Related parties in respect of the Merck Group are E. Merck KG as well as the companies Emanuel Merck Vermögens KG and E. Merck Beteiligungen KG (until and including December 31, 2008: E. Merck Beteiligungen OHG). In principle, direct or indirect subsidiaries of Merck KGaA, associates and joint ventures of the Merck Group as well as pension funds that are classified as funded defined benefit plans in accordance with IAS 19, are also related parties within the meaning of IAS 24. Members of the Executive Board and the Supervisory Board of Merck KGaA, the Board of Management and the Board of Partners of E. Merck KG as well as close members of their families are also related parties.
As of December 31, 2008, there were liabilities by Merck KGaA and Merck & Cie KG, Altdorf, to E. Merck KG in the amount of € 332.8 million (2007: € 626.6 million). In addition, Merck KGaA was owed receivables in the amount of € 18.0 million (2007: € 20.8 million) by E. Merck KG as of December 31, 2008. The balances result mainly from the profit transfers by Merck & Cie to E. Merck KG, the reciprocal profit transfers between Merck KGaA and E. Merck KG, as well as the extension of loans by E. Merck KG to Merck KGaA as well as the extension of loans by Merck KGaA to E. Merck KG. These financial payables of € 98.2 million (2007: € 93.5 million) are subject to standard market interest rates. From January to December 2008, Merck KGaA performed services for E. Merck KG with a value of € 1.2 million (2007: € 1.1 million). In exchange, E. Merck KG performed services for Merck KGaA with a value of € 0.5 million (2007: € 0.5 million). As of December 31, 2008, Merck KGaA had receivables from E. Merck Beteiligungen KG in the amount of € 4.5 million (2007: € 5.8 million). From January to December 2008, Merck KGaA and Merck Shared Services Europe GmbH performed services for E. Merck Beteiligungen KG with a value of € 0.5 million (2007: € 0.3 million). In addition, Merck KGaA performed services for Emanuel Merck Vermögens KG with a value of € 0.1 million (2007: € 0.1 million).
Business transactions with major subsidiaries have been eliminated during consolidation and are not disclosed further in the Notes. Information on pension funds that are classified as funded defined-benefit plans in accordance with IAS 19 can be found under Provisions for pensions and other post-employment benefits of the Notes. There were no further material transactions with these pension funds.
From January to December 2008, companies of the Merck Group supplied goods with a value of € 0.3 million (2007: € 3.9 million) to associates. During the same period, associates provided no services to companies of the Merck Group (2007: € 5.2 million). There were no further material transactions with associates.
The remuneration of the Executive Board of Merck KGaA is largely paid by the general partner, E. Merck KG, and recorded as an expense in its income statement. For January to December 2008, fixed salaries of € 2.4 million (2007: € 3.0 million) and variable compensation of € 9.9 million (2007: € 21.9 million) were recorded for Members of the Executive Board of Merck KGaA. Variable compensation is in principle based on the three-year rolling average of profit after tax of the E. Merck Group. Furthermore, additions to pension provisions of E. Merck KG include current service costs of € 2.0 million (2007: € 2.0 million) for members of the Executive Board of Merck KGaA.
Subject to the approval of the Annual General Meeting on the proposed distribution of a € 1.50 dividend per share, the remuneration of the Supervisory Board amounting to € 586 thousand (2007: € 964 thousand) consists of a fixed portion of € 116 thousand (2007: € 95 thousand) and a variable portion of € 470 thousand (2007: € 869 thousand).
Further material transactions, for example the provision of services or the extension of loans, between companies of the Merck Group and members of the Executive Board and the Supervisory Board of Merck KGaA, the Executive Board and the Board of Partners of E. Merck KG or close members of their families did not take place in 2008.
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