Aksigorta : A.Ş. 2022 - Aksigorta A.Ş. 2021 - Corporate Governance and Sustainability Principle Compliance Report

Corporate Governance and Sustainability Principle Compliance Report

SECTION I - CORPORATE GOVERNANCE

1. Corporate Governance Approach

Aksigorta complies with the 4 main principles of corporate governance based on Transparency, Fairness, Responsibility and Accountability. The Group understands that corporate governance practices area essential for sustainable growth in today's economies.

Operating under the partnership of Sabancı Holding and Ageas, and listed in BIST Star index, Aksigorta designs its governance approach in line with these principles and improves its corporate governance practices in accordance with the best practices in the world.

2. Compliance with Corporate Governance Principles

Aksigorta is in full compliance with the 26 principles mandatory to be followed by public companies whose shares are traded on the stock exchange. These principles are specified in the Corporate Governance Principles attached to the Corporate Governance Communiqué (Communiqué) numbered II-17.1 of the Capital Markets Board, which is the regulatory board responsible for the regulation and supervision of corporate governance practices in Turkey.

Aksigorta has fully complied with 31 of the 42 principles that are not required to be complied with in accordance with the Communiqué, while it has been able to partially comply with 2 of them and has not been able to comply with 4 of them at all. Since no activities that fall within the scope of the remaining 5 principles were carried out in 2022, the remaining 5 principles were considered irrelevant and no compliance status could be assessed.

In 2022, Aksigorta continued efforts to improve its compliance with the principles in question, taking into account the benefit of all stakeholders, especially shareholders. However, some non-mandatory principles could not be fully complied due to the difficulties in implementation practice of these principles, ongoing debates on some of these principles, some mismatching between the market conditions and these principles. We are pursuing the developments on these issues and following compliance opportunities.

In 2022, we disclosed all useful information to shareholders, investors and analysts for their investment decisions with transparent, consistent and timely manner via Investor Relations announcements on corporate web site, Public Disclosure Platform, Investor meetings and conferences to keep the continuous and effective communication with the investors and the analysts. Also, we were complied with all regulation on this subject.

Aksigorta will care to be in compliance with the principles and follow the recent developments in the legislation and the market practices.

2.1. The partially complied principles are summarized below with the reasons for not achieving full compliance:

4.2.8. Losses incurred in the company by the members of the board of directors as a result of their faults during their term of office, are insured with a policy that will have a value exceeding 25% of the company capital and this issue is publicly disclosed on the Public Disclosure Platform (KAP).

Aksigorta holds an executive liability insurance policy covering the members of the Board of Directors and executives. Although the insurance amount is below the 25% of the Company's capital, it covers the reasonable risk level predicted.

4.6.5. Wages and other benefits granted to board members and executives with administrative responsibilities are disclosed to the public in the annual report. Disclosure on the basis of each such person is essential.

The remunerations provided to the Board Members are determined by the General Assembly and the disclosures are made on individual basis. Remunerations provided to the senior executives are disclosed to the public in the footnotes of our financial statements. Remunerations to executives are provided in accordance with the remuneration policies, taking into account the performance criteria. These details are not explained on individual basis since they are considered as personal information.

2.2. The principles that have not been complied are summarized below, with the reasons for not achieving full compliance:

1.5.2. Minority rights may be granted to those who hold less than one twentieth of the capital pursuant to the Articles of Association. The scope of minority rights may be expanded subject to the Articles of Association.

Minority rights are determined within the scope of the provisions of the relevant legislation and there are no provisions in the Articles of Association for the expansion of minority rights.

3.2.2. Conduct surveys / questionnaires to learn about the opinions of beneficiaries in important decisions.

Aksigorta does not conduct surveys / questionnaires to learn about the opinions of beneficiaries in important decisions

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

There are no limitations on the external duties held by the Members of the Board of Directors. The CV information, including the duties that our Board of Directors members have taken outside our company, is on the corporate website of our company.

4.5.5. Board Members serve in only one of the Board's committees.

Our Board members can be members of more than one committee in order to benefit from their local and international experience in related fields and because they have the qualifications expected of committee members, our Board members can be members of more than one committee.

2.3. The principles considered irrelevant since no activities that fall within the scope of these principles were performed in 2022 are as follows:

1.3.7. Persons who have the right to access shareholding information with privilege shall inform the Board of Directors for the inclusion of the transactions they performed in their own name coinciding with the Company's operating area into the agenda of the General Assembly.

1.4.3. The Company has not exercised the voting rights at the General Assembly of a corporation with which it has a subsidiary relation that involves controlling rights.

3.3.8. The Company ensures freedom of association and supports the right for collective bargaining.

4.4.3. Opinions of those board members who did not attend the meeting but conveyed their opinion to the Board in writing are presented to other board members.

4.5.7. Committees get the opinion of independent experts in matters they deem necessary with regard to their activities. The fees of the consulting services required by the Committees are covered by the Company. However, information on the persons/ entities providing such services and/or whether such persons/entities have a relation with the company is explained in the annual report.

Aksigorta' s compliance status with the Corporate Governance Principles in 2022 is summarized in the table below:

Status	Full Compliance	Partial Compliance	Non-Compliant	Irrelevant
Mandatory	26	-	-	-
Discretionary	31	2	4	5
Total	57	2	4	5

In 2022, full compliance has not been reached with such voluntary principles due to the difficulties in their implementation, ongoing discussions in Turkey and on international platforms regarding their implementation, the contradiction between the Company's interests, and the implementation of such principles as per the practices of the Company and the market. Thanks to the value and importance Aksigorta attributes to corporate governance, developments on this matter are monitored closely, and efforts towards full compliance with these principles are ongoing at full speed.

The Corporate Governance Compliance Report (URF) and the Corporate Governance Information Form (KYBF) for 2022 issued in accordance with the CMB's Decision No. 2/49 dated 10.01.2019 and approved by the Board of Directors of our Company are made available to public in this address: www.aksigorta.com.tr.

3. Investor Relations Activities

In an attempt to assist investors and analysts in their decision-making processes as per applicable laws, Aksigorta paid ultimate attention in 2022 to inform them as necessary, transparently, promptly, accurately, thoroughly, legibly, directly, sufficiently, regularly, and concurrently with all market participants, on the developments that might affect their investment decisions.

For this purpose, Sabancı Holding updated the Public Disclosure Platform (PDP) and the Investor Relations page (www.aksigorta.com.tr) regularly. Investor meetings and conferences were organized to keep the continuous and effective communication with the investors and the analysts. In 2022, 25 institutional investors/analysts were interviewed.

No issues that may cause conflicts of interests between Aksigorta and institutions Sabancı Holding receives services such as investment consultancy and rating have been encountered.

Their names, titles, tasks and charters of the managers and employees who are involved in investor relations in Aksigorta task are listed as below:

Osman Akkoca, CFO - CMB Charter Level 3, Corporate Governance Rating Charter

Zeynep Eröktem, Financial Control Department Manager, Investor Relations Head

4. Monitoring the Changes in Legislation and Legal Procedures

No amendment that could impact Aksigorta' s operations substantially was introduced to applicable laws in 2022. However, potential effects of the amendments to the Capital Markets Law, Turkish Commercial Code, and tax regulations on Aksigorta as a whole were analyzed in detail.

However, collaboration was made with Turkey Insurance Association and the relevant institutions and organizations in order to increase the benefits of the legislative changes in question to the interests of Aksigorta and to the development of the Turkish economy and markets. With the slogan "Beyond", the interests of our country and Aksigorta were kept together and significant contributions were made to the changes in financial legislation.

Aksigorta monitored legislative developments that pertained to it closely and took necessary action promptly in 2022, just as it did in previous years.

Last but not least, no lawsuit was filed against the Company that may impact the financial position or operations of Aksigorta in 2022. In addition, no administrative or legal sanction on the grounds of practices contradictory with the provisions of applicable regulations was imposed against the legal entity of Aksigorta, its Board Members, and the Senior Management.

SECTION II - BOARD OF DIRECTORS

1. Structure and Composition of the Board of Directors

The procedures and principles concerning the company's Board of Directors' structure, duties, management rights, and representation authorities, etc. are decided upon in accordance with the provisions stipulated in the company's Articles of Association.

The Company is managed and represented by a Board of Directors consisting of minimum 7 and maximum 15 members elected by the General Assembly in accordance with the provisions of the Turkish Commercial Code and Capital Market Legislation.

Minimum qualifications required in Board members are not stated in the Articles of Association. However, the required qualifications of the Members of the Company's Board of Directors are in line with the relevant articles of Corporate Governance Principles. Two members of the Board of Directors are independent members who are determined according to the Capital Markets Board's Corporate Governance Principles and regulations on Corporate Governance. Independent board members' independence statements have been received prior to the appointment and these statements remain in full force and effect. During the reporting period, there is no condition which interrupts the independency.

The Members of the Board of Directors may be elected for a term of office of one year, and re-election of the members whose term of office has expired is permissible. If a membership is vacated for any reason, at its first meeting, the Board of Directors elects a new member and submits him/her to General Assembly's approval. This member completes the remaining term of his/her predecessor.

On the basis of the General Meeting's resolution, Board members are authorized to perform transactions within the scope of Articles 395 and 396 of the Turkish Commercial Code.

2. Operating Principles of the Board of Directors

The Board of Directors meets as often as they could perform their duties effectively, they execute their activities in transparent, accountable, fair and responsible manner, while they also consider the long-term targets and interests of the Company.

Every year, the Members of the Board of Directors elect a chairman and a deputy chairman who will be the acting chairman in the absence of the chairman for the meetings. The Chairman of the Board of Directors determines the agenda of the Board of Directors' meetings by taking the opinions of the other members and the CEO. The determined agenda and the contents of the agenda items are communicated in writing to the Board Members one week in advance in order to enable them to carry out the necessary assessments and works. Agenda items of the Board meetings are discussed clearly and with every aspect. The Chairman of the Board of Directors is obligated to show the maximum effort for ensuring effective participation of the non-executive members in the meetings. Timing and the agenda of the Board meetings are organized by the Chairman or the Deputy Chairman.

The Board of Directors convenes upon the call of the Chairman and the Deputy Chairman whenever necessary. The meeting date may be determined with the decision of the Board of Directors as well. In case the chairman or the deputy chairman does not call the Board of Directors for the meeting upon the request of one of the members, then the members will be entitled to make a call for the meeting ex-officio.

The Board of Directors must convene at least four (4) times a year.

Board of Directors may also approve on paper a member's recommendation about a certain matter unless one of them requests physical meeting.

Board of Directors' meetings and decision quorums are subject to the provisions of Turkish Commercial Code.

The Board of Directors held meetings four (4) times between 01.01.2022 and 31.12.2022.