Siegfried Annual Report 2009

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11. Derivative financial instruments The principles of Siegfried’s financial risk management are described in the accounting principles. Within the framework of these principles, Siegfried uses derivative financial instruments to hedge foreign exchange and interest rate risks. The contract value discloses the outstanding transaction volume. Derivative financial instruments Contract value Positive fair value Negative fair value In 1000 CHF 2009 2008 2009 2008 2009 2008 Foreign currency swaps – 4 699 – 434 – – Interest rate swaps at fair value through profit and loss 40 000 40 000 – – 1 519 1 183 Interest rate swaps “CF hedges” 33 210 33 795 – – 2 335 3 117 Total 73 210 78 494 – 434 3 854 4 300 Foreign exchange contracts: At the balance sheet date there were no open foreign exchange forward contracts. In the previous year expected cash inflows of USD 4.7 million were hedged with the aid of foreign exchange forward contracts. Fair value changes in foreign exchange contracts are recognized in the financial result. A loan of USD 32 million raised in the Group in 2005 is to be regarded as a hedge of the net investment in the US subsidiary, Penick Holding Company (hedge of a net investment). The exchange gain resulting from translating the liability into CHF at the reporting date of CHF 0.6 million (2008: CHF 2.2 million) has been recognized directly in equity. Interest rate swaps: Interest rate swaps were used to fix variable interest loans in CHF and USD in the amount of CHF 73.2 million (2008: CHF 73.8 million). The fixed interest rates at 31.12.2009 vary between 2.6% and 4.5% (2008: 2.6% and 4.5%), the most important variable interest rates are CHF LIBOR 3 months 0.3% (2008: 0.7%), USD LIBOR 0.3% (2008: 1.4%) and EURIBOR 3 months 0.7% (2008: 2.9%). The fair value changes of the interest rate swaps of CHF 40 million are recognized in the financial result. The interest rate swap of USD 32 million qualifies as a hedge and therefore the portion effective for hedging is recognized in equity. 12. Cash Cash balances of CHF 8.1 million (2008: CHF 14.9 million) are primarily current accounts with banks. 94 Financial Statements Siegfried Group
13. Treasury shares Treasury shares are deducted at transaction value directly from Equity. At 31.12. 2009 the nominal amount of the treasury shares was CHF 65 476 (2008: CHF 59 156). 2008 Change 2009 Treasury shares Shares reserved for Employee Share Plan 8 762 3 160 11 922 Treasury shares not reserved 20 816 – 20 816 Total treasury shares 29 578 3 160 32 738 Total shares in issue 2 770 422 –3 160 2 767 262 Total Siegfried shares 2 800 000 – 2 800 000 and the financing of expected growth. As of 31.12.2009 CHF 71.2 million (2008: CHF 86.1 million) of this credit line has been drawn; the covenants were met. In connection with the decision not to capitalize development costs related to the inhalation technology, an amendment of the covenants was discussed with the banks in the reporting period. The covenants were adapted to the new situation. In addition the credit line of CHF 200 million was reduced to CHF 120 million. At year-end, the company was again negotiating with the banks to adjust the covenants, but the credit line is unchanged. The company is confident that these discussions will be concluded in the first quarter 2010. The syndicated bank loan will be due for repayment in 2012. Siegfried has the right to draw up to CHF 30.0 million in additional debt capital outside this facility. 14. Financial liabilities In 1000 CHF 2009 2008 Loans from banks 71 210 86 127 Other non-current liabilities 126 – Total non-current interest bearing liabilities 71 336 86 127 Maturity and average interest rates of bank loans: 2009 2008 In the year 2012 71 210 86 127 Ø Interest rate in % 4.0% 5.4% Total 71 210 86 127 15. Provisions Environmental Other In 1000 CHF provisions provisions Total Statement of changes As of December 31, 2008 10 522 4 809 15 331 Costs incurred –178 – –178 Additions, interest 601 1 717 2 318 Releases (unused provisions) –1 000 –1 255 –2 255 As of December 31, 2009 9 945 5 271 15 216 Of which current 3 595 5 271 8 866 of which non-current 6 350 – 6 350 Variable interest rate bank loans of CHF 40.0 million and USD 32.0 million (2008: CHF 40.0 million and USD 32 million) were fixed with interest rate swaps. The remaining financial liabilities are subject to interest rate risks. The financial liabilities are denominated in the following currencies: In 1000 CHF Total CHF EUR USD As of December 31, 2009 Bank loans 71 210 38 000 – 33 210 Other non-current liabilities 126 – Total 71 336 38 000 – 33 210 As of December 31, 2008 Bank loans 86 127 30 000 22 332 33 795 Total 86 127 30 000 22 332 33 795 In August 2006 a credit line of a syndicated bank loan of CHF 200 million was opened. This credit line was arranged with a group of banks to secure planned capital expenditure Environmental provisions The Siegfried Group produces chemicals at various locations. As part of the manufacturing process, undesirable incidents may arise that result in an obligation to remedy pollutant effects on the environment. Such obligations are recognized in the period when they become apparent. A provision is recorded if it is expected that the obligation results in an outflow of economic resources in the medium term and if a reasonable estimate of that obligation can be made. By their nature the amounts and timing of any outflows are difficult to predict. In connection with planned construction projects, environmental investigations were performed. Possible remediation obligations of CHF 9.9 million have been provided for. The start of the planned construction projects is anticipated within the next 15 years; in connection with the construction of a laboratory building CHF 0.2 million of the provision was used; the unused portion of the provision foreseen for this purpose of CHF 1.0 million has been released to income. The environmental provision was discounted to the present value of the expected expenditures. Management reviews the provisions annually based on regulatory changes or changes in planned investments. Financial Statements Siegfried Group 95
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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
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3.6 Executive management informatio
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Group Management From left to right
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4.2 Portraits Dr. Rudolf Hanko, CEO
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Marianne Späne, President Siegfrie
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4.3 Management Contracts Siegfried
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Shareholders with at least 250,000
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Dr. Tanja Westphal Manager Pharmace
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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 and 80: exchange rates prevailing on the tr
Page 81 and 82: of discounted future cash flows. Va
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: 8. Inventories In 1 000 CHF 2009 20
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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