Kesko's year 2007

Year 2007
Note 35
Contingent liabilities
Divisions The Group
Financial
statements
Further information
Commitments
€ million
Collateral given for own commitments
2007 2006
Pledges 38 57
Mortgages 26 26
Guarantees
Other commitments and contingent
101 118
liabilities 50 62
Collateral given for shareholders
Guarantees 1 1
Collateral given for others
Other commitments and contingent
liabilities 6 9
Guarantees 3 4
Note 36
Operating leases
Group as the lessee
Minimum lease payments under non-cancellable operating lease
agreements:
€ million 2007 2006
Not later than 1 year 285.3 191.9
Later than 1 year and
not later than 5 years 830.5 767.3
Later than 5 years 675.8 570.9
Total 1,791.5 1,530.1
Expected future minimum lease
payments under non-cancellable
sublease agreements 46.4 40.3
Lease and sublease payments recognised
for the period:
Minimum lease expenses 262.6 246.5
Contingent lease expenses 0.3 2.0
Sublease payments (-income/+expense) -16.4 -17.6
The 2007 income statement includes operating lease payments in a total
amount of €317.7 million (€290.1 million).
Kesko leases retail and logistics premises for its operating activities.
Most of the leases are index-linked and in conformity with local market
practice. Future minimum lease payments for the comparison year
(2006) have been adjusted to correspond to their actual amounts.
Group as the lessor
Minimum lease payments based on non-cancellable operating leases:
115
€ million 2007 2006
Not later than 1 year 8.9 11.2
Later than 1 year and
not later than 5 years 15.1 18.3
Later than 5 years 20.0 22.5
Total 44.1 52.0
Aggregate contingent rents charged to
the income statement 0.2 0.7
Kesko leases premises to entrepreneurs other than K-retailers in order
that the total service offer of a store site support its profit generation
potential. Such premises typically include so-called store entrance stores
at large retail outlets.
Note 37
Share-based payments
The Group operates option plans as part of the management's incentive
and commitment arrangements. Each option gives its holder the right to
subscribe for one Kesko Corporation B share at a price and during the
period specified in the terms of the option scheme. The options are forfeit
if the employee leaves the company before the end of the vesting
period.
Year 2003 option plan
On 31 March 2003, the Annual General Meeting resolved to grant a total
of 1,800,000 options with no consideration to the management of the
Kesko Group as well as to a wholly-owned subsidiary of Kesko Corporation.
A deviation was made from the shareholders' pre-emptive subscription
rights, since the stock options form a part of the incentive and commitment
programme for the management. Each option entitles its holder
to subscribe for one new Kesko Corporation B share. The options are
marked with the symbols 2003D (KESBVEW103), 2003E (KESBVEW203)
and 2003F (KESBVEW303) in units of 600,000 options each. The share
subscription periods of options are:
• 2003D 1 April 2005–30 April 2008
• 2003E 1 April 2006–30 April 2009 and
• 2003F 1 April 2007–30 April 2010.
The original exercise price per share of option 2003D was equal to the
volume weighted average price of a Kesko Corporation B share on the
Helsinki Stock Exchange between 1 April-30 April 2003 (€9.63), that of
option 2003E between 1 April-30 April 2004 (€15.19) and that of option
2003F between 1 April-30 April 2005 (€19.08). The exercise prices were
reduced by the amounts of dividends per share distributed after the end
of the above period for the determination of the exercise price, but before
the exercise date. At the end of 2007, the price of a B share subscribed for
with option 2003D was €3.03 and with option 2003E it was €10.59, and
the exercise period started on 1 April 2006. At the end of 2007, the price