Equity capital
The total capital of the company consists of the share capital composed of shares and the equity interest held by the general partner E. Merck KG. As of the balance sheet date, the company’s share capital amounting to € 168.0 million was divided into 64,621,125 no par value bearer shares plus one registered share and is disclosed as subscribed capital. The amount resulting from the issue of shares by Merck KGaA exceeding the nominal amount was recognized in the capital reserves. The equity interest held by the general partner amounted to € 397.2 million.
E. Merck KG’s share of net profit
E. Merck KG and Merck KGaA engage in reciprocal net profit transfers. This makes it possible for E. Merck KG, the general partner of Merck KGaA, and the shareholders to participate in the net profit/loss of Merck KGaA in accordance with the ratio of the general partner’s equity interest and the share capital (70.274% or 29.726% of the total capital).
The allocation of net profit/loss is based on the net income of E. Merck KG determined in accordance with the provisions of the German Commercial Code as well as the income/loss from ordinary activities and the extraordinary result of Merck KGaA. These results are adjusted for trade tax and create the basis for the allocation of net profit/loss.
The reciprocal net profit/loss transfer between E. Merck KG and Merck KGaA as stipulated by the Articles of Association was as follows:
| XLS |
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2013 |
2012 |
||
|
€ million |
|
E. Merck KG |
Merck KGaA |
E. Merck KG |
Merck KGaA |
|
Result of E. Merck KG |
|
–9.2 |
– |
7.5 |
– |
|
Result of ordinary activities of Merck KGaA |
– |
534.9 |
– |
–17.2 |
|
|
Extraordinary result |
– |
– |
– |
–513.8 |
|
|
Adjustment for trade tax in accordance with Art. 27 (1) Articles of Association of Merck KGaA |
– |
– |
– |
– |
|
|
Trade tax in accordance with Art. 30 (1) Articles of Association of Merck KGaA |
– |
–34.6 |
– |
1.7 |
|
|
Basis for the appropriation of profits |
(100%) |
–9.2 |
500.3 |
7.5 |
–529.3 |
|
Profit transfer to E. Merck KG |
(70.274%) |
351.6 |
–351.6 |
–372.0 |
372.0 |
|
Profit transfer from E. Merck KG |
(29.726%) |
2.7 |
–2.7 |
–2.2 |
2.2 |
|
Trade tax |
|
– |
– |
– |
– |
|
Corporation tax |
|
– |
–12.0 |
– |
4.0 |
|
Net income/loss |
|
345.1 |
134.0 |
–366.7 |
–151.1 |
The result of E. Merck KG on which the appropriation of profits is based amounted to € –9.2 million (2012: € 7.5 million). This resulted in a profit transfer to Merck KGaA of € –2.7 million (2012: € 2.2 million). Merck KGaA’s result from ordinary activities adjusted for trade tax and extraordinary result, on which the appropriation of its profit is based, amounted to € 500.3 million (2012: € –529.3 million). Merck KGaA transferred € 351.6 million of its profit to E. Merck KG (2012: loss assumption of € 372.0 million). In addition, the expense from corporation tax charges amounting to € 12.0 million resulted (2012: income of € 4.0 million). Corporation tax is only calculated on the income received by shareholders. Its equivalent is the income tax applicable to E. Merck KG. However, this must be paid by the partners of E. Merck KG directly and is not disclosed in the annual financial statements.
Appropriation of profits
The profit distribution to be resolved upon by shareholders also defines the amount of that portion of net profit/loss freely available to E. Merck KG. If the shareholders resolve to carry forward or to allocate to retained earnings a portion of Merck KGaA’s net retained profit to which they are entitled, then E. Merck KG is obligated to allocate to the profit brought forward/retained earnings of Merck KGaA a comparable sum determined in accordance with the ratio of share capital to general partner’s capital. This ensures that the retained earnings and the profit carried forward of Merck KGaA correspond to the ownership ratios of the shareholders on the one hand and E. Merck KG on the other hand. Consequently, for distributions to E. Merck KG, only the amount is available that results after netting the profit transfer of Merck KGaA with the amount either allocated or withdrawn by E. Merck KG from retained earnings/profit carried forward. This amount corresponds to the amount that is paid as a dividend to the shareholders, and reflects their pro rata shareholding in the company.
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2013 |
2012 |
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€ million |
|
E. Merck KG |
Merck KGaA |
E. Merck KG |
Merck KGaA |
|
Net income/net loss |
|
345.1 |
134.0 |
–366.7 |
–151.1 |
|
|
|
|
|
|
|
|
Profit carried forward previous year |
|
– |
– |
502.5 |
212.6 |
|
Withdrawal from revenue reserves |
|
– |
– |
114.4 |
48.4 |
|
Transfer to revenue reserves |
|
– |
– |
– |
– |
|
Retained earnings Merck KGaA |
|
|
134.0 |
|
109.9 |
|
|
|
|
|
|
|
|
Withdrawal by E. Merck KG |
|
–318.8 |
|
–250.2 |
|
|
Dividend proposal |
|
|
–122.8 |
|
–109.9 |
|
Profit carried forward |
|
26.3 |
11.2 |
– |
– |
For 2012, a dividend of € 1.70 per share was distributed. The dividend proposal for fiscal 2013 will be € 1.90 per share, corresponding to a total dividend payment of € 122.8 million (2012: € 109.9 million) to shareholders. The amount withdrawn by E. Merck KG would amount to € 318.8 million (2012: € 250.2 million).
Changes in reserves
For 2013 the profit transfer to E. Merck KG including changes in reserves amounted to € –383.0 million. This consists of the profit transfer to E. Merck KG (€ –351.6 million), the result transfer from E. Merck KG to Merck KGaA (€ –2.7 million), the profit carried forward of E. Merck KG (€ 26.3 million) as well as the profit transfer from Merck & Cie to E. Merck KG (€ –55.0 million). Merck & Cie is a partnership under Swiss law that is controlled by Merck KGaA, but distributes its operating result directly to E. Merck KG. This distribution is a payment to shareholders, which is why it is likewise presented under changes in equity.
Non-controlling interests
The disclosure of non-controlling interests was based on the stated equity of the subsidiaries concerned after any adjustment required to ensure compliance with the accounting policies of the Merck Group, as well as pro rata consolidation entries.
The net equity attributable to non-controlling interests mainly related to the minority interests in Merck Ltd. India, Merck Ltd., Thailand, Merck (Pvt.) Ltd., Pakistan, and P.T. Merck Tbk, Indonesia.