31. Equity

In terms of amount and composition – that is, the ratio of ordinary to preference shares – subscribed capital has not changed compared with 30 September 2013 and totals €835,419,052.27. It is divided as follows:

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No-par-value bearer shares, accounting par value approximately €2.56

30/9/2013

30/9/2014

Ordinary shares

Shares

324,109,563

324,109,563

€ approx.

828,572,941

828,572,941

Preference shares

Shares

2,677,966

2,677,966

€ approx.

6,846,111

6,846,111

Total shares

Shares

326,787,529

326,787,529

Total share capital

€ approx.

835,419,052

835,419,052

Each ordinary share grants one voting right. In addition, ordinary shares of METRO AG entitle the holder to dividends. In contrast to ordinary shares, preference shares 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 states:

“(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; that is, 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 per cent of such dividend as, in accordance with Section 4 herein below, will be paid to the holders of ordinary shares insofar 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 Annual General Meeting on 23 May 2012 authorised 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 one or several tranches for a total maximum of €325,000,000 by 22 May 2017 (authorised capital I). The Management Board is authorised, with the consent of the Supervisory Board, to exclude shareholder subscription rights in certain cases. To date, the 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 one or several tranches by 4 May 2015 and to grant the bond holders warrant or conversion rights for 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. The Management Board is authorised, with the consent of the Supervisory Board, to exclude shareholder subscription rights in certain cases. 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 on or before 4 May 2015 to acquire shares of the company of any share class representing a maximum of 10 per cent of the share capital issued as of the date the Annual General Meeting resolution date passed. 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.

For more information about authorised capital, contingent capital, on the authorisation to issue warrant and/or convertible bonds as well as on share buybacks, see the combined management report in chapter 10 Notes pursuant to § 315 Section 4 and § 289 Section 4 of the German Commercial Code and explanatory report of the Management Board.

Capital reserve

The capital reserve amounts to €2,551 million (30/9/2013: €2,551 million).

Reserves retained from earnings

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€ million

30/9/2013

30/9/2014

Effective portion of gains/losses from cash flow hedges

61

82

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

70

0

Currency translation differences from translating the financial statements of foreign operations

−407

−441

Remeasurement of defined benefit pension plans

−611

−865

Income tax on components of “other comprehensive income”

174

201

Other reserves retained from earnings

2,506

2,625

 

1,793

1,602

Changes in the financial instruments presented above and the corresponding deferred tax effect consist of the following components:

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€ million

9M 2013

12M 2012/13

12M 2013/14

1

Adjustment of previous year’s figures for the sole presentation of the tax effect of the recognised components shown above

Initial or subsequent measurement of derivative financial instruments

14

2

24

Derecognition of cash flow hedges

−8

3

−3

thereof in inventories

(−11)

(−3)

(−6)

thereof in financial result

(3)

(6)

(3)

Effective portion of gains/losses from cash flow hedges

6

5

21

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

65

68

−70

 

71

73

−49

Net deferred tax effect thereon1

−1

0

−3

 

70

73

−52

In addition, currency translation differences of €34 million reduced equity (12M 2012/13: €–129 million; 9M 2013: €–91 million).

The translation of the local balance sheets to the group currency resulted in a decline of €156 million in equity with no effect on profit or loss. The recognition in the amount of €122 million from the cumulated currency differences of companies that will be deconsolidated within this financial year or discontinue their operations in profit or loss had the opposite effect.

Other reserves retained from earnings increased by €119 million from €2,506 million to €2,625 million. This increase was primarily influenced by the profit for the period attributable to the shareholders of METRO AG of €127 million.

Non-controlling interests

Non-controlling interests comprise the shares held by third parties in the share capital of the consolidated subsidiaries. They amounted to €11 million at the end of the financial year (30/9/2013: €27 million). The decline is primarily the result of the dividend distribution of €86 million. The amount of total comprehensive income attributable to non-controlling interests had the opposite effect (€57 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 12 February 2014, total reported net retained profit of €137 million for the short financial year 2013 was added to other reserves retained from earnings in financial year 2013/14.

Regarding the appropriation of the balance sheet profit for 2013/14, the Management Board of METRO AG will propose to the Annual General Meeting to distribute from the reported balance sheet profit of €319 million a dividend in the amount of €0.90 per ordinary share and €1.13 per preference share – that is, a total of €295 million – and to carry forward the remaining amount to the new account. The dividend proposal contains a preference dividend of €0.17 per preference share to cover the dividend that was not paid in the short financial year 2013 and that must be subsequently paid in accordance with § 140 Section 2 of the German Stock Corporation Act and § 21 Section 2 of the Articles of Association of METRO AG.