3 Investments accounted for at equity

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EUR million 2015 2014
As at 1 Jan. 3,012 3,215
Changes in equity interest recognised in profit or loss 57 14
Profit distribution -88
Changes in equity interest recognised in other comprehensive income 74 -207
Reclassification as assets held for sale
Disposals and transfers -493 -10
As at 31 Dec. 2,562 3,012

Investments accounted for at equity mainly comprise the investment of EUR 2,562 million in METRO AG by Franz Haniel & Cie. GmbH (previous year: EUR 3,012 million). METRO AG, domiciled in Düsseldorf, is the holding company of the METRO GROUP, an international merchandiser. The METRO GROUP’s independent sales lines operate self-service wholesale (METRO Cash & Carry), retail electronics (Media-Saturn) and self-service hypermarket (Real) businesses in Europe and Asia.

On 7 May 2015, Haniel sold 16.25 million ordinary shares in METRO AG to institutional investors. This reduced Haniel’s interest in the voting rights of METRO AG from 30.01 per cent to 25.00 per cent. At the same time, an exchangeable bond linked to METRO AG’s ordinary shares with a nominal volume of EUR 500 million and a 5-year term was issued; therefore, a further reduction in the ownership interest is possible in the future.

The impairment test on the investment in METRO AG is performed as a general rule by applying the same model and relevant parameters that are used to test the impairment of goodwill. The impairment test, based on planning of future cash flows, a weighted average cost of capital before taxes of 10.4 per cent (previous year: 9.8 per cent) and a growth rate of 0.5 per cent – as in the previous year – for the years after the detailed planning period did not indicate a need to adjust the carrying amount of the investment accounted for at equity in the financial year.

The Metro investment contributed earnings totalling EUR 57 million (previous year: EUR 14 million).

Due to the nature of its industry, METRO AG has had a financial year of 1 October through 30 September instead of the calendar year since 2013. However, the METRO GROUP is included in Haniel’s consolidated financial statements based on annual reports and published quarterly statements using results from 1 January through 31 December.

Material financial information on the IFRS consolidated financial statements of METRO AG as well as a reconciliation to the carrying amount of the Metro investment reported in Haniel’s consolidated financial statements are presented below.

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EUR million 2015 2014
Revenue 58,991 59,536
Profit after taxes 2 -58
Profit after taxes from discontinued operations 850 185
Other comprehensive income 155 -652
Comprehensive income 1,007 -525
Dividends received from METRO AG 88  

The profit after taxes from discontinued operations from the consolidated financial statements of METRO AG presented in the above table includes the current results of the Galeria Kaufhof sales line, which was sold on 30 September 2015, as well as the related gain on disposal.

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EUR million 31 Dec. 201531 Dec. 2014
Non-current assets 13,15314,918
Current Assets 17,10416,713
Non-current liabilities 6,8277,420
Current liabilities 17,71619,150
Equity 5,7145,061
Equity attributable to shareholders of METRO AG 5,6995,032
Haniel’s share of equity of METRO AG 1,4131,498
Remaining adjustments from purchase price allocation 1,9992,535
Impairments on investment accounted for at equity 8501,021
Carrying amount of the Metro investment 2,5623,012

In addition, METRO AG has contingent liabilities from suretyships, rent guarantees and other warranty contracts in the amount of EUR 71 million (previous year: EUR 58 million).

The stock market value of Haniel’s 24.79 per cent interest (previous year: 29.76 per cent) in the ordinary and preferred shares of METRO AG as at the reporting date amounted to EUR 2,395 million (previous year: EUR 2,462 million), valued at a share price of EUR 29.56 per ordinary share (previous year: EUR 25.31 per share).