MILLIRE_2019_Annual Report

259 Milli Re Annual Report 2019 Activities and Major Developments Related to Activities Financial Status Risks and Assessment of the Governing Body Unconsolidated Financial Statements Together with Independent Auditors’ Report Thereon Consolidated Financial Statements Together with Independent Auditors’ Report Thereon General Information Financial Rights Provided to the Members of the Governing Body and Senior Executives Research & Development Activities Millî Reasürans Türk Anonim Şirketi NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note 2.1.1) (Currency: Turkish Lira (TL)) A reconciliation of tax expense applicable to profit from operating activities before income tax at the statutory income tax rate to income tax expense at the Group’s effective income tax rate for the year ended December 31, 2019 and 2018 is as follows: 2019 2018 Profit before taxes 634.616.315 Tax rate (%) 529.665.325 Tax rate (%) Taxes on income per statutory tax rate 139.615.589 22 ,00 116.526.372 22,00 Tax exempt income (63.502.257) (10,01) (60.400.133) (11,40) Non-deductible expenses 56.760.405 8,95 55.505.609 10,48 Total tax expense recognized in consolidated profit or loss 132.873.737 20,94 111.631.848 21,08 36 Net foreign exchange gains Net foreign exchange gains are presented in Note 4.2 - Financial Risk Management above. 37 Earnings per share Earnings per share are calculated by dividing Group’s net profit of the year to the weighted average number of shares. 2019 2018 Net profit/loss for the period 309.978.881 278.283.572 Weighted average number of shares 66.000.000.000 66.000.000.000 Earnings/losses per share (TL) 0,0047 0,0042 38 Dividends per share Dividend distribution policy of the Company stated its Articles of Association are as follows: Net profit for the year presents remaining amount of total income of the year after deducting operating expenses, amortisation, provisions, taxes and other similar obligations and prior year losses if any. Net profit is divided and distributed in accordance with order as follows. - 5% of legal reserve is divided from annual net profit, until it reaches 20% of share capital. - Amounts described by a and b clauses of 2nd paragraph of 519th article of the Turkish Commercial Law will be added to general legal reserves, after legal limit is reached. - 10% of the remaining net profit amount is distributed to shareholders, as first dividend. - If the company has acquired his share, according to 520th article of the Turkish Commercial Law, legal reserve is divided to meet the acquiring amount. - Reserve for natural disasters and catastrophe might be allocated, if deemed necessary, based on the suggestion of the Board of Directors and decision of the General Assembly, - After the allocation of first legal reserves, first dividend to shareholders and statutory reserves, up to 3% of the remaining amount not exceeding three-wages is distributed to personnel. - After the allocation of above mentioned reserves and dividends, second dividend to shareholders might be allocated, based on the suggestion of the Board of Directors and decision of the General Assembly. - According to c clause of 2nd paragraph of 519th article of the Turkish Commercial Law, 10% of total amount distributed to people have share of profit will be added to general legal reserves. - The fate of remaining amount will be determined by the General Assembly. Judgements of 3rd paragraph of 519th article of Turkish Commercial Law are reserved. Other legal reserves can not be divided, profit can not be transferred to next year and share of profit can not be distributed to workers, unless legal reserves have to be divided according to laws and first dividend for shareholders is divided, in accordance with the Articles of Association.