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Equity

12 Months Ended

Dec. 31, 2021

18.

Equity

As of December 31, 2019 and 2020, common stock consists of the following:

	Number of shares		Nominal value
Fixed Capital
Series B		476,850,000	Ps.	5,257,319
Series BB		84,150,000		927,763
Total		561,000,000	Ps.	6,185,082

As of December 31, 2021, common stock consists of the following:

	Number of shares		Nominal value
Fixed Capital
Series B		446,739,215	Ps.	144,823
Series BB		78,836,332		25,558
Total		525,575,547	Ps.	170,381

As of December 31, 2021, all shares are fully subscribed and paid. The Company’s shares are represented by common ordinary shares and without nominal value. Series “BB” shares, which may represent up to 15% of common stock, may only be transferred upon prior conversion into Series “B” shares, based on certain time restrictions.

Each share of Series “B” and “BB” gives the holder the right to one vote at any Ordinary Shareholders’ Meeting. According to the Company’s bylaws, shareholders of Series “B” shares either individually or jointly with their related parties, cannot hold more than 10% of the total outstanding common stock of the Company, and therefore are prohibited from exceeding such limits by participating through trusts, agreements, social pacts or bylaws, pyramid schemes or any other mechanism that provides a larger share than legally allowed. Additionally, the Company’s bylaws provide that if a person individually or jointly with its related parties, acquires a percentage of shares exceeding the limits of participation previously mentioned, the person or group of persons will be required to sell the excess over what is allowed through a public offering, during which time, the shares owned over the 10% threshold by such individuals will not have voting rights and cannot be represented in any Stockholder Meeting. Furthermore, the shareholders of Series “BB” shares, either individually or jointly with their related parties, may also be owners of shares of Series “B” shares, regardless of the shares they hold in the aggregate of Series “B” and Series “BB”. However, for those shareholders of the Series “BB” shares, their votes will be limited to no more than 10% of the voting common stock, and any additional participation is required to vote in the same way of the majority of the votes in any Stockholder Meeting.

Shareholders of Series “BB” shares are entitled to elect four members to the board of directors and their alternates, whereas shareholders of Series “B” shares with rights to vote, even limited or restricted, that individually or together owning 10% or more of the Company’s capital stock is entitled to elect one member to the board of directors at a Shareholders’ Meeting, and in such instances, such a shareholder or group of shareholders may not exercise the right to vote for the board members corresponding to the majority. If any shareholder or group of shareholders representing at least 10% of the common shares of which the common stock is comprised, exercises the right to appoint a board member, such a shareholder will not have the right to vote in the designation of the board members that correspond to appointment by the majority of Series “B” shareholders. The total number of members of the Board of Directors of the Company is 11, therefore holders of Series “B” shares have the right to appoint only seven members.

The members of the Board of Directors appointed by the Shareholders of the Series “BB” will have the ability to make the following valid designations: (i) upon consultation with the Company’s Nomination and Compensation Committee, appointment and dismissal of the Chief Executive Officer and the top-level executive officers; (ii) appointment of three of the six members of the Operating Committee and three alternates, and the number of members and their alternates to the Audit Committee, including the acquisition, nominations and compensation corresponding to 20% (twenty percent) of the total members, with the understanding that there will be at least one member and alternate, for each of them, iii) in the creation and determination of the Operating Committee whom are not part of the Company, members of the Board of Directors or the Company's officers.

For the Audit Committee, is complying with the legal restrictions of independence.

In an Ordinary Shareholders’ Meeting held on April 23, 2019, the shareholders approved a dividend payment of Ps.8.42 per outstanding shares at the date of each payment, excluding shares repurchased in accordance with Article 56 of the Securities Market Law. The first payment for Ps.4.21 per outstanding share was made on August 29, 2019 of Ps.2,212,673 and the second payment for Ps.4.21 per outstanding share was on November 20, 2019 of Ps.2,212,673. In the same Shareholders´ meeting the reserve for repurchase of shares approved at the Shareholders´ Meeting held on April 25, 2018 of Ps.1,250,000 was canceled, and simultaneously the Shareholders approved a maximum amount of Ps.1,550,000 for the reserve for repurchase of shares to be executed in the next twelve-month period, in case that this will be determinate convenient or necessary by the management of the Company.

In a General Extraordinary Shareholders’ Meeting held on April 23, 2019, the shareholders approved a capital reduction of Ps.3.03 per outstanding shares for the total of Ps.1,592,494. The payment was made on May 17, 2019.

In an Ordinary Shareholders’ Meeting held on July 1, 2020, the stockholders approved the cancellation of the remnant of tge repurchase fund for Ps.1,550,000 approved in an Ordinary General Shareholders´ Meeting held on April 23, 2019 , and a maximum amount of resources allocated was approved for the repurchase of the company's own shares of Ps.1,550,000 during the 12 months following its approval, if the Company’s management determines it convenient or necessary.

In an Ordinary Shareholders' Meeting held on April 27, 2021, the stockholders approved the cancellation of the remnant of the repurchase fund for Ps.1,550,000, approved in an Ordinary General Shareholders' Meeting held on July 1, 2020 and a maximum amount of resources allocated was approved for the repurchase of the company's own shares of Ps.3,000,000 during the 12 months following its approval, if the Company's management determines it convenient or necessary.

In a General Extraordinary Meeting of Shareholders on April 27, 2021, the stockholders approved the following: i) the cancellation of 35,424,453 shares that were held in treasury as of December 31, 2020, ii) a capital reduction of Ps.3.823095061582 pesos per outstanding share at the time of payment, which was paid on May 28, 2021 for Ps.2,000,000.

In an Ordinary General Shareholders' Meeting held on September 14, 2021, the stockholders approved the proposal to increase the maximum amount of resources allocated for the repurchase of the company's own shares from an additional Ps.2,000,000 to the Ps.3,000,000 approved at the Ordinary General Shareholders' Meeting held on April 27, 2021, to be exercised during the 12 months after the approval, if the Company's management determines it convenient or necessary.

In a General Extraordinary Shareholders' Meeting held on September 14, 2021, a capital reduction of Ps.7.80 pesos per outstanding share was approved, which was paid on September 28, 2021 for Ps.4,014,701.

General Corporate Law requires that at least 5% of the unconsolidated net income of the year, be transferred to the legal reserve until the reserve equals 20% of capital stock at par value (nominal pesos). The legal reserve may be capitalized but may not be distributed, except in the form of stock dividends, until the entity is dissolved. The legal reserve must be replenished if it is reduced for any reason. As of December 31, 2019, 2020 and 2021, the legal reserve, in nominal pesos, was Ps.1,592,551, in the three years corresponding to 25.7%, 25.7% and 934.7%, of the common stock, respectively.

As of December 31, 2021, the Company has a maximum amount of funds approved to repurchase shares of the Company for Ps.5,531,292. From the approved amount, 13,273,970 shares have been repurchased for a total of Ps.3,000,037, corresponding to repurchases made from March 2021 to December 2021. The remaining balance of Ps.2,531,255 is available to repurchase shares.

Shareholders’ equity distribution, except for the restatement amounts of the common stock contributed and the Net tax income account, will be subject to an ISR tax, calculated at the tax rate applicable to the distribution year. This corporate level dividend income tax on the distribution of earnings may be applied as a credit against ISR corresponds to the fiscal year in which the dividend was paid and the subsequent two fiscal years following the date in which the dividend was paid. Starting in 2014, dividends distributed to shareholders that originate from tax retained earnings generated from 2014 and later, will generate an additional withholding tax of 10% that is directly attributable to non-Mexican and individual shareholders receiving the dividend.

The balances of Shareholders’ equity tax accounts as of December 31, 2019, 2020 and 2021 were as follows:

	2019		2020		2021
Contributed capital account	Ps.	25,621,413	Ps.	26,428,488	Ps.	21,903,565
Net tax income account		4,840,176		6,826,301		11,743,049
Stockholders equity tax account	Ps.	30,461,589	Ps.	33,254,789	Ps.	33,646,614

In years 2019, 2020 and 2021 the balance of other comprehensive income consists of the reserve for foreign currency translation of DCA, MBJA and PACKAL from functional currency (euro and US dollar respectively) to the reporting currency (Mexican peso), the effects of the remeasurements of the employee benefit, the net income tax and the reserve for cash flow hedges financial instruments.