Page 233 - TSMC 2022 Annual Report

May only be used to offset a deficit
From share of changes in equities of subsidiaries From share of changes in equities of associates Donations - unclaimed dividend
May not be used for any purpose Employee restricted shares
$
4,229,892 311,863 53,680
$
113,952 307,322 40,475
-
December 31, 2022
December 31, 2021
438,029 $ 69,330,328
$ 64,761,602 (Concluded)
If such capital surplus is distributed as transferred to share capital, it is limited to a certain percentage of the Company’s paid-in capital each year.
c. Retained earnings and dividend policy
TSMC’s Articles of Incorporation provide that, earnings distribution may be made on a quarterly basis
after the close of each quarter. Distribution of earnings by way of cash dividends should be approved by
TSMC’s Board of Directors and reported to TSMC’s shareholders in its meeting. When allocating
earnings, TSMC shall first estimate and reserve the taxes to be paid, offset its losses, set aside a legal capital reserve at 10% of the remaining earnings (until the accumulated legal capital reserve equals TSMC’s paid-in capital), then set aside a special capital reserve in accordance with relevant laws or regulations or as requested by the authorities in charge. Any balance left over shall be allocated according to relevant laws and TSMC’s Articles of Incorporation.
TSMC’s Articles of Incorporation also provide that profits of TSMC may be distributed by way of cash
dividend and/or stock dividend. However, distribution of earnings shall be made preferably by way of cash dividend. Distribution of earnings may also be made by way of stock dividend, provided that the ratio for stock dividend shall not exceed 50% of the total distribution.
The legal capital reserve may be used to offset a deficit, or be distributed as dividends in cash or stocks for the portion in excess of 25% of the paid-in capital if the Company incurs no loss.
Pursuant to existing regulations, the Company is required to set aside additional special capital reserve equivalent to the net debit balance of the other components of stockholders’ equity, such as the accumulated balance of foreign currency translation reserve, unrealized valuation gain or loss from fair value through other comprehensive income financial assets, gain or loss from changes in fair value of hedging instruments in cash flow hedges, etc. For the subsequent decrease in the deduction amount to stockholders’ equity, any special reserve appropriated may be reversed to the extent that the net debit balance reverses.
The appropriations of 2022, 2021 and 2020 quarterly earnings have been approved by TSMC’s Board of Directors in its meeting, respectively. The appropriations and cash dividends per share were as follows:
Resolution Date of TSMC’s
Board of Directors in its meeting
Special capital reserve
Cash dividends to shareholders Cash dividends per share (NT$)
Third Quarter of 2022
November 8, 2022
Second Quarter of 2022
August 9, 2022
Fourth Quarter of 2022 February 14, 2023
First Quarter of 2022 May 10, 2022
$ (31,910,353)
$ 71,308,547 $ 71,308,546 $ 71,308,546 $2.75$2.75$2.75
$ $ $
17,166,163 71,308,546 2.75
$ (12,002,798)
$ (15,541,054)
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