Pursuant to the Capital Markets Board (the "CMB") Decision dated 10 January 2019 and numbered 2/49, it has been decided that "Reporting on Compliance with Corporate Governance," previously made through "the Communiqué on Corporate Governance Principles II-17.1" (the "Communiqué"), should now be made by means of the "Corporate Governance Compliance Report" (CRF or "URF" in Turkish) and the "Corporate Governance Information Form" (CGIF or "KYBF" in Turkish). The format of the Corporate Governance Principles Compliance Report, previously announced by the CMB under the annexes of its decision dated 27 January 2014 and numbered 2/35, was abolished on 10 January 2019, but the CMB offers flexibility to affected companies by allowing them to prepare these reports in accordance with the old requirements for the year 2018 as part of the transition process.
New templates - companies required to prepare reports within the framework of the Communiqué must use the templates from (i) the URF for the purpose of reporting the status of "compliance with voluntary principles" and (ii) the KYBF for the purposes of providing information on existing corporate governance practices. The companies must publish the same annually through the Public Disclosure Platform ("PDP") within the financial statements announcement period and, in any case, at least three weeks prior to the date of the general assembly meeting. Whether or not to include the respective templates in the activity reports is at the companies' discretion. That being said, companies are required to (i) provide the necessary explanations in their annual activity report pursuant to Article 8, titled "the Corporate Governance Principles Compliance Report" of the Communiqué and (ii) explicitly specify their PDP access addresses in the content of the declarations to be made in their activity reports. Additionally, in accordance with the Communiqué on Principles Regarding Financial Reporting in the Capital Markets numbered II-14.1, the URF and the KYBF should be explicitly incorporated in the contents of (i) the resolution of the companies' board of directors upon the approval of the companies' financial statements and the activity reports, and (ii) the statements in relation to the foregoing.
Changes in the interim - in the event of change with respect to the companies' compliance with voluntary principles (transition from compliance to non-compliance with the URF, or vice versa) between the two announcement periods in relation to disclosure of the annual activity report (current period) and any change in material information regarding the KYBF, the respective changes should be disclosed by revision of the templates under the PDP in accordance with the CMB regulations on material events. These changes should also be included in the interim activity reports.
Transition period - as this will be the first year applying the "Reporting Corporate Governance Compliance" within the framework mentioned above, companies are free to prepare compliance reports regarding the year 2018 in accordance with the previous format. However, in such case, until the end of the announcement period of the financial statements in the PDP, a board of directors resolution should be taken in line with the "Communiqué on Principles Regarding Financial Reporting in the Capital Markets numbered II-14.1" for approval of the URF and KYBF for the same period and announcement should be made by using URF and KYBF templates within the framework of new reporting principles in the PDP system. Companies that will implement the new reporting principles are required to publish the URF and KYBF on the PDP at the same time as the annual activity reports, provided that the announcement period for the financial statements has not been exceeded, at least three weeks before the date of the general assembly meeting.
The CMB also announced that there will be no updates during the interval, starting from the end of the accounting period until the time the templates are filled and announced, due to technical matters regarding the functioning of the PDP.
15 January 2019
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