BORUSAN MANNESMANN BORU SANAYİ VE TİCARET A.Ş. DIVIDEND DISTRIBUTION POLICY
Our company's dividend distribution policy has been prepared on the basis of the Capital Markets Board's Dividend Communiqué Series: II No: 19.1, which entered into force upon publication in the Official Gazette dated 23.01.2014 and numbered 28891.
When our Company's retained earnings and dividend performance is analyzed, it appears that our Company has recorded profits even in the most distressed periods of economy and since 1994, the year we went public, we have distributed 50% or more of our net profit to our shareholders as dividend. It is aimed to continue this understanding in the future periods, within the framework of the Turkish Commercial Code, Capital Market legislation and the implementation and principle decisions of the Capital Markets Board. Our Company's profit distribution policy for the year 2014 and future years is to distribute 50% or more of the distributable profit as dividends. However, our distribution rate will be reviewed every year according to the developments in domestic and foreign economic conditions, investment opportunities and financing opportunities of our company.
The proposal of the board of directors regarding the profit distribution is announced to the public within the framework of the regulations of the Board regarding the public disclosure of material events together with the profit distribution table determined by the Board.
Matters regarding profit distribution are set out below in article 26 of our Articles of Association.
The net profit which remains after deducting amount payable and to be set aside by the company such as general expenses and depreciation as well as the statutory taxes payable by the company in its capacity as a legal entity from the amounts calculated at the end of the fiscal year and which is shown on the annual balance-sheet less losses of the previous year, if any, shall be distributed as follows in the order shown below.
The First Class of Legal Reserves:
a) 5% thereof is set aside as legal reserve,
b) The first dividend is set aside at such rate and amount as determined by the Capital
Without prejudice to the first dividend, the following net items are set aside from the
remaining net distributable profit.
c) 10% is set aside for holders of dividend share.
d) Maximum 5% of the amount remaining after payment of items specified in clauses (a) and (c) above to members of the Board of Directors and company's directors and officers may be, upon discretion of the General Assembly, allocated as gain margin. The distribution of the profit share determined for the members of the Board of Directors by the members of the Board of Directors shall be determined by the General Assembly taking into account the legislation related to the Capital Markets.
e) Maximum 5% of the sum may be allocated for the foundations that are established or participated by the company or such individuals and/or institutions related to the same.
f) The portion remaining after deduction of sums specified in clauses a, b, c, d and e from the net profit may be, partially or fully, distributed by General Assembly to the shareholders pro rata to their shareholding as the second dividend share and it may be, partially or fully, set aside extraordinary legal reserve.
The Second Class of Legal Reserves:
g) One-tenth of the amount calculated after deduction of dividend at the rate of 5% of the paid-in capital from the portion that has been decided to be paid to shareholders and other persons with a share in profit is set aside as the second class legal reserve pursuant to the 3rd clause, 2nd paragraph, article 466 of the Turkish Commercial Code.
h) Unless mandatory legal reserves are set aside and the first dividend stipulated in the articles of association for the shareholders is distributed in cash and/or in stocks, a decision cannot be made to set aside further legal reserves, to carry profits forward to the next year and to distribute dividends to preferred stockholders, holders of participating, founder's and common dividend shares, members of the board of directors, janitors and workers, foundations established for various purposes and such persons and/or other organizations.
Dividend advance may be distributed pursuant to provisions of Capital Markets Law and in accordance with principles contained in Capital Markets legislation. The deduction of the advance payment is also made according to the provisions of the relevant legislation.
If it is decided to distribute dividends, the dividend will be paid in cash to those who are entitled, and the distribution time is determined by the board of directors at the latest as the end of the accounting period in which the general assembly meeting where the distribution decision is made.