Quarterly Report • Sep 5, 2024
Quarterly Report
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PREPARED PURSUANT TO THE CAPITAL MARKET BOARD'S COMMUNIQUE II‐14.1 "COMMUNIQUE ON THE PRINCIPLES OF FINANCIAL REPORTING IN THE CAPITAL MARKETS".
05.09.2024
| A | Galata Wind at a Glance | 4 |
|---|---|---|
| B | Key Financial Data | 12 |
| C | General Information | 14 |
| D | Remuneration Provided for Members of the Governing Body and | |
| Senior Executives | 22 | |
| E | Research & Development Activities of the Company | 22 |
| F | Incentives Granted to the Company | 22 |
| G | Company Operations and Material Developments | 23 |
| H | Financial Status | 28 |
| I | Risks and Evaluation of the Governing Body | 31 |
| J | Corporate Governance and Sustainability | 31 |
| K | Miscellaneous | 38 |
| L | Declaration of Responsibility | 39 |
| M | Board of Directors' Resolution Approving the Interim Report | 40 |
| N | Independent Auditor's Report on the Interim Activity Report | 41 |
| O | Financial Report | 42 |
This Interim Report has been prepared pursuant to Article 8 of the Capital Market Board's ("CMB") Communiqué on Principles of Financial Reporting in Capital Markets (II‐14.1), promulgated in the Official Gazette edition 28676 on 13.6.2013, to provide an overview of the activities of Galata Wind Enerji A.Ş. ("Galata Wind," "Company" or "Group") in the interim accounting period of 01.01.2024 - 30.06.2024 and to inform investors.
Ensuring the satisfaction of our customers and communities is the focus of all of our activities. We complete and fully deliver our commitments on time.
We monitor our processes with quality, environment, occupational health & safety, and energy performance indicators and strive to improve our system before irregularities occur.
We work as a goal-driven team of qualified professionals, specialized in their respective areas, each working with a high level of knowhow, passion for their jobs, responsibility and pride, without engaging in personal conflicts.
For us, mitigating all the risks that may harm human and environmental health and keeping our people and the public informed is an integral part of our processes and activities.
To create sustainable value for our country and stakeholders with our competent employees, by generating electrical energy exclusively from renewable sources in line with our environmentally friendly, respectful and transparent management principles.
To become a preferred, exemplary, pioneering and respected organization with top-of-the-mind recognition in Turkey and in the region with an environmentally friendly, reliable and sustainable business model while reducing Turkey's dependence on imported energy by using national renewable energy sources.
At Galata Wind, we adopt Doğan Holding's core values as our own;
Galata Wind, a subsidiary of Doğan Holding, invests in sustainable energy sources for a clean future and generates 100% renewable electricity at its Gold Standard and VCS certified wind and solar power plants across Turkey. The company also designs solar power systems to be installed on the roofs of residences, schools, workplaces, gas stations and factories to enable the users to generate their own energy.
Galata Wind Energy reduces carbon emissions by approximately 430,000 tons every year by generating 100% clean electrical energy from renewable resources. With a total installed capacity of 297.2 MW, Galata Wind aims to reduce the country's dependence on imported energy by
utilizing renewable energy sources and to become Turkey's clean electricity provider with an environmentally friendly, reliable and sustainable business model.
Sunflower Solar, a subsidiary of the company, operates with the mission of enabling every household to generate its own clean energy with commercial and industrial solar roof projects. The company also conducts research on alternative and niche technologies such as electric vehicle charging stations and battery systems.
Operating with a team of highly qualified and agile professionals, Galata Wind has strived to contribute to the national economy and the industry since its inception, working toward a more sustainable future. With significant investments in green, clean and renewable power generation plants, Galata Wind is committed to growing its portfolio only with renewable energy projects.
Galata Wind aims to grow the capacity of its portfolio to 550 MW by 2025 with only renewable energy investments through a number of actions: increasing capacity in the existing power plants, acquiring operational WPPs and SPPs in Turkey, participating in the government's YEKA tenders, building electricity power plants with storage facilities, and acquiring small and medium-sized power plants or developing projects
abroad, starting with Europe. The company's 2030 vision is to reach a total installed capacity of 1,000 MW across all its local and international assets. For Galata Wind, the ultimate goal is to provide its investors with environmentally friendly, clean, sustainable and foreseeable profit margin and cash flow by including renewable power plants with guaranteed purchase agreements and long-term bilateral agreements in its portfolio.
A
TOTAL
16.4 MW 50.5 MW
105 MW
35 units of Vestas V90 3 MW turbines
79 MW
14 units of Nordex N149 4.8 MW turbines + 2 units of Nordex N149 5,9 MW turbines
62.7 MW
297.2 MW TOTAL INSTALLED
14 units of Vestas V90 3 MW turbines + 6 units of Vestas V112 3.45 MW turbines
246.7 MW
WIND POWER INSTALLED CAPACITY
24.7 MW
Smart Solar 360/365 W MonoPerc panels
9.4 MW
Çorum SPP JinkoSolar 320 W
Polycrystalline panels
Taşpınar Hybrid SPP
panels
CAPACITY
Commissioning date: Oct 2020
):
USD/MWh (until the end of 2025)
Erzurum SPP
Installed Capacity: 24.7 MW Annual Average Electricity Generation (MWh): 40,000 Capacity Utilization Rate:
23.0%*
Annual Average Carbon Emission Reduction (tCO2
):
20,000
YEKDEM Expiry Date: 2028
):
* Capacity Utilization Rates are calculated based on the MWe power of the plants.
(Unlicensed) The best production capacity in the region
Galata Wind focuses its core business on renewable energy generation and has many years of experience in operating renewable energy power plants. With its low leverage and strong capital structure, the company is able to make investments that provide high profitability and predictable cash flows at lower costs and operate at high operational efficiency.
One of Galata Wind's strategic goals is to grow and become a global player in the renewable energy sector. The company is taking strategic steps to achieve this goal:
Galata Wind is closely monitoring industry developments to take advantage of growth opportunities. The company's potential growth areas have been identified as follows:
The Company boasts the potential to increase the installed capacity of the power plants it currently operates. Accordingly, application procedures are monitored and the applications for capacity increases are filed when needed.
The Company has established a business development team to review opportunities for acquisitions and project development. The domestic and international markets are constantly monitored for opportunities that meet the investment criteria.
In parallel with the growth of the Turkish electricity sector, new business models are emerging and regulations are being updated to provide a basis for these business models. Galata Wind is evaluating the right investment opportunities that will create value for its stakeholders from these business models. In this context, the company:
Carbon credits with Gold Standard and VCS certificates are issued via all of the Company's power plants. In view of the developments in the areas of the environment and sustainability, which are gaining importance worldwide (Paris Agreement and climate targets, European Union Green Deal, and Carbon Border Adjustment Mechanism), the Company expects carbon credit prices and thus revenues from carbon credits to increase.
Recognizing the optimization of its operational efficiency as a fundamental priority, Galata Wind sources high-quality turbines and panels for its power plants, uses most efficient systems by following technological developments, and monitors its power plants continuously from a single center. The company conducts continuous improvement studies for this purpose and considers possible options to improve production performance. The company strives to achieve the best possible availability for all its plants.
Galata Wind, standing as Turkey's first green IPO with a collective portfolio consisting exclusively of wind and solar power plants, operates with the mission of becoming a leading and exemplary company in sustainability in the energy sector. More information about the company's sustainability strategy is provided in the "Galata Wind and Sustainability" section of the report. Galata Wind's sustainability reports are available on the corporate website.
Aiming to differentiate itself from other companies in the sector and become a pioneer in sustainable development, Galata Wind has opened its operating strategy to monitoring by international organizations and made the following commitments in a transparent manner to ensure the implementation of this strategy.
Galata Wind commits to:
Galata Wind is rated by independent international organizations for its sustainability practices.
According to the analysis conducted by Sustainalytics in July 2023, Galata Wind's Environmental, Social and Governance (ESG) Risk Rating Score was determined to be 14.9. This score reflects that the company adheres to ESG governance best practices, has boardlevel oversight of ESG issues, and has a "low" risk of being financially impacted by ESG factors. In terms of ESG risk rating, Galata Wind ranks 39th among 699 companies in the Electricity Services (Utilities) sector.
Galata Wind will allow its power plants to benefit from YEKDEM throughout their lifetime under this mechanism as long as YEKDEM prices are above spot prices. Otherwise, or at the end of the YEKDEM term, the company aims to fix its electricity sales from its power plants annually through bilateral agreements linked to the spot price.
On average, 75% of the company's operating expenses are directly related to contracts or tariffs. These expenses include maintenance costs, land lease, transmission, distribution and insurance costs.
Galata Wind's debt-to-equity ratio is the lowest compared to the other companies in the BIST Electricity Index. Thanks to its robust capital structure, the company is able to make new investments with its own funds. Aiming to increase its total installed capacity from 297.2 MW to 550 MW by 2025, the company plans to keep its net debt/EBITDA ratio below 3.5-4x to achieve this goal. Currently, this ratio is close to zero.
According to the results of the ESG assessment conducted by S&P Global in July 2023, Galata Wind earned a score of 67, demonstrating that it is adequately prepared against short and medium-term disruptions that may occur in the electricity sector. The report stated that the company's 2025 targets are achievable and would have a significant impact on reducing the ratio of fossil fuels in Turkey's energy supply.
The Group prepared its consolidated financial statements as at and for the year ended March 31, 2024 by applying TAS 29 "Financial Reporting in Hyperinflationary Economies" in accordance with the announcement made by POA on November 23, 2023 and the "Application Guidance on Financial Reporting in Hyperinflationary Economies". The standard requires that financial statements prepared in the currency of a hyperinflationary economy be stated in terms of the purchasing power of that currency at the balance sheet date and that comparative figures for prior period financial statements be expressed in terms of the measuring unit current at the end of the reporting period. Therefore, the Group has presented its consolidated financial statements as of December 31, 2023 and June 30, 2023 on the purchasing power basis as of June 30, 2024.
| Summary of Financial Statement (Mio TRY) |
Reviewed Current Period 30 June 2024 |
Audited Prior Period 31 December 2023 |
Change (%) |
|---|---|---|---|
| Current Assets | 560,858 | 407,150 | 37.8% |
| Non-Current Assets | 10,992,602 | 11,017,963 | -0.2% |
| Propert, Plant and Equipment | 7,129,528 | 6,418,774 | 11.1% |
| Intangible Assets | 3,264,835 | 3,308,708 | -1.3% |
| Total Assets | 11,553,460 | 11,425,113 | 1.1% |
| Current liabilities | 713,069 | 487,169 | 46.4% |
| Non-Current liabilities | 2,110,540 | 2,165,616 | -2.5% |
| Equity | 8,729,851 | 8,772,328 | -0.5% |
| Attributable to Equity Holders of the Parent Company |
8,729,851 | 8,772,328 | -0.5% |
| Total Equity & Liabilities | 11,553,460 | 11,425,113 | 1.1% |
| Consolidated Statement of Profit & Loss (Mio TRY) |
Reviewed Current Period 30 June 2024 |
Reviewed Prior Period 30 June 2023 |
Change (%) |
|---|---|---|---|
| Revenue | 977,417 | 1,076,976 | -9.2% |
| Cost of Sales (-) | -453,818 | -440,205 | 3.1% |
| Gross Profit/(Loss) | 523,599 | 636,771 | -17.8% |
| Operating Costs (-) | -75,777 | -43,791 | 73.0% |
| Other Operating Income/(Expenses), net | 37,848 | 358,080 | -89.4% |
| Operating Profit/(Loss) | 485,670 | 951,059 | -48.9% |
| Financi Income/(Expense), net | 110,108 | -370,506 | -129.7% |
| Profit/(Loss) Before Taxation From Continued Operations |
595,778 | 580,553 | 2.6% |
| Tax Income/(Expense) From Continued Operations |
-179,277 | -292,912 | -38.8% |
| Profit/(Loss) for the Period | 416,501 | 287,641 | 44.8% |
| EBITDA* | 714,191 | 828,847 | -13.83% |
* EBITDA is calculated as the sum of gross profit-operating expenses + depreciation and amortization. The depreciation of assets with the right of use shown in the financial statement within the scope of TFRS 16 is also included in the depreciation.
| Financial Ratios | 30 June 2024 | 31 December 2023 |
|---|---|---|
| Net Financial Debt/EBITDA (*) | 0.29 | 0.51 |
| Net Financial Debt/Equity | 0.05 | 0.10 |
| Financial Debt/Total Assets | 0.06 | 0.08 |
| Current Ratio | 0.79 | 0.84 |
| Current Assets/Total Assets | 5% | 4% |
| Current Liabilities/Total Liabilities | 25% | 18% |
| Total Liabilities/Total Assets | 24% | 23% |
* 30 June 2024 EBITDA was annualized.
This activity report pertains to the operations in the interim accounting period of 01.01.2024 - 30.06.2024.
| Commercial Name: | Galata Wind Enerji A.Ş. |
|---|---|
| Founded on: | April 11, 2006 |
| Trade Registry Number: | 648259-0 |
| MERSIS Number: | 0388067309700012 |
| Tax Office: | Üsküdar Tax Office |
| Tax Number: | 3880673097 |
| Paid-in Capital:** | TRY 540,000,000 |
| Registered Capital Ceiling: | TRY 1,000,000,000 |
| Traded on Stock Exchange: Borsa İstanbul A.Ş. (BIST) | |
| Ticker Symbol: | GWIND |
| IPO Date: | April 22, 2021 |
| Address: | Burhaniye Mahallesi, Kısıklı Caddesi, No: 65, 34676 Üsküdar/İstanbul |
| Corporate Website: | www.galatawindenerji.com |
| Email: | [email protected] |
| Phone: | (0216) 556 9000 |
| Fax: | (0216) 556 9327 |
C.2. The Company's commercial name, trade registry number, contact information for the headquarters and branch offices, if any, and the website address, if any:
Galata Wind Enerji A.Ş. is subject to Capital Market Legislation and the Capital Market Board ("CMB") regulations and its shares are traded on Borsa İstanbul A.Ş. as of April 22, 2021.
Galata Wind's shareholding structure as of 30 June 2024 and 31 December 2023 is as follows.
| Shareholder | Share (%) | 30 June 2024 | Share (%) | 31 December 2023 |
|---|---|---|---|---|
| Doğan Şirketler Grubu Holding A.Ş. | 70.00 | 377,999,963.73 | 70.00 | 377,999,963.73 |
| Free float (1) | 30.00 | 162,000,036.27 | 30.00 | 162,000,036.27 |
| Issued capital | 100.00 | 540,000,000 | 100.00 | 540,000,000 |
There are no privileged shares in the Company's capital.
The chairperson and members of the Board of Directors have the powers specified in the relevant articles of the Turkish Commercial Code ("TCC") and the Company's Articles of Association. Members of the Board of Directors are elected to serve for a minimum of one year and a maximum of three years in line with Article 9 of the Company's Articles of Association. The current Board members have been elected at the Ordinary General Assembly Meeting on 18.04.2024 to serve for one year starting from the date of the said
general assembly meeting. In the first half of 2024, the Board of Directors has convened/passed resolutions 12 times (01.01.2023-30.06.2023: 21).
The current Board members have been elected at the Ordinary General Assembly Meeting on 18.04.2024 to serve for one year starting from the date of the said general assembly meeting. The résumés of the Board members and their duties outside the company are provided on the corporate website: www. galatawindenerji.com.
The declarations of independence have been assessed by the Board of Directors. The independence declarations of the Independent Board Members are available on the corporate website: https://www. galatawindenerji.com/kurumsal-yonetim/
| Full Name | Duty | Since | Term (years) | Executive / Non-executive |
|---|---|---|---|---|
| Çağlar Göğüş | Chairman | 18.04.2024 | 1 | Non-executive |
| Bora Yalınay | Vice Chairman | 18.04.2024 | 1 | Non-executive |
| Burak Kuyan | Member | 18.04.2024 | 1 | Executive |
| Neslihan Sadıkoğlu | Member | 18.04.2024 | 1 | Non-executive |
| Ozan Korkmaz | Independent Member | 18.04.2024 | 1 | Non-executive |
| Hüseyin Faik Açıkalın | Independent Member | 18.04.2024 | 1 | Non-executive |
| Full Name | Duties Outside the Company |
|---|---|
| Çağlar Göğüş Doğan Holding CEO, Board Memberships in Group and non-group companies |
|
| Bora Yalınay Doğan Holding CFO, Board Memberships in Doğan Holding subsidiaries |
|
| Burak Kuyan | Galata Wind Enerji CEO, Board Memberships in Doğan Holding companies and subsidiaries |
| Neslihan Sadıkoğlu Doğan Holding Vice President, Corporate Communications and Sustainability |
|
| Ozan Korkmaz | Board Memberships in non-group companies: APlus, SmartPulse, Sayax |
| Hüseyin Faik Açıkalın | Board Memberships in non-group companies: Doğan Holding A.Ş., Migros Turk A.Ş., Karsu Tekstil A.Ş., Global Yatırım Holding A.Ş. |
Çağlar Göğüş earned his bachelor's degree in Business Administration at Bilkent University in Turkey and an MBA from the University of Florida. He began his professional career in 1996 as a Senior Analyst at Coopers & Lybrand (currently PwC). After serving as a Senior Analyst and consultant at Arthur Andersen and AT Kearney, he joined the Peppers & Rogers Group in 2000. Later becoming an international partner at Peppers & Rogers, he initially served as the General Manager overseeing after-sales services in all regions. Göğüş played an important role in Peppers & Rogers' growth in the EMEA region and beyond. Through his consultancy work for over fifty major companies and regulatory authorities across several markets, he has gained special expertise in strategic growth and transformation.
Having gained vast experience over the years in the new economic order as well as in classic economics, Göğüş joined the Doğan Group in 2015 as an independent board member for Hürriyet Gazetecilik. After holding this position for one year, he served for over two years as Chief Executive Officer (CEO) at Hürriyet Gazetecilik. During his term, he oversaw major projects, including those involving digital transformation, efficiency, profitability, the redefining of business processes and the designing of a corporate identity for Hürriyet Emlak (Hürriyet Real Estate and Properties).
Göğüş, who has been the Chief Executive Officer and Executive Board Member at Doğan Holding since 2019, also serves as the Chairman at Galata Wind Enerji, Ditaş Doğan Yedek Parça, Doğan Burda Dergi, Doğan Dış Ticaret, Doğan Trend Otomotiv, Doruk Faktoring, Hepiyi Insurance, and Öncü Girişim Sermayesi; and Vice Chairman at DMC, D Investment Bank, and Doğan Publishing. He is also a Board Member in a number of companies, including Karel Elektronik, SESA Ambalaj, Hürriyet Emlak, Aytemiz, Alterna Yazılım, and Düş Yeri.
Çağlar Göğüş also leads the sustainability efforts across Doğan Group and is the co-chair of the Sustainability Committee.
Bora Yalınay has over a quarter-century of experience in international audit companies and local and international public companies. His areas of expertise include financial restructuring, investor and analyst relations, financing, public offerings, cost optimization, financial planning, and analysis.
Bora Yalınay graduated from the Department of Economics at Bilkent University in 1997. He began his professional career the same year at the Istanbul office of Deloitte where he last served as a senior manager. He later worked at Deloitte Canada from 2000 to 2002. Following his auditing experience of over a decade and one year of financial control at Yaysat, he joined Yıldız Holding in 2009 as the Group Financial Audit General Manager. He later served as the CFO at Ülker Bisküvi from 2010 to 2016. In the process that began with the financial restructuring of the company in 2010, he was instrumental in several acquisitions, company sales and merger projects, completed overseas financing projects worth USD 1 billion, and led the secondary public offering process in 2013. He worked as the Vice President, Finance at Ülker Bisküvi in charge of Turkey, Saudi Arabia, Egypt, Romania, Kazakhstan, Lebanon, and Pakistan operations from 2015 through 2016. During that time, he led a team of over 200 finance professionals across six geographies.
Yalınay, who is a certified CPA, has served as CFO and Executive Board Member, Finance at Doğan Şirketler Grubu Holding A.Ş. since 2019, and is member in the Early Risk Detection Committee and Sustainability Committee. He also serves as a member on the Boards of Galata Wind Enerji A.Ş., Karel Elektronik San. ve Tic. A.Ş., Ditaş Doğan Yedek Parça İmalat ve Teknik A.Ş., Doğan Dış Ticaret ve Mümessillik A.Ş., Doruk Faktoring A.Ş., Doğan Trend Otomotiv Tic. Hizmet ve Teknoloji A.Ş., Öncü Girişim Sermayesi Yatırım Ortaklığı A.Ş. and D Gayrimenkul Yatırımları ve Tic. A.Ş., and Turkish Investor Relations Society (TÜYİD).
Bora Yalınay Vice Chairman
Burak Kuyan graduated from the Faculty of Business Administration at Istanbul University in 1998, and later earned his MBA from Virginia Polytechnic Institute and State University in 2002. He is currently working toward a PhD in Business Administration and Finance at Işık University.
Upon graduation, Mr. Kuyan worked as a Private Portfolio Manager at Finans Yatırım Menkul Değerler A.Ş. He joined Doğan Group in 2005 as Assistant Specialist in Strategical Planning and Business Development. With the Group's investments in the energy field, he was appointed Energy Director at Doğan Holding in 2012. Kuyan, who was appointed Chairman and Executive Board Member at Galata Wind in 2014, has assumed the role of Chief Executive Officer since 2017. Currently an Executive Board Member and Chief Executive Officer at Galata Wind, Kuyan is also the head of all energy investments and operations at Doğan Group. In addition, Kuyan serves as a Board Member at the Energy Trading Association (ETD), the Solar Energy Investors Association (GUYAD), and the Electricity Generators Association (EÜD).
Neslihan Sadıkoğlu, who is the Vice President - Corporate Communications and Sustainability at Doğan Şirketler Grubu Holding A.Ş., has over two decades of experience in all areas of communication, including corporate communications, reputation and crisis communications, media relations, brand management, marketing and social responsibility and sustainability communications.
Following her graduation from the Faculty of Communications at Galatasaray University, Ms. Sadıkoğlu began to work at CNN Türk's Public Relations department in 1999, and was appointed Corporate Communications Director in 2002. She later continued her career at Vakko Holding as Communications Coordinator, at Step Halı as Corporate Communications Director, at Doğan Burda Magazine Group as Corporate Communications Director, and at Douglas Perfumery as Turkey Marketing Director.
Neslihan Sadıkoğlu, who has led the sustainability efforts at Doğan Holding and completed the Cambridge University Sustainability Leadership program in 2020, is currently Vice President - Corporate Communications and Sustainability. She has served as a Board member responsible for Sustainability at Galata Wind since December 21, 2021. Neslihan Sadıkoğlu is also a Board member at UN Global Compact Turkey and Sustainable Development Association (SKD).
After earning a bachelor's degree in Business Administration from the Middle East Technical University in 1987, Faik Açıkalın began his banking career as a management trainee at Interbank the same year. He subsequently held various positions, including Internal Auditor, Relationship Manager, Branch Manager and Marketing Manager at Interbank, Marmarabank, Kentbank, Finansbank, and Demirbank, respectively (1992 – 1998).
In 1998, he joined Dışbank as Executive Vice President. Later that year, he was appointed Chief Operating Officer (COO) responsible for coordination and communication between the Board of Directors and business units. He also served as a member of the Credit Committee. In 1999, Açıkalın was appointed Deputy Chief Executive Officer (CEO) and a Board member and then became the CEO of Dışbank in 2000. Following the acquisition of the majority shares of Dışbank by Fortis in July 2005, he continued to serve as CEO of the bank after it was renamed Fortisbank. During that period, he also worked in the international management of Fortis.
In 2007, he resigned from his duties at Fortisbank and became the CEO of Doğan Gazetecilik. In 2009, Açıkalın was appointed as an executive Board member at Yapı Kredi and also Chairman of the Executive Committee. Serving as Yapı Kredi's CEO since 2009, in addition to his current role, Açıkalın was also appointed as CEO of Koç Financial Services in 2010. Furthermore, in 2011, Açıkalın became the President of the Banking and Insurance Group at Koç Holding. In the same time period, Açıkalın served as Chairman of Yapı Kredi Malta, Yapı Kredi Invest, Yapı Kredi Leasing, Yapı Kredi Factoring, Yapı Kredi Bank Nederland NV, Yapı Kredi Bank Azerbaijan, Yapı Kredi Bank Moscow, Yapı Kredi Koray Real Estate Investment Trust, and Koç Finansman A.Ş., as Vice Chairman of Banque de Commerce et de Placements S.A. and Allianz Yaşam ve Emeklilik and as Director of the Banks Association of Turkey. At the end of 2017, Açıkalın relinquished his duties at Koç Holding, YKB and its subsidiaries.
Hüseyin Faik Açıkalın has served as an Independent Board Member at Doğan Holding since March 30, 2018 and at Galata Wind since December 21, 2021.
Ozan Korkmaz, who is the founding partner of APLUS Energy and SmartPulse Technology companies, has two decades of experience in the energy sector. The companies he has started operate in the Turkish energy market and also export energy services and software to European countries. His areas of expertise include energy demand and price forecasting modeling, feasibility and engineering studies of electricity generation investments, operational regime optimization in thermal and hydroelectric power plants, electricity transmission and distribution retail tariff modeling, and consultancy.
Before founding APLUS, Ozan Korkmaz, who has studies in the academic field related to energy markets, worked as a consultant on numerous energy generation and distribution projects. After graduating from the Faculty of Civil Engineering at Middle East Technical University, earned his M.Sc. in Hydroelectric Energy in the same department. He is currently pursuing a PhD in Energy Engineering at Istanbul Technical University.
Ozan Korkmaz has served as an Independent Board Member at Galata Wind since December 21, 2021.
By resolution of the Board of Directors dated May 13, 2024, the Audit Committee and the Early Risk Detection Committee were appointed until the Annual General Meeting at which the activities and financial statements for 2024 are discussed, and the Corporate Governance Committee was appointed until the first meeting of the Board of Directors following the Annual General Meeting at which the activities and financial statements for 2024 are discussed the "Establishment of the Executive Committee" will be
adopted.. With the same resolution, it was decided that the Corporate Governance Committee will also assume the tasks of the "Nomination Committee" and the "Remuneration Committee" as set out in the Capital Markets Board ("CMB") II-17.1 "Corporate Governance Communiqué" ("Communiqué"). The working principles of the committees of the Board of Directors can be found on the company's website in the Corporate Governance/Committees section at the following link: https://www.galatawindenerji.com/ en/corporate-governance/committees-and-workingprinciples.
| Full Name | Position |
|---|---|
| Burak Kuyan | Chief Executive Officer/ CEO |
| Zeki Onur Aytekin | Chief Financial Officer / CFO |
| Mehmet Ali Gürpınar | Chief Operations Officer / COO |
| Özlen Cendere Ertuğrul | Chief Legal Officer / CLO |
| Full Name | Position | |
|---|---|---|
| Hüseyin Faik Açıkalın | Chairman | |
| Ozan Korkmaz | Member |
| Full Name | Position |
|---|---|
| Ozan Korkmaz | Chairman |
| Hüseyin Faik Açıkalın | Member |
| Halide Müge Yücel | Member |
| Full Name | Position |
|---|---|
| Hüseyin Faik Açıkalın | Chairman |
| Bora Yalınay | Member |
| Neslihan Sadıkoğlu | Member |
| Full Name | Position |
|---|---|
| Hüseyin Faik Açıkalın | Chairman |
| Neslihan Sadıkoğlu | Member |
| Halide Müge Yücel | Member |
| Mehmet Ali Gürpınar | Member |
| Full Name | Position |
|---|---|
| Çağlar Göğüş | Chairman |
| Burak Kuyan | Member |
| Bora Yalınay | Member |
| Zeki Onur Aytekin | Member |
| Mehmet Ali Gürpınar | Member |
Since the Committees' formation on 13.05.2024, the Audit Committee, the Corporate Governance Committee and the Early Risk Detection Committee have each passed on two (2) resolution, all of which were submitted to the Board of Directors in writing in the 01.01.2024 – 30.06.2024 interim accounting period.
As of June 30, 2024, the number of employees of the company was 56 (June 30, 2023: 57). As of June 30, 2024, the company had 3 blue, 20 gray and 33 white collar employees (June 30, 2023: 8 blue, 20 gray and 29 white collar employees).
Galata Wind determines and updates its remuneration policy according to the current sector and market benchmarks, based on position, grade and title criteria. Galata Wind applies a remuneration system based on the philosophy of "equal pay for equal work", not according to the individual, but according to the grade structure shaped according to position and job description. Annual wage increases are reflected in the wages of employees in January each year in line with inflation and market research, with the approval of the Company's senior management. When deemed necessary, the employer may also apply increases to employees at different time periods during the year with the approval of senior management. All employees benefit from fringe benefit packages offered according to their title and grade level.
The Company's Annual General Meeting decides each year on the remuneration, rights and benefits of the members of the Board of Directors. Executive members of the Board of Directors may receive a monthly salary and related benefits, in addition to the "attendance fee" they receive along with the other members of the Board of Directors, depending on their duties in the Company. In addition, officers and other employees who have a say in the management of the Company may be entitled to an additional "bonus" or "reward" based on their performance. In the footnotes to the consolidated financial statements for the interim period ended March 31, 2024, this is disclosed in Note 23 under the heading Payments to key management personnel.
The approval of the general assembly is sought regarding the transactions, specified in Articles 395 and 396 of the TCC, except for the prohibited transactions, that the Board members are allowed to execute. To the extent of information available to Galata Wind, members of the Board of Directors have not engaged in commercial activities on their own behalf or on behalf of other parties in the Company's fields of operation during the 01.01.2024-30.06.2024 interim accounting period.
No amendments were made to the articles of association during the reporting period.
D
E
According to Article 3 "Purpose and Subject" of the Articles of Association, "The Company operates in the field of building, commissioning, and renting electricity power generation plants, electricity power generation, and selling the electricity power generated." Within the scope of this purpose and subject, Galata Wind generates power using renewable energy sources and sells this electricity to the Turkish Interconnected Network.
Sunflower Solar Güneş Enerjisi Sistemleri Ticaret A.Ş., a wholly owned subsidiary of the Company, designs and installs roof solar energy systems. Galata Wind Energy Global BV, another 100% subsidiary of the Company, is based in the Netherlands and continues its project development activities in Europe.
The total installed capacity on the Turkish electricity market increased by 3.8% to 110,355 MW in June 2024 compared to the end of 2023 (June 2023: 107,099 MW). Hydropower generation accounted for the largest share of installed capacity in Turkey at 29.1%, while all wind power plants and all solar power plants contributed 11.1% and 13.6% respectively.
In the first half of 2024, electricity generation in Turkey increased by 6.9% y-o-y to 164,321 GWh (H1 2023: 153,721 GWh). Natural gas and imported coal accounted for 33.4% of this generation, while domestic coal accounted for 13.6%, hydropower for 28.0%, wind for 10.9%, geothermal and biomass for 6.1% and solar for 7.9%. In the first half of 2024, electricity consumption in Turkey increased by 5.8% y-o-y to 164,807 GWh (H1 2023: 155,757 GWh). In the first six months of the year, 66.4% of the country's demand was met by domestic resources (2023 H1: 59.2%). Renewable energies accounted for 52.7% of demand (2023 Q1: 44.4%).
Electricity prices fell in the first half of 2024 compared to the same period of the previous year. Compared to the previous year, electricity prices fell by 12% and amounted to an annual average of TRY 2,004.7/ MWh (H1 2023: TRY 2,277.1 /MWh). Including the depreciation of the Turkish lira against the USD, electricity prices in USD fell by 45.8% to USD 63.5/MWh (2023 H1: USD 117.2/MWh). Turkey's hydro generation in the first half of this year has played a significant role in the decline in electricity prices. In addition, although electricity demand has increased compared to last year, the economic bottleneck and high inflation in Turkey are still hampering production activities, especially in large industrial plants. In addition, despite the ongoing wars in Eastern Europe and the Middle East, oil and natural gas prices in international markets
Galata Wind has identified members of the Board of Directors, the General Manager, Deputy General Manager and Directors as key executives. Remuneration offered for key executives include financial benefits such as salaries and bonuses and other benefits like health insurance as well as communication and transportation expenses. These benefits are explained in more detail under Note 23 - Related Party Disclosures of the consolidated financial statements for the interim accounting period of
01.01.2024-30.06.2024.
D.2. Senior executives:
Information regarding the senior executives of Galata Wind is provided on the corporate web site (www.
galatawindenerji.com).
Galata Wind has not engaged in any research & development activities or incurred any related costs during the 01.01.2024-30.06.2024 interim accounting period.
F
The company currently holds a valid Incentive Certificate, issued on 28.12.2022 for TRY 432,713,966. On 30.05.2023, the company received an Investment
Incentive Certificate in the amount of TRY 689,000,000 for the Mersin WPP Additional Capacity Project.
continued to decline. Considering that about half of the country's energy resources are imported, the decline in the marginal production costs for oil and natural gas is also pulling down the average electricity price. As demonstrated at every opportunity, the importance of domestic and renewable energy resources for security of supply and energy costs is undeniable, despite fluctuations in local and global markets.
In YEKAs, one of our country's mechanisms to support renewable energy, work continues on offshore wind capacities, one of the YEKAs announced for 2023. The market is still very interested in this area. The Ministry of Energy has identified an area of approximately 2,000 km2 off the coast of Bandırma, Gelibolu, Karabiga and Bozcaada as having the potential for the installation of 5GW of offshore wind by 2035. YEKA competitions are of great importance for Turkey to reach its 2035 wind and solar targets and 2053 net-zero targets.
The distribution of preliminary licenses for applications submitted under the "Regulation Amending the Regulation on Storage Activities in the Electricity Market" continues. To date, 31.5 GW of the approx. 33.5 GW of applications assessed have been granted preliminary licenses. Around 55% of the preliminary approvals relate to wind power plants and 45% to solar power plants.
Galata Wind has 3 wind power plants ("WPP"), 2 solar power plants ("SPP") and 1 hybrid solar power plant ("SPP"). The total installed capacity of these plants is 297.2 MW. Galata Wind's wind power plants generated 363,877 MWh of electricity in the first half of 2024. Galata Wind's Şah WPP, Mersin WPP and Taşpınar WPP wind power plants accounted for 2.0% of Turkey's total installed wind power capacity and 2.0% of electricity generation from wind power during this period.
Galata Wind's solar power plants generated 26,383 MWh of electricity in the first half of 2024. The SPP plants in Erzurum and Çorum accounted for 0.35% of Turkey's total installed solar capacity and 0.35% of solar power generation. Taşpınar WPP and Hybrid SPP, Çorum SPP and Erzurum SPP were included in the YEKDEM list in 2024. Mersin WPP and Şah WPP sold their electricity via bilateral agreements at spot prices.
In the interim accounting period from 01.01.2024 to 30.06.2024, Galata Wind has acquired current and non-current assets amounting to TRY 928,287 thousand (2023/06: TRY 382,722 thousand).
The Audit and Risk Management Group of Doğan Şirketler Grubu Holding A.Ş., the parent company of Galata Wind holding 70% of its shares, provides guidance and support to the Company in conducting the internal audits and performing the control function.
The findings of Doğan Şirketler Grubu Holding A.Ş. Audit and Risk Management Group are assessed by the Company and corrections and revisions are introduced in line with the recommendations while the internal control systems are continuously improved.
The Company currently has one direct affiliate. Information on the affiliate and its share ratio is provided in the notes of the consolidated financial statements for the interim accounting period of 01.01.2024 to 30.06.2024. This information is available on Galata Wind's corporate web site (www. galatawindenerji.com) and the Public Disclosure Platform ("KAP") (www.kap.org.tr).
The Company has not acquired any of its own shares within the 01.01.2024-30.06.2024 interim accounting period.
Galata Wind has not been subjected to any private or public audits within the 01.01.2024-30.06.2024 interim accounting period.
The provisions reserved for the lawsuits filed against the Group and the lawsuit damages, depending on the specific aspects of the lawsuits are shown under Note 11 - Provisions, Contingent Assets and Liabilities / (a) Other short-term provisions of the consolidated financial statements for the interim accounting period ending on June 30, 2024.
The total amount related to the lawsuits filed against the Group is TRY 576 thousands as of June 30, 2024 (December 31, 2023: TRY 1,2 million).
No administrative or legal sanctions were imposed within the reporting period on the Company and members of the governing body due to practices in violation of applicable legislation.
The Company has fulfilled all General Assembly resolutions during the 01.01.2024 - 30.06.2024 interim accounting period.
No extraordinary general assembly meetings were held during the 01.01.2024 - 30.06.2024 interim accounting period.
The donations and aids extended by the Company within the interim accounting period of 01.01.2024 - 30.06.2024 amounted to TRY 2,666,958 (01.01.2023- 30.06.2023: TRY 5,849,389).
G.13. If the Company is a subsidiary of a group, legal transactions made with the parent company, a subsidiary of the parent company, for the interests of the parent company or a subsidiary of the parent company under the direction of the parent company, and all other measures implemented or avoided from
Galata Wind has not engaged in any legal transactions with a subsidiary of its parent company, under the direction of the parent company, for the interests of the parent company or one of its subsidiaries, has not implemented any measures or avoided implementation or offset transactions for the interests of the parent company or one of its subsidiaries during the previous fiscal year.
G.14. If the Company is a subsidiary of a group, as per the circumstances and conditions known to them at the time of the above mentioned legal action taken or the measure implemented or avoided, whether a proper counter action is executed in the case of each legal action and whether the measure implemented or avoided has caused damage to the company, and if the company has indeed suffered a loss, whether it has been offset:
Since Galata Wind does not have any transactions of the nature specified in Article F.13 of this report, no loss needed to be offset.
The Ordinary General Assembly Meeting, at which the company's activities and annual financial statements for 2023 were discussed, was held at the company's registered office on April 18, 2024. A total of 391,499,040,054 shares were represented at the
Annual General Meeting on April 18, 2024, of which 391,479,407,395 shares were represented by proxy and 19,632,659 shares were represented in person. In summary, the following resolutions have been passed and the full resolutions are available on our corporate website www.galatawindenerji.com.
Today (14.06.2024), 7 MW of the 42.5711 MW Auxiliary Source installed capacity (Hybrid SPP) of our Company's "Taşpınar Combined Renewable Electricity Generation Facility Project", which is under construction in Korubaşı Neighborhood, Nilüfer District, Bursa Province, has been commissioned with the acceptance of the Ministry.
With this acceptance, the total installed capacity of the Taşpınar Hybrid SPP has reached 16.4 MW and the first phase of the project has been completed. Construction work on the second and final phase of the project is scheduled to be completed by the end of 2024.
As of today, the total installed capacity of our Taşpınar WPP and Hybrid SPP plant is 95.4 MWm / 73 MWe. Important developments that may occur in the upcoming period regarding the project will be shared
with our investors through annual reports and material event disclosures.
A Share Purchase and Sale Agreement ("Agreement") dated 14.08.2024 was signed between Galata Wind Energy Global B.V., the foreign subsidiary of our Company, and Emirhan Nacar ("Seller"), the sole shareholder of Nova Grup Enerji Yatırımları A.S. ("Nova") and Avrupa Grup Enerji Yatırımları A.S. ("Avrupa"), for the acquisition of all registered shares representing 100,00% of the capital of Nova and Avrupa by Galata Wind Energy Global.
In the Agreement, the realization of the share transfer is subject to the completion of the closing conditions, including obtaining the necessary permits and approvals, as of the closing date, and it was seen that the closing conditions were completed as of the signature date, and the signature of the agreement and the closing transactions were realized simultaneously.
Nova and Avrupa have pre-licenses granted by the Energy Market Regulatory Authority for a solar power plant with storage in Ankara province with a total installed capacity of 60 MWm / 60 MWe. These projects will make a significant contribution to our Company's goal of reaching 1000 MW installed capacity by 2030, and the estimated start date of the projects is expected to be after 2026.
Developments on the issue will be shared with the public.
| Donation and Aid Amount | Amount (TRY) |
|---|---|
| Nilüfer Belediyespor Club Association | 1,743,670 |
| Student Scholarship | 802,228 |
| Ramadan Aid | 96,974 |
| METU Development Foundation Donation |
19,513 |
| Turkish Education Foundation | 3,557 |
| Association for Supporting Contemporary Life |
1,016 |
| TOTAL | 2,666,958 |
In the first half of 2024, Galata Wind's consolidated total assets increased by 1% year-on-year to TRY 11,553.46 million. The Company's consolidated current liabilities amounted to TRY 713.07 million (31.12.2023: TRY 487.17 million), while noncurrent liabilities amounted to TRY 2,110.54 million (31.12.2023: TRY 2,165.62 million).
Deferred tax liabilities amounting to TRY 1.43 billion (December 31, 2023: TRY 1.34 billion) is included in non-current liabilities. TRY provisions for foreign currency denominated borrowings included in noncurrent liabilities decreased by 21% to TRY 613.6 million despite the increase in EUR/TRY parity due to the settlement of principal balances. Current liabilities increased by 46% to TRY 713.07 million as of June 30, 2024 due to dividends payable amounting to TRY 437 million recorded under other payables to related parties.
Galata Wind's consolidated revenues decreased by 9.24% y-o-y to TRY 977.42 million in 1H2024. Despite 19% increase in total production and 17% increase in MCP, revenues were 9.24% lower than last year due to 72% indexation rate. In addition, in the period of June 2023, TRY 56 million revenue was generated from carbon credit sales, while no carbon credit sales were realized in the period of June 2024 due to the lack of favorable prices.
In the first half of 2024, cost of sales increased by 3% y-o-y to TRY 453.82 million. The main reason for the increase in cost of sales is the depreciation expenses amounting to TRY 264.24 million (June 30, 2023: TRY 234.33 million) due to the commissioning of Phase 1 of our Taşpınar Hybrid Power Plant in the second quarter of 2024. In line with the 9.24% decline in revenues, gross profit decreased by 17.77% to TRY 523.60 million compared to the same period last year. Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) decreased by 13.83% to TRY 714.19 million (2023/06: TRY 828.85 million).
Finance expenses decreased by TRY 166.9 million to TRY 81.75 million in 1H2024 compared to the same period of the previous year, mainly due to the higher depreciation of TRY in the same period last year (2023/06: TRY 248.65 million net finance expense). In the first half of 2024, FX gains and interest income decreased by TRY 314.69 million to TRY 40.63 million compared to the same period last year, as the
liquidity available at the end of 2023 was used for investments.
Galata Wind's profit before tax in the first half of 2024 increased by 2.62% to TRY 595.78 million (June 30, 2023: TRY 580.55 million) due to the gain on net monetary position. In 2024, net profit for the period increased by 44.80% to TRY 416.50 million, as the sum of current tax expense and deferred tax expense was TRY 113.63 million lower compared to the same period of the previous year.
The equity as of 30.06.2024 amounted to TRY 8,729.85 million, 1616% above our issued capital of TRY 540 million. This ratio is an indicator of our strong equity structure.
The Group's cash position and financial debts are continuously monitored in terms of financial risk management aspects such as maturity structure, interest risks and foreign exchange risks. Accordingly, no measures or actions are currently needed to improve the current financial structure.
Galata Wind's profit distribution policy is available on the corporate website (www.galatawindenerji.com). The Board of Directors has evaluated profit distribution by considering whether a distributable term profit had occurred in the independently audited financial statements for the accounting period of 01.01.2023 - 31.12.2023 and presented its recommendations to the General Assembly.
In consideration of the provisions of the Turkish Commercial Code ("TCC"), Capital Markets Law and Capital Markets Board ("CMB") regulations, corporate income tax, income tax and other relevant laws, relevant provisions of our company's Articles of Association and "Dividend Distribution Policy", we have informed the public;
The summary consolidated financial statement and profit or loss statement of Galata Wind for the first six months of 2023 are provided below.
| Condensed Financial Status (TRY million) |
30 June 2024 | 31 December 2023 | Change (%) |
|---|---|---|---|
| Total Assets | 11,553.46 | 11,425.11 | 1% |
| Current Assets | 560.86 | 407.15 | 38% |
| Cash & Cash Equivalents | 320.05 | 82.33 | 289% |
| Financial Investments | 14.62 | 110.13 | -87% |
| Non-Current Assets | 10,992.60 | 11,017.96 | 0% |
| Property, Plant and Equipment | 7,129.53 | 6,418.77 | 11% |
| Intangible Assets | 3,264.83 | 3,308.71 | -1% |
| Total Liabilities | 2,823.61 | 2,652.79 | 6% |
| Current Liabilities | 713.07 | 487.17 | 46% |
| Non-Current Liabilities | 2,110.54 | 2,165.62 | -3% |
| Bank Borrowings | 739.28 | 921.21 | -20% |
| Equity | 8,729.85 | 8,772.33 | 0% |
| Net Debt | 2,503.56 | 2,570.46 | |
| Net Financial Debt | 419.24 | 838.88 | |
| Investment amount (Capex) | -928.29 | -382.72 |
| Condensed Income Statement (TRY million) |
30 June 2024 | 30 June 2023 | Y-o-Y Change (%) |
|---|---|---|---|
| Revenue | 977.42 | 1.076.98 | -9% |
| Gross Profit | 523.60 | 636.77 | -18% |
| Operating Profit/Loss (-) | -75.78 | -43.79 | -73% |
| General Administrative Expenses (-) | -59.26 | -31.40 | -89% |
| Marketing Expenses (-) | -16.52 | -12.39 | -33% |
| Other Operating Income/(Expense), net | 37.85 | 358.08 | -89% |
| Operating Profit Before Finance Expense | 485.67 | 951.06 | -49% |
| EBITDA* | 714.19 | 828.85 | -14% |
| Finance Income/(Expense), net | 110.11 | -370.51 | 130% |
| Net Profit | 416.50 | 287.64 | 45% |
| Earning/(Loss) Per Share | 0.7713 | 0.5379 |
* EBITDA is calculated as the sum of gross profit-operating expenses + depreciation and amortization. The depreciation of assets with the right of use shown in the financial statement within the scope of TFRS 16 is also included in the depreciation.
At the Ordinary General Meeting on April 18, 2024, it was decided to distribute a total net "cash" dividend of gross 437 million Turkish Lira, which corresponds to 80.93% of the issued capital. The cash dividend rights have been exercised on August 29, 2024.
Galata Wind Enerji A.Ş.'s shares started trading on Borsa İstanbul A.Ş. as of April 22, 2021.
I
Since April 22, 2021, when the stocks started to trade on Borsa Istanbul with the ticker "GWIND," the Company has been subject to the regulations of the Capital Markets Board. In accordance with Corporate Governance Communiqué no. II-17.1 promulgated by the Capital Markets Board and published in the Official Gazette no. 28871 on 03.01.2014, the Company has strived to adopt the principles of equality, transparency, accountability and responsibility. Article no. 24 under the "Corporate Governance Principles" in the Articles of Association stipulates that the Company and its bodies will follow the principles mandated by the Capital Markets Board. The activities and Board resolutions that do not align with the mandatory principles will be deemed void and in violation of the Articles of Association. The Capital
Markets Board's corporate governance regulations will be followed during the implementation of the Corporate Governance Principles and in related party transactions of material significance for the Company's activities.
According to the CMB's Board of Directors resolution no. 2/51 dated 12.01.2023, Galata Wind is included among the BIST First Group Companies in the 2023 accounting period. The company was evaluated by Kobirate Uluslararası Kredi Derecelendirme ve Kurumsal Yönetim Hizmetleri A.Ş. using the methodology for "BIST First Group Companies" based on 456 criteria. The Communiqué "(II-17.1.a)" Amending the "Corporate Governance Communiqué (II-17.1)" and the Corporate Governance Communiqué No. II-17.1, both published by the Capital Markets Board, the regulations regarding the non-mandatory sustainability principles compliance framework, and
Galata Wind defines the measurement of operational, environmental, information technology, legal, compliance, and financial risks within the framework of its risk management policies and ensures that they are measured. The relevant executives monitor and manage these risks in light of available data and recommendations.
More information on the Early Risk Detection Committee, formed according to Article 378 of the Turkish Commercial Code, the CMB's Corporate Governance Communiqué (II-17.1), and Board of Directors resolution dated 13.05.2024, to serve until the Ordinary General Assembly Meeting where the accounting and operating results of 2023 would be reviewed is provided in Article B.5.
The Early Risk Detection Committee has convened two times in the 01.01.2024 - 30.06.2024 interim accounting period.
the Board of Directors' resolution no.4/105 passed at the CMB's board meeting on 01.02.2013, were taken into consideration in the methodology and during the rating process.
Following the evaluations under the main headings of Shareholders, Public Disclosure and Transparency, Stakeholders and the Board of Directors, Corporate Governance Rating of Galata Wind Enerji A.Ş. was upgraded to 9.52. This score shows that the risks that the Company may be exposed to have been determined to a large extent, that the Company observes the rights of the shareholders and stakeholders, public disclosure and transparency activities are at a good level, and the structure and procedures of the Board of Directors are in compliance with the principles. Accordingly, Galata Wind has achieved significant compliance with the Corporate Governance Principles published by the Capital Markets Board.
J.2.Sustainability
At Galata Wind, we work to reduce Turkey's dependence on imported energy by generating 100% renewable and environmentally friendly electricity. Galata Wind has adopted the principles of equality, transparency, accountability and responsibility as part of its sustainability program and disclosed the data for the year 2023 on the Public Disclosure Platform and in the Annual Report in accordance with Sustainability Principles Compliance Framework specified in the amendment to the Corporate Governance Communiqué No. II -17.1 published on October 2, 2020. The non-mandatory environmental, social and corporate governance disclosures that should be reported on a "comply or explain" basis are included in the outline and in the notes to the report. Following the developments in 2022, our company was included in the BIST Sustainability Index from the first
quarter of 2023 and published its first sustainability report in international standards.
We regard sustainability, which lies at the heart of our business since our founding, as a source of inspiration for living up to our responsibility to the planet, society and all our stakeholders. Together with our dedicated employees, we are resolutely moving forward on this path, which we have embarked upon with the desire to lead the sustainable future of our country.
At Galata Wind, we are working to reduce Turkey's dependence on imported energy, leave a cleaner world for future generations, and rank among the key strategic players in sustainable development by generating environmentally friendly electricity from 100% renewable energy sources such as solar and wind. We are committed to creating sustainable value and investing only in renewable and clean energy.
However, we recognize that sustainability is more than just protecting the ecological environment and reducing the negative impact of climate change through decarbonization measures. Therefore, we review our approach to sustainability in line with
what all our key stakeholders expect of us in terms of social, environmental and economic issues.
Accordingly, we have defined our sustainability strategy, key stakeholders and materiality areas for 2022, and developed our sustainability management model to achieve performance comparable to international standards. Our sustainability management model and strategy, which we consider a part of our corporate risk management, have also been approved by the Board of Directors and the Sustainability Committee, which reports directly to the Board of Directors.
In addition to the social, environmental and economic expectations of key stakeholders identified by using the methodology proposed by AA1000SES (AccountAbility Stakeholder Engagement Standard), the risk perspective and indicators from various sources such as industry priorities, UN Sustainable Development Goals and the World Economic Forum Risk Report were also considered. In the first materiality analysis workshop, Galata Wind also evaluated the direct impact of climate change on its activities and the impact of our company's activities on climate in line with the dual materiality principle, and disclosed its findings within the sustainability report. Galata Wind's sustainability perspective is built on the pillars below:
integrated management system in all its operating processes. The company holds ISO 9001, 14001, 45001, 10002, 50001 and 27001 certifications for its headquarters and power plants.
Galata Wind takes the United Nations Sustainable Development Goals as the basis for its sustainability approach. In line with the company's material areas, the UN Sustainable Development Goals table is published on the corporate website. Galata Wind is also a signatory of the United Nations Global Compact (UNGC).
Galata Wind published its first Sustainability Report in July 2023. Our Company has published its sustainability performance for 2022 in accordance with globally recognized international reporting standards. From now on, our Company will continue to publish regular sustainability reports to inform its stakeholders about its sustainability performance. Galata Wind, which published a report using the SASB sectoral index in the energy sector for the first time in Turkey, also included the United Nations Global Compact Communication on Progress and the United
Galata Wind, the first company to be offered as a green IPO, with a total portfolio consisting exclusively of wind and solar energy, is pursuing a strategy of being a leader in sustainability and setting a benchmark for the energy sector.
Recognizing the need to consider ESG issues as part of risk management and to organize the entire business model to meet international sustainability expectations, all policies and procedures are reviewed in line with the activities initiated in 2022. All administrative and operational policies and procedures from supply chain management and human resources management to quality processes and stakeholder engagement platforms have been reorganized and updated in 2023, and will be updated in 2024.
Due to the nature of the sector in which the company operates, there is a high level of regulatory compliance. Therefore, Galata Wind prioritizes the
Nations Sustainable Development Goals Index in the report. In the first Sustainability Report to use the 2021 version of the GRI standards as report content, Galata Wind's social, environmental and corporate governance goals are included alongside its strategic management approach.
Galata Wind plans to publish its second sustainability report for the first time in September 2024 in accordance with the expectations of TSRS (Turkish Sustainability Reporting Standards) and ESRS (European Sustainability Reporting Standards). Considering Sustainability Reporting as a high-level performance in a very comprehensive manner, Galata Wind has directed its 2024 efforts to directly follow the developments related to CSRD (Corporate Sustainability Reporting Directive).
It has addressed the compliance of its procurement processes with sustainability criteria and initiated its sustainable procurement policy and process
management for the first time. In addition, sustainable supply chain model studies have also been finalized. Within the scope of this work, principles were also determined with the Supplier Code of Ethics.
In order to support the development of its employees, our company has also implemented a training management procedure in order to bring its training activities to international standards. A survey was also organized to inquire about the views and expectations of Galata Wind employees on equality, inclusion and non-discrimination.
In April 2024, 38 employees at our power plants in Balıkesir, Bursa and Mersin received face-to-face sustainability training with a field trip attended by our Human Resources Department manager. In addition to Galata Wind employees, subcontractor and supplier employees in the relevant regions also participated in the trainings. In the trainings given by our Sustainability Consultant, information was conveyed
within the scope of basic sustainability concepts, business ethics, environment and climate change awareness. Employees of our service suppliers also participated in the trainings.
The company's policies are provided on the corporate website in the Policies tab of the Corporate Governance section as well as in the Sustainability tab: https://galatawindenerji.com/kurumsal-yonetisim/ politikalar/ https://www.galatawindenerji.com/surdurulebilirlik/
Climate Change and Resilience Strategy
As one of Turkey's young and dynamic green energy companies, Galata Wind Enerji A.Ş. is committed to building corporate and operational resilience in the
face of climate change. Our approach to climate adaptation is strategic, proactive and based on a deep understanding of the environmental risks and opportunities affecting our operations by all managers and employees of the Company. Our commitment to climate resilience is not only about reducing the impacts of climate change on our business, but also about our role in the renewable energy sector to positively contribute to global climate goals.
Our climate adaptation strategy is evaluated under five main headings:
According to the analysis conducted by Sustainalytics in June 2022, Galata Wind's Environmental, Social
and Governance (ESG) Risk Rating is 19.9. This assessment refl ects that the company applies ESG governance best practices, has board-level oversight of ESG issues and has a "low" risk of being materially impacted by ESG factors. In July 2023, the company's risk rating was updated to 14.9. Based on the ESG risk rating, Galata Wind is ranked 39th out of 699 companies in the Utilities sector.
As a result of the ESG assessment conducted by S&P Global in July 2023, the company scored 67 points and proved to be adequately prepared for short and medium-term disruptions that may occur in the electricity sector. The assessment also showed that the company's 2025 targets are achievable and will have a significant impact on reducing the share of fossil fuels in Turkey's energy supply.
The Group companies do not have any shares in the capital of the parent company.
The consolidated financial statements of the Group have been prepared in accordance with the Communiqué Series II, No. 14.1 "Communiqué on the Principles of Financial Reporting in Capital Markets" ("the Communiqué") of the Capital Markets Board ("CMB"), published in the Official Gazette on June 13, 2013 under number 28676, and in accordance with the resolution of the CMB dated June 28, 2013. The consolidated financial statements have been prepared in accordance with the provisions of Communiqué no. 14.1 "Communiqué on the Principles of Financial Reporting in Capital Markets" ("the Communiqué") and the CMB's resolution of December 28, 2023 on the application of inflation accounting. The consolidated financial statements have been prepared in accordance with the formats specified in the "Announcement on the TFRS Taxonomy" published by the POA on October 4, 2022 and in the examples of financial statements and user manual published by the CMB.
The interim report and the compliance report of the Company are prepared in accordance with the provisions of the Turkish Commercial Code. Members of the Board of Directors did not have any requests as per Article 199/4 of the TCC.
Legal entities, including the direct or indirect affiliates of Galata Wind, "partnerships subject to joint management," natural person and legal entity shareholders with sole or joint management control, their close family members (up to the second degree), and legal entities directly or indirectly controlled by them, either individually or jointly and/or legal entities wherein they have significant influence and/or are employed in key executive positions, the Company's subsidiaries and their Board members, key executives, and their close family members (up to
the second degree) and legal entities who are directly or indirectly controlled by them, individually or jointly, are considered related parties.
Transactions with related parties are provided under Note 23 - Related Party Disclosures of the consolidated financial statements for the interim accounting period ending on June 30, 2024.
K.5. Information on shareholders with management control, Board members, senior executives, and their spouses and blood relatives up to the second degree being involved in materially significant transactions that may cause a conflict of interest with the Company or its subsidiaries and/or performing a business transaction in the same type of commercial activities as the Company or its subsidiaries either on their own behalf or on behalf of someone else or joining another company engaged in the same type of commercial activities as a partner with unlimited responsibility:
Shareholders with management control, Board members, senior executives and their spouses and blood relatives up to the second degree have not been involved in any materially significant transactions that may cause a conflict of interest with the Company or its subsidiaries. They have not performed a business transaction in the same type of commercial activities as the Company or its subsidiaries on their own behalf or on behalf of someone else nor joined another company engaged in same type of commercial activities as a partner with unlimited responsibilities.
K.6. If the ratio of the Company's shares in the capital of a direct or indirect subsidiary, in which we hold five, ten, twenty, twenty-five, thirty-three, fifty, sixty-seven or one hundred percent of the shares, fell below or exceeded the specified ratios, the nature of and reasons for such an occurrence:
None.
The Company is included in the following indices: BIST BALIKESIR / BIST SERVICES / BIST ALL SHARES-100 / BIST ELECTIRICTY / BIST STARS / BIST DIVIDEND / BIST SUSTAINABILITY / BIST ALL SHARES / BIST 500 / BIST CORPORATE GOVERNANCE
Galata Wind has been traded on BIST STAR since April 22, 2021.
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GALATA WIND ENERJİ A.Ş. BOARD OF DIRECTORS' RESOLUTION ON APPROVAL OF FINANCIAL STATEMENTS AND INTERIM REPORT
RESOLUTION DATE: 05.09.2024 RESOLUTION NO: 2024/20
We have reviewed and examined;
Regarding Financial Reporting in Capital Markets" numbered II-14.1, and which is in compliance with the financial statements and footnotes for the accounting period 01.01.2024 - 30.06.2024, and which has been independently
within the framework of the information we have in our field of duty and responsibility;
the facts on any material matter or any material omission that may be construed as misleading as of the date of
Standards, give a true and fair view of the Company's assets, liabilities, profit and loss and financial position, and
has been identified.
Hüseyin Faik AÇIKALIN Audit Committee - Chairman (signature on original)
Ozan KORMAZ Audit Committee - Member (signature on original)
Zeki Onur AYTEKİN Assistant General Manager - CFO (signature on original)
GALATA WIND ENERJİ A.Ş. BOARD OF DIRECTORS RESOLUTION
MEETING DATE: 05.09.2024 RESOLUTION NO: 2024/20
The Board of Directors has convened at the Company's Headquarters with the attendance of the undersigned members to resolve on the issues on the agenda.
Agenda: Approval of the Company's consolidated condensed statement of financial position, income statement, statement of comprehensive income, statement of cash flows and statement of changes in equity for the interim period between 01.01.2024-30.06.2024 ("Consolidated Condensed Financial Statements").
Resolution:
As a result of the deliberations; the Board of Directors has unanimously resolved to approve:
CHAIRMAN ÇAĞLAR GÖĞÜŞ VICE CHAIRMAN
BORA YALINAY
MEMBER NESLİHAN SADIKOĞLU
MEMBER BURAK KUYAN
INDEPENDENT MEMBER OZAN KORKMAZ
INDEPENDENT MEMBER HÜSEYİN FAİK AÇIKALIN
DRT Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. Maslak No1 Plaza Eski Büyükdere Caddesi Maslak Mahallesi No:1 Maslak, Sarıyer 34485 İstanbul, Türkiye
Tel: +90 (212) 366 60 00 Fax: +90 (212) 366 60 10 www.deloitte.com.tr
Mersis:0291001097600016 Ticari Sicil No: 304099
To the General Assembly of Galata Wind Enerji A.Ş.
Introduction
We have been charged with reviewing the consistency of consolidated interim financial information provided in interim activity report of Galata Wind Enerji A.Ş. ("the Company") and its subsidiaries (together will be referred as "the Group") dated 30 June 2024 with the reviewed consolidated interim financial statements. The Group Management is responsible from the aforementioned interim activity report. Our responsibility is to express a conclusion as to whether the financial information presented in the interim activity report is consistent with the reviewed consolidated interim financial statements and explanatory notes over which auditor's review report is issued as of 5 September 2024.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. Our review involves the examination as to whether financial information provided management's interim period report are consistent with the reviewed consolidated interim financial statements and explanatory notes. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our limited review, nothing has come to our attention that causes us to believe that the consolidated interim financial information provided in the interim activity report and reviewed consolidated interim financial statements and explanatory notes, in all material respects, are not consistent.
DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş. Member of DELOITTE TOUCHE TOHMATSU LIMITED
Cem Tovil, SMMM Partner
İstanbul, 5 September 2024
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