Communiqué on Corporate Governance

II-17.1 COMMUNIQUÉ ON CORPORATE GOVERNANCE
(Published in the Official Gazette edition 28871 on 03.01.2014) List of Amendments:

1. Communiqué (II-17.1.a) Amending Communiqué (II-17.1) on Corporate Governance,
   published in the Official Gazette edition 31262 on 02.10.2020 FIRST CHAPTER Purpose, Scope, Legal Basis and Definitions Purpose and scope
   ARTICLE 1 – (1) The purpose and scope of this Communiqué is to determine corporate
   governance principles as well as principles and procedures on related party transactions, which shall be applied by corporations. (2) Corporations set forth below shall not be subject to the provisions in the Second
   Chapter of this Communiqué regarding corporate governance principles:
   a) Publicly held corporations whose shares are not traded on the exchange. b) Corporations whose shares are traded on markets, market places or platforms other than National Market, Second National Market or Collective Products Market. c) Corporations whose shares will be traded on markets, market places or platforms other than National Market, Second National Market or Collective Products Market, from among those which have applied to the Board for offering their shares to public and/or being admitted to the trading on the exchange for the first time. ç) Corporations deemed to be residing abroad in accordance with the Decree numbered 32 regarding Protection of the Value of Turkish Currency come into force by the Cabinet Decree dated 7 August 1989 and numbered 89/14391. (3) Corporations set forth in subparagraphs (a) and (b) of the second paragraph shall not be subject to provisions in Article 11 of this Communiqué regarding the section of investor relations department. (4) Corporations set forth in subparagraph (a) of the second paragraph shall not be subject to provisions in the Third Chapter regarding the related party transactions and in Article 12 regarding securities, pledges, mortgages and sureties. (5) (Added: OG 02.10.2020 – 31262) Corporations, other than those listed under the second paragraph are subject to sustainability principles, and corporate governance compliance reports of such corporations shall include explanations on the sustainability principles compliance outline.

Legal Basis
ARTICLE 2 – (1) This Communiqué is prepared in reliance upon Article 17 of the
Capital Markets Law dated 6 December 2012 and numbered 6362.
Definitions and Abbreviations
ARTICLE 3 – (1) For the purpose of this Communiqué, following definitions and
abbreviations shall apply; a) Subsidiaries: Subsidiaries defined in the Turkish Accounting Standards, b) Bank: Banks defined in the Banking Law dated 19 October 2005 and numbered 5411, c) Exchange: Exchange defined in subparagraph (ç) of the first paragraph of Article 3 of the Law, ç) Financial Institutions: Financial institutions defined in the Banking Law except for the development and investment banks, d) Financial reports: Reports consisting financial statements, annual reports and statements of responsibility, e) Financial statements: A statement of financial position, a statement of profit or loss and other comprehensive income, a statement of cash flows and a statement of changes in equity,, together with their footnotes f) Corporation: Corporations the shares of which are offered to public or are deemed to be offered to public, g) Related party: Related party defined in the Turkish Accounting Standards, ğ) Related party transactions: Related party transactions defined in the Turkish Accounting Standards, h) Joint venture: Joint ventures defined in the Turkish Accounting Standards, ı) Associates: Associates defined in the Turkish Accounting Standards, i) Law: Capital Markets Law dated 6 December 2012 and numbered 6362, j) PDP: Public Disclosure Platform, k) Board: Capital Markets Board, l) CRA: Central Registry Agency m) Common and continuous transactions: Transactions in same qualification of the corporations fulfilled or to be fulfilled at least two times in one year accounting period, within the scope of their ordinary activities either commercial or not.

SECOND CHAPTER
Corporate Governance Principles
Corporate Governance Principles
ARTICLE 4 – (1) Corporate governance principles to be taken as basis by the
corporations are set forth in the annex to this Communiqué.
Implementation of corporate governance principles
ARTICLE 5 – (1) Corporations are liable to implement corporate governance principles
numbered (1.3.1.), (1.3.5.), (1.3.6.), (1.3.9.), (4.2.6.), (4.3.1.), (4.3.2.), (4.3.3.), (4.3.4.), (4.3.5.), (4.3.6.), (4.3.7.), (4.3.8.), (4.5.1.), (4.5.2.), (4.5.3.), (4.5.4.), (4.5.9.), (4.5.10.), (4.5.11.), (4.5.12.), (4.5.13.), (4.6.2.) and (4.6.3.) from among those set forth in the annex to this Communiqué. (2) With respect to designation and supervision of corporate governance principles set forth in the Annex to this Communiqué, which shall be mandatory to apply, corporations, whose shares are traded on National Market, Second National Market and Collective Products Market of the exchange shall be divided into three groups in accordance with their systemic significance considering their market values and the market values of the shares in active circulation. The average of the closing prices in the second session of the last trading days of March, June, September and December and the rates of the shares in active circulation shall be the basis of the calculation of the market price and the price of the shares in active circulation. In cases where different share groups of the same corporation are traded on the exchange, all of such groups shall be taken into consideration. This calculation shall be made by the Board each year in January to re-determine the groups in which the corporations are included and the list shall be published in the Board Bulletin. The numerical thresholds to be used accordingly for grouping are set forth below:
a) First group: Corporations whose average market value is above TRY 3 billion and average market value in actual circulation is above TRY 750 million. b) Second group: Corporations among those excluded from the first group, the average market value of which is above TRY 1 billion and average market value in actual circulation is above TRY 250 million. c) Third group: Corporations among those excluded from the first and second groups, the shares of which are traded on National Market, Second National Market and Collective Products Market. (3) The corporation which is announced by the Board that has risen to an upper group as a result of a change in its market value and/or rate of share in actual circulation shall be subject to corporate governance principles relating to the new group as of the year following the year to which the calculation is relevant. Contrary situation shall not require a change in the corporate governance principles to which the corporation is subject. Compliance with principles relevant to the new group shall be ensured as of the date of the earliest meeting of general assembly following the announcement in the Board Bulletin of the Board decision on inclusion in the new group.

(4) Corporations which have applied to the Board for offering their shares to public and/or being admitted to the trading on the exchange for the first time shall be subject to the liabilities of the corporations in the third group until the list stated in the second paragraph has been announced, and they shall be obliged to ensure compliance as of the date of the earliest meeting of the general assembly following the admission of their shares to trading on the exchange. (5) The third paragraph of the principle numbered (4.3.7.) and the second paragraph of the principle numbered (4.3.8.) shall not be applied for the corporations in the second and the third groups. Any event that the Board does not issue a negative opinion on the candidates for independent member of board of directors shall not mean that the independence of the candidate has been warranted by the Board or the public. (6) It is sufficient that the independence criterion set forth in the subparagraph (d) of the first paragraph of the principle numbered (4.3.6.) is ensured by at least half of the independent members. Exemptions in implementation of corporate governance principles
ARTICLE 6 – (1) The criteria stated under the principle numbered (4.3.4.) regarding the
number of independent board members shall not be applied for the third group corporations, and provided that an application made in relation thereto is accepted by the Board, for joint ventures, with the exception of banks, where management control is shared equally based on a contract, among two real persons or legal entities who, are not related in terms of capital, management or auditing, and who hold in equal rates at least 51 % of capital, independent from each other and where affirmative votes of both parties are required for significant decisions with regard to the corporation. It shall be sufficient for such corporations to have two independent members. (2) Conditional on obtaining the affirmative opinion of the Board, the criteria set forth in subparagraphs (ç) and (g) of the first paragraph of the principle numbered (4.3.6) shall not be required and the principle numbered (4.3.7) regarding the election of these members shall not be applied in respect of the independent members of board of directors of the corporations the main field of activity of which is to use a license or a concession granted by public authorities or institutions either for a temporary or permanent term in for rendering a public service, or of corporations, in which public authorities or institutions have privileged shares and the shares of which are traded on National Market, Second National Market and Collective Products Market. (3) Banks the shares of which are traded on National Market, Second National Market and Collective Products Market shall comply with the principles herein, with respect to the implementation of the principles numbered (4.3.2.), (4.3.3.) and (4.3.4.). a) Number of independent board members may be determined by banks, provided that it is not less than three. Board members who are appointed as an audit committee member within the bank’s organizational structure shall be considered as independent board members under this Communiqué. The Qualifications set forth in the principle numbered (4.3.6) shall not be required and the principle numbered (4.3.7) and (4.3.8) regarding the election of these members shall not be applied in respect of the audit committee members of the banks. b) Qualifications set forth in the principle numbered (4.3.6) shall be required in any case with respect to independent board members who will not be appointed in the audit committee,

and for at least one member in cases where all independent members of board of directors are appointed in the audit committee, and principles numbered (4.3.7) and (4.3.8) shall apply with regard to the election of such independent member or members. (4) Execution by investment companies of transactions stated under the principle numbered (1.3.9) shall be possible without the requirement of approval by the general assembly, even though the majority decision quorum of independent members is not provided. However in this case, the reasoned opposition of the majority of independent members of board of directors shall be disclosed at PDP and the shareholders shall be informed on the matter by an additional agenda item at the earliest meeting of the general assembly to be conducted. (5) In cases where there are reasonable grounds, persons who do not comply with one or some of the independence criteria may be elected by the general assembly as independent members of board of directors, limited to maximum one year of provisional term subject to the consent of the Board. The independence criterion that is not complied with shall be disclosed at PDP together with its ground for non-compliance. Measures to be taken upon breach of the obligation to comply with corporate governance principles
ARTICLE 7 – (1) In cases where the compliance obligation is not performed as set forth
in this Communiqué or within the term granted by the Board, the Board shall be authorized to take decisions providing fulfillment of the compliance liability and conduct the relevant transactions ex officio. (2) Even if a specific time period is not designated or granted for fulfillment of the compliance obligation, the Board shall be authorized to request cautionary injunction exempt from all kinds of guarantee, to file a lawsuit for determination of the illegality of activities breaching compliance obligations or for cancellation of these activities, to request a court decision that will result in the way that leads to the fulfillment of compliance. A compliance proposal involving the transactions required for compliance with corporate governance principles shall be added to the request to be submitted to the court. (3) In cases where, although corporations have the required number of board members, the board of directors or the general assembly does not fulfill the required transactions or take required resolutions in order to ensure compliance with mandatory corporate governance principles, the Board shall grant a term of 30 days to these corporations. In case the transactions required for compliance have not been fulfilled within the granted time period, the Board shall appoint ex officio independent members of board of directors in required number that is necessary for the board of directors to convene and to take resolution in accordance with Article 17 of the Law and to fulfil the independence criterion. Upon consent of the Board, the new board of directors shall make required amendments to the articles of association to provide compliance with mandatory corporate governance principles and shall register these amendments with the trade registry and have them announced. Corporate Governance Principles Compliance Reports
ARTICLE 8 – (1) (As amended: OG 02.10.2020 – 31262) Annual reports shall include
information as to whether or not corporate governance principles set forth in the annex to this Communiqué are implemented, if not, it shall include a reasoned explanation with this regard,

any conflicts of interest that arise due to non-compliance with the principles, and explanations as to whether or not the corporation has plans to change management practices in the future in line with the relevant principles. Annual reports shall also include information as to whether or not sustainability principles are complied with, and if not, a reasoned explanation relating thereto, and explanations on impacts to environmental and social risk management due to non￾compliance. In case there is a significant amendment within the period on these explanations, such amendments shall be included within the interim activity report. (2) Principles as to the content and publication of the Corporate Governance Principles Compliance Reports shall be designated by the Board and the format of the reports shall be announced by the Board. (3) (Added: OG 02.10.2020 – 31262) The implementation of sustainability principles announced by the Board shall be voluntary. Principles with respect to the contents and publication of the sustainability principles compliance outline shall be determined and announced by the Board. THIRD CHAPTER Related Party Transactions Transactions to be conducted with related parties
ARTICLE 9 – (1) Corporations and subsidiaries thereof, prior to initiating transactions
set forth in the second and third paragraphs to be conducted with their related parties shall take a resolution of board of directors designating the principles of the transaction to be conducted. (2) With respect to transactions between corporations and their subsidiaries with their related parties, in cases where, a) In transactions similar to asset and service purchase and transactions involving obligation transfers, the ratio of the transaction amount to total assets as of the latest financial statements disclosed to public, or to revenue as of the latest financial statements disclosed to public or to the value of the corporation to be calculated on the basis of the average of the weighted average of the daily corrected prices of the six-month term prior to the board of directors resolution date, b) In transactions similar to asset and service sale, the ratio of the transaction amount (in case the net book value of the asset is higher, the rate of the net book value) to total assets as of the latest financial statements disclosed to public, or to revenue (in cases that the asset is transferred, leased out or right in rem is established thereon, the rate of profit earned from the asset as of the latest financial statements comparing to the profit of the corporation before the taxation on its ongoing operations) as of the latest financial statements disclosed to public, or to the value of the corporation to be calculated on the basis of the average of the weighted average of the daily corrected prices of the six-month term prior to the board of directors resolution date, is foreseen to be more than 5%, before the transaction it is mandatory to have an appraisal made by an institution designated by the Board. In cases where assets subject to transaction are shares, and the transfer of such shares stock is conducted on the exchange, then a separate appraisal report shall not be required. In lease transactions and/or other transactions in which cash flows can be isolated with certainty, actual net value of the total lease income/expense

and/or other income/expense calculated in accordance with the reduced cash flow method shall be taken into consideration as the transaction amount. In cases where, the ratios calculated under the principles stated herein are negative or non-applicable for reasons such as obtaining unreasonably high results, such rate shall not be taken into consideration during appraisal and this situation shall be disclosed at PDP in a manner including a satisfactory explanation. Provisions regarding common and continuous transactions set forth in Article 10 are reserved. c) In cases where the amount corresponding to 5% of the revenue is lower than the amount corresponding to one per thousand of the total equity capital; rate based on revenue shall not be deemed applicable. ç) In relation to banks, revenue interest yield earned from their major field of activity.
3) In cases where it is foreseen that a ratio above 10% may be achieved with respect of
the ratios stated under the second paragraph, approval by the majority of the independent board members shall be required in the resolution of board of directors regarding the transaction, in addition to the obligation of having made an appraisal. Members of board of directors who are related parties shall not vote in the board of directors meeting in which this subject will be discussed. In cases where the majority of independent board members do not approve such a transaction, this situation shall be disclosed at PDP in a manner including a satisfactory explanation and the transaction shall be submitted to the approval of the general assembly. In these general assembly meetings, resolution shall be taken through voting, in which parties to the transaction and the persons related thereto shall not vote. Meeting quorum shall not be required in general assembly meetings to be made in situations stated in this Article. Resolutions shall be taken by the simple majority of those who have voting rights. Resolutions of board of directors and of general assembly which have not been taken pursuant to the principles stated in this paragraph shall not be deemed valid. (4) Real estate, integral parts of real estate, real estate projects and rights attached to real estate that are included in the transaction shall be subject to appraisal according to the regulations of the Board regarding real estate appraisal. (5) Appraisal services provided in cases other than the fourth paragraph shall be made according to the regulations of the Board regarding appraisal. (6) In cases where it has been decided to execute the related party transaction, direct or indirect relations among the parties to the transaction, features of the transaction, a summary of the appraisal report including assumptions used in the appraisal and appraisal results; and if transactions have not been conducted in accordance with the results obtained in the appraisal report, the ground for this situation shall be disclosed at PDP under the regulations of the Board on public disclosure. (7) This Article shall not apply to portfolio management services, investment advice services and intermediary services for sale and purchase of securities, that investment companies receive from their related parties. (8) Banks and financial institutions are not obliged to fulfill the obligations set forth in this Article for related party transactions arising from their ordinary activities.

(9) The Board, if an when it deems necessary regardless of the ratios stated in this Communiqué, may impose an appraisal obligation for transactions between corporations or corporations’ subsidiaries and their related or non-related parties, and the disclosure of appraisal results to public under the principles set forth in this Communiqué. Common and continuous transactions
ARTICLE 10 – (1) The scope of the common and continuous transactions between the
corporations and subsidiaries thereof with their related parties and the conditions as to these transactions shall be resolved by the board of directors. In case a significant amendment is made within the scope and the conditions of these transactions, a new resolution of board of directors shall be taken. (2) In cases where it has been foreseen that the rate of the amount of common and continuous transactions between the corporations and subsidiaries thereof with their related parties within an account period, compared to a) For purchases, the cost of sales in the latest annual financial statements disclosed to public, b) For sales, the revenues in the latest annual financial statements disclosed to public, exceed 10%, the board of directors of the corporation shall, in addition to its resolution, issue a report regarding the conditions of the transactions and comparison thereof with the market conditions and the entire report or its result only shall be disclosed at the PDP. Transactions with similar features shall be evaluated collectively for the calculation of the rates, yet transactions with the same corporation that encompass different features shall be deemed as separate transactions. In cases where the majority of the independent board members do not approve such transactions, the ground for opposition shall be disclosed at the PDP. (3) Reports to be issued according to the second paragraph shall include at least the following issues:
a) Information on parties to the transaction including their trade name, their activities in relation to the corporation, whether it is a public corporation or not, and summary annual financial information including total assets, operation profits, net sales, and similar information. b) General information on the feature of the relations with the corporations, which are party to the transaction and the effects thereof on the operations of the corporation, c) Date, subject and significant issues of the contract that the transaction is based on, provided that they are not commercial secrets, and in case such information has been disclosed in a document such as prospectus in the past, information on this matter. ç) Criteria employed during the evaluation of the compatibility of the transaction with market conditions. d) Evaluation as to whether the transaction is compatible with market conditions.

(4) Provisions of this Article shall not apply with respect to dividend distributions, exercise of the right to acquire new shares in capital increases, and payments in relation to financial rights of managers, and portfolio management, investment advice and intermediary services for sale and purchase of the securities, received by securities investment companies, real estate investment companies and venture capital investment companies from their related parties as well as related party transactions arising from ordinary activities of banks and financial institutions. FOURTH CHAPTER Other Obligations Investor relations department
ARTICLE 11 – (1) Investor relations department shall be established in order to ensure
communication between corporations and investors, and this department shall function directly under the general manager or vice general manager or one of the other equivalent executives and shall prepare a report at least once a year about the activities conducted, and submit this report to the board of directors. (2) Manager of the investor relations department must have a “Capital Market Activities Advanced Level License Certificate” and a “Corporate Governance Rating Specialist License” and shall be employed in the corporation as a full time manager and be appointed as a member of the corporate governance committee. In so far, such personnel employed in securities investment companies are not required to be employed full time. The name, surname and contact information of the manager of the investor relations department and at least one of the department’s employees, and the changes on these issues shall be disclosed at PDP under the regulations of the Board on material events. In the event that the department manager resigns, a new person shall be appointed within 30 days. (3) The duty of the investor relations department may also be performed by various units provided that it is disclosed to public. In this case, the manager who is responsible for most duties shall be deemed as the manager of the investor relations department and the duties set forth in the first paragraph shall be performed by these personnel. (4) For managers of the investor relations department of corporations included in the third group designated as per this Communiqué, it shall be adequate that they have either one of the “Capital Market Activities Advanced Level License Certificate” and “Corporate Governance Rating Specialist License” stated in the second paragraph or solely the “Basic License on Capital Markets Activities”. (5) Major duties of the investor relations department are as follows:
a) To ensure that records relating to correspondences between investors and the corporation and any other information or documents thereof are kept proper, secure and up-to￾date. b) To respond to the written information requests of shareholders regarding the corporation.

c) To prepare documentation with respect to the general assembly meeting required to be submitted to the shareholders for their information and review and to take the measures in order to ensure that the general assembly meeting is conducted in accordance with the legislation, articles of association and other internal regulations. ç) To supervise and monitor that liabilities arising from capital market legislation including any matters with respect to corporate governance and public disclosure are fulfilled. (6) Corporations which have applied to the Board for offering their shares to public and/or for being admitted to trading on the exchange for the first time shall fulfill their obligations within the scope of this Article within six months as of the date on which their shares have been admitted to the trading on the exchange. Collateral, pledge, mortgage and sureties
ARTICLE 12 – (1) Corporations and subsidiaries thereof shall not provide collateral,
pledge, mortgage and surety in favor of third parties, except those provided; a) In favor of their own legal entity, b) In favor of corporations that are fully consolidated in their financial statements, c) In favor of other third parties for the purpose of conducting its own ordinary commercial activities. (2) Collateral, pledge, mortgage and surety may be provided in favor of associates and joint ventures in which there is direct capital contribution, in proportion of the directly contributed capital share. (3) Under any condition, approval of the majority of the independent board members shall be required in the resolution of board of directors relevant to granting collateral, pledge, mortgage and surety in favor of third parties for the purpose of conducting their ordinary commercial activities. Board members who are also a related party shall not vote in the board of directors meetings in which this subject will be discussed. In cases where the majority of the independent board members do not approve such transactions, their ground of opposition shall be disclosed at PDP. (4) Securities, pledge, mortgage and surety provided in favor of third parties and the income and benefits obtained from the securities, pledge, mortgage and surety granted shall be included as a separate agenda item in the ordinary general assembly meeting. (5) Corporations which have applied to the Board for offering their shares to public and/or for being admitted to trading on the exchange for the first time shall reduce their existing collateral, pledge, mortgage and surety in violation of this Article to zero by the end of the fourth year following the year on which their shares have been admitted to trading on the exchange. (6) Provisions of this Article shall not apply with respect to the collateral, pledge, mortgage and surety provided in favor of third parties by investment companies, banks and financial institutions.

FIFTH CHAPTER
Miscellaneous and Final Provisions
Rates and amounts
ARTICLE 13 – (1) The Board is authorized to change the rates and the amounts in this
Communiqué.
(2) Transactions may not be conducted with the purpose of staying below the limits and amounts set forth in this Communiqué, through such means as completion of a transaction in a number of times or changing accounting policies. Authority of the Board MADDE 14 – (1) The Board, if deemed necessary, may impose obligations for corporations whose shares are not traded on the exchange considering criteria such as size of balance sheet and capital, and field of activity, and for banks whose shares are not traded on the exchange provided the the opinion of the Banking Regulatory and Supervisory Agency is obtained. Repealed communiqués
ARTICLE 15 – (1) Communiqué on Determination and Implementation of Corporate
Governance Principles (Serial: IV, No: 56) published in the Official Gazette dated 30 December 2011 and numbered 28158 and Communiqué on Principles to be Followed by Joint Stock Corporations subject to Capital Markets Law (Serial: IV, No: 41) published in the Official Gazette dated 19 March 2008 and numbered 26821 have been repealed. (2) References made in other regulations of the Board to the communiqués stated in the first paragraph shall be deemed made to this Communiqué. Transition process TRANSITIONAL ARTICLE 1 – (1) Corporations must ensure compliance with Article 11 by 30 June 2014. (2) Corporations must ensure compliance with Article 12 by 31 December 2014. Enforcement
ARTICLE 16 – (1) This Communiqué shall enter into force on the date of its publication.
Execution
ARTICLE 17 – (1) The provisions of this Communiqué shall be executed by the Board.

ANNEX-1
CAPITAL MARKETS BOARD
CORPORATE GOVERNANCE PRINCIPLES

1. SHAREHOLDERS
   1.1. Facilitating the Exercise of Shareholders Rights
   1.1.1. In addition to the bodies of the corporation, “Investor Relations Department” shall
   also have an active role in facilitating the protection and exercise of shareholders rights, mainly the rights to obtain information and to examine.
   1.1.2. Information and disclosures which may affect the exercise of shareholders rights
   shall be made available and up-to-date on the corporate website for utilization of the investors.
   1.2. Right to Obtain Information and to Examine
   1.2.1. Management of the corporation shall refrain from transactions that would
   complicate the conduct of special audit.
   1.3. General Assembly
   1.3.1. Following information shall be announced in a discernible manner on the corporate
   website of the corporation and at PDP, at least three weeks before the general assembly meeting excluding the days of announcement and the meeting, together with documentation which shall be submitted to shareholders for their examination as per Article 437 of the Turkish Commercial Code dated 13 January 2011 and numbered 6102 and with notifications and explanations that the corporation shall make in accordance with the relevant legislation:
   a) Total number of shares and voting rights reflecting the current corporate structure as of the date that the announcement, and should the corporation have privileged shares, number of privileged shares and voting rights for each privileged share group, and information on the feature of the privileges. b) Changes in the management and activities of the corporation and subsidiaries thereof that took place in the past accounting period or that are planned for future accounting periods, which may affect the activities of the corporation significantly, and information on the reasons for such changes. c) In case the general assembly meeting agenda includes dismissal, change or election of board of directors members, the grounds for their dismissal and change, and with respect to the persons whose candidacy has been declared to the corporation; their curricula vitae, duties that they have conducted in the last ten years and reasons for their departure from office, attributes and materiality level of their relation with the corporation and its related parties, whether they are independent or not, and information on similar issues which may affect the activities of the corporation should these persons be elected as members of board of directors.

ç) Written requests of shareholders submitted to the Investor Relations Department for inclusion of an item into the agenda, and in the event that the board of directors does not accept the proposals, such proposals which have not been accepted and grounds for their refusal. d) In case the agenda includes amendments to articles of association, relevant resolution of the board of directors and former and new versions of the articles of association.
1.3.2. While preparing the agenda for the general assembly, each proposal shall be
submitted under a separate topic, and each topic in the agenda shall be phrased explicitly and in a manner not to cause different interpretations. Attention shall be paid for not using expressions such as “other”, “miscellaneous” etc. in the agenda. Information to be provided prior to the general assembly meeting shall be given with reference to the relevant agenda items.
1.3.3. In order to promote the attendance of shareholders, the general assembly meeting
shall be conducted in a manner that does not cause inequality among shareholders, and that enables the attendance of the shareholders with minimum cost. For this purpose, the meeting shall be conducted at the place where the numerical majority of shareholders are located in , provided that this matter is set forth in the articles of association.
1.3.4. The chairperson of the meeting shall be prepared and obtain the required
information in advance regarding the conduct of the general assembly meeting in accordance with the Turkish Commercial Code, the Law and relevant legislation.
1.3.5. The chairperson of the meeting shall be attentive in the general assembly meeting
that the agenda items should be expressed in an objective and detailed manner with a clear and comprehensible method. Shareholders should be provided with equal opportunities to express their opinions, and raise questions. The chairperson of the meeting shall ensure that each question raised by the shareholders and which is not a commercial secret is responded directly in the general assembly. In case the question posed is not related to the agenda or is too complicated to be responded during the meeting, then the question shall be responded in writing within 15 days by the Investor Relations Department. All questions posed in the general assembly meeting and all responses to these questions shall be announced to public via the corporation’s website by the Investor Relations Department within 30 days at the latest following the date of the general assembly meeting.
1.3.6. In cases where shareholders who have management control, members of board of
directors, executives, and their spouses, relatives by blood or marriage up to second degree conduct a significant transaction with the corporation or subsidiaries thereof which may cause a conflict of interest, and/or conduct a transaction on behalf of themselves or a third party which is in the field of activity of the corporation or subsidiaries thereof, or become an unlimited shareholder to a corporation which operates in the same field of activity with the corporation or subsidiaries thereof, such transactions shall be included in the agenda as a separate item for providing detailed information at the general assembly meeting on the matter, and shall be recorded in the minutes of meeting.
1.3.7. Persons who have the opportunity to access information of the corporation in a
privileged way, other than those listed under principle (1.3.6), shall inform the board of directors to have this item added to the agenda in order to provide information at the general assembly regarding the transactions that they have conducted on their own behalf within the scope of the corporation’s field of activity.

1.3.8. It shall be ensured that the members of board of directors, other related persons,
officers who are responsible in preparation of the financial statements and the auditors are present at the general assembly meeting in order to provide required information and respond to questions in relation to specific agenda items.
1.3.9. With respect to transactions of Corporations;
a) In transactions such as asset and service purchase and obligation transfer transactions, the rate of the transaction amount comparing to the total asset amount as per the latest financial statements disclosed to public, or to the revenue amount as per the latest financial statements disclosed to public, or to the value of the corporation to be calculated on the basis of the average of the daily corrected weighted average prices of the six-month term prior to the board of directors resolution date, b) In transactions such as asset and service sale, the rate of the transaction amount (in case the net book value of the asset is higher, the rate of the net book value) comparing to the total asset amount as per the latest financial statements disclosed to public, or to the revenue amount (in cases where the asset is transferred, leased out or right in rem is established thereon, the rate of the profit earned from the asset comparing to the profit of the corporation before taxation on its ongoing operations as per the latest financial statements) (with the exception of establishment of right in rem arising from ordinary activities of banks and financial institutions) as per the latest financial statements disclosed to public, or to the value of the corporation to be calculated on the basis of the average of the daily corrected weighted average prices of the six￾month term prior to the board of directors resolution date, exceed 10%, or an activity is ceased; approval of the majority of independent members shall be required in order to execute the board of directors resolution in relation to such transactions. In cases where the board of directors resolution has not been taken with a unanimous vote of attending members, the signed board of directors resolution and the dissenting opinions shall be disclosed at PDP. In lease transactions and/or other transactions in which cash flows may be certainly dissociated, net present value of the total annual gross lease income/expense and/or other income/expense calculated in accordance with the reduced cash flow method shall be taken into consideration as the transaction amount. In cases where the majority of the independent board members do not approve the transaction, this situation shall be disclosed at PDP in a manner including a satisfactory explanation and the transaction shall be submitted to the approval of the general assembly. In general assembly meetings, the principles in the sixth paragraph of Article 29 of the Law shall apply. In cases where, the rates calculated within the framework of the principles stated in this paragraph are negative or non-applicable for the reasons such as obtaining unreasonably high results, such rates shall not be taken into consideration during assessment and this situation shall be disclosed at PDP so as to include a satisfactory explanation. In cases where the amount corresponding to 10% of the revenue is lower than the amount corresponding to two per thousand of the
total shareholders’ equity; rate based on the revenue shall not be deemed applicable.

1.3.10. A policy regarding donations and contributions shall be formed and submitted to
the approval of the general assembly. Information regarding the amounts and beneficiaries of all donations and contributions made within the term in line with the policy approved by the general assembly and the amendments in the policy shall be provided to the shareholders through a separate agenda item at the general assembly meeting.
1.3.11. General assembly meetings may be conducted open to public including
stakeholders and media, provided that those shall not have the right to speak and a provision may be included in the articles of association in this respect.
1.4. Voting Right
1.4.1. Any actions that may complicate the use of voting rights must be avoided. Each
shareholder shall be given the opportunity to exercise his/her voting right, including cross border voting, in the most appropriate and convenient manner.
1.4.2. Privileges regarding voting rights should be avoided. In case there is a privilege in
voting rights, privileges that may prevent the holders of publicly traded shares from being represented at the board of directors of the corporation shall in principle be revoked.
1.4.3. In case cross ownership is associated with a control relationship, the corporations
in such cross ownership shall avoid exercising their voting rights in the general assembly meeting of corporations in which they have cross ownership, provided that no compulsory cases arise, such as ensuring a quorum, and this matter shall be disclosed at the PDP in accordance with the relevant legislation.
1.5. Minority Rights
1.5.1. Maximum diligence shall be performed for the exercise of minority rights.
1.5.2. Minority rights may be defined in the articles of association for shareholders
holding less than one twentieth of the capital of the corporation. The scope of minority rights may be extended in the articles of association.
1.6. Dividend Right
1.6.1. The corporation shall have a clearly defined and consistent dividend distribution
policy. This policy shall be submitted for the approval of the shareholders at the meeting of general assembly and shall be disclosed to public via the corporate website of the corporation.
1.6.2. Policy of dividend distribution shall contain the minimum information to ensure
that shareholders can foresee the procedure and principles of dividend distribution out of profits that the corporation shall obtain in the future.
1.6.3. In case the board of directors proposes not to distribute dividends to the general
assembly, the reason for such proposal and information as to use of the profits shall be included into the agenda item regarding dividend distribution.
1.6.4. A balanced policy shall be followed with regard to dividend distribution, between
the benefits of the shareholders and the corporation.

1.7. Transfer of Shares
1.7.1. Practices that would complicate the free transfer of shares shall be avoided.
2. PUBLIC DISCLOSURE AND TRANSPARENCY
2.1. Corporate Website
2.1.1. In addition to information mandatory to disclose pursuant to relevant legislation,
the corporate website of the corporation shall also include trade registry information; up-to-date information about shareholding and management structure; detailed information about privileged shares, the final version of the corporation’s articles of association together with date and numbers of the Turkish Trade Registry Gazettes in which amendments were published; material information disclosures; financial statements, annual reports, prospectuses and other documents for public disclosure, agendas of the general assembly meetings, lists of attendees and meeting minutes, form for proxy voting at the general assembly meeting, mandatory information forms prepared for tender offer or proxy solicitation and similar forms, policy for buy-back, if any, dividend distribution policy, notification policy, ethical rules established by the corporation, and under the heading of frequently asked questions, information requests from the corporation, questions and complaints and answers provided. In this context, the corporate website shall contain information of the last 5-year-term as a minimum.
2.1.2. Shareholding structure of the corporation, names, number and ratio of shares, and
privileges of real person shareholders who have more than 5% shareholding cleared from indirect relations and cross ownership relations, shall be disclosed by being updated at least every 6 months.
2.1.3. Notifications of financial statements, except for material events and footnotes,
which are mandatory to be disclosed to public in accordance with capital markets legislation shall be disclosed at PDP in English as well as in Turkish. Disclosures made in English shall be true, full, direct, comprehensible, satisfactory and consistent with the Turkish version thereof as a summary, to the extent that the disclosure assists the beneficiaries to make a decision.
2.1.4. Information on the website shall be prepared also in foreign languages to be
selected in line with the requirements, in completely same content with the Turkish version, for use by international investors.
2.2. Annual Report
2.2.1. The board of directors shall issue the annual report in a detailed way to ensure that
the public can reach complete and true information with respect to the activities of the corporation.
2.2.2. In addition to the information under relevant legislation and corporate governance
principles, annual reports shall also include; a) Information on duties of the members of the board of directors and executives conducted outside the company, and declarations on independence of the members of board of directors,

b) Information on members of committees established under the board of directors, meeting frequency of these committees, evaluation of the board of directors regarding the working principles including activities conducted and efficiency of the committees, c) Number of meetings of the board of directors in a year and attendance of the members of board of directors to these meetings, ç) Information on amendments to legislation, which may significantly affect the activities of the corporation, d) Information on significant lawsuits filed against the corporation and the possible results thereof, e) Information on conflicts of interest between the corporation and institutions that it receives services on matters such as investment advice and rating, and the measures taken by the corporation in order to avoid these conflicts of interest, f) Information on cross ownership whereby direct contribution to the capital exceeds 5%, g) Information on social rights and vocational training of employees, and activities of corporate social responsibility with respect to corporate activities that cause social and environmental results.
3. STAKEHOLDERS
3.1. Corporation’s Policy on Stakeholders
3.1.1. Stakeholders are persons, institutions or interest groups that are related with the
achievement of goals or activities of the corporation such as employees, creditors, clients, suppliers, trade unions, various non-profit organizations. In its transactions and activities, the corporation shall protect the rights of stakeholders, which have been regulated in legislation and mutual contracts. In case the rights of stakeholders are not protected by relevant legislation and mutual contracts, the rights of stakeholders shall be protected within the framework of bona fide principles and within the capabilities of the corporation.
3.1.2. Effective and rapid compensation shall be offered in case the rights of stakeholders
that are protected under the relevant legislation and contracts are violated. The corporation shall facilitate the utilization of mechanisms such as compensation provided for stakeholders as per legislation. Furthermore, the corporation shall form a policy on compensation towards the corporation’s employees and disclose this policy to public via the corporate website.
3.1.3. Stakeholders shall be informed adequately with regard to the corporation’s policy
and procedures on protection of their rights by using the corporate website as well.
3.1.4. Corporation shall establish the required mechanisms for informing the corporate
governance committee or audit committee by stakeholders on transactions of the corporation breaching relevant legislation and which are not ethically acceptable.
3.1.5. In cases where conflicts of interest arise among the stakeholders or a stakeholder is
involved in more than one interest group; a balanced policy, as far as possible shall be followed

with regard to protection of vested rights, and each right shall be aimed to be protected independently.
3.2. Supporting the Participation of the Stakeholders in the Corporation’s
Management
3.2.1. Models supporting the participation of stakeholders, primarily corporation’s
employees, in management, shall be developed in a manner not to hinder the activities of the corporation. Such models adopted by the corporation shall be incorporated into the internal regulations or articles of association of the corporation.
3.2.2. With respect to significant decisions that affect stakeholders, opinions of the
stakeholders shall be taken.
3.3. Human Resources Policy of the Corporation
3.3.1. When establishing employment policies and preparing career plans, the corporation
shall adopt the principle to provide equal opportunities to individuals who have similar specifications. In cases where the change of duty of the managers may cause a disruption in corporate governance, a succession plan shall be made with respect to the determination of the managers to be appointed.
3.3.2. Recruitment criteria shall be determined in writing and shall be complied with.
3.3.3. The corporation shall be fair in all rights provided to employees, organize training
programs for improvement of the knowledge, skill and experience of employees, and issue training policies.
3.3.4. The corporation shall enable exchange of opinions by organizing meetings for
informing employees on issues such as financial standing of the corporation, remuneration, career planning, education, health, and for exchange of opinions.
3.3.5. Decisions taken in relation to employees or developments relevant to employees
shall be notified to employees or representatives thereof and, the opinion of the trade union shall also be taken in such decisions.
3.3.6. Job definition and distribution of duties, and criteria for performance and rewards
shall be announced to employees. Productivity shall be considered in determination of remuneration and other benefits granted to the employees. The corporation may arrange employee stock ownership plans.
3.3.7. Measures shall be taken in order to prevent discrimination in terms of race, religion,
language and gender among employees, and to protect employees against any physical, psychological and emotional mistreatment in the corporation.
3.3.8. The corporation shall support efficient recognition of the freedom to establish
association and the right of collective bargaining.
3.3.9. Safe working environment and conditions shall be ensured for employees.

3.4. Relations with Customers and Suppliers
3.4.1. The corporation shall take all measures in order to ensure that its customers are
fully satisfied with the marketing and sale of its goods and services.
3.4.2. Requests of customers concerning their purchases of goods and services shall be
handled in a quick and efficient manner, and any delay in handling customer requests shall be notified to customers before the end of the time period.
3.4.3. The corporation shall comply with the quality standards of goods and services and
be attentive to preserve the standard. For this purpose, a specific guarantee shall be provided with respect to quality.
3.4.4. The corporation shall be diligent to keep the confidentiality of commercial secrets
of customers and suppliers.
3.5. Ethical Rules and Social Responsibility
3.5.1. Operations of the corporation shall be carried out in accordance with ethical rules
disclosed to public via the corporate website.
3.5.2. The corporation shall be sensitive towards its social responsibilities and comply
with regulations and ethical rules with respect to environment, consumers, public health. The corporation shall support and respect internationally recognized human rights. The corporation shall combat against any kind of corruption including embezzlement and bribery.
4. BOARD OF DIRECTORS
4.1. Functions of the Board of Directors
4.1.1. The board of directors shall manage and represent the corporation through its
strategic decisions by protecting primarily, the long-term interests of the corporation with a rational and prudent risk management approach that maintains an appropriate balance of the corporation’s risks, growth, and returns.
4.1.2. The board of directors shall define the strategic targets of the corporation,
determine the work force and financial resources that the corporation would require, and audit the performance of the management.
4.2. Principles of Activity of the Board of Directors
4.2.1. The board of directors shall conduct its activities in a transparent, accountable, fair
and responsible manner.
4.2.2. In case there is delegation of duties among board members, duties and authorities
of the members of the board of directors shall be announced in its annual report.
4.2.3. The board of directors shall establish internal control systems consisting of risk
management, information systems and processes, which may minimize the effects of risks on

stakeholders of the corporation, mainly on shareholders, upon consideration of opinions of the relevant committees of the board of directors.
4.2.4. The board of directors shall review the efficiency of their risk management system
and internal control system at least once a year. The Board of directors shall provide information regarding the functioning and efficiency of the internal control system in its annual report.
4.2.5. Authorities of the chairperson of the board of directors and the chief executive
officer/general manager shall be explicitly separated and this separation shall be set forth in writing in the articles of association. No one in the corporation should be singly delegated with unlimited decision-making authority.
4.2.6. In case it has been resolved that the chairperson of the board of directors and the
chief executive officer/general manager will be the same person, this situation shall be disclosed at PDP with its grounds.
4.2.7. The board of directors shall act as leader in ensuring efficient communication
between the corporation and the shareholders, in resolving and settling disputes that may arise, and for this purpose it shall be in close cooperation with the corporate governance committee and Investor Relations Department.
4.2.8. Damages to the corporation that may be caused by faults of the board of directors
during the performance of their duties shall be insured for an amount exceeding 25% of the corporation’s capital and this matter shall be disclosed at PDP.
4.3. Structure of the Board of Directors
4.3.1. The number of members of the board of directors, provided that the number is not
less than five in any case, shall be determined in order to ensure that the board members conduct productive and constructive activities, make rapid and rational decisions and efficiently organize the establishment and activities of the committees.
4.3.2. A majority of the members of the board of directors shall consist of members who
do not have an executive duty. A non-executive member of the board of directors shall be a person who does not have any administrative duty other than being a board member, or to whom no executive units report, and who is not involved in the daily work flow or ordinary activities of the corporation.
4.3.3. Among non-executive board members, there shall be members who have the ability
to fulfill their duties without being prejudiced.
4.3.4. The number of independent board members may not be less than one third of the
total number of members. In calculation of the number of independent board members, fractions shall be considered as the following whole number. In any case, the number of independent board member shall not be less than two.
4.3.5. The term of office of the independent members of the board of directors shall be
up to three years and they may be nominated and elected again.

4.3.6. A member of the board of directors who meet the following conditions shall be
referred to as an “independent member”:
a) Not having a relationship between themselves, or their spouse and relatives by blood or marriage up to second degree, and the corporation, companies where the corporation holds management control1 or significant influence2 , and shareholders who hold management control of the corporation or have significant influence in the corporation, and legal entities in which these shareholders hold management control, in terms of employment at an administrative level to take upon significant duties and responsibilities within the last five years, not to own more than 5% of the capital or voting rights or privileged shares jointly or solely, or not having established a significant commercial relation. b) Not having been a shareholder (5% and more), an employee at an administrative level to take upon significant duties and responsibilities, or member of board of directors within the last five years in companies that the corporation purchases or sells goods or services at a significant level within the framework of contracts executed, especially on audit (including tax audit, statutory audit, internal audit), rating and consulting of the corporation, at the time period when the corporation purchases or sells services or goods. c) To have professional education, knowledge and experience in order to duly fulfill the duties assigned for being an independent board member. ç) Not to be a full time employee of public authorities and institutions after being elected, except being an academic member at university provided that is in compliance with the relevant legislation. d) To be residing in Turkey in accordance with the Income Tax Law dated 31 December 1960 and numbered 193. e) To be capable to contribute positively to the operations of the corporation, to maintain their objectivity in conflicts of interests between the corporation and the shareholders, to have strong ethical standards, professional reputation and experience to freely take decisions by considering the rights of the stakeholders. f) To be able to allocate time for the corporation’s business in order to follow up the activities of the corporation and duly fulfill the allocated duties. g) Not to having been a member of the board of directors for more than a period of six years within the last ten years. ğ) The same person shall not be an independent member of the board of directors in more than three corporations where the corporation or the controlling shareholders of the corporation

1
In order for the detection as to whether there is control, provision of TFRS 10 and as to whether there is significant influence provision of TMS 28 shall be taken into consideration. 2 In cases where the corporations within the scope of this subparagraph were inactive in the last three accounting periods, there shall be no violation of the independence criteria. In case that the ratio of turnover/profit before taxation obtained from the significant commercial relation to total turnover/profit before taxation obtained from same kind of business is 20% or higher with respect to any of the candidates for independent board member or any person from the corporation, independence shall be deemed to have been damaged.

hold management control, and in more than five corporations admitted to trading on the exchange in total. h) Not to be registered and announced as a board member representing a legal entity.
4.3.7. The nomination committee shall evaluate proposed candidate for independent
membership, including those of the management and the investors, by considering whether the candidate meets the independence criteria, and shall report its evaluations and submit its report to the approval of the board of directors. Candidates for independent member of the board of directors shall submit a written declaration to the Nomination Committee at the time of their nomination, stating that they are independent within the framework of relevant legislation, articles of association and the criteria set forth above. The Board of directors shall compile a list of candidate independent members within the framework of the report of nomination committee and send this list to the Board together with the report of the nomination committee and the resolution of the board of directors at least 60 days in advance from the general assembly meeting. In case the Board has an adverse opinion as a result of its evaluations within the framework of the principle numbered 4.3.6., it shall notify the corporation of its adverse opinion regarding the list within 30 days. A person who has been subject to the adverse opinion of the Board may not be submitted as a candidate independent member in the general assembly meeting. The corporation shall disclose at PDP the list of the candidate independent members and of the candidates who have not been accepted as candidate independent member, at the latest with the announcement of the general assembly meeting. Resolution of the general assembly of shareholders with regard to the nomination of independent members of the board of directors shall be announced together with the opposing votes and the grounds thereof, via the corporate website of the corporation.
4.3.8. In the event that a situation which revokes independence arises, this situation and
the grounds thereof shall be immediately notified to the board of directors by the independent board member in order to be disclosed at PDP. Such a member shall simultaneously notify in writing this situation and the grounds thereof to the Board. In principle, the member who lost their independence shall resign. In order to reinstate the minimum number of members of the board of directors, the nomination committee shall make an evaluation for election of independent members to the vacant positions to perform duties until the earliest general assembly meeting and notify the result of its evaluation to the board of directors. The board of directors shall elect the independent members from among the candidates in the report of the nomination committee. The Board of directors shall send to the Board the candidate list determined within the framework of the nomination committee within 30 days as of the date that the independent membership becomes vacant. If the Board has an adverse opinion, it shall notify the corporation of its adverse opinion within 20 days. A person who has been subject to the adverse opinion of the Board may not be nominated as an independent member. The members elected by the board of directors within this framework shall be on duty until the earliest general assembly. The provisions set forth in this Article shall also be applicable in cases where the independent member of the board of directors resigns or becomes unable to fulfill their duties.

4.3.9. With regard to the membership of women in the board of directors, the corporation
shall determine a target rate, provided that it is not less than 25%, and a target time, and form a policy for this target. The Board of directors shall annually evaluate progress with respect to the achievement of this target.
4.3.10. At least one of the members responsible for audit shall have 5 years of experience
on audit/accounting and finance.
4.4. Procedure of Board of Directors meetings
4.4.1. Board of directors shall convene frequently in order to fulfill its duties efficiently.
The Chairman of the board of directors shall determine the agenda of the board of directors meeting by consulting with other members of the board of directors and the chief executive officer/general manager. Members of the board of directors shall be diligent to attend the meetings and declare their opinion. The board of directors meeting shall also be enabled in an electronic environment.
4.4.2. Chairperson of the board of directors shall be responsible for submitting the
information and documents relating to the agenda of the board of directors meeting for revision to provide equal information flow in a reasonable time before the meeting.
4.4.3. Opinions of the members who could not attend the meeting but who have notified
their opinions in writing to the board of directors shall be presented to other members for information.
4.4.4. Each member in the board of directors shall have one voting right.
4.4.5. Procedure for the board of directors meeting shall be documented in writing within
internal regulations of the corporation.
4.4.6. Board of directors meeting agenda items shall be discussed clearly and
comprehensively. The chairperson of the board of directors shall use their best effort to ensure the efficient attendance of the non-executive members. Members of the board of directors shall have their dissenting opinion recorded in minutes for decisions, with reasonable and detailed grounds.
4.4.7. Members of the board of directors shall allocate a reasonable time for the business
of the corporation. In cases where a member of the board of directors is a manager or board member in another corporation or renders consultancy services to another corporation, in principal this situation must not cause a conflict of interest and must not hinder the member from performing their duty in the corporation. Within this context, external duties that the member conducts shall be conditional on certain rules or be restricted. External duties conducted by the member of the board of directors and the grounds thereof shall be submitted to the shareholders for information, by distinguishing whether such corporation is intragroup or out of the group, together with the agenda item regarding election, at the general assembly meeting in which the election is discussed.

4.5. Committees Established under the Board of Directors.
4.5.1. Board of directors shall form an “Audit Committee” (except for banks), “Early
Detection of Risk Committee” (except for banks), “Corporate Governance Committee”, “Nomination Committee, Compensation Committee” (except for banks) in order to fulfill its duties and responsibilities in a reliable way. However, in cases where a separate nomination committee and compensation committee cannot be established due to the structure of the board of directors, corporate governance committee shall perform the duties of such committees.
4.5.2. Duties, working principles and the members of the committees shall be determined
by the board of directors and disclosed at PDP.
4.5.3. Committees shall be composed of at least two members. In case there are two
members, both of them, and in case there are more than two members, the majority of them shall be comprised of non-executive members of the board of directors. The chairperson of each committee shall be elected from among the independent members of the board of directors. All members of the audit committee shall be independent members of board of directors. Specialists who are not a member of the board of directors may become a member of the committees except for the audit committee.
4.5.4. Chief executive officer/general manager shall not have a duty in the committees.
4.5.5. Diligence shall be exercised to ensure that that any member of the board of directors
shall not have a duty in more than one committee.
4.5.6. All kinds of resources and support in order for the committees to fulfill their duties
shall be provided by the board of directors. Committees may invite persons deemed necessary to meetings to obtain their views.
4.5.7. Committees may benefit from the opinions of independent specialists on matters
that they find necessary with regard to their activities. The fee for consultancy services required by committees shall be paid by the corporation. However, in this case information as to the person/institution that the service is purchased from and as to whether this person/institution has any relation with the corporation shall be stated in the annual report.
4.5.8. Committees shall keep a record of all their work in writing. Committees shall
convene in frequency as deemed necessary for the efficiency of their work and as stated in their working principles. Committees shall submit information on their work and reports containing meeting outcomes to the board of directors.
4.5.9. Audit Committee
The audit committee shall be in charge of the supervision of the corporation’s accounting system, public disclosure of financial information, independent auditing, and the operation and efficiency of internal control and internal audit system. Election of the independent audit firm, initiation of the independent audit process by preparing contracts of independent audit, and the work of the independent audit firm at all levels shall be conducted under the supervision of the audit committee.

The independent audit firm and the service to be procured from this firm shall be determined by the audit committee and submitted for the approval of the board of directors. The audit committee shall designate the applicable method and criteria with regard to the review and resolution of complaints regarding the accounting and internal control system, and independent audit of the corporation, evaluation of notifications from employees of the corporation with regard to matters on accounting and independent audit of the corporation, within the framework of the confidentiality principle. The audit committee shall notify its assessment with regard to the veracity and accuracy of the annual and interim period financial statements to be disclosed to the public and accounting principles followed by the corporation to the board of directors in writing, together with opinions of responsible executives and independent auditors of the corporation. The audit committee shall convene at least four times a year, provided that it is once in three months, record meeting minutes and submit the resolutions to the board of directors. There shall be an explanation in the annual report with regard to the activities and meeting outcomes of the audit committee. The number of written notifications of the audit committee to the board of directors within the term of the account period shall also be set forth in the annual report. The audit committee shall report its findings relevant to its own duty and responsibilities and evaluations relevant thereto immediately in writing to the board of directors.
4.5.10. Corporate Governance Committee
The corporate governance committee shall determine whether corporate governance principles are applied, if not applied its grounds, and any conflicts of interest arising from incompliance with these principles, and shall provide advice to the board of directors in order to enhance corporate governance practices, and supervise the work of the investor relations department.
4.5.11. Nomination Committee
The nomination committee shall; a) Be in charge of establishing a transparent system for the determination, evaluation and training of candidates suitable for the board of directors and for executives and of conducting studies to determine policies and strategies with this regard, b) Evaluate regularly the structure and productivity of the board of directors and submit its recommendations to the board of directors regarding possible amendments in this respect.
4.5.12. Committee on Early Detection of Risk
The committee on early detection of risk shall be responsible for early detection of risks, which pose a threat to the existence, development and continuation of the corporation, taking the necessary measures with respect to detected risks and working on risk management. The committee on early detection of risk shall review the risk management systems at least once a year.

4.5.13. Remuneration Committee
The remuneration committee shall; a) Designate principles, criteria and practices to be employed in the remuneration of members of the board of directors and executives, considering the long term targets of the corporation, and shall conduct supervision thereof, b) Submit its recommendations with respect to the remuneration of the board of directors and the executive managers, considering the achievement level of the criteria used in remuneration.
4.6. Financial Rights Provided for Members of the Board of Directors and
Executives
4.6.1. The board of directors shall be responsible for the corporation’s achievement of its
targets on operational and financial performance designated and disclosed to the public. Assessment as to whether the corporation has achieved its targets on operational and financial performance disclosed to public or not, and if not achieved, reasoning thereof shall be included in the annual report. The board of directors shall undertake self-criticism and performance evaluation on the basis of the board, the members, and the executives. Members of the board of directors and executives shall be either awarded or discharged subject to these evaluations.
4.6.2. Principles on remuneration of members of the board of directors and executives
shall be documented in writing and submitted to the shareholders as a separate agenda item at the general assembly meeting and the shareholders shall be enabled to express opinion on this matter. The remuneration policy issued with this objective shall be set forth in the corporate website of the corporation.
4.6.3. In remuneration of independent members of the board of directors, payment plans
such as dividend, stock options or payment options based on the corporation’s performance shall not be used. In so far, remuneration of the independent members of the board of directors shall be at a level to protect their independence.
4.6.4. The corporation shall not loan money, make credit available, extend the term of
loans or credits provided, improve conditions, make credit available via a third party as a personal credit, or grant securities such as surety to any of its members of the board of directors or executives. However, institutions providing retail loans may make credits and other services available to these persons, within the conditions provided to other persons.
4.6.5. Remuneration provided to members of the board of directors and executives and
all other benefits3 provided shall be disclosed via the annual report to the public. Public disclosure shall in principle be made on the basis of the persons.

3 Payments shall include cash payments such as remuneration, bonus, other regular and incidental payments, non-cash payments such as share, derivatives based on share, share options in the framework of stock option plans, residence, automobile, ownership of which is granted and/or designated for utilization, and all benefits provided.