Financial Statements - Solvay

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76 Solvay Global Annual Report 2008 (12b) Deferred taxes on the balance sheet Deferred tax assets and liabilities are recorded in the balance sheet in respect of temporary differences arising from the fact that the tax authorities apply different rules when assessing assets and liabilities than those used for drawing up annual accounts. Variations occurring during the year in the deferred taxes recorded in the balance sheet are taken into income, except where they relate to items that are recorded directly in shareholders’ equity (see above). Deferred taxes are calculated based on the prevailing tax rates, or where they have been changed, at the enacted rates that are expected to apply at the time of recording the taxes payable (or recoverable) in the statutory accounts. Deferred tax assets are written down to the extent that it appears unlikely, in the light of expected future tax situations, that they will in the future generate either a reduction in the tax base or tax credits. Unless a dividend payment is planned, no deferred tax is calculated on the undistributed profi ts of subsidiaries reinvested locally. The deferred taxes recorded in the balance sheet fall into the following categories: Deferred tax assets Deferred tax liabilities EUR Million 2007 2008 2007 2008 Employee benefi ts obligations 190 192 Provisions other than employee benefi ts 198 159 Tax losses 305 483 Tax credits 57 128 Depreciation of tangible assets and amortization of intangible assets 241 199 -366 -367 Development costs -29 -4 Other 264 213 -200 -236 Total (gross amount) 1 255 1 374 -595 -607 Employee benefi ts obligations -59 -68 Provisions other than employee benefi ts -33 -35 Tax losses -146 -191 Tax credits -57 -62 Depreciation of tangible assets and amortization of intangible assets -37 -22 Other -50 -1 Total unrecognized deferred tax assets -381 -379 Offset -350 -344 350 344 Total (net amount) 524 651 -245 -263 In the above table, the 2008 totals include the amount of deferred taxes presented as “assets held for sale” and “liabilities associated with assets held for sale” in the balance sheet (EUR 2 million of deferred tax assets and EUR 5 million of deferred tax liabilities). Unused tax losses (credits) and deductible temporary differences for which a deferred tax asset has not been recognized amount to EUR 379 million including in this fi gure tax losses amounting to EUR 191 million (mainly Solvay SA: EUR 86 million and Solvay Chimie: EUR 21 million) and tax credits of EUR 62 million (R&D tax credits in Belgium, mainly for Solvay SA: EUR 53 million and Solvay Chimie: EUR 3 million).
Other information All the Group’s tax loss carryforwards have generated deferred tax assets (some of which have not been recognized). These carried-forward tax losses are given below by expiry date. EUR Million 2007 2008 Within 1 year 1 11 Within 2 years 14 36 Within 3 years 38 23 Within 4 years 24 18 Within 5 or more years 113 127 No time limit 820 881 The acquisition during 2008 of Innogenetics increased the Group’s total tax-loss carryforwards by EUR 170 million. (13) Net income of the Group Net income amounted to EUR 449 million. This is EUR 379 million (-45.8 %) lower than net income in 2007 (EUR 828 million). This result refl ects the decrease in operating results and the EUR -309 million impact of the impairment on the Fortis shares available for sale. The minority interest in this net income fi gure is EUR 44 million compared with EUR 47 million in 2007. The impact of the change of consolidation method applied to the SolVin Group from proportionate consolidation (75 %) to full consolidation with minority interests (25 %) is EUR 1 million. (14) Diluted earnings per share The diluted earnings per share amount is obtained by dividing net income by the number of shares, increased by the number of potentially diluting shares attached to the issue of share options. Full data per share can be found in the management report. Consolidated cash fl ow statement (15) Depreciation, amortization and impairments Total depreciation, amortization and impairment losses amount to EUR 417 million, down EUR 176 million with respect to 2007 (EUR 593 million). Normal straight-line depreciation and amortization remain stable: EUR 471 million in 2008 against EUR 470 million in 2007. In 2008, the net balance of impairment losses is positive (EUR 54 million) because of the reversal of the EUR 92 million impairment loss recorded earlier on the trona mine in the US (natural soda ash). In 2007, the impairment losses of EUR 123 million were linked to the restructuring of the Fluor and Molecular Solutions activities and, for the Pharmaceuticals Sector, to the write-down of an intangible asset and the recognition of impairment losses in the context of the “INSPIRE” project. Financial 77 Solvay Global Annual Report 2008 Financial
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Managing Challenges Solvay Global A
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Key fi gures - Solvay Group Financi
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February 1 Caprolactones Solvay con
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Apart from increasing our competiti
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and optional overtime and taking of
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... and Long-Term Value Creation Th
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and using it without limits, the pi
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Chemicals Sales: EUR 3.1 billion -
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2008 : operating result down 19% on
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EUR million 2007 2008 2008/2007 GRO
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Balance sheet Total Equity stood at
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Current profi t before taxes amount
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Robot in Weesp. This 384 wells plat
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Key fi gures [EUR million] 2006 200
Page 29 and 30: Flagship Products in 2008 Therapeut
Page 31 and 32: Sales of less important products In
Page 33 and 34: Sodium bicarbonate. Sodium bicarbon
Page 35 and 36: Key fi gures [EUR million] 2006 200
Page 37 and 38: natural resources and limit waste d
Page 39 and 40: The Organic cluster: Molecular Solu
Page 41 and 42: Solvay specialty polymers The outst
Page 43 and 44: Key fi gures [EUR million] 2006 200
Page 45 and 46: Technological leadership through Re
Page 47 and 48: production capacities have been inc
Page 49 and 50: New Business Development OLED. Orga
Page 51 and 52: future) reacts with atmospheric oxy
Page 53 and 54: Increasing cultural diversity. Solv
Page 55 and 56: New career management process In 20
Page 57 and 58: The 5x5 Matrix The 5x5 Matrix is th
Page 59 and 60: Investors: responding to growing in
Page 61 and 62: Financial Statements The following
Page 63 and 64: Consolidated balance sheet EUR Mill
Page 65 and 66: Minority interests The increase in
Page 67 and 68: • IFRIC 15 Agreements for the con
Page 69 and 70: 9. Research and Development costs R
Page 71 and 72: Key assumptions & key sources of es
Page 73 and 74: General description of the segments
Page 75 and 76: Information per primary segment for
Page 77 and 78: For the Pharmaceuticals Sector, whi
Page 79: - Current tax represents the tax pa
Page 83 and 84: The acquisitions in 2008 consist ma
Page 85 and 86: Alexandria Sodium Carbonate On 17 O
Page 87 and 88: (20) Capital increase / redemption
Page 89 and 90: Consolidated balance sheet (22) Int
Page 91 and 92: (24) Tangible assets (including fi
Page 93 and 94: (26) Other investments EUR million
Page 95 and 96: (29) Provisions EUR Million Employe
Page 97 and 98: The amounts recorded in the balance
Page 99 and 100: Actuarial assumptions used in deter
Page 101 and 102: - the risks attached to ongoing lit
Page 103 and 104: Fair value of fi nancial debts For
Page 105 and 106: ) Balance sheet risk The Group’s
Page 107 and 108: Financial instruments IAS 39 defi n
Page 109 and 110: (32) Assets held for sale and liabi
Page 111 and 112: Management of Risks Acting responsi
Page 113 and 114: In reference to Raw Materials, in a
Page 115 and 116: Since 2007 a compliance organizatio
Page 117 and 118: Participation in venture capital fu
Page 119 and 120: Compensation report 1. Description
Page 121 and 122: affi liated to the Pension Regulati
Page 123 and 124: Companies leaving the Group Country
Page 125 and 126: SolVin France SA, Paris 75 Pl Vival
Page 127 and 128: Solvay Soda Ash Joint Venture, Hous
Page 129 and 130: FINLAND Pipelife Finland OY, Oulu 5
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Summary fi nancial statements of So
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STATUTORY AUDITOR’S REPORT To the
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Report on the application of the Co
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Introduction This report presents t
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The Board of Directors noted their
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notice of the meeting by mail at th
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Year of birth Year of 1st appointme
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eing a non-executive director of a
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4.5.2. The Audit Committee At Janua
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corresponding to the decision or re
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which remained valid for the 2008 f
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Manager, a member of the Executive
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EUR The Solvay share compared with
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ANNEX 1 Audit Committee Mission Sta
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during the 30 days preceding the st
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Executive Committee 1 | Christian J
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ABAF: Belgian Financial Analysts As
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Shareholders’ Diary - Tuesday May
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Financial Statements - Solvay

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