The financial statements represent the financial position of Compagnie Financière Richemont SA (‘the Company’) at 31 March 2006 and the results of its operations for the year then ended, prepared in accordance with Swiss law.
General expenses comprise the following:
| 2006 CHF m |
2005 CHF m |
||
|---|---|---|---|
| Personnel expenses | 4.0 | 3.1 | |
| Depreciation of property, plant and equipment | - | 0.1 | |
| Other | 4.4 | 5.0 | |
| 8.4 | 8.2 |
These comprise investments in wholly-owned subsidiary companies, which are stated at cost.
| 2006 CHF m |
2005 CHF m |
||
|---|---|---|---|
| Richemont SA, Luxembourg | 700.0 | 700.0 | |
| Other investments | 0.2 | 0.2 | |
| 700.2 | 700.2 |
| 2006 CHF m |
2005 CHF m |
||
|---|---|---|---|
| 522 000 000 ‘A’ bearer shares with a par value of CHF 1.00 each, fully paid | 522.0 | 522.0 | |
| 522 000 000 ‘B’ registered shares with a par value of CHF 0.10 each, fully paid | 52.2 | 52.2 | |
| 574.2 | 574.2 |
The legal reserve of CHF 117.6 million (2005: CHF 117.6 million) is not available for distribution.
The reserve is created in respect of Richemont ‘A’ units purchased by a subsidiary company.
The Group did not purchase any ‘A’ units in the open market or from executives in 2006 or 2005.
During the year 5 793 352 ‘A’ units (2005: 4 318 652 ‘A’ units) were sold to executives of the Group under the Group’s stock option plan.
At 31 March 2006, following these transactions, the Group held 18 175 256 Richemont ‘A’ units (2005: 23 968 608 Richemont ‘A’ units) with a cost of € 407.9 million. The reserve for own shares of CHF 153.8 million represents 25 per cent of this amount. The remaining 75 per cent is recorded in the balance sheet of Richemont SA.
A Richemont ‘A’ unit is composed of one ‘A’ bearer share issued by the Company and one participation certificate issued by Richemont SA. 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 the Company and 75 per cent to the participation certificate issued by Richemont SA. In terms of the reserve for own shares established in respect of the units purchased, an amount of CHF 60.3 million has been transferred out of the reserve for own shares (2005: CHF 14.2 million). The remaining 75 per cent of the adjusted cost of units sold has been transferred out of a reserve for own participation certificates in the balance sheet of Richemont SA.
During the year the Group sold call options to acquire 1 000 000 ‘A’ units and purchased call options to acquire 1 706 974 ‘A’ units (2005: the Group purchased call options to acquire 4 000 000 ‘A’ units) in order to hedge obligations under the Group‘s stock option plan. No part of these option contracts was exercised in 2006 or 2005.
| 2006 CHF m |
2005 CHF m |
||
|---|---|---|---|
| Balance at 1 April of prior year retained earnings | 491.0 | 363.6 | |
| Dividend paid | (35.5) | - | |
| Net transfer from reserve for own shares | 60.3 | 14.2 | |
| Balance at 1 April, after appropriations | 515.8 | 377.8 | |
| Net profit | 281.3 | 113.2 | |
| Balance at 31 March | 797.1 | 491.0 |
At 31 March 2006 the Company had given no guarantees, nor at 31 March 2005.
The directors believe that there are no contingent liabilities.
Pursuant to the requirements of the Swiss Federal Act on Stock Exchanges and Securities Trading and the associated ordinances, the Company received formal notification in December 2000 from Compagnie Financière Rupert that it held 522 000 000 ‘B’ registered shares, representing 50.0 per cent of the voting rights in the Company. In addition, Compagnie Financière Rupert has indicated that parties related to it held or controlled 160 694 ‘A’ bearer shares (either directly or through the medium of South African Depository Receipts), representing 0.02 per cent of the voting rights in the Company as at 31 March 2006.
Also pursuant to the requirements of the Swiss Federal Act on Stock Exchanges and Securities Trading and the associated ordinances, the Company received formal notification in May 2006 from Public Investment Corporation Limited, Pretoria, which invests funds on behalf of South African public sector entities, that accounts under its management held Richemont South African Depository Receipts equivalent to 52 559 740 ‘A’ bearer shares, representing 5.03 per cent of the voting rights in the Company as at 31 March 2006.
Richemont Securities SA, a wholly-owned subsidiary of the Company, acts as depository in respect of Richemont South African Depository Receipts (‘DR’s’), which are traded on the JSE Limited (the Johannesburg Stock Exchange). DR’s trade in the ratio of ten DR’s to each Richemont ‘A’ unit. In its capacity as depository and on behalf of the holders of DR’s, Richemont Securities SA holds one ‘A’ unit in safe custody for every ten DR’s in issue. Richemont Securities SA’s interest in Richemont ‘A’ units is therefore non-beneficial in nature.
All dividends attributable to the ‘A’ units held in safe custody are remitted by Richemont Securities SA individually to holders of DR’s and Richemont Securities SA acts as the approved representative of DR holders in voting at shareholders’ meetings of the Company. DR holders may provide Richemont Securities SA with voting instructions as to their holdings of DR’s and Richemont Securities SA may only vote on behalf of those DR holders from whom it has received such instructions.
At 31 March 2006, Richemont Securities SA held 187 289 151 Richemont ‘A’ units (2005: 160 543 267 units), representing some 36 per cent (2005: 31 per cent) of the ‘A’ units, in safe custody in respect of DR’s in issue.
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