Annual Report 2001 - KSPG AG

90
Consolidated financial statements 2001 of Kolbenschmidt Pierburg AG
Notes
Comments on the consolidated balance sheet
in prior periods were written up at
€0.6 million (up from €0 million).
According to the German Tax Reduction
Act of Oct. 23, 2000, the changeover
from the imputation system to
the split rate system (split income
taxation) is accompanied by a 15-year
transition period during which dividends
distributed from EK-40 equity
portions formerly subject to the full
(15) Total equity Kolbenschmidt Pierburg AG’s capital
stock amounts to €87.1 million and is
divided into 28,003,395 no-par bearer
shares of fully voting common stock.
There is no unpaid capital subscribed.
The Executive Board is authorized to
raise the capital stock on or before
June 30, 2003, after first obtaining the
Supervisory Board’s approval, by issuing
once or several times new stock
against cash contributions for an aggregate
maximum of €25.6 million, duly
granting the stockholders their subscription
rights. However, the Executive
Board is authorized with the Supervisory
Board’s prior approval to exclude
subscription rights to fractions and,
moreover, to the extent required to
grant the holders of option or conversion
rights under bonds (whether
floated or yet to be issued) the same
statutory subscription right of Kolbenschmidt
Pierburg AG stockholders as
if such stock options or conversion
rights had already been exercised
(authorized capital I). In the year under
review, part of the authorized capital I
was utilized pursuant to Art. 4(2) of
the Company’s articles of association
to raise the capital stock by €3.6 million
by issuing 1,400,200 no-par bearer
shares of common stock. After this increase,
a total 28,003,395 bearer
shares of issued common stock have
been outstanding.
German income tax now entail a corporate
income tax reduction and
those distributed from EK-02 equity
portions exempt from corporate income
tax increase corporate income
tax. As of December 31, 2001, EK-40
portions no longer existed and, therefore,
no potential for any deferred tax
relief did either. The potential for deferred
tax burdens amounts to €0.5
million.
Furthermore, the Executive Board is
authorized to raise the capital stock
on or before June 30, 2003, after first
obtaining the Supervisory Board’s
approval, by issuing once or several
times new stock against cash contributions
for an aggregate maximum of
€6.6 million. With the Supervisory
Board’s prior approval, the Executive
Board may generally exclude the
subscription rights if issuing the new
stock at a price that is not significantly
below the market price. If the Executive
Board does not exercise its authority
to exclude subscription rights, such
subscription may with the Supervisory
Board’s approval nonetheless
be excluded for fractions and to the
extent required to grant the holders
of option or conversion rights under
bonds (whether already floated or yet
to be issued) the same statutory subscription
right of Kolbenschmidt Pierburg
AG stockholders as if such stock
options or conversion rights had
already been exercised (authorized
capital II).
Moreover, the Executive Board has
been authorized to acquire on or before
December 12, 2002, treasury stock
equivalent to an aggregate maximum
of 10 percent of the current capital
stock. In the year under review, the
authority to repurchase any of the
Company’s stock was not exercised.
€million
Upon transfer of the stock premium
from the capital increase, the additional
paid-in capital rose by €11.9
million to €174.0 million.
The other reserves include, besides
the reserves retained by Kolbenschmidt
Pierburg AG from earnings,
also the other comprehensive income,
which breaks down into the reserve
for adjustments due to the first-time
application of the IAS (which are recognized
in equity only), differences
from currency translation, as well as
reserves from fair valuation.
The analysis in 2001 of such reserves
presents the following picture:
Initial application of IAS 39 (Jan. 1, 2001)
Deferred taxes on differences
0.0 21.6 21.6
from the first-time application of IAS 39 (Jan. 1, 2001) 0.0 (8.7) (8.7)
Balance at January 1, 2001 0.0 12.9 12.9
Changes in the fair valuation of derivatives (0.4) 0.0 (0.4)
Deferred taxes on changes in the hedge reserve 0.1 0.0 0.1
Balance at December 31, 2001 (0.3) 12.9 12.6
(16) Accruals for pensions and
similar obligations
Hedge
reserve
The differences from the fair valuation
of interest rate swaps (which mature in
2005) were transferred to the hedge
reserve.
These accruals provide for obligations
under vested rights and current pensions
payable to eligible active and
former employees and their surviving
dependants. Such commitments
primarily encompass pensions, both
basic and supplementary. The individual
confirmed pension entitlements
are based on benefits that vary according
to country and company and,
as a rule, are measured according to
service years and employee pay.
Being a noncurrent provision for the
accumulated postretirement benefit
obligation, the accrued health care
obligations to the retirees of some
US group companies are also included
in the pension accruals recognized
hereunder.
Securities
available
for sale
Reserves
from fair
valuation
The separate financial statements of
Kolbenschmidt Pierburg AG close the
fiscal year with net earnings of €14.0
million, proposed to be distributed in
full to pay a cash dividend of €0.50
per no-par share of stock.
The company pension system consists
of both defined-contribution and defined-benefit
plans. Under a DCP, the
company incurs no obligations other
than the payment of contributions to
earmarked funds. These pension expenses
are shown within personnel
expenses. In the year under review,
a total €32.6 million (up from €31.9
million) was paid to DCPs.
Under defined benefit plans, a company
is obligated to meet its confirmed
commitments to active and former
employees. In accordance with IAS 19,
the projected unit credit (PUC) method
is used to measure accrued defined
benefit obligations. To this end, the
present value of the defined benefit
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