Annual Report - Sonova Holding AG

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sheet. Loans are measured at amortized cost. Amortized cost is the amount at which the financial asset is measured at initial recognition minus principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount, minus any reduction for impairment or uncollectibility. The effective interest method is a method of calculating the amortized cost of a financial asset and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset. Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s Management has the intention and ability to hold to maturity. Assets under this category that have a fixed maturity are valued at amortised cost using the effective interest rate method. Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are designated in this category or not classified in any of the other categories. They are included in non-current assets unless Management intends to dispose of the investment within 12 months of the balance sheet date. Available-for-sale financial assets are initially measured at their fair value. After initial recognition available-for-sale financial assets are measured at fair value with gains and losses being recognized as a separate component of equity until the investment is derecognized or until the investment is determined to be impaired at which time the cumulative gain or loss previously reported in equity is included in the income statement. The fair values of investments that are actively traded are based on current bid prices. If the market for a financial asset is not active fair value is determined using valuation techniques. Impairment of financial assets A financial asset is impaired if its carrying amount is greater than its estimated recoverable amount. The Group assesses, at each balance sheet date, whether there is any objective evidence that a financial asset may be impaired. If any such evidence exists, the Group estimates the recoverable amount of that asset and recognizes any impairment loss in the income statement. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be objectively related to an event occurring after the write-down, the write-down of the financial asset is reversed. The reversal generally will not result in a carrying amount of the financial asset that exceeds what amortized cost would have been, had the impairment not been recognized, at the date the write-down of the financial asset is reversed. The amount of the reversal is included in net profit or loss for the financial year. 3.7 Derivative financial instruments and hedging The Group regularly hedges its net exposure from expected future cash in- and outflows in foreign currencies with forward contracts. Such contracts are not qualifying hedges and are therefore not accounted for using hedge accounting. Gains and losses on these transactions are taken directly to the income statement; the corresponding positive and negative replacement values are recognized on the balance sheet as financial assets/financial liabilities at fair value through profit or loss. Until November 2004, the Group entered into derivative contracts in order to hedge investments in foreign entities. Such derivative contracts were designated as hedges, with changes in their fair value recognized in equity. However, no net investment hedge has been made since November 2004. 4. Changes in Group Structure The following changes in the Group structure (fully consolidated companies) have occurred in the last 2 financial years: Financial year 2005/06: Acquisition of CAS Produtos Médicos Ltda., Brazil, as of October 4, 2005 Acquisition of Metro Hearing Inc., USA, as of November 1, 2005 In addition to the two main acquisitions mentioned above, 4 smaller entities have been acquired during the financial year 2005/06. For more detailed information regarding the acquisitions please refer to Note 29. Financial year 2004/05: Unitron (Sichuan) Co., Ltd, China, founded in June 2004 Consolidated Financial Statements 57
5. Segment information Profit or loss based on location of assets 1,000 CHF Sales Third parties Intersegment sales Total sales Operating profit (EBIT) Financial income/(expenses), net Share of (loss)/gain in associates/joint ventures Income before taxes Taxes Income after taxes Total assets 1) Total liabilities 1) Capital expenditure in tangible and intangible assets Depreciation and amortization on tangible and intangible assets Third party sales based on location of customers Growth in local currencies 1) “Others” include only unallocated corporate assets and liabilities 2) The segment Americas includes North and South America (previous year North America only) Prior-year figures have been adjusted accordingly The Group is active in one business segment; the development, manufacture, production, distribution and service of hearing systems and related products. The primary segment information is presented according to geographical regions based on location of assets. This corresponds to the organizational structure. Transactions between segments are generally conducted at market rates. 58 Consolidated Financial Statements Europe 2005/06 416,812 275,930 692,742 207,628 (134) 979,962 391,045 17,999 18,827 391,156 20.4% 2004/05 345,997 264,339 610,336 142,076 152 731,173 336,167 17,421 19,947 322,920 Americas 2) 2005/06 399,697 33,321 433,018 24,334 533,958 331,361 10,066 6,578 400,360 34.7% 2004/05 280,824 22,460 303,284 25,196 382,111 206,468 3,668 4,618 284,144
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Annual Report 2005/06 Annual Report
Page 3 and 4:
FIVE-YEAR KEY FIGURES (Consolidated
Page 5 and 6:
CHAIRMAN’S FOREWORD In 2005/06, t
Page 7:
Move with the melody
Page 10 and 11: digital entry-level product line, w
Page 12 and 13: MARKETS General market development
Page 15 and 16: NEW TECHNOLOGIES AND PRODUCTS Platf
Page 17 and 18: OPERATIONS AND STAFF Operations Wit
Page 19: Listen to life
Page 22 and 23: This report describes the principle
Page 24 and 25: Capital Structure Changes in capita
Page 26 and 27: Left to right: Robert F. Spoerry, D
Page 28 and 29: Andy Rihs (born in 1942) has been C
Page 30 and 31: Dr. Valentin Chapero Rueda (born in
Page 32 and 33: Share and option ownership of membe
Page 34 and 35: Highest total compensation The high
Page 36 and 37: Investor Relations Calendar July 6,
Page 39 and 40: SUSTAINABILITY Phonak’s managemen
Page 41 and 42: Our customers buy a better quality
Page 43 and 44: Corporate Governance Phonak’s Boa
Page 45: Push your performance
Page 49 and 50: Consolidated Income Statement 1,000
Page 51 and 52: Consolidated Statement of Cash Flow
Page 53 and 54: Notes to the Consolidated Financial
Page 55 and 56: equity method, the investment in an
Page 57 and 58: Short-term debts Short-term debts c
Page 59: Employee benefit plans Phonak has v
Page 63 and 64: 6. Consolidated Income Statement by
Page 65 and 66: 9. Financial income/(expenses), net
Page 67 and 68: 11. Earnings per share Basic earnin
Page 69 and 70: 17. Inventories 1,000 CHF Raw mater
Page 71 and 72: 19. Investments in associates and j
Page 73 and 74: 1,000 CHF Cost Balance April 1 Chan
Page 75 and 76: Among various other items, other pr
Page 77 and 78: 27. Other long-term liabilities 1,0
Page 79 and 80: 29. Acquisition of subsidiaries Dur
Page 81 and 82: 30. Related-party transactions 1,00
Page 83 and 84: The amount recognized in the consol
Page 85 and 86: Summary of outstanding and exercisa
Page 87 and 88: 35. Number of employees At March 31
Page 89 and 90: 38. List of significant consolidate
Page 91: Cherish the cheers
Page 95 and 96: Income Statement 1,000 CHF Income M
Page 97 and 98: Notes to the Financial Statements 1
Page 99 and 100: 3.4 List of significant investments
Page 101 and 102: Appropriation of Available Earnings
Page 103: Launch a laugh
Page 106 and 107: Phonak AB Hornsbruksgatan 28 SE-117
Page 108 and 109: Impressum Concept Althaus & Weil AG
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Annual Report - Sonova Holding AG

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