Pronova BioPharma intend to retain all earnings, if any, in order to finance further growth. Therefore, the company do not
currently intend to pay dividends in the foreseeable future. Pronova BioPharma has not paid dividends in the past.
Legal Constraints on the Distribution of Dividends
Dividends may be paid in cash or in some instances in kind. The Norwegian Public Limited Companies
Act provides several constraints on the distribution of dividends:
- Dividends are payable only out of distributable reserves. Section 8-1 of the Norwegian Public Limited Companies Act provides
that distributable reserves consist of the profit for the prior fiscal year (as reflected in the consolidated income statement
approved by the annual general meeting of shareholders) and the retained profit from previous years (adjusted for any reclassification
of equity), less (i) uncovered losses, (ii) the book value of research and development, goodwill and net deferred tax assets
(as recorded in the balance sheet, as of the most recent fiscal year end, approved by the annual general meeting of shareholders),
(iii) the total nominal value of treasury shares which Pronova BioPharma has acquired for ownership or as security in previous
fiscal years, and credit and security which, pursuant to Sections 8-7 to 8-9 of the Norwegian Public Limited Companies Act,
fall within the limits of distributable equity, and (iv) that part of the profit for the prior fiscal year which, by law or
pursuant to Pronova BioPharma’s articles of association, must be allocated to the undistributable reserve or cannot be distributed
as a dividend.
- Dividends cannot be distributed if Pronova BioPharma's equity amounts to less than 10 per cent of the total assets.
- Dividends can only be distributed to the extent compatible with good and careful business practice, with due regard to any
losses which Pronova BioPharma may have incurred since the balance sheet date (i.e., the prior fiscal year end) or which the
Company may expect to incur.
According to the Norwegian Public Limited Companies Act, there is no time limit after which entitlement to dividends lapses.
Further, there are no dividend restrictions or specific procedures for non-Norwegian resident shareholders in the Act. For
a description of withholding tax on dividends that is applicable to non-Norwegian residents. See “Taxation — Norwegian Taxation
— Taxation of Dividends”.
