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article; significant events that took place after the end of the activity
year, research and development activities of the company, pecuniary
benefits of BoD members and executive managers such as remunera-
tion and premiums, various expenditures, real and pecuniary opportu-
nities, insurance and similar securities shall be detailed in the annual
activity report.
Pursuant to Article 516/3 of the New TCC, the mandatory content
of the annual activity report shall be regulated by a regulation of the
ministry of Industry and Commerce.
Articles 517 and 518 of the New TCC bring similar dispositions
with regards to financial statements and annual activity report of group
of companies. Pursuant to article 517 of the New TCC, TAS shall
determine the enterprises obliged to prepare consolidated financial
statements and enterprises which fall within the scope of consolida-
tion, and relevant issues. Article 518 of the New TCC regulates that the
annual activity report with regards to group of companies shall be pre-
pared with the BoD of the parent company, pursuant to Article 516
which regulates the annual activity report.
Reserve Funds
Articles 519-523 of the New TCC regulate reserve funds. Article
519 of the New TCC which regulates the general statutory reserve
funds is similar to the corresponding disposition of the TCC. Pursuant
to Article 519/1 of the New TCC, five percent of the annual profit shall
be reserved as general reserve fund until this sum reaches twenty per-
cent of paid-in capital. After reaching this threshold, figures listed
under Article 519/2 shall be added to general statutory reserve funds.
General statutory reserve funds shall be spent only on recovering loss-
es, maintaining the activities of the enterprise or preventing unemploy-
ment, unless it exceeds half of the share capital or the issued capital.
Article 520 of the New TCC provides a new disposition which was
not included in the TCC. Pursuant to Article 520/1 of the New TCC,
the company shall reserve funds equivalent to the amount of the shares
acquired by the company, in the event that the company acquires its
own shares. These reserve funds may only be spent in proportion with
the acquisition value of the bought back shares once transferred or
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