simona worldwide...simona ag investor relations teichweg 16 d-55606 kirn phone +49(0)6752 14-0 fax...

SIMONA AGInvestorRelationsTeichweg16D-55606Kirn

Phone+49 (0) 67 5214-0Fax +49 (0) 67 5214-211

[email protected]

11FinancialReportofSIMONAGroupandSIMONAAG 02May2011

AnalystConferencefor2010AnnualResults(Frankfurt) 04May2011

InterimAnnouncementwithintheFirstHalf 04May2011

AnnualGeneralMeeting 01July2011

PublicationofGroupFinancialReport(Half-Year) 24August2011

InterimAnnouncementwithintheSecondHalf 09November2011

FinancialCalendar

SIMONAworldwide➝

01 COMpANY

ManagementBoard 02

LettertoShareholders 03

KeyEvents 04

StockPerformanceandCapitalMarkets 06

ReportbytheSupervisoryBoard 07

CorporateGovernanceReport 11

GoverningBodies 14

Shareholdings 15

02 GrOup MANAGeMeNt repOrt

BusinessActivitiesandGeneralConditions 17

FinancialPerformance 23

FinancialAssetsandLiabilities 24

FinancialPosition 24

EventsaftertheReportingDate 26

RiskReport 26

ReportonExpectedDevelopments 27

OtherInformation 28

03 GrOup FINANCIAl StAteMeNtS

GroupIncomeStatement 36

GroupStatementofComprehensiveIncome 37

GroupStatementofFinancialPosition 38

NotestoConsolidatedFinancialStatements 39

GroupStatementofCashFlows 74

GroupStatementofChangesinEquity 75

DetailsofShareholdings 76

Auditor’sReport 77

OtherInformation 78

04 FINANCIAl StAteMeNtS OF SIMONA AG (eXCerpt)

BalanceSheet 80

IncomeStatement 82

OtHer

Imprint 84

FinancialCalendar Cover

SIMONAWorldwide Cover

2010SIMONA Group – Consolidated Financial Statements

SIMONA AMerICA Inc.

SIMONA S.A. paris

SIMONA AG Werk III

SIMONA-plAStICS CZ, s.r.o.

SIMONA FAr eASt lIMIted

SIMONA uK lIMIted

SIMONA AG SCHWeIZ

SIMONA pOlSKA Sp. z o.o.

SIMONA eNGINeerING plAStICS (Guangdong) Co. ltd.

SIMONA eNGINeerING plAStICS trAdING (Shanghai) Co. ltd.

SIMONA AG SIMONA plast-technik s.r.o.

SIMONA IBerICA SeMIelABOrAdOS S.l.

SIMONA S.r.l. ItAlIA

SIMONAworldwide

SIMONA GrOup*

2010 2009 2008

Revenue € m 267.4 215.1 303.7

Year-on-yearchange % 24.3 –29.2 1.3

ofwhichabroad € m 176.8 138.6 191.6

ofwhichabroad % 66.1 64.4 63.1

Staffcosts € m 55.9 55.3 58.2

Profitbeforetaxes € m 10.5 7.1 20.2

Profitfortheyear € m 7.2 5.0 13.9

Netcashfromoperatingactivities € m 3.1 28.2 44.7

EBIT € m 10.1 7.3 19.8

EBIT % 3.8 3.4 6.5

EBITDA € m 22.7 21.9 32.3

EBITDA % 8.5 10.2 10.6

Totalassets € m 245.0 244.7 244.8

Equity € m 162.2 157.5 157.6

Non-currentassets € m 89.4 94.3 97.1

Investmentsinproperty,plantandequipment € m 6.5 11.6 21.2

Employees(annualaverage) 1,218 1,230 1,237

*basedonIFRS

KeyFinancials

reVeNue ANd eBIt SIMONA GrOup

in € millions

300 24

250 20

200 16

150 12

100 8

50 4

0 0 Totalrevenue

2008 2009 2010 EBIT

reVeNue BY reGION SIMONA GrOup

in%

Germany

RestofEurope&Africa

Asia,America&Australia

51.9 53.4 49.6

11.3 11.2 16.6

36.8 35.4 33.8

2008 2009 2010

prOduCtION SIteS

plant I/IITeichweg16D-55606KirnGermanyPhone +49 (0) 67 5214-0Fax +49 (0) 67 5214-211

plant IIIGewerbestraße1–2D-77975RingsheimGermanyPhone +49 (0) 7822436-0Fax +49 (0) 7822436-124

SIMONA plast-technik s.r.o.UAutodílen23CZ-43603Litvínov-ChudeřínCzechRepublic

SIMONA AMerICA Inc.64N.ConahanDriveHazleton,PA18201USA

SIMONA eNGINeerING plAStICS (Guangdong) Co. ltd.No.368JinouRoadHigh&NewTechnologyIndustrialDevelopmentZoneJiangmen,GuangdongChina529000

SAleS OFFICeS SIMONA S.A. parisZ.I.1,rueduPlantLogerF -95335DomontCedexPhone +33 (0) 139 35 4949Fax +33 (0) 139 [email protected]

SIMONA uK lIMItedTelfordDriveBrookmeadIndustrialParkGB-StaffordST163STPhone +44 (0) 1785222444Fax +44 (0) [email protected]

SIMONA AG SCHWeIZIndustriezoneBäumlimattstraße16CH-4313MöhlinPhone +41 (0) 618 55 9070Fax +41 (0) 618 55 [email protected]

SIMONA S.r.l. ItAlIAViaPadanaSuperiore19/BI -20090Vimodrone(MI)Phone +390225 08 51Fax +390225 08 [email protected]

SIMONA IBerICA SeMIelABOrAdOS S.l.DoctorJosepCastells,26–30PolígonoIndustrialFonollarE-08830SantBoideLlobregatPhone +3493 635 4103Fax +3493 630 88 [email protected]

SIMONA AG

teichweg 16d-55606 KirnGermanyPhone +49 (0) 67 5214-0Fax +49 (0) 67 [email protected]

SIMONA-plAStICS CZ, s.r.o.Zdebradskául.70CZ-25101Rícany-JazlovicePhone +420 323 6378 3-7/-8/-9Fax +420 323 6378 [email protected]

SIMONA pOlSKA Sp. z o.o.ul.H.Kamienskiego201–219PL-51-126WrocławPhone +48 (0) 713 52 80 20Fax +48 (0) 713 52 [email protected]

SIMONA FAr eASt lIMItedRoom501,5/FCCTTelecomBuilding11WoShingStreetFoTanHongkongPhone +85229 47 01 93Fax +85229 47 01 [email protected]

SIMONA eNGINeerING plAStICS trAdING (Shanghai) Co. ltd.RoomC,19/F,BlockAJiaFaMansion129DaTianRoad,JingAnDistrictShanghaiChina200041Phone +862162670881Fax [email protected]

SIMONA AMerICA Inc.64N.ConahanDriveHazleton,PA18201USAPhone +1866 501 2992Fax +1800 522 [email protected]

StOCK dAtA

2010 2009 2008

Earningspershare € 12.00 8.31 23.20

Dividend € 6.50 6.00 8.50

Dividendyield 2.1 1.9 2.6

P/Eratio* 26.3 38.1 14.0

Marketcapitalisation-over-equityratio* 1.17 1.21 1.23

sharepriceasatDec.31 € 315.00 317.00 324.00

*Eachcalculatedonconsolidatedbasis

2


1.BusinessActivitiesand

GeneralConditions 5

2.FinancialPerformance 11

3.FinancialAssetsandLiabilities 12

4.FinancialPosition 12

5.EventsaftertheReportingDate 14

6.RiskReport 14

7.ReportonExpectedDevelopments 15

8.OtherInformation 16










OtherInformation 66

03 SIMONA WOrldWIde

Contents

3

1.BusinessActivitiesandGeneralConditions 05

2.FinancialPerformance 11

3.FinancialAssetsandLiabilities 12

4.FinancialPosition 12

5.EventsaftertheReportingDate 14

6.RiskReport 14

7.ReportonExpectedDevelopments 15

8.OtherInformation 16

GroupManagementReport

1. BuSINeSS ACtIVItIeS ANd GeNerAl CONdItIONS

1.1. Organisation and legal structure of the SIMONA

Group

TheSIMONAGroupdevelops,manufacturesandmar-

ketsarangeofsemi-finishedthermoplastics,pipesand

fittingsaswellasfinishedparts.Thematerialsused

includepolyethylene(PE),polypropylene(PP),polyvinyl

chloride(PVC),polyethyleneterephthalate(PETG),poly-

vinylidenefluoride(PVDF)andethylene-chlorotrifluor-

oethylene(E-CTFE)aswellasvariousspecialistmateri-

als.Theproductionmethodsappliedwithinthisarea

rangefromextrusion,pressingandinjectionmouldingto

CNCmanufacturing.SIMONAalsomaintainsitsown

plasticslaboratoriesandworkshopsfortheproduction

ofcustomisedfittings.Semi-finishedproductsare

deployedmainlywithintheareaofchemicalequipment

andmechanicalengineering,thetransportindustry,the

constructionsector,theexhibitionanddisplaysectoras

wellastheautomotiveindustry.Pipesandfittingsare

usedprimarilyfordrinking-watersupply,sewagedis-

posalandindustrialpipingsystems,includingthe

chemicalprocessindustry.Finishedpartsaredestined

inparticularforthemechanicalengineeringandtrans-

porttechnologysectors.

TheSIMONAGroupmarketsitsproductsworldwide.The

salesstructureisprimarilybasedonthefollowingthree

salesregions:

� Germany

� RestofEuropeandAfrica

� Asia,AmericaandAustralia

Thesecondarysegmentsarecentredaroundproduct

areas(semi-finishedproductsaswellaspipesandfit-

tings).SalesactivitiesatGrouplevelareconductedby

SIMONAAGandsubsidiariesintheUnitedKingdom,

Italy,France,Spain,Poland,theCzechRepublic,Hong

Kong,ChinaandtheUnitedStates,bothdirectlyandvia

tradingpartners.Beyondthis,theAG(i.e.theparent

company)operatesasalesofficeinMöhlin,Switzerland.

Theparentcompany,SIMONAAG,hasitsregistered

officein55606Kirn(Germany).Intheperiodunder

review,theSIMONAGroupoperatedfacilitieslocatedin

Germanyandabroad.Semi-finishedproducts(sheets,

rods,weldingrods)aremanufacturedattwoplantsin

Kirn(Rhineland-Palatinate),whilesheetswereproduced

atthecompany’splantinKirchhundem-Würdinghausen

(NorthRhine-Westphalia)andpipes,fittingsandfinished

partsatafacilityinRingsheim(Baden-Württemberg).

ThefacilitybasedinHazleton(Pennsylvania,USA)man-

ufacturesextrudedsemi-finishedproductsdestined

mainlyfortheAmericanmarket.TheplantinLitvinov,

CzechRepublic,producessheetsandpipes,primarily

fortheEasternEuropeanmarket,whilethesiteinJiang-

men,China,manufacturesextrudedsheets.Thefactory

inKirchhundem-Würdinghausenwascloseddowneffect-

ivefrom30September2010.

InthefinancialyearunderreviewtheManagement

BoardconsistedofWolfgangMoyses(Chairman/CEO),

DirkMöller(DeputyChairman,since1May2010),

DetlefBeckerandJochenFeldmann(until10August

2010).In2010,themembersoftheSupervisoryBoard

includedHans-WernerMarx(Chairman),Dr.RolfGößler

(DeputyChairman),RolandFrobelandDr.RolandReber

asshareholderrepresentatives,aswellasBernd

MeurerandKarl-ErnstSchaab(until31August2010),

whorepresentedstaffinterests.


BusinessActivitiesandGeneralConditions

FinancialPerformance

FinancialAssetsandLiabilities

FinancialPosition

EventsaftertheReportingDate

RiskReport

ReportonExpectedDevelopments

OtherInformation

02GROUPFINANCIALSTATEMENTS 04FINANCIALSTATEMENTSOF

SIMONAAG(EXCERPT)

01COMPANY

5

1.2. Business review

Significant growth in revenue

Theoverallrecoveryoftheworldeconomywasfaster

thananticipatedfollowingtheslumpinducedbythe

globalfinancialandeconomiccrisis.Afteradownturn

of0.9percentin2009,globalgrossdomesticproduct

rosesignificantlybyanestimated5percent.Having

saidthat,theworldeconomylostitsforwardmomentum

astheyearprogressed,withglobaltradefailingto

expandsignificantlyinthesecondhalfof2010.Global

economicperformancein2010clearlyillustratedthe

growingimportanceoftheemergingmarketswithinthe

contextofinternationaltrade.Whiletheemergingmar-

ketsinAsiareturnedtotheirpre-crisislevelsin2010,

productionintheindustrialisedcountriesagainfell

shortofthefiguresrecordedpriortotheeconomic

downturn.

Againstthisbackdrop,SIMONAAGsawitssalesrev-

enuerisesignificantlyfromMarch2010onwards,after

asluggishstarttotheyear.Remainingbuoyantuntilthe

endofthefinancialyear,salesrevenueincreasedby

24.3percentyearonyearto€ 267.4millionforthe

annualperiodasawhole(2009:€ 215.1million).Much

oftheimpetuscamefrommoreexpansiveinvestments

inmachineryandequipment,particularlyinthechemi-

calandmechanicalengineeringindustry.Revenuegen-

eratedbytheparentcompany,SIMONAAG,rosefrom

€ 191.1millionayearagoto€ 232.5millionin2010,

ayear-on-yearincreaseof21.7percent.

Germany

InGermany,GDPgrewby3.5percentin2010asa

whole–adjustedforpricesandworkingdays–andwas

dominatedbyreboundingmarketsastheeconomy

emergedfromthecrisis.Facedwithadouble-digitdown-

turnineconomicoutputoverthecourseof2009,the

manufacturingsector,inparticular,recordedastrong

performanceintermsofgrossvalueadded,whichrose

byanimpressive10.3percentin2010.Exportsrose

by14.2percentinthesameperiod.Investmentsin

machineryandequipmentwereup9.4percentonthe

figurerecordedin2009,althoughthisareahadbeen

worsthitbytheeconomicdownturn.Recoveryslowed

downslightlyinthefourthquarter,withGDPrisingby

just0.4percentcomparedtothepreviousquarter.

Exportsalsoprovedbuoyantinthefourthquarter,witha

year-on-yearincreaseof15.9percentintermsofgoods

andservicessoldabroad.

deVelOpMeNt OF reVeNue SIMONA GrOup

in€ m

300

275

250

225

200

175

150

125

100

2008 2009 2010

GrOup MANAGeMeNt repOrt

+1.3%

– 29.2%

+ 24.3%

6

review of the principal sales segments and plastics

processing industry in 2010

TheGermanchemicalindustryrecordedan11percent

increaseinproductionvolume,withrevenuesexpanding

by17.5percent.Withinthiscontext,foreignmarkets

providedmuchoftheimpetus.Growthwaslesspro-

nouncedinthesecondhalfoftheyear.Germany’s

mechanicalandplantengineeringindustrymanagedto

expanditsproductionoutputby8.8percentin2010.

Orderintakeroseby36percentinrealterms,with

domesticordersincreasingby29percentandnon-

domesticordersexpandingby39percent.Theoverall

exportratiowithinthissectorroseto74.8percent

(2009:73.6percent).Thesolidperformancein2010is

reflectedinthelevelofcapacityutilisation,whichwasup

from72.5percentin2009to79.8percentin2010.

Afterthesignificantdeclinerecordedin2009,theinter-

nationalexhibitionandtradefairindustryinGermanywas

facedwithasluggishrecoveryintheperiodunderreview,

mainlyduetothefactthatstreamliningmeasuresagreed

in2009remainedinplacetosomeextent.Basedonini-

tialestimates,exhibitornumbersroseby1percent

(2009:–4percent),whiletheoverallnumberofvisitors

recededslightlyby2percent(2009:–8percent).

TheGermanconstructionindustryalsofailedtokeepup

withthegeneralpaceofeconomicrecoveryintheperiod

underreview.Revenuesintheprincipalconstruction

sectorcontractedby1percent(2009:–4percent)in

nominalterms.Thisdeclinewasattributabletothe

adverseeffectsfeltwithinthecommercialconstruction

sector(–4.5percent)andinthepublic-sectorsegment

(–3percent).

Basedonpreliminaryfigures,Germany’splastics-

processingindustrymanagedtoliftrevenuesby14per

centto€ 51.3billionin2010,thusalmostreturningto

thelevelrecordedin2008.At12.2milliontonnes,the

volumeofplasticsprocessedalsomovedcloser

towardsthefigureachievedin2008.Amongthe

principalgrowthdriversweresuppliersoftechnicalcom-

ponents,whoaccountedfor23percentofoverall

growth.Withintheareaofconsumerandotherplastic

goods,totalrevenueincreasedby14.7percentto

€ 16.4billion.Theconstructionsectorrecordedgrowth

of5percent,takingitstotalrevenueto€ 10.8billion.

Theplasticspackagingindustry,thelargestsegment

withintheplastics-processingsector,sawitsgrossout-

putriseby14percentto€ 12.2billion.Intermsof

value,however,thefigurewasdown2percentonlast

year’stotal.Thepositiveperformancewasdrivenmainly

byforeigntrade.At+15.5percent,exportsattributable

totheplastics-processingindustryoutpaceddomestic

sales(+14percent).Theexportratiorosefrom34.3

percentto35.7percentin2010.

Withcustomersinthechemicalandmechanicalengi-

neeringindustry–akeymarketforSIMONA–expanding

theircapitalexpenditureonmachineryandbenefiting

frombuoyantexports,SIMONAsawitsrevenuesurgein

theperiodunderreview.Salesrevenuesgeneratedin

Germanyroseby18.4percentto€ 90.6million(2009:

€ 76.5million).





FinancialPosition


RiskReport


OtherInformation


SIMONAAG(EXCERPT)

01COMPANY

7

Revenuebyproductgroup

70,6 € MIllIONS

SIGNIFICANt GrOWtH IN SAleS VOluMeS

Intheareaofsemi-finishedproducts,salesvolumesofPEandPPsheetsusedintankandapparatusconstructionrosesharply.Busi-

nessrelatingtofinishedpartsaswellasplasticsheetsdestinedforthephotovoltaicsandsolarpowerindustryalsodevelopedwell.The

GrouprecordedsignificantgrowthintheareaofPPpipesforindustrialapplications,whereasrevenuegeneratedthroughPEpipescon-

tracted.

+31,6 %+7,8 %

196,8 € MIllIONS

SeMI-FINISHed prOduCtS

pIpeS ANd FIttINGS

8

europe and Africa

Grossdomesticproductintheeurozoneexpandedby

1.7percentin2010(prev.year:–4.0percent),while

theEU27regionrecordedgrowthof1.8percentinthe

sameperiod(prev.year:–4.2percent).

EconomicgrowthintheMiddleEastandNorthAfrica

stoodat3.9percentin2010.

RevenuefromsalesintheRestofEuropeandAfrica

alsorosesharplyduringtheperiodunderreview.In

WesternEurope,themostimportantmarketfor

SIMONA,thedownturnseenin2009hadnotbeenas

pronouncedasinotherregions.Asaresult,revenue

growthin2010wasbelowaverage.Intotal,theRestof

EuropeandAfricaaccountedforsalesrevenueof

€ 132.7million(2009:€ 115.4million).Thisrepres-

entsanincreaseof15.0percentcomparedto2009.

Asaregion,theRestofEuropeandAfricaaccountedfor

49.6percentoftotalrevenuegeneratedbySIMONA

AG,downonlastyear’sfigureof53.6percent.

America, Asia and Australia

At2.8percent(2009:–2.6percent),theUSeconomy

grewatalesspronouncedratethanmanyoftheother

industrialisedeconomies.NotonlyweretheAsianmar-

ketsthefirsttobeaffectedbytheeconomicandfinan-

cialcrisis,theyalsoborethebruntofthedownturn.On

amorepositivenote,theyledthewaywhenitcameto

economicrecovery.BothChina(+10.3percent)and

India(+9.7percent)returnedtotheirpre-crisislevelsof

growthin2010.SIMONAwasabletoreaptherewards

ofthistrendbygeneratingabove-averagerevenue

growthinAsia.InNorthAmerica,bycontrast,business

grewatalowlevel.Intotal,revenuefromsalesinAsia,

AmericaandAustraliaroseby82.9percentto€ 44.5

million.Asaresult,thisregionaccountedfor16.6per

centoftotalsalesrevenue,asignificantyear-on-year

increase.

Strong expansion of sales volumes of pe and pp

sheets as well as specialty plastics – Above-average

revenue growth for pipes and fittings

Intheareaofsemi-finishedproducts,salesvolumesof

PEandPPsheetsusedintanksandapparatusengin-

eeringrosesharplyin2010.Businessrelatingtoplastic

sheetsusedbythephotovoltaicsandsolarindustry

alsodevelopedwellintheperiodunderreview.Bycon-

trast,businesscentredaroundPVCsheetswasmore

sluggish.SIMONAalsosawafurtherincreaseinthe

overallsalesvolumeoffinishedparts.Productsmade

ofspecialtyplasticsshowedmoreforwardmomentum

thanbusinesswithintheareaofsemi-finishedplastics.

Intotal,revenuegeneratedfromsemi-finishedproducts

stoodat€ 196.8million,ayear-on-yearincreaseof

31.6percent.

SIMONA reVeNue BY reGION

in%

Germany

RestofEuropeandAfrica

Asia,America,Australia





FinancialPosition


RiskReport


OtherInformation

02GROUPFINANCIALSTATEMENTS

2010

17

34

50

2009

11

35

54

04FINANCIALSTATEMENTSOF

SIMONAAG(EXCERPT)

01COMPANY

9

Withintheareaofpipingsystems,thecompanyalso

succeededinexpandingsalesrevenues,albeitata

muchlesspronouncedratethanintheareaofsemi-fin-

ishedplastics.SalesvolumesofPPpipesforindustrial

applicationsrosesignificantly,whereasrevenuesgener-

atedintheareaofPEfittingsweredown.Thepipesand

fittingsproductsegmentrecordedrevenuegrowthof7.8

percentto€ 70.6millionintotal.

product development for safety-critical and

eco-specific applications

SIMONApursuesproductdevelopmentatvariouslevels.

OurTechnicalServiceCentreisresponsibleforreviewing

customerrequirementsandrefiningexistingproductsby

makingwell-judgedalterationstopolymerproperties,e.g.

bychangingthebasicformula.TheNewProducts&Applica-

tionsunitworksinclosecollaborationwithourproduct

managementtotestnewmaterialsanddevelopplastics

fornewfieldsofapplication.Committedtopromoting

energy-efficientartificialicerinks,SIMONAdeveloped

SIMONA®Eco-Ice®andlaunchedthenewproductatthe

beginningof2010.Incontrasttoconventionalicerinks,

installationsusingSIMONA®Eco-Ice®canbeoperated

withoutcoolingpipesandcoolantsforiceproduction.

Theiceskatescanbeuseddirectlyontheplasticpanels,

whicharesecurelyjoinedtooneanothertoformanice

rinksurface.SIMONA®Eco-Ice®issuppliedinvariouspol-

yethylenedesigns:PE-HD(highheatresistance),PE-HMW

(highmolecularweight)andPE-UHMW(ultra-highmolecu-

larweight).Inmid-2010,thesystemwasextendedto

includeperimeterboardsmadeofPEFOAMtwin-wall

sheets.Indehoplast®x-detect,anultrahigh-molecular-

weightpolyethylene,SIMONAhasdevelopedapremium

productforthefoodandpharmaceuticalindustries.In

theeventofafracture,evensmallplasticparticlescan

bedetectedinfoodbymeansofmetaldetectors.Devel-

opedin2009,thePVCsheetSIMOSHIELDfordoors,

manufacturedonthebasisofinlinefoilingtechnology,

waslaunchedontothemarketinearly2010.ThePVC

free-foamsheetSIMOPOR-DIGITAL,whichwasdeveloped

fordigitaldirectprinting,wasalsolaunchedontotheEuro-

peanmarketin2010.Withintheareaofpolyolefins,we

carriedouttechnicalrefinementstothefoamedsheets

PEFOAMandPPFOAM.ThePEFOAMlinewasextended

toincludeatwin-wallsheetthatisusedprimarilyfor

perimeterboardsandhousingsaswellasnoiseandheat

insulation.

Inthefieldofpipingsystems,welaunchedanadvanced

SIMONA®PP-HAlphaPlus®pipingsystemtailoredspecific-

allytothegeothermalindustry;itiscapableofwithstand-

ingextremethermal,mechanicalandhydraulicstresses.

Elsewhere,theSIMOFUSE®joiningmethod,firstdevel-

opedforwastewatermanagementinnon-pressurised

applications,hasbeenrefinedtomeettherequirements

ofthepowersupplyindustryanditsdemandsforsustain-

ablesolutions.SIMOFUSE®pipemodulescanbesupplied

indiametersofupto1,000mm.Followingthesuccessful

marketlaunchofprotective-jacketpipesmadeofPE,

SIMONA–asthefirstmanufacturerworldwide–commis-

sionedanindependenttestingunittoassessthefullRC

(ResistancetoCracking)fittingsportfolioinaccordance

withPAS1075.Thetestresultswerehighlyencouraging.

Inpipeextrusion,initialproductiontestingwasconducted

forpipeswithawear-resistantinteriorskin.Theaimisto

developapipewithahighlevelofabrasionresistancefor

thetransportofsolidmaterials.

Researchanddevelopmentexpensesaremainlycom-

prisedofstaffcosts,materialcostsanddepreciation/

amortisationofnon-currentassets.Owingtotheinterrela-

tionshipbetweencustomer-specificmanufacturingproce-

dures,optimisationmeasureswithintheareaofprocess

engineeringandformulaeaswellasproductdevelopment

itself,theabove-mentionedexpensescannotbeclearly

segregatedfromproductioncosts.


10

2. FINANCIAl perFOrMANCe

earnings

Againstthebackdropofgradualeconomicrecovery,the

SIMONAGroupsawitsearningsbeforeinterest,taxes

andincomefromequityinvestments(EBIT)riseby€ 2.8

millionto€ 10.1million.TheEBITmarginstoodat3.8

percent,upfromamarginof3.4percentlastyear.

Rawmaterialpricescontinuedtospiraloverthecourse

of2010.Withinthiscontext,theGroupwasunableto

passonthesepricehikesinfull.Asaresult,theper-

centageincreaseinexpensesrelatingtorawmaterials

andconsumableswasmorepronouncedthanthelevel

ofrevenuegrowth.Intotal,thecostofmaterialsroseby

49percentyearonyearto€ 154.4million(2009:

€ 103.7million).Followingasignificantreductionin

2009,thecostsattributabletoenergyandwateredged

upby€ 0.9millionintheperiodunderreviewasa

resultofhigherproductionoutput.

Inviewofexpandingsales,thegrossprofitfor2010

roseby€ 8.5millionto€ 125.5million,whichrepre-

sents47percentofrevenue.

Owingtohighercommoditypricesandinventorystream-

lining,thechangeininventories,aspresentedinthe

incomestatement,amountedto€ 5.3million.

Otheroperatingincomecontractedmarginally,down

€ 0.2millionto€ 7.2million.

At€ 55.9million,staffcostswereslightlyhigherthan

thefigurerecordedayearago(2009:€ 55.3million).

Depreciationofproperty,plantandequipmentand

amortisationofintangibleassetsfellby€ 1.9millionto

€ 12.6millionasaresultofimpairmentchargesrecog-

nisedin2009.

Otheroperatingexpensesroseby€ 7.1millionto

€ 46.9million.Againstthebackdropofmoreexpansive

business,theGroupincurredhighercostsrelatingto

outwardfreightandpackaging,inparticular,aswellas

seeingariseinmaintenancecostsformanufacturing

systems.

Theperformancesoftheindividualsubsidiariesdiffered

fromregiontoregion.Withinthiscontext,earningsper-

formancewasencouraginginPoland,theUnitedKing-

domandtheCzechRepublic.Bycontrast,theresults

postedinItalyandparticularlyFrance,whichincurred

lossesasaresultofrestructuringmeasures,wereless

satisfactory.

TheproductioncompanyintheCzechRepublicisoper-

atingataprofitablelevel.

TheUS-basedsubsidiarypostedaloss,althoughits

earningsperformanceimprovedmarkedlyinayear-on-

yearcomparison.Aprofithasbeenbudgetedforfiscal

year2011.

TheperformanceofoursalescompaniesinAsia

improvedsubstantiallyintheyearunderreview.Our

plantinChinaisstillinthestart-upphaseandhasyet

togenerateaprofit.





FinancialPosition


RiskReport


OtherInformation


SIMONAAG(EXCERPT)

01COMPANY

11

eBIt margin

ThekeyfinancialindicatorsusedbySIMONAforthepur-

poseofanalysingandcontrollingoperatingresultsare

EBIT(earningsbeforeinterestandtaxes)andEBITDA

(earningsbeforeinterest,taxes,depreciationandamor-

tisation).EBITrepresentstheoperatingresultbefore

interestandtaxesaswellastheeffectsofequity

investments.InthecaseofEBITDA,non-cashdeprecia-

tionofproperty,plantandequipmentaswellasamorti-

sationofintangibleassetsareaddedtotheEBITfigure.

BothEBITandEBITDAcanthusbeusedforthepurpose

ofevaluatingacompany’searningsperformance,in

additiontoprovidinganapproximationofcashflow.

Earningsbeforeinterestandtaxesamountedto€ 10.1

million,resultinginanEBITmarginof3.8percent.

EBITDAatGrouplevelroseslightlyto€ 22.7million

(2009:€ 21.9million),withamortisationofintangible

assetsanddepreciationofproperty,plantandequip-

mentcontractingyearonyear.At8.5percent,the

EBITDAmarginremainedjustunderthefigureof10.2

percentrecordedinpreviousfinancialyear.

3. FINANCIAl ASSetS ANd lIABIlItIeS

Thefinancialassetsmainlycomprisecashandshort-

termbankdepositstotalling€ 39.3million(2009:

€ 61.5million).Additionally,theGroupmadeasecur-

itiesinvestmentincoveredbonds(Pfandbriefe)totalling

€ 10.0millionin2010.

Non-currentfinancialliabilitieswerescaledbackby

€ 2.1millionto€ 4.8millioninthefinancialyearunder

review.Thereductionwasattributabletotheearlyrepay-

mentofaloanamountingtoGBP2.0millioninrespect

ofSIMONAUKLtd.,whichwasreplacedbyGroupfunds.

In2010,currentfinancialliabilitiesdeclinedasaresult

ofthescheduledrepaymentofaUSD5.0millionloan,

theprincipalbeingdueatthefinalmaturitydate.Along-

sidecurrentfinancialliabilities,theGrouphadaddi-

tionalfinancialliabilitiesof€ 0.2millioninconnection

withaninterestrateswaptohedgetheriskassociated

withaUSdollarloan.

Otherfinancialobligationstotalling€ 2.9million(2009:

€ 3.1million)wereattributabletorentalandleaseagree-

ments.Ofthistotal,anamountof€ 1.3millionisdue

withinoneyear.Atotalof€ 1.9millionincurrentobliga-

tionsisattributabletocontractsalreadyawardedaspart

ofcapitalexpenditureprojects.

Basedonfinanceincomeof€ 1.0millionandfinance

costof€ 0.6million,netfinanceincomeamountedto

€ 0.4millionin2010(2009:€ –0.2million).

4. FINANCIAl pOSItION

Higher equity ratio

At31December2010totalassetsremainedlargely

unchangedat€ 245million.

DespitefurtherinvestmentsinnewplantsinLitvinov

(CzechRepublic)andJiangmen(China),thetotalcarry-

ingamountofproperty,plantandequipmentfellby

€ 4.7millionintheperiodunderreview,asdepreciation

andwrite-downsexceededtotalcapitalexpenditure.

Rawmaterialsandconsumablesroseby€ 1.7million

yearonyear,whilefinishedgoodsandmerchandise

increasedby€ 4.8million.

Highertradereceivables,up€ 8.5millionto€ 41.8mil-

lion,wereareflectionofmorepronouncedrevenue

growthin2010.


12

Revenuebyregion

€44,5 MIllION*

€90,6 MIllION*

€132.7 MIllION*

AM

er

IKA

Ger

MA

NY

eu

rO

pe &

AFr

ICA

AS

IeN

33,8 %

16,6 %

49,6 %

prOGrAMMe OF INterNAtIONAlISAtION BeArS FruIt

TheGroupincreaseditsrevenuemarkedlyinallsalesregions.ThebuoyantAsianmarketsaccountedforsignificantgrowthintheregion

America,Asia&Africa.Thisregiongenerated16.6percentoftotalrevenuewithintheSIMONAGroup,upfrom11.2percentayearago.

TheGroup‘ssolidperformanceisatestamenttoitsincisivestrategyofinternationalexpansion.

*RoundingdifferencesduetoGroupeliminations13

Otherfinancialassetscomprisecapitalisedcorporation

taxcreditsofSIMONAAGamountingto€ 4.5million,

theeconomicbenefitsofwhichwillflowtothecompany

after31December2010.Theentitlementwasrecog-

nisedasanassetinthestatementoffinancialposition

asat31December2010inanamountequivalentto

thepresentvalue.

Cashandcashequivalentsfellby€ 22.1million,mainly

asaresultofinventorydownsizing,anincreasein

receivables,asecuritiesinvestmentincoveredbonds

andtherepaymentoffinancialliabilities.Theseaspects

arepresentedintheStatementofCashFlowsinthe

notestotheconsolidatedfinancialstatements.

Equityroseby€ 4.7millioninthefinancialyearunder

review,whileliabilitieswerescaledbackbythesame

amount.

Attheendofthefinancialyear,Groupequityamounted

to€ 162.2million(2009:€ 157.5million).Thisfigure

includesannualprofitof€ 7.2millionandadividend

paymentof€ 3.6millionin2010.TheGroupequity

ratioatthereportingdatewas66percent(2009:64

percent).

Attheendofthereportingperiodtradepayables

amountedto€ 11.2million,up€ 4.3millionyearon

yearduetomorebuoyantbusiness.

Othercurrentprovisionsdeclinedby€ 3.6million,prim-

arilyduetotheutilisationofrestructuringprovisionsin

connectionwiththeclosureoftheplantinKirchhundem-

Würdinghausen.

5. eVeNtS AFter tHe repOrtING dAte

Therewerenoeventsofmaterialsignificancetothe

stateofaffairsoftheSIMONAGroupintheperiod

betweentheendofthe2010financialyearandthe

preparationofthismanagementreport.Beyondthisand

inaccordancewithstatutoryprovisions,interim

announcementswillbeissuedduring2011,outlining

thedevelopmentoftheentityandanyeventsthatare

subjecttodisclosurerequirements.

6. rISK repOrt

TheriskmanagementsystemofSIMONAAGcontrols

thefollowingmaterialrisks:risksrelatingtothegeneral

businessenvironmentandsector,financialrisksandIT-

specificrisks.

Therisksassociatedwiththegeneralbusinessenviron-

mentandthesectorinwhichthecompanyoperates

relatemainlytotheeconomicdevelopmentofcustomer

segmentsservedbySIMONA.Theyalsoincludeexchange

rateandcommoditypricevolatilityaswellastheavail-

abilityofrawmaterials.Owingtoourbroadrangeof

productsandthoroughanalysisofthemarket,weare

abletomitigatetheserisksandrespondtochanges.

TheproductionfacilitiesintheUnitedStates,Chinaand

theCzechRepublicwillhelpustoimprovethecompa-

ny’sflexibilitywhenitcomestomeetingnewcustomer

requirementsatagloballevel.

Pricerisksassociatedwithexchangeratestendto

increaseinproportiontorevenuegeneratedbySIMONA

outsidetheeurozone.Theexpansionofproductionin

foreignsalesmarketshashelpedtoscalebackrisks

withinthisarea.Sector-specificriskswillcontinueto

beafocalpointofourriskmanagementduring2011.

Bothrevenueandearningsperformancein2011willbe

dependenttoalargeextentondevelopmentswithinthe

salesmarketsprimarilytargetedbySIMONA.Against

thebackdropofamorefavourableeconomicclimate,

therisksituationisnowconsideredmuchlesspro-

nounced.Bycontrast,therisksassociatedwithcom-


14

moditypriceshaveincreasedduringthefirstmonthsof

2011andarelikelytobeakeyfactorinearningsper-

formancefor2011asawhole.Initiatedtwoyearsago,

thetransitionfromquarterlytomonthlycontractsfor

ethyleneandpropylenehasledtosignificantpricevol-

atilityfordownstreamproducts.

Asregardsreceivables,theriskofdefaultismitigated

bymeansofextensivecreditratingchecksinthecase

ofnewaccountsandongoingassessmentsofthecredit

ratingsofexistingcustomers.Default-relatedriskasso-

ciatedwithspecificcustomersislimitedbycreditinsur-

anceandthecut-offofdeliveriesinthecaseofout-

standingpayments.Thecarryingamountsofinventories

areassessedonaregularbasis,andadjustmentsin

theformofallowancesweremadeforspecificunsale-

ableproducts.

Risksattributabletoinformationtechnologyarecon-

trolledGroup-widebythecompany’sownITdepartment,

whosetaskistomanage,maintain,refineandprotect

theITsystemsonacontinualbasis.

Attheendofthe2010financialyear,weareofthe

opinionthattheoverallrisksituationforthecompany

hasimprovedslightlyasaresultofthefactorsoutlined

above.

Corporate Governance Statement

Thedeclarationoncorporategovernancepursuantto

Section289a(1)sentences2and3oftheGerman

CommercialCode(Handelsgesetzbuch–HGB)hasbeen

publishedbySIMONAAGonitscorporatewebsiteat

www.simona.de.

7. repOrt ON eXpeCted deVelOpMeNtS

Growth with considerable risks

Theglobaleconomylostmostofitsdynamismtowards

mid-2010,withthemajorityofthedevelopedcountries

recordingsubduedGDPgrowthinthefourthquarterof

2010.However,indicatorsimprovedagaintowardsthe

endoftheyear,whichwasunderlinedbythesignificant

expansionoftheworldeconomysincethebeginningof

2011.Havingsaidthat,therearesignsofbifurcation:

theemergingmarkets–particularlyinAsia–have

returnedtoorexceededtheirpre-crisislevelsandcur-

rentlyruntheriskofoverheating,whereasmanyofthe

developedeconomies–suchastheUnitedStates,the

UnitedKingdomandSpain–havebeensluggish.The

globaleconomyisexposedtocertainriskswithregard

toitsfutureperformance.Withinthiscontext,spiralling

commoditypricesrepresentoneofthemostpotent

risks.Thepriceofcrudeoilhassurgedinthewakeof

thepoliticalupheavalwitnessedthroughouttheArab

world.Governmentsintheemergingmarketswillbe

forcedtocounteracttherisktostabilitythatisgenerally

associatedwithaneconomicboom.Itremainstobe

seentowhatextentthepriceofcrudeoilandglobal

economicperformanceasawholewillbeaffectedby

thenaturalandnucleardisasterinJapan.

InJanuary,theInternationalMonetaryFund(IMF)pro-

jectedglobaleconomicgrowthof4.4percentfor2011.

However,thelatestforecastsissuedbyeconomistssug-

gestthatgrowthwillbelesspronounced.TheIMFagain

anticipatesstronggrowthforChina(+9.6percent)and





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SIMONAAG(EXCERPT)

01COMPANY

15

India(+8.4percent).TheRussianeconomyisexpected

toexpandby4.5percent.Recoverythroughoutthe

eurozoneremainssluggish;againstthisbackdrop,GDP

isforecasttogrowbyjust1.7percent.TheUSeco-

nomyisexpectedtogainsomemomentum,withesti-

matedgrowthof3.0percentin2011.

SIMONAanticipatesthattheoverallordersituationwill

remainsolidin2011.Orderintakeremainsstableata

highlevel.Followingthedownturn,thereremainssignifi-

cantpotentialwithregardtocapitalexpenditureon

machineryandequipment–ofparticularrelevanceto

ourbusiness–withinkeysalesmarkets.Inaddition,

demandislikelytobebuoyedbyexporttradeonthe

partofcustomersoperatingwithinthechemicaland

mechanicalengineeringindustry.Pipingsystemsengin-

eeringisexpectedtodevelopatamoresubduedrate.

Short-timeworkwaspartiallyintroducedattheRings-

heimplant,whichproducedpipesandfittings.

Elevatedcommoditypricescontinuetoexertdownward

pressureonourgrossprofitmargin,asthepercentage

ofmaterialcostsattributabletoourproductsissignifi-

cant.Itwillbedifficulttopassthesehighercostsonto

customerswithinthehighlycompetitivemarketsof

Europe.

TheSIMONAGroupwillbelookingtopropelrevenue

furthertoatleast€ 290millionforthefinancialyear

2011asawhole.Despitethecontinuedriseincom-

modityprices,profitablegrowthremainsatoppriority

forSIMONA;thetargetforGroupearningsbeforetaxes

hasbeensetat€ 15million.Ourfocusforthefuture

willbeonextrudedsemi-finishedthermoplasticsand

relatedproductsforsafety-criticalandeco-specific

applications.Wehavealsoidentifiedopportunitiesfor

growthwithintheareaofenergyutilitiesandcommo-

dities,environmentalengineeringandagriculture/food

manufacturing.

Owingtotheuncertaintiesassociatedwiththecommod-

itymarketsaswellastheinconsistenteconomictrends

andtheriskofunforeseenevents,suchasrecentdevel-

opmentsinJapan,providingaperformanceoutlookfor

2012isdifficult.Giventhegrowthopportunitieseman-

atingfromtheemergingmarketsandthenewfocuson

safety-criticalandeco-specificapplications,SIMONA

anticipatesthatitsbusinessperformancewillremain

favourablebeyondthefinancialyear2011.

8. OtHer INFOrMAtION

employees

Inaggregate,thenumberofpeopleemployedwithinthe

SIMONAGroupremainedstablein2010.Attheendof

thereportingperiod,theGroupheadcountstoodat

1,236(2009:1,234).Withinthiscontext,theclosureof

ourplantinKirchhundem-Würdinghausenandthedis-

continuationoftwologisticssitesinFrancepushedthe

Group’sheadcountdown,whiletherecruitmentefforts

atthenewproductionfacilityinJiangmen,China,

resultedinnewjobsbeingcreatedwithintheGroup.The

averagenumberofemployeeswithintheGroupwas

1,218.Asat31December2010,theheadcountforthe

parentcompany,SIMONAAG,was910(2009:957).

Attheendof2010,54youngpeople(2009:59)were

enrolledinvocationalprogrammesrelatingtooneof

seventechnicalandcommercialtrainingcourses.In

total,18apprenticessuccessfullycompletedtheirvoca-

tionaltrainingprogrammes;nineofthemwereoffered

permanentemploymentcontracts.Twoapprentices

optedforanintegrateddegreecourseofferedby

SIMONAincooperationwiththeUniversityofApplied

SciencesLudwigshafen.At31December2010,6

femalemembersofstaffwereonparentalleave.Atthe

endof2010,60membersofstaff(2009:64)had

optedforearlypart-timeretirement.


16





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In2010,SIMONAextendeditsBalancedScorecardasa

strategicmanagementinstrumenttoincorporateother

organisationallevelswithinthecompany.In-housetrain-

ingwithinthecontextofacross-companyprojectaimed

atimprovingtheorderprocessformedoneofthefocal

pointsofHRdevelopmentintheyearunderreview.Addi-

tionally,thecompanyorganisedanumberofpersonal-

isedspecialisttrainingschemesanddrewupaconcept

fortheestablishmentofatalentpromotioncircle,which

willcommencein2011.

In2011,theemphasiswithregardtoITwasonstand-

ardisingtheSAPmodulesusedwithintheGroupand

introducingSAPinfullatSIMONAAMERICAInc.Further-

more,therollouttemplaterelatingtotheSAPmodule

HumanResourceswasextendedandinitialpreparations

weremadeforreleasemigration.

Significant elements of the internal control and man-

agement system

Overallresponsibilityfortheinternalcontrolsystemwith

regardtothefinancialandtheGroupfinancialreporting

processrestswiththeManagementBoard.Allentities

includedwithintheconsolidatedgrouphavebeeninteg-

ratedwithinthissystembymeansofclearlydefined

managementandreportingstructures.

Theinternalcontrolsystem,whichimplementsspecific

controlswithregardtothefinancialreportingprocess,

isaimedatprovidingreasonableassurancethatannual

financialstatementscanbepreparedinaccordance

withstatutoryrequirementsdespitepossiblerisks.The

riskmanagementsystemincludesthefullrangeof

guidelinesandmeasuresrequiredtoidentifyriskandto

manageriskassociatedwithcommercialoperations.

Thepolicies,thestructuralandproceduralorganisation

aswellastheprocessesoftheinternalcontrolandrisk

managementsystemoperatedinrespectoffinancial

reportinghavebeenincorporatedinguidelinesand

organisationalinstructionsthatarerevisedregularlyto

accountforthelatestexternalandinternaldevelop-

ments.Asregardsthefinancialreportingprocess,we

considerthoseelementstobeofsignificancetothe

internalcontrolandriskmanagementsystemthatmay

potentiallyinfluencefinancialreportingandoverall

assessmentoftheannualfinancialstatements,includ-

ingthemanagementreport.Theseelementsareasfol-

lows:

� Identificationofsignificantareasofriskandcontrol

withaninfluenceoverthegroup-widefinancial

reportingprocess

� Monitoringofthegroup-widefinancialreportingpro-

cessandanyfindingstherefromatManagement

Boardlevel

� Preventativemeasuresofcontrolwithregardto

groupaccountingaswellassubsidiariesincludedin

theconsolidatedgroup

� MeasuresthatsafeguardtheappropriateIT-based

preparationofitemsanddataofrelevancetofinan-

cialreporting

Quality and environmental management

ThegoalofSIMONA’squalitymanagementistoensure

thatthequalityofitsproductsandprocessesissafe-

guardedandoptimisedonacontinualbasis.Withinthis

context,theaimistoachieveaconsistentlyhighlevel

ofqualityawarenessatallproductionanddistribution

sites.Theincorporationofthenewproductionsiteat

Jiangmen,China,intotheSIMONAqualitymanagement

conceptprogressedwell,andcertificationoftheQM

systematourChinesemanufacturingplantcannowbe

plannedfortheendof2011.

Amongthefocalpointsofthequalitymanagementsys-

temin2010wereaninterdisciplinaryqualitycircle,

productauditsandseveralprocessoptimisationmeas-


SIMONAAG(EXCERPT)

01COMPANY

17

Staffandrevenue

relIABle ANd AttrACtIVe eMplOYer

Despitetheeconomicupheavalseenin2009and2010,SIMONAmaintainedkeptstaffinglevelsstable.Wedemandperformanceand

encourageinitiative.Thisisillustratedbyouraward-winningvocationaltrainingprogramme,ourclosecollaborationwithuniversitiesand

thenewlycreatedSIMONATalentPromotionCircle–„YourTalent.OurFuture.“

303,7

1.236

2008

2009

2010

1.234

215,1

267,4

Revenuein€ millions

Employeesatyears-end

1.251

18

uresrelatingtonewautomotiveprojects.Intheareaof

pipesandfittings,anincreasingnumberofcountry-spe-

cificproductcertificationswerenecessaryinresponse

tocustomerandmarketrequirements.Thisresultedin

severalauditsaspartofwhichwewereabletoproveto

externalauditorstheefficacyoftheSIMONAmanage-

mentsystemsaswellastheexceptionallyhighquality

ofourproductsandprocesses.

Asacompanyoperatingwithintheglobalbusiness

arena,SIMONAAGiswellawareofitsresponsibilities

towardspeopleandtheenvironment.Thus,sustainabil-

ityandenvironmentalcompatibilityformanintegralpart

ofthecorporatephilosophyembracedbySIMONAAG.

SIMONAproductscontributetotheprotectionof

resources,e.g.byreplacingheaviermaterials,byfacili-

tatingwatertreatmentorbyreducingCO2emissions.

Sustainabilityhasalsobeendefinedasastrategicgoal

withregardtoourproductionprocesses.Indeed,pro-

duction-integratedenvironmentalprotectionplaysapiv-

otalrolewhenitcomestoplanningnewproduction

processesandcoordinatingfabricationmethods.

SIMONAAGiscommittedtoimprovingitsprocesseson

acontinualbasis,withtheexpresspurposeofactingin

aresource-andenvironmentally-friendlymanner.

Compensation report

Management Board compensation

TheSupervisoryBoard,basedontherecommendations

ofthePersonnelCommittee,isresponsiblefordeter-

miningtheoverallcompensationoftherespectiveMan-

agementBoardmembers.Italsoregularlyreviewsthe

compensationsystemrelatingtotheManagement

Board.ThePersonnelCommitteeconsistsofHans-

WernerMarx,ChairmanoftheSupervisoryBoard,as

wellastheSupervisoryBoardmembersDr.RolfGößler

andRolandFrobel.Compensationforthemembersof

theManagementBoardofSIMONAAGiscalculatedon

thebasisofthesizeofthecompany,itscommercial

andfinancialposition,aswellasthelevelandstructure

ofcompensationgrantedtoManagementBoardmem-

bersofsimilarenterprises.Inaddition,thedutiesand

thecontributionoftherespectivemembersoftheMan-

agementBoardaretakenintoaccount.

ManagementBoardcompensationisperformance-

based.Itiscomprisedofafixedlevelofremuneration

aswellasavariablecomponentintheformofabonus.

Bothoftheaforementionedcomponentsareassessed

onanannualbasis.Inaddition,bothcomponentsare

subjecttothoroughanalysesinintervalsoftwotothree

years,basedonacomparisonwithcompensationfig-

uresapplicabletoexecutivestaffofsimilarenterprises.

Themostrecentassessmentwasconductedin2009.

Thefixedcomponentofcompensationispaidasasal-

aryonamonthlybasis.Inaddition,themembersofthe

ManagementBoardreceiveabonus,thelevelofwhich

isdependentonattainingspecificfinancialtargets

whicharecalculatedonthebasisofthecompany’s

earningsperformance.TotalcompensationfortheMan-

agementBoardamountedto€ 1,553thousand(prev.

year:€ 1,296thousand).Totalcompensationcomprises

€ 1,034thousand(prev.year:€ 988thousand)infixed-

levelcompensationand€ 519thousand(prev.year:

€ 308thousand)inbonuspayments.Thecompanydoes

notgrantloanstomembersoftheManagementBoard.

Therearenoshareoptionplansorothershare-based

compensationprogrammesinplaceformembersofthe

ManagementBoard.

Thecompany’sArticlesofAssociationcontainnoprovi-

sionsthatarenon-compliantwiththosesetoutinthe

GermanStockCorporationActasregardstheconditions





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SIMONAAG(EXCERPT)

01COMPANY

19

applicabletotheappointmentorremovalofManage-

mentBoardmembersaswellasamendmentstothe

company’sArticlesofAssociation.Inviewofthis,readers

areaskedtorefertotherelevantstatutoryprovisionsset

outinSections84,85,133and179oftheGerman

StockCorporationAct(Aktiengesetz–AktG)forfurther

details.

RemunerationfortheformermembersoftheManage-

mentBoardamountedto€ 592thousand(previous

year:€ 853thousand).Pensionprovisionsforactive

andformermembersoftheManagementBoardwere

recognisedtothefullextentandamountedto€ 7,756

thousandasat31December2010(previousyear:

€ 8,507thousand).

Supervisory Board compensation

SupervisoryBoardcompensationiscalculatedaccord-

ingtothesizeofthecompany,aswellasthedutiesand

responsibilitiesoftheSupervisoryBoardmembers.The

ChairmanandtheDeputyChairmanaswellasmembers

involvedinCommitteesreceivesupplementarycom-

pensation.

MembersoftheSupervisoryBoardreceiveastandard

fixedlevelofcompensationamountingto€ 10,000.The

ChairmanoftheSupervisoryBoardreceivesanamount

equivalenttodoublethestandardlevelofcompensa-

tion;theDeputyChairmanreceivesanamountequival-

enttooneandahalftimesthestandardlevelofcom-

pensation.SupervisoryBoardmemberswhoare

engagedinCommitteeworkreceivesupplementary

compensationof€ 5,000.Allexpensesassociated

directlywithapositionontheSupervisoryBoard,as

wellassalestax,arereimbursed.

Inadditiontofixedcompensation,theGeneralMeeting

shallbeauthorisedtopassaresolutiononavariable

componentofcompensation,paymentofwhichshallbe

dependentonwhetherspecificcorporateperformance

indicatorshavebeenmetorexceeded.AttheAnnual

GeneralMeetingofShareholderson25June2010no

suchresolutionforvariablecompensationcomponents

waspassedforthe2010financialyear.

SupervisoryBoardcompensationfor2010amountedto

€ 121thousand(previousyear:€ 121thousand).The

companydoesnotgrantloanstomembersofthe

SupervisoryBoard.Therearenoshareoptionplansor

othershare-basedcompensationprogrammesinplace

formembersoftheSupervisoryBoard.

disclosures pursuant to Sections 289 (4) and 315 (4)

HGB and explanatory report

Asat31December2010,thesharecapitalofSIMONA

AGwas€ 15,500,000,dividedinto600,000no-par-value

bearershares(“Stückaktien”governedbyGermanlaw).

Thus,itremainedunchangedinthe2010financialyear.

ThesharesaretradedintheGeneralStandardofthe

GermanstockexchangeinFrankfurtaswellasonthe

Berlinsecuritiesexchange.Therearenodifferentcate-

goriesofshareorsharesfurnishedwithspecialrights.

EachshareisequippedwithonevoteattheGeneral

MeetingofShareholders.Inviewofthefactthata

shareholder’srighttoacertificateofownershipinter-

estshasbeenprecludedunderthecompany’sArticles

ofAssociation,thesharecapitalofourcompanyisrep-

resentedonlyintheformofaglobalcertificate,which

hasbeendepositedwithClearstreamBankingAG,

FrankfurtamMain.Therefore,ourshareholdersonly

haveaninterestasco-ownersinthecollectiveholdings

oftheno-par-valuesharesinourcompany,asheldby

ClearstreamBankingAG,accordingtotheirinterestin

thecompany’ssharecapital.Weshallnolongerissue

effectivesharecertificates.AsfarastheManagement

Boardisaware,therearenorestrictionsaffectingvoting

rightsorthetransferofshares.

A30.79percentinterestwasheldbyDr.Wolfgangund

AnitaBürkleStiftung(Kirn),an11.64percentinterest

byDirkMöller(Kirn),an11.41percentinterestby


20

RegineTegtmeyer(Seelze),a15.0percentinterestby

KreissparkasseBiberach(Biberach),a10.0percent

interestbySIMONAVermögensverwaltungsgesellschaft

derBelegschaftmbH(Kirn)anda10.1percentinterest

byRossmannBeteiligungsGmbH(Burgwedel).The

remaining11.06percentofsharesinthecompany

wereinfreefloat.On10June2010,Dr.Wolfgangund

AnitaBürkleStiftungnotifiedthecompanyinaccord-

ancewithSection21(1)oftheGermanSecuritiesTrad-

ingAct(Wertpapierhandelsgesetz–WpHG)thatits

votingpowerinrespectofSIMONAAGhadexceeded

thethresholdof15percent,20percent,25percent

and30percentofthevotingrightson13May2010

andthatatthisdateitsinterestwas30.79percent

(correspondingto184,739votingrights).On10June

2010,Dr.WolfgangundAnitaBürkleStiftungfiledan

applicationwiththeFederalFinancialSupervisory

Authority(BundesanstaltfürFinanzdienstleistungsauf-

sicht–BaFin)forexemptionpursuanttoSection37(1)

and(2)oftheSecuritiesAcquisitionandTakeoverAct

(Wertpapiererwerb-undÜbernahmegesetz–WpÜG)in

conjunctionwithSection9sentence1no.1ofthe

WpÜGOfferOrdinance(WpÜG-Angebotsverordnung).On

thebasisofanofficialNoticeissuedbytheFederal

FinancialSupervisoryAuthorityon22July2010,Dr.

WolfgangundAnitaBürkleStiftungwasexemptedfrom

itsdutiesunderSection35(2)sentence1WpÜGtosub-

mitanofferdocumenttotheFederalFinancialSuper-

visoryAuthorityanditsdutiesunderSection35(2)sen-

tence2inconjunctionwithSection14(2)sentence1

WpÜGtopublishamandatoryoffer.Thisexemptionwas

grantedunderSection37(1)and(2)WpÜGinconjunc-

tionwithSection9sentence1no.1WpÜGOfferOrdi-

nanceinrespectofthecontrolgainedoverSIMONAAG

followingthetestamentarysuccessionof13May2010.

On22April2010,LandkreisBiberach,Biberach,Germany,

notifiedthecompanyinaccordancewithSection21(1)

WpHGthatitsvotingpowerinrespectofSIMONAAGhad





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exceededthethresholdof3percent,5percentand10

percenton29November2006andthatatthisdateits

interestwas10.67percent(64,000votingrights).Of

thesevotingrights,10.67percent(64,000votingrights)

areattributabletotheaforementionedshareholderin

accordancewithSection22(1)sentence1no.1WpHG.

Withinthiscontext,attributablevotingrightsareheldby

theaforementionedpartyviathefollowingentityunder

itscontrolwhosevotingpowerinrespectofSIMONAAG

amountsto3percentormore:KreissparkasseBiber-

ach,Biberach,Germany.On22April2010,Landkreis

Biberach,Biberach,Germany,notifiedthecompanyin

accordancewithSection21(1)WpHGthatitsvoting

powerinrespectofSIMONAAGhadexceededthe

thresholdof15percenton2March2010andthatat

thisdateitsinterestwas15.0038percent(90,023

votingrights).

Ofthesevotingrights,15.0038percent(90,023voting

rights)areattributabletotheaforementionedshare-

holderinaccordancewithSection22(1)sentence1no.

1WpHG.Withinthiscontext,attributablevotingrights

areheldbytheaforementionedpartyviathefollowing

entityunderitscontrolwhosevotingpowerinrespectof

SIMONAAGamountsto3percentormore:Kreisspar-

kasseBiberach,Biberach,Germany.

Asat25June2010,membersoftheManagement

Boardreportedatotalholdingof70,776ownshares;

thiscorrespondsto11.8percentofthesharecapital

ofSIMONAAG.Accordingtothenotificationof25June

2010,membersoftheSupervisoryBoardheldatotalof

1,700shares.Thiscorrespondsto0.28percentof

totalsharecapital.

Totheextentthatemployeesholdaninterestinthe

company’scapital,theseemployeesthemselvesdirectly

exercisetherightsofcontrolassociatedwiththeir

shareholdings.


SIMONAAG(EXCERPT)

01COMPANY

21


Theappointmentandtheremovalofmembersofthe

ManagementBoardaregovernedbythestatutoryprovi-

sionssetoutinSections84and85oftheGerman

StockCorporationAct(Aktiengesetz–AktG)aswellas

bySection9oftheArticlesofAssociationofSIMONA

AG.Undertheseprovisions,theManagementBoardof

thecompanyconsistsofatleasttwomembers.The

appointmentofdeputymembersoftheManagement

Boardispermitted.TheManagementBoardgenerallyhas

achairmantobeappointedbytheSupervisoryBoard.

TheSupervisoryBoardisentitledtotransfertoaSupervi-

soryBoardcommitteethedutiesrelatingtotheconclu-

sion,amendmentandterminationofManagementBoard

employmentcontracts.AnyamendmentstotheArticles

ofAssociationmustbemadeinaccordancewiththestat-

utoryprovisionssetoutinSection179etseq.oftheGer-

manStockCorporationAct.

AccordingtoSection6oftheArticlesofAssociation,the

companyisentitledtoissuesharecertificatesthat

embodyoneshare(singlecertificate)ormultipleshares

(globalcertificates).

Atpresenttherearenosignificantagreementscontaining

achangeofcontrolprovisionthatwouldapplyinthe

eventofatakeoverbid.

Atpresenttherearenoagreementswithmembersofthe

ManagementBoardorwithemployeesrelatingtocom-

pensationpaymentsintheeventofachangeofcontrol.

Forward-looking statements and forecasts

ThisGroupmanagementreportcontainsforward-looking

statementsthatarebasedonthecurrentexpectations,

presumptionsandforecastsoftheManagementBoard

ofSIMONAAGaswellasoninformationcurrentlyavail-

abletotheManagementBoard.Theseforward-looking

statementsshallnotbeinterpretedasaguaranteethat

thefutureeventsandresultstowhichtheyreferwill

actuallymaterialise.Rather,futurecircumstancesand

resultsdependonamultitudeoffactors.Theseinclude

variousrisksandimponderabilities,aswellasbeing

basedonassumptionsthatmayconceivablyprovetobe

incorrect.SIMONAAGshallnotbeobligedtoadjustor

updatetheforward-lookingstatementsmadeinthis

report.

Closing statement

Weherebydeclarethattothebestofourknowledgethe

managementreportconveysthecourseofbusiness,the

financialperformanceandthematerialopportunities

andrisksassociatedwiththeexpecteddevelopmentof

theSIMONAGroup.

SIMONAAG

Kirn,31March2011

TheManagementBoard

22









OtherInformation 68

GroupFinancialStatements

in€ ‘000 Notes 01/01 - 31/12/10 01/01 - 31/12/09

Revenue [7] 267,402 215,070

Otheroperatingincome [8] 7,201 7,408

Changesininventoriesoffinishedgoods 5,314 –1,833

Costofmaterials 154,420 103,686

Staffcosts [9] 55,876 55,256

Depreciationofproperty,plantandequipment,andamortisationofintangibleassets [16],[17] 12,606 14,554

Otheroperatingexpenses [11] 46,946 39,830

Incomefromequityinvestments 500 0

Interestincome [12] 498 506

Interestexpense [12] 579 690

profit before tax 10,488 7,135

Incometaxexpense [13] 3,263 2,113

profit for the period 7,225 5,022

ofwhichattributableto:

Ownersoftheparentcompany 7,198 4,988

Non-controllinginterests 27 34

earnings per share:

in€

–basic,calculatedonthebasisofprofitfortheperiodattributabletoordinaryshareholdersoftheparentcompany [14] 12.00 8.31

–diluted,calculatedonthebasisofprofitfortheperiodattributabletoordinaryshareholdersoftheparentcompany [14] 12.00 8.31

GroupIncomeStatementofSIMONAAG

GrOup FINANCIAl StAteMeNtS

24

in€ ‘000 01/01 - 31/12/10 01/01 - 31/12/09

profit for the period 7,225 5,022

Exchangedifferencesontranslatingforeignoperationsduringtheyear 1,040 –17

Amountrecogniseddirectlyinequity 1,040 –17

total comprehensive income 8,265 5,005

Totalcomprehensiveincomeattributableto:

Ownersoftheparentcompany 8,235 4,968

Non-controllinginterests 30 37

GroupStatementofComprehensiveIncomeofSIMONAAG

01GROUPMANAGEMENTREPORT 02 GrOup FINANCIAl StAteMeNtS

GroupIncomeStatement

GroupStatementofComprehensiveIncome

GroupStatementofFinancialPosition

NotestoConsolidatedFinancialStatements

GroupStatementofCashFlows

GroupStatementofChangesinEquity

DetailsofShareholdings

Auditor’sReport

OtherInformation


SIMONAAG(EXCERPT)

01COMPANY

25

GroupStatementofFinancialPositionofSIMONAAG


ASSetS

in€ ‘000 Notes 31/12/10 31/12/09

Intangibleassets [16] 1,294 1,412

Property,plantandequipment [17] 88,126 92,839

Financialassets [30] 23 23

Non-currenttaxassets [20] 3,773 4,320

Deferredtaxassets [13] 173 236

Non-current assets 93,389 98,830

Inventories [18] 50,515 43,994

Tradereceivables [19] 41,845 33,320

Otherassetsandprepaidexpenses [20] 9,947 6,902

Derivativefinancialinstruments [30] 0 160

Otherfinancialassets [30] 10,000 0

Cashandcashequivalents [21] 39,316 61,479

Current assets 151,623 145,855

total assets 245,012 244,685

eQuItY ANd lIABIlItIeS

in€ ‘000 Notes 31/12/10 31/12/09

equity attributable to owners of theparent company

Issuedcapital 15,500 15,500

Capitalreserves 15,274 15,274

Revenuereserves 131,425 127,755

Otherreserves –260 –1,225

161,939 157,304

Non-controlling interests 272 242

total equity [22] 162,211 157,546

Financialliabilities [23] 4,848 7,000

Provisionsforpensions [24] 38,322 36,698

Otherprovisions [26] 6,036 5,979

Otherliabilities 211 414

Deferredtaxliabilities [13] 5,654 5,271

Non-current liabilities 55,071 55,362

Financialliabilities [23] 313 3,824

Provisionsforpensions [24] 1,248 1,637

Otherprovisions [26] 2,535 5,708

Tradepayables 11,202 6,904

Incometaxliabilities 1,607 2,638

Otherliabilitiesanddeferredincome 10,670 10,771

Derivativefinancialinstruments [30] 155 295

Current liabilities 27,730 31,777

total equity and liabilities 245,012 244,685

26


[1] COMpANY INFOrMAtION

SIMONAAGisastockcorporation(Aktiengesellschaft)

foundedinGermany–registeredofficeatTeichweg16,

55606Kirn,Germany.Itssharesaretradedwithinthe

GeneralStandardoftheFrankfurtandBerlinStock

Exchanges.Theconsolidatedfinancialstatementsof

SIMONAAGforthefinancialyearended31December

2010werereleasedbytheManagementBoardonthe

basisofaresolutionpassedon31March2011forthe

purposeofforwardingthemtotheSupervisoryBoard.

TheactivitiesofSIMONAAGmainlyincludetheproduc-

tionandsaleofsemi-finishedproductsintheformof

sheets,rods,weldingrods,pipes,fittingsandfinished

partsmadeofthermoplastics.

Thesemi-finishedproductsaremanufacturedinGermany

atplantsinKirnandKirchhundem-Würdinghausen(until

30September2010),aswellasinHazleton(USA)and

Jiangmen(China).Pipesandfittingsareproducedatthe

plantinRingsheim(Germany).TheplantinLitvinov

(CzechRepublic)manufacturessemi-finishedproducts,

pipesandfittings.Theproductsaremarketedunderthe

jointSIMONAbrandaswellasarangeofseparate

brands.

SIMONAAGmaintainsasalesofficeinMöhlin,

Switzerland.

Inaddition,distributionisconductedviasubsidiariesin

theUnitedKingdom(SIMONAUKLimited,Stafford,

UnitedKingdom),France(SIMONAS.A.,Domont,France),

Italy(SIMONAS.r.l.,Vimodrone,Italy),Spain(SIMONA

IBERICASEMIELABORADOSS.L.,Barcelona,Spain),

Poland(SIMONAPOLSKASp.zo.o.,Wrocław,Poland,

DEHOPLASTPOLSKASp.zo.o.,Kwdizyn,Poland),the

CzechRepublic(SIMONAPLASTICSCZ,s.r.o.,Prague,

CzechRepublic),HongKong(SIMONAFAREASTLtd.,

HongKong,China),China(SIMONAENGINEERINGPLAS-

TICSTRADINGCo.Ltd,Shanghai,China)andtheUnited

States(SIMONAAMERICAInc.,Hazleton,USA).

[2] ACCOuNtING pOlICIeS

Basis of preparation

Theconsolidatedfinancialstatementsareprepared

usingthehistoricalcostprinciple,withtheexceptionof

derivativefinancialinstrumentsandavailable-for-sale

financialassets,whicharemeasuredatfairvalue.The

consolidatedfinancialstatementsarepreparedineuro.

Unlessotherwisestated,allamountsareroundedto

€ ‘000.

Statement of compliance with IFrS

TheconsolidatedfinancialstatementsofSIMONAAG

andtheentitiesincludedintheconsolidatedgroupfor

theperiodended31December2010,havebeenpre-

paredinaccordancewiththeInternationalFinancial

ReportingStandards(IFRS)applicableatthereporting

date,asadoptedbytheEuropeanUnion,andtheprovi-

sionsofcommerciallawtobeappliedadditionallypur-

suanttoSection315a(1)oftheGermanCommercial

Code(Handelsgesetzbuch–HGB).

Theterm“IFRS”comprisesallInternationalFinancial

ReportingStandards(IFRS)andInternationalAccounting

Standards(IAS)tobeappliedonamandatorybasisas

atthereportingdate.Additionally,allinterpretations

issuedbytheInternationalFinancialReportingInterpre-

tationsCommittee(IFRIC)–formerlyStandingInterpre-

tationsCommittee(SIC)–wereappliedinsofarastheir

applicationwasmandatoryforthe2010financialyear.

Theconsolidatedfinancialstatementsconsistofthe

financialstatementsofSIMONAAGanditssubsidiaries

asat31Decemberofeachfinancialyear(hereinafter

alsoreferredtoas“Group”or“SIMONAGroup”).

TheGroupstatementoffinancialpositionconformswith

thepresentationrequirementsofIAS1.Variousitems

reportedintheincomestatementandthestatementof

financialpositionhavebeenaggregatedforthepurpose

ofimprovingtheoverallclarityofpresentation.These









Auditor’sReport

OtherInformation


SIMONAAG(EXCERPT)

01COMPANY

27

itemsaredisclosedanddiscussedseparatelyinthe


principles of consolidation

Theconsolidatedfinancialstatementscomprisethe

accountsofSIMONAAGanditssubsidiariesforeach

financialyearended31December.Thefinancialstate-

mentsofSIMONAAGandthesubsidiariesareprepared

usinguniformaccountingpoliciesforthesamereporting

period.

Allintragroupbalances(receivables,liabilities,provi-

sions),transactions,incomeandexpensesaswellas

profitsandlossesfromtransactionsbetweenconsoli-

datedentities(“intercompanyprofits”)areeliminatedas

partofconsolidation.

Subsidiariesarefullyconsolidatedeffectivefromthe

acquisitiondate,whichisthedateonwhichtheGroup

effectivelyobtainscontrol.Inclusionintheconsolidated

financialstatementsendsassoonastheparentceases

tocontrolthesubsidiary.Changesinaparent’sowner-

shipinterestinasubsidiarythatdonotresultinaloss

ofcontrolareaccountedforasequitytransactions.

Non-controllinginterestsaredisclosedseparatelyinthe

GroupincomestatementandwithinequityoftheGroup

statementoffinancialposition.

[3] NeW FINANCIAl repOrtING StANdArdS

3.1 Accounting standards applicable for the first time

in the financial year

Theaccountingmethodsappliedtotheseconsolidated

financialstatementsareconsistentwiththoseapplied

inthepreviousyear,withtheexceptionofthefollowing

newandamendedStandardsandInterpretationseffec-

tiveasat1January2010.Thefollowingsectionpro-

videsasummaryofStandardsthatareofrelevanceto

SIMONAAG,aswellasdetailingthepossibleimplica-

tionsfortheconsolidatedfinancialstatements:

� IAS39“FinancialInstruments:Recognitionand

Measurement”(EligibleHedgedItems)

� IFRS2“Share-basedPayment”(GroupCash-settled

Share-basedPaymentTransactions)

� IFRS3“BusinessCombinations”/IAS27“Consoli-

datedandSeparateFinancialStatements”(PhaseII:

generalrevisionaspartoftheconvergenceproject

oftheIASBandFASB

� IFRIC17DistributionsofNon-cashAssetstoOwners

(newinterpretation)

� ImprovementstoIFRS2008


Thefollowingsectionprovidesasummaryoftherelev-

antStandards,aswellasdetailingthepossibleimpli-

cationsfortheconsolidatedfinancialstatements:


Measurement”(EligibleHedgedItems)clarifiesthat

anentityisentitledtodesignatejustsomeofthe

changesinthecashflowsorfairvaluesofafinan-

cialinstrumentasahedgeditem.Thisalsoencom-

passesthedesignationofinflationasahedgedrisk

orportioninparticularsituations.TheSIMONA

Grouphasascertainedthatthisamendmentwillnot

affecttheGroup’sfinancialposition,financialper-

formanceandcashflows,astheGrouphasnot

enteredintoanysuchtransactions.


Share-basedPaymentTransactions)containsamend-

mentstothescopeandaccountingofGroupcash-

settledshare-basedpaymenttransactions).The

amendmenttoIFRS2hasnoeffectonthefinancial

position,financialperformanceandcashflowsof

theSIMONAGroup,asnoshare-basedpaymentis

offered.


datedandSeparateFinancialStatements”were

amendedextensivelyaspartoftheconvergence


28

projectimplementedbytheIASBandFASB.Thekey

amendmentsarecentredaroundtheintroductionof

anoptionrelatingtothemeasurementofnon-con-

trollinginterests,withachoicebetweenrecognition

onthebasisoftheproportionateidentifiablenet

assets (purchased Goodwill Method)andtheso-

calledFull Goodwill Method,wherebytheentirepor-

tionofgoodwillapplicabletotheminorityshare-

holdershallberecognised.Otherpointsincludethe

revaluation,withrecognitioninprofitorloss,ofany

existingownershipinterestsatthedateofinitially

obtainingcontrol(businesscombinationachievedin

stages),therecognitionattheacquisitiondateof

anyconsiderationcontingentonfutureeventsas

wellastherecognitionoftransactioncostsinprofit

orloss.Thetransitionalprovisionsstipulateapro-

spectiveapplicationoftheamendments.Thereare

nochangesinrespectofassetsandliabilitiesthat

arisefrombusinesscombinationspriortotheinitial

applicationofthenewstandards.Theamendments

mayhaveaneffectonthecarryingamountofgood-

will,ontheresultsofthereportingperiodinwhicha

businesscombinationhasoccurredandonfuture

results.Inparticular,applicationofthefull-goodwill

methodmayresultinhighergoodwillbeingrecog-

nised.Theseamendmentshadnoeffectonthe

2010financialyear,asnotransactionsrelatingto

businesscombinationsoccurredintheperiodunder

review.

� IFRIC17includesdetailsonhowtoaccountfordis-

tributionsofnon-cashassetstoownerseitherfrom

reservesorintheformofdividends.ThisInterpreta-

tiondoesnoteffectthepresentationoffinancial


theSIMONAGroup,asnosuchdistributionswere

made.

3.2 Issued standards and interpretations which have

not yet been applied (eu endorsement completed)

TheInternationalAccountingStandardsBoard(IASB)and

theInternationalFinancialReportingInterpretations

Committee(IFRIC)issuedthefollowingStandardsand

Interpretationswhichhavealreadybeenadoptedbythe

EuropeanUnionaspartofthecomitologyprocedurebut

whoseapplicationwasnotyetmandatoryinthe2010

financialyear.TheGroupwillnotapplytheseStandards

andInterpretationsforanearlierperiod.

� IFRS1“First-timeAdoptionofInternationalFinancial

ReportingStandards”(LimitedExemptionfromCom-

parativeIFRS7DisclosuresforFirst-timeAdopters)

� IAS24“RelatedPartyDisclosures”

� IAS32“FinancialInstruments:Presentation”(Classi-

ficationofRightsIssues)

� IFRIC14“PrepaymentsofaMinimumFunding

Requirement”

� IFRIC19“ExtinguishingFinancialLiabilities

withEquityInstruments”

� VariousimprovementstoIFRS(omnibusstandardfor

thepurposeofamendingvariousIFRSs).

Basedonsoundjudgement,theSIMONAGroupmay

potentiallybeaffectedbythefollowingamendments:

� IAS1“PresentationofFinancialStatements”

� IAS27“ConsolidatedandSeparateFinancial

Statements”

� IFRS3“BusinessCombinations”

� IFRS7“FinancialInstruments:Disclosures”

WiththeexceptionofIAS24,applicationoftheafore-

mentionedstandardsandinterpretationsisunlikelyto

havesignificantimplicationsforthefuturefinancial

statementsissuedbytheSIMONAGroup:

IAS24(amended)wasissuedinNovember2009and

mustbeappliedbyentitiesforannualperiodsbeginning

onorafter1January2011.Itrevisesthedefinitionof

relatedpartiesinordertosimplifytheprocessofidenti-

fyingrelationshipswithrelatedparties,aswellas









Auditor’sReport

OtherInformation


SIMONAAG(EXCERPT)

01COMPANY

29

itemsaredisclosedanddiscussedseparatelyinthe


principles of consolidation

Theconsolidatedfinancialstatementscomprisethe

accountsofSIMONAAGanditssubsidiariesforeach

financialyearended31December.Thefinancialstate-

mentsofSIMONAAGandthesubsidiariesareprepared

usinguniformaccountingpoliciesforthesamereporting

period.

Allintragroupbalances(receivables,liabilities,provi-

sions),transactions,incomeandexpensesaswellas

profitsandlossesfromtransactionsbetweenconsoli-

datedentities(“intercompanyprofits”)areeliminatedas

partofconsolidation.

Subsidiariesarefullyconsolidatedeffectivefromthe

acquisitiondate,whichisthedateonwhichtheGroup

effectivelyobtainscontrol.Inclusionintheconsolidated

financialstatementsendsassoonastheparentceases

tocontrolthesubsidiary.Changesinaparent’sowner-

shipinterestinasubsidiarythatdonotresultinaloss

ofcontrolareaccountedforasequitytransactions.

Non-controllinginterestsaredisclosedseparatelyinthe

GroupincomestatementandwithinequityoftheGroup

statementoffinancialposition.

[3] NeW FINANCIAl repOrtING StANdArdS

3.1 Accounting standards applicable for the first time

in the financial year

Theaccountingmethodsappliedtotheseconsolidated

financialstatementsareconsistentwiththoseapplied

inthepreviousyear,withtheexceptionofthefollowing

newandamendedStandardsandInterpretationseffec-

tiveasat1January2010.Thefollowingsectionpro-

videsasummaryofStandardsthatareofrelevanceto

SIMONAAG,aswellasdetailingthepossibleimplica-

tionsfortheconsolidatedfinancialstatements:


Measurement”(EligibleHedgedItems)


Share-basedPaymentTransactions)


datedandSeparateFinancialStatements”(PhaseII:

generalrevisionaspartoftheconvergenceproject

oftheIASBandFASB

� IFRIC17DistributionsofNon-cashAssetstoOwners

(newinterpretation)



Thefollowingsectionprovidesasummaryoftherelev-

antStandards,aswellasdetailingthepossibleimpli-

cationsfortheconsolidatedfinancialstatements:


Measurement”(EligibleHedgedItems)clarifiesthat

anentityisentitledtodesignatejustsomeofthe

changesinthecashflowsorfairvaluesofafinan-

cialinstrumentasahedgeditem.Thisalsoencom-

passesthedesignationofinflationasahedgedrisk

orportioninparticularsituations.TheSIMONA

Grouphasascertainedthatthisamendmentwillnot

affecttheGroup’sfinancialposition,financialper-

formanceandcashflows,astheGrouphasnot

enteredintoanysuchtransactions.


Share-basedPaymentTransactions)containsamend-

mentstothescopeandaccountingofGroupcash-

settledshare-basedpaymenttransactions).The

amendmenttoIFRS2hasnoeffectonthefinancial


theSIMONAGroup,asnoshare-basedpaymentis

offered.


datedandSeparateFinancialStatements”were

amendedextensivelyaspartoftheconvergence


30

projectimplementedbytheIASBandFASB.Thekey

amendmentsarecentredaroundtheintroductionof

anoptionrelatingtothemeasurementofnon-con-

trollinginterests,withachoicebetweenrecognition

onthebasisoftheproportionateidentifiablenet

assets (purchased Goodwill Method)andtheso-

calledFull Goodwill Method,wherebytheentirepor-

tionofgoodwillapplicabletotheminorityshare-

holdershallberecognised.Otherpointsincludethe

revaluation,withrecognitioninprofitorloss,ofany

existingownershipinterestsatthedateofinitially

obtainingcontrol(businesscombinationachievedin

stages),therecognitionattheacquisitiondateof

anyconsiderationcontingentonfutureeventsas

wellastherecognitionoftransactioncostsinprofit

orloss.Thetransitionalprovisionsstipulateapro-

spectiveapplicationoftheamendments.Thereare

nochangesinrespectofassetsandliabilitiesthat

arisefrombusinesscombinationspriortotheinitial

applicationofthenewstandards.Theamendments

mayhaveaneffectonthecarryingamountofgood-

will,ontheresultsofthereportingperiodinwhicha

businesscombinationhasoccurredandonfuture

results.Inparticular,applicationofthefull-goodwill

methodmayresultinhighergoodwillbeingrecog-

nised.Theseamendmentshadnoeffectonthe

2010financialyear,asnotransactionsrelatingto

businesscombinationsoccurredintheperiodunder

review.

� IFRIC17includesdetailsonhowtoaccountfordis-

tributionsofnon-cashassetstoownerseitherfrom

reservesorintheformofdividends.ThisInterpreta-

tiondoesnoteffectthepresentationoffinancial


theSIMONAGroup,asnosuchdistributionswere

made.


not yet been applied (eu endorsement completed)

TheInternationalAccountingStandardsBoard(IASB)and

theInternationalFinancialReportingInterpretations

Committee(IFRIC)issuedthefollowingStandardsand

Interpretationswhichhavealreadybeenadoptedbythe

EuropeanUnionaspartofthecomitologyprocedurebut

whoseapplicationwasnotyetmandatoryinthe2010

financialyear.TheGroupwillnotapplytheseStandards

andInterpretationsforanearlierperiod.


ReportingStandards”(LimitedExemptionfromCom-

parativeIFRS7DisclosuresforFirst-timeAdopters)

� IAS24“RelatedPartyDisclosures”

� IAS32“FinancialInstruments:Presentation”(Classi-

ficationofRightsIssues)

� IFRIC14“PrepaymentsofaMinimumFunding

Requirement”

� IFRIC19“ExtinguishingFinancialLiabilities

withEquityInstruments”

� VariousimprovementstoIFRS(omnibusstandardfor

thepurposeofamendingvariousIFRSs).

Basedonsoundjudgement,theSIMONAGroupmay

potentiallybeaffectedbythefollowingamendments:

� IAS1“PresentationofFinancialStatements”

� IAS27“ConsolidatedandSeparateFinancial

Statements”

� IFRS3“BusinessCombinations”


WiththeexceptionofIAS24,applicationoftheafore-

mentionedstandardsandinterpretationsisunlikelyto

havesignificantimplicationsforthefuturefinancial

statementsissuedbytheSIMONAGroup:

IAS24(amended)wasissuedinNovember2009and

mustbeappliedbyentitiesforannualperiodsbeginning

onorafter1January2011.Itrevisesthedefinitionof

relatedpartiesinordertosimplifytheprocessofidenti-

fyingrelationshipswithrelatedparties,aswellas









Auditor’sReport

OtherInformation


SIMONAAG(EXCERPT)

01COMPANY

31

exemptingareportingentityfromitsdisclosurerequire-

mentsinrelationtorelatedpartytransactionswitha

governmentthathascontrol,jointcontrolorsignificant

influenceoverthereportingentityandanotherentity

thatisarelatedpartybecausethesamegovernment

hascontrol,jointcontrolorsignificantinfluenceover

boththereportingentityandtheotherentity.TheStand-

ardistobeappliedretrospectively.Inviewofthe

extendeddefinitionsetoutintheamendment,itislikely

thatadditionaldisclosuresrelatingtothecircleof

relatedpartiesoftheGroupwillberequired.Thedetails

ofapplicationofthisreviseddefinitionarecurrently

beingassessed.However,theamendmentwillhaveno

implicationsfortherecognitionandmeasurementof

assetsandliabilitiesintheconsolidatedfinancialstate-

mentsandfortheresultsinthefuturefinancialyears.


not yet been applied (eu endorsement pending)

TheIASBandIFRICissuedthefollowingStandardsand

Interpretationsthatwerenotyetapplicableinthe2010

financialyear.TheseStandardsandInterpretationshave

yettobeadoptedbytheEuropeanUnionandarethere-

forenotappliedbytheGroup.

� IAS12“IncomeTaxes”(DeferredTax:Recoveryof

UnderlyingAssets)


ReportingStandards”(SevereHyperinflationand

RemovalofFixedDatesforFirst-timeAdopters)


(IFRSDisclosures—TransfersofFinancialAssets)

� IFRS9“FinancialInstruments:Classificationand

Measurement”(newStandard).

TheimplicationsoftheaforementionedStandardsand

Interpretationswithregardtothefinancialposition,

financialperformanceandcashflowsoftheGroupare

currentlybeinganalysed.However,theGroupdoesnot

anticipatethatitsfinancialposition,financialperform-

anceandcashflowswillbeaffectedbytheapplication

ofsaidamendments.

[4] MAterIAl JudGeMeNtS ANd eStIMAteS

Judgements

Whenapplyingtheaccountingpolicies,themanagement

madethefollowingjudgementswiththemostsignificant

effectontheamountsrecognisedinthefinancialstate-

ments.Withinthiscontext,decisionscontainingesti-

mateshavenotbeentakenintoaccount.Amongother

aspects,significantestimatesrelatetotheusefullives

ofassets.

Materialjudgementsrelatetotheclassificationof

leases,therecognitionofprovisions,theestimationor

assessmentoftherecoverabilityorpossibleimpairment

oftradereceivables,inventoriesanddeferredtax

assets,aswellasassessmentoffactorsthatmayindi-

cateanimpairmentofassets.

uncertainties relating to estimates

Thefollowingsectionoutlinesthemostimportantfor-

ward-lookingassumptionsaswellasothermaterial

uncertaintyregardingtheuseofestimates,applicable

atthereportingdate,asaresultofwhichthereisasig-

nificantriskthatthecarryingamountsofassetsandlia-

bilitiesmayrequirematerialadjustmentswithinthe

comingfinancialyear.

Impairment of goodwill

TheGroupperformsimpairmenttestsforgoodwillat

leastonceperyear.Thisrequiresestimatestobemade

withregardtothevalueinuseofcash-generatingunits

towhichgoodwillisallocated.Forthepurposeofesti-

matingthevalueinuse,theGrouphastodetermine,on

thebasisofestimates,theprojectedcashflowsassoci-

atedwiththecash-generatingunit,aswellasselecting

anappropriatediscountrateinordertodeterminethe


32









Auditor’sReport

OtherInformation

presentvalueoftheaforementionedcashflows.Asat

31December2010,thecarryingamountofgoodwill

was€ 143thousand(prev.year:€ 143thousand).

deferred tax assets

Deferredtaxassetsarerecognisedforthecarryforward

ofunusedtaxlossestotheextentthatitisprobable

thatfuturetaxableprofitwillbeavailableagainstwhich

theunusedtaxlossescanbeutilised.Theprocessof

determiningthelevelofdeferredtaxassetsrequires

significantjudgementbythemanagementwithregardto

thetimingandamountoffuturetaxableprofitaswellas

thefuturetaxplanningstrategies.Forfurtherdetails,

pleaserefertoNote[13].

provisions

Provisionsarerecognisedinaccordancewiththe

accountingpoliciesdiscussedinNote[26].Indetermin-

ingthelevelofprovisions,themanagementisrequired

tomakesignificantjudgementsastothetimingandthe

amountsoffutureoutflowofresources.

pensions

Expensesrelatingtodefinedbenefitplansaredeter-

minedonthebasisofactuarialmethods.Actuarialvalu-

ationisconductedonthebasisofassumptionsin

respectofdiscountrates,futuresalaryincreases,mor-

talityandfuturepensionincreases.Inviewofthelong-

termorientationofsuchplans,theseestimatesare

associatedwithsignificantuncertainty.Forfurther

details,pleaserefertoNote[24].

[5] SuMMArY OF SIGNIFICANt ACCOuNtING

pOlICIeS

Business combinations

a)Businesscombinationsasfrom1January2010

Businesscombinationsareaccountedforbyapplying

theacquisitionmethod.Thecostofabusinesscombi-

nationiscalculatedasthesumoftheconsideration

transferred,measuredattheacquisition-datefairvalue,

andanynon-controllinginterestintheacquiree.Inthe

caseofeachbusinesscombination,theacquirermeas-

urescomponentsofnon-controllinginterestseitherat

fairvalueorattheproportionateshareintherecog-

nisedamountsoftheacquiree’sidentifiablenetassets.

Acquisition-relatedcostsareaccountedforasexpenses

andpresentedasadministrationcosts.

Goodwillismeasuredastheexcessoftheconsidera-

tiontransferredandtheamountofanynon-controlling

interestintheacquireeoverthenetoftheacquisition-

dateamountsoftheidentifiableassetsacquiredand

theliabilitiesassumed.Iftheconsiderationtransferred

islowerthanthefairvalueofthenetassetsofthe

acquiredsubsidiary,thedifferenceisaccountedforin

profitandloss.

Afterinitialrecognition,goodwillismeasuredatcost

lessaccumulatedimpairmentlosses.Forthepurpose

ofimpairmenttesting,asfromthedateofacquisition

goodwillacquiredaspartofabusinesscombinationis

allocatedtothosecash-generatingunitsoftheGroup

thatareexpectedtobenefitfromthebusinesscombina-

tion.Thismethodisappliedregardlessofwhetherother

assetsorliabilitiesoftheacquireeareallocatedto

thesecash-generatingunits.

b)Businesscombinationspriorto1January2010

Themethodpreviouslyappliedtotherecognitionand

measurementofbusinesscombinationsdifferedfrom

theapproachoutlinedabove:

Businesscombinationswereaccountedforbyapplying


SIMONAAG(EXCERPT)

01COMPANY

33

thepurchasemethod.Transactioncostsdirectlyattribut-

abletotheacquisitionrepresentedpartofthecostof

thebusinesscombination.Thenon-controllinginterest

(previouslyreferredtoasminorityinterests)wasmeas-

uredatthecorrespondingpro-ratashareoftheidentifi-

ablenetassetsoftheacquiree.

Allbusinessacquisitionsweretransactedpriorto1Janu-

ary2010.

Currency translation

Annualfinancialstatementspreparedbytheconsoli-

datedGroupentitiesinaforeigncurrencyaretranslated

onthebasisofthefunctionalcurrencymethod.The

functionalcurrencyisthecurrencyoftheprimaryeco-

nomicenvironmentinwhichtheentitiesoperate,which

inthecaseoftheGroupcompaniesofSIMONAAGis

therespectivelocalcurrency.Theconsolidatedfinancial

statementsarepreparedineuro.

Thoseforeignentitieswhosefunctionalcurrenciesdiffer

fromtheeurohavebeenpresentedbelow,togetherwith

detailsoftheirfunctionalcurrency:

SIMONAUKLtd.,Stafford,UnitedKingdom–

PoundSterling

SIMONAPOLSKASp.zo.o.,Wrocław/Poland–

PolishZloty

DEHOPLASTPOLSKASp.zo.o.,Kwidzyn,Poland–

PolishZloty

SIMONA-PLASTICSCZs.r.o,Prague,CzechRepublic–

CzechKoruna

SIMONAPlast-Techniks.r.o.,Litvinov,CzechRepublic–

CzechKoruna

SIMONAFAREASTLtd.,HongKong,China–

HongKongDollar

SIMONAASIALtd.,HongKong,China–

HongKongDollar

SIMONAAMERICAInc.,Hazleton,USA–USDollar

64NORTHCONAHANDRIVEHOLDINGLLC,Hazleton,

USA–USDollar

SIMONAENGINEERINGPLASTICSTRADINGCo.Ltd.,

Shanghai,China–Renminbi

SIMONAENGINEERINGPLASTICSCo.Ltd.,Jiangmen,

China–Renminbi

Theitemsaccountedforintherespectivefinancialstate-

mentsaremeasuredonthebasisofthefunctionalcur-

rency.Foreigncurrencytransactionsaretranslatedini-

tiallybetweenthefunctionalcurrencyandtheforeign

currencyatthearithmeticmeanrateapplicableonthe

dayofthetransaction.Allexchangedifferencesare

recordedinprofitorlossfortheperiod.

Non-monetaryitemsthataremeasuredathistoricalcost

ofpurchaseorconversioninaforeigncurrencyaretrans-

latedattheforeignexchangerateapplicableontheday

ofthetransaction.Non-monetaryitemsthataremeas-

uredatfairvalueintheforeigncurrencyaretranslated

attheratethatwasprevailingatthetimethefairvalue

wasdetermined.

Intheconsolidatedfinancialstatementsexpensesand

incomeassociatedwithfinancialstatementsofsubsidi-

ariespreparedinaforeigncurrencyaretranslatedon

thebasisoftheyear-averageexchangerate,whereas

assetsandliabilitiesaretranslatedonthebasisofthe

closingrate.Exchangedifferencesarisingfromthetrans-

lationofequityaswellasexchangedifferencesarising

fromtheuseofexchangeratesintheincomestatement

thatdifferfromthoseusedforthetranslationofbalance

sheetitemsarerecognisedinotherreserves.

Onthedisposalofaforeignoperation,thecumulative

amountoftheexchangedifferencesaccountedforin

respectoftheforeignoperationisrecognisedinprofitor

loss.

property, plant and equipment

Allitemsclassifiedasproperty,plantandequipmentare

usedforoperationalpurposesandaremeasuredatcost

lessdepreciationonasystematicbasis.Depreciationof

property,plantandequipmentisperformedonastraight-


34









Auditor’sReport

OtherInformation

linebasisinaccordancewiththepatternofuseofsuch

items.Totheextentthatdepreciableassetsofproperty,

plantandequipmenthavedifferentusefullives,theyare

depreciatedseparately.

Thecarryingamountsofproperty,plantandequipment

aretestedforimpairmentassoonasthereareindica-

tionsthatthecarryingamountofanassetexceedsits

recoverableamount.

Theresidualvaluesofassetsaswellastheusefullives

anddepreciationmethodsareassessedattheendof

eachfinancialyearandareadjustedwherenecessary.

leasing

Whetheranagreementconstitutesaleaseisdeter-

minedonthebasisofthesubstanceofthetransaction

detailedintheagreementatthetimetheagreementis

concluded.Thisrequiresanassessmentastowhether

thefulfilmentofthecontractualagreementisdepend-

entontheuseofaspecificassetorspecificassets

andwhethertheagreementgrantstherighttousethe

asset/assetsevenifthisrightisnotspecificallydefined

intheagreement.

Financeleases,whichtransfertotheGroupsubstan-

tiallyalltherisksandrewardsincidentaltoownershipof

anasset,arerecognisedasassetsinthestatementof

financialpositionatthecommencementofthelease

term.Asat31December2010,nosuchfinanceleases

existedwithintheGroup.

Leasepaymentunderanoperatingleasearerecognised

intheincomestatementasanexpenseonastraight-

linebasisandarepresentedasotheroperating

expense.

Borrowing costs

Borrowingcoststhataredirectlyattributabletothe

acquisition,constructionorproductionofaqualifying

asset,whichisdefinedasanassetthatnecessarily

takesasubstantialperiodoftimetogetreadyforits

intendeduseorsale,formpartofthecostofthatasset

andarecapitalisedaccordingly.Allotherborrowing

costsarerecognisedasanexpenseintheperiodin

whichtheyareincurred.Borrowingcostsareinterest

andothercoststhatanentityincursinconnectionwith

theborrowingoffunds.Noborrowingcostshavebeen

capitalisedbytheGroup,asitdoesnotpossessqualify-

ingassets.

Intangible assets

Acquiredandinternallygeneratedintangibleassetsare

capitalisedinaccordancewithIAS38ifitisprobable

thattheintangibleassetwillgeneratefutureeconomic

benefitsandthecostsoftheintangibleassetcanbe

reliablymeasured.Theyaremeasuredatcostofpur-

chaseorconversion.Intangibleassetswithafiniteuse-

fullifeareamortisedonthebasisofthelengthofthat

usefullife.Amortisationofintangibleassets,withthe

exceptionofcapitaliseddevelopmentcosts,isper-

formedoverausefullifeofbetweenthreeandfive

years.Intangibleassetswithindefiniteusefullivesare

regularlyassessedforimpairment.Inthecaseof

impairment,theyareadjustedtotheirrecoverable

amount.

research and development costs

Theresearchanddevelopmentactivitiesconductedby

SIMONAAGaredirectedprincipallyattheoptimisationof

productionandmanufacturingprocesses(advancement

withintheareaofproductionengineering),atchanges

andimprovementstoformulae,someofwhichhavebeen

inexistenceforanextensiveperiodoftime,oratfunda-

mentalimprovementsforthepurposeofmeetingspeci-

fiedqualityandinspectionrequirements,includingnew

testingproceduresandnewareasofapplication.Gener-

ally,theseactivitiesdonotinvolvethedevelopmentofan

entirelynewproductthatwouldseverthelinkwithexist-

ingformulaeandmanufacturingprocesses.


SIMONAAG(EXCERPT)

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35

Totheextentthatresearchanddevelopmentactivities

providethebasisforaproductthatistechnicallyfeas-

ibleandfromwhichtheGroupcangeneratefutureeco-

nomicbenefits,theperiodattributabletogeneral

researchactivitiesconstitutesthemajorpartthereof.

Thescaleofdevelopmentexpensesarisingafterthe

producthasbeenmademarketableisnegligible.Incon-

siderationoftheprincipleofmaterialitytheintangible

assetisnotcapitalisedinsuchcases.Thisapproach

doesnotadverselyeffectthetrueandfairviewofthe

Group’sstateofaffairsasregardsfinancialperform-

ance,financialpositionandcashflows.

Inaddition,SIMONAAGdoesnotcapitalisedevelop-

mentcoststotheextentthatcosts(expenditure)can-

notbereliablyallocatedtodevelopmentprojects.The

costsarerecognisedasexpenseintheperiodinwhich

theyareincurred.

Therewerenodevelopmentprojectsresultinginthe

capitalisationofintangibleassetsin2010or2009.

Impairment of assets

TheGroupassessesateachreportingdatewhether

thereisanyindicationthatanassetmaybeimpaired.If

suchindicationsarepresentoranannualimpairment

testofanassetisrequired,theGroupmakesanesti-

mateoftherecoverableamount.Therecoverable

amountofanassetoracash-generatingunitisthe

higherofitsfairvaluelesscoststosellanditsvaluein

use.Iftherecoverableamountofanassetislessthan

itscarryingamount,thecarryingamountoftheasset

shallbereducedtoitsrecoverableamount.Thatreduc-

tionisanimpairmentloss.

Investments and other financial assets

FinancialassetswithinthemeaningofIAS39areclassi-

fiedeitherasfinancialassetsatfairvaluethroughprofit

orloss,asloansandreceivables,asheld-to-maturity

investmentsorasavailable-for-salefinancialassets.On

initialrecognitionthefinancialassetsaremeasuredat

fairvalue.Additionally,inthecaseoffinancialassets

otherthanthoseclassifiedasatfairvaluethroughprofit

orloss,transactioncostsdirectlyattributabletothe

acquisitionoftheassetareaccountedforaccordingly.

Thedesignationoffinancialassetstotherespective

measurementcategoriesoccursuponinitialrecognition.

Totheextentthattheyarepermittedandnecessary,

reclassificationsareperformedattheendofthefinan-

cialyear.Noreclassificationshavebeenperformedto

date.

Allregularwaypurchasesorsalesoffinancialassetsare

accountedforatthedateofsettlement.Aregularway

purchaseorsaleisapurchaseorsaleofafinancial

assetunderacontractwhosetermsrequiredeliveryof

theassetwithinthetimeframeestablishedgenerallyby

regulationorconventioninthemarketplaceconcerned.

Thegroupoffinancialassetsatfairvaluethroughprofit

orlosscomprisesfinancialassetsheldfortrading.A

financialassetisclassifiedasheldfortradingifitis

acquiredprincipallyforthepurposeofsellingitinthe

nearterm.Derivates,includingembeddedderivatives

accountedforseparately,arealsoclassifiedasheldfor

trading,withtheexceptionofthosederivativesthatare

designatedandeffectivehedginginstruments.Gainsand

lossesonfinancialassetsheldfortradingarerecognised

inprofitorloss.TheGrouphasnotmadeuseofthe

optiontodesignatefinancialassetsorliabilitiesas

“measuredatfairvaluethroughprofitorloss”.

Derivativesembeddedwithinahostcontractarerecog-

nisedseparatelyattheirfairvalueiftheireconomicchar-

acteristicsandrisksarenotcloselyrelatedtothoseof

thehostcontractandthehostcontractsarenotheldfor

tradingpurposesorarenotdesignatedas“atfairvalue

throughprofitorloss”.Theseembeddedderivativesare

measuredattheirfairvalue;changestothefairvalue

arerecognisedinprofitorloss.Areassessmentisper-

formedonlyuponamendmentstothecontractualterms


36









Auditor’sReport

OtherInformation

andconditionsifthisleadstoasignificantchangetothe

cashflowsthatwouldotherwisehaveresultedfromthe

contract.

Non-derivativefinancialassetswithfixedordeterminable

paymentsandfixedmaturitythatanentityhastheposi-

tiveintentionandabilitytoholdtomaturityareclassified

asheld-to-maturityinvestments.Afterinitialrecognition

held-to-maturityinvestmentsaremeasuredatamortised

costusingtheeffectiveinterestmethod.Gainsorlosses

arerecognisedinprofitorlosswhenthefinancialasset

isderecognisedorimpaired,andthroughtheamortisa-

tionprocess.

Loansandreceivablesarenon-derivativefinancialassets

withfixedordeterminablepaymentsthatarenotquoted

inanactivemarket.Afterinitialrecognitionloansand

receivablesaremeasuredatamortisedcostusingthe

effectiveinterestmethod,lessimpairmentswhere

applicable.Gainsorlossesarerecognisedinprofitor

losswhentheloansandreceivablesarederecognisedor

impaired,andthroughtheamortisationprocess.

Available-for-salefinancialassetsarethosenon-deriva-

tivefinancialassetsthataredesignatedasavailablefor

saleorarenotclassifiedas(a)loansandreceivables,

(b)held-to-maturityinvestmentsor(c)financialassetsat

fairvaluethroughprofitorloss.Afterinitialrecognition

available-for-salefinancialassetsaremeasuredatfair

value.Unrealisedgainsandlossesonavailable-for-sale

financialassetsarerecogniseddirectlyinequity.Ifan

available-for-salefinancialassetisderecognisedor

impaired,thecumulativegainorlosspreviouslyrecog-

nisedinequityisrecognisedinprofitorloss.

Thefairvalueoffinancialinstrumentstradedwithin

organisedandactivemarketsisdeterminedonthe

basisofthemarketpricequotedatthereportingdate.

Thefairvalueoffinancialinstrumentsforwhichno

activemarketexistsisdeterminedonthebasisofvalu-

ationtechniques.Valuationtechniquesincludeusing

recentarm’slengthmarkettransactionsbetweenknow-

ledgeable,willingparties,ifavailable,referencetothe

currentfairvalueofanotherinstrumentthatissubstan-

tiallythesame,discountedcashflowanalysisandother

valuationmodels.

Held-to-maturityinvestmentsaswellasloansandreceiv-

ablesaremeasuredatamortisedcost.Thecalculation

includesallfeesandpointspaidorreceivedbetween

partiestothecontractthatareanintegralpartofthe

effectiveinterestrate,transactioncosts,andallother

premiumsordiscounts,minusanyreductionforimpair-

ments.

Afinancialasset(orapartofafinancialassetorapart

ofagroupofsimilarfinancialassets)isderecognised

whenthecontractualrightstothecashflowsfromthe

financialassetexpire.

Impairment of financial assets

TheGroupdeterminesattheendofeachreportingperiod

whetherthereisanyobjectiveevidencethatafinancial

assetorgroupoffinancialassetsisimpaired.Ifthereis

objectiveevidencethatanimpairmentlossonfinancial

assetscarriedatamortisedcosthasbeenincurred,the

amountoftheimpairmentlossismeasuredasthedif-

ferencebetweentheasset’scarryingamountandthe

presentvalueofestimatedfuturecashflowsdiscounted

atthefinancialasset’soriginaleffectiveinterestrate,

i.e.theeffectiveinterestratecomputedatinitialrecog-

nition.Thecarryingamountoftheassetisreduced

throughuseofanallowanceaccount.Theamountofthe

impairmentlossisrecognisedinprofitorloss.If,ina

subsequentperiod,theamountoftheimpairmentloss

decreasesandthedecreasecanberelatedobjectively

toaneventoccurringaftertheimpairmentwasrecog-

nised,thepreviouslyrecognisedimpairmentlossis

reversed.However,thenewcarryingamountmustnot

exceedtheamortisedcostatthedatetheimpairment

isreversed.Theamountofthereversalisrecognisedin

profitorloss.


SIMONAAG(EXCERPT)

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37

Ifinthecaseoftradereceivablesthereisobjectiveevi-

dencethatnotalldueamountswillbereceivedin

accordancewiththeagreedinvoicingtermsandcondi-

tions(e.g.likelihoodofaninsolvencyorsignificant

financialdifficultiesoftheobligor),thecarryingamount

isreducedthroughuseofanallowanceaccount.Receiv-

ablesarederecognisedwhentheyareconsideredtobe

uncollectible.

Inventories

Inventoriesarestatedatthelowerofpurchaseorcon-

versioncostandcurrentcostornetrealisablevalue.

Theinventoriesassociatedwithconsumableshavebeen

capitalisedataveragehistoricalcost.AspartofGroup

accounting,thecostofrawmaterialsisassignedmainly

byusingthefirst-in,first-out(FIFO)method.Finished

goodsaremeasuredatmanufacturingcost(costofcon-

version)accordingtoitem-by-itemcalculationsbasedon

currentoperationalaccounting;inadditiontothedirectly

relatedcostofdirectmaterialandunitsofproduction,

thisitemalsoincludesspecialproductioncostsaswell

asproductionandmaterialoverheads,includingdeprecia-

tion.Financingcostsarenotaccountedforinthecostof

conversion.Allidentifiablerisksassociatedwithinventor-

ies,particularlyrelatingtoholdingperiodsinexcessof

averageduration,diminishedusabilityandnetrealisable

value,arerecognisedbyanappropriatewrite-down.

Thenetrealisablevalueistheestimatedsellingprice

achievableintheordinarycourseofbusiness,lessthe

estimatedcostsincurreduntilcompletionandthe

estimatedcostsnecessarytomakethesale.

Interest-bearing borrowings

Oninitialrecognition,loansaremeasuredatthefairvalue

oftheconsiderationreceived,havingdeductedthe

transactioncostsrelatingtotheoriginationoftheloan.

Afterinitialrecognitioninterest-bearingborrowingsare

measuredatamortisedcostusingtheeffectiveinterest

method.Afinancialliabilityisderecognisedwhenthe

obligationspecifiedinthecontractisdischarged,can-

celledorwhenitexpires.

Cash and cash equivalents

Cashandcashequivalentsrecognisedinthestatement

offinancialpositioncomprisecashonhand,bankbal-

ancesandshort-termdepositswithoriginalmaturities

oflessthanthreemonths.

AsregardstheGroupstatementofcashflows,cashand

cashequivalentscomprisetheaforementionedcashand

cashequivalentsinadditiontooverdraftsusedbythe

Groupandsecuritiesthatarereadilyconvertibletocash.

Other provisions

Otherprovisionsarerecognisedwhenanobligation

existstowardsathirdparty,settlementofthisobligation

isprobableandareliableestimatecanbemadeofthe

amountoftherequiredprovision.Otherprovisionsare

measuredataggregatecosts.Long-termprovisionswith

morethanoneyeartomaturityarerecognisedattheir

discountedsettlementvalueasatthereportingdate.

pensions

TheGrouphasdirectpensionplansaswellasoneindi-

rectpensionplan.Theindirectpensionplanisserviced

bySIMONASozialwerkGmbH,whichmanagestheplan

assets.TheplanassetsareaccountedforintheGroup

statementoffinancialpositionsuchthatthefairvalue

ofthoseassetsofSIMONASozialwerkGmbHand

SIMONAVermögensverwaltungsgesellschaftderBeleg-

schaftmbHthatfulfiltherequirementsforplanassets


38









Auditor’sReport

OtherInformation

aredeductedfromthebenefitobligationoftheGroup

(fundingcompany)whenmeasuringthepensionprovi-

siontoberecognised.Astherequirementsforplan

assetsspecifiedinIAS19.7havebeenfulfilled,the

deductionoftheplanassetsfromtheobligationofthe

Groupdoesnotgiverisetoanobligationtoconsolidate

onthepartofSIMONASozialwerkGmbHandSIMONA

VermögensverwaltungsgesellschaftderBelegschaft

mbHbecausetheirsolepurposeistoservicethepen-

sionobligations.

Provisionsforpensionsareaccountedforonthebasis

oftheProjectedUnitCreditMethod(sometimesknown

astheaccruedbenefitmethodpro-ratedonserviceor

asthebenefit/yearsofservicemethod)(IAS19).As

partofthisprocess,besidespensionsandbenefits

knownatthereportingdate,expectedfutureincreases

insalariesandpensionsareaccountedforwithsuffi-

cientreliability.Thecalculationisbasedonactuarial

reportsthattakeintoaccountspecificbiometricdata.

Actuarialgainsandlossesarerecognisedasincomeor

expenseifthenetcumulativeunrecognisedactuarial

gainsandlossesattheendofthepreviousreporting

periodexceededthegreaterof10percentofthe

presentvalueofthedefinedbenefitobligationatthat

date(beforedeductingplanassets)and10percentof

thefairvalueofanyplanassetsatthatdate.

Theamountrecognisedasadefinedbenefitliabilityis

thenettotalofthepresentvalueofthedefinedbenefit

obligationattheendofthereportingperiodplusany

actuarialgains(lessanyactuariallosses)notrecog-

nisedminusanypastservicecostnotyetrecognised

minusthefairvalueattheendofthereportingperiod

ofplanassetsoutofwhichtheobligationsaretobe

settleddirectly.

Government grants

Agovernmentgrantisnotrecogniseduntilthereisreas-

onableassurancethattheentitywillcomplywiththe

conditionsattachingtoit,andthatthegrantwillbe

received.Grantsrelatedtoincomearepresentedinthe

incomestatementas“otheroperatingincome”.

revenue recognition

Revenueisrecognisedwhenitisprobablethattheeco-

nomicbenefitsassociatedwithatransactionwillflowto

theGroupandtheamountofrevenuecanbemeasured

reliably.Additionally,thefollowingconditionsmustbe

satisfiedfortherecognitionofrevenue.

a)Saleofgoods

RevenueisrecognisedwhentheGrouphastransferred

tothebuyerthesignificantrisksandrewardsofowner-

shipofthegoods.

b)Interest

Revenueisrecognisedusingtheeffectiveinterestmethod

whentheinterestarises.

taxes

a)Currenttaxassetsandcurrenttaxliabilities

Currenttaxliabilitiesandcurrenttaxassetsforcurrent

andpriorperiodsaremeasuredattheamountexpected

tobepaidtoorrecoveredfromthetaxationauthorities,

usingthetaxratesandtaxlawsthathavebeenenacted

orsubstantivelyenactedbytheendofthereporting

period.

b)Deferredtaxes

Deferredtaxesarerecognisedforalltemporarydiffer-

encesbetweenthecarryingamountofanassetorliabil-

ityinthestatementoffinancialpositionanditstax

baseaswellasinconnectionwithconsolidationproced-

ures.Additionally,adeferredtaxassetisrecognisedfor

alldeductibletemporarydifferencestotheextentthatit

isprobablethattaxableprofitwillbeavailableagainst

whichthedeductibletemporarydifferencecanbeuti-


SIMONAAG(EXCERPT)

01COMPANY

39

lised.Deferredtaxassetsandliabilitiesaremeasured

atthetaxratesthatareexpectedtoapplytotheperiod

whentheassetisrealisedortheliabilityissettled,

basedontaxrates(andtaxlaws)thathavebeen

enactedorsubstantivelyenactedbytheendofthe

reportingperiod.

c)Valueaddedtax

Salesrevenues,expensesandassetsarerecognised

afterdeductionofvalueaddedtax.

derivative financial instruments and hedging

instruments

Derivatefinancialinstrumentsareusedsolelyforhedg-

ingpurposesinordertomitigatecurrencyandinterest

raterisksarisingfromoperatingbusiness.UnderIAS

39,allderivativefinancialinstruments,suchasinterest

rate,currencyandforeignexchangeforwardcontracts

aswellascurrencyoptions,aretobecarriedatfair

value,irrespectiveofthepurposesuchtransactions

havebeenenteredintobytheentity.

Thederivativefinancialinstrumentsdonotfulfilthe

restrictiverequirementsofIAS39applyingtotherecog-

nitionofhedgingrelationships.Therefore,gainsand

lossesarisingfromachangeinthefairvalueofderiva-

tivefinancialinstrumentsarerecognisedimmediatelyin

profitorloss.

Thefairvalueofderivativefinancialinstrumentsiscal-

culatedonthebasisofmarketdataandgenerally

acceptedvaluationmethodologies.Themarketchanges

associatedwithderivativefinancialinstrumentsare

reportedinnetfinancecost/income.


40









Auditor’sReport

OtherInformation

[6] SeGMeNt repOrtING

Forcompanymanagementpurposes,theGroupis

organisedaccordingtogeographicregionsandhasthe

threefollowingreportableoperatingsegments:

�Germany

�RestofEuropeandAfrica

�Asia,AmericaandAustralia

Allthreesegmentsgeneratetheirrevenuesmainly

throughthesaleofsemi-finishedplasticsandpipes,as

wellasfittingsandfinishedparts.

Managementassessestheoperatingresultsofthese

segmentsforthepurposeofmakingdecisionsastothe

distributionofresourcesanddeterminingtheprofitabil-

ityofthebusinessunits.Segmentprofitabilityisdeter-

minedonthebasisofoperatingresultsfromoperating

activitiesbeforetheeffectsoffinancingactivitiesand

excludingincometaxeffects.

Asamatterofcourse,segmentinformationisbased

onthesameprinciplesofpresentationandthesame

accountingpoliciesasthoseappliedtotheconsoli-

datedfinancialstatements.Receivables,liabilities,reve-

nuesandexpensesaswellasprofit/lossbetweenthe

individualsegmentsareeliminatedaspartofreconcilia-

tion.Internaltransferpricingbetweenthebusinessseg-

mentsisdeterminedonthebasisofcompetitivemarket

priceschargedtounaffiliatedthirdparties(regularway

transaction).Externalsalesrevenuerelatestothe

countryinwhichthecustomerisdomiciled.Capital

expenditurerelatestoadditionstointangibleassetsas

wellasproperty,plantandequipment.Segmentassets

andsegmentliabilitiescompriseassetsandliabilities

thatcontributetotheachievementofoperatingprofit.

Depreciationandamortisationofnon-currentassets

relatetobothintangibleassetsandproperty,plantand

equipment.

Thefollowingtablesincludeinformationrelatingtoreve-

nuesandprofitorlossaswellasspecificinformation

regardingassetsandliabilitiesofthesegments.The

differencesinrespectoftheconsolidatedfinancial

statementsarepresentedinthereconciliation.


SIMONAAG(EXCERPT)

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41

Areconciliationbetweensegmentassets,segment

liabilitiesandsegmentprofit/lossandcurrentandnon-

currentassetsandliabilitiesaswellasearningsbefore

taxesispresentedbelow:


SeGMeNt INFOrMAtION – SIMONA GrOup FOr FY 2010

Segmentation by region

Germany rest of europe and Africa

Asia, America and Australia

eliminations Group

in€ ‘000 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009

Revenuefromsalestoexternalcustomers

90,625 76,518 132,689 115,387 44,475 24,319 –387 –1,154 267,402 215,070

Revenuefromsalestoothersegments

14,583 0 48,336 47,097 12,522 5,306 –75,441 –52,403 0 0

Segment revenue 267,402 215,070

Segmentresult 6,546 4,080 3,925 3,836 –402 –597 0 0 10,069 7,319

Segmentassets 123,160 122,362 33,862 31,032 33,138 24,344 190,160 177,738

Segmentliabilities 60,238 62,150 4,315 3,479 5,671 2,482 70,224 68,111

Segmentcapitalexpenditure

3,576 5,323 696 4,023 2,329 3,050 6,601 12,396

Depreciation/amortisation 9,842 12,860* 1,138 925 1,626 769 12,606 14,554

*Depreciation/amortisationincludesimpairmentlossesof€ 1,790thousand

reCONCIlIAtION

in€ ‘000 31/12/10 31/12/09

Segmentassets 190,160 177,738

Otherfinancialassets 10,000 0

Cashandcashequivalents 39,316 61,479

Non-currenttaxassets 3,773 4,320

Currenttaxassets 1,567 889

Deferredtaxassets 173 236

Financialassets 23 23

Current and non-current assets

245,012 244,685

Segmentliabilities 70,224 68,111

Deferredtaxliabilities 5,654 5,271

Incometaxliabilities 1,607 2,638

Non-currentfinancialliabilities 4,848 7,000

Currentfinancialliabilities 313 3,824

Derivativefinancialinstruments 155 295

Current and non-current liabilities

82,801 87,139

Segmentresult 10,069 7,319

Incomefromequityinvestments 500 0

Interestincome 498 506

Interestexpense 579 690

earnings before taxes 10,488 7,135

42









Auditor’sReport

OtherInformation

Information relating to product groups

SAleS reVeNue FrOM eXterNAl CuStOMerS

in € ‘000 2010 2009

Semi-finishedproductsandfinishedparts 196,816 149,534

Pipesandfittings 70,586 65,536

total 267,402 215,070

NOteS tO GrOup INCOMe StAteMeNt

[7] SAleS reVeNue

Salesrevenueisattributablesolelytothesaleofsemi-

finishedplastics,pipesandfittingsaswellasfinished

parts.Theclassificationofsalesrevenuebyregionand

productsegmentisoutlinedinsegmentreporting–

Note[6].

[8] OtHer OperAtING INCOMe

Otheroperatingincomeincludesgovernmentgrantsof

€ 546thousand(prev.year:€ 0).Theywereprovidedby

theCzechstateforthepurposeofpromotinginvest-

mentsintheCzechRepublic.Thegovernmentgrantwas

issuedsubjecttotheprovisothat65newjobsarecre-

atedintheCzechRepublic.InaccordancewithIAS

20.7,thegovernmentgrantwasrecognisedinprofitor

loss,asthereisreasonableassurancethattheGroup

willcomplywiththeconditionsattachingtoit.

[9] StAFF COStS

in € ‘000 2010 2009

Wagesandsalaries 44,243 43,703

Expensesrelatingtosocialsecurity 9,015 9,005

Expensesrelatingtopensions 2,618 2,548

55,876 55,256

[10] reSeArCH ANd deVelOpMeNt eXpeNSeS

Thecostsincurredaspartofresearchanddevelopment

activitiesvaryinnatureandarerecognisedinthe

respectiveitemsoftheGroupincomestatement.Delin-

eationofresearchanddevelopmentcostsfromcosts

incurredwhenimplementingcustomisedproductproper-

tiesisnotpossibleonasystematicbasisduetothe

sameproductionprocessesappliedinbothareas.

Researchanddevelopmentexpensesaremainlycom-

prisedofstaffcosts,materialcostsanddepreciationof

property,plantandequipment.

[11] reNtAl ANd leASING eXpeNSeS

Otheroperatingexpensesincludeexpensesrelatingto

rentalandleaseagreementsamountingto€ 1,961

thousandinthefinancialyearunderreview(prev.year:

€ 1,978thousand).Theexpensesareattributablemainly

totherentalofdispatchwarehousesandproduction

facilities.Therentalagreementshavevariouscontractual

maturities(usually3to15years);someoftherental

agreementsincludeoptionsfortheextensionofrental

periods.Allrentalandleaseagreementsarestructured

asoperatingleaseswithinthemeaningofIAS17.


SIMONAAG(EXCERPT)

01COMPANY

43


[12] Net FINANCe INCOMe

in€ ‘000 2010 2009

Interest income 498 506

ofwhichfromthemeasurementofderivatives 163 76

ofwhichfromloansandreceivables 335 430

in€ ‘000 2010 2009

Interest expense 579 690

ofwhichfromborrowingsandfinancialliabilities 579 690

[13] INCOMe tAXeS

Theprincipalelementsofincometaxexpenseforthe

2010and2009financialyearsareasfollows:

GrOup INCOMe StAteMeNt

in€ ‘000 2010 2009

Current tax

Currenttaxexpense 2,780 4,185

Adjustmentsofcurrenttaxattributabletopreviousperiods 230 –80

Incomefrommeasurementofcreditsforthereductionofcorporationtax –193 –214

deferred tax

Originationandreversaloftemporarydifferences 446 –1,778

Income tax expense reported in Group income statement 3,263 2,113

Reconciliationbetweenincometaxexpenseandthe

productofprofitfortheyearcarriedinthestatementof

financialpositionandthetaxrateapplicabletothe

Groupforthe2010and2009financialyearsisas

follows:

in€ ‘000 2010 2009

earnings before taxes 10,488 7,135

IncometaxexpenseatGermantaxrateof29.13%(prev.year28.43%) 3,055 2,028

Adjustmentsofcurrenttaxattributabletopreviousperiods 230 –80

Taxeffectofnon-deductibleexpenses 20 26

Taxratedifferences –526 –125

Incomefrommeasurementofcreditsforthereductionofcorporationtax –193 –214

Losscarryforwardsusedinconnectionwithdeferredtaxassetsnotrecognisedinpreviousyear –136 –116

Unrecogniseddeferredtaxassetsrelatingtotaxlosses 1,006 532

Tax-freedividendincome –207 0

Other 14 62

Income tax expense at effective tax rate of 31.11%(prev. year 29.61%) 3,263 2,113

Income tax expense reported inGroup income statement 3,263 2,113

44









Auditor’sReport

OtherInformation

At31December2010,thepotentialcreditforthe

reductionofcorporationtax,whichresultsfromthepro-

visionssetoutinSection37and38KStGandistobe

disclosedinaccordancewithIAS12.82A,was€ 5,175

thousand(prev.year:€ 5,914thousand).Intheperiod

underreview,thecreditforthereductionofcorporation

taxwasmeasuredatthepresentvalueof€ 4,492thou-

sand(prev.year:€ 5,037thousand).Payoutsinconnec-

tionwiththecorporationtaxcreditswillbemadein

sevenremainingannualinstalmentsof€ 739thousand

p.a.intheperiodfrom2011to2017.Totheextentthat

thesepaymentsdonotfallduewithinoneyear,the

itemsareaccountedforinthestatementoffinancial

positionasnon-currentassets.Paymentsduewithin

oneyeararecarriedascurrentassets.

deferred tax

Thedeferredtaxliabilitiesandassetsfortheperiod

underreviewareoutlinedbelow:

Group statement of financial position

Group income statement

in€ ‘000 31/12/10 31/12/09 2010 2009

deferred tax liabilities

Non-currentassets 7,758 7,954 –196 –700

Inventories 3,031 1,677 1,354 –780

Receivablesandotherassets 261 168 93 –93

Otherprovisionsandliabilities 18 52 –34 –99

Otheritems 0 0 0 –211

11,068 9,851 1,217 –1,883

deferred tax assets

Provisionsforpensions 4,626 3,565 –1,061 59

Otherprovisionsandliabilities 393 490 97 20

Inventories 455 465 10 115

Losscarryforward 47 179 132 –118

Otheritems 66 117 51 29

5,587 4,816 –771 105

afterset-off:

deferred tax assets 173 236

deferred tax liabilities –5,654 –5,271

deferred tax expense(prev. year: deferred tax income) 446 –1,778


SIMONAAG(EXCERPT)

01COMPANY

45


Deferredtaxassetsanddeferredtaxliabilitiesareoff-

settotheextentthatthecompanyhasalegallyenforce-

ablerighttosetoffcurrenttaxassetsagainstcurrent

taxliabilitiesandthedeferredtaxassetsandthe

deferredtaxliabilitiesrelatedtoincometaxesleviedby

thesametaxationauthority(IAS12.74).

Attheendofthereportingdate,losscarryforwards

amountedto€ 12,544thousand(prev.year:€ 10,990

thousand).Deferredtaxassetsof€ 47thousand(prev.

year:€ 179thousand)wererecognisedfor€ 271thou-

sand(prev.year:€ 1,147thousand)ofthelosscarry-

forwardsmentionedabove.Beyondthis,noother

deferredtaxassetswererecognised,asthelossesmay

notbeusedforthepurposeofset-offwiththetaxable

profitofotherGroupcompanieswhoseearningssitua-

tionisunlikelytoimprovesosignificantlyintheshort

termthatfuturetaxableprofitwillbeavailableagainst

whichtheunusedtaxlossescanbeutilised.

eXpIrY dAte OF tAX lOSS CArrYFOrWArdS

in€ ‘000 2010 2009

Between3and20years 11,579 10,452

Indefinitecarryforward 965 538

12,544 10,990

[14] eArNINGS per SHAre

Forthecalculationofbasicearningspershare,the

profitorlossattributabletoordinaryequityholdersof

theparententitysharesisdividedbytheweightedaver-

agenumberofordinarysharesoutstandingduringthe

year.Therewerenodilutiveeffectsinthe2010or2009

reportingperiods.

Thefollowingtablepresentstheamountsrelevantto

thecalculationofbasicanddilutedearningspershare:

in€ ‘000orunitsof1,000 2010 2009

Profitorlossattributabletoordinaryequityholdersoftheparentcompany 7,198 4,988

Weightedaveragenumberofordinaryshares(withouttreasuryshares)forthepurposeofcalculatingbasicearningspershare 600 600

Dilutiveeffects 0 0

Weightedaveragenumberofordinaryshares(withouttreasuryshares)forthepurposeofcalculatingdilutedearningspershare 600 600

Basicearningspershare(ineuro) 12.00 8.31

Dilutedearningspershare(ineuro) 12.00 8.31

Notransactionswithordinarysharesoccurredbetween

thereportingdateandthepreparationoftheconsoli-

datedfinancialstatements.

[15] pAId ANd prOpOSed dIVIdeNdS

Duringthefinancialyearadividend,attributabletothe

ordinarysharesoftheparentcompany,intheamountof

€ 6.00persharewasdeclaredanddistributed.The

totalpaymentmadeinthefinancialyearunderreview

amountedto€ 3,600thousand(prev.year:€ 5,100

thousand).

Adividendproposalof€ 6.50pershare(prev.year:

€ 6.00pershare)willbesubmittedtotheAnnualGen-

eralMeetingofShareholders.Theproposedtotaldivi-

dendwasnotrecognisedasaliabilityatthereporting

date.Thecorrespondingpaymentwouldtotal€ 3,900

thousand(prev.year:€ 3,600thousand).

46









Auditor’sReport

OtherInformation

NOteS tO tHe GrOup StAteMeNt OF FINANCIAl

pOSItION

[16] INtANGIBle ASSetS

31 deCeMBer 2010

in€ ‘000patents and

licences Goodwill total

Balanceat1January2010(Costofpurchase/conver-sion,takingintoaccountaccumulatedamortisationandimpairments) 1,269 143 1,412

Additions 89 0 89

Amortisationduringthefinancialyear –277 0 –277

Effectsofchangesinforeigncurrencyexchangerates 70 0 70

Balance at 31 december 2010 (Cost of purchase/conversion, taking into account accumulated amortisation and impair-ments) 1,151 143 1,294

Balanceat1January2010

Costofpurchase/con-version(grosscarryingamount) 8,460 143 8,603

Accumulatedamortisation –7,191 0 –7,191

Carrying amount 1,269 143 1,412

Balanceat31December2010




Inaccordancewiththemethodappliedintheprevious

year,patentsandlicencesareamortisedsystematically

overtheireconomiclifeofthreetofiveyearsbyusing

thestraight-linemethod.

31 deCeMBer 2009

in€ ‘000patents and

licences Goodwill total

Balanceat1January2009(Costofpurchase/conver-sion,takingintoaccountaccumulatedamortisationandimpairments) 1,355 143 1,498

Additions 834 0 834

Amortisationduringthefinancialyear –920 0 –920

Balance at 31 december 2009 (Cost of purchase/conversion, taking into account accumulated amortisation and impair-ments) 1,269 143 1,412










SIMONAAG(EXCERPT)

01COMPANY

47


[17] prOpertY, plANt ANd eQuIpMeNt

31 deCeMBer 2010

in€ ‘000land and buildings

plant and equipment total

Balanceat1January2010(Costofpurchase/conver-sion,takingintoaccountaccumulateddepreciationandimpairments) 33,938 58,901 92,839

Additions 471 6,041 6,512

Disposals –19 –864 –883

Depreciationduringthefinancialyear –2,006 –10,323 –12,329

Effectsofchangesinfor-eigncurrencyexchangerates 1,003 984 1,987

Balance at 31 december 2010 (Cost of purchase/conversion, taking into account accumulated depreciation and impair-ments) 33,387 54,739 88,126


Costofpurchaseorconversion 60,888 196,577 257,465

Accumulateddepreciationandimpairments –26,950 –137,676 –164,626

Carrying amount 33,938 58,901 92,839




Carrying amount 33,387 54,739 88,126

31 deCeMBer 2009

in€ ‘000land and buildings

plant and equipment total

Balanceat1January2009(Costofpurchase/conver-sion,takingintoaccountaccumulateddepreciationandimpairments) 28,782 66,819 95,601

Additions 6,818 4,744 11,562

Disposals –20 –426 –446

Depreciationduringthefinancialyear* –1,544 –12,090 –13,634

Effectsofchangesinfor-eigncurrencyexchangerates –98 –146 –244

Balance at 31 december 2009 (Cost of purchase/conversion, taking into account accumulated depreciation and impair-ments) 33,938 58,901 92,839




Carrying amount 28,782 66,819 95,601




Carrying amount 33,938 58,901 92,839

*Depreciationoftechnicalequipmentaswellasoperatingandofficeequip-mentforthefinancialyear2009includesimpairmentlossesof€ 1,790thousand.Theimpairmentlosshasbeenallocatedtothesegment“Germany”(pleaserefertoNote[6]).Theimpairmentlossof€ 1,790thousandrecognisedinthe2009financialyearrelatestothereductionofthecarryingamountofspecificitemsofproperty,plantandequipmentwithintheareaof“PVC”totherecoverableamountduetoexpectednegativecashflows.Theimpairmentlosswasrecognisedintheincomestatementasdepreciationofproperty,plantandequipment,andamortisationofintangibleassets.Therecoverableamountwasdeterminedonthebasisofthevalueinuse.

48









Auditor’sReport

OtherInformation

Theusefullivesoftheassetswereestimatedasfol-

lows:

Buildings 20–40years

Plantandequipment 5–20years

Otheroperatingincomeincludesgainsof€ 109thou-

sand(prev.year:€ 430thousand)fromthedisposalof

property,plantandequipment;otheroperatingexpense

includeslossesof€ 139thousand(prev.year:€ 209

thousand)fromthedisposalofproperty,plantandequip-

ment.

[18] INVeNtOrIeS

in€ ‘000 31/12/10 31/12/09

Rawmaterialsandconsumablesused 14,601 12,904

Finishedgoods 35,914 31,090

Inventories 50,515 43,994

Inthe2010financialyearinventoryimpairmentsfellby

€ 402thousandto€ 2,828thousandcomparedto31

December2009.Thecostofmaterialsincludesex-

pensesrelatingtorawmaterialsandconsumablesin

theamountof€ 153,861thousand(prev.year:

€ 103,082thousand).

[19] trAde reCeIVABleS

Tradereceivablesarenotinterest-bearingandaregener-

allyduewithin30to90days.

in€ ‘000 31/12/10 31/12/09

Carrying amount 41,845 33,320

ofwhichnotimpairedatthereport-ingdateandpastduewithinthefol-lowingtimeranges

•upto30days 4,853 3,512

•between31and60days 2,322 884

•between61and90days 470 408

•between91and120days 595 72

•morethan120days 1,075 916

Asregardsthetradereceivablesthatwereneither

impairednorpastdue,therewerenoindicationsatthe

reportingdatethatcustomerswillfailtomeettheirpay-

mentobligations.

Thechangestovaluation allowances for trade receiv-

ablesareoutlinedbelow:

in€ ‘000 31/12/10 31/12/09

Balanceofspecificallowancesat1January 919 894

Exchangedifferences +11 +7

Allocated +284 +183

Utilised –4 –28

Reversed –59 –137

Balance of specific allowances at 31 december 1,151 919


SIMONAAG(EXCERPT)

01COMPANY

49


Thefollowingtableincludesexpensesattributableto

thederecognitionoftradereceivablesaswellasincome

fromamountsreceivedinconnectionwithderecognised

tradereceivables.Expensesattributabletothederecog-

nitionoftradereceivablesarereportedasotheroperat-

ingexpenses,whileincomeattributabletoamounts

receivedinconnectionwithderecognisedtradereceiv-

ablesisaccountedforasotheroperatingincome.

in€ ‘000 2010 2009

Expensesattributabletothederecognitionoftradereceivables 263 82

Incomeattributabletoamountsreceivedinconnectionwithderecognisedtradereceiv-ables 45 35

[20] NON-CurreNt tAX ASSetS AS Well AS OtHer

ASSetS ANd prepAId eXpeNSeS

OtHer ASSetS ANd prepAId eXpeNSeS

in€ ‘000 31/12/10 31/12/09

Otherreceivables 9,401 6,139

Receivablesfromotherlong-terminvesteesandinvestors 62 58

Prepaidexpenses 484 705

Other assets and prepaid expenses 9,947 6,902

Otherreceivablesincludereimbursementrightsin

respectofsalestaxaswellasbonusreceivablesfrom

suppliers.Atthereportingdate,otherassetswere

neitherimpairednorpastdue.

Non-currenttaxassetsincludetheduereimbursement

rightinrespectofcreditsforthereductionofcorporation

taxrelatingtoSEStEGthatisnotduewithinoneyear.

[21] CASH ANd CASH eQuIVAleNtS

in€ ‘000 31/12/10 31/12/09

Bankbalancesandcashonhand 39,316 61,479

Cash and cash equivalents 39,316 61,479

Bankbalancesbearinterestonthebasisoffloating

interestratesapplicabletobalancespayableon

demand.

At31December2010,theGrouphadundrawnborrow-

ingfacilitiesof€ 6,600thousand(prev.year:€ 6,829

thousand).

[22] eQuItY

Changesinequityarepresentedinaseparatestate-

mentofchangesinequity.

Issued capital

Asat31December2010,thesharecapitalofSIMONA

AGwasdividedinto600,000no-par-valueshares.

Thesesharesareclassifiedasordinarybearershares.

Eachno-par-valuesharehasanotionalinterestof

€ 25.83inthecompany’ssharecapital.Theordinary

shareshavebeenissuedandfullypaidin.

in€ ‘000 31/12/10 31/12/09

Sharecapital 15,500 15,500

Issuedcapital 15,500 15,500

OtHer reSerVeS

in€ ‘000 31/12/10 31/12/09

Currencytranslationeffects –260 –1,225

Otherreserves –260 –1,225

50









Auditor’sReport

OtherInformation

Otherreservesincludecurrencytranslationeffectsattrib-

utabletoexchangedifferencesoccurringupontranslation

ofthefinancialstatementsofforeignsubsidiaries.

[23] FINANCIAl lIABIlItIeS

in€ ‘000 due date 31/12/10 31/12/09

Current liabilities

Pro-rataloanofUSD3million(principalrepaymentsdueby31/12/11) 09/2011 249 231

LoanofUSD5million(nominalamount) 09/2010 0 3,471

Pro-rataloanofUSD210thousand(principalrepaymentsdueby31/12/11)

01/2011-12/2011 24 22

LiabilitiesfromdeferredinterestattributabletoUSDloans(currentliabilities) 03/2011 35 85

LiabilitiesfromdeferredinterestattributabletoGBPloans(currentliabilities) 04/2010 0 15

Bankoverdrafts ondemand 5 0

313 3,824

Non-current liabilities

LoanofUSD5million(nominalamount) 12/2013 3,742 3,471

Pro-rataloanofUSD3million(principalrepaymentsdueafter31/12/11)

09/2012-09/2015 998 1,157

LoanofGBP2million(nominalamount) 0 2,252

Pro-rataloanofUSD210thousand(principalrepaymentsdueafter31/12/11)

01/2012-10/2016 108 120

4,848 7,000

Fixedorfloatinginterestratesofbetween4.9percent

and6.8percenthavebeenagreedinrespectofthe

interest-bearingloans.Interestiscomputedeitheron

thebasisofthenominalvalueoftheloanortheremain-

ingamountoftheloan.

TheloanofGBP2million(nominalamount)wasfully

extinguishedduringthefinancialyear2010.

[24] peNSIONS

ThemajorityofemployeeswithintheSIMONAGroupare

entitledtopost-employmentbenefitsattributabletopen-

sionplanagreements.Theaforementionedplansare

structuredasfinalsalarypensionplansinthecaseof

bothpersonnelemployedonthebasisofcollective

wageagreementsandmanagerialstaff,includingmem-

bersandformermembersoftheManagementBoard.

WiththeexceptionofpaymentstoSIMONASozialwerk

GmbH(cf.Note[25]),nocontributionsaremadeto

funds.

Thefollowingtableincludesabreakdownofthe

expenseitemsrecognisedintheGroupincomestate-

mentinconnectionwithretirementbenefitsaswellas

theamountscarriedintheGroupstatementoffinancial

positionfortherespectiveplans.

Expensesincludedinstaffcostsforretirementbenefits:

in€ ‘000 2010 2009

Currentservicecost 934 947

Interestcost 1,733 1,672

Actuarialgain –49 –71

Cost of retirement benefits 2,618 2,548


SIMONAAG(EXCERPT)

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Thechangesinthepresentvalueofdefinedbenefitobli-

gationsareasfollows:

in€ ‘000 31/12/10 31/12/09

Obligationatbeginningofreportingperiod 38,335 37,505

Currentservicecost 934 947


Actuarialgain –49 –71

Benefitspaid –1,383 –1,718

Obligationsatendofreportingperiod 39,570 38,335

–ofwhichnon-currentliability 38,322 36,698

–ofwhichcurrentliability 1,248 1,637

TheGroupanticipatesexpensesof€ 2,388thousand

inconnectionwithdefinedbenefitpensionplansforthe

2011financialyear.

Actuarialgainsandlossesareoffsetinprofitorlossto

theextentthattheyexceedthe10percentcorridor.As

fromthesubsequentperiod,theportionofactuarial

gainsandlossesexceedingthiscorridorisoffsetover

thefutureaverageremainingworkinglifeoftheem-

ployees.

lIABIlItIeS AttrIButABle tO deFINed BeNeFIt OBlIGAtIONS

in€ ‘000 31/12/10 31/12/09

Presentvalueofdefinedbenefitobligations 32,946 34,022

Unrecognisedactuarialgainsattributabletotheobligations –6,625 –4,313

Liabilitiesattributabletodefinedbenefitobligations 39,570 38,335

Thepresentvaluesofthedefinedbenefitobligations

ofthecurrentandthepreviousfourannualreporting

periodsareasfollows:

in€ ‘000 2010 2009 2008 2007 2006

Presentvalueofdefinedbenefitobligations 32,946 34,022 32,826 33,598 37,123

Theassumptionsmadeforthepurposeofdetermining

thepensionobligationsareasfollows:

in€ ‘000 31/12/10 31/12/09

Discountrate 5.15% 5.25%

Salaryincrease 2.5% 2.0%

Pensionadjustments 1.5% 1.5%

Mortality(mortalitytablespublishedbyK.Heubeck) 2005G 2005G

[25] COMpANY WelFAre INStItutIONS

SIMONASozialwerkGmbHisstructuredasalong-term

employeebenefitfundwithinthemeaningofIAS19.7.

UndertheArticlesofAssociation,theentityoperates

solelyforthepurposeofensuringthatformeremployees

ofSIMONAAGaswellastheirdependantsreceive

retirementbenefits.Thebeneficiariesofpensionsare

entitledtoalltheassetsbelongingtotheentityaswell

asallincomederivedfromtheseassetswhiletheentity

isinexistenceaswellasinthecaseofliquidationor

insolvencyoftheentity.SIMONAAGhasnoaccess

rightstoassetsheldbySIMONASozialwerkGmbH.In

theeventofliquidationoftheentity,theentity’sassets

aretobeallocatedtotherecipientsofbenefitsorare

tobesecuredforthepurposeofprovidingfuturebene-

fitsforsaidrecipients.Thus,evenintheeventthat

SIMONAAGbecomesinsolvent,thecreditorsidentified

inconnectionwithinsolvencyhavenorightsinrespect

oftheassetsofSIMONASozialwerkGmbH.

52









Auditor’sReport

OtherInformation

TheassetsofSIMONAVermögensverwaltungsgesell-

schaftderBelegschaftmbHmaybeutilisedsolelyfor

benefit-relatedpurposesrelatingtoSIMONASozialwerk

GmbH.

in€ ‘000 31/12/10 31/12/09

Presentvalueofdefinedbenefitplansatthebeginningoftheyear 28,500 26,603

Currentservicecost 1,158 1,188


Benefitspaid –723 –704

present value of defined benefit plans at the end of the year 30,412 28,500

Marketvalueoffundassetsatthebeginningoftheyear 38,597 39,074

Disposalsoffinancialassets –723 –704

Returnonfundassets 1,334 227

Marketvalueoffundassetsattheendoftheyear 39,208 38,597

Surplusplanassets 8,796 10,097

Asregardsthebasicassumptionsfordeterminingthe

pensionobligations,pleaserefertothedetailsinNote

[24].

Thesurplusrelatingtoplanassetsisnotaccountedfor

intheconsolidatedfinancialstatementsofSIMONAAG,

asSIMONAAGhasnocontrolovertheseassets.In

accordancewiththeprovisionssetoutinIAS19.7,the

planassetsareavailabletobeusedonlytopayorfund

employeebenefits.

Thefairvalueoftheplanassetsincludessharesin

SIMONAAGwithafairvalueof€ 18,900thousand

(prev.year:€ 18,900thousand)asat31December

2010.

ASSetS/ (lIABIlItIeS) AttrIButABle tO deFINed BeNeFIt OBlIGAtIONS

in€ ‘000 31/12/10 31/12/09

Definedbenefitobligations –30,412 –28,500

Fairvalueofplanassets 39,208 38,597

Overfunded 8,796 10,097

Unrecognisedactuariallossesattributabletotheobligations 1,620 42

Assets attributable to defined benefit obligations 10,416 10,139

Theamountsofthedefinedbenefitobligationsandthe

planassetsrelatingtothecurrentandthefourprevious

annualreportingperiodsareasfollows:

in€ ‘000 2010 2009 2008 2007 2006

Presentvalueofdefinedbenefitobligations –30,412 –28,500 –27,327 –27,381 –30,184

Fairvalueofplanassets 39,208 38,597 39,074 40,276 37,400

8,796 10,097 11,747 12,895 7,216


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53


[26] OtHer prOVISIONS

Personnel-relatedprovisionsencompassobligationsin

connectionwithagreementsregardingpart-timeemploy-

mentofstaffapproachingretirement,provisionsrelating

toanniversariesaswellasobligationsfromflexitime

surplusesaccumulatedbyemployees.Withtheexcep-

tionofprovisionsforflexitimesurpluses,personnel-

relatedprovisionsaremeasuredonthebasisofactuar-

ialdata.

Atthereportingdate,obligationsinconnectionwith

agreementsregardingpart-timeemploymentofstaff

approachingretirementamountedto€ 3,748thousand

(prev.year:€ 4,161thousand).Thisitemiscomposed

ofobligationsforperformance-relatedarrears,addi-

tionalcompensationandseverancepayments.

Provisionsforguaranteesarerecognisedinconnection

withwarrantiesforproductssoldinprecedingyears.

Guarantee-relatedprovisionsatSIMONAAGarerecog-

nisedforongoing,regularlyoccurringwarrantycasesas

wellasforindividualcasesthatoccuronanirregular

basisandareassociatedwiththeriskofabove-average

claims.

Asregardsregularlyoccurringwarrantycases,aprovi-

sioniscalculatedonthebasisofexperienceoverwhat

isadjudgedtobeaprobableaverageclaimperiodof5

years.Forthepurposeofmeasuringtheprovision,the

expensesactuallyincurredinconnectionwithcustomer

credits/refundsfromwarrantyobligationsaswellasthe

thusresultingdirectcostsofprocessingacomplaintare

analysedindetail.Withinthiscontext,theweightedaver-

agewarrantyexpenseofthepast5yearsisusedforcal-

culationpurposes.

Theportionofwarrantyprovisionscalculatedinrespect

ofindividualcasesoccurringonanirregularbasisis

recognisedonlywhentheutilisationoftheprovisionis

consideredlikely,apaymentrelatingtheretoisdeemed

probableandareliableestimatecanbemade.

Theportionofthewarrantyprovisionwhoseutilisationis

notduewithinoneyearafterthereportingdateisdis-

counted.

In2009,otherprovisionsincludedprovisionsof€ 3,294

thousandinconnectionwithrestructuringmeasuresat

theKirchhundem-Würdinghausenplant,whichwasclosed

downon30September2010.In2010,anamountof

€ 3,060thousandrelatingtotheprovisionwasutilised.

Additionally,anallocationof€ 156thousandwas

made;itisincludedinotheroperatingexpensesandis

attributablesolelytothesegment“Germany”.The

remainingprovisionamountsto€ 390thousand.

[27] StAteMeNt OF CASH FlOWS

Thestatementofcashflowspresentschangestocash

andcashequivalentsduringthefinancialyearbyoutlin-

ingcaseinflowsandoutflows.InaccordancewithIAS7,

in€ ‘000

per-sonnel-related obliga-

tions

Guaran-tees/

warran-ties

Other items total

Balance at 1 January 2010 4,944 3,153 3,590 11,687

Allocated 1,872 877 158 2,907

Used 1,556 691 3,329 5,576

Reversed 400 24 23 447

Balance at 31 december 2010 4,860 3,315 396 8,571

Short-termprovisions 1,424 721 390 2,535

Long-termprovisions 3,436 2,594 6 6,036

Balance at 31 december 2010 4,860 3,315 396 8,571

Short-termprovisions 1,455 715 3,538 5,708

Long-termprovisions 3,489 2,438 52 5,979

Balance at 31 december 2009 4,944 3,153 3,590 11,687

54









Auditor’sReport

OtherInformation

thestatementofcashflowsincludesinformationrelat-

ingtocashflowsfromoperatingactivities,investing

activitiesandfinancingactivities.

Asat31December,totalcashandcashequivalents,

togetherwithcurrentfinancialliabilities,wereasfollows:

in€ ‘000 31/12/10 31/12/09

Cashandcashequivalents 39,316 61,479

Currentfinancialliabilities(excludingliabilitiesattributabletoloans)

–40 –100

39,276 61,379

Theeffectsofchangestocashandcashequivalents

attributabletoexchangerateswere€ 734thousand

(prev.year:minus€ 190thousand)atGrouplevel.

Cashflowsfrominvestingandfinancingactivitiesare

accountedfordirectly,i.e.onapaymentsbasis.Cash

flowsfromoperatingactivitiesaredeterminedindirectly

onthebasisofearningsbeforetaxes,i.e.viachanges

totheGroupstatementoffinancialposition,having

accountedfortheeffectsofcurrencytranslation.

[28] relAted-pArtY dISClOSureS

EntitiesandpersonswithcontrolovertheSIMONA

Group,aswellasassociatedentitiesandpersons,

includingclosemembersofthefamilyandintermediate

entities,withsignificantinfluenceoverthefinancialand

operatingpoliciesoftheSIMONAGrouparetobedis-

closedinaccordancewithIAS24.

Management Board

�WolfgangMoyses,ChairmanoftheManagement

Board,Kirn

� DirkMöller,DeputyChairmanoftheManagement

Board(since1May2010),Kirn

� DetlefBecker,Saarbrücken

� JochenFeldmann,Kirn(until10August2010)

Supervisory Board

� Hans-WernerMarx,Kirn,Merchant

ChairmanoftheSupervisoryBoard

� Dr.RolfGößler,BadDürkheim,Diplom-Kaufmann

DeputyChairmanoftheSupervisoryBoard

MemberoftheSupervisoryBoardofJ.Engelsmann

AG,Ludwigshafen

� RolandFrobel,Isernhagen,ManagingDirectorof

DirkRossmannGmbH,Burgwedel

MemberoftheSupervisoryBoardofDeutsche

BeteiligungsAG,Frankfurt(since23March2011)

� Dr.RolandReber,Stuttgart,

ManagingDirectorofEnsingerGmbH,Nufringen

� BerndMeurer,Hennweiler,EmployeeRepresentative

� Karl-ErnstSchaab,Bergen,EmployeeRepresentative

(until31August2010)

DirkMöllerisashareholder(11.64percentofsharesin

SIMONAAG)andamemberoftheManagementBoardof

SIMONAAG.Additionally,Mr.Möllerperformsexecutiveor

controllingdutieswithintheindividualcompaniesofthe

SIMONAGroup:

� SIMONAPlast-Techniks.r.o.,Litvinov,(1),

� SIMONAAMERICAInc.,Hazleton,(2),

� SIMONAFAREASTLtd.,HongKong,(2),

� SIMONAENGINEERINGPLASTICSTRADINGCo.Ltd.,

Shanghai,(2),

� SIMONAASIALtd.,HongKong,(2),

� SIMONAENGINEERINGPLASTICSCo.Ltd.,

Jiangmen,(2)

Thedutiesasanexecutiveorcontrollingbodyareasfol-

lows:(1)ManagingDirector/GeneralManager,(2)Mem-

beroftheBoardofDirectors.

Dr.RolandReber,memberoftheSupervisoryBoardof

SIMONAAG,isalsotheManagingDirectorofEnsinger

GmbH,Nufringen.Thetwoentitiesmaintainbusiness

relationswitheachotheronarm’slengthterms.Inthe


SIMONAAG(EXCERPT)

01COMPANY

55


financialyearunderreview,productsalesamountingto

€ 189thousandweretransactedbetweenSIMONAAGand

EnsingerGmbH,Nufringen.

Beyondthis,companiesoftheSIMONAGroupenteredinto

nosignificanttransactionswithmembersoftheManage-

mentBoardortheSupervisoryBoardofSIMONAAGand/

orentitiestowhichthesepersonshavebeenappointedin

anexecutiveorcontrollingcapacity.Thisalsoappliesto

closefamilymembersoftheaforementionedpersons.

Aspartofitsordinaryoperatingactivities,SIMONAAGpro-

videsvariousservicesforthesubsidiariesincludedinthe

consolidatedfinancialstatements.Conversely,therespect-

iveGroupcompaniesrenderserviceswithintheSIMONA

Groupinthecontextoftheirbusinesspurpose.These

businesstransactionsrelatingtothesupplyofgoodsand

therenderingofservicesaremadeatmarketprices.

On10June2010,Dr.WolfgangundAnitaBürkleStiftung,

Kirn,notifiedthecompanyinaccordancewithSection

21(1)oftheGermanSecuritiesTradingAct(Wertpapierhan-

delsgesetz–WpHG)thatitsvotingpowerinrespectof

SIMONAAGhadexceededthethresholdof15percent,20

percent,25percentand30percentofthevotingrights

on13May2010andthatatthisdateitsinterestwas

30.79percent(correspondingto184,739votingrights).

On10June2010,Dr.WolfgangundAnitaBürkleStiftung

filedanapplicationwiththeFederalFinancialSupervisory

Authority(BundesanstaltfürFinanzdienstleistungsaufsicht

–BaFin)forexemptionpursuanttoSection37(1)and(2)

oftheSecuritiesAcquisitionandTakeoverAct(Wert-

papiererwerb-undÜbernahmegesetz–WpÜG)inconjunc-

tionwithSection9sentence1no.1oftheWpÜGOffer

Ordinance(WpÜG-Angebotsverordnung).Onthebasisofan

officialNoticeissuedbytheFederalFinancialSupervisory

Authorityon22July2010,Dr.WolfgangundAnitaBürkle

StiftungwasexemptedfromitsdutiesunderSection35(2)

sentence1WpÜGtosubmitanofferdocumenttotheFed-

eralFinancialSupervisoryAuthorityanditsdutiesunder

Section35(2)sentence2inconjunctionwithSection

14(2)sentence1WpÜGtopublishamandatoryoffer.This

exemptionwasgrantedunderSection37(1)and(2)WpÜG

inconjunctionwithSection9sentence1no.1WpÜG

OfferOrdinanceinrespectofthecontrolgainedover

SIMONAAGfollowingthetestamentarysuccessionof13

May2010.Withtheexceptionofthedividendpaymentof

€ 6.00pershare(totalof€ 1,109thousand),noother

businessrelationsexistedwithDr.WolfgangundAnita

BürkleStiftung,Kirn,inthefinancialyearunderreview.

Compensation of members of the Management Board

and Supervisory Board

TotalManagementBoardcompensationamountedto

€ 1,553thousandintheperiodunderreview(prev.year:

€ 1,296thousand).Itcomprises€ 1,034thousand(prev.

year:€ 988thousand)infixed-levelcompensationand

€ 519thousand(prev.year:€ 308thousand)inbonus

payments.Thecompanydoesnotgrantloanstomembers

oftheManagementBoard.

Post-employmentbenefitsof€ 7,756thousand(prev.

year:€ 8,507thousand)havebeenprovisionedforactive

membersoftheManagementBoard,formermembersof

theManagementBoardandtheirsurvivingdependants.

CompensationofformerManagementBoardmembers

andtheirsurvivingdependantsamountedto€ 592thou-

sand(prev.year:€ 853thousand).

SupervisoryBoardcompensationatGroupleveltotalled

€ 121thousandinthe2010financialyear(prev.year:

€ 121thousand).SupervisoryBoardcompensation

encompassesnovariablecomponents.

56









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OtherInformation

[29] FINANCIAl rISK MANAGeMeNt OBJeCtIVeS

ANd pOlICIeS

principles of risk management

Someoftheassets,liabilitiesandplannedtransactionsof

SIMONAAGareexposedtorisksassociatedwithchangesto

foreignexchangeratesandinterestrates.

Theprincipalaimoffinancialriskmanagementistomitigate

risksattributabletoongoingoperatingandfinance-related

transactions.

Dependingontherisk,theaimistorestrictthelevelof

associatedriskbymeansofderivativefinancialinstruments

andnon-derivativehedginginstruments.Allhedginginstru-

mentsareusedsolelyforthepurposeofhedgingcashflows.

Interest-rate risk

Thefinancialinstrumentsexposedtointerest-raterisk

includeshort-termbankoverdraftsaswellasafloating-rate

USdollarloan.Inthe2010financialyear,theinterest-rate

riskassociatedwiththeseinstrumentswasmitigateden-

tirelybymeansofinterestratederivatives(interestrate

swaps),aswasthecaseinthepreviousfinancialyear.In

accordancewithIFRS7,interest-raterisksareaddressedin

theformofsensitivityanalyses.Thesepresenttheeffects

ofchangesinmarketinterestratesoninterestincome,inter-

estexpenseanditemsinthestatementoffinancialposi-

tion.Astheinterestratederivatives(interestrateswaps)

arenotpartofahedgingrelationshipasdescribedinIAS

39,changesarerecogniseddirectlyinfinanceincomeor

cost.

HadthemarketinterestrateoftheUSdollarbeen100

basispointshigherorlowerat31December2010,thenet

financeresultwouldhavebeen€ 32thousandhigherand

€ 34thousandlowerrespectively.

HadthemarketinterestrateoftheUSdollarbeen100

basispointshigherorlowerat31December2009,thenet

financeresultwouldhavebeen€ 60thousandhigherand

€ 62thousandlowerrespectively.

Currency risks

TheSIMONAGroupisexposedtorisksassociatedwith

exchangeratefluctuationswithintheareaofinvestingand

financingactivities.Risksattributabletoforeigncurrencies

arehedgedtotheextentthattheyaffectthecashflowsof

theGroup.Theriskofexchangeratefluctuationsassoci-

atedsolelywiththetranslationofassetsandliabilitiesinto

thereportingcurrencyoftheconsolidatedfinancialstate-

ments(euros)remainsunhedged.

Exchangeraterisksattributabletothefinanceareaexist

withregardtotheoriginationofaUSdollarloaninDecem-

ber2008forthebenefitofanAsiansubsidiary,whichhas

accountedforanintercompanyreceivableinthesame

amount.Therefore,theaggregateunhedgedcurrencyrisk

remainsbalanced.

Atanoperatinglevel,therespectiveentitieswithinthe

Groupconductthemajorityoftheirbusinesstransactions

intheirfunctionalcurrency.Theparentcompanyisrespon-

siblealmostsolelyformanagingtransactionsinforeign

currenciesandhedgestheseactivitieswithinspecified

parametersaspartoftreasurymanagement.Asatthe

reportingdate,noforeignexchangeforwardcontractsand

currencyoptionswereusedforthepurposeofhedging

currencyrisksassociatedwithoperatingactivities.

IFRS7requiresentitiestopresentriskonthebasisof

sensitivityanalyses.Theseanalysesshowhowprofitor

lossandequitywouldhavebeenaffectedbychangesin

therelevantriskvariablethatwerereasonablypossibleat

theendofthereportingdate.Exchangeratemovements

mayoccurinthecaseofprimaryfinancialinstrumentsthat

arebeyondthehedgedparametersorthatarehedgedby

meansoffinancialderivativesintheformofforwardforeign

exchangetransactionsorcurrencyoptions.

If,asat31December2010,theeurohadappreciated

(depreciated)by10percentagainstallothercurrencies,

earningsbeforetaxeswouldhavebeen€ 2,311thousand

lower(€ 2,825thousandhigher).


SIMONAAG(EXCERPT)

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57


Thehypotheticaleffectonprofitofminus€ 2,311thou-

sand(plus€ 2,825thousand)isattributabletothefol-

lowingsensitivitytoexchangerates:

€ ‘000 € ‘000

EUR/USD –696 (851)

EUR/CHF –1 (1)

EUR/GBP –526 (643)

EUR/CZK –389 (475)

EUR/PLN –197 (241)

EUR/HKD –502 (614)

–2,311 (2,825)

If,asat31December2009,theeurohadappreciated

(depreciated)by10percentagainstallothercurren-

cies,earningsbeforetaxeswouldhavebeen€ 990

thousandlower(€ 1,569thousandhigher).

Thehypotheticaleffectonprofitofminus€ 990thou-

sand(plus€ 1,569thousand)isattributabletothefol-

lowingsensitivitytoexchangerates:

€ ‘000 € ‘000

EUR/USD –236 (439)

EUR/CHF –117 (143)

EUR/GBP 143 (34)

EUR/CZK –628 (768)

EUR/PLN –103 (126)

EUR/HKD –49 (59)

–990 (1,569)

Credit risk

SIMONAAGisexposedtocreditriskaspartofitsoper-

atingactivities.Financialassetsoutstanding–principally

tradereceivables–aremonitoredonadecentralised

basis,i.e.byeachlegallyseparatecompanywithinthe

Group.Dependingonthecreditratingofthecustomer,

receivablesaresubjecttotheriskofdefault,whichis

addressedwiththehelpoftradecreditinsurance.

Receivablesexposedtoprobablecreditriskareidenti-

fiedandmonitoredonaregularbasis;creditriskrelating

tosuchitemsisaccountedforbymeansofspecific

allowancesonanitem-by-itembasis.Themaximum

potentialcreditriskislimitedtothenetcarryingamount

(lessvalue-addedtax)ofthefinancialassets.

liquidity risk

Inordertoensuresolvencyandmaintainfinancialflexi-

bility,theGroupcontinuouslymonitorsliquiditylevels

associatedwithoperatingactivitiesaswellasantici-

patedpaymentsattributabletocommitmentsarising

fromcapitalinvestmentordersoftherespectivecompa-

nies.Withinthiscontext,liquidityisidentifiedand

assessedwithaseparatetool.

Alongsidecashandcashequivalentsamountingto

€ 39.3million,theSIMONAGrouphasundrawnborrow-

ingfacilitiesof€ 6.6million.TheGroup’sobjectiveisto

maintainawell-judgedbalancebetweenongoingcover-

ageofcashrequirementsandsustainedflexibility

throughtheutilisationofbankoverdraftsandloans.

Asat31December2010,thematuritystructuresofpay-

mentobligationsrelatingtothefinancialliabilitiesofthe

Groupwereasfollows:

in€ ‘000up to 1

year2–5

years

More than 5 years total

Financialpayables 547 5,382 20 5,949

Tradepayables 11,202 0 0 11,202

Financial liabilities 11,749 5,382 20 17,151

Asat31December2009,thematuritystructuresof

paymentobligationsrelatingtothefinancialliabilitiesof

theGroupwereasfollows:

in€ ‘000up to 1

year2–5

years

More than 5 years total

Financialpayables 4,271 7,480 288 12,039

Tradepayables 6,904 0 0 6,904

Financial liabilities 11,175 7,480 288 18,943

58









Auditor’sReport

OtherInformation

Asinthepreviousfinancialyear,at31December2010,

therewerenoforeignexchangeforwardcontractsthat

wouldresultinamountsduetotheentityorpayment

obligations.

Themarketvaluationofinterestrateswapsresultedin

anetpaymentobligationof€ 155thousand(prev.year:

€ 295thousand).

Nocurrencyoptionsexistedasat31December2010.

Basedonmarketdata,thevalueofthecurrencyoptions

isconsideredtobepositive;inthepreviousyear,this

resultedinanetamountdueof€ 160thousand.

Capital management

Theprimaryobjectiveofcapitalmanagementwithinthe

Groupistoensureahighcreditratingandmaintaina

healthyequityratio.

TheGroupmanagesitscapitalstructureandmakes

adjustmentsinresponsetochangingeconomicconditions

wheresuchactionisdeemedappropriate.

[30] FINANCIAl INStruMeNtS

Thefollowingtablepresentsthecarryingamountsandfair

valuesofallfinancialinstrumentsrecognisedbythe

Group:

Carrying amount Fair value

in€ ‘000 31/12/10 31/12/09 31/12/10 31/12/09

Non-current financial assets

Financialassets HtM 23 23 23 23

Current financial assets

Otherfinancialassets AfS 10,000 0 10,000 0

Cashandshort-termdeposits LaR 39,316 61,479 39,316 61,479

Currencyoptions FAHfT 0 160 0 160

Tradereceivables LaR 41,845 33,320 41,845 33,320

Financial liabilities

Bankoverdrafts FLAC –5 0 –5 0

Othercurrentfinancialliabilities FLAC –35 –100 –35 –100

Loans FLAC –5,121 –10,724 –5,121 –10,724

Interest-rateswap FLHfT –155 –295 –155 –295

Tradepayables FLAC –11,202 –6,904 –11,202 –6,904

total by measurement category

HtM 23 23 23 23

AfS 10,000 0 10,000 0

LaR 81,161 94,799 81,161 94,799

FAHfT 0 160 0 160

FLAC –16,363 –17,728 –16,363 –17,728

FLHfT –155 –295 –155 –295

(HtM=HeldtoMaturity,AfS=AvailableforSale,LaR=LoansandReceivables,FAHfT=FinancialAssetsHeldforTrading,FLAC=FinancialLiabilitiesMeasuredatAmortisedCost,FLHfT=FinancialLiabilitiesHeldforTrading)


SIMONAAG(EXCERPT)

01COMPANY

59

Thefairvalueofderivativefinancialinstrumentsand

loanswasdeterminedbydiscountingtheexpected

futurecashflowsonthebasisoftheprevailingmarket

rateofinterestaswellasbyapplyingoptionpricing

models.Withinthiscontext,thecalculationtakesinto

accountthattheloansaresubjecttofloatingorfixed

interestratesonthebasisofstandardmarketterms

andconditions.

Theavailable-for-salefinancialassets(AfS)includenon-

exchange-listeddebtinstrumentswhosefairvaluewas

reliablymeasurableandwasthusmeasuredatafair

valueof€ 10,000thousandasat31December2010.

Thefollowingtablepresentsthenetgainsandlosses

fromsubsequentmeasurementoffinancialinstruments

recognisedinthestatementoffinancialposition,listed

accordingtotherespectivemeasurementcategories:

2010: Net GAINS ANd lOSSeS BY MeASureMeNt CAteGOrY

in€ ‘000 InterestFair

Value

Currency transla-

tion

Impair-ment

loss / disposal total

LaR 335 0 805 –449 691

HfT 0 3 263 0 266

FLAC –501 0 0 0 –501

total –166 3 1,068 –449 456

2009: Net GAINS ANd lOSSeS BY MeASureMeNt CAteGOrY

in€ ‘000 InterestFair

Value

Currency transla-

tion

Impair-ment

loss / disposal total

LaR 506 0 263 –73 696

HfT 0 –288 –124 0 –412

FLAC –559 0 0 0 –559

total –53 –288 139 –73 –276

HedGING trANSACtIONS

Cash flow hedging instruments

Asat31December2010and31December2009,the

Groupheldnoforwardcurrencycontracts.

Atthereportingdate,theGrouphadaninterest-rate

swapusedforthepurposeofhedgingriskarisingfrom

changesinthecashflowofthefloating-rateUSdollar

loan.Thetermisbasedontheunderlyingloan.

Asat31December2010,theGroupheldnocurrency

options.

ThetermsandconditionsofcontractsheldbytheGroup

asat31December2009,areoutlinedinthefollowing

table:

FOreIGN CurreNCY OptIONS FOr FAIr VAlue HedGING

in ‘000 due date exchange rate

US-Dollar 3,500 03/2010 1.4000

PoundSterling 3,00001/2010–

07/2010 0.9000

TheGroupusesthefollowinghierarchyforthepurpose

ofdetermininganddisclosingthefairvaluesoffinancial

instrumentspermeasurementmethod:

�Level1:quotedprices(unadjusted)inactive

marketsforidenticalassetsorliabilities

�Level2:methodsforwhichallinputswithasigni-

ficanteffectontherecognisedfairvalueareobserv-

ableeitherdirectlyorindirectly;and

�Level3:methodsthatuseinputswhichhaveasig-

nificanteffectontherecognisedfairvalueandare

notbasedonobservablemarketdata


60

Assetsmeasuredatfairvalue:

in€ ‘000

as at 31 december

2010 level 1 level 2 level 3

Financialassetsatfairvaluethroughprofitorloss

Securities 10,000 0 10,000 0

Thesecuritiesdisclosedaboveareacertificateofdebt.

Thecertificateofdebtisdueon10May2013atthe

latest,butcanbecancelledbythelenderatanytime.

Thecertificateofdebtbearsinterestbasedonthesix-

monthEURIBORrateplusafloatingpremium.Thefloat-

ingpremiumamountedto25basispointsandrises

eachhalf-yearuntilithasreached125basispointatthe

endofmaturity.

in€ ‘000

as at 31 december


Financialassetsatfairvaluethroughprofitorloss

Foreigncurrencyoptions 160 0 160 0

Liabilitiesmeasuredatfairvalue:

in€ ‘000

as at 31 december


Financialliabilitiesatfairvaluethroughprofitorloss

Interest-rateswap 155 0 155 0

in€ ‘000

as at 31 december


Financialliabilitiesatfairvaluethroughprofitorloss

Interest-rateswap 295 0 295 0

[31] OtHer INFOrMAtION

Subsidiaries

AlongsideSIMONAAGastheparent,theconsolidated

financialstatementsincludethefollowingentities.

Unlessotherwisespecified,theownershipinterestin

thepreviousyearwasidenticaltothatofthefinancial

yearunderreview.

Ownership interest in %

SIMONABeteiligungs-GmbH,Kirn,Germany 100.0

SIMONAUKLtd.,Stafford,UnitedKingdom 100.0

SIMONAS.A.,Domont,France 96.6

SIMONAS.r.l.,Vimodrone,Italy 98.0

SIMONAIBERICASEMIELABORADOSS.L.,Barcelona,Spain 100.0

SIMONAPOLSKASp.zo.o.,Wrocław,Poland 100.0

SIMONA-PLASTICSCZs.r.o.,Prague,CzechRepublic 100.0

SIMONAFAREASTLtd.,HongKong,China 100.0

SIMONAAMERICAInc.,Hazleton,USA 100.0

SIMONAENGINEERINGPLASTICSTRADINGCo.Ltd.,Shanghai,China 100.0

SIMONAASIALtd.,HongKong,China 100.0

SIMONAENGINEERINGPLASTICSCo.Ltd.,Jiangmen,China 100.0

64NORTHCONAHANDRIVEHOLDINGLLC,Hazleton,USA 100.0

DEHOPLASTPOLSKA,Sp.zo.o.,Kwidzyn,Poland 51.0

SIMONAPlast-Techniks.r.o.,Litvinov,CzechRepublic 100.0









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OtherInformation


SIMONAAG(EXCERPT)

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61

Financial assets

SIMONAAGholdsatleastaone-fifthinterestinthefol-

lowingentities,withoutbeingabletocontrolorsignifi-

cantlyinfluencethefinancialandoperatingpoliciesofthe

entitiesinquestion.Unlessotherwisespecified,theown-

ershipinterestinthepreviousyearwasidenticaltothat

ofthefinancialyearunderreview.

CompanyOwnership

Interestequity

31/12/09profit/loss

2009

% € ‘000 € ‘000

SIMONASozialwerkGmbH,Kirn,Germany 50.0 13,910 –267

SIMONAVermögensver-waltungsgesellschaftderBelegschaftmbH,Kirn,Germany 50.0 8,304 619

Owingtoitsclassificationasapensionfund,SIMONA

SozialwerkGmbHisnotincludedintheconsolidated

financialstatements,asspecifiedinIAS19.7.SIMONA

VermögensverwaltungsgesellschaftderBelegschaftmbH

isnotincludedintheconsolidatedfinancialstatements

becausetheassetsofthisentitymaybeutilisedsolely

forfundingpurposesinrespectofSIMONASozialwerk

GmbHandthusremainoutsideSIMONAAG’sscopeof

economiccontrol.

TheinterestsinSIMONASozialwerkGmbHandSIMONA

VermögensverwaltungsgesellschaftderBelegschaft

mbHareaccountedforatbookvalue,asthefairvalue

isnotreliablydeterminable.ThebookvaluesofSIMONA

SozialwerkGmbHandSIMONAVermögensverwaltungs-

gesellschaftderBelegschaftmbHare€ 10thousand

and€ 13thousandrespectively.

Average number of staff employed during the financial

year:

2010Group

2009Group

Industrialstaff 710 744

Clericalstaff 457 430

1,167 1,174

School-leavertrainees(apprentices) 51 56

Totalnumberofemployees 1,218 1,230

Contingent liabilities and other financial commitments

Noprovisionswererecognisedforthefollowingcontin-

gentliabilities,carriedattheirnominalamounts,

becausetheprobabilityoftheoccurrenceofriskiscon-

sideredtobelow.

OtHer FINANCIAl COMMItMeNtS

in€ ‘000 31/12/10 31/12/09

Commitmentsfromoperatingrentalandleaseagreements

Duewithin:

1year 1,302 1,278

2–5years 1,578 1,730

after5years 0 53

2,880 3,061

purchase commitments arising from investment projects

in€ ‘000 31/12/10 31/12/09

1,916 711


62

declaration of Conformity regarding the German Corpo-

rate Governance Code

InaccordancewithSection161AktG,theCompanyfiled

aDeclarationofConformityfor2010on10March

2011.Ithasbeenmadepermanentlyavailabletoshare-

holdersonitscorporatewebsiteatwww.simona.de.

directors’ holdings – Shares held by members of

the Management Board and Supervisory Board of

SIMONA AG

Asat25June2010(dateoftheAnnualGeneralMeeting

ofShareholders)themembersoftheManagement

Boardreportedatotalholdingof70,776shares;this

correspondstoapprox.11.80percentoftheshare

capitalofSIMONAAG.

ThemembersoftheSupervisoryBoardreportedhold-

ingsof1,700shares,whichcorrespondsto0.28per

centofsharecapital.

InaccordancewithSection15aoftheSecuritiesTrading

Act(Wertpapierhandelsgesetz–WpHG),themembersof

theSupervisoryBoardandtheManagementBoard,as

wellasrelatedparties,arelegallyobligedtodiscloseall

significantacquisitionsordisposalsofsharesin

SIMONAAG.Intheperiodunderreview,thecompany

wasnotifiedofnosuchtransaction.

Audit fees

Professionalfeesaccountedforasexpenseinconnec-

tionwiththeyear-endfinancialauditamountedto€ 247

thousand,whilefeesattributabletotaxconsulting

servicesamountedto€ 22thousandandotherservices

totalled€ 56thousand.

events after the reporting period

Noeventsoccurredafterthereportingdatethatwould

necessitateachangetomeasurementsorrecognised

amounts.

SIMONAAG

Kirn,31March2011

ManagementBoard









Auditor’sReport

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SIMONAAG(EXCERPT)

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63

GroupStatementofCashFlowsofSimonaAG

in€ ‘000 Notes 01/01 - 31/12/10 01/01 - 31/12/09

Profitbeforetax 10,488 7,135

Incometaxespaid –3,010 –4,105

Interestexpense/income [12] 81 184

Amortisationofintangibleassetsanddepreciationofproperty,plantandequipment [16,17] 12,606 14,554

Othernon-cashexpensesandincome –824 441

Changeinpensions [24] 1,235 830

Resultfromdisposalofnon-currentassets [17] 30 –221

Changeininventories [18] –6,521 –285

Changeintradereceivables [19] –8,525 8,025

Changeinotherassets –2,338 2,495

Changeinliabilitiesandotherprovisions –130 –901

Net cash from operating activities 3,092 28,152

Investmentsinintangibleassetsandproperty,plantandequipment [16,17] –6,601 –12,396

Paymentsrelatingtotheshort-termfinancialmanagementofcashinvestments –10,000 0

Proceedsfromthedisposalofnon-currentassets 853 667

Net cash used in investing activities –15,748 –11,729

Proceedsfromfinancialliabilities 0 2,398

Repaymentoffinancialliabilities –6,337 –235

Dividendpaidtoownersoftheparent [15] –3,600 –5,100

Dividendpaidtonon-controllinginterests 0 –6

Interestreceived 335 430

Interestpaid –579 –660

Net cash used in financing activities –10,181 –3,173

effect of foreign exchange rate changes on liquidity [27] 734 –190

Change in cash and cash equivalents [27] –22,103 13,060

Cash and cash equivalents at 1 January [27] 61,379 48,319

Cash and cash equivalents at 31 december [27] 39,276 61,379

Change in cash and cash equivalents [27] –22,103 13,060


64









Auditor’sReport

OtherInformation

GroupStatementofChangesinEquityofSimonaAG

equity attributable to owners of the parent company Non-con-trolling interests

total equity

Notes Issued capital Capital re -

ser ves

revenue reserves Otherre-serves

in€ ‘000 [22] Sha

rec

apita

l

tota

l

Lega

lres

erve

s

Sta

tuto

ry

rese

rves

Oth

err

even

ue

rese

rves

Accu

mul

ated

pro

f-it

for

the

perio

d

tota

l

Cur

renc

ytr

ansl

a-tio

ndi

ffer

ence

s

Balanceat01/01/09 15,500 15,500 15,274 397 2,847 80,449 44,399 128,092 –1,430 211 157,647

Amountrecogniseddirectlyinequity 0 0 0 0 0 0 –225 –225 205 3 –17

Profitfortheperiod 0 0 0 0 0 0 4,988 4,988 0 34 5,022

Totalcomprehensiveincomefortheperiod 0 0 0 0 0 0 4,763 4,763 205 37 5,005

Appropriationstooth-errevenuereserves 0 0 0 0 0 6,206 –6,206 0 0 0 0

Dividendpayment [15] 0 0 0 0 0 0 –5,100 –5,100 0 0 –5,100

Distributiontonon-Groupparties 0 0 0 0 0 0 0 0 0 –6 –6

Balanceat31/12/09 15,500 15,500 15,274 397 2,847 86,655 37,856 127,755 –1,225 242 157,546

Balanceat01/01/10 15,500 15,500 15,274 397 2,847 86,655 37,856 127,755 –1,225 242 157,546

Amountrecogniseddirectlyinequity 0 0 0 0 0 0 72 72 965 3 1,040

Profitfortheperiod 0 0 0 0 0 0 7,198 7,198 0 27 7,225

Totalcomprehensiveincomefortheperiod 0 0 0 0 0 0 7,270 7,270 965 30 8,265

Appropriationstootherrevenuereserves 0 0 0 0 0 5,762 –5,762 0 0 0 0

Dividendpayment [15] 0 0 0 0 0 0 –3,600 –3,600 0 0 –3,600

Balanceat31/12/10 15,500 15,500 15,274 397 2,847 92,417 35,764 131,425 –260 272 162,211


SIMONAAG(EXCERPT)

01COMPANY

65

DetailsofShareholdingsofSimonaAG

Company Ownership interest

percent

equity

€ ‘000

profit/loss of last financial year

€ ‘000

Indirectly

SIMONAS.A.,Domont,France 96.6 2,513 –686

SIMONAS.r.l.,Vimodrone,Italy 98.0 417 –181

SIMONAUKLtd.,Stafford,UnitedKingdom 100.0 910 230

SIMONAIBERICASEMIELABORADOSS.L.,Barcelona,Spain 100.0 26 41

SIMONAENGINEERINGPLASTICSTRADINGCo.Ltd.,Shanghai,China 100.0 762 238

SIMONAENGINEERINGPLASTICSCo.Ltd.,Jiangmen,China 100.0 8,282 –716

64NORTHCONAHANDRIVEHOLDINGLLC,HAZLETON,USA 100.0 2,729 0

directly

SIMONA-PLASTICSCZs.r.o.,Prag,CzechRepublic 100.0 422 87

SIMONAFAREASTLtd.,HongKong,China 100.0 1,081 272

SIMONAPOLSKASp.zo.o.,Wrocław,Poland 100.0 1,040 387

SIMONASozialwerkGmbH,Kirn(2009) 50.0 13,910 –267

SIMONAVermögensverwaltungsgesellschaftderBelegschaftmbH,Kirn(2009) 50.0 8,304 619

SIMONABeteiligungs-GmbH,Kirn 100.0 1,834 0

SIMONAAMERICAInc.,Hazleton,USA 100.0 3,569 –900

SIMONAPlast-Techniks.r.o.,Litvinov,CzechRepublic 100.0 7,696 2,216

SIMONAASIALtd.,HongKong,China 100.0 5,165 –205

DEHOPLASTPOLSKASp.zo.o.,Kwdizyn,Poland 51.0 365 109


66

Auditor’sReport

Wehaveauditedtheconsolidatedfinancialstatements

ofSIMONAAG,Kirn,comprisingthestatementoffinan-

cialposition,theincomestatement,thestatementof

comprehensiveincome,thestatementofchangesin

equity,thestatementsofcashflowsandthenotestothe

consolidatedfinancialstatements,togetherwiththe

Groupmanagementreportforthefinancialyearfrom1

Januaryto31December2010.Thelegalrepresentatives

oftheCompanyareresponsibleforthepreparationof

theconsolidatedfinancialstatementsandtheGroup

managementreportinaccordancewithIFRS,asadopted

bytheEU,aswellasincompliancewiththeadditional

provisionssetoutinSection315a(1)oftheGerman

CommercialCode(Handelsgesetzbuch–HGB).Our

responsibilityistoexpressanopinionontheconsoli-

datedfinancialstatementsandtheGroupmanagement

reportbasedonouraudit.Weconductedourauditofthe

consolidatedfinancialstatementsinaccordancewith

Section317oftheGermanCommercialCodeandin

compliancewithGermangenerallyacceptedstandards

fortheauditoffinancialstatementspromulgatedbythe

InstitutderWirtschaftsprüfer(IDW).Thosestandards

requirethatweplanandperformtheauditsuchthatmis-

statementsmateriallyaffectingthepresentationofthe

netassets,financialpositionandresultsofoperationsin

theconsolidatedfinancialstatementsinaccordancewith

theapplicablefinancialreportingframeworkandinthe

Groupmanagementreportaredetectedwithreasonable

assurance.Knowledgeofthebusinessactivitiesandthe

economicandlegalenvironmentoftheGroupandexpec-

tationsastopossiblemisstatementsaretakeninto

accountinthedeterminationofauditprocedures.

Theeffectivenessoftheaccounting-relatedinternalcon-

trolsystemandtheevidencesupportingthedisclosures

intheconsolidatedfinancialstatementsandtheGroup

managementreportareexaminedprimarilyonatest

basiswithintheframeworkoftheaudit.Theauditalso

includesassessingtheannualfinancialstatementsof

thoseentitiesincludedinconsolidation,thedetermina-

tionoftheentitiestobeincludedinconsolidation,the

accountingandconsolidationprinciplesappliedandthe

significantestimatesmadebythelegalrepresentatives,

aswellasevaluatingtheoverallpresentationofthecon-

solidatedfinancialstatementsandtheGroupmanage-

mentreport.Webelievethatourauditprovidesareason-

ablebasisforouropinion.

Ouraudithasnotledtoanyreservations.

Inouropinion,basedonthefindingsofouraudit,the

consolidatedfinancialstatementscomplywithIFRS,as

adoptedbytheEU,andtheadditionalrequirementsof

GermancommerciallawpursuanttoSection315a(1)

HGBandgiveatrueandfairviewofthenetassets,

financialpositionandresultsofoperationsinaccord-

ancewiththeserequirements.TheGroupmanagement

reportisconsistentwiththeconsolidatedfinancialstate-

mentsandasawholeprovidesasuitableviewofthe

Group’spositionandsuitablypresentstheopportunities

andrisksoffuturedevelopment.

Eschborn/FrankfurtamMain,11April2011

Ernst&YoungGmbH

Wirtschaftsprüfungsgesellschaft

vonSeidel Erbacher

GermanPublicAccountant GermanPublicAccountant









Auditor’sReport

OtherInformation


SIMONAAG(EXCERPT)

01COMPANY

67

reSpONSIBIlItY StAteMeNt purSuANt tO

SeCtIONS 297 (2), 315 (1) HGB

“Tothebestofourknowledge,andinaccordancewith

theapplicablereportingprinciples,theconsolidated

financialstatementsoftheSIMONAGroupgiveatrue

andfairviewoftheassets,liabilities,financialposition

andprofitorlossoftheSIMONAGroup,andtheman-

agementreportoftheGroupincludesafairreviewof

thedevelopmentandperformanceofthebusinessand

thepositionoftheGroup,togetherwithadescription

oftheprincipalopportunitiesandrisksassociatedwith

theexpecteddevelopmentoftheSIMONAGroup.”

SIMONAAG

Kirn,31March2011

TheManagementBoard

OtherInformation


68

SIMONA AMerICA Inc.

SIMONA S.A. paris

SIMONA AG Werk III

SIMONA-plAStICS CZ, s.r.o.

SIMONA FAr eASt lIMIted

SIMONA uK lIMIted

SIMONA AG SCHWeIZ

SIMONA pOlSKA Sp. z o.o.

SIMONA eNGINeerING plAStICS (Guangdong) Co. ltd.

SIMONA eNGINeerING plAStICS trAdING (Shanghai) Co. ltd.

SIMONA AG SIMONA plast-technik s.r.o.

SIMONA IBerICA SeMIelABOrAdOS S.l.

SIMONA S.r.l. ItAlIA

SIMONAworldwide

SIMONA GrOup*

2010 2009 2008

Revenue € m 267.4 215.1 303.7

Year-on-yearchange % 24.3 –29.2 1.3

ofwhichabroad € m 176.8 138.6 191.6

ofwhichabroad % 66.1 64.4 63.1

Staffcosts € m 55.9 55.3 58.2

Profitbeforetaxes € m 10.5 7.1 20.2

Profitfortheyear € m 7.2 5.0 13.9

Netcashfromoperatingactivities € m 3.1 28.2 44.7

EBIT € m 10.1 7.3 19.8

EBIT % 3.8 3.4 6.5

EBITDA € m 22.7 21.9 32.3

EBITDA % 8.5 10.2 10.6

Totalassets € m 245.0 244.7 244.8

Equity € m 162.2 157.5 157.6

Non-currentassets € m 89.4 94.3 97.1

Investmentsinproperty,plantandequipment € m 6.5 11.6 21.2

Employees(annualaverage) 1,218 1,230 1,237

*basedonIFRS

KeyFinancials

reVeNue ANd eBIt SIMONA GrOup

in € millions

300 24

250 20

200 16

150 12

100 8

50 4

0 0 Totalrevenue

2008 2009 2010 EBIT

reVeNue BY reGION SIMONA GrOup

in%

Germany

RestofEurope&Africa

Asia,America&Australia

51.9 53.4 49.6

11.3 11.2 16.6

36.8 35.4 33.8

2008 2009 2010

prOduCtION SIteS

plant I/IITeichweg16D-55606KirnGermanyPhone +49 (0) 67 5214-0Fax +49 (0) 67 5214-211

plant IIIGewerbestraße1–2D-77975RingsheimGermanyPhone +49 (0) 7822436-0Fax +49 (0) 7822436-124

SIMONA plast-technik s.r.o.UAutodílen23CZ-43603Litvínov-ChudeřínCzechRepublic

SIMONA AMerICA Inc.64N.ConahanDriveHazleton,PA18201USA

SIMONA eNGINeerING plAStICS (Guangdong) Co. ltd.No.368JinouRoadHigh&NewTechnologyIndustrialDevelopmentZoneJiangmen,GuangdongChina529000

SAleS OFFICeS SIMONA S.A. parisZ.I.1,rueduPlantLogerF -95335DomontCedexPhone +33 (0) 139 35 4949Fax +33 (0) 139 [email protected]

SIMONA uK lIMItedTelfordDriveBrookmeadIndustrialParkGB-StaffordST163STPhone +44 (0) 1785222444Fax +44 (0) [email protected]

SIMONA AG SCHWeIZIndustriezoneBäumlimattstraße16CH-4313MöhlinPhone +41 (0) 618 55 9070Fax +41 (0) 618 55 [email protected]

SIMONA S.r.l. ItAlIAViaPadanaSuperiore19/BI -20090Vimodrone(MI)Phone +390225 08 51Fax +390225 08 [email protected]

SIMONA IBerICA SeMIelABOrAdOS S.l.DoctorJosepCastells,26–30PolígonoIndustrialFonollarE-08830SantBoideLlobregatPhone +3493 635 4103Fax +3493 630 88 [email protected]

SIMONA AG

teichweg 16d-55606 KirnGermanyPhone +49 (0) 67 5214-0Fax +49 (0) 67 [email protected]

SIMONA-plAStICS CZ, s.r.o.Zdebradskául.70CZ-25101Rícany-JazlovicePhone +420 323 6378 3-7/-8/-9Fax +420 323 6378 [email protected]

SIMONA pOlSKA Sp. z o.o.ul.H.Kamienskiego201–219PL-51-126WrocławPhone +48 (0) 713 52 80 20Fax +48 (0) 713 52 [email protected]

SIMONA FAr eASt lIMItedRoom501,5/FCCTTelecomBuilding11WoShingStreetFoTanHongkongPhone +85229 47 01 93Fax +85229 47 01 [email protected]

SIMONA eNGINeerING plAStICS trAdING (Shanghai) Co. ltd.RoomC,19/F,BlockAJiaFaMansion129DaTianRoad,JingAnDistrictShanghaiChina200041Phone +862162670881Fax [email protected]

SIMONA AMerICA Inc.64N.ConahanDriveHazleton,PA18201USAPhone +1866 501 2992Fax +1800 522 [email protected]

StOCK dAtA

2010 2009 2008

Earningspershare € 12.00 8.31 23.20

Dividend € 6.50 6.00 8.50

Dividendyield 2.1 1.9 2.6

P/Eratio* 26.3 38.1 14.0

Marketcapitalisation-over-equityratio* 1.17 1.21 1.23

sharepriceasatDec.31 € 315.00 317.00 324.00

*Eachcalculatedonconsolidatedbasis

69

SIMONA AGInvestorRelationsTeichweg16D-55606Kirn

Phone+49 (0) 67 5214-0Fax +49 (0) 67 5214-211

[email protected]

11FinancialReportofSIMONAGroupandSIMONAAG 02May2011

AnalystConferencefor2010AnnualResults(Frankfurt) 04May2011

InterimAnnouncementwithintheFirstHalf 04May2011

AnnualGeneralMeeting 01July2011

PublicationofGroupFinancialReport(Half-Year) 24August2011

InterimAnnouncementwithintheSecondHalf 09November2011

FinancialCalendar

SIMONAworldwide➝

01 COMpANY

ManagementBoard 02

LettertoShareholders 03

KeyEvents 04

StockPerformanceandCapitalMarkets 06

ReportbytheSupervisoryBoard 07

CorporateGovernanceReport 11

GoverningBodies 14

Shareholdings 15


BusinessActivitiesandGeneralConditions 17

FinancialPerformance 23

FinancialAssetsandLiabilities 24

FinancialPosition 24

EventsaftertheReportingDate 26

RiskReport 26

ReportonExpectedDevelopments 27

OtherInformation 28










OtherInformation 78

04 FINANCIAl StAteMeNtS OF SIMONA AG (eXCerpt)

BalanceSheet 80

IncomeStatement 82

OtHer

Imprint 84

FinancialCalendar Cover

SIMONAWorldwide Cover

2010Financial report of SIMONA AG

KeyFinancialsforFY2010 ➝

simona worldwide...simona ag investor relations teichweg 16 d-55606 kirn phone +49(0)6752 14-0 fax...

Documents