Annual Report 2005

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$HP Latex Printing Technologies - Neschen$

56 Notes relating to the consolidated annual accounts Trade receivables and other assets Trade receivables are classified as “advances and debts managed by the company” in accordance with IAS 39 “Financial instruments: recognition and measurement” and shown at acquisition cost. If doubts should arise regarding recovery, customer debts will be shown at their lower realisable value. Besides the necessary individual value adjustments, recognisable risks from the general credit risk will be taken into account by carrying out general value adjustments. All other receivables and assets are shown at acquisition cost. Evidence of depreciation will be taken into account by applying appropriate unscheduled depreciation to the lower recoverable amount. In principle, non-interest-bearing receivables with a residual term of more than one year will be discounted and shown at their current value. Securities Securities are classified as “held for trading purposes” or as “available for sale” in accordance with IAS 39 “Financial instruments: recognition and measurement” and valued at fair value. Liquid assets Cash and cash equivalents include cash assets, cheques and bank funds which are immediately available with an original term of up to three months and shown at nominal value. Income taxes Income taxes represent the total actual income taxes and deferred income taxes. Deferred taxes are calculated in accordance with IAS 12 “Income taxes”. Tax relief and tax charges which are likely to arise in the future will be shown for temporary differences between the book values shown in the Group financial statement and the tax valuations for assets and liabilities. Tax savings expected from the utilisation of loss carry-forwards which are considered to be realisable in the future will be shown as assets. Deferred tax assets for deductible temporary differences and tax loss carry-forwards which exceed the deferred tax liabilities from taxable temporary differences will only be recognised to the extent that it is sufficiently probable that sufficient taxable income will be obtained in order to realise the corresponding benefit. Deferred taxes will be valued at the rates expected to be valid for the period in which an asset is realised or a liability is discharged. Deferred taxes will be shown as tax proceeds or tax expenditure in the profit and loss account unless they relate to items entered directly under shareholders’ equity capital without affecting income. If that is the case, the deferred taxes will also be entered under shareholders’ equity capital without affecting income. Transitory items Transitory depreciation is shown in connection with deferred charges to expenses and deferred credits to income. Provisions The actuarial valuation of pension provisions for company pension schemes is carried out in accordance with the projected unit credit method prescribed in IAS 19 “Employee benefits”. This procedure based on the present value of entitlement takes account of both the known pension and entitlements accrued on the closing date as well as increases in wages and pensions to be expected in the future. Differences arising at the end of the year (so-called actuarial profits or losses) between scheduled pension obligations determined and the actual value of entitlement will only be shown if they lie outside a margin of 10% of the scope of the obligation. If that is the case, they will be distributed over the average remaining period of service of employees with an entitlement from the following year and entered as income or expenditure. The pro rata interest relating to the addition to reserve included under pension costs will be shown as an interest expense within the financial result. Other provisions for pensions and similar obligations will be created based on actuarial reports in accordance with IAS 19. Other provisions will be created in the case of legal or de facto obligations to third parties which are based on past business transactions or events and which will probably (more than 50% likely to occur) lead to asset outflows which can be reliably determined. They will be shown at their expected realisable value taking account of all the resulting recognisable risks and not offset against rights of recovery. The realisable value with the highest probability of occurrence will be used in each case. Provisions for warranty costs will be entered when the product in question is sold. The amount entered as the provision represents the best possible estimate of the expenditure required to meet the current obligation. Provisions for restructuring will be entered once the Group has drawn up a formal plan for the restructuring program and it has been distributed to the units to be affected by the program.
Notes relating to the consolidated annual accounts Liabilities Financial obligations from financing leases are shown as liabilities at the current value of the future lease payments. Liabilities due to banks are shown at the amount payable received minus directly attributable expenditure. Financing costs including those connected with the repayment or discharge of premiums payable are shown on an accruals basis and will increase the book value of the instrument unless they were paid when it was created. Liabilities from supplies and services as well as other liabilities are shown at their repayment value apart from derivative financial instruments which are shown at fair value in accordance with IAS 39 “Financial instruments: recognition and measurement”. Contingencies Contingencies are possible or existing liabilities based on past events where an outflow of resources is, however, regarded as improbable. In accordance with IAS 37 “Provisions, contingent liabilities and contingent assets”, such liabilities are not to be entered in the balance sheet but specified in the Notes to the balance sheet. Recognition of derivative financial instruments/Hedge accounting All derivative financial instruments are to be recognised at fair value in accordance with IAS 39 “Financial instruments: recognition and measurement”. The valuation of derivative financial instruments is based on inter-bank conditions or rates of exchange, using the buying and selling rates on the closing date. If exchange rates are not used, the fair value will be calculated using recognised financial models. The fair value shown corresponds to the amount for which an asset could be exchanged or a liability settled between knowledgeable, willing business partners in an arm’s length transaction in each case. Profits and losses resulting from derivative financial instruments which have been defined as qualified hedging tools within a fair value hedge or for which it was not possible to create a qualified hedge in accordance with IAS 39 “Financial instruments: recognition and measurement” and therefore hedge accounting cannot be carried out will be shown as affecting the result in the profit and loss account. The results from derivative financial instruments for which a cash flow hedge is created and which are proven to be effective will be shown in the shareholders’ equity capital without affecting the result until the time when the secured underlying transaction is realised. The effects of any changes to the result caused by the ineffectiveness of these financial instruments will be shown immediately in the profit and loss account. Share-based payment systems The Group is not currently operating any share price-oriented payment systems via shareholders’ equity capital instruments or share price-oriented cash payment systems. The making of assumptions and use of estimates When the Group’s financial statement was drawn up, assumptions were made and estimates used which affected the presentation and levels of assets, liabilities, income, expenditure and contingencies shown. These assumptions and estimates mainly related to the standardised determination of useful commercial lives within the Group, the valuation of provisions and the feasibility of future tax relief. In individual cases, the actual values may differ from the assumptions made and estimates used. Changes will be taken into account and shown as affecting the result when further information on these becomes available. Realisation of profit Income will be valued at the current value of the consideration received or debt to be reconciled and represents amounts for goods supplied and services provided as part of normal business activity minus discounts, turnover tax and other taxes arising in connection with sales. Proceeds from the sale of goods will be entered on delivery after the transfer of ownership. Income from interest will be determined for periods taking into account the outstanding amount of the loan and the effective interest rate to be applied. The effective interest rate is the interest rate to be used in order to ensure that the current value of the payments expected to be made in the future over the expected useful life of the financial asset is equal to the net book value. Dividend income from financial investments will be entered when the shareholder becomes entitled to payment. Research and development costs It is not permitted to show research costs as assets. Development costs are to be shown as assets if cumulatively all the appropriation criteria from IAS 38 “Intangible assets” are met, the research phase can be clearly distinguished from the development phase and costs incurred can be attributed to the individual project phases without any overlapping. 57
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Annual Report 2005
Page 4 and 5:
4 Financial Overview HGB IFRS IFRS
Page 6 and 7: 6 Neschen AG · Consolidated Compan
Page 8 and 9: 8 Foreword by the Spokesman for the
Page 10 and 11: 10 Foreword by the Spokesman for th
Page 12 and 13: 12 Business Units NESCHEN AG has le
Page 14 and 15: 14 Market Strategy NESCHEN AG has h
Page 16 and 17: 16 Restructuring Program the site o
Page 18 and 19: 18 Business Unit “Graphics” The
Page 20 and 21: 20 Business Unit “Graphics” The
Page 22 and 23: 22 Business Unit “Documents” Th
Page 24 and 25: 24 Business Unit “Special Product
Page 26 and 27: 26 Quality Management During the pa
Page 28 and 29: 28 Corporate Governance Code With t
Page 30 and 31: 30 Report of the Supervisory Board
Page 32 and 33: 32 Course of business and Group’s
Page 34 and 35: 34 Profit and Loss Statement During
Page 36 and 37: 36 Profit and loss statement The re
Page 38 and 39: 38 Cash Flow Cash flow as of 31/12
Page 40 and 41: 40 Personnel development As of 31.1
Page 42 and 43: 42 Forecast We plan to achieve sale
Page 44 and 45: 44 Research and Development Approxi
Page 46 and 47: 46 Outlook The past year - 2005 - h
Page 48 and 49: 48 Consolidated balance sheet Conso
Page 50 and 51: 50 Notes relating to the consolidat
Page 78 and 79: 78 Neschen AG balance sheet (in acc
Page 80 and 81: 80 Income statement of Neschen AG F
Page 82: 82 Imprint Imprint The Annual Repor
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Annual Report 2005

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