Genentech transaction
28. Equity attributable to Roche shareholders
Changes in equity attributable to Roche shareholders
|
in millions of CHFReserves Share capital Retained earnings Fair
value Hedging Translation Total
Year ended 31 December 2009
At 1 January 2009 160 52,081 (231) 9 (7,540) 44,479
Net income recognised
in income statement – 7,784 – – – 7,784
Available-for-sale investments – Valuation gains (losses)
taken to equity – – 162 – – 162
– Transferred to income statement
on sale or impairment – – 207 – – 207
– Income taxes – – (14) – – (14)
– Non-controlling interests – – (3) – – (3)
Cash flow hedges
– Gains (losses) taken to equity – – – 2,090 – 2,090 – Transferred to income statement a) – – – (1,973) – (1,973)
– Transferred to the initial carrying
value of hedged items – – – – – –
– Income taxes – – – (42) – (42)
– Non-controlling interests – – – (15) – (15)
Currency translation of foreign operations
– Exchange differences – – (22) (4) 3,081 3,055
– Accumulated differences transferred
to income statement on divestment 34 – – – – (1) (1)
– Non-controlling interests – – – – (333) (333)
Defined benefit post-employment plans
– Actuarial gains (losses) 10 – (69) – – – (69)
– Limit on asset recognition 10 – (3) – – – (3)
– Income taxes – 67 – – – 67
– Non-controlling interests – (1) – – – (1)
Other comprehensive income,
net of tax – (6) 330 56 2,747 3,127
Total comprehensive income – 7,778 330 56 2,747 10,911
Dividends paid – (4,300) – – – (4,300)
Equity compensation plans, net of
transactions in own equity instruments – 77 – – – 77
Chugai share repurchases 4 – (9) – – – (9)
Changes in ownership interests in subsidiaries
– Genentech 3 – (43,777) – – – (43,777)
– Memory 7 – (2) – – – (2)
Changes in non-controlling interests – (13) – – – (13)
At 31 December 2009 160 11,835 99 65 (4,793) 7,366
a) Of amounts transferred to income statement, losses of 12 million Swiss francs were reported as ‘Royalties and other operating income’ and gains of 1,985 million Swiss francs as ‘Financial income’.
Changes in equity attributable to Roche shareholders
|
in millions of CHF Reserves Share capital Retained earnings Fairvalue Hedging Translation Total
Year ended 31 December 2010
At 1 January 2010 160 11,835 99 65 (4,793) 7,366
Net income recognised
in income statement – 8,666 – – – 8,666
Available-for-sale investments – Valuation gains (losses)
taken to equity – – 113 – – 113
– Transferred to income statement
on sale or impairment – – (102) – – (102)
– Income taxes – – 6 – – 6
– Non-controlling interests – – 1 – – 1
Cash flow hedges
– Gains (losses) taken to equity – – – (1,373) – (1,373) – Transferred to income statement a) – – – 1,073 – 1,073
– Income taxes – – – 107 – 107
– Non-controlling interests – – – – – –
Currency translation of foreign operations
– Exchange differences – – (11) 3 (490) (498)
– Non-controlling interests – – – – (29) (29)
Defined benefit post-employment plans
– Actuarial gains (losses) 10 – (344) – – – (344)
– Limit on asset recognition 10 – (2) – – – (2)
– Income taxes – 80 – – – 80
– Non-controlling interests – 16 – – – 16
Other comprehensive income,
net of tax – (250) 7 (190) (519) (952)
Total comprehensive income – 8,416 7 (190) (519) 7,714
Dividends paid – (5,144) – – – (5,144)
Equity compensation plans, net of
transactions in own equity instruments – (467) – – – (467)
Changes in non-controlling interests – – – – – –
Other movements – (90) 68 22 – –
At 31 December 2010 160 14,550 174 (103) (5,312) 9,469
a) Of amounts transferred to income statement, gains of 29 million Swiss francs were reported as ‘Royalties and other operating income’ and losses of 1,102 million Swiss francs as ‘Financial income’.
The Group completed the purchase of the non-controlling interests in Genentech effective 26 March 2009, as described in Note 3. Based on the revised International Accounting Standard 27 ‘Consolidated and Separate Financial Statements’ (IAS 27), which was adopted by the Group in 2008, this transaction was accounted for in full as an equity transaction. As a consequence, the carrying amount of the consolidated equity of the Group was reduced by 52.2 billion Swiss francs, of which 8.5 billion Swiss francs was allocated to eliminate the book value of Genentech non-controlling interests. This accounting effect significantly impacts the Group’s net equity, but has no effect on the Group’s business or its dividend policy.
Share capital
As of 31 December 2010, the authorised and issued share capital of Roche Holding Ltd, which is the Group’s parent company, consisted of 160,000,000 shares with a nominal value of 1.00 Swiss franc each, as in the preceding year. The shares are bearer shares and the Group does not maintain a register of shareholders. Based on information supplied to the Group, a shareholder group with pooled voting rights owns 50.0125% (2009: 50.0125%) of the issued shares. This is further described in Note 33. Based on information supplied to the Group, Novartis Ltd, Basel, and its affiliates own 33.3330% (participation below 331⁄
3%) of the issued
shares (2009: 33.3330%).
Non-voting equity securities (Genussscheine)
As of 31 December 2010, 702,562,700 non-voting equity securities have been authorised and were in issue as in the preceding year. Under Swiss company law these non-voting equity securities have no nominal value, are not part of the share capital and cannot be issued against a contribution which would be shown as an asset in the balance sheet of Roche Holding Ltd. Each non-voting equity security confers the same rights as any of the shares to participate in the net profit and any remaining proceeds from liquidation following repayment of the nominal value of the shares and, if any, participation certificates. In accordance with the law and the Articles of Incorporation of Roche Holding Ltd, the Company is entitled at all times to exchange all or some of the non-voting equity securities into shares or participation certificates.
Dividends
On 2 March 2010 the shareholders approved the distribution of a dividend of 6.00 Swiss francs per share and non-voting equity securities (2009: 5.00 Swiss francs) in respect of the 2008 business year. The distribution to holders of outstanding shares and non-voting equity securities totalled 5,144 million Swiss francs (2009: 4,300 million Swiss francs) and has been recorded against retained earnings in 2010. The Board of Directors has proposed dividends for the 2010 business year of 6.60 Swiss francs per share and non-voting equity security which, if approved, would result in a total distribution to shareholders of 5,693 million Swiss francs. This is subject to approval at the Annual General Meeting on 1 March 2011.
Own equity instruments
Holdings of own equity instruments in equivalent number of non-voting equity securities
31 December 2010 (millions)
31 December 2009 (millions)
Non-voting equity securities 11.2 6.7
Derivative instruments 9.9 7.4
Total 21.1 14.1
Own equity instruments are recorded within equity at original purchase cost. Details of own equity
instruments held at 31 December 2010 are shown in the table below. Fair values are disclosed for information purposes.
Own equity instruments at 31 December 2010: supplementary information
Equivalent number of non-voting equity securities
(millions) Maturity Strike price (CHF) (CHF billions)Market value
Non-voting equity securities 11.2 – – 1.5
Derivative instruments 9.9 8 Feb. 2012– 16 Sep. 2016 145.40– 229.60 0.1 Total 21.1 1.6
Non-voting equity securities and derivative instruments are held for the Group’s potential conversion obligations that may arise from the Roche Option Plan, Roche Stock-settled Stock Appreciation Rights and Roche Restricted Stock Unit Plan (see Note 11). These mainly consist of call options that are exercisable at any time up to their maturity.
The Group holds none of its own shares. Reserves
Fair value reserve
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The fair value reserve represents the cumulative net change in the fair value of available-for-sale financial assets until the asset is sold, impaired or otherwise disposed of.Hedging reserve