AUDIT COMMITTEE
TERMS OF REFERENCE
I.
Effective Date
:
25.01.2013
Code
:
BTC-YÖN-02
Revision Date
:
-/-
Page
:
1/4
PURPOSE
1. The purpose of this document is to determine the terms of reference of the Audit
Committee of Batıçim Batı Anadolu Çimento Sanayii A.Ş. (“Company”).
II. SCOPE
2. The Audit Committee shall assist the Board of Directors in fulfilling its duty of
oversight, specifically in the following areas:

Integrity of the Company’s financial statements,

Compliance with legal and regulatory requirements,

Competency and independence of the audit firm, and

Effectiveness of the Company’s internal audit function and its external auditors.
3. The main function of the Audit Committee is to ensure the reliability, accuracy and
transparency of the financial reporting system, to monitor the risk-management
process, to evaluate the effectiveness of the internal audit system, to oversee the
independent audit process and to advise the Board of Directors on the appointment of
an independent audit firm.
4. The terms of reference of the Audit Committee have been prepared in accordance with
the regulations, rules and principles specified in the Capital Markets Board’s
Independent Audit Standards Series: X, No: 22 (“Standards”)
and the Capital
Markets Board’s Communiqué Series: IV, No: 56 on Determination and Implementation
of Corporate Governance Principles (“Communiqué”).
III. COMPOSITION, STRUCTURE AND FUNCTIONING AND REPORTING OF THE
CORPORATE GOVERNANCE COMMITTEE
Composition and Structure
The Audit Committee shall
5. consist of at least two members of the Board of Directors, all of whom shall be elected.
Committee members can also be elected from amongst the independent directors as
per item 4.5.3 of the Communiqué.
AUDIT COMMITTEE
TERMS OF REFERENCE
Effective Date
:
25.01.2013
Code
:
BTC-YÖN-02
Revision Date
:
-/-
Page
:
2/4
6. be appointed by the Board of Directors for a period equal to its term of office. The
Board of Directors can replace a member or members of the Committee if and when
deemed necessary.
7. Duties, terms of reference and composition of the Audit Committee shall be determined
by the Board of Directors as per item 4.5.2 of the Communiqué.
Terms of Reference:
8. The Audit Committee shall monitor the accounting system of the Company, the
announcement of financial statements and the efficient functioning of the external audit
and internal control system as per item 25/2 of the Standards.
9. The
Audit
Committee
shall
when
necessary
submit
a
written
report
on
its
recommendations to the Board of Directors, with which the final decision ultimately
rests as per item 4.5.8 of the Communiqué.
10. To the extent possible, scheduling for the Audit Committee meetings shall be
determined in accordance with the dates of the meetings of the Board of Directors.
11. The Committee shall produce minutes of the proceedings and resolutions of the
meeting and submit them to the Board of Directors, and shall circulate a synopsis of
the meeting to all members of the Board if deemed necessary as per item 4.5.8 of the
Communiqué.
12. produce minutes of its proceedings and keep records in a documented manner as per
item 4.5.8 of the Communiqué.
13.The Board of Directors shall provide all necessary resources to support the Audit
Committee in performing its duties as per item 4.5.6 of the Communiqué.
14. The Committee may invite any manager of the Company, as well as internal or
external auditors, to attend its meetings in order to seek their opinion as per item
4.5.6 of the Communiqué.
15. The Audit Committee shall monitor if the financial statements of the Company and
explanatory notes thereto are prepared in accordance with the current legislation and
international accounting standards and, if deemed necessary, report to the Board of
Directors in writing upon receiving the opinion of the external auditor as per item 25/6
of the Standards.
AUDIT COMMITTEE
TERMS OF REFERENCE
Effective Date
:
25.01.2013
Code
:
BTC-YÖN-02
Revision Date
:
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Page
:
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Reporting to the Board of Directors, Audit Committee and Executive
Committee
16. The internal audit department shall present a report outlining material risks and
control issues, along with the internal audit manager’s recommendations, to both the
Executive Committee and the Audit Committee simultaneously.
17. The Audit Committee shall hold meeting with the internal audit department to review
the findings in the report.
18. Consequently, the internal audit department shall review the contents of the Audit
Committee meeting together with the Executive Committee. Taking into account the
findings and recommendations in the audit report, suggested actions shall be reviewed
and the outcomes of the meeting shall be determined in writing.
Independent Audit Process
19. The Audit Committee shall oversee the appointment of the audit firm, preparation of
audit agreements, initiation of the audit process and all activities related to the
external audit process as per item 25/2 of the Standards.
20.The Audit Committee shall determine the external auditor and the services to be
received and submit this for the Board of Directors’ approval as per item 25/3 of the
Standards.
21. The external auditor shall inform the Audit Committee regarding accounting policies
and practices of the Company, recommendations previously made to Company
management on alternative practices or public-disclosure strategies, suggested actions
and expected outcomes thereto, as well as any material correspondence with Company
management as per item 25/4 of the Standards.
Internal Control Process
22. The Audit Committee shall keep under review the effectiveness and adequacy of the
Company’s internal controls, review findings regarding the same and, if deemed
necessary, submit them to the Board of Directors as per item 25/2 of the Standards.
Internal Audit Process
AUDIT COMMITTEE
TERMS OF REFERENCE
Effective Date
:
25.01.2013
Code
:
BTC-YÖN-02
Revision Date
:
-/-
Page
:
4/4
23. The Audit Committee shall determine methods and criteria to evaluate the Company’s
procedures under which its employees can raise concerns, in confidence, about
accounting, internal controls and independent audit matters as per item 25/5 of the
Standards.
IV. OTHER MATTERS
24. The Audit Committee may obtain, at the Company’s expense, outside professional
advice on any matter within its terms of reference as per item 25/7 of the Standards.
25. The Audit Committee shall meet at least four times a year, and in any event at least
once each quarter, and minutes of these meetings shall be submitted to the Board of
Directors. The Audit Committee shall submit its findings and recommendations in
writing on any matter within its terms of reference to the Board of Directors as per item
25/8 of the Standards.
26. Responsibilities and duties of the Audit Committee shall not eliminate the Board of
Directors’ responsibility arising from the Turkish Commercial Code as per item 25/9 of
the Standards.
Amendment of the Terms Of Reference
27. These terms of reference are subject to amendments with a Board resolution.
Effective Date
28. These terms of reference have been approved by the Board of Directors of Batıçim
Batı Anadolu Çimento San. A.Ş. with a Board resolution dated January 25, 2013, and
numbered 1206/01-01 to enter into effect as of January 25, 2013, as per item 4.5.2 of
the Communiqué.