas amounting to 50.000.000 m3 for the first year
and 975.000.000 m3 for the next five years.
23. NATURE OF EXPENSES
Nature of expenses consists of cost of sales, selling, general and administrative expenses.
2009 2008
Direct materials and merchandise expenses 312.314 333.997
Employee and personnel expenses 16.364 16.288
Energy expenses 13.016 8.918
Depreciation and amortization 43.570 37.386
Outsourcing expenses 12.856 12.327
Repair and maintenance expenses 18.873 12.349
Energy transmission line distribution expenses 1.792 2.744
Türkiye Elektrik İletim A.Ş. rounding correction expenses 24.145 18.637
Other 13.938 33.541
24. OTHER INCOME AND OTHER EXPENSE
456.868 476.187
Provisions released 44 1.910
Profit on sale of property, plant and equipment 1.113 163
Income on insurance claims 374 542
Profit on sale of financial assets 181.243 --
Other 3.257 64
Other income 186.031 2.679
Loss on sale of financial assets 6.780 --
Drilling expenses (note 12) 1.356 2.761
Loss on sale of property, plant and equipment 1.206 --
Tax penalty for TRT -- 9.626
Provision for unconsolidated subsidiaries 4.835 --
Other 348 21
Other expense 14.525 12.408
Other income and other expense include profit/(loss) on sale of subsidiaries, Zorlu Doğal Elektrik Üretimi A.Ş., Zorlu O/M Enerji Tesisleri
İşletme ve Bakım Hizmetleri A.Ş., Zorlu Endüstriyel ve Enerji Tesisleri İnşaat Ticaret A.Ş., Zorlu Elektrik Enerjisi İthalat İhracat ve Toptan Ticaret
A.Ş., Trakya Bölgesi Doğalgaz Dağıtım A.Ş., Gazdaş Gaziantep Doğalgaz Dağıtım A.Ş. and Zorlu Doğalgaz İthalat İhracat ve Toptan Ticaret A.Ş.,
of the Company and Zorlu Petrogas, Petrol, Gaz ve Petrokimya Ürünleri İnşaat Sanayi ve Ticaret A.Ş. amounting to TL 181.243 and TL 6.780,
respectively (note 27).
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
25. FINANCING INCOME AND FINANCING EXPENSE
2009 2008
Foreign exchange gain 359.710 424.592
Interest income 33.111 2.378
Unearned interest on payables 1.528 577
Financing income 394.349 427.547
Foreign exchange loss 358.108 457.971
Interest expense 131.805 85.541
Unearned interest on receivables 17.874 5.249
Bank commissions and other financing expenses 7.839 2.688
Financing expense 515.626 551.449
26. RELATED PARTY DISCLOSURE
In the course of conducting its business, the Group conducted various business transactions with related parties on commercial terms. These
comprised the following:
i) Year end balances with related parties
Trade receivables Trade payables Other assets Other liabilities
2009
Korteks Mensucat Sanayi ve Ticaret A.Ş. 5.204 -- -- --
Zorluteks Tekstil Ticaret ve Sanayi A.Ş. 2.451 -- -- --
Trakya Bölgesi Doğalgaz Dağıtım A.Ş. 65.051 6.327 -- 423
Gazdaş Gaziantep Doğalgaz Dağıtım A.Ş. 16.113 -- 8.728 --
Zorlu Doğal Elektrik Enerji Üretim A.Ş. 3.753 -- -- --
Zorlu O/M Enerji Tesisleri İşletme ve Bakım Hizmetleri A.Ş. -- -- 17.611 --
Zorlu Holding A.Ş. -- 6.363 -- 369.075
Zorlu Endüstriyel ve Enerji Tesisleri İnşaat Ticaret A.Ş. -- 60.449 -- 52.684
Zorlu Elektrik Enerjisi İthalat İhracat ve Toptan Ticaret A.Ş. -- -- -- 1.763
Other related parties 4.253 653 68 4.609
96.825 73.792 26.407 428.554
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Trade receivables Trade payables Other assets Other liabilities
2008
Zorlu Holding A.Ş. -- 8.926 -- 524.441
Zorluteks Tekstil Ticaret ve Sanayi A.Ş. 2.114 5 -- --
Korteks Mensucat Sanayi ve Ticaret A.Ş. 2.900 136 -- --
Zorlu Enerji Pakistan Ltd. 21.265 -- 9.190 --
Other related parties 2.004 2.574 -- 224
ii) Transactions carried out with related parties during the year:
28.283 11.641 9.190 524.665
Operating Other Financing Financing
Sales expenses income income expense
2009
Zorlu Holding A.Ş. 650 5.779 32.469 39.595 40.306
Korteks Mensucat Sanayi ve Ticaret A.Ş. 44.261 227 -- -- 2.366
Zorluteks Tekstil Ticaret ve Sanayi A.Ş. 22.476 100 36 -- 649
Trakya Bölgesi Doğalgaz Dağıtım A.Ş. 22.612 -- 673 3.742 2.423
Zorlu Endüstriyel ve Enerji Tesisleri İnşaat Ticaret A.Ş. -- 10 1.037 17.324 16.984
Other related parties 5.961 3.689 2.020 8.202 4.443
95.960 9.805 36.235 68.863 67.171
2008
Zorlu Holding A.Ş. -- 6.584 -- 85.652 42.543
Korteks Mensucat Sanayi ve Ticaret A.Ş. 38.848 435 -- -- --
Zorluteks Tekstil Ticaret ve Sanayi A.Ş. 23.082 43 29 -- --
Other related parties 511 514 169 140 5.106
62.441 7.576 198 85.792 47.649
Zorluteks Tekstil Ticaret ve Sanayi A.Ş. is a subsidiary of the equity holder of the Company named Zorlu Holding A.Ş.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
27. DISCONTINUED OPERATIONS
Company Field of activity Country
Zorlu Doğal Elektrik Üretimi A.Ş. Production of electricity Turkey
Zorlu O/M Enerji Tesisleri İşletme ve Bakım Hizmetleri A.Ş. Energy facility maintenance services Turkey
Zorlu Endüstriyel ve Enerji Tesisleri İnşaat Ticaret A.Ş. Energy facility construction services Turkey
Zorlu Elektrik Enerjisi İthalat İhracat ve Toptan Ticaret A.Ş. Purchase and sale of electricity Turkey
Trakya Bölgesi Doğalgaz Dağıtım A.Ş. Natural gas distribution Turkey
Gazdaş Gaziantep Doğalgaz Dağıtım A.Ş. Natural gas distribution Turkey
Zorlu Doğalgaz İthalat İhracat ve Toptan Ticaret A.Ş. Purchase and sales of natural gas Turkey
Zorlu Doğal Elektrik Üretimi A.Ş. (Istanbul/Turkey) - Zorlu Doğal Elektrik was established in 2008 to build and operate hydroelectric power
plants as well as power stations based on all forms of renewable energies.
On 05 March 2008 the Group has won the tender for the operating licenses of Tercan, Kuzgun, Mercan, İkizdere, Çıldır, Beyköy and Ataköy
Hydroelectric power plants and the thermal power plant in Denizli for a period of 30 years and for acquisition of the ownership of natural gas
power plant located in Van all owned by Ankara Doğal Elektrik Üretim ve Ticaret A.Ş. for USD 510 million. The tender was organised by the
Turkish Privatisation Administration and approved on 07.05.2008. In accordance with the agreement signed on 01.09.2008, the consideration
for the tender was met fully in cash.
Type of Date of License Production of Production capacity
Region power plant license obtained period electric/Power per year KW hour
Van Fuel oil 21.08.2008 49 years 15,0 MW 2.300.000
Denizli Thermal 21.08.2008 29 years 15,0 MW 83.000.000
Tokat Hydroelectric 21.08.2008 30 years 5,5 MW 8.000.000
Eskişehir Hydroelectric 21.08.2008 30 years 16,8 MW 59.000.000
Kars Hydroelectric 21.08.2008 30 years 15,4 MW 46.800.000
Rize Hydroelectric 21.08.2008 30 years 18,6 MW 109.000.000
Erzurum Hydroelectric 21.08.2008 30 years 20,9 MW 24.000.000
Tunceli Hydroelectric 21.08.2008 30 years 20,4 MW 85.000.000
Erzincan Hydroelectric 21.08.2008 30 years 15,0 MW 45.000.000
Total 142,6 MW 462.100.000
In accordance with the decision of the Energy Market Regulatory Authority (EMRA) dated on 21 August 2008, the license period of the thermal
power plant in Denizli/Sarayköy is 29 years 3 months and 17 days to be valid on 01 September 2008.
Zorlu O&M Enerji Tesisleri İşletme ve Bakım Hizmetleri A.Ş. (“Istanbul/Turkey”) Zorlu O&M power plant operation and maintenance services
company was established 2000 to provide operational and maintenance services to power plants. Zorlu O&M has cooperation agreements with
and provides operation and maintenance services in Turkey to Zorlu Energy’s power stations. Internationally it provides services for the power
stations in Greece, India and Kuwait. Zorlu O&M will provide operation and maintenance services to Zorlu Energy’s Russia and Israel power plant
projects. The contract for operation and maintenance services of power plants in Israel and Pakistan has been signed.
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Zorlu Enerji Elektrik Üretim A.Ş.
Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Zorlu Endüstriyel ve Enerji Tesisleri İnşaat Ticaret A.Ş. (“Istanbul/Turkey”) – Zorlu Endüstriyel became operational in 2000 for the purpose of
developing, implementing and providing financial support to industrial and energy plant projects.
Zorlu Endüstriyel is also responsible for the construction of power plants in Moscow (Russia) and Lüleburgaz (Turkey), and construction and
mounting (EPC) of 4 combine cycle plants in Israel and the wind energy power plant under construction in Osmaniye (Turkey) and Pakistan. The
validity of “Construction and Service Certificate” license obtained on 14.06.2007 is for 10 years.
Zorlu Elektrik Enerji İthalat İhracat A.Ş. (“Istanbul/Turkey”) - Zorlu Elektrik was established in 2003 for the purpose of procurement of
wholesale electricity from domestic sources, free trade zones and international grid-connected countries for distribution; on wholesale and retail
basis. The validity of the license obtained on 23.10.2003 is for 10 years.
Trakya Bölgesi Doğalgaz Dağıtım A.Ş. (“Istanbul/Turkey”) – This company was established in 2005 for the purpose of city gas distribution.
On August 2006, Trakya Doğal Gaz won the tender of city gas distribution in Tekirdağ, Muratlı, Edirne, Kırklareli, Kavaklı, Babaeski, Lüleburgaz,
Evrensekiz, Büyükkarıştıran, Misinli, Ulaş, Çerkezköy, Kapaklı, Kızılpınar, Karaağaç, Velimeşe, Veliköy, all in the Thrace region for 30 years starting
on 25.01.2006. As a condition of the tender the price for unit service and depreciation was determined as “0” (zero) cent/kwh and the price for
subscription deposits as “0” (zero) USD for the first 8 years. After 8 years, natural gas sales conditions will be determined by EMRA.
Gazdaş Gaziantep Doğalgaz Dağıtım A.Ş. (“Istanbul/Turkey”) – This company was established in 2005 for the purpose of city gas distribution.
On August 2005, Gazdaş won the tender of city gas distribution in Gaziantep, Kilis and Nizip all in Southeast Anatolia region for 30 years
starting on 24.02.2006. As a condition of the tender the price for unit service and depreciation was determined as “0” (zero) cent/kwh and the
price for subscription deposits as “0” (zero) USD for the first 8 years. After 8 years, natural gas sales conditions will be determined by EMRA.
Zorlu Doğalgaz İthalat İhracat A.Ş. (“Istanbul/Turkey”) – Zorlu Doğalgaz was established in 2003 for the purpose of wholesale procurement
and distribution of compressed natural gas (“CNG”) and/or liquefied natural gas (“LNG”) to other wholesale companies, free trade zones and
countries abroad; owns license for wholesale and retail sales and direct sales to consumers .
Based on the Board of Directors decision dated 23.06.2009 the Company sold the following shares:
340.000 shares and 85.000 shares in Trakya Bölgesi Doğal Gaz Dağıtım A.Ş. respectively to Zorlu Holding A.Ş. for TL 340 and to Zorluteks
Tekstil Sanayi ve Ticaret A.Ş. for TL 85;
500.000 shares and 125.000 shares in Gazdaş Gaziantep Doğal Gaz Dağıtım A.Ş. respectively to Zorlu Holding A.Ş. for TL 500 and to Zorluteks
Tekstil Sanayi ve Ticaret A.Ş. for TL 125;
500.000 shares and 500.000 shares in Zorlu Doğal Gaz İthalat İhracat ve Toptan Ticaret A.Ş. respectively to Zorlu Hometeks Tekstil Ürünleri
Sanayi ve Ticaret A.Ş. for TL 5 and to Zorluteks Tekstil Sanayi ve Ticaret A.Ş. for TL 5;
500.000 shares and 500.000 shares in Zorlu Elektrik Enerjisi İthalat İhracat ve Toptan Ticaret A.Ş. respectively to Zorlu Hometeks Tekstil
Ürünleri Sanayi ve Ticaret A.Ş. for TL 5,2 and to Zorluteks Tekstil Sanayi ve Ticaret A.Ş. for TL 5,2;
950.000 shares and 50.000 shares in Zorlu Endüstriyel ve Enerji Tesisleri İnşaat Ticaret A.Ş. respectively to Zorlu Holding A.Ş. for TL 16.827 and
to Zorlu Dış Ticaret A.Ş. for TL 886;
950.000 shares and 50.000 shares in Zorlu O/M Enerji Tesisleri İşletme ve Bakım Hizmetleri A.Ş. respectively to Zorlu Holding A.Ş. for TL 2.097
and to Zorlu Dış Ticaret A.Ş. for TL 110;
790.000 shares and 10.000 shares in Zorlu Enerji ve İnşaat Sanayi ve Ticaret A.Ş. respectively to Zorlu Holding A.Ş. for TL 790 and to Deniz
Destek Oto Alım Satım Kiralama Temizlik Hizmetleri ve İnşaat A.Ş. for TL 10;
47.500.000 shares and 500.000 shares in Zorlu Doğal Elektrik Üretimi A.Ş. respectively to Zorlu Holding A.Ş. for USD 40.591.600 and to Deniz
Destek Oto Alım Satım Kiralama Temizlik Hizmetleri ve İnşaat A.Ş. for USD 427.280. All transfer transactions were completed on the same date
as the Board decision.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Zorlu Petrogas Petrol Gaz ve Petrokimya Ürünleri İnşaat Sanayi ve Ticaret A.Ş., a subsidiary of the Group with a 73% economic interest sold
shares as follows:
500.000 shares and 500.000 in Zorlu Doğal Gaz İthalat İhracat ve Toptan Ticaret A.Ş. respectively to Zorluteks Tekstil Sanayi ve Ticaret A.Ş. for
TL 5 and to Zorluhometeks Tekstil Ürünleri Sanayi ve Ticaret A.Ş. for TL 5;
500.000 shares and 500.000 shares in Zorlu Elektrik Enerjisi İthalat İhracat ve Toptan Ticaret A.Ş. respectively to Zorluteks Tekstil Sanayi ve
Ticaret A.Ş. for TL 5,2 and to Zorluhometeks Tekstil Ürünleri Sanayi ve Ticaret A.Ş. for TL 5,2;
50.000 shares in Zorlu Enerji ve İnşaat Sanayi ve Ticaret A.Ş. to Zorlu Dış Ticaret A.Ş. for TL 50;
500.000 shares in Zorlu Doğal Elektrik Üretimi A.Ş. shares to Zorlu Dış Ticaret A.Ş. for USD 427.280.
The fair value of Zorlu Doğal Elektrik Üretim AŞ. was ascertained by an independent valuation company on basis of Discounted Cash Flow
method. In accordance with the valuation report of the said company dated 22.06.2009 the fair value of the Company amounted to USD
42.728.000 and the value of the related transfer of shares was accounted for on basis of this valuation.
Profit and loss resulting from the operations of the subsidiaries which has been disposed were consolidated by eliminating all inter company
transactions until the date of cessation of control and presented in the statement income as discontinued operations in line with IFRS 5.
a. Results of discontinued operations
Discontinued operations
2009 2008
Revenue 106.931 135.735
Cost of sales (-) (72.543) (123.259)
Gross profit 34.388 12.476
Selling expenses (-) (6.892) (4.970)
General and administrative expenses (-) (10.090) (17.032)
Other income 1.093 735
Other expense (-) (1.263) (13)
Operating profit (loss) 17.236 (8.804)
Financing income 21.723 44.166
Financing expense (-) (75.273) (204.451)
Loss before taxation (36.314) (169.089)
Taxation on income (1.149) 16.898
Loss from discontinued operations for the year (37.463) (152.191)
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
b. Cash flow from (used in) discontinued operations
2009 2008
Net cash used in operating activities (21.142) (104.239)
Net cash used in investing activities (26.230) (560.961)
Net cash provided by financing activities 65.229 612.209
28. FINANCIAL INSTRUMENTS
17.857 (52.991)
Financial risk management objectives and policies
The Group is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk and certain other
price risks, which result both from its operating and investing activities. The Group’s risk management is coordinated at its headquarters, in
close co-operation with the board of directors, and focuses on actively securing the Group’s short to medium term cash flows by minimizing the
exposure to financial markets. Long term financial investments are managed to generate lasting returns.
The Group does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant
financial risks to which the Group is exposed to are described below.
Credit risk
The Group’s exposure to credit risk is limited to the carrying amount of financial assets recognized at the balance sheet date.
Credit risk concerns the risk that a loss will be suffered by a party due to the reason that the other party to the transaction is unable to meet its
obligations.
The Group continuously monitors defaults of customers and other counterparties, identified either individually or by group, and incorporates
this information into its credit risk controls. Where available at reasonable cost, external credit ratings and/or reports on customers and other
counterparties are obtained and used. The Group’s policy is to deal only with creditworthy counterparties.
The Group management considers that all the financial assets shown above under paragraph liquidity risk that are not impaired for each of the
reporting dates under review are of good credit quality.
In respect of trade and other receivables, the Group is not exposed to any significant credit risk exposure to any single counterparty or any group
of counterparties having similar characteristics. The credit risk for liquid funds and other short-term financial assets is considered negligible,
since the counterparties are reputable banks with high quality external credit ratings.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
As of balance sheet dates, the Group’s exposure to credit risk is as summarised below:
Receivables
Trade receivables Other receivables
Related Third Related Third Bank Derivative
2009 party party party party amounts instruments Other
Secured portion of maximum credit risk with collateral -- 1.188 -- -- -- -- --
A. Carrying amount of financial assets that are
not overdue and not impaired 17.293 74.692 26.407 2.548 43.135 -- 56
B. Carrying amount of assets that are overdue
but not impaired 79.532 21.045 -- 764 -- -- --
- Carrying amount secured with collateral -- (1.188) -- -- -- -- --
C. Carrying amount of assets that are impaired -- -- -- -- -- -- --
- Overdue (gross carrying amount) -- 10.346 -- -- -- -- --
- Impairment -- (10.346) -- -- -- -- --
Total risk as of 31.12.2009 96.825 95.737 26.407 3.312 43.135 -- 56
Receivables
Trade receivables Other receivables
Related Third Related Third Bank Derivative
2008 party party party party amounts instruments Other
Secured portion of maximum credit risk with collateral -- 6.301 -- -- -- -- --
A. Carrying amount of financial assets that are
not overdue and not impaired 28.283 90.134 9.190 5.246 7.482 -- 92
B. Carrying amount of assets that are overdue but not impaired -- 4.030 -- 1.768 -- -- --
- Carrying amount secured with collateral -- (6.301) -- -- -- -- --
C. Carrying amount of assets that are impaired
- Overdue (gross carrying amount) -- 10.108 -- -- -- -- --
- Impairment -- (10.108) -- -- -- -- --
Total risk as of 31.12.2008 28.283 94.164 9.190 7.014 7.482 -- 92
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
As of the balance sheet dates, aging of overdue trade receivables is given below:
Receivables 2009
Trade receivables
Other receivables
Not more than 30 days 38.837 --
Within 1 month to 3 months 37.644 --
Within 3 months to 12 months 29.150 --
Within 1 year to 5 years 4.673 --
More than 5 years 619 764
Total 110.923 764
Carrying amount secured with collateral (1.188) --
Receivables 2008
Trade receivables
Other receivables
Not more than 30 days -- --
Within 1 month to 3 months 2.514 --
Within 3 months to 12 months 8.035 --
Within 1 year to 5 years 3.589 1.768
Total 14.138 1.768
Carrying amount secured with collateral (6.301) --
Foreign currency risk
The majority of the Group’s transactions are carried out in Euros and US Dollars. Exposure to currency exchange rates arise from the Group’s
bank loans and due to related parties which are primarily denominated in US Dollars and Euros.
Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
The Group manages its currency exposure risk by organizing a balanced distribution between its foreign currency assets and commitments and
by matching off the liabilities and receivables and its net currency position.
USD EUR RUR GBP TL equivalent
2009
Cash and cash equivalents 22.799 251 142.931 -- 42.019
Trade receivables 56.405 -- 13.575 -- 85.608
Other receivables 18.280 -- -- -- 27.524
Total foreign currency assets 97.484 251 156.506 -- 155.151
Current borrowings 239.668 14.185 -- -- 391.512
Non-current borrowings 438.718 87.384 -- -- 849.352
Trade payables 14.319 33.302 -- 136 93.827
Other payables 92 -- -- -- 139
Total foreign currency liabilities 692.797 134.871 -- 136 1.334.830
Net foreign currency position (595.313) (134.620) 156.506 (136) (1.179.679)
Import 192.234 -- -- -- 297.405
Export 1.515 -- -- -- 3.273
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
USD EUR RUR GBP TL equivalent
2008
Cash and cash equivalents 171 66 10.250 -- 929
Trade receivables 665 168 8.109 -- 1.784
Advances received 2.105 117 -- -- 3.435
Other receivables 24.707 -- 20.016 -- 38.398
Total foreign currency assets 27.648 351 38.375 -- 44.546
Current borrowings 186.375 6.847 -- -- 296.515
Non-current borrowings 928.448 25.549 -- -- 1.458.787
Trade payables 8.588 12.314 539.516 27 67.248
Due to related parties and other 112.330 -- -- -- 169.876
Total foreign currency liabilities 1.235.741 44.710 539.516 27 1.992.426
Net foreign currency position (1.208.093) (44.359) (501.141) (27) (1.947.880)
Import 33.892 -- -- -- 43.738
Export 608 1.987 -- -- 4.561
On basis of the above an increase of 1% in the foreign exchange rates against the Turkish Lira as of 31 December 2009 will amount to a loss of TL
11.797 (2008: TL 19.479) and a decrease will amount to profit of the same amount.
Interest rates risk
Interest rate risk arises because changes in interest rates may affect profitability as disclosed in financial statements.
The Group is subject to interest rate risk as a result of differences in balancing off the dates or timing differences related to assets and liabilities
maturing or to be subjected to price revision. The Group manages its interest rate risk by applying risk management strategies whereby it strives
to balance off the dates of changes in interest rates related to assets and liabilities.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
The Group’s interest rate position is as follows:
2009 2008
Fixed interest rate financial instruments
Financial assets-time deposits
- Time deposits 33.721 1.630
Financial liabilities 427.458 78.906
Variable interest rate financial instruments
Financial liabilities 953.981 1.717.650
As of balance sheet dates, the Group’s annual effective interest rates are as follows:
2009 (%) USD EUR RUR TL
Assets
Cash and cash equivalents 1,7% -- 6,9% --
Trade receivables 0,2% -- -- 7,3%
Liabilities
Borrowings 6,9% 7,0% -- 2,6%
Trade payables 0,2% 0,5% -- 7,3%
2008 (%) USD EUR RUR TL
Assets
Cash and cash equivalents -- -- -- 15,0%
Trade receivables 0,4% 2,4% -- 15,5%
Liabilities
Borrowings 7,2% 7,6% -- 18,9%
Trade payables 0,4% 2,6% -- 16,1%
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
As of 31.12.2009, if the variable interest rates of bank borrowing increased or decreased of +1% and -1% and if all other variables are held
constant the result before tax would have been influenced favorably or unfavorably by TL 1.711 (2008: TL 5.525) for an increase and for a
decrease in value of TL.
Liquidity risk
Liquidity risk comprises the risk that the Group becomes unable to find its payment requirements.
The Group manages its liquidity needs by carefully monitoring scheduled debt servicing payments for long-term financial liabilities as well as
cash-outflows due in day-to-day business. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well
as on the basis of a rolling 30 day projection. Long-term liquidity needs for a 180 day and 360 day lookout period are identified monthly.
The breakdown of liabilities according to their contractual maturity is based on the maturity dates from the date of the balance sheet is given
below:
Book Total cash Within 3 to 12 Over
2009 value out flow 3 months months 1 to 5 years 5 years
Contractual maturities
Borrowings 1.381.439 1.656.779 167.952 441.608 831.467 215.752
Trade payables 301.852 300.479 174.298 -- 126.181 --
Other liabilities 420.592 420.592 10.035 -- 410.334 223
2.103.883 2.377.850 352.285 441.608 1.367.982 215.975
Expected maturities
Trade payables 841 841 841 -- -- --
Other liabilities 18.674 18.674 677 -- 17.997 --
19.515 19.515 1.518 -- 17.997 --
Book Total cash Within 3 to 12 Over
2008 value out flow 3 months months 1 to 5 years 5 years
Contractual maturities
Borrowings 1.796.556 2.348.398 144.716 199.119 1.246.388 758.175
Trade payables 189.047 191.490 79.391 54.658 57.441 --
Other liabilities 539.617 539.617 11.734 566 524.441 2.876
2.525.220 3.079.505 235.841 254.343 1.828.270 761.051
Expected maturities
Trade payables 14.411 14.411 14.411 -- -- --
Other liabilities 461 461 461 -- -- --
14.872 14.872 14.872 -- -- --
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Capital risk management
The Group’s capital management objectives are:
• ensure the Group’s ability to continue as a going concern; and
• to provide an adequate return to shareholders,
by pricing products and services commensurately with the level of risk
The Group monitors capital on the basis of the carrying amount of equity plus its total of current and non current borrowings (net debt) less cash
and cash equivalents as presented on the face of the consolidated balance sheet.
The Group sets the amounts of capital in proportion to its overall financing structure i.e. equity and financial liabilities. The Group manages
the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying
assets. In order to maintain or adjust the capital structure the Group may adjust the amount of dividends paid the shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debt.
The Group’s capital to overall or financing ratio developed as follows:
2009 2008
Total borrowings (note 15) 1.381.439 1.796.556
Less : Cash and cash equivalents (note 7) (43.191) (7.574)
Net debt 1.338.248 1.788.982
Total equity 223.622 (98)
Overall financing 1.561.870 1.788.884
Net debt to overall financing ratio 86% 100%
Fair value of financial instruments
Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a
forced sale or liquidation, and is best evidenced by a quoted market price, if one exists.
The estimated fair values of financial instruments have been determined by the Group using available market information, management’s
judgment and appropriate valuation methodologies. The following disclosure of the estimated fair value of financial instruments is made with
the requirements of IAS 32. To the extent relevant and reliable information is available from the financial markets in Turkey; the fair value of the
financial instruments of the Group is based on such market data. The fair values of the remaining financial instruments of the Group can only be
estimated. The estimates presented herein are not necessarily indicative of the amounts the Group could realize in a current market exchange.
The following methods and assumptions were used to estimate the fair value of the Group’s financial instruments:
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
Financial assets
Monetary assets for which fair value approximates carrying value:
-Balances denominated in foreign currencies are translated at year-end exchange rates. The fair value of certain financial assets carried at cost,
including cash and due from banks, marketable securities plus the respective accrued interest are considered to approximate their respective
carrying values.
-The carrying value of the trade receivables net of provisions for uncollectible are considered to approximate their fair values.
Financial liabilities
Monetary liabilities for which fair value approximates carrying value:
-The fair values of short-term bank loans and other monetary liabilities are considered to approximate their respective carrying values due to
their short-term nature.
-The fair values of long-term bank borrowings which are denominated in foreign currencies and translated at year-end exchange rates are
considered to approximate their carrying values.
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Notes to Consolidated Financial Statements for the Year Ended 31 December 2009
(All amounts in thousands of Turkish Lira (“TL”) unless indicated otherwise.)
29. SUPPLEMENTARY CASH FLOW INFORMATION
2009 2008
Depreciation of property plant and equipment, note 13 42.525 37.400
Amortization of intangible assets, note 14 12.469 9.198
Provision for employee termination benefits, note 20 1.658 1.397
Provision (release) for diminution in value of inventories, note 9 (164) 196
Loss (profit) on sale of property, plant and equipment 89 (176)
Increase (decrease) in provisions (1.521) (4.667)
Profit on sale of subsidiaries (174.463) --
Provision for unconsolidated subsidiaries, note 11 4.835 --
Interest income, note 25 (33.111) (2.378)
Interest expense, note 25 131.805 85.541
Unearned interest on receivables, note 25 17.874 5.249
Unearned interest on payables, note 25 (1.528) (577)
Provision for doubtful receivables, note 8 238 6.519
706 137.702
Continued operations
Cost of sales 41.066 35.237
Operating expenses 2.504 2.149
43.570 37.386
Discontinued operations 11.424 9.212
54.994 46.598
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Zorlu Enerji Elektrik Üretim A.Ş.
Investor Information
Ordinary General Meeting
In line with a resolution passed at a meeting of the Board of Directors of Zorlu Enerji Elektrik Üretim A.Ş., the Company’s ordinary general
meeting for 2009 will be held on 31 May 2010 at 14:00 am at the address of Bursa Organize Sanayi Bölgesi Sarı Cad. No: 29 - Bursa.
Independent Auditor
Engin Bağımsız Denetim ve Serbest Muhasebecilik Mali Müşavirlik A.Ş.
Member of Grant Thornton International
Yıldız Posta Cad. Dedeman İşhanı No: 48, Kat: 5
34349 Gayrettepe-İstanbul
Financial Information and Company News
Zorlu Enerji Elektrik Üretim A.Ş. annual reports, financial statements, auditor’s reports, explanations on special events and other information
about the Company may be obtained from the Company’s website at http://zorluenerji.com.tr/ as well as from the Zorlu Group Investor Relations
Department by email or telephone.
Investor Relations
Figen Çevik
Corporate Finance and Investor Relations Director
Zorlu Plaza 34310 Avcılar İstanbul Turkey
Phone: (+90 212) 422 01 07
Email: yatirimci@zoren.com.tr
Page 108
Zorlu Energy 2009 Annual Report

Contact
Bursa (Head Office):
Istanbul:
Kırklareli:
Ankara:
Kayseri:
Yalova:
Organize Sanayi Bölgesi, Pembe Cadde,
No: 13 16159 Bursa, Turkey
Phone: +90 224 242 5616
Fax: +90 224 242 5611
Zorlu Plaza 34310 Avcılar - Istanbul, Turkey
Phone: +90 212 456 2300
Fax: +90 212 422 0099
Büyükkarıştıran Kasabası, Teyyare Meydanı Mevkii
39760 Lüleburgaz - Kırklareli, Turkey
Phone: +90 288 427 31 70
Fax: +90 288 427 31 77
ASO 1.Organize Sanayi Bölgesi, Büyük Selçuklu Caddesi
No: 1 06935 Sincan - Ankara, Turkey
Phone: +90 312 267 1929
Fax: +90 312 267 1939
Organize Sanayi Bölgesi, 6. Cadde,
No: 21 38070 Melikgazi - Kayseri, Turkey
Phone: +90 352 321 2420
Fax: +90 352 321 2918
İpek Kağıt Fabrikası, Zorlu Enerji Tesisleri,
Tokmakköyü 77700 Altınova - Yalova, Turkey
Phone: +90 226 462 8900
Fax: +90 226 462 8899
Rotor Electric Power Yeni Sanayi Sitesi Yanı 8500
Production Inc.
Bahçe - Osmaniye
Phone: +90 328 861 22 45
Fax: +90 328 861 22 40
Produced by Tayburn Kurumsal
Tel: (90 212) 227 04 36 Fax: (90 212) 227 88 57
www.tayburnkurumsal.com

www.zorluenerji.com.tr