Balance Sheet Disclosures

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32. Equity

The changes in equity are presented in the statement of changes in equity. The co-operative shares in RZF are shown as debt capital under financial liabilities. The changes in this item between reporting dates are explained in note 35 "Other Financial Liabilities".

Subscribed Capital

As in the previous year, the subscribed capital of RZAG is divided into 1,512,000 registered no-par-value shares with restricted transferability; it amounted to 38.7 million euros as at the balance sheet date. The subscribed capital is fully paid up. Each share carries one vote.

Capital Reserves

The capital reserves relate to the premiums from the capital increases RZAG implemented in 1987 and 1990.

Retained Earnings

Retained earnings include the legal reserves, other revenue reserves, the unappropriated profit, the reserve for pension obligations and the reserves from adjustment entries made for the transition from local GAAP to IFRS accounting. A total of 612.6 million euros (previous year: 535.0 million euros) of retained earnings is attributable to the legal reserve of RZF and 38.7 million euros (previous year: 38.7 million euros) to the legal reserve of RZAG. These amounts are not eligible for distribution as dividends.

The other change in retained earnings is due primarily to the net income generated in the financial year amounting to 342.3 million euros (previous year: 456.5 million euros), which is attributable to the shareholders of the parent companies, the result of 10.6 million euros from the remeasurement of defined benefit pension commitments including the corresponding deferred taxes (previous year: loss of 47.6 million euros) and a dividend distribution of 4.9 million euros (previous year: 4.7 million euros). Further effects resulted from the changes in the scope of consolidation amounting to 0.9 million euros (previous year: 2.3 million euros). In addition, retained earnings also fell by 2.2 million euros (previous year: -19.9 million euros) as a result of the acquisition of shares from other shareholders.

Other Reserves

The statement of comprehensive income shows how changes in these reserves impact on profit or loss.

The reserve for cash flow hedges includes the measurement gains or losses on cash flow hedges taken directly to equity, which are discussed in note 41.

The reserve for available-for-sale financial assets includes measurement gains or losses, taken directly to equity, on non-derivative financial assets classified as available for sale.

The revaluation reserve results from after-tax remeasurement gains or losses, taken directly to equity, on shares held before control was obtained in companies acquired in stages. If such companies are sold, the revaluation reserve is reclassified directly to retained earnings; otherwise it is transferred to retained earnings on a pro rata basis.

The reserve for currency translation differences is the result of translating other currencies into euros (see note 6 "Currency Translation").

The reserve for income components of equity-accounted companies recognised directly in equity contains the accumulated other comprehensive income of associates and joint ventures.

The deferred tax reserve includes the accumulated deferred taxes recognised in equity on the items recognised in other reserves, as explained above.

Treasury Shares

Treasury shares relate to shares in RZAG that are directly or indirectly held by RZF companies.

Non-Controlling Interests

Non-controlling interests comprise third-party interests in the equity of consolidated subsidiaries. They amounted to 147.4 million euros as at 31 December 2017 (previous year: 48.5 million euros). 

The prior-year figure 26.3 million euros was restated outside of profit or loss by 22.2 million euros to 48.5 million euros in accordance with IFRS 3 due to a subsequent correction of a purchase price allocation. 

Changes in the scope of consolidation included the non-controlling interests relating to the first-time consolidation of REWE Dortmund SE & Co. KG, Dortmund.

The changes in non-controlling interests between reporting dates are detailed in the statement of changes in equity. 

Appropriation of Profits

The Management Board and the Supervisory Board of RZAG will propose to the Annual General Meeting on 24 June 2018, following the withdrawal from retained earnings of 10.0 million euros, to use the unappropriated commercial law profit of RZAG totalling 38.1 million euros (previous year: 28.9 million euros) to pay dividends of 36.3 million euros (previous year: 6.0 million euros), corresponding to 24.00 euros per share, and to allocate 1.8 million euros to retained earnings.

After the payment of interest on the co-operative shares and the statutory allocation of 11.8 million euros (previous year: 28.2 million euros) to legal reserves, the Management Board and the Supervisory Board of RZF will propose to the general meeting on 24 June 2018 to allocate, from the unappropriated commercial law profit for financial year 2017 totalling 66.8 million euros (previous year: 159.8 million euros), an amount of 27.5 million euros (previous year: 65.8 million euros) to legal reserves and an amount of 39.3 million euros (previous year: 94.0 million euros) to other revenue reserves.