Kesko's year 2007

98 Kesko's year 2007
Note 9
Income taxes
Income taxes in the income statement
€ million 2007 2006
Current tax -78.2 -95.1
Tax for prior periods -7.5 -24.2
Deferred taxes -4.5 12.2
Total -90.2 -107.1
Reconciliation between tax expense recognised in the income statement
and tax calculated at domestic rate:
Profit before tax 369.3 357.8
Tax at parent's rate (26%) -96.0 -93.0
Effect of foreign subsidiaries' different
tax rates 5.0 6.0
Effect of income not subject to tax
Effect of expenses not deductible for
12.8 1.4
tax purposes -11.0 -8.3
Effect of tax losses -0.7 7.8
Effect of consolidation and elimination 2.2 0.5
Taxes for prior periods -7.5 -24.2
Adjustment of prior period deferred taxes 2.4 0.0
Others 2.6 2.7
Taxes in the income statement -90.2 -107.1
Most part, €–5.8 million, of prior period taxes relate to Rautakesko Ltd's
2001 fiscal year, on which the Helsinki Administrative Court gave its
decision in 2007. Most part of the prior period taxes in the amount of
€–24.2 million recorded in 2006 consisted of the recovery of the €67.3
million impairment made by Kesko Corporation on the shares of
Hämeenkylän Kauppa Oy (former Tuko Oy) in 1996.
Note 10
Earnings per share
Basic earnings per share is calculated by dividing the net profit attributable
to the parent's equity holders by the weighted average number of
shares outstanding during the period. Diluted earnings per share is
calculated by adjusting the weighted average number of all shares to
assume conversion of all potentially dilutive shares. The Group operates
a stock option scheme with a dilutive effect, which increases the number
of stocks. The stock options have a dilutive effect when their exercise
price is lower than the fair value of a share. The dilutive effect is the
number of shares which has to be issued without consideration, because
the Group could not use the assets received from the exercise of the stock
options to issue an equal number of shares at fair value. The fair value of
a share is based on the average share price during the period.
€ million 2007 2006
Profit for the period attributable
to parent's equity holders, € million
Profit for the period attributable
to parent's equity holders, continuing
285.0 368.7
operations, € million
Profit for the period attributable
to parent's equity holders, discontinued
256.8 240.0
operations, € million 28.2 128.7
Number of shares
Weighted average of outstanding shares 97,665,884 97,152,281
Effect of options granted
Diluted weighted average
729,435 874,714
of outstanding shares 98,395,319 98,026,995
Basic earnings per share 2.92 3.80
Diluted earnings per share 2.90 3.76
Basic earnings per share from continuing
operations
Diluted earnings per share from
2.63 2.47
continuing operations 2.61 2.45
Basic earnings per share from
discontinued operations
Diluted earnings per share from
0.29 1.33
discontinued operations 0.29 1.31