1. Corporate Governance Compliance Disclosure
Our Company works within the framework of all existing regulations and the “Corporate Governance Principles” announced and accepted by CapitalMarket Board (CMB) on 04.07.2003 with resolution no:35/835 and subsequently revised by a resolution dated 10.12.2004 and with no: 48/1588. Our company aims to develop structures and principles that are appropriate for the conduct of our business and which will serve best for the benefit of our shareholders and other stakeholders.
Our Company complies with and has implemented the Corporate Governance Principles issued by CMB except for the below-mentioned provisions in the period of 01.01.2006-31.12.2006.
According to the Articles of Association of our Company any sale of the immovable assets of the company needs the approval of the General Assembly. On the other hand, without any prejudice to the provisions no 443 m.2 of the Turkish Commercial Code, there are no provisions therein with respect to passing of other major resolutions by the General Assembly regarding any splitting, purchasing, selling, renting and leasing significant amount of property. The Board of Directors of our Company discussed the matter of adoption of such resolutions in the General Assembly and decided by a majority that such delegation would diminish the acting capability of the management against dynamic and changing business opportunities to the detriment of all shareholders and hinder the operations of the Company. Therefore, the Board of Directors found it appropriate to inform all shareholders in the very first General Assembly following such transaction(s), if any.
There is currently no provision in the Articles of Association of our company allowing the exercise of cumulative voting system.
In line with the articles 3.3.4 and 3.3.5 of Section IV of the CMB’s Corporate Governance Principles, there is one independent member in our Company’s Board of Directors at the moment. There are also independent and professional individuals in capacity of consultants in our Company’s Board of Directors. In the future the number of independent board members is planned to be increased to at least two as per the Corporate Governance Principles, believing that the availability of independent members in the Board of Directors will contribute to the development of the Company, help to the settlement of a more professional management approach and strengthen the Company’s operations.
Currently an independent member chairs the Audit Committee whereas the chairman of the Corporate Governance Committee is not an independent board member. At the re-election of the mentioned committees, depending on the number of independent board members, it is aimed to elect the Chairman of the Audit Committee and/or of the Corporate Governance Committee from among the independent board members.
SECTION I
SHAREHOLDERS
2. Shareholder Relations Unit
The Corporate Finance and Investor Relations Directorate established within our Company’s Finance and Investor Relations Directorate oversees the relations with our shareholders. The individuals in charge of shareholder relations are as follows:
Details regarding the activities performed by this unit in 2006 can be found in page 71 under Section 7 in our Company’s 2006 Annual Report.
3. Exercise of the Information Rights by Shareholders
Our Disclosure Policy dictates equal treatment of all our shareholders and investors, and provides that accurate disclosure with similar content reaches to every recipient at the same time. Response to information requests from shareholders are managed according to this policy and include information which is already made available publicly. Information requests from shareholders regarding the matters that are not yet within the public domain are also managed within this scope and we make sure that instead of selective disclosure, information is provided publicly to all audiences by means of press releases and announcements to the Istanbul Stock Exchange.
All information as per article no 1.11.5 of Section II of the Corporate Governance Principles is available in our Company’s web site for the shareholders.
Individual requests by each shareholder from the General Assembly to appoint a special auditor to exclusively survey and clarify a particular material case is not set as a right in our Company’s Articles of Association. Amendment of the Articles of Association of our Company accordingly has been examined by the Board; however it is concluded that the desired benefit to shareholders would not be realized on the fact that appointment of a special auditor would complicate the management of the Company and deteriorate its acting capability. On the other hand, believing that satisfying such requests is crucial, our Board of Directors has principally adopted that any disputable matter(s) on which the conduct of a survey is requested by the minority shareholders be conveyed to the Audit Committee for detailed examination in order to reserve the information rights of the minority shareholders and further resolved to effect necessary changes accordingly in the working procedures of the Audit Committee.
4. Particulars of the General Assembly
The annual ordinary General Assembly of our Company was held on 15.05.2006 with a quorum of 54.9% constituted by the total present 62,010,628.92 shares out of the total 112,876,818.27 shares representing the paid-in capital of our Company in amount of YTL 112,876,818.27. Our domestic and foreign shareholders attended the General Assembly in person or by proxy. Our Company has no bearer shares and the day, hour, venue and agenda of the meeting was announced on the Turkish Commercial Registry Journal no 6545 dated 28/04/2006, on page 4 of Dünya newspaper dated 28/04/2006 circulated country-wide and on page 3 of Ulus newspaper dated 28/04/2006 circulated Istanbul-wide as well as on our web site at www.anadoluefes.com. The attorney forms for attendance by proxy is also available on our web site to ease the process of attendance.
Our Company’s annual report has also been made available to shareholders in our registered office and our web site at the date of announcement of the General Assembly and all information regarding our operations are kept updated in our web site. Holders of the shares traded at the Istanbul Stock Exchange can also cast their votes by way of submitting a document showing the blockage of share certificates by Takasbank A.Ş. The minutes of the ordinary Annual General Assembly are published in our web site thereby allowing for the analysis of shareholder questions in the meeting and the corresponding answers, advices and other assessments. Meeting minutes are forwarded to Istanbul Stock Exchange in the same day and also announced to the public via the Stock Exchange Bulletin.
In the General Assembly, shareholders attending the meeting have not exercised their rights of asking questions on meeting agenda. Out of agenda questions which have been raised with respect to Company operations have been replied by the Company’s management.
While our Company’s Articles of Association contain a provision with respect to rendering of resolutions by the General Assembly regarding the sale of immovable assets of the Company, there are no provisions therein with respect to passing of other major resolutions by the General Assembly regarding any splitting, purchasing, selling, renting and leasing significant amount of property, without prejudice to the provisions no 443/2 of the Turkish Commercial Code. The matter of adoption of such resolutions in General Assembly was discussed by the Board of Directors which resolved that delegating such decisions to the General Assembly would remarkably impede the operations of the Company, diminish the acting capability of the management against dynamic and changing business opportunities to the detriment of all shareholders. So as to pursue this purpose, it was found proper to advise all shareholders of the said transaction(s), if any, in the first General Assembly following such transaction(s).
5. Voting Rights and Minority Rights
There are no privileged shares among the shares representing the paid-in capital of our Company. There is no cross shareholding relationship with the majority shareholders of our Company. There is currently no provision in the Articles of Association of our Company allowing the exercise of cumulative voting system.
6. Dividend Policy and Dividend Payment Time
There is no privilege granted to shareholders regarding the distribution of dividends.
As a general rule, except for investment periods requiring high cash outflows, distributing a dividend amounting to 50% of the distributable net profit to shareholders has principally been adopted and so far such resolution has successfully been implemented as allowed by the economical conjuncture.
Within the framework of conformity with Corporate Governance Principles, this policy has been resolved to be handled as a written policy starting from 2005. Accordingly, without prejudice to CMB’s prevailing regulations, our Company has adopted the distribution of at least 50% of the distributable profit as dividend each year. Maintenance of this policy is among the primary objectives of our Company except for special conditions caused by extraordinary developments in economical conditions as well as investment and other funding requirements necessary for the long-term growth of the Company.
Profit distribution in 2006 has been fulfilled within prescribed legal periods.
Detailed explanations and tables regarding the distribution of profit for the year 2006 are provided in page 87 under Section 10 in our Company’s 2006 Annual Report.
7. Transfer of Shares
There are no provisions contained in the Company’s Articles of Association restricting the transfer of shares.
SECTION II
PUBLIC DISCLOSURE AND TRANSPARENCY
8. Company Disclosure Policy
Our Company maintains to act, in the course of disclosure to all our shareholders and other stakeholders, within the principles of equality, accuracy, impartiality, consistency and timing. It is essential to provide such announcement and clarifications under this policy in correct, timely, complete, understandable, analyzable and cost effective manner in strict observance of the rights and interests of our Company as well.
To this end, information is immediately disclosed to the public about any development that may bring in a substantial change in the financial status and/or operations of our Company as well as all other matters laid down by the Capital Markets Board Legislation. However, information revealed to the public cannot contain any sort of information that may potentially impede the competitive power thereby leading to detrimental consequences for our Company, shareholders and stakeholders and cannot be in the nature of trade secret. Public disclosure is made by means of press releases when necessary in addition to special case explanations. Furthermore, information and meeting requests from shareholders and other stakeholders are processed as per our Company’s disclosure policy and any sharing of information is effected with already publicly available content. Whenever it is necessary to reveal any information that has not already been made public as a reply to any question transmitted by shareholders and other stakeholders regarding all the matters prescribed as per the Capital Markets Board Legislation, a working group comprised of the related Group President, Group Chief Financial Officer as well as the Corporate Finance and Investor Relations Director under the coordination of our Company’s Corporate Governance Committee, handles and processes the matter within the framework of our Company’s disclosure policy. Questions transmitted to our Company in that manner and the related disclosure can only be made public upon approval of this working group.
At least two regular meetings per year are held, in order to give information to investors and research analysts on the results of operations, performance and other developments within the period. Additionally, domestic and international conferences and other meetings held for the purpose of giving information to shareholders and investors are participated.
The official web site of our Company currently hosted at www.anadoluefes.com is prepared and utilized, in both Turkish and English, as a communication channel for shareholders, investors, research analysts and other stakeholders in line with the issues laid down in the CMB’s Corporate Governance Principles. A copy of all the announcements and presentations utilized in meetings held for the purpose of giving information are kept in our web site in an updated fashion.
In addition to the traditional data transmission channels, various communication facilities provided by information technologies may be employed for public disclosure. Within this framework, special case announcements and statements made by our Company can be sent directly by e-mail to stakeholders that have delivered their contact information via our web site or other communication channels.
In addition to all the information and documentation assembled as per the legislation with respect to the matters to be discussed in ordinary General Assemblies, a presentation relating to the results of annual operations and performance of our Company and other developments within the period is prepared and presented to the General Assembly. A copy of such presentation is published in our web site.
Press releases and/or press conferences may also be utilized for disclosing the results of annual operations including the year-end operational results, performance of our Company and other developments within the period as well as any development that may have a major impact on the financial status and/or operations of our Company. Disclosure via press is effected under the coordination of our Company’s Corporate Governance Committee and in collaboration with the above mentioned working group and Corporate Communications Manager. A copy of each published press release is kept updated in our web site. Requests for information transmitted via press are collected by the Corporate Communications Manager and assessed by the working group in line with our Company’s disclosure policy and replied accordingly.
In all data communication channels including the press and in the meetings with shareholders, investors, research analysts and other stakeholders, only related Group President, Group Chief Financial Officer and Corporate Finance and Investor Relations Director as well as other managers and members of the Board designated by the Corporate Governance Committee will act in the capacity of spokesperson for and on behalf of our Company within the framework of our Company’s disclosure policy.
Our Company’s disclosure policy and any modifications thereto are approved by our Board of Directors, submitted to the information of the General Assembly and announced to the public. The conduct of our Company’s disclosure policy is undertaken by the Corporate Finance and Investor Relations Directorate under the coordination of the Corporate Governance Committee.
This disclosure policy has been negotiated and approved in the meeting of the Board of Directors of Anadolu Efes Biracılık ve Malt Sanayii A.Ş. dated 26/04/2005 and put into effect the same day.
9. Special Case Explanations and Statements
A total of 38 special case announcements have been released within the year pursuant to CMB’s regulations. Following important disclosures to CMB/ISE, within the framework of the Level-1 ADR (American Depository Receipt) program under the Securities Exchange Commission (SEC), such special case announcements are also forwarded to SEC. In this regard, a total of 22 special case announcements have been forwarded within the year. All special case announcements have been made in due time.
10. Corporate Web Site and Content
Our corporate web site is at www.anadoluefes.com. In our web site, all information required as per article no 1.11.5 in Section II of CMB’s Corporate Governance Principles is available.
11. Declaration of Ultimate Real Person Shareholder/Shareholders
Directly and indirectly, Mr. Kamil Yazıcı holds 12% and Mr. İzzet Özilhan, Mrs. Türkan Özilhan, Mrs.Tülay Aksoy and Mr. Tuncay Özilhan each holds around 5% of our issued capital.
12. Disclosure of the Persons Entitled to Access Inside Information
The list of the members of the board, members of the top management and other officers entitled to access inside information is as follows:
Members of the Board of Directors of Anadolu Efes and Anadolu Endüstri Holding
Kamil Yazıcı - Chairman
İzzet Özilhan - Vice Chairman
Tuncay Özilhan - Member
Süleyman Vehbi Yazıcı - Member
İbrahim Yazıcı - Member
Tülay Aksoy - Member
Gülten Yazıcı - Member
Hülya Elmalıoğlu - Member
Nail Özkardeş - Member
Ali Şanal - Member
Metin Tokpınar - Member
Ali Zülfü Tigrel - Member
Engin Akçakoca – Member
Consultants to the Board of Directors
Ege Cansen - Consultant
Ahmet Boyacıoğlu1 - Consultant
Yılmaz Argüden - Consultant
Nedim Esgin - Consultant
Cem Kozlu – Consultant
1Since his retirement as the President of the Efes Beer Group on 01.02.2007, Mr. Ahmet Boyacıoğlu has been serving as a consultant to the Board of Directors of Anadolu Efes.
Members of the Board of Auditors
Mustafa Uysal
Ali Baki Usta
Executives of Anadolu Endüstri Holding
Ahmet Bal
Menteş Albayrak
İrem Çalışkan Dursun
Bora Öner
Executives of the Efes Beverages Group
Alejandro Jimenez
Michael O’Neill
Hurşit Zorlu
Can Çaka
Cem Güner
Tulu Özütürk
Altuğ Aksoy
Thomas Schwind
Yüksel Gökbulut
Semih Maviş
Serdar Bölükbaşı
Osman Mut
Haluk Ilıcalı
Orhun Köstem
Mustafa Susam
Volkan Harmandar
Dilek Başarır
Ertan Cüceloğlu
Kenan Özçelik
Melih Balcı
Adnan Aktan
Burak Başarır
Demir Şarman
Deniz Çelik
Murat Küçük
Durul Berk Candemir
Murat Kaan Tuncer
Ayşe Gündüz
Anıl Karaca
Ayfer Yılmaz
Çiçek Uşaklıgil
Özge Özvardar
Nida Akgül
SECTION III
STAKEHOLDERS
13. Informing the Stakeholders
Creating timely and applicable solutions to problems regarding the employees and other stakeholders in order to maintain the satisfaction of all the stakeholders is one of the key policies of the Company. Our employees, suppliers, customers and consumers are informed on related matters in different ways.
The Efes Communication Line that is currently active (444 EFES / 444 33 37) serves 6 days of the week excluding Sundays between 08:00-20:00. A majority of the incoming calls are for information purposes and calls are immediately replied.
Information exchange with customers and suppliers is ensured by periodic dealer meetings as well as site meetings held by individuals in charge in relevant locations. Furthermore, customers and suppliers are capable of transmitting their problems to our Company via the dealer meetings and through oral or verbal applications submitted to the Company’s management.
Meetings are held with our suppliers so as to improve the quality of the current materials as well as on other sectoral developments and pilot activities are conducted with respect to the co-produced projects.
Through the wide data information network established with our customers, we can exchange information on a real-time basis.
Through our e-sales system operating on the internet, our customers are immediately informed of modifications put into effect, trainings are provided when necessary and satisfaction questionnaires are conducted.
Our Company also conducts training programs in order to enhance the development of the employees. The “Efes Academy” system that has been designed and tailored within this framework which runs on the internet platform, allows sharing of knowledge acquired in different business lines and marketplaces at Group level as well as improving the operational and administrative knowledge and skills of the employees.
14. Participation of the Stakeholders in Management
Through the technological communication infrastructure, effective participation of employees in decisions is ensured.
Employees are capable of transmitting their value added requests and business development suggestions via the computer based “Business Development Suggestions” and “Project Follow-up Application” databases which are part of the “Suggestion Follow-up System”. In addition “Human Resources Request & Improvement Line” that facilitates submission of requisitions and improvement requirements regarding the services provided by our Human Resources function is used effectively by our employees. Each year, a study for Measuring Employee Satisfaction is conducted and employees can also transmit their suggestions for improvement at this stage.
Indicators designated under strategic planning process within the framework of our management systems are reviewed with the monthly field meetings for business conclusions and suggestions for improvement are logged and tracked. Company performance is also tracked by our employees through the monthly Business Result Reports.
15. Human Resources Policy
Our Human Resources mission is to develop Human Resources Strategies and coordinate the application of Human Resources systems in our operations in line with our Company’s Vision and Mission in order to support our strategic development and growth
strategies.
In line with our Human Resources Mission our key strategy is to build up a satisfied and well-educated workforce that works as a team and continually develops, operates on knowledge and focuses on Company targets. Our human resources strategy is also disclosed publicly in our website.
In all of the Group companies the Human Resources Strategy is designed in line with our vision and mission in order to support our strategic business plan and implemented under the following headings:
(1) Centralized Strategy, Local Policy Development
(2) Right Person for the Right Position,
(3) Maintaining a Dynamic & Proactive Structure,
(4) An Unreplicated Human Capital that Creates Competitive Advantage.
Our Company places great importance on training at all stages and at all levels in order to prepare our employees to the future. We “INVEST IN PEOPLE” through established systems where we present this importance in a transparent way. In addition, through the “Efes Academy” system, established as an e-Learning platform over the internet, we aim to improve the personal and occupational knowledge and skills of our domestic employees as well as our employees in the subsidiaries and affiliates abroad.
“Efes Quality Circle” project, whereby our employees voluntarily solve the problems in their respective work areas, enable a better environment for communication, creativity and innovation while contributing to our employees’ personal development and hence increasing their motivation.
It is essential to implement fastidiously any resolution rendered by our Board of Directors in the pertinent field of activity. Monitoring of such applications is conducted within the framework of the designated Critical Performance Criteria focused not only on the operating performance but also profitability. The annual performance targets we have designated for our employees in line with the relevant criteria allow not only the qualititative measurement but also the indicator-based quantitative assessment of our management policies.
One of our Group’s commitments towards its employees in the course of every relationship, which is part of our working principles and followed strictly without any concession, is not to make any discrimination in terms of race, skin color, age, nationality, gender and religious beliefs. We take pride in different aspects and cultural diversification of our employees and consider such diversification a valuable tool for advancement towards a common objective.
In every Human Resources practice spanning from the initial recruitment to the training, compensation, career and financial means granted, equal opportunity is provided to all employees. No complaints, in particular on discrimination, have been raised by any of our employees within the period.
We are committed to respect and protect the rights granted to our employees by law and regulations.
Representatives have been designated to conduct the relations with employees.
For white-collar workers, a “Health and Security Worker Representative” has been selected to represent the workers only on issues of occupational health and security. The duties and authorities of such representative that is selected by the workers at the workplace, as per Occupational Health and Safety Statute, are as follows:
One or more workers act as the “Health and Security Worker Representative” and participate in studies for health and security in the workplace, monitor the studies, request for measures and precautions, give suggestions and represent workers in similar matters
particularly on health and security.
For blue-collar workers, a “Trade Union Representative at the workplace” is present as set forth in the collective bargaining agreements.
The trade union representatives fulfill the following delegated tasks to ensure occupational peace, maintain and safeguard the balance between the worker and the employer:
a) Ensuring the cooperation and occupational peace between the worker and the employer at the workplace,
b) Examining the demands and complaints of workers, persuading the worker in withdrawing its unreasonable demand or complaint, reflecting any demand or complaint that it will find reasonable in his sole discretion to the employer (the representative may not be penalized for his/her discretion in this process.)
c) Striving to settle amicably, conflicts or disputes to arise between the worker and employer,
d) Seeking remedies for problems that may arise in connection with implementing these contractual provisions and if necessary, conveying the matter to the employer after consulting with workers.
e) Striving to prevent, to the extent of his/her authority, any illegalized attempt or behavior, refraining from getting involved in such attempts or behaviors,
f) Regulating the relationship of workers that are trade union members with the trade union,
g) Ensuring the uninterrupted execution of the contract,
h) Transmitting any matter that he/she could not settle at the workplace to his/her affiliated branch/department in writing,
i) Fulfilling all other liabilities imposed by the legislation.
16. Information about Customer-Supplier Relations
The satisfaction level of our customers is measured at all outlets throughout the country with regularly conducted Customer Satisfaction questionnaire studies. Improvement activities are designed and implemented based on the results derived from such studies.
With the Efes Communication Line, complaints or claims from our customers, suppliers or consumers are replied and remedied within prescribed periods by designated officers in charge at relevant units and all incoming requests are stored in electronic media, allowing the monitoring and reporting of progress in customer satisfaction. In addition, the performance of our suppliers in terms of quality, price and delivery are monitored on our computer systems where they are scored and benchmarked on periodic basis.
New product developments are steered by Customer-Consumer research results and product improvement and development work is conducted in accordance with the demand from the market with product, package and technology investments.
17. Social Responsibility
Detailed explanations regarding the activities of our Company within the framework of social responsibility can be found on page 64 under Section 5 in our Company’s 2006 Annual Report.
SECTION IV
BOARD OF DIRECTORS
18. Structure, Composition of the Board of Directors and Independent Members
The Board of Directors of our Company, its structure and consultants are as follows:
| Kamil Yazıcı |
Chairman |
| Izzet Özilhan |
Vice Chairman |
| Tuncay Özilhan |
Member |
| Süleyman Vehbi Yazıcı |
Member |
| Ibrahim Yazıcı |
Member |
| Tülay Aksoy |
Member |
| Gülten Yazıcı |
Member |
| Hülya Elmalıoğlu |
Member |
| Nail Özkardeş |
Member |
| Ali Şanal |
Member |
| Metin Tokpınar |
Member |
| Ali Zülfü Tigrel |
Member |
| Engin Akçakoca |
Member |
| Ege Cansen |
Consultant |
| Ahmet Boyacıoğlu2 |
Consultant |
| Yılmaz Argüde |
Consultant |
| Nedim Esgin |
Consultant |
| Cem Kozlu |
Consultant |
2Since his retirement as the President of the Efes Beer Group on 01.02.2007, Mr. Ahmet Boyacıoğlu has been serving as a consultant to the Board of Directors of Anadolu Efes.
All members of our Board of Directors are non-executive board members.
Our Company believes that availability of independent board memberships as part of the Corporate Governance Principles will highly contribute to the development and strengthening of the Company’s operations as well as the settlement of a more professional management approach. To this end, professional and independent individuals in capacity of consultants are included in the Company’s Board of Directors.
Mr. Akçakoca fulfills the independence criteria as per articles 3.3.4 and 3.3.5 of Section IV of the CMB’s Corporate Governance Principles. In the future, it is planned to increase the number of the independent board memberships to provide at least two independent members of the Board of Directors as per CMB’s Corporate Governance Principles.
In the ordinary General Assembly of our Company, members of the board have been authorized as per articles 334 and 335 of the Turkish Commercial Code to enable them to take positions in other Anadolu Group companies operating within similar or different business scopes and which have managerial or capital affiliation with our Company.
19. Qualifications of the Members of the Board of Directors
Minimum qualifications sought in the election of new members of the Board of Directors of the Company conform with the qualities laid down in Section IV articles no 3.1.1, 3.1.2 and 3.1.5 of CMB’s Corporate Governance Principles. Principles regarding the matter have not been set forth in the Articles of Association.
Newly elected board members may receive training, if they deem necessary, on the analysis of financial statements, reporting, budgeting and legal regulations in order to have adequate competency in meeting the minimum requirements of the Company.
Activities within the scope of training the Board members are conducted under the coordination of the Corporate Governance Committee.
20. Mission, Vision and Strategic Objectives of the Company
The Board of Directors approves annually the mission/vision of the Company and such specified vision/mission is announced to public by including it both in our web site and annual report.
The vision of our beer operations is to become one of the worldwide leading beer systems with core strengths generated in Eurasia; and our mission is to maximize sustainable stakeholder value and to make our flagship brand “Efes” global.
The vision of our soft drink operations is to be an outstanding regional Company ranked within the top six bottlers of The Coca-Cola System with respect to quality, volume and profitability operating in a geography encompassing Southern Eurasia and Middle East; and our mission is to add value to all our stakeholders, to be the supplier of choice consistently exceeding customer and consumer expectations, to be the first in identifying, creating and capturing profitable opportunities and to retain, develop and attract the people capable of driving superior growth.
Within the scope of the annual Strategic Business Plans, targets and indicators are established on business unit basis parallel to our Company’s vision and mission. Such targets and indicators, which are consolidated Company-wide, are approved by the Board of Directors during the budget meetings held at the beginning of each year. The Board reviews operating results in comparison with previous year performances and targeted values in its ordinary meetings held six times a year. Members of the Board may also convene upon any other extraordinary situation and render resolutions on major agenda issues.
21. Risk Management and Internal Control Mechanism
Risk management and internal control mechanisms have been established within the Company and fundamental principles with respect thereto have been announced via our annual report and website. Identification of all the existing and potential risks for the Company, development of practices for minimization of the identified risks and monitoring of such practices constitute the basic starting point of the risk management system.
Existing or potential risks for our Company are defined below:
Financial risk; assets and liabilities risk, credibility, equity/ debt ratio, exchange rate risk and other factors that can affect the Company’s financial status.
Operational risk; the use of the technology at an optimal level and to identify the required investments that can affect our competitive advantage.
Environmental risk; risk factors such as fire, earthquake, etc. that can affect the Company’s performance negatively.
SAP system is an important technological tool that provides measurement and processing to assist the decision support function to minimize the existing risks. SAP supplies operational results in real time that eliminates the human error and improves the efficiency of the internal control system. On the other hand, our high technology internal communication system enables us to quickly act and generate immediate solutions to problems as they occur.
Operational effectiveness is ensured through ISO 9000 (Quality Management System Standards), ISO 14001 (Environmental Management System Standarts), OHSAS 18001 (Employee Health and Occupational Safety Standarts), Technical Security and HACCP (Danger Analysis and Critical Control Points) systems all of which are embedded within
our existing management system.
Within the finance function, the actual results are compared to the budgeted figures on a regular basis and any deviations are analyzed.
The “Guarantee - Risk Management System” devoted to tracking customer risks has been put into service. Accordingly, purchasing limits applicable to our customers have been established and our systems are designed to prevent any product shipments in excess of prescribed limits.
The authorities and responsibilities are defined in writing in the internal control mechanism of the Company. Within this framework, the rules governing the fulfillment of tasks by directorates in their respective business areas and the holders of such responsibilities are explicitly defined. The internal control mechanism is equipped with the following features:
Purposes and principles of activities are explicitly defined.
The current/potential risks of the Company are defined and constantly being monitored.
Regular reporting is made to executives.
Issues to be approved as per chart of authorities are provided to executives electronically accompanied with detailed remarks and viewed, scrutinized and approved by several executives within pre-determined limits.
Investments within the annual budgets and business plans allow us to use the state-of-the-art technology in our facilities and the most up to date technology prevailing in the global brewing industry is utilized.
All our facilities are insured in order to minimize the environmental risks, and investments for back up systems are being made against any data loss due to extraordinary events.
Additionally, environmental factors and extraordinary operations are monitored on an immediate basis and investigations are made to take necessary measures against the causes to minimize financial risk.
Our Company is subject to financial and operational internal audit applied throughout the Anadolu Group.
22. Authorities and Responsibilities of the Members of the Board and Management
The authorities and responsibilities of the Board members are explicitly laid down in the Articles of Association of our Company. In addition, the actual duties and responsibilities of the Board members are summarized below:
- To set the Company’s vision and mission,
- To determine the strategic targets of the Company,
- To approve the budget and business plans of the Company,
- To supervise the achievement of Company targets and to review the results of operations,
- To review the corporate governance principles of the Company, to eliminate deficiencies,
- To establish the committees of the Board of Directors and to make them operational.
23. Operating Principles of the Board of Directors
The procedures and frequency of Board meetings, meeting and resolution quorum, process of asserting objections and the validity of Board resolutions are explicitly laid down in our Company’s Articles of Association. The agenda of Board meetings comprises of the agenda issues designated in the previous Board meeting for further negotiation in the next meeting along with the issues designated by the related Group President. Dates of the Board meetings are fixed at the beginning of the year and accordingly the Board members are notified of the meeting dates. Furthermore Board members are also notified by means of a formal memorandum and report at least one week prior to any meeting. The Board holds its ordinary meetings six times a year and the Board members also may convene upon any extraordinary situation and negotiate and render resolutions on critical agenda issues. The rate of participation of Board Members in meetings during the year has been 95%. A secretariat is constituted for the meetings and all questions raised during the meetings and all issues negotiated are recorded into meeting minutes. On matters laid down as per provision of article 2.17.4 in section IV of the Corporate Governance Principles, actual participation is provided in Board meetings. Meeting proceedings in the nature of trade secrets are not disclosed to the public. However all of the critical matters resolved are announced through a special case announcement. Board Members do not reserve the right to cast weighted vote and/or power of veto.
24. Restrictions on Transactions with and Competition against the Company
In the ordinary General Assembly of our Company, members of the Board have been authorized as per articles 334 and 335 of the Turkish Commercial Code to enable them to take positions in other Anadolu Group companies operating within similar or different business scopes and which have managerial or capital affiliation with our Company. Restrictions on transactions with and competition against the Company are duly applied within the operating period.
Our Board members are not individually engaged in any transactions with and competition against the Company.
25. Ethical Rules
Ethical rules are highly respected within our Company and these merits have been exercised for years within the corporate culture of Anadolu Group, our parent company. Anadolu Group Working Principles, which form our ethical values are disclosed publicly
in our website, whereas the minimum ethical rules with respect to environment, discrimination, child employees and union rights have been announced to public in our annual report and web site.
26. Number, Structure and Independence of the Committees established under the Board
Our Company adopts the principle of establishing two committees, one in charge of the audit and the other in charge of corporate governance.
Upon resolution of the Board dated 25.05.2004, the Audit Committee is established.
As per the resolution of the Board dated 26.05.2005, Mr. Engin Akçakoca has been elected as the Chairman and Mr. İbrahim Yazıcı as the member of the Audit Committee for a term of one year and they are to continue their duties until the Audit Committee is re-elected following the Ordinary Annual General Assembly.
In order that the financial and operational functions are performed properly, the Audit Committee provides the transparent conduct of the internal and independent external audit, the effective operation of the internal control system, selection and analysis of the independent auditor and also monitors that the financial results which are to be announced publicly are prepared in accordance with the international accounting standards and existing regulations.
Upon resolution of the Board dated 26.05.2005, the Corporate Governance Committee is established. Mr. Ali Tigrel has been elected as the Chairman and Mr. Ali fianal as the member of the Corporate Governance Committee for a term of one year and they are to continue their duties until the Corporate Governance Committee is reelected following the Ordinary Annual General Assembly.
The Corporate Governance Committee verifies whether the Corporate Governance Principles are duly implemented in the Company and further detects any conflicts of interest arising out of the failure to duly abide by said principles and gives advice to the Board regarding the improvement of practices, coordinates the operation of the shareholder relations function, conducts studies for building up a transparent system devoted to designating, assessing, training and rewarding appropriate candidates to the Board as well as other studies for establishing policies and strategies in this regard, provides suggestions about the number of Board Members.
A Board Member does not take office within several committees.
As per articles 3.3.4 and 3.3.5 of Section IV of the CMB’s Corporate Governance Principles, there is one independent member in our Company’s Board of Directors. Currently the Chairman of the Audit Committee, who is on duty until re-election, is an independent member, while the Chairman of the Corporate Governance Committee, who is on duty until re-election, is not an independent board member. At the re-election of the mentioned committees, depending on the number of independent board members, it is intended to elect the Chairman of the Audit Committee and/or of the Corporate Governance Committee from among the independent board members.
27. Financial Benefits granted to the Board of Directors
No compensation is paid to the members of the Board of our Company pursuant to the resolution adopted in the ordinary annual General Assembly. On the other hand, if approved by the General Assembly and after setting aside the statutory legal reserves and only on the condition of not reducing the 1st dividend in any way whatsoever:
(i) 10% of the issued capital;
(ii) 2% for founder dividends out of the profit calculated upon deducting the legal reserves and the amount set forth in sub-clause (i) above;
(iii) after setting aside the legal reserves and further the amounts specified in sub-clauses (i) and (ii) above, 5% of the remaining portion is distributed pari passu as dividend.
The total amount of dividends distributed to Board members in 2006 in the fashion specified above sums up to YTL 6,378,555. There is no other compensation or interest provided to the Board.
The determination of financial rights and benefits to which Board Members are entitled is not based upon the performance of Board members however reserving dividends out of profit is a rewarding scheme reflecting the overall performance of the Company.
Our Company has neither lent any loan or credit to any Board Member, nor served any personal loan to any beneficiary through any third party and has not served any security or guarantee such as indemnity to the interest of any third party.