Annual Report 2006

58
Notes to the Consolidated Financial
Statements 2006 of the Mikron Group
Research and development
CHF 1‘000 2006 2005
Capitalized own production -5‘113 -4‘071
Research and development expensed in the income statement -9‘225 -10‘639
Total research and development -14‘338 -14‘710
Mikron develops customized solutions in machining and assembly systems for highly innovative new products. Accordingly,
engineering is part of nearly all customer projects. Existing basic machines are further developed on an ongoing basis and
new concepts introduced. In the year under review, the Machining Technology division worked on the industrialization of the
new "Mikron NRG-50" machining system and started the fundamental redesign of two product lines. The Assembly Technology
division was occupied with the industrialization of the Assembly Center and launched a major software project.
The increase in capitalized development costs relates to the basic machine and software developments already referred to and
is made up of almost 74% (prior year: 59%) own work capitalized. Smaller development projects, early-stage development
expenditure and product maintenance for existing tools and machines are charged directly to the income statement.
6.8 Investment properties
CHF 1‘000 31.12.2006 31.12.2005
Balance at 1 January 29‘796 0
Transfer from tangible assets 0 29‘796
Capitalized expenditures 127 0
Revaluations 731 0
Balance at 31 December 30‘654 29‘796
Fire insurance values 54‘867 54‘867
Mikron Group is the owner of a property in Switzerland (land and building), fully leased to third parties. Rental income
amounted to CHF 2.7 million (prior year: CHF 2.7 million) and direct operating expenses arising from the investment property
to CHF 0.2 million (prior year: CHF 0.2 million).
In the year under review, the fair value of this property was evaluated and changes recognized in the income statement. For
the valuation, the discounted cash flow method was used. Cyclical investments have been taken into consideration in determining
the cash flow. A discount rate of 5.2% was applied.
6.9 Financial assets
CHF 1‘000 31.12.2006 31.12.2005
Investments held-to-maturity 15‘000 15‘000
Total current financial assets 15‘000 15‘000
Financial assets include deposits in CHF with a duration of less than 6 months.