17 Share capital/capital management
Share capital
As of 31 December 2016, the share capital comprised 4ʼ100ʼ898 registered shares with a par value of CHF 1 each. Total dividend-bearing nominal capital amounted to CHF 4ʼ100ʼ898.
Capital management
The capital managed by the Corporation consists of the consolidated equity. The Corporation has set the following goals for the management of its capital:
- –maintain a healthy and sound balance sheet structure based on going concern values
- –ensure the necessary financial scope in order to make investments and acquisitions in the future
- –realize a return for investors commensurate with the risk
The Corporation uses two ratios to monitor equity: the equity ratio and the return on equity. The equity ratio represents equity as a percentage of total assets. Return on equity is net profit expressed as a percentage of average equity. These ratios are reported to the Executive Committee and the Board of Directors at regular intervals through the internal financial reporting. Both, total equity and the balance sheet total, increased slightly, resulting in an unchanged equity ratio of 37% as of 31 December 2016.
As an industrial group, GF strives to maintain a strong balance sheet with a high portion of equity. In the medium term, the Corporation aims to achieve an equity ratio of 35% to 40%. The medium-term target for return on equity is above 15%.
The ratios are shown in the table below:
The Corporation does not have any financial covenants with minimal capital requirements. There is one financial covenant concerning the equity ratio.
The Board of Directors presents a proposal for the appropriation of retained earnings to the Annual Shareholders’ Meeting. GF pursues a results-oriented dividend policy and usually distributes about 30% to 40% of the Corporation’s consolidated net profit to shareholders. This may be distributed either in the form of a dividend payment from the retained earnings or from the reserves from capital contributions. The Board of Directors is proposing to the Annual Shareholders’ Meeting a dividend payment out of the retained earnings of CHF 20 in total per registered share for the fiscal year 2016 (previous year: CHF 18 in total per registered share). As of 31 December 2016, the par value of the Georg Fischer registered share amounts to CHF 1.
The authorized capital and the conditional capital consists of a maximum of 600ʼ000 shares. The maximum amount of the authorized or conditional capital is reduced by the amount that authorized or conditional capital is created through the issue of bonds or similar debt instruments or new shares.
By no later than 22 March 2018, the maximum authorized share capital will be CHF 600ʼ000 divided into no more than 600ʼ000 registered shares each with a par value of CHF 1.
The reserves which are not disposable respectively
distributable amount to CHF 85 million as of 31 December 2016 (previous year:
CHF 122 million). The
decrease is caused by offsetting agio reserves with losses carry forward in
Corporate Companies.
