Annual Report 2001 - Bohler Uddeholm materializing visions

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Notes to the Consolidated Financial Statements 2001 52 BÖHLER-UDDEHOLM Annual Report 2001 Minority interest in the equity and profit or loss of entities controlled by the parent company is shown separately in the consolidated financial statements. The same basic principles used to consolidate subsidiaries apply analogously to companies consolidated using the proportional method. The purchase method is used to consolidate companies at equity. Any resulting positive difference is capitalized as goodwill and amortized over a period of five years. All receivables, liabilities, expenses and income arising from transactions between member companies of the Group are eliminated. Profits arising from the provision of goods and services between Group companies are also eliminated if they are material. Interim profits are not eliminated for companies carried at equity since these entities have an immaterial effect on the asset, financial and earnings positions of the Group. 3. FOREIGN CURRENCY TRANSLATION In accordance with IAS 21 (The Effects of Changes in Foreign Exchange Rates — revised 1993), the annual financial statements of foreign companies included in the consolidation are translated into Euro using the functional currency method. The relevant national currency is the functional currency in all cases since these companies operate independently from a financial, economic and organizational perspective. All assets and liabilities are therefore translated at the closing rate on the balance sheet date; income and expenses are translated at the average rate for the year. Translation differences between the closing rate on the balance sheet date and the average rate used for the income statement are charged or credited to equity. Any translation difference resulting from the adjustment of equity versus the initial consolidation is charged or credited to revenue reserves with no effect on the income statement. The resulting increase in equity for the reporting year is 1.1 m€ (previous year: 6.4 m€). Changes in fixed assets are translated at average rates. Changes in exchange rates over the prior year and differences resulting from the use of average rates to translate current year changes are shown separately as “currency differences” in the consolidated statement of fixed assets. Translation differences resulting from the conversion of monetary items denominated in a foreign currency, which arise from exchange rate fluctuations between the date the translation was recorded and the balance sheet date, are recognized as income or expense in the relevant period. Non-monetary items valued at purchase or production cost are translated at the historical rate. Translation differences on monetary items, such as long-term receivables or loans, that are partly owned by a foreign entity are charged or credited to equity with no effect on the income statement. If foreign currency receivables or liabilities are hedged with forward transactions, any unrealised exchange rate gains as of the balance sheet date are shown under other receivables and assets; unrealized exchange rate losses are recorded under other provisions.
Group valuation rules reflect the principle of consistent balance sheet preparation and valuation. Compliance with these uniform valuation principles is verified and attested by the auditors of the individual company financial statements. Data from companies consolidated using the equity method are not adjusted to conform to Group valuation methods. NON-CURRENT ASSETS Tangible assets are valued at purchase or production cost and depreciated regularly over their useful life or to the lower recoverable amount. Depreciation is calculated according to the straight-line method. The depreciation rates on fixed assets are as follows: Residential property 2.0 – 3.0% Office and plant buildings, other structures 2.0 – 20.0% Machinery and equipment 3.3 – 25.0% Tools, office equipment 5.0 – 25.0% Minor assets 100.0% Impairment losses are reflected in extraordinary depreciation. Whenever an impairment loss is reversed, a corresponding write-up is made. Leases for tangible assets, which transfer all risks and opportunities of ownership to the lessee (finance leasing), are capitalized at market value or the lower cash value in accordance with IAS 17 (Leases — revised 1997). These assets are depreciated over their useful life or the shorter term of the lease contract. Payment obligations resulting from future lease instalments are discounted and carried as liabilities. Maintenance expenses for the financial year are recorded at cost. Third party interest expense on tangible assets is not capitalized if production or purchase extends over a longer period of time. Grants from public sources (investment subsidies) are recorded as a liability and amortized over the useful of the asset. Intangible assets are valued at cost and amortized using the straight-line method. Amortization rates are between 6.67% and 33.3%. Research costs may not be capitalized according to IAS 38 (Intangible Assets), and are therefore expensed as incurred. Development costs also generally represent period expenses. These costs may only be capitalized if development activity will lead with sufficient probability to future revenues, which also cover the related costs. Moreover, various criteria detailed under IAS 38.45 (Intangible Assets) must be fulfilled in a cumulative manner with regard to development projects. Shares in associated companies, which are not of minor importance, are included in the consolidated financial statements at equity based on the latest annual accounts available. C. ACCOUNTING AND VALUATION METHODS BÖHLER-UDDEHOLM Annual Report 2001 53
Page 1 and 2: ANNUALREPORT 2001
Page 3 and 4: Annual Report 2001 Products made of
Page 6 and 7: BÖHLER-UDDEHOLM at a Glance 6 BÖH
Page 8 and 9: Organizational Chart BÖHLER-UDDEHO
Page 10 and 11: Foreword from the Chairman of the M
Page 13: The Management Board (above left) K
Page 16 and 17: Directors’ Report 2001 Sales in m
Page 18 and 19: Directors’ Report 2001 Earnings b
Page 21 and 22: Segment Reporting STRUCTURES, PRODU
Page 23: Segment Reporting STRUCTURES, PRODU
Page 32 and 33: Overview of Key Segment Figures SEG
Page 34 and 35: Investor Relations / Corporate Gove
Page 37 and 38: The number of employees in the BÖH
Page 39: The maintenance and distribution of
Page 42 and 43: Report of the Supervisory Board 42
Page 44 and 45: Balance Sheet as at 31 December 200
Page 46 and 47: Changes in Equity BÖHLER-UDDEHOLM
Page 48 and 49: Cash Flow Statement 2001 BÖHLER-UD
Page 50 and 51: Notes to the Consolidated Financial
Page 72 and 73: Statement of Fixed Assets as at 31
Page 74 and 75: Table of Holdings as at 31 December
Page 76 and 77: Table of Holdings Abbreviation Comp
Page 78 and 79: Table of Holdings Abbreviation Comp
Page 81 and 82: RETURN ON SALES (ROS) Earnings befo

Annual Report 2001 - Bohler Uddeholm materializing visions

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