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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 activities 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):

2023

2022

Third parties

293 658

266 770

Investment Manager

40 561

58 243

334 219

325 013

2.2 Shareholders’ equity

The share capital of the Company consists of 55.4 mn fully paid registered shares (2022: 55.4 mn registered shares) with a par value of CHF 0.20 each (2022: CHF 0.20).

In April 2019, the Board of Directors approved the repurchase of a maximum of 5 540 000 own registered shares with a nominal value of CHF 0.20 each. Until the end of the program, at April 11, 2022, no shares had been repurchased under this share buy-back program.

In April 2022, 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 13, 2022 until April 11, 2025 at the latest. Until December 31, 2023, no shares had been repurchased under this share buy-back program. The repurchase will take place via second trading line for the purpose of a subsequent capital reduction.

At December 31, 2023 and 2022, the Company has neither authorized nor conditional capital.

2.3 Other income

Other income comprises the following (in CHF):

2023

2022

Income group services

5 894 000

5 466 000

Other income

5 016

3 937

5 899 016

5 469 937

2.4 Administrative expenses

Administrative expenses comprise the following (in CHF):

2023

2022

Board of Directors remuneration

1 680 000

1 550 000

Social insurance contributions and duties

44 921

45 935

Investment manager compensation

503 308

663 577

Staff costs

94 230

52 107

2 322 459

2 311 619

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

2.5 Other expenses

Other expenses comprise the following (in CHF):

2023

2022

Marketing and financial reporting

1 566 758

1 170 645

Audit, legal and consulting expenses

380 428

287 701

Bank charges

1 134

1 159

Other expenses

1 087 747

1 198 791

3 036 067

2 658 296

2.6 Tax expenses

Tax expenses comprise the following (in CHF):

2023

2022

Income taxes

78 992

61 027

Capital taxes

43 817

57 766

122 808

118 794

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 2023 (2022: below 10).

3.3 Investments

Investments of BB Biotech AG comprise, in the business years 2023 and 2022, 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, 2022

107 426

107 426

Purchases Biotech Target N.V. at an average price of CHF 61.14

446 574

446 574

Balance at December 31, 2022

554 000

554 000

Balance at December 31, 2023

554 000

554 000

3.5 Audit fees

The audit fees comprise the following (in CHF):

2023

2022

Audit fees

120 000

120 000

Audit-related fees

3 000

ESG training of the Board of Directors

18 000

138 000

123 000

3.6 Commitments and contingencies

The Company had no commitments or other off-balance sheet transactions open at December 31, 2023 (2022: 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, 2023, no proceedings existed which could have any material effect on the financial position of the Company (2022: none).

3.7 Subsequent events

There have been no events subsequent to December 31, 2023, which would affect the 2023 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, 2023 and 2022.

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:

2023

2022

Dr. Erich Hunziker, Chairman

957 884

957 884

Dr. Clive Meanwell, Vice-Chairman

5 163

5 163

Laura Hamill

Dr. Pearl Huang

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 2023 CHF 503 308 (2022: CHF 663 577) to Bellevue Asset Management AG.

4.4 Management 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, a management report and cash flow statement.

5. Movements on retained earnings

5. Movements on retained earnings

in CHF

2023

2022

Retained earnings at the beginning of the year

918 922 082

919 296 212

Dividend

(156 311 100)

(212 241 799)

Net income for the year

156 706 872

211 867 669

Retained earnings at the end of the year

919 317 855

918 922 082

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

2023 Proposal of the Board

2022 Resolution passed at the AGM

Retained earnings at the disposal of the Annual General Meeting

919 317 855

918 922 082

Dividend

(110 800 000)

(156 311 100)

Carry forward to the next period

808 517 855

762 610 982

919 317 855

918 922 082

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