(24) Shareholders’ equity
Subscribed capital
The subscribed capital of Jungheinrich AG, Hamburg (Germany) was fully paid up as of the balance sheet date and amounts to €102,000 thousand (prior year: €102,000 thousand). As in the preceding year, it was divided among 18,000,000 ordinary shares and 16,000,000 preferred shares, each accounting for an imputed €3.00 share of the subscribed capital. All of the shares had been issued as of the balance sheet date. The preferred shares do not bear voting rights and have preferential dividend privileges.
Capital reserve
The capital reserve includes premiums from the issuance of shares and additional income from the sale of own shares in prior years.
Retained earnings
Retained earnings contain undistributed earnings generated by Jungheinrich AG and consolidated subsidiaries in preceding years as well as consolidated net income for the period under review. Furthermore, differential amounts resulting from the transition of accounting and measurement methods to IFRS effective January 1, 2004, were recognized in retained earnings without an effect on results.
The following transactions are reflected in other changes in retained earnings of the year under review.
The existing pension plans of Jungheinrich AG, Hirschthal (Switzerland) totalling €2,262 thousand were covered by the Group’s provisions for pensions for the first time in 2007. Net of taxes, this addition resulted in a €1,732 thousand charge against retained earnings.
Due to the first-time inclusion of eleven foreign sales companies in the basis of consolidation effective January 1, 2007, €1,830 thousand net of taxes allocable to the consolidation measures were offset against the Group’s retained earnings.
Dividend proposal
Jungheinrich AG pays its dividend from the distributable profit stated in the annual financial statements of Jungheinrich AG, which are prepared in accordance with the German Commercial Code. The Board of Management of Jungheinrich AG proposes to use the €20,266 thousand distributable profit for the 2008 financial year to pay a dividend of €0.49 per ordinary share and €0.55 per preferred share, amounting to a total dividend payment of €17,620 thousand, and transfer €2,646 thousand to other retained earnings.
Managing capital
Jungheinrich is not subject to any minimum capital requirements pursuant to its articles of association.
The Group manages the way in which its capital is used commercially via the return on capital employed (ROCE).
The capital and finance structure of the Group and its companies is managed using ‘net gearing’ and ‘indebtedness ratio’ as key ratios. ‘Net gearing’ is defined as the ratio of net indebtedness to shareholders’ equity, expressed as a percentage. ‘Indebtedness ratio’ is defined as the ratio of net indebtedness to earnings before interest, taxes, depreciation and amortization (EBITDA).
Jungheinrich determines these key ratios when preparing its quarterly financial statements. They are reported to the Board of Management once a quarter, in order to enable it to initiate measures if necessary.
The net indebtedness factored into these two key ratios is the result of the Group’s financial liabilities, minus notes receivable, liquid assets and securities, plus the balance of other liabilities and receivables to affiliated companies and companies accounted for using the equity method:
The key ratios ‘net gearing’ and ‘indebtedness ratio’ did not change materially compared with the previous year:
The Group’s overall strategy for managing capital was unchanged compared with the previous year.