Merck 2014 Annual Report Download - page 227

222 CONSOLIDATED FINANCIAL STATEMENTS → Notes to the Group accounts
The reciprocal net profit / loss transfer between E. Merck KG,
Darmstadt, Germany, and MerckKGaA, Darmstadt, Germany, as
stipulated by the Articles of Association was as follows:
2014 2013
€ million
E. MerckKG,
Darmstadt, Germany
Merck KGaA,
Darmstadt, Germany
E. MerckKG,
Darmstadt, Germany
Merck KGaA,
Darmstadt, Germany
Result of E. MerckKG, Darmstadt, Germany –17.9 – – 9.2 –
Result of ordinary activities of Merck KGaA, Darmstadt,
Germany – 651.2 – 534.9
Extraordinary result – – – –
Adjustment for trade tax in accordance with Art. 27 (1)
Articles of Association of Merck KGaA, Darmstadt,
Germany – 3.1 – – –
Trade tax in accordance with Art. 30 (1) Articles of
Association of Merck KGaA, Darmstadt, Germany
– – 54.2 – – 34.6
Basis for appropriation of profits (100 %) – 21.0 597.0 – 9.2 500.3
Profit transfer to E. MerckKG, Darmstadt, Germany
Ratio of general partner’s capital to total capital (70.274 %) 419.5 – 419.5 351.6 – 351.6
Profit transfer from E. MerckKG, Darmstadt, Germany
Ratio of share capital to total capital (29.726 %)
6.3 – 6.3 2.7 – 2.7
Trade tax 3.1 – – –
Corporation tax – – 22.8 – –12.0
Net income 407.9 148.4 345.1 134.0
The result of E. MerckKG, Darmstadt, Germany, on which the ap-
propriation of profits adjusted for trade tax is based amounted to
€– 21.0 million (2013: €– 9.2 million). This led to a result transfer
to the company of €– 6.3 million (2013: €– 2.7 million). Result
from ordinary activities of Merck KGaA, Darmstadt, Germany,
adjusted for trade tax and extraordinary result, on which the ap-
propriation of its profit is based, amounted to €597.0 million
(2013: €500.3 million). MerckKGaA, Darmstadt, Germany, trans-
ferred €419.5 million of its profit to E. MerckKG, Darmstadt,
Germany (2013: €351.6 million). In addition, an expense from
corporation tax charges amounting to € 22.8 million resulted
(2013: expense of €12.0 million). Corporation tax is only calcu-
lated on the income received by shareholders. Its equivalent is the
income tax applicable to E. MerckKG, Darmstadt, Germany. How-
ever, this must be paid by the partners of E. MerckKG, Darmstadt,
Germany, 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 avail-
able to E. MerckKG, Darmstadt, Germany. If the shareholders re-
solve to carry forward or to allocate to retained earnings a portion
of the net retained profit of MerckKGaA, Darmstadt, Germany, to
which they are entitled, then E. MerckKG, Darmstadt, Germany,
is obligated to allocate to the profit brought forward / retained
earnings of MerckKGaA, Darmstadt, Germany, 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, Darmstadt, Germany,
correspond to the ownership ratios of the shareholders on the one
hand and E. MerckKG, Darmstadt, Germany, on the other hand.
Consequently, for distributions to E. Merck KG, Darmstadt,
Germany, only the amount is available that results after netting
the profit transfer of the company with the amount either allocated
or withdrawn by E. MerckKG, Darmstadt, Germany, 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.