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Financial Report Notes to the financial statements

Notes to the financial statements BB Biotech AG

1. Accounting policies

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. Details and explanations to the financial statements 

2.1 Other current liabilities

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

 

 

2021

 

2020

Third parties

 

325 557

 

308 546

Investment Manager

 

77 545

 

72 644

 

 

403 102

 

381 190

2.2 Shareholders’ equity

The share capital of the Company consists of 55.4 mn fully paid registered shares (2020: 55.4 mn registered shares) with a par value of CHF 0.20 each (2020: CHF 0.20).

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, 2021, 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, 2021 and 2020, the Company has neither authorized nor conditional capital.

2.3 Other income

Other income comprises the following (in CHF):

 

 

2021

 

2020

Income group services

 

5 945 000

 

5 500 500

Other income

 

3 206

 

3 045

 

 

5 948 206

 

5 503 545

2.4 Administrative expenses

Administrative expenses comprise the following (in CHF):

 

 

2021

 

2020

Board compensation

 

1 332 853

 

1 272 316

Investment manager compensation

 

921 468

 

723 837

Staff costs

 

66 007

 

81 669

 

 

2 320 327

 

2 077 822

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

2.5 Other expenses

Other expenses comprise the following (in CHF):

 

 

2021

 

2020

Marketing and financial reporting

 

1 293 068

 

1 612 762

Consulting and audit

 

524 201

 

356 501

Bank charges

 

1 039

 

1 078

Other expenses

 

1 267 194

 

952 317

 

 

3 085 502

 

2 922 658

2.6 Tax expenses

Tax expenses comprise the following (in CHF):

 

 

2021

 

2020

Income taxes

 

67 338

 

75 442

Capital taxes

 

56 002

 

36 995

 

 

123 340

 

112 437

3. Other information required by law

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 2021 (2020: below 10).

3.3 Investments

Investments of BB Biotech AG comprise, in the business years 2021 and 2020, the following subsidiaries:

Company

 

Capital in CHF 1 000

 

Capital and voting interest in %

Biotech Focus N.V., Curaçao

 

11

 

100

Biotech Growth N.V., Curaçao

 

11

 

100

Biotech Invest N.V., Curaçao

 

11

 

100

Biotech Target N.V., Curaçao

 

11

 

100

3.4 Treasury shares (balances and change)

Treasury shares are held indirectly by its 100% subsidiary Biotech Target N.V. 

 

 

Biotech Target N.V.

 

Total

Balance at January 1, 2020

 

 

Purchases Biotech Target N.V. at an average price of CHF 71.83

 

114 998

 

114 998

Sales Biotech Target N.V. at an average price of CHF 60.18

 

(336)

 

(336)

Balance at December 31, 2020

 

114 662

 

114 662

 

 

 

 

 

Purchases Biotech Target N.V. at an average price of CHF 85.73

 

110 336

 

110 336

Sales Biotech Target N.V. at an average price of CHF 82.10

 

(117 572)

 

(117 572)

Balance at December 31, 2021

 

107 426

 

107 426

3.5 Audit fees

The audit fees comprise the following (in CHF):

 

 

2021

 

2020

Audit fees

 

120 000

 

120 000

Audit-related fees

 

 

2 800

 

 

120 000

 

122 800

3.6 Commitments and contingencies

The Company had no commitments or other off-balance sheet transactions open at December 31, 2021 (2020: 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, 2021, no proceedings existed which could have any material effect on the financial position of the Company (2020: none).

3.7 Subsequent events

There have been no events subsequent to December 31, 2021, which would affect the 2021 financial statements.

4. Other information

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, 2021 and 2020.

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:

 

 

2021

 

2020

Dr. Erich Hunziker, Chairman

 

957 884

 

957 884

Dr. Clive Meanwell, Vice-Chairman

 

5 163

 

5 163

Prof. Dr. Mads Krogsgaard Thomsen

 

 

Dr. Thomas von Planta

 

12 000

 

12 000

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 2021 CHF 921 468 (2020: CHF 723 837) 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

5. Movements on retained earnings

in CHF

 

2021

 

2020

Retained earnings at the beginning of the year

 

918 925 781

 

919 777 517

Dividend

 

(199 440 000)

 

(188 360 000)

Net income for the year

 

199 810 431

 

187 508 264

Retained earnings at the end of the year

 

919 296 212

 

918 925 781

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

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

in CHF

 

2021 Proposal of the Board

 

2020 Resolution passed at the AGM

Retained earnings at the disposal of the Annual General Meeting

 

919 296 212

 

918 925 781

Dividend

 

213 290 000

 

199 440 000

Carry forward to the next period

 

706 006 212

 

719 485 781

 

 

919 296 212

 

918 925 781

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