Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
calida<br />
bodywear<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2003</strong>
4<br />
8<br />
10<br />
32<br />
38<br />
CONTENTS<br />
CALIDA IN THE YEAR UNDER REVIEW<br />
CALIDA IN PROFILE<br />
CALIDA GROUP’S ANNUAL FINANCIAL STATEMENT<br />
CALIDA HOLDING AG’S ANNUAL FINANCIAL STATEMENT<br />
CORPORATE GOVERNANCE<br />
THIS REPORT IS PUBLISHED IN GERMAN AND ENGLISH.<br />
IN THE EVENT OF ANY AMBIGUITY, THE GERMAN VER-<br />
SION IS BINDING.
CALIDA IN THE YEAR UNDER REVIEW<br />
Dear shareholders<br />
We are pleased to report that CALIDA returned to profit in the <strong>2003</strong> financial year. With sales<br />
revenues of CHF 141.8 million (previous year CHF 153.2 million), the company posted a profit<br />
of CHF 2.6 million. This represents a year-on-year improvement of CHF 9 million in the corporate<br />
result. After four years of sometimes significant losses and a far-reaching restructuring<br />
programme, CALIDA has thus achieved its turnaround.<br />
The year under review not only saw earnings improve decisively into positive territory: progress<br />
was made in nearly all the other financial and operational key figures as well. Sales were still in<br />
decline (-7.5 percent), though they stabilized over the course of the year to post a fall of only<br />
5.9 percent in the second half.<br />
The measures we took in relation to products and marketing were well received by retailers and<br />
consumers. The launch of the «active & air» line of sports underwear was a complete success,<br />
and the brand campaign for «just feel» has credibly positioned CALIDA as a modern, aesthetically<br />
aware and forward-looking brand.<br />
As in 2002, the year under review was characterized by extremely cautious consumer sentiment<br />
and a declining overall market. CALIDA’s negative revenue trend ran parallel to the overall<br />
performance of the market in the core territories of Switzerland and Germany. The fact that the<br />
turnaround was achieved in this difficult market environment confirms the wisdom of the selected<br />
strategy. We are confident that CALIDA will succeed in its aims despite the continuing difficult<br />
conditions.<br />
Stronger earning power<br />
During the year under review CALIDA once again followed the strict guiding principle that the<br />
company’s success depends on sufficient earnings power across all products, sales markets<br />
and distribution channels. The contribution margin – gross income after deducting manufacturing<br />
costs – increased again during the year under review from 31.2 percent to 34.3 percent,<br />
which comes on top of the improvement of 7.3 percentage points recorded in 2002. This positive<br />
trend is the result of various factors. Simpler structures and strict cost management in the<br />
production area certainly helped. The development of collections in line with clear contribution<br />
margin rules and optimized purchasing also played a significant part in the improvement.<br />
Manufacturing costs could thus be reduced by CHF 7 million. No compromises were made on<br />
the quality of fabrics and materials used. In fact during the year under review it was possible<br />
to make marked improvements in key quality standards such as shrinkage values, fit and wearer<br />
comfort.<br />
| 4
Operating costs followed the sales trend. Overall they were CHF 5.9 million lower than in the<br />
previous year at CHF 42 million. Expenditure was reduced particularly in the following areas:<br />
administration and management (CHF -2.4 million), IT (CHF -1.1 million) and logistics (CHF -0.5<br />
million). Relatively small cost savings were made in sales, marketing, design and product<br />
management (CHF -1.9 million). This reflects our strategy of focusing CALIDA as a marketingoriented<br />
company.<br />
The reduction in operating costs resulted primarily from process optimization, as well as<br />
simplification of work processes and administrative structures. No significant job cuts were<br />
required to achieve the company’s savings targets. In taking all these measures, our priority<br />
was always to reinforce product, market and sales structures in order to increase CALIDA’s<br />
strength as a company with a clear market focus.<br />
We continue to make efforts to strengthen CALIDA’s long-term earning power. In the medium<br />
term, this will involve a gradual relocation of production capacities from our factory in Portugal<br />
to our factory in Hungary and to other external suppliers in Eastern Europe. A charge of CHF<br />
2.4 million was taken during the year under review to cover the cost of this shift over the course<br />
of 2004.<br />
Higher cash-flow and a solid balance sheet structure<br />
As in 2002, the strategic realignment of production and sales structures initiated two years ago<br />
had a positive effect on the development of our inventories and accounts receivable. With sales<br />
falling by 7.5 percent, merchandise inventories fell by 10.1 percent and accounts receivable by<br />
17.3 percent. The reduction in inventories was mainly seen in raw materials, whereas semimanufactures<br />
and finished goods declined in line with the fall in sales. CALIDA thus achieved<br />
a rotation of merchandise inventories of almost four while simultaneously increasing deliverability<br />
to retail outlets.<br />
CALIDA was also very cautious with regard to investment in <strong>2003</strong>. Investments totalled CHF<br />
1.7 million while depreciation came to CHF 5.7 million. Fixed assets fell by CHF 5.3 million and<br />
total assets by CHF 5.4 million to CHF 99 million.<br />
Pleasingly, cash-flow went up again during the year under review. Operating cash-flow came<br />
to CHF 17.6 million and free cash-flow to CHF 17.4 million.<br />
This high level of cash-flow had a very positive impact on the company’s equity capital position.<br />
On the balance sheet date, CALIDA thus had net liquid assets of CHF 25.8 million. Short and<br />
long-term bank liabilities were reduced by CHF 20 million to CHF 10 million. As a consequence,<br />
net debt was reduced to zero from 2002’s CHF 1.8 million. As at the balance sheet date, CALIDA<br />
now has net liquidity of CHF 15.8 million. The equity ratio increased from 62.5 percent in the<br />
previous year to 69.6 percent.<br />
| 5
Prospects for 2004<br />
All over the world, the clothing industry has been subject to far-reaching and rapid structural<br />
change for a number of years now. The main causes of this change are new, fast-moving<br />
consumer habits, the trend towards low-price products and a shift of consumer spending out<br />
of the clothing sector and into other areas such as home entertainment, telecommunications,<br />
leisure, sport and entertainment. This has produced constant pressure on margins right along<br />
the value chain. Things are made even more difficult by the fact that the propensity to spend<br />
among CALIDA’s traditional middle class consumers in its core markets will not recover this<br />
year.<br />
Given this background, CALIDA’s operating environment will remain extremely challenging in<br />
2004. We expect little positive momentum in sales revenues. However, we have defined the<br />
necessary strategies and initiated the measures required to achieve success in a stagnant market.<br />
Our product and collections concepts have been modernized, for example. We have focused<br />
sharply on introducing modern, high-quality basic underwear lines that perfectly meet the<br />
needs of the current generation of consumers, and which underpin a new emotional tie between<br />
the consumer and CALIDA.<br />
A good example of this is the successful seamless «just feel» line, which since its launch in 2000<br />
has attracted new and younger consumer groups to the CALIDA brand. The «just feel» line is<br />
continually being enhanced by the addition of up-to-the minute trends which add to its<br />
continuing market appeal.<br />
Within its fast-growing micro-fibre line «Sensitive», CALIDA strengthened its range of brassieres<br />
during the year under review and enhanced its reputation among consumers. The «active & air»<br />
sports underwear line introduced last autumn significantly exceeded our expectations and<br />
opened up growth opportunities for CALIDA in the very promising «sport and wellness» sector.<br />
The «cotton needs» elasticized cotton underwear for ladies, also introduced in <strong>2003</strong>, set new<br />
standards of quality and comfort. A first-rate price-performance ratio also helped this line to<br />
win great approval from retailers and consumers alike.<br />
Our product managers are working hard to ensure that CALIDA’s range is constantly updated<br />
in terms of both styling and design and that it always meets customer requirements.<br />
| 6
One of our most important goals in sales and marketing will be to work closely with our retail<br />
partners to modernize CALIDA sales points: our product and marketing philosophy demands<br />
that the CALIDA collection is attractively displayed in its entirety as an integrated branding<br />
concept. Another consequence of this philosophy is that we attach a high priority to the rapid<br />
expansion of franchised CALIDA stores and CALIDA shop-in-shops within department stores<br />
and leading retail outlets.<br />
CALIDA has created a stable foundation that will now allow the company to devote its full<br />
energies to further corporate development. The main goal at the moment is to stabilize sales.<br />
At the same time, however, we want to achieve a further increase in earnings power. As part of<br />
our corporate strategy we are thus examining all development opportunities in terms of both<br />
products and geographical spread.<br />
CALIDA has achieved its turnaround. It is now a largely debt-free, profitable company, which<br />
can look forward with self-belief and confidence to the future. We can thank our employees for<br />
this, because it is their skill, dedication and loyalty that have made it possible.<br />
We would also like to thank you, our shareholders, for the confidence you have shown in<br />
CALIDA.<br />
Dr. Thomas Lustenberger Felix Sulzberger<br />
Chairman of the Board of Directors Chief Executive Officer<br />
| 7
CALIDA IN PROFILE<br />
Selected key figures<br />
in CHF ’000 except employees<br />
| 8<br />
<strong>2003</strong> 2002 2001 2000 1999<br />
Gross sales 141.8 153.2 191.4 200.2 195.3<br />
as % of previous year<br />
Profit /(loss) before interest,<br />
92.6 % 80.0 % 95.6 % 102.5 % 97.2 %<br />
taxes and exceptional costs 2.7 (3.6) (16.7) (2.1) (1.3)<br />
as % of gross sales revenue 1.9 % ( 2.3 %) (8.7 %) (1.0 %) (0.7 %)<br />
Profit /(loss) before interest and taxes 2.7 (6.1) (43.0) (8.0) (1.3)<br />
Profit /(loss) for the year<br />
before exceptional costs 2.6 (5.3) (14.0) (3.3) (2.5)<br />
as % of gross sales 1.8 % (3.5 %) (7.3 %) (1.6 %) (1.3 %)<br />
Profit /(loss) for the year 2.6 (6.4) (40.3) (10.3) (2.5)<br />
Cash and cash equivalents 25.8 18.2 9.5 9.9 12.4<br />
Securities & derivative financial instruments – 0.2 0.4 16.3 14.7<br />
Liquidity 25.8 18.4 9.9 26.2 27.1<br />
Short-term bank liabilities (5.0) (10.0) (5.4) (19.2) (8.8)<br />
Long-term bank loans ( 5.0) (10.0) (20.0) (20.0) (15.0)<br />
Total bank liabilities and loans (10.0) (20.0) (25.4) (39.2) (23.8)<br />
Net liquidity 15.8 (1.6) (15.5) (13.0) 3.3<br />
Operating cash-flow 17.6 12.5 8.7 (10.8) 6.9<br />
Free cash-flow excluding change in securities 17.4 15.8 7.2 (15.3) (10.7)<br />
Cash-flow margin<br />
Operating cash-flow<br />
(as % of gross sales) 12.4 % 8.2 % 4.5 % (5.4 %) 3.5 %<br />
Free cash-flow<br />
(as % of gross sales) 12.3 % 10.3 % 3.8 % (7.6 %) (5.5 %)<br />
Investments in fixed assets 1.4 1.2 1.2 4.1 9.6<br />
Investments in intangible assets 0.3 0.2 1.1 1.5 4.7<br />
Depreciation and amortization 5.7 8.5 23.1 12.4 9.3<br />
Trade accounts receivable 10.5 12.5 16.5 17.7 18.4<br />
Inventories 28.9 32.1 41.9 69.1 52.7<br />
Fixed assets 28.8 33.5 41.8 60.4 68.5<br />
Total capital employed (CE) 68.2 78.1 100.3 147.2 139.5<br />
Average capital employed (CE av.) 73.2 89.2 123.7 143.3 138.8<br />
Return on Capital Employed in %<br />
Profit / (loss) before interest, taxes<br />
and exceptional costs against CE av.) 3.7 % (4.0 %) (13.5 %) (1.5 %) (0.9 %)<br />
Equity capital 68.9 65.2 71.5 111.9 128.6<br />
Equity ratio 69.6 % 62.5 % 58.0 % 58.4 % 66.0 %<br />
Return on Equity in %<br />
(annual result before exceptional expenditure<br />
against average equity capital) 3.9 % (7.8 %) (15.3 %) (2.7 %) (1.9 %)<br />
Number of employees 861 996 1 301 1 371 1 395
Share information<br />
in CHF<br />
| 9<br />
<strong>2003</strong> 2002 2001 2000 1999<br />
Number of registered shares at CHF 50 par value each 303 000 300 000 300 000 300 000 300 000<br />
Ranking for dividends as at 31 December 303 000 298 978 299 153 299 092 299 024<br />
Outstanding options 14 999 14 999 – – –<br />
Share capital 15 150 000 15 000 000 15 000 000 15 000 000 15 000 000<br />
Key figures per registered share<br />
Profit / (loss) before interest, taxes and exceptional costs 9.18 (12.00) (55.54) (6.97) (4.33)<br />
Profit / (loss) for the year before exceptional costs 8.84 (17.67) (46.68) (10.90) (8.22)<br />
Profit / (loss) for the year 8.84 (21.41) (134.74) (34.34) (8.22)<br />
Shareholders’ equity (book value per share) 232 218 239 382 430<br />
Gross dividend per registered share *3.00 – – – –<br />
*proposed by the Board of Directors<br />
Stock market prices High 260 220 313 320 400<br />
Low 125 120 194 260 300<br />
Year-end 240 135 210 270 329<br />
Market capitalization High 78.0 66.0 93.9 96.0 120.0<br />
in CHF ’000 Low 37.5 36.0 58.2 78.0 90.0<br />
Year-end 73.0 40.5 63.0 81.0 98.7<br />
Price/earnings ratio (P/E) 27.1 – – – –<br />
Price/book value ratio (P/BV) 1.0 0.6 0.9 0.7 0.8<br />
CALIDA Holding AG registered share<br />
Stock market price performance <strong>2003</strong><br />
CHF<br />
300<br />
250<br />
200<br />
150<br />
100<br />
50<br />
0<br />
Start of year<br />
January<br />
February<br />
March<br />
April<br />
May<br />
June<br />
July<br />
August<br />
September<br />
October<br />
November<br />
December<br />
End of year<br />
Comparative figures 1996 to <strong>2003</strong><br />
CHF m<br />
30<br />
20<br />
10<br />
0<br />
-10<br />
-20<br />
-30<br />
-40<br />
-50<br />
1996 1997 1998 1999 2000 2001 2002 <strong>2003</strong><br />
Profit /(loss) before interest and taxes<br />
Profit /(loss) for the year<br />
Cash-flow<br />
Free cash-flow
CONSOLIDATED BALANCE SHEET<br />
per 31 December<br />
in CHF ’000<br />
ASSETS Notes <strong>2003</strong> 2002<br />
Current assets<br />
Cash and cash equivalents 1/3 25 820 18 204<br />
Securities & derivative financial instruments 2 – 175<br />
Trade accounts receivable – 3rd parties 4 10 230 12 373<br />
Trade accounts receivable – related parties 223 147<br />
Other accounts receivable – 3rd parties 5 2 709 4 669<br />
Short-term receivables – related parties 30 400 420<br />
Inventories 6 28 891 32 152<br />
Accrued income and prepaid expenses 839 1 060<br />
Total current assets 69 112 69 200<br />
Non-current assets<br />
Fixed assets 7 28 800 33 589<br />
Intangible assets 8 407 607<br />
Financial assets – 3rd parties 9 663 516<br />
Long-term receivables – related parties 30 – 420<br />
Total non-current assets 29 870 35 132<br />
TOTAL ASSETS 98 982 104 332<br />
LIABILITIES<br />
Current liabilities<br />
Bank loans 3/10 5 000 10 001<br />
Trade accounts payable 4 586 5 990<br />
Other current liabilities 11 1 816 1 861<br />
Liabilities due to shareholders 13/30 671 1 173<br />
Accrued expenses and deferred income 5 598 4 409<br />
Current tax liabilities 839 866<br />
Provisions 12 2 565 2 739<br />
Total current liabilities 21 075 27 039<br />
Non-current liabilities<br />
Bank loans 10 5 000 10 000<br />
Deferred tax liabilities, net 14 – –<br />
Provisions 12 3 974 2 056<br />
Total non-current liabilities 8 974 12 056<br />
Total liabilities 30 049 39 095<br />
Shareholders’ equity<br />
Share capital 16 15 150 15 000<br />
Own shares 18 – (265)<br />
Reserves 53 783 50 502<br />
Total shareholders’ equity 68 933 65 237<br />
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 98 982 104 332<br />
The accounting principles and explanations shown on pages 14 to 29 form an integral part of these consolidated financial statements.<br />
| 10
CONSOLIDATED INCOME STATEMENT<br />
in CHF ’000<br />
| 11<br />
Notes <strong>2003</strong> 2002<br />
Gross sales 31 141 803 153 228<br />
Sales deductions (11 677) (13 946)<br />
Net sales 130 126 139 282<br />
Change in inventory of finished and semi-finished products (755) (4 622)<br />
Gain from disposal of fixed assets 81 1 103<br />
Other operating income 1 212 2 108<br />
Operating income 130 664 137 871<br />
Cost of goods and third party supplies (60 779) (64 497)<br />
Personnel expenses 15 (38 409) (39 747)<br />
Depreciation and amortisation 21 (5 686) (8 472)<br />
Other operating expenses 22 (23 057) (31 234)<br />
Total operating expenses (127 931) (143 950)<br />
Profit/(loss) before interest and taxes 2 733 (6 079)<br />
Financial income 23 486 518<br />
Financial expenses 24 (963) (1 222)<br />
Currency differences 25 322 (610)<br />
Income from divestment of joint venture company 20 – 1 332<br />
Total non-operating expenses/income, net (155) 18<br />
Net profit/(loss) before tax 2 578 (6 061)<br />
Income taxes 26 53 (342)<br />
Profit/(loss) for the year 2 631 (6 403)<br />
Profit/(loss) per registered share in CHF 27 8.84 (21.41)<br />
Diluted profit/(loss) per registered share in CHF 27 8.84 (21.41)<br />
The accounting principles and explanations shown on pages 14 to 29 form an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY<br />
in CHF ’000<br />
Share capital<br />
Balance at 31 December 2001 15 000 (239) – 60 610 – (3 897) 56 716 71 477<br />
Changes in fair value of securities – – – – (131) – (131) (131)<br />
Translation adjustment – – – – – 320 320 320<br />
Change in own shares, at acquisition costs – (26) – – – – – (26)<br />
Loss for the year – – – (6 403) – – (6 403) (6 403)<br />
Balance at 31 December 2002 15 000 (265) – 54 207 (131) (3 574) 50 502 65 237<br />
Realised result from securities – – – – 131 – 131 131<br />
Translation adjustment – – – – 170 170 170<br />
Change in own shares, at acquisition costs – 265 – – – – – 265<br />
Profit on sale of own shares – – 212 – – – 212 212<br />
Capital increase 150 – 137 – – – 137 287<br />
Profit for the year – – – 2 631 – – 2 631 2 631<br />
Balance at 31 December <strong>2003</strong> 15 150 – 349 56 838 – (3 404) 53 783 68 933<br />
The free reserves include legal reserves of TCHF 12 625 (2002: TCHF 12 811), which cannot be distributed to the shareholders.<br />
The total amount of the directly recorded earnings in the reserves amount to TCHF 301 (2002: TCHF 189).<br />
The accounting principles and explanations shown on pages 14 to 29 form an integral part of these consolidated financial statements.<br />
Own shares<br />
| 12<br />
Capital reserves<br />
Free reserves<br />
Revaluation<br />
reserve<br />
Translation<br />
adjustment<br />
Reserves<br />
Shareholders’<br />
equity
CONSOLIDATED CASH-FLOW STATEMENT<br />
in CHF ’000<br />
| 13<br />
Notes <strong>2003</strong> 2002<br />
Profit/(loss) before interest and taxes 2 733 (6 079)<br />
Depreciation and amortisation 21 5 686 8 472<br />
Change in long-term provisions 1 870 532<br />
Profit from disposal of fixed assets (81) (1 103)<br />
Profit from disposal of group company – (632)<br />
Change in inventories 3 265 8 874<br />
Change in trade accounts receivable 2 569 3 181<br />
Change in other current assets 2 246 3 737<br />
Change in current liabilities (677) (4 432)<br />
Income taxes paid (21) (20)<br />
Cash-flow from operating activities (A) 17 590 12 530<br />
Interest received 93 278<br />
Sale of securities 189 90<br />
Disposal of group company 20 – (520)<br />
Disposal of joint venture company 20 – 1 332<br />
Investments in fixed assets 7 (1 416) (1 209)<br />
Sale of fixed assets 1 086 3 244<br />
Investments in intangible assets 8 (263) (167)<br />
Net cash-flow from change in loans receivable 293 268<br />
Cash-flow from investing activities (B) (18) 3 316<br />
Interest paid (613) (914)<br />
Change in short- and long-term bank debt (10 001) (5 211)<br />
Change in short- and long-term loans payable (491) (953)<br />
Capital increase 287 –<br />
Purchase/sale of own shares 479 (26)<br />
Cash-flow from financing activities (10 339) (7 104)<br />
Translation adjustment on cash and cash equivalents 383 (11)<br />
Net cash-flow 7 616 8 731<br />
Cash and cash equivalents at beginning of year 18 204 9 473<br />
Cash and cash equivalents at end of year 1 25 820 18 204<br />
Free cash-flow (A+B) 17 572 15 846<br />
Free cash-flow without change in securities 17 383 15 756<br />
The accounting principles and explanations shown on pages 14 to 29 form an integral part of these consolidated financial statements.
NOTES<br />
ACCOUNTING PRINCIPLES<br />
General<br />
The consolidated financial statements of the CALIDA Group were prepared in accordance with the International Financial<br />
<strong>Report</strong>ing Standards (IFRS) and in application of the principle of historic costs with the exception of securities and derivative<br />
financial instruments which are recorded at market values. The consolidated financial statements also comply with Swiss law.<br />
Preparation of the consolidated financial statements demands of the company’s management assessments and assumptions<br />
which influence the recorded value of assets and liabilities, contingent liabilities at the cut-off date of the balance sheet as well<br />
as income and expenses during the reporting period. The value of assets and liabilities is recorded in the balance sheet if the<br />
future commercial benefit for or to the detriment of the Group is probable and the associated amounts can be reliably assessed.<br />
If, at a later point in time, those assessments and assumptions which were submitted by the company’s management<br />
in good faith at the cut-off date of the balance sheet deviate from what really happens, the original assessments and assumptions<br />
are amended in the reporting year in which the circumstances change.<br />
Basis of consolidation<br />
The consolidation is based on the audited financial statements of CALIDA Holding AG and its subsidiaries as at 31 December<br />
and in application of uniform accounting principles.<br />
Consolidation principles<br />
The consolidated annual financial statements of the CALIDA Group encompass all the companies for which the Group holds<br />
voting rights of more than 50 % or exercises control in any other way. Newly acquired companies are consolidated from the<br />
date of their acquisition. Joint ventures and companies in which the Group holds more than 20 % but not more than 50 % of<br />
the voting rights are recorded under the equity method. In those cases, the percentile participation of the Group in the net assets<br />
are recorded separately in the balance sheet and the proportional net result in the income statement.<br />
Capital consolidation is based on the purchase method. Any goodwill that arises on acquisition was offset directly against<br />
equity until 1994. From 1995 onwards, goodwill was capitalised and amortised on a straight-line basis over the estimated<br />
useful life of a maximum of 20 years. The book value of goodwill is examined annually. To the extent necessary, an impairment<br />
test is carried out and, wherever necessary, an impairment loss is recorded for any long-term reduction of value.<br />
In the consolidation, all transactions and balances between consolidated Group companies were eliminated. The participations<br />
of minority shareholders in equity and profit are shown separately in the consolidated annual financial statements.<br />
| 14
Consolidation scope<br />
Companies Business activity Registered capital<br />
Capital/<br />
Voting share<br />
in %<br />
CALIDA Holding AG Oberkirch, Switzerland Holding CHF 15 150 000 Public<br />
CALIDA AG Oberkirch, Switzerland Prod./Distr. CHF 10 000 000 100 %<br />
CALIDA Portugal S.A. Amares, Portugal Production EUR 6 250 000 100 %<br />
CALIDA Ungarn GmbH Rajka, Hungary Production HUF 477 300 000 100 %<br />
CALIDA GmbH Düsseldorf, Germany Distribution EUR 102 258 100 %<br />
CALIDA of Switzerland New York, USA Distribution USD 5 000 100 %<br />
CALIDA France SAS Metz, France Distribution EUR 1 300 000 100 %<br />
CALICOM AG Sursee, Switzerland Advertising CHF 100 000 100 %<br />
Changes in consolidation scope<br />
The consolidation scope has not changed in the reporting year. In the previous year, the following changes took place:<br />
NATURAL TEXTILES LTD. Bangalore, India Production INR 120 000 000 100 %<br />
The company was sold as at 1 April 2002.<br />
INTIPOR –<br />
Industrias Téxteis Lda. Santo Tirso, Portugal Production PTE 300 000 000 50 %<br />
The liquidation of the company was completed during the course of 2002.<br />
Conversion of foreign currencies<br />
The annual financial statements of the foreign subsidiaries are prepared in their relevant national currencies and converted into<br />
Swiss Francs for the purposes of consolidation as follows: The balance sheet is converted at the rates applicable at the<br />
year-end, the income statement is converted at the average currency rate for the financial year. The resultant differences, as<br />
well as the conversion of group loans with participation character in foreign currencies are offset directly against equity without<br />
an effect on the income statement.<br />
Other currency differences, including those arising from holdings of foreign currencies and foreign currency transactions in the<br />
normal course of business are debited or credited to the income statement.<br />
Own shares<br />
Own shares are recorded at acquisition cost and presented as a deduction from equity. Gains or losses resulting from the sale<br />
of own shares are recorded in the capital reserves.<br />
| 15
NOTES<br />
VALUATION PRINCIPLES<br />
Net sales and realisation of income<br />
Net sales include all sales invoiced to third parties after deduction of any value-added tax, volume rebates and other reductions<br />
of income involved. Revenues are booked on delivery.<br />
Costs of liabilities<br />
Interest and other costs for liabilities are debited directly to the income statement.<br />
Cash and cash equivalents<br />
Cash and cash equivalents include petty cash, cash at banks as well as immediately available and fixed deposits at banks<br />
and similar institutes for which the original term is less than three months.<br />
Securities and derivative financial instruments<br />
Securities, comprised of titles which are held for resale and are easily marketable, are recorded at their market values. Valuation<br />
differences are recorded via the revaluation reserve within equity and only transferred to the income statement if such<br />
securities are sold or in the case of an impairment by means of recycling.<br />
In order to hedge currency and interest risks, the Group uses forward currency and option contracts as well as swaps. All costs<br />
associated with the transaction are booked to the income statement. The derivative financial instruments are recorded at fair<br />
market values. The resultant profit or loss is booked to the income statement.<br />
The fair value of the derivative financial instruments is the amount which – using rate details provided by the house banks –<br />
would probably be received by the Group if the contracts were to be processed on the cut-off date of the balance sheet.<br />
CALIDA does not use hedge accounting.<br />
Trade accounts receivable<br />
The value shown equates to the amounts invoiced minus value adjustments for doubtful receivables. Apart from individual adjustments<br />
of value for specifically known risks, lump-sum adjustments are also made on the basis of the past experience for<br />
receivables which have been overdue for more than 120 days.<br />
Inventories<br />
Purchased raw materials are recorded at their purchase price using the average price method, self-produced semi-finished<br />
and finished products as well as goods in trade at their manufacturing costs. The manufacturing costs include all the costs of<br />
the material, proportional processing costs and a proportional share of the fixed production costs. Corrections in the net<br />
realizable value are booked for slow- or non-moving goods as well as for those which have fallen out of fashion. Intermediate<br />
profits from group-internal supplies are eliminated.<br />
Fixed assets / Depreciation<br />
Land is capitalised at acquisition costs. Buildings (including those not used for operations), machines, motor vehicles and operating<br />
fixtures are recorded at their acquisition values minus cumulative depreciation and any special write-offs (impairment).<br />
Depreciation is calculated by the straight-line method over the following estimated useful lives:<br />
Useful life in years<br />
Buildings 25–40<br />
Fixtures and installations 8–12<br />
Machinery 5–10<br />
Computer equipment and operating software 3–5<br />
Motor vehicles 5<br />
Furniture 10<br />
Shop fittings 3<br />
The Group has not concluded any finance-leasing agreements.<br />
Adjustments are made for any reductions in value. Investment contributions granted by the government are offset directly<br />
against the investment assets. Repair and maintenance costs which do not give rise to an increase in value are debited directly<br />
to the income statement. Gains or losses that arise when fixed assets are sold are shown separately in the income statement.<br />
Financial fixed assets<br />
Loans are shown in the balance sheet at amortised costs. Adjustments are made for any ongoing reductions in value.<br />
| 16
Intangible assets / Amortisation<br />
Intangible assets encompass goodwill, SAP costs, licences and other identifiable rights. They are capitalised at their procurement<br />
value and amortised by the straight-line method over the estimated economic useful life (goodwill: max. 20 years,<br />
other intangible assets: 3 to 5 years).<br />
Basically, the internal costs which are associated with the development of computer software are recorded as expenditure in<br />
the income statement in the period during which the costs arise because their future use cannot be reliably calculated. External<br />
costs which provide a measurable benefit to the organisation over a number of years are capitalised as intangible assets<br />
and amortised by the straight-line method over three years.<br />
The book value of all intangible assets is examined annually and, to the extent necessary, an impairment test is carried out.<br />
Where required, special amortisation is booked for sustained reductions in value.<br />
Impairment<br />
The ability of assets to retain their value is assessed at least once per annum. If there are any indications of a sustained loss<br />
in value, a calculation of the realizable value (Impairment Test) is carried out. If the book value of an asset is higher than the<br />
realizable value, an appropriate adjustment is made.<br />
Income taxes<br />
Taxes which arise on the basis of the profits achieved are provided for, regardless of the point at which such charges fall due<br />
for payment. Deferred taxes are the result of deviations between the group-standard and tax-relevant valuation in the<br />
individual financial statements which lead to a postponement of the requirement to pay taxes. The calculation is made using<br />
the so-called «Balance Sheet Liability Method». The actual local tax-rate is applied for the calculation of the tax liability at the<br />
cut-off date of the balance sheet. Deferred tax receivables arising from tax-deductible losses carried forward are only<br />
recorded in the balance sheet if their future ability to be realized through offsetting them against future profits appears likely.<br />
For those companies for which a legal right to offset exists and settlement is intended by a simultaneous reduction of the<br />
liability and the receivable(s), the current and deferred tax assets and liabilities are offset against each other. For taxes which<br />
would fall due if profits are distributed by subsidiaries, no cut-off calculations are recorded except in cases in which a<br />
distribution is intended in the foreseeable future.<br />
Employee benefits<br />
Group<br />
The Group operates several defined benefit and defined contribution plans. Active and former employees are provided with<br />
different pension benefits as retirement benefits and risk insurance, covering death and disability, in accordance with the<br />
legally required social security regulations in the different countries. Employees of foreign group companies receive mainly<br />
state pensions or benefits from independent savings funds. Contributions to the defined contribution pension plans are<br />
charged to the operating statement as they become due and are included in the personnel expenses.<br />
Switzerland<br />
All the Group’s Swiss companies are affiliated to the semi-autonomous pension foundation. The foundation is funded by contributions<br />
from the company and the employees. The valuation of future pension liabilities is based on actuarial calculations.<br />
The defined benefit obligation is measured at the present value of service costs based on past and future service years, development<br />
of salaries and pensions. The liabilities with respect to defined benefit pension plans are in all material cases calculated<br />
annually by independent actuaries using the projected unit credit method. Plan assets are recorded at their fair<br />
values. The charge for such pension plans, representing the net periodic pension cost less employee contributions, is included<br />
in the personnel expenses. Actuarial gains or losses arising from experience adjustments or changes in actuarial assumptions<br />
are charged or credited to income over the average expected service periods of the related employees, if they exceed<br />
10 % of the higher of the defined benefit obligation and the fair value of the plan assets (corridor). Pension assets are<br />
recognised only if they represent the present value of any future economic benefits available in the form of refunds from the<br />
plan and/or expected reductions in future contributions to the plan from this asset. If a surplus is not available to the Group<br />
do not represent future reductions of pension costs, they are not recognised, but shown in the notes. Deficits arising from<br />
these calculations are recognised using the above-mentioned corridor approach. Prepaid employer contributions (employer<br />
contribution reserves) presented as financial assets.<br />
Provisions<br />
Provisions are recognised if the Group has a legal or factual liability whose settlement will probably lead to an outflow of cash<br />
and whose amount can be reliably determined.<br />
Prior year figures<br />
In order to guarantee comparability, the presentation of the previous year’s figures has been partly adapted.<br />
| 17
NOTES<br />
Notes to the consolidated financial statements<br />
The figures shown in the notes to the consolidated financial statements are presented in CHF ’000 unless otherwise mentioned.<br />
1. Cash and cash equivalents <strong>2003</strong> 2002<br />
Petty cash and cash at banks 25 676 17 556<br />
Deposits due in less than 3 months 144 648<br />
Total 25 820 18 204<br />
2. Securities and derivative financial instruments<br />
Securities – 175<br />
Hedging instruments 32 – –<br />
Total – 175<br />
3. Net liquidity<br />
Cash and cash equivalents 25 820 18 204<br />
Short-term bank debt (5 000) (10 001)<br />
Total 20 820 8 203<br />
4. Trade accounts receivable – 3rd parties<br />
Trade accounts receivable 10 610 13 156<br />
Provision for bad debts (380) (783)<br />
Total, net 10 230 12 373<br />
5. Other accounts receivable – 3rd parties<br />
Receivables from government authorities 1 876 2 550<br />
Receivables from pension funds 225 1 368<br />
Other receivables 1 130 751<br />
Provision for bad debts (522) –<br />
Total, net 2 709 4 669<br />
6. Inventories<br />
Raw material 5 118 7 525<br />
Semi-finished products 6 107 5 853<br />
Finished products 17 666 18 774<br />
Total 28 891 32 152<br />
The individual inventory figures shown above have already been reduced by value adjustments totalling TCHF 7 800 (2002:<br />
TCHF 8 000).<br />
| 18
7. Fixed assets<br />
Land and<br />
buildings<br />
Acquisition costs<br />
Balance at 1 January <strong>2003</strong> 60 705 25 334 16 172 5 488 9 296 650 117 645<br />
Translation adjustment 209 293 144 12 39 5 702<br />
Additions 1 286 253 664 113 99 1 416<br />
Disposals (79) (6 216) (174) (1 088) (845) (190) (8 592)<br />
Balance at 31 December <strong>2003</strong> 60 836 19 697 16 395 5 076 8 603 564 111 171<br />
Accumulated depreciation<br />
Balance at 1 January <strong>2003</strong> 37 993 20 322 12 416 4 965 7 833 527 84 056<br />
Translation adjustment 179 343 96 11 45 5 679<br />
Additions: ordinary depreciation 1 566 1 599 932 406 650 70 5 223<br />
Disposals (16) (5 468) (165) (960) (800) (178) (7 587)<br />
Balance at 31 December <strong>2003</strong> 39 722 16 796 13 279 4 422 7 728 424 82 371<br />
Net book value<br />
as at 31 December <strong>2003</strong> 21114 2 901 3 116 654 875 140 28 800<br />
as at 31 December 2002 22 712 5 012 3 756 523 1 463 123 33 589<br />
The fire insurance value of the fixed assets at 31 December <strong>2003</strong> amounted to TCHF 139 465 (2002: TCHF 139 647). Fixed<br />
assets with a total value of TCHF 16 172 (2002: TCHF 17 376) are pledged (see Note 29).<br />
The CALIDA Group does not currently hold investment property. With regard to investment orders, see Note 28.<br />
8. Intangible assets<br />
Acquisition costs<br />
Balance at 1 January <strong>2003</strong> 7 722 466 8 188<br />
Translation adjustment 11 – 11<br />
Additions 263 – 263<br />
Disposals (270) – (270)<br />
Balance at 31 December <strong>2003</strong> 7 726 466 8 192<br />
Accumulated depreciation<br />
Balance at 1 January <strong>2003</strong> 7 115 466 7 581<br />
Translation adjustment 11 – 11<br />
Additions 463 – 463<br />
Disposals (270) – (270)<br />
Balance at 31 December <strong>2003</strong> 7 319 466 7 785<br />
Net book value<br />
as at 31 December <strong>2003</strong> 407 – 407<br />
as at 31 December 2002 607 – 607<br />
The Group does not carry out any formalised research and development activities whose costs could be systematically recorded.<br />
Such costs are included directly in expenses.<br />
Machinery<br />
| 19<br />
Installations<br />
Software<br />
Computer<br />
equipment<br />
Furniture<br />
& fittings<br />
Other<br />
intangible<br />
assets<br />
Motor vehicles<br />
Total<br />
Total<br />
»
9. Financial assets – 3rd parties <strong>2003</strong> 2002<br />
Loans to 3rd parties 4 558 3 690<br />
Provision for bad debts (3 895) (3 174)<br />
Total, net 663 516<br />
These loans carry interest of up to 7%, are due for repayment up to the year 2008 and have only a limited ability to retain their<br />
value because they are connected with legal disputes (see Note 12 7).<br />
10. Bank loans<br />
<strong>2003</strong> Interest rate:<br />
Due at sight –<br />
October 2004 5 000 4.5500 %<br />
November 2005 5 000 4.8800 %<br />
Total 10 000<br />
of which Current bank loans 5 000<br />
Non-current bank loans 5 000<br />
2002 Interest rate:<br />
Due at sight 1<br />
February <strong>2003</strong> 5 000 4.3750 %<br />
July <strong>2003</strong> 5 000 3.6500 %<br />
October 2004 5 000 4.5500 %<br />
November 2005 5 000 4.8800 %<br />
Total 20 001<br />
of which Current bank loans 10 001<br />
Non-current bank loans 10 000<br />
Of the bank loans, TCHF 10 000 (2002: TCHF 20 000) are secured by means of pledged real estate (see Note 29). The loans<br />
are denominated in CHF.<br />
11. Other current liabilities <strong>2003</strong> 2002<br />
Indirect taxes 816 394<br />
Liabilities due to representatives 804 1 168<br />
Other liabilities 196 299<br />
Total 1 816 1 861<br />
| 20
12. Current and non-current provisions<br />
Balance at<br />
31 Dec. 2002<br />
Restructuring and social plans<br />
– Restructuring in Portugal 1) – – 532 – 532 – 532<br />
– Restructuring in Hungary 2) 60 – – – – (60) –<br />
– Restructuring in Switzerland 3) 500 – – (29) (29) (471) –<br />
– Bridging pensions Switzerland 3) – – 52 – 52 – 52<br />
Total 560 – 584 (29) 555 (531) 584<br />
Commissions 4) 679 – 457 – 457 (679) 457<br />
Other provisions<br />
– Short-term share of staff participation plan 5) 50 – – (15) (15) (35) –<br />
– Indirect taxes 563 12 – (240) (240) – 335<br />
– Short-term customer takeover amounts 6) 729 – 222 – 222 (390) 561<br />
– Various legal disputes 7) – – 570 – 570 – 570<br />
– Other 158 – – (15) (15) (85) 58<br />
Total 1 500 12 792 (270) 522 (510) 1 524<br />
Total current provisions 2 739 12 1 833 (299) 1 534 (1720) 2 565<br />
Non-current provisions<br />
– Restructuring in Portugal 1) – – 1 933 – 1 933 – 1 933<br />
– Bridging pensions Switzerland 3) – – 47 – 47 – 47<br />
– Long-term customer takeover amounts 6) 748 – – (62) (62) – 686<br />
– Various legal disputes 7) 1308 – – – – – 1 308<br />
Total non-current provisions 2 056 – 1 980 (62) 1 918 – 3 974<br />
1) In the reporting year, the decision was reached to close the factory in Portugal by 2006 at the latest. The provision takes into account the<br />
costs of the resultant staff redundancies. The long-term part was discounted at 4%.<br />
2) In the reporting year, the decision was reached to close the knitwear operation at the factory in Hungary. The provision takes into account<br />
the costs of the resultant staff redundancies.<br />
3) In autumn 2002, the Company decided to wind down the knitwear operation in Sursee. It was furthermore decided to convert the sewing<br />
shop into a specialised order and prototype sewing shop. The provision takes into account the costs of the associated staff redundancies.<br />
During the year under review an additional TCHF 99 was granted for bridging pensions for hardship cases.<br />
4) The entitlement of representatives to commissions is calculated on the basis of paid sales. The provision equates to commissions payable<br />
in future on open receivables from customers at the year-end.<br />
5) The profit-dependent management remuneration system «Long-term Incentive Plan (LTI)» was terminated in 2001. That remuneration<br />
system foresaw the payment of a part of the remuneration earned after a blocked period of three years to those with entitlement to it. The<br />
final payment was made in <strong>2003</strong>.<br />
6) The guaranteed customer takeover amounts on termination of agreements with trade representatives are provided for on the basis of the<br />
likelihood of their happening by means of an additional commission on sales. The customer takeover amounts are calculated on the basis<br />
of the sales achieved by the individual trade representatives.<br />
7) The short-term position covers disputes regarding orders and employment matters. The long-term position covers legal disputes in<br />
connection with procurement contracts.<br />
| 21<br />
Translation<br />
adjustments<br />
Additions<br />
Release<br />
of provisions<br />
no longer required<br />
Effect on income<br />
statement<br />
Provisions used<br />
Balance at<br />
31 Dec. <strong>2003</strong><br />
»
13. Liabilities due to shareholders <strong>2003</strong> 2002<br />
Interest-bearing, current liabilities to shareholders (at sight) 671 1 173<br />
Total 671 1 173<br />
The interest rate is at an average of 2.90 % (2002: 3.50 %) and is periodically adjusted. The loans from shareholders include<br />
loans from members of the Board of Directors amounting to TCHF 32 (2002: TCHF 65).<br />
14. Deferred tax liabilities, net<br />
The non-current deferred tax liabilities arose from temporary<br />
differences in the following balance sheet positions: <strong>2003</strong> 2002<br />
Fixed assets 1 911 2 370<br />
Minus deferred tax credits on tax-deductible losses (1 911) (2 370)<br />
Total deferred tax liabilities, net – –<br />
Deferred tax credits arising from tax-deductible losses carried forward are only capitalised if their future realization is likely by<br />
means of offsetting against future taxable profits. For those companies which have a legal right to offset and which intend to<br />
settle current taxes with a simultaneous reduction of the liability and the credit, the deferred tax credits and liabilities are offset<br />
against each other.<br />
15. Employee benefits and personnel expenses<br />
The Group has, apart from the legally required social security schemes, an independent pension plan in Switzerland which is<br />
considered as defined benefit plan under IAS 19. The calculation of the pension liability is based on the following assumptions:<br />
Assumptions <strong>2003</strong> 2002<br />
Average remaining years of service of employees 8.2 Jahre 9.2 Jahre<br />
Discount rate 3.50 % 4.25 %<br />
Expected long-term rate of return on plan assets 4.50 % 4.75 %<br />
Estimated future salary increases 1.50 % 2.00 %<br />
Future pension increases 0.50 % 1.00 %<br />
| 22
Status of defined benefit plans <strong>2003</strong> 2002<br />
All amounts as per expert valuation opinion<br />
Defined benefit obligations 46 726 51 789<br />
Fair value of planned assets 53 201 53 476<br />
Over-coverage 6 475 1 687<br />
Unrecorded over-coverage (cumulative investment and actuarial profits, net) (6 475) (1 687)<br />
Defined benefit obligations recognised in the balance sheet – –<br />
Summary of personnel costs<br />
Wages and salaries 30 798 32 358<br />
Social security costs 4 733 4 392<br />
Net periodic costs of defined benefit plans 1 432 1 400<br />
Other personnel expenses 1 446 1 597<br />
Total 38 409 39 747<br />
Components of net periodic expenses of defined benefit plans<br />
Current service costs 2 664 2 768<br />
Interest costs 1 593 2 068<br />
Expected return on assets (2 256) (2 378)<br />
Employee contributions (942) (1 285)<br />
Total costs 1 059 1 173<br />
Non-capitalised additional contributions from employer 373 227<br />
Total net periodic costs of defined benefit plans 1 432 1 400<br />
Changes in obligations<br />
Total costs (see above) 1 059 1 173<br />
Contributions paid by employer (1 432) (1 400)<br />
Non-capitalised additional contributions from employer 373 227<br />
Total closing balance – –<br />
| 23<br />
»
16. Share capital<br />
The share capital of CALIDA Holding AG is comprised as follows: <strong>2003</strong> 2002<br />
303 000 registered shares (2002: 300 000 registered shares)<br />
at par value of CHF 50.– (issued and fully paid up) 15 150 15 000<br />
Total 15 150 15 000<br />
Conditional capital:<br />
At the annual general meeting of 8 June 2001, a resolution was passed to create conditional capital of CHF 1 million to serve<br />
staff participation by issuance of max. 20 000 registered shares to be fully paid up at a par value of CHF 50.– each.<br />
In the course of the reporting year, the share capital was increased through the exercising of conditional capital of CHF 150 000<br />
or 3 000 registered shares. As at 31 December <strong>2003</strong>, the available conditional capital amounts to CHF 850 000 (2002:<br />
CHF 1 000 000). This equates to 17 000 registered shares (2002: 20 000) at a par value of CHF 50.– each.<br />
The Board of Directors recommends to the annual general meeting of CALIDA Holding AG a gross dividend of CHF 3.– per<br />
registered share with dividend entitlement (see annual financial statements <strong>2003</strong> of CALIDA Holding AG, proposal of the Board<br />
regarding appropriation of free reserves).<br />
17. Major shareholders<br />
At the cut-off date (31 December <strong>2003</strong>), the Kellenberger Family held, according to its own statement, 51.2 % (2002: 51.8 %)<br />
of all shares of CALIDA Holding AG. The family group of shareholders was inscribed in the share register with voting rights for<br />
those 51.2 % (2002: 51.8 %).<br />
At the cut-off date (31 December <strong>2003</strong>), Marco Vögele controlled, according to his own statement, 26.2 % (2002: 26.5 %) of<br />
all shares of CALIDA Holding AG and was inscribed in the share register with voting rights for those 26.2 % (2002: 26.5 %).<br />
18. Own shares<br />
The number of own shares at acquisition costs changed in the reporting year as follows:<br />
<strong>2003</strong> 2002<br />
units units<br />
Balance at 1 January 1 022 265 847 239<br />
Purchases 3 198 478 179 27<br />
Sales (4 220) (743) (4) (1)<br />
Balance at 31 December – – 1 022 265<br />
The average acquisition price of the own shares per 1 January <strong>2003</strong> was CHF 261.40. In the first half of the financial year <strong>2003</strong>,<br />
3 198 shares were acquired via the stock exchange at an average price of CHF 149.50. As at 30 June <strong>2003</strong>, companies of the<br />
CALIDA Group held a total of 4 220 shares at an average acquisition price of CHF 176.60. In the second half of the year, all<br />
the shares were sold at an average price of CHF 226.75. As at the cut-off date of the balance sheet (31 December <strong>2003</strong>), neither<br />
CALIDA Holding AG nor any of its group companies held any own shares.<br />
| 24
19. Management participation plan<br />
As part of the performance-related, variable remuneration for certain members of management and of the Board of Directors,<br />
options are granted for the drawing of CALIDA Holding AG registered shares. The options give entitlement to the drawing of<br />
one share per option. The options are of American style. The following options were granted to the Chief Executive Officer:<br />
Exercisable Balance as at Exercise<br />
Year of issue Issue until Term Buy-back Conversion 31.12.<strong>2003</strong> price CHF<br />
2002 3 000 31.10.2002 31.12.2011 – – 3 000 200<br />
3 000 31.10.<strong>2003</strong> 31.12.2011 – – 3 000 200<br />
3 000 31.10.2004 31.12.2011 – – 3 000 200<br />
3 000 31.10.2005 31.12.2011 – – 3 000 200<br />
2 999 31.10.2006 31.12.2011 – – 2 999 200<br />
Total 14 999 14 999<br />
If there is a change in control of the Company, the CEO is entitled to terminate his employment arrangements and to exercise<br />
all outstanding options from the share-option programme within three months after his departure. In that case, and under<br />
certain other conditions, he also obtains a put option for all of the registered shares he acquires from this programme. The<br />
price applicable for the put options is based on the stock-exchange price or the results achieved in the previous two years.<br />
The Company currently regards the probability of conditions occurring that would fulfil the criteria for the acquisition of the put<br />
option as low.<br />
20. Divestments of group company and joint venture company<br />
In the previous year, the consolidation scope changed as follows due to the disposal and liquidation of group companies:<br />
Disposal of Natural Textiles Ltd., Bangalore/India<br />
In calculating the cash-flow from the disposals of group companies, the values of the cash and cash equivalents on<br />
divestment are deducted from the applicable sales price.<br />
| 25<br />
2002<br />
Divestment<br />
Current assets 3 190<br />
Fixed assets 172<br />
Current liabilities (2 964)<br />
Non-current liabilities (16)<br />
Net assets sold 382<br />
Cash and cash equivalents sold (1 534)<br />
(1 152)<br />
Profit on divestment with effect on liquidity 632<br />
Net cash-flow from divestment (520)<br />
The profit from the sale of the investment is included in other operating income.<br />
Liquidation of Intipor – Indústrias Téxteis Lda., Santo Tirso / Portugal<br />
The liquidation of Intipor – Indústrias Téxteis Lda., Santo Tirso was completed in 2002. The CALIDA Group received a<br />
liquidation dividend of CHF 1 332 thousand.<br />
»
21. Depreciation and amortisation Notes <strong>2003</strong> 2002<br />
Depreciation of fixed assets 7 (5 223) (5 091)<br />
Impairment of fixed assets 7 – (2 288)<br />
Amortisation of intangible assets 8 (463) (1 093)<br />
Total (5 686) (8 472)<br />
22. Other operating expenses<br />
Advertising (9 757) (12 346)<br />
General administrative expenses (3 576) (5 929)<br />
Transport and travel expenses (3 385) (3 610)<br />
Other expenses (6 339) (9 349)<br />
Total (23 057) (31 234)<br />
23. Financial income<br />
Interest income 472 516<br />
Other financing income 14 2<br />
Total 486 518<br />
24. Financial expenses<br />
Interest expenses (826) (1 072)<br />
Other financing expenses (137) (150)<br />
Total (963) (1 222)<br />
25. Currency differences<br />
Exchange gains 1 705 1 625<br />
Exchange losses (1 383) (2 235)<br />
Total 322 (610)<br />
Year-end conversion rates<br />
EUR 1.559000 1.453000<br />
USD 1.237000 1.402000<br />
HUF 0.005942 0.006160<br />
Average conversion rates for year<br />
EUR 1.520600 1.467300<br />
USD 1.345100 1.557600<br />
HUF 0.005998 0.006040<br />
| 26
26. Income taxes <strong>2003</strong> 2002<br />
Current income taxes<br />
– Assessment current year (54) (342)<br />
– Refund for previous years 107 –<br />
Deferred income taxes – –<br />
Total 53 (342)<br />
Analysis of tax expenses:<br />
The tax rate anticipated for the Group is approx. 20 %.<br />
Profit/(loss) before income taxes 2 578 (6 061)<br />
Expected (tax expenditure)/tax income (516) 1 212<br />
Usage of unrecognised losses brought forward 921 –<br />
Effect on current results of unrecognised losses (557) (2 135)<br />
Refund from previous years 107 –<br />
Other 98 581<br />
Recognised tax income/(tax expenses), net 53 (342)<br />
Unrecognised tax loss carryforwards:<br />
Year of expiry of unrecognised losses brought forward (gross)<br />
2005 556 631<br />
2006 1 589 1 593<br />
2007 24 740 30 855<br />
2008 12 107 16 326<br />
2009 11 163 11 163<br />
Total unrecognised losses brought forward 50 155 60 568<br />
Potential tax credit 10 031 12 114<br />
27. Profit/(loss) per share<br />
Profit/(loss) of the year 2 631 (6 403)<br />
Average number of issued shares 297 621 299 052<br />
Profit/(loss) per registered share in CHF 8.84 (21.41)<br />
Diluted profit/(loss) per registered share in CHF 8.84 (21.41)<br />
In the period between 1 January to 25 September <strong>2003</strong>, the share price was below and in the period from 26 September until<br />
31 December <strong>2003</strong> above the exercise price for the existing options. The basis used for calculation of the profit-dilution effect<br />
is formed by the average number of granted options on registered shares, the average number of own shares and the average<br />
share price. This, calculated on the daily closing basis, lies below the exercise price. As a result there is no profit-dilution<br />
effect in accordance with IAS 33. In the previous year, the share price from the first point in time at which options were able<br />
to be exercised until the end of the financial year was constantly lower than the exercise price. There was therefore no dilution<br />
effect for the financial year 2002 either.<br />
»<br />
| 27
28. Contingent liabilities<br />
Guarantees<br />
As at 31 December <strong>2003</strong>, there are no guarantees (2002: none) issued in favour of third parties.<br />
Minimum purchase volume obligations<br />
There are no material minimum purchase volume obligations (2002: none).<br />
Rental obligations<br />
The following minimum payments are anticipated for the next few years based on existing rent agreements (without consideration<br />
of extension options):<br />
Term <strong>2003</strong> 2002<br />
up to 1 year 701 164<br />
2 to 5 years 2 234 459<br />
more than 5 years 1 442 99<br />
Total 4 377 722<br />
The increase in rental obligations is attributable to the newly opened CALIDA stores. Their annual rent is usually calculated on<br />
the basis of turnover achieved. The term of the rent agreements is between 3 and 15 years whereby there are extension<br />
options in most cases.<br />
The rent expenses amounted to TCHF 462 (2002: TCHF 261).<br />
Leasing obligations<br />
As at 31 December <strong>2003</strong> there are no material leasing obligations to third parties (2002: none).<br />
Obligations for the acquisition of assets<br />
As at 31 December <strong>2003</strong> there are no obligations to acquire fixed or intangible assets (2002: none).<br />
29. Pledged assets <strong>2003</strong> 2002<br />
Pledged real estate and land at book value 16 172 17 376<br />
Existing land-lease rights thereon 27 000 27 000<br />
Bank loans and credit lines secured by land-lease 10 000 20 000<br />
Pledged bank assets 51 –<br />
30. Related parties<br />
Related persons are major shareholders, members of the Board of Directors and companies controlled by them.<br />
All business transactions with related persons and companies are based on standard forms of contract and conditions. The<br />
liabilities to shareholders are explained in Note 13. The recorded receivables from related parties are with regard to a company<br />
controlled by a major shareholder, with which turnover in <strong>2003</strong> amounted to CHF 1 195 thousand (2002: CHF 1 575 thousand).<br />
The ordinary remuneration paid to members of the Board of Directors amounted to CHF 305 thousand in <strong>2003</strong> (2002: CHF<br />
300 thousand). Apart from the ordinary fees, individual members of the Board were also allocated a total of 3 000 registered<br />
shares of CALIDA Holding AG at a strike price of CHF 100.–. This share allocation equates to a gross consideration totalling<br />
CHF 102 thousand.<br />
| 28
31. Segment reporting<br />
a) Primary segmentation by geographic areas<br />
Switzerland Germany Other markets Elimination TOTAL<br />
<strong>2003</strong> 2002 <strong>2003</strong> 2002 <strong>2003</strong> 2002 <strong>2003</strong> 2002 <strong>2003</strong> 2002<br />
By position of assets: 1)<br />
Net sales 127 390 144 431 1 304 866 17 296 40 885 (15 864) (46 900) 130 126 139 282<br />
Assets 89 107 94 019 322 253 9 552 10 060 – – 98 981 104 332<br />
Liabilities (66 132) (74 593) (195) (256) (6 316) (4 963) 42 594 40 717 (30 049) (39 095)<br />
Depreciation (4 481) (4 693) (19) (19) (1 186) (1 472) – – (5 686) (6 184)<br />
Long-term reduction in value – (2 140) – – – (148) – – – (2 288)<br />
Operating result 5 196 (6 291) 107 87 (2 570) 217 – (92) 2 733 (6 079)<br />
Investments 1 218 638 2 – 196 571 – – 1 416 1 209<br />
No. of employees<br />
Gross sales<br />
326 411 10 11 525 574 – – 861 996<br />
(by location of customers) 63 294 68 914 52 262 56 693 26 247 27 621 – – 141 803 153 228<br />
1) Point of view legal entities (see accounting principles/consolidation scope).<br />
The transfer prices between the group companies are calculated at arm’s length. Net sales with other segments in the<br />
elimination column are mainly generated in the other markets.<br />
b) Secondary segmentation<br />
Due to the structure of CALIDA, no further segmentation can be made.<br />
32. Financial instruments<br />
The CALIDA Group can conclude forward currency contracts and enter into option transactions in order to protect itself from<br />
risks which can arise in the case of currency fluctuations for specific transactions. In their inclusion in the balance sheet, the<br />
contracts are compared with the anticipated payment inflows in foreign currency, primarily from sales. The Group does not<br />
use derivative instruments for speculative purposes. As at the cut-off date (31 December <strong>2003</strong>), there were no open hedging<br />
contracts in existence (see Note 2).<br />
Credit risks<br />
The short-term cash at banks and deposits are placed at banking institutes with a high level of creditworthiness. Trade<br />
accounts receivable are shown after deduction of value adjustments for risks of bad debt. The credit risk in this position is<br />
restricted insofar that the Group’s circle of customers is comprised of a large number of individual customers distributed over<br />
various industries and geographic regions. There is therefore no significant cluster-risk for the Group.<br />
Interest rate risks<br />
The short-term cash at banks and deposits held by the Group attract interest at varying rates. With regard to the interest<br />
payable by the Group, please refer to Note 10.<br />
Fair Value<br />
Cash and cash equivalents and cash at banks, trade accounts receivable and short-term liabilities equated approximately to<br />
fair value as at 31 December <strong>2003</strong> due to the short-term payment dates involved. The fair value of the other financial investments<br />
and the long-term financial liabilities do not deviate significantly from the values shown in the balance sheet.<br />
33. Post balance sheet events<br />
The consolidated financial statements were approved by the Risk & Audit Committee on 23 February 2004. On that same date,<br />
the Board of Directors approved the publication. They are still subject to approval by the <strong>Annual</strong> General Meeting of shareholders.<br />
There were no events between 31 December <strong>2003</strong> and the date of approval of these consolidated financial statements<br />
by the Board of Directors which would require an adjustment of the values shown in the balance sheet or which would<br />
need to be disclosed in these notes.<br />
| 29
<strong>Report</strong> of the Group Auditors to the <strong>Annual</strong> General Meeting of<br />
CALIDA HOLDING AG, OBERKIRCH<br />
As Group Auditors, we have audited the consolidated financial statements (balance sheet,<br />
income statement, consolidated statement of changes in equity, cash-flow statement and<br />
notes) of CALIDA Holding AG for the year ended on December 31, <strong>2003</strong> as shown on pages<br />
10 to 29 of this report.<br />
The consolidated financial statements are the responsibility of the Board of Directors. Our<br />
responsibility is to express an opinion on these consolidated finacial statements based on our<br />
audit. We confirm that we meet the legal requirements concerning professional qualification<br />
and independence.<br />
Our audit was conducted in accordance with auditing standards promulgated by the Swiss<br />
profession and with the International Standards on Auditing (ISA), which require that an audit<br />
be planned and performed to obtain reasonable assurance whether the consolidated financial<br />
statements are free of material misstatement. We have examined, on a test basis, evidence<br />
supporting the amounts and disclosures in the consolidated financial statements. We have<br />
also assessed the accounting principles used, significant estimates made and the overall<br />
consolidated financial statement presentation. We believe that our audit a reasonable basis for<br />
our opinion.<br />
In our opinion, the consolidated financial statements give a true and fair view of the consolidated<br />
financial position, results of operations and cash flows in accordance with the International<br />
Financial <strong>Report</strong>ing Standards (IFRS) and comply with Swiss law.<br />
We recommend that the consolidated financial statements submitted to you be approved.<br />
KPMG Fides Peat<br />
Markus Forrer Urs Matter<br />
Swiss Certified Accountant Swiss Certified Accountant<br />
Auditor in charge<br />
Lucerne, February 23, 2004<br />
| 30
FINANCIAL STATEMENTS CALIDA HOLDING AG<br />
Balance sheet as at 31 December<br />
in CHF ’000<br />
ASSETS Notes <strong>2003</strong> 2002<br />
Current assets<br />
Cash and cash equivalents 1 022 28<br />
Other receivables due<br />
– from third parties 11 40<br />
– from group companies 2 389 1 757<br />
Total current assets 3 422 1 825<br />
Non-current assets<br />
Financial assets<br />
– Investments 1 32 082 29 400<br />
– Loans to group companies 33 591 33 636<br />
– Own shares 2 – 114<br />
Total non-current assets 65 673 63 150<br />
TOTAL ASSETS 69 095 64 975<br />
LIABILITIES & SHAREHOLDERS’ EQUITY<br />
Liabilities<br />
Other liabilities due<br />
– to third parties 11 29<br />
– to shareholders 11 12<br />
Provisions 200 208<br />
Total liabilities 222 249<br />
Shareholders’ equity<br />
Share capital 4 15 150 15 000<br />
Legal reserves<br />
– General reserves 7 500 7 500<br />
– Share premium reserves 4 137 –<br />
– Reserves for own shares 2 – 265<br />
Free reserves 2 66 500 66 235<br />
Accumulated losses (20 414) (24 274)<br />
Total shareholders’ equity 68 873 64 726<br />
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 69 095 64 975<br />
| 32
FINANCIAL STATEMENTS CALIDA HOLDING AG<br />
Income statement<br />
in CHF ’000<br />
INCOME <strong>2003</strong> 2002<br />
Financial income 1 315 1 504<br />
Licence fee income 545 520<br />
Investment income Natural Textiles Limited – 502<br />
Liquidation dividend Intipor Indústrias Téxteis Lda. – 1 332<br />
Decrease of provision for value adjustments of investments 2 682 –<br />
Total income 4 542 3 858<br />
EXPENSES<br />
Administrative expenses (638) (623)<br />
Increase of provision for value adjustments of investments – (11 294)<br />
Financial expenses (44) (63)<br />
Total expenses (682) (11 980)<br />
Net result before tax 3 860 (8 122)<br />
Taxes – 29<br />
Net profit/(loss) for the year 3 860 (8 093)<br />
Statement of changes in shareholders’ equity<br />
(in CHF '000)<br />
Share capital<br />
General<br />
reserves<br />
Share premium<br />
reserves<br />
Balance at 31 December 2000 15 000 7 500 – 260 7 760 66 240 (728) 88 272<br />
Change in reserves for own shares (82) (82) 82 –<br />
Net loss for the year (15 453) (15 453)<br />
Balance at 31 December 2001 15 000 7 500 – 178 7 678 66 322 (16 181) 72 819<br />
Change in reserves for own shares 87 87 (87) -<br />
Net loss for year (8 093) (8 093)<br />
Balance at 31 December 2002 15 000 7 500 – 265 7 765 66 235 (24 274) 64 726<br />
Capital increase 150 137 137 287<br />
Change in reserves for own treasury shares (265) (265) 265 -<br />
Net profit for the year 3 860 3 860<br />
Balance at 31 December <strong>2003</strong> 15 150 7 500 137 – 7 637 66 500 (20 414) 68 873<br />
| 33<br />
Reserves for<br />
own shares<br />
Total legal reserves<br />
Free reserves<br />
Accumulated losses<br />
Shareholders’<br />
equity
FINANCIAL STATEMENTS CALIDA HOLDING AG<br />
Notes<br />
1. Investments<br />
Company Activity Registered share capital Participation<br />
CALIDA AG<br />
Oberkirch/Sursee, Switzerland Production/Distribution CHF 10 000 000 100 %<br />
CALIDA Portugal S.A.<br />
Amares, Portugal Production EUR 6 250 000 100 %<br />
CALIDA Hungary GmbH<br />
Rajka, Hungary Production HUF 477 300 000 100 %<br />
CALIDA GmbH<br />
Düsseldorf, Germany Distribution EUR 102 258 100 %<br />
CALICOM AG<br />
Sursee, Switzerland Advertising CHF 100 000 100 %<br />
The participations have not changed in comparison with the previous year. The book values of the investments are periodically<br />
re-valued. They are valued at the lower of historical cost or net equity values.<br />
2. Own shares Units Amount<br />
(in CHF ’000)<br />
Balance at 31 December 2002 847 114<br />
Sales (847) (114)<br />
Balance at 31 December <strong>2003</strong> – –<br />
As at 31 December 2002, CALIDA AG held 175 shares of CALIDA Holding AG. The reserve for own shares as at December<br />
31, 2002 of <strong>Calida</strong> Holding AG represented therefore a total of 1 022 of own shares held. The average purchase price of those<br />
shares was CHF 261.40. In the first half of the financial year <strong>2003</strong>, CALIDA AG acquired 3 198 shares at an average price of<br />
CHF 149.50 via the stock exchange. As at 30 June <strong>2003</strong>, CALIDA Group companies were holding a total of 4 220 own shares<br />
at an average purchase price of CHF 176.60. In the second half of the year, all the shares were sold at an average price of<br />
CHF 226.75. As at the cut-off date of the balance sheet (31 December <strong>2003</strong>), neither CALIDA Holding AG nor any of its group<br />
companies held any own shares anymore. The reserve for own shares was therefore dissolved.<br />
3. Major shareholders<br />
As at 31 December <strong>2003</strong>, and as per their own statements, the Kellenberger Family held 51.2 % and Mr. Marco Vögele 26.2 %<br />
of the shares of CALIDA Holding AG with voting rights. Those details correspond to the entries in the share register.<br />
4. Conditional share capital<br />
At the annual general meeting of 8 June 2001, a resolution was passed to create conditional capital of CHF 1 million to serve<br />
staff participation by issuance of max. 20 000 registered shares to be fully paid up at a par value of CHF 50.– each.<br />
In the course of the reporting year, the share capital was increased through the exercising of conditional capital of<br />
CHF 150 000 or 3 000 registered shares. With the capital increase, the share premium reserves of CHF 136 620 were built. As<br />
at 31 December <strong>2003</strong>, the available conditional capital amounts to CHF 850 000 (2002: CHF 1 000 000). This equates to<br />
17 000 registered shares (2002: 20 000) at a par value of CHF 50.– each.<br />
There are no further facts that would require disclosure according to Article 663 b of the Swiss Code of Obligations.<br />
| 34
FINANCIAL STATEMENTS CALIDA HOLDING AG<br />
Proposal of the Board of Directors regarding appropriation of free reserves<br />
in CHF ’000<br />
| 35<br />
<strong>2003</strong> 2002<br />
Accumulated losses at beginning of year (24 274) (16 181)<br />
Profit / (loss) for year 3 860 (8 093)<br />
Accumulated losses at end of year (20 414) (24 274)<br />
Release of free reserves 66 500 –<br />
Dividend payment (909) –<br />
To be carried forward 45 177 (24 274)<br />
The Board of Directors recommends the distribution of a gross dividend of CHF 3.– per registered share. This equates to a<br />
distribution of 6 % of the par value of the registered share. After deduction of the Swiss federal withholding tax of 35 %, there<br />
remains a net dividend of CHF 1.95 per registered share for direct payment to the shareholders.<br />
If approval is given for this dividend distribution at the <strong>Annual</strong> General Meeting, it will be paid out from 10 May 2004 onwards.
<strong>Report</strong> of the Statutory Auditors to the General Meeting of<br />
CALIDA HOLDING AG, OBERKIRCH<br />
As Statutory Auditors, we have audited the accounting records and the financial statements<br />
(balance sheet, income statement, statement of changes in shareholders’ equity and notes as<br />
shown on pages 32 to 35 of CALIDA Holding AG, Oberkirch, for the year ended December 31,<br />
<strong>2003</strong>.<br />
These financial statements are the responsibility of the Board of Directors. Our responsibility<br />
is to express an opinion on these financial statements based on our audit. We confirm that we<br />
meet the legal requirements concerning professional qualification and independence.<br />
Our audit was conducted in accordance with auditing standards promulgated by the Swiss<br />
profession, which require that an audit be planned and performed to obtain reasonable assurance<br />
about whether the financial statements are free from material misstatement. We have<br />
examined on a test basis evidence supporting the amounts and disclosures in the financial<br />
statements. We have also assessed the accounting principles used, significant estimates<br />
made and the overall financial statement presentation. We believe that our audit provides a<br />
reasonable basis for our opinion.<br />
In our opinion, the accounting records, the financial statements and the proposal with regard<br />
to the appropriation of free reserves comply with Swiss law and the Company's articles of incorporation.<br />
We recommend that the financial statements submitted to you be approved.<br />
KPMG Fides Peat<br />
Markus Forrer Urs Matter<br />
Swiss Certified Accountant Swiss Certified Accountant<br />
Auditor in charge<br />
Lucerne, February 23, 2004<br />
| 36
CORPORATE GOVERNANCE<br />
1. Group structure<br />
The operational Group structure shown here came into effect in January <strong>2003</strong>.<br />
Sales<br />
Rosemarie Gaebke<br />
Marketing<br />
Felix Sulzberger<br />
Chief Executive Officer<br />
Felix Sulzberger<br />
| 38<br />
Operations<br />
Daniel Gemperle<br />
Finance/Services<br />
Andreas Lindemann<br />
The legal Group structure is as follows:<br />
Equity capital Capital/voting<br />
Group company Business activity in local currency stake in % Held by<br />
CALIDA Holding AG,<br />
Oberkirch/Sursee, Switzerland<br />
CALIDA AG,<br />
Holding CHF 15 150 000 100 % Public<br />
Oberkirch/Sursee, Switzerland<br />
CALIDA Portugal S.A.,<br />
Production/sales CHF 10 000 000 100 % CALIDA Holding AG<br />
Amares, Portugal<br />
CALIDA Ungarn GmbH,<br />
Production EUR 6 250 000 100 % CALIDA Holding AG<br />
Rajka, Hungary<br />
CALIDA GmbH,<br />
Production HUF 477 300 000 100 % CALIDA Holding AG<br />
Düsseldorf, Germany<br />
CALIDA of Switzerland Inc.,<br />
Sales EUR 102 258 100 % CALIDA Holding AG<br />
New York, USA<br />
CALIDA France SAS,<br />
Sales USD 5 000 100 % CALIDA AG<br />
Metz, France<br />
CALICOM AG,<br />
Sales EUR 1 300 000 100 % CALIDA AG<br />
Sursee, Switzerland Marketing CHF 100 000 100 % CALIDA Holding AG
2. Capital structure<br />
The company’s share capital amounts to CHF 15.15 million. This is divided into 303 000 registered shares with a par value of<br />
CHF 50 each. The registered shares of CALIDA Holding AG, domiciled in Oberkirch, are traded on the main board of the SWX<br />
Swiss Exchange (securities number 901813, ISIN CH0009018133, abbreviation CALN). As at the balance sheet date of 31<br />
December <strong>2003</strong>, the company’s market capitalization was approximately CHF 73 million.<br />
The General Meeting of Shareholders of 8 June 2001 created conditional capital not exceeding CHF 1 000 000 to fund participation<br />
schemes for employees and Members of the Board of Directors. This increase was carried out by issuing a maximum<br />
of 20 000 fully paid up registered shares of CHF 50 par value; shareholders’ preemption rights were excluded. The issue of<br />
registered shares or options on these shares to employees and Members of the Board of Directors is to be carried out in accordance<br />
with one or more regulations issued by the Board of Directors. Registered shares or options may be issued to employees<br />
and Members of the Board of Directors at less than the stock market price. For further information about employee options,<br />
please see the «Compensation, profit-sharing and loans» section. Over the course of the year under review, the company’s<br />
capital was increased by CHF 150 000 through the issue of 3 000 registered shares from the conditional capital. As at 31<br />
December <strong>2003</strong>, CHF 850 000 of conditional capital was available. This is equivalent to 17 000 registered shares with a par<br />
value of CHF 50 each.<br />
The changes to capital over the last three reporting years can be seen in detail in the «CALIDA Holding AG annual financial<br />
statement» section of the annual report under the heading «Changes to equity capital».<br />
3. Shareholders<br />
According to their information, as at 31 December <strong>2003</strong>, the common-voting shareholders of the Kellenberger family controlled<br />
51.2% of all shares of CALIDA Holding AG.<br />
According to his information, as at 31 December <strong>2003</strong>, shareholder Marco Vögele controlled 26.2% of all shares of CALIDA<br />
Holding AG.<br />
This information matches the entries in the share register. The company does not know of any other major shareholders.<br />
There are no cross-shareholdings of any type.<br />
4. Board of Directors<br />
Name Nationality Born Position Joined<br />
Dr. Thomas Lustenberger CH 1951 Chairman 16.06.2000<br />
Alfred M. Niederer CH 1941 Vice Chairman 16.06.2000<br />
Povl van Deurs Jensen DK 1943 Member 16.06.2000<br />
Erich Kellenberger CH 1948 Member 22.09.1986<br />
Marco Vögele CH 1958 Member 08.06.2001<br />
The Board of Directors of CALIDA Holding AG consists of five people. All Members of the Board of Directors are non-executive<br />
members. Apart from Erich Kellenberger, who until 31 March 2001 performed the role of Chief Executive Officer and Delegate<br />
of the Board of Directors of CALIDA Holding AG, none of the Members of the Board of Directors has been a member of the<br />
Executive Board of CALIDA Holding AG or any of its Group companies. The Members of the Board of Directors have no<br />
material relations to CALIDA Holding AG or its subsidiaries, apart from those mentioned in note 30 of the consolidated annual<br />
financial statement.<br />
| 39<br />
»
Dr. Thomas Lustenberger<br />
University of Berne (Dr. of law), Harvard Law School (LL.M.)<br />
Professional background:<br />
Partner in the legal practice Meyer Lustenberger in Zurich<br />
Other functions and activities:<br />
Chairman of the Board of Directors of Allreal Holding AG, Zurich, Vice Chairman of Micronas Semiconductor Holding AG,<br />
Zurich, and of Schlatter Holding AG, Schlieren, Member of the Board of Directors SEZ Holding AG, Zurich, and of Vitra Holding<br />
AG, Birsfelden<br />
Alfred M. Niederer<br />
Federal Institute of Technology Zurich (engineering degree, textiles engineering and business management), Stanford University<br />
(Senior Executive Program)<br />
Professional background:<br />
Chairman of Bally International AG from 1986 to 1992, Vice President of Bata Europe from 1992 to 1995<br />
Other functions and activities:<br />
Owner and sole board member of Conpatex Holding AG, Lichtensteig, Chairman of the Board of Directors of Von Roll Holding<br />
AG, Zurich, Vice Chairman of the Board of Directors of Charles Vögele Holding AG, Pfäffikon, and of Desco von Schulthess<br />
Holding AG, Zurich, Member of the Board of Directors of Netstal Maschinen AG, Näfels, of Micronas Semiconductors Holding<br />
AG, Zurich, and of AG Cilander, Herisau, Chairman of the Foundation Board of the Schwerpunktspital Wädenswil<br />
Povl van Deurs Jensen<br />
Commercial diploma, training as bookseller, officer training in the Danish Army<br />
Professional background:<br />
Until 31 December <strong>2003</strong> Executive President and Member of the Executive Committee of Japan Tobacco International (JTI)<br />
Other functions and activities:<br />
Member of the Board of Directors of JTI Dagmersellen<br />
Erich Kellenberger<br />
Kantonsschule Lucerne, Leicester Polytechnic (textile engineering)<br />
Professional background:<br />
Operational functions at the CALIDA Group between 1970 and 2001<br />
Other functions and activities:<br />
Member of the Board of Directors of Bächler Beteiligungen AG<br />
Marco Vögele<br />
Training in textile retailing<br />
Professional background:<br />
Until 1998 longstanding Member of the Executive Board of Charles Vögele Holding AG, responsible for purchasing/sales and<br />
marketing, independent businessman<br />
| 40
The Board of Directors as a whole is elected for a term of three years. Members shall be eligible for unlimited reelection. The<br />
current term of office shall end on the day of the General Meeting of Shareholders for the 2004 financial year.<br />
The Board of Directors constitutes itself. It elects a secretary, who does not have to be a Member of the Board of Directors or<br />
a shareholder. The Board of Directors is quorate when the majority of its members are present, except in the case detailed in<br />
Art 652 para. 2 SCO. It shall pass its resolutions and carry out its elections by the majority of votes cast. The Chairman also<br />
has a vote. If votes are tied, the Chairman has the casting vote. The Board of Directors’ votes are taken openly. Resolutions<br />
on proposals may be passed in writing (including by fax), provided none of the members requests an oral discussion. A<br />
resolution is passed when the majority of the entire board votes for it. Such resolutions are to be minuted. All Members of the<br />
Board of Directors must leave the meetings when business is being discussed that touches on their own interests or the<br />
interests of a person or company with which they are closely associated.<br />
The Board of Directors may delegate the preparation of individual resolutions, the monitoring of business operations, and other<br />
special tasks to committees. These committees do not have the power to pass resolutions. The duties that cannot be delegated<br />
as defined in Art. 716a CO remain with the Board of Directors as a whole.<br />
During the second half of the year under review, the Board of Directors wound up its previous committee, whose members<br />
were Dr. Thomas Lustenberger, Chairman, and Alfred M. Niederer, Vice Chairman, and which helped and supported the Chief<br />
Executive Officer as well as fulfilling the tasks of an audit committee and a remuneration committee. The tasks performed by<br />
this committee, especially «nominations» and «remuneration» will be taken over by the Board of Directors as a whole. The<br />
Board of Directors has also created an Audit & Risk Committee. Its members are Alfred M. Niederer, Vice Chairman (Chair) and<br />
Povl van Deurs Jensen, Member. This committee assesses the CALIDA Group’s risk and control processes, monitors financial<br />
reporting and evaluates the statutory and Group auditors (see also Chapter 9, Auditor).<br />
The Board of Directors usually meets four or five times a year. Its meetings last for between half and one-and-a-half days. Four<br />
meetings were held during the <strong>2003</strong> financial year.<br />
The committee usually met up to twelve times. Six meetings were held during the year under review before the committee was<br />
wound up. The Audit & Risk Committee will hold three or four regular meetings each year. It begins work at the start of the<br />
2004 financial year. In addition, the Chairman undertakes special tasks as a partner for the Chief Executive Officer and the<br />
Executive Board. This involves holding up to twelve meetings a year. Ten meetings were held last year.<br />
While the meetings of the Board of Directors usually take place at the company’s head offices, the committee and now the<br />
Audit & Risk Committee also meet at other locations. The members of the Executive Board attend the meetings of the Board<br />
of Directors and the committee/Audit & Risk Committee as required.<br />
The Board of Directors is the most senior supervisory and management body. As prescribed in the Organizational Regulations<br />
that it issued, the Board of Directors has delegated management of the business to the Executive Board.<br />
The individual accounts (balance sheet, profit and loss account) of CALIDA Holding AG’s subsidiaries are produced monthly,<br />
quarterly, half-yearly and annually. The figures are consolidated for the Group. Comparisons are made with the previous year’s<br />
figures and the budgeted figures. The budget is periodically reviewed in the form of a forecast of attainability. As part of the<br />
Management Information System, individual Members of the Executive Board produce a monthly report for the Chief Executive<br />
Officer. The Chief Executive Officer submits this report to the Board of Directors as a whole and discusses it at the Board’s<br />
meetings. These reports were also discussed at meetings of the committee until the committee was wound up.<br />
| 41<br />
»
5. Executive Board<br />
Name Nationality Born Position Joined<br />
Felix Sulzberger CH 1951 Chief Executive Officer &<br />
Head of Marketing 01.11.2001<br />
Rosemarie Gaebke D 1953 Head of Sales 01.03.2001<br />
Daniel Gemperle CH 1959 Head of Operations 01.03.1999<br />
Andreas Lindemann CH 1962 Chief Financial Officer 01.01.<strong>2003</strong><br />
Felix Sulzberger<br />
University of Graz/Austria (masters in economics)<br />
Professional background:<br />
From 1976 to 1986 international marketing and sales positions in the tobacco and food division of a multinational company,<br />
from 1986 to 2001 CEO/General Manager at European level for three leading multinational companies in the sports and clothing<br />
sector<br />
Other functions and activities:<br />
Member of the Advisory Board of Finatem Beteiligungs GmbH, Frankfurt a.M., Member of the Advisory Board of Lafuma Group<br />
GmbH, Bissingen b.T., Germany<br />
Rosemarie Gaebke<br />
Business diploma in sales and marketing, technical college, IMD Lausanne<br />
Professional background:<br />
From 1978 to 1982 sales manager in the music industry in Germany, from 1982 to 1995 various senior sales positions including<br />
Commercial Director Germany for a leading American clothing company, from 1998 to 2001 Vice Chairman Retail Europe at<br />
an international textile company based in Switzerland<br />
Daniel Gemperle<br />
University of Applied Sciences, textile clothing and technology, Mönchengladbach/D<br />
Professional background:<br />
From 1984 to 1988 production manager at a Swiss clothing group (retail and production) with particular responsibility for<br />
managing the «production merger and rationalization» project as part of a merger between various group companies, from<br />
1988 to 1998 Member of the Executive Board (Operations division) and Board of Directors of a Swiss clothing company<br />
Andreas Lindemann<br />
School of Economics and Business Administration, Lucerne (federal diploma in business administration) Kammerschule Zurich<br />
(federal auditing diploma)<br />
Professional background:<br />
From 1989 to 1995 auditor at one of the major international auditing and consulting firms, from 1995 to 1998 Head of Finance<br />
and Accounting in the duty free division of a multinational tobacco company, 1998 to 2002 Member of the Management Board<br />
(CFO and Head of Management Services) at a Swiss media group<br />
Members Of The Executive Board are appointed by the Board of Directors at the request of the Chief Executive Officer.<br />
The Executive Board usually meets between one and four times a month.<br />
Neither CALIDA Holding AG nor its subsidiaries have signed management contracts with third parties.<br />
| 42
6. Compensation, profit-sharing and loans<br />
Compensation and profit-sharing programs: content and procedures<br />
Members of the Board of Directors are usually paid fixed compensation for their work. This compensation is stipulated in the<br />
regulations that are periodically issued by the Board of Directors. In addition to this fixed component, individual or all Members<br />
of the Board of Directors may be allocated registered shares of CALIDA Holding AG as part of a variable compensation<br />
scheme. The Board of Directors as a whole determines the timing of such allocations, the number of shares, the purchase<br />
price and the blocking periods.<br />
Compensation for the Executive Board includes a fixed component and a variable component. This variable component can<br />
amount to a maximum of 55 % of the fixed compensation. The size of the variable component is based on the corporate goals<br />
and on predefined individual goals. The Board of Directors approves the Executive Board’s compensation (including the share<br />
option scheme) at the request of the Chief Executive Officer.<br />
The General Meeting of Shareholders of 8 June 2001 approved conditional capital of CHF 1 000 000 for the creation of the<br />
share option scheme. The option scheme is designed to encourage Members of the Board of Directors and employees to<br />
implement corporate strategy and increase the value of the company in the interests of all shareholders.<br />
Compensation for company officers<br />
Fixed compensation (including all employer contributions to pension funds, excluding employer contributions to the AHV or<br />
similar state social insurances) paid to the five Members of the Board of Directors in the <strong>2003</strong> financial year amounted to CHF<br />
305 000. In addition to this fixed component, individual Members of the Board of Directors were allocated a total of 3 000<br />
registered shares of CALIDA Holding AG. The purchase price per share was fixed at CHF 100. These shares are blocked for<br />
sale until 31 January 2006. This allocation of shares is equivalent to a gross payment of approximately CHF 102 000. During<br />
the year under review, no options were allocated from a share option scheme to Members of the Board of Directors. Total compensation<br />
paid to the Board of Directors during the year under review thus came to CHF 407 000.<br />
The highest overall compensation (including all employer contributions to pension funds, excluding employer contributions to<br />
the AHV) paid to a Member of the Board of Directors in the <strong>2003</strong> financial year comprised fixed compensation of CHF 100 000<br />
plus variable compensation in the form of the allocation of 1 500 registered shares of CALIDA Holding AG. This allocation of<br />
shares is equivalent to a gross payment of approximately CHF 44 000. Total compensation paid to this Member of the Board<br />
of Directors thus came to CHF 144 000.<br />
The overall amount (including all employer contributions to pension funds, excluding employer contributions to the AHV or<br />
similar state social insurances) paid to the four Members of the Executive Board in the <strong>2003</strong> financial year amounted to<br />
approximately CHF 1 626 000. During the year under review no shares and no options to buy shares of CALIDA Holding AG or<br />
its subsidiaries were allocated to Members of the Executive Board. In 2002, the Chief Executive Officer was given a total of<br />
14 999 options to buy 14 999 registered shares of CALIDA Holding AG of par value CHF 50 each at the exercise price of CHF<br />
200. The options can be exercised in installments over a period of five years. Three thousand of these options can be exercised<br />
every year on 31 October, beginning on 31 October 2002, and 2 999 on 31 October 2006. These are American-style options<br />
and can be exercised up until 31 December 2011. As at 31 December <strong>2003</strong>, none of the 14 999 options had been exercised.<br />
During the <strong>2003</strong> financial year, none of the Members of the Board of Directors and none of the Members of the Executive Board<br />
who left their posts as company officers were paid an exit settlement.<br />
No compensation was paid to former company officers in the <strong>2003</strong> financial year.<br />
According to its own information, the Board of Directors and people with close relations to it held a total of 238 887 registered<br />
shares of CALIDA Holding AG as at 31 December <strong>2003</strong>. This is equal to 78.8 % of the share capital. According to their own<br />
information, the Members of the Executive Board and people with close relations to them held no shares of CALIDA Holding<br />
AG as at 31 December <strong>2003</strong>.<br />
| 43<br />
»
Additional fees and remuneration, loans to company officers<br />
The Meyer Lustenberger legal practice, in which Chairman of the Board of Directors Dr. Thomas Lustenberger is one of eleven<br />
partners, invoiced CALIDA Holding AG or one of its Group companies approximately CHF 166000 for legal consultancy during<br />
the year under review.<br />
Member of the Board of Directors Erich Kellenberger helps the Executive Board on product and marketing issues. During the year<br />
under review CALIDA AG paid Erich Kellenberger approximately CHF 265000 as part of this advisory mandate.<br />
CALIDA AG granted Bächler Beteiligungen AG a loan to finance the furnishing and equipping of CALIDA stores. Member of the<br />
Board of Directors Erich Kellenberger has a stake in Bächler Beteiligungen AG. As at the balance sheet date, this loan amounted<br />
to CHF 400000. Interest is charged at normal market rates. An interest rate of five percent currently applies. The loan is unsecured<br />
and is repayable in two equal installments by 31 December 2004. In return, CALIDA AG owes the commonvoting shareholder<br />
group associated with Erich Kellenberger a total of approximately CHF 670500.<br />
7. Shareholders’ rights<br />
Only persons who are registered in the share register shall be deemed to be shareholders in the company. The company’s<br />
articles of association place no restrictions on registration or voting rights. Shareholders registered in the share register on the<br />
date on which invitations to the meeting are sent out shall be entitled to vote at the General Meeting of Shareholders. A shareholder<br />
can be represented at the General Meeting of Shareholders by another shareholder on the basis of a written proxy.<br />
Items on the agenda involving motions to the General Meeting of Shareholders must be submitted in writing to the Board of<br />
Directors at least four weeks prior to the date of the General Meeting of Shareholders. Invitations to shareholders are sent out<br />
in writing at least 20 days before the meeting to shareholders registered in the share register, as well as being published in the<br />
Swiss Commercial Gazette. No changes will be made to the share register between the sending out of invitations and the date<br />
of the General Meeting of Shareholders.<br />
The General Meeting of Shareholders shall pass its resolutions and carry out its elections with an absolute majority of the share<br />
votes represented unless the law or the articles of association stipulate otherwise. If there is a second round of voting, a relative<br />
majority shall decide the matter. In the event of tied votes, the chairman shall have the casting vote in the case of a poll; in the<br />
case of elections, the vote shall be decided by lot.<br />
8. Change of control and defensive measures<br />
There are no regulations in the articles of association about opting out or opting up (Art. 22 BEHG).<br />
There are no «change of control» clauses in favor of Members of the Board of Directors.<br />
In the event of a change in control of the company, the Chief Executive Officer can resign his employment relationship and<br />
demand immediate release with full pay for the notice period. In this case he acquires a put option for the registered shares<br />
acquired as part of the share option scheme. If the Chief Executive Officers resigns within 24 months of a change of control,<br />
he receives a settlement equivalent to one annual salary including an annual bonus.<br />
There are no agreements with other Members of the Executive Board for the event of a change of control.<br />
| 44
9. Auditors<br />
KPMG Fides Peat, Lucerne, has been the statutory and Group auditor for CALIDA Holding AG since 2000. The head auditor<br />
has been responsible for the audit mandate since this date. All subsidiaries of CALIDA Holding AG are audited by auditors of<br />
the KPMG group around the world.<br />
The cost for the period of auditing the individual accounts and consolidated financial statement for <strong>2003</strong> came to approximately<br />
CHF 242 500. In addition, KPMG charged approximately CHF 102 000 for tax and business consultancy during the year<br />
under review.<br />
This Board of Directors’ committee, and now the new Audit & Risk Committee (see also chapter 4, Board of Directors), conducts<br />
an annual review of the performance, fees and independence of the statutory and Group auditors. It suggests to the<br />
Board of Directors which statutory and Group auditors it should propose to the General Meeting of Shareholders. This Board<br />
of Directors’ committee, and now the new Audit & Risk Committee, evaluates the work of the statutory and Group auditors by<br />
referring to the management letters, explanations and audit reports prepared by the external auditors.<br />
10. Information policy<br />
CALIDA Holding AG informs shareholders and the interested general public about the course of its business by means of halfyearly<br />
and annual reporting. The annual report up to 31 December was sent to shareholders together with their invitations to<br />
the General Meeting of Shareholders. The semi-annual report is sent to shareholders registered in the share register at the end<br />
of August/beginning of September. The annual report, semi-annual report and press releases can be accessed on the Internet<br />
at www.calida.com under the Company section. Printed documentation can be ordered from the website www.calida.com, by<br />
e-mail from investor@calida.com or by post from CALIDA Holding AG, Investor Relations, Postfach, 6210 Sursee. Pricesensitive<br />
information is announced in accordance with the provisions of the SWX Swiss Exchange.<br />
| 45
CALIDA Holding AG<br />
Bodywear, Postfach, CH-6210 Sursee<br />
Tel. 0041 (0)41 925 45 25, Fax 0041 (0)41 925 42 84<br />
www.calida.com<br />
Investor Relations, Postfach, CH-6210 Sursee<br />
Tel. 0041 (0)41 925 42 42, Fax 0041 (0)41 925 46 22<br />
investor@calida.com