16 Equity

‘Acquisition of NCI without a change in control’ in 2021 relates to the purchase of the remaining 35% non-controlling interest in DSM Rainbow (Inner Mongolia) Biotechnology Co., Ltd. See Note 17 Non-controlling interests.

Dividend

For the year 2021, the following dividends were proposed by the Managing Board.

The proposed final dividend on ordinary shares is subject to approval by the Annual General Meeting of Shareholders and has not been deducted from Equity.

For a description of the rules of profit appropriation and of the statutory rights attached to Cumulative Preference Shares A and B, see Note 6 Shareholders’ equity to the Parent company financial statements.

Share capital

On 31 December 2021, the authorized capital amounted to €1,125 million (2020: €1,125 million), distributed over 330,960,000 ordinary shares, 44,040,000 Cumulative Preference Shares A and 375,000,000 Cumulative Preference Shares B. All shares have a nominal value of €1.50 each. The outstanding shares are entitled to one vote per share at the General Meeting of Shareholders. All rights attached to the Company’s shares held by the Group (treasury shares) are suspended until those shares are reissued.

Every year the Managing Board, with the approval of the Supervisory Board, shall decide which part of the profit shall be set aside. Out of the profit remaining, a dividend based on EURIBOR plus a premium at the company’s discretion, shall be distributed insofar as possible on the Cumulative Preference Shares B. From the amount remaining of the profit, a dividend shall be distributed insofar as possible on the Cumulative Preference Shares A, the percentage based on the effective return on government loans, increased by a mark-up to be determined at the company’s discretion. If, for any financial year, the distributions on the Cumulative Preference Shares B and A cannot be effected or cannot be fully effected because the profit after reservation does not suffice, the deficit shall be distributed to the debit of the following financial years. In that case, each time as much as possible, the overdue dividend, augmented by the dividend for the last expired financial year, shall be distributed, first on Cumulative Preference Shares B and next on Cumulative Preference Shares A. The remaining profit shall be put at the disposal of the General Meeting of Shareholders.

In the period from April 2019 until June 2020, DSM repurchased 6,638,971 shares with the stated intention to reduce its issued share capital. On 29 April 2021, DSM announced this share cancellation, resulting in a decrease of the number of issued ordinary shares from 181,425,000 to 174,786,029.

The changes in the number of issued and outstanding shares in 2020 and 2021 are shown in the following table.

The average number of ordinary shares outstanding in 2021 was 172,647,995 (2020: 171,535,921). All shares issued are fully paid.

The Cumulative Preference Shares A have been classified as equity, because there is no mandatory redemption and distributions to the shareholders are at the discretion of DSM.

On 31 December 2021, no Cumulative Preference Shares B were outstanding (same as 2020).

Share premium

Of the total share premium of €471 million (2020: €489 million), an amount of €89 million (2020: €91 million) can be regarded as entirely free of tax.

Treasury shares

In 2021, DSM repurchased 1.1 million shares for an amount of €165 million to cover commitments for stock dividend. DSM did not repurchase any shares in 2021 to fulfill its obligations under share-based compensation plans. Furthermore, 6,638,971 ordinary shares held in treasury since the execution of the share buyback program earmarked for capital reduction were canceled.

At 31 December 2021, DSM possessed 1,817,299 (2020: 9,205,661) ordinary shares with a nominal value of €3 million, or 0.83% (2020: 4.08%) of the share capital. The average purchase price of the ordinary treasury shares as at 31 December 2021 was €97.50 (2020: €105.98). At 31 December 2021, 1,665,073 (2020: 2,460,656) of the total number of treasury shares outstanding were held for servicing share-option rights and share plans, 152,226 (2020: 106,034) shares for stock dividend, and no more shares (2020: 6,638,971) were earmarked for capital reduction.

The increase in the Translation reserve in 2021 is mainly caused by a weakening of the euro against the US dollar, Chinese renminbi and Swiss Franc. As a consequence, the total value of the subsidiaries increased, which led to a positive exchange difference of €478 million.

The Translation reserve, Hedging reserve and Fair value reserve (partly) are legal reserves in accordance with Dutch law and cannot be distributed to shareholders. Additional information is provided in Note 6 Shareholders’ equity to the Parent company financial statements.

In the reporting year, DSM sold part of its shares in Amyris, Inc., which is accounted for as an Other participating interest. The related accumulated fair value increase of €93 million up to the date of sale has been transferred within equity from the Fair value reserve to Retained earnings.