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 2012 and 31 December 2012, 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

31/12/2012

30/9/2012

30/9/2013

Ordinary shares

Shares

324,109,563

324,109,563

324,109,563

828,572,941

828,572,941

828,572,941

Preference shares

Shares

2,677,966

2,677,966

2,677,966

6,846,111

6,846,111

6,846,111

Total share capital

Shares

326,787,529

326,787,529

326,787,529

835,419,052

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 state:

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

(2) Should the balance sheet profit 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 balance sheet profit 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 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 per cent 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 10 “Notes pursuant to § 315 Section 4 and § 289 Section 4 of the German Commercial Code (HGB) as well as the explanatory report of the Management Board” in the combined management report.

Capital reserve1

The capital reserve amounts to €2,551 million (30/9/2012: €2,544 million; 31/12/2012: €2,544 million).

1 Revised terminology (see chapter “Notes to the group accounting principles and methods”)

Reserves retained from earnings

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€ million

31/12/2012

30/9/2012

30/9/2013

1

Adjustment of previous year (see chapter “Notes to the group accounting principles and methods”)

Effective portion of gains/losses from cash flow hedges

55

56

61

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

5

2

70

Currency translation differences from the conversion of the accounts of foreign operations1

–316

–278

–407

Remeasurement of defined benefit pension plans

–621

–580

–611

Income tax on components of “other comprehensive income”1

187

166

174

Other reserves retained from earnings1

2,904

2,873

2,506

 

2,214

2,239

1,793

Changes in reserves for the effective portion of gains/losses from cash flow hedges of €6 million (9M 2012: €–33 million; 12M 2012: €–34 million), valuation effects on available-for-sale financial assets of €65 million (9M 2012: €0 million; 12M 2012: €3 million) as well as for income tax on “other comprehensive income” amounting to €–13 million (9M 2012: €112 million; 12M 2012: €133 million) consist of the following components:

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€ million

12M 2012

9M 2012

9M 2013

Derecognition of cash flow hedges

19

–21

–8

thereof in inventories

(24)

(–29)

(–11)

thereof in net financial result

(–5)

(8)

(3)

First-time or subsequent measurement of derivative financial instruments

–53

–12

14

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

3

0

65

 

–31

–33

71

Net deferred tax effect thereon

133

112

–13

 

102

79

58

In addition, currency translation differences of €–91 million reduced equity. (30/9/2012: €160 million; 31/12/2012: €122 million, increases in equity, respectively). The currency-related reduction in equity is primarily attributable to Russia, India, Turkey, Poland and the Czech Republic, while the currency-related increase in equity stems mostly from Romania and Kazakhstan.

Other reserves retained from earnings declined by €398 million to €2,506 million. Essentially, this decline is attributable to the net loss for the period of €71 million and the dividend payout of €327 million for the financial year 2012.

Non-controlling interests

Non-controlling interests comprise the shares held by third parties in the share capital of the consolidated subsidiaries. They amounted to €27 million at the end of the year (30/9/2012: €31 million; 31/12/2012: €73 million). The decline by €46 million is due mostly to the share of comprehensive income attributable to non-controlling interests (€0 million) less dividends (€–51 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 8 May 2013, a dividend of €1.00 per ordinary share and €1.06 per preference share, for a total of €327 million, was paid in the financial year 2013 from the reported balance sheet profit of €349 million for the financial year 2012. The remaining amount was carried forward to the new account.

The Management Board of METRO AG will propose to the Annual General Meeting that the complete reported balance sheet profit of €137 million be added to other reserves retained from earnings.