C. Reserves

I. Legal reserves

1. General reserve

¹ Five per cent of the annual profit must be allocated to the general reserve until this equals 20 per cent of the paid-up share capital.

² Even after it has reached the statutory level, the following must be allocated to the general reserve:

1.

any share issue proceeds in excess of the nominal value remaining after the issue costs have been met, unless used to fund write-downs or for staff welfare purposes;

2.

any amount remaining from sums paid in on forfeited shares after any shortfall on the shares issued in return has been met;

3.

ten per cent of the amounts distributed as the share in the profit above and beyond payment of a divaidend of 5 per cent.

³ To the extent it does not exceed one-half of the share capital, the general reserve may be used only to cover losses or for measures designed to sustain the company through difficult times, to prevent unemployment or to mitigate its consequences.

⁴ The provisions in para. 2 number 3 and paragraph 3 do not apply to companies whose primary purpose is to hold equity participations in other companies (holding companies).

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