Richemont SA is a Luxembourg holding company, incorporated on 5 March 1979. It is a wholly owned subsidiary of Compagnie Financière Richemont SA, Geneva,Switzerland.
The Company's accounts are included in the consolidated accounts established by Compagnie Financière Richemont SA. These consolidated accounts can be obtained at the registered office of that company at 8 Boulevard James Fazy, 1201 Geneva, Switzerland.
These comprise investments in subsidiary companies, which are stated at cost.
The loans to and from Group companies are principally interest free and are repayable on demand.
| 2005 € m |
2004 € m |
|
|---|---|---|
| Issued and fully paid 1 914 000 shares of no par value | 215.0 | 215.0 |
| 2005 € m |
2004 € m |
|
|---|---|---|
| Reserve established in respect of 574 200 000 participation certificates with no par value | 645.0 | 645.0 |
The Company has set aside a participation reserve amounting to € 645.0 million and issued, in respect of this reserve, 522 000 000 (2004: 522 000 000) bearer participation certificates with no par value and 52 200 000 (2004: 52 200 000) registered participation certificates with no par value. Bearer and registered participation certificates have identical rights.
The legal reserve amounting to € 21.5 million (2004: € 21.5 million) is not available for distribution.
The general reserve amounting to € 427.0 million (2004: € 427.0 million) is available for distribution subject to the approval of the shareholders.
The reserve is created in respect of Richemont 'A' units purchased by a subsidiary company.
During the year the Group did not purchase any 'A' units (2004: 6 345 960 'A' units were purchased in the open market for a total consideration of € 133.8 million in order to hedge obligations under the Group's stock option plan and a further 120 150 units were repurchased from executives).
During the year 4 318 652 'A' units (2004: 1 597 850 'A' units) were sold to executives of the Group under the Group's stock option plan.
At 31 March 2005, following these transactions, the Group held 23 968 608 Richemont 'A' units (2004: 28 287 260 Richemont 'A' units).
During the year the Group purchased a call option to acquire 4 000 000 Richemont 'A' units in order to hedge obligations under the Group's stock option plan. No part of this option contract was exercised in the year.
A Richemont 'A' unit is composed of one 'A' bearer share issued by Compagnie Financière Richemont SA and one participation certificate issued by the Company. At the time of formation of Richemont, 25 per cent of the value of an 'A' unit was attributed to the 'A' bearer share issued by Compagnie Financière Richemont SA and 75 per cent to the participation certificate issued by the Company. In terms of the reserve for own participation certificates established in respect of the units purchased, an amount of € 69.0 million, being 75 per cent of the cost of units sold to Group executives during the year, has been transferred out of the reserve for own participation certificates. This amount has been partly offset by an amount of € 46.1 million, being 75 per cent of an adjustment due to a change in the method of valuing the Group's stock of units. The net amount of € 22.9 million has been transferred out of the reserve for own participation certificates (2004: € 57.7 million had been transferred to the reserve for own participation certificates). The remaining 25 per cent of the adjusted cost of units sold has been transferred out of a reserve for own shares in the balance sheet of Compagnie Financière Richemont SA.
| 2005 € m |
2004 € m |
|
|---|---|---|
| Balance at 1 April of prior year retained earnings before appropriation | 514.9 | 413.2 |
| Dividend paid on share capital | (74.4) | (59.1) |
| Dividend paid on participation reserve | (229.7) | (183.8) |
| Balance at 1 April, after appropriation | 210.8 | 170.3 |
| Net transfer from/(to) reserve for own participation certificates | 22.9 | (57.7) |
| Net profit for the year | 954.5 | 402.3 |
| Balance at 31 March | 1 188.2 | 514.9 |
The retained earnings at 31 March are stated before the proposed appropriation as set out below.
These borrowings were dematerialised treasury notes issued under a Commercial Paper Programme which allowed Richemont SA, using a bank as intermediary, to borrow up to € 100.0 million for a duration of less than one year in the European retail market. All amounts were repaid in the year and the programme has been terminated.
At 31 March 2005 the Company had given guarantees totalling € 78.2 million (2004: € 681.5 million) to cover obligations of various Group companies amounting to € 28.3 million (2004: € 166.3 million). The Company does not foresee any liability arising under these guarantees and, therefore, no provision has been made.
The directors believe that there are no other contingent liabilities.
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