We make our customers successful. - Oerlikon Barmag

Provisions are set up for current legal and actual liabilities which
are attributable to events in the past. The amount of the provisions
is based on the expected use of funds for covering the liabilities.
Retirement and other employee benefits Saurer companies
operate various plans for providing employees with retirement benefits,
which conform to local circumstances and practice in the
countries concerned.
These include defined benefit and defined contribution plans, under
which benefits are provided through separate funds, insurance
plans or unfunded arrangements. For defined benefit plans, the
amount charged to the income statement consists of current service
cost which includes the normal cost of financing benefits in
respect of future years of service as well as net interest on the assets
or obligations. Contributions to defined contribution pension
schemes are charged to the income statement as incurred.
For funded plans, plan assets are held separately from those of the
group in independently administered funds. The group’s liability to
pay future retirement benefits is determined using the “projected
unit credit method” in accordance with IAS 19 (revised), and is
provided in the group’s balance sheet. Actuarial gains and losses
are amortized over the average remaining period of employment,
insofar as they exceed 10% of the higher amount of the present
value of the benefits and of the plan assets.
The additional costs for early retirement and reduced working
hours are provided for at the time of the respective agreement.
Employee stock options are issued with exercise prices equivalent
to market prices at the date of issue and therefore no charge
is made to income at the date of issue. On the exercise of the option,
the difference between the exercise and market prices is offset
by an equivalent gain on the sale of treasury shares.
Accounting principles
Convertible bond The convertible bond includes a liability and
an equity component. At the time of issue the equity component
is booked directly to shareholders’ equity. The difference between
the liability and the nominal value is treated as interest expense
over the duration of the loan.
Other assets and liabilities are reported at their nominal or
market value.
Composition of items in the income statement
Sales Revenues from products sold or services rendered are stated
without turnover or value added tax, net of allowances, and are
recognized when title is passed to the customer, which is generally
on shipment.
Research and development Research and development costs
are charged to the income statement insofar as the conditions for
capitalization in accordance with IAS 38 are not fulfilled. Only the
costs for the development of new products and the further development
of existing products are included.
Income taxes Liabilities for taxes on income are calculated and
provided for, irrespective of their maturity, on the basis of the
expected tax rates of the relevant companies. Deferred taxes on
differences between group and tax valuations as well as eliminations
with an effect on the income statement are accounted for in
accordance with the liability method. Deferred tax assets and liabilities
are offset insofar as this is legally permissible.
Tax effects from tax loss carry forwards are taken into account if it
can be reasonably expected that they will be realized.
Provisions for non-recoverable withholding taxes are set up in respect
of retained earnings at group companies, as soon as a distribution
of profits is planned.
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