21.Equity

The individual components of equity and changes in equity in fiscal years 2019 and 2020 are presented in the Covestro Group consolidated statement of changes in equity.

Capital stock

The capital stock of Covestro AG changed as follows in fiscal 2020:

The Covestro AG’s capital stock as of December 31, 2020, is divided into 193,200,000 (previous year: 183,000,000) no-par value bearer shares and is fully paid up. Each share confers the right to one vote.

On October 13, 2020, the Board of Management, with the approval of the Supervisory Board, partially utilized the Authorized Capital 2020 created by resolution of the Annual General Meeting (AGM) on July 30, 2020, to increase the company’s capital stock by €10.2 million by issuing 10,200,000 new, no-par value bearer shares with a proportionate interest in the capital stock of €1.00 each against cash contributions, while disapplying the subscription rights of shareholders.

Treasury shares

Covestro AG issued 95,859 (previous year: 160,083) treasury shares to employees of the German legal entities under the Covestment stock participation program. As of December 31, 2020, the company held 39,456 (previous year: 135,315) treasury shares. This corresponds to 0.02% (previous year: 0.07%) of the capital stock.

The cost of the treasury shares held by Covestro AG at the end of the fiscal year was €2 million. This was based on a price of €49.22 per share. They are valued using the FIFO method.

Authorized and conditional capital

The authorized capital and conditional capital as of December 31, 2020, were comprised as follows:

After partial use of the authorized capital 2020, this amounted to €63 million as of December 31, 2020.

On July 30, 2020, the AGM additionally authorized the Board of Management to issue bonds with conversion or exchange rights or warrants, or with conversion obligations, or a combination of these instruments on up to 18,300,000 no-par value bearer shares of Covestro AG. Based on this authorization, convertible/warrant bonds can be issued up to a total nominal value of €2 billion by the company or a Group company in the period up to July 29, 2025. The 2020 AGM also resolved to conditionally increase the capital stock by up to €18.3 million by issuing up to 18,300,000 no-par value bearer shares to grant shares to the holders or creditors of such convertible/warrant bonds (Conditional Capital 2020).

Conditional capital has not been used to date.

Capital reserves

Covestro AG’s capital reserves as of December 31, 2020, amounted to €3,925 million (previous year: €3,487 million). The increase is attributable to the capital increase and the issuance of treasury shares under the Covestment program. The capital increase amounted to €434 million after the costs of raising equity were deducted.

Dividend

The dividend available for distribution is based on the distributable profit reported in the annual financial statements of Covestro AG, which were prepared according to the provisions of the German Commercial Code (HGB). The dividend proposed for fiscal 2020 amounts to €1.30 per share carrying dividend rights for a total distribution of €251 million based on the number of shares carrying dividend rights as of December 31, 2020, and depends on authorization by the shareholders at the Annual General Meeting. It is therefore not recognized as a liability in the consolidated financial statements. For fiscal 2019, a dividend of €1.20 per share carrying dividend rights was paid in August 2020.

Equity attributable to noncontrolling interest

The equity attributable to noncontrolling interest mainly relates to the equity of Pearl Covestro Polyurethane Systems FZCO, Dubai (United Arab Emirates), Sumika Covestro Urethane Company, Ltd., Amagasaki (Japan), DIC Covestro Polymer Ltd., Tokyo (Japan), and Covestro (Taiwan) Ltd., Kaohsiung City (Taiwan).

The changes in equity attributable to noncontrolling interest are presented in the following table:

Accumulated other comprehensive income

Accumulated other comprehensive income were comprised as follows: