31. Equity

In terms of amount and composition, i.e. the ratio of ordinary to preference shares, subscribed capital has not changed compared with 31 December 2011 and totals €835,419,052.27. It is divided as follows:

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No-par-value bearer shares, accounting par value approx. €2.56

 

31/12/2011

31/12/2012

Ordinary shares

Shares

324,109,563

324,109,563

828,572,941

828,572,941

Preference shares

Shares

2,677,966

2,677,966

6,846,111

6,846,111

Total share capital

Shares

326,787,529

326,787,529

835,419,052

835,419,052

Each ordinary share of METRO AG grants 1 voting right. In addition, ordinary shares of METRO AG entitle the holder to dividends. In contrast to ordinary shares, preference shares of METRO AG principally do not carry voting rights and give a preferential entitlement to profits in line with §21 of the Articles of Association of METRO AG, which state:

“(1) Holders of non-voting preference shares will receive from the annual net earnings a preference dividend of €0.17 per preference share.

(2) Should the net earnings available for distribution not suffice in any one financial year to pay the preference dividend, the arrears (excluding any interest) shall be paid from the net earnings of future financial years in an order based on age, i.e. in such manner that any older arrears are paid off prior to any more recent ones and that the preference dividends payable from the profit of a financial year are not distributed until all of any accumulated arrears have been paid.

(3) After the preference dividend has been distributed, the holders of ordinary shares will receive a dividend of €0.17 per ordinary share. Thereafter, a non-cumulative extra dividend of €0.06 per share will be paid to the holders of non-voting preference shares. The extra dividend shall amount to 10 percent of such dividend as, in accordance with Section 4 herein below, will be paid to the holders of ordinary shares inasmuch as such dividend equals or exceeds €1.02 per ordinary share.

(4) The holders of non-voting preference shares and of ordinary shares will equally share in any additional profit distribution in the proportion of their shares in the share capital.“

Authorised capital

The previously existing and unutilised authorisations of the Management Board to increase the share capital by issuing new ordinary bearer shares in exchange for cash contributions for a total maximum of €40,000,000 by 23 May 2012 (former authorised capital I), by issuing new ordinary bearer shares in exchange for non-cash contributions for a maximum of €60,000,000 by 23 May 2012 (former authorised capital II), and by issuing new ordinary bearer shares in exchange for cash or non-cash contributions for a maximum of €225,000,000 by 12 May 2014 (former authorised capital III) have been subsumed in a single authorisation by resolution of the Annual General Meeting on 23 May 2012. This new, single authorisation authorises the Management Board to increase the share capital, with the consent of the Supervisory Board, by issuing new ordinary bearer shares in exchange for cash or non-cash contributions in 1 or several tranches for a total maximum of €325,000,000 by 22 May 2017 (authorised capital I). To date, the newly created authorised capital I has not been utilised.

Contingent capital

The Annual General Meeting on 5 May 2010 resolved a contingent increase in the share capital by up to €127,825,000, divided into up to 50,000,000 ordinary bearer shares (contingent capital I). This contingent capital increase is connected to the creation of a new authorisation for the Management Board to issue warrant or convertible bearer bonds (“bonds”), with the consent of the Supervisory Board, with a nominal value of up to €1,500,000,000 in 1 or several tranches by 4 May 2015 and to grant the bond holders warrant or convertible rights to up to 50,000,000 new ordinary shares in the Company based on the conditions of the bonds, to provide for the respective warrant or conversion obligations or to provide for the Company’s right to redeem the bonds by providing ordinary shares in METRO AG, in whole or in part, in lieu of cash payment. To date, no warrant and/or convertible bonds have been issued based on said authorisation.

Share buyback

On the basis of §71 Section 1 No. 8 of the German Stock Corporation Act, the Annual General Meeting on 5 May 2010 authorised the Company to acquire shares of the Company of any share class representing a maximum of 10 percent of the share capital on or before 4 May 2015. To date, neither the Company nor any company controlled or majority-owned by the Company or any other company acting on behalf of the Company or of any company controlled or majority-owned by the Company has exercised this authorisation.

Additional information on authorised capital, contingent capital, on the authorisation to issue warrant and/or convertible bonds as well as on share buybacks can be found in chapter 9 “Notes pursuant to § 315 Section 4 of the German Commercial Code and explanatory report of the Management Board” in the Group management report.

Capital reserve

The capital reserve amounts to €2,544 million (previous year: €2,544 million).

Reserves retained from earnings

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€ million

31/12/2011

31/12/2012

Effective portion of gains/losses from cash flow hedges and gains/losses from the revaluation of financial instruments in the category available for sale

91

60

Currency translation differences from the conversion of the accounts of foreign subsidiaries

–438

–314

Income tax on components of "other comprehensive income"

–4

8

Other reserves retained from earnings

3,336

2,891

 

2,985

2,645

Changes in reserves for the effective portion of gains/losses from cash flow hedges and valuation effects on available-for-sale financial assets of €–31 million (previous year: €28 million) and income tax on “other comprehensive income” in the amount of €12 million (previous year: €–21 million) consist of the following components:

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€ million

31/12/2011

31/12/2012

Derecognition of cash flow hedges

–8

19

thereof in inventories

(–7)

(24)

thereof in net financial result

(–1)

(–5)

First-time or subsequent measurement of derivative financial instruments

36

–56

Gains/losses from the revaluation of financial instruments in the category "available for sale"

0

6

 

28

–31

Net deferred tax effect thereon

–21

12

 

7

–19

In addition, an increase in equity due to currency translation differences of €124 million (previous year: reduction in equity of €123 million) is primarily attributable to Russia, Poland, Great Britain and Hungary, while a reduction in equity due to currency translation differences stems mostly from Ukraine, India and Serbia.

Due mostly to the dividend payout for the financial year 2011 other reserves retained from earnings declined by €442 million to €2,891 million.

Non-controlling interests

Non-controlling interests comprise the shares held by third parties in the share capital of the consolidated subsidiaries. At year-end, these amounted to €77 million (previous year: €73 million). The increase by €4 million is due mostly to the share of comprehensive income attributable to non-controlling interests (€102 million) less dividends (€–97 million). Significant non-controlling interests exist only at Media-Saturn-Holding GmbH.

Appropriation of the balance sheet profit, dividends

Dividend distribution of METRO AG is based on METRO AG’s annual financial statements prepared under German commercial law.

As resolved by the Annual General Meeting on 23 May 2012, a dividend of €1.350 per ordinary share and €1.485 per preference share, for a total of €442 million, was paid in the financial year 2012 from the reported net profit of €462 million for the financial year 2011. The remaining amount was carried forward to the new account.

The Management Board of METRO AG will propose to the Annual General Meeting to pay from the reported net profit of €349 million for 2012 a dividend of €1.00 per ordinary share and €1.06 per preference share, for a total of €327 million, and to carry the remaining amount forward to the new account.