Volvo 1998 Annual Report Download - page 69

67
In accordance with the Swedish Companies Act, distribu-
tion of dividends is limited to the lesser of the unrestric-
ted equity shown in the consolidated or Parent Company
balance sheets after proposed appropriations to restric-
ted equity. Unrestricted equity in the Parent Company at
December 31, 1998 amounted to 49,995.
As of December 31, 1998, Volvo related foundation’s
holdings in Volvo were 1.3% of the share capital and
3.2% of the voting rights.
As shown in the consolidated balance sheet as of
December 31, 1998, unrestricted equity amounted to
48,307 (41,309; 40,652). It is estimated that 5 of this
amount will be allocated to restricted reserves.
Restricted Unrestricted
Change in shareholders’ equity Share capital reserves reserves Total equity
Balance December 31, 1995 2,318 14,264 34,618 51,200
Cash dividend — — (1,854) (1,854)
Distribution of shareholding in Swedish Match — — (4,117) (4,117)
Profit for the year — — 12,477 12,477
Effect of equity method of accounting 1— 373 (373) —
Transfer between unrestricted and restricted equity — 439 (439) —
Translation differences — (222) 87 (135)
Exchange differences on loans and futures contracts 2— — 40 40
Other changes — 52 213 265
Balance December 31, 1996 2,318 14,906 40,652 57,876
Cash dividend — — (1,993) (1,993)
Redemption of shares (113) — (5,694) (5,807)
Bonus issue of shares 441 (113) (328) —
Profit for the year — — 10,359 10,359
New issue of shares 3 113 — 116
Effect of equity method of accounting 1— (34) 34 —
Transfer between unrestricted and restricted equity — 92 (92) —
Translation differences — 1,396 (528) 868
Exchange differences on loans and futures contracts 2— — (665) (665)
Accumulated translation difference on the Renault holding 3— — (552) (552)
Other changes — 113 116 229
Balance December 31, 1997 2,649 16,473 41,309 60,431
Cash dividend — — (2,208) (2,208)
Profit for the year — — 8,638 8,638
Effect of equity method of accounting1— (466) 466 —
Transfer between unrestricted and restricted equity — 130 (130) —
Translation differences — 970 441 1,411
Exchange differences on loans and futures contracts 2— — (237) (237)
Other changes — (7) 28 21
Balance December 31, 1998 2,649 17,100 48,307 68,056
1 Mainly associated companies’ contributions to Group net in-
come, reduced by dividends received.
2 Hedged net investments in foreign subsidiaries and associat-
ed companies.
3 Difference pertains to Renault shares sold and, in connection
with the sale, has affected consolidated capital gains.
1996 1997 1998
Provisions for pensions 1,937 1,905 1,451
Provisions for other post-employment benefits 1,213 1,391 1,485
Total 3,150 3,296 2,936
Provisions for post-employment benefits Note 22
The amounts shown for Provisions for postemployment
benefits correspond to the actuarially calculated value of
obligations not insured with a third party or secured
through transfers of funds to pension foundations. The
amount of pensions falling due within one year is inclu-
ded. The Swedish Group companies have insured their
pension obligations with third parties.
Group pension costs in 1998 amounted to 3,567
(3,660; 3,446). The greater part of pension costs consist
of continuing payments to independent organizations
that administer pension plans.
In 1996 two Groupwide pension foundations for
employees in Swedish companies were formed to secure
commitments in accordance with the ITP plan. The Volvo