32. 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 2014 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

30/9/2014

30/9/2015

Ordinary shares

Shares

324,109,563

324,109,563

€ approximately

828,572,941

828,572,941

Preference shares

Shares

2,677,966

2,677,966

€ approximately

6,846,111

6,846,111

Total shares

Shares

326,787,529

326,787,529

Total share capital

€ approximately

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 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 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 20 February 2015 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 related to the establishment of an authorisation of the Management Board, with the consent of the Supervisory Board, to issue warrant or convertible bearer bonds (in aggregate, “bonds”) with an aggregate par value of €1,500,000,000 prior to 19 February 2020, at once or in several stages, and to grant the holders of warrant or convertible bearer bonds warrant or conversion rights or impose warrant or conversion obligations upon them for ordinary bearer shares in METRO AG representing up to €127,825,000 of the share capital in accordance with the terms of the warrant or convertible bearer bonds, or to foresee the company’s right to deliver ordinary shares in the company as full or partial compensation for a cash redemption of the bonds. 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

In line with § 71 Section 1 No. 8 of the German Stock Corporation Act (AktG), the Annual General Meeting of 20 February 2015 authorised the company on or before 19 February 2020 to acquire shares of the company of any share class representing a maximum of 10 per cent of the share capital issued at the time the Annual General Meeting has passed the resolution or – if this value is lower – at the time the authorisation is exercised. 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, about the authorisation to issue warrant and/or convertible bonds as well as about share buybacks, see the chapter notes pursuant to § 315 Section 4 and § 289 Section 4 of the German Commercial Code and explanatory report of the Management Board in the combined management report.

Capital reserve

The capital reserve amounts to €2,551 million (30/9/2014: €2,551 million).

Reserves retained from earnings

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€ million

30/9/2014

30/9/2015

Effective portion of gains/losses from cash flow hedges

82

70

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

0

0

Currency translation differences from translating the financial statements of foreign operations

−441

−626

Remeasurement of defined benefit pension plans

−865

−646

Income tax on components of other comprehensive income

201

131

Other reserves retained from earnings

2,625

2,864

 

1,602

1,793

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

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€ million

2013/14

2014/15

Initial or subsequent measurement of derivative financial instruments

24

−38

Derecognition of cash flow hedges

−3

26

thereof in inventories

(−6)

(23)

thereof in net financial result

(3)

(3)

Effective portion of gains/losses from cash flow hedges

21

−12

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

−70

0

 

−49

−12

Net deferred tax effect thereon

−3

2

 

−52

−10

In addition, currency translation differences of €185 million reduced equity (2013/14: €–34 million) and can be broken down as follows.

The translation of the local balance sheets to the group currency resulted in a decline of €257 million in equity with no effect on profit or loss. The recognition in the amount of €72 million from the cumulated currency differences of companies that will be deconsolidated within financial year 2014/15 or discontinue their operations in profit or loss had the opposite effect.

An increase in equity resulted from the effects of the remeasurement of defined benefit pension plans of €93 million before deferred taxes that were recognised outside of profit or loss. Related income taxes amount to €–31 million. The cumulative effects from the remeasurement of defined benefit pension plans of €–126 million and the related income taxes of €39 million attributable to the sold department store business of the Galeria Kaufhof group were reclassified into other reserves retained from earnings.

Other reserves retained from earnings increased by €239 million to €2,864 million from €2,625 million. Profit for the period attributable to the shareholders of METRO AG of €672 million accounts for most of this increase. The opposite effect was produced by dividend payments of €319 million and the above-mentioned reclassification of cumulative effects from the remeasurement of defined benefit pension plans in the amount of €87 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 €–7 million at the end of the financial year (30/9/2014: €11 million). The decline is primarily the result of the dividend distribution of €45 million. The share of total comprehensive income attributable to non-controlling interests had the opposite effect (€41 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 20 February 2015, a dividend of €0.90 per ordinary share and €1.13 per preference share – that is, a total of €295 million – was paid in financial year 2014/15 from the reported balance sheet profit of €319 million for financial year 2013/14. The remaining amount was carried forward to the new account.

Regarding the appropriation of the balance sheet profit for 2014/15, the Management Board of METRO AG will propose to the Annual General Meeting to distribute dividends in the amount of €1.00 per ordinary share and €1.06 per preference share from the reported balance sheet profit of €384 million – that is, a total of €327 million – and to carry forward the remaining amount to the new account.