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.
| 2006 €m |
2005 €m |
||
|---|---|---|---|
| Issued and fully paid 1 914 000 shares of no par value | 215.0 | 215.0 |
| 2006 €m |
2005 €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 (2005: 522 000 000) bearer participation certificates with no par value and 52 200 000 (2005: 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 (2005: € 21.5 million) is not available for distribution.
The general reserve amounting to € 427.0 million (2005: € 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.
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 participation certificates of € 305.9 million represents 75 per cent of this amount. The remaining 25 per cent is recorded in the balance sheet of Compagnie Financière Richemont SA.
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 € 113.8 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 (2005: € 22.9 million). The remaining 25 per cent of the cost of units sold has been transferred out of a reserve for own shares in the balance sheet of Compagnie Financière 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 €m |
2005 €m |
||
|---|---|---|---|
| Balance at 1 April of prior year retained earnings before appropriation | 1188.2 | 514.9 | |
| Dividend paid on share capital | (181.6) | (74.4) | |
| Dividend paid on participation reserve | (551.2) | (229.7) | |
| Balance at 1 April, after appropriation | 455.4 | 210.8 | |
| Net transfer from reserve for own participation certificates | 113.8 | 22.9 | |
| Net profit for the year | 1162.9 | 954.5 | |
| Balance at 31 March | 1732.1 | 1188.2 | |
The retained earnings at 31 March are stated before the proposed appropriation as set out on the next page.
At 31 March 2006 the Company had given guarantees totalling € 76.7 million (2005: € 78.2 million) to cover obligations of various Group companies amounting to € 21.8 million (2005: € 28.3 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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