Early Detection of Risk Committee

Name Surname Title
Mehmet Halit Selçuk Chairman (Independent Board Member)
Hamit Arvas Member

 

EARLY DETECTION AND MANAGEMENT OF RISK COMMITTEE

DUTIES AND OPERATING PRINCIPLES

  1.  PURPOSE

In accordance with the Turkish Commercial Code and the Capital Markets Board’s Corporate Governance Principles Communiqué, it has been decided to establish a Risk Management Committee.

Previously, the functions related to risk management, which were carried out by the Corporate Governance Committee, will now be carried out by a separate committee, as decided at the Board of Directors meeting on March 12, 2013.

The purpose of the Early Detection and Management of Risk Committee, which will operate under the Board of Directors, is to monitor the risks the Company may be exposed to and to develop the necessary policies for the implementation of risk management processes.

  1. GROUNDS

This document has been prepared within the framework of the regulations, provisions and principles contained in the Turkish Commercial Code, Capital Markets Legislation, the Company’s Articles of Association and the Capital Markets Board’s Corporate Governance Principles.

  1. AUTHORITY AND SCOPE

Risk Management is a systematic process implemented throughout the organization, established to identify strategic, operational, external environmental, and financial risks that may affect the company, to manage these risks in accordance with the company’s corporate risk profile, and to provide a reasonable degree of assurance regarding the achievement of the company’s objectives; it is used by the company’s board of directors, senior management, and all other employees in determining strategies.

The Committee acts within its authority and responsibility and makes recommendations to the Board of Directors; the final decision-making responsibility always rests with the Board of Directors.

3.1. Establishing effective control systems for identifying, evaluating, monitoring, and managing risk factors that may affect the achievement of company objectives according to their impact and probability,

3.2. Integrating risk management and internal control systems into the company’s corporate structure and monitoring their effectiveness,

3.3. Conducting studies on measuring, reporting, and using risk factors in decision-making mechanisms by the company’s risk management and internal control systems, taking into account appropriate controls,

3.4. Determining and reviewing risk management policies, understanding, and standards throughout the company,

3.5. Taking and implementing all necessary action decisions regarding the identified risks,

  1. STRUCTURE OF THE COMMITTEE

4.1. The Early Detection of Risk Committee consists of at least two members of the Board of Directors. If the committee consists of two members, both must be members of the Board of Directors who do not directly hold executive functions, such as the general manager or a member of the executive committee, and who do not hold the title of delegate in management matters. If the committee consists of more than two members, the majority of the members must be members of the Board of Directors.

4.2. The members of the Early Detection of Risk Committee elect a chairman from among themselves. The chairman of the committee is selected from among the independent members of the Board of Directors.

4.3. The members of the Board of Directors appoint the members of the Early Detection of Risk Committee at the first Board meeting following the General Assembly meeting at which they were elected.

4.4. The Early Detection of Risk Committee serves until the next Board of Directors election.

4.5. The Board of Directors has the discretion to terminate the term of any member of the Early Detection of Risk Committee.

4.6. In the event of the termination, resignation, or death of any committee member, the Board of Directors appoints a new member to complete the term.

  1. DUTIES AND RESPONSIBILITIES

5.1. The committee works to identify early any strategic, operational, financial, legal, and other risks that may jeopardize the company’s existence, development, and continuity, to implement necessary measures regarding the identified risks, and to manage the risks.

5.2. It meets as frequently as deemed necessary for the effectiveness of its work.

5.3. In its report to the Board of Directors every two months, it evaluates the situation, points out any dangers, and suggests solutions. The committee also sends the report it prepares to the auditor.

5.4. It may invite any manager it deems necessary to its meetings and obtain their opinions.

5.5. The committee prepares and submits an annual activity report to the Board of Directors, which will include the committee’s members, meeting frequency, activities undertaken, and working principles, and will serve as a basis for the Board of Directors’ assessment of the committee’s effectiveness.

5.6. The Early Risk Detection Committee provides its opinion to the Board of Directors on establishing internal control systems, including risk management and information systems and processes, that can minimize the impact of risks that may affect the company’s stakeholders, primarily shareholders.

5.7. The Committee participates in the design, selection, implementation, and pre-approval process of risk measurement models, which are a fundamental tool in the risk management process; regularly reviews the models; conducts scenario analyses and makes necessary changes.

5.8. It requests information, opinions, and reports from relevant units when deemed necessary to ensure the effective performance of the risk monitoring function.

5.9. The Committee monitors and evaluates the effectiveness and results of risk management activities throughout the company.

5.10. The Committee regularly monitors critical risks and developments related to these risks.

5.11. The company’s risk management and internal control systems measure, report, and utilize risk factors in decision-making processes, ensuring appropriate controls are in place.

5.12. The Committee reviews risk management systems at least once a year.

  1.  ENFORCEMENT

The Committee’s duties and operating principles, and any changes thereto, shall come into effect upon a decision of the Board of Directors.