Parent Company
According to Swedish law, shareholder’s equity shall be divided between funds that may not be paid as dividends (restricted funds) and funds that may be paid as dividends (unrestricted funds).
Restricted reserves
Restricted funds consist of share capital and the following reserves:
- Revaluation reserve
When a tangible or financial non-current asset is revalued, the amount by which it is revalued is allocated to a revaluation reserve. - Legal reserve
The purpose of the legal reserve is to set aside the portion of net earnings not required to cover a loss brought forward.
Unrestricted equity
- Unrestricted funds consist of retained earnings and premium reserve: Retained earnings
Consist of the preceding year’s unrestricted equity after any allocation to legal reserve and after any dividends paid. Constitute the total unrestricted equity together with this year’s income, i.e. the amount available for payment as dividends to the shareholders. - Premium reserve
When shares are issued at a premium, when payment for shares is made in excess of their nominal value, an amount equivalent to the amount received in excess of the quotient value of the shares must be credited to the premium reserve.
Share capital
Distribution and change of class of shares
| Classes of shares | Shares outstanding | Number of votes |
|---|---|---|
| Class A shares, 10 votes per share | 1,094,654 | 10,946,540 |
| Class B shares, 1 vote per share | 22,078,655 | 22,078,655 |
| Class B shares held in treasury | –1,195,500 | –1,195,500 |
| Total | 21,977,809 | 31,829,695 |
|
|
Class A shares | Class B shares |
|---|---|---|
| Number of shares outstanding at beginning of period | 1,095,998 | 23,318,234 |
| Redemption of shares |
|
–1,240,923 |
| Conversion of class A shares | –1,344 | 1,344 |
| Number of shares outstanding at end of period | 1,094,654 | 22,078,655 |
| Repurchased shares | Class A shares | Class B shares |
|---|---|---|
| Number of repurchased shares at beginning of period | – | 1,936,423 |
| Redemption of shares |
|
–1,240,923 |
| Shares repurchased during the year |
|
500,000 |
| Number of shares held in treasury at end of period | – | 1,195,500 |
The share capital amounted to MSEK 48.9 at the end of the period. The class B shares is listed on OMX Nordic Exchange Stockholm. According to the Articles of Association the share capital is a minimum of MSEK 25 and a maximum of MSEK 100. The quotient value of the share is SEK 2.11.
The proposed dividend for the year is SEK 1.50 (1.50) per share.
The option programmes described in Note 6 are secured by shares held in treasury at an average price of SEK 25.57.
When the call options are exercised at a redemption price of SEK 36.00, SEK 44.00 and SEK 36.80 per share, respectively, the number of shares outstanding can potentially increase by the number of redeemed call options, which are 675,000. In such a case the number of shares held in treasury decreases accordingly.
Group
The Group’s equity consists of share capital and the following items:
Other contributed capital
Refers to equity capital contributed by the owners.
Reserves
Reserves refer to restatement reserve hedging reserve.
The restatement reserve includes all FX rate translation differences that arise when translating the financial statements of foreign operations. These entities prepare their financial statements in other currencies than the Group and the Parent Company, which report in Swedish kronor (SEK). The restatement reserve additionally consists of exchange rate differences that arise upon revaluation of net investments in foreign operations.
The hedging reserve includes the effective portion of the accumulated net change in fair value of a cash flow hedging instrument attributable to hedging transactions that have not yet transpired.
Retained earnings
Retained earnings include earned profit in the Parent Company and its subsidiaries. Profit for the year is reported separately in the balance sheet. Prior provisions to the legal reserve, not including transferred premium reserves, are included in this equity item.
Capital management
The Group’s goal, as expressed in its finance policy, is to have a good capital structure and financial stability in the interest of retaining the confidence of investors, credit institutions and the market in general. In addition, this constitutes a foundation for continued development of the business operations. Capital is defined as total shareholders’ equity, not including minority interests.
The ambition of the Board of Directors is to retain a balance between a high return and the security of a large capital base. The Group’s goal is to achieve a return on equity of at least 25 percent per year. For the 2008/09 financial year the return was 14 percent (21).
The Group’s dividend policy is to pay a dividend amounting to 30-50 percent of the year’s profit. Before the 2009 Annual Meeting the Board of Directors has proposed a dividend of SEK 1.50 (1.50) per share. The proposed dividend translates to a dividend share of 49 percent (38). The dividend is also equivalent to 6 percent (7) of consolidated equity as of 31 March 2009.
The Group’s Board of Directors has a mandate from the 2008 Annual Meeting to repurchase shares. The Group has made repurchases of shares on several occasions. In part, the timing of these repurchases has been determined by the market price of the share. A portion of the repurchased shares are intended cover the Group’s commitment under outstanding option programmes, where members of senior management and certain key persons have the opportunity to acquire class B shares by exercising acquired options. There is no formal repurchase plan. Decisions to buy and sell shares in the Group are instead made by the Board of Directors within the framework of the mandate given by the Annual Meeting. The Board of Directors is again proposing to the 2009 Annual Meeting to pass a resolution to repurchase own shares. There was no change in the Group’s capital management during the year.
