Siegfried Annual Report 2009

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Goodwill from acquisitions and intangible assets with indefinite useful lives are not amortized. Instead these items are tested for impairment at least once a year, or if indications for possible impairment are evident. After the impairment of Goodwill in the year 2008, the Siegfried Group’s Balance Sheet contains no assets with indefinite useful lives. All intangible assets having a finite useful life and are amortized systematically on a straight-line basis over their economic or legal life, whichever is shorter: Licenses, patents Trademarks, technology client base Capitalized development costs Software The shorter of economic or legal life, as a rule 5 – 20 years The shorter of economic or legal life, as a rule 5 – 20 years 5–10 years 3–5 years Impairment tests are carried out whenever there are indications that intangible assets may be impaired. If the carrying amount is greater than the recoverable amount, equal to the greater of the two amounts market value less costs of disposal and value in use, the carrying amount is reduced to the recoverable amount. This reduction is recognized in the Consolidated Income Statement as expense. Intangible assets also include capitalized development costs for Siegfried products and for Generic projects as well as Actives. Assets are capitalized only if all relevant capitalization criteria are fulfilled. These costs are capitalized according to the stage of the project. The capitalized development costs are regularly assessed for “recoverability” and impaired if the recoverable amount is below the carrying amount. Impairments of capitalized development costs are recognized in the Income Statement under Research and development. Impairment of non-financial non-current assets An assessment whether the value of Property, plant and equipment and other non-current assets with finite useful life may be impaired is undertaken if as a result of events or changed circumstances it appears possible that the carrying amounts are too high. If the carrying amount exceeds the recoverable amount, then a special impairment is recorded to this amount. The recoverable amount is the higher of the asset’s fair value less costs to sell and the value in use. When an impairment loss arises the useful life of the asset in question is reviewed and, if necessary, the future depreciation charge is accelerated. The recoverability of assets with an indefinite life is reviewed at least once a year. Financial assets Financial assets are classified into the following categories: – Financial investments at ”fair value through profit and loss“. These include financial investments that are held for trading purposes and derivative and financial instruments that on initial recognition are designated as at ”fair value through profit and loss”. These are acquired for the purpose of generating a profit from short-term fluctuations in price. These assets are included under current assets, if they are held for trading purposes or will probably be realized within 12 months. – Loans and receivables. These contain loans, trade and other receivables and cash and cash equivalents with fixed payments that are not listed on a capital market. With a due date of 12 months or less, they are classified as current assets; anything over that period is classified as a non-current asset at discounted value. – Financial investments “available for sale” are non-derivative instruments, which either were allocated to this category or belong to neither of the other categories. They are disclosed under non-current assets in Financial and other non-current investments, except when it is planned to sell them within the coming 12 months. The classification of the financial assets is reviewed at every reporting date. All purchases and disposals of financial assets are recognized on the trade date. All financial assets are initially recorded at fair value, including transaction costs, except for “fair value through profit and loss” assets (no transaction costs). Changes in the fair value of “fair value through profit and loss“ assets are recorded in the financial result of the reporting period. Available-for-sale financial assets are subsequently carried at fair value, with all unrealized changes in fair value (after tax) recorded in equity. When the available-for-sale financial assets are sold, impaired or otherwise disposed of, the cumulative gains and losses previously recognized in equity are transferred to the result for the current period. The fair value of financial assets is based in principle on current market prices. If the market for a financial investment is not active and no current market prices are available, the fair value is determined by means of suitable valuation techniques such as reference to comparable instruments and transactions or the application of Discounted Cash Flow analyses. At each balance sheet date financial assets are assessed for impairment. Financial assets are impaired only if there is objective evidence of impairment as a result of events that occurred after the initial recognition of the asset. If the carrying value exceeds the net recoverable amount, the asset is impaired to the recoverable amount calculated on the basis 76 Financial Statements Siegfried Group
of discounted future cash flows. Various criteria are applied to determine if there is objective evidence of an impairment loss. These criteria include significant financial difficulty of the issuer, a breach of contract, danger of bankruptcy, disappearance of an active market, etc. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is evidence that the assets are impaired. Inventories Inventories are carried in the Balance Sheet at the lower of acquisition/production costs and net realizable value. Production costs comprise all manufacturing costs including an appropriate share of production overheads. Costs are assigned to inventory based on the “first-in, firstout” method. Appropriate valuation allowances are made for obsolete and slow-moving inventory items. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Intercompany profits on inventories of goods produced in the Group are eliminated from net profit. Trade receivables Trade receivables are included initially at fair value and subsequently at amortized cost; this is equal to the amounts invoiced after deducting allowances for doubtful accounts. Indications for possible impairment are given if payment is delayed, the customer is experiencing financial difficulties or recapitalization or bankruptcy is likely. Allowances for doubtful accounts are established based on the difference between the net present value of the nominal amount of the receivables and the estimated net collectible amount. The expected loss is recognized in the Income Statement in the caption “Marketing and sales”. When a trade receivable becomes uncollectible, it is written off against the allowance for doubtful accounts. Other current assets Other current assets consist of advance payments for deliveries of goods or services, prepayments and accrued income and other amounts receivable. They are recorded at net realizable value. Cash Cash consists of cash, balances held in postal and bank accounts and short-term deposits with a maturity of three months or less from the date of acquisition. Cash is the defined fund of the Consolidated Cash Flow Statement. Non-current assets held for sale Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. Non-current assets held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Equity/Treasury shares A purchase of treasury shares by a Group company, including all costs (net after taxes), is recorded against equity, until the shares are redeemed, issued again or sold. If treasury shares are issued or sold at a later date, the net consideration less directly attributable transaction costs and income taxes is recorded in equity. Transactions with minority interests are treated using the Economic Entity method like treasury share transactions. Therefore all payments for the purchase of minority interests or sales proceeds on the sale of minority interests are recorded over equity. Any differences compared with the minority interests carried in the Balance Sheet are eliminated through the reserves. Financial liabilities All financial liabilities are recorded under current or non-current financial liabilities. They are valued at amortized cost and any difference between the amount received (less transaction costs) and the settlement amount is recognized in the Income Statement over the period of the loan using the effective interest method. The non-current financial liabilities include all liabilities with a residual duration of more than one year. The current financial liabilities include all liabilities with a duration of less than one year, including the current portion of non-current liabilities. If at the reporting date there is a binding commitment to extend a maturing loan, it is classified according to the new duration. Provisions Provisions are calculated according to uniform, consistent operating criteria. They are intended to cover identifiable risks of loss and payment liabilities. Provisions are recorded if the Group has, as a result of a past event, a present obligation (legal or constructive) that will probably (more likely than not) result in an outflow of economic resources and if a reasonable estimate of that obligation can be made. Provisions are discounted to their net present value. Increases in provisions due to interest effects are recorded as interest expenses. Possible obligations that are dependent on future events or where no reasonable estimate of the obligation can be made, are not recorded, but disclosed as contingent liabilities. Financial Statements Siegfried Group 77
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Siegfried Annual Report 2009
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Key numbers Siegfried Group 2009 20
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Letter from the Chairman & CEO Dear
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preconditioning the physical charac
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eaching 25% by the end of 2009. Pro
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election. Bernard Siegfried first j
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Roland Schuermann Head Chemical Ope
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0. Foreword and general framework R
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Participation structure of Siegfrie
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2. Capital structure 2.1 Capital Th
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Name Birthyear Position Entry Elect
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Bernard A. Siegfried, Ph.D., Honora
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Malcolm Perkins Malcolm Perkins (19
Page 29: 3.6 Executive management informatio
Page 32 and 33: Group Management From left to right
Page 34 and 35: 4.2 Portraits Dr. Rudolf Hanko, CEO
Page 36 and 37: Marianne Späne, President Siegfrie
Page 38 and 39: 4.3 Management Contracts Siegfried
Page 40 and 41: Shareholders with at least 250,000
Page 43 and 44: Dr. Tanja Westphal Manager Pharmace
Page 45 and 46: IntroductionSituation ‘Sustainabi
Page 47: 2009 Audits Site Inspections (Custo
Page 50 and 51: Compliance Introduction Siegfried i
Page 52 and 53: Our goal is to cultivate a quality
Page 54 and 55: External audits During 2009, nation
Page 56 and 57: the Siegfried teams pedaled the dis
Page 58 and 59: Energy consumption 2009 2008 2007 2
Page 60 and 61: Water consumption Water consumption
Page 62 and 63: Reclaimed solvents 2009 2008 2007 2
Page 64 and 65: Fines and non-monetary penalties Si
Page 66 and 67: Total workforce by region as of Dec
Page 69 and 70: Ken Zrebiec Director of Operations
Page 71 and 72: elated to the Deliver project. In a
Page 73 and 74: Consolidated income statement In 10
Page 75 and 76: Consolidated statement of changes i
Page 77 and 78: Reclassification of Balance sheet J
Page 79: exchange rates prevailing on the tr
Page 83 and 84: production overheads related to the
Page 85 and 86: Financial risk management Financial
Page 87 and 88: to 20.5% (2008: 17.7%) and 13.4% (2
Page 89 and 90: ealized, the obligation to eliminat
Page 91 and 92: 2. Property, plant and equipment La
Page 93 and 94: 4. Investments in associated compan
Page 95 and 96: 6. Financial and other non-current
Page 97 and 98: 8. Inventories In 1 000 CHF 2009 20
Page 99 and 100: 13. Treasury shares Treasury shares
Page 101 and 102: 19. Employee benefits and personnel
Page 103 and 104: The following table shows how the a
Page 105 and 106: CHF 1.2 million) were purchased fro
Page 107 and 108: In addition to sales of products ne
Page 109: Five-year overview 2005 - 2009, con
Page 112 and 113: Financial Statements Siegfried Hold
Page 114 and 115: Transparency Law Art. 663b and Art.
Page 116 and 117: Siegfried Group, in which the risks
Page 118 and 119: Stock market data 2009 2008 2007 20
Page 120: Publisher’s note This annual repo
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Siegfried Annual Report 2009

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