Date and time of publication on KAP: 18.04.2024 23:05:19
https://www.kap.org.tr/en/Bildirim/1274781

KAMUYU AYDINLATMA PLATFORMU

KARSAN OTOMOTİV SANAYİİ VE TİCARET A.Ş.
Corporate Governance Compliance Report
2023 - Annual Notification

Summary2023 Corporate Governance Compliance ReportCorporate Governance Compliance Report

Related Companies []Related Funds[]

Company Compliance Status
Explanation
Yes Partial No Exempted Not Applicable
Corporate Governance Compliance Report
1.1. FACILITATING THE EXERCISE OF SHAREHOLDER RIGHTS

1.1.2- Up-to-date information and disclosures which may
affect the exercise of shareholder rights are available toinvestors at the corporate website.

X

1.2. RIGHT TO OBTAIN AND REVIEW INFORMATION

1.2.1 - Management did not enter into any transaction thatwould complicate the conduct of special audit.

X

1.3. GENERAL ASSEMBLY

1.3.2 - The company ensures the clarity of the General
Assembly agenda, and that an item on the agenda does notcover multiple topics.

X

1.3.7- Insiders with privileged information have informed
the board of directors about transactions conducted on
their behalf within the scope of the company's activities inorder for these transactions to be presented at the General
Shareholders' Meeting.

X

1.3.8 - Members of the board of directors who areconcerned with specific agenda items, auditors, and otherrelated persons, as well as the officers who are responsible
for the preparation of the financial statements werepresent at the General Shareholders' Meeting.

X

1.3.10 - The agenda of the General Shareholders' Meeting
included a separate item detailing the amounts andbeneficiaries of all donations and contributions.

X

1.3.11 - The General Shareholders' Meeting was held open
to the public, including the stakeholders, without having
the right to speak.

The participants to theCompany's Ordinary
General Assembly for
2021 held on May 25,
2023, were one of theCompany's Independent
Members of the Board ofDirectors, the Company's
Executive Director andCEO, the AssistantGeneral Manager ofFinancial Affairs andFinance, the persons
responsible for thepreparation of thefinancial statements, theCompany auditor and theGeneral AssemblyCompany employees
who wanted toparticipate.

X

1.4. VOTING RIGHTS

1.4.1 - There is no restriction preventing shareholders fromexercising their shareholder rights.

X

1.4.2 - The company does not have shares that carry
privileged voting rights.

X

1.4.3-The company withholds from exercising its voting
rights at the General Shareholders' Meeting of any company
with which it has cross-ownership, in case suchcross-ownership provides management control.

X

There is no mutual
participation relationshipthat brings thedomination.

1.5. MINORITY RIGHTS

1.5.1 - The company pays maximum diligence to theexercise of minority rights.

X
The reason for thenon-compliance of item
no. 1.5.2 of the CMB
Corporate GovernancePrinciples is that thescope of minority rights
has not been expandedin the Company's articles

1.5.2 - The Articles of Association extend the use of minority
rights to those who own less than one twenthieth of theoutstanding shares, and expand the scope of the minority
rights.

Xof association. It isregulated in thecompany's articles ofassociation that five
percent of the capitalwould be sufficient torepresent the minority
rights stipulated. It is notplanned to expand
minority rights in theupcoming period.

1.6. DIVIDEND RIGHT

1.6.1 - The dividend policy approved by the General
Shareholders' Meeting is posted on the company website.

X

1.6.2 - The dividend distribution policy comprises theminimum information to ensure that the shareholders canhave an opinion on the procedure and principles ofdividend distributions in the future.

X

1.6.3 - The reasons for retaining earnings, and theirallocations, are stated in the relevant agenda item.

X

1.6.4 - The board reviewed whether the dividend policy
balances the benefits of the shareholders and those of thecompany.

X

1.7. TRANSFER OF SHARES

1.7.1 - There are no restrictions preventing shares frombeing transferred.

X

2.1. CORPORATE WEBSITE

2.1.1. - The company website includes all elements listed in
Corporate Governance Principle 2.1.1.

X

2.1.2 - The shareholding structure (names, privileges,
number and ratio of shares, and beneficial owners of morethan 5% of the issued share capital) is updated on thewebsite at least every 6 months.

X

2.1.4 - The company website is prepared in other selected
foreign languages, in a way to present exactly the same
information with the Turkish content.

X

2.2. ANNUAL REPORT

2.2.1 - The board of directors ensures that the annual report
represents a true and complete view of the company'sactivities.

X

2.2.2 - The annual report includes all elements listed inCorporate Governance Principle 2.2.2.

X

3.1. CORPORATION'S POLICY ON STAKEHOLDERS

3.1.1- The rights of the stakeholders are protected pursuant
to the relevant regulations, contracts and within theframework of bona fides principles.

X

3.1.3 - Policies or procedures addressing stakeholders'
rights are published on the company's website.

X

3.1.4 - A whistleblowing programme is in place for reportinglegal and ethical issues.

X

3.1.5 - The company addresses conflicts of interest among
stakeholders in a balanced manner.

X

3.2. SUPPORTING THE PARTICIPATION OF THE STAKEHOLDERS IN THE
CORPORATION'S MANAGEMENT

The reason why thearticle partially compliedwith numbered 2.1.4 of
the CMB Corporate
Governance Principles isthat the majority of theTurkish content isprepared in English, andsome documents arepresented in Turkish on
the website. Although notcompletely in the samecontent as Turkish, thecorporate website is alsoavailable in English,French, German, Italian,Portuguese, Polish,Lithuanian, Bulgarian,Romanian, Greek, Slovak,Spanish, Danish, Hebrew,
Norwegian, Swedish,Ukrainian and Dutch.
There has been noadverse situation
regarding the current
practice so far, and it is
not planned to prepare
the information on theCorporate website inTurkish in a way that isexactly the same in theupcoming period.

3.2.1 - The Articles of Association, or the internal
regulations (terms of reference/manuals), regulate theparticipation of employees in management.

3.2.2 - Surveys/other research techniques, consultation,interviews, observation method etc. were conducted toobtain opinions from stakeholders on decisions thatsignificantly affect them.

3.3. HUMAN RESOURCES POLICY

3.3.1 - The company has adopted an employment policy
ensuring equal opportunities, and a succession plan for all
key managerial positions.

X

3.3.2 - Recruitment criteria are documented.

X

3.3.3 - The company has a policy on human resources
development, and organises trainings for employees.

X

3.3.4 - Meetings have been organised to inform employeeson the financial status of the company, remuneration,
career planning, education and health.

X

3.3.5 - Employees, or their representatives, were notified ofdecisions impacting them. The opinion of the related tradeunions was also taken.

X

3.3.6 - Job descriptions and performance criteria have been
prepared for all employees, announced to them and taken
into account to determine employee remuneration.

X

3.3.7 - Measures (procedures, trainings, raising awareness,goals, monitoring, complaint mechanisms) have beentaken to prevent discrimination, and to protect employees
against any physical, mental, and emotional mistreatment.

X

3.3.8 - The company ensures freedom of association andsupports the right for collective bargaining.

X

3.3.9 - A safe working environment for employees ismaintained.

X

3.4. RELATIONS WITH CUSTOMERS AND SUPPLIERS

3.4.1-The company measured its customer satisfaction, andoperated to ensure full customer satisfaction.

X

3.4.2 - Customers are notified of any delays in handlingtheir requests.

X

3.4.3 - The company complied with the quality standards
with respect to its products and services.

X

3.4.4 - The company has in place adequate controls toprotect the confidentiality of sensitive information andbusiness secrets of its customers and suppliers.

X

3.5. ETHICAL RULES AND SOCIAL RESPONSIBILITY

3.5.1 - The board of the corporation has adopted a code ofethics, disclosed on the corporate website.

X

3.5.2-The company has been mindful of its social
responsibility and has adopted measures to prevent
corruption and bribery.

X

4.1. ROLE OF THE BOARD OF DIRECTORSX

Union Representatives
are included in theOccupational Health andSafety Board, thePermission Board, theDisciplinary Board andsocial rights meetings,
and no regulation has
been made regarding theparticipation ofemployees in themanagement. Therefore,
it is partially compliedwith Article No. 3.2.1 of
the CMB Corporate
Governance Principles.
No adverse situation has
been observed in our
Company so far
regarding the lack of any
regulation regarding theparticipation ofemployees in the
management, and no
new regulation isplanned in the upcomingperiod.

XIn important decisions
that have consequences
for some of the
stakeholders, requests,
suggestions andcomplaints ofstakeholders are received
and evaluated. Therefore, Partial compliance isachieved with Article No.
3.2.2 of the CMB
Corporate GovernancePrinciples. It is planned
to continue the practicein the same way in theupcoming period.

4.1.1 - The board of directors has ensured strategy and risks
do not threaten the long-term interests of the company,
and that effective risk management is in place.

X

4.1.2 - The agenda and minutes of board meetings indicatethat the board of directors discussed and approved
strategy, ensured resources were adequately allocated, andmonitored company and management performance.

XAlthough there is anagenda for the meetingsof the Board of Directorsof the company, nominutes are kept.
Therefore, partial
compliance is achieved
with Article 4.1.2 of theCMB Corporate
Governance Principles. In
terms of Corporate
Governance, no conflictof interest or adverse
situation has been
observed in practice sofar, and it is planned tocontinue the practice inthe same way in theupcoming period.

XThe damage to be causedby the faults of themembers of the Board ofDirectors in the course of
their duties is insured
with an insurance
amount of 10 Million USD, which is less than 25%of the Company's capital.
Therefore, partial
compliance is achieved
with Article 4.2.8 of theCMB Corporate
Governance Principles. In
practice, no negative
situation has been
observed so far, and theamount in question isre-evaluated every year.

XAlthough a target rate
and time for the rate offemale members to be
included in the Board ofDirectors is not less than25%, a policy has not yet
been determined in orderto achieve these targets.
The structure of theboard of directors isreviewed annually, andthis issue is taken into
account during thenomination process.
Therefore, it is partiallycomplied with Article
4.3.9 of the CMB's
Corporate GovernancePrinciples.

4.2. ACTIVITIES OF THE BOARD OF DIRECTORS

4.2.1-The board of directors documented its meetings andreported its activities to the shareholders.

X

4.2.2 - Duties and authorities of the members of the boardof directors are disclosed in the annual report.

X

4.2.3-The board has ensured the company has an internal
control framework adequate for its activities, size andcomplexity.

X

4.2.4 - Information on the functioning and effectiveness of
the internal control system is provided in the annual report.

X

4.2.5 - The roles of the Chairman and Chief Executive Officer
are separated and defined.

X

4.2.7-The board of directors ensures that the Investor
Relations department and the corporate governancecommittee work effectively. The board works closely withthem when communicating and settling disputes withshareholders.

X

4.2.8 - The company has subscribed to a Directors andOfficers liability insurance covering more than 25% of thecapital.

4.3. STRUCTURE OF THE BOARD OF DIRECTORS

4.3.9 - The board of directors has approved the policy on its
own composition, setting a minimal target of 25% forfemale directors. The board annually evaluates its
composition and nominates directors so as to be compliant
with the policy.

4.3.10 - At least one member of the audit committee has 5years of experience in audit/accounting and finance.

X

4.4. BOARD MEETING PROCEDURES

4.4.1-Each board member attend the majority of the board
meetings in person or via an electronic board meetingsystemX

4.4.2 - The board has formally approved a minimum time bywhich information and documents relevant to the agenda
items should be supplied to all board members.

X

4.4.3 - The opinions of board members that could notattend the meeting, but did submit their opinion in written
format, were presented to other members.
4.4.4 - Each member of the board has one vote.

4.4.5 - The board has a charter/written internal rules
defining the meeting procedures of the board.

4.4.6 - Board minutes document that all items on theagenda are discussed, and board resolutions include
director's dissenting opinions if any.

4.4.7-There are limits to external commitments of boardmembers. Shareholders are informed of board members'
external commitments at the General Shareholders'Meeting.

Although the Company's
Board of Directors adopts
the practice of sending
information anddocuments on theagenda to all members
before the meeting, nominimum period has
been defined for thesubmission of suchinformation anddocuments. In addition,
it is planned to write theWorking Principles of theBoard of Directors for theupcoming period and todetermine the minimum
submission period.
Therefore, it is notcomplied with Article
4.4.2 of the CMB
Corporate GovernancePrinciples.
XX
The manner in which theCompany's Board of
Directors meetings will
be held is determined inArticle 10 of theCompany's articles ofassociation. Apart fromthe company's articles ofassociation, there is noother in-company
regulation on the subject.
However, it is planned towrite the Working
Principles of the Board of
Directors for theupcoming period.
Therefore, partial
compliance is achievedwith Article 4.4.5 of theCMB Corporate
Governance Principles.

XXXThe Company does notkeep a memorandum at
the Board of Directorsmeetings. No conflict ofinterest has been
observed regarding thispractice of our company
so far, and the practicewill be re-evaluated in
the coming period.
Therefore, it is notcomplied with Article
4.4.6 of the CMB's
Corporate GovernancePrinciples.
The members of theBoard of Directors of theCompany were given
permission at the General
Assembly to carry out thetransactions specified in
Articles 395 and 396 of
the Turkish CommercialCode. Therefore, it is notcomplied with Article
4.4.7 of the CMB
Corporate GovernancePrinciples. Informationon the duties held by themembers of theCompany's Board ofDirectors outside theCompany is included in
the General Assembly
information document,
the annual report and thePublic Disclosure
Platform. No conflict ofinterest has been
observed regarding thispractice of our company
so far, and it is planned
to continue this practicein the coming period.
4.5. BOARD COMMITTEES

4.5.5 - Board members serve in only one of the Board'scommittees.

4.5.6 - Committees have invited persons to the meetings as
deemed necessary to obtain their views.

XX

4.5.7 - If external consultancy services are used, theindependence of the provider is stated in the annual report.
4.5.8 - Minutes of all committee meetings are kept andreported to board members.

Within the framework of
CMB regulations, some ofour board members are
assigned to more than
one committee as aresult of the requirementthat committee chairs becomposed ofindependent members,
all members of the audit
committee must beindependent members,
the chief executive officer/general manager cannot
take part in committees,
and the knowledge andexperience of our board
members are taken intoaccount. Therefore, it is
not complied with Article
4.5.5 of the CMB
Corporate GovernancePrinciples.

XX

4.6. FINANCIAL RIGHTS

4.6.1-The board of directors has conducted a board
performance evaluation to review whether it hasdischarged all its responsibilities effectively.

4.6.4-The company did not extend any loans to its board
directors or executives, nor extended their lending period
or enhanced the amount of those loans, or improveconditions thereon, and did not extend loans under apersonal credit title by third parties or provided guarantees
such as surety in favour of them.

4.6.5 - The individual remuneration of board members andexecutives is disclosed in the annual report.

XExplanations about
whether the targets set in
the previous periods
have been achieved or
not are included in theannual report of theBoard of Directors of theCompany. Apart from this, there is no separate
performance evaluation.
Therefore, it is notcomplied with Article
4.5.5 of the CMB
Corporate GovernancePrinciples. There has
been no adverse
situation regarding thecurrent practice, and nochanges are planned inthe practice in the
coming period.

XX

Within the scope of thearticle numbered 4.6.5 of
the CMB Corporate
Governance Principles
regarding the payments
made to the Members of
the Board of Directorsand executives withadministrative
responsibility,
determining theattendance fees paid tothe members of theBoard of Directors at theGeneral Assembly andexplaining them in the
Annual Report with thedistinction ofindependent /non-independent
members, however,partial compliance withthe relevant article isachieved since theremunerations given toexecutives withadministrative
responsibility aredisclosed to the public
not on an individual basis, but on a collective basis,in the Company's AnnualReport, in line with thegeneral practice. Nochanges are planned forthe current practice inthe upcoming period.