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Eichhof GroupConsolidated Income Statement 37Consolidated Balance Sheet 38Consolidated Cash Flow Statement 39Consolidated Statement of Changes in Equity 40Notes to the Consolidated Financial Statements
– Accounting Principles 41– Valuation Principles 42
Notes 46Report of the Group Auditors 63
Eichhof Holding Ltd.Income Statement 64Balance Sheet 65Notes 66Proposal of the Board of Directors 68Report of the Statutory Auditors 69
Investors' Information 70Addresses 72
Financial year from October 1, 2003, through
September 30, 2004
Financial Report
36
37
Eichhof Group
CONSOLIDATED INCOME STATEMENT 1)
in TCHF 2003/2004 2002/2003
Gross sales 278 103 283 346
Sales deductions -25 596 -25 149
Net sales 252 507 100,0% 258 197 100,0%
Changes in inventories -1 380 -2 950
Costs for material and goods -104 184 -110 522
Gross margin 146 943 58,2% 144 725 56,1%
Personnel expenses 3.2 -62 070 -64 344
Sales and administration expenses 3.3 -36 858 -38 356
Other operating expenses -10 552 -11 963
EBITDA 37 463 14,8% 30 062 11,6%
Depreciation of fixed assets 3.10 -8 632 -11 258
Amortization of intangible assets 3.11 -4 553 -5 889
EBIT 24 278 9,6% 12 915 5,0%
Financial result 3.4 -1 468 -4 217
Profit before income taxes 22 810 9,0% 8 698 3,4%
Income taxes 3.5 -4 452 -569
Net profit 18 358 7.3% 8 129 3.1%
CHF CHF
Earnings per share 3.19
- non diluted 112,64 46,46
- diluted 110,41 46,36
1) The consolidated income statement in the cost of sales format is presented in note 3.28.
38
Eichhof Group
CONSOLIDATED BALANCE SHEET
in TCHF 30.09.04 30.09.03
Assets
Cash and cash equivalents 3.6 23 090 8 889
Financial assets 3.12 22 168 15 280
Accounts receivable 3.7 45 877 45 297
Other accounts receivable 3.8 7 896 8 147
Inventories 3.9 24 219 24 770
Prepaid expenses 2 959 2 310
Current assets 126 209 46,2% 104 693 39,8%
Fixed assets 3.10 100 273 109 718
Intangible assets 3.11 16 561 20 639
Financial assets 3.12 29 259 26 941
Deferred tax assets 3.5 1 071 1 003
Non-current assets 147 164 53,8% 158 301 60,2%
Assets 273 373 100,0% 262 994 100,0%
Liabilities and shareholders' equity
Accounts payable 15 761 15 809
Financial liabilities 3.13 61 931 8 021
Current tax liabilities 5 538 6 625
Other liabilities 3.14 11 952 8 559
Accrued liabilities 13 451 11 680
Current liabilities 108 633 39,7% 50 694 19,3%
Financial liabilities 3.13 41 182 99 653
Other liabilities 3.14 5 642 5 870
Provisions 3.15 781 752
Deferred tax liabilities 3.5 14 491 15 193
Non-current liabilities 62 096 22,8% 121 468 46,2%
Liabilities 170 729 62,5% 172 162 65,5%
Share capital 177 177
Own shares -14 -14
Capital reserves 7 545 7 545
Retained earnings 94 936 83 124
Shareholders' equity 102 644 37,5% 90 832 34,5%
Liabilities and shareholders' equity 273 373 100,0% 262 994 100,0%
39
Eichhof Group
CONSOLIDATED CASH FLOW STATEMENT
in TCHF 2003/2004 2002/2003
Profit before income taxes 22 810 8 698
Depreciation of fixed assets 3.10 8 632 11 258
Amortization of intangible assets 3.11 4 553 5 889
Non-cash sales deductions 3.6 3 283 3 329
(Gain) / Loss on disposal of non-current assets 3.10 -5 954 57
Changes in provisions 3.15 29 245
Interest expense net 3.4 4 083 4 355
Income from securities 3.4 -2 654 -1 237
Interest paid -4 294 -4 835
Income taxes paid -5 912 -590
Other non-cash positions -283 -219
Cash flow before working capital changes 24 293 26 950
Changes in accounts receivable 3.7 -562 2 373
Changes in other accounts receivable and prepaid expenses 1) -380 3 690
Changes in inventories 3.9 703 4 163
Changes in accounts payable -48 -1 112
Changes in other liabilities and accrued liabilities 4 614 -2 143
Cash flow from operating activities 28 620 33 921
Investments in fixed assets 3.10 -7 831 -9 201
Investments in intangible assets 3.11 -256 -425
Investments in financial assets 1) -12 354 -1 633
Acquisitions 3.25 -581 0
Divestments of fixed assets 14 336 169
Interest and dividends received 2 685 1 475
Cash flow from investing activities -4 001 -9 615
Decrease of financial liabilities -5 762 -9 573
Purchase of own shares -54 -899
Sale of own shares 60 18
Share repurchase program 0 -18 131
Reimbursement of par value 0 -3 910
Dividends paid -4 564 0
Cash flow from financing activities -10 320 -32 495
Changes in cash and cash equivalents 14 299 -8 189
Cash and cash equivalents at beginning of the year 8 889 17 615
Effect of foreign currency translation on opening balances -98 -537
Cash and cash equivalents at end of the year 3.6 23 090 8 889
EBITDA 37 463 30 062
Free cash flow (cash flow from operating activities less cash flow frominvesting activities excluding acquisitions) 25 200 24 3061) Changes in current financial assets are newly included in investments in financial assets.
40
Eichhof Group
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
in TCHF
Accu- Totalmulated Hedge Total share-
Share Own Capital Retained translation Accounting retained holders'capital shares 3) reserves earnings differences (IAS 39) earnings equity
Balance as of 1.10.2002 4 929 -292 7 977 93 135 2 196 0 95 331 107 945
Share repurchase program -492 -432 -17 207 -17 207 -18 131
Reimbursement of par value -4 260 350 0 -3 910
Purchase of own shares -90 -809 -809 -899
Sale of own shares 18 0 18
Translation differences -2 320 -2 320 -2 320
Net profit 8 129 8 129 8 129
Balance as of 30.09.2003 177 -14 7 545 83 248 -124 0 83 124 90 832
Balance as of 1.10.2003 177 -14 7 545 83 248 -124 0 83 124 90 832
Dividends -4 564 -4 564 -4 564
Purchase of own shares 0 -54 -54 -54
Sale of own shares 0 60 60 60
Adjustment of financial instruments to fair value -1 173 2) -1 173 -1 173
Translation differences -815 -815 -815
Net profit 18 358 18 358 18 358
Balance as of 30.09.2004 177 1) -14 7 545 97 048 -939 -1 173 94 936 102 644
1) The share capital as of September 30, 2004, consists of 177 491 registered sharesof CHF 1 par value each.
2) The adjustment of financial instruments to the fair value concerns the valuation ofan interest rate swap. For further details see note 3.17 on page 57.
3) Par value; at cost the total reduction in consolidated equity due to own shareholdings amounts to TCHF 15 505 (previous year: TCHF 10 142).
For further details regarding equity see note 5 on page 66 of Eichhof Holding Ltd..
41
Eichhof Group
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 Accounting principles
1.1 General Eichhof Holding Ltd. is a Swiss limited company, domiciled in Lucerne (Ober-grundstrasse 110). It is the parent company of the Eichhof Group, the numberone independent brewery and one of the biggest beverages distributors in Swit-zerland, and of the Datacolor Group, a leading provider of color measurementsystems. In addition to its Swiss operations, the Eichhof Group also does busi-ness through its Datacolor Group in Europe, North America, and Asia. The Eich-hof Group employs 679 (previous year: 662) persons.
1.2 Basis of The consolidated financial statements of Eichhof Group comply with Internatio-preparation nal Financial Reporting Standards (IFRS). By the balance sheet date, all appli-
cable standards of the IASB and interpretations of the IFRIC are implemented.Only the new IFRS 3 “Business Combinations” had an impact on the accountingprinciples, compared to the previous year, as the accounting for businesscombinations for which the agreement date is on or after March 31, 2004 haschanged.
The consolidated financial statements are prepared on a historical cost basis,except for the measurement at fair value of derivative financial instruments andavailable for sale or held for trading financial assets. Expenses and revenues arerecognized on an accrual basis.
Comparative information is partly restated to improve the comparison.
1.3 Use of estimates In preparing the financial statements in accordance with IFRS certain assump-tions have to be made which affect the reported values of assets and liabilities,the income statement and the disclosure of contingent liabilities. The assump-tions are based on forecasts and estimates at the time the financial statementsare prepared. Actual outcome may differ from those estimates.
1.4 Scope of General:consolidation The consolidated financial statements include the financial statements of
Eichhof Holding Ltd. and its subsidiaries that are controlled by Eichhof Hol-ding Ltd.. Control is presumed to exist when Eichhof Holding Ltd. owns,directly or indirectly through subsidiaries, more than one half of the votingpower of an enterprise or otherwise exercises management control.
The closing date for the financial statements of Eichhof Holding Ltd. and all itssubsidiaries is September 30.
There are no associated companies or joint ventures.
Changes in the scope of consolidation:There were no changes in the scope of consolidation in the reporting period.
A summary of shareholdings is given on page 62.
1.5 Principles of The assets and liabilities included in the consolidated financial statements are consolidation measured according to uniform principles.
Intragroup balances and intragroup transactions and resulting unrealized profitsare eliminated upon consolidation.
42
Eichhof Group
1.6 Foreign currency The financial statements of foreign subsidiaries are prepared in their respectivetranslation local currency and translated into Swiss francs (reporting currency) for consoli-
dation purposes.
Assets and liabilities of foreign subsidiaries are translated at the rate ofexchange ruling at the balance sheet date. The income statements of foreignsubsidiaries are translated at weighted average exchange rates for the year. Theresulting exchange differences are posted directly to equity.
In the financial statements of the local subsidiaries transactions in foreign cur-rencies are recorded at the rate ruling at the date of transaction. Assets and lia-bilities denominated in foreign currencies are translated at the rate of exchangeruling at the balance sheet date. All resulting differences are recognized asexchange gains or losses in the income statement of the local subsidiary.
1.7 Segment reporting Segment information is based on two segment formats: the primary formatreflects the business segments whereas the secondary format presents thegeographical segments. Segment reporting based on business segmentsrepresents the Group’s structure with independent management of theDivisions.
2 Valuation principles
2.1 Gross revenue and Gross sales include all invoiced sales and services to third parties. Sales arerealization of recognized when the economic benefits associated with the transaction will proceeds flow to the company and the amount of the revenue can be measured reliably.
Sales deductions include sales taxes and discounts; the latter category alsoincludes amortization of loans to secure distribution channels.
2.2 Management share Options for purchase of Eichhof registered shares are granted as part of perfor-option plan mance-based variable compensation for certain management personnel and
members of the Board of Directors. Quantity and prize are determined by theHuman Resources and Compensation Committee. The granted options carrythe right to purchase one share of Eichhof Holding Ltd. per option, vest in threeyears, and expire in ten years. The exercise price is determined in advance inaccordance with the Black-Scholes-formula. The quantity of the granted optionsdepend on the individual performance of the entitled persons and on the perfor-mance of their business unit. To accommodate the option plan with those ofother companies the exercise period was increased to ten years.
The option premium is recorded on an accrual basis as a personnel expense atthe time of issuance.
2.3 Taxes Income taxes are recognized according to economic criteria on an accrualbasis. Deferred income taxes are provided, using the “comprehensive balancesheet liability-method”, on all temporary differences at the balance sheet datebetween the tax bases of assets and liabilities and their carrying amounts forfinancial reporting purposes. They are measured at the current tax rates. Nodeferred income taxes are recorded in respect of temporary differences associ-ated with investments in subsidiaries, as it is assumed that such differences willhave no tax consequences in the foreseeable future.
43
Eichhof Group
Tax loss carry-forwards are only recognized as deferred tax assets when it canbe reasonably assumed that future taxable income will be sufficient to securetax advantage by offsetting losses.
If no dividend payments are planned, withholding taxes and other taxes onpotential later dividends are not recognized, since retained earnings are gene-rally reinvested.
2.4 Research and Software development expenses incurred are only capitalized on an individual development project basis if such outlay is likely to be covered by corresponding future
income. Research costs are expensed as incurred.
Capitalized software development expenditures include material and payrollexpenses, depreciation of equipment and machinery and the overhead costsdirectly attributable.
2.5 Borrowing costs Borrowing costs, incurring during the construction of fixed assets, are recogni-zed as an expense.
2.6 Impairment of The carrying amounts of non-current assets are reviewed for impairment atassets each balance sheet date whether there is any indication that an asset may be
impaired. If any indication exists the recoverable amount is estimated. If thecarrying values exceed the estimated recoverable amounts, the assets are writ-ten down to their recoverable amounts. Impairment losses are recognized in theincome statement. The recoverable amount is the higher of the asset’s net sel-ling price and its value in use. The net selling price is the amount obtainablefrom the sale of an asset in an arm’s length transaction between independentparties less the cost of disposal. The value in use is the present value of esti-mated future cash flows expected to arise from the continuing use of the assetand from its disposal at the end of its useful life.
2.7 Employee benefit Eichhof Group companies have different employee benefit plans in accordanceliabilities with local regulations and customs in the relevant countries. These plans com-
prise financially independent funds and foundations which are organized on adefined contribution or defined benefit basis and cover the majority of em-ployees. They provide benefits in case of death, disability, retirement, or termi-nation of employment. They may be financed through a combination ofemployee and employer contributions or through employer contributions alone.
Assets covering existing and future benefit obligations for insured parties in theBeverages Division are held in the Eichhof Pension Fund, an autonomous, inde-pendent foundation organized under the Occupational Pension Act (BVG). TheEichhof Group also has one employer foundations in Switzerland which is like-wise governed by the provisions of the BVG.
Defined contribution plans:The Color Division's benefit plans are organized through external savingsbanks. The Eichhof Group is not subject to further obligations beyond ongoingcontributions owed and recognized.
Defined benefit plans:Actuarial calculations using the projected unit credit method are carried out todefine the present value of the expected obligation for Swiss employee pensionplans classified as defined benefit plans. All significant pension fund obligationsand the assets covering them are assessed periodically, all others on a regularbasis. The latest actuarial calculations were carried out as of September 30,2004, by external experts.
44
Eichhof Group
Benefit expenses resulting from employee services in the current period (cur-rent service costs) are recognized in the income statement. Benefit expensesassociated with employee services in prior periods, resulting in the currentperiod from the introduction of, or changes to, post-employment benefits (pastservice costs) are recognized on a straight-line basis over the average perioduntil the benefits become vested. Actuarial gains and losses are recognized asincome or expense when the cumulative unrecognized actuarial gains or lossesfor each individual plan exceed 10% of the higher of defined benefit obligationand the fair value of plan assets. These gains or losses are recognized over theexpected average remaining working periods of the employees participating inthe plans. Unrecognized actuarial gains and losses are reflected in the balancesheet.
Prepaid employee benefits (employer’s contribution reserves) are reported asnon-current financial assets. Other employee benefit surpluses are only capitali-zed if available to the Group as future contribution repayments or reductions.
2.8 Cash and cash Cash and cash equivalents include cash, bank accounts, demand deposits,equivalents money market instruments as well as short-term deposits with an initial term not
exceeding 3 months.
2.9 Current financial Current financial assets are investments which are classified as held for tradingassets and and comprise marketable, easily realized securities. They are measured at fair liabilities value. Not realized gains or losses on investments held for trading are recogni-
zed in financial result. Current financial liabilities include bank payables, whichare recorded at nominal value.
2.10 Accounts Accounts receivable are recognized and carried at nominal values less neces-receivable sary allowances for individual accounts as well as an overall allowance based
on aging.
2.11 Inventories Inventories are measured at the lower of acquisition or production cost or netrealizable value, using the weighted average cost formula.
2.12 Fixed assets Fixed assets including investment property are reported at acquisition cost lessaccumulated depreciation and any impairment in value. Land is depreciatedonly if periodic appraisals reveal a sustained impairment in value. Expenditureswhich increase the useful life of an asset are capitalized. Fixed assets aredepreciated on a straight-line basis according to economic criteria correspon-ding to the estimated useful lives of the assets as set forth in the principles ofvaluation. Essentially, these are:
Buildings 30 – 40 years
Machinery and equipment 3 – 20 years
Vehicles 5 – 12 years
2.13 Intangible assets Intangible assets such as software development costs, goodwill arising frombusiness combinations for which the agreement date is before 31 March 2004,trademarks, licenses, and patents are capitalized at acquisition or productioncost and amortized on a straight-line basis over their estimated useful life, notexceeding 20 years. Impairments are recognized as necessary.
Goodwill arising from business combinations for which the agreement date is onor after 31 March 2004 are not amortized on a straight-line basis anymore, butare reviewed for impairment at each balance sheet date (see 2.6).
45
Eichhof Group
2.14 Non-current Non-current financial assets consist of investments available-for-sale, prepaidfinancial assets employee benefits and non-current loans. Investments available-for-sale are
measured at fair value. Not realized gains or losses are included in financialresult. Prepaid employee benefits consist mainly of employer’s contributionreserves and are recorded at nominal value. The third-party loans are intendedto secure distribution channels for the Beverages Division. They are amortized inline with sales and are recognized as sales deductions.
2.15 Non-current Debenture bonds and other interest-bearing loans are measured at amortizedfinancial liabilities cost using the effective interest rate method. Amortized cost was calculated by
taking into account any issue costs. Gains and losses through the amortizationprocess are recognized in financial result.
2.16 Derivative financial Derivative financial instruments are recognized as current or non-currentinstruments financial assets or liabilities, depending on the duration. If Hedge Accounting
according to IAS 39 is applied, the gains and losses on the hedging instrumentsare recognized directly in the equity until the recognition of the hedged risk inthe balance sheet. All other derivative financial instruments are recognized atfair value and not realized gains or losses are included in financial result.
2.17 Provisions Provisions are recognized for present obligations with uncertain timing oramounts as a result of a past event and for which a future outflow of resourcesis probable. The amount is based on the best possible estimate of the expectedoutflow of resources.
2.18 Own shares Own shares are reported at par value and presented as a deduction fromequity. Cost incurred or considerations received in excess of par value arerecognized in retained earnings.
46
Eichhof Group
NOTES
The figures below are stated in thousands of Swiss Francs (TCHF)
unless otherwise indicated.
3.1 Segment information
Business segments 2003/2004 2002/2003
as % as %of total of total
Net sales to third parties 252 507 100,0 258 197 100,0
Beverages Division 168 868 66,9 176 491 68,4
Color Division 75 387 29,9 79 060 30,6
Real Estate 8 414 1) 3,3 2 800 1,1
Other -162 -0,1 -154 -0,1
as % as %of sales of sales
EBITDA 37 463 14,8 30 062 11,6
Beverages Division 19 582 11,6 19 937 11,3
Color Division 12 040 16,0 10 285 13,0
Real Estate 7 204 1) 85,6 1 985 70,9
Other -1 363 n/a -2 145 n/a
as % as %of sales of sales
EBIT 24 278 9,6 12 915 5,0
Beverages Division 12 454 7,4 11 696 6,6
Color Division 6 613 8,8 2 851 3,6
Real Estate 6 640 1) 78,91 048 37,4
Other -1 429 n/a -2 680 n/a
as % as %of sales of sales
Depreciation of fixed assetsand intangible assets 13 185 5,2 16 147 6,3
Beverages Division 7 128 4,2 8 242 4,7
Color Division 5 427 7,2 6 433 8,1
Real Estate 564 6,7 937 33,5
Other 66 n/a 535 n/a
as % as %of sales of sales
Impairment 0 0,0 1 000 0,4
Beverages Division 0 0,0 0 0,0
Color Division 0 0,0 1 000 1,3
Real Estate 0 0,0 0 0,0
Other 0 n/a 0 n/a
1) includes gain on disposal of investment property of TCHF 5 964
47
Eichhof Group
Business segments 2003/2004 2002/2003as % as %
of total of total
Gross investments in fixed assets 13 918 100,0 14 352 100,0
Beverages Division 11 395 81,9 10 469 72,9
Color Division 1 601 11,5 1 081 7,5
Real Estate 894 6,4 2 656 18,6
Other 28 0,2 146 1,0
as % as %of total of total
Average number of employees 669 100,0 662 100,0
Beverages Division 409 61,1 427 64,5
Color Division 253 37,8 228 34,4
Real Estate 2 0,3 2 0,3
Other 5 0,8 5 0,8
Net assets by business segment
as of September 30, 2004 Assets Liabilities Net
Beverages Division 126 043 65 186 60 857
Color Division 52 850 44 155 8 695
Real Estate 41 459 0 41 459
Other 53 021 61 388 -8 367
Total 273 373 170 729 102 644
as of September 30, 2003 Assets Liabilities Net
Beverages Division 128 898 66 435 62 463
Color Division 53 695 52 836 859
Real Estate 46 068 0 46 068
Other 34 333 52 891 -18 558
Total 262 994 172 162 90 832
Return on average net assets 2003/2004 2002/2003
Beverages Division 20,2% 18,3%
Color Division 138,4% 614,4%
Real Estate 15,2% 2,3%
The figures of the holding company, financial activities, and consolidationeffects are included in the position "Other".
The products and business activities of the three business units are des-cribed in the report of the business year. The Eichhof group accounts forintra-segment sales and transfers as if the sales or transfers were to thirdparties at current market prices. There are no material inter-segment sales.
48
Eichhof Group
Geographical segments 2003/2004 2002/2003as % as %
of total of total
Net sales to third parties 252 507 100,0 258 197 100,0
Europe 207 455 82,2 210 848 81,7
America 27 588 10,9 25 216 9,8
Asia/Pacific 17 464 6,9 22 133 8,5
as % as %of total of total
Assets 273 373 100,0 262 994 100,0
Europe 251 037 91,8 238 355 90,6
America 17 733 6,5 20 147 7,7
Asia/Pacific 4 603 1,7 4 492 1,7
as % as %of total of total
Gross investments in fixed assets 13 918 100,0 14 352 100,0
Europe 12 511 89,8 13 554 94,4
America 1 066 7,7 720 5,0
Asia/Pacific 341 2,5 78 0,6
as % as %of total of total
Average number of employees 669 100,0 662 100,0
Europe 480 71,7 498 75,2
America 144 21,5 138 20,9
Asia/Pacific 45 6,8 26 3,9
3.2 Personnel expenses 2003/2004 2002/2003
Wages and salaries 51 982 51 909
Social security costs 4 045 4 336
Pension costs
– for defined benefit plans 3.16 1 902 3 165
– for defined contribution plans 3.16 2 032 2 093
Other personnel expenses 2 109 2 841
Personnel expenses 62 070 64 344
The revaluation of the prepaid employee benefits resulted in a gain ofTCHF 122 in the reporting period. In contrast to this, an expense of TCHF1 044 was recorded due to the amortization of the funding deficit as of30.09.02 over the expected average remaining working periods of theemployees in the previous period.
3.3 Sales and administration expenses 2003/2004 2002/2003
Sales expenses 27 021 26 585Administration expenses 9 837 11 771Sales and administration expenses 36 858 38 356
49
Eichhof Group
3.4 Financial result 2003/2004 2002/2003
Interest income 239 314
Income from securities 2 654 1 237
Exchange gains 2 981 3 159
Financial income 5 874 4 710
Interest expense -4 322 -4 838
Expenditure relating to securities -762 -1 703
Exchange losses -2 108 -2 217
Amortization of issue costs -150 -169
Financial expenses -7 342 -8 927
Financial result, net -1 468 -4 217
3.5 Income taxes 2003/2004 2002/2003
Current income taxes -5 222 -1 438
Deferred income taxes 770 869
Effective tax expense -4 452 -569
The effective tax expense, calculated by multiplying the local statutory taxrate with local taxable profit or loss, differs from expected tax expense asfollows:
2003/2004 2002/2003
Profit before income taxes 22 810 8 698
Expected taxes (25,6%; previous year 24,0%) -5 838 -2 088
Effect on deferred tax liabilities due to changes in income tax rates -68 -117
Recognition of tax losses not capitalized 1 887 2 151
Other effects -433 -515
Effective tax expense -4 452 -569
Changes in deferred taxes were calculated as follows:
2004 2003
Deferred tax assets
As of Oktober 1 1 003 458
Discharges to income statement 68 545
Deferred tax assets as of September 30 1 071 1 003
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Eichhof Group
2004 2003
Deferred tax liabilities
As of Oktober 1 15 193 15 517
Discharges to income statement -702 -324
Deferred tax liabilities as of September 30 14 491 15 193
The deferred taxes are attributable to the following balance sheet items:
2004 2003
Losses available for offseting against future taxable income 455 433
Inventories 196 220
Other assets 420 350
Deferred tax assets as of September 30 1 071 1 003
2004 2003
Inventories 1 270 2 098
Fixed assets 8 175 8 543
Other assets 4 277 3 846
Liabilties 769 706
Deferred tax liabilities as of September 30 14 491 15 193
The Eichhof Group has total tax losses carried forward whose potentialtax effect is about CHF 9.6 million (previous year: CHF 8.8 million), ofwhich TCHF 455 (previous year: TCHF 433) were capitalized as deferredtax assets. These tax losses carried forward can potentially be used inSwitzerland for seven years and abroad partly unrestrictedly.
30.09.04 30.09.03
Tax losses may be offset: 2004 0 1 844
2005 0 0
2006 0 0
2007 0 7 510
2008 194 2 078
more than five years 33 089 30 944
Total tax losses carried forward available for offseting 33 283 42 376
51
Eichhof Group
3.6 Cash and cash equivalents 30.09.04 30.09.03
Cash in hand, postal accounts 514 1 281
Cash at bank 19 576 7 608
Short-term deposits (up to 90 days) 3 000 0
Cash and cash equivalents 23 090 8 889
Material non-cash transactions refer to the amortization of loans, intendedto secure distribution channels, as sales deductions.
3.7 Accounts receivable 30.09.04 30.09.03
Gross trade accounts receivable 48 044 100% 49 026 100%
Allowances -2 167 -5% -3 729 -8%
Net accounts receivable 45 877 95% 45 297 92%
3.8 Other accounts receivable 30.09.04 30.09.03
Other accounts receivable due from
– third parties 3 995 3 478
– government 1 140 1 479
– pension funds 2 737 3 041
Prepayments to third parties 24 149
Other accounts receivable 7 896 8 147
Eichhof Holding Ltd. gave an unsecured, always repayable loan of TCHF2 500 (previous year TCHF 3 000) to the pension fund at market terms forpartial financing of real estate.
3.9 Inventories 30.09.04 30.09.03
Raw materials 820 3% 672 2%
Work-in-progress 147 1% 379 1%
Semi-finished and finished goods 9 794 34% 11 753 40%
Trading goods 17 583 62% 16 772 57%
Gross inventories 28 344 100% 29 576 100%
Allowances -4 125 -15% -4 806 -16%
Net inventories 24 219 85% 24 770 84%
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Eichhof Group
3.10 Changes to fixed assets
Machinery Land and buildings Fixed assetsequipment, Operating Investment under con- Total
Acquisition or production costs vehicles property property struction fixed assets
as of 1.10.2002 143 060 81 665 65 635 0 290 360
Additions 4 380 2 165 2 656 0 9 201
Disposals -1 981 -108 0 0 -2 089
Translation differences -1 388 -1 296 0 0 -2 684
as of 30.09.2003 144 071 82 426 68 291 0 294 788
Additions 5 396 1 679 756 0 7 831
Reclassifications 0 -853 -3 034 3 887 0
Disposals -9 262 1) 0 -6 672 2) 0 -15 934
Translation differences -454 -459 0 0 -913
as of 30.09.2004 139 751 82 793 59 341 3 887 285 772
Accumulated depreciation
as of 1.10.2002 112 936 43 268 21 287 0 177 491
Additions 8 517 1 805 936 0 11 258
Disposals -1 809 -54 0 0 -1 863
Translation differences -1 138 -678 0 0 -1 816
as of 30.09.2003 118 506 44 341 22 223 0 185 070
Additions 6 958 1 116 558 0 8 632
Reclassifications 0 -701 -241 942 0
Disposals -7 266 1) 0 -286 0 -7 552
Translation differences -393 -258 0 0 -651
as of 30.09.2004 117 805 44 498 22 254 942 185 499
Net carrying amount as of 30.09.2003 25 565 38 085 46 068 0 109 718
as of 30.09.2004 21 946 38 295 37 087 2 945 100 273
Insurance values as of 30.09.2004 97 291 87 021 42 425 2 411 229 148
Net carrying amount of fixed assets under finance leases as of 30.09.2004 0
Fixed assets in construction are investment properties which are developed bythe Eichhof Group itself. Market values of investment properties and fixed assetsin construction were determined based on valuations performed by indepen-dent experts and amount to CHF 48,2 million (previous year: CHF 58,8 million).Income from investment property amounts to TCHF 2 450 (previous year: TCHF2 715), expenses for investment property amount to TCHF 780 (previous year:TCHF 730).
1) The Beverages Division sold its trucks in the reporting period. The trucks andvans are now leased (operating lease). Regarding leasing liabilities see note3.21.
2) In the reporting period, the result on disposal of fixed assets amounts toTCHF 5 954 (previous year: TCHF -57). It includes a gain after tax on a sale ofan investment property of CHF 4,9 million.
53
Eichhof Group
3.11 Changes to intangible assets
Capitalized Tradesoftware marks,
development licenses,Acquisition or production costs costs Goodwill patents Total
as of 1.10.2002 11 675 2 499 21 243 35 417
Additions 425 2) 0 0 425
Translation differences -856 0 -226 -1 082
as of 30.09.2003 11 244 2 499 21 017 34 760
Additions 0 2) 365 1) 256 621
Disposals -412 0 -1 439 -1 851
Translation differences -325 -6 -4 -335
as of 30.09.2004 10 507 2 858 19 830 33 195
Accumulated amortization
as of 1.10.2002 4 114 500 4 104 8 718
Additions 2 740 249 1 900 4 889
Impairment 0 0 1 000 3) 1 000
Translation differences -268 0 -218 -486
as of 30.09.2003 6 586 749 6 786 14 121
Additions 2 292 250 2 011 4 553
Disposals -412 0 -1 439 -1 851
Translation differences -189 0 0 -189
as of 30.09.2004 8 277 999 7 358 16 634
Net carrying amount
as of 30.09.2003 4 658 1 750 14 231 20 639
as of 30.09.2004 2 230 1 859 12 472 16 561
1) In the reporting period, the Color Division acquired the net assets of Milori,Inc. For further details see note 3.25.
2) Out of the total of TCHF 7 207 (previous year: TCHF 5 098) spent on softwaredevelopment costs, no costs (previous year: TCHF 425) were capitalized.
3) In the Color Division an additional impairment for patents and licenses in theamount of TCHF 1 000 had to be recorded in the previous year due to conser-vative estimates of future cash flows and due to exchange rate risks.
54
Eichhof Group
3.12 Financial assets 30.09.04 30.09.03
Marketable securities 22 168 15 041
Derivative financial instruments 0 239
Current financial assets 22 168 15 280
Investments in third parties 148 135
Prepaid employee benefits 2 525 2 403
Non-current loans to third parties 26 586 24 403
Non-current financial assets 29 259 26 941
Financial assets 51 427 42 221
Non-current loans to third parties mainly comprise interest-free loans forlong-term securing of distribution channels for the Beverages Division. Seenote 3.16 regarding the prepaid employee benefits.
3.13 Financial liabilities 30.09.04 30.09.03
Bank overdrafts 0 5 940
Financial liabilities - third parties 2 070 2 081
Debenture bond 59 850 0
Derivative financial instruments 11 0
Non-current financial liabilities 61 931 8 021
Debenture bonds 39 981 99 653
Derivative financial instruments 1 201 0
Non-current financial liabilities 41 182 99 653
Financial liabilities 103 113 107 674
Eichhof Holding Ltd. has the following bonds outstanding:
CHF 60 million bond at 4 1/4%, 1997-2005, due April 1, 2005CHF 40 million bond at 4%, 1998-2006, due March 30, 2006
Repayable as follows: 30.09.04
Up to 1 year Up to 5 years Total
Financial liabilities – third parties 2 070 0 2 070
Debenture bonds 59 850 39 981 99 831
Derivative financial instruments 11 1 201 1 212
Financial liabilities 61 931 41 182 103 113
55
Eichhof Group
3.14 Other liabilities 30.09.04 30.09.03
Other current liabilities towards
– third parties 6 689 6 429
– government 3 804 631
– pension funds 0 26
Prepayments from third parties 1 459 1 473
Other current liabilities 11 952 8 559
Other non-current liabilities 5 642 5 870
Other liabilities 17 594 14 429
Other non-current liabilties towards third parties include "Deposits on contai-ners".
Credit lines and bank liabilities include agreements between subsidiaries andtheir local banks.
30.09.04 30.09.03
Credit lines available 28 340 30 200
Credit lines not drawn on 28 340 24 260
There are no material debt covenants. All credit terms entered into in order tomaintain the credit lines were met at the balance sheet date.
3.15 Provisions
Warranties Other Total
As of 1.10.2002 451 56 507
Additions 282 239 521
Utilized 0 -3 -3
Dissolved -214 -20 -234
Translation differences -46 7 -39
As of 30.09.2003 473 279 752
Additions 130 6 136
Utilized -53 -34 -87
Translation differences -22 2 -20
As of 30.09.2004 528 253 781
Provisions for warranty claims refer to the Color Division. It is expected thatmost of these costs will incur within the first year after the delivery of the pro-duct.
56
Eichhof Group
3.16 Employee benefits
Defined benefit plans
Net benefit expenses 2003/2004 2002/2003
Current service cost 4 041 4 342
Interest cost on benefit obligation 3 779 3 971
Expected return on plan assets -4 668 -4 501
Effect of curtailments / settlements 0 -339
Amortization of transition cost 13 350
Amortization of losses 218 890
Employee contributions -1 481 -1 548
Expense recognized in the income statement 1 902 3 165
Actual return on plan assets 10 111 6 739
Net prepaid employee benefits 30.09.04 30.09.03
Present value of funded obligations 106 232 104 794
Market value of plan assets -102 241 -95 027
Funding deficit 3 991 9 767
Present value of unfunded obligations 289 291
Unrecognized actuarial losses -6 670 -12 312
Unrecognized transition cost -135 -149
Prepaid employee benefits -2 525 -2 403
Movement in the net prepaid employee benefits
2004 2003
Prepaid employee benefits as of October 1 -2 403 -3 447
Net expense recognized in the income statement 1 902 3 165
Employer's contributions -2 026 -2 138
Translation differences 2 17
Prepaid employee benefits as of September 30 -2 525 -2 403
The prepaid employee benefits of TCHF 2 525 are due to Swiss pension plans.These plans are legally independent foundations, the Group is not liable for. Theneeded coverage is established according to national legislation, where contri-butions paid until the balance sheet date and the corresponding interest areincluded. Future salary and pension increases though, in contrary to IAS 19, areexcluded. The Swiss pension plans are covered by 103% as of January 1, 2004(previous year: 100%).
According to Swiss law, prepayments reported on the balance sheet cannot bereimbursed to the company, but in some pension schemes they are used tofinance employer contributions to individual benefit plans.
57
Eichhof Group
The decrease of the unrecognized actuarial losses in the reporting and in theprevious period was the result of a return on assets exceeding expectations, ofthe amortization included in the current expense and of an actuarial gain due toan adjustment of the assumption of the future rate of pension increases.
The plan assets also include 2 660 (previous year: 2 660) shares of Eichhof Hol-ding Ltd. at fair value of TCHF 2 846 as of September 30, 2004 (previous year:TCHF 1 862).
The weighted actuarial assumptions can be summarized as follows:
30.09.04 30.09.03
Discount rate 3,72% 3,70%
Expected long-term rate of return on assets 4,50% 4,98%
Expected rate of salary increases 2,00% 2,00%
Defined contribution plans
The company maintains various defined contribution plans for which expensesfor 2003/2004 amount to TCHF 2 032 (previous year: TCHF 2 093).
3.17 Financial instruments
Risk management and risk hedging instrumentsand off-balance-sheet risks
The Group's operating activities are exposed to a certain level of interest rate,foreign currency and credit risks. Individual categories of risks are con-tinuously monitored and adjusted in relation to the overall risk exposure of theGroup.
To hedge foreign currency and interest rate risks and to improve the yield onfinancial assets the Eichhof Group uses currency futures, option contracts andother financial instruments.
Management of interest rate risks
The Group is exposed to interest rate fluctuations due to movements in finan-cial markets. In order to hedge those risks, interest swaps may be entered.
Management of foreign currency risks
A significant portion of the Group's cash flows is denominated in foreign cur-rencies. The Group attempts to minimize currency exposure by matching ope-rating income and operating expenses in foreign currency. Any residual risk ishedged in accordance with financial risk policy. Hedging instruments includestandardized foreign currency futures and options denominated in variousmajor currencies, generally with maturities of less than 12 months.
58
Eichhof Group
Derivative financial instruments
Positive NegativeContract values replacement value replacement value
as of 30.09. 2004 2003 2004 2003 2004 2003
Currency instruments
Foreign currency futures 1 210 16 290 0 239 -11 0
Interest instruments
Interest rate swap 50 000 0 0 0 -1 201 0
Outstanding foreign currency futures transactions are due until October 25,2004. The related derivative financial instruments were recognised in currentfinancial assets and liabilities at fair values. There were no currency optionsoutstanding on September 30, 2004 as in the previous year.
The interests of a probable refinancing of the debenture bond, due next year,were hedged by a interest rate swap for the periode from April 1, 2005 to April 1, 2010. Eichhof Holding Ltd. pays a fixed interest rate of 2,84% p.a. andreceives a variable interest rate based on the 6 months CHF-LIBOR.
Fair values
The carrying values of cash and cash equivalents, trade accounts reveivableand current liabilities approximate the fair values according to IFRS. Currentfinancial assets and derivative financial instruments were measured at fairvalues.
Management of credit risks
Credit risks comprise of the credit and default risks associated with marketa-ble securities and claims as well as of derivative financial instruments andmoney market contracts.
The credit risk is minimized by only purchasing marketable securities of com-panies with high ratings. Default risk for derivative financial instruments andmoney market contracts is reduced by entering into transactions only withbanks or other financial institutions with a high rating at the time of closing. Thecredit risks are continually monitored and kept within defined parameters.
Due to its large geographic diversification and number of customers, theGroup is not exposed to material concentrations of credit risks.
59
Eichhof Group
3.18 Management share option plan
Options to subscribe Eichhof registerel shares are granted to members of theBoard of Directors and of the management as part of their performance-rela-ted bonuses. The options carry the right to purchase one share per option,vest in three years, and expire in ten years. They have a predetermined exer-cise price calculated according to the Black-Scholes-formula. For the possibleexcercise of the options a conditional share capital of maximally CHF 8 800exists at par value of CHF 1.
Quantity of Quantity of Quantity ofoptions Expiration Expiration options optionsissued Exercise- of blocking of exercise exercised repurchased
Year issued 30.09.2004 price (CHF) period periode 30.09.2004 30.09.2004
per October 1:
1998 980 1 050 01.10.01 01.10.08 0 420
1999 1 560 680 01.10.02 01.10.09 0 360
2000 1 380 730 01.10.03 01.10.10 0 160
2001 1 400 280 01.10.04 01.10.11 0 140
2002 1 420 205 01.10.05 01.10.12 0 40
2003 1 640 300 01.10.06 01.10.13 0 0
Total 8 380 0 1 120
No options were exercised in the reporting and in the previous period.
3.19 Earnings per share (EPS)
Earnings per share were calculated by dividing the net profit attributable toordinary shareholders by the average number of ordinary shares outstandingduring the year (issued shares less own shares).
Diluted earnings per share were calculated by dividing the net profit attributa-ble to ordinary shareholders by the average number of ordinary shares out-standing during the year adjusted for the effects arising as a result of issuingown shares reserved for the management share option plan.
2003/2004 2002/2003
Net profit per income statement 18 358 8 129
Average number of shares outstanding 162 983 174 956
Basic earnings per share in CHF 112,64 46,46
Effect of dilution: Number of share options 3 281 388
Adjusted average number of shares for diluted earnings per share 166 264 175 344
Diluted earnings per share in CHF 110,41 46,36
60
Eichhof Group
3.20 Related parties
Related parties are members of the Board of Directors, the management andimportant shareholders. As in the previous year, no claims or liabilities existbetween the company and its related parties.
Additionally, no transactions took place except for those in the normal courseof business (e.g. salary, dividends, etc.) in the reporting and in the previousyear. The compensatioon paid to the members of Eichhof Holding Ltd’s Boardof Directors are shown on page 12.
3.21 Leasing liabilities
As in the previous year, no finance lease contracts exist at the balance sheetdate.
The following overview shows future liabilities arising from non-capitalized ope-rating lease contracts:
30.09.04 30.09.03
Due in reporting period + 1 year 1 080 674
Due in reporting period + 2 years 1 010 241
Due in reporting period + 3 years 943 180
Due in reporting period + 4 years 796 13
Due in reporting period + 5 years 796 0
Due in reporting period + > 5 years 764 0
Non-capitalized operating leasing liabilities 5 389 1 108
The Beverages Division began to lease its trucks and vans in the reportingperiod. The lease term is six years. There are no renewal or purchase options.
3.22 Contingent liabilities
There were no sureties, guarantee obligations or pledges in favor of third par-ties either in the reporting period or in the previous year.
The company is involved in legal disputes, lawsuits and court cases in the ordi-nary course of business. As far as the company can assure such legal claimsare not currently expected to have a significant impact on its financial situationor operating result on a scale greater than its existing provisions.
3.23 Securing of own liabilities
No assets were charged to secure own liabilties in the reporting and in the pre-vious period.
3.24 Commitment to capital expenditure
As of September 30, 2004, no commitments to capital expenditure exist.
61
Eichhof Group
3.25 Acquisitions
Datacolor acquired the net assets and the technology of Milori, Inc. as of16.07.2004. After deducting current assets of USD 0,2 million a goodwill ofTUSD 285 remained. This was mainly paid for the technology of color calibara-tion of Home Theater display devices and video projectors. The fair value couldnot be measured reliably.
The revenue and the result of the purchased activities was immaterial in thereporting period.
3.26 Post balance sheet events
The Group Financial Statements were approved for publication by the Board ofDirectors on November 18, 2004. They must still be approved by the sharehol-ders at the Annual General Meeting.
No significant events have occurred since the balance sheet date and up toNovember 18, 2004, which might have any influence on the information pres-ented in the 2003/2004 annual report or which might need to be disclosedhere.
3.27 Foreign exchange ratesYear-end rates Average rates
for balance sheet for income statement
Currency Unit 30.09.04 30.09.03 2003/2004 2002/2003
USD 1 1,2600 1,3200 1,2800 1,3900
EUR 1 1,5500 1,5400 1,5500 1,5000
GBP 1 2,2700 2,1900 2,2800 2,2200
HKD 1 0,1616 0,1710 0,1700 0,1610
3.28 Consolidated income statement (cost of sales)
2003/2004 2002/2003
Net sales 1) 259 670 100,0% 265 599 100,0%
Cost of goods sold 1) -127 635 -137 497
Gross profit 132 035 50,8% 128 102 48,2%
Sales and marketing -82 298 -86 537
Administration -15 259 -18 061
Research and development -9 752 -10 296
Other operating expenses -448 -293
EBIT 24 278 9,4% 12 915 4,9%
1) The difference of net sales compared to the presentation according to thenature of expense method is mainly due to the reclassification of the beertaxes from sales deductions to cost of goods sold.
62
Eichhof Group
3.29 Subsidiary companiesShare capital Holdings
Company Location Currency in 1 000s in %
Beverages Division
Brauerei Eichhof AG* CH-Lucerne CHF 15 000 100
Eichhof Getränke AG* CH-Lucerne CHF 10 000 100
Bier-Import AG* CH-Lucerne CHF 500 100
MABAG AG* CH-Lucerne CHF 100 100
Kellerei St. Georg AG (prev. Lufrisca AG) CH-Lucerne CHF 100 100
Der fliegende Harass AG CH-Zurich CHF 50 100
Ulmer & Knecht AG CH-Zurich CHF 392 100
Color Division
Datacolor Holding AG* CH-Lucerne CHF 10 000 100
CV US Inc.* USA-Ohio USD 0 100
Colorvision Administrative AG CH-Lucerne CHF 3 000 100
Datacolor AG CH-Dietlikon CHF 2 000 100
Datacolor International France SA F-Montreuil EUR 274 100
Datacolor GmbH D-Marl EUR 256 100
Datacolor Asia Pacific Pte. Ltd. Singapore SGD 3 000 100
Datacolor Asia Pacific (HK) Ltd. Hong Kong HKD 10 100
Applied Color Systems Inc. USA-Lawrenceville USD 35 808 100
Colorvision Inc. USA-Delaware USD 0 100
Datacolor International Ltd. GB-Altrincham GBP 7 500 100
Datacolor Technology (Suzhou) Co., Ltd. China USD 350 100
*These companies are held directly by Eichhof Holding Ltd.
63
Eichhof Group
REPORT OF THE GROUP AUDITORS
to the General Meeting of Eichhof Holding Ltd., Lucerne
As Group auditors, we have audited the consolidated financial statements(income statement, balance sheet, cash flow statement, statement of changesin equity, and notes, as set out on pages 37 to 62) of Eichhof Holding Ltd. forthe year ended September 30, 2004.
These consolidated financial statements are the responsibility of the Board ofDirectors. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audit. We confirm that we meet the legalrequirements concerning professional qualification and independence.
Our audit was conducted in accordance with auditing standards promulgatedby the Swiss profession and with the International Standards on Auditing (ISA),which require that an audit be planned and performed to obtain reasonableassurance about whether the consolidated financial statements are free frommaterial misstatement. We have examined on a test basis evidence supportingthe amounts and disclosures in the consolidated financial statements. We havealso assessed the accounting principles used, significant estimates made andthe overall consolidated financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements give a true and fair view ofthe financial position, the results of operations and the cash flows in accor-dance with the International Financial Reporting Standards (IFRS) and complywith Swiss law.
We recommend that the consolidated financial statements submitted to you beapproved.
KPMG Fides Peat
Markus Forrer Sandro MascarucciSwiss Certified Accountant Swiss Certified AccountantAuditor in Charge
Lucerne, November 18, 2004
64
Eichhof Holding Ltd.
INCOME STATEMENT
in TCHF 2003/2004 2002/2003
Financial income 23 482 7 440
Financial expenses -6 214 -5 875
Administrative expenses -943 -1 141
Income taxes -509 -117
Net profit 15 816 307
Retained earnings carried forward 11 846 11 539
Dividend -4 970 0
Retained earnings 22 692 11 846
65
Eichhof Holding Ltd.
BALANCE SHEET
in TCHF 30.09.04 30.09.03
Assets
Cash and cash equivalents 12 928 1 169
Current financial assets 21 450 14 434
Other accounts receivable
– third parties 2 610 3 000
– group companies 168 20 062
Prepaid expenses 81 183
Current assets 37 237 23,5% 38 848 26,7%
Investments in group companies 3 69 696 67 421
Own shares 5 15 505 10 142
Loans to group companies 3 35 600 28 700
Organization costs 150 300
Non-current assets 120 951 76,5% 106 563 73,3%
Assets 158 188 100,0% 145 411 100,0%
Liabilities and shareholders' equity
Financial liabilities 4 62 081 2 081
Other current liabilities
– third parties 166 250
– group companies 323 151
Accrued liabilities 2 193 1 550
Current liabilities 64 763 40,9% 4 032 2,8%
Financial liabilities 4 41 201 100 000
Non-current liabilities 41 201 26,1% 100 000 68,7%
Liabilities 105 964 67,0% 104 032 71,5%
Share capital 177 177
Legal reserves 2 332 2 332
Reserves for own shares 16 234 16 247
Free reserves 10 789 10 777
Retained earnings 22 692 11 846
Shareholders' equity 5 52 224 33,0% 41 379 28,5%
Liabilities and shareholders' equity 158 188 100,0% 145 411 100,0%
Eichhof Holding Ltd.
66
4 Financial liabilities 30.09.04 30.09.03TCHF TCHF
Current financial liabilities due to third parties 2 070 2 081
Debenture bond 1) 60 000 0
Derivative financial instruments 11 0
Current financial liabilities 62 081 2 081
Debenture bonds 1) 40 000 100 000
Derivative financial instruments 1 201 0
Non-current financial liabilities 41 201 100 0001) For details see notes Eichhof Group on page 54
NOTES
1 Introduction
The financial statements of Eichhof Holding Ltd. comply with the SwissCode of Obligation.
2 Accounting and valuation principles
Financial assetsFinancial assets are reported at acquisition cost or lower market value.
Investments and loansThey are reported at acquisition cost less accumulated depreciation.
3 Loans and investments
Loans granted to group companies serve to finance them and are given ona long-term basis. The directly and indirectly hold investments of EichhofHolding Ltd. are presented in note 3.29, page 62 of this report.
5 Shareholders' equity
Share capitalThe share capital of Eichhof Holding Ltd. of CHF 177 491 (previous year:CHF 177 491) is fully paid-in and consists of 177 491 registered shares with apar value of CHF 1 each (previous year: 177 491 registered shares with a parvalue of CHF 1 each).
In the reporting period 2002/2003 19 665 shares were bought back and eli-minated. Additionally, the par value of the share was reduced from CHF 25 toCHF 1. The resulting effects were recorded in the free reserves.
The shares are listed on the Zurich Stock Exchange under issue number 853 104.
67
Eichhof Holding Ltd.
Conditional share capitalFor the possible excercise of the management share options a conditionalshare capital of maximally CHF 8 800 exists at par value of CHF 1 (previousyear: CHF 8 800).
Own sharesEichhof Holding Ltd. holds a total of 14 491 (previous year: 14 488) of ownshares, carried at TCHF 15 505. The voting rights for these shares aresuspended. A reserve for own shares has been duly formed for these shares.
2003/2004 2002/2003
Par value Book value Par value Book valueTCHF TCHF Number TCHF TCHF Number
Balance at 1.10. 14 10 142 14 488 292 7 001 11 669
+ Shares purchased
At par of CHF 25 90 2 166 3 631
At par of CHF 1 0 54 63 0 66 114
- Shares sold
At par of CHF 25 -18 -417 -720
At par of CHF 1 0 -60 -60 0 -113 -206
+/- Adjustment for repayment of par value -350 -350
+/- Market value adjustment 5 369 1 789
Balance at 30.09. 14 15 505 14 491 14 10 142 14 488
The share capital entitled to a dividend amounts to CHF 163 000.
Major shareholdersThe Board of Directors of Eichhof Holding Ltd. is aware of the following indi-vidual shareholders and jointly voting shareholder groups whose holdingsexceed 5% of all voting shares:
Dubach family 28,7% (previous year 29,0%), Keller family 8,2% (previousyear 8,2 %), Marc Rich Group 9,2% (previous year 10,9%).
6 Pledges and guarantees in favour of third parties
On September 30, 2004, Eichhof Holding Ltd. had provided pledges to amaximum amount of TUSD 10 000 (previous year: TUSD 10 000) on behalf ofgroup companies, of which none (previous year: TUSD 4 500) were drawn onat the balance sheet date.
68
Eichhof Holding Ltd.
PROPOSAL OF THE BOARD OF DIRECTORS
Proposed appropriation of retained earnings
Retained earnings
Profit 2003 /2004 CHF 15 815 225
Retained earnings carried forward CHF 6 877 073
Retained earnings CHF 22 692 298
The Board of Directors proposes the retained earnings of CHF 22 692 298 ofEichhof Holding Ltd. to be distributed as follows:
Dividend on dividend-entitled capital of CHF 163 000 CHF 2 445 000
Retained earnings to be carried forward CHF 20 247 298
Retained earnings CHF 22 692 298
The dividends of CHF 2 445 000 corresponds to a gross dividend of CHF 15per dividend-entitled share at par value of CHF 1. If this earnings appropria-tion proposal is accepted, the date of payment will be Tuesday, February 1,2005.
69
Eichhof Holding Ltd.
REPORT OF THE STATUTORY AUDITORS
to the General Meeting of Eichhof Holding Ltd., Lucerne
As statutory auditors, we have audited the accounting records and the finan-cial statements (income statement, balance sheet, and notes, as set out onpages 64 to 68) of Eichhof Holding Ltd. for the year ended September 30,2004.
These financial statements are the responsibility of the Board of Directors. Ourresponsibility is to express an opinion on these financial statements based onour audit. We confirm that we meet the legal requirements concerning profes-sional qualification and independence.
Our audit was conducted in accordance with auditing standards promulgatedby the Swiss profession, which require that an audit be planned and perfor-med to obtain reasonable assurance about whether the financial statementsare free from material misstatement. We have examined on a test basis evi-dence supporting the amounts and disclosures in the financial statements. Wehave also assessed the accounting principles used, significant estimatesmade and the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.
In our opinion, the accounting records and financial statements and the propo-sed appropriation of retained earnings comply with Swiss law and the compa-ny's articles of incorporation.
We recommend that the financial statements submitted to you be approved.
KPMG Fides Peat
Markus Forrer Sandro MascarucciSwiss Certified Accountant Swiss Certified AccountantAuditor in Charge
Lucerne, November 18, 2004
70
Investors’ information
INVESTORS' INFORMATION
Stock exchange information
Expected ex-date 2005 01.02.05
Security ID 853 104
ISIN CH0008531045
Reuters EINZn.S
Bloomberg EI/N
Investdata EIN
Capital structure 30.09.04 30.09.03
Share capital in CHF 177 491 177 491
Conditional share capital in CHF 8 800 8 800
Number of registered shares 177 491 177 491
Nominal value per share in CHF 1 1
Registration restrictions none none
Voting restrictions none none
Opting out / opting up none none
Major shareholders (in%) 30.09.04 30.09.03
Dubach family 28,7 29,0
Keller family 8,2 8,2
Marc Rich Group 9,2 10,9
Shareholders' structure (in%) 30.09.04 30.09.03
Major shareholders 46,1 48,1
Private investors 68,2 72,2
Corporate investors 31,8 27,8
thereof institutional investors 3,9 4,1
Shares at disposal 7,9 11,4
Spread of shares 30.09.04 30.09.03
1 – 100 3 056 3 060
101 – 1 000 61 65
1 001 – 5 000 6 4
5 001 – 10 000 0 0
>10 000 *4 *4
Total 3 127 3 133
* incl. own shares of Eichhof Holding Ltd.
71
Investors’ information
Share price data in CHF 2004 2003
First trading day 690 (01.10.2003) 600 (01.10.2002)
Low 685 (07.10.2003) 515 (10.03.2003)
High 1075 (07.09.2004) 705 (18.09.2003)
Last trading day 1070 (30.09.2004) 700 (30.09.2003)
Average 860 708
Market capitalisation in TCHF as of 30.09. 189,9 124,2
Per share data 1) 2004 2003 2002 2001 2000
Group net income, CHF 112,6 46,5 24,9 22,7 35,0
Cash flow from operating activities 175,6 193,9 132,1 48,8 -21,7
Shareholders' equity 629,8 519,2 580,5 608,0 649,2
Dividend in CHF 15,0 28,0 0,0 12,0 20,0
Reimbursement of par value in CHF 0,0 0,0 24,0 30,0 45,0
Total distribution in CHF 2) 15,0 28,0 24,0 42,0 65,0
Yield in % 2) 1,4 4,0 4,0 5,5 5,9
1) calculated by the weighted average number of shares outstanding (issued shares less own sha-res) and consolidated figures
2) According to the proposal of the Board of Directors to the shareholders of the Annual GeneralMeeting of January 27, 2005
72
Beverages Division Brauerei Eichhof AG Kellerei St. Georg AGObergrundstrasse 110 Obergrundstrasse 110CH-6002 Luzern CH-6002 LuzernTel. +41 41 319 11 11 Tel. +41 41 319 19 19Fax +41 41 319 12 06 Fax +41 41 319 14 41www.eichhof.ch www.kellerei-st-georg.ch
Eichhof Getränke AG The Beer CompanyObergrundstrasse 110 Obergrundstrasse 110CH-6002 Luzern CH-6002 LuzernTel. +41 41 319 12 12 Tel. +41 41 319 13 13Fax +41 41 319 12 06 Fax +41 41 319 10 30www.eichhof.ch www.thebeercompany.ch
Color Division Headquarter AsiaDatacolor International Datacolor Asia Pacific (HK) LimitedApplied Color Systems Inc. Room 4602-4603, 46/F5 Princess Road Metroplaza, Tower IILawrenceville NJ, USA 223 Hing Foug RoadTel. +1 609 924 21 89 Kwai Chung,Fax +1 609 895 74 72 Hong Kongwww.datacolor.com Tel. +852 2 420 82 83
Fax +852 2 420 83 20EuropeDatacolor AGBrandbachstrasse 10CH-8305 DietlikonTel. +41 1 835 37 11Fax +41 1 835 38 35www.datacolor.com
ADRESSES
Headquarter Holding Eichhof Holding Ltd.Obergrundstrasse 110CH-6002 LuzernTel. +41 41 319 12 42Fax +41 41 319 12 60www.eichhof.com
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