CARBOGEN AMCIS AG Bubendorf

Transcription

1 Report of the Statutory Auditor to the General Meeting of CARBOGEN AMCIS AG Bubendorf on the financial statements 2016/2017 An independent member of Baker Tilly International Baker Tilly OBT Ltd Hardturmstrasse Zurich T F

2 Report of the Statutory Auditor to the General Meeting of CARBOGEN AMCIS AG Bubendorf As statutory auditor, we have audited the accompanying financial statements of CARBOGEN AMCIS AG, which comprise the balance sheet, the income statement, the cash flow statement and notes for the year ended 31 March Board of Directors Responsibility The Board of Directors is responsible for the preparation of these financial statements in accordance with the requirements of Swiss law and the company s articles of incorporation. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control system. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements for the year ended 31 March 2017 comply with Swiss law and the company s articles of incorporation. Baker Tilly OBT Ltd Hardturmstrasse Zurich T F

3 Other matter The financial statements of CARBOGEN AMCIS AG for the year ended 31 March 2016 were audited by another statutory auditor who expressed an unmodified opinion on those financial statements on 24 June Report on Other Legal Requirements We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act and independence (article 728 Code of Obligations (CO)) and there are no circumstances incompatible with our independence. In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the instructions of the Board of Directors. We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company s articles of incorporation. We recommend that the financial statements submitted to you be approved. Baker Tilly OBT Ltd Kevin McCabe licensed audit expert auditor in charge Adrian Treier licensed audit expert Zurich, 15 June Financial statements 2016/2017 (balance sheet, income statement, cash flow statement and notes) - Proposed appropriation of available earnings

4 2016/2017 CARBOGEN AMCIS AG Bubendorf - Financial statements 2016/2017 Balance sheet as per 31 March 2017 Income statement 2016/2017 Cash flow statement 2016/2017 Notes to the financial statements as per 31 March Proposed appropriation of the available earnings

5 CARBOGEN AMCIS AG, Bubendorf 31 MARCH MARCH 2016 BALANCE SHEET AS OF 31 MARCH 2017 ASSETS Cash and cash equivalents 424'863 1'572'334 Trade accounts receivable 13'539'928 9'275'671 Trade accounts receivable - from third parties 13'434'623 7'326'923 Trade accounts receivable - from related parties 105'305 1'948'748 Other short-term receivables 15'845'835 17'323'398 Other short-term receivables - from third parties 6'476'695 5'570'162 Other short-term receivables - from related parties 9'369'140 11'753'236 Inventories and non-invoiced services 31'070'950 23'243'091 Raw materials and supplies 1'275'180 5'458'407 Work in progress 25'480'465 15'727'363 Finished goods 3'938'088 2'057'321 Spare parts 377'216 0 Prepaid expenses and accrued income 781'100 4'402'899 Total current assets 61'662'676 55'817'393 Property, plant and equipment 54'983'699 49'314'830 Office and IT equipment 532' '175 Machinery and lab equipment 16'549'892 14'245'904 Building and fixtures 22'997'957 17'631'015 Fixed assets under construction 14'903'794 16'932'736 Intangible assets 0 1 Software 0 1 Total non-current assets 54'983'699 49'314'830 TOTAL ASSETS 116'646' '132'223 Trade accounts payables 12'536'225 8'599'856 Trade accounts payables - due to third parties 10'918'419 5'876'397 Trade accounts payables - due to related parties 1'617'806 2'723'459 Short-term interest-bearing liabilities 12'070'000 11'614'411 Short-term interest-bearing liabilities - due to third parties 12'070'000 11'614'411 Other short-term liabilities 8'277'250 5'729'941 Other short-term liabilities - due to third parties 7'161'517 4'300'728 Other short-term liabilities - due to related parties 1'115'733 1'429'212 Customer deposits 17'027'529 19'160'154 Accrued expenses and deferred income 9'379'607 6'237'672 Total current liabilities 59'290'611 51'342'034 Long-term interest-bearing liabilities 7'445' '000 Other long-term liabilities 2'544'853 2'871'268 Other long-term liabilities - due to third parties 2'544'853 2'370'688 Other long-term liabilities - due to related parties 0 500'580 Provisions 5'503'925 5'169'829 Asset retirement obligation 5'503'925 5'169'829 Total non-current liabilities 15'493'778 8'676'097 Share capital 1'450'000 1'450'000 Legal retained earnings 725' '000 Voluntary retained earnings 26'115'792 33'717'113 Net profit for the year 13'571'193 9'221'979 Total shareholders' equity 41'861'985 45'114'092 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 116'646' '132'223 Page 1 of 9

6 CARBOGEN AMCIS AG, Bubendorf 1 APRIL APRIL MARCH MARCH 2016 INCOME STATEMENT FOR FY 2017 AND 2016 Revenue from sale of goods and services 134'872' '776'149 Income processing 54'002'773 59'328'244 Income material 28'383'790 10'374'769 Income infrastructure 8'353'175 7'665'563 Income standard products 44'132'409 34'407'572 Other operating income 1'930'649 5'890'346 Refund from insurance - 5'000'000 Total revenue 136'802' '666'495 Stock movements 5'922'494 2'045'926 Cost of sales -37'190'118-32'283'101 Total purchases -31'267'624-30'237'175 Gross profit 105'535'172 92'429'320 Staff salaries -49'801'839-43'445'345 Social insurances -8'462'034-7'726'603 Other personnel expenses -2'270'149-1'450'700 Rent, rates and services -10'198'719-9'775'758 Promotions and advertising -1'081' '903 Travel, accomodation and entertainment -1'290'914-1'365'944 IT expenses -664' '595 General and administration -2'074'764-1'596'533 Legal and consulting -1'424'366-1'472'929 Repairs and maintenance -5'539'401-5'575'429 Insurance -619' '161 Depreciation and impairment losses on property, plant and equipment -6'154'948-6'442'781 Total operating expenses -89'583'006-81'015'681 Operating result 15'952'167 11'413'639 Financial income 1'081' '291 Financial expenses -111'741-74'358 Profit before taxes 16'922'075 11'566'572 Income taxes -3'350'882-2'344'593 Net profit for the year 13'571'193 9'221'979 Page 2 of 9

7 CARBOGEN AMCIS AG, Bubendorf Notes to the financial year 2016/ Applied principles Applied accounting law These financial statements were prepared according to the Swiss Law on Accounting and Financial Reporting (32th title of the Swiss Code of Obligations). Significant valuation principles have been applied in the preparation of these financial statements which are not prescribed by law are described below. Valuation principles Assets are valued at cost. Liabilities are recorded at nominal value. All assets and liabilities in foreign currencies are translated by applying the exchange rate prevailing on the balance sheet date. Exchange rate differences are recognized in profit and loss. Earnings and expenses originating in foreign currencies are translated at the exchange rate prevailing on the respective transaction dates. The financial statements require estimates and judgments by the board of directors, which may affect the reported amounts of assets, liabilities and contingent liabilities at the closing date, as well as income and expenses during the reporting period. The board of directors thereby decides in its own discretion on the use of existing legal valuation and accounting leeway. To ensure the continued prosperity of the company within the prudence principle it is possible that higher depreciation, allowances and accruals than operationally necessary might be recorded. These financial statements were created under the historical cost principle and the board of directors believes that the company will continue to operate in the foreseeable future. In the presentation of prior year information, the same principles have been applied. Trade accounts receivable Trade receivables and other short-term receivables are carried at their nominal value. Impairment charges are calculated for these assets on an individual basis or with an aging older than 120 days; for the remainder, a general allowance of 5% or 10% has been made for national and international receivables. Valuation of inventories Inventories are valued at the lower of cost (acquisition or manufacturing cost) and net realisable value. Cost comprises all directly attributable costs of materials and production, and overheads necessary to bring the inventories to their present location and condition. Cost is determined using the FIFO method. Net realisable value is the estimated selling price less the estimated cost to completion and the estimated selling cost. Impairment charges are made for unsellable inventory or inventory with a low turnover. Furthermore, the company has made use of a general value adjustment admissible under tax law. Property, plant and equipment / Intangible assets Property, plant and equipment are measured at cost and depreciated over their estimated useful life on a straight line basis, with the depreciation charged to the income statement. Years Office and IT equipment 3 10 Machinery and lab equipment 5 15 Building and fixtures Additional costs that extend the useful economic life of property, plant and equipment are capitalised separately. The value of property, plant and equipment is reviewed whenever events or changes in circumstances indicate that the carrying amount may be impaired. Page 3 of 9

8 CARBOGEN AMCIS AG, Bubendorf Notes to the financial year 2016/2017 Revenue recognition / work in progress Revenues comprise all proceeds from the sale of services and goods. Revenues from sale of goods are calculated on the basis of the product actually provided to the customer up to the balance sheet date. These revenues are recognised if the amount of revenue can be reliably measured and it is sufficiently probable that the economic benefits will flow to the company. Revenues from development projects are recognised on the basis of customer-specific contracts using the percentage of completion method. For each order, the percentage of completion is determined on the basis of the costs incurred in relation to the estimated total costs. If the outcome of a long-term contract cannot be estimated reliably, revenue is recognised only to the extent that it is probable the contract costs incurred will be recoverable and the contract costs are recognised as an expense in the period in which they are incurred. This corresponds to valuation at manufacturing cost. When it is probable that the total contract costs will exceed contract revenue, the expected loss is recognised as an expense immediately. Leases Leasing and rental contracts are recognized based on legal ownership. Therefore, any leasing or rental expenses are recognised as expenses in the period they are incurred; however, the leased or rented objects themselves are not recognised in the balance sheet. 2 Assets pledged to secure own liabilities, as well as assets with retention of title Pledge of all current and future goods (like raw materials, finished goods, etc.) held and fully owned by CARBOGEN AMCIS AG and stored in the warehouses located in Switzerland as per a separate pledge agreement ("Sicherungsvertrag betreffend Warenlager"). Assignment of all current and future receivables in connection with the business operations as per the "General declaration of assignment". CARBOGEN AMCIS AG has agreed to serve as a guarantor in a loan contract between ICICI Bank Limited, Bahrain and CARBOGEN AMCIS HOLDING AG, Switzerland, up to a total amount of 110% of the ICICI loan whereby the latter is the borrower. The guarantee is limited to the maximum amount of unrestricted equity surplus, retained earnings (including the unrestricted portion of general and statutory reserves, other free reserves, retained earnings and, extent permitted by the applicable law, current net profits) available for distribution as dividends to the shareholder. 2016/ /2016 Trade accounts receivable and other short-term receivables 29'385'763 26'599'069 Inventory 31'070'950 23'243'091 The company further agreed to a negative pledge clause on all its other assets. Pledged assets (mortgage): Building Hauptstrasse 167, 4416 Bubendorf, Switzerland 1'113'996 1'133'996 Building Hauptstrasse 145, 4416 Bubendorf, Switzerland 3'000'000-3 Full-time equivalents The annual average number of full-time equivalents for the reporting year, as well as the previous year, is over Rental commitment The minimum lease payments for office and production premises and non-cancellable rental agreements are: 2016/ /2016 Up to 1 year 5'436'928 5'956' years 5'221'526 10'938'853 More than 5 years - - Total 10'658'453 16'895'781 Page 4 of 9

9 CARBOGEN AMCIS AG, Bubendorf Notes to the financial year 2016/ Residual amount of leasing obligations The maturity of leasing obligations which have a residual term of more than twelve months or which cannot be canceled within the next twelve months is as follows: 2016/ /2016 Up to 1 year 1'643'009 1'366' years 3'979'873 2'942'668 More than 5 years 187'315 17'902 Total 5'810'198 4'327'229 6 Liabilities to pension fund As of 31 March 2017 the liabilities due to pension fund amounted to 5'460'069. As of 31 March 2016 there were no liabilities due to the pension fund. 7 Audit fees 2016/ /2016 Audit services 220' '849 Other services 59' Total 279' '243 8 Foreign currencies Monetary and non-monetary items in foreign currency are translated into Swiss francs at the following exchange rates: 1 USD 1 EUR 1 GBP Balance sheet as at 31 March The exchange rates used for balance sheet items are the rates prevailing on March 31; the exchange rates used for transactions conducted during the course of the year and for items in the profit and loss statement are average rates for the 2016/2017 financial year. Page 5 of 9

10 CARBOGEN AMCIS AG, Bubendorf Notes to the financial year 2016/ Related party disclosure On 20 March 2017, the company arranged to provide 5.5 million of its 40 million credit facility with Credit Suisse as a guarantee for a private financing transaction entered into between Arpit Vyas, (a member of the company s management and Managing Director and CFO of the ultimate parent company) and the Cantonal Bank of Lucerne. Trade accounts receivables from related parties ( 105'305 as per 31 March 2017; 1'948'748 as per 31 March 2016) include: - receivables from shareholder of 0 (as per 31 March 2017) and 326'316 (as per 31 March 2016) - receivables from group companies of 105'305 (as per 31 March 2017) and 1'622'432 (as per 31 March 2016). Other short-term receivables from related parties ( 9'369'140 as per 31 March 2017; 11'753'236 as per 31 March 2016) include: - receivables from shareholder of 88'674 (as per 31 March 2017) and 0 (as per 31 March 2016) - receivables from group companies of 9'280'467 (as per 31 March 2017) and 11'753'236 (as per 31 March 2016). Trade accounts payables due to related parties ( 1'617'806 as per 31 March 2017; 2'723'459 as per 31 March 2016) include: - payables due to shareholder of 0 (as per 31 March 2017) and 0 (as per 31 March 2016) - payables due to group companies of 1'617'806 (as per 31 March 2017) and 2'723'459 (as per 31 March 2016). Other short-term liabilities due to related parties ( 1'115'733 as per 31 March 2017; 1'429'212 as per 31 March 2016) include: - liabilities due to shareholder of 0 (as per 31 March 2017) and 1'244'625 (as per 31 March 2016) - liabilities due to group companies of 1'115'733 (as per 31 March 2017) and 184'587 (as per 31 March 2016). Other long-term liabilities due to related parties ( 0 as per 31 March 2017; 500'580 as per 31 March 2016) include: - liabilities due to shareholder of 0 (as per 31 March 2017) and 0 (as per 31 March 2016) - liabilities due to group companies of 0 (as per 31 March 2017) and 500'580 (as per 31 March 2016). 10 Additional information The financial reporting of the CARBOGEN AMCIS GROUP has been revised in the year under review. Therefore the financial statement deviates from the principle of consistency in representation. For the purpose of transparency note 10 shows the balance sheet and the income statement once with the previous mapping and once with the current mapping for the financial year ending 31 March Page 6 of 9

11 CARBOGEN AMCIS AG, Bubendorf new mapping old mapping 31 MARCH MARCH 2016 NOTE 10: BALANCE SHEET AS OF 31 MARCH 2017 ASSETS Cash and cash equivalents 1'572'334 1'572'334 Trade accounts receivable 9'275'671 7'385'267 Trade accounts receivable - from third parties 7'326'923 7'385'267 Trade accounts receivable - from related parties 1'948'748 0 Other short-term receivables 17'323'398 19'323'007 Other short-term receivables - from third parties 5'460'969 5'511'830 Other short-term receivables - from related parties 11'862'429 13'811'177 Inventories and non-invoiced services 23'243'091 22'398'090 Raw materials and supplies 5'458'407 6'346'068 Work in progress 15'727'363 21'508'480 Finished goods 2'057'321 5'191'298 Provision for inventory 0-10'647'756 Spare parts 0 0 Prepaid expenses and accrued income 4'402'899 4'402'898 Total current assets 55'817'393 55'081'595 Property, plant and equipment 49'314'830 49'314'830 Office and IT equipment 505'175 1'299'506 Machinery and lab equipment 14'245'904 19'526'311 Building and fixtures 17'631'015 19'487'939 Fixed assets under construction 16'932'736 8'619'398 Spare parts 0 381'676 Intangible assets 1 1 Software 1 1 Total non-current assets 49'314'830 49'314'831 TOTAL ASSETS 105'132' '396'426 Trade accounts payable 8'599'856 4'739'539 Trade accounts payable - due to third parties 5'876'397 4'739'539 Trade accounts payable - due to related parties 2'723'459 0 Short-term interest-bearing liabilities 11'614'411 11'634'411 Short-term interest-bearing liabilities - due to third parties 11'614'411 11'634'411 Other short-term liabilities 5'729'941 6'459'217 Other short-term liabilities - due to third parties 4'300'728 1'063'497 Other short-term liabilities - due to related parties 1'429'212 5'395'720 Customer deposits 19'160'154 19'160'154 Accrued expenses and deferred income 6'237'672 11'504'184 Total current liabilities 51'342'034 53'497'505 Long-term interest-bearing liabilities 635' '000 Other long-term liabilities 2'871'268 0 Other long-term liabilities - due to third parties 2'370'688 0 Other long-term liabilities - due to related parties 500'580 0 Provisions 5'169'829 5'169'829 Asset retirement obligation 5'169'829 5'169'829 Total non-current liabilities 8'676'097 5'784'829 Share capital 1'450'000 1'450'000 Legal retained earnings 725' '000 Voluntary retained earnings 33'717'113 33'717'113 Net profit for the year 9'221'979 9'221'979 Total shareholders' equity 45'114'092 45'114'092 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 105'132' '396'426 Page 7 of 9

12 CARBOGEN AMCIS AG, Bubendorf new mapping old mapping 1 April April March March 2016 NOTE 10: INCOME STATEMENT FOR FY 2017 AND 2016 Revenue from sale of goods and services 111'776' '715'939 Income processing 59'328'244 55'522'386 Income material 10'374'769 14'180'627 Income infrastructure 7'665'563 7'665'563 Income standard products 34'407'572 34'347'363 Other operating income 5'890'346 6'805'556 Refund from insurance 5'000'000 5'000'000 Total revenue 122'666' '521'495 Stock movements 2'045'926 2'045'926 Cost of sales -32'283'101-33'138'101 Total purchases -30'237'175-31'092'175 Gross profit 92'429'320 92'429'320 Staff salaries -43'445'345-43'560'197 Social insurances -7'726'603-4'464'728 Pension costs - -2'860'785 Other personnel expenses -1'450'700-1'754'602 Rent, rates and services -9'775'758-7'767'807 Promotions and advertising -930' '627 Travel, accomodation and entertainment -1'365'944-1'599'233 IT expenses -572'595-1'826'716 General and administration -1'596'533-1'432'856 Legal and consulting -1'472'929-1'005'276 Repairs and maintenance -5'575'429-6'796'913 Insurance -660' '161 Depreciation and impairment losses on property, plant and equipment -6'442'781-6'442'780 Total operating expenses -81'015'681-81'015'680 Operating result 11'413'639 11'413'640 Financial income 227' '322 Financial expenses -74' '390 Profit before taxes 11'566'572 11'566'572 Income taxes -2'344'593-2'344'593 Net profit for the year 9'221'979 9'221'979 Page 8 of 9

13 CARBOGEN AMCIS AG, Bubendorf Proposed appropriation of retained earnings (in ) The Board of Directors proposes the following appropriation of available earnings: 31 March March 2016 Voluntary retained earnings (carried forward) 26'115'792 33'717'113 Net profit for the year 13'571'193 9'221'979 Total available earnings 39'686'985 42'939'092 Dividends distributed to shareholders - -10'000'000 Extraordinary dividend distributed to shareholder (see note) - -6'823'300 Carried forward 39'686'985 26'115'792 Note On the extraordinary general assembly on 3rd of March 2017 an additional dividend of 5'000'000 and USD 1'800'000 (which is the equivalent of 1'823'300) was decided to distribute to the shareholder. 5'000'000 were paid by offsetting against an outstanding loan granted to the shareholder (CARBOGEN AMCIS HOLDING AG). Page 9 of 9