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Notes to the consolidated financial statements continued17. Equity continued17.3. Treasury sharesIn order to hedge partially its potential obligations arising under the share option plan, the Group has purchased Richemont ‘A’ shares.Changes in the holding of this treasury stock of shares are shown as movements in shareholders’ equity as follows:Units/sharesmillionsBalance at 1 April 2007 12.8 264Purchased 3.0 61Sold (2.7) (57)Balance at 31 March 2008 13.1 268Purchased 8.4 118Sold (1.0) (27)Transfer to investments in listed undertakings (note 11) – (164)Balance at 31 March 2009 20.5 195€ mThe cost value of the 1.0 million shares (2008: 2.7 million shares) sold during the year to plan participants who exercised their optionswas € 27 million (2008: € 57 million).As in previous years, the Group has entered into over-the-counter purchased call options (‘OTC options’) with a third party to purchase treasuryshares at the same strike prices as the share options granted to executives. These OTC options together with treasury shares provide a comprehensivehedge of the Group’s potential obligations arising under the share option plan. Following the de-twinning of the Richemont units in October2008, the treasury shares and the outstanding OTC options were modified in line with the terms of the de-twinning and market practise. Thetreasury shares converted into ordinary shares in the Company and Reinet. A cost of € 164 million has been transferred to investments in listedundertakings representing the historic cost of the Reinet shares included in the treasury reserve at the date of de-twinning. An immediate gain of€ 19 million was recognised on measuring the Reinet shares at market value. This gain has been recognised directly in equity retained earnings.The OTC options converted into OTC options over the Company’s ordinary shares only with both the number and strike prices having beenadjusted at nil cost.The costs of these call options together with the loss realised on shares sold during the year to plan participants, offset by the gain of € 19 millionon measuring the Reinet shares at market value, amounted to € 7 million (2008: € 33 million) and were recognised directly in retained earnings.The market value of the 20.5 million shares (2008: 13.1 million shares) held by the Group at the year end, based on the closing price at31 March 2009 of CHF 17.78 (2008: CHF 55.70), amounted to € 242 million (2008: € 467 million).17.4. Hedge and share option reservesHedgeShare optionreserve reserve Total€ m € m € mBalance at 1 April 2007 8 143 151Movements in hedge reserve– fair value gains 31 – 31– recycle to income statement (13) – (13)Movement in employee share option reserve– expense recognised in the year – 31 31Tax on items recognised directly in equity (3) (21) (24)Balance at 31 March 2008 23 153 176Movements in hedge reserve– fair value losses (41) – (41)– recycle to income statement (12) – (12)Movement in employee share option reserve– expense recognised in the year – 31 31– derivative liability recognised on stock option modification – (60) (60)Tax on items recognised directly in equity 3 (7) (4)Balance at 31 March 2009 (27) 117 9017.5. Legal reservesLegal reserves amounting to € 95 million (2008: € 95 million) are included in the reserves of Group companies but are not available for distribution.84 Richemont Annual Report and Accounts 2009Consolidated financial statements
18. Borrowings2009 2008€ m € mNon-currentBank borrowings 73 238Finance lease obligations 4 877 246CurrentShort-term loans 276 267Bank borrowings 184 8Finance lease obligations 4 4464 279Total borrowings 541 525Short-term loans Bank borrowings Finance lease obligations Total2009 2008 2009 2008 2009 2008 2009 2008€ m € m € m € m € m € m € m € mAmounts repayable within the financial yearended/ending 31 March2009 – 267 – 8 – 4 – 2792010 276 – 184 176 4 4 464 1802011 – – – 62 4 4 4 662012 – – 73 – – – 73 –276 267 257 246 8 12 541 525Interest – – – – – – – –276 267 257 246 8 12 541 525Bank and other borrowings are subject to market-linked rates of interest ranging from 1.0 per cent to 14.4 per cent.The interest rates applied to bank borrowings are fixed until the maturity of the borrowing.The Group’s borrowings are denominated in the following currencies:2009 2008€ m € mEuro 7 23Hong Kong dollar 112 101Japanese yen 158 137Swiss franc 1 91US dollar 80 68Chinese renminbi 126 59Other 57 46541 525The carrying amounts of borrowings approximate their fair values. The fair values of long-term borrowings are based on cash flows discountedusing a rate based on the borrowing rate.Richemont Annual Report and Accounts 2009 85Consolidated financial statements
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Financial and operating highlights
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BUSINESS DEVELOPMENTWhilst the year
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JewelleryMaisonsKey resultsSales (
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Exceptional client service remains
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SpecialistWatchmakersKey resultsSal
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Established 1845Altenberger Strasse
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Established 1860Piazza San Giovanni
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Established 183050 chemin de la Ch
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Established 20078 chemin de Blandon
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Established 1906Hellgrundweg 100Ham
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OtherBusinessesKey resultsSales (
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Established 19837 rue de MoussyPari
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Financial reviewRICHARD LEPEU, GROU
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Sales and operating results by busi
Page 36 and 37: Sales by distribution channelin €
Page 38 and 39: Summarised balance sheetin € mill
Page 40 and 41: Corporate responsibilityRichemont h
Page 42 and 43: Corporate governanceGENERAL PRINCIP
Page 44 and 45: on page 103. The operating expense
Page 46 and 47: Board of directors of Compagnie Fin
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Page 50 and 51: Group Management CommitteeJohann Ru
Page 52 and 53: Continued from page 47The executive
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Page 56 and 57: No specific provisions exist in the
Page 58 and 59: Consolidated balance sheetat 31 Mar
Page 60 and 61: Consolidated statement of changes i
Page 62 and 63: Notes to the consolidated financial
Page 110 and 111: Company financial statementsCompagn
Page 112 and 113: Compagnie Financière Richemont SAN
Page 114 and 115: Compagnie Financière Richemont SAR
Page 116 and 117: Five year record continuedConsolida
Page 118 and 119: Notice of meetingThe Annual General
Page 120: www.richemont.com
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