Shareholders’ equity

Shareholders’ equity consists of the issued share capital, capital and other
reserves and the retained earnings. Unpaid and uncalled amounts on share
capital are shown as a deduction from the nominal amount of issued share
capital. Amounts called up but not yet paid are an asset. The retained earnings
are net of dividends declared during the year and may also be shown net of the
dividend proposed.

If the shareholders’ equity is negative because the accumulated losses exceed
the capital paid up and the accumulated reserves, the net amount is shown on
the assets side of the balance sheet as “accumulated losses in excess of equity
paid”. In that case, it will be necessary to explain in a note to the accounts why
the company has not instigated insolvency proceedings.