Pharmaceuticals Sector - Solvay

56
Solvay Global Annual Report 2005
The Pharmaceuticals Sector produces most of the
active ingredients needed for manufacturing the drugs
in its portfolio.
In the Plastics Sector, the situation differs between
Specialties and Vinyls. The vinyl activities are largely
integrated in terms of chlorine but not for the ethylene
needed for producing PVC. Fluctuations in the price of
ethylene affect the margins of this activity to a greater
or lesser extent depending on the market situation
and the possibility of passing on these fl uctuations in
PVC sales prices. Specialties (Specialty Polymers and
Inergy Automotive Systems), with their technology
content and high added value, are less sensitive to
raw materials prices. Fluorinated polymers enjoy a
high degree of upstream integration, high performance
polymers less so.
PARENT COMPANY RESULTS
EUR million 2004 2005
Net profi t for the year
available for distribution
226 387
Carried forward 347 363
Total available to the
General Shareholders’
Meeting
573 750
Allocations:
Gross dividend 210 *221
Carried forward 363 *529
Total 573 750
* These amounts may increase slightly owing to the exercise of share options covered by
earlier share purchases.
Comments
The company recorded a net current loss before taxes
of EUR 23 million, compared with a profi t of EUR 87
million in 2004. The net extraordinary gain was EUR
377 million as against EUR 151 million in 2004.
The reorganization of pharmaceutical activities with
the Solvay group has produced major changes in the
investments held by Solvay S.A. These movements
have been recorded at market value as required
by Belgian accounting law. The company has
decided, however, to maintain its investment in its
pharmaceutical holding company at the historical
value of the contributed investments, so as not to
excessively impact the parent company earnings with
internal capital gains.
Taking into account a EUR 33 million tax credit
(compared with a EUR 12 million tax charge in 2004),
the net profi t of Solvay S.A. in 2005 amounted to EUR
387 million, compared to EUR 226 million in 2004.
In the absence of transfers to untaxed reserves, net
income of EUR 387 million is available for distribution
(71% more than in 2004).
STATUTORY AUDITOR’S
EXAMINATION OF THE
ACCOUNTS
On June 3, 2004 the General Shareholders’ Meeting
appointed Deloitte as Statutory Auditor. The Statutory
Auditor’s report can be found on page 105. In 2005
Deloitte & Touche received additional fees of EUR 268
thousand.
Deloitte’s fees in 2004 for all consolidated Group
companies together amounted to
- account auditing fees
EUR 4 184 thousand
- other auditing and other services
EUR 420 thousand
- consulting and tax advice
EUR 121 thousand