Campus

Caution, double agents

Among investor protection agencies there are black sheep too, as a study by the VERS insurance consultancy company has shown. Through Internet searches, author Werner Siepe has investigated a number of alleged investor protection agencies, and in his paper revealed a few providers who use the cover of protection of investors and consumers to pursue primarily their own interests. Such pseudo investor protection associations as for instance the Consumer Association (BDV) or the Savers Association (BDS) recommend doubtful financial products and providers, says Siepe. Financial news service GoMoPa offers information on the Internet about questionable firms, including wrong information about companies. The consultancy contracts concluded with financial service providers are said nothing about here, the study continues. No less bad are shareholder protection associations that cooperate with lawyers, where many associations act to draw in clients: in the cases of the Verein Mensch und Kapital or the Deutsche Anleger Stiftung, it is clearly the lawyers’ interest in fees that takes primacy over investor interests.

High interest in on-line business reports

In May the business-report portal Anwender asked in what form business reports should be accessible, whether on-line or as a print version. By a large majority of 74%, respondents voted for having the business report accessible both on-line and as a PDF (hard copy). 21% stated that it would be enough for the report to be available only as an on-line version. Alongside the traditional Internet, availability on new media is also becoming increasingly important. Thus, 41% wanted a version for the iPhone, 29% for the iPad and 12% for the eBook Reader. A main reason for publishing an on-line version of the business report is stated by 53% as the use of multimedia content like video and audio. The points of rapidity and topicality were mentioned by 29%. 80% of them stated that the number of clicks on business reports on their internet page had increased in recent years. In answer to the question whether the print version would become superfluous in future, minds are divided: half take the opinion that it will, the other that it will not.

AGM attendance constant

This season attendance by investors at the annual general meetings of the 38 DAX groups was almost at the same level as the previous year, said an analysis by investor association Deutsche Schutzvereinigung für Wertpapierbesitz (DSW). On average the attendance figure was 57.8%, 0.4 percentage points lower than the previous year. The highest attendance figure was at the Metro AGM (81.5%).

German IR prize goes to Bayer

The best IR in the DAX this year, according to DIRK, came from Bayer, BASF and Allianz. On an individual rating for the best IR manager, in the DAX the winner was Oliver Luckenbach (Henkel), followed by Henning Gieseke (Metro) and Oliver Schmidt (Allianz). In the MDAX, Deutsche EuroShop, Lanxess and Douglas were on top, and among the best IR managers chosen were Martin Praum (IVG Immobilien), Patrick Kiss (Deutsche EuroShop) and Ralf Gierig (ProSiebenSat.1). In the TECDAX Software, Aixtron and United Internet won, as did Marcus Bauer (United Internet), Guido Pickert (Aixtron) and Otmar Winzig (Software). The German Investor Relations Prize is awarded by the German Investor Relations Association (DIRK) in collaboration with Thomson Reuters Extel Surveys and Wirtschaftswoche. This year 815 experts were surveyed, from 300 companies in 19 countries.

KPMG analysis: Groups have adjusted their EBIT by over 13 billion euros because of the financial crisis

Companies listed in the DAX and MDAX adjusted their earnings before interest and taxes (EBIT) by on balance a total of around €13.2 billion in the business year 2009. This was found by KPMG’s "EBIT/EBITDA-Monitor", for which 137 final reports of groups quoted on the German stock exchange were assessed at the cut-off date of 31 December 2009. Altogether, in the DAX, the MDAX and the TECDAX a slightly positive trend could be noted to providing an EBITDA index figure. The reason for the adjustment was, according to KPG, primarily the special-effects expenses on things like restructurings and unplanned write-offs caused by the financial crisis. At one in three of the firms (33%) these amounted on balance to over 200 million Euros.

The DAX companies adjusted their EBIT in the business year 2009 by around 9.1 billion Euros on balance, and their EBITDA by around €2.2 billion. The MDAX companies on balance adjusted their EBIT by €4.1 billion Euros, and their EBITDA by €349 million. In the TECDAX the corresponding figures were €71 million and less than €20 million respectively.

Some catching-up called for in compliance

70% of companies in Germany are calling on their workers to get to know their own company’s compliance guidelines and processes. At the same time, however, nearly 60% of the companies are doing without any training in the desired rules of conduct. This was found by Steria Mummert Consulting’s Managementkompass Compliance, in collaboration with the F.A.Z. Institute. Yet training measures are key to companies’ compliance-management systems, said Bernd Michael Lindner, compliance expert at Steria Mummert Consulting. “Only if the relevant legal and internal company rules are known can management and employees recognize critical situations and deal with them with the requisite sensitivity. Merely putting provisions into writing is not by itself a sufficient guarantee of a functioning compliance culture.”

In practice, according to Steria Mummert, training using real-life situations has proved itself. About half those involved were from the company itself. To prevent criminal acts, it was important to know the motives and the security gaps of employees in danger. “Among these,” said Lindner, “is in the first place anonymity, lack of identification with company goals and unclear communication of the code of conduct.”

The flat tax too has to be regarded as provisional

Since the end of 2009, the revenue offices have been fixing the solidarity levy in tax decisions for assessment periods as from 2005 only provisionally, given the questions as to the constitutionality of the Act on the solidarity levy. Since however as from 2009 capital gains are in principle no longer to be indicated in the tax declaration, it was still questionable how the solidarity levy applying to the flat tax was to be handled. A current circular from the revenue administration answers the question in favour of capital investors. If the Federal Constitutional Court decides that the solidarity levy is to be repealed and replaced, on application the solidarity levy charged on the capital gains tax with the effect of a flat tax will also be reimbursed. An application to assess income tax is not, however, to be presumed. Where no income tax declaration is made, the reimbursement entitlement exists only within the statute of limitations for the assessment (BMF Circular of 23.4.2010, Az. IV C 1 - S 2283-c/09/10005).

PR costs soon to be deductible?

Since the introduction of the flat tax, PR costs arising in connection with capital investments can no longer be claimed separately. Instead, the PR costs are reckoned at the flat-rate amount of €801 per year per person (€1,602 for married couples submitting a joint assessment). This is the case even where in fact more than €801 were incurred in PR costs. This means that fees on accounts and deposits, administrative fees or even interest on debt can no longer be deducted. The elimination of deduction of an actual PR cost particularly affects capital investors who have taken up a loan in order to finance their capital investment. It means that PR costs arising in connection with a capital investment and PR costs arising in connection with some other type of income are treated differently. Whether this unequal treatment infringes the equality principle and the requirement of consistency is now to be tested in a test case. A jumping action in this connection has been brought in Münster Financial Court (Bund der Steuerzahler, communication of 1.6.2010; pending action at FG Münster, Az. 6 K 1847/10 E).