Untitled - Zorlu Enerji

Period between 01.01.2006 – 31.12.2006 

contents 

Coming to 2006 5 

Competencies and Competitive Advantages 6 

Board of Directors 8 

Message from the Chairman 10 

Message from the General Manager 12 

Report of the Board of Directors 14 

Affiliates 16 

Domestic and International Operations 24 

Corporate Governance Compliance Report 28 

Results of the Operations 39 

Proposed Distribution of Profit 40 

Summary of Auditor’s Report 41 

Summary of Independent Auditor’s Report 42 

Financial Statements and Footnotes 44 

Footnotes to Consolidated Financial Statements 50

Coming to 

2006... 

Zorlu Enerji Group started its 

operations in 1993. With the 

companies and power plants 

established since then, it started 

to deliver turnkey solutions in all 

branches of energy industry. Zorlu 

Enerji Group is continuing its 

operations also in Europe, Asia 

and Middle East as well as in 

Turkey. 

Zorlu Enerji Elektrik Üretim A.fi., 

under Zorlu Enerji Group, is 

providing electricity and steam for 

industrial firms. It provides reliable 

and good quality energy for 

almost 240 industrial firms, with 

total of 420 MW power supplied 

by natural gas combined cycle 

power plants in Bursa, Ankara 

and Kayseri, and cogeneration 

power plants in Lüleburgaz, 

Kayseri and Yalova. Zorlu Enerji 

Elektrik Üretim A.fi. has 800 MW 

natural gas combined cycle power 

plant and 100 MW cogeneration 

power plant investments in 

Southern Israel, and, two cogeneration 

power plants project in 

progress, each has a power of 

370 MW, in Russia. 

Zorlu Endüstriyel ve Enerji Tesisleri 

‹nflaat Ticaret A.fi. is founded in 

2000 as an undertaking company 

operating in international energy 

industry, which has been 

delivering turnkey power plant 

installations to industrial firms, 

since then. 

Zorlu O&M Enerji Tesisleri ‹flletme 

ve Bak›m Hizmetleri A.fi. is 

providing maintenance and 

operational services to Zorlu Enerji 

Elektrik Üretim A.fi. and other 

energy firms in this industry. Zorlu 

O&M, founded in 2000, is the first 

Turkish company established in 

field of power plant operations 

and maintenance. 

Zorlu Petrogas Petrol, Gaz ve 

Petrokimya Ürünleri ‹nfl.San. ve 

Tic. A.fi. performs gas and petrol 

field operations for Zorlu Enerji 

Group. Company has been 

founded in 2000, and has 25 

licenses to search natural gas and 

petrol in various locations in 

Turkey; where it works together 

with Amity Oil International Pty. 

Ltd. in 5 of them. 

In 2005, Zorlu Enerji Group has 

obtained the contracts by tender 

for natural gas distribution in 

Trakya and Gaziantep Region; 

through the companies founded 

for this reason, Trakya Bölgesi 

Do¤algaz Da¤›t›m A.fi. and 

Gazdafl Gaziantep Do¤algaz 

Da¤›t›m A.fi., distribution and 

infrastructure projects are 

continuing in these regions. 

In addition to providing the electric 

needs of industrial companies, 

Zorlu Enerji Group also is 

performing electric and gas 

wholesale through Zorlu Enerji 

‹thalat, ‹hracat ve Toptan Ticaret 

A.fi. and Zorlu Do¤al Gaz ‹thalat, 

‹hracat ve Toptan Ticaret A.fi.. 

In 2006, Zorlu Enerji Group 

tended to hydro energy; obtained 

the DSI contracts by tender, 

preparations for two hydroelectric 

power plant constructions on 

Dalaman Stream in Mu¤la are in 

progress. Group has investments 

in all fields of energy and is 

continuing its developments with 

the principle of product and 

service diversity; therefore, 

company is continuing its 

consistent works in the field of 

renewable energy. In order to 

produce electricity from wind 

power, works in Turkey and in 

Pakistan are continuing. 

Zorlu Enerji 2006 Annual Report 5

Competencies 

and Competitive Advantages

By using the advantage of being 

one of the first in this field of 

industry, Zorlu Enerji Group 

started to spread its operations 

outside Turkey; therefore it 

became a group of companies 

implementing the principle of risk 

equalizing. Considering the 

developments in this industry, 

Group has major competence and 

competitive advantages in Turkey 

and neighboring countries. 

Diversity of Product and 

Services 

First years following the 

establishment, Zorlu Enerji Group 

was producing electricity for only 

Zorlu Group. Today, through its 

specialized firms, company is 

supplying the energy and steam 

needed by other companies. 

Group is conducting business in 

abroad field such as providing 

turnkey power plant installation 

services for industrial firms, natural 

gas sales and distribution to 

supply natural gas needs of 

houses and commercial entities, 

maintenance and operational 

services for other industrial entities 

operating power plants; company 

also conducts projects aiming to 

find and produce its own natural 

gas. In the frame of product and 

service diversity strategy, Zorlu 

Enerji Group is following tenders 

for hydroelectric plants to be 

privatized, wind power plants, 

electric distribution tenders, 

thermal power plant installations, 

conditional coal tenders and 

natural gas contract transfer 

tenders. 

Geographical Competence 

Nowadays, mobility and 

competence of Zorlu Enerji Group 

is carried across the borders and 

to other countries. Zorlu Enerji 

Group has completed first power 

plants operated by private sector 

in Moscow, and in accordance to 

company’s strategic goals, taking 

solid steps in Israel. Zorlu Enerji 

Group is interested in projects in 

surrounding geography as well as 

developing new markets, 

company is dedicated to carry the 

experience and know-how, i.e. 

50MW wind power plant in 

Pakistan, to different countries. 


Members of the Board 

of Directors and Auditors 

Members of the Board of Directors 

Zeki Zorlu 

Chairman of the Board 

Yüksel Yalova 

Deputy Chairman of the Board 

Olgun Zorlu 

Member of the Board 

Türkan Zorlu 


Berrin Zorlu 


Selen Zorlu Melik 


Zuhal Bereket Bafl Member of the Board 

Members of Board of Auditors 

fierif Ar› 

Hakan Efltürk 

Period of Duty 

Members of the Board of Directors and Board of 

Auditors have been elected at the Periodic Meeting of 

the Board of Shareholders dated May 16, 2006. They 

will be on duty until the 2006 Fiscal Year General 

Meeting. 

Limits of Authority 


Auditors perform their duties in the limits of authority 

given to them in accordance to Turkish Law of Trade, 

Main Contract of the Company and other legal 

regulations. 

8 Zorlu Enerji 2006 Annual Report

Zorlu Enerji Elektrik Üretim A.fi. 

Top Management 

Murat Sungur BURSA 

Chief Executive Officer 

Selen ZORLU MEL‹K 

Deputy Chief Executive Officer 

M. Salim ARSLANALP General Manager 

‹. Sinan AK Deputy General Manager / Finance 

Nurflah KOfiAR 

Deputy General Manager 

U¤ur BAYRI 

Planning and Business Development Director 

Hüseyin GÜL 

Power Plant Operation Manager 

Serhat fi‹MfiEK 



Message from 

the Chairman

Dear Partners, 

We left behind one more year. 

Despite the uncertainty created in 

the energy industry because of 

high natural gas but low electric 

prices and also unfair competitive 

conditions, Zorlu Enerji had a 

successful year. 

By strengthening our operational 

competence and making 

investments in fields requiring 

leadership, We achieved a full 

development on the way to our 

goals with continuous and 

profitable growth. 

• We have almost completed the 

investment contract negotiations for 

building a natural gas power plant in 

Israel (Solbar 100 MW) 

• We are continuing project works for a 

wind power plant construction in 

Pakistan (50 MW at first stage, to be 

extended to 300 MW) 

• We are continuing our final feasibility 

studies for two hydroelectric power 

plants in Turkey (on Dalaman Stream; 

Sandalc›k, Sami Soydam, 127.8 MW; 

Narl›, 82.5 MW) 

• Necessary infrastructural work related 

to the tenders obtained for natural 

distribution in Trakya and Gaziantep 

region. 

• Natural gas drill work and production 

are continuing in the areas of Turkey 

where licenses are taken. 

• Natural gas power plant maintenance in 

Turkey and abroad are continuing. 

For Zorlu Enerji, national or 

international investments on 

energy, research, conduction, 

transportation and distribution will 

always keep the position of being 

strategic goals. 

We believe that Zorlu Enerji will 

continuously grow in international 

energy business. 

While Zorlu is reaching its goals 

and overcoming the difficulties, our 

workforce in Zorlu, equipped with 

modern technology and rational 

implementations will be our most 

precious capital. 

We continued to make investments 

in Turkey and also in international 

scale. 

If we look at the general situation 

of our investments: 

• We have started the turnkey 

construction of two natural gas energy 

plants in Russia (Tereshkovo, 370 MW 

& 150 Gcal heat; Kojuhovo, 370 MW & 

270 Gcal heat), 

• We have signed an investment contract 

for natural gas power plant in Israel 

(Agan, 50 MW), 

• We have completed the preliminary 

engineering and design work of a 

natural gas power plant in Israel (Dorad, 

800 MW) 

Looking to future 

By means of teamwork of our 

qualified labor force, we will adopt 

the changes in international energy 

market and keep growing. The 

policy of saving energy and using 

energy effectively will be used in 

structure of Zorlu Enerji carefully 

and consistently. Zorlu Enerji gives 

renewable and alternative energy 

investments a great importance. 

With my best wishes for a 

successful 2007... 

Zeki ZORLU 



Message from 

the General Manager

“Indecision and delay are reason of failure.” 

W. E. Channing 

Dear Members of Board of Directors, 

and Partners, 

As a member who just joined the 

Zorlu Family in November 2006, I 

have hesitated for a moment with 

the thought of whether if I have 

the right to evaluate a whole year, 

which is a very difficult year with 

instability reached its peak in 

energy industry, however, 

production run without a break, a 

year which giant investments got 

accelerated in order to realize the 

firsts in Russian Federation and 

Israel, toughest markets in our 

region. 

Our Chairman of the Board of 

Directors told me that he would 

cover the necessary subjects; I 

have decided to use this 

opportunity to introduce myself to 

you. 

It was a difficult year for both 

Turkey and the entire world. 

Energy Market seemed like 

running the World Economy. Thus, 

sometimes players of this market 

carried the game beyond the 

rules. The leaders of developing 

economies tried to save the day 

by interventions performed with 

the pressure of political process 

and social imbalance. 

During all these fluctuations, Zorlu 

Group its decision to grow 

demonstrated in energy sector 

and clearly displayed its will to be 

a “Regional Actor” with the 

investments made. 

2006 has become a year that 

Zorlu Enerji structured its new 

vision, and parallel to that, 

continued intensively to form a 

professional organization. 

In projections performed in 

consideration of 2006, energy 

again became a major actor in 

global economies. The 

understanding “future” of Zorlu 

Enerji has also changed in 

accordance to those projections 

covering minimum of 20-30 years 

from now. Fixed investments, 

service sectors that Zorlu Enerji is 

in, researches and strategic plan 

preparations show only one goal; 

“without compromising from its 

esteem and social responsibilities, 

in the frame of 5 and 15 years 

development plans, increasing the 

market value of Zorlu Enerji to 

maximum level and become one 

of the regional leaders”. We 

believe that we will certainly reach 

that goal. The major input of 

energy investment is considered 

as fuel and technology follows 

that. However, researches exhibit 

us very clearly that the problem of 

following decade ahead of us is 

neither fuel sources nor 

technology: Qualified Human 

Power. 

Qualified and young labor force of 

Turkey that created the miracles of 

textile and electronic are the most 

significant advantages, which will 

carry Zorlu to the top of energy 

sector racing with time. Because, 

Zorlu knows the value of this 

power, and with the ability of 

acting brave and quick, success 

comes by itself. 

With my best regards, 

M. Salim Arslanalp 

General Manager 


Report of the 

Board of Directors

Report of the Board of 

Directors 

Structure of Partnership 

Our company, as a result of opening to public on May 27, 2000, increased its paid capital from 2.350.000 YTL 

to 10.000.000 YTL, with an increase of 7.650.000 YTL. In addition to that, 2 billion shares of the company 

(20% of the paid capital), at a base value of 0.017 YTL presented to public trade in ISE (Istanbul Stock 

Exchange). (ISE Code: ZOREN) 

On October 15, 2001, our partners, Zorlu Holding A.fi., Korteks Mensucat Sanayi ve Ticaret A.fi., and Zorlu 

Linen Dokuma Emprime Konfeksiyon Sanayi ve Ticaret A.fi. have sold 2 billion shares in their portfolio, which 

are equal to 20% of the whole shares unpublicized to Denizbank A.fi., another partner of our company. 

On August 26,2002, total sum of 70.000.000 YTL (30.160.269 YTL from Emission Premium, 24.258.919 YTL 

from Revaluation Value Increase Fund, and 15.580.812 YTL from extraordinary Reserves) transferred to Capital 

account, increase in Capital has been approved by Capital Markets Committee decision no 49/1477 dated 

November 1, 2002. Related capital increase is registered at Bursa Commercial Registry Office on November 

11, 2002, and publicized in Turkish Trade Registry Journal No. 5687 on November 28, 2002. As of December 

19,2002, against the number 1 share coupons of stocks, 700% free of charge stock distribution is done. 

By the decision of Board of Directors, no 2004/12, dated 02.06.2004, issued capital of 80.000.000 YTL has 

been increased to 81.665.350 YTL, increase to be covered by 2003 profit shares. This decision has been 

approved by Documents issued by Capital Markets Committee no 113/849, dated 13.07.2004; and, capital 

increase has been registered by Bursa Commercial Registry Office on 30.09.2004. 2,08168% of shares 

distributed free of charge to shareholders against the profit share coupons of 2003. 

On 21.02.2005, 3.361.276 shares equal to 336.127.600 YTL has been transferred from Denizbank to Zorlu D›fl 

Ticaret A.fi. In accordance to Board of Directors’ decision no. 12, dated 22.06.2005, 2.930.478 YTL 

dividends, net profit of 2004, calculated according to new legal regulations has been distributed in cash, 

between 24.06.2005 and 08.07.2005. 

On 18.09.2006, 20.730.000 YTL shares, equal to 2.073.000.000 , has been transferred from Denizbank to 

Zorlu Holding A.fi., and, on 29.12.2006, 19.191.357 shares, equal to 191.914 YTL has been transferred from 

Vestel Komünikasyon San. ve Tic. A.fi. to Zorlu Holding A.fi. 

Shareholders Number of Shares Nominal Value of Shares (YTL) Share of Capital (%) 

Zorlu Holding A.fi. 3.528.843.300 35.288.433 43,20 

Korteks Mensucat A.fi. 1.433.019.800 14.330.198 17,50 

Other Partners 3.204.671.900 32.046.719 39,30 

Total 8.166.535.000 81.665.350 100,00 


Affiliates

Zorlu Endüstriyel ve Enerji 

Tesisleri ‹nflaat Ticaret A.fi. 

Zorlu Endüstriyel, with the goal of 

becoming a preferred undertaking 

company in energy market, was 

founded in 2000. Company 

delivers environment friendly 

solutions at reasonable prices, 

including services such as 

feasibility studies, engineering, 

procurement, turnkey construction 

and assembly services EPC 

(Engineering, Procurement, 

Construction). In this scope, 

Company took full responsibility 

during the engineering, supply 

and assembly stages of power 

plants owned by Zorlu Enerji, and, 

by means of the power plants 

built, company succeeded to 

create a space for itself and Zorlu 

Enerji in international market. 

Zorlu Endüstriyel, which took the 

EPC responsibility of two 

Heat-Power plants (150 

Gcal–370MWe) in Moscow, and 

four combined cycle power plants 

at a capacity of 60 – 800 MWe to 

be build in Israel, is looking for 

new business opportunities in the 

frame of growth objectives. 

Zorlu Endüstriyel already possess 

the ISO 9001-2000 Quality 

Management System Certificate, 

will commence OHSAS 18001 

and ISO 14001 certification 

processes until 2008, and aiming 

to have a place in first league of 

EPC sector. 

Zorlu O&M 

Enerji Tesisleri ‹flletme ve Bak›m Hizmetleri A.fi. 


ve Bak›m Hizmetleri A.fi. was 

founded in 2000 to provide 

operation and maintenance 

services for Zorlu Enerji and other 

companies in energy sector. Zorlu 

O&M is the first Turkish company 

in the field of providing services 

for power plant operation and 

maintenance. 

Company develops new points of 

view, methods, technologies and 

strategies appropriate for the 

current market, and delivers the 

best service to its customers. 

Zorlu O&M, having a ISO 9001- 

2000 Quality Management 

System Certificate, with its well 

trained and experienced team, 

delivers quick and customer 

oriented services by using today’s 

technology in protective and 

concise maintenance, 

performance viewing and repair 

services. The main operations of 

the company are complete turbine 

replacement, replacement of 

hot-section modules, compressor 

wing repairs, complete power 

plant maintenance, control 

systems maintenance and 

software development studies. 

Zorlu O&M provides maintenance 

service for all Zorlu Enerji power 

plants in Turkey; in addition to 

those, company also provides 

long-term operation and 

maintenance services for Nuh 

Enerji, Bosen Enerji and Y›ld›z 

MDF power plants; company also 

provides maintenance service for 

similar power plants in Greece 

and India. 

Zorlu O&M has cooperation 

agreements with General Electric 

and THY (Turkish Airlines). 

Long-term operation and 

maintenance services for projects 

run by Zorlu Endüstriyel are also 

undertaken by Zorlu O&M. 


Zorlu Elektrik Enerjisi 

‹thalat, ‹hracat ve Toptan Ticaret A.fi. 

Zorlu Elektrik Enerjisi ‹thalat, ‹hracat ve Toptan Ticaret 

A.fi. conducts electric wholesale (including import 

and export) in accordance to the EPDK (EMRA - 

Energy Market Regulatory Authority). 

In 2003, Company started operations to buy electric 

energy and capacity for resale from free zones and 

countries complying with condition of international 

interconnection; wholesale to license bearing 

distribution, wholesale, retail sale companies; direct 

sale to consumers and to export countries in 

accordance with international interconnection 

conditions. 

Zorlu Petrogas 

Petrol, Gaz ve Petrokimya Ürünleri ‹nflaat San. ve Tic. A.fi. 

Zorlu Petrogas Petrol, Gaz ve Petrokimya Ürünleri 

‹nflaat Sanayi ve Ticaret A.fi., expert in the subjects 

of natural gas, petrol and petrol-chemistry, was 

founded to create natural gas distribution projects, to 

build facilities producing petroleum and 

petrochemical products and to purchase-sell petrol 

and natural gas in 2000. As of the end of 2005, 

Company has 27 petrol and natural gas search 

licenses in various locations in Turkey. Company is 

continuing licensed drill works in Adana and Trakya 

Regions. Zorlu Petrogas proposed to offer in tenders 

organized by EPDK and awarded the contracts in 

both natural gas distribution tenders. 

Amity Oil 

International Pty. Ltd. 

In October 2005, Zorlu Enerji took over Amity Oil 

International Pty. Ltd., an Australian company 

operating business on research, production and sale 

of petrol and natural gas, and this company is now 

operating under Zorlu Enerji Group. Amity Oil is 

producing natural gas in cooperation with TPAO, in 

four locations under license. In two of the licences 

(Göçerler and Adatepe) Amity Oil and in the other two 

licences (East Adatepe and Çay›rdere) TPAO is 

currently working as “operator”. Amity Oil produces 

natural gas at 13 sources at Göçerler region and sells 

this gas to local industrial companies. In addition to 

these, studies to increase the number of existing 

drilling operations and natural gas production fields 

are continuing. 


Zorlu Do¤algaz 

‹thalat ‹hracat ve Toptan Ticaret A.fi. 

In 2003, Company started operations to buy 

domestic product from importers and other wholesale 

companies, free zones and from abroad in form 

of Compressed Natural Gas (CNG) or Liquidized 

Natural Gas (LNG), for resale; wholesale to license 

owning distribution, wholesale, retail sale companies; 

direct sale to consumers and wholesale to exporting 

companies. 

Company is granted qualification from EPDK (EMRA- 

Energy Market Regulatory Authority) to 

purchase-wholesale, import and export natural gas 

and to give a proposal for the tender of BOTAfi; 

Company is in progress for preparations parallel to 

phases of this tender. 

Trakya Bölgesi 

Do¤algaz Da¤›t›m A.fi. 

In August 2005, tender held by EPDK in accordance 

to Law no 4646 of Natural Gas Market, Zorlu 

Petrogas Petrol, Gaz ve Petrokimya Ürünleri ‹nfl. San. 

ve Tic. A.fi. obtained the contract for natural gas 

distribution for 30 years in “Tekirda¤, Muratl›, Edirne, 

K›rklareli, Kavakl›, Babaeski, Lüleburgaz, Evrensekiz, 

Büyükkar›flt›ran, Misinli, Ulafl, Çerkezköy, Kapakl›, 

K›z›lp›nar, Karaa¤aç, Velimefle, Veliköy” residential 

areas. In order to continue operations in this region, 

“Trakya Bölgesi Do¤algaz Da¤›t›m A.fi.” is founded. 

Distribution Company has completed preliminary 

preparations and received the distribution license on 

January 25, 2006; and started the preparations of 

infrastructure for distribution. Upon transfer of natural 

gas pipelines providing natural gas for houses and 

industrial consumers in the region, Trakya Bölgesi 

Do¤algaz Da¤›t›m A.fi. will start supplying gas for 

existing and future consumers and will operate this 

business for 30 years. Company accelerated the 

work for this reason and completed administrative 

offices in 5 locations and started operations. 

Gazdafl Gaziantep 






distribution for 30 years in “Gaziantep, Kilis and Nizip” 

residential areas. 

In order to continue operations in this region, 

“Gazdafl Gaziantep Do¤algaz Da¤›t›m A.fi.” is 

founded. Distribution Company has received the 

license on February 24, 2006; and, started the 

preparations of infrastructure for distribution in the 

first months of 2006. Upon transfer of natural gas 

pipelines providing natural gas for houses and 

industrial consumers in the region, Gazdafl will start 

supplying gas for existing and future industrial 

consumers and will operate this business for 30 

years. Company accelerated the work for this reason 

and completed administrative offices in 2 locations 

and started operations. 


Participations as of 13.12.2006 

Capital of Rate of Amount of 

Name of the Company Participation (YTL) Participation (%) Participation (YTL) 

1. Zorlu O&M 

Enerji Tesisleri ‹flletme ve Bak›m Hizmetleri A.fi. 5.000.000 20 1.000.000 

2. Zorlu Endüstriyel ve Enerji 

Tesisleri ‹nflaat Ticaret A.fi. 5.000.000 20 1.000.000 

3. Zorlu Petrogas 

Petrol, Gaz ve Petrokimya Ürünleri ‹nfl. San. ve Tic.A.fi. 10.000.000 73 7.300.000 

4. Zorlu Do¤algaz 

‹thalat, ‹hracat ve Toptan Ticaret A.fi. 1.000.000 1 10.000 

5. Zorlu Elektrik Enerjisi 


6. Gazdafl Gaziantep 

Do¤algaz Da¤›t›m A.fi. 1.000.000 5 50.000 

7. Trakya Bölgesi 


8. Rosmiks 

International B.V. - 51 - 

Participations did not distribute dividend in 2006. 


Power Plants 

Location 

: Büyükkar›flt›ran, Lüleburgaz-K›rklareli 

Type of Power Plant Natural Gas Alternate Cogeneration Energy 

Capacity 

Year of Completion 

Phase I 

Phase II 

Phase III 

Phase IV 

Phase V 

65.7 MW Electricity + 162 t/h Steam 

1998 (2 x EGT Gas Turbine + Boiler) 

1999 (1 x LM6000 Gas Turbine + Boiler) 

2000 (1 x Steam Turbine) 

1999 (Customer Steam Lines Construction) 

2005 (Upgrading AGT Gas Turbine Boilers to 

Aalborg high pressure Boiler and 5 MW 

additional energy can be obtained from 

existing steam turbine) 

Location 

: Bursa Organize Sanayi Bölgesi 

(Bursa Organized Industrial Zone) 

Type of Power Plant Alternate Combined Cycle 

Capacity 


90 MW Electricity 

Phase I 1998 

(1 x GE LM2500 + Gas Turbine 26.5 MW + 

DESA Furnace + 8.5 MW Siemens Steam 

Turbine) 

Phase II 2000 

(1 x GE LM6000 Gas Turbine 42.5 MW + 

Aalborg Boiler + 12.5 MW ABB Steam Turbine) 

Cogeneration power plant in Lüleburgaz operating 

with dual fuel is the first power plant of Zorlu Enerji. It 

was built to provide electricity and steam needed by 

textile factory owned by Zorlu Group. Later, in order 

to supply electricity to other customers phase II was 

built and second and third phases started operation 

in 2000. In order to supply the demand of steam 

requested by neighboring factories, customer steam 

line has been constructed. Finally, in order to supply 

efficiently the increasing need for steam, upgrade 

work has been started and fifth phase has been 

completed in third quarter of 2005. 

Second power plant of Zorlu Enerji is installed in 

Bursa Organized Industrial Zone and designed to 

operate with dual fuel. First phase started operation 

in third quarter of 1998 and second phase started 

operation in third quarter of 2000. 


Location 

Ankara Organized Industrial Zone 

Type of Power Plant Natural Gas Combined Cycle 

Capacity 

50.3 MW 

Year of Completion 2003 


Aalborg Boiler + Alstom Steam Turbine 10.6 

MW) 

Location 

Alt›nova / ‹pekka¤›t Tic. A.fi. / Yalova 


Capacity 



(1 x Gas Turbine + 1x Gas Engine + Boilers) 

Natural gas combined cycle power plant investment 

with production capacity of 55 MW completed and 

started to be used for commercial purpose in second 

quarter of 2003. 

Natural gas cogeneration power plant investment 

with production capacity of 16 MW electricity and 30 

t/h steam completed and started to be used for 

commercial purpose in last quarter of 2005. 

Location 

Kayseri Organized Industrial Zone 

Type of Power Plant Natural Gas Alternate Combined Cycle 

Capacity 

188.5 MW 


(3 x GE LM6000 Gas Turbine 3 x 42,5 MW + 

3 x Boiler + Siemens Steam Turbine 33,5 

MW) 

Location Kayseri Central Organized Industrial Zone / 

Birlik Mensucat Enterprises 


Capacity 



(1 x Gas Turbine + Boiler) 



started to be used for commercial purpose in third 


Natural gas cogeneration power plant, started being 

operated for commercial purpose in second quarter 

of 2006, has capacity of 7.3 MW electricity and 15 

t/h steam. 


Domestic and 

International 

Operations

Besides the ones in Turkey, Zorlu 

Enerji Group have investments in 

Russia and Israel. In Russia 

operations will start at the end of 

2007. Construction of power 

plants in Israel will also be started 

in 2007. 


the first company of Zorlu Enerji 

Group, is supplying total of 

approximately 420 MW of 

uninterrupted and high quality 

energy for industrial enterprises at 

capacity of 90 MW in Bursa, 50.3 

MW in Ankara, with two power 

plants at capacity of 188.5 and 

7.2 MW in Kayseri, 65.7 MW in 

Lüleburgaz and 15.9 MW in 

Yalova. Giving great importance to 

various energy sources, Zorlu 

Enerji is aiming to include different 

types of power plants generating 

energy from different sources, 

such as hydroelectric, wind, coal, 

geothermic and other renewable 

sources, into its portfolio. In 

accordance with this target 

company is following alternative 

projects in Turkey and abroad and 

also the privatization of stages 

realized by the governments. 

Zorlu Enerji Group formed 

partnerships with foreign 

companies, in order to undertake 

four important projects in Israel. 

These projects are: 

Project Dorad: It is a natural gas 

power plant with production capacity 

of 800 MW. It is expected to be 

completed in 2010. 

Project Solbar: It is a cogeneration 


of 100 MW of electricity and 70 t/h of 

steam. It is expected to be completed 

in 2009. 

Project Agan: It is a cogeneration 




in 2008. 

Project Macteshim: It is a cogeneration 




in 2009. 

ICFS International LLC, which 

Zorlu Enerji has formed a 

partnership with 51% of share, 

has 100% of Rosmiks in Russia. 

In 2005, Rosmiks obtained the 

contracts by tender organized by 

Municipality of Moscow for 

Tereshkovo and Kojuhovo 

regions. Municipality of Moscow 

granted the work of increasing the 

capacity of the power plant in 

Kojuhovo from 170 MW to 

550MW and increasing the 


Tereshkovo from 170 MW to 340 

MW to Rosmiks LLC. Both 

projects are expected to be 

completed at the end of 2007. 

For these power plants that will be 

built by Zorlu Endüstriyel long 

term operation and maintenance 

works will be provided by Zorlu 

O&M Enerji Tesisleri ‹flletme ve 

Bak›m Hizmetleri A.fi. 

Besides for all the power plants of 

Zorlu Enerji in Turkey, Zorlu O&M 

provides maintenance and 

operation services for other 

private enterprises’ power plants, 

too. Zorlu O&M provides services 

for customers in Greece and 

India. 

Zorlu Enerji Group conducts 

business in natural gas and petrol 

with Zorlu Petrogas which has 25 

natural gas and petrol search 

licenses. 

Amity Oil International Pty. Ltd., 

producing natural gas from the 

sources in Trakya region, and 

taken over by Zorlu Petrogas in 

2005, is selling natural gas to 

industrial customers operating in 

the same region. 

Zorlu Enerji Group that has 

started natural gas distribution 

business in Trakya and Gaziantep 

regions, is continuing 

infrastructure works through 

Trakya Bölgesi Do¤algaz Da¤›t›m 

A.fi. and Gazdafl Gaziantep 

Do¤algaz Da¤›t›m A.fi., which are 

founded for distributing natural 

gas to their region and have the 

related licenses. 


Coming to 

2006... 

Zorlu Enerji Group started its 

operations in 1993. With the 

companies and power plants 

established since then, it started 

to deliver turnkey solutions in all 

branches of energy industry. Zorlu 

Enerji Group is continuing its 

operations also in Europe, Asia 

and Middle East as well as in 

Turkey. 


under Zorlu Enerji Group, is 

providing electricity and steam for 

industrial firms. It provides reliable 

and good quality energy for 

almost 240 industrial firms, with 

total of 420 MW power supplied 

by natural gas combined cycle 

power plants in Bursa, Ankara 

and Kayseri, and cogeneration 

power plants in Lüleburgaz, 

Kayseri and Yalova. Zorlu Enerji 

Elektrik Üretim A.fi. has 800 MW 

natural gas combined cycle power 

plant and 100 MW cogeneration 

power plant investments in 

Southern Israel, and, two cogeneration 

power plants project in 

progress, each has a power of 

370 MW, in Russia. 

Zorlu Endüstriyel ve Enerji Tesisleri 

‹nflaat Ticaret A.fi. is founded in 

2000 as an undertaking company 

operating in international energy 

industry, which has been 

delivering turnkey power plant 

installations to industrial firms, 

since then. 


ve Bak›m Hizmetleri A.fi. is 

providing maintenance and 

operational services to Zorlu Enerji 

Elektrik Üretim A.fi. and other 

energy firms in this industry. Zorlu 

O&M, founded in 2000, is the first 

Turkish company established in 

field of power plant operations 

and maintenance. 

Zorlu Petrogas Petrol, Gaz ve 

Petrokimya Ürünleri ‹nfl.San. ve 

Tic. A.fi. performs gas and petrol 

field operations for Zorlu Enerji 

Group. Company has been 

founded in 2000, and has 25 

licenses to search natural gas and 

petrol in various locations in 

Turkey; where it works together 

with Amity Oil International Pty. 

Ltd. in 5 of them. 

In 2005, Zorlu Enerji Group has 

obtained the contracts by tender 

for natural gas distribution in 

Trakya and Gaziantep Region; 

through the companies founded 

for this reason, Trakya Bölgesi 

Do¤algaz Da¤›t›m A.fi. and 

Gazdafl Gaziantep Do¤algaz 

Da¤›t›m A.fi., distribution and 

infrastructure projects are 

continuing in these regions. 

In addition to providing the electric 

needs of industrial companies, 

Zorlu Enerji Group also is 

performing electric and gas 

wholesale through Zorlu Enerji 

‹thalat, ‹hracat ve Toptan Ticaret 

A.fi. and Zorlu Do¤al Gaz ‹thalat, 

‹hracat ve Toptan Ticaret A.fi.. 

In 2006, Zorlu Enerji Group 

tended to hydro energy; obtained 

the DSI contracts by tender, 

preparations for two hydroelectric 

power plant constructions on 

Dalaman Stream in Mu¤la are in 

progress. Group has investments 

in all fields of energy and is 

continuing its developments with 

the principle of product and 

service diversity; therefore, 

company is continuing its 

consistent works in the field of 

renewable energy. In order to 

produce electricity from wind 

power, works in Turkey and in 

Pakistan are continuing. 


Competencies 

and Competitive Advantages

By using the advantage of being 

one of the first in this field of 

industry, Zorlu Enerji Group 

started to spread its operations 

outside Turkey; therefore it 

became a group of companies 

implementing the principle of risk 

equalizing. Considering the 

developments in this industry, 

Group has major competence and 

competitive advantages in Turkey 

and neighboring countries. 

Diversity of Product and 

Services 

First years following the 

establishment, Zorlu Enerji Group 

was producing electricity for only 

Zorlu Group. Today, through its 

specialized firms, company is 

supplying the energy and steam 

needed by other companies. 

Group is conducting business in 

abroad field such as providing 

turnkey power plant installation 

services for industrial firms, natural 

gas sales and distribution to 

supply natural gas needs of 

houses and commercial entities, 

maintenance and operational 

services for other industrial entities 

operating power plants; company 

also conducts projects aiming to 

find and produce its own natural 

gas. In the frame of product and 

service diversity strategy, Zorlu 

Enerji Group is following tenders 

for hydroelectric plants to be 

privatized, wind power plants, 

electric distribution tenders, 

thermal power plant installations, 

conditional coal tenders and 

natural gas contract transfer 

tenders. 

Geographical Competence 

Nowadays, mobility and 

competence of Zorlu Enerji Group 

is carried across the borders and 

to other countries. Zorlu Enerji 

Group has completed first power 

plants operated by private sector 

in Moscow, and in accordance to 

company’s strategic goals, taking 

solid steps in Israel. Zorlu Enerji 

Group is interested in projects in 

surrounding geography as well as 

developing new markets, 

company is dedicated to carry the 

experience and know-how, i.e. 

50MW wind power plant in 

Pakistan, to different countries. 


Members of the Board 

of Directors and Auditors 

Members of the Board of Directors 




Deputy Chairman of the Board 









Zuhal Bereket Bafl Member of the Board 

Members of Board of Auditors 

fierif Ar› 


Period of Duty 


Auditors have been elected at the Periodic Meeting of 

the Board of Shareholders dated May 16, 2006. They 

will be on duty until the 2006 Fiscal Year General 

Meeting. 

Limits of Authority 


Auditors perform their duties in the limits of authority 

given to them in accordance to Turkish Law of Trade, 

Main Contract of the Company and other legal 

regulations. 



Top Management 

Murat Sungur BURSA 


Selen ZORLU MEL‹K 

Deputy Chief Executive Officer 

M. Salim ARSLANALP General Manager 

‹. Sinan AK Deputy General Manager / Finance 

Nurflah KOfiAR 


U¤ur BAYRI 

Planning and Business Development Director 

Hüseyin GÜL 


Serhat fi‹MfiEK 



Message from 

the Chairman


We left behind one more year. 

Despite the uncertainty created in 

the energy industry because of 

high natural gas but low electric 

prices and also unfair competitive 

conditions, Zorlu Enerji had a 

successful year. 

By strengthening our operational 

competence and making 

investments in fields requiring 

leadership, We achieved a full 

development on the way to our 

goals with continuous and 

profitable growth. 

• We have almost completed the 

investment contract negotiations for 

building a natural gas power plant in 

Israel (Solbar 100 MW) 

• We are continuing project works for a 

wind power plant construction in 

Pakistan (50 MW at first stage, to be 

extended to 300 MW) 

• We are continuing our final feasibility 

studies for two hydroelectric power 

plants in Turkey (on Dalaman Stream; 

Sandalc›k, Sami Soydam, 127.8 MW; 

Narl›, 82.5 MW) 

• Necessary infrastructural work related 

to the tenders obtained for natural 

distribution in Trakya and Gaziantep 

region. 

• Natural gas drill work and production 

are continuing in the areas of Turkey 

where licenses are taken. 

• Natural gas power plant maintenance in 

Turkey and abroad are continuing. 

For Zorlu Enerji, national or 

international investments on 

energy, research, conduction, 

transportation and distribution will 

always keep the position of being 

strategic goals. 

We believe that Zorlu Enerji will 

continuously grow in international 

energy business. 

While Zorlu is reaching its goals 

and overcoming the difficulties, our 

workforce in Zorlu, equipped with 

modern technology and rational 

implementations will be our most 

precious capital. 

We continued to make investments 

in Turkey and also in international 

scale. 

If we look at the general situation 

of our investments: 

• We have started the turnkey 

construction of two natural gas energy 

plants in Russia (Tereshkovo, 370 MW 

& 150 Gcal heat; Kojuhovo, 370 MW & 

270 Gcal heat), 

• We have signed an investment contract 

for natural gas power plant in Israel 

(Agan, 50 MW), 

• We have completed the preliminary 

engineering and design work of a 

natural gas power plant in Israel (Dorad, 

800 MW) 

Looking to future 

By means of teamwork of our 

qualified labor force, we will adopt 

the changes in international energy 

market and keep growing. The 

policy of saving energy and using 

energy effectively will be used in 

structure of Zorlu Enerji carefully 

and consistently. Zorlu Enerji gives 

renewable and alternative energy 

investments a great importance. 

With my best wishes for a 

successful 2007... 

Zeki ZORLU 



Message from 

the General Manager

“Indecision and delay are reason of failure.” 

W. E. Channing 

Dear Members of Board of Directors, 

and Partners, 

As a member who just joined the 

Zorlu Family in November 2006, I 

have hesitated for a moment with 

the thought of whether if I have 

the right to evaluate a whole year, 

which is a very difficult year with 

instability reached its peak in 

energy industry, however, 

production run without a break, a 

year which giant investments got 

accelerated in order to realize the 

firsts in Russian Federation and 

Israel, toughest markets in our 

region. 

Our Chairman of the Board of 

Directors told me that he would 

cover the necessary subjects; I 

have decided to use this 

opportunity to introduce myself to 

you. 

It was a difficult year for both 

Turkey and the entire world. 

Energy Market seemed like 

running the World Economy. Thus, 

sometimes players of this market 

carried the game beyond the 

rules. The leaders of developing 

economies tried to save the day 

by interventions performed with 

the pressure of political process 

and social imbalance. 

During all these fluctuations, Zorlu 

Group its decision to grow 

demonstrated in energy sector 

and clearly displayed its will to be 

a “Regional Actor” with the 

investments made. 

2006 has become a year that 

Zorlu Enerji structured its new 

vision, and parallel to that, 

continued intensively to form a 

professional organization. 

In projections performed in 

consideration of 2006, energy 

again became a major actor in 

global economies. The 

understanding “future” of Zorlu 

Enerji has also changed in 

accordance to those projections 

covering minimum of 20-30 years 

from now. Fixed investments, 

service sectors that Zorlu Enerji is 

in, researches and strategic plan 

preparations show only one goal; 

“without compromising from its 

esteem and social responsibilities, 

in the frame of 5 and 15 years 

development plans, increasing the 

market value of Zorlu Enerji to 

maximum level and become one 

of the regional leaders”. We 

believe that we will certainly reach 

that goal. The major input of 

energy investment is considered 

as fuel and technology follows 

that. However, researches exhibit 

us very clearly that the problem of 

following decade ahead of us is 

neither fuel sources nor 

technology: Qualified Human 

Power. 

Qualified and young labor force of 

Turkey that created the miracles of 

textile and electronic are the most 

significant advantages, which will 

carry Zorlu to the top of energy 

sector racing with time. Because, 

Zorlu knows the value of this 

power, and with the ability of 

acting brave and quick, success 

comes by itself. 

With my best regards, 

M. Salim Arslanalp 

General Manager 


Report of the 

Board of Directors

Report of the Board of 

Directors 

Structure of Partnership 

Our company, as a result of opening to public on May 27, 2000, increased its paid capital from 2.350.000 YTL 

to 10.000.000 YTL, with an increase of 7.650.000 YTL. In addition to that, 2 billion shares of the company 

(20% of the paid capital), at a base value of 0.017 YTL presented to public trade in ISE (Istanbul Stock 

Exchange). (ISE Code: ZOREN) 

On October 15, 2001, our partners, Zorlu Holding A.fi., Korteks Mensucat Sanayi ve Ticaret A.fi., and Zorlu 

Linen Dokuma Emprime Konfeksiyon Sanayi ve Ticaret A.fi. have sold 2 billion shares in their portfolio, which 

are equal to 20% of the whole shares unpublicized to Denizbank A.fi., another partner of our company. 

On August 26,2002, total sum of 70.000.000 YTL (30.160.269 YTL from Emission Premium, 24.258.919 YTL 

from Revaluation Value Increase Fund, and 15.580.812 YTL from extraordinary Reserves) transferred to Capital 

account, increase in Capital has been approved by Capital Markets Committee decision no 49/1477 dated 

November 1, 2002. Related capital increase is registered at Bursa Commercial Registry Office on November 

11, 2002, and publicized in Turkish Trade Registry Journal No. 5687 on November 28, 2002. As of December 

19,2002, against the number 1 share coupons of stocks, 700% free of charge stock distribution is done. 

By the decision of Board of Directors, no 2004/12, dated 02.06.2004, issued capital of 80.000.000 YTL has 

been increased to 81.665.350 YTL, increase to be covered by 2003 profit shares. This decision has been 

approved by Documents issued by Capital Markets Committee no 113/849, dated 13.07.2004; and, capital 

increase has been registered by Bursa Commercial Registry Office on 30.09.2004. 2,08168% of shares 

distributed free of charge to shareholders against the profit share coupons of 2003. 

On 21.02.2005, 3.361.276 shares equal to 336.127.600 YTL has been transferred from Denizbank to Zorlu D›fl 

Ticaret A.fi. In accordance to Board of Directors’ decision no. 12, dated 22.06.2005, 2.930.478 YTL 

dividends, net profit of 2004, calculated according to new legal regulations has been distributed in cash, 

between 24.06.2005 and 08.07.2005. 

On 18.09.2006, 20.730.000 YTL shares, equal to 2.073.000.000 , has been transferred from Denizbank to 

Zorlu Holding A.fi., and, on 29.12.2006, 19.191.357 shares, equal to 191.914 YTL has been transferred from 

Vestel Komünikasyon San. ve Tic. A.fi. to Zorlu Holding A.fi. 

Shareholders Number of Shares Nominal Value of Shares (YTL) Share of Capital (%) 

Zorlu Holding A.fi. 3.528.843.300 35.288.433 43,20 

Korteks Mensucat A.fi. 1.433.019.800 14.330.198 17,50 

Other Partners 3.204.671.900 32.046.719 39,30 

Total 8.166.535.000 81.665.350 100,00 


Affiliates

Zorlu Endüstriyel ve Enerji 

Tesisleri ‹nflaat Ticaret A.fi. 

Zorlu Endüstriyel, with the goal of 

becoming a preferred undertaking 

company in energy market, was 

founded in 2000. Company 

delivers environment friendly 

solutions at reasonable prices, 

including services such as 

feasibility studies, engineering, 

procurement, turnkey construction 

and assembly services EPC 

(Engineering, Procurement, 

Construction). In this scope, 

Company took full responsibility 

during the engineering, supply 

and assembly stages of power 

plants owned by Zorlu Enerji, and, 

by means of the power plants 

built, company succeeded to 

create a space for itself and Zorlu 

Enerji in international market. 

Zorlu Endüstriyel, which took the 

EPC responsibility of two 

Heat-Power plants (150 

Gcal–370MWe) in Moscow, and 

four combined cycle power plants 

at a capacity of 60 – 800 MWe to 

be build in Israel, is looking for 

new business opportunities in the 

frame of growth objectives. 

Zorlu Endüstriyel already possess 

the ISO 9001-2000 Quality 

Management System Certificate, 

will commence OHSAS 18001 

and ISO 14001 certification 

processes until 2008, and aiming 

to have a place in first league of 

EPC sector. 

Zorlu O&M 

Enerji Tesisleri ‹flletme ve Bak›m Hizmetleri A.fi. 


ve Bak›m Hizmetleri A.fi. was 

founded in 2000 to provide 

operation and maintenance 

services for Zorlu Enerji and other 

companies in energy sector. Zorlu 

O&M is the first Turkish company 

in the field of providing services 

for power plant operation and 

maintenance. 

Company develops new points of 

view, methods, technologies and 

strategies appropriate for the 

current market, and delivers the 

best service to its customers. 

Zorlu O&M, having a ISO 9001- 

2000 Quality Management 

System Certificate, with its well 

trained and experienced team, 

delivers quick and customer 

oriented services by using today’s 

technology in protective and 

concise maintenance, 

performance viewing and repair 

services. The main operations of 

the company are complete turbine 

replacement, replacement of 

hot-section modules, compressor 

wing repairs, complete power 

plant maintenance, control 

systems maintenance and 

software development studies. 

Zorlu O&M provides maintenance 

service for all Zorlu Enerji power 

plants in Turkey; in addition to 

those, company also provides 

long-term operation and 

maintenance services for Nuh 

Enerji, Bosen Enerji and Y›ld›z 

MDF power plants; company also 

provides maintenance service for 

similar power plants in Greece 

and India. 

Zorlu O&M has cooperation 

agreements with General Electric 

and THY (Turkish Airlines). 

Long-term operation and 

maintenance services for projects 

run by Zorlu Endüstriyel are also 

undertaken by Zorlu O&M. 


Zorlu Elektrik Enerjisi 

‹thalat, ‹hracat ve Toptan Ticaret A.fi. 

Zorlu Elektrik Enerjisi ‹thalat, ‹hracat ve Toptan Ticaret 

A.fi. conducts electric wholesale (including import 

and export) in accordance to the EPDK (EMRA - 

Energy Market Regulatory Authority). 

In 2003, Company started operations to buy electric 

energy and capacity for resale from free zones and 

countries complying with condition of international 

interconnection; wholesale to license bearing 

distribution, wholesale, retail sale companies; direct 

sale to consumers and to export countries in 

accordance with international interconnection 

conditions. 

Zorlu Petrogas 

Petrol, Gaz ve Petrokimya Ürünleri ‹nflaat San. ve Tic. A.fi. 

Zorlu Petrogas Petrol, Gaz ve Petrokimya Ürünleri 

‹nflaat Sanayi ve Ticaret A.fi., expert in the subjects 

of natural gas, petrol and petrol-chemistry, was 

founded to create natural gas distribution projects, to 

build facilities producing petroleum and 

petrochemical products and to purchase-sell petrol 

and natural gas in 2000. As of the end of 2005, 

Company has 27 petrol and natural gas search 

licenses in various locations in Turkey. Company is 

continuing licensed drill works in Adana and Trakya 

Regions. Zorlu Petrogas proposed to offer in tenders 

organized by EPDK and awarded the contracts in 

both natural gas distribution tenders. 

Amity Oil 

International Pty. Ltd. 

In October 2005, Zorlu Enerji took over Amity Oil 

International Pty. Ltd., an Australian company 

operating business on research, production and sale 

of petrol and natural gas, and this company is now 

operating under Zorlu Enerji Group. Amity Oil is 

producing natural gas in cooperation with TPAO, in 

four locations under license. In two of the licences 

(Göçerler and Adatepe) Amity Oil and in the other two 

licences (East Adatepe and Çay›rdere) TPAO is 

currently working as “operator”. Amity Oil produces 

natural gas at 13 sources at Göçerler region and sells 

this gas to local industrial companies. In addition to 

these, studies to increase the number of existing 

drilling operations and natural gas production fields 

are continuing. 


Zorlu Do¤algaz 

‹thalat ‹hracat ve Toptan Ticaret A.fi. 

In 2003, Company started operations to buy 

domestic product from importers and other wholesale 

companies, free zones and from abroad in form 

of Compressed Natural Gas (CNG) or Liquidized 

Natural Gas (LNG), for resale; wholesale to license 

owning distribution, wholesale, retail sale companies; 

direct sale to consumers and wholesale to exporting 

companies. 

Company is granted qualification from EPDK (EMRA- 

Energy Market Regulatory Authority) to 

purchase-wholesale, import and export natural gas 

and to give a proposal for the tender of BOTAfi; 

Company is in progress for preparations parallel to 

phases of this tender. 

Trakya Bölgesi 






distribution for 30 years in “Tekirda¤, Muratl›, Edirne, 

K›rklareli, Kavakl›, Babaeski, Lüleburgaz, Evrensekiz, 

Büyükkar›flt›ran, Misinli, Ulafl, Çerkezköy, Kapakl›, 

K›z›lp›nar, Karaa¤aç, Velimefle, Veliköy” residential 

areas. In order to continue operations in this region, 

“Trakya Bölgesi Do¤algaz Da¤›t›m A.fi.” is founded. 

Distribution Company has completed preliminary 

preparations and received the distribution license on 

January 25, 2006; and started the preparations of 

infrastructure for distribution. Upon transfer of natural 

gas pipelines providing natural gas for houses and 

industrial consumers in the region, Trakya Bölgesi 

Do¤algaz Da¤›t›m A.fi. will start supplying gas for 

existing and future consumers and will operate this 

business for 30 years. Company accelerated the 

work for this reason and completed administrative 

offices in 5 locations and started operations. 

Gazdafl Gaziantep 






distribution for 30 years in “Gaziantep, Kilis and Nizip” 

residential areas. 

In order to continue operations in this region, 

“Gazdafl Gaziantep Do¤algaz Da¤›t›m A.fi.” is 

founded. Distribution Company has received the 

license on February 24, 2006; and, started the 

preparations of infrastructure for distribution in the 

first months of 2006. Upon transfer of natural gas 

pipelines providing natural gas for houses and 

industrial consumers in the region, Gazdafl will start 

supplying gas for existing and future industrial 

consumers and will operate this business for 30 

years. Company accelerated the work for this reason 

and completed administrative offices in 2 locations 

and started operations. 


Participations as of 13.12.2006 

Capital of Rate of Amount of 

Name of the Company Participation (YTL) Participation (%) Participation (YTL) 

1. Zorlu O&M 

Enerji Tesisleri ‹flletme ve Bak›m Hizmetleri A.fi. 5.000.000 20 1.000.000 

2. Zorlu Endüstriyel ve Enerji 

Tesisleri ‹nflaat Ticaret A.fi. 5.000.000 20 1.000.000 

3. Zorlu Petrogas 

Petrol, Gaz ve Petrokimya Ürünleri ‹nfl. San. ve Tic.A.fi. 10.000.000 73 7.300.000 

4. Zorlu Do¤algaz 


5. Zorlu Elektrik Enerjisi 


6. Gazdafl Gaziantep 


7. Trakya Bölgesi 


8. Rosmiks 

International B.V. - 51 - 

Participations did not distribute dividend in 2006. 


Power Plants 

Location 

: Büyükkar›flt›ran, Lüleburgaz-K›rklareli 


Capacity 


Phase I 

Phase II 

Phase III 

Phase IV 

Phase V 


1998 (2 x EGT Gas Turbine + Boiler) 

1999 (1 x LM6000 Gas Turbine + Boiler) 

2000 (1 x Steam Turbine) 

1999 (Customer Steam Lines Construction) 

2005 (Upgrading AGT Gas Turbine Boilers to 

Aalborg high pressure Boiler and 5 MW 

additional energy can be obtained from 

existing steam turbine) 

Location 

: Bursa Organize Sanayi Bölgesi 

(Bursa Organized Industrial Zone) 

Type of Power Plant Alternate Combined Cycle 

Capacity 


90 MW Electricity 

Phase I 1998 

(1 x GE LM2500 + Gas Turbine 26.5 MW + 

DESA Furnace + 8.5 MW Siemens Steam 

Turbine) 

Phase II 2000 


Aalborg Boiler + 12.5 MW ABB Steam Turbine) 

Cogeneration power plant in Lüleburgaz operating 

with dual fuel is the first power plant of Zorlu Enerji. It 

was built to provide electricity and steam needed by 

textile factory owned by Zorlu Group. Later, in order 

to supply electricity to other customers phase II was 

built and second and third phases started operation 

in 2000. In order to supply the demand of steam 

requested by neighboring factories, customer steam 

line has been constructed. Finally, in order to supply 

efficiently the increasing need for steam, upgrade 

work has been started and fifth phase has been 

completed in third quarter of 2005. 

Second power plant of Zorlu Enerji is installed in 

Bursa Organized Industrial Zone and designed to 

operate with dual fuel. First phase started operation 

in third quarter of 1998 and second phase started 

operation in third quarter of 2000. 


Location 

Ankara Organized Industrial Zone 

Type of Power Plant Natural Gas Combined Cycle 

Capacity 

50.3 MW 



Aalborg Boiler + Alstom Steam Turbine 10.6 

MW) 

Location 

Alt›nova / ‹pekka¤›t Tic. A.fi. / Yalova 


Capacity 



(1 x Gas Turbine + 1x Gas Engine + Boilers) 



started to be used for commercial purpose in second 


Natural gas cogeneration power plant investment 

with production capacity of 16 MW electricity and 30 

t/h steam completed and started to be used for 

commercial purpose in last quarter of 2005. 

Location 

Kayseri Organized Industrial Zone 

Type of Power Plant Natural Gas Alternate Combined Cycle 

Capacity 

188.5 MW 


(3 x GE LM6000 Gas Turbine 3 x 42,5 MW + 

3 x Boiler + Siemens Steam Turbine 33,5 

MW) 

Location Kayseri Central Organized Industrial Zone / 

Birlik Mensucat Enterprises 


Capacity 



(1 x Gas Turbine + Boiler) 



started to be used for commercial purpose in third 


Natural gas cogeneration power plant, started being 

operated for commercial purpose in second quarter 

of 2006, has capacity of 7.3 MW electricity and 15 

t/h steam. 


Domestic and 

International 

Operations

Besides the ones in Turkey, Zorlu 

Enerji Group have investments in 

Russia and Israel. In Russia 

operations will start at the end of 

2007. Construction of power 

plants in Israel will also be started 

in 2007. 


the first company of Zorlu Enerji 

Group, is supplying total of 

approximately 420 MW of 

uninterrupted and high quality 

energy for industrial enterprises at 

capacity of 90 MW in Bursa, 50.3 

MW in Ankara, with two power 

plants at capacity of 188.5 and 

7.2 MW in Kayseri, 65.7 MW in 

Lüleburgaz and 15.9 MW in 

Yalova. Giving great importance to 

various energy sources, Zorlu 

Enerji is aiming to include different 

types of power plants generating 

energy from different sources, 

such as hydroelectric, wind, coal, 

geothermic and other renewable 

sources, into its portfolio. In 

accordance with this target 

company is following alternative 

projects in Turkey and abroad and 

also the privatization of stages 

realized by the governments. 

Zorlu Enerji Group formed 

partnerships with foreign 

companies, in order to undertake 

four important projects in Israel. 

These projects are: 

Project Dorad: It is a natural gas 


of 800 MW. It is expected to be 

completed in 2010. 

Project Solbar: It is a cogeneration 




in 2009. 

Project Agan: It is a cogeneration 




in 2008. 

Project Macteshim: It is a cogeneration 




in 2009. 

ICFS International LLC, which 

Zorlu Enerji has formed a 

partnership with 51% of share, 

has 100% of Rosmiks in Russia. 

In 2005, Rosmiks obtained the 

contracts by tender organized by 

Municipality of Moscow for 

Tereshkovo and Kojuhovo 

regions. Municipality of Moscow 

granted the work of increasing the 


Kojuhovo from 170 MW to 

550MW and increasing the 


Tereshkovo from 170 MW to 340 

MW to Rosmiks LLC. Both 

projects are expected to be 

completed at the end of 2007. 

For these power plants that will be 

built by Zorlu Endüstriyel long 

term operation and maintenance 

works will be provided by Zorlu 

O&M Enerji Tesisleri ‹flletme ve 

Bak›m Hizmetleri A.fi. 

Besides for all the power plants of 

Zorlu Enerji in Turkey, Zorlu O&M 

provides maintenance and 

operation services for other 

private enterprises’ power plants, 

too. Zorlu O&M provides services 

for customers in Greece and 

India. 

Zorlu Enerji Group conducts 

business in natural gas and petrol 

with Zorlu Petrogas which has 25 

natural gas and petrol search 

licenses. 

Amity Oil International Pty. Ltd., 

producing natural gas from the 

sources in Trakya region, and 

taken over by Zorlu Petrogas in 

2005, is selling natural gas to 

industrial customers operating in 

the same region. 

Zorlu Enerji Group that has 

started natural gas distribution 

business in Trakya and Gaziantep 

regions, is continuing 

infrastructure works through 

Trakya Bölgesi Do¤algaz Da¤›t›m 

A.fi. and Gazdafl Gaziantep 

Do¤algaz Da¤›t›m A.fi., which are 

founded for distributing natural 

gas to their region and have the 

related licenses. 


Investments 

The first power plant of Zorlu 

Enerji is the dual fuel (natural gas 

and liquid fuel) cogeneration 

facilities in Lüleburgaz. Power 

plant consists of two x 7 MW EGT 

Tempest and 1 x MW gas turbine 

unit (GE, LM 6000 PC). In 

November 2000, 9 MW reverse 

pressure gas turbine started to be 

operated and steam production 

capacity reached to 162 t/h. 

The second power plant of Zorlu 

Enerji is again a dual fuel 

combined cycle power plant in 

Bursa Organized Industrial Zone. 

Power plant consists of 1 x 26 

MW gas turbine (GE, LM2500+) 

with 9 MW steam turbine and 1 x 

43 MW gas turbine (GE, LM6000 

PC) with 12 MW steam turbine. 

The third power plant of Zorlu 

Enerji is also a dual fuel combined 

cycle power plant in Ankara 

Chamber of Commerce First 

Organized Industrial Zone. Power 

plant consists of 1 x 39.7 MW gas 

turbine (GE, LM6000 PC) with 

10.6 MW steam 

turbine. 

On 21 March, 

2003, EPDK 

granted 

this power plant 

an autoproducer 

license for 10 

years period. 

Zorlu Enerji is the first company 

awarded with this license, our 

power plant started operation in 

second quarter of 2003. 

The fourth power plant of Zorlu 

Enerji is a combined cycle dual 

fuel power plant in Kayseri First 



turbine (GE, LM6000 PC) and 

33.5 MW steam turbine. 

The fifth power plant of Zorlu 

Enerji is a cogeneration power 

plant built for Yalova ‹pek Ka¤›t. 

This power plant is at a capacity 

of 16 MW electricity and 20 t/h 

steam, consists of 1 Wartsila 

engine, 1 Turbo mach gas turbine 

and 1 excess heat boiler. 

The sixth power plant of Zorlu 

Enerji is cogeneration power plant 

constructed for Kayseri Birlik 

Mensucat. Power plant has the 

capacity of 7.2 MW electricity and 

15 t/h steam, with 1 Turbo mach 

gas turbine and 1 excess heat 

boiler. Powerplant is in 

commercial operation since the 


(See Table 1) 


Investments 

The first power plant of Zorlu 

Enerji is the dual fuel (natural gas 

and liquid fuel) cogeneration 

facilities in Lüleburgaz. Power 

plant consists of two x 7 MW EGT 

Tempest and 1 x MW gas turbine 

unit (GE, LM 6000 PC). In 

November 2000, 9 MW reverse 

pressure gas turbine started to be 

operated and steam production 

capacity reached to 162 t/h. 

The second power plant of Zorlu 

Enerji is again a dual fuel 

combined cycle power plant in 

Bursa Organized Industrial Zone. 

Power plant consists of 1 x 26 

MW gas turbine (GE, LM2500+) 

with 9 MW steam turbine and 1 x 

43 MW gas turbine (GE, LM6000 

PC) with 12 MW steam turbine. 

The third power plant of Zorlu 

Enerji is also a dual fuel combined 

cycle power plant in Ankara 

Chamber of Commerce First 



turbine (GE, LM6000 PC) with 

10.6 MW steam 

turbine. 

On 21 March, 

2003, EPDK 

granted 

this power plant 

an autoproducer 

license for 10 

years period. 

Zorlu Enerji is the first company 

awarded with this license, our 

power plant started operation in 


The fourth power plant of Zorlu 

Enerji is a combined cycle dual 

fuel power plant in Kayseri First 



turbine (GE, LM6000 PC) and 

33.5 MW steam turbine. 

The fifth power plant of Zorlu 

Enerji is a cogeneration power 

plant built for Yalova ‹pek Ka¤›t. 

This power plant is at a capacity 

of 16 MW electricity and 20 t/h 

steam, consists of 1 Wartsila 

engine, 1 Turbo mach gas turbine 

and 1 excess heat boiler. 

The sixth power plant of Zorlu 

Enerji is cogeneration power plant 

constructed for Kayseri Birlik 

Mensucat. Power plant has the 

capacity of 7.2 MW electricity and 

15 t/h steam, with 1 Turbo mach 

gas turbine and 1 excess heat 

boiler. Powerplant is in 

commercial operation since the 


(See Table 1) 


Employment 

In 2006, number of total employee in the 

Company increased 40% and reached to 

415. The increase is caused by three power 

plant started operations, natural gas 

distribution activities started in Trakya and 

Gaziantep region and the purchase of 

Amity Oil. 

Production Activities 

The increase in capacity of installed power and efficiency, 

compared to 2005, 40% increase in electricity production and 

28% increase in steam production are recorded in 2006. 

(See Table 2 – Table 3) 

2006 2005 Change % 

Administrative Staff 156 87 79 (+) 

Other Staff 259 209 24 (+) 

Total 415 296 40 (+) 

The salary of our staff was increased twice 

in accordance with the inflation, and for 

premiums were paid. In addition, food and 

transportation services, provisions in every 

three months and leave with pay 

applications were continued in 2006. 

Severance Pay Obligation 

As of December 31st, 2005, the whole 

severance pay obligations were fulfilled and 

the amount reached 2.117.234 YTL. 

Sales Activities 

Main objective of our company is to provide sustainable 

electricity and steam for our customers. As of the end of 2006, 

the company has 250 customers. Produced steam is sold to 

industry facilities. The company sold all electricity produced in 

2006 to customers, and in cases of insufficient production, the 

required energy was bought from TETAfi and resold. 

(See table 4) 

Caused by Torts and Indemnities Paid in 

2006 and Paid Fiscal Penalties 

In 2006, there were no payments caused 

by unrightful acts. 

Important Disputes 

The Company has no important disputes 

neither with its employees nor 

governmental associations. 


Corporate Governance 

Compliance Report

Corporate Governance 

Compliance Report 

CONTENTS 

1- Declaration of Corporate Management 

SECTION I- SHAREHOLDERS 

2- Department of Relations with Shareholders 

3- Utilization of Shareholders Right of Getting Information 

4- Information about the General Board Meeting of Shareholders 

5- Voting and Minority Rights 

6- Profit Distribution Policy and Time for Profit Distribution 

7- Assignment of Shares 

SECTION II- INFORMING THE PUBLIC AND TRANSPARENCY 

8- Company Policy for Releasing Information 

9- Announcements About Special Situation 

10- Company Website and Contents 

11- Announcement of the Real Person Final Dominant Shareholder, Right Holder 

12- Disclosure to the Public the Names of Persons that may have insider trading information 

SECTION III- BENEFICIARIES 

13- Informing the Beneficiaries 

14- Beneficiaries’ Contribution to Administration 

15- Human Resources Policy 

16- Information about Relations with Customers and Suppliers 

17- Social Responsibility 

SECTION IV- BOARD OF DIRECTORS 

18- Structure of the Board of Directors, its Constitution and Independent Members 

19- Attributes of Board of Directors Members 

20- Mission, Vision and Strategic Goals of the Company 

21- Risk Management and Internal Control Mechanisms 

22- Authorities and Responsibilities of Board of Directors Members 

23- Principals of Activity for Members of Board of Directors 

24- Conducting Business with the Company and Rule of Competition 

25- Rules of Ethic 

26- The Number, Structure and Independence of Committees Established in the Board of Directors 

27- Financial Rights Granted to the Board of Directors 


Zorlu Enerji Elektrik Üretim A.fi. Corporate Governance Compliance Report 

1- Declaration of Corporate Management 

Zorlu Enerji Elektrik Üretim A.fi. is at the stage of 

completion of Corporate Management mechanisms 

in the company, started in 2005 and implemented in 

the concept of Conformity with Principles of 

Corporate Management. In this declaration, there are 

information about the conformity level of the 

company to these principles, and subjects that are 

not in conformity. 

In order to perform its liabilities to corporate and 

individual shareholders, Zorlu Enerji Elektrik Üretim 

A.fi. has decided to implement the Principles of 

Corporate Management. During the works done, 

great amount of effort is used in order to conform to 

the Principles of Corporate Management, all 

administrative staff and employees believed in 

necessity of implementing these principles at all levels 

of activities, and they worked together with the 

principles of transparency, equality, responsibility and 

accountability. Following the adaptation of Principles 

of Corporate Management to the company, 

Corporate Governance Report stating that the 

company activities will be performed in conformity to 

principles of transparency, equality, responsibility and 

accountability has been disclosed to public. Through 

the previous works done and its determination about 

conforming the Principles of Corporate Management, 

Zorlu Enerji Elektrik Üretim A.fi. has shown its 

awareness for company’s responsibilities to all 

shareholders, without the consideration of the 

amount of shares held. 

In this declaration, together with the conformity to 

Principles of Corporate Management of SPK (Capital 

Markets Committee), the subjects that are not in 

conformity with the principles are explained with the 

reasons. The works done in Zorlu Enerji Elektrik 

Üretim A.fi. for the implementation of Principles of 

Corporate Management are as follows: 

In order to increase the effectiveness of Board of 

Directors, Zorlu Enerji Elektrik Üretim A.fi. 

implemented some arrangements through the 

Principles of Corporate Management. By means of 

these arrangements, two independent members 

assigned to take part in the Board of Directors and 

the Board is structured in conformity with Principles 

of Corporate Management. 

In order to perform the Board of Directors meetings 

in an organized way, to keep and to archive the 

minutes of meetings and to allow easy access by 

Members to company information, a secretariat 

connected with the Board of Directors has been 

formed. 

In order to organize the relations with the investors, 

an “Investor Relations Department” has been formed 

in the company, as well as the responsibility of any 

publicized information, responsibility of the website 

has been given to this department. 

Company policy for releasing information has been 

prepared written and presented to attendants in 

General Meeting. 

Website has been recreated in conformity with the 

Principles of Corporate Management. 

Scheduled General Meeting held on May 16, 2006, 

Main Contract of the company has been amended in 

accordance to Principles of Corporate Management, 

with the acceptance of the majority of shareholders. 

The outlines of amendments made on Company’s 

Main Contract are as follows: 

• New rights are entitled to the minority shareholders, the rate of 

10% of the capital stated in Turkish Trade Law for 

representation of minor share holders has been changed, and 

in accordance to the article 11 of Law of Capital Markets 

amended by law no.4487, “minority shareholders rights are 

used by shareholders representing the minimum 1/20 of the 

paid capital of the Company” has been added to main 

contract (Article 20). 

• Shareholders representing minimum of 1/20 of company 

capital are entitled with the right of calling Board of Directors 

Meeting, by means of a written summon stating the reason of 

call (Article 9). 

• An article stating, “the transfer of company shares is 

unrestricted” has been added to the Main Contract of the 

Company (Article 21). 

• The subject of disclosure of the reasons of the independent 

members’ negative votes in Board of Directors has been 

regulated in the Main Contract (Article 9). 



• The subject of assigning independent members of Board of 

Directors has been added to main contract as “the number of 

independent members will be 1/3 of total members of board, 

but not less than 2” (Article 7). 

• The decision about the subject that the majority of the 

Members of the Board of Directors will not take part of 

execution, and different persons will perform duties of 

Chairmanship and Executive Chairmanship has been added to 

the Main Contract. Also, the principle of age limit for Member, 

which is not one of the Principles of Corporate Management of 

CMC (Capital Markets Committee), however, one of the 

principles recognized internationally, has been started being 

implemented by the company and this subject also has been 

added to the main contract (Article 7). 

• In accordance to Principles of Corporate Management, the 

subject of monthly wages of independent members of Board 

of Directors assigned, or, the subject that their welfare rights 

are not going to affect their independency has been added to 

the Main Contract (Article 12). 

• The subject that the permissions for Members’ right of 

conducting business and competition granted by the General 

Board Meeting of Shareholders can only be granted with the 

approval of the 2/3 majority of shareholders attended to the 

General Board Meeting of Shareholders has been added to 

the Main Contract (Article 13). 

• Committees connected with the Board of Directors and 

regulations about these committees have been added to the 

Main Contract (Article 13A) 

• General Board Meeting of Shareholders will elect two company 

auditors out of shareholders or people nominated by the 

shareholders, for maximum three years, and, the General 

Board Meeting of Shareholders will determine their salaries; 

this subject has been added to the Main Contract. Also, 

shareholders representing the 5% of the public shares of the 

Company can request from General Board Meeting of 

Shareholders to assign special auditor for investigation of a 

specific financial situation. In case that request is rejected by 

the General Board Meeting of Shareholders, shareholders 

representing the 1/20 of Company capital will have the right to 

go to the competent court with the request of assigning an 

auditor to investigate the specific situation and reach a result; 

this subject is clearly stated in the Main Contract (Article 14). 

• The subject that the company’s annual financial reports and 

other interval reports required by Capital Markets Regulations 

are to be audited by an independent audition firm approved by 

General Board Meeting of Shareholders and company can 

work maximum five consecutive fiscal years with the same 

independent audition firm has been added to the Main 

Contract of the Company (Article 15A). 

• The subject that other assigned shareholders or persons out of 

shareholders at General Board Meeting of Shareholders can 

represent the shareholders is stated in the Main Contract. The 

subject that the type of Authorization Document for 

Representation and implementation in accordance to Capital 

Markets Committee regulations will be based on Board of 

Directors decision has been stated in the Main Contract 

(Article 19). 

• In order to encourage and increase the attendance to General 

Board Meeting of Shareholders, it has been decided that an 

announcement should be made three weeks prior to the 

Meeting and this subject is stated in the Main Contract. Also, 

together with this announcement, information and documents 

related to the agenda should be provided in company center, 

branches and should be informed to the public (Article 23). 

During the process of implementing Principles of 

Corporate Management, some principles that don’t 

match with the Company structure and some that 

may have negative effects on activities are not 

applied. Respective principles and reasons for no 

implementation are summarized below: 

Accumulated vote implementation: Company does 

not apply the method of accumulated vote. However, 

by means of the independent members in the Board 

of Directors representation that can be achieved by 

accumulated vote method is provided. 

In the Main Contract, any amendment about some 

important subjects, such as “division and transfer of 

shares, purchase/sale of tangible/intangible assets at 

high value, rent to/from such, transfer of any 

immovable by method of donation or issuing bail, lien 

for the benefit of third parties” are not made. The 

reason of that is the Company makes lots of 

sale/purchase and rent because of the nature of the 

business sector, which the Company is in. Since that 

will not be possible for General Meeting of Board of 

Shareholders to get together for each conduct, this 

subject was not added to Main Contract. In order to 

accelerate the business transactions and avoid 

missing the opportunities, this subject is not placed in 

the Main Contract. 

With this declaration, Zorlu Enerji adopts a method of 

transparent and open management, and targets to 

form a responsible, accountable method of 

management for all its shareholders especially for the 

minority shareholders. 

Improvements that will be done in time in accordance 

to Principles of Corporate Management will be 

disclosed on Company’s website. 



SECTION I – Shareholders 

2- Department of Relations with Shareholders 

By making the plan of forming Department of 

Relations with Shareholders real, Zorlu Enerji Elektrik 

Üretim A.fi., has formed Department of Relations 

with Shareholders in 2006 as one step of the project 

of Corporate Management started in 2005. 

In managerial unit formed in 2006 to follow the 

activities related to investors, Fatih Y›lmaz is on duty, 

investors can get all kind of information about the 

company through phone lines: 0212 4562300, 0212 

4562196, 0212 4562199 as well as the company’s 

website, also by sending an email to 

yatirimci@zoren.com.tr. 

In this period, 30 questions by email and 80 

questions by phone are directed to the department. 

All the questions asked are replied meticulously 

verbal and/or written, in consideration of policy of 

giving information and following the principles of 

confidentiality. 

3- Utilization of Shareholders Right of Getting 

Information 

In 2006, 110 requests for information were received 

by Zorlu Enerji Accounting Department, and all are 

replied in details. Details about the number of 

requests received are as follows: 

Request of Information by Number 

E-Mail 30 

Fax - 

Mail - 

Telephone 80 

Total 110 

In 2006, Zorlu Enerji Department of Relations with 

Investors replied all 110 requests for information in 

details. 90% of the requests received by the 

department were about activities and financial 

performance of the Company, 10% were about 

investments, changes in share values, information 

about General Board Meeting of Shareholders, etc. In 

order to present most possible information in shortest 

time, correct, fast, complete and in an understandable 

way to investors, Company reorganized its website. 

Special attention is given to Website including detailed 

information in accordance to investors’ right of being 

informed, also all subjects covered in Capital Markets 

Committee Principles of Corporate Management are 

presented in company’s website. 

At the year 2006 Periodic General Board Meeting of 

Shareholders, the amended article of Main Contract 

about assigning a special auditor is as “Shareholders 

representing the 5% of the public shares of the 

Company may request from General Board Meeting 

of Shareholders to assign special auditor for 

investigation of a specific financial situation. In case 

that request is rejected by the General Board Meeting 

of Shareholders, shareholders representing the 1/20 

of Company capital will have the right to go to the 

competent court with the request of assigning an 

auditor to investigate the specific situation and reach 

a result”; in this period, there was no request for 

assigning a special auditor. 

4- Information about the General Board Meeting of 

Shareholders 

For year 2005, Periodic General Board Meeting of 

Shareholders has been held in Bursa Organized 

Industrial Zone on May 16, 2006 at 13:00 o’clock. 

Invitation for the meeting has been done in time in 

accordance to the related laws and as stated in the 

Main Contract, call for the meeting including the 

agenda has been published in Turkish Trade Registry 

Journal no.6546, dated 01.05.2006, Dünya 

Newspaper dated 02.05.2006 and Bursa Hakimiyet 

Newspaper dated 02.05.2006; shareholders which 

have issued stocks on their name and shareholders 

which has bearers bond, who have their addresses in 

the records are informed by registered letters. 

Although the General Board Meeting of Shareholders 

is open to public and media, beneficiaries and media 

did not attend the meeting. 

54.790.835.990 YTL of the company capital 

representing 5.479.083.599 shares, representing 67% 

of total 8.166.535.000 shares equal to 81.665.350 

YTL of company capital, 4.662.430.099 acting as 



principal, out of 816.635.500 Group A issued on 

name and 7.349.881.500 Group B issued on name 

has been represented in the meeting. General Board 

Meeting of Shareholders was held with 67% of 

attendance. There was no vote used by 

representatives. 

In order to assure the attendance of the shareholders 

bearing registered shares, no time for registering in 

book of shares is determined. 

Before the General Board Meeting of Shareholders, 

annual report and financial reports were kept ready 

for shareholders, at the company and holding center. 

Company Main Contract is also provided for 

requesting investors. Company’s Main Contract and 

documents regarding to General Board of 

Shareholders can also be provided at 

www.zoren.com.tr. 

During the General Board Meeting of Shareholders, 

shareholders are given right to ask questions. All 

questions asked by shareholders are answered in 

details. 

to beneficiaries and media. 

The minutes of General Board Meeting of 

Shareholders kept at the Company and Holding 

Center for shareholders’ inspection. With the new 

updates in company’s website, all announcements 

and documents regarding General Board Meeting of 

Shareholders are provided for informing all 

shareholders and beneficiaries. 

5- Voting and Minority Rights 

All shares of Zorlu Enerji Elektrik Üretim A.fi. contain 

equal rights. There are no privileges regarding right of 

voting and share of profit. This subject also exists in 

Company’s Main Contract. 

Zorlu Endüstriyel ve Enerji Tesisleri ‹nflaat Ticaret A.fi., 

Zorlu O&M Enerji Tesisleri ‹flletme ve Bak›m Hizmetleri 

A.fi., Zorlu Petrogas Petrol, Gaz ve Petrokimya Ürünl. 

‹nfl. San. ve Tic. A.fi., Zorlu Elektrik Enerjisi ‹thalat 

‹hracat ve Toptan Tic. A.fi., Zorlu Do¤algaz ‹thalat 

‹hracat ve Toptan Tic. A.fi., Trakya Bölgesi Do¤algaz 

Da¤›t›m A.fi., Gazdafl Gaziantep Do¤algaz Da¤›t›m 

A.fi, which are partners of Zorlu Enerji Elektrik Üretim 

A.fi.’ have no shares in the Company. 

Shareholders did not present any proposals or offers 

regarding to Company’s business. 

In the Main Contract, there is no article stating that 

General Board Meeting of Shareholders makes 

decision about “division and transfer of shares, 

purchase/sale of assets at high value, rent to/from 

such”. The reason is the Company makes lots of 

sale/purchase and rent because of the nature of the 

business sector, which the Company is in. It will not be 

possible for General Meeting of Board of Shareholders 

to get together to make a decision for each conduct of 

purchasing, buying or renting. Therefore, this subject 

did not take place in the Main Contract. 

Assigned two independent members in the Board of 

Directors represent minority shares. Since the 

independent members of the Board of Directors are 

qualified to execute their duties without being under 

any pressure, all rights of shareholders including the 

ones holding minority shares are protected and 

represented equally in the Board of Directors. 

Company does not apply accumulated voting 

method. However, by means of the independent 

members in of the Board of Directors, representation, 

which can be provided by accumulated voting 

method, can also be obtained. 

Since all the shares of the company are registered on 

names, meeting invitation, agenda and other 

information regarding to the agenda has been sent to 

all shareholders. Also, announcement for the meeting 

was publicized in Dünya and Bursa Hakimiyet 

Newspapers, in order to inform the investors. General 

Board Meeting of Shareholders has been held open 

6- Profit Distribution Policy and Time for Profit 

Distribution 

Regarding to profit distribution, there are no 

privileged shares in Company. Each share of 

Company has equal amount of profit share. 

The proposal about the profit of 2005 stated in 



General Board Meeting of Shareholders’ agenda 

(Article 8) has been explained to attendants and 

accepted in General Board Meeting of Shareholder 

unanimously. 

The results of year 2005 are 4.448.346 YTL 

consolidated net profit and 33.590.146 YTL loss 

according to records held in accordance to tax laws 

applied, since it is stated in decision, no. 7/242, 

dated 25.02.2005, of Capital Markets Committee that 

if financial tables prepared according to Capital 

Markets Committee or legal records shows loss in 

any fiscal period, company do not perform a 

distribution of profit, therefore, company did not 

perform a distribution of profit, since the company’s 

legal records are closed with loss for the year 2005. 

7- Assignment of Shares 

In the Main Contract of the Company, there is no 

regulation limiting the assignment of shares. The 

statement “Assignment of shares is permitted with 

the condition of compliance to Turkish Trade Law 

regulations of, Capital Markets Committee and 

Energy Market Regulation Committee and Main 

Contract of the Company” constitutes the Article 6 of 

the Main Contract. 

SECTION II- Informing the Public and Transparency 

8- Company Policy for Releasing Information 

Zorlu Enerji Elektrik Üretim A.fi.’s Company Policy for 

Releasing Information has been formed around the 

Capital Markets Committee Principles of Corporate 

Management in 2005, and, during the 2006 Periodic 

General Board Meeting of Shareholders, presented to 

the investors as an attachment to the Annual Report. 

Company Policy for Releasing Information is also 

presented to public through company’s website. 

The contents of the Policy for Releasing Information 

are as follows: 

• Any information disclosed to public should be clear, isochronal 

and correct 

• Contents of the information to be disclosed to public 

• Frequency of public disclosures and media 

• Information tools 

• People authorized to do the disclosures 

• Relations of the members of the Board of Directors and the 

managers with the press. 

• Meetings for Investors 

• General Board Meetings of Shareholders 

• Announcements made for press and media 

• Efficiency of the website 

• Future oriented announcements 

Company Policy for Releasing Information is 

approved by Board of Directors. Board is responsible 

for following up, controlling and developing the 

Company Policy for releasing Information. Investor 

Relations Unit will be responsible for supervision and 

proceedings of the policy. 

9- Announcements About Special Situation 

The Company made 40 announcements about 

special situations in 2006, these announcements 

have been sent to Capital Markets Committee and 

Istanbul Stock Exchange Market. For two of those 

announcements, ISE and Capital Markets Committee 

have requested additional information. The unit 

responsible for explaining special situations is 

Investor Relations Unit. Since the company’s stocks 

are not in foreign markets, announcements were 

made only inside the country. 

10- Company website and contents 

Company has an active and easy accessible website. 

On the website, www.zoren.com.tr, all the 

information given in Capital Markets Committee 

Principles of Corporate Management Section II – 

Article I.11.5 are provided. Website has been 

rearrenged at the beginning of 2006 and deficiencies 

determined in 2005 have been corrected. 

11- Announcement of the Real Person Final 

Dominant Shareholder, Right Holder 

There is no real person as a decisive shareholder. 

Partners of the Company are as follows: 

Nominal Value 

Partners Capital Share (%) of Shares (YTL) 

Zorlu Holding A.fi. 43.21 35.288.432,74 

Korteks Mensucat San. ve Tic.A.fi. 17.55 14.330.198,11 

Prime Emerging M. 3.50 2.858.287,25 

Zorlu Linen Dokuma Empirme 

Konf. San.ve Tic. A.fi. 0.53 428,743,09 

Linens Pazarlama A.fi. 0.47 383.827,15 

Zorluteks Tekstil Tic. ve San. A.fi. 0.23 191.913,57 

Zorlu Gayrimenkul Gel. ve Yat.A.fi. 0.35 287.870,36 

Zorlu Grand Otel ‹flletmeleri A.fi. 0.23 191.913,57 

Vestel Elektronik San. ve Tic. A.fi. 0.40 326.661,40 

Zorlu D›fl Tic. A.fi. 4.12 3.361.276,00 

Open to Public 29.41 24.016.226,76 

TOTAL 100,00 81.665.350,00 



12- Disclosure to the Public the Names of Persons 

that may have insider trader information 

Company has disclosed to public the names of the 

people known from inside. The list below shows the 

persons can be known from inside. 

Name 







Zuhal Bereket Bafl 

fierif Ar› 


Murat Sungur Bursa 

M.Salim Arslanalp 

Title 

Chairman of the Board of Directors 

Deputy Chairman of the Board of Directors 

Member of the Board of Directors 





Auditor 

Auditor 


General Manager / Zorlu Enerji A.fi. 

Mehmet B. Akdevelio¤lu General Manager / Zorlu Endüstriyel A.fi. 

M. Erdo¤an Günefl General Manager / Zorlu O&M A.fi. 

‹. Sinan Ak Deputy General Manager / Energy Group 

Nurflah Koflar 

Hüseyin Morkoyun 

Vedat Gülen 

U¤ur Bayr› 

Ayten Eslek 

Erol Birinci 

Ahmet Tansel Varan 

Nahit Kahraman 

fieref Ekinci 

Hasan Ayd›n 

Fatih Y›lmaz 

At›lay Y›lmaz 

Bülent Çilingir 

Gürcan Okumufl 

Hüseyin Gül 

Serhat fiimflek 

Türkan Güngör 

Müjgan Selik 

Salih Gürleyen 

Erdal Kural 

Cenk Teber Ordu 

Burcu Tekin 

Hüseyin Atabay 

Mehmet Çavuflo¤lu 

Osman Karabay 

fierif Ar› 



Deputy General Manager / Natural Gas 

Group 

Projects and Investments Director 

Planning and Business Development 

Director 

Accounting Manager 

Accounting Manager 

Human Resources and Corporate 

Communications Director 

Project Manager 

Projects and Investments Director 

Finance Manager 

Finance and Investor Relations Specialist 

Manager of Kayseri Power Plant 

Purchasing and Logistics Director 

Manager of Bursa Power Plant 

Manager of Lüleburgaz Power Plant 

Manager of Ankara Power Plant 

Accounting Assistant Manager 

Chief Accountant 

Chief Accountant 

Budget Chief 

Contracts Manager 

Finance Specialist 

Project Manager 

System Development and Project Manager 

Geothermal Investments Director 

Ar›lar Independent External Inspection 

Ar›lar Independent External Inspection 

SECTION III- Beneficiaries 

13- Informing the Beneficiaries 

Zorlu Enerji Elektrik Üretim A.fi. reorganized the 

website in order to inform the beneficiaries about the 

subjects concerning them, and any kind of 

information in the frame of Principles of Corporate 

Management. Also, in order to inform the employees, 

there is an “intranet” system in the company, and 

personnel can provide the information they needed 

from the system as their authorization level of access. 

All information in details needed by employees are 

presented in intranet system. 

In order to inform customers and suppliers, 

informative meetings are organized upon requests 

coming from them. In case of any requests coming 

from investors and agencies, one-to-one or group 

meetings are organized. 

14- Beneficiaries’ Contribution to Administration 

Beneficiaries do not take part in administration. 

However, care is given for participation of employees 

to meetings of boards of directors to indicate their 

opinions. Any other model for other beneficiaries to 

take part in administration is not developed. 

15- Human Resource Policy 

Human Resource Policy is prepared as to cover 

hiring, promoting, dismissing, training and 

compensation systems. In order to increase the 

productivity of employees, training programs are 

organized in certain times, and employees 

attendance to these programs is encouraged. 

There is not an assigned representative to organize 

the relations with the employees. If there will assign 

an independent member in the Board, this member 

will represent all beneficiaries as well as the 

employees in the Board of Directors. 

All employees are given equal opportunities for 

trainings, having a career, promotions and other 

subjects, with no discrimination. 

There is no complaint about discrimination received 

from employees. 



16- Information about the Relations with 

Customers and Suppliers 

Zorlu Enerji Elektrik Üretim A.fi. gives customer 

satisfaction a great importance. Demands coming 

from customers are replied in shortest time possible, 

all effort is used to find solutions for any issues. 

In order to achieve customer satisfaction, Customer 

Services Department has been established. This 

department usually provides technical and financial 

support. For the issues customers are having with 

EPDK (EMRA-Energy Market Regulatory Authority) 

and Treasury, same department acts also as an 

intermediary agent. Complying with the EPDK 

Directives, customers’ meters are replaced with new 

ones, and in order to provide remote supervision, 

modems are installed. 

Since the company has no direct relations with the 

customers, customer satisfaction is related with the 

discount rate applied. 

17- Social Responsibility 

In 2006, Zorlu Enerji has all required and legal 

inspections related to environmental protection done. 

In the same direction, ÇED (Environmental Impact 

Assessment) documents related with the installations 

are taken from Ministry of Environment, every year. 

Until today, no violation regarding environmental 

protection is determined in environmental influence 

reports, and all implementations are done in 

consideration to environmental factors. Company 

also has three certifications regarding environmental 

protection, issued by ISO. 

In 2006, no negative effect to environment was 

determined and there is no law suit filed against the 

Company. 

All kinds of works regarding Social Responsibilities 

are performed group based by Mehmet Zorlu 

Foundation, and Zorlu Enerji Elektrik Üretim A.fi. 

contributes to these as a Company in the Group. 

SECTION IV- Board of Directors 

18- Structure of the Board of Directors, its 

Constitution and Independent Members 

Zorlu Enerji Elektrik Üretim A.fi. Board of Directors 

consists 7 members. Almost no member of the Board 

takes any part in execution. The Chairman of the 

Board, Zeki Zorlu, acts as a member taking no part in 

execution. The General Manager of the Company is 

Salim Arslanalp. Different persons act as Chairman of 

the Board and Executive Directors. 

Member Title Attribute of Member 

Zeki Zorlu Chairman of the Takes no part in execution 

Board of Directors 

Yüksel Yalova Deputy Chairman Takes no part in execution 

of the Board of Directors 

Olgun Zorlu Member Takes no part in execution 

Türkan Zorlu Member Takes no part in execution 

Berrin Zorlu Member Takes no part in execution 

Selen Zorlu Melik Member Takes part in execution 

Zuhal Bereket Bafl Member 

Takes no part in execution 

In accordance with the Corporate Management 

implementation two independent members are 

assigned and the Board of Directors has seven 

members including the independent members. 

Independent members bear the independency criteria 

provided in Capital Markets Committee Principles of 

Corporate Management. For the Board Members, 

there is no limitation regarding to undertake other 

duty or duties outside the Company. 

19- Attributes of Board of Directors Members 

Following the amendments to be done on Main 

Contract at Periodic General Board Meeting of 

Shareholders, minimum specifications to be borne by 

Board Members will be added to Main Contract. 

Specifications, which will be added to the Main 

Contract, will be as same as the ones mentioned in 

Capital Markets Committee Principles of Corporate 

Management Section IV. Article 3.1.1, 3.1.2 and 3.1.5. 

Corporate Management Committee, which will be 

acting connected to Zorlu Enerji Elektrik Üretim A.fi. 

Board of Directors, decided to organize training 

programs, if necessary, for the members who do not 

bear the specifications; until now, there have been no 

training program implemented for Board Members. 



20- Mission, Vision and Strategic Goals of the 

Company 

22- Authorities and Responsibilities of Board of 

Directors Members 

Board of Directors has determined the mission and 

vision of the Company and announced them to public: 

Mission: From the source to the socket, provide 

quality and reliable services, to give energy to life. 

Vision: In all levels of energy sector, to become the 

leader in Turkey and a preferred bridge of energy in 

the world. 

Board of Directors confirms the strategic goals 

determined by directors. Zorlu Enerji Elektrik Üretim 

A.fi. Board takes grate care in considering the 

opinions and proposals of related departments, when 

the strategic goals are being determined. Proposals 

about the strategic goals are reported to Board and 

works to implement the goals are started immediately. 

The levels of achieving the goals are evaluated by 

means of the results in financial charts and based on 

activities in year-end reports. Board of Directors, once 

a year, performs an annual evaluation to determine 

the level of achieving the goals, activities and previous 

performances. 

21- Risk Management and Internal Control 

Mechanisms 

Zorlu Enerji Elektrik Üretim A.fi. Board of Directors 

uses SAP system in the Company, in order to achieve 

Risk Management and internal control. By means of 

SAP system, all integrated work process can be 

operated/recorded by computer systems and 

productivity can be increased. Also, with this system, 

employees and managers, as their level of 

authorization allows, can access any kind of 

information and reports they need. 

In order to provide internal control, a problem-solving 

program is installed in Company’s intranet system and 

is operated effectively. Any problem faced is directed 

to related managers and solved immediately. Zorlu 

Enerji Elektrik Üretim A.fi. Board defined all existing 

and potential risks and determined policies against 

those risks. 

In Main Contract of Zorlu Enerji Elektrik Üretim A.fi., 

authorities and responsibilities of Board of Directors 

did not take place in details. With the amendments 

made in 2005 General Board Meeting of 

Shareholders, authorities and responsibilities of Board 

of Directors members took place in main contract. 

Authorities and responsibilities of Board of Directors 

took place in Main Contract are as follows: 

• Determining the mission and vision of the Company and announce 

them to public, following up and supervising the proceedings on 

the way to determined goals; 

• Representing the company to shareholders and third parties and 

determining the policies to do; 

• Approving the annual budgets and business plans of the company; 

• Protecting the company activities to comply with the directives, 

main contract and internal regulations; 

• Having the company records kept properly; 

• Preparing company balance sheet, preparing profit/loss accounts, 

preparing annual report, and presenting those to shareholders 

attention before the General Board Meeting of Shareholders; 

• Presenting to General Board of Shareholders a proposal about the 

way of profit distribution; 

• Calling General Board of Shareholders for ordinary or extraordinary 

meeting and providing the procedure for General Board Meeting of 

Shareholders; 

• Ensuring the decisions made by Shareholders during General 

Board Meeting to be realized; 

• Determining the rules followed by Company employees, including 

the ethic rules to be followed; 

• Determining the Company Policy for Releasing Information and 

disclose it to public; 

• Forming the committees connected to the Board of Directors, 

assigning the members and determining the work principles, 

ensuring the effective and productive work of such; 

• Evaluating the recommendations of corporate management 

committee about top-level managers of the Company. 

23- Principals of Activity for Members of Board of 

Directors 

The Chairman of the Board and Members determine 

Board meeting agendas. While determining the 

agenda, requests coming from directors are also 

taken into consideration. In the Article 9 of Main 

Contract, it is stated that the Board will gather at least 

once a month. Board of Directors Meetings are held 

at least 12 times a year. 

A secretariat inside the Company working connected 

with Board of Directors has been formed, in the 

concept of Principles of Corporate Management. Duty 

of the Secretariat is to keep the records of the Board 

Meetings, to archive the records and provide updated 

information for the members of the Board. Also, 



agenda and information about the agenda, as well as 

the reports, are delivered to the Members, at least 

one week prior to meetings. 

During the Meetings, any opposite opinions and 

detailed information about the reasons of voting 

against the common practice are decided to be put 

into records and passed to the auditors, but so far 

such a situation did not occurre. Following the 

approval of Main Contract by General Board Meeting 

of Shareholders, if independent members have a 

different opinion, the reasons of voting against shall 

be disclosed to the public through the website. The 

actual participation of the members to the board 

meetings is required for articles that need to be 

approved by the members of the board of directors 

indicated in Section IV article 2.17.4 of the Principles 

of Corporate Management of the Capital Markets 

Committee. None of the Board members, including 

the Chairman, have more voting rights and/or the right 

to veto. All members and chairman has equal vote. 

24- Conducting Business with the Company and 

Rule of Competition 

The Subject of having business conducts with the 

Company or competing with the Company is 

presented in the agenda for approval of General 

Board of Shareholders, every year. In year 2006, no 

case regarding business conducts with the Company 

or competition of Members of the Board is occurred. 

In case that any situation occurs related to business 

conduct and competition with the company, in 

concept of Principles of Corporate Management, the 

profit disputes arise will be disclosed to public. 

25- Rules of Ethic 

Ethic Rules of Zorlu Enerji Elektrik Üretim A.fi. prepared 

in form of writing and delivered to all employees. 

Maximum care is given to the implementation of rules 

of ethics having been established for the Board of 

Directors, the company and its employees. 

26-The Number, Structure and Independence of 

committees established in the Board of Directors 

The Board of Directors has established an Audit 

Committee for auditing the financial and operational 

activities in accordance with the bulletin of the Capital 

Markets Committee with Series Seri X, No:19 Article 3 

The Corporate Management Committee has not yet 

been established. However, with the appointment of 

independent members to the Board of Directors and 

within the framework of the Principles of Corporate 

Management of the Capital Markets Committee, it is 

planned that the Corporate Management Committee 

be established under the chairmanship of an 

independent chairman. The principles of working have 

been established in writing and in a detailed manner 

within the framework of this plan. The establishment 

of the Committee shall commence after the Ordinary 

General Meeting. The working plans of the Audit 

Committee and the Corporate Management 

Committee has been established in writing and in a 

detailed manner. 

The Audit Committee comprises of two persons, who 

are Türkan Zorlu and Selen Zorlu Melik. Selen Zorlu 

Melik from among the committee members is a 

member with executive powers while Türkan Zorlu is a 

member who does not have executive powers. 

The Board of Directors resolved that as of 2006, the 

Audit Committee holds meetings each quarter and 

meet at least 4 times in year. 

Board secretariat will be responsible for keeping the 

records of decision of meetings. Committee performs 

its duties in accordance to working principles 

prepared in details and in form of writing. 

27- Financial Rights Granted to the Board of 

Directors 

General Board of Shareholders determines social 

benefits given to Members of the Board of Directors. 

In 2006, total of 100.000 YTL. is paid to Board 

Members of Zorlu Enerji Elektrik Üretim A.fi., in 

conformity with sector average. Each of Board 

Auditors is paid 2.232YTL. Gross per year. 

A performance appraisal is not conducted for 

members of the Board of Directors. A rewarding 

system reflecting the performance of the Company 

has not been established. 

The Company did not give any debt or loan to any 

member of the Board of Directors and the managers. 


Zorlu Enerji Elektrik Üretim A.fi. Results of the Operations 


The gross revenue of our Company for year 2006 

increased by 71,23% when compared with the 

previous year and was recorded as 408.235.775 YTL. 

403.156.270 YTL of our gross sales revenues were 

generated from domestic sales while 3.596.491 YTL 

was from foreign sales and 1.483.014 YTL from other 

sales. Our net sales revenue for year 2006 on the 

other hand increased by 80,87% when compared with 

2005 and was recorded as 16.390.093 YTL after 

deducting the sales discount of 391.845.862 YTL. 

The cost of our Sales increased by 76,47% in 2006 

when compared with 2005 and became 341.981.436 

YTL. On the other hand, our Gross Sales Profit for the 

same period decreased by 118,16% and became 

49.864.246 YTL. Our Profits after Tax decreased by 

70.89% when compared with 2005 and became 

4.448.345 YTL. The main reasons for decrease of 

profitability were the fact that the price of electricity 

remained constant; a rapid increase was observed in 

the natural gas and energy transfer amounts and the 

coming into effect of amortizations of our Kayseri and 

Yalova powerhouses. 

As a consequence of our activities for 2006 the total 

assets of our company reached 842.013.429 YTL 

with an increase of 43,86%. Against this increase in 

the assets of our balance sheet, our Short Term 

Receivables in the liabilities increased by 175,67% and 

became 285.605.093 YTL. Our Fixed Assets 

increased by 27,83% and became 619.149.097 YTL 

and Long Term Payables decreased by 55,62% and 

became 252.618.336 YTL. The equity Capital of our 

Company has been inflation adjusted in 2006 and 

reached 285.779.429 YTL with a decrease of 8,23% 

after adding the net profit for the. The paid up Capital 

of our company as of end of 2006 is 81.665.350 YTL. 

Our Company places maximum attention to Risk 

Management. The risk management components 

implemented by our company during its operations 

can be cited briefly in the following manner: 

Provision of Guarantees for Collections. The debt 

status of our customers are followed up regularly and 

maximum attention is paid for them to fulfill their 

obligations towards us. Besides this, we provide 

service against Definite Bank Guarantees by taking 

into consideration the amount of electricity % natural 

gas requested. 

Insurance 

We have insurance policies for our powerhouses and 

all equipment against Loss of profit, Breakdown of 

Machines and Fire and in this manner we protect 

ourselves against unexpected failures and accidents. 

Protection against Natural Gas Prices 

Although our natural gas input, constituting a large 

part of our costs, is subject to price fluctuations, a 

“natural” protective shield has been formed by 

purchasing Amity Oil, an Australian company 

producing natural gas in the Thrace Region and 

including it in our structure and by also purchasing 

natural gas from the Thrace Basin producing natural 

gas in the same region, to decrease our main input 

costs. 

Finance and Loan Foreign Currency Risk Position 

Powerhouse investments are funded with long term 

project finance loans, which provide ease for cash 

flows during payment of loans. The interest of loans 

used is variable; it has not been fixed due to the low 

interest rates in the world, which led to an advantage 

in finance expenses. Our position in American Dollars 

is minimized since a large part of the receivables of 

our Company is in terms of American Dollars against 

credits in American Dollars. There is a Euro credit risk 

position however, as the New Turkish Lira gained 

value against the American Dollar and EURO, the 

foreign currency risk positions concerned are taken 

and an advantage has been created for our Company. 

Diversification of the Customer Portfolio 

Our sales revenue and profitability is increasing by 

managing an instant portfolio aimed against industries 

and trading houses in many different sectors besides 

our customers for electricity and natural gas. 

Best Regards, 

‹. Sinan Ak 



Proposed Distribution 

of Profit 

CURRENT PERIOD 

PREVIOUS PERIOD 

31.12.2006 31.12.2005 

1. Profit of the Period LOSS 4.448.346,00 

2.Loss of the previous years - - 

3. Tax payables 0 0 

- Corporate Tax 0 0 

- Income Tax Deduction 0 0 

- Other Taxes and substitutes 0 0 

4.First Legal Reserves 0 0 

NET DISTRIBUTIBLE EARNINGS OF THE PERIOD 0 4.448.346,00 

5.First dividends to the Partners 0 0 

- Owners of Common Stocks 0 0 

- Owners of Preferred Stocks 0 0 

6.Dividends to the Employees 0 0 

7.Dividends to the Board Of Directors 0 0 

8.Second dividends to the Partners 0 0 

- Owners of Common Stocks 0 0 

- Owners of Preferred Stocks 0 0 

9. Second Legal Reserves 0 0 

10.Statutory Reserves 0 0 

11.Special Reserves (Issue Premium) 0 0 

EXTRAORDINARY RESERVES 0 0 

A. Distribution from the Reserves - - 

B. Profit per share (YTL) 0 0,0540 

C. Profit Rate per Share (%) 0,0 0,1% 


Summary of Auditor’s Report 

To the General Assembly of the Zorlu Energy Electric Generation Inc. 

Corporate Name : Zorlu Energy Electric Generation Co. Inc. 

Head Office : Organize Sanayi Bölgesi Pembe Cad. No: 13 Bursa 

Capital : 81.665.350 YTL. 

Subject of the Operations : Production of Electricity and Steam 

Names of auditors, duration of service, and : fierif Ar› -1 year 

nature of association with the Company 

Hakan Efltürk -1 year 

They are neither partners nor personnel 

Number of meetings of the Board of Directors 

attended and meetings of the Board of Auditors held : 6 

Dates, extent and result of examination of : The previous month’s balance sheets are audited at 

Company accounts, books and records 

the beginning of each month. It was determined that 

they were kept according to accepted procedures. 

Number and results of Company cash counts 

conducted as required by Turkish Trade Law, : Five cash counts were made in different times in 

article 353, section 1.3 

the year and it is approved that all are in accordance 

with existing records. 

Date and results of examinations as required : In the audit made once in a month, it is understood 

by Turkish Trade Law, article 353, section 1.4 

that there is no pledge, guarantee or securities 

supplied as bail. 

Any complaints or irregularities brought to 

the auditors’s attention and the action taken : No complaints or irregularities were received. 

We have audited the balance sheet and the statement of income of Zorlu Energy Electricity 

Generation Co.Inc. for the period between 01.01.2006 and 31.12.2006, in accordance with 

the Turkish Trade Law, the Company’s articles of association of foundation and other legislation 

and in accordance with generally accepted accounting principles and standards. 

In our opinion, the attached balance sheet drawn up on 31.12.2006 present fairly the 

financial position of the Company on the said date and the statement of income for the 

period between 01.01.2006 and 31.12.2006 present fairly the results of the activities 

pertaining to that period. 

We hereby request the Balance Sheet and Income Statement to be approved, and 

Administrative Board to be granted full discharge. 

Board of the Auditors 

fierif Ar› 



Summary of Independent 

Auditors Report 

ZORLU ENERJ‹ ELEKTR‹K ÜRET‹M A.fi. 

CONSOLIDATED FINANCIAL STATEMENTS 

AT 31 DECEMBER 2006 TOGETHER WITH AUDITORS’ REPORT 

To The Shareholders and Board of Directors of 


Auditor’s responsibility 

We have audited the accompanying consolidated 

financial statements of Zorlu Enerji Elektrik Üretim 

A.fi. (the “Company”) and its subsidiaries listed under 

note 1, which comprise the consolidated balance 

sheet as at 31 December 2006, and the consolidated 

statements of 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. 

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. 


We believe that the audit evidence we have 

obtained is sufficient and appropriate to provide a 

basis for our audit opinion. 

During 2006, there have been changes in the 

regulations related to investment allowances. 

According to these changes investment allowances 

have been discontinued as from 01 January 2006. 

However investment allowances unused and carried 

forward as of 31 December 2005 and investment 

allowances on projects approved as of 31 December 

2005 on which expenditure continues to be incurred 

after 31 December 2005 may be deducted from the 

profits for the years 2006, 2007 and 2008. However, 

the profit remaining after deduction of investment 

allowances for the said three years will be subject to 

30% corporation tax. The Company has become 

entitled to investment allowances of 343.492.425 

YTL as of 31 December 2006 and the Company has 

exercised the option of using investment allowances 

and pay corporation tax at 30%. The deferred tax 

asset related to investment allowances as of 31 

December 2006 was calculated as 49.911.573 YTL. 

The realization of this deferred tax asset is dependent 

upon generation of sufficient profits until and 

including 2008. 

Opinion 

In our opinion, except for the effects, if any, of the 

matters explained the preceding paragraph, the 

consolidated financial statements present fairly in all 

material respects, the consolidated financial position 

of the Company as of 31 December 2006, and of its 

consolidated financial performance and its 

consolidated cash flows for the year then ended in 

accordance with International Financial Reporting 

Standards. 

ARKAN & ERG‹N 

Uluslararas› Denetim ve Yeminli Mali Müflavirlik A.fi. 

Member Firm of GRANT THORNTON International 

Naz›m Hikmet 

Partner 

‹stanbul, 10 April 2007 


Financial Statements 

and Footnotes

Contents 

Page 

Consolidated Balance Sheets 46-47 

Consolidated Statements of Income 48 

Consolidated Statements of Changes In Shareholders' Equity 48 

Consolidated Cash Flow Tables 49 

Footnotes to The Consolidated Financial Statements 

Note 1 Organization and Nature of Activities 51 

Note 2 Basis of Presentation of The Financial Statements 52 

Note 3 Summary of Significant Accounting Policies 53 

Note 4 Earning Per Share 57 

Note 5 Cash and Cash Equivalents 57 

Note 6 Trade Receivables 57 

Note 7 Construction Contracts Work in Progress 57 

Note 8 Inventories 57 

Note 9 Other Assets 57 

Note 10 Investments 58 

Note 11 Property, Plant and Equipment, net 58 

Note 12 Intangible Assets, net 59 

Note 13 Borrowings 59 

Note 14 Trade Payables 59 

Note 15 Provision for Expenses 59 

Note 16 Other Liabilities 60 

Note 17 Taxation on Income 60 

Note 18 Reserve for Retirement Pay 62 

Note 19 Share Capital 62 

Note 20 Commitments and Contingencies 62 

Note 21 Segment Information 63 

Note 22 Other Income (Expense), net 63 

Note 23 Financing Income (Expense), net 63 

Note 24 Related Party Disclosure 63 

Note 25 Financial Instruments 64 

Note 26 Supplementary Cash Flow Information 65 

Note 27 Post Balance Sheet Events 65 

Ar›lar Independent Auditors Inc. (Ar›lar Ba¤›ms›z D›fl Denetim A.fi.) 


Zorlu Enerji Elektrik Üretim A.fi. Financial Statements and Footnotes 


Consolidated Balance Sheets at 31.12.2006 and 2005 

(All amounts in New Turkish Lira (“YTL”) unless indicated otherwise.) 

Assets Notes 31.12.2006 31.12.2005 

Current assets 

Cash and cash equivalents 5 305.099 747.693 

Trade receivables 6 44.099.957 33.742.872 

Construction contracts work in progress 7 136.526.469 — 

Inventories 8 26.090.263 14.790.077 

Other assets 9 14.353.822 50.400.622 

Total current assets 221.375.610 99.681.264 

Non-current assets 

Investments 10 1.334.102 533.045 

Property, plant and equipment, net 11 531.724.268 469.556.361 

Intangible assets, net 12 33.341.512 30.876.246 

Other assets 95.455 76.103 

Deferred tax asset 17 51.765.218 32.621.435 

Total non-current assets 618.260.555 533.663.190 

Total assets 839.636.165 633.344.454 

The accompanying notes are an integral part of these consolidated financial statements. 




Consolidated Balance Sheets at 31.12.2006 and 2005 


Liabilities and equity Note 31.12.2006 31.12.2005 

Short Term Liabilities 285.605.093 103.605.187 

Current liabilities 

Borrowings 13 157.115.394 67.311.203 

Trade payables 14 45.437.084 27.373.980 

Taxation on income 17 2.618.822 1.287.456 

Provision for expenses 15 399.681 258.657 

Other liabilities 16 75.680.641 2.355.092 

Total current liabilities 281.251.622 98.586.388 

Non-current liabilities 

Borrowings 13 199.299.125 161.345.651 

Trade payables 172.102 — 

Provision for expenses 15 4.350.855 5.255.136 

Reserve for retirement pay 18 1.033.844 723.391 

Deferred tax liability 17 51.231.617 31.205.824 

Total non-current liabilities 256.087.543 198.530.002 

Equity 

Share capital 19 192.613.350 192.613.350 

Minority interest 20.731.161 9.744.666 

Retained earnings 88.952.489 133.870.048 

Total equity 302.297.000 336.228.064 

Commitments and contingencies 20 

Total liabilities and equity 839.636.165 633.344.454 





Consolidated Income Statements for the Years Ended 31 December 2006 and 2005 


Note 01.01.-31.12.2006 01.01.-31.12.2005 

Net sales 21 391.845.682 218.774.188 

Cost of sales (343.626.103) (195.605.218) 

Gross profit 48.219.579 23.168.970 

Selling expenses (24.362.698) (20.312.959) 

General and administrative expenses (25.244.031) (12.688.362) 

Other income (expense), net 22 (4.648.420) 3.424.505 

Operating loss (6.035.570) (6.407.846) 

Financing income 23 54.804.468 13.395.545 

Financing expense 24 (79.719.961) (8.156.879) 

Loss before taxation (30.951.063) (1.169.180) 

Taxation charge 

Current (7.190.144) (1.313.738) 

Deferred (882.010) 5.424.721 

Taxation on income 17 (8.072.154) 4.110.983 

Profit (loss) after taxation (39.023.217) 2.941.803 

Monetary gain — 587.129 

Net profit (loss) for the year (39.023.217) 3.528.932 

Attributable to: 

Equity holders of the Company (44.917.559) 4.015.299 

Minority interest 5.894.342 (486.367) 

(39.023.217) 3.528.932 

Basic and fully diluted earnings per share 4 (0,00) 0,00 



Consolidated Statements of Changes in Equity for the Years Ended 31 December 2006 and 2005 


Share capital Retained earnings Minority interest Total equity 

Balance at 31 December 2004 192.613.350 132.837.205 7.082.089 332.532.644 

Dividends paid — (2.967.151) — (2.967.151) 

Acquisition of subsidiary — — 3.133.639 3.133.639 

Change in minority interest — (15.305) 15.305 — 

Net profit for the year — 4.015.299 (486.367) 3.528.932 


Cash increase in subsidiaries’ share capital — — 5.092.153 5.092.153 

Net loss for the year — (44.917.559) 5.894.342 (39.023.217) 






Consolidated Cash Flow Statements for the Years Ended 31 December 2006 and 2005 


Note 31.12.2006 31.12.2005 

Adjustment to reconcile net income to net 

cash provided from operating activities: 26 35.788.198 21.650.545 

Operating profit before changes in working capital 4.837.135 21.068.494 

Changes in operating assets and liabilities 26 (31.175.759) 31.948.040 

Taxes paid (5.858.778) (26.282) 

Net cash provided by (used in) operating activities (32.197.402) 52.990.252 

Cash flows from financing activities 

Changes in borrowings 124.670.411 45.576.421 

Dividends paid — (2.967.151) 

Net cash provided by (used in) financing activities 124.670.411 42.609.270 

Cash flows from investing activities 

Changes in minority interest 5.092.153 3.133.639 

Purchases of investments (801.057) (533.045) 

Purchases of property, plant and equipment (93.056.106) (67.230.417) 

Purchases of intangible assets (4.181.961) (30.487.068) 

Proceeds from sale of property, plant and equipments 31.368 191.749 

Net cash used in investing activities (92.915.603) (94.925.142) 

Net increase (decrease) in cash and cash equivalents (442.594) 674.380 

Cash and cash equivalents at beginning of year 747.693 73.313 

Cash and cash equivalents at end of year 305.099 747.693 



Footnotes to 

Consolidated Financial 

Statements

1. ORGANISATION AND NATURE OF ACTIVITIES 

Zorlu Enerji Elektrik Üretim A.fi. (the “Company” or “Zorlu Enerji”) is a member of the Zorlu Group of Companies 

which are under the control of the Zorlu family. The Company and its subsidiaries were established to meet the 

power requirements of Zorlu Group establishments and other industrial companies. 

The registered office address of the Company is Nilüfer Organize Sanayi Bölgesi, Pembe Caddesi, 

Bursa/Turkey. The movement in the shareholding of Zorlu Enerji is given below: 

Operating Shareholding (%) Shareholding (%) 

Consolidated Company Location 31.12.2006 31.12.2005 

Zorlu O/M Enerji Tesisleri ‹flletme A.fi. Turkey 24,0 24,0 

Zorlu Endüstriyel ve Enerji Tesisleri ‹nflaat Ticaret A.fi. Turkey 20,0 20,0 

Zorlu Petrogas, Petrol, Gaz ve Petrokimya A.fi. Turkey 79,1 79,1 

Zorlu Elektrik Enerji ‹thalat ‹hracat A.fi. Turkey 2,4 2,4 

Zorlu Do¤algaz ‹thalat ‹hracat A.fi. Turkey 2,4 2,4 

Trakya Bölgesi Do¤algaz Da¤›t›m A.fi. Turkey 11,0 11,0 

Gazdafl Gaziantep Do¤algaz Da¤›t›m A.fi. Turkey 11,0 11,0 

Amity Oil International Pty. Ltd. Turkey 79,1 79,1 

Rosmiks International B.V. Holland 51,0 — 

For the purpose of consolidated financial statements 

Zorlu Enerji and its subsidiaries will be referred to 

collectively as the “Group”. 

Zorlu Elektrik Enerji ‹thalat ‹hracat A.fi., Zorlu 

Do¤algaz ‹thalat ‹hracat A.fi., Trakya Bölgesi 

Do¤algaz Da¤›t›m A.fi.and Gazdafl Gaziantep 

Do¤algaz Da¤›t›m A.fi. are consolidated because 

they are under the effective control and management 

of the Group. 

Nature of activities of the Group 

Zorlu Enerji Elektrik Üretim A.fi. (Bursa / Turkey) 

Zorlu Enerji was established in 1993 for the purpose 

of generating electricity and steam mainly for Zorlu 

Holding Group Companies. Zorlu Enerji Elektrik 

Üretim A.fi. supplies uninterrupted power to around 

240 industrial users, by its natural gas combined 

cycle plants in Bursa (90 MW), in Ankara (50.3 MW), 

in Kayseri (188.5 MW) and by its cogeneration plants 

in Lüleburgaz (65.7 MW), in Kayseri (7.2 MW) and 

Yalova (15.9 MW). 

Zorlu O&M Enerji Tesisleri ‹flletme ve Bak›m Hizmetleri 

A.fi. (Istanbul / Turkey) Zorlu O&M Powerplant 

Operation and Maintenance Services was establised 

in 2000 to provide operational and maintenance 

services to powerplants. 

Zorlu Endüstriyel ve Enerji Tesisleri ‹nflaat Ticaret A.fi. 

(Istanbul / Turkey) This company became operational 

in 2000 for the purpose of developing, implementing 

and providing financial support to industrial and 

energy plant projects. 

Zorlu Petrogas, Petrol, Gaz ve Petrokimya Ürünleri 

‹nflaat Sanayi ve Ticaret A.fi. (Istanbul / Turkey) 

Zorlu Petrogas, Petroleum, Gas and Petrochemical 

Products, Construction was established in 2000 to 

engage in natural gas distribution projects, petroleum 

and petrochemical production facilities, as well as 

marketing of petroleum and natural gas. 

Zorlu Elektrik Enerji ‹thalat ‹hracat A.fi. 

(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 resale; 

on wholesale and retail basis. 

Zorlu Do¤algaz ‹thalat ‹hracat A.fi. (Istanbul / Turkey) 

Zorlu Do¤algaz was established in 2003 for the 

purpose of wholesale procurement of compressed 

natural gas and/or liquefied natural gas to other 

wholesale companies, free trade zones and countries 

abroad; owns license for wholesale and retail sales 

and direct sales to the free consumers . 


Zorlu Enerji Elektrik Üretim A.fi. Footnotes to Consolidated Financial Statements 

Trakya Bölgesi Do¤algaz Da¤›t›m A.fi. (Istanbul / 

Turkey) This company was established in 2005 for 

the purpose of city gas distribution in Edirne- 

K›rklareli-Trakya, Turkey. 

Gazdafl Gaziantep Do¤algaz Da¤›t›m A.fi. (Istanbul / 

Turkey) This company was established in 2005 for 

the purpose city gas distribution in Gaziantep-Kilis 

region, Turkey. 

Amity Oil International Pty. Ltd. Zorlu Petrogas 

acquired the 100% shares in Amity Oil in 2005. Amity 

Oil is engaged in petroleum and natural gas 

exploration and production in Turkey. 

Rosmiks International B.V. (Holland) This company 

was established in 2006 for the purpose of providing 

financial support to two energy plant projects (170 

MW each) in Russia. 

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”). 

The Company, which is quoted on the ‹stanbul 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 New Turkish Lira (YTL) 

by closing rate method. The consolidated financial 

statements have been prepared from statutory 

financial statements of the Company and its 

subsidiaries and presented in New Turkish Lira (YTL) 

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, investment property, receivables, 

interest expense accruals on bank loans. 

Measurement currency and reporting currency 

The restatement for the changes in the general 

purchasing power of YTL as of 31 December 2005 is 

based on IAS 29 (“Financial Reporting in 

Hyperinflationary Economies”). IAS 29 requires that 

financial statements prepared in the currency of a 

hyperinflationary economy be stated in terms of the 

measuring unit current at the balance sheet date and 

the corresponding figures for previous periods be 

restated in the same terms. One characteristic, (but 

not limited to), that necessitates the application of IAS 

29 is a cumulative three year inflation rate approaching 

or exceeding 100%. As of 31 December 2005, the 

three year cumulative rate has been 36% (31 

December 2004: 70% - 31 December 2003: 181%) 

based on the Turkish countrywide wholesale price 

index published by the State Institute of Statistics. 

As of 1 January 2006, it has been decided to 

discontinue the adjustment of financial statements for 

inflation after taking into account that hyperinflation 

period has come to an end as indicated by existing 

objective criteria and, that other signs indicating the 

continuance of hyperinflation have largely 

disappeared the financial statement as of 31 

December 2006 have therefore, not been subjected 

to any adjustment for inflation. 

The effects of ending the adjustments for inflation on 

financial statements are summarized as follows: 

The financial statements as of 31 December 2006 

have not been subjected to any inflation adjustment 



whereas the financial statements for previous periods 

have been adjusted for inflation on basis of the 

measuring unit current at the last preceding balance 

sheet date namely 31 December 2005. 

Together with the ending of the hyperinflationary 

period the balances adjusted for inflation as of the 

last preceding balance sheet date form the opening 

balances of the assets, liabilities and equity accounts 

as of 1 January 2006. 

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 (listed under note 1). 

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. 

The results of subsidiaries acquired or disposed of 

during the year are included in the consolidated 

inco-me 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. 

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 acquirement, 

plus any costs directly attributable to the business 

combination. The acquirements 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 acquirements 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 

acquirement is initially measured at the minority’s 

proportion of the net fair value of the assets, liabilities 

and contingent liabilities recognized. 

Foreign currency translations 

Transactions are recorded in New Turkish Lira, which 

is the Company’s functional currency. Transactions in 

foreign currencies during the periods have been 

translated at the exchange rates prevailing at the 

dates of these transactions. Balance sheet items 

denominated in foreign currencies have been 

translated at the exchange rates prevailing at the 

balance sheet dates. Exchange gains or losses 

arising from settlement and translation of foreign 

currency items have been included in the financing 

income or expense accounts as appropriate. 

The foreign exchange rates used by the Group are as 

follows: 

2006 2005 

US Dollar 1,4056 1,3418 

EURO 1,8515 1,5875 



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. 

Property, plant and equipment 

Property, plant and equipment are stated at cost as 

restated in the equivalent purchasing power of YTL at 

31 December 2005 less accumulated depreciation 

and any impairment in value. Depreciation is charged 

so as to write off the cost or valuation of assets, 

other than land and properties under construction, 

over the estimated useful live of the asset using the 

straight line basis over the following years stated 

below: 

Useful life in years 

Land improvements 25 - 30 

Buildings 25 - 30 

Leasehold improvements 5 

Machinery and equipments 17 - 25 

Furniture, fixtures and office equipments 5 - 10 

Motor vehicles 5 

The carrying values of property, plant and equipment 

are reviewed for impairment periodically and 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. 

Oil and gas exploration expenses 

Costs directly associated with an exploration well, 

and exploration and property leasehold acquisition 

costs are capitalised until the determination of 

reserves is evaluated. If it is determined that 

commercial discovery has not been achieved, these 

costs are charged to expense. 

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 amortisation is charged during the exploration 

and evaluation phase. 

Development tangible and intangible assets 

Expenditure on the construction, installation or 

comp-letion of infrastructure facilities, such as 

platforms, pipelines and the drilling of commercially 

proven development wells, is capitalised within 

tangible and intangible assets according to nature. 

When development is completed on a specific field, it 

is transferred to production assets. Depreciation 

and/or amortisation is charged during the exploration 

and evaluation phase. 

Depreciation/amortisation 

Oil and gas properties/intangible assets are 

depreciated/amortised 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. 

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. 

Intangible assets 

Rights and other intangible assets are capitalized and 

amortized on a straight line basis over their estimated 

useful lives, not exceeding a period of 5 years. 

Impairment – exploration and evaluation assets 

An impairment loss is recognised 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. 

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. 

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. 

Related parties 

Companies and their related parties, investments and 

affiliates controlled by Zorlu Group are considered 

and referred to as related parties. 

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. 

is recognised as an expense immediately. 

The Group uses the ‘percentage of completion 

method’ to determine the appropriate amount to 

recognise in a given period. The stage of completion 

is measured by reference to the contract costs 

incurred up to the balance sheet date as a 

percentage of total estimated costs for each contract. 

Costs incurred in the year in connection with future 

activity on a contract are excluded from contract 

costs in determining the stage of completion. They 

are presented as inventories, prepayments or other 

assets, depending on their nature. 

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. Investment income earned on the 

temporary investment of specific borrowings pending 

their expenditure on qualifying assets is deducted 

from the cost of those assets. All other borrowing 

cost are recognized in net profit or loss in the period 

in which they are incurred. 

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. 

Construction contracts 

Contract costs are recognised when incurred. When 

the outcome of a construction contract cannot be 

estimated reliably, contract revenue is recognised 

only to the extent of contract costs incurred that are 

likely to be recoverable. When the outcome of a 

construction contract can be estimated reliably and it 

is probable that the contract will be profitable, 

contract revenue is recognised over the period of the 

contract. When it is probable that total contract costs 

will exceed total contract revenue, the expected loss 

Commitments and contingencies 

Transactions that may give rise to contingencies and 

commitments are those where the outcome and the 

performance of which will be ultimately confirmed 

only on the occurrence or non occurrence of certain 

future events, unless the expected performance is 

not very likely. Accordingly, contingent losses are 

recognized in the financial statements if a reasonable 

estimate of the amount of the resulting loss can be 

made. Contingent gains are reflected only if it is 

virtually certain that the gain will be realized. 



Use of estimates 

The preparation of financial statements in conformity 

with IFRS requires management to make estimates 

and assumptions that affect reported amounts of 

assets and liabilities and disclosure of contingent 

assets and liabilities at the date of the financial 

statements, and the reported amounts of revenues 

and expenses during the reporting period. Actual 

results could differ from these estimates. These 

estimates are reviewed periodically, and as 

adjustments become necessary, they are reported in 

earnings in the periods in which they become known. 

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. 

Provisions 

Employee 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. 

Other 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. 

Investments 

All investments are initially recognized at cost, 

restated at the equivalent purchasing power of New 

Turkish lira at 31 December 2005, being the fair value 

of the consideration given and including acquisition 

charges associated with the investment. 

Recognition and derecognition of financial 

instruments 

The Group 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 Group derecognizes a financial asset 

or a portion of financial asset when and only when it 

loses control of the contractual rights that comprise 

the financial asset or a portion financial asset. The 

Group derecognizes a financial liability when and only 

when a liability is extinguished that is when the 

obligation specified in the contract is discharged, 

cancelled and expires. 

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. 



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. 

Bank borrowings 

Interest-bearing bank loans and overdrafts are 

recorded at the proceeds received, net of direct issue 

costs. Finance charges, including premiums payable 

on settlement or redemption, are accounted for on 

an accrual 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. 

6. TRADE RECEIVABLES 

Current accounts 

- Third parties 37.072.071 28.964.381 

- Related parties, note 24 7.503.658 5.617.701 

Notes receivable 

- Third parties 371.008 — 

Others 9.889 88.008 

44.956.626 34.670.090 

Unearned interest on receivables (-) (276.405) (346.954) 

Allowance for doubtful receivables (-) (580.264) (580.264) 

44.099.957 33.742.872 

7. CONSTRUCTION CONTRACTS WORK IN 

PROGRESS 

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, other 

money market placements and funds lent under 

securities resale agreements with the original maturity 

of three months or less. 

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. 

4. EARNINGS PER SHARE 

31.12.2006 31.12.2005 

Net profit attributable to shareholders (39.023.217) 3.528.932 

Weighted average number of ordinary shares in issue 

8.166.535.000 8.166.535.000 

Basic and diluted earnings per share (0,00) 0,00 

5. CASH AND CASH EQUIVALENTS 

Cash in hand 180.434 31.118 

Demand deposit at banks 124.665 716.575 

305.099 747.693 

During July 2006, Rosmiks International BV and Zorlu 

Endüstriyel ve Enerji Tesisleri ‹nflaat ve Ticaret A.fi. 

signed two agreements to build two 170 MW energy 

plants. One in Kojuhovo Region (Russia) amounting 

to USD 221.000.000 and the other in Tereshkovo 

Region (Russia) amounting to USD 215.810.000. As 

of 31.12.2006, an advance payment of YTL 

136.526.469 was given to equipment provides for 

these two projects. 

8. INVENTORIES 

31.12.2006 31.12.2005 

Raw materials 1.428.955 1.088.024 

Spare part 23.645.455 12.969.306 

Merchandise 178.208 549.590 

Advances given 1.181.246 183.157 

Allowance for diminution in value (-) (343.601) — 

26.090.263 14.790.077 

The cost of inventories recognized as expense and 

included in cost of sales during the year amounted to 

YTL 220.450.034 (2005: YTL 110.271.037). 

9. OTHER ASSETS 

Current 

Prepaid expenses 1.567.862 1.609.840 

Income accruals 6.462.289 — 

VAT receivable 4.953.976 1.732.492 

Work advances 321.431 247.832 

Due from personnel 23.490 — 

Due from related parties, note 24 — 45.644.824 

Prepaid taxes 13.527 427.214 

Other 1.011.247 738.420 

14.353.822 50.400.622 



10. INVESTMENTS 

Share % 

Amount 

Entity Country 31.12.2006 31.12.2005 31.12.2006 31.12.2005 

Solbar Energy Ltd. Isreal 27 27 932.621 131.564 

ICFS International LCC Russia 51 51 394.787 394.787 

LLC Zorlu Enerji Ukraine 100 100 6.694 6.694 

1.334.102 533.045 

As of 31 December 2006, the following companies in which the Company has a 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. 

11. PROPERTY, PLANT AND EQUIPMENT, net 

01.01.2006 Additions Disposals Transfers 31.12.2006 

Cost 

Land 5.507.690 299.556 — — 5.807.246 

Land improvements 13.591.744 540.075 (77.883) — 14.053.936 

Buildings 22.426.636 70.531 — 534.382 23.031.549 

Leasehold improvements 18.633 26.527 — — 45.160 

Plant and machinery 492.643.757 700.419 — 35.620.652 528.964.828 

Motor vehicles 405.857 — (212.496) — 193.361 

Furniture and fixtures 3.772.663 692.048 — 156.518 4.621.229 

Construction in progress 34.929.549 90.726.950 — (36.311.552) 89.344.947 

573.296.529 93.056.106 (290.379) — 666.062.256 

Accumulated depreciation 

Land improvements 5.013.054 1.960.967 (24.144) — 6.949.877 

Buildings 2.018.316 636.762 — — 2.655.078 

Leasehold improvements 5.837 7.429 — — 13.266 

Plant and machinery 94.353.903 27.671.818 — — 122.025.721 

Motor vehicles 227.310 32.842 (74.842) — 185.310 

Furniture and fixtures 2.121.748 386.988 — — 2.508.736 

103.740.168 30.696.806 (98.986) — 134.337.988 

Net book value 469.556.361 531.724.268 

The Company’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. 

Significant portion of the construction-in-progress balance represented investment made in; 

natural gas exploration in Trakya region, laying down natural gas pipeline infrastructure in Lüleburgaz, Edirne, 

Çerkezköy, K›rklareli, Tekirda¤ and modernisation of Lüleburgaz energy plant. 

As of 31.12.2006, fixed assets were insured for YTL 468.427.896. 

The guarantees given to secure bank loans are set out in note 20. 



12. INTANGIBLE ASSETS, net 

01.01.2006 Additions 31.12.2006 

Cost 

Rights 3.380.173 3.074.714 6.454.887 

Goodwill 24.595.565 — 24.595.565 

Exploration cost 8.857.795 1.081.282 9.939.077 

Other intangible assets 431.467 25.965 457.432 

37.265.000 4.181.961 41.446.961 

Accumulated amortization 

Rights 2.007.092 532.024 2.539.116 

Exploration cost 4.266.074 1.113.731 5.379.805 

Other intangible assets 115.588 70.940 186.528 

6.388.754 1.716.695 8.105.449 

Net book value 30.876.246 33.341.512 

13. BORROWINGS 

31.12.2006 31.12.2005 

Current 

New Turkish Lira bank loans 29 7 

Foreign currency bank loans 157.082.647 67.311.196 

Finance lease liabilities, net 32.718 — 

157.115.394 67.311.203 

Non-current 

Foreign currency bank loans 199.223.024 161.345.651 

Finance lease liabilities, net 76.101 — 

199.299.125 161.345.651 

Foreign currency bank loans effective interest rates 

vary between 3,56% and 8,87% (2005: 3,34% and 

8,13%). 

Summary maturity schedule of bank borrowings is 

given below: 

31.12.2006 USD EURO YTL Equivalent 

2007 105.871.810 4.466.233 157.082.647 

2008 21.471.708 4.126.494 37.820.836 

2009 21.471.708 3.986.199 37.561.080 

2010 21.471.708 3.986.199 37.561.080 

2011 14.831.708 3.800.445 27.883.979 

2012 8.191.708 3.241.783 17.516.426 

2013 5.002.091 1.109.058 9.084.360 

2014 5.002.091 1.109.058 9.084.360 

2015 5.002.091 1.109.058 9.084.360 

2016 5.002.091 1.109.058 9.084.360 

2017 2.501.047 554.529 4.542.183 

215.819.761 28.598.114 356.305.671 

31.12.2005 

2006 45.013.577 4.354.002 67.311.196 

2007 12.716.152 4.258.612 23.823.080 

2008 11.471.708 4.118.317 21.930.565 

2009 11.471.708 3.978.022 21.707.847 

2010 11.471.708 3.978.022 21.707.847 

2011 9.831.708 3.688.371 19.047.475 

2012 8.191.708 2.526.761 15.002.867 

2013 5.002.091 1.109.059 8.472.437 

2014 5.002.091 1.109.059 8.472.437 

2015 5.002.091 1.109.059 8.472.437 

2016 5.002.091 1.109.059 8.472.437 

2017 2.501.046 554.531 4.236.222 

132.677.679 31.892.874 228.656.847 

The payment schedules of finance lease liabilities are 

given below: 

31.12.2006 31.12.2005 

Finance lease installments: 

Due in one year 45.638 — 

Due between one to five years 86.839 — 

Future finance charges on finance leases (23.658) — 

108.819 — 

The present value of finance lease liabilities: 

Due in one year 32.718 — 

Due between one to five years 76.101 — 

108.819 — 

14. TRADE PAYABLES 

Current 

Current accounts 

- Third parties 45.794.823 25.139.847 

- Related parties, note 24 43.566 2.523.768 

Other 816 — 

45.839.205 27.663.615 

Unearned interest on payables (-) (402.121) (289.635) 

45.437.084 27.373.980 

15. PROVISION FOR EXPENSES 

31.12.2006 31.12.2005 

Current 

Provision for legal claims 399.681 258.657 

Non-current 

Provision for share of TRT 4.350.855 5.255.136 



An accrual for the share of Turkish Radio Television 

(TRT) charged to the Company in regards the license 

agreement signed with EPDK (EMRA-Energy Market 

Regulatory Authority) on 21.03.2003. According to 

the representation furnished by the Company’s 

management, the Company filed a lawsuit against 

EPDK to object to such amounts claimed. The 

related court proceeding is in progress and the 

outcome of the court decision is being awaited. In 

the accompanying financial statements full provision 

was set aside for this claim. 

The movement of provisions is as follows: 

Legal claims 

Provision for share of TRT 

Opening balance 258.657 5.255.136 

Additions 180.214 205.196 

Disposals (39.190) (1.109.477) 

Ending balance 399.681 4.350.855 

16. OTHER LIABILITIES 

31.12.2006 31.12.2005 

Income tax and social security 

premiums payable 3.324.151 398.971 

Advances received 206.238 61.032 

Due to related parties, note 24 71.896.365 102.567 

Withholding taxes payable — 1.282.891 

Due to personnel 227.432 329.387 

Other 26.455 180.244 

17. TAXATION ON INCOME 

75.680.641 2.355.092 

In Turkey, the corporation tax rate on the profits for 

the calendar year 2006 is 20% (2005: 30%). 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 immovables 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 minimum five years. 

Companies were allowed to deduct 40% of the value 

of fixed assets (exceeding YTL 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: 

31.12.2006 31.12.2005 

Corporation and income taxes 7.190.144 2.717.466 

Prepaid taxes (-) (4.571.322) (1.430.010) 

2.618.822 1.287.456 

Taxation on income for the year ended 31.12.2006 is 

reconciled to the profit per income statement is as 

follows: 

Amount 

Loss before tax (30.951.063) 

Corporation tax using applicable tax rates (7.190.144) 

Disallowable expenses 26.394.841 

Investment allowances (20.267.115) 

Income not subject to tax (6.285.075) 

Other (724.661) 

(8.072.154) 

Deferred taxation 

The Group recognizes deferred tax assets and 

liabilities based upon temporary differences between 

its financial statements as reported for IAS purposes 

and its statutory tax financial statements. These 

differences usually result in the recognition of revenue 

and expenses in different reporting periods for IAS 

and tax purposes. 

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 

31.12.2006 31.12.2005 31.12.2006 31.12.2005 

Deferred tax asset 

Retirement pay provision 1.033.844 723.391 268.353 217.017 

Unearned interest on receivables 276.405 347.954 74.577 104.386 

Accrued expenses 4.516.342 7.255.136 1.333.968 2.176.541 

Investment incentives 343.492.425 290.631.937 49.911.573 29.644.458 

Other 836.614 1.596.777 176.747 479.033 

51.765.218 32.621.435 

Deferred tax liability 

Temporary differences arising 

from restating non-monetary assets 171.600.077 103.729.777 51.114.515 31.118.933 

Unearned interest on payables 402.131 289.635 117.102 86.891 

51.231.617 31.205.824 

(533.601) (1.415.611) 

The movement of deferred tax liability is given below: 

31.12.2006 31.12.2005 

Opening balance (1.415.611) 4.009.110 

Deferred tax charge (income) 882.010 (5.424.721) 

Closing balance (533.601) (1.415.611) 



18. RESERVE FOR RETIREMENT PAY 

In accordance with existing social legislation in 

Turkey, the Company is required to make lump-sum 

termination indemnities to each eligible employee 

who has completed one year of service with the 

Company, 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 1.857,4 YTL as of 31 December 

2006 (2005: 1.727,2 YTL) on historical cost basis. 

The Company has no other obligation for employee 

termination other than the retirement pay above. 

In the accompanying consolidated financial 

statements, the Company 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. 

The Group has no other obligation for employee 

termination other than the retirement pay above. 

01.01- 31.12.2006 01.01-31.12.2005 

Opening balance 723.391 835.353 

Additions 380.835 (75.647) 

Disposals (70.382) — 

Monetary gain — (36.315) 

Closing balance 1.033.844 723.391 

Personnel cost: 

Gross salaries, wages and employers’ 

share of social insurance 11.336.339 8.266.015 

Number of personnel at year end: 437 316 

19. SHARE CAPITAL 

The authorized share capital of the Company comprised 190.000.000 shares of par value Ykr 1 each at 

31.12.2006 and the issued and paid up share capital of the Company comprised 81.665.350 shares of par 

value Ykr 1 each at 31.12.2006 and 2005. 

As of 31.12.2006 and 2005 the shareholders of the Company and their percentage shareholdings were as 

follows: 

Shareholding % 

Shareholding amount 

31.12.2006 31.12.2005 31.12.2006 31.12.2005 

Zorlu Holding A.fi. 43% 24% 35.288.433 19.513.720 

Denizbank A.fi. 0% 30% — 24.091.276 

Korteks Mensucat Sanayi ve Ticaret A.fi. 18% 18% 14.330.198 14.330.198 

Public shares 29% 22% 24.016.227 17.966.409 

Other shareholders 10% 6% 8.030.492 5.763.747 

Share capital 100% 100% 81.665.350 81.665.350 

Inflation adjustment of share capital 110.948.000 110.948.000 

192.613.350 192.613.350 

20. COMMITMENTS AND CONTINGENCIES 

a. As of 31.12.2006, the Group mortgaged its property, plant and equipment to the extent of USD 60.000.000. 

Additionally Zorlu Holding A.fi. and Korteks Mensucat Sanayi ve Ticaret A.fi. were guarantors for the loans 

obtained for long term investments by the Group. 

b. The Group signed a loan agreement with HSBC Bank amounting to USD 50.000.000. 

c. Courts cases started by the Group and pending as of 31.12.2006 amounted to 1.752.342 YTL and as of 

the same date court cases started and pending against the Group amounted 370.683 YTL. 



21. SEGMENT INFORMATION 

A. Business segments 

Segment sales 31.12.2006 31.12.2005 

Total sales - Quantity 

Electricity – kW/h 2.474.980.355 1.948.655.767 

Steam - ton 711.323 556.010 

Natural gas –S/m3 250.085.768 — 

Total sales - Amount 

Electricity 290.409.171 210.547.626 

Steam 95.310.259 — 

Natural gas 6.126.252 8.226.562 

Segment assets 

391.845.682 218.774.188 

Electricity and steam 700.445.794 554.330.012 

Natural gas 13.312.875 53.284.638 

Energy plant projects, operational 

and maintenance services 125.877.496 25.729.804 

839.636.165 633.344.454 

B. Geographical segments 

Significant part of the Group’s assets and liabilities 

are located in Turkey and significant portion of sales 

are domestic sales. 

22. OTHER INCOME (EXPENSE), net 

01.01.-31.12.2006 01.01.-31.12.2005 

Profit on sale of fixed assets 153.481 184.096 

Reversal of unnecessary provision 1.109.477 376.762 

Income on insurance claims 342.334 2.008.367 

Other 612.334 898.095 

Other income 2.217.626 3.467.320 

Loss on sale of fixed assets (313.506) — 

Expenses incurred to seal well (6.405.603) — 

Other (146.937) (42.815) 

Other expense (6.866.046) (42.815) 

(4.648.420) 3.424.505 

23. FINANCING INCOME (EXPENSE), net 

Foreign exchange gain 51.820.538 7.460.354 

Interest income 2.234.855 4.483.580 

Unearned interest on payables 749.075 1.439.722 

Others — 11.889 

Financing income 54.804.468 13.395.545 

Foreign exchange loss (59.699.820) (2.726.704) 

Interest expense (18.748.320) (3.685.487) 

Bank commission expenses (26.772) (302.681) 

Unearned interest on receivables (566.040) (737.709) 

Other financial expenses (679.009) (704.298) 

Financing expense (79.719.961) (8.156.879) 

(24.915.493) 5.238.666 

24. RELATED PARTY DISCLOSURE 

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. In the 

course of conducting its business, the Group conducted various business transactions with related parties on 

commercial terms. 

a) As of 31.12.2006 and 2005, the most significant balances with related parties are as follows: 

Due from related parties 

Due to related parties 

31.12.2006 Trade receivables Other assets Trade payables Other liabilities 

Zorlu Holding A.fi. — — — 68.488.033 

Zorlu Linen Dokuma Emprime Konfeksiyon A.fi. 1.983.311 — — 3.408.332 

Korteks Mensucat Sanayi ve Ticaret A.fi. 5.438.361 — — — 

Other related parties 81.986 — 43.566 — 

7.503.658 — 43.566 71.896.365 

31.12.2005 

Zorlu Holding A.fi. — 36.495.243 1.864.400 — 

Korteks Mensucat Sanayi ve Ticaret A.fi. 3.740.897 9.099.580 — — 

Zorlu Linen Dokuma A.fi. 1.729.694 — — — 

Other related parties 147.110 50.001 659.368 — 

Due to shareholders — — — 102.567 

5.617.701 45.644.824 2.523.768 102.567 



b) Transactions carried out with related parties are as follows: 

Sales Operating expenses Financing income Financing expense 

01.01.- 31.12.2006 

Zorlu Holding A.fi. — 4.579.989 7.337.374 4.024.055 

Korteks Mensucat Sanayi ve Ticaret A.fi. 38.190.584 109.607 2.115.267 684.886 

Zorlu Linen Dokuma Emprime Konfeksiyon A.fi. 17.671.637 906 31.666 — 

Other related parties 792.493 — — — 

56.654.714 4.690.502 9.484.307 4.708.941 

Sales to related parties for 12 month period ended 31.12.2005 amounted 61.150.251 YTL. 

25. FINANCIAL INSTRUMENTS 

Financial risk management objectives and policies 

The Group’s principal financial instruments comprise 

bank loans, overdrafts, cash and short-term deposits. 

The main purpose of these financial instruments is to 

raise funds for the Group’s operations. The Group 

has various other financial instruments such as trade 

debtors and trade creditors, which arise directly from 

its operations. 

The main risks arising from the Group’s financial 

instruments are liquidity risk, foreign currency risk and 

credit risk. The management reviews and agrees 

policies for managing each of these risks and they 

are summarized below. 

Credit risk 

The Group trades primarily with recognized, 

creditworthy third parties. It is the Group policy that 

all customers who wish to trade on credit terms are 

subject to credit screening procedures. In addition, 

receivable balances are monitored on an ongoing 

basis with the result that the Group’s exposure to 

bad debts is not significant. 

With respect to credit risk arising from the other 

financial assets of the Group, comprising cash and 

cash equivalents, the Group’s exposure to credit risk 

arises from default of the other party, with a 

maximum exposure equal to the carrying amount of 

these instruments. There are no significant 

concentrations of credit risk within the Group. 

Interest rates risk 

The Group’s exposure to market risk for changes in 

interest rates relates primarily to the Group’s 

long-term debt obligations. The Group’s policy is to 

manage its interest cost using a mix of fixed and 

variable rate debt. 

Liquidity risk 

The Group raises funds by liquidating its short term 

financial instruments, e.g. by collecting receivables 

and disposing of trading investments. The Group’s 

proceeds from these instruments generally 

approximate their fair values. 

Foreign currency risk 

The Group’s operations are conducted locally. During 

the course of its business, the Group is exposed to 

transactional and contractual foreign exchange risks 

resulting from currency exposures with respect to 

USD and EURO. The most significant foreign 

currency risk exposure arises from the foreign 

currency borrowings that were obtained to finance 

the investments undertaken. The Group tries to 

manage such risk by strictly monitoring the domestic 

and international money markets and taking 

precautionary position in the event of high currency 

fluctuations. 



31.12.2006 

USD EURO YTL equivalent 

Cash and cash equivalents 16.031 70.883 153.773 

Trade receivables 955.004 45.484 1.426.567 

Due from related parties 4.094.608 — 5.755.381 

Other receivables 686.550 5.363 974.944 

Advances given 350.000 — 491.960 

Construction contracts 

work in progress 81.810.000 11.630.749 136.526.468 

Total foreign currency assets 87.912.193 11.752.479 145.329.093 

Current borrowings 105.871.810 4.466.233 157.082.648 

Non-current borrowings 109.947.951 24.131.884 199.223.024 

Current finance lease liabilities — 17.669 32.718 

Non-current finance lease liabilities — 41.102 76.101 

Trade payables 5.206.652 39.655 7.391.891 

Due to related parties 11.575.191 — 16.270.088 

Other liabilities — 2.554 4.729 

Total foreign currency 

liabilities 232.601.604 28.699.097 380.081.199 

Net foreign currency 

position (144.689.411)(16.946.618) (234.752.106) 

31.12.2005 

Cash and cash equivalents 344.104 2.172 465.167 

Due from related parties 33.980.342 — 45.594.823 

Advances given 817.868 7.977.515 13.761.720 

Total foreign currency assets 35.142.314 7.979.687 59.821.710 

26. SUPPLEMENTARY CASH FLOW 

INFORMATION 

01.01.- 31.12.2006 01.01.-31.12.2005 

Adjustment to reconcile net income to net cash provided from 

operating activities: 

Depreciation expense 30.696.806 21.470.840 

Amortization charge 1.716.695 1.181.017 

Provision for retirement pay 310.453 (111.962) 

Deferred tax effect of consolidated 

entity — (261.212) 

(Profit) loss on sale of fixed assets 160.025 (184.096) 

Accrued interest expense on 

borrowings 3.087.254 257.970 

Unearned interest on receivables (70.549) (803.133) 

Unearned interest on payables (112.486) 101.121 

Changes in operating assets and liabilities: 

35.788.198 21.650.545 

31.12.2006 31.12.2005 

Trade receivables (10.286.536) (12.450.422) 

Construction contracts work in 

progress (136.526.469) — 

Inventories (11.300.186) 1.215.796 

Other assets 36.027.449 34.187.410 

Trade payables 18.347.692 8.351.070 

Other liabilities 72.562.291 644.186 

(31.175.759) 31.948.040 

Current borrowings 45.013.577 4.354.002 67.311.203 

Non-current borrowings 87.664.102 27.538.872 161.345.651 

Trade payables 10.069.248 67.332 13.617.807 

Total foreign currency 

liabilities 142.746.927 31.960.206 242.274.661 

Net foreign currency 

position (107.604.613)(23.980.519) (182.452.951) 

27. POST BALANCE SHEET EVENTS 

Zorlu Enerji A.fi. signed a letter of intent with Rotor 

Elektrik Üretim A.fi. to acquire 100% of its share 

capital. 


ZORLU ENERJ‹ ELEKTR‹K ÜRET‹M ANON‹M fi‹RKET‹ 

Capital 

ISE (Istanbul Stock Exchange) Code 

E-Mail 

Website 

: 81.665.350.-YTL 

: ZOREN 

: zoren@zorlu.com 

: www.zoren.com.tr 

Bursa Power Plant (Center) : Organize Sanayi Bölgesi, Pembe Caddesi No:13 

Bursa - Türkiye 

Phone : (90-224)- 242 56 16 

Fax : (90-224)- 242 56 11 

Lüleburgaz Power Plant : Tayyare Mevkii Büyükkar›flt›ran Kasabas› Lüleburgaz, 

K›rklareli - Türkiye 

Phone : (90-288)- 436 24 78 

Fax : (90-288)- 436 24 87 

Ankara Power Plant : ASO 1.Organize Sanayi Bölgesi, Ayafl Yolu 25. Km. 

3. Bölge, Büyük Selçuklu Cad. 06935 

Ankara - Türkiye 

Phone : (90-312)- 267 19 29 

Fax : (90-312)- 267 19 39 

Kayseri OSB (Organized Industrial Zone) : Organize Sanayi Bölgesi, 6.Cad. No:1, Anhar 

Kayseri - Türkiye 

Phone : (90-352)- 321 11 00 

Fax : (90-352)- 221 27 10 

Yalova ‹pek Power Plant : Tokmak Köyü 77700, Alt›nova, 

Yalova - Türkiye 

Phone : (90-226)- 462 89 00 

Fax : (90-226)- 462 88 99 

‹stanbul (Office) : Zorlu Plaza, Kat 18 Ambarl› Petrol Ofisi 

Dolum Tesisleri Yolu 34840 Avc›lar, 

Istanbul - Türkiye 

Phone : (90-212) - 456 23 00 

Fax : (90-212) - 422 00 99 

Ankara (Office) : ‹rfan Bafltu¤ Cad. Kat:4 No:48, Alt›nda¤, 

Ankara - Türkiye 

Phone : (90-312) - 317 32 79 

Fax : (90-312) - 317 18 54

Untitled - Zorlu Enerji

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