Published in the Official Gazette dated 14/02/2002, No. 24671

Regulation on Operational Procedures and Principles of the Sugar Authority

Part I

General Principles

Section I

General Provisions

Purpose

Article 1 - The purpose of this Regulation is to provide implementation of the Sugar Law No: 4634 and of other relevant legislation, to control and finalize implementations, to make arrangements within the framework of the authorizations vested with the Law, and to determine methods and principles of foundation, duties and operation of the Sugar Authority established in order to perform other duties set forth in the Law and to use authorizations.

Scope

Article 2 - Methods and principles of organizational structure, management, and operation of Sugar Authority are determined with this Regulation.

Grounds

Article 3 - This Regulation is prepared in accordance with the Article 12 of the Sugar Law No: 4634 which came into effect by being published in the Official Journal dated 19 April 2001 No: 24378.

Definitions

Article 4 - The terms used in this Regulation, namely;

a) Ministry means the Ministry of Industry and Commerce,

b) Undersecretariat means the Undersecretariat of Foreign Trade,

c) Authority means the Sugar Authority,

d) Board means the Sugar Board,

e) Chairman means the Chairman of the Sugar Board,

f) Law means the Sugar Law No: 4634,

g) Sugar means sugar solution, invert sugar syrup and inuline syrup, composed of dissolved saccharose or invert sugar syrup or both into water, classified as white sugar (standard, refined cube and crystal sugar), half-white sugar, refined sugar, raw sugar, and brown sugar, produced with sugar beet or sugar cane, with crystallized saccharose and starch origins, in the form of liquid or dried glucose syrup.

h) Marketing Year means the period between September 1 and August 31.

i) Quota A means amount of sugar produced according to domestic demand and distributed to domestic marketing during the marketing year,

j) Quota B means amount of sugar in a certain percentage of Quota A and produced for keeping for safety reasons,

k) Sugar Factory means enterprises producing sugar by treating the products set forth in the item (g) and raw sugar apart from those enterprises using sugar as an input,

l) Company means legal entities having and/or operating one or more than one sugar factories in its organizational structure.

Section II

Foundation and Organization

Foundation and Legal Structure of the Authority

Article 5 - The Sugar Authority is a public legal entity founded according to the Law in order to perform the duties set forth in the Law and to use authorizations. The Authority is composed of the Sugar Board and relevant service units. The Authority is managed by the Sugar Board.

The principal office of the Authority is in Ankara.

The Authority is affiliated with the Ministry of Industry and Commerce.

Part II

The Sugar Board

Section I

Organization and Term of Office of the Sugar Board

Organization of the Sugar Board

Article 6 - The Sugar Board is the decision making body of the Authority, and composed of total seven members, including one Chairman and one Deputy Chairman, to make and implement all kinds of decisions in issues included in the scope of the Law.

Election of Members of the Board

Article 7 - The Cabinet of Ministers selects and appoints six members and one Chairman out of two candidates to be presented by the Ministry, the Ministry of Agriculture and Rural Services, the Ministry with which Undersecretariat is affiliated, and the supreme union composed of the Company which produces sugar with saccharose and starch origins and capital of which belongs to the public, and beet cooperatives, and out of two candidates to be separately presented by the two companies with the highest annual nominal production capacity average in the factories in Turkey from each group of companies producing sugar with saccharose and starch origins.

Chairman

Article 8 -

The Chairman of the Board holds the office of the Chairman of the Authority as well. The Chairman represents the Authority before the administrative and judiciary authorities and before the third persons. This responsibility covers the duty of informing the public on the activities of the Board.

In the event that the Chairman leaves his office before the end of the term of office of five year with any reason, the procedure according to the Article 8 of the Law is observed.

Deputy Chairman

Article 9 - The Deputy Chairman is elected among the members of the Board. Following the election of the Chairman and members of the Board, the Chairman is informed about the candidates. The Chairman of the Board puts the candidates on the agenda. The Deputy Chairman takes on all duties and authorities of the Chairman in the absence of the Chairman.

Terms of Appointment

Article 10 - Chairman and members of the Board are required to be university graduates of minimum four-year in the branches of law, economics, engineering, business administration, international relations, public administration or finance in Turkey or abroad (this condition is not required for the member representing the supreme union established by beet cooperatives), with sufficient occupational knowledge and experience and with minimum ten-year term of public or private sector service related to their occupation. Moreover, Chairman and members of the Board are required to meet the conditions set forth in the items 1, 4, 5, 6 and 7 of the paragraph (A) of the Article 48 of the State Officials Law No: 657.

Term of Office

Article 11 - The term of office of the Chairman, Deputy Chairman and members of the Board is five years.

In the event that members appointed to the Board leave their offices, which they represent in the Board, their membership ceases. For the members, whose membership ends with this reason or any other reason, new members are selected and appointed by the Cabinet of Ministers in maximum one month. The term of office of those members appointed in this way is the remaining term of office of the members, whose membership ceases.

The term of office of the Chairman, Deputy Chairman and members of the Board ceases provided that a final court decision saying that they do not bear the required conditions for the appointment any more or that they have committed an offense related to the work given with the Law.

Prohibitions

Article 12 - Membership of the Board does not cover the prohibition of undertaking or performing other works and services laid down by the State Officials Law No: 657, the Decree in the Power of the Law concerning the Organization of State-owned Economic Enterprises No: 399 and the Decree in the Power of the Law concerning the Repealing of Certain Articles of the Decree in the Power of the Law No: 233.

Members of the Board are deemed to be State Officials for offenses they commit related to money, legal documents equivalent to money, title deeds, and for offenses they commit related to balance sheets, minutes, reports and other similar documents and books, and provisions set forth in the Third and Six Chapters of the Second Book of the Turkish Criminal Code .

Provided that members of the Board discloses confidential information they have acquired during their service, provision set forth in the Article 229 of the Turkish Criminal Code No: 765 is implemented and their membership ceases. Such persons cannot be appointed as a member of the Board again.

Section II

Duties and Authorities of the Board

Duties and Authorities of the Board

Article 13 - The duties and authorities of the Board are as follows:

a) Establishing Quota A and Quota B, taking decisions on canceling and transferring them and implementing such decisions,

b) Establishing participation shares belonging to the current marketing year of the active companies in order to be used for organizational expenditures and proceedings, storage premium, research and development activities and similar administrative expenses at the beginning of the current marketing year in such a way not exceeding one in one thousand of the amount to be calculated for the factory sale price of the sugar equivalent of the Quota A in the first marketing year of the new companies established, taking and implementing decisions for this subject.

c) Taking and implementing decisions for making or not making storage deduction for sugar, and for paying premiums or not, making arrangements for domestic production and market functions in accordance with the objectives of the Law, accepting storage deduction, establishing storage premiums, taking decisions for expenditures and inputs.

d) Informing the Undersecretariat on its views on the arrangements to be made in the sugar trade by taking domestic price, supply-demand balance and speculative affects.

e) Implementing administrative fines laid down in the Law.

f) Making organizations by directing research and development activities related to the sector, and allocating resources when required.

g) Requesting all relevant information deemed to be required from public institutions and organizations, from real and legal entities producing goods or extending services, marketing such goods and services, and from all kinds of unions established for such institutions, organizations, and entities.

h) Making researches and controls in the companies and affiliated factories for the matters related to its duties when required, and making use of independent control organizations if necessary.

i) Taking and implementing decisions in other points related to the sector in accordance with the objectives of the Law.

j) Making cooperation with all organizations related to its subject matters in Turkey or abroad, becoming members to such organizations when required.

k) Establishing and implementing methods and principles for preventing the disclosure of all information deemed to be commercially sensitive including commercially classified information and confidential competition information.

l) Electing Deputy Chairman of the Board.

m) Establishing and implementing methods and principles for staff policies, and for working, monitoring the implementation of such methods and principles, making appointment decisions for the staff to be employed in the service units, establishing general election and appointment conditions for the staff to be employed in the service units.

n) Preparing and approving the annual budget, income-expenditure final calculation, and annual work program of the Authority, taking decisions to make transfers between the accounts in the budget when required.

o) Making relevant arrangements on the matters of purchasing, sales, renting of moveable and immovable.

p) Performing other duties to be extended related to the Law and Regulations to be issued based on the Law.

r) Establishing duty authority field of staff with the authority of signature on behalf of the Board Chairman,

s) Taking decisions on the matters of out of the country assignments of the members of the Board and the staff of the service units.

t) Establishing travel expenses and daily fees of the members of the Board and the staff employed in the service units in Turkey and abroad within the limits stated by the laws.

The Board issues and implements communiqu�s and regulations on the matters of above stated duties in order to make necessary arrangements by taking the Law and the Regulations.

Section III

Working Principles of the Board

Meeting Time and Request for Meeting

Article 14 - The Board holds meeting on the request of the Chairman of the Board. The meeting is held with the absolute majority of all qualified members, not less than twice in a month. The Board can hold extraordinary meetings on the request of the Chairman or with the written request of minimum three members and with the absolute majority of all qualified members. Members of the Board are notified about the hour date and hour of the meeting.

The Chairman determines the meeting request, place and hour of the meeting in the event that they have not stated in the previous meeting, and members of the Board are notified in written by the Secretariat General. The Authority can hold meetings in places other than its principal office.

Agenda of the Meeting and Procedures to Observe in the Meetings

Article 15 - The meeting is chaired by the Chairman of the Board, the agenda of the meeting is established by the Chairman and members of the Board are notified. The Chairman determines the issues for which decisions will be taken, and provide a free discussion environment for such issues. The Chairman uses its vote as a last person and collects the votes.

The Board can decide the secret voting and the methods to be implemented.

Failures to Attend the Meetings

Article 16 - The Chairman and members of the Board are required to be present at all meetings.

Those members with relevant excuses have to report such excuses to the Chairmanship in written.

Members failing to attend four successive meetings or total ten meetings in a year without any excuse are deemed to be resigned. New members are appointed according to the procedures set forth in the Law.

Decisions of the Board

Article 17 - The Board takes decisions at clandestine meetings. Members of the Board cannot use abstaining votes. All members except those with excuses attend the meetings.

Meeting and the Decisions

Article 18 - The meeting is held with the absolute majority of all qualified members, and takes decisions with the votes in the same direction with the absolute majority of all qualified members.

Minutes and Decisions

Article 19 - Decisions are recorded in written by the Chairman of the Board or by an employee of the Authority. All pages of the books, where minutes are recorded, are initialed by the Chairman and members present at the meeting.

The Board can make a decision to record speeches in written with a principle decision in advance or during the meeting. However, meetings, which are requested to be recorded in written by the Chairman or one of members of the Board, are recorded as well.

Members with objection against the decision have the explanation or grounds of their votes in objection recorded separately or together in the minutes and initialed them.

Decision Book

Article 20 -. All pages of the decisions recorded in the minutes of the meeting are initialed by the Chairman and members present at the meeting.

Meeting and decisions minutes of the Board are transferred to a book having successive pages certified by a notary public in the order of date and number without leaving a line or marginal space.

The following order is taken into consideration for recording minutes and decisions belonging to meetings in the decision book:

a) Names of persons who have attended to the meeting and who have failed to attend with their excuses,

b) Suggestion notes or proposals on issues in the agenda,

c) Meeting minutes, and

d) The text of the decision.

Keeping and Publishing Decisions

Article 21 - Original copy of the minutes with signatures are kept at the General Secretariat of the Authority. Approved samples of the decisions and/or their results are sent to the relevant service units or relevant persons.

The Chairman of the Board approves the compliance of copies of the decision with the original version.

Disclosure of Decisions

Article 22 - The Chairman of the Board can make statements to media on issues taken up at the meetings, decisions taken, and on all activities of the Board.

Part III

Service Units of the Authority

Section I

Service Units of the Authority

Article 23 - Duties required by the services of the Authority are undertaken by service units. The service units are composed of four main units stated in the enclosed diagram to the Regulation by taking the Table (I) of the Law: Legal Advisory Unit, Economic Research-Planning and Evaluation, Monitoring Coordination and Controlling Unit, Staff, Administrative and Financial Affairs Unit. The Board establishes duties and authorities of the staff working in these units. The Board is authorized to make changes of title and status in the permanent staff positions provided that the total number set forth in the permanent staff positions of the enclosed Table (I) of the Law.

Requirements of Appointment of the Staff to be Employed in the Service Units of the Authority

Article 24 - Secretary General, Deputy Secretary General, Expert, and Expert Assistants are required to be university graduates of minimum four-year. 20 % of the administrative staff is required to be graduates of high school, other staff are required to be university graduates of minimum four-year in Turkey or abroad. Moreover, the staff to be employed in the Service Units of the Authority are required to meet the conditions set forth in the items 1, 4, 5, 6 and 7 of the paragraph (A) of the Article 48 of the State Officials Law No: 657.

Section II

Rights and Responsibilities of the Staff

to be Employed in the Service Units of the Authority

Wages, Retirement and Bonus Wages

Article 25 - The staff to be employed in the service units are subjected to the provisions of the Labor Law No: 1475.

Wages of the staff are established by the Sugar Board within the framework of a hierarchical scale. Wages cannot be higher than double the amount of the ceiling wage established for the highest contracted wage for the staff subjected to Table (II) employed in the State-owned Economic Enterprises by the Supreme Planning Board. Wage increases are performed in the same amount and on the same date with other public staff. Bonus wages are annually paid to staff in the amount of two salaries. The Board decides on the payment date of the bonus wages.

This staff is subjected to the Social Security Authority Law No: 506 for the retirement proceedings.

Health Aid

Article 26 - Health services of the staff to be employed in the service units of the Authority are carried out within the framework of the Social Security Authority Law No: 506.

Disciplinary Provisions

Article 27 - The Board establishes the principals on the disciplinary rules to be observed by the staff to be employed in the service units of the Authority.

Part IV

Various Provisions

Keeping Information Undisclosed

Article 28 - The Chairman, members and staff of the Board are required to keep information on the Authority, on affiliated persons of organizations with the Authority, and on third persons they acquired during their service and works disclosed.

The Chairman, members and staff of the Board are required to take precautions to keep documents, copies and photocopies of documents, other data in the enclosures of files and other written information they obtained during their service and works, and to prevent them from being obtained by other parties,

Confidential information cannot be disclosed to persons or organizations other than authorized by the Laws by no means.

This obligation continues after concerned persons leave their offices and positions.

Control of the Authority

Article 29 - The Board establishes the principles of control, examination and investigation in the Authority. Proceedings regarding this matter will be undertaken by the authorized persons to be assigned by the decision of the Board.

The control of the Authority is undertaken by the Prime Ministry Supreme Control Board.

Validity

Article 30 - This Regulation enters into force on the date of its publication in the Official Journal.

Execution

Article 31 - The Sugar Board executes the provisions of this Regulation.