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12 Equity

As at 31 December 2015, the subscribed capital of Franz Haniel & Cie. GmbH remained unchanged at EUR 1,000 million. All shares are fully paid-in and held either directly or indirectly by the Haniel family.

Changes in equity are shown in the statement of changes in equity. The changes in the scope of consolidation during the financial year presented there relate to the reduction in Haniel’s interest in METRO AG. In the previous year, the changes in the scope of consolidation related to the disposal of the Celesio division.

Treasury shares with a par value of EUR 1 million (previous year: EUR 1 million) were acquired during the financial year. The non-controlling interests in the equity of consolidated subsidiaries relate primarily to TAKKT AG, which is domiciled in Stuttgart. As at the reporting date, Haniel held a 50.25 per cent interest in TAKKT AG, the holding company of the TAKKT division. The tables below contain the financial information on the TAKKT division recognised in Haniel’s consolidated financial statements.

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EUR million 31 Dec. 2015 31 Dec. 2014
Non-current assets 813 741
Current assets 229 219
Non-current liabilities 300 225
Current liabilities 176 255
Equity 566 480
    of which attributable to non-controlling interests 216 174
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EUR million 20152014
Revenue 1,064981
Operating profit 129111
Profit after taxes 8166
of which attributable to non-controlling interests 4033
Other comprehensive income 279
Comprehensive income 10875
of which attributable to non-controlling interests 5438
  
Cash flow from operating activities 87101
Cash flow from investing activities -90-13
Cash flow from financing activities 2-90
Dividends paid to non-controlling interests 1010

The accumulated other comprehensive income of the Haniel Group changed as follows:

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EUR million As at
1 Jan. 2015
Changes in
the scope of
consolidation
Changes in
shares in com-
panies already
consolidated
Other
comprehensive
income
Currency translation effects As at
31 Dec. 2015
Remeasurements of defined benefit plans -167 25 -3 -145
Deferred taxes 47   -8 1 40
Pro-rata other comprehensive income not to be reclassified to profit or loss from investments accounted for at equity -230 40 45 -145
Other comprehensive income from Investments accounted for at equity -350 40 0 62 -2 -250
Derivative financial instruments -6 4 -2
Financial assets available for sale 0   -2 -2
Deferred taxes 2 2
Currency translation effects -7   39 2 34
Share of other comprehensive income of investments accounted for at equity -239   29 -210
Other comprehensive income from Investments accounted for at equity -250 0 0 70 2 -178
Accumulated other comprehensive income -600 40 0 132 0 -428
of which attributable to non-controlling interests -10 14 4
of which attributable to shareholders of Franz Haniel & Cie. GmbH -590 40 118 -432
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EUR million As at
1 Jan. 2014
Changes in
the scope of
consolidation
Changes in
shares in comp-
anies already
consolidated
Other com-
prehensive
income
Currency translation effects As at
31 Dec. 2014
Remeasurements of defined benefit plans -288 201 -81 1 -167
Deferred taxes 72 -49   24 47
Pro-rata other comprehensive income not to be reclassified to profit or loss from investments accounted for at equity -131 1 -100 -230
Other comprehensive income from Investments accounted for at equity -347 153 0 -157 1 -350
Derivative financial instruments -23 2 15 -6
Financial assets available for sale 0 0
Deferred taxes 6 -4 2
Currency translation effects -318 145 167 -1 -7
Share of other comprehensive income of investments accounted for at equity -132 -107 -239
Other comprehensive income from Investments accounted for at equity -467 147 0 71 -1 -250
Accumulated other comprehensive income -814 300 0 -86 0 -600
of which attributable to non-controlling interests -242 223 9   -10
of which attributable to shareholders of Franz Haniel & Cie. GmbH -572 77 -95 -590

In the previous year, the accumulated other comprehensive income presented contained a total amount of EUR 2 million that was attributable to assets and liabilities held for sale. In the year under review, this amount was reclassified to profit or loss in full due to the disposal of the assets and liabilities.

Capital management
The aim of the Haniel Group’s capital management is, for one, to safeguard financial flexibility, provide scope for value-enhancing investments, and maintain sound ratios in the statement of financial position. The Group seeks to achieve investment-grade credit ratings. Another aim of capital management is to ensure that the capital employed in the Haniel Group is used to increase value.

The Haniel Group’s net financial position, defined as net financial liabilities less the investment position of the Haniel Holding Company, can be broken down as follows:

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EUR million 2015 2014
Financial liabilities, including held for sale1,6801,469
- Cash and cash equivalents, including held for sale 342 111
Net financial liabilities 1,338 1,358
Investment position Haniel Holding Company 893 584
Net financial position 445 774

The investment position of the Haniel Holding Company, which is available for the acquisition of new divisions, includes non-current and current financial assets and other assets of the Holding and other companies segment.

The Group manages the solidity of its balance sheet ratios by monitoring the equity ratio, the gearing, the interest cover ratio, and the core repayment period.

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EUR million 2015 2014
Equity 4,169 3,973
/ Total assets 6,847 6,446
Equity ratio (in %) 60.9 61.6
 
Net financial position 445 774
/ Equity 4,169 3,973
Gearing 0.1 0.2
 
(Operating profit, including discontinued operations 193 258
+ Result from investments accounted for at equity, including discontinued operations 57 14
+ Other investment result, including discontinued operations) 1
/ (Finance costs, including discontinued operations 89 221
- Other net financial income, including discontinued operations) 13 8
Interest cover ratio 3.3 1.3
 
(Net financial position 445 774
- Net financial liabilities allocated to Metro investment) 600 600
/ (Operating profit, including discontinued operations 193 258
+ Depreciation and amortisation, including discontinued operations 172 162
+ Impairment of goodwill, including discontinued operations)
Core repayment period -0.4 0.4

The core repayment period is the ratio of the operating profit plus depreciation and amortisation of the four divisions and the Holding and other companies segment to the net financial position. Since the Metro investment is accounted for at equity and thus not included in operating profit, EUR 600 million in net financial liabilities are deducted and allocated to the Metro investment for the purpose of calculating the core repayment period.

In order to manage the capital employed from yield perspectives, the Group uses the Haniel value added (HVA) and the return on capital employed (ROCE) as value-oriented performance indicators. They show whether the profits generated with the capital employed cover the cost of capital.

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EUR million 2015 20142013
Operating profit193217
+ Result from investments accounted for at equity 57 14
+ Other investment result
+ Other net financial income 13 9
- Income tax expenses 54 59
+ Profit after taxes from discontinued operations before finance costs 726
Return 209 907
 
Total assets 6,847 6,44613,387
- Current provisions 95 103122
- Trade payables and similar liabilities137151125
- Income tax liabilities 22 1812
- Other current liabilities 208 226200
- Deferred tax liabilities 115 5150
- Non-interest bearing liabilities held for sale 83,103
Capital employed 6,270 5,8899,775
 
Average capital employed (current and previous year divided by two) 6,080 7,832 
x Weighted average cost of capital (in %) 8.1 8.1 
Cost of capital 492 634 
 
Return 209 907 
- Cost of capital 492 634 
Haniel value added (HVA) -283 273 
 
Return 209 907 
/ Average capital employed 6,080 7,832 
Return on capital employed (ROCE, in %) 3.4 11.6 

The weighted average cost of capital (WACC) reflects the expected return of equity and debt providers after taxes.

In addition, investment projects are assessed using uniform DCF methods; risk-appropriate minimum rates of return are specified for each division and each strategic business unit.