Actavis, Inc. - FORM 8-K/A - EX-99.2

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8-K/A - FORM 8-K/A - Actavis, Inc.	a55210e8vkza.htm
EX-99.3 - EX-99.3 - Actavis, Inc.	a55210exv99w3.htm

Exhibit 99.2

Robin Hood Holdings Limited

Condensed Consolidated Interim
Financial Statements

June 30, 2009 and 2008

Company Registration Number: C 31123

ROBIN HOOD HOLDINGS LIMITED
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2009 AND JUNE 30, 2008

Contents


	Page(s)
Condensed Consolidated Interim Financial Statements:

Balance Sheet		1

Statement of Comprehensive Income		2

Statement of Changes in Equity		3 — 4

Cash Flow Statement		5

Notes to the Condensed Consolidated Interim Financial Statements		6 — 10

ROBIN HOOD HOLDINGS LIMITED
CONDENSED CONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 2009 AND DECEMBER 31, 2008

2009

2008

Note

USD ’000

USD ‘000

Assets

Goodwill and other intangible assets

155,178

154,379

Property, plant and equipment

72,631

67,396

Investments in associates

2,674

1,603

Other equity investments

6,069

6,069

Deferred tax assets

11,466

11,615

Total non-current assets

248,018

241,062

Inventories

170,146

145,200

Trade and other receivables

175,877

166,680

Marketable securities

16,099

7,064

Cash and cash equivalents

74,925

107,273

Total current assets

437,047

426,217

Total assets

685,065

667,279

Equity

Issued capital

32,685

32,685

Share premium

26,932

26,932

Shareholders’ loan notes

132,742

131,565

Other reserves

22,681

3,563

Retained earnings

294,079

291,498

Total equity attributable to equity holders of the Company

509,119

486,243

Non-controlling interest

4,191

1,933

Total equity

513,310

488,176

Liabilities

Bank borrowings

2,097

2,047

Other loans payable

1,733

1,718

Deferred tax liabilities

10,438

5,537

Other payables

406

300

Total non-current liabilities

14,674

9,602

Bank borrowings

887

873

Other loans payable

701

1,731

Trade and other payables

105,622

120,195

Current taxation

49,871

46,702

Total current liabilities

157,081

169,501

Total liabilities

171,755

179,103

Total equity and liabilities

685,065

667,279

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

ROBIN HOOD HOLDINGS LIMITED

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2009 AND JUNE 30, 2008


		2009			2008
	Note	USD ’000			USD ‘000
Continuing operations

Revenue	6		247,633			402,066

Cost of sales			(127,077	)		(136,099	)


Gross profit			120,556			265,967

Selling, general and administration costs			(65,324	)		(73,260	)

Development costs			(31,776	)		(38,792	)


Result from operations			23,456			153,915

Net financing income			3,087			2,846

Share of results of associates			1,037			(364	)

Impairment loss	7		(2,059	)		(1,562	)


Profit before tax			25,521			154,835

Income tax expense	8		(8,702	)		(15,754	)


Profit for the period from continuing operations			16,819			139,081


Discontinued operations

(Loss)/gain for the period from discontinued operations	9		(454	)		22,324


Profit for the period			16,365			161,405

Other comprehensive income
Foreign exchange translation differences			8,466			8,119


Total comprehensive income			24,831			169,524


Profit attributable to
Owners of the Company			13,497			160,756
Non-controlling interest			2,868			649


Profit for the period			16,365			161,405


Total Comprehensive Income attributable to
Owners of the Company			22,464			168,900
Non-controlling interest			2,367			624


			24,831			169,524

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

ROBIN HOOD HOLDINGS LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2009 AND JUNE 30, 2008

Attributable to owners of the Company

Non-

Share

Shareholders’

Other

Retained

controlling

Total

capital

premium

loan notes

reserves

earnings

Total

Interest

equity

Comparative period

USD’000

Balance at January 1, 2008

32,685

26,932

261,531

26,059

142,618

489,825

3,262

493,087

Total comprehensive income for the period

Profit for the period

—

160,756

649

161,405

Other comprehensive income

Foreign exchange translation differences

8,144

(25

)

8,119

Total comprehensive income

—

8,144

160,756

168,900

624

169,524

Transaction with owners, recorded directly to equity

Own shares acquired

(8,477

)

(8,477

)

(8,477

)

Shareholders’ loan notes:

Interest, net of current taxation

(1,192

)

(1,192

)

(1,192

)

Accrued interest payable

1,192

Repayment of shareholders’ loan notes

(132,803

)

(132,803

)

(132,803

)

Net transfers to other reserves

(5,134

)

5,134

—

Total transaction with owners

—

(131,611

)

(13,611

)

3,942

(141,280

)

—

(141,280

)

Balance at June 30, 2008

32,685

26,932

129,920

20,592

307,316

517,445

3,886

521,331

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

ROBIN HOOD HOLDINGS LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2009 AND JUNE 30, 2008

Attributable to owners of the Company

Non-

Share

Shareholders’

Other

Retained

controlling

Total

capital

premium

loan notes

reserves

earnings

Total

Interest

equity

Current period

USD’000

Balance at January 1, 2009

32,685

26,932

131,565

3,563

291,498

486,243

1,933

488,176

Total comprehensive income for the period

Profit for the period

—

13,497

2,868

16,365

Other comprehensive income

Foreign exchange translation differences

8,967

(501

)

8,466

Total comprehensive income

—

8,967

13,497

22,464

2,367

24,831

Transaction with owners, recorded directly to equity

Shares acquired from minority

)

Shareholders’ loan notes:

Interest, net of current taxation

(765

)

(765

)

(765

)

Accrued interest payable

1,177

Net transfers to other reserves

10,151

(10,151

)

—

Dividend paid by subsidiaries to minority shareholders

(107

)

(107

)

Total transaction with owners

—

1,177

10,151

(10,916

)

412

(109

)

303

Balance at June 30, 2009

32,685

26,932

132,742

22,681

294,079

509,119

4,191

513,310

The accompanying notes are an integral part of these condensed consolidated interim financial statements

ROBIN HOOD HOLDINGS LIMITED

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2009 AND JUNE 30, 2008


	2009			2008
	USD ’000			USD ‘000
Cash flows used in operating activities
Profit for the period		16,365			161,405
Adjustments for:
Stock provisions and write-offs		282			4
Provision for doubtful debts		125			(717	)
Depreciation		3,832			4,613
Amortisation		2,206			2,415
Profit on disposal of property, plant and equipment		(11	)		(18	)
Gain on disposal of subsidiary		—			(25,924	)
Impairment loss		2,059			1,562
Interest receivable		(436	)		(1,588	)
Interest expense		123			326
Unrealised foreign exchange gains		(266	)		(451	)
Share of results of associate		(1,037	)		364
Income tax expense		8,730			15,754


		31,972			157,745
Working capital changes:
Inventories		(25,228	)		(19,122	)
Receivables		844			(51,018	)
Payables		(23,376	)		44,503


Cash absorbed by operations		(15,788	)		132,108
Taxation paid		(5,458	)		(15,753	)
Taxation refunded		503			—

Net cash used in operating activities		(20,743	)		116,355


Cash flows used in investing activities
Payments for marketable securities		(9,035	)		—
Proceeds from disposal of subsidiary		—			24,161
Acquisition of non-controlling interest		(877	)		(2,179	)
Repayment for acquisition of shares in minority		(2	)		—
Acquisition of other intangible assets		(2,427	)		(2,253	)
Acquisition of property, plant and equipment		(5,327	)		(5,398	)
Proceeds from sale of property, plant and equipment		34			49
Funds advanced to related parties		(3,096	)		(1,570	)
Repayment of funds advanced to related parties		9			852
Interest received		476			1,595

Net cash used in investing activities		(20,245	)		15,257


Cash flows used in financing activities
Payment for acquisition of own shares		—			(8,477	)
Repayment of shareholders’ loan notes		—			(132,803	)
Bank finance		63			109
Funds advanced by other related parties		1,076			92
Repayment of funds advanced by other related parties		(971	)		(8,810	)
Funds from other borrowings		—			1,111
Repayment of funds advanced from borrowings		(319	)		(75	)
Dividends paid by subsidiaries to minority shareholders		(107	)		—
Interest paid		(165	)		(355	)


Net cash used in financing activities		(423	)		(149,208	)


Net decrease in cash and cash equivalents before foreign exchange		(41,411	)		(17,596	)

Effect of exchange rate fluctuations on the translation of cash flows of foreign operations		9,063			13,124

Net decrease in cash and cash equivalents		(32,348	)		(4,472	)

Cash and cash equivalents (net of bank overdraft) at January 1		107,273			134,827


Cash and cash equivalents (net of bank overdraft) at June 30		74,925			130,355

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

ROBIN HOOD HOLDINGS LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1		Reporting entity

		The condensed consolidated interim financial statements comprise those of Robin Hood Holdings Limited (the “Company”) and its subsidiaries (together referred to as the “Group”) and the Group’s interest in associates and joint ventures. The Company is, in turn, a subsidiary company of Quiver Inc. (referred to as the “Parent Company”). The registered office of the Company is at 57 St. Christopher Street, Valletta, Malta.

2		Basis of preparation

2.1		Statement of compliance

		The condensed consolidated interim financial statements for the six months ended June 30, 2009 have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the annual financial statements for the year ended December 31, 2008, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

		These condensed consolidated interim financial statements have been prepared in connection with Watson Pharmaceuticals Inc’s acquisition of the ordinary shares of Robin Hood Holdings Limited as described in Note 12.

		The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning January 1, 2009 and have not been early adopted:

		— IFRS 3 (revised), ‘Business combinations’ and consequential amendments to IAS27, ‘Consolidated and separate financial statements’, ISD28, ‘Investments in associates’ and ISD31, ‘Interests in joint ventures’, effective prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after July 1, 2009.

2.2		Functional and presentation summary

		These consolidated financial statements are presented in US Dollar (USD), which is the Company’s functional currency. All financial information presented in USD has been rounded to the nearest thousand.

3		Significant accounting policies

		Except for the changes described below, the accounting policies used in the preparation of the condensed consolidated interim financial statements are consistent with those used in the consolidated financial statements for the year ended December 31, 2008. Management is in the process of evaluating the new standards that have been released since the issue of the previous financial statements, however they do not anticipate that these new standards will have any impact on the Group’s current reporting.

3.1		Presentation of financial statements

		The Group applies revised IAS 1 Presentation of Financial Statements (2007), which became effective as of January 1, 2009. As a result, the Group presents in the consolidated statement of changes in equity all owner changes in equity, whereas all non-owner changes in equity are presented in the consolidated statement of comprehensive income. This presentation has been applied in these condensed interim financial statements as of and for the six month periods ended on June 30, 2009 and June 30, 2008.

ROBIN HOOD HOLDINGS LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Intangible assets


						Intellectual						Computer
	Goodwill					Property						Software						Total
	2009		2008			2009			2008			2009			2008			2009			2008
	USD ‘000		USD ‘000			USD ‘000			USD ‘000			USD ‘000			USD ‘000			USD ‘000			USD ‘000
Opening net book amount at January 1		147,523		148,223			5,810			6,169			1,046			1,499			154,379			155,891

Effects of movements in foreign exchange rates		—		—			46			372			(8	)		117			38			489
Acquisition of non-controlling interest		877		2,179			—			—			—			—			877			2,179
Other additions		—		—			1,783			2,674			307			98			2,090			2,772
Disposals		—		(3,136	)		—			(604	)		—			—			—			(3,740	)
Amortisation		—		—			(1,802	)		(1,959	)		(404	)		(456	)		(2,206	)		(2,415	)


Closing net book amount at June 30		148,400		147,266			5,837			6,652			941			1,258			155,178			155,176

4.1

Goodwill

		For the purpose of impairment testing of goodwill the Group is regarded as a single group of cash generating unit. The grouping is based on various factors including: (i) the level at which information about goodwill is available, (ii) the level at which management monitors goodwill, and (iii) the fact that the Group operates as a single segment under IAS 14 Segment Reporting. The cash generating unit’s recoverable amount is based on value in use using projections of the Group’s post tax cash flows plus a terminal value. The projections include key assumptions about internal future products, and expected prices. These calculations are based on actual operating results and four-year budgets/forecasts approved by the Board of Directors. Value in use is calculated using a discounted cash flow approach. A pre-tax risk-adjusted discount rate of 12.5% and an average growth rate of 1% has been applied to the projections for the years ended December 31, 2007 and 2008 respectively. The valuation indicates sufficient headroom such that changes to key assumptions discussed above are unlikely to result in any impairment of goodwill.

		An impairment test of goodwill is performed at the end of the year. There have been no changes in the business since the tests carried out in December 2008 and December 2007 that would trigger an impairment of goodwill in the period to June 30, 2009 and June 30, 2008 respectively.

ROBIN HOOD HOLDINGS LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Property, plant and equipment


	2009			2008
	USD ’000			USD ‘000
Opening net book amount at January 1		67,396			76,626
Effects of movement in foreign exchange rates		3,810			2,808
Additions		5,280			5,066
Disposals		(23	)		(70	)
Depreciation		(3,832	)		(4,613	)


Closing net book amount at June 30		72,631			79,817

Revenue

6.1

Category of activity


	2009		2008
	USD ’000		USD ‘000
Sales		235,298		390,851
Licence fees and royalties		9,025		8,268
Other		3,310		2,947


		247,633		402,066

During 2009 there were no first-to-file products in the US market and this contributed to the declining revenue compared with 2008.

6.2

Geographical markets


	2009		2008
	USD ’000		USD ‘000
Europe		138,277		147,148
US		43,548		194,116
Canada		36,801		32,737
Australia and New Zealand		23,789		21,077
Brazil		2,682		3,183
South Africa		130		1,424
Rest of the world		2,406		2,381


		247,633		402,066

Impairment loss

The impairment loss relates to loans originated from financing transactions between the Group and an investee, which have been assessed as non-recoverable.

ROBIN HOOD HOLDINGS LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Income tax expense


	2009			2008
	USD ’000			USD ‘000
Income tax on taxable income for the period		(9,703	)		(15,786	)
Withholding taxes on interest		(11	)		(35	)
Tax refund		943			—
Tax effect of interest on loan notes charged to equity		(412	)		—
Tax over provided in prior years		481			67


Tax expense for the period		(8,702	)		(15,754	)

The effective tax rate as of June 30, 2008 (10.17%) was significantly lower than the effective rate for the six months ended June 30, 2009 (34.10%). This is primarily the result of change in the jurisdictions where the majority of the companies’ taxable profits are recognised.

Discontinued operations

During the first half of 2008 the Group sold one of its subsidiaries, Oryx Pharmaceuticals Inc and later in the year discontinued the distribution operation in Portugal.

Financial risk management

Risk mitigation is a key part of the management of the group and the Group has a well developed process to identify, manage and limit exposure to areas which may have a negative impact on the business.

There have been no major changes to the principal risks and uncertainties identified and disclosed in the notes to the financial statements for the year ended December 31, 2008. These are summarised as:

	-		Credit risk

	-		Market risk

	-		Interest rate risk

	-		Foreign Currency risk

	-		Price risk

	-		Liquidity risk

Related parties

11.1

Identity of related parties

The Group has a related party relationship with its Parent Company, other shareholders, associates, its directors and other related parties.

In addition to disclosures contained elsewhere in these financial statements, further related party disclosures are set out below.

ROBIN HOOD HOLDINGS LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Related parties (continued)

11.2		Transactions with related parties

		The following transactions were carried out with related parties:


	2009		2008
	USD ’000		USD ‘000
Sale of goods to Associate		53		—


Purchases of goods from related party		380		—


Services provided by related party		11		11


Interest receivable from related company		116		49


Interest on loan notes charged to equity:
Parent company		779		792
Other shareholders		398		400


		1,177		1,192

Goods are sold on the same terms and at the same selling price that are available to Group companies.

11.3		Transactions with key management personnel

		The Company’s directors are considered as the Group’s key management personnel. Total directors’ remuneration paid during the year and included within salaries cost was USD657 thousand (2008: USD2,488 thousand).

Events occurring after the Balance Sheet date

The following material events took place subsequent to the period end:

	•		On October 1, 2009, the Group exercised an option to receive upfront payments totalling USD 61.4million in consideration for the grant of certain rights and licenses under the terms of an agreement with a third party.

	•		On December 2, 2009, Watson Pharmaceuticals Inc acquired all of the ordinary shares of Robin Hood Holdings Limited for a total consideration of USD1.75 billion (the Watson transaction).

	•		In conjunction with the Watson transaction, on November 30, 2009, the outstanding balance on the convertible shareholders’ loan notes together with accrued interest to date, were fully repaid. The repayment was in part financed through a fresh bank loan amounting to USD90 million and the cash received from the early termination of a license agreement as discussed above.

	•		On January 28, 2010, the Group acquired the remaining outstanding shares of Eden BioPharma Inc. for USD15.0 million. Disclosures under IFRS 3 are not presented as the effect of the acquisition was not material to the Group.

Actavis, Inc. - FORM 8-K/A - EX-99.2 - February 16, 2010

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Actavis, Inc. Reports