Article 1: Establishment

These working principles (‘Working Principles’) set out the scope of duties and working principles of the Investment Committee (‘Committee’) of Çates Elektrik Üretim A.Ş. (‘Company’).

The Committee was established by the decision of the Board of Directors of the Company (‘Board of Directors’) within the framework of the relevant provisions of the Company's Articles of Association (‘Articles of Association’).

Article 2: Purpose and Scope

The purpose of the Committee is to evaluate, submit for the approval of the Board of Directors and carry out the follow-up processes of investment and business development projects over USD 1 million, which are in line with the purpose and subject of the Company's Articles of Association.

Article 3: Definitions

‘General Manager’ refers to the general manager of the Company.

‘Total Asset Value’ means the total asset value, including cash, as per the most recent financial statements of the Company.

‘Investment Criteria’ refers to the investment criteria set out in Article 7 of these Terms and Conditions.

‘Investment Project’ refers to capital expenditures, investment and business development projects to be made with Company resources for the acquisition of long-term assets or improvement of existing assets in order to increase the efficiency or capacity of the Company, its subsidiaries or affiliates.

Article 4: Establishment and Membership

The Committee consists of at least three members.

Committee members are determined by the Board of Directors. The term of office shall not exceed three years and committee members whose term of office expires may be reappointed.

All kinds of resources and support required for the Committee to fulfil its duties are provided by the Board of Directors. The Committee may invite the managers and consultants it deems necessary to its meetings and receive their opinions. The Committee shall benefit from the opinions of experts and consultants when necessary.

Article 5: Meetings

The Committee convenes quarterly. In cases deemed necessary for the efficiency of the activities, it may convene more frequently at the Company headquarters or at another place where the committee members are present. The timing of the Committee meetings shall be compatible with the timing of the Board of Directors meetings as much as possible.

The Committee convenes with the presence of the absolute majority of its members and takes decisions with the majority of the members present at the meeting.

The Committee puts all its activities in writing, keeps a record of them and reports to the Board of Directors, including information on the Committee's activities and the results of the Committee meetings. The Committee immediately notifies the Board of Directors in writing about the determinations and suggestions related to its duties and responsibilities. Minutes of the Committee meetings are approved by the Committee members and kept together with the Committee decisions. Minutes are shared with the members before the next meeting.

The Company's financial affairs director or a member appointed by the committee assumes the responsibility of Rapporteur reporting to the Committee Chairman. The Rapporteur submits the meeting agenda and related documents to the Committee members before the meeting. He/she ensures the attendance of the persons requested by the Chairman to attend the meeting. He/she writes the minutes and decisions of the meeting and ensures their distribution to the relevant parties.

The secretariat of the Board of Directors is responsible for the administrative organisation of the meetings, the distribution of the minutes of the meetings to the members of the Board of Directors and the storage of the decisions in the decision book.

Article 6: Reporting and Investment Decision

The Investment Committee evaluates the Investment Projects to be carried out within the Company, its subsidiaries or affiliates and reports its opinions on the relevant investment to the Board of Directors. The relevant report is prepared by taking into account project basic and feasibility analyses, project financing analyses, budget approval and Investment Criteria.

The Board of Directors is authorised to take investment decisions regarding Investment Projects. However, the Board of Directors cannot take an investment decision on the relevant Investment Project without the opinion of the Investment Committee.

Article 7: Investment Criteria

The Investment Committee evaluates the Investment Projects to be made within the Company, its subsidiaries or affiliates according to certain Investment Criteria and reports its opinions on the relevant investment to the Board of Directors. The relevant reporting is prepared by taking into account project basic and feasibility analyses, project financing analyses, budget approval and Investment Criteria. The board of directors is authorised to take investment decisions regarding investment projects. However, the Board of Directors cannot take an investment decision without the opinion of the Investment Committee regarding the relevant investment project.

Investment Projects must be realised in accordance with the following criteria:

·        Not making investments that are incompatible with the Company's sustainability, environment, occupational health and safety, governance and social policies;

·        Not to conflict with obligations under existing contracts, including loan agreements;

·        The internal rate of return (equity IRR) of any asset under construction, development and/or development is not less than 10% in USD terms;

·        The investment amount of any asset is not more than 20% of the total asset value, except for investments that are considered to have a strategic and significant impact on the Company's long-term policies and growth plans;

·        The total investment amount of assets under construction and/or under construction is not more than 25% of the total asset value;

·        preventing concentration of counterparty risk by ensuring that revenues from a single customer do not exceed 30 per cent of total revenues

·        Making assessments by considering environmental, social and governance (ESG) criteria in all our distribution activities and new investments within the scope of combating climate change and ensuring safe and efficient energy supply;

·        Identifying, periodically monitoring and managing ESG risks within the framework of sustainability approach;

·        Ensuring the direct integration of our sustainability approach into investment decisions and all our commercial activities;

·        Not investing in projects that have a negative impact on UNESCO World Heritage sites or areas designated for nature conservation and,

·        Not investing in projects involving child labour and forced labour.

Article 8: Amendments

Amendments to the Working Principles of the Investment Committee are subject to the approval of the Board of Directors.