Annual Report 2009/2010 Geschäftsbericht 2009/2010 ... - biolitec AG

98 Annual Financial Statement Konzern-Jahresabschluss
cash flow forecasts are derived from the management’s current long-term planning for the biolitec
group, generally for a three-year planning period, which involves assumptions, especially regarding future
selling prices, sales volumes and costs. They consider the experience from the past and are based
on the management’s best estimation on future developments. For reasons of a conservative approach,
an extrapolation of the cash flows beyond this planning period, based on individual growth rates, has
not been effected.
biolitec calculates the cost of capital on the basis of the debt / equity ratio. The underlying capital structure
of the group is determined by benchmarking against comparable companies in the same industry
sector. The cost of equity corresponds to the return expected by shareholders, while the cost of debt is
based on the conditions on which the company can obtain long-term financing. Both components are
derived from capital market information.
The discount rate used is 8.23 percent (domestic) and 8.55 percent (foreign). This rate is based on assumptions
and estimates relating to business-specific costs of capital, which in turn depend on country
risks, credit risks, and additional risks resulting from the volatility of certain businesses. The risk adjustment
for the group is determined by benchmarking against comparable companies in the same industry
sector.
In the period under review, as well as in the previous fiscal year, neither depreciations as a result of specific
events nor changes in circumstances, nor impairment tests led to any impairment charges.
Although the estimates of the useful lives of certain assets, assumptions concerning the macroeconomic
environment and developments in the industries in which the biolitec group operates and estimates
of the discounted future cash flows are believed to be appropriate, changes in assumptions or
circumstances could require changes in the analysis. This could lead to additional impairment charges
in the future or – except in the case of goodwill – to valuation write-backs should the expected trends
reverse.
Within the operating business, major goodwill are assigned to the following companies: biolitec Inc,
USA KEUR 2,014 (previous year: KEUR 1,988), CeramOptec Industries Inc, USA KEUR 1,940 (previous year:
KEUR 1,939).