ADT 2011 Annual Report Download - page 33

PROPOSAL NUMBER FIVE—ALLOCATION OF FISCAL YEAR 2011 RESULTS AND
APPROVAL OF ORDINARY DIVIDEND
Proposal 5(a)—Allocation of Fiscal Year 2011 Results
The Board of Directors proposes that the Company’s net income as shown below be used to
reduce the Company’s allocated deficit in its statutory accounts. The Company’s net income for fiscal
2011 increases total shareholders’ equity in the Company’s statutory accounts. The corresponding
allocation to accumulated deficit does not have an impact on net equity. The Company’s net income in
its standalone statutory accounts for fiscal 2011 is derived primarily from intercompany transactions in
fiscal 2011, and is separate from the Company’s net income reported in its consolidated financial
statements presented in accordance with U.S. generally accepted accounting principles. The following
table shows the appropriation of net income in Swiss francs and U.S. dollars (converted from Swiss
francs as of September 30, 2011) as proposed by the Board:
Swiss francs U.S. dollars
Net income ....................... CHF 7,159,800,990 $ 7,978,920,000
Accumulated deficit, beginning of period . . CHF (34,246,650,764) $(38,164,600,000)
Accumulated deficit, carried forward ..... CHF(27,086,849,774) $(30,185,680,000)
The Board of Directors proposes that the Company’s net income of CHF 7,159,800,990 be used to
reduce the accumulated deficit in accordance with the table above. Under Swiss law, the allocation of
the Company’s balance sheet results is customarily submitted to shareholders for resolution at each
annual general meeting.
The allocation of fiscal 2011 results requires the affirmative vote of a relative majority of the votes
cast by the holders of common shares represented at the Annual General Meeting in person or by
proxy, whereby abstentions, broker non-votes, blank and invalid votes are disregarded in establishing
the number of votes cast.
The Board unanimously recommends that shareholders vote FOR using the Company’s net
income to reduce the accumulated deficit.
Proposal 5(b)—Consolidation of Reserves
The Board of Directors proposes to consolidate the Company’s reserves in its statutory accounts,
which consist of the general reserve, the reserve for treasury shares and the contributed surplus under a
new account entitled ‘‘reserve from capital contributions.’’ Pursuant to recently enacted regulations,
Swiss tax authorities require that all shareholder contributions must be booked into a reserve
specifically entitled ‘‘reserve from capital contributions’’ in order to preserve the Company’s ability to
return such contributions to shareholders free of Swiss withholding tax.
The Board of Directors therefore proposes to consolidate the general reserve, the reserve for
treasury shares and the contributed surplus under a new account entitled ‘‘reserve from capital
contributions’’ (‘‘Gesetzliche Reserve aus Kapitaleinlagen’’) thereby confirming that the contributed
surplus shall in principle remain available for distribution to shareholders.
2012 Proxy Statement 19