FY 2010 Annual Report - Part II - Orascom Development

Orascom Development Holding (Consolidated Financial Statement)
stake of 98.05%, later increased to 98.16% at 31 December
2008.
Whereas the new holding company (ODH) is ultimately owned
and controlled by the same major shareholders, management
decided that this Group reorganisation was for the purpose of
capital restructuring and it has been accounted for as a
continuation of the financial statements of the initial holding
Group (OHD) in the 2008 consolidated financial statements
Management concluded that the above Group restructure is
classified as a transaction under common control since the
combining entities are ultimately controlled by the same parties
both before and after the combination and that control is not
transitory.
However, since IFRS 3 Business Combinations excludes from its
scope business combinations involving entities or businesses
under common control (common control transactions), IAS 8
requires management to develop and apply an accounting policy
that results in information that is relevant and reliable.
Management used its judgment in developing and applying an
accounting policy for common control transactions arising from
the Group’s capital restructuring as follows:
−
−
−
Recognition of the assets acquired and liabilities
assumed of the initial holding Group (OHD) at their
previous carrying amounts;
Recognition of the difference between purchase
consideration and net assets acquired as an adjustment
to equity;
Transaction costs, which were incurred in relation to the
issuance of ODH shares, have been recognised as a
reduction to the reserve from common control
transaction. Amount included in the consolidated
statement of changes in equity.
27.6 Foreign currencies translation reserve
CHF 2010 2009
Balance at beginning of year
(75,348,038) (43,899,293)
Exchange differences arising
on translating the net assets
of foreign operations (120,455,143) (31,448,745)
27.7 Equity swap settlement
CHF 2010 2009
Balance at
beginning of
year - -
Contract over
(10,220,295)
own shares
-
Balance at
end of year (10,220,295) -
Part of the consideration from the sale of the six percent stake of
the former Garranah subsidiaries will be settled by the receipt of a
fixed number of the Parent Company’s own shares and therefore
it was recorded as an equity instrument within equity (see note
34).
28 RETAINED EARNINGS
___________________________________________________________________________________
CHF 2010 2009 (restated)
Balance at beginning of year
301,959,550 195,468,663
Profit attributable to owners
of the Parent Company 94,920,828 106,490,887
Balance at end of year
396,880,378 301,959,550
During 2009 and 2010 no dividends had been paid, but a
capital reduction with payment to the shareholders took place in
each year as explained in note 26. In respect of the current year,
the Board of Directors propose a capital reduction amounting to
CHF 0.65 per share to be paid to the shareholders on or around
31 August 2011. This capital reduction is subject to approval by
the shareholders at the Annual General Meeting and has
therefore not been recorded as a liability in these consolidated
financial statements. The proposed capital reduction is payable to
all shareholders based on the Register of Members on 23 May
2011. The total estimated capital reduction to be paid is CHF
18,338,527. The payment of this capital reduction will not have
any tax consequences for the Group.
Balance at end of year
(195,803,181) (75,348,038)
Exchange differences relating to the translation of the results and
net assets of the Group's foreign operations from their functional
currencies to the Group's presentation currency (CHF) are
recognized directly in other comprehensive income and
accumulated in the foreign currency translation reserve. Exchange
differences previously accumulated in the foreign currency
translation reserve in respect of translating the net assets of
foreign operations are reclassified to profit or loss on the disposal
of the foreign operation.
F-53