Capital Management Clause Samples

Capital Management. 5.1 The capital required for the business of the LLP shall be contributed by the partners as per their mutual convenience irrespective of the extent of their shares. 5.2 The LLP business shall be carried on by all the Designated Partners as Working Partners themselves faithfully, diligently, honestly, lawfully and in the best interests of the firm and in accordance with the policy and decisions taken by the Designated Partners from time to time.

Capital Management. Party B shall manage and control all funds of Party A. Party A shall open or appoint a management account for its funds (“Management Account”) and Party B shall be responsible for and have the right in deciding the inward and outward remittance of its funds. The seals affixed to such account shall be that of the person appointed and confirmed by Party B. As of the day when this Agreement comes into effect, all cashes of Party A, including but not limited to revenues from sales, existing working capitals, collecting of receivables, and all payables and operating expenses, employees’ salaries and compensations and assets acquisition, must be saved and transacted in this Management Account.

Capital Management. The Company defines capital that it manages as shareholders' equity that is expected to be realized in cash. The Company raises capital through private share offerings and related party loans and advances. Capital is managed in a manner consistent with the risk criteria and policies provided by the board of directors and followed by management. All sources of financing and major expenditures are analyzed by management and approved by the board of directors. The Company’s primary objectives when managing capital is to safeguard and maintain the Company’s financial resources for continued operations and to fund programs to further advance their hydro power technology. The Company is meeting its objective of managing capital through detailed review and the preparation of short-term and long-term cash flow analysis to maintain sufficient resources. HYDRO POWER TECHNOLOGIES INC. NOTES TO THE FINANCIAL STATEMENTS FOR THE QUARTERS ENDED DECEMBER 31, 2019 and 2018 (Expressed in Canadian dollars)

Capital Management. The Board of Directors policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the return on equity, which the Company defines as net profit divided by total shareholders’ equity. The Board of Directors also monitors the level of dividends to ordinary shareholders. There were no changes in the Company’s approach to capital management during the year. The Company is not subject to externally imposed capital requirements. The Board of Directors believes that the fair values of financial assets and liabilities are not significantly different from their carrying amounts at the end of the reporting date.

Capital Management. For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. As at 31st March, 2022, the Company has only one class of equity shares and has no long term debt. Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for the re-investment into business based on its long term financial plans.

Capital Management. The primary objective of Sovello’s capital management is the sustainability of the financial flexibility necessary for the Company’s long-term growth. Sovello is still going through a phase of strong growth and development. This involves extensive investment, which the Company must finance. Sovello meets the resulting financing risks with a solid capital structure encompassing equity, the shareholders’ and bank loans and the applicable portions of the financial assistance from the government. Short-term liquidity management is based on a rolling planning horizon of twelve months. The table below shows the balance sheet total, the equity in absolute figures and in per cent of the balance sheet total, and the net financial liabilities (financial liabilities minus cash and cash equivalents): (In thousands of EUR) Dec 31, 08 Dec 31, 07 Balance sheet total 467,145 380,179 Equity 107,796 91,168 Equity in per cent of balance sheet total 23.1 24.0 Net indebtedness 247,527 161,953 Annex 1.5 / 28 The loan agreement made in 2007 with the banking syndicate led by Deutsche Bank has been revised by the supplementary agreement of September 1, 2008. The syndicated loan agreement deals primarily with the continuation of the existing financing arrangements and the extending of the syndicated financing for the investment in the Company’s third production line at Bitterfeld-Wolfen. The financing now includes an additional loan of EUR 60 million of which EUR 35 million has been drawn. The tranches of the original syndicated loan agreement continue to be available on the original terms, except that interim financing of investment grant receivables was raised from EUR 30 million to EUR 45 million and the working capital loan was reduced from EUR 22 million to EUR 20 million. Drawings on the investment-grant interim financing line amounted at the reporting date to EUR 33.5 million. There were no drawings on the working capital loan. The syndicated loan agreement requires Sovello to achieve certain financial ratios. It also provides for compulsory unscheduled repayments if certain events occur, such as certain sales transactions, or if a third party acquires more than 50% of Sovello AG’s shares without the prior approval of the banks. Refer also to Note 4.12. Subsequent events.

Capital Management. The Board of Directors’ policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board monitors the return on capital, which the Group defines as result from operating activities divided by total shareholders’ equity, excluding non-controlling interests and also monitors the level of dividends to ordinary shareholders.

Capital Management. The primary objective of capital management of the Group is to ensure that it has an appropriate financial structure and preserves the ability to continue its business as a going concern. According to the statement of financial position as at March 31, 2022 and December 31, 2021, the consolidated financial statements debt-to-equity ratio 0.82 : 1 and 0.90 : 1, respectively. (Separate financial statements 0.80 : 1 and 0.89 : 1, respectively)

Capital Management. The primary objective of capital management of the Company and its subsidiaries is to ensure that it has an appropriate financial structure and preserves the ability to continue its business as a going concern. As at December 31, 2020 and 2019, the Company and subsidiaries have debt to equity ratio as summarized below: Consolidated financial statements Separate financial statements 2020 2019 2020 2019 Debt to equity ratio 0.40 0.27 0.05 0.01 31. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES Changes in the liabilities arising from financing activities for the years ended December 31, 2020 and 2019 are as follows: Consolidated financial statements 2020 Balance as at Cash flows Non-cash transaction Balance as at January 1, Increase Increase Translation on December 31, 2020 (decrease)* exchange rate 2020 Long-term loan from financial institutions 219,125 22,432 948 - 242,505 Lease liabililies 492 (931) 51,081 - 50,642 Total 219,617 21,501 52,029 - 293,147 Consolidated financial statements 2019 Balance as at Cash flows Non-cash transaction Balance as at January 1, Increase Increase Translation on December 31, 2019 (decrease)* exchange rate 2019 Short-term borrowings from related companies 40,300 (40,300) - - - Long-term borrowings from related person 9,000 (9,000) - - - Long-term loan from financial institutions 212,601 6,524 - - 219,125 Lease liabililies 555 (952) 889 - 492 Total 262,456 (43,728) 889 - 219,617 Separate financial statements 2020 Balance as at Cash flows Non-cash transaction Balance as at January 1, Increase Increase Translation on December 31, Short-term loan from related parties - 31,519 - - 31,519 Lease liabililies 492 (153) - - 339 Total 492 31,366 - - 31,858 Separate financial statements 2019 Balance as at Cash flows Non-cash transaction Balance as at January 1, Increase Increase Translation on December 31, 2019 (decrease)* exchange rate 2019 Short-term loan from related parties 58,000 (58,000) - - - Lease liabililies 555 (952) 889 - 492 Total 58,555 (58,952) 889 - 492 *Financing cash flows included net proceed and repayment cash transactions in the statement of cash flows.