Comment of the Board on the agenda item of the EGM December 2, 2014
Pursuant to article 27 of the Codified Law 2190/1920 as it is in force, the comment of the Board of Directors of MOTOR OIL (HELLAS) S.A. on the sole item of the daily agenda of the Extraordinary General Shareholders Meeting to be held on Tuesday December 2nd, 2014 at 12:00 hrs at the Headquarters of the Company at 12A Irodou Attikou street at Maroussi is presented hereunder.
With regard to the sole item on the agenda
“Offsetting an amount of Euro 2,686,626.60 tax exempt reserves, formed according to the provisions of the Law 2238/1994, with fiscal year 2013 Company losses, pursuant to the Law 4172/2013” the Board hereby notes the following:
According to the provisions of the Law 4172/2013 three options are available to the Company in respect of the tax exempt reserves formed in accordance with the provisions of the Law 2238/1994. Regardless of the option which will be adopted, a decision by a General Assembly which must take place until December 31, 2104 is required.
The first option regards the offsetting of tax exempt reserves against losses from whichever cause during the last five (5) fiscal years.
The second option regards payment of a tax amount at a rate of 19% (Euro 510 thousand approximately) so that these reserves qualify for distribution following a subsequent General Assembly decision.
The third option also regards payment of a tax amount at a rate of 19% (Euro 510 thousand approximately) so that these reserves qualify for capitalization by the means of a change in the share nominal value.
From the above options, the first one is recommended as the most prudent on the grounds that the Company posted Euro 7,632,417.45 losses (based on Greek GAAP) in fiscal 2013 and consequently the aggregate amount of tax exempt reserves Euro 2,686,626.60 can be offset against these Company losses.
The second and third options have the drawback that an immediate cash outlay (tax) of a Euro amount of 510 thousand approximately is required. Furthermore, in the case of the third option additional cash outlay is required because of the tax relating to the share capital increase (assuming an increase of the share nominal value).
The Board of Directors
7 November 2014