Atlas Copco - Annual Report 1999

18
Shareholders’ equity
Group Share Restricted Retained
capital reserves earnings
Opening balance, Jan. 1 918 5,195 9,154
Dividend to shareholders –826
New issue of shares 130 3,994
Statute-barred dividend 0
Transfers between restricted
equity and retained earnings 626 –626
Equity hedging –128
Translation differences
for the year 201
Profit for the year 2,247
Closing balance, Dec. 31 1,048 9,815 10,022
Parent Company Share Share Legal Retained
capital premium reserve earnings
reserve
Opening balance, Jan. 1 918 – 1,737 3,807
Dividend to shareholders –826
New issues of shares 130 3,994
Statute-barred dividend 0
Profit for the year 1,037
Closing balance, Dec. 31 1,048 3,994 1,737 4,018
To strengthen the Group’s capital base and enhance financial
flexibility following the acquisition of Rental Service Corporation,
an Extraordinary General Meeting held on September 6,
1999, approved the issue of new shares with preferential rights
to existing shareholders. The new shares were issued at a subscription
price of SEK 160 per share at a ratio of 1:7. In October
1999, the issue provided the Company with net proceeds of
4,125 after deduction for issue expenses of 50.
Group shareholders’ equity has been affected by translation
differences arising from the application of the currentrate
method. The accumulated translation difference in equity
since beginning of 1992 amounts to 1,144 (1,071). Translation
differences in 1999 amount to 201 and have been reduced by
128 through hedging the net assets of certain subsidiaries.
The Atlas Copco Group’s retained earnings are defined as
follows: Parent Company’s retained earnings plus the Group’s
share in each subsidiary’s retained earnings, to the extent that
they can be distributed without writing down the shares in the
subsidiary.
This amount has been reduced by deducting the Group’s
share in the accumulated losses and other reductions of capital
in subsidiaries to the extent that these amounts have not affected
share values in the Parent Company’s accounts. Internal
profit eliminated in the consolidated balance sheet has also
been charged against the Group’s retained earnings.
Of the Group’s retained earnings, 20 will be transferred to
restricted reserves based on the proposals of the board of
directors in each company.
Any evaluation of the Atlas Copco Group’s retained earnings
and net profit for the year should take into account that a
substantial portion is earned by companies outside Sweden
and that in certain cases profits transferred to the Parent Company
are subject to taxation or restrictions.
19
Untaxed reserves
NOTES TO THE FINANCIAL STATEMENTS
Untaxed reserves are reported in the Parent Company Balance
Sheet as a compound item; the breakdown into individual items
is shown below. These are totally eliminated in the consolidated
accounts, as described in Accounting principles, page 15. Of the
Parent Company’s total untaxed reserves of 1,453, deferred tax
accounts for 407, reported in the consolidated accounts.
Parent Company
1999 1998
Additional tax depreciation
Buildings – 2
Equipment etc. 1 –
Tax allocation reserve 1,229 1,075
Foreign exchange reserve 166 207
Tax equalization reserve 57 114
1,453 1,398
Provisions have been made to the tax allocation reserve as
shown below:
1999
1995 240
1996 253
1997 261
1998 144
1999 177
2000 154
1,229
ATLAS COPCO 1999 25