- 20 NOTE F20 Intangible assets
- 21 NOTE F21 Goodwill and business combinations
- 22 NOTE F22 Property, plant and equipment
- 23 NOTE F23 Right-of-use assets and lease liabilities
- 24 NOTE F24 Joint operations
- 25 NOTE F25 Investments in associates and joint ventures
- 26 NOTE F26 Other investments
- 27 NOTE F27 Impairment of property, plant and equipment, intangible assets, right-of-use assets, and equity method investees
- 28 NOTE F28 Inventories
- 29 NOTE F29 Other receivables (current)
- 30 NOTE F30 Assets held for sale
- 31 NOTE F31 Equity
- 32 NOTE F32 Non-controlling interests
- 33 NOTE F33 Share-based payments
- 34 NOTE F34 Provisions
- 35 NOTE F35 Financial instruments and financial risk management
- 36 NOTE F36 Net indebtedness
- 37 NOTE F37 Other liabilities (current)
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issuance of new share capital are directly recognized in equity as a deduction, net of tax, from the equity issuance proceeds.
The reserves include:
- treasury shares;
- perpetual hybrid bonds that qualify as equity absent any unavoidable contractual obligation to repay the principal and interest of the perpetual hybrid bonds (no maturity, interest is payable annually but can be deferred indefinitely at the issuer’s discretion);
- retained earnings;
- currency translation differences from the consolidation process relating to the translation of the financial statements of foreign operations prepared in a non-euro functional currency to the euro presentation currency;
- the impacts of the fair value remeasurement of equity instruments measured at fair value through other comprehensive income;
- the impacts of the fair value remeasurement of financial instruments documented as hedging instruments in cash flow hedges;
- actuarial gains and losses related to defined benefit plans.
Those represent the share of non-controlling interests in the net assets and comprehensive income of subsidiaries of the Group, and corresponds to the interests in subsidiaries that are not held by the Company or its subsidiaries.
Perpetual hybrid bonds
To strengthen its capital structure, Solvay issued undated deeply subordinated perpetual bonds (“perpetual hybrid bonds”) of respectively € 1.2 billion (€ 1,194 million net of issuance costs) in 2013 following the acquisition of Chemlogics, € 1.0 billion (€ 994 million net of issuance costs) in 2015 for the financing of the acquisition of Cytec, and € 300 million (€ 298 million net of issuance costs) in November 2018. In May 2019, Solvay has repaid € 700 million of hybrid bonds (NC5.5 at 4.199%) issued in 2013, further to the exercise of its first call option.
All perpetual hybrid bonds are classified as equity absent any unavoidable contractual obligation to repay the principal and interest of the perpetual hybrid bonds, specifically:
- no maturity, yet the issuer has a call option at every reset date to redeem the instrument;
- at the option of the issuer, interest payments can be deferred indefinitely.
The coupons related to the perpetual hybrid bonds are recognized as equity transactions and are deducted from equity upon declaration (see consolidated statement of changes in equity):
- amounting to € 57 million in 2019 (€ 57 million in 2018) for the 2013 € 1.2 billion issuance (€ 700 million NC5.5 at 4.199% - repaid in May 2019 – and outstanding € 500 million NC10 at 5.425%);
- amounting to € 55 million in 2019 (€ 55 million in 2018) for the 2015 € 1.0 billion issuance (€ 500 million NC5.5 at 5.118% and € 500 million NC8.5 at 5.869%);
- amounting to € 3 million in 2019 (corresponding to a quarter) for the 2018 € 300 million issuance (NC5.25); the coupon expected to be declared in 2020 is expected to amount to € 13 million (4.25% yearly coupon).
Should Solvay have elected not to pay any interests to the perpetual hybrid bond holders, then any payment of dividends to the ordinary shareholders or repayment of ordinary shares would trigger a contractual obligation to pay previously unpaid interests to the perpetual hybrid bond holders.
Tax impacts related to the perpetual hybrid bonds are recognized in profit or loss (also see section Basis of Preparation).