2 APPENDIX A – COMPANIES THAT CONSTITUTED THE ISE-100 IN 2005

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APPENDICES

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2 APPENDIX A – COMPANIES THAT CONSTITUTED THE ISE-100 IN 2005

(FOURTH QUARTER)

Item Firm 44 Finansbank 45 Ford Otosan 46 Fortis Bank 47 Garanti Bankasi 48 Garanti Gmyo

49 Gima

50 Global Yatarim Holding 51 Goldas Kuyumculuk 52 Good-Year

53 GSD Holding 54 Hurriyet Gzt.

55 Ihlas Holding 56 Is Bankasi

57 Is Finansal Kiralama 58 Is Gmyo

59 Izmir Demir Celik 60 Kardemir 61 Karsan Otomotiv 62 Kartonsan 63 Koc Holding 64 Koza Davetiye 65 Mardin Cimento 66 Marmaris Marti 67 Menderes Tekstil 68 Migros

69 Net Holding 70 Net Turizm 71 Netas Telekom 72 Otokar

73 Park Elek. Madencilik 74 Petkim

75 Petrol Ofisi 76 Sabanci Holding 77 Sanko Pazarlama 78 Sekerbank 79 Sise Cam

80 Tansas

81 Tat Konserve 82 Tek-art Turizm 83 Tekstilbank

84 Tofas Turk Otomobil Fabrikasi A.S.

85 Trakya Cam 86 T.S.K.B.

87 Tupras Item Firm

1 Adana Cimento (C) 2 Advansa Sasa 3 Ak Enerji

4 Akbank

5 Akcansa

6 Aksa

7 Aksigorta 8 Alarko Gmyo 9 Alarko Holding 10 Alcatel Teletas 11 Anadolu Efes 12 Anadolu Sigorta 13 Arcelik

14 Aselsan 15 Atakule Gmyo 16 Ayen Enerji

17 Aygaz

18 Bagfas (Bandirma Gubre Fabrikalari) 19 Banvit

20 Beko Elektronik 21 Bolu Cimento

22 Borusan Mannesmann 23 Borusan Yat. Paz.

24 Bosch Fren Sistemleri

25 Bossa

26 Boyner Magazacilik 27 Brisa

28 Ceytas Madencilik

29 Cimsa

30 Denizbank 31 Deva Holding 32 Dogan Gazetecilik 33 Dogan Holding 34 Dogan Yayin Holding 35 Dogus Otomotiv 36 Doktas

37

Eczacibasi Ilac (pharmaceuticals production)

38 Eczacibasi Yapi (building material) 39 Eczacibasi Yatirim (holding) 40 Efes Holding

41 Enka Insaat 42 Eregli Demir Celik 43 Fenerbahce Sportif

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Item Firm

88 Turcas Petrol 89 Turkcell

90 Turk Demir Dokum 91 Turk Ekonomi Bank 92 Turk Hava Yollari 93 Turk Traktor

94 Usas

95 Uzel Makina 96 Ulker Gida 97 Vestel

98 Yapi Kredi Koray Gmyo 99 Yapi ve Kredi Bank 100 Yazicilar Holding

Source: Annual Factbook ISE 2005 – page 14-16.

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4 APPENDIX B – EMAIL

Dear Mister/Mrs.,

My name is Linda Gorissen and I am a Dutch student who is studying International Financial Management at the University of Groningen (the Netherlands) and the University of Uppsala (Sweden). I have also studied a semester at the Orta Dogu Teknik Universitesi in Ankara. I am currently writing my final thesis in order to graduate for my double master-degree program.

The subject of my thesis is the extent to which companies that were listed on the Istanbul Stock Exchange in 2005 have complied with the Turkish Code of Corporate Governance Principles in 2005 (these principles were issued by the Capital Markets Board of Turkey in 2003). Since your company was listed on the ISE in 2005, your company is part of my sample.

I have searched for an English annual report of 2005 (including a Corporate Governance Compliance Report) on your website but have not been able to find one. I would therefore like to ask whether you can send me an English copy of your Corporate Governance Compliance Report for the year 2005. I am waiting for your reply and would like to thank you in advance for your cooperation.

Kind regards, Linda Gorissen --

Linda Gorissen

Professor Rankestraat 39a

9713 GD Groningen

The Netherlands

0031 6 16 135 777

lindagorissen@gmail.com

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1 - Has a Corporate Governance Compliance Report been published?

Section 1 - shareholders

2 - Shareholder relation department

2.1. Has a shareholder relation department been established?

2.1.b. If such a unit has not been established, why not?

2.2. Is the name of the manager ot the department disclosed?

2.3. Are the names of the staff of the department disclosed?

2.4. Is contact information of the shareholder relation unit disclosed?

2.5. What have been the main operations of the department in 2005?

2.6. How many information requests have been made in 2005?

2.7. How many responses were given?

3 - Shareholder's right to obtain information

3.1. Are the frequency and content of requested information disclosed?

3.2. Is requested information evaluated in any way?

3.3. Is the efficiency of electronic forms to announce changes in shareholder rights evaluated?

3.4. How are changes in shareholders rights communicated?

3.5 Is requesting a special auditor an individual right in articles of association?

3.5.b. If not, why not?

3.6. Has there been a request for a special auditor?

3.6.b. If so, how did it conclude?

4 - Information on shareholder's meeting 4.1. Has there been a shareholder meeting in period?

4.1.1. What has been the attendance quorum?

4.1.2. Have stakeholders attended the meeting?

4.1.3. Has the media attended the meeting?

4.1.4. How have shareholders been invited?

4.1.5. How has participation in the meeting been eased for shareholder?

4.2. How much time has been anticipated for recording of shareholders in share ledger?

4.2.b. If such time has been anticipated, why?

4.3. What kind of information has been made available before the shareholder meeting?

4.3.b How has this information been made available?

4.4. Do shareholders have the right to ask questions at meeting?

4.4.b. Have these questions been answered?

4.5. Did shareholders make proposals at shareholder meeting?

4.5.b. How did these proposals conclude?

4.6. Are there provisions in articles of associations so that certain decisions can only be made at shareholder meeting?

4.7. Are the minutes of the shareholder available for shareholders?

5 - Voting rights & minority rights

5.1. Are there any privileged rights on voting in articles of association?

5.1.b. Explantion of these rights

5.2. Have these rights been exercised and how?

5.3. Did companies in mutual ownership cast their votes in shareholder meeting?

5.4. Are minority shareholders represented in management?

5.5. Is a cumulative voting procedure adopted?

6 - Dividend policy & deadline for dividend distribution

6.1. Are there any privileged rights on distribution of dividends in articles of association?

6.1.b. Explanation of these rights

6.2. Does the company have a dividend policy?

6.2.b. Explanation of this policy

6.2.c. Has this information been disclosed on the shareholders meeting?

6.2.d. If the information was not made public, why not?

6.3. Has the distribution of dividends been realized in the period set by legislation?

6.3.c. If not, did the firm encounter legal results?

7 - Transfer of shares

7.1. Are there restrictions on transfer of shares?

7.2. If so, information on the policy 7.3. If so, reasons for the policy

APPENDIX C – GATHERED INFORMATION FROM CGCRs

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Section 2 - public disclosure and transparency 8 - Company information disclosure policy

8.1. Is the company disclosure policy in line with the corporate governance principles?

8.1.b. does the policy prescribe the form of disclosure?

8.1.c. does the policy prescribe the frequency of disclosure?

8.1.d. does the policy prescribe the methods of disclosure?

8.1.e. does the policy prescribe the frequency of confrontation board and executives with press/media?

8.1.f. does the policy prescribe the frequency of meetings for public disclosure?

8.1.g. does the policy prescribe the method that is adopted for answering questions?

8.2. Are the reasons for not determining a policy disclosed?

8.3. Are the reasons given for non-disclosure after a policy has been determined?

8.4. Are the names and duties of people responsible for implementation of disclosure policy given?

9 - Disclosure of material events

9.1. Are the number of disclosures on material events according to CMB regulations during the accounting period dislosed?

9.2. Is information on how many additional disclosure statements have been requested from CMB and ISE regarding disclosure of material events given?

9.3. Are the number of disclosures on material events in foreign stock exchanges if the company’s shares are 9.3.b. Have these material events been disclosed in home country?

9.4. If material events have not been disclosed timely, why not?

9.4.b. Which sanctions did the CMB impose for not disclosing material events on time?

10 - Company's website and contents 10.1. Is there are a website (address)?

10.1.b. if not, why not?

10.2. Does the website publish:

a - trade register information a.1. - if not, why not?

b - detailed informaton on shareholder and management structure b.1. - if not, why not?

c - detailed information about preferred shares c.1. - if not, why not?

d - final version of company's articles of association d.1. - if not, why not?

e - date and numbers of trade register gazettes in which amendments are published e.1. - if not, why not?

f - publicly disclosed material information f.1. - if not, why not?

g - annual reports g.1. - if not, why not?

h - periodical financial statements h.1. - if not, why not?

i - prospectuses and circulars i.1. - if not, why not?

j - agendas of general shareholder meetings j.1. - if not, why not?

k - list of participants shareholder meetings k.1. - if not, why not?

l - minutes of shareholder meetings l.1. - if not, why not?

m - form for proxy voting at shareholder meetings m.1. - if not, why not?

n - mandatory information forms prepared for proxy solicitation and tender offers and similar forms n.1. - if not, why not?

o - minutes of important board meetings which may affect value of capital market instruments o.1. - if not, why not?

p - frequenly asked questions including requests for information, queries and notifications and responses thereof.

p.1. - if not, why not?

11 - Beneficial ownership

11.1. Is information about ultimate controlling individual shareholder(s) (determined after eliminating the effects of indirect and mutual ownership) disclosed to the public?

12 - Disclosure on insiders

12.1. - Is the list of individuals who can be classified as insiders disclosed to the public?

12.2. Is this list given in the CGCR?

12.2.b. If the list is not disclosed in the CGCR, why not?

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Section 3 - stakeholders 13 - Informing stakeholders

13.1. Have stakeholders been informed about issued related to themselves?

13.1.b. If they have not been informed, why not?

13.2. How have the been informed (in which ways)?

14 - Participation of stakeholders in management

14.1. Which actions have been taken for the participation of stakeholders in management?

14.2. Has a model been established regarding participation of stakeholders in management?

14.3. If such a model has been established, what kind of participation has taken place?

15 - Human resources policy

15.1. Is information on whether a policy on human resources been established given?

15.2. If the firm has established a human resources policy; are the main principles disclosed?

15.3. If the firm has not established a human resources policy, why not?

15.4. Has a representative been assigned to manage the relationships with the employees?

15.4.b. If so, are the name, duties and authorization of representative assigned disclosed?

15.4.c. If no representative has been assigned, why not?

15.5. Have there been complaints from employees on discrimination?

15.5.b. If so, what has been done to solve these complaints?

16 - Information on relation with clients and suppliers

16.1. Is information given on marketing and sales of goods and services?

16.2. Is information given on what has been done to maintain customer's satisfaction?

17 - Social responsibility

17.1. Is information given on activities concerning the environment, region and the public?

17.2 Is information given on law suits against the company regarding damages given to the environment?

17.2.b. If there was a lawsuit against the firm, what was the outcome?

17.3. Are there any environmental effect evaluation reports on activities?

Section 4 - board of directors

18 - Structure & composition of BoD and independent members

18.1. Are the names of board members and chairman (general director if not available) disclosed?

18.1.b. Are they executive, non-executive or independent board members?

18.2. Are the board chairman and executive chairman/general director the same person?

18.2.b. If so, why?

18.3. Do more than half of the board members have executive duties?

18.3.b. If so, why?

18.4. Are there independent members in the board?

18.5. Are there two independent members (or do they make up at least one third of number of members) in the 18.5.b. If not, why not?

18.6. Are independency statements of independent members disclosed?

18.7. Which actions have been taken in case of any situation which jeopardize the independency of members in any way in the related period?

18.8 Are duties carried out by board members out of the company regulated by rules and/or restricted in any

19 - Qualifications of board members

19.1.Are the board member elected from candidates with high level of knowledge and skills and a qualified specific experience and background?

19.2. Have the board members not been convicted of non-conformity with the capital markets legislation, insurance legislation, banking legislation, legislation on prevention of money laundering and legislation on lending money; or sentenced with heavy imprisonment or imprisoned for more than five years, excluding negligent offences, even if they have enjoyed amnesty, or infamous crimes like embezzlement, qualified embezzlement, extortion, bribe, theft, swindling, forgery, abuse of trust, deceptive bankruptcy, and smuggling crimes other than employment and consumption smuggling; any fraudulent act to render official tenders;

revealing state secrets; tax evasion; attempting or participating in tax evasion?

19.3. Do the board members meet the following requirements:

a. Be capable of analyzing and interpreting financial statements and reports

b. Have basic knowledge about the legal regulations applicable to the company for daily or long term business c. Be able to participate in all board meetings in the relevant budget year.

19.4. Have the above-mentioned rules for the selection process been incorporated in the articles of association of the company?

19.5. Were there any training and adaptation programs applied for board members who did not have the mentioned qualifications ?

19.5.b. If so, which subjects were included?

19.6. Did the corporate governance committee conduct any studies on this subject?

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20 - Mission, vision & strategic goals of the company

20.1. Did the BoD determine and disclose a mission/vision (which)?

20.2. Did the board approve strategic goals that were set by managers?

20.3. Is information on formation, approval and implementation process of strategic goals given?

20.4. Is the board rated in meeting goals?

20.5. Has the BoD reviewed past performance and activities?

20.5.b If so, what has been the frequency of these reviews?

20.5.c. By what kind of method did this review take place?

20.6. In case of any non-compliance with the above mentioned principles; explain why.

21 - Internal control & risk management mechanism 21.1. Did the BoD establish any internal control mechanism?

21.2. Did the BoD establish any risk management mechanism?

21.3. Is information given on operation and efficiency of above mentioned mechanisms?

22 - Authority & responsibilities of members of BoD & executives

22.1. Are the authorities and responsibilities of board members and executives explicitly regulated in the articles of association?

23 - Principles of activity of BoD

23.1. Which method has been followed to determine the agenda of board meetings?

23.1.b. How many meetings were held in the related period?

23.1.c. What have been the methods and procedures for calling and attending the meetings?

23.2. Has a secretariat been formed to inform the members and to facilitate communication?

23.3. Have reasonable and detailed grounds for dissenting opinions discussed in the meeting been written to the minutes of the meeting?

23.3.b. Have legal company auditors been informed in writing?

23.4. Have grounds of dissenting opinions of independent board members been disclosed to public?

23.5. Whether attendance to meetings in person have been obtained on the following subjects:

a. Deciding the areas of business in which the company will operate and approving business and financial plans b. Inviting the ordinary/extraordinary general shareholder meeting and organization thereof

c. Finalizing the annual report to be submitted to the general assembly d. Electing the board chairman and deputy chairman and new board members e. Establishing administrative divisions or terminating their operations f. Appointing or dismissing the chief executive officer/general director g. Establishing committees

h. Mergers, divestitures, reorganization; sale of the company or 10% of its fixed assets or investing in an amount i. Determining the dividend policy of the company and amounts to be distributed for the relevant term

j. Increasing or decreasing of equity capital

23.6. Have questions of board members in the meeting been recorded in the minutes of the meeting?

23.7. Have members been granted with weighted voting rights and/or negative veto rights?

24 - Prohibition of Carrying Out Transactions with the Company and Prohibition of Competing with the 24.1. Have the prohibition of carrying out transactions with the company and prohibition of competing with the company been implemented?

24.2. If members carried out transactions with the company and competed with the company, why?

24.2.b. Did this lead to conflicts of interest?

25 - Ethical rules

25.1. Did the board of directors establish ethical rules for the company and the employees?

25.2. Have ethical rules been disclosed to employees and the public?

26 - Number, structure & independency of committees established by the BoD

26.1. Did the BoD establish a corporate governance committee or other committees besides audit committee in order to fulfill its tasks and responsibilities?

26.2. If no corporate governance committee was established, why not?

26.3. Are the qualifications of the chairman and members of committees disclosed?

26.4. How frequent did the committees meet and what have their activities been in the relevant period?

26.4.b. If information is not disclosed, why not?

26.5. Are there procedures to be followed during the execution of these activities?

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26.6 Have the committee chairmen of all committees been selected from independent board members?

26.6.c. Did it lead to any conflicts of interest?

26.7. Were both of the members in committees with two members and most of the members in committees with more than two members non-executive board members?

26.8. Is there a board member that serves in more than one committee?

26.8.b. If so, why?

27 - Remuneration of BoD

27.1. Are rights, compensations and wages granted to the members of the board dislosed?

27.2. What were the criteria that were used to determine those?

27.3. Is remuneration of the board of directors determined according their performance and the performance of the company?

27.4. Has the company lended money to any member of the board and the managers?

27.4.b. If so, why?

27.5. Has the company provided credit to them?

27.5.b. If so, why?

27.6. Has the company prolonged the terms of existing loans and credits?

27.6.b. If so, why?

27.7. Has the company improved the borrowing conditions?

27.7.b. If so, why?

27.8. Has the company extended credit under the name of personal credit means through a third person or 27.8.b. If so, how many of these cases took place?

27.8.c. If so, why?

27.8.d. Did it lead to any conflicts of interest?

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10 APPENDIX D – PUBLICATION OF CGCRS BY ISE-100 FIRMS IN 2005

¹

ISE 100-National Index

59%

9%

8%

2%

22%

No website / email-address available No reply on emails

Response on email: no CGCR available Turkish CGCR

English CGCR

1 Annual reports ISE-100 firms, websites ISE-100 firms

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11 APPENDIX E

LEVEL OF COMPLIANCE OF ISE-100 FIRMS – SHAREHOLDERS

²

2 Corporate Governance Compliance Reports ISE-100 firms

PRINCIPLE

DIRECT & INDIRECT COMPLIANCE

DIRECT COMPLIANCE

2.1. Whether a shareholder relations department has been established 100% 93%

2.2. Whether the name of the manager of the department is disclosed 71% 71%

2.3. Whether the names of staff of the department are disclosed 64% 64%

2.4. Whether contact information of the department is disclosed 87% 87%

2.5. Whether main activities of the department in 2005 are disclosed 85% 85%

2.6. Whether the amount of request made to the department are disclosed 64% 64%

2.7. Whether such requests have been answered 64% 64%

Average level of compliance principle 2 76% 75%

3.1. Whether the content of request to the department are disclosed 37% 37%

3.2. Whether information are evaluated before answering 12% 12%

3.3. Whether the efficiency of electronic forms for communicating information to shareholders has

been evaluated 0% 0%

3.4. How changes in shareholders' rights are communicated 93% 93%

3.5. Whether requesting a special auditor is a right is an individual right in articles of association 44% 8%

3.6. Whether there has been a request for a special auditor 78% 78%

3.6.b. How this request has concluded 0% 0%

4.1. Whether there has been a shareholder meeting in 2005 98% 98%

4.1.1. Whether the attendance quorum has been disclosed 81% 81%

4.1.2. Whether stakeholders have attended the meeting 39% 39%

4.1.3. Whether media has attended the meeting 58% 58%

4.1.4. Disclosed how shareholders have been invited 97% 97%

4.1.5. Whether participation in the meeting has been eased for shareholders 56% 54%

4.2. Whether time has been anticipated for recording in share ledger of firm 37% 22%

4.3. Disclosure what kind of information has been made available before shareholder meeting 90% 90%

4.3.b. Disclosure how this information has been made available 88% 88%

4.4. Whether shareholders had the right to ask questions at shareholders' meeting 92% 92%

4.4.b. Whether these questions have been answered 80% 80%

4.5. Whether shareholders made proposals at shareholders' meeting 61% 61%

4.5.b. Disclosed how these proposals concluded 54% 54%

4.6. Whether there are provisions in articles of associations so that certain decisions can only be

made at shareholders' meeting 54% 10%

4.7. Whether the minutes of the shareholder meeting are kept ready for shareholders 86% 86%

5.1. Whether there are any privileged rights on voting in articles of association 100% 100%

5.1.b. Whether information on these rights has been provided 100% 100%

5.2. Whether these rights have been exercised and how 0% 0%

5.3. Whether companies in mutual ownership have cast their votes at shareholders' meeting 63% 63%

5.4. Whether minority shareholders are represented in management 32% 10%

5.5. Whether a cumulative voting procedure has been adopted 34% 2%

6.1. Whether there are any privileged rights on distribution of dividends in articles of association 80% 80%

6.1.b. Whether information on these rights has been provided 100% 100%

6.2. Whether the company has a dividend policy 41% 41%

6.2.b. Whether information on this policy has been provided 100% 100%

6.2.c. Whether information on this policy has been provided on the shareholders meeting 58% 58%

6.3. Whether the distribution of dividends has been realized in the period set by legislation 58% 58%

6.3.c. If not, whether the firm encountered legal results 0% 0%

7.1. Whether there are restrictions on transfer of shares 90% 59%

7.1.b. Whether information on this policy has been provided 100% 100%

Average level of compliance section one 64% 60%

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12 APPENDIX F

REASONS FOR NON-COMPLIANCE OF ISE-100 FIRMS –SHAREHOLDERS

³

2.1. Reasons for not having a shareholder relation unit

o Since the incoming flow of investors' requests is not heavy 2 o Since shareholders are also informed in a good manner without having a special

department for shareholders 2

Total 4

3.5. Reasons for not granting the right to appoint a special auditor as an indivual right in the articles of association

o Legislation is followed (TCC / banking law) 13

o Company is audited by independent auditor that is selected by general assembly 6

o Problems regarding confidentiality of information 3

o Would complicate management of the company 2

o Management is transparent / no such request yet 1

Total 25

4.1.5. Reasons for not easing participation of shareholders in the meeting o Since past experience had shown that participation of shareholders was rather

limited 1

1

4.2. Reasons for anticipating time to register shareholders in the share ledger

o Deadline of current legislation is being followed 8

o Deadline as specified in Articles of Association is being followed 1

Total 9

4.6. Reasons for not having provisions in articles of associations so that certain decisions can only be made at shareholders' meeting

o Since it would decrease the efficiency in management and adversely affect the

competitive edge and result in missing important opportunities 12

o Current legislation is being followed 8

o BoD represents will of shareholders 4

o Since no such needs has come up to date, there was no need to put a relevant

clause in Articles of Association 1

o Turkish Armed Forces Foundation has affirmative vote and this foundation acts

in line with public interest 1

Total 26

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5.4. Reasons for not having minority shareholders represented in management

o Minority shares are represented in the General Assembly 5

o No demand / criticism from minority shareholders yet 3

o No shareholder has claimed minority shareholder status 1 o Share certificates do no involve participation in management 1

o Not possible because of the privileged voting rights 1

o Since directors are elected from among group A shareholders 1

o Feedback is communicated to management 1

Total 13

5.5. Reasons for not having adopted a cumulative voting method

o Current legislation is being followed 9

o Not to harm the harmonious management structure 9

o Minority shareholders are represented by (independent) directors 4

o Not possible because of the privileged voting rights 1

o No need for sovereign shareholding by the major shareholders 1

Total 24

7.1. Reasons for having restrictions on transfer of shares

o firm is forced to have such restrictions because of legislation 10 o to protect the current owner from increased competition 7

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14 APPENDIX G

LEVEL OF COMPLIANCE OF ISE-100 FIRMS – PUBLIC DISCLOSURE AND TRANSPARENCY

⁴

4 Corporate Governance Compliance Reports ISE-100 firms PRINCIPLE

DIRECT COMPLIANCE

8.1. Whether the company disclosure policy is in line with code 66% 56%

8.3. Disclosure of reasons for non-disclosure after a policy has been determined 23% 23%

8.4. Whether the names and duties of the people responsible for implementation of the policy

are disclosed 80% 80%

9.1. Number of disclosures on material events to CMB are disclosed 98% 98%

9.2. How many additional disclosure statements have been requested from CMB and ISE 85% 85%

9.3. How many disclosures on material events in foreign stock exchanges have been made 28% 28%

9.3.b. Whether these material events have also been disclosed in Turkey 21% 21%

9.4. Whether reasons for non-timely disclosure are disclosed 0% 0%

9.4.b. Whether the CMB imposed sanctions for not disclosuring in time 17% 17%

10.1. Whether the website address has been disclosed 100% 100%

10.2. Whether the company publishes all information on the website as required by the code 72% 68%

11.1. Whether information about ultimate controlling individual shareholder(s) has been

disclosed 83% 64%

12.1. Whether insiders have been disclosed 58% 47%

12.2. Whether insiders are disclosed in CGCR 46% 46%

Average level of compliance section two 58% 55%

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15 APPENDIX H

REASONS FOR NON-COMPLIANCE OF ISE-100 FIRMS –SHAREHOLDERS

⁵

8.1. Reasons for not setting up a disclosure policy

o Company is currently establishing such a policy 2 o Any relevant information is disclosed to the shareholders. since the

current system seems to be sufficient and there are no requests by

the shareholders, the company has not defined a disclosure policy 4 6

10.2. Reasons for not disclosing certain information on internet site

o Items will be added when completed 4

o Not applicable for firm (e.g. no prospectus since no public offers

were made in 2005) 1

o Information is disclosed in another way (e.g. material disclosures) 2 o Those wanting to obtain additional information can contact CEO

through email 1

8

11.1. Reasons for not disclosing ultimate owners

o The Company’s shares are traded on Istanbul Stock Exchange

Market. Therefore, the company does not know all the shareholders. 2 o Current information that company has may be shared with the public

when necessary 2

o Since the public knows that members of the Koç Family are the ultimate controlling shareholders of the Company, it was considered unnecessary to perform and disclose a separate calculation in this

regard. 5

o No study has been done on this subject 2

o Disclosure would not affect investors 2

13

12.1. Reasons for not disclosing insiders

o insiders will be disclosed on website 1

o since there is no legislation making disclosure compulsory and no

need arised to disclose to the public 3

o Considering that the information and strategic resolution only entitled to the top management of the company and assuming that the public is not able to know those persons, it has not been needed to

announce the names of them previously 2

o According to Banking Law and legal and ethical rules, it is forbidden for employees to pass on confidential information that they acquire during their duties. This liability continues after the termination of employment, it was therefore not deemed necessary to disclose

insiders 1

7

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16 APPENDIX I

LEVEL OF COMPLIANCE OF ISE-100 FIRMS – STAKEHOLDERS

⁶

6 Corporate Governance Compliance Reports ISE-100 firms PRINCIPLE

DIRECT COMPLIANCE 13.1. Whether stakeholders are informed about issues related to

themselves 97% 97%

13.2. Disclosed how stakeholders have been informed 90% 90%

14.1. Whether stakeholders participate in management 80% 80%

14.2. Whether a model has been established regarding participation of

stakeholders in management 86% 80%

14.3. Disclosed what kind of participation has taken place 94% 94%

15.1. Whether a HR policy has been established 100% 100%

15.2. Disclosure of main principles HR policy 86% 86%

15.4. Whether there is a employee-representative 56% 22%

15.4.b. Disclosure of name, duties and authorization of representative 15% 15%

15.5. Whether employees have complained about discrimination 59% 59%

15.5.b. Disclosure on what has been done to solve complaints 0% 0%

16.1. Disclosure on marketing and sales of goods and services 86% 86%

16.2. Disclosure of actions to maintain customer's satisfaction 93% 93%

17.1. Disclosure of activities concerning environment/region/public 88% 88%

17.2. Disclosure of law suits against the company 61% 61%

17.2.b. Disclosure of the outcome of lawsuits 0% 0%

17.3. Disclosure whether firm has environmental effect evaluation reports 24% 24%

Average level of compliance section three 66% 63%

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17 APPENDIX J

REASONS FOR NON-COMPLIANCE OF ISE-100 FIRMS –STAKEHOLDERS

⁷

14.2. Reasons for not having a model for participation of employees in management

o If a public model is established providing the participation of stakeholders in management, the company would "naturally

abide" by the requirements of such a model 1 o As banking practices and legal regulations place strict

restrictions on the appointment of executives, no model has been devised for stakeholders to personally take part in

management. 1

o Rights of owners of interest are protected by virtue of

applicable legislation 2

4

15.4. Reasons for not having a representative for employees o The necessary units have been constituted to carry out the

relations with the employees. Education is carried out by the Administrative Affairs, Personnel and Salary Matters are handled in the Logistic services Management, Labour Health and Safety, Quality and Environment Management Systems

are run by Quality Control and Government Management 1 o Personnel-related decisions are carried out and implemented

by the department of Financial and Administrative Affairs 1 o Logistic Services Manager represents the non-union members 2 o Employee relations are the primary function of the Industrial

Relations Department, consisting of team of nine people 1 o No need for employees representative since company has HR

Manager 14

o Various committees have been established to execute relations with the employees and employees have a

representative in each of those committees 1 o The managers take a close interest in the problems of the

employees that are reporting to them and follow their career development opportunities. HR Department also takes an important role on this subject. The doors of both the middle managers and the top management are at all times open to

the employees 1

o While there is no board member responsible for overseeing employee relations, individuals representing employees are invited to be present at board meetings at which issues affecting employees are to be decided on so that they may

provide the board with information about the matter at hand 1 22

(18)

18 APPENDIX K

LEVEL OF COMPLIANCE OF ISE-100 FIRMS – BOARD OF DIRECTORS

⁸

PRINCIPLE

INDIRECT COMPLIANCE

18.1. Whether names of board members and chairman are disclosed 86% 86%

18.1.b. Disclosed whether members are executive/non-executive/independent 83% 83%

18.2. Whether board chairman and CEO are the same person 83% 83%

18.3. Whether less than half of board members have executive duties 71% 69%

18.4. Whether there are independent members in the board 68% 32%

18.5. Whether there at least 2/3 of the board members are independent 58% 17%

18.6. Whether independency statement of independent members have been disclosed 26% 26%

18.7. Disclosed which actions have been taken when the independency of members was

jeopardized 32% 32%

18.8. Whether duties carried out by board members outside company have been regulated 20% 20%

19.1. Whether board member were elected from qualified candidates 92% 92%

19.2. Whether board members have not been convicted before 80% 80%

19.3.a. Whether board member have been selected from among candidates that are

capable of analyzing and interpreting financial statements 90% 90%

19.3.b. Whether board members have been selected from among candidates that have

basic knowledge about legal regulations 92% 92%

19.3.c. Whether board members have been selected from among candidates that are able

to participate in all board meetings 86% 86%

19.4. Whether rules for selection are incorporated in AoA 32% 15%

19.5. Whether board members have followed training and adaptation programs when the

did not have sufficient qualifications? 24% 12%

19.5.b. Disclosed which subjects were included 86% 86%

19.6. Whether CG committee has conducted studies on selection 32% 32%

20.1. Whether the firm has disclosed mission/vision 93% 93%

20.2. Whether board has approved strategic goals set by managers 56% 56%

20.3. Whether information on formation/approval/implementation of strategic goals has

been disclosed 42% 42%

20.4. Whether board has been rated in meeting goals 7% 7%

20.5. Whether BoD has reviewed past performance 83% 83%

20.5.b. Disclosure of frequency of reviews 59% 59%

20.5.c. Disclosed by what kind of method review took place 63% 63%

21.1. Whether BoD established internal control mechanism 92% 83%

21.2. Whether BoD established risk management mechanism 78% 71%

21.3. Whether information on operation/efficiency mechanisms has been disclosed 80% 80%

22.1. Whether authorities and responsibilities of board members and executives have

been explicitly regulated in AoA 86% 68%

(19)

19 APPENDIX K CONTINUED

LEVEL OF COMPLIANCE OF ISE-100 FIRMS – BOARD OF DIRECTORS

⁹

PRINCIPLE

INDIRECT COMPLIANCE

23.1. Disclosure how agenda of board meetings has been determined 68% 68%

23.1.b. Disclosure how many meetings were held 85% 85%

23.1.c. Disclosure of methods and procedures for calling/attending meetings 58% 58%

23.2. Whether a board secretariat has been formed 64% 34%

23.3. Whether grounds for dissenting opinions discussed have been written to minutes 73% 73%

23.3.b. Whether legal company auditors been informed about dissenting opions in writing 59% 59%

23.4. Whether dissenting opinions of independent members have been disclosed to public 25% 25%

23.5. Whether meetings on areas specified by the code have been attended in person 56% 56%

23.6. Whether questions of members in the meeting have been recorded in the minutes 34% 22%

23.7. Whether members have been granted with weighted voting rights and/or negative

veto rights 64% 64%

24.1. Whether the prohibition of carrying out transactions with the company and competing

with the company been implemented 69% 69%

24.2. Whether and why members carried out transactions with the company and competed

with the company 47% 46%

24.3. Whether non-compliance lead to conflicts of interest 28% 28%

25.1. Whether BoD has established ethical rules 95% 88%

25.2. Whether ethical rules have been disclosed to employees and public 63% 63%

26.1. Whether BoD established CG committee or other committees besides audit

committee 53% 53%

26.2. Whether it is disclosed why no corporate governance has been set up 70% 70%

26.3. Whether qualifications of the chairman and members of committees are disclosed 78% 78%

26.4. Disclosure of frequency of meeting committees and activities 53% 51%

26.5. Whether procedures had to be followed during activities 20% 20%

26.6. Whether committee chairmen of all committees been selected from independent

board members 68% 15%

26.6.c. Disclosed whether non-compliance has lead to conflicts of interest 0% 0%

26.7. Whether both of the members in committees with two members and most of the

members in committees with more than two members were non-executive board members 61% 58%

26.8. Whether there is a board member that serves in more than one committee 76% 76%

27.1. Whether the rights/compensations and wages granted to the members of the board

are disclosed 69% 69%

27.2. Disclosure of the criteria that were used to determine those 12% 12%

27.3. Whether remuneration is based on performance and performance of the company 64% 64%

27.4. Whether the company lended money, provided credit, prolonged the terms of existing loans and credits, improved the borrowing conditions or extended credit under the

name of personal credit means through a third person or provided warranties 76% 76%

27.4.b. Disclosed how many of these cases took place 0% 0%

27.4.c. Disclosed whether it has led to any conflicts of interest 0% 0%

Average level of compliance section four 57% 53%

(20)

20 APPENDIX L - REASONS FOR NON-COMPLIANCE OF ISE-100 FIRMS –

BOARD OF DIRECTORS

¹⁰

18.3. Reasons why more than half of the board members have executive duties

o Because of the scope of the corporate activities and the character of its

organization 1

1

18.4. Reasons for not having independent members

o Since there are no non-corporate ultimate shareholders with a controlling interest in the Company, all naturally possess the advantage to act

independently and are impartial in their decisions 3

o Since such a need has not arisen 3

o No discrimination of executive, non-executive and independent board members in the company as required by articles of incorporation 4 o The company is joint venture. Due to joint management structure, there are no

independent members on the Board 1

o No independent member was elected during the General Assembly 1 o The Board is careful to listen to the views of shareholders 2

o Firm outsources consultancy services when required 2

o Since there is no requirement stipulated in the this respect in related regulation 3 o The non-executive directors are individuals who are regarded as experts in the

sector and whose actions are guided by the principle of protecting the interests of both the company and its shareholders by means of their personal

knowledge and experience 1

o Since 3 members are elected among candidates nominated by the A group shareholders, 3 members among candidates nominated by the B group

shareholders and 1 member among candidates nominated by the C group. 6 o Because the requirements for this position need qualifications above the

personal ones as indicated by the law, this limits the number of suitable

candidates to the post. 4

30

18.5. Reasons for not having at least 1/3 independent members

o In the future, it is planned to increase the number of the independent board

memberships 2

2

19.4. Reasons for not stating selection criteria in AoA

o Because it is regulated by the law, the AoA contain no other provisions in

relation to the minimum qualifications required in Board Director elections 5 o The Company’s Articles of Association state specific selection criteria, however

principles 3.1.1, 3.1.2, and 3.1.5. of CMB Corporate Management Principles

have not been indicated separately 5

10

(21)

21

19.5. Reasons for not having an training/adaption program

o Since the members were selected from among candidates who have been screened by the CG and nomination committee they are deemed suitable for

these duties and have not received any training and orientation 7 7

21.1. Reasons for not having an internal control mechanism

o Internal Audit Division established within the Holding Company carries out

activities in Company too. 3

o The Executive Committee controls actively all risks relevant to the Company. 1

o Since there is no legal requirement 1

o The company's business, operations, and number of employees does not

create a need for it 1

6

21.2. Reasons for not having an risk mechanism

o There is no risk control mechanism and internal control mechanism established.

Internal Audit Division established within the Holding Company carries out

activities in Company too. 2

o The Executive Committee controls actively all risks relevant to the Company.

Therefore, a separate risk management and internal control mechanism was

not established 1

o Risk management mechanism is currently developed 1

4

22.1. Reasons for not specifying duties board members / executives in AoA

o Authorities of manageres are prepared and arranged every year 1 o Responsibilities of managers are specified by BoD / managers perform their

duties in line with objectives and under the instructions of BoD 3 o Because of time and finance considerations; since every alteration in the

responsibilities and authorities will require an amendment in AoA which will

further require authorization of general assembly 1

o Written job descriptions spell out such duties and responsibilities for all

employees (including senior management) 1

o Powers of executives are clearly specified in the Company's record of

authorized signatures 1

o It has not been found necessary to set the responsibilities down in the AoA since the provisions of art. 336 of TCC and other related regulations describe this matter in detail / since those are identified through laws and regulations,

rules of ethics and company procedures 3

o Required amendments to the Articles of Association are deemed necessary 1 11

23.2. Reasons for not having a secretariat

o Establishment of a secretariat was not considered as a requirement 1 o Secretariat duties are conducted, in rotation, within the Board of Directors 1 o Carried out general secretariat / IR department / general manager 14

16

(22)

22

23.6. Reasons for not stating questions in minutes

o Being only a matter of discussion, the questions asked by the Directors in the

Board meetings are not written in the meeting records 1

o Since there were no questions 7

8

24.2. Reasons for having transactions with the firm or competing with it o Since a large part of the board comprise persons who engage in active duty in

other firms, it is inevitable that situations in the scope of 334 & 335 of TCC

should arise 1

1

25.1. Reasons for not having specified ethical rules

o Job descriptions have been developed for company employees 1 o Company has its own traditional rules which have formed due to past

accumulation of experience and are not in form of a text 1 o Studies have begun on preparation of a directive on ethical rules 3 5

25.2. Reasons for not disclosing ethical rules

o New arrangements to be made within the framework of information policy will be

disclosed to public as they take place 1

1

26.2. Reasons for not having a CG-committee

o CG committee will be organized in accordance with concerned laws and

regulations to be promulgated by CMB 5

o Since it was not considered necessary (it was deemed more appropriate to

oversee the CG principles by the entire board of directors) 8 o Since it has outsourced consultancy services when necessary 2 o Evaluations of Board of Directors related with the constitution of the Corporate

Management Committee are still going on 6

21

26.6. Reasons for not having independent chairmen for all committees

o Since there are no independent members in the board either 26 o In the future, considering the amount of independent board members, the

intention is to appoint an independent member as chairmen of one or both

committees 1

o Since the chairman does not have any executive duties, this does not violate

capital markets legislation 2

29

26.7. Reasons for not having a majority of non-executive members in committees

o Since there are no non-executive members in the board either 1 1

(23)

23 APPENDIX M – SPEARMAN RANK CORRELATION TEST –

LEVEL OF COMPLIANCE AND SIZE

¹¹

APPENDIX N – SPEARMAN RANK CORRELATION TEST – LEVEL OF COMPLIANCE AND ULTIMATE OWNERSHIP BY FAMILIES

¹²

11 Information on compliance is gathered from Corporate Governance Compliance Reports of ISE-100 firms, information on size (market value) is gathered from the Annual Factbook 2005 of the ISE, pages 53 – 59.

12 Information on compliance is gathered from Corporate Governance Compliance Reports of ISE-100 firms, information on ultimate ownership by families is gathered from (firm) websites and annual reports – see references.

Correlations

1,000 ,221*

. ,026

78 78

,221* 1,000

,026 .

78 78

Correlation Coefficient Sig. (1-tailed) N

compliance

size Spearman's rho

compliance size

Correlation is significant at the 0.05 level (1-tailed).

*.

Correlations

1,000 ,012

. ,458

78 78

,012 1,000

,458 .

78 78

compliance

family Spearman's rho

compliance family

(24)

24 APPENDIX O – SPEARMAN RANK CORRELATION TEST –

LEVEL OF COMPLIANCE AND FOREIGN OWNERSHIP

¹³

APPENDIX P – SPEARMAN RANK CORRELATION TEST – LEVEL OF COMPLIANCE AND ACTIVITIES OF THE FIRM

¹⁴

13 Information on compliance is gathered from Corporate Governance Compliance Reports of ISE-100 firms, information on foreign ownership is gathered from (firm) websites and annual reports – see references.

14 Information on compliance is gathered from Corporate Governance Compliance Reports of ISE-100 firms, information on the activities conducted by the firms are gathered from (firm) websites and annual reports – see references.

Correlations

1,000 ,087

. ,223

78 78

,087 1,000

,223 .

78 78

compliance

foreign ownership Spearman's rho

compliance

foreign ownership

Correlations

1,000 ,088

. ,221

78 78

,088 1,000

,221 .

78 78

compliance

sector Spearman's rho

compliance sector