Financial statements

NOTE 12



EQUITY

12.1 Share capital

The Company’s share capital is 50 million euros, represented by 5,000 shares with a par value of 10,000 euros per share, all of the same class, fully subscribed and paid. All the shares representing the share capital, numbered from 1 to 5,000 inclusive, have been subscribed by the sole shareholder, the government of Andorra.

There have been no changes in the Company's share capital since its incorporation.

12.2 Legal reserve and other reserves

Under the Decree assigning assets, rights and obligations to the government-owned company Andorra Telecom, S.A.U., the reserves transferred to the Company are as detailed below:

(Amounts in euros) 31/12/2017 31/12/2016
Legal reserve 10.000.000 10.000.000
Non-restricted share premium reserve 199.722.196 200.205.992
Restricted share premium reserve 50.236.060 50.236.060
TOTAL RESERVES 259.958.256 260.442.052

In accordance with the Law on public limited companies, companies must allocate at least 10% of their profits to the legal reserve until that reserve reaches an amount equivalent to 20% of share capital. The legal reserve may only be used to offset losses when there are no other reserves available. An allocation of 10 million euros was made to this reserve when the Company was incorporated and the reserve is therefore fully constituted.

Following a technical edict on tax matters issued by the Government of Andorra on 22 September 2017, the Company has reviewed how it treats all forms of payment in kind and intends to include a retrospective adjustment in its tax return for payments in kind that were not correctly declared. The adjustment for the tax years from 2013 to 2016 totals 483,796 euros. This amount has been allocated to equity (unrestricted reserves) in accordance with current accounting standards.

12.3 Allocation of profit for 2016

On 29 March 2017 the General Meeting of Shareholders of the Company resolved to distribute all the profit for 2016 as dividends.

Amounts in euros
Income for the year 2016 37.757.895
To dividents (100%) -37.757.895

As a result of the interim payments made, the final amount payable was as follows:

Dividents to be paid (100%) 37.757.895
Interim dividend -11.901.121
Payment remaining dividends 2016 25.856.774

At 31 December 2017 all the dividends declared against 2016 profits had been paid.