ASELSAN Elektronik Sanayi ve Ticaret Anonim Sirketi : BOD Report 2023-12

Report of The Board of Directors

31 December 2023

Table of Contents

Page No

Page No

• 4 Vision - Mission

• 5 Principles of Preparation

• 5 Company Information and Organizational Structure

• 7 The Company's Shareholder Structure

• 10 Main Factors That Affect the Performance,

  Investment and Dividend Policy of the Company

• 11 Enterprise Risk Management

• 14 Financial Information of the Company

• 17 Changes in the Legislation Which Would

  Have Significant Impact on the Activities of

  the Company

• 18 Compliance Report on Corporate Governance Principles and Sustainability Principles Compliance Framework Report

• 19 Information Regarding the Lawsuits of the Group

• 19 Information Regarding the Transactions Made within the Reporting Period

Vision-Mission

Vision

To be a reliable, competitively preferred, environment-friendly and human conscious technology firm which preserves its sustainable growth in the global market via the values created for stakeholders, as well as serving its establishment purposes.

Mission

By focusing primarily on the needs of the Turkish Armed Forces; to provide high-value-added, innovative and reliable products and solutions to both local and foreign customers in the fields of electronic technologies and system integration; continuing activities in line with global targets as well as increasing brand awareness and contributing to the technological independence of Türkiye.

2- Principles of Preparation

The annual report of the Board of Directors is prepared on the basis of Communiqué Series II, No: 14.1 "Principles of Financial

Reporting in Capital Markets" dated 13 June 2013.

The report comprises the events took place during the period 1 January - 31 December 2023. The title of the main shareholder in the report is ASELSAN Elektronik Sanayi ve Ticaret A.Ş and will be referred as "the Company" in the accompanying notes.

The Company's consolidated subsidiaries are ASELSAN Baku ("ASELSAN Baku"), Mikroelektronik Ar-Ge Tasarım ve Ticaret Ltd. Co. ("Mikro AR- GE"), ASELSANNET Elektronik ve Haberleşme Sistemleri Sanayi Ticaret İnşaat ve Taahhüt Ltd. Co. ("ASELSANNET"), ASELSAN Malaysia Sdn. Bhd. ("ASELSAN Malaysia"), Aselsan Konya Silah Sistemleri Anonim Şirketi ("ASELSAN KONYA"), BITES Savunma Havacılık ve Uzay Teknolojileri Yazılım A.Ş. ("BITES"), Aselsan Global Dış Ticaret ve Pazarlama A.Ş. ("ASELSAN GLOBAL"), Aselsan Sivas Hassas Optik San. Tic. A.Ş. ("ASELSAN Optik"), ASELSAN UKRAINE LLC. ("ASELSAN Ukraine") and ULAK Haberleşme A.Ş. ("ULAK").

Five branch offices; Aselsan Elektronik Sanayi ve Ticaret Anonim Şirketi EP Co. (''ASELSAN South Africa''), ASELSAN Balkans (''ASELSAN Balkans'') and ASELSAN Kıbrıs İleri Teknolojiler Araştırma Merkezi ("ASELSAN N.Cyprus") and ASELSAN Elektronik Sanayi ve Ticaret A.Ş. Katar ("ASELSAN Qatar") and ASELSAN Elektronik Sanayi ve Ticaret A.Ş. Poland ("ASELSAN Poland") located in Republic of South Africa, Macedonia, Turkish Republic of Northern Cyprus ("TRNC"), Qatar and Poland respectively. The branches are also included in the consolidated financial statements.

3- Company Information and Organizational

Structure

The Company is a leading defense industry company developing advanced technology system solutions within land, air, naval and space platforms.

The Company, being an establishment of Turkish Armed Forces Foundation ("TSKGV"), stands in aposition of a technology center within the fields of design, development, manufacturing, system integration, modernization and after sales services of military and civil communication systems, avionics systems, electronic warfare and intelligence systems, radar systems, command and control systems, naval warfare systems, security systems, transportation systems, energy systems, traffic and automation systems, medical systems, electro-optic systems and products.

The Company has been organized under five divisions with regard to production and engineering requirements of projects. These divisions comprise Communication and Information Technologies Vice Presidency (''HBT''), Microelectronics, Guidance & Electro- Optics Vice Presidency (''MGEO''), Defence Systems Technologies Vice Presidency (''SST''),

Radar and Electronic Warfare Systems Vice Presidency (''REHİS''), and Transportation, Security, Energy, Automation and Medical Systems Vice Presidency (''UGES'').

In addition to the Vice Presidencies above, the Company organization also includes six Vice Presidencies to fulfil the planning, monitoring and analyzing functions: Financial Management Vice Presidency, Corporate Management Vice Presidency, Technology and Strategy Management Vice Presidency, Business Development and Marketing Vice Presidency and Supply Chain Management Vice Presidency. In addition to these, there are also Legal Affairs and Office of the Private Secretary.

The Internal Audit Department and Board of Directors Planning and Coordination Department have been established under the Board of Directors.

The Company maintains production and engineering operations in Ankara, Macunköy, Akyurt and Gölbaşı campuses and engineering operations in METU Teknokent, Hacettepe Teknokent, Teknopark İstanbul, Gebze Technology Development Zone and Başkent Organize Sanayi Bölgesi. Headquarters is located in Ankara Macunköy.

The Company's international, nation-wide and sectoral rankings are summarized in the table below:

Top 500 Companies

2023

40

31

Sustainability Index Corporate Management Index BIST Top 30 Index

BIST Top 100 Market Value Ranking

• No Ranking

• No Ranking

  2023

• No Ranking

7

9

Top 1000 Exporters

2023

122

366

Most Valuable Brands Top 100

2023

27

20

Ideal Employers (Engineering and IT) 100 Companies

2022

1

1

Commercial title and trade registration number of the company and contact information pertaining to its headquarters, branches and its website addresses are shown below:

Company

Type

Country / City

Address

Telephone / Fax

Web Site

ASELSAN Elektronik Sanayi ve Ticaret A.Ş.

Head Quarters

Mehmet Akif Ersoy Mahallesi İstiklal Marşı Caddesi No:16 06200

Türkiye

Yenimahalle/Ankara Trade Registery: 31177

Tel: [phone]

Fax: [phone]

www.aselsan.com

Rep. Of South Africa

ASELSAN South Africa

Branch

Pretoria

Summit Place Office Park Building 2, First Floor 221 Garsfontein Road Menlyn, Pretoria, 0181

Tel: [phone]

Fax: [phone]

--

Macedonia

ASELSAN Balkans

Branch

Ankarska 29A, Skopje

--

--

Skopje

ASELSAN Cyprus Advanced Tech. Research CenterBranch

Güzelyurt

TRNC

Middle East Technical University North Cyprus Campus ODTÜ KALTEV AR-GE Building No: E-19 99738 Kalkanlı/Güzelyurt

--

--ASELSAN Qatar

Branch

Qatar

Doha

Qatar Science & Technology Park Free Zone, Street No: 2322, Zone No: 51, Unit No: 107, Building No:153, Building Name: Tech1

Tel: + 974 444 11 975

--ASELSAN Poland Branch

Poland

Branch

Skylight Building, 5 th Floor, Złota 59, 00-120 Warszawa

--

--

Warszawa

Suudi Arabia

ASELSAN Saudi Arabia Office

Office

Riyadh Business Gate, Building: Zone D-3, GF, Unit 1

--

--

RiyadASELSAN Pakistan Office

Office

İslamabad

Pakistan

Serena Business Complex 3 rd Level, Office No:3 Sector G-5/1 Ramna Suhrwardy İslamabad

ASELSAN Technologies (BAE)

Office

Abu Dhabi

BAE

Office No. 04 30 th Floor- Tamouh Tower, Building 12 - Marina Square - Al Reem Island. Abu Dhabi

ASELSAN Latin America SpA

Office

Santiago

Chile

Don Carlos 2939, Oficina 803, Las Condes, Región Metropolitana, Santiago de Chile

------------

4- The Company's Shareholder Structure

Registered capital ceiling of the Company is TL 10.000.000.000 (TL ten billion). The nominal capital of the Company is TL 4.560.000.000

(TLfour billion five hundred sixty million) and is divided into 4.560.000.000 (TLfour billion five hundred sixty million) shares, each having a nominal value of 1 TL.

2.421.818.182 (two billion four hundred twenty one million eight hundred eighteen thousand one hundred eighty two) of the shares are Group A shares and 2.138.181.818 (two billion one hundred thirty eight million one hundred eighty one thousand eight hundred eighteen) of the shares are Group B Shares. All shares are in the name of the holder.

Group A shares are nominative preferred shares and 6 of the Members of the Board of Directors are elected among the Group A preferred shareholders or among the candidates presented by them.

Share distribution table of the Shareholders is presented below:

%74,2

%25,8

Partners	TL Thousand
Turkish Armed Forces Foundation (TSKGV)	3.383.302
Quoted on BIST (Free Float)	1.176.698
Paid-in Capital	4.560.000
Inlation Adjusted Capital	19.919.232

a) Members of the Board of Directors and Senior Executives

Within the framework of the provisions of the Company's Articles of Association, the Board of Directors consists of total 9 members comprising of 6 members to be elected from preferred shareholders or candidates nominated by group A and 3 independent members to be elected under Capital Markets Board (CMB) regulations. Information regarding the Members of the Board of Directors and Senior Executives as of publishing date of the report are as follows:

Members Of The Board Of Directors And Senior Executives

List NoName and SurnamePosition

Positions In Other Company's

Date of First Assignment

1.

Ercümend ARVAS

Member Of The Board Of Directors of Kardemir Sanayi Ve Ticaret A.Ş., Vice Chairman of The Board of Directors ofChairman of the Board

22 September 2023

Karçel A.Ş.

2.

Alpaslan KAVAKLIOĞLU

Deputy Chairman of the Board

Deputy Minister of Ministry of Defense, Member of The Board of Directors of Turkish Parliamentarians Union, Chairman of The Board of Directors of Asfat

26 April 2019

3.

İsmail ARI

Ozyegin University Faculty Member, Member of The Board of Directors of Tübitak Sage, Member of The Board ofMember

22 September 2023

Directors of University-Industry Collaboration Centers Platform of Türkiye

4.

Bekir BAYRAKDAR

Member

5.

Yavuz ÇELİK

Member / Managing MemberCommissioner of Revenue Administration --

22 September 2023

19 June 2020

6.

Salih KUL

Member

--

26 April 2019

7.

8.

Mustafa Murat ŞEKER Ebru TÜMER

Member / Managing Member

Vice President At Presidency of Defence Industries, Vice Chairman of Ankara Aerospace Industry Zone, Vice Chairman of The Board of Directors of SSTEK A.Ş.

29 June 2021

Member

Professor in Gebze Technical University

22 September 2023

9.

Ahmet YOZGATLIGİL

Member

Deputy Minister of Ministry of Industry And Technology, Member of The Board of Directors of Bilişim Vadisi, Member of The Board of Directors of Saha Istanbul, Member of The Board of Directors of Izmir Biomedicine And Genome Center

22 September 2023

10.

Ahmet AKYOL

President and CEO

Member of The Board of Directors of TÜBİTAK Sage, Member of NATO Science And Technology Organization Set Panel, Member of The Board of Directors of BARQ, Vice Chairman of The Board of Directors of IGG-Aselsan Integrated Systems LLC., Member of The Board of Directors of SASAD, Member of The Board of Directors of Saha Istanbul, Chairman of TOBB (The Union of Chambers And Commodity Exchanges of Türkiye) Defense Industry Council, Member of The Board of Turkish Defence And Aerospace Industry Exporters' Database, Member of The Board of

1 July 2022

Directors of Istanbul Finans Ve Teknoloji Üssü A.Ş.

11.

Yunus POYRAZ

Vice President (Financial Management)

12.

Mehmet ARTAR

Vice President (Corporate Management)

----6 March 2023

18 July 2023

13.

Nuh YILMAZ

Vice President (Supply Chain Management)

Vice Chairman of The The Board of Dasal Havacılık Teknolojileri A.Ş, Chairman of The Board of The Directors of Aselsan Konya Silah Sistemleri A.Ş., Member of The Board of Directors of Bites Savunma Havacılık ve Uzay

1 April 2021

Teknolojileri Yazılım Elektronik Ticaret A.Ş.

14.

Taha YÜCEL

Vice President (Technology & Strategy

Chairman of The Board of Information Security Association, Member of The Board of Directors of ÜRTEMM, Member of The Board of Directors of Teknohab

1 July 2022

Management)

15.

Özgür Taylan SARI

Vice President (Business Development and

Chairman of The Board of The Directors of Aselsan Qatar

17 August 2023

Marketing)

Vice President and President

16.

Mustafa YAMAN

Business SectorMember of The Board of Directors of Ulak A.Ş., Chairman of The Board of Managers of Aselsannet, Chairman of The Board of The Directors of Communication Technologies Cluster, Chairman of The Board of The Directors of Aselsan

1 July 2022

(HBT Sector President) Vice President and President

Bakü

17.

Murat KARATAŞ *

Business Sector

Member of The Board of Directors of Aselsan Middle East

22 January 2024

(MGEO Sector President) Vice President and PresidentChairman of The Board of Directors of Aselsan Bilkent Mikronano A.Ş., Chairman of The Board of Managers of

18.

M. Mustafa AKKUL

Business Sector

Mikroelektronik Araştırma-Geliştirme Tasarım ve Tic. Ltd. Şti., Member of The Board of Directors of Tüyar

1 July 2022

(REHİS Sector President)

Vice President and President

19.

Zekeriyya ŞAHİN *

Business Sector

(SST Sector President) Vice President and President

Member of The Board of Directors of IGG-Aselsan Integrated Systems LLC., Chairman of The Board of Directors of Bites Savunma Havacılık Ve Uzay Teknolojileri Yazılım Elektronik A.Ş., Member of The Board of Directors of Kazakhstan Aselsan Engineering

22 January 2024

20.

Mehmet ÇELİK

Business Sector (UGES Sector President)

Member of The Presidency's Council of Science, Technology And Innovation Policies, Principle Member of Turkish Academy of Sciences, Member of The Board of Managers of Aselsannet, Chairman of The Board of Directors of

1 July 2022

Aselsan Sivas Hassas Optik A.Ş., Teaching Professor in KTO Karatay University Mechanical Engineering Department

21.

Mürsel Ali KAPLAN

President of Internal Audit

--

6 March 2023

*As per our Board of Director's resolution as on 19th January 2024; Murat KARATAŞ was appointed as Vice President of Microelectronics, Guidance and Electro-Optics (MGEO) Sector, Zekeriyya ŞAHİN was appointed as Vice President of Defense Systems Technologies (SST) Sector.

The Members of the Board of Directors are entitled with the authorizations stipulated in the Turkish Code of Commerce ("TCC") and in article 13 of the Articles of Association of the Company.

Entitled shareholders, members of the board of directors, senior executives and to their spouses as well as relatives up to second degree are not authorized to perform transactions, which may cause conflict of interest or competition with the Company and/or subsidiaries. There is not any ban on trading for board members with the Company, which they performed on their own or on behalf of a third party. There is no operation regarding the non-compete obligation by the members of the board.

The controls are carried out by the Internal Audit Presidency ("IAP") and Audit Committee within the parent company in order to minimize the substantial error risk on the financial statements of the Group. IAP and Audit Committee carry out their duties independent from each other but within the guidance of common objectives andtargets, with the aim of observing an internal control system, which provides required controls in matters such as the reliability of the financial reporting system, the efficiency of the activities in order to eliminate the operational risks and compliance with the law. Furthermore, the efficiency and sufficiency of the internal control are supported with the directives in effect.

Total Amount of the Financial Benefits Given to Senior Executives:

The total amount of the remuneration and similar benefits paid to the senior executives by the Company as for the period that ended on 31 December 2023 is approximately TL 209.083 Thousand (Of the amount paid, salary and benefit payments comprise the most).

b) Information on Business Partnerships,

Associates, Subsidiaries, Joint Ventures and Branches

The Company's consolidated subsidiaries and branches are as follows: