REPORT ON COMPLIANCE WITH MANAGEMENT POLICIES

1. DECLARATION OF COMPLIANCE TO CORPORATE MANAGEMENT POLICIES

 

1.1 INSTITUTIONAL MANAGEMENT PRINCIPLES THAT ARE NOT YET APPLIED

Our Company believes in the significance of compliance to Institutional Management Principles, that were published in 2003, and revised by the Capital Markets Board in 2005. However, compliance to some principles is not fulfilled yet due to reasons such as the market, and the Company’s current structure not being able to correspond to some principles, conflicts in compliance both domestically and overseas, issues that might delay the Company’s activities; thus conducts on performing the compliance are being carried out, as explained below.

 

1.2. COMPLIANCE STUDIES CONDUCTED WITHIN THE PERIOD

 

Audit Committee Working Principles have been approved by the Administrative Board in 10.10.2011, within the context of CMB Corporate Governance Policies Part IV, Article 5.6, and CMB Independent Audit Report Serie: X No.22 Article 25. It is placed on the Company’s website as approved:

 

KATMERCİLER ARAÇ ÜSTÜ EKİPMAN SAN. ve TİC. A.Ş. AUDIT COMMITTEE DUTY AND WORKING PRINCIPLES

 

1 - GOAL AND GROUNDS:

 

The aim in the preparation of this document is to accurately monitor the financial and operational activities of Katmerciler Araç Üstü Ekipman San. ve Tic. A.Ş. (the Company) Audit Committee (a. Committee).

 

This document has been prepared within the context of Article 25 of CMB Independent Audit Report Serie: X No.22, Article 5.6 of CMB Corporate Governance Policies republished in February 2005, and Articles 26 and 27 of the Company’s Articles of Incorporation; by the 2010/17 resolution of the Company’s Administrative Board, dated 22.04.2010.

 

2 - STRUCTURE AND WORKING PRINCIPLES OF THE AUDIT COMMITTEE

 

The Audit Committee is made up of two non-executive members selected among the Administrative Board members. At least one member should have accounting or finance formation and/or experience. In the related accounting period, counsel of independent experts could be utilized, other than the independent audit firm experts’ feedback, in case that the Audit Committee considers necessary. This sort of consultancy fee is compensated by the Company.

 

The Audit Committee assembles every three months, at least four times. Timing of the meetings are arranged in convenience with the timing of Administrative Board Meetings. For urgent matters, the Audit Committee may gather extraordinarily by the convocation of one of its members, any member of the Administrative Board or by the Chairman’s request.

 

If the Audit Committee deems necessary, Company executives may hold meetings with internal and external auditors, employees, customers, suppliers, and creditors; receive written or verbal information; on condition that they maintain confidentiality. These meetings may be held and correspondence may be effected via all sorts of electronic communication channels, taking the confidentiality of Company information into consideration. Any resource required for the meetings, delibertations and studies of the Audit Committee will be compensated by the Company, via Administrative Board’s approval. The Audit Committee declares all evaluations and proposals that are within its scope of duty and responsibility to the Administrative Board in written; in addition to regular declaration of ordinary meetings’ conclusions.

 

3 - DUTIES AND RESPONSIBILITIES OF THE AUDIT COMMITTEE

 

a) The Audit Committee monitors the Company’s accounting system, public declaration of financial information, independent audit and functioning and efficiency of the Company’s internal system. Selection of the independent audit company, preparation of internal audit agreements, initialization of audit process, and monitoring every stage of independent company’s studies. Additionally, the Audit Committee takes all precautions to ensure that all sorts of internal and independent audits are conducted sufficiently and transparently.

 

b) The Audit Committee determines the independent audit company that will provide services, and presents it to the approval of the Administrative Board. The Audit Committee declares the Administrative Board of any possible factors that might damage the independence reputation of the audit company, prior to presenting an audit company to the Administrative Board’s approval.

 

c) The independent audit company immediately declares to the Audit Committee; significant factors about the Corporation’s accounting policies and implementation, alternative options for applications and public declarations in the context of the Board’s accounting standards and policies; their possible consequences and significant correspondence with the Company Administration, in written.

 

d) Methods and measures for the inspection and conclusion of complaints regarding the Company’s accounting, internal control and independent audit systems; and also methods and measures for the evaluation of declarations by the Company employees regarding the Company’s accounting and independent audit in the context of confidentiality are issues determined by the Audit Committee.

 

e) The Audit Committee presents public declarations of annual and periodic financial tables and annotations to the Administrative Board in written, including its own evaluations. This presentation is done through checking the conformity of the reports with international accounting policies and principles, with legal regulations, and their accuracy, by taking the opinions of Company executors in charge and independent auditors.

 

4 – OTHER FACTORS:

 

a) The Auditing Committee monitors conformity of internal regulations and policies that prevent any conflicts that may arise between administrative board members, executors and other employees. The Committee also monitors regulations and policies that prevent the abuse of confidential commercial information.

 

b) For a better audit quality, this document can partially or completely be amended in parallel with developments, by the request of the Audit Committee or one of the Administrative Board members, through the Board’s approval.

 

c) The Audit Committee’s duties and responsibilities do not abolish the Administrative Boards missions generating from the Turkish Commercial Code.

List of ‘Person who can be informed internally’ is prepared, and declared to the public via the Company’s website. (www.katmerciler.com.tr)

 

PART I - SHAREHOLDERS

 

2. RELATIONS WITH SHAREHOLDERS DEPARTMENT

During the utilization of shareholders rights, compliance with legislation, Articles of Incorporation and other internal regulations are assured; as well as the assurance on the utilization of these rights. Katmerciler A.Ş. conducts relations with shareholders within Financial Coordination. Primary goal of the Company is to provide that shareholders’ right to information is fulfilled with justice and accuracy. In addition, the Company fulfills the partnership rights of shareholders accurately and in shortest term possible.

Major activities conducted by the Relations with Shareholders Unit are:

• To keep registration of shareholders up to date, safe and sound.

• To fulfill shareholders’ verbal and written demands from the Company, except for the trade secrets that are not disclosed.

• To ensure that the General Assembly Meeting is in compliance with the legislation in effect, the Articles of Incorporation or other internal regulations.

• To prepare the documents that the shareholders might benefit from in the General Assembly.

• To ensure accurate registration of voting results and delivery of these reports to shareholders on demand.

• To look out for and pursue every kind of issue regarding informing the public, including the legislation and the Company’s information policy.

• To prepare the context of ‘investors relations’ tab on the Company’s corporate website (www.katmerciler.com.tr), to update it periodically, to ensure that the shareholders access the Company information fastly and easily.

• To inform the public by announcing the ‘Special Occasion Declaration’ by ISE via Public Disclosure Platform, grounded on Capital Markets Board’s Series VIII, No: 54 notice.

• To pursue legislational changes related to the Capital Markets Board and bring them to the relevant department’s attention.

•To represent the Company in the presence of the Capital Markets Board, İstanbul Stock Exchange and the Central Registry Agency.

Employees liable of relations with shareholders department:

Gökmen Ölçer		Financial Coordinator
Nebile Haspolat		Chief Accountant
Phone		: 0232 376 75 75
Fax		: 0232 394 01 97
E-mail		: yatirimci.iliskileri@katmerciler.com.tr

 

NOTIFICATION OF INVESTORS IN 2011

In 2011, all written and verbal inquiries forwarded to the Investor Relations Unit have been responded to, as shown with statistical data below:

Notifications via phone : 17

Notifications via e-mail : 71

 

3. UTILIZATION OF THE RIGHT TO INFORMATION OF SHAREHOLDERS

 

Utilization of the right to information and examination is assured on a non-discriminatory basis within the Company.

 

With the intention of expanding shareholders’ rights to information and to ensure accurate usage of these rights, in addition to financial statements, necessary information and documents are also brought into utilization of shareholders electronically in the Company’s corporate website (www.katmerciler.com.tr) which is updated periodically.

 

Shareholders’ verbal or written inquiries within the period are fulfilled verbally or written on a non-discriminatory basis, within Capital Markets Legislation.

 

Special occasion declarations, which are obligatory to be presented to ISE within the context of Public Disclosure Platform, financial statements and other information on the Company are presented electronically as well; bearing an electronical signature.

 

Company activities are audited periodically by AC International Independent Auditing and Accounting and Financial Advising Inc., an independent auditing company selected by the Administrative Board by Supervisory Committee’s recommendation, and by the Supervisors elected in the General Meeting. There is no regulation in the Articles of Incorporation regarding the assignment of a private auditor.

 

4. GENERAL ASSEMBLY INFORMATION

All of Group A shares of the Company capital are registered, and Group B shares are to the bearer. Prior to the General Meeting, informative documents will be prepared regarding the items in the agenda and they will be disclosed to the public via internet website.

 

The Company called two General Meetings in 2011; one of which was Ordinary, and the other was Extraordinary. The Ordinary General Meeting regarding 2010 activities was held on May 11, 2011.

 

The Extraordinary General Meeting held in 27.07.2011, was regarding increasing paid capital from TL 12.500.000 to TL 25.000.000 by 100% capitalization issue. It was approved as per the 6th article of ‘Capital and Shares’ of the Articles of Incorporation.The Ordinary and Extraordinary General Meetings were held at the head office of the Company. Informative documents, Minutes of Meetings, Attendance Sheets and Supervisor Reports are published in our website (www.katmerciler.com.tr).

 

5. VOTING AND MINORITY RIGHTS

 

The voting procedure in General Meetings is proclaimed to shareholders prior to the meeting. At the Company, applications obstructing the voting right are avoided, and each shareholder is provided with the simplest and most appropriate method to exercise their right to vote.

 

There is no privilage stated in the Articles of Incorporation, regarding the exercise of voting rights. Each share has the right for one vote. There are no legal persons among the Company’s affiliates. There is no provision in the Articles of Incorporation that obstructs non-shareholders to vote by proxy as representatives. With their participation to the General Assembly, shareholders representing minority shares constitute the management together with the majority of shareholders. Cummulative voting method is not included in the Articles of Incorporation.

 

6. DIVIDEND DISTRIBUTION POLICY AND PERIOD

 

By the Administrative Board resolution No. 2011/12 dated 25.02.2011, our Company’s dividend distribution policy regarding year 2010 and consequent years is constituted, and published in the Company’s website (www.katmerciler.com.tr), under investor relations tab.

 

In the Company’s Articles of Incorporation, Article 34, titled ‘Determination and Distribution of Dividends’ is formed in compliance with the Turkish Commercial Code and the Capital Market Law.

 

7. TRANSFER OF SHARES

 

Our Company’s capital consists of 1,000,000 registered Group A, and 11,500,000 Group B bearer shares. 3,000,000 B Group bearer shares are traded in ISE Secondary National Market. As per our Company’s Articles of Incorporation, persons who own Group A registered shares (including ownership through legacy or grants) are not permitted to sell or transfer their shares without the written consent of the Company’s Administrative Board. The Administrative Board is authorized to overrule the demands on this matter without stating a reason. In condition that the Administrative Board’s written consent is obtained, persons who own Group A registered shares are permitted to exchange their shares with Group B bearer shares.

 

There are no restrictions regarding Group B bearer shares. Transfer of these shares are subject to provisions of the Turkish Commercial Code, Capital Markets Law, and other relevant legislations.

 

PART II - PUBLIC DISCLOSURE AND TRANSPARENCY

 

8. COMPANY’S INFORMING POLICY

 

GOAL

 

As in every field of activity, Katmerciler is conscious to its responsibility towards all of its partners. Katmerciler performs a clear and transparent attitude towards relevant public authorities, finance and capital markets institutions as well as all investors and shareholders. The Company considers acting in accordance with corporate citizenship principles as a natural manner. This approach establishes the basics of Katmerciler’s informing policy.

 

The goals of Informing Policy are; by taking company strategies and performance into consideration, to share information equally with the public and authorized establishments, existing and potential investors and shareholders. Within this context, the Company shares information on its accumulative performance, future expectations, strategies, goals and visions, excluding commercial confidential information; to offer a continious, efficient and open communication platform through investor relations department, by declaring financial information accurately and promptly, and in detail; within the frame of generally accepted accounting principles, International Accounting Standards and Capital Markets Law. Katmerciler complies with regulations of Capital Markets Board and İstanbul Stock Exchange Market (ISE), in all practices regarding public disclosure.

 

MANDATE AND LIABILITY

 

The Executive Board is liable for the constitution, audit and update of the Informing Policy. The Informing Policy authorized by the Administrative Board is submitted to shareholders and disclosed to the public through the website. Financial Coordination is assigned for pursuing every kind of matter regarding public disclosure.

 

METHODS AND TOOLS

 

Within the frame of Capital Markets Board regulations and the Turkish Commercial Code, when determining its public disclosure and enlightment policy, Katmerciler Araç Üstü Ekipman San. ve Tic. A.Ş. utilizes the following methods and tools:

 

— Special Occasion Declarations presented to ISE (Public Disclosure Platform notifications are presented simultaneously and electronically).

— Financial Reports delivered periodically to ISE (Public Disclosure Platform notifications are presented simultaneously and electronically).

— Annual and interim activity reports (Published in print and in the Company website www.katmerciler.com.tr).

— Corporate website (www.katmerciler.com.tr).

— Information and introduction documents prepared for investors.

— Prospectus, circular, announcement texts and documents, as per Capital Markets Board regulations.

— Press releases and bulletins via printed and visual media.

— Notices and announcements made via Turkish Registry Gazette and daily newspapers.

— Bulletins intended to inform investors and shareholders.

 

PUBLIC DISCLOSURE OF SPECIAL OCCASIONS

 

ÖSpecial occasion declarations are disclosed to the public within the context of Capital Markets Board, Series VIII, Notice No, titled ‘Principles Regarding Public Disclosure of Special Occasions.’ Special occasion declarations that intend to assist persons or establishments in decision-making process, are prompt, accurate, eligible, sufficient and remote from deceptive expressions. Mentioned declarations can not be used for advertising purposes.

 

Public declaration, in circumstances which might affect capital market tools, is prepared by Investor Relations Department, and is signed by the Accounting Manager, Financial Coordinator and General Manager in accordance with the work-flow and approval procedure, and delivered to ISE on the same or consequent day until 9.00 am.

 

Electronically signed special occasion declarations and financial statements are delivered to Public Disclosure Platform within the framework of ISE and Capital Markets Board Regulations. These are published in the Company website within the next working day, following the day of public disclosure.

 

Our Company’s history, up-to-date and retrospective information are available on the website. Important headlines from the website are summarized as below:

1- Stock and Investor Information

2- Preferred Stock

3- Financial Reports

4- Corporate Identity and Management

5- Special Occasion Declarations

6- Public Offering Documents

 

Precautions are taken regarding any extrinsic intervention to the information published in the Company website.

 

PUBLIC DISCLOSURE OF FINANCIAL STATEMENTS

 

Our Company’s financial statements are prepared within the provisions determined by Capital Markets Board and in accordance with International Accounting Standards. Annual and semi-annual financial statements are declared to public by independent auditing in conformity with International Standards on Auditing. Financial statements and annotations are submitted for Administrative Board’s approval before declared to public, within the frame of Capital Markets Board legislations, and with conformity of Supervisory Committee. After the signing of the attestation, financial statements, annotations and Independent Audit Report are delivered to İMKB in line with regulations of Capital Markets Board and İMKB. Financial statements, annotations and Independent Audit Report are available on Katmerciler’s website.

 

ANNUAL REPORT PUBLIC DISCLOSURE

 

Katmerciler annual report is constituted in accordance with international standards, Capital Markets Board regulations and institutional management principles. Annual report is prepared by Investor Relations department, and then submitted for Administrative Board’s approval. Printed copies of the annual report, which is accessible on the website 15 days prior to General Meeting, can be supplied from Investor Relations department. In addition, interim reports, prepared for quarterly periods, are announced to public through Public Disclosure Platform; and available for investors’ information on Company website.

 

WEBSITE

 

Katmerciler website, in Turkish and English languages, is effectively utilized for public informing with its detailed and up-to-date content regarding Company activities, as a communication platform, which enables share- and stakeholders keep track of stock performance up-to-date and conveniently.

 

NOTICE AND ANNOUNCEMENTS

 

As per Capital Markets Law, Turkish Commercial Code and Katmerciler Articles of Incorporation; announcements regarding General Meeting, Articles of Incorporationmodification, capital increase and dividend payments are made via Trade Registry Gazette, Public Disclosure Platform and Company website. Investor Relations department gives detail information to the public by looking out for news in printed or visual media that might positively or negatively effect Katmerciler’s stocks. Only authorized persons are allowed to give information to the press or the public about the Company.

 

PERSONS AUTHORIZED TO GIVE INFORMATION

 

Except for the matters mentioned above, and the matters anounced to public through special occasions declarations; persons authorized to give information are the Chairman of Administrative Board and General Manager.

 

COMMUNICATION WITH CAPITAL MARKETS PARTICIPANTS

 

As per Capital Markets Board’s Series VI, Notice No. 41, 7th Article ‘Regarding the Principles That the Incorporations Subject to Capital Markets Law, will Comply with’, in order to provide communication between our Company and investors, based on Administrative Board Decision No.2010/20 dated 28.04.2010, a ‘Relations with Shareholders Department’ is constituted. Relations with Shareholders Department; fulfills the investors’ verbal or written demands, except for the confidential information and trade secrets that are not disclosed to the public.

 

9. SPECIAL OCCASION DECLARATIONS

 

Our Company made four special occasion declarations within the period. Regarding public declarations made in year 2010, no situation that required Capital Markets Board or IMKB request annotations occured. There is no special occasion declaration, except IMKB, since Company does not have a quote capital market tool in foreign stock markets. No sanctions are applied as the special occasions declarations are completed within the term set forth by the law.

 

10. COMPANY WEBSITE AND CONTENT

 

For the intention of giving information to shareholders and the public, our Company is actively utilizing the Company website, www.katmerciler.com.tr, as projected by Capital Markets Board Principles. Entire information stated in Capital Markets Board Institutional Management Principles Part II. Article 1.11.5, is available on the website.

 

Financial Coordination is responsible for the constitution of ‘Investor Relations’ tab on the website, update of information and addition of new information. Works intended for better website service are continuing.

 

11. DECLARATION OF NATURAL PERSON PREDOMINANT SHAREHOLDER/SHAREHOLDERS

 

İsmail Katmerci is the ultimate controlling shareholder with 58.40 % shares. Our predominant partner is declared to public in Public Offering Prospectus and Public Disclosure Platform Company General Information Form.

 

12. PUBLIC DECLARATION REGARDING PERSONS ABLE TO BE INFORMED INTERNALLY

 

Great importance is attached to the attention that must be paid to the rules by all Company employees, regarding the information acquired within the Company, for the balance between transparency and protection of Company benefits. Every kind of precaution is taken regarding the prevention of the utilization of information acquired within the Company.

 

The information on Company, that are acquired during work time, not desired by the Company to be shared with persons other than the necessary persons, are accepted as ‘Company Info’. While all employees who work for Katmerciler A.Ş. and maintain Company confidentiality, they do not utilize information directly or indirectly. None of the Katmerciler employees can perform any activities that will generate revenue by the sale or purchase of Katmerciler A.Ş. shares, utilizing the information they acquired internally.

 

In case that Company Administrators of the Company, who are able to acquire information that might effect value of capital market tools, purchase or sell via Company’s issued capital market tools; they are obliged to public declaration. Such declarations are available on Company’s website as well.

 

PART III - STAKEHOLDERS

 

13. INFORMING STAKEHOLDERS

 

Company respects and protects the rights that the stakeholders acquired through mutual agreement and contracts, considering that cooperating with stakeholders is for the Company’s benefit.

 

14. STAKEHOLDERS’ PARTICIPATION IN ADMINISTRATION

 

Employees participation in Administration as stakeholders, is supported via tools such as suggestions, surveys etc., in a manner that Company activities are not failed.

 

15. HUMAN RESOURCES POLICY

 

Katmerciler Group; has been conducting its operations in a human-focused manner grounding on its principle of preserving employee commitment and contentment at the highest level, since its establishment. Efficient management of effort constitutes the basis of our human resources policy. In our fast growing company, human resources processes are managed within the scope of institutional culture and codes of conduct. In our Company, basic principles of human resources are; respect, sufficiency (the right person), career planning, being scientific, equality of opportunity, justice, objectivity and job security.

 

16. INFORMATION ON CUSTOMER AND SUPPLIER RELATIONS

In relations with customers and suppliers; honesty, trust, consistency, professionalism and respect to mutual benefits principles are pursued. In manufacturing, a complete fullfillment of customer needs and expectations is aimed at. Company’s trade secrets, information on customers and employees are kept confidential. Donations of the Company are declared to the stakeholders and the public duly.

 

17. SOCIAL RESPONSIBILITY

 

Sensitive to matters such as protection of the environment and natural life, customer rights and public health; and in compliance with legislations. Cooperates with civil society organizations with a view to social responsibility.

 

PART IV - ADMINISTRATIVE BOARD

 

18. STRUCTURE AND CONSTITUTION OF ADMINISTRATIVE BOARD AND INDEPENDENT MEMBERS

 

According to the Articles of Incorporation; Company’s business and management is conducted by an Administrative Board that is composed of minimum three and maximum seven members, who are elected by the General Board, among candidates nominated by Group A shareholders in Turkish Commercial Code chambers. The number of Administrative Board members is determined in a manner that enables Administrative Board members to perform efficient and creative works, to make rapid and rational decisions, and to organize the constitution of committees and efficiency of their works. It is obligatory to elect all Administrative Board members among candidates nominated by Group A shareholders. Company’s Administrative Board constitutes of three members for year 2011. Mr. Mehmet Katmerci takes place in the Administrative Board as Executive Member.

 

ADMINISTRATIVE BOARD MEMBERS

 

Mehmet Katmerci	Chairman	Executive Duty
Furkan Katmerci	Member	Non – Executive Duty
Havva Katmerci	Member	Non – Executive Duty

 

In the case of an available member seat, new member assignment is conducted by remaining members of the Administrative Board. The assignment is then submitted for the approval of General Board at the soonest meeting. Thus, assigned member performs duty until the soonest General Meeting and in the act of General Board’s approval, the member fills in for previous member.

 

There are no independent members in Company Administrative Board. All members are elected in representation of specific shareholders. Company benefits from Administrative Board members’ knowledge and experiences.

 

19. QUALIFICATIONS OF ADMINISTRATIVE BOARD MEMBERS

 

Company Administrative Board is formed in a manner that enables highest efficiency. Administrative Board members qualify for Capital Markets Board’s Institutional Management Principles.

 

20. COMPANY MISSION, VISION AND STRATEGIC OBJECTIVES

 

OUR VISION

 

Katmerciler; aims to grow together with its partners, employees, suppliers and customers, and become a world brand in on-vehicle equipment sector.

 

OUR MISSION

 

Katmerciler undertakes determination of our leadership in the market as a duty

 

• by continuing to grow in domestic and international markets,

• With a production understanding that grounds on customer satisfaction,

• by always protecting customer rights through support during and after sales,

• within an awareness that contains the close follow of technological developments;

• by being sensitive towards the environment and human,

• by gaining strenght through the determination and support of our employees,

• In order to always succeed; for our country, customers, employees, business partners and stockholders.

 

STRATEGIC PRINCIPLES

 

· Achieving an R&D percentage increase by 2% in 2015.

· Dominate Africa and Middle East garbage truck market.

· Become more known in world on-vehicle equipment sector as Katmerciler brand by year 2015.

 

21. RISK MANAGEMENT AND INTERNAL CONTROL MECHANISM

 

Company’s activities regarding risk management are conducted by Financial Coordination. In addition, our Company is audited periodically by a Certified Public Accountant with a full approval contract and an Independent Auditing company. Findings of both auditing exercises are first shared with Committee Liable of Supervision members and delivered to Administrative Board. The Company’s work-flow, procedures, employee authorization and responsibilities are taken under control within risk management and internal control system.

 

22. AUTHORIZATION AND RESPONSIBILITIES OF ADMINISTRATIVE BOARD MEMBERS AND ADMINISTRATORS

 

 

Authorization and responsibilities of Company Administrative Board members are clearly defined in the Articles of Incorporation.

 

23. FUNDAMENTALS OF ADMINISTRATIVE BOARD ACTIVITIES

 

According to the Company’s Articles of Incorporation: Administrative Board assembles when required by the business, but at least once in a month in any case, on Chairman or Vice Chairman’s call. Any member might request a written convocation from the Chairman for the Administrative Board Meeting. Administrative Board meetings are held at the head office. However, if Administrative Board decides, meetings might be held somewhere else.

 

Administrative Board’s agenda is determined by Chairman of Administrative Board. With Administrative Board’s decision, changes in agenda might be done.

 

24. TRANSACTIONS WITH COMPANY AND PROHIBITION OF COMPETITION

 

General Board’s approval is obtained within Turkish Commercial Code’s 334th and 335th articles, in case that Chairman and members of Administrative Board perform operations regarding company business, in person or on behalf of another or by becoming such companies’ partners.

 

25. CODES OF CONDUCT

 

No discrimination by race, etnic origin, nationality, religion or gender among employees. Equal opportunities are provided to employees in equal conditions, wage and promotion are grounded on performance and efficiency. A safe and healthy work place is provided to employees, and so is progress opportunity in their careers. It is fundamental that employees relate within respect, trust and sense of team work. Employees are not allowed to utilize undisclosed information on Company for their or others’ benefit. As well as personal and occupational matters, employees are trained for first-aid situations, earthquake and fire. Considering the employees’ business and private life balances, our Company encourages them to willingly participate in social and communal activities.

 

26. NUMBER, STRUCTURE AND INDEPENDENCE OF COMMITTEES FORMED IN ADMINISTRATIVE BOARD

 

SUPERVISION COMMITTEE:

In the Company, a Committee Liable of Supervision is constituted of non-executive Administrative Board members, for the purpose of inspecting the accounting system, financal information and public disclosures, and supervising process and efficiency of internal control system; so that the Administrative Board is enabled to fulfill tasks and responsibilities. For year 2010, Furkan Katmerci and Havva Katmerci are elected members of Committee Liable of Supervision by Administrative Board. Committee Liable of Supervision conducts activities in accordance with Capital Market Legislation and Capital Market Board Institutional Management Principles. Members in the mentioned committee are not independent members.

 

Name Surname	Position	Company Relation
Furkan Katmerci	Committee Chairman	Vice Chairman of the Executive Board
Havva Katmerci	Committee Member	Administrative Board Member

 

27. FINANCIAL RIGHTS OF ADMINISTRATIVE BOARD

 

According to the Company Master Agreement; amount and sorts of financial rights of Administrative Board members are determined by the General Board every year. A specific payment is made either monthly or yearly or per meeting. For the year 2011, a total amount of TL 561.588 gross payment is made to the Administrative Board members.

 

KATMERCİLER ON-VEHICLE EQUIPMENT IND. AND TRADE INC.

AUDIT REPORT

 

Title		Katmerciler Araç Üstü Ekipman San. ve Tic. A.Ş.
Registered Office		İzmir
Capital		25.000.000,-TL
Activity Scope		On-vehicle equipment Production – Sale
Names and Duty Terms of Auditors		Osman Gürbüz ÖZKARA Duty term 1 year Erkan GÜL Görev Süresi 1 year
Number of Administrative Board Meetings and Supervisory Meetings		Attended all Administrative Board Meetings held in 2011.
Context, Dates and Result of Investigations on Partnership Accounts, Books and Documents		In terms of Tax Legislation, Capital Market Legislation and Commercial Law, investigation and controls were performed during the first weeks of 3rd, 6th, 9th and 12th months and no matters were encountered that require condemnation.
Dates and Results of Countings Performed in Partnership Treasury, as per Clause 3, 1st Subclause, 353rd Article of the Turkish Commercial Code		Physical counting is performed in the Company Treasury every month-end, and no matters were encountered that require condemnation.
Dates and Results of Investigations performed as per Clause No.4, 1st Subclause, 353rd Article of the Turkish Commercial Code		During the investigations on the first day of each month, it is determined that existing securities conform with book entries.
Submitted Complaints and Illegalities and Actions Taken Regarding These		No complaints were submitted.

To our knowledge; attached, prepared on 31.12.2011, prepared in compliance with provisions of Capital Markets Board’s Series: XI No. 29 titled ‘Notice of Principles Regarding Financial Reporting in Capital Market’, reflect Company’s actual activity results of the actual financial state on aforesaid date and in aforesaid period, correctly.

 

We have investigated accounting and operations of 01.01.2011-31.12.2011 period of Katmerciler Arac Ustu Ekipman San. ve Tic. A.S. Company, according to Turkish Comemrcial Code, Capital Markets Legislation, Master Agreement of Partnership and other legislation and generally accepted Accounting Principles and Standarts.

 

In our opinion; balance sheet prepared on 31.12.2011, reflet Partnership’s actual financial state and aforesaid period results of income statement of 01.01.2011-31.12.2011 period veridically and correctly; profit distribution suggestion is in compliance with Capital Markets Board regulations and Partnership Master Agreement. We submit approval of balance sheet and income statement, and acquittance of Administrative Board, to your votes.

 

Best Regards.

 

AUDITOR		AUDITOR
Osman Gürbüz ÖZKARA		Erkan GÜL