Financial Statements - Solvay

60
Solvay Global Annual Report 2008
Statement of changes in equity
EUR Million
Equity attributable to equity holders of the parent
Share
capital
Issue Retained Treasury Currency
premiums earnings shares translation
differences
Fair value
differences
Total Minority
interests
Balance at 31/12/2006 1 271 18 3 283 -138 -420 200 4 214 242 4 456
Net profi t for the period 781 781 47 828
Income and expenses directly
allocated to equity
Total
equity
-119 -248 -367 -39 -406
Total comprehensive income 781 -119 -248 414 8 422
Cost of stock options 6 6 6
Dividends -236 -236 -12 -248
Acquisitions / sale of treasury shares -95 -95 -95
Other -1 -1 -82 -83
Balance at 31/12/2007 1 271 18 3 834 -233 -539 -48 4 303 156 4 459
Net profi t for the period 405 405 44 449
Income and expenses directly allocated
to equity
-82 62 -20 -9 -29
Total comprehensive income 405 -82 62 385 35 420
Cost of stock options 8 8 8
Dividends -246 -246 -11 -257
Acquisitions / sale of treasury shares 7 7 7
Other -8 -8 116 108
Balance at 31/12/2008 1 271 18 3 994 -226 -621 14 4 449 296 4 745
Currency translation differences
The closing balance sheet exchange rate for the US dollar changed from 1.4721 at the end of 2007 to 1.3917
at the end of 2008. Despite the stronger dollar, the currency translation difference is negative, the main reason being
the weakening of the Argentinian peso, the Brazilian real, the British pound and the Thai baht. The total difference
amounts to EUR 91 million of which 82 million EUR for the Group’s share, which takes the balance of this item from
EUR 539 million at the end of 2007 to EUR 621 million at the end of 2008.
Fair value differences
These differences represent the marking to market of available-for-sale investments and fi nancial derivatives used for
hedging purposes.
In 2008, the positive variation of EUR 62 million is due principally to the recycling to the income statement of the latent
capital loss on our shareholding in Fortis (EUR 41 million) and to the reversal of the unrecognized loss allocated directly
to equity at year end 2007 on Innogenetics shares in an amount of EUR 20 million as Innogenetics is fully consolidated
and no longer classifi ed as an available-for-sale investment.
The fair value differences also include the marking to market of fi nancial instruments accounted for according to IAS 39
as cash fl ow hedges. Only the effective part of the hedge is recognized in equity, with the balance being taken directly
into income. The variation in this effective part, recognized among fair value differences, amounted to EUR 10 million at
the end of 2008 (end 2007: EUR 7 million).
When the fi nancial instrument designated as a hedge matures, its value recognized in equity is transferred to the income
statement. In 2008, there was no transfer from equity to the income statement.