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

50 Management Report Konzernlagebericht
Production and quality risks
The company strives to maintain all necessary regulatory approvals and licences to undertake its business
and to guarantee adherence by appropriate quality control procedures. Broad quality management
guarantees highest quality- and security standards.
The company is insured against potential product liability risks that are standard for this industry.
Concerning the development and release of new biolitec products, there is always a risk existing inherent
to the system, e.g. time schedules that cannot be met or clinical examination that cannot be passed.
With pharmaceutical substances like e.g. sensitizers clinical studies of the phases I, II and III have to be
performed. Each of these studies contains the risk that the efficiency of the product cannot clearly be
proven or uncalculated side-effects appear so that approval will not be issued by the competent authorities.
Large-scale test rows are conducted at the earliest, possible stages in order to reduce this risk.
Project management is structured in a way that possible deadline differences can be balanced. A real
time realization in accordance with the strict approval guidelines of MDD and MPG as well as the FDA
(Food and Drug Administration) guidelines is targeted.
Human resources risks
The performance of biolitec’s employees and executives is a key factor to its success. biolitec’s success is
especially based on its founder and member of the executive board Dr. Wolfgang Neuberger’s many
years of sector experience, expertise and managerial ability. Many key positions in R&D, distribution,
production and administration are held by persons whose departure could bear risks for the company.
Yet the risk is deemed to be minimal due to good human resource management which lowers the fluctuation
rate in key positions.
Non-payment risks
Business is only conducted with creditworthy partners after a credit assessment. Accounts receivable
are constantly monitored and credit insurances concluded for selected customers. Significant risks cannot
be observed. The non-payment risk for other financial assets is equal to their book value.
The group invested in short-term Greek government bonds. A non-payment risk cannot be seen due to
the European Financial Stabilization Mechanism (EFSM). The bond was profitably sold in the fiscal year
2010/2011.
Other significant liquidity is deposited on Malaysian fixed deposit accounts. A non-payment risk cannot
be observed due to the fact that the bank has a A3-rating from Moody’s and an A-rating from Standard
& Poor’s respectively.