1. Declaration of Compliance with the Corporate Governance Principles
Our Company is aware of the importance of the implementation of the principles included in the Corporate Governance Principles published by the Capital Market Board in 2003 and revised and finalized in 2005, and has undertaken necessary work and continues to show necessary care to make further progress in this process. Please find below the evaluations and findings of our Company in respect to the level of compliance with the Corporate Governance Principles, as well as its comprehensive opinion for the improvement of the level of compliance in terms of scope and nature. In brief;
• The organization of stockholder relations has been restructured.
• Arrangements have been made in respect to trading of insider information.
• Working guidelines of committees have been reshaped.
• The website has been designed as stated in the Principles.
• Work has been undertaken for the Compliance of the Articles of Incorporation with the Corporate Governance Principles.
• Work has been undertaken for the organization of a Corporate Governance Committee and for the reorganization of the Audit Committee under the Board of Directors.
It is also planned to gradually implement those principles which have not yet been implemented, although this has not led to any conflict of interests between the interest owners to date.
The following Corporate Governance Principles Compliance Report has also been disclosed to the public on the Company’s website at www.ulkerbiskuvi.com.tr.
SECTION I - STOCKHOLDERS
2. Stockholder Relations Unit
Relations with stockholders are managed by İlhan Turan Usta, Finance and Accounting Manager of Ülker Bisküvi. He also responds to queries made by our stockholders in writing or via Internet as well as attending investor meetings held in Turkey and abroad. Their contact details are given below:
İlhan Turan Usta
Finance and Accounting Manager
Davutpaşa Cad. No: 10 34015
Topkapı Istanbul/Turkey
ilhan.usta@ulker.com.tr
+90 (212) 567 68 00
Relations with shareholders are managed by Erdal Atak (erdal.atak@ulker.com.tr), the CMB-UFRS Expert in the Department of Finance. This unit manages the communication with ISE, CMB, CRA (Central Registry Agency) and ISE Settlement and Custody Bank (Takasbank) and informs shareholders of announcements from these bodies. It also organizes meetings with shareholders upon their request, or on a project basis as required, in addition to the ordinary and extraordinary shareholders’ meetings.
3. Exercise of the Right of Access to Information by Stockholders
The written or verbal requests of information from our stockholders during the period have been met, except those that are characterized as business secrets or not disclosed to the public. All information that might be required for the exercise of the stockholders’ rights is provided to our stockholders in our annual reports, special case announcements and through individual requests. Furthermore, necessary information is also made available to stockholders in general at the website:
www.ulkerbiskuvi.com.tr.
4. Information on General Meetings
One Ordinary General Meeting was held in 2008.
Ordinary General Meeting:
The Ordinary General Meeting 2007, held on 27 May, 2008, was attended by our stockholders representing approximately 74% of the paid-in capital, which was TRY 268,600,000. No interest owner or media came to the meeting.
As provided in the Law and Articles of Incorporation, the invitation to the meeting containing venue, date, time, agenda and power of attorney form was made duly by a notice given in Turkish Trade Registry Gazette No. 7059, dated 9 May 2008, daily newspapers Dünya and Referans of 8 May 2008 and via Internet, as well as by sending registered mail to the holders of stocks issued to name and to holders of stocks issued to the bearer if they have lodged shares and notified the Company of their address in advance.
The financial statements and reports, including the annual report, the profit distribution proposal, any necessary information document prepared in relation to the items on the agenda of the General Meeting, and any other documents in support of the items on the agenda as well as the latest version of the Articles of Incorporation and the copy of amendments and grounds thereof if any amendment will be in the Articles of Incorporation are made available to our stockholders for review at the head office and branch offices of our Company as from the date of notice given for invitation to the General Meeting.
In the General Meeting, information about the issues on the agenda was given in a straightforward and clear manner. Shareholders were given equal opportunity to express their feelings and ask questions and a healthy discussion atmosphere was created.
No questions were raised by the stockholders at the General Meeting, and no proposals were made other than the items on the agenda.
5. Voting Rights and Minority Rights
Every stock has one vote, as per our Articles of Incorporation.
The capital of our Company consists of Group (A), (B), (C) and (D) stocks, and four members of the Board of Directors can be elected from among the candidates nominated by the absolute majority of Group (A) stockholders, and one member can be elected from among the candidates nominated by the absolute majority of Group (D) stockholders, and the other members can be elected from among the candidates nominated according to the general provisions. There is no mutual affiliation relationship between any of our shareholders and our Company.
There is no provision in our Articles of Incorporation that prevents voting by proxy as the representative of stockholders not present.
6. Profit Distribution Policy and Date of Profit Distribution
Within the scope of the Corporate Governance Principles set forth by CMB, our Board of Directors has adopted a profit distribution policy as mentioned herein below as the profit distribution policy to be proposed to the General Meetings. Accordingly;
Our Company has adopted the principle of determining the amount of dividend to be distributed according to the resolution adopted in the General Meeting within the framework of Turkish Commercial Law, provisions of the CMB, and the provisions laid down in the Articles of Incorporation, which will not be less than the rate and amount fixed by the Capital Market Board, and distributing it within the legal periods designated by the CMB.
Profit distribution proposals made by the Board of Directors to the General Meeting keep a sensitive balance between the expectations of the stockholders and the growth requirements of our Company in consideration of the existing conditions of the national economy and the industry in which the Company operates.
The principle of distributing the dividends in cash and/or as free shares, and the shares A and B and founding shares are privileged to have shares from the profit at the rates laid down in the Articles of Incorporation. Furthermore, the Articles of Incorporation also states that employees shall be paid merit bonuses from the profit according to their performance.
Also, although there is a provision on payment of advance dividend in the Articles of Incorporation, this method has not been exercised to date.
The stockholders were informed about the profit distribution policy of our Company at the General Meeting. This profit distribution policy is disclosed to the public and is also included in the Company’s website and annual reports.
7. Transfer of Shares
Article 10 of our Articles of Incorporation provides for the transfer of shares issued to name. According to the said Article, the shares issued to name can be transferred in principle. The transfer shall be effective as from delivery of share to the transferee and registration into the share book. The Company may refrain from registering the transfer into the share book without stating a reason.
SECTION II - PUBLIC INFORMATION AND TRANSPARENCY
8. Company Information Policy
Company information policy is carried out in accordance with legal regulations, CMB legislation and the rules determined by legal announcements. The Company prepared a written document regarding public disclosure and information and published it on its website following the approval of the Board of Directors.
Additionally, it is adopted as the basic principle to make available any information which has been already disclosed to the public, to the relevant person in the shortest time possible upon request. In addition, stockholders’ requests for information are met in writing or verbally by Erdal Atak, CMB-UFRS Expert reporting to the Department of Finance. In the event of any important developments requiring public information during the year, necessary special case announcements are also made in a timely manner. Our annual report is prepared in detail to ensure public access to any information regarding the activities of the Company.
9. Material Case Announcements
Our Company issued 15 material case announcements in 2008, pursuant to the CMB regulations. No additional explanation was requested by CMB in reference to the special case announcements made by our Company. There are no special case announcements that have not been made in due time by our Company.
10. Company Website and its Content
All data related to informing the stockholders in relation to our Company are available at www.ulkerbiskuvi.com.tr both in Turkish and English. The website contains the following information:
- Information on Ülker Bisküvi and its subsidiaries
- Vision of the Company
- Ethical rules and principles
- Information on the Board of Directors and the General Manager
- Capital structure of the Company
- Organizational structure
- Social responsibility
- Trade registry information and Company profile
- Articles of Incorporation
- Financial Statements and footnotes
- Annual reports
- Material case announcements
- Corporate Governance Principles
- Information on General Meetings (Agenda, minutes, list of attendants and power of attorney form)
- Company Information Policy
- Committees
- Press announcements (General Meeting announcements, etc)
- Insider information list
- Broker companies’ reports
- Rating reports
- ISE stock performance
11. Declaration of Individual Ultimate Controlling Stockholder(s)
There is no individual ultimate controlling stockholder in our Company. Our shareholder structure is included in the annual report and on our website.
12. Public Disclosure of Persons who can have Insider Information
Our Company has taken every precaution necessary to prevent the use of insider information, and the website lists the executives who have access to information that can affect the value of capital market instruments, as well as other individuals/entities from whom it receives services.
SECTION III - INTEREST OWNERS
13. Informing the Interest Owners
In the event that the rights of interest owners are not regulated by the legislation or contract, their interests shall be protected within the framework of the rules of goodwill and by observing the prestige of Company to the extent permitted by the resources of the Company.
Additionally, the employees have access to circulars and announcements through the internet portal of the Company. Some of the important announcements are released simultaneously to all employees via e-mail.
14. Participation of Interest Owners in the Management
The Board of Directors consists of seven members, as per our Articles of Incorporation, and these members are elected by the General Meeting upon recommendation of various shareholders according to the provisions laid down in the Articles of Incorporation.
15. Human Resources Policy
The basic policy of the human resources department is to develop a high performance team with the improvement and development of human resources building upon what has been done to date.
The human resources policy adopted by our Company is in general the policies adopted by Yıldız Holding and these policies are available at www.ulker.com.tr and www.ulkerbiskuvi.com.tr. No discrimination complaint was made against the human resources policy implemented by our Company.
16. Information Regarding Relations with Customers and Suppliers
Our Company seeks continuity of service quality and standards at all stages of production. Utmost care is taken about the confidentiality of the customers and suppliers’ information that has the nature of trade secrets. Customer satisfaction is one of the basic principles of our Company.
17. Social Responsibility
The social responsibility activities of Yıldız Holding, under which our Company operates, are listed in our annual report and are also available at www.ulker.com.tr and www.ulkerbiskuvi.com.tr. Our Company takes utmost care about implementing such policies that respect and support the environment, sports, education and public health.
SECTION IV - BOARD OF DIRECTORS
18. Structure and Composition of the Board of Directors, and the Independent Members
The Board of Directors is composed of seven members. In line with the Articles of Incorporation, these members are elected by the General Meeting. Four members can be elected from among the candidates nominated by the absolute majority of Group (A) stockholders and one member can be elected from among the candidates nominated by the absolute majority of Group (D) stockholders, and the other members can be elected from among the candidates nominated according to the general provisions.
Details of members of the Board of Directors and the General Manager are provided below.
Murat Ülker Chairman of the Board
Orhan Özokur Vice-Chairman of the Board
Ali Ülker Board Member, Managing Director
Necdet Buzbaş Board Member
Mahmut Mahir Kuşculu Board Member
Cengiz Solakoğlu Board Member
Güven Obalı Board Member
Mahmut Mahir Kuşculu, Cengiz Solakoğlu and Güven Obalı serve on the Board of Directors as independent members.
19. Qualifications of Members of the Board of Directors
The minimum qualifications required for election as a member of the Board of Directors are in line with the qualifications set forth in Articles 3.1.1., 3.1.2 and 3.1.5 of Section IV of CMB Corporate Governance Principles. In the Articles of Incorporation, there is a provision requiring that the Board Members have a sufficient knowledge of the legal framework which regulates the activities of the Company, and be qualified and experienced and able to analyze the financial statements and reports of the Company. Additionally, as per the Articles of Incorporation, at least one third of the members of the Board of Directors are required to be elected from among university graduates.
Our Board of Directors consists of seven members, and this number ensures efficient organization of the activities of the Board of Directors.
20. The Vision of the Company
Our Company, and all companies of Yıldız Holding, have been founded with the belief that every person is entitled to enjoy a pleasant childhood no matter which country s/he may live in.
The vision of Ülker Bisküvi is to strengthen its position as a most preferred brand by consumers, and to be among the top five companies in the world markets within the next 10 years, particularly in the area of bakery products.
The vision and mission of Yıldız Holding and our Company have been made public and are available at www.ulker.com.tr and www.ulkerbiskuvi.com.tr.
21. Risk Management and Internal Control Mechanism
Activities regarding risk management are carried out by the Committee in Charge of Audit within the scope of Internal Control Regulation. Furthermore, our Company is also audited regularly by the audit units of Yıldız Holding A.Ş., its principal shareholder, and by independent auditors. The findings of these audits are submitted to members of the Committee in Charge of Audit and other members of the Board of Directors. Company workflows, procedures, powers and responsibilities of employees have been placed under control, subjected to constant supervision within the framework of risk management.
22. Powers and Responsibilities of Members of the Board of Directors and Executives
The powers and responsibilities of members of the Board of Directors and executives are clearly set forth in the Articles of Incorporation available at www.ulkerbiskuvi.com.tr.
The Board of Directors exercises its powers having all the information required, prudently and within the framework of rules of goodwill to ensure proper fulfillment of its role.
23. Principles of Activity of the Board of Directors
The Board of Directors held 27 meetings in 2008. Utmost care is taken to determine the date of meetings to allow all members to attend. The Board of Directors meets at least once a month regularly and as pre-scheduled and irrespective of this period, whenever it is deemed necessary.
24. Non-Transaction and Non-Competition with the Company
Members of the Board of Directors do not have any transaction or activity that may be within the scope of prohibition of transaction and competition with the Company and, hence, require permission from the General Meeting.
25. Ethic Rules
Ülker Bisküvi is a member of a Group that produces quality and healthy products, respects its employees, cares for the rights of shareholders, suppliers and customers, is law-abiding, attaches importance to values of the society, bears social responsibility, has adopted such principles of management that are based on the highest level respect, cooperation, high performance of work, honesty, consistence, respect, confidence and responsibility between executives, employees, suppliers and customers, and that endeavors to improve these principles.
The ethic rules adopted by Yıldız Holding companies are implemented in all group companies, and these ethic rules also covering our Company have been made public and are available for the information of our stockholders at www.ulker.com.tr and www.ulkerbiskuvi.com.tr.
26. Number, Composition and Independence of the Committees in the Board of Directors
Audit Committee:
The Audit Committe, which was established with the decision of the Board of Directors dated 22 May 2006, has been reorganized as per Communiqué No: 22, Series: X of CMB following the decision of the Board decision on 5 August 2008. The Audit Committe ensures that financial and operational activities of the Company are carried out on a solid and healthy base. Working under the Board of Directors, the Committee is responsible for following up the processes of the accounting system, auditing and disclosure of financial information, and internal control system. This committee meets whenever required, which should be no less than quarterly.
The information on the Audit Committee is as follows:
Name & Surname Title Position
Mahmut Mahir Kuşculu Chairman of the Committee Board Member (Independent)
Güven Obalı Committee Member Board Member (Independent)
Musa Doğan Committee Member Inspector
Corporate Governance Committee:
Following the decision of the Board on 5 August 2008, a Corporate Governance Committee was established within the Company as per CMB Corporate Governance Principles. Being responsible to the Board of Directors, the Committee meets whenever required, which should be no less than three times in a year.
The information on the Corporate Governance Committee is as follows:
Name & Surname Title Position
Cengiz Solakoğlu Chairman of the Committee Board Member (Independent)
İlhan Turan Usta Committee Member Finance and Accounting Manager
27. Financial Benefits Provided for the Board of Directors
The fees of members of the Board of Directors are determined separately for each by the General Meeting in view of the financial conditions of the Company. It has been decided to pay a monthly gross fee of TRY 2,200 to each member of the Board of Directors in 2008, pursuant to the decision adopted at the General Meeting.
No member of the Board of Directors or executive has been either directly or through a third party, given any loan, or allowed to use any credit, or provided any guarantees during this period.