Common use of Allocation of Profit Clause in Contracts

Allocation of Profit. The income statement, which summarises all the income and expenses for the year, shows, after depreciation, amortisation and provisions, the profit or loss for the financial year (hereinafter the "Profit"). Out of the Profit for the year, less previous accumulated losses if any, a certain amount must, by law, be set aside in priority and to the extent necessary to form the legal reserve. Distributable profit is composed of the Profit for the year less any accumulated losses and transfers to reserves required by law or by the Articles of Association, plus any unappropriated retained earnings. A sum equal to 1% of consolidated net profit for the year after minority interests is then deducted from distributable profit and allocated to the General Partners in their capacity as General Partners, whether they are Managing Partners or not. The General Partners allocate the amount of this remuneration among themselves in the proportions they decide. The balance is allocated to the shareholders in proportion to the number of shares held by each. However, the General Meeting may, upon recommendation of the Managing Partners, decide to set aside from the balance available for distribution among the shareholders such amounts as it deems fit to be carried forward, or to be allocated to one or more general, extraordinary or special reserves. Dividends are distributed, by priority, out of the Profit for the year. The General Meeting may, in addition, decide to distribute any part of the reserves available to it by expressly indicating those reserves from which such distributions are to be made. To the extent such reserves have been established by deduction from distributable profit allocated to the shareholders, the dividends paid out therefrom accrue to the benefit of owners of shares alone, in proportion to the number of shares held by each. The General Meeting called to approve the financial statements for the year may, in respect of all or part of said dividend, offer each shareholder the option to receive payment in cash or in shares. Similarly, the General Meeting approving the distribution of an interim dividend under the terms of article L 232-12 of the French Commercial Code, may, in respect of all or part of said interim dividend, offer each shareholder the option to receive payment thereof in cash or in shares. The offer for payment in shares, the price and conditions under which the shares are issued, the request for payment in shares and the conditions of the resulting capital increase are governed by the applicable law and regulations. Dividends are paid at the times and in the places determined by the Managing Partners, within a maximum period of nine months from the close of the financial year, save where this period is extended by court order. The General Meeting may also decide at any time to distribute the profits, reserves and/or premiums at its disposal by means of any distribution method, directly or indirectly, for all or part of the distribution, of negotiable financial instruments or any other assets included on the Company’s balance sheet. Shareholders must, where applicable, personally ensure that the shares are grouped in such a way as to obtain a whole number of financial instruments or other rights so distributed.