GDZ ELEKTRİK DAĞITIM ANONİM ŞİRKETİ

ARTICLES OF ASSOCIATION 

ORGANIZATION

Article 1- . The articles of association of Gdz Elektrik Dağıtım Anonim Şirketi (hereinafter referred to as the "Company"), which was included in the scope and program of privatization with the Decision of the High Council of Privatization dated 02.04.2004 and numbered 2004/22, in which Türkiye Elektrik Dağıtım Anonim Şirketi is a shareholder and which was transferred with the Share Sale Agreement dated 29.05.2013 within the scope of the Law No. 4046, is amended as follows.

COMPANY TITLE

Article 2- The title of the Company is GDZ ELEKTRİK DAĞITIM ANONİM ŞİRKETİ.

PURPOSE AND SUBJECT

Article 3- The purpose of the Company is to carry out electric energy distribution activities in İzmir and Manisa provinces in accordance with the Electricity Market Law, without prejudice to the provisions of the Capital Markets Law regarding the transfer of hidden income. 

The Company will also carry out the following activities in accordance with the Turkish Commercial Code, capital markets legislation, relevant legislation on the electricity market and other relevant legislation:

1)          To distribute electric energy within the scope of the Transfer of Operating Rights Agreement and Electric Energy Sales Agreements it has signed and the amendment agreements it has signed or will sign in relation to them,

2)          To establish new distribution facilities, making necessary improvements, operating, maintaining and repairing the distribution system in accordance with the relevant legislation,

3)          To buy and/or sell electrical energy and capacity to fulfill its activities,

4)          To perform other duties and fulfill obligations assigned by the Electricity Market Law and related legislation,

On the other hand, in order to realize the matters related to its purpose and subject, the Company may also engage in the following matters, provided that they are limited to the activities of the Company and in compliance with the relevant legislation regarding the electricity market: 

a.          In relation to its fields of activity; it may construct, establish, sell, buy, purchase, operate, lease, rent, participate, perform or have these works done by third parties and keep the machines and may make all kinds of dispositions on them for this purpose.

b.          The Company may acquire, transfer and assign, lease, establish usufruct, condominium and condominium easement in order to be limited to the subject matter of the Company.

c.          It may purchase, transfer, lease the necessary machinery, tools, equipment and auxiliary materials related to its fields of activity.

d.          It may acquire, use and, when necessary, dispose of know-how, permits, licenses, patents, copyright, concession, trademark and all other kinds of intangible rights and industrial property rights in order to use them in relation to the activities within the scope of its license.

e.          Without prejudice to the provisions of the Capital Markets Law on disguised profit transfer, the Company may obtain the internal and external loans required for its activities from internal and external financing institutions, domestic and foreign enterprises.

f.           Within the framework of Article 57 of the Electricity Market License Regulation; the Company may mortgage the real estates and assets owned by the Company or owned by other persons and entities, may pledge them as collateral, and may take or give mortgages against its receivables, and may release the mortgages existing on its own assets or the assets of others. Within the framework of Article 57 of the Electricity Market License Regulation, it may also carry out all kinds of usufruct, easement, residence rights and other real and intangible rights within the framework of the provisions of the Civil Code. It may give all kinds of guarantees and sureties in favor of the Company and 3rd parties. The exercise of such rights is subject to the approval of the Energy Market Regulatory Authority pursuant to Article 36 of the Electricity Market License Regulation.

g.          Procurement of services within the framework of Article 48 of the Electricity Market License Regulation while performing its activities.

h.          To buy and sell securities such as share certificates, bonds, usufruct certificates, and to engage in all kinds of transactions related to securities, provided that it does not engage in securities brokerage activities and is not in the nature of investment services and activities regulated by the Capital Markets Legislation, and provided that it complies with the limitations and procedures in the legislation.

i.           Without prejudice to the provisions of the Capital Markets Law on disguised profit transfer, to participate in public and private domestic and international tenders and to open tenders.

j.           Without prejudice to the provisions of the Capital Markets Law on disguised profit transfer, provided that it complies with the regulations of the Energy Market Regulatory Authority, to carry out a non-market activity that will increase efficiency to be carried out together with the distribution activity, provided that it remains within this scope, to establish partnerships with other real and legal entities existing in Türkiye and abroad, to participate in existing companies as a partner, to merge, to leave these partnerships and to terminate and liquidate these partnerships.

k.          In the event that it is deemed beneficial to carry out activities other than those mentioned in the above-mentioned articles and which, if carried out together with the distribution activities, will increase efficiency, to carry out such commercial activities upon the proposal of the Board of Directors and the approval of the General Assembly, upon obtaining the necessary permissions from the Ministry of Commerce, the Capital Markets Board and other relevant authorities and with the approval of the Energy Market Regulatory Authority.

l.           Buy back its own shares provided that it acts in accordance with the capital markets legislation and other relevant legislation and makes the necessary material event disclosures.

m.         To make all kinds of donations and aids to all kinds of persons, institutions and organizations, including universities, educational institutions, foundations, public benefit associations and persons or organizations of this nature, in a manner that does not hinder its own purpose and subject matter, provided that it does not contradict the concealed gain transfer and other regulations of the capital markets legislation, the necessary material event disclosures are made and the donations made during the year are submitted to the information of the shareholders at the general assembly. The annual upper limit of donations to be made is determined by the General Assembly, no donations exceeding this limit may be made in the same year and donations made are added to the distributable profit base. Regarding the amount of donations, in any case, the mandatory limits to be determined by the Capital Markets Board shall be complied with.

However, none of the above-mentioned activities may be interpreted and implemented in violation of the Electricity Market Law No. 6446 and the relevant legislation of the Energy Market Regulatory Authority regarding the electricity market. 

The principles determined within the framework of the energy market and capital markets legislation shall be complied with and the necessary approvals from the board shall be obtained for the Company to provide guarantees, sureties, collaterals or to establish pledge rights, including mortgages, on its own behalf and in favor of third parties.
In case of any change in the purpose and subject of the Company, the necessary permissions must be obtained from the Turkish Ministry of Trade, Energy Market Regulatory Authority and Capital Markets Board.

In the event that the matters set forth in this article differ from the regulations to be made by the Capital Markets Board and the Energy Market Regulatory Authority in the future, the regulations to be made by the Capital Markets Board and the Energy Market Regulatory Authority shall be complied with.

In transactions that may affect the investment decisions of investors in terms of the business, transactions and activities carried out by the Company within the scope of this article, mandatory disclosures shall be made in accordance with the regulations of the Capital Markets Board regarding public disclosure in order to enlighten investors in accordance with the capital markets legislation.

HEADQUARTERS AND BRANCHES OF THE COMPANY

Article 4- The head office of the Company is located in BORNOVA district of İZMİR province.

The address is Üniversitesi Caddesi No:57 Bornova/İZMİR, Türkiye. 

In case of any change of address, the new address shall be registered with the trade registry and announced in the Turkish Trade Registry Gazette and also notified to the Ministry of Trade and the Capital Markets Board. Notifications made to the registered and announced address shall be deemed to have been made to the company. For a company which has left its registered and announced address but has not registered its new address within the prescribed period, this shall be deemed as a reason for termination. 

The Company may, by resolution of the Board of Directors, open branches and representative offices in Türkiye and abroad, provided that the provisions of the Turkish Commercial Code and other relevant legislation are complied with and the Ministry of Trade, the Capital Markets Board and the Energy Market Regulatory Authority are informed.

DURATION

Article 5- The duration of the company is unlimited as of its establishment. This period may be extended or shortened by amending the articles of association.

CAPITAL

Article 6- The Company has accepted the registered capital system in accordance with the provisions of the Capital Markets Law No. 6362 and has switched to the registered capital system with the permission of the Capital Markets Board dated 21.03.2024 and numbered 17/439.

The registered capital ceiling of the Company is 2,000,000,000,000 (two billion) Turkish Liras (TL) and this capital is divided into 2,000,000,000,000 (two billion) registered shares with a nominal value of TL 1.00 (one) each.

The authorized capital ceiling permission granted by the Capital Markets Board is valid for the years 2024-2028 (5 years). Even if by the end of 2028 the permitted registered capital ceiling has not been reached, in order for the board of directors to take a capital increase decision after 2028, it is obligatory to obtain authorization from the general assembly for a new period not exceeding five years by obtaining permission from the Capital Markets Board for the previously permitted ceiling or a new ceiling amount. In case the said authorization is not obtained, no capital increase can be made with the decision of the board of directors.

The issued capital of the Company is TL 509,716,000.00 (Five hundred and nine million seven hundred and sixteen thousand). All of this capital has been paid in cash and in full, free of collusion.
The issued capital of the Company amounting to TL 509,716,000.00 is divided into 305,829,600 (three hundred and five million eight hundred and twenty-nine thousand six hundred) Class A registered shares with a nominal value of TL 1.00 (one) each and 203,886,400 (two hundred and three million eight hundred and eight hundred and eighty-six thousand four hundred) Class B registered shares with a nominal value of TL 1.00 (one) each. 

Shares representing the issued capital are monitored in dematerialized form within the framework of dematerialization principles.

Between the years 2024-2028 (until the end of 2028), the board of directors is authorized to take decisions on increasing the issued capital by issuing new shares up to the registered capital ceiling when it deems necessary in accordance with the provisions of the Capital Markets Law, restricting the rights of privileged shareholders and limiting the right of shareholders to acquire new shares, and issuing privileged or premium shares or shares below their nominal value. The authorization to restrict the right to acquire new shares may not be exercised in a way to cause inequality among shareholders.

CAPITAL INCREASE AND DECREASE

Article 7- The capital of the Company may be increased or decreased, if necessary, within the framework of the provisions of the Turkish Commercial Code, the Electricity Market Law and Capital Market Legislation. Amendments to the articles of association regarding the reduction of capital are subject to the permission of the Energy Market Regulatory Authority.

The bonus shares issued in capital increases are distributed to the existing shareholders on the date of the increase in proportion to their shares. 

Unless otherwise agreed in the capital increases to be made, Class A shares shall be issued in exchange for Class A shares and Class B shares shall be issued in exchange for Class B shares.

In the initial public offering of the Company's shares, the board of directors is authorized to issue all shares to be issued within the scope of the capital increase by restricting the rights of all existing shareholders to purchase new shares from Group B and to offer all of these shares to the public.

After the initial public offering of the Company's shares, the board of directors is authorized to issue all shares to be issued within the scope of the increase from group B only if expressly authorized by the general assembly.

TYPE OF SHARE CERTIFICATES

Article 8-  All shares of the Company other than those traded on the stock exchange in accordance with the capital markets legislation are registered shares. The Company may not issue bearer share certificates except those to be issued for trading on the stock exchange. In the event that the Company is included within the scope of the Capital Markets Law by offering its share certificates to the public and has switched to the registered capital system, the Company may increase its capital by issuing share certificates up to the amount of registered capital whenever the Board of Directors deems necessary.

In the event that the General Assembly or the Board of Directors decides to issue new share certificates, it may issue privileged share certificates or share certificates above their nominal value.

The articles of association may be amended to grant privileges to certain shares in accordance with the provisions of the Turkish Commercial Code.

TRANSFER OF SHARES OR SHARE CERTIFICATES

Article 9- The transfer of share certificates is subject to the provisions of the Turkish Commercial Code, Capital Market Law, Electricity Market Law and the relevant legislation issued pursuant to these laws. The transfer of registered share certificates shall be realized by endorsement and delivery, provided that approval is obtained. The transfer shall be recorded in the share ledger and shall also be recorded on the share certificate.

Pursuant to Article 57 of the Electricity Market Licensing Regulation, share transfers or other transactions resulting therefrom, pledging the shares of the legal entities holding such licenses, pledging accounts of such legal entities and granting sureties are subject to the approval of the Energy Market Regulatory Authority each time and are carried out within the framework of the principles and procedures specified in the relevant Regulation and capital market legislation.

In the event that the Company buys back its own shares, the Company acts in accordance with the capital markets legislation and other relevant legislation and necessary material event disclosures are made.

BOARD OF DIRECTORS

Article 10- The affairs and administration of the Company shall be carried out by a Board of Directors consisting of at least five and at most nine members to be elected by the General Assembly in accordance with the provisions of the Turkish Commercial Code and the Capital Markets Law and in compliance with the conditions specified in the Turkish Commercial Code and the capital markets legislation. 

Board members are not required to be shareholders. Legal entities may be elected to the board of directors. If a legal entity is elected as a member of the board of directors, only one real person designated by the legal entity on behalf of the legal entity shall be registered and announced together with the legal entity; in addition, the registration and announcement shall be announced on the company's website. Only the person so registered may attend and vote on behalf of the legal entity.

Provided that the capital represented by Class A shares continues to represent at least 30% of the issued capital of the Company, two members of the board of directors if the board of directors consists of five members, three members if the board of directors consists of six or seven members, and four members if the board of directors consists of eight or nine members, shall be elected among the candidates nominated by the shareholders holding the majority of the capital represented by Class A shares. The members of the Board of Directors to be elected among the candidates nominated by the shareholders holding the majority of the capital represented by the aforementioned Group A shares shall be members other than the independent members specified in the corporate governance principles of the Capital Markets Board. 

In the event that the capital represented by Class A shares does not continue to represent at least 30% of the issued capital of the Company, the above-mentioned privilege to nominate candidates to the board of directors will automatically cease to exist as of the moment the legal transaction giving rise to the aforementioned situation is realized. Furthermore, in the first general assembly meeting to be held upon the realization of this situation, these articles of association will be amended and share groups and references to share groups will be removed. 

A sufficient number of independent board members are elected to the board of directors by the general assembly within the framework of the principles regarding the independence of board members set forth in the corporate governance principles of the Capital Markets Board. Independent members must fulfill the conditions stipulated in the Capital Markets Board's regulations on corporate governance.

TERM OF OFFICE AND DISMISSAL OF BOARD MEMBERS

Article 11- Members of the Board of Directors may be elected for a maximum of three years. Board members whose term of office expires may be re-elected. 

Regarding the terms of office of the independent members of the Board of Directors, the regulations of the Capital Markets Board on corporate governance and the provisions of these Articles of Association shall be complied with.

If deemed necessary, the General Assembly may dismiss the members of the Board of Directors at any time.

In the event that one of the memberships becomes vacant for any reason or an independent member of the Board of Directors loses his/her independence, an appointment is made in accordance with the provisions of the Turkish Commercial Code and capital markets legislation and submitted to the approval of the first subsequent general assembly. The member whose election is approved by the General Assembly shall complete the remaining term of office of the member he/she was elected to replace. In the event of a vacancy, in place of the member of the board of directors elected by nomination of the shareholders holding the majority of the capital represented by Class A shares, the candidate jointly proposed by all of the members of the board of directors who continue to hold office among the members of the board of directors elected by nomination of the shareholders holding the majority of the capital represented by Class A shares shall be appointed with the approval of the board of directors.

The Board of Directors may conclude contracts and other transactions exceeding its term of office.

MEETINGS OF THE BOARD OF DIRECTORS AND MINUTES OF MEETINGS AND RESOLUTIONS

Article 12- The provisions of the Turkish Commercial Code and the capital markets legislation shall apply with respect to meeting and resolution quorums at the meetings of the Board of Directors. 

Pursuant to the provisions of the Turkish Commercial Code, if none of the members of the board of directors requests a meeting to be held, and provided that the written approval of a sufficient number of members of the board of directors as stipulated in the Turkish Commercial Code, capital markets legislation and these articles of association is obtained for the proposal of one of the members of the board of directors written in the form of a resolution on a specific issue, the board of directors may take a decision.

Those who have the right to attend the meetings of the Board of Directors of the Company may also attend these meetings electronically in accordance with Article 1527 of the Turkish Commercial Code. Pursuant to the provisions of the Communiqué on the Meetings to be held in Electronic Environment in Commercial Companies other than the General Assemblies of Joint Stock Companies, the Company may establish an Electronic Meeting System that will enable the right holders to participate and vote in these meetings electronically, or may purchase services from the systems established for this purpose. In the meetings to be held, it is ensured that the right holders can exercise their rights specified in the relevant legislation through the system established pursuant to this provision of the articles of association of the company or through the system from which support services will be procured, within the framework specified in the provisions of the Communiqué on Meetings to be Held Electronically in Commercial Companies other than the General Assemblies of Joint Stock Companies.

REPRESENTATION AND BINDING OF THE COMPANY

Article 13- The management and representation of the Company against outsiders belongs to the Board of Directors. 

The Board of Directors performs the duties assigned to it pursuant to the Turkish Commercial Code, Capital Markets Law, other relevant legislation and these Articles of Association.

In order for all kinds of documents and agreements to be issued on behalf of the Company and to put the Company under commitment to be valid, they must bear the signatures of the persons authorized to represent and bind the Company under the Company's title in accordance with Article 373 of the Turkish Commercial Code by a resolution of the Board of Directors. The Board of Directors is authorized to determine the persons authorized to sign on behalf of the Company and the limits of their signature authority. Pursuant to Article 370/2 of the Turkish Commercial Code, without prejudice to the duties and authorities that are not transferable by law, the Board of Directors may, upon a resolution, delegate the authority to represent the Company to one of the members of the Board of Directors with a single signature or to one or more executive directors or to third parties as managers. At least one member of the Board of Directors must be authorized to represent. Unless the decision indicating the persons authorized to represent and their representation forms is registered and announced in the trade registry, the transfer of representation authority shall not be valid. The limitation of the power of representation shall not be effective against third parties in good faith; however, the registered and announced limitations regarding the exclusive or joint exercise of the power of representation only for the affairs of the head office or a branch office shall be valid. The provisions of Articles 371, 374 and 375 of the Turkish Commercial Code are reserved. 

The board of directors is authorized to delegate its management powers and responsibilities, in whole or in part, to one or more members of the board of directors or to a third party in accordance with an internal directive to be issued within the framework of Article 367 of the Turkish Commercial Code. The authorizations of third parties to whom management authority is delegated in this manner shall be valid after the term of office of the board of directors is completed, until the new board of directors delegates authority in the same matter.

ATTENDANCE FEE AND REMUNERATION OF BOARD MEMBERS

Article 14- Pursuant to Article 394 of the Turkish Commercial Code, the members of the Board of Directors may be paid attendance fees, salaries, bonuses, premiums and shares from the annual profit, provided that these are determined by a resolution of the General Assembly.

The provisions of the Capital Markets Law and related legislation regarding the remuneration of independent board members are reserved.

DUTIES AND AUTHORITIES OF THE BOARD OF DIRECTORS AND COMMITTEES

Article 15- The Board of Directors is authorized to take decisions on all kinds of business and transactions required within the scope of the purpose and activities of the Company, except for those that are left to the authority of the General Assembly pursuant to the Turkish Commercial Code and these Articles of Association. 

The provisions of the relevant legislation shall apply to the formation, duties and working principles of the committees that the Board of Directors is obliged to establish within the scope of the Capital Markets Law, the regulations of the Capital Markets Board regarding corporate governance and the Turkish Commercial Code and the relevant legislation, and their relations with the Board of Directors. In order to ensure that the board of directors fulfills its duties and responsibilities in a healthy manner, the board of directors establishes committees including the Early Detection of Risk Committee, Audit Committee, Corporate Governance Committee, Nomination Committee and Remuneration Committee, as well as other committees required by law or deemed appropriate by the board of directors.

However, if a separate Nomination Committee and Remuneration Committee cannot be established due to the structure of the Board of Directors, the Corporate Governance Committee fulfills the duties of these committees. The formation of the committees, their duties, working principles and the members of the committees are determined and disclosed to the public by the Board of Directors in accordance with the provisions of the Turkish Commercial Code, Capital Markets Law, Capital Markets Board's regulations on corporate governance and other relevant legislation. All members of the Audit Committee and the chairmen of the other committees must be elected among the independent board members.

INDEPENDENT AUDIT

Article 16- The provisions of the Turkish Commercial Code, the Capital Markets Law, the Electricity Market Law and the provisions of the relevant legislation shall apply with respect to the audit of the Company and other matters stipulated in the legislation.

GENERAL ASSEMBLY AND MEETINGS

Article 17- The General Assembly of the Company convenes in ordinary and extraordinary meetings.

The following principles shall be applied in the said general assembly meetings:

a.         Invitation Form: Notifications regarding general assembly meetings are made in accordance with the provisions of the Turkish Commercial Code and capital markets legislation. In addition to the procedures stipulated in the legislation, the announcement of the general assembly meeting shall be made at least three weeks prior to the date of the general assembly meeting, excluding the announcement and meeting days, by using all means of communication including electronic communication. The said announcement shall be published on the Company's website, Public Disclosure Platform and other places determined by the Capital Markets Board and in the Turkish Trade Registry Gazette. In addition to the notifications and disclosures that the Company is required to make pursuant to the legislation, the issues determined by the corporate governance regulations of the Capital Markets Board are announced to the shareholders in a conspicuous manner on the Company's website together with the announcement of the general assembly meeting.

b.         Meeting Time Ordinary general assembly meetings shall be held within three months following the end of the relevant accounting period of the Company and at least once a year. Extraordinary General Assemblies are convened when and where required by the Company's business.

c.         Meeting Location: General Assembly meetings may be held at the Company's headquarters or at a convenient place in the city where the headquarters is located or, in accordance with the decision to be taken by the Company's Board of Directors, only in any of the provinces of Denizli, Muğla, İstanbul or İzmir.

d.         Voting and Proxy Designation: Each share has one vote. When voting, the provisions of the Turkish Commercial Code, Capital Markets Law and other relevant legislation shall be complied with. Shareholders may have themselves represented at the General Assembly meetings by other shareholders or by proxy appointed from outside. Proxies who are shareholders in the Company are authorized to use the votes of the shareholders they represent in addition to their own votes. The regulations of the Capital Markets Board regarding proxy voting shall be complied with. Shares are indivisible against the Company. If there is more than one holder of a share, they may exercise their rights against the Company only through a jointly appointed proxy. Unless they appoint a joint attorney, notices to be served by the Company to one of them shall be valid for all of them.

e.         Conduct of Deliberations and Quorum: In the general assembly meetings of the Company, the agenda determined within the framework of the Turkish Commercial Code and capital markets legislation is discussed and necessary decisions are taken. Without prejudice to Article 438 of the Turkish Commercial Code and Article 29 of the Capital Markets Law, matters not included in the agenda cannot be discussed and resolved. In the general assembly meetings, the provisions of the capital markets legislation and the regulations of the Capital Markets Board's corporate governance principles and the provisions of the Turkish Commercial Code shall be complied with in the meeting and decision quorums. Provided that the quorums stipulated in the Capital Markets Law and the Turkish Commercial Code are maintained, the affirmative vote of the shareholders holding the majority of the capital represented by Group A shares is also required for the General Assembly of the Company to take decisions on the following matters and amendments to the Articles of Association falling within the scope of these matters: 

- Amendment of the articles of association, except for capital increases to be made according to the registered capital system.

- Changing the company's field of activity, entering into new lines of business or abandoning existing lines of business.

- Capital increase, liquidation, dissolution, termination, capital decrease, change of type of the Company, except for capital increases to be made according to the registered capital system.

- Bankruptcy, concordat, application for financial restructuring within the scope of Article 309/m of the Execution and Bankruptcy Law No. 2004.

- Transfer of all or part of the company's commercial enterprise.

In the event that the capital represented by Class A shares does not continue to represent at least 30% of the issued capital of the Company, the requirement for the affirmative vote of the shareholders holding the majority of the capital represented by Class A shares in relation to the aforementioned matters will automatically cease to exist as soon as the legal transaction giving rise to the aforementioned situation is realized. In addition, upon the realization of this situation, this article of the articles of association will be amended and the relevant provisions will be removed at the first general assembly meeting to be held. 

f.          Procedure of Meetings and Internal Regulations: The functioning of the general assembly meetings shall be regulated by an internal directive. The provisions of the Turkish Commercial Code, capital markets legislation, these Articles of Association and the Company's Internal Directive on the Working Principles and Procedures of the General Assembly shall apply to the General Assembly meetings.

g.         Electronic General Assembly: Those who have the right to attend the general assembly meetings of the Company may also attend these meetings electronically in accordance with Article 1527 of the Turkish Commercial Code. Pursuant to the provisions of the Regulation on General Assembly Meetings of Joint Stock Companies to be held in Electronic Environment, the Company may establish an electronic general assembly system that will enable the right holders to participate in the general assembly meetings electronically, to express their opinions, to make suggestions and to vote, or may benefit from the systems established for this purpose by purchasing services. In all general assembly meetings to be held, it is ensured that the right holders and their representatives can exercise their rights specified in the provisions of the Regulation on General Assemblies to be held in Electronic Environment in Joint Stock Companies through the system established pursuant to this provision of the Articles of Association.