Nokia 2003 Annual Report Download - page 140

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Notes to the Consolidated Financial Statements (Continued)
20. Fair value and other reserves (Continued)
In order to ensure that amounts deferred in the cash flow hedging reserve represent only the
effective portion of gains and losses on properly designated hedges of future transactions that
remain highly probable at the balance sheet date, Nokia has adopted a process under which all
derivative gains and losses are initially recognized in the profit and loss account. The appropriate
reserve balance is calculated at the end of each period and posted to equity.
Nokia continuously reviewed the underlying cash flows and the hedges allocated thereto, to
ensure that the amounts transferred to the Hedging Reserve during the year ended December 31,
2003 and 2002 did not include gains/losses on forward exchange contracts designated to hedge
forecasted sales or purchases that are no longer expected to occur. Because of the number of
transactions undertaken during each period and the process used to calculate the reserve balance,
separate disclosure of the transfers of gains and losses to and from the reserve would be
impractical.
All of the net fair value gains or losses recorded in the Fair value and other reserve at
December 31, 2003 on open forward foreign exchange contracts which hedge anticipated future
foreign currency sales or purchases are transferred from the Hedging Reserve to the profit and
loss account when the forecasted foreign currency cash flows occur, at various dates up to 1 year
from the balance sheet date.
21. The shares of the Parent Company
Nokia shares and share capital
Nokia has one class of shares. Each Nokia share entitles the holder to one (1) vote at General
Meetings of Nokia. With effect from April 10, 2000, the par value of the share is EUR 0.06.
The minimum share capital stipulated in the Articles of Association is EUR 170 million and the
maximum share capital is EUR 680 million. The share capital may be increased or reduced within
these limits without amending the Articles of Association. On December 31, 2003 the share capital
of Nokia Corporation was EUR 287,777,547.60 and the total number of shares and votes was
4,796,292,460.
On December 31, 2003 the total number of shares included 96,024,549 shares owned by the Group
companies with an aggregate par value of EUR 5,761,472.94 representing approximately 2.00% of
the total number of shares and votes.
Authorizations
Authorizations to increase the share capital
The Board of Directors had been authorized by Nokia shareholders at the Annual General Meeting
held on March 21, 2002 to decide on an increase of the share capital by a maximum of
EUR 55,800,000 offering a maximum of 930,000,000 new shares. In 2003, the Board of Directors did
not increase the share capital on the basis of this authorization. The authorization expired on
March 21, 2003.
At the Annual General Meeting held on March 27, 2003 Nokia shareholders authorized the Board of
Directors to decide on an increase of the share capital by a maximum of EUR 57,000,000, of which
a maximum of EUR 3,000,000 may result from incentive plans. The increase of the share capital
may consist of one or more issues offering a maximum of 950,000,000 new shares with a par
F-31