Samsung 1999 Annual Report Download - page 66

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14. Retained Earnings:
Retained earnings at December 31, 1999 consist of the following:
Reference Thousands of Korean Won
Appropriated:
Legal reserve ( A ) 387,789,000
Reserve for business rationalization ( B ) 1,512,100,829
Reserve for improvement of financial structure ( C ) 204,815,000
Reserve for overseas market development ( D ) 548,741,108
Reserve for overseas investment losses ( D ) 213,382,454
Reserve for technology development ( D ) 2,023,097,908
Reserve for export losses ( D ) 217,118,059
Reserve for facilities ( E ) 134,615,000
5,241,659,358
Unappropriated: 31,989
5,241,691,347
(A) The Korean Commercial Code requires the Company to appropriate as a legal reserve an amount equal to a minimum of 10%
of annual cash dividends declared, until the reserve equals 50% of capital stock. This reserve is not available for the payment of
cash dividends but may be transferred to capital stock or used to reduce the accumulated deficit, if any.
(B) Pursuant to the Tax Exemption and Reduction Control Law, the Company is required to appropriate as a reserve for business
rationalization, an amount equal to the exemption of income taxes resulting from investment tax credits and certain deductions
from taxable income specified by such law. This reserve may be used for the reduction of the accumulated deficit, if any, or
transferred to capital stock.
(C) The Financial Control Regulations for listed companies require the Company to appropriate as a reserve for improvement of
financial structure an amount equal to at least 50% of the net extraordinary gain on disposal of property, plant and equipment and
10% of net earnings for each year until the Company’s net worth equals 30% of total assets. This reserve is not available for
payment of cash dividends, but may be transferred to capital stock or used to reduce the accumulated deficit, if any.
(D) Pursuant to the Korean tax laws, the Company is allowed to claim the amounts of retained earnings appropriated for
reserves for overseas market development, overseas investment losses, technology development and export losses as deductions
in determining taxable income. These amounts are not available for dividends until used for the specified purposes or reversed.
(E) The reserve for facilities represents amounts appropriated by the Company for capital expenditures and may be used for any
purpose through shareholders’ resolution.
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