Financial Statement - Utimaco

Appendix III
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UTIMACO SAFEWARE AG, OBERURSEL, GERMANY
APPENDIX FOR THE FISCAL YEAR 2003/2004
I. GENERAL NOTES ON THE FINANCIAL STATEMENT AND THE REPORTING AND EVALUATION
METHODS
The annual financial report for Utimaco Safeware AG, Oberursel, Germany, (also called "Utimaco"
below) has been created in accordance with the regulations specified in the German
HGB (Handelsgesetzbuch - commercial code) and AktG (Aktiengesetz - stock corporation law)
laws. As Utimaco Safeware AG is listed on the stock exchange, it is classified as a "large corporation"
as defined in Sect. 267 Para. 3 HGB.
Structure and Statement
The profit and loss statement is structured in accordance with Sect. 266 HGB.
The profit and loss statement has been created using the cost-of-sales accounting format as
defined in Sect. 275 Para. 3 HGB.
In the profit and loss statement, Research and Development costs are shown as special items
before the Sales and Marketing costs, with the application of Sect. 264 Para. 2 Article 1 and
Sect. 265 Para. 5 Article 2 HGB.
Project-related development costs are reported in the item "Cost of manufacture for providing
services for achieving net sales" from fiscal year 2003/2004 onwards. In the year under review €
487,000 (previous year: € 518,000) was spent for this purpose. To facilitate comparison, the
values from previous years for the "Research and development expenses" and "Cost of manufacture
for providing services for achieving net sales" items were adjusted.
The Communications and Insurance costs, and expenditure on the corporate IT infrastructure,
have been included in the "General Administration Costs" posting, as in the previous year, to
make the accounts more informative.
Evaluation Methods
Intangible assets and property, plant and equipment assets are stated in the balance sheet at
acquisition or manufacturing cost less scheduled depreciations through use. Scheduled depreciations
are applied linearly.
The goodwill in the company KryptoKom, acquired in the fiscal year 1999/2000, will be written
off over 10 years, since it involves the purchase of a complete commercial business that had its
own products, trade marks and 10 years of product experience.
For data-processing software and similar rights, the effective life is 1.5 to 3 years, and for fixtures,
furniture and office equipment, the effective life is mainly 3 to 10 years. Small-value capital
assets are depreciated immediately: it is assumed that they are disposed of within the fiscal
year.
Financial assets have been reported at their cost of acquisition or the lower attributable value.
Inventories have been reported at their acquisition or manufacturing costs with the application of
permitted calculation simplification methods. Finished products are evaluated at their cost of