Notes to the financial statements BB Biotech AG

1. Accounting policies 

General

The financial statements of BB Biotech AG (the Company) have been prepared in accordance with the provisions of commercial accounting as set out in the Swiss Code of Obligations. The financial statements have been prepared under the historical cost convention.

Cash and cash equivalents

Cash and cash equivalents includes current accounts at banks. These are stated at the notional amount.

Investments

The investments include the subsidiaries over which the Company has control. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Initially and subsequently, investments are valued at historical cost. An impairment is recognized if the value in use is expected to permanently fall below the book value.

Income from investments is recognized in the income statement when the Company’s right to receive the dividend payment is established.

Receivables/liabilities

Receivables/liabilities are classified as current assets/liabilities if maturity is expected to be within twelve month after the balance sheet date. Else, they are classified as long-term assets/liabilities. Receivables/liabilities are recognized at notional value. Receivables/liabilities against related parties include transactions with the Board of Directors as well as Group companies and affiliates. Receivables/liabilities against group companies result mainly from cash-pooling activies of the Group. The Group consists of BB Biotech AG and the mentioned subsidiaries under 3.3.

Treasury shares

Treasury shares are deducted from shareholders’ equity. All profits and losses arising from trading in treasury shares are included in the income statement. A reserve for treasury shares is built for treasury shares held by subsidiaries, booked against other reserves. The reserve is based on cost prices.

2. Details and explanations to the financial statements 

2.1 Other current liabilities

The other current liabilities comprise the following (in CHF):

2.2 Shareholders’ equity

The share capital of the Company consists of 55.4 mn fully paid registered shares (2019: 55.4 mn registered shares) with a par value of CHF 0.20 each (2019: CHF 0.20).

The General Shareholders’ Meeting held on March 17, 2016, has approved a share buy-back program, whereby up to 5 540 000 shares may be repurchased by the Company. Until the end of the program, at April 11, 2019, no shares had been repurchased under this share buy-back program.

The Board of Directors has approved the repurchase of a maximum of 5 540 000 own registered shares with a nominal value of CHF 0.20 each. The share buy-back program will run from April 12, 2019, until April 11, 2022, at the latest. Until December 31, 2020, no shares had been repurchased under this share buy-back program. A repurchase would take place via second trading line for the purpose of a subsequent capital reduction.

At December 31, 2020 and 2019, the Company has neither authorized nor conditional capital.

2.3 Other income

Other income comprises the following (in CHF):

2.4 Administrative expenses

Administrative expenses comprise the following (in CHF):

The remuneration report discloses further details to the Board of Directors compensation.

2.5 Other expenses

Other expenses comprise the following (in CHF):

2.6 Tax expenses

Tax expenses comprise the following (in CHF):

3. Other information required by law 

3.1 Name, legal form and registered office

BB Biotech AG is a limited company according to the Swiss Code of Obligation and has its registered office at Schwertstrasse 6 in Schaffhausen.

3.2 Declaration of number of full-time equivalents

The number of full-time equivalents did not exceed 10 in the calendar year 2020 (2019: below 10).

3.3 Investments

Investments of BB Biotech AG comprise, in the business years 2020 and 2019, the following subsidiaries:

3.4 Treasury shares (balances and change)

Treasury shares are partly held by the Company directly and partly by its 100% subsidiary Biotech Target N.V. indirectly.

3.5 Audit fees

The audit fees comprise the following (in CHF):

3.6 Commitments and contingencies

The Company had no commitments or other off-balance sheet transactions open at December 31, 2020 (2019: none).

The operations of the Company are affected by legislative, fiscal and regulatory developments for which provisions are made where deemed necessary. The Board of Directors concludes that as at December 31, 2020, no proceedings existed which could have any material effect on the financial position of the Company (2019: none).

3.7 Subsequent events

There have been no events subsequent to December 31, 2020, which would affect the 2020 financial statements.

4. Other information 

4.1 Significant shareholders

The Board of Directors is not aware of any major shareholder with a holding exceeding 3% of all votes as at December 31, 2020 and 2019.

4.2 Statement of holdings of the Board of Directors

As at December 31, the Board of Directors held the following registered shares of BB Biotech AG:

4.3 Management contracts

On behalf of the Company, the Board of Directors has entered into a management contract with Bellevue Asset Management AG (investment manager). In this contract, the investment manager commits to carry out management services relating to the investment activity and management of BB Biotech AG. Under this contract the Company paid in the business year 2020 CHF 723 837 (2019: CHF 737 585) to Bellevue Asset Management AG.

4.4 Annual report and cash flow statement

Due to the fact that BB Biotech AG prepares consolidated financial statements in accordance with a recognized international accounting standard (IFRS), the Company doesn’t prepare, in line with the legal requirements, an annual report and cash flow statement.

5. Movements on retained earnings 

6. Proposal of the Board of Directors for the appropriation of retained earnings