Kesko's Annual Report 2009

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120 Kesko financial statements 2009 would account for 4.67% of shares and 1.23% of all votes. The subscriptions made with stock options could raise the number of the company's shares to 101,688,793. As a result of the subscriptions, the voting rights carried by all shares could increase to 387,321,856 votes. STOCK OPTIONS DURING THE FINANCIAL YEAR 1 JANUARY–31 DECEMBER 2009 Main terms and conditions of the plans 2003 STOCK OPTIONS 2007 STOCK OPTIONS Grant date 31 March 2003 26 March 2007 Instrument stock option stock option Target group management management, other key personnel 2003D 2003E 2003F 2007A 2007B 2007C Original number of options 600,000 600,000 600,000 1,000,000 1,000,000 1,000,000 Number of shares per option 1 1 1 1 1 1 Original exercise price per share 9.63 € 15.19 € 19.08 € 45.82 € 26.57 € 16.84 € Dividend adjustment Yes Yes Yes Yes Yes Yes Exercise price 31 Dec. 2006 4.53 € 12.09 € 17.98 € - - - Exercise price 31 Dec. 2007 3.03 € 10.59 € 16.48 € 45.82 € - - Exercise price 31 Dec. 2008 2.00 € 8.99 € 14.88 € 44.22 € 26.57 € Exercise price 31 Dec. 2009 Fair value at grant date 7.99 € 13.88 € 43.22 € 25.57 € 16.84 € 17 Jul. 2007:2007A 50.25 € 19 Sep. 2007: 2007A 45.02 € 12 Dec. 2007:2007A 39.42 € 29 May 2008:2007B 26.47 € 27 May 2009:2007C 20.12 € First allocation, date 1 Apr. 2005 1 Apr. 2006 1 Apr. 2007 1 Apr. 2010 1 Apr. 2011 1 Apr. 2012 Expiry, date 30 Apr. 2008 30 Apr. 2009 30 Apr. 2010 30 Apr. 2012 30 Apr. 2013 30 Apr. 2014 Remaining vesting period, years expired expired 0.3 2.3 3.3 4.3 Plan participants at end of financial year - - 32 116 124 128 Movements in quantities and exercise prices 2009 2009 2003D 2003E 2003F 2003 STOCK OPTIONS 2007 STOCK OPTIONS Weighted average exercise price 2007A 2007B 2007C Weighted average exercise price Options outstanding at beginning of period 383,394 433,045 12.11 € 756,500 767,500 35.33 € Options available for grant at beginning of period 24,000 47,500 12.90 € 243,500 232,500 1,000,000 35.60 € Options granted during period 785,500 16.84 € Options forfeited during period 19,000 22,000 3,000 32.60 € Options exercised during period 383,394 113,281 9.33 € Options lapsed during period 24,000 7.99 € Options outstanding at end of period 319,764 13.88 € 737,500 745,500 782,500 28.30 € Options exercisable at end of period 367,264 13.88 € 1,000,000 1,000,000 1,000,000 28.54 € Average price weighted by grant date trading volume* 17.05 € 19.19 € The shares subscribed for with stock options entitle to dividends and carry other shareholder rights after the corresponding share capital increase has been entered in the Trade Register. The company has not granted other options or special rights entitling to shares. Kesko B share price at end of grant year 2007 37.72 € 2008 17.80 € 2009 23.08 € * for 2003E: trade volume weighted average price of a B share in January-April 2009, for 2003F: trade volume weighted average price of a B share in 2009
Movements in quantities and exercise prices 2008 2008 2003D 2003E 2003F Kesko financial statements 2009 2003 STOCK OPTIONS 2007 STOCK OPTIONS Weighted average exercise price 2007A 2007B 2007C 121 Weighted average exercise price Options outstanding at beginning of period 33,150 406,133 434,245 13.23 € 786,000 45.82 € Options available for grant at beginning of period 25,912 24,000 47,500 11.45 € 214,000 1,000,000 1,000,000 45.82 € Options granted during period 776,000 26.57 € Options forfeited during period 29,500 8,500 40.27 € Options exercised during period 33,150 22,739 1,200 5.05 € Options lapsed during period 25,912 2.00 € Options outstanding at end of period 383,394 433,045 12.11 € 756,500 767,500 35.33 € Options exercisable at end of period 407,394 480,545 12.18 € 1,000,000 1,000,000 1,000,000 35.40 € Average price weighted by grant date trading volume* 30.87 € 23.61 € 23.61 € * for 2003D: trade volume weighted average price of a B share in January-April 2008, for 2003E and 2003F: trade volume weighted average price of a B share in 2008 Fair value measurement For fair value measurement Kesko Corporation has consulted Alexander Corporate Finance Oy. The fair value of options has been calculated using the Black-Scholes share pricing model. The fair value of options determined on the date of the grant has been expensed over their vesting period. During the financial year 1 January-31 December 2009, the options contributed €8.1 million (€5.5 million) to the Group's profit. Black-Scholes model assumptions € million Granted in 2009 Granted in 2008 Granted in 2007 All options Number of options granted, pcs 785,500 776,000 789,000 2,350,500 B share average (weighted) price 20.12 € 26.47 € 49.37 € 32.03 € Average (weighted) exercise price 16.84 € 26.57 € 45.82 € 29.78 € Expected average (weighted) volatility 32.0% 27.4% 21.7% 27.0% Average (weighted) vesting period 4.9 yrs 4.9 yrs 4.8 yrs 4.9 yrs Average (weighted) risk-free interest rate 3.0% 4.4% 4.5% 4.0% Returned options (weighted average) 0.4% 3.9% 6.1% 4.09% Total fair value, € 6,320,122 6,406,920 11,697,744 24,424.787 The expected volatility of a Kesko B share has been estimated based on historic volatility using weekly changes over a period of time corresponding to the option's vesting period. The risk-free interest rate is the government zero coupon bond interest rate at the measurement date with a maturity equalling the option vesting period.
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Kesko’s year
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2 Kesko’s year 2009 Kesko in brie
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4 Kesko’s year 2009 Review by the
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6 Kesko’s year 2009 Year 2009 in
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Kesko is a highly valued listed tra
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uct and service benefits to custome
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the Pirkka magazine continued to in
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16 Kesko’s year 2009 K-food store
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18 Kesko’s year 2009 High-quality
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Kesko’s home and speciality goods
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Year 2009 In 2009, the net sales of
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Market shares and competitors Hyper
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28 Kesko’s year 2009 Products and
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30 Kesko’s year 2009 Through its
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32 Kesko’s year 2009 Responsibili
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VV-Auto and Konekesko make up the c
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market for agricultural machinery i
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Market shares VV-Auto Finland: Volk
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Real estate operations indicators f
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44 Kesko’s year 2009 Kesko is a g
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46 Kesko’s year 2009 The widest v
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Principles and indicators of respon
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effective stakeholder interaction w
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compare the responsibility practice
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member and expiring at the close of
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Decision-making, activities and mee
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A written managing director’s ser
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made by the Remuneration Committee
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programmes, for their competitive t
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the Audit Committee, and reports on
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Mikko Kosonen b. 1957, D.Sc. (Econ.
Page 71 and 72: Notice period and severance pay: 6
Page 73 and 74: Report by the Board of Directors Ja
Page 75 and 76: In January-December, two new K-raut
Page 77 and 78: The retail sales of the K-rauta and
Page 79 and 80: Significant risks and uncertainties
Page 81 and 82: Group performance indicators Kesko
Page 83 and 84: Net sales by segment, continuing op
Page 85 and 86: Calculation of performance indicato
Page 87 and 88: Consolidated Financial Statements C
Page 89 and 90: Consolidated statement of cash flow
Page 91 and 92: NOTE 1 Accounting policies for the
Page 93 and 94: Foreign currency items The consolid
Page 95 and 96: Other intangible assets The cost of
Page 97 and 98: exceed 10 percent of the higher rat
Page 99 and 100: cating resources, has been identifi
Page 101 and 102: Segment information 2008 Income sta
Page 103 and 104: Net assets of discontinued operatio
Page 105 and 106: Exchange differences recognised in
Page 107 and 108: Goodwill and intangible rights by s
Page 109 and 110: Property, plant and equipment inclu
Page 111 and 112: NOTE 18 Finance lease receivables K
Page 113 and 114: NOTE 20 Kesko financial statements
Page 115 and 116: A total amount of €12.6 million (
Page 117 and 118: Kesko financial statements 2009 Rev
Page 119 and 120: NOTE 29 Finance lease liabilities K
Page 121: Group as the lessor Minimum lease p
Page 125 and 126: NOTE 41 Financial risk management W
Page 127 and 128: Liquidity risk and sensitivity anal
Page 129 and 130: Kesko financial statements 2009 Bre
Page 131 and 132: Fair values of derivative financial
Page 133 and 134: with regard to business operations,
Page 135 and 136: In addition, the other operating ex
Page 137 and 138: Owned by other Group companies Domi
Page 139 and 140: Parent's balance sheet (FAS) € 31
Page 141 and 142: Kesko financial statements 2009 Not
Page 143 and 144: € million 2009 2008 Accumulated d
Page 145 and 146: Increase in share capital During th
Page 147 and 148: Signatures Signatures Helsinki, 4 F
Page 149 and 150: the record date, and whose custodia
Page 151 and 152: Share performance indicators Tradin
Page 153 and 154: Prices and trading of Kesko A and B
Page 155 and 156: Share capital and shares Kesko fina
Page 157 and 158: Information about Kesko for investo
Page 159 and 160: Kenkäkesko Ltd Kutojantie 4, FI-02
Page 161 and 162: Operations control system (ERP Ente
Page 163: www.kesko.fi Business ID 0109862-8
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Kesko's Annual Report 2009

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