Practices with regard to the Corporate Governance Principles

When the concept of corporate governance have emerged into the world, our Company immediately took necessary steps to achieve high standards in this area and make it a part of our corporate culture, thus, Corporate Governance Principles have been implemented in the best possible way so far. Regarding to the Capital Markets Board (CMB) decision of 35/385 about Corporate Governance Principles (CGP), which had been published on 4th April 2003 and was revised in May 2005, CGP were introduced again with new regulations in December 2012 by the Capital Markets Board. Our Company has adopted these universal principles right away from the first implementation. However, the related principles and the regulation were later revised under II-17.1 Communiqué On Corporate Governance published in the Official Gazette dated 3 January 2014 and numbered 28871.

Although corporate governance practices usually rest on the rule "if you can't implement it, disclose it" and even though some corporate governance practices are only recommendations, our Company has chosen to actually implement the Corporate Governance Principles that have been defined in line with its objective to become "a well-managed Company."

For our Company the four main elements of Corporate Governance Principles, which are "Fairness", "Transparency", "Accountability" and "Responsibility" are of great significance. Our Company adheres to all compulsory Corporate Governance Principles and does its best to fulfil its obligations with respect to the optional principles.

Our Company complies with CMB's principles with regard to Shareholders mentioned under the following headings;
- Facilitating the Exercise of Shareholders Rights,
- Right to Obtain Information and to Examine, 
- General Assembly, 
- Voting Right, 
- Minority Rights, 
- Dividend Right and 
- Transfer of Shares 

Public Disclosure And Transparency, Stakeholders and Board Of Directors have been other major issues which the Company has taken into consideration while applying the related principles.

In an effort to provide comprehensive information to shareholders and all other parties concerned, the Company has appointed an investor relations department reporting to the CFO. The Investor Relations Department is responsible for quickly and effectively providing information to investors and all related regulatory institutions. Prompt and detailed responses are sent to investors applying to the Investor Relations Department using the Company's e-mail address or other channels of communication. With a view toward maximizing participation at the General Assemblies, notifications are sent reasonably in advance and related documents are made available to shareholders both at Company Headquarters and on the website.

Decisions about the venue of General Assemblies are made in such a way as to give all shareholders equal opportunity to attend at minimum cost. Class A shareholders' preferential rights are limited to the right to nominate candidates for 2/3 of the Board memberships. Shareholders do not have any other preferential rights and are entitled to one vote for each share they hold. They may vote in person or by proxy. The Company's shareholders may also exercise their minority rights as per the Turkish Commercial Code and the Law on Capital Markets. Our Company has not adopted a cumulative voting system as of yet. The Company's profit distribution policy is to disburse the largest possible dividend subject to the limits specified by the Capital Markets Board and in line with the Company's investment strategies. There are no restrictions on the transfer of shares and all shareholders, whether foreign shareholders or minority shareholders, are subject to the same rules.

The Company adheres strictly to Corporate Governance Principles concerning Public Disclosure and Transparency, providing shareholders and stakeholders with the right information at the right time, complete and accessible at low-cost. All disclosures to shareholders and stakeholders regarding the Company (including information concerning relations between the Company and its shareholders, Board members or administrators) are quickly made through the Public Disclosure Platform (KAP) and placed at the Company's website in timely manner in accordance with the Capital Markets Board's (CMB) II-15.1 Communiqué On Material Events Disclosure and other related regulations in application. The latest Disclosure Policy of the Company was announced in June 2015. The Company has also taken into account the Capital Markets Board's amendment under Article 24/4 of Communiqué On Material Events Disclosure, which became effective on 17 February 2017. Public disclosures are coordinated by Investor Relations Department Manager reporting directly to the CFO.

As for corporate governance principles concerning stakeholders, the Company handles all operations with a view to fully protecting the interests of its employees, creditors and customers. Employee opinions are taken into consideration in formulating management principles. With a view to maximizing customer satisfaction, the Company takes into consideration the views and suggestions of its customers in line with providing goods and services. The Company strictly adheres to its code of ethics.

The Company adheres to all major Corporate Governance Principles concerning its Board of Directors. The Board of Directors is made up of nine members; six are Class A Shareholders and three are independent members as defined in the Communiqué on Real Estate Investment Trusts and CMB Principles of Corporate Governance . Independent Board members are elected at the Company's General Assembly. Board members are not paid additional profit shares. The Company’s Audit Committee, Corporate Governance Committee and Risk Management Committee members, are chosen by the General Assembly.

The Company is committed to further improving its corporate governance practices all the time. "The Corporate Governance Principles Compliance Report" is prepared and revised by the Investor Relations Department in every Annual Report according to the principles set forth in CMB's weekly bulletin dated 27 January 2014 and it is announced at the Company's internet site three weeks prior to the General Assembly. For interim reports, "Statement of Compliance With Corporate Governance Principles" part of the mentioned report is regularly revised. The Investor Relations Department prepares each year an Investor Relations Department Report to be submitted to the Board of Directors, as well.