Dividend Distribution Policy

Dividend Distribution Policy

The Dividend Distribution Policy for 2014 and subsequent years has been determined as follows and submitted for the approval of the shareholders at the ordinary general meeting held on March 31, 2015.

Our company distributes dividends in accordance with the provisions of the Turkish Commercial Code, Capital Market Regulations, Tax Regulations, and other relevant regulations, as well as the article of our Articles of Association regarding dividend distribution. In dividend distribution, a balanced and consistent policy is followed between the interests of shareholders and the Company, in accordance with Corporate Governance Principles.

As long as financial resources permit, the dividend distribution rate is determined by the Board of Directors, taking into account market expectations, long-term company strategy, investment and financing policies, profitability and cash flow, in accordance with the Turkish Commercial Code, Tax Procedure Law, Capital Market Law, Capital Market Board principle decisions and similar legislation, and the relevant provisions of the company’s articles of association, and submitted to the General Assembly for approval. If a dividend distribution decision is made, the distribution will be decided by the Company’s Board of Directors as cash and/or bonus shares and submitted to the General Assembly for consideration.

If a decision is made to distribute dividends in cash, they may be paid in equal or different installments, provided that this is decided at the General Assembly meeting where the distribution is decided. The number of installments is determined by the General Assembly or, provided that it is explicitly authorized by the General Assembly, by the Board of Directors.

There is no preferential treatment in dividend distribution. Dividends are distributed equally to all existing shares, regardless of their issuance and acquisition dates.

The payment date for dividends is submitted to the General Assembly by the Board of Directors. Taking into account legal regulations and the relevant provision of the Company’s articles of association, dividends will be distributed to shareholders within the statutory periods, following the proposal of the Board of Directors and the approval of the General Assembly of Shareholders, on a date determined by the General Assembly.

Unless the reserves required by law are set aside, and unless the first dividend determined for shareholders in the articles of association is distributed in cash and/or in the form of shares; The Board of Directors may not decide to allocate additional reserves, carry forward profits to the following year, or distribute dividends to preferred shareholders, holders of participation, founder and common share certificates, members of the board of directors, and employees, and similar individuals and/or institutions.

The Board of Directors may distribute advance dividends, provided it is authorized by the General Assembly and complies with Capital Market legislation. The total advance dividend to be distributed in an accounting period cannot exceed half of the previous year’s profit. The authority granted to the Board of Directors by the General Assembly to distribute advance dividends is limited to the year in which this authority is granted. No decision may be made to grant an additional advance dividend and/or distribute dividends unless the previous year’s advance dividend has been fully offset.

The upper limit for donations made during an accounting period is determined by the General Assembly, provided that the donations made during the year are presented to the shareholders at the General Assembly, provided that they do not constitute a violation of the Capital Market Law and related legislation. Donations exceeding this limit are not permitted and any donations made will be added to the distributable profit base.

Articles 29 and 30 of our Articles of Association are as follows:

DETERMINATION AND DISTRIBUTION OF PROFIT:

Article – 29:

  1. Dividend

The Company’s profit is determined in accordance with the Turkish Commercial Code, Capital Market Legislation, and generally accepted accounting principles. It is the amount remaining after deducting the Company’s general expenses and various depreciation amounts, which are necessary to be paid and set aside by the Company, as well as the taxes that the Company’s legal entity is obliged to pay, from the income determined at the end of the fiscal year, and which appears in the annual balance sheet. The amount reached after deducting any losses from previous years is distributed as follows:

General Legal Reserve

  1. A legal reserve of five percent (5%) of the net profit is set aside.

First Dividend

  1. After deducting the amount specified in clause (a) from the net profit, the first dividend is allocated in accordance with the dividend distribution policy determined by the General Assembly and the provisions of the relevant legislation.

Second Dividend

  1. After deducting the amounts specified in clauses (a) and (b) from the net profit, the General Assembly is authorized to distribute the remaining portion, in whole or in part, as a second dividend, or to distribute dividends to the members of the board of directors and the company’s employees, or to set aside as a reserve fund as it voluntarily sets aside in accordance with Article 521 of the Turkish Commercial Code.

General Statutory Reserve Fund

  1. Ten percent of the amount remaining after deducting a dividend of 5% of the paid-up capital from the portion decided to be distributed to shareholders and other persons participating in the profit is set aside as a second statutory reserve fund in accordance with Article 519, paragraph 2/c of ​​the Turkish Commercial Code.
  2. The General Assembly may decide to make donations by setting an upper limit. Donations made by the company during the relevant fiscal year are added to the distributable profit base.

Unless the reserves required by law are set aside, and unless the dividend determined for shareholders in the Articles of Association is set aside, no other reserves may be set aside, no profits may be carried forward to the following year, and no dividends may be distributed to holders of usufruct certificates, foundations established for various purposes, and such individuals and/or institutions, members of the board of directors, and employees of the company. Furthermore, dividends cannot be distributed to these individuals unless the determined dividend has been paid.

  1. Dividends shall be distributed equally to all existing shares as of the dividend distribution date, regardless of their issuance and acquisition dates.
  2. The method and timing of the distribution of the decided dividend shall be determined by the General Assembly upon the proposal of the Board of Directors. The provisions of the Capital Market Legislation shall be complied with.

The dividend distribution decision made by the general assembly in accordance with these articles of association cannot be revoked.

  1. Dividend Advance

The Board of Directors may distribute a dividend advance, limited to the relevant year, provided that it is authorized by the General Assembly and complies with the Capital Market Legislation. The authority granted to the Board of Directors by the General Assembly to distribute advance dividends is limited to the year in which this authority is granted. No decision can be made to grant an additional advance dividend or distribute dividends unless the previous year’s advance dividends have been fully offset.

PROFIT DISTRIBUTION DATE:

Article – 30:

The date and method of distribution of profits to company shareholders shall be determined by the General Assembly upon the proposal of the Board of Directors, provided that it complies with capital market legislation.