Pursuant to the Company’s charter, dividends are recommended to the General Shareholders’ Meeting by a majority vote of the Board of Directors, and approved by the General Shareholders’ Meeting by a majority vote.
The amount of the dividend approved at the General Shareholders’ Meeting may not be more than the amount recommended by the Board of Directors. Dividends are distributed to shareholders entitled to participate in the General Shareholders’ Meeting, which approved the dividends, and shall be paid within the period of not more than 60 days from the date when their distribution has been approved.
When making recommendations about payment, and when paying dividends, the Company is required to follow the limitations established by the Joint Stock Companies Law. In particular, dividends may be declared only out of net profits calculated under RAS and as long as the following conditions have been met:
- the Company’s share capital has been paid in full;
- the value of the Company’s net assets, calculated under RAS, is not less (and would not become less as a result of the proposed dividend payment) than the sum of the Company’s share capital, the Company’s reserve fund and the difference between the liquidation value and the par value of the Company’s issued and outstanding preferred shares, if any;
- the Company has repurchased all shares from shareholders having the right to demand repurchase; and
- the Company is not insolvent, and will not become insolvent, as the result of the proposed dividend payment.
The Company did not pay dividends to its shareholders during the years ended 31 March 2004, 2005, 2006 and 2007 and expects to reinvest all net profits into its business instead of declaring and paying dividends in the foreseeable future.