REVISED SCOPE OF INDEPENDENT AUDIT

The decree issued by the Council of Ministers, numbered 2014/7149 and published in the Official Gazette numbered 29254 on 1 February 2015 (hereinafter referred to as the “Second Amendment Decree”) has set forth new numeric limits determining whether or not a company shall be subject to independent audit through a revision upon the limits determined by the decree numbered 2014/5973 (hereinafter referred to as the “First Amendment Decree”) published in the Official Gazette numbered 28941 on 14 March 2014. As per the Article 635 of the Turkish Commercial Code numbered 6102 (in Turkish “Türk Ticaret Kanunu”, hereinafter referred to as the “Code”), both joint stock companies and limited liability companies complying with the criteria determined as per the related Decree shall be subject to the provisions set forth therein.

The changes brought by the First Amendment Decree upon the Decree numbered 2012/4213 on Determination of the Companies Subject to Independent Audit (in Turkish “Bağımsız Denetime Tabi Olacak Şirketlerin Belirlenmesine Dair Karar”, hereinafter referred to as the “Decree”) published in the Official Gazette numbered 28537 on 23 January 2013 having been explained in our newsletter on May 2014; the criteria in force following the changes brought by the Second Amendment Decree are as follows:

1. As per the Article 3 of the Decree (as amended), the companies falling into the scope of the Annex I thereof are subject to independent audit.
2. Additionally, the companies who, solely or together with the affiliated companies and subsidiaries, meet at least two of the three following measures are subject to independent audit:
   1. Companies with total assets equal to or above TRY 50,000,000.00- (the requirement of the abolished provision was “equal to or above TRY 75,000,000.00-”).
   2. Companies with annual net revenues equal to or above TRY 100,000,000.00- (the requirement of the abolished provision was “equal to or above TRY 150,000,000.00-”).
   3. Companies with total employees equal to or above 200 employees (the requirement of the abolished provision was “equal to or above 250 employees”).
3. Furthermore, the companies falling into the scope of the Annex II of the Decree solely or together with their affiliated companies and subsidiaries shall also be subject to independent audit, taking into account the limitations set forth therein, within the scope of the relevant legislation.In this respect, as per the Second Amendment Decree, (i) the companies subject to the audit of the Information and Communication Technologies Authority (in Turkish “Bilgi Teknolojileri Kurumu”) with the exception of those having authorisation without source foundation and of call center companies, and (ii) the companies subject to Energy Market Regulatory Authority (in Turkish “Enerji Piyasası Düzenleme Kurumu”) and having license, certificate or authorization certificate, who meet at least two of the three following measures, are subject to independent audit:
   1. Companies with total assets equal to or above TRY 50,000,000.00- (the requirement of the abolished provision was “equal to or above TRY 75,000,000.00-”).
   2. Companies with annual net revenues equal to or above TRY 100,000,000.00- (the present provision remains unchanged).
   3. Companies with total employees equal to or above 200 employees (the requirement of the abolished provision was “equal to or above 250 employees”).

1. The Article 4 of the Decree foresees that the companies exceeding two of the said limits for two consecutive fiscal years shall be subject to independent audit as of the following fiscal year and that the companies subject to independent audit shall be excluded from the scope of such audit as of the following fiscal year if;
   1. (i) they remain below the two or more of the said limits for two consecutive fiscal years; or,
   2. (ii) they remain below the two or more of the said limits at the rate of 20% or more for one fiscal year.

   As per the paragraph 2 of the Article 4, the determination of whether or not the measures foreseen in the Decree have been exceeded; the points to be taken into consideration are as follows:

   1. (i) financial statements of the two previous fiscal years (with regard to the total amount of assets and net revenue of the company),
   2. (ii) average number of employees of the two previous fiscal years (with regard to the number of employees).

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