Shareholders' equity

 
2017
2016
   
Balance at 1 January
6,072
5,541
   
Net profit
1,769
621
Exchange differences, net of income tax
(637)
197
Net actuarial gains/(losses) on defined benefit obligations
74
(9)
Dividend
(320)
(296)
Repurchase of shares
(297)
(273)
Proceeds from reissue of ordinary shares
233
253
Other changes
68
38
   
Balance at 31 December
6,962
6,072

For details see the Consolidated statement of changes in equity (Note 16).

Legal reserve

In Shareholders' equity, an amount of -€107 million (2016: €530 million) is included for Translation reserve, -€148 million (2016: -€207 million) for Hedging reserve, €5 million (2016: €8 million) for Fair value reserve and -€182 million(2016: -€100 million) for intangible assets related to product development projects. In addition, a legal reserve of €126 million (2016: €120 million) is recognized for profits that cannot be distributed and received in the Netherlands.

Profit appropriation

According to article 32 of the Articles of Association of Koninklijke DSM N.V. and with the approval of the Supervisory Board, every year the Managing Board determines the portion of the net profit to be appropriated to the reserves. For the year 2017, the net profit is €1,769 million (2016: €621 million) and the amount to be appropriated to the reserves has been established at €1,438 million (2016: €311 million). From the subsequent balance of the net profit of €331 million (2016: €310 million), dividend is first distributed on the cumulative preference shares B. At the end of 2017 no cumprefs B were in issue (2016: no cumprefs B). Subsequently, a 3.26% (2016: 1.759%) dividend is distributed on the cumulative preference shares A, based on a share price of €5.29 (2016: €5.29) per cumulative preference share A. For 2017, this distribution amounts to €0.17 (2016: €0.09) per share, which is €8 million in total. An interim dividend of €0.06 per cumulative preference share A having been paid in August 2017, the final dividend will then amount to €0.11 per cumulative preference share A.

The profit remaining after distribution of these dividends on the cumulative preference shares A of €1,761 million (2016: €617 million) will be put at the disposal of the Annual General Meeting of Shareholders in accordance with the provisions of Article 32, section 5 of the Articles of Association.

The Managing Board proposes a dividend on ordinary shares outstanding for the year 2017 of €1.85 (2016: €1.75) per share. With an interim dividend of €0.58 (2016: €0.55) per ordinary share having been paid in August 2017, the final dividend would then amount to €1.27 (2016: €1.20) per ordinary share.

If the Annual General Meeting of Shareholders makes a decision in accordance with the proposal, the net profit will be appropriated as follows:

Profit appropriation

 
2017
2016
   
Net profit
1,769
621
   
Profit appropriation:
  
- To be added to the reserves
1,438
311
- Dividend on cumprefs A
8
4
- Interim dividend on ordinary shares
101
96
- Final dividend distributable on ordinary shares
222
210