Note 23
Financial statements - Notes to the consolidated financial statements
Common shares and additional paid-in capital
Ahold common shares are listed on Euronext Amsterdam.
On December 22, 2006, Ahold completed the delisting of its
shares from the Zurich Stock Exchange. Additionally,
Ahold's common shares are listed on the NYSE in the United
States in the form of American Depositary Shares ("ADSs"),
represented by American Depositary Receipts ("ADRs").
The depositary for the ADSs is The Bank of New York. Each
ADS represents the right to receive one common share.
Changes in the number of common shares were as follows:
Balance as of December 28, 2003
Issue of common shares
Equity settled share-based payments
Converted subordinated notes
1,552,603
1,634
17
9
Balance as of January 2, 2005
1,554,263
Issue of common shares
Equity settled share-based payments
O O
O LO
(j)
Balance as of January 1, 2006
1,555,313
Issue of common shares
Equity settled share-based payments
365
Balance as of December 31, 2006
1,555,678
The increase of additional paid-in capital in 2006 primarily
relates to tax on share issuance costs incurred in 2003
(EUR 29). For further information on taxes, see Note 11.
Cumulative preferred shares
The Company's Articles of Association provide for the
possible issuance of cumulative preferred shares. The
Company believes that its ability to issue this class of shares
could prevent, or at least delay, an attempt by a potential
bidder from making a hostile takeover bid and may also
safeguard the interests of the Company and all stakeholders
in the Company and resist influences which might conflict
with those interests by affecting the Company's continuity,
independence or identity. No cumulative preferred shares
were outstanding as of December 31, 2006 or during 2006,
2005 and 2004.
In March 1989, the Company entered into an agreement
with Stichting Ahold Continuïteit ("SAC") as amended and
restated in April 1994, March 1997, December 2001 and
December 2003 (the "Option Agreement"). Pursuant to the
Option Agreement, SAC was granted an option, without
payment, to acquire from the Company, from time to time
until December 2016, cumulative preferred shares up to a
total par value that is equal to the total par value of all issued
and outstanding shares of Ahold's share capital, excluding
cumulative preferred shares, at the time of exercising the
option. The Option Agreement provides for an increase of
the total par value of cumulative preferred shares under
option, taking into account the new, increased authorized
share capital. The holders of the cumulative preferred
shares are entitled to 2,000 votes per share and a
cumulative dividend expressed as a percentage of the
amount called-up and paid-in to purchase the cumulative
preferred shares. The percentage to be applied is the sum of
(1) the average basic refinancing transaction interest rate as
set by the European Central Bank - measured by the
number of days during which that rate was in force in the
fiscal year over which the dividend is paid - plus
2.1 percent, and (2) the average interest surcharge rate -
measured by the number of days during which that rate was
in force in the fiscal year over which the dividend is paid -
that would be charged by the credit institution in the
Netherlands which, according to its balance sheet total as at
the close of the fiscal year immediately preceding the fiscal
year over which the dividend is paid, is the largest credit
institution in the Netherlands. The minimum percentage to
be applied is 5.75 percent. Subject to limited exceptions,
any potential transfer of cumulative preferred shares
requires the approval of the Corporate Executive Board.
Cumulative preferred shares can only be issued in registered
form. No share certificates are issued for cumulative
preferred shares. The Company may stipulate that only
25 percent of the par value will be paid upon subscription
for cumulative preferred shares until payment in full is later
required by the Company. SAC would then only be entitled
to a market-based interest return on its investment.
SAC is a foundation organized under the laws of the
Netherlands. Its statutory purpose is to safeguard the
interests of the Company and all stakeholders in the
Company and to resist to the best of its ability influences
which might conflict with those interests by affecting the
Company's continuity, independence or identity. In the case
of liquidation, the SAC board of directors will decide on the
use of any remaining residual assets. The SAC board of
directors has four members. The members are appointed
by the board of SAC itself.
Legal reserves
Ahold is a company incorporated under Dutch law. In
accordance with the Netherlands Civil Code, legal reserves
have to be established in certain circumstances. The
currency translation reserve and cash flow hedging reserve
are both legal reserves. The other legal reserves primarily
consist of the cumulative share in income of joint ventures
and associates less dividends received from these joint
ventures and associates, adjusted for any direct equity
movements of joint ventures and associates. Legal reserves
are not available for distribution to the Company's
shareholders. If the currency translation reserve or the cash
flow hedging reserve has a negative balance, distributions to
the Company's shareholders are restricted to the extent of
the negative balance.
The addition to other legal reserves of EUR 32 includes a
revaluation adjustment of ICA (EUR 33), resulting from the
step acquisition of the remaining stake in the joint venture
ICA Baltics AB. The adjustment to the fair values relating to
the previously held interest is recognized in equity.
Number of common shares issued
and fully paid (x 1,000)
94 Ahold Annual Report 2006
