Note 22. Shareholders' equity
At the end of December 2015, the total number of Kesko Corporation shares was 100,019,752, of which 31,737,007, or 31.7%, were A shares and 68,282,745, or 68.3%, were B shares. All issued shares have been fully paid. The maximum number of A shares is 250 million and the maximum number of B shares is also 250 million, so that the total number of shares is 400 million at maximum. Each A share carries ten (10) votes and each B share one (1) vote. The total number of votes attached to all shares was 385,652,815. At the end of December 2015, Kesko Corporation's share capital was €197,282,584.
Changes in share capital
Number of shares
Share capital A B Total Share
€ million
Reserve of
€ million
€ million
€ million
1 January 2014 31,737,007 67,546,702 99,283,709* 197.3 20.6 197.8 415.7
Exercise of share options 187,059 187,059 2.1 2.1
Acquisition of treasury shares -500,000 -500,000
Transfer of treasury shares 53,669 53,669
31 December 2014 31,737,007 67,287,430 99,024,437* 197.3 22.8 197.8 417.8
Transfer of treasury shares 117,738 117,738
31 December 2015 31,737,007 67,405,168 99,142,175* 197.3 22.8 197.8 417.8
Number of votes 317,370,070 67,405,168 384,775,238
* Excluding treasury shares which totalled 877,577 (995,315) at the end of the financial year.
Treasury shares
Authorised by the General Meeting, the Board of Directors acquired a total of 700,000 own B shares (purchase price €23.7 million) in the financial year 2011 and a total of 500,000 own B shares (purchase price €16.1 million) in the financial year 2014. The total prices paid for the shares have been deducted from retained earnings in equity. The shares are held by the Company as treasury shares and the Company Board is entitled to transfer them. Based on the authorisations to issue own shares and the fulfilment of the vesting criteria of the 2013 vesting period of Kesko's share-based compensation plans, the Board granted a total of 50,520 own shares held by the Company as treasury shares, and based on the fulfilment of the 2014 vesting period, a total of 120,022 own shares held by the Company as treasury shares to the persons included in the target groups of the vesting periods. In addition, Mikko Helander, the Company President and CEO as from 1 January 2015, was granted 8,791 shares held by the Company as treasury shares in December 2014. The transfers of treasury shares were announced in a stock exchange release on 24 March 2014, 25 March 2014, 17 December 2014, 1 April 2015 and 7 April 2015. During the financial year, a total of 2,284 shares already granted were returned to the Company in accordance with the terms and conditions of the share-based compensation plan. At the end of the financial year, the Company held 877,577 own B shares (995,315 B shares) as treasury shares. The €27.5 million (€31.5 million) acquisition cost of these shares has been deducted from retained earnings in equity. Details of the share-based payments are disclosed in note 30.
After the balance sheet date, the Board of Directors has proposed that €2.50 per share be distributed as dividends. A dividend of €1.50 per share was distributed on the profit for 2014.
Equity and reserves
Equity consists of share capital, share premium, reserve of invested non-restricted equity, other reserves, revaluation reserve, currency translation differences and retained earnings net of treasury shares. In addition, the portion of accumulated depreciation difference and optional provisions net of deferred tax liabilities are included in equity.
Share premium
The amount exceeding the par value of share received by the Company in connection with share subscriptions was recorded in the sshare premium in cases where options had been granted under the old Limited Liability Companies Act (29 Sept. 1978/734). As at the end of the financial year, the share premium was €197.8 million.
Reserve of invested non-restricted equity
The reserve of invested non-restricted equity, €22.8 million, includes the other equity-related investments and share subscription prices to the extent not designated to be included in share capital.
Other reserves
Other reserves, a total of €242.8 million, have mainly been created and increased as a result of resolutions by the General Meeting. Other reserves mainly comprise contingency reserves to a total amount of €242.3 million at the end of the financial year.
Currency translation differences
Currency translation differences arise from the translation of foreign operations’ financial statements. Gains and losses arising from net investment hedges in foreign operations are also included in currency translation differences, provided they qualify for hedge accounting. The change in currency translation differences is stated within comprehensive income.
Revaluation reserve
The revaluation reserve includes the change in the fair value of available-for-sale financial instruments and the effective portion of the change in the fair value of derivatives for which cash flow hedge accounting is applied. Cash flow hedges include electricity derivatives and interest rate derivatives hedging the Private Placement note interest. The change in the reserve is stated within comprehensive income.
Result of cash flow hedging
Hedge accounting is applied to hedging electricity price risk. As a result, an amount of €2.6 million (€2.4 million) was removed from equity and included in the income statement as purchase cost adjustment, and €-3.2 million (€-1.0 million) was recognised in equity, respectively. Their combined effect on the revaluation reserve for the year was €-0.5 million (€1.4 million) before accounting for deferred tax assets.
A fair value change of €0.5 million (€-0.3 million) was recognised in equity for the USD-denominated Private Placement facility before accounting for deferred taxes. In addition, a €0.5 million (€0.6 million) interest expense adjustment for interest rate derivatives was recognised in the income statement.