COMMERZBANK AKTIENGESELLSCHAFT

To our Shareholders Corporate Responsibility Management Report Risk Report Group Financial Statements Further Information 277 333
258 202 Statement of comprehensive income
260 204 Balance sheet
262 206 Statement of changes in equity
264 208 Cash flow statement
266 210 Notes
409 353 Auditors’ report
b) Capital reserve
The capital reserve shows, in addition to premiums from the
issue of shares, fair values of share-based remuneration
transactions in equity instruments that have not yet been
exercised. If bonds and notes are issued for conversion and
option rights entitling holders to purchase shares, the amounts
realised are recognised in the capital reserve.
In addition, costs arising in connection with capital increases,
which must be shown as a deduction from equity in accordance
with IAS 32.35, are deducted from the capital reserve.
For the resale of treasury shares, the difference between the
notional par value and the market value of the share is
recognised in the capital reserve, if the latter exceeds the
original acquisition costs of these shares.
c) Retained earnings
Retained earnings consist of the statutory reserve and other
reserves. The statutory reserve contains reserves which are
mandated by German law; in the parent company financial
statements, the amounts assigned to this reserve may not be
distributed. The total amount of retained earnings stated in the
balance sheet resulted from other retained earnings of €8.822m
(previous year: €9.140m). There were no statutory reserves at
December 31, 2011 or December 31, 2010.
For purchases of treasury shares, the difference between the
acquisition costs and the notional par value is recognised in the
capital reserve. The resale of treasury shares is reported as a
mirror-image of the purchase of treasury shares.
d) Silent participations
The contributions of SoFFin, represented by the FMSA, were
reduced by €14.5bn from €16.4bn to €1.9bn over the course of
the year through a number of capital measures (see page 207).
The silent participations are based on the agreement dated
December 19, 2008 and the supplementary agreement dated
June 3, 2009 on the establishment of a silent partnership
concluded between SoFFin, represented by the FMSA, and
Commerzbank Aktiengesellschaft. Interest of 9% p.a. will be
paid on the participations, which are eligible in full as Tier I
capital. Repayment will be at par. The interest rate on the silent
participations rises in years when a dividend is paid. The
additional interest to be paid in such cases is based on the total
cash dividend paid out. For approximately every €5.9m of cash
dividend paid, the interest rate will rise by 0.01 percentage
points.
SoFFin participates in any net loss in proportion to the ratio
of the book value of the silent participation to the overall book
value of all of the Company’s liable capital participating in the
net loss (Art. 10 (2a), (4) and (5) German Banking Act). After a
reduction the silent participation will be written up again in the
following financial years to its full original nominal value,
provided that this does not thereby cause or increase a net loss.
Furthermore, Commerzbank Aktiengesellschaft and Allianz
SE concluded an agreement on June 3, 2009 on the
establishment of a silent partnership, on the basis of which
Allianz, through a subsidiary, provided Commerzbank
Aktiengesellschaft with a silent participation of €750m. The
silent participation comes with a profit participation consisting
of fixed interest of 9% p.a. on the nominal contribution amount
plus additional dividend-linked remuneration of 0.01% p.a. for
approximately each €5.9m of cash dividends paid.
Under IFRS the silent participations must be recognised
separately within equity, and the interest paid on the silent
participations set off directly against equity without affecting the
income statement. Interest is only payable on the silent
participations if the Company reports a net distributable profit in
its separate accounts under the German Commercial Code
(HGB). This condition was not met in 2011 and no expenses
were therefore incurred (previous year: nil).
e) Revaluation reserve
Gains or losses from revaluing financial investments at fair value
are recognised in the revaluation reserve net of deferred taxes.
Gains or losses are recognised in the income statement only if
the asset has been disposed of or impaired.
f) Cash flow hedge reserve
The net gain or loss on remeasuring the effective part of cash
flow hedges is reported in this equity item after deduction of
deferred taxes. We ended cash flow hedge accounting in the
financial year 2009 with only a few exceptions and since then
have been using micro hedge accounting and portfolio fair value
hedge accounting to manage interest rate risks. From the date of
this change, the cash flow hedge reserve reported in equity and
the associated hedging transactions have been amortised in net
interest income over the residual term of the hedging
transactions. This has no impact on net income.
g) Currency translation reserve
The reserve from currency translation relates to translation gains
and losses arising upon the consolidation of the capital
accounts. This includes exchange rate differences arising from
the consolidation of subsidiaries and companies accounted for
using the equity method.
Group Financial Statements