Annual Report • Apr 22, 2010
Annual Report
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Innovation for the future
| The Group | 2007 EUR ´000 |
2008 EUR ´000 |
2009 EUR ´000 |
Change |
|---|---|---|---|---|
| Sales | 38,104 | 2,325 | 23,283 | 14.8 % |
| Net margin | 2. % | | | |
| EBITDA | 3,008 | 91 | 3,024 | |
| EBIT | 880 | 3,3 | 494 | |
| EBT | 804 | 3,925 | 829 | |
| Net loss (profi t) | 1,033 | 3,333 | 80 | |
| Earnings per share (diluted/basic in EUR) | 0.24 | 0.8 | 0.22 | |
| Cash fl ow total | 289 | 8,542 | 5,315 | |
| Net cash fl ow for operating activities | 4,214 | 2,044 | 1,350 | |
| Capital expenditure | 6,289 | 4,844 | 4,264 | 12.0 % |
| 12-31-2007 EUR ´000 |
12-31-2008 EUR ´000 |
12-31-2009 EUR ´000 |
Change | |
| Total assets | 43,855 | 40,189 | 36,652 | 9 % |
| Equity | 25,869 | 21,48 | 20,906 | 3 % |
| Equity ratio | 59 % | 53 % | 5 % | |
| Employees (number) | 236 | 241 | 26 | 10.8 % |
| (end 3312010) | ||||
|---|---|---|---|---|
| The stock | 2007 | 2008 | 2009 | 2010 |
| Closing price (in EUR) | 9.15 | 1. | 3.95 | 4.05 |
| Period high (in EUR) | 19.6 | 9.04 | 4.3 | 4.25 |
| Period low (in EUR) | 8.5 | 1.4 | 1.34 | 3.45 |
| Marketcapitalisation at end of period (million EUR) | 39.2 | .3 | 16.9 | 1.4 |
| Number of shares | 4,28,000 | 4,28,000 | 4,28,000 | 4,28,000 |
Die Aktienkurse sind Schlusskurse im XetraHandel
content
| The Group | 4 |
|---|---|
| Preface | 4 |
| Report of the Supervisory Board | 6 |
| Company Boards | 8 |
| Company Profi le | 9 |
| InTiCa Systems stock and Investor Relations | 19 |
| Corporate Governance Report | 22 |
| Group Management Report | 25 |
| Risk Management und Risk Report | 35 |
| Subsequent Events | 38 |
| Outlook | 38 |
| Consolidated Financial Statements | 41 |
| Consolidated Balance Sheet | 43 |
| Consolidated Statement of Comprehensive Income | 44 |
| Consolidated Cash Flow Statement | 45 |
| Consolidated Statement of Changes in Equity | 46 |
| Notes to Consolidated Financial Statements | 48 |
| Responsibility Statement | 69 |
| Auditor´s Certifi cate | 0 |
| Technical Glossary | 72 |
| Financial Calendar | 75 |
Your confi dence in InTiCa Systems has paid off. While 2008 was a very diffi cult year for the company, we are now able to report that the groundwork done in that year was crowned with success in 2009. Despite the unfavourable background of the economic crisis, which led to a massive downturn in many sectors of industry, including those served by InTiCa Systems, we managed to generate growth through innovative products and thus position the company well for the future.
One major factor in this was our early focus on innovative and effi ciencyenhancing inductive components for applications in the industrial electronics and automotive technology segments, while ensuring stringent cost containment. For example, new clients in the automotive industry commissioned InTiCa Systems to develop and manufacture mechatronic assemblies, principally because our design meets their high technological and quality requirements. New customers from the solar sector achieved a signifi cant improvement in effi ciency combined with a reduction in the space required for installations thanks to inductive components and modules developed by InTiCa Systems.
These innovations enabled the Automotive Technology and Industrial Electronics segments to report growth against the trend in their industries. Despite high development expenses and the un avoidable startup costs, they will be able to report positive marginal income in the present fi scal year.
Group
Combining production at our ultramodern, central site in Prachatice, Czech Republic, and an increase in value added within the company brought further effi ciency improvements. Capacity utilization at this site is already most satisfactory and the site also offers suffi cient scope for planned future growth.
The Automotive Technology segment increased sales by more than 33 % to EUR 8.1 million in fi scal 2009, while the Industrial Electronics segment grew sales by more than 233% to EUR 1. million. It is particularly pleasing to report that as well as their good sales position, which already accounts for 42 % of consolidated sales, these two segments also operating profi tably at segment level.
At the same time, we registered a massive drop in sales in Communications Technology, which is still our largest segment.
On the positive side, we can report that this segment was able to further decrease its dependency on individual customers and reduced losses considerably in 2009.
The total comprehensive income of the InTiCa Systems Group was still negative at yearend, but this was mainly attributable to restructuring costs incurred in the fi rst six months, together with the investments made in this period to put the company back on a successful track.
Especially pleasing aspects of the company's development in 2009 were its success in broadening and internationalizing its customer base. InTiCa Systems was successful in a number of national and international tenders and was able to acquire orders, generally extending over several years, thanks to the signifi cant technological edge of its products. These achievements in a recessionary environment make us confi dent that we can continue to offer our customers innovative products that give them a competitive edge in the future. We have therefore established a sound basis which should pave the way for profi table growth of InTiCa Systems in the coming years. Logically, our goals for 2010 are to acquire further orders for innovative product developments and to ramp up the midterm growth of the company.
We would like to thank our shareholders, employees and business associates for the confi dence they placed in us in the past year. Although 2010 will continue to confront us all with new challenges, we believe that InTiCa Systems is very wellpositioned to tackle them. We trust we can count on your continued support.
Passau, April 2010
Yours,
Walter Brückl Günther Kneidinger
Chairman of the Board of Directors Member of the Board of Directors
In 2009 the Supervisory Board closely monitored the operating performance and future strategic development of InTiCa Systems. The main issues discussed at its meetings were the current production and volume sales situation and the progress being made with measures introduced in the previous year to raise effi ciency. The Supervisory Board discussed the company's business trends at every meeting, and also considered a range of supervisory issues.
The success of the measures introduced by the Board of Directors in fi scal 2008 with the support of the Supervisory Board became evident in the third and fourth quarters of 2009.
The members of the Supervisory Board in the year under review were Dr. Walter Hasselkus (Chairman), Dr. Horst Hollstein (Deputy Chairman) and Dr. Wulfdieter Braun.
Since the Supervisory Board only has three members, it has not established any committees. The full Supervisory Board discusses all relevant issues.
In performance of the advisory and supervisory functions imposed on it by law, the articles of incorporation and the rules of procedure, in 2009 the Supervisory Board continuously monitored the work of the Board of Directors in the interests of the company and its shareholders and provided advice. The yardsticks for oversight were the lawfulness, correctness, costeffectiveness and expediency used for the management of the company and the Group. The Board of Directors gave the Supervisory Board detailed information and explanations with regard to all business transactions and other matters requiring the approval of the Supervisory Board in compliance with the law, articles of incorporation or rules of procedure, and obtained the necessary consent. The Board of Directors provided continuous, comprehensive and timely information to the Supervisory Board either verbally or in writing.
Group
Discrepancies between planned and actual business performance and the budgets presented were discussed individually with the Supervisory Board and examined on the basis of the documents provided. The Board of Directors and Chairman of the Supervisory Board maintained close contact outside the regular meetings of the Supervisory Board. The Board of Directors ensured timely and full reporting on the economic development and fi nancial condition of the company and discussed corporate planning with the Supervisory Board.
The Supervisory Board held five ordinary meetings in 2009. All members of the Supervisory Board attended all meetings.
March 26, 2009: The annual financial statements and management report for fiscal 2008 were approved and adopted. Other items discussed were the plans for 2009, current business performance and adoption of the Declaration of Conformity.
June 4, 2009: Current business performance, progress with costsaving projects and new development projects were discussed. The other main issues on the agenda for this meeting were the resolutions and the presentation for the Annual General Meeting.
July 14, 2009: The current business performance, planned performance in the second half of the year and new development projects were discussed. Another area of focus was the status of talks with banks.
October 13, 2009: The Supervisory Board was informed of business trends in the first nine months and the expectations for the fourth quarter. In addition, the Board of Directors provided information on the planned share buy-back, new regulations resulting from the Corporate Governance Code and progress with building work to extend the Prachatice site in the Czech Republic.
November 27, 2009: The Supervisory Board was informed of current business trends and expectations for fiscal 2009. The corporate planning for 2010 to 2012 was also discussed and adopted. Other issues were adjusting the D&O insurance and contracts with members of the Board of Directors to align them to changes in the German Corporate Governance Code and the necessary re-election of the auditors for fiscal 2010.
The auditors Nirschl, Grössl & Koll GmbH, Eging am See, Germany, were selected by the Annual General Meeting to audit the annual financial statements and consolidated financial statements for the fiscal year from January 1, 2009 to December 31, 2009 and the Supervisory Board granted the audit contract in accordance with this.
The auditors have audited the management report and annual financial statements of InTiCa Systems Aktiengesellschaft as of December 31, 2009, prepared in accordance with the German Commercial Code (HGB), the consolidated financial statements as of December 31, 2009 prepared in accordance with the IFRS/IAS, and the Group management report, together with the book-keeping, and have awarded them an unqualified opinion. Impairment testing of orders on hand and advance payments for development and production work were agreed with the
auditors as the focal areas for the audit. In compliance with the statutory provisions, the Group's risk management system was included in the audit.
The Supervisory Board received regular progress reports from the auditors on the audit and acknowledged and approved the audit reports. The Supervisory Board has examined the management report, annual financial statements, consolidated financial statements and Group management report for 2009 submitted by the Board of Directors in detail and has no objections to raise on the basis of this examination. The annual financial statements, consolidated annual statements and management report on InTiCa Systems AG and the Group were approved by the Supervisory Board at its meeting on April 19, 2010. The auditors were present at this meeting and answered questions put by the members of the Supervisory Board on the financial statements and the audit. The financial statements are thus adopted.
The Supervisory Board also discussed issues relating to corporate governance and its further development, taking into account changes in German legislation and amendments made to German Corporate Governance Code in June 2009. The current Declaration of Conformity by the Board of Directors and Supervisory Board pursuant to sec. 161 of the German Stock Corporation Act (AktG) was adopted on April 19, 2010 and has been published on the company's website. The Supervisory Board is not aware of any conflicts of interest within the Supervisory Board.
Further details of corporate governance can be found in the joint report on corporate governance by the Board of Directors and Supervisory Board.
The Supervisory Board would like to thank the Board of Directorsand employees of the Group for their excellent work and outstanding commitment in fiscal 2009.
Passau, April 20, 2010
Dr. Walter Hasselkus
Chairman of the Supervisory Board
President Strategy, Finance, Human Resources, Production, Manufacturing Technology, IT, Investor Relations, Public Relations
Sales, R & D, Materials Management and Quality Management
Lawyer Gräfelfi ng
Member of the Supervisory Board of DAF Trucks NV, Eindhoven Chairman of the Supervisory Board of Ehlebracht AG, Enger Non-Executive Director of Wincanton plc, UK Chairman of the Supervisory Board of Wincanton GmbH, Mannheim Member of the Supervisory Board of W.E.T Automotive Systems AG, Odelzhausen
ViceChairman Business administration graduate Jesteburg Member of the Supervisory Board of Otto M. Schröder Bank AG, Hamburg Member of the Advisory Board of MAINKA Bauunternehmung August Mainka GmbH & Co., Lingen
InTiCa Systems is a European leader in the development, manufacture and commercialization of inductive components, passive analogue switching technology and mechatronic assemblies. It operates in the Automotive Technology, Communication Technology and Industrial Technology segments and has more than 295 employees at its sites in Passau (Germany), Prachatice (Czech Republic) and Neufelden (Austria).
Satisfi ed customers, longterm business relations and trend setting products that are in line with market requirements are the highest aims of InTiCa Systems. All our employees focus on quality by their thoughts and actions.
To develop an "idea" to a product that can be manufactured is doubtless one of the biggest challenges for a production company. A key to this is the manufacturing technology we use to realise the characteristics and attributes of our clients' products.
We appreciate this fact using our team of experts, who deal exclusively with new and innovative manufacturing technologies and manufacturing processes.
Core competence of the manufacturing technology
Here production processes are planned and custommade concepts for the clients' product are developed and implemented. We use our own manufacturing equipment, so we can ensure that we meet the demands of our clients for small as well as for large numbers
…in the end a satisfi ed client!
Communication and data networks via cable, radio or satellite necessitate ultimate requirements in quality and safety.
Our team of experts has indepth experience in development, construction and production of products and manufacturing technologies for advanced broadband components.
We use our skills to realise innovative projects in a short space of time, working together with our clients in an effi cient way.
For many years InTiCa Systems have effectively developed and produced applications for ultimate data rates and maximum packing density.
for high-speed data transfer, for example, for telecommunications equipment.
CPE SPLITTER (CUSTOMER PREMISES EQUIPMENT)
CO SPLITTER (CENTRAL OFFICE)
MDF SPLITTER (MAIN DISTRIBUTION FRAME)
InTiCa Systems
Products from the Automotive Technology segment include inductive components and mechatronic modules that raise the comfort and safety of cars, improve the performance of electric and hybrid vehicles and reduce carbon emissions.
that increase comfort and safety, for example, keyless entry systems that ensure only authorized persons have access to a vehicle.
DRIVE SYSTEMS
ENTERTAINMENTSYSTEMS
POWER AND CONTROL UNITS FOR HYBRID VEHICLES
ENERGY AND MOTOR MANAGEMENT CONTROL
KEYLESS ENTRY SYSTEMS
TYRE PRESSURE MONITOR SYSTEM
InTiCa Systems
InTica Systems' Industrial Electronics segment specializes in developing and manufacturing highquality, customtailored inductive components, mechatronic modules and system solutions for regenerative energy sources (solar power) and automation and drive technology.
Extensive knowhow in the development of inductive components combined with indepth expert knowledge ensures that our clients receive a rapid, effi cient performance, together with costoptimised solutions to the highest quality level.
PERFORMANCE COMPONENTS
PFC AND STORAGE CHOKE
FILTER AND NOISE SUPPRESSION
TRANSDUCERS AND TRANSFORMERS
COMPONENTS FOR RIFD (NONCONTACT TRANSMISSION)
MECHATRONIC MODULES AND SYSTEMS
Automation to maximise effi ciency
Stock
The consequences of the fi nancial and economic crisis depressed investors' sentiment on the international capital markets, especially in the fi rst quarter of 2009. At the time, many members of the fi nancial community expected a longdrawnout recession. As a result, the at times massive downslide in prices seen on the global stock exchanges in 2008 continued at the start of 2009, and the DAX dropped a further 25 % in the fi rst three months of 2009. However, sentiment picked up markedly in the second quarter, with extensive economic support from governments and central banks and hopes of a rapid economic recovery fuelling a broadly based rebound on the world's equity markets. Investors' confi dence gradually returned, initially in selective sectors, and their appetite for risk increased. Share prices were also pushed up by the high level of liquidity held by investors. Around midyear uncertainty about the sustainability of the economic uptrend caused prices to dip again temporarily. However, the markets rallied again in the third quarter, as many investors upped the equity exposure of their portfolios again in response to improve economic data.
Within a few weeks, the DAX managed to offset the heavy losses sustained up to the start of the second quarter and in the third quarter it was around 18 % higher than at yearend 2008. The DAX ended 2009 at 5,95 points, around 24 % up on yearend 2008 (4,810).
InTiCa Systems' share price developed positively in these conditions. Having hit a low of EUR 1.29 at the start of the year as a result of the disappointing earnings situation and the general pessimism on the fi nancial and capital markets, the share rallied considerably in the spring and traded around EUR 3 for a prolonged period. It rose further in the summer in the wake of the clear improvement in the economic outlook and the positive news fl ow from the company, which reported further new orders and a stabilization of sales and cost structures. The interim report confi rmed capital market expectations of the impact of the effi ciency enhancement drive and stronger growth prospects for the Automotive Technology and Industrial Electronics segments. In September the share topped EUR 4. Demand and supply remained around this level to the end of the year, so the share ended 2009 at EUR 3.95. Market capitalisation was thus EUR 16.9 million at yearend.
The most important trading exchange for shares in InTiCa Systems was the electronic trading platform XETRA, which accounted for nearly 71 % of trading in the share, followed by the Frankfurt Stock Exchange, which accounted for around 23%. An average of around 105,205 InTiCa Systems shares per month were traded via the XETRA® system in 2009. Marketmaking to support the liquidity and tradability of shares in InTiCa Systems in the fully electronic Xetra trading system operated by Deutsche Börse AG is still provided by Bank M.
| Shares in InTiCa Systems | 2009 | 2008 |
|---|---|---|
| Year high (XETRA®-closing price) |
4.37 | 9.04 |
| Year low (XETRA®-closing price) |
1.34 | 1.40 |
| Market capitalization at year end in EUR million |
16.9 | 7.29 |
The sharp drop in value suffered by InTiCa Systems' shareholders in 2008 was partly recouped by the share price performance of 132 % in 2009. The price performance of shares in InTiCa Systems was thus very significantly above that of most benchmark indices such as the DAX and TecDAX. It should also be noted that the DAXsector Technology index, which is calculated by Deutsche Börse AG and includes all technology companies listed in the Prime Standard, did even better, with a performance of 220 %. This is probably due to the fact that technological innovators are particularly badly hit at the start of a crisis but are then identified by many members of the investment community as future growth drivers during the crisis. Demand for shares in such companies was thus correspondingly high.
| Closing prices | 2009 | 2008 | Change |
|---|---|---|---|
| Shares in InTiCa Systems (XETRA®) |
3.95 | 1.70 | 132.4 % |
| DAX | 5,957.43 | 4,810.20 | 23.8 % |
| TecDAX | 817.58 | 508.31 | 60.8 % |
| DAXsector Technology | 316.46 | 98.94 | 219.9 % |
| DAXsubsector Communi cations Technology |
72.99 | 46.64 | 56.5 % |
As in the past, InTiCa Systems provided shareholders and members of the public with timely information on the company's development in 2009 through regular reporting and by taking part in several investor events such as capital market conferences and roadshows. In addition, background reports on InTiCa Systems and interviews with members of the Board of Directors were published in various high-circulation specialist stock-market and investment journals.
Investors also had regular opportunities to obtain timely information on corporate news and InTiCa Systems' business performance from the viewpoint of experienced capital market analysts and to keep abreast of their assessment of the company's future business development. The latest research reports from BankM are always available on the Investor Relations pages on InTiCa Systems' website. Moreover, the estimates for key financial data are included in the websites operated by major financial portals and online brokers, thus ensuring widespread access.
InTiCa Systems will be holding roadshows in 2010 on the same scale as in 2009 to present the company to new capital market multipliers and professional investors. It will also be reporting in detail on the company's business development at one-on-one meetings with present and potential investors.
The Board of Directors of InTiCa Systems believes that active, open and transparent communication with the capital markets, general public and the media is imperative. In the opinion of the Board of Directors, timely information on the company's current business performance and prospects remains essential, not just when conditions are good, but above all in periods of stock market weakness.
| ISIN | DE000584846 |
|---|---|
| WKN | 58 484 |
| Stock exchange symbol | IS |
| Bloomberg ticker symbol | IS:GR |
| Reuters ticker symbol | ISG.DE |
| No. of shares | 4,28,000 |
| Trading segment | Regulierter Markt, Prime Standard |
|---|---|
| Trading platforms/ stock exchanges |
XETRA®, Frankfurt, Hamburg, Berlin, Munich, Stuttgart, Düsseldorf |
| Designated sponsor | BankM |
| Research coverage | BankM |
| The principal shareholders on April 15, 2010 were as follows: | |
|---|---|
| UBS Global Asset Management (Deutschland) GmbH | more than 5 % |
| KST Beteiligung AG | more than 5 % |
| Dr. Dr. Axel Diekmann | more than 5 % |
| Karl Kindl | more than 3 % |
| UBS Fund Management (Switzerland) AG | more than 3 % |
| Dr. Paul and Maria Grohs | more than 3 % |
| Treasury stock | 4.91 % |
InTiCa Systems AG DAX TecDAX
Corporate governance report and declaration on corporate management pursuant to sec. 289a of the German Commercial Code (HGB)
The Board of Directors and Supervisory Board of public companies issue an annual declaration that they have complied with and will comply with the recommendations of the Government Commission on the German Corporate Governance Code, together with details of any recommendations that were not and will not be implemented. This declaration must be permanently available to the public and is posted on the company's website at www.inticasystems.de (Investor Relations / Corporate Governance).
In previous years the company complied with the recommendations of the valid version of the German Corporate Governance Code, apart from the exceptions stated in the Declarations of Conformity pursuant to sec. 161 of the German Companies Act (AktG) for the relevant year. From fi scal 2010 the company will comply with the recommendations of the Corporate Governance Code in the version dated June 18, 2009 with the following exceptions:
The company does not notify fi nancial services providers, shareholders and shareholders' associations of General Meetings or make the associated documents available by electronic means (Corporate Governance Code 2.3.2). The company publishes the invitation to its General Meetings in the electronic Federal Gazette and also provides its shareholders with invitations to General Meetings and annual reports in printed form via their custodian banks. The invitations to General Meetings and the related documents are also available on the company's website as downloads from the date on which the General Meeting is convened. The Board of Directors and Supervisory Board are convinced that in this way they provide fi nancial services providers, shareholders and shareholders' associations with suffi cient opportunity to obtain the information and that sending out invitations to General Meetings and the related documents by electronic means is neither necessary nor expedient.
The D&O insurance taken out by the company does not yet include a deductible (Corporate Governance Code 3.8). The statutory deductible that becomes mandatory for members of the Board of Directors on July 1, 2010 will be included as of this date. At the same time, a corresponding deductible for the members of the Supervisory Board will be written into the insurance policy, so this recommendation made by the Corporate Governance Code will be met in future.
When concluding contracts with members of the Board of Directors, the Supervisory Board will ensure that an appropriate cap is agreed for benefits paid in the event of premature termination of their contract, except with cause. The Supervisory Board does not accept the recommendation that the cap should be set at two years' compensation (Corporate Governance Code 4.2.3) as if believes it is more expedient to limit such payments to the fixed salary for the remaining term of the contract and thus to exclude variable remuneration components.
Age limits are not set for members of the Board of Directors and Supervisory Board (Corporate Governance Code 5.1.2, 5.4.1). In compliance with the law and articles of incorporation, members of the Board of Directors and Supervisory Board may be appointed for a maximum term of office of five years. The Board of Directors and Supervisory Board believe it makes sense for the bodies responsible for appointments to examine each candidate's age at the time of initial appointment or renewed appointment and that they should be free to appoint older candidates with special professional or other experience without being tied to rigid age limits.
The Supervisory Board has not adopted rules of procedure (Corporate Governance Code 5.1.3), nor set up any committees (5.3.1, 5.3.2 and 5.3.3). The company's Supervisory Board has three members. Since it is a legal requirement that any committee that takes decisions must also have at least three members, the establishment of committees is neither necessary nor expedient. The Supervisory Board has so far refrained from adopting rules of procedure since the rulings contained in legal statutes and the articles of incorporation have proven sufficient.
The members of the Supervisory Board do not necessarily receive performance-based remuneration (Corporate Governance Code 5.4.6). The company's articles of incorporation provide for the General Meeting to decide on whether the members of the Supervisory Board should receive remuneration based on the company's net income in addition to their fixed remuneration. The articles of incorporation thus do not exclude performancebased remuneration for the members of the Supervisory Board but delegates the decision to the General Meeting. The Board of Directors and Supervisory Board regard this flexible arrangement as preferable to the rigid ruling recommended by the Corporate Governance Code.
The consolidated financial statements will probably not be made available publicly within 90 days from the end of the financial year and the interim reports will probably not be available within 45 days from the end of the reporting period (Corporate Governance Code 7.1.2). The company cannot guarantee that it can meet the deadlines recommended by the Corporate Governance Code in view of the need to include foreign companies in the consolidated financial statements and interim reports. The consolidated financial statements will, however, be available within four months from the end of the financial year, while interim reports will be published within the statutory deadlines, which the Board of Directors and Supervisory Board consider to be adequate.
InTiCa Systems regards compliance with the corporate governance guidelines as a key basis for responsible, valuedriven corporate management, and as the basis for efficient collaboration between the Board of Directors and Supervisory Board, and for ensuring transparent reporting and implementing a functioning risk management system.
Through direct contact with customers, InTiCa Systems always keeps an eye on new markets and changing requirements. By linking its core competencies across all business segments, the company is able to constantly develop new products for a wide variety of business areas and market requirements.
Satisfied customers, long-term business relationships and marketdriven future-oriented products are the company's priorities. Quality is implemented by all employees through the way in which they think and act in their day-to-day work.
Ensuring a sustained rise in the value of the company is the guiding principle for the members of the Board of Directors and Supervisory Board of InTiCa Systems AG. Securing the confidence of investors and other stakeholders in effective and transparent management is a matter of prime significance.
The aim of our investor relations activities is to achieve the level of transparency expected by the capital markets and give shareholders a true and fair view of the company. The underlying principle is providing reliable and timely information for our shareholders on all major events in the company. We also see this as an opportunity to gain new German and foreign investors. Therefore we constantly strive to optimize communication to ensure a sustained and appropriate valuation of our stock.
The company's Board of Directors is responsible for its strategic focus, budget planning, and defi ning and overseeing the operating segments. The Board of Directors also ensures that there is an appropriate risk management and control system. Systematic risk management as part of valuedriven corporate management ensures timely identifi cation, analysis and evaluation of risks and optimization of risk positions.
The Board of Directors provides the Supervisory Board with full and timely information on the development of the company, its current position, current risks and how they progress. It discusses the strategy drafted with the Board of Directors. Progress in implementing strategic planning and possible deviations from the plans are reported to the Supervisory Board. Major decisions require the approval of the Supervisory Board. The Board of Director also informs the Supervisory Board of the management of risks and opportunities in the group.
The Supervisory Board receives written monthly reports on the company's fi nancial position, assets and results of operations. It also receives a detailed explanation of any discrepancy between the planned and actual business development. Further, the Chairman of the Supervisory Board is informed directly and regularly of the current situation, important business events and signifi cant upcoming decisions.
The Supervisory Board and Board of Directors work together closely for the benefi t of the company.
The Supervisory Board has not established any committees and the relevant issues are dealt with by the full Supervisory Board. This applies in particular to examination of the quarterly and annual fi nancial statements and topics directly relating to the members of the Board of Directors. A D&O insurance policy without a deductible has been taken out for the Board of Directors and Supervisory Board.
Agreements on variable remuneration for the members of the Board of Directors of InTiCa Systems linked to corporate performance (EBIT adjusted for special items) were introduced in 2008. The company refrained from variable remuneration components for the former members of the Board of Directors – contrary to the recommendations of the German Corporate Governance Code – due to their shareholdings in the company. InTiCa Systems considers that variable remuneration of the Supervisory Board to be contrary to its oversight function. However, under the company's articles of incorporation the General Meeting is empowered to grant the Supervisory Board a share in net income.
Further details of the remuneration system for members of the governance bodies can be found in Section of the management report (Remuneration of members of governance bodies).
Members of the Board of Directors and Supervisory Board hold a small amount of the company's stock. The combined shareholdings of members of both governance bodies is well below 3 %. On April 15, 2010 Mr. Walter Brückl held a total of 16,500 shares in InTiCaSystems AG (0.4 %) and Dr. Wulfdieter Braun held 26,015 shares in the company (0.6 %).
In 2009 the following securities transactions that have to be disclosed pursuant to sec. 15a of the German Securities Trading Act (WpHG) were undertaken by members of the Board of Directors (BD) and Supervisory Board (SB) of InTiCa Systems AG:
| Governance | Transaction value | Stock | |||||
|---|---|---|---|---|---|---|---|
| Date | Person | body | Purchase/sale | Units | Price in EUR | in EUR | exchange |
| Oct. 29, 2009 | Walter Brückl | BD | Purchase | 1,000 | 3.6 | 3,60 | Frankfurt |
| Aug. 28, 2009 | Walter Brückl | BD | Purchase | 2,000 | 2.86 | 5,20 | Xetra |
| Apr. 1, 2009 | Walter Brückl | BD | Purchase | 2,000 | 1.90 | 3,800 | Frankfurt |
The Group management report should be read in conjunction with the audited consolidated fi nancial statements for the InTiCa Systems Group. The following comments are based on various assumptions, which are set out in detail in the Notes. In addition, the management report contains forward-looking statements, i.e. statements based on specifi c assumptions and the current plans, estimates and forecasts derived from those assumptions. Forward-looking statements are only valid at the time at which they are made. The management of InTiCa Systems AG has no obligation to revise and/or publish a revision of the forward-looking statements underlying this document in the event of new information. Forward-looking statements are always exposed to risks and uncertainties. The management of InTiCa Systems AG hereby points out that a large number of factors could lead to substantial differences in attainment of these objectives. The principal factors are outlined in detail in the section headed "Risk report".
To improve presentation, the sections on business performance and the Group's position have been restructured. Moreover, current statutory requirements, especially those introduced by the German Accounting Law Modernization Act (BilMoG), are taken into account.
InTiCa Systems ranks among the German and European market and technology leaders in products and solutions based on hightech inductivity. The ability of a coil to produce voltage in its own windings by means of a magnetic fi eld or, conversely, to generate a magnetic fi eld in a coil if voltage is applied, is utilized by the company in the following fi elds of activity:
InTiCa Systems thus has a basic technology that can be used for a wide variety of industrial applications. The chief advantage of these passive inductive components is that they do not require any additional energy source such as mains current or a battery. Moreover, they are reliable, almost entirely free of wear and can be produced extremely costeffectively.
This technology is used in products for high-speed data transmission in the telecommunications sector (ADSL+, VDSL+, referred to jointly as xDSL). InTiCa Systems' Communication Technology segment serves this sector. The Automotive Technology segment develops and manufactures products, solutions and complete systems for sensor technology, electronic control and network topologies in the automotive sector. The Industrial Electronics segment established in 2007 supplies powerful chokes and transformers for investors in solar systems and to increase energy and cost-efficiency. Other activities mainly comprise developing components and systems for industrial automation. InTiCa Systems actively commercializes its products and developments on the international market through three segments, subdivided on the basis the underlying technologies:
InTiCa Systems develops and manufactures optimized solutions for ADSL and VDSL as a basis for broadband internet access via the present and future telephone network. VDSL, which represents an improvement on ADSL, was developed to offer customers "triple-play" services. This term refers to the convergence of conventional telephony services, in other words, analogue, ISDN and IP telephony, broadband internet access and IPTV. Since 2008, network operators have increasingly been installing VDSL2 splitters on the provider's side in both copper wire and fibre optic technology. VDSL offers theoretical data transfer rates of up to 50 Mbit/s.
In addition to technological upgrading of the provider side, since 2006 InTiCa Systems has been supplying telecommunications companies with the VDSL splitters required by end-users to support downward compatibility for ADSL2+ (up to 16 Mbits/s) and VDSL data transfer rates (up to 50 Mbit/s).
The products normally have to meet widely differing specifications for both present and potential future customers. These comprise telecommunications companies, which require splittersfor subscribers, and system suppliers to the telecommunications companies who order splitters from InTiCa Systems for the provider side. The product range is rounded out by DSLAM splitters and main distribution frame (MDF) splitters, which InTiCa-Systems delivers for multifunctional curb-side boxes to bring VDSL closer to end-users' homes.
The Communication Technology segment generated sales of EUR 13.5 million (2008: EUR 20.7 million), which was around 58 % of total consolidated sales (2008: 76 %). InTiCa Systems estimates that despite declining volume sales its splitters business still has a market share of around 70 % in Germany. In recent years, an increasing number of Asian suppliers have been operating on the European market. Owing to the sharp drop in prices, especially as a result of rising competition from low-wage countries, a decline in sales could not be prevented. Moreover, overall growth potential in the market for splitters has been declining in recent years, and expansion of the VDSL network by Deutsche Telekom AG has so far fallen short of the level originally anticipated. This is partly attributable to the continuing debate about alternative future transmission technologies, which has further reduced willingness to invest in a nationwide VDSL network.
The drop in sales could not be fully offset by successful action to raise efficiency, nor by foreign sales of splitters, so the segment reported negative EBIT (earnings before interest and taxes) of minus EUR 1.05 million in 2009 (2008: minus EUR 3.1 million).
InTiCa Sytems' Automotive Technology segment develops and manufactures products, solutions and complete systems for keyless go/entry systems, safety systems, engine and energy management systems (for example, for electric and hybrid vehicles) for a wide range of vehicle classes from luxury limousines and high-end sports cars to less expensive compact models. Its immobilizers, keyless entry systems, tire pressure sensors and engine controls for electric and hybrid vehicles (i.e. mechantronic modules that reduce CO2 emissions) are supplied to well-known European, American and Asian producers and their system suppliers.Thanks to orders running for several years placed by well-known new clients in 2009 and early 2010, InTiCa Systems has access to additional sales potential in further automotive applications and product areas. Despite the overall downtrend on the automotive market, InTiCa Systems was able to raise the proportion of sales generated with this sector compared with the previous year. In fiscal 2009 the Automotive Technology segment contributed sales of around EUR 8.1 million, a rise of 33 % compared with the previous year (2008: EUR 6.1 million). This segment now accounts for nearly 35 % of consolidated sales (2008: 22 %) and is thus well on the way to becoming InTiCa Systems' main sales driver. This segment's EBIT (earnings before interest and taxes) also increased significantly year-on-year to EUR 0.4 million (2008: minus EUR -0.3 million) and was positive for the first time.
High-performance mechatronic modules for inverter technology and innovative inductive components for automation are examples of the applications for which InTiCa Systems' Industrial Electronics segment develops, produces and supplies solutions. This segment makes use of the company's expertise and technological edge in complex inductive components such as coils, interference suppression and power transfer and filters, and systematically utilizes synergies. Thanks to its very broad range of potential applications and widely diversified customer base, the customer and technology risks in this segment are lower than in the other two segments. For example, the components produced by InTiCa Systems for inverters for regenerative energies convert renewable energy sources into power with high efficiency, i.e. low losses. The improvement in efficiency is accompanied by a reduction in dimensions, thus delivering enormous benefits for customers. In fiscal 2009 this segment contributed sales of around EUR 1.7 million (2008: EUR 0.5 million), which was around 7 % of total consolidated sales (2008: 2 %). Sales grew by 233 % year-on-year. The Industrial Electronics segment increased EBIT (earnings before interest and taxes) to EUR 0.1 million in 2009 (2008: minus EUR 0.3 million) and was thus also able to break even for the first time.
2009 saw what was probably the biggest global financial and economic crisis in modern times. Global economic output shrank for the first time since the Second World War, resulting in the most dramatic year-on-year downturn in the post-war era. The economic slump peaked in winter 2008/2009 so the first two quarters of 2009 were still in the depths of the crisis. Widespread restraint in investment and consumer spending led to a massive drop in demand in some areas, accompanied by enormous uncertainty about future economic trends. The economic situation only showed slight signs of stabilization at a new, lower level in the second quarter, with growing signs that the steep downturn in the German economy could be bottoming out. The economy was prevented from sliding into a deep recession by central banks' low-interest and liquidity policy, supported by extensive government economic stimulus packages and state guarantees for the financial sector in many countries. Alongside brighter sentiment indicators, during the year information on global economic trends steadily improved and from mid-year there were clear signs of an economic recovery. Support came from lower energy prices, low inflation and the unexpectedly stable development, especially in emerging Asian economies such as China and India. As a result, many countries reported renewed growth in real GDP in the last two quarters. However, this was principally attributable to support measures and accompanying factors, so a rapid return to high growth cannot be expected.
Capacity utilization in the German manufacturing sector dropped to historic lows in 2009. The business climate indicator published by the ifo economic research institute in Munich is still indicating a very low and almost unchanged level of business in manufacturing industry. By contrast, business expectations for the next six months are more optimistic. Nevertheless, it seems unlikely that demand will rapidly rebound to the prerecession level, as many companies still need to adjust capacity to order volumes in the wake of the sharp downturn. In many sectors there is a clear reluctance to invest in new equipment or modernization as companies are focusing their attention predominantly on optimizing costs and raising efficiency. Since the labour market has not yet felt the full impact on of the global economic crisis, many experts still believe that unemployment is almost certain to rise further, resulting in a new low in consumer spending.
Global economic output contracted by around 2 % in 2009. While the emerging economies achieved total growth of around 1 %, and Asian countries like China continued to report strong growth, the recession in the industrialized countries, where growth declined by around 3.5 %, played a significant role in the overall downturn. Countries like Germany and Japan that are dependent on exports and capital goods were particularly severely affected by the crisis (-5 % in both cases). In the industrialized countries, relevant indicators such as capacity utilization, order intake, capital spending, industrial output and exports plummeted in almost all sectors.
Although broadband DSL internet connections via telephone cables are an extremely attractive and costeffective solution for both telecommunications companies and endusers, the current market trend is characterized by stagnation. There seems to be little scope for further growth in the market for transmission rates of up to 16 Mbit/s. The reasons are the price competition resulting from the market entry of several competitors in 200 and increasing "technological competition" from cable providers, who are offering this alternative method of internet access via broadband cables previously used exclusively to deliver TV services. Moreover, DSL providers are continuing to experience new competition in the market for super highspeed internet connections. For example, Kabel Deutschland has announced that it will be offering broadband connections with data rates of up to 100 Mbit/s from 2010. Telecommunications companies such as Deutsche Telekom, Vodafone and 1&1 are currently offering data rates of up to 50 Mbit/s. Kabel Deutschland's broadband offer was previously only 32 Mbit/s. Internet connections with speeds of up to 100 Mbit/s are currently only available from regional cable network providers. Highspeed connections are mainly required for the transmission of video and TV content via the internet.
In the splitter market InTiCa Systems has two serious competitors in Germany and currently has a market share of around 0 %. Internationally there are four relevant competitors, but a high proportion of their products are supplied to other European countries. The Communication Technology segment is still exposed to high price pressure, mainly due to Asian competitors which are expanding in the European market of relevance for InTiCa Systems.
The German Automotive Industry Association expects new registrations to drop to 2.5 – 3.0 new vehicles in 2010. Despite the risk that volume sales of cars could decline following the expiry of environmental bonuses and other state schemes to boost sales in major markets, demand for affordable fi ttings that improve comfort and safety is rising. This trend extends to midclass and compact models. As a result of the phased startup of serial production, even if volume sales remain below the level originally anticipated, InTiCa Systems expects to report an higher sales as its components are introduced in leading international carmakers' volume models. Within the automotive sector, Asia will most likely be the real growth market. InTiCa Systems is therefore currently examining various options of positioning itself in this regional growth market. In addition, it could benefi t particularly from the future market for electric and hybrid vehicles, where it has a promising position with European producers.
In 2009 and at the start of 2010, it gained orders from several new customers for the development and manufacture of mechatronic components. These products, which reduce CO2 emissions, are used by various European automotive producers in a variety of electric and hybrid vehicles. Gaining these customers, which are systems suppliers to world-leading automotive suppliers, opens up further sales potential for InTiCa Systems with other products and areas of application.
InTiCa Systems is giving priority to applications in the fields of renewable energies (especially solar power) and automation technology with a view to potential sales growth. Photovoltaic systems are being installed around the world to utilize solar energy in regions with high levels of sunshine. The efficiency of energy generation from such systems can be increased considerably by using InTiCa Systems' inductive modules. Consequently, InTiCa Systems has recently received several orders from new customers in the solar sector to develop and produce inductive components because its products improve efficiency and reduce the space required for solar installations.
InTiCa Systems also develops and manufactures products for transmission technologies in collaboration with customers such as Loewe, for weighing technology with Bizerba (the world market leader in retail scales and industrial weighing technology), and for other industrial applications.
Thanks to the acquisition of a large number of new customers and orders, mainly for solar technology, this segment will be able to make a perceptible contribution to corporate performance in fiscal 2010.
Despite its technological edge, InTiCa Systems has to align its costs to market conditions. Stringent cost management, optimized vertical integration and a reduction in fixed overheads are key factors in this.
At the same time, the constant innovation, rapid technological progress and rising performance requirements in all product segments in which InTiCa Systems operates can only be met with the newest and most advanced manufacturing technologies. Steps taken last year have increased vertical integration further and thus reduced dependence on individual customers and products. Even so, InTiCa Systems already has impressive strengths (for example, extensive expertise in the field of inductive components, filtration, mechatronic systems and production technology) and is positioned to benefit from a potential cyclically driven market consolidation by gaining market
share. Through its central production site in Prachatice, Czech Republic, InTiCa Systems also has an ultra-modern, integrated production facility that is available to all business segments and has scope for expansion. The success of this strategy started to bear fruit last year.
The key elements of the company's mid-term strategic objectives are developing innovative products and manufacturing technologies and achieving zero defect production at competitive prices. Even stronger internationalization is planned for both sales and production.
The efficiency-enhancement drives, which have cut costs by more than EUR 3.0 million, were visible on a full-year basis for the first time in 2009. This cushioned the earnings impact of the drop in demand and enabled the company to move back into profit at operating level (EBITDA). In view of the success in cutting costs and the large number of new orders, which have led to significant expansion of the customer base and product portfolio, plans to achieve a turnaround in 2010 have been placed on a far more reliable basis.
In terms of costs and products, the Board of Directors believes that InTiCa Systems is well-positioned even though the business environment remains tough. Orders secured by the Automotive Technology and Industrial Electronics segments from leading technology suppliers in recent months highlight the competitiveness of our products. For example, inductive components and assemblies developed by InTiCa Systems which increase efficiency yet reduce overall dimensions were responsible for the acquisition of orders from three new customers in the solar industry. Two new clients in the automotive industry have commissioned InTiCa Systems to develop and manufacture mechatronic assemblies, principally because its design meets their high technological and quality requirements. These new orders enhance the reliability of planning for the coming years and will permit us to achieve a good level of capacity utilization at the Czech site.
These achievements in a recessionary environment make the Board of Directors confident that InTiCa Systems can continue to offer customers innovative products that give them a competitive edge in the future.
The management's aim is to continue to develop and manufacture innovative products and applications while maintaining competitive cost structures and strengthening the technological leadership of the operating segments.
Sales dropped 14.8 % in fiscal 2009 to EUR 23.3 million (2008: EUR 27.3 million). This was principally due to the reduction in business volume resulting from competitive conditions and the economic situation, which led to a massive downturn in the Communication Technology segment. The number of splitters ordered by customers in the telecommunications sector declined further. In this segment, sales were EUR 13.5 million, down roughly 35 % year-on-year (2008: EUR 20.7 million). Despite the tough economic conditions, strong sales growth was reported by Automotive Technology and by the inductive components and mechatronic modules marketed by the Industrial Electronics segment (Automotive Technology +33 % to EUR 8.1 million vs. EUR 6.1 million in 2008; Industrial Electronics +233 % to EUR 1.7 million vs. EUR 0.5 million in 2008). However, this could not fully offset the sales shortfall in the Communication Technology segment.
Successful cost-cutting proved favourable for both material and personnel expenses in 2009. The material cost ratio declined from 71 % to 64 %, while the personnel expense ratio was reduced from 25 % to 21 %. Personnel expenses decreased from EUR 6.8 million to EUR 4.9 million in 2009 although the average headcount was almost unchanged at 244 employees (2008: 247). The principal reasons for the reduction were the restructuring of the Board of Directors and the closure of the Greek production site. Despite capital expenditures for property, plant and equipment and intangible assets, depreciation and amortization amounted to EUR 3.5 million, 5 % below the year-back figure of EUR 3.7 million. Other expenses dropped by roughly 28 % to EUR 3.1 million (2008: EUR 4.3 million) in the reporting period as the cost-cutting drive impacted the full-year results for the first time.
Research and development expenses totalled EUR 2.4 million in 2009 (2008: EUR 2.1 million). The majority of this was channelled to development activities in the Automotive Technology and Industrial Electronics segments. EUR 0.4 million was expensed in the income statement (2008: EUR 0.3 million).
EBITDA (earnings before interest, taxes, depreciation and amortization) was EUR 3.02 million in 2009, well above the previous year, when the company reported a negative EBITDA of minus EUR 0.09 million. Around two-thirds of EBITDA was generated in the second half of 2009.
The increase to over EUR 3 million shows that the cost-cutting measures are having an impact and that InTiCa Systems is once again able to generate positive marginal income.
EBIT (earnings before interest and taxes) also increased considerably, but was still negative at minus EUR 0.5 million. In the previous year, the loss was around EUR 3.8 million as the company was unable to compensate for the drop in sales and margins. Unlike the situation 2008, in 2009 earnings were not affected by one-off factors. Automotive Technology and Industrial Electronics, which is included in "Others", both broke even for the first time in the second quarter of 2009 and reported a further significant year-on-year rise in sales and earnings in the following two quarters. EBIT was EUR 0.4 million in the Automotive Technology segment and EUR 0.1 million in Industrial Electronics. Both thus reported clearly positive EBIT (2008: minus EUR 0.3 million in both cases).
Financial expense was EUR 0.5 million in the reporting period, while financial income amounted to EUR 0.2 million (2008: EUR 0.6 million and EUR 0.4 million respectively). The negative net financial result was due to lower drawings on borrowings and a reduction in investment of financial assets.
In fiscal 2009, InTiCa Systems reported a pre-tax loss of EUR 0.83 million (2008: pre-tax loss of EUR 3.93 million). After taxes, the loss was EUR 0.87 million (2008: loss of EUR 3.33 million). Earnings per share were minus EUR 0.22 (2008: minus EUR 0.78).
Changes in the consolidated balance sheet in the reporting period were essentially due to a few factors. Firstly, the adjustments resulting from changes in the economic conditions affected the balance sheet. At the same time, the increase in business volume in the Automotive Technology and Industrial Electronics segments also led to some changes. The reduction of around EUR 3.5 million in total equity and liabilities was mainly due to a reduction in liabilities.
As of December 31, 2009, the Group had equity of EUR 20.9 million (2008: EUR 21.5 million). With total assets of EUR 36.7 million (2008: EUR 40.2 million) the equity ratio was very sound at around 57 % (2008: 53 %). This ensures that company's credit standing will remain high.
Liabilities declined to EUR 15.8 million as of December 31, 2009, a drop of EUR 2.9 million compared with December 31, 2008 (EUR 18.7 million).
Non-current assets increased slightly as a result of the capitalization of development costs and other investments in intangible assets and the increase in deferred taxes, which rose by nearly EUR 1.1 million from EUR 22.0 million as of December 31, 2008 to EUR 23.1 million as of December 31, 2009. Owing to ongoing investment of EUR 1.8 million to expand capacity, as of December 31, 2009 property, plant and equipment was virtually unchanged at EUR 16.5 million, compared with EUR 16.3 million at year-end 2008.
Current assets contracted considerably during the year from EUR 18.2 million to EUR 13.6 million as of December 31, 2009. This significant drop was due to a reduction in cash and cash equivalents from EUR 10.4 million as of December 31, 2008 to around EUR 5.0 million as of December 31, 2009. This was attributable to pre-financing of orders for which payment has not yet been received and a reduction in payables. In addition, trade accounts receivable were reduced to EUR 4.3 million (December 31, 2008: EUR 4.9 million).
Inventories were around EUR 4.0 million on December 31, 2009, around EUR 1.4 million higher than in the previous year (2008: EUR 2.6 million). This increase was mainly driven by orders received by the Automotive Technology and Industrial Electronics segments.
Alongside deferred taxes, non-current liabilities mainly comprise liabilities to banks amounting to EUR 9.5 million (2008: EUR 9.75 million). These comprise fixed-interest loans with a term of up to six years. With the exception of the EUR 5 million bonded loan, which is due on the maturity date, repayment is in equal half-yearly instalments. Interest rates are between 3.8 % and 5.27 % and are fixed until the end of the loans.
Current liabilities also dropped EUR 7.2 million to around EUR 4.3 million. This sharp decline was mainly due to a reduction in trade payables and liabilities to finance leasing. Moreover, a sales-driven drop in provisions was also registered.
The Group's equity at year-end 2009 was EUR 20.9 million, only EUR 0.6 million less than at year-end 2008 (EUR 21.5 million) despite the net loss of EUR 0.9 million. This was due to positive currency translation adjustments relating to the Czech subsidiary and a gain on the sale of treasury stock. The equity ratio increased slightly from 53.4 % as of December 31, 2008 to 57.0 % as of December 31, 2009 because total assets declined faster than equity, from EUR 40.2 million to EUR 36.7 million in the reporting period.
The net cash outflow for operating activities was EUR 1.2 million in fiscal 2009 (2008: outflow of EUR 2.0 million). The main factors here were the net loss for the period, an increase in inventories and a decrease in trade payables.
The net cash outflow for investing activities was EUR 4.0 million in the reporting period (2008: inflow of EUR 10.2 million). The high prior-year figure was due to restructuring of securities holdings.
The net cash outflow for financing activities was EUR 0.04 million and thus down on the year-back figure (2008: cash inflow of EUR 0.3 million). This was because no new loans were taken out in the reporting period and repayment instalments of EUR 0.25 million were made. The non-current fixed-interest loans have a remaining term of 4-6 years and an average annual interest rate of 4.6 %. Proceeds from the sale of treasury stock amounted to EUR 0.2 million.
The Group's liquidity comprises fixed-term investments that can be liquidated rapidly (EUR 4.0 million) and cash (EUR 1.0 million). Together, cash and cash equivalents amounted to around EUR 5.0 million as of December 31, 2009 (2008: EUR 10.4 million). Cash and cash equivalents less overdrafts amounted to EUR 4.1 million as of December 31, 2009 (December 31, 2008: EUR 9.4 million). The Group also has undrawn credit lines of EUR 2.4 million. The average variable interest rate on overdrafts is 3.28 %.
InTiCa Systems was able to meet its repayment obligations at all times in the reporting period.
Capital expenditures amounted to EUR 4.3 million in 2009 (2008: EUR 4.8 million). Investments mainly comprised selfcreated intangible assets and technical plant and machinery, which were financed entirely out of liquid assets. Upcoming investments, mainly relating to expansion of the production site in the Czech Republic, should be financed predominantly out of the cash flow from operating activities.
Further personnel adjustments were made in the first few months of fiscal 2009. These initially reduced the headcount. In view of the improved order situation and resultant clear rise in capacity utilization, together with the amalgamation of production activities at the central site in Prachatice in the Czech Republic, new full-time employees were recruited, raising the headcount from 241 as of December 31, 2008 to 267 as of December 31, 2009.
| Communication | ||||||||
|---|---|---|---|---|---|---|---|---|
| Segment | Technology | Automotive Technology | Other | Total | ||||
| In EUR'000 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
| Sales | 13,467 | 20,731 | 8,128 | 6,088 | 1,688 | 506 | 23,283 | 27,325 |
| Earnings (before taxes) | -1,050 | -3,075 | 445 | -347 | 111 | -277 | -494 | -3,699 |
The discrepancy between the sum of the segment results and the pre-tax loss of EUR 3,925 thousand in 2008 is attributable to losses of EUR 152 thousand on non-allocable assets and a negative financial result of EUR 74 thousand.
The Group draws a geographical distinction between Germany and other countries (secondary segment).
| Germany | Other countries | Total | ||||
|---|---|---|---|---|---|---|
| In EUR'000 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
| Sales | 18,100 | 17,943 | 5,183 | 9,391 | 23,283 | 27,325 |
| Segment assets | 10,279 | 11,362 | 19,382 | 16,624 | 29,661 | 27,986 |
| Employees | 50 | 48 | 194 | 199 | 244 | 247 |
The Group's earnings, asset and financial position in 2009 was still clearly dominated by external factors resulting from the economic downturn and by internal restructuring. The majority of the related charges were taken in the first two quarters. The operational turnaround reflected in the third quarter result played a perceptible part in stabilizing net income, which was nevertheless still negative at year-end. The brighter economic situation in the second half of the year was one factor that generated an improvement in the business situation of InTiCa Systems. While working capital and available current liabilities declined considerably in the reporting period, non-current tied capital and available long-term liabilities were stable. Thanks to the reduction in total assets, the equity ratio rose by around 4 percentage points year-on-year to 57 %.
The Board of Directors has issued the declaration required to comply with sec. 264 paragraph 2 sentence 3 of the German Commercial Code (HGB). This is published as a separate section of the consolidated financial statements.
The members of the Board of Directors receive a fixed monthly salary and a variable component based on the company's performance, which is payable after the end of the fiscal year. Remuneration is based on the customary remuneration in the sector and the size of the company. In addition, contributions are made to retirement pensions and each member of the Board of Directors has the use of a company car. The pension contributions are paid into a benevolent fund. The contracts with the members of the Board of Directors do not include any specific commitments in the event of termination of the contract. Nor do they contain any change of control clause. There are no commitments for future pension or annuity payments to members of the Board of Directors. A breakdown of the individual remuneration of members of the Board of Directors can be found in Note 27.3 to the financial statements.
Sec. 11 of the articles of incorporation of InTiCa Systems sets out the remuneration of the Supervisory Board. In addition to reimbursement of expenses and value-added tax payable on income relating to payments for their duties on the Supervisory Board, after the end of the fiscal year each member of the Supervisory Board receives a fixed fee and remuneration for
attending meetings. The Annual General Meeting is responsible for deciding whether to pay the Supervisory Board members a bonus based on the profit shown on the balance sheet. So far, this possibility has not been used. The Chairman of the Supervisory Board receives fixed annual remuneration of EUR 30,000, the Deputy Chairman receives EUR 25,000 and other members EUR 15,000. The fee for attending meetings is EUR 1,500. The company includes the members of the Supervisory Board in a Directors' and Officers' (D&O) insurance policy with an insured sum of up to EUR 3 million and pays the associated insurance premiums. A breakdown of the individual remuneration of members of the Supervisory Board in the reporting period can be found in Note 27.3 to the financial statements.
Total expenses for both governance bodies amounted to EUR 421 thousand in fiscal 2009.
The Board of Directors and Supervisory Board of public companies issue an annual declaration that they have complied with and will comply with the recommendations of the Government Commission on the German Corporate Governance Code, together with details of any recommendations that were not and will not be applied. This declaration must be made available permanently to the public.
The Board of Directors and Supervisory Board of InTiCa Systems AG issued its declaration in conformance with sec. 161 of the German Companies Act (AktG). This states that they have and will comply with the recommendations and suggestions of the Government Commission on the Corporate Governance Code in the version dated June 18, 2009 as published by the German Justice Ministry in the official section of the electronic Federal Gazette. The Board of Directors and Supervisory Board of InTiCa Systems also intend to comply with these recommendations in the future.
The Corporate Governance report on pages 22 ff. of this annual report and the Declaration of Conformity with the German Corporate Governance Code on page 22 ff. form an integral part of the declaration on corporate governance. The management declaration required in compliance with sec. 289a of the German Corporate Code (HGB) can be found on the company's website at www.intica-systems.de under Investor Relations/Corporate Governance.
The capital stock of InTiCa Systems AG comprises EUR 4,287,000 and is divided into 4,287,000 no-par bearer shares, which constitute a theoretical pro rata share of the capital stock of EUR 1.00 per share. All shares have the same voting rights and dividend claims. The only exceptions are shares held by the company (treasury stock), which do not confer any rights on the company. The rights and obligations of the shareholders are out in detail in the German Stock Corporation Act (AktG), in particular in sec. 12, sec. 53a et seq., sec. 118 et seq. and sec. 186.
Restrictions on the voting rights of shares could result from statutory provisions (sec. 71b and sec.136 AktG). The Board of Directors is not aware of any other restrictions on the exercise of voting rights or the transfer of shares.
Under the provisions of German securities trading legislation, every investor whose proportion of the voting rights in the company reaches, exceeds or falls below certain thresholds as a result of the purchase or sale of shares or in any other way must notify the company and the Federal Financial Supervisory Office (BaFin) thereof. The lowest threshold for such disclosures is 3 %. No direct or indirect stakes in the company's capital that have reached or exceed the 10% threshold have been notified to the company and it is not aware of any such shareholdings.
There are no shares in the company with special rights according rights of control.
InTiCa Systems AG does not currently have any employee stock programmes.
Statutory provisions and regulations in the articles of incorporation on the appointment and dismissal of members of the Board of Directors and changes to the articles of incorporation The appointment and dismissal of members of the Board of Directors is governed by sec. 84 and sec. 85 of the German Stock Corporation Act (AktG). Pursuant to the statutory provisions (sec. 197 paragraph 1 AktG) any amendment to the articles of association requires a resolution of the General Meeting. Under sec. 8 paragraph 4 of the company's articles of incorporation, the Supervisory Board may make amendments to the articles of incorporation, providing these are merely editorial.
In addition, resolutions adopted by the Annual General Meetings on September 6, 2004 and May 24, 2007 authorized the Supervisory Board to amend sec. 3 of the articles of incorporation to reflect the utilization of the authorized capital 2004 and the authorized capital 2007 and after expiry of the deadline for utilization thereof.
Under sec. 3 paragraph 4 of the articles of incorporation, the Board of Directors is also authorized, until May 24, 2012, to increase the company's capital stock, with the consent of the Supervisory Board, by up to EUR 1,672,500.00 by issuing new shares for cash or contributions in kind in one or more tranches. Further details are given in sec. 3 paragraphs 3 and 4 of the company's articles of incorporation, which can be downloaded from the company's website at Company/Downloads.
On the basis of the of the resolution of the Annual General Meeting of May 29, 2008, the company is authorized, until November 28, 2009, to repurchase up to 10 % of the capital stock of 428,700 shares at the date of the resolution. This resolution was used to purchase 263,889 shares in the company. As of December 31, 2009, InTiCa Systems still had treasury stock amounting to 210,489 shares (2008: 263,889).
InTiCa Systems has a EUR 5 million bonded loan which gives the lender a right of termination in the event of a change in the borrower's shareholder or ownership structure such that the shareholders or owners relinquish control over the borrower during the term of the loan or a person or group of persons acting jointly acquire more than 50 % of the voting rights and/ or more than 50 % of the capital of the borrower, unless the prior consent of the lender is obtained.
There are no compensation agreements with either members of the Board of Directors or employees relating to a takeover bid.
The monitoring, analysis and control of risks are essential elements in the management and oversight regulations set out in sec. 91 paragraph 2 of the German Stock Corporation Act (AktG). Further, the German Commercial Code (HGB) requires a report on the company's future development and the related risks and opportunities.
InTiCa Systems has established a risk management system to identify, analyze and evaluate potential risks. Business activities are examined for opportunities and risks at planning meetings and, on the basis of the findings, targets are derived. The attainment of these targets is monitored by a controlling and reporting system. These systems provide a variety of indicators on, for example, the following key aspects: sales and earnings trends, orders on hand and inventories, gross margins, consumption of materials, production defects, personnel, liquidity and investments. The Board of Directors can access each report via the IT system and initiate appropriate counteraction.
Risk potential is updated regularly by senior managers. A monthly overview of risk potential is derived from the wide range of individual data entered. The risks are derived from the present business activities of the segments and sub-segments and corporate targets. The Board of Directors discusses the facts presented at its next meeting.
The efficiency of the risk management system as a whole is regularly monitored and assessed. If potential for improvement is identified, the Board of Directors is notified and modifications are implemented without delay. The systematization and monitoring of risks in this way includes regular documentation of the entire risk management and early warning system and checking that it is effective and fit for purpose.
The accounting process is controlled by the parent company through the Group-wide Finance and Accounting, Controlling and Investor Relations departments. Functions and responsibilities in these areas are clearly separated / assigned and there are mutual control processes to ensure a continuous exchange of information. The internal control system for financial accounting is based on defined preventive and supervisory control mechanisms such as systematic and manual checking, predefined approval procedures, the separation of functions and compliance with guidelines. Appropriate IT precautions are in place to protect the financial systems used from unauthorized access. Financial accounting systems only use standard software. Uniform accounting is ensured by applying corporate accounting guidelines and standardized reporting formats. The guidelines and reporting formats are determined by the Board of Directors of the parent company and compliance is monitored continuously by employees in the finance department. Alongside technical checks by the system, manual and analytical checks are performed. External consultants such as auditors and lawyers are consulted on changes and complex accounting issues. The internal control and risk management system for financial accounting is fully integrated into the Group's quality assurance process and documented separately.
The central objective of financial management at InTiCa Systems is to ensure sufficient liquidity reserves at all times, avoid financial risks and secure financial flexibility. The basis for safeguarding liquidity is integrated financial and liquidity planning spanning a number of years. InTiCa Systems includes all consolidated subsidiaries in this planning process. The segments' operating business and the resulting cash flows are the Group's main source of liquidity. Operational planning is based on a long-term liquidity forecast. The short and mediumterm forecasts are updated monthly. Surplus funding within the Group is distributed to those areas that require it via cash pooling in order to reduce external funding requirements and optimize net interest expense. To secure its liquidity position, InTiCa systems also uses various internal and external financing instruments such as credit agreements, which form the basis for short and medium-term financing, finance leasing and vendor loans. As a result of the company's capital base and financing arrangements, the Board of Directors is of the opinion that the main preconditions for future financing have been met.
Through its Communication Technology, Automotive Technology and Industrial Electronics segments, InTiCa Systems operates in areas exposed to general economic fluctuations. In the Communication Technology segment in particular, the company is dependent on political and/or strategic decisions by a few key customers relating to DSL and other broadband technologies. Even though the customer base has now been expanded considerably and placed on a more international basis, dependence on political and strategic decisions still constitutes a significant risk factor. Further, competition is continuing to increase, especially from Asian companies. This would be exacerbated, in particular, if the US dollar were to depreciate against the euro.
In principle, the Communication Technology segment, which is still the main sales generator, is exposed to higher sector-specific fluctuations than the Automotive Technology and Industrial Electronics segments. The Automotive Technology segment is exposed to the customary economic risks in this sector, which could hold back expected growth considerably. That would be particularly true if customers of InTiCa Systems were to postpone the start of production of new models containing new components from InTiCa Systems due to the poor economic situation.
In 2009, around 36 % of sales in the Communication Technology segment were generated with a single customer and around 59 % of sales in this segment were generated with five further customers. InTiCa Systems has reduced its dependence on these major customers through proactive internationalization in recent years but dependence on individual customers remains high. In the other two segments, sales are more broadly diversified among various customer groups.
Substitution of splitter technology as a result of full digitization of landline technology is possible in the medium to long term. Solutions that could endanger the operational success of InTiCa Systems AG are based on the television cable network, satellite and radio transmission, powerline technology and fibre optic cables. The cost of a technical upgrade of the television cable network is considerably higher than upgrading the existing copper wire telephone network for VDSL. Moreover, powerline technology has not yet achieved a breakthrough. Similarly, in Germany, installation of a nationwide network based on fibre optic technology, which currently has the highest transmission capacity, would require enormous investment.
Moreover, interconnection with the copper-wire networks in homes requires the use of converters and splitters where InTiCa Systems has so far been the market leader.
In view of the economic downswing, the Board of Directors sees a comparatively low risk of losing key personnel at present. Nevertheless, there is a risk that key employees, especially sales and research and development personnel, could leave the company. InTiCa System uses its remuneration system, social security benefits and a wide range of vocational and further training offers to counter this risk. These reduce staff fluctuation and position the company as a employer offering long-term security and career opportunities.
The financial risks mainly result from orders in foreign currencies and the parent company's financing activities. In particular, the company could sustain considerable damage if the euro were very strong, as production is mainly in the euro zone.
InTiCa Systems currently has a bonded loan from a leading German commercial bank and a loan from the German development bank KfW. Both are used to safeguard long-term liquidity. The company also has credit lines of EUR 3.3 million. Together with liquid assets of EUR 5.0 million, this resulted in a lower but still adequate financial base in the fiscal year.
The main currency risk for InTiCa Systems comprises the operating costs of its Czech production facilities and some customer contracts in US dollars. In view of the low volume of sales in US dollars, following on from the practice in previous years the company did not undertake currency hedging in 2009. The exchange rate for the euro versus the US dollar increased from 1.3974 euros/US dollar on December 31, 2008 to 1.4329 euros/US dollar on December 31, 2009. The highest exchange rate in 2009 was over 1.50 euros/US dollar. However, the euro/ dollar exchange rate has been declining again since the start of 2010 and is currently far weaker than at the end of the reporting period. Orders placed in 2010 and future orders based on the stronger US dollar will result in higher margins in euros, unless the appreciation of the dollar is completely negated by price concessions as a result of the recessionary environment.
Price pressure from companies that produce in the US dollar zone and can export cheaply to the euro zone could increase further if the euro were strong. Due to the exchange rate, this effect could be fully offset by favourable procurement terms for materials and raw materials in the dollar zone or goods invoiced predominantly in dollars.
InTiCa Systems' production facility in the Czech Republic sources goods from the euro zone. All deliveries are made on a euro basis, either to InTiCa Systems AG or to external manufacturers who undertake further processing steps. The currency risk with regard to the Czech koruna is therefore limited to local wages and overheads and the liabilities of the Czech subsidiary to the parent company. No currency hedging was undertaken here, either. The risk comprises a further rise in the Czech koruna – unless this can be absorbed by raising efficiency, a reduction in the cost of materials or price increases.
The company's exposure to the risk of short-term changes in interest rates is limited as the loan from the KfW runs for 10 years and the loan from a German commercial bank runs for 7 years. Moreover, InTiCa Systems AG has agreed fixed interest rates for these loans. However, interest income is dependent on short-term money market trends and there is thus a risk that only low interest income will be earned if rates fall. A capital investment guideline has been issued to document this conservative investment strategy.
The company does not currently hold any shares in third party companies and does not plan to acquire any such shares. Equity market risk is thus confined to the treasury stock of 210,489 shares purchased in 2009 under the share buy-back programme adopted by the Board of Directors on July 2, 2008. These shares are subject to normal fluctuations in market price.
The Board of Directors is concerned that considerable default risks could result from a continuation of the general economic downturn. An extensive review of credit standing and intensive receivables management are being used to counter this risk. Nevertheless, it cannot be ruled out that customers of InTiCa systems could face unexpected insolvency. In view of the highly diversified customer base, the risk associated with individual customers is becoming less significant.
Moreover, it should be noted that the economic downturn and declining volume sales entail a significant sector risk, especially in the cyclical automotive sector, which is a key future market for InTiCa Systems.
So far the company has not taken out credit insurance. InTiCa Systems does not currently grant loans to employees or to external parties.
InTiCa Systems AG holds 100 % of the shares in the following subsidiaries:
The site in the Czech Republic is a production facility. The Austrian subsidiary develops components and designs manufacturing technologies.
Exceptional events: In the reporting period InTiCom Components GmbH, the former branch in Thessaloniki, Greece, was finally liquidated following the winding up of a business agreement with the company. The production formerly located at this branch had been shut down in the previous year and all production equipment and warehouse materials had been transferred to the central production site in Prachatice, Czech Republic.
In the light of market-driven developments in the Communication Technology segment, InTiCa Systems is stepping up investment in the newer Automotive Technology and Industrial Electronics segments with a view to positioning them as additional sales generators.
Alongside RFID solutions for keyless entry/go systems in the automotive sector and safety and control systems (tyre pressure control and power steering), the company supplies systems and components for engine and energy management systems (for example, for electric and hybrid vehicles) and provides traditional assembly services. Products developed and manufactured by InTiCa Systems are used in various classes of vehicle from luxury limousines and high-end sports cars to compact models. Within just under three years, the company has managed to gain wellknown German, French, US and Asian producers (or system suppliers) as customers. Many long-term orders have been secured. Serial production has already started for some while for others its is scheduled to start in 2010. These orders generally run for between five and eight years. However, the price pressure exerted by automotive producers on component suppliers could reduce InTiCa Systems' margins and thus its corporate performance. An unchallenged position as technological leader is therefore exceptionally important.
Moreover, systematic development of the Industrial Electronics segment will continue in 2010. This unit developed new products last year, and gained a large number of new customers, together with orders running for several years. In this segment InTiCa Systems is giving priority to renewable energies (formerly solar energy) and automation technology. Photovoltaic systems are being installed around the world to utilize solar energy in regions with high levels of sunshine. The efficiency of energy generation from such systems can be increased considerably by using InTiCa's inverters.
This systematically utilizes the company's expertise and technological edge in complex inductive components such as coils, filters, noise suppression and power transfer systems. Available synergies are also being leveraged, for example, for energy conversion and storage in electric and hybrid vehicles. There is constant knowledge transfer and utilization of synergies between organizational units and technologies to ensure that the current products and solutions can trigger new applications.
No exceptional events have occurred since the end of the reporting period.
Successful restructuring and marketing achievements have opened up a new phase in the development of the Group, geared to sustained, above-average sales and earnings growth.
The focus is on further expansion of the Automotive Technology and Industrial Electronics segments, stabilizing the Communication Technology segment and stepping up international business.
Opportunities for growth are based mainly on steadily rising demand for our innovative products for the automotive and solar industries.
Another key success factor is customer focus, combined with the ability to drive forward the development of products and manufacturing technologies rapidly and with a clear focus.
Expanding the regional presence also plays a key role in future development. The aim is to secure a successful long-term market presence through international distribution and production sites.
Tougher competition among suppliers and between transmission technologies, accompanied by strong price pressure and a reluctance to invest in expansion of the broadband network have led to an above-average drop in sales and margins on our splitters in recent years. To counter this situation, various innovative new products have been/are being developed for this market.
These new developments are used for copper and fibre optic DSL broadband networks and to suppress interference in electricity networks. We anticipate that these new products could stabilize sales trends and generate new growth impetus in the medium term. Our sales guidance for 2010 is around EUR 12 million, in other words, around the same level as 2009.
Following outstanding volume sales of cars in Germany, with 3.8 million vehicles sold as a result of the scrappage premium in 2009, experts are predicting that 2010 will be a difficult year for the sector. The German Automotive Industry Association (VDA) assumes that 2.75 – 3.0 new vehicles will be sold. While foreign business started to pick up, volume sales in Germany nosedived at the start of this year. New car sales were almost 25 % lower than in the first quarter of 2009. Buzzwords like "electromobility" and "green technology" have been hoist on the banners of the automotive producers, who are determined to make Germany one of the leading markets for electric vehicles.
Despite the difficult general situation in the automotive sector, InTiCa Systems should be able to meet its growth targets for two reasons. Firstly, its products are used in applications such as keyless entry/go systems, which were mainly used in premium vehicles in the past but are now increasingly being built into midclass and compact cars. Secondly, there is high demand for our new performance electronics products for applications in electric and hybrid vehicles as almost every car producer is working on the development of such vehicles or already has relevant models on the market. So far, InTiCa Systems's innovative products are used in more than 120 models. On the basis of current orders, a large number of enquiries about new projects, especially in the areas of performance electronics for electric and hybrid vehicles, we remain confident that we can achieve our ambitious midterm growth target of 30 % p.a. Our sales guidance for this segment in 2010 is around EUR 11 million, which would be a year-on-year rise of around 35 %.
Despite the present difficult market environment for Industrial Electronics, we still see tremendous growth potential for this segment, especially in the solar industry. There could be some consolidation of the solar sector, which is likely to be good for prices in the medium term. Last year, InTiCa Systems gained to new customers and secured a large number of orders. These have already gone into serial production and work is under way on new projects, especially for applications involving regenerative energies (solar energy) and automation and drive technologies. Since project times are normally far shorter than in the Automotive Technology and Communication Technology segments, this unit should start to make a significant contribution to the company's financial performance this year. Our sales guidance for 2010 is around EUR 6 million, which translates into a year-on-year growth rate of around 250 %. In the medium term, we expect growth of more than 40 % p.a.
To sum up, the Board of Directors expects ongoing recovery of the economic situation in 2010 to allow overall sales growth of more than 20 % to around EUR 28 – 30 million, accompanied by clearly positive pre-tax income. By the end of the first quarter of 2010, orders on hand had been doubled year-on-year to EUR 17 million. For fiscal 2011 the management is anticipating sales of well over EUR 34 million and an even higher rise in earnings. Since net income is expected to be positive, the Board of Directors still anticipates a sustained good asset and financial position.
Passau, March 12, 2010
The Board of Directors
Walter Brückl Günther Kneidinger Chairman of the Board of Directors Member of the Board of Directors
for InTiCa Systems according to IFRS
as of December 31, 2009
| Assets Note |
31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|---|---|---|
| Non-current assets | ||
| Intangible assets 14 |
4,852 | 4,195 |
| Property, plant and equipment 13 |
16,503 | 16,325 |
| Deferred taxes 10.4 |
1,719 | 1,490 |
| Total non-current assets | 23,074 | 22,010 |
| Current assets | ||
| Inventories 17 |
3,975 | 2,586 |
| Trade receivables 18 |
4,331 | 4,880 |
| Tax assets 10.3 |
91 | 128 |
| Other current receivables 16 |
233 | 223 |
| Cash and cash equivalents 28 |
4,948 | 10,362 |
| Total current assets | 13,578 | 18,179 |
| Total assets | 36,652 | 40,189 |
| Equity and liabilities | 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|---|---|---|
| Equity | ||
| Capital stock 19 |
4,287 | 4,287 |
| Treasury stock 19 |
-210 | -264 |
| General capital reserve 20 |
14,808 | 14,650 |
| Profit reserve 20 |
1,792 | 2,663 |
| Currency translation reserve 20 |
229 | 142 |
| Total equity | 20,906 | 21,478 |
| Non-current liabilities | ||
| Non-current finacial liabilities 21 |
9,500 | 9,750 |
| Deferred taxes 10.4 |
1,991 | 1,728 |
| Total non-current liabilities | 11,491 | 11,478 |
| Current liabilities | ||
| Other short-term provisions 22 |
466 | 605 |
| Current finacial liabilities 21 |
1,133 | 1,232 |
| Trade payables 23; 26.2 |
2,095 | 4,051 |
| Finance lease 25 |
290 | 1,014 |
| Other current liabilities 24 |
271 | 331 |
| Total current liabilities | 4,255 | 7,233 |
| Total equity and liabilities | 36,652 | 40,189 |
for the period from January 1 until December 31, 2009
| Note | Fiscal year EUR ´000 |
Previous year EUR ´000 |
|
|---|---|---|---|
| Sales | 6.1 | 23,283 | 27,325 |
| Other operating income | 7 | 618 | 974 |
| Changes in finished goods and work in process | 17 | 217 | 198 |
| Other own costs capitalized | 1,838 | 1,926 | |
| Material expense | 14,925 | 19,347 | |
| Personnel expense | 7 | 4,880 | 6,823 |
| Depreciation and amortization | 11.2 | 3,518 | 3,682 |
| Other expenses | 7 | 3,127 | 4,344 |
| Operating income | -494 | -3,773 | |
| Cost of financing | 9 | 529 | 584 |
| Other financial income | 8 | 194 | 432 |
| Loss before taxes | -829 | -3,925 | |
| Income taxes | 10.1 | 41 | -592 |
| Net loss | -870 | -3,333 | |
| Other comprehensive income | |||
| Exchange differences from translating foreign business operations | 87 | -265 | |
| Deferred taxes from translating foreign business operations | 0 | -91 | |
| Other comprehensive income, after taxes | 87 | -356 | |
| Total comprehensive income | -783 | -3,689 | |
| Earnings per share (diluted/basic in EUR) | 12 | -0.22 | -0.78 |
| Note | Fiscal year EUR ´000 |
Previous year EUR ´000 |
|
|---|---|---|---|
| Cash flow from operating activities | |||
| Net income | -870 | -3,333 | |
| Income tax receipts | 10.1 | 41 | -592 |
| Cash outflow for borrowing costs | 9 | 529 | 584 |
| Income from financial investments | 8 | -194 | -432 |
| Depreciation and amortization of non-current assets | 11.2 | 3,518 | 3,682 |
| Other non-cash transactions | -13 | 58 | |
| Increase/decrease in assets not attributable to financing or investing activities | |||
| Inventories | 17 | -1,389 | -1,029 |
| Trade receivables | 18 | 549 | 994 |
| Other assets | -145 | 15 | |
| Increase/decrease in liabilities not attributable to financing or investing activities | |||
| Other current provisions | 22 | -139 | 278 |
| Trade payables | 26.2 | -1,956 | -959 |
| Other liabilities | -830 | -918 | |
| Cash flow from operating activities | -899 | -1,652 | |
| Cash inflow from income taxes | 31 | 138 | |
| Cash outflow for interest payments | -482 | -530 | |
| Net cash flow for operating activities | -1,350 | -2,044 | |
| Cash flow for investing activities | |||
| Increase/decrease in financial assets due to short-term financial management | 0 | 14,702 | |
| Cash inflow from interest payments | 329 | 384 | |
| Cash inflow from the disposal of property, plant and equipment | 9 | 0 | |
| Cash outflow for intangible assets | 14 | -2,033 | -1,954 |
| Cash outflow for property, plant and equipment | 13 | -2,231 | -2,890 |
| Net cash flow for investing activities | -3,926 | 10,242 | |
| Cash flow from financing activities | |||
| Cash outflow for the repurchase of shares from equity holders of the parent company | 0 | -691 | |
| Cash inflow from the sale of treasury stock | 211 | 0 | |
| Expenses for repurchasing shares | 0 | -10 | |
| Cash inflow from loans | 0 | 1,045 | |
| Cash outflow for loan repayment installments | -250 | 0 | |
| Net cash flow from financing activities | -39 | 344 | |
| Total cash flow | -5,315 | 8,542 | |
| Cash and cash equivalents at start of year | 28 | 9,379 | 834 |
| Impact of changes in exchange rates on cash and cash equivalents held in foreign currencies | 1 | 3 | |
| Cash and cash equivalents at year-end | 28 | 4,065 | 9,379 |
for the period from January 1 until December 31, 2009
| Capital stock EUR ´000 |
Treasury stock EUR ´000 |
Paid-in capital EUR ´000 |
Retained earnings EUR ´000 |
Currency trans lation reserve EUR ´000 |
Total equity EUR ´000 |
|
|---|---|---|---|---|---|---|
| As of January 1, 2008 | 4,287 | 0 | 15,088 | 5,996 | 498 | 25,869 |
| Net loss | 0 | 0 | 0 | -3,333 | 0 | -3,333 |
| Other comprehensive income, after taxes | 0 | 0 | 0 | 0 | -356 | -356 |
| Total comprehensive income | 0 | 0 | 0 | -3,333 | -356 | -3,689 |
| Share buy-back | 0 | -264 | -428 | 0 | 0 | -692 |
| Cost of share buy-back | 0 | 0 | -10 | 0 | 0 | -10 |
| As of December 31, 2008 | 4,287 | -264 | 14,650 | 2,663 | 142 | 21,478 |
| Net loss | 0 | 0 | 0 | -870 | 0 | -870 |
| Other comprehensive income, after taxes | 0 | 0 | 0 | 0 | 87 | 87 |
| Total comprehensive income | 0 | 0 | 0 | -870 | 87 | -783 |
| Sale of shares | 0 | 54 | 158 | 0 | 0 | 212 |
| As of December 31, 2009 | 4,287 | -210 | 14,808 | 1,793 | 229 | 20,907 |
(Rounding difference -1)
InTiCa Systems AG was established on August 16, 2000 and is registered in the Commercial Register at the District Court of Passau (HR B 359). The company has been listed in the Prime Standard on the Frankfurt stock exchange since November 8, 2004 (ISIN DE000584846, ticker symbol IS).
The company's registered offi ce is in Passau, Germany. Its address is InTiCa Systems AG, Spitalhofstrasse 94, 94032 Passau, Germany. The company holds stakes in companies in Austria and the Czech Republic. The principal activities of the company and its subsidiaries are described in Note 6.
2.1 Standards and interpretations impacting the amounts reported for fi scal 2009 (and/or previous years)
» IAS 1 (revised 2007) Presentation of fi nancial statements IAS 1 introduced new terminology and changes in the presentation and content of the annual fi nancial statements. The changes mainly related to the consolidated income statement and consolidated statement of changes in equity.
2.2 Standards and interpretations whose application had no impact on the consolidated fi nancial statements
Notes
The changes were implemented in the previous year's fi nancial statements.
The other new or revised standards and interpretations were also applied in the present fi nancial statements. Application had either no impact or an immaterial impact on the values reported in these fi nancial statements but might affect the reporting of future transactions or agreements.
IAS 40 Investment Property
IFRS 1 First-time Adoption of IFRS and IAS 27 Consolidated and Separate Financial Statements
The consolidated financial statements have been prepared in conformance with the International Financial Reporting Standards, as applicable for use in the EU.
The consolidated financial statements have been drawn up on the basis of historical acquisition or production costs. The principal accounting policies and valuation methods are outlined below. Where amounts are stated in thousands of euros (EUR'000) individual items or transactions may be subject to rounding differences of +/-1.
The consolidated financial statements comprise the financial statements of the parent company and its subsidiaries as of December 31 of the respective fiscal year. The financial statements of subsidiaries are drawn up as of the same reporting date as those of the parent company using uniform accounting and valuation policies.
All intragroup balances, transactions, income, expenses, profits and losses relating to intragroup transactions that are contained in the carrying amounts of assets and liabilities have been eliminated.
Subsidiaries are fully consolidated as of the date of acquisition, in other words, the date on which the Group gains control over them. Inclusion in the consolidated financial statements ends when the parent company no longer exercises control.
Sales revenues are recognized at the fair value of the consideration received or to be received, less any expected returns by customers, discounts and similar deductions.
Revenues are recognized when it is probable that the economic benefit will flow to the company and the level of the revenue can be determined reliably. In addition, the following recognition criteria must be fulfilled:
Revenues from the sale of goods are recognized when the material risks and opportunities associated with ownership thereof have passed to the buyer.
Interest income is recognized when interest is received.
The economic substance of an agreement determines whether it is or contains a leasing agreement. This entails an assessment of whether performance of the contractual agreement is dependent on the use of a specific asset or assets and whether the agreement provides a right to use the asset.
Finance leases where all material risks and benefits associated with ownership of the asset are transferred to the Group are capitalized at the start of the lease at the fair value of the leased asset or the present value of the minimum lease payments, if this is lower. Lease payments are thus divided into financing costs and repayment of the leasing liability so as to produce a constant periodic rate of interest on the residual carrying amount. Financing costs are expensed immediately.
Instalments for operating leases are expensed in the income statement over the term of the lease using the straight-line method.
The consolidated financial statements are prepared in euros, the Group's functional and reporting currency. Each company in the Group defines its own functional currency. The items included in the financial statements of each company are valued in that company's functional currency. Foreign currency transactions are initially translated between the functional currency and foreign currency using the spot rate on the date of the transaction. Monetary assets and liabilities in foreign currencies are translated into the functional currency at the closing rate. All translation differences are recognized in income for the reporting period, with the exception of translation differences relating to monetary receivables and payables in respect of foreign business operations, where realization is neither forecast nor probable. These items are recognized in the income statement at the time of disposal of the net investment. Nonmonetary items which are recognized at fair value in a foreign currency are translated at the exchange rate applicable when their fair value is determined.
The functional currency of the Czech subsidiary is the Czech koruna. The assets and liabilities of this subsidiary as of the reporting date are translated for presentation in the functional currency of InTiCa Systems AG (euros) at the closing rate. Income and expenses are translated using the weighted average exchange rate for the fiscal year. The resulting translation differences are recognized as a separate component of equity. If a foreign business operation is divested, the cumulative translation differences recognized in equity for this foreign business operation are released to the income statement. The following exchange rates were used for the consolidated financial statements:
| Country | Closing rate | Average rate | ||
|---|---|---|---|---|
| 2009 | 2008 | 2009 | 2008 | |
| Czech | 1 EUR/ 26.46 CZK |
1 EUR/ 26.93 CZK |
1 EUR/ 26.43 CZK |
1 EUR/ 24.95 CZK |
Public subsidies (investment subsidies) are deducted from the cost of acquisition of the assets to which the subsidy applies. Subsidies are not disclosed as liabilities.
Income tax expense represents the sum of current tax expense and deferred taxes.
Current taxes are determined on the basis of taxable income for the year. Taxable income differs from the net income shown in the consolidated income statement because it excludes income and expenses that will be taxable or tax-deductible in future periods or will never have a tax impact. The Group's current tax liability is calculated on the basis of tax rates applicable on the balance date or which will become applicable shortly after the reporting date. Since fiscal 2007 the Czech subsidiary has been exempt from tax for a ten-year period or until taxation reaches a maximum of 61% of the subsidized investment cost.
Deferred taxes are recognized for differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding valuation used to calculate taxable income for the fiscal authorities and recognized using the liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized if it is probable that sufficient taxable profit will be available to utilize the tax-deductible temporary differences. Such assets and liabilities are not recognized if the temporary differences relate to goodwill and liabilities resulting from events that do not affect taxable income or net income.
The carrying amount of deferred tax assets is tested annually as of the reporting date and an impairment write-down is recognized if it is no longer probable that sufficient taxable income will be available for full or partial realization of the deferred tax asset.
Deferred tax assets and liabilities are calculated on the basis of the tax rates (and tax legislation) that are expected to be applicable as of the date of performance of the liability or realization of the asset. The valuation of deferred tax assets and liabilities reflects the tax implications that would arise assuming that the liability is settled or the asset realized in the manner anticipated by the Group as of the reporting date.
Deferred tax assets and liabilities are netted if there is a legally enforceable basis for netting current tax assets and liabilities and if both relate to income taxes within the same tax jurisdiction, and the Group intends to settle its current tax assets and liabilities on a net basis.
Current and deferred taxes are recognized as income or expense unless they relate to items recognized directly in equity. In this case, the deferred taxes are also recognized in equity. Further, taxes are not recognized if the tax effect results from first-time consolidation of a business combination.
Property, plant and equipment are recognized at acquisition or production cost – excluding ongoing maintenance expenses – less accumulated depreciation and accumulated impairment write-downs. These costs include the costs of replacing parts of such assets at the time when such costs are incurred, providing that the recognition criteria are met.
The carrying amounts of the property, plant and equipment are tested for impairment as soon as there are indications that they may exceed the recoverable amount.
Property, plant and equipment are derecognized at the date of disposal or when no further economic benefit is expected from the continued use or sale of the asset. Gains or losses resulting from derecognition of the asset are calculated from the difference between the net proceeds from the sale of the asset and its carrying amount and recognized in the income statement for the period in which the asset is derecognized.
The residual values of assets, their useful lives and the depreciation method are reviewed at the end of each fiscal year and adjusted where necessary.
Assets are depreciated over the following useful lives using the straight-line method:
| Equipment, plant and office buildings | 10 – 30 years |
|---|---|
| Technical facilities and machines | 5 – 8 years |
| Vehicles, other facilities, furniture and | |
| office equipment | 3 – 14 years |
The costs of major overhauls are included in the carrying amount of the asset providing that the recognition criteria are met.
Intangible assets acquired separately are recognized at acquisition or production costs less accumulated amortization and impairment write-downs. They amortized over their expected useful life using the straight-line method and amortization is recognized in the income statement. The expected useful life of intangible assets and the amortization method are reviewed at the end of each fiscal year and any revised estimates are recognized prospectively. The useful lives of intangible assets vary between 3 and 5 years.
Research costs are expensed in the period in which they are incurred. No additional cost of debt is capitalized.
Self-created intangible assets resulting from development work are expensed if, and only if, it can be demonstrated that all the following criteria are met:
The amount initially capitalized for a self-created intangible asset is the expense incurred from the date on which the intangible asset fulfils these conditions. If a self-created intangible asset cannot be capitalized, the development costs are expensed in the period in which they are incurred.
In subsequent periods self-created intangible assets are carried at cost less accumulated amortization and impairment writedowns in the same way as intangible assets acquired separately. The useful life varies between 3 and 6 years and amortization is recognizued using the straight-line method.
Inventories are carried at the lower of cost of acquisition or production cost and net realizable value.
The net realizable value is the estimated price that can be obtained in normal business conditions less the estimated production and selling expenses.
Write-downs are made for obsolete and slow-moving inventories.
Provisions are established for all legal and substantive liabilities to third parties as of the balance sheet date, where these relate to past events that will probably lead to an outflow of resources in the future and a reliable estimate can be made of the level of such outflows. They represent uncertain liabilities that are determined on the basis of the best estimate. Provisions with a term of more than one year are discounted using market interest rates that reflect the risk and period until performance.
The valuation and derecognition of financial assets takes place on the trading date. This is the date on which the financial asset is purchased or sold, i.e. the date on which the contractual terms set forth the delivery of the financial asset within the customary period for the market concerned. They are initially measured at fair value plus transaction costs, except for financial assets classified as "at fair value through profit or loss", which are initially measured at fair value without taking transaction costs into account.
Financial assets are assigned to the following categories:
Classification is based on the type and purpose of the financial asset and is made at the time of addition.
The effective interest method is a method of calculating the amortized cost of financial assets and allocating interest income to the relevant periods. The effective interest rate is the interest rate used to discount the forecast future cash inflows (including all fees which form part of the effective interest rate, transaction costs and other premiums and discounts) over the expected term of the financial instrument or a shorter period, where applicable, to arrive at the carrying amount.
Income from debt securities is recognized on the basis of the effective interest rate.
Financial assets are classified to this category if they are held for trading. This applies if they are purchased principally with the intention of selling them in the near future. They are recognized at fair value. Any resultant gain or loss is recognized in profit or loss. The net gain or loss includes any dividends and interest payments on the financial asset.
Trade receivables, loans and other receivables involving fixed or determinable payments, which are not quoted on an active market, are classified as loans and receivables. Loans and receivables are recognized at amortized cost calculated using the effective interest method, less any impairment write-downs. With the exception of current receivables, where the interest impact would be negligible, interest income is computed using the effective interest method.
Financial assets, with the exception of those recognized in income at fair value, are tested for indications of impairment as of every reporting date. A write-down is made if, as a result of one or more factors occurring after the initial recognition of the asset, there are objective signs of a negative change in expected future cash flows from the financial asset.
Trade receivables for which there is no individual indication of impairment are tested for impairment on a portfolio basis. An objective indication of the impairment of a portfolio of receivables could be the Group's experience of receipts in the past, an increase in the frequency of defaults within the portfolio that exceed the average credit term of 60 days, and observable changes in the national or local economic environment which could be associated defaults on receivables.
In the case of financial assets recognized at amortized cost, the impairment charge corresponds to the difference between the carrying amount of the asset and the present value of expected future cash flows calculated using the original effective interest rate for the financial asset.
Impairment results in a direct reduction in the carrying amount of all financial assets affected with the exception of trade receivables, where the carrying amount is reduced by means of an impairment account. If a trade receivable is considered to be uncollectable, the impairment write-down is recognized in the impairment account. Subsequent receipts relating to amounts that have already been written down are also booked to the impairment account. Changes in the carrying amount of the impairment account are recognized in the income statement.
If the impairment of a financial asset that is not classified as available-for-sale is reduced in a subsequent reporting period and this reduction can be objectively assigned to an event occurring after recognition of the impairment write-down, the original impairment write-down is reversed via the income statement. However, the asset may not be written back to a value above the amortised cost if an impairment had not been recognised.
Financial assets are only derecognized when the contractual rights to receive cash flows from the financial asset expire or the financial asset and all material risks and opportunities associated with ownership thereof are transferred to a third party. If the Group does not transfer or receive all material risks and opportunities associated with ownership and retains a right of disposal over the asset transferred, its remaining share in the asset is recognized, together with a corresponding liability reflecting in any amounts that may have to be paid.
Financial liabilities, including borrowing, are initially measured at fair value less transaction costs.
Subsequent measurement of financial liabilities is at amortized cost using the effective interest method, with interest expense recognized on the basis of the effective interest rate.
The effective interest method is a method of calculating the amortized cost of financial liabilities and allocating interest expense to the relevant periods. The effective interest rate is the interest rate at which the estimated future payments are discounted over the expected term of the financial instrument or a shorter period, where applicable, to arrive at the net carrying amount derived from initial measurement.
The Group derecognizes financial liabilities when the corresponding liability has been settled or eliminated or has expired.
In the application of the accounting policies outlined in Note 3, the Board of Directors is required to assess facts, draw up estimates and make assumptions relating to the carrying amount of assets and liabilities where these cannot be obtained from other sources. Such estimates and the underlying assumptions are based on past experience and other factors deemed to be of relevance. The actual values may differ from the estimates.
The assumptions underlying such estimates are reviewed regularly. Where changes to such estimates only affect one period, they may only be adjusted if they relate to the present or future reporting periods, in which case they may be reflected in such periods.
This section outlines the main future-oriented assumptions and other major sources of estimation uncertainty as of the balance sheet date, insofar as they involve a material risk that a substantial adjustment might have to be made to the measurement of assets and liabilities in the future.
The management tested the Group's development department for impairment during the fiscal year and self-created intangible assets have been remeasured as a consequence. EUR 4.7 million is recognized in the consolidated balance sheet as of December 31, 2009 (2008: EUR 4.0 million) for these intangible assets.
Projects proceeded satisfactorily and customer resonance has confirmed previous estimates made by the management of the expected future revenues. However, the sluggish business development prompted the management to review is assumption of future market trends and expected profit margins on products. Following a detailed sensitivity analysis, the Board of Directors has come to the conclusion that the carrying amounts of assets will be realized in full, despite the possibility of lower revenues. The situation is being monitored closely and adjustments will be made in future years if this is rendered necessary by the market situation.
Sales solely result from revenues from the sale of goods.
The segment report is based on IFRS 8. It contains an overview of certain items from the consolidated financial statements by segment and region, based on the Group's internal reporting structure. Segmentation is designed to provide a transparent view of the earnings, assets and financial position of individual business areas and regions in which the Group operates.
This segment comprises DSL splitters for rapid data transfer. The Group's central business focus is the development, production and commercialization of splitter hardware for telecommunications service providers and private households. Splitters are manufactured in collaboration with cooperation partners and production covers all major components. The production site is in Prachatice (Czech Republic). The customer base covers all known telecommunications providers.
The Automotive Technology segment covers the design, development and production of systems and solutions for sensor technology, electronic controls and network topologies. Most products are manufactured entirely by the Group, with production operations spanning plastics processing, coils, soldering, welding, testing, casting and assembly. This segment's customers are suppliers to all known automotive brands.
The column headed "Other" in the segment report combines the other segments, which are reported together as they do not exceed the materiality threshold.
| Segment sales | Segment result | |||
|---|---|---|---|---|
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
| Communication Technology |
13,467 | 20,731 | -1,050 | -3,075 |
| Automotive Technology |
8,128 | 6,088 | 445 | -347 |
| Other | 1,688 | 506 | 111 | -277 |
| Total | 23,283 | 27,325 | -494 | -3,699 |
| Income and expenses for non-allocable assets |
-0 | -74 | ||
| Financial result | -335 | -152 | ||
| Pre-tax loss | -829 | -3,925 |
The sales revenues in the above segment report comprise revenues from transactions with external customers. There were no intersegment sales (2008: zero).
The accounting and valuation methods used by the reportable segments are identical to those used by the Group as outlined in Note 3. The segment result shows each segment's EBIT. EBIT is reported to the company's chief operating decision maker as a basis for deciding on the allocation of resources to each segment and the valuation of its profitability.
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Communication Technology | 15,789 | 17,168 |
| Automotive Technology | 10,976 | 9,821 |
| Other | 2,896 | 997 |
| Total segment assets |
29,661 | 27,986 |
| Non-allocable assets |
6,991 | 12,203 |
| Total consolidated assets |
36,652 | 40,189 |
For the purpose of monitoring profitability and allocating resources between the segments, the company's chief operating decision maker monitors the tangible, intangible and financial assets allocated to each segment.
31.12.2009 in EUR'000 31.12.2008 in EUR'000
Assets are allocated among the segments, with the exception of the following items:
The Group's principal geographical segmentation comprises Germany and other countries.
31.12.2008 in EUR'000
Germany 18.100 17,934 10,279 11,362
countries 5.183 9,391 19,382 16,624 Total 23.283 27,325 29,661 27,986
actions with external customers Non-current assets
Sales revenues from trans-
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Cash and cash equivalents |
4,948 | 10,362 |
| Other current receivables |
233 | 223 |
| Tax receivables | 91 | 128 |
| Securities | 0 | 0 |
| Deferred taxes | 1,719 | 1,490 |
| 6,991 | 12,203 |
| Depreciation and amortization |
Additions of non current assets |
|||
|---|---|---|---|---|
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
| Communication Technology |
1,898 | 2,586 | 1,517 | 1,888 |
| Automotive Technology |
1,443 | 1,015 | 1,857 | 2,556 |
| Other | 177 | 81 | 890 | 399 |
| 3,518 | 3,682 | 4,264 | 4,843 |
In addition to the depreciation and amortization stated above, impairment write-downs of EUR 200 thousand (2008: zero) were recognized for the Automotive Technology segment.
The sales split between the Group's principal products is as follows:
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Small signal electronics | 7,098 | 12,801 |
| Power electronics | 5,513 | 7,716 |
| Mechatronic modules and components |
5,252 | 3,565 |
| Other | 5,420 | 3,243 |
| 23,283 | 27,325 |
With the exception of small signal electronics, which are assigned to the Communication Technology segment, clear allocation of products to individual segments is not possible.
31.12.2009 in EUR'000
The Group generated sales revenues of EUR 4,894 thousand from the direct sale of products (2008: EUR 9,171 thousand). Its two largest customers accounted for EUR 4,788 thousand of this amount (2008: EUR 2,690 thousand). Most customers come from the telecommunications sector.
Other
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Gains from the sale of property, plant and equipment |
1 | 3 |
| Net gain from foreign currency translation |
488 | 418 |
| Change in the fair value of financial assets held for trading |
0 | 144 |
| Other | 129 | 409 |
| 618 | 974 |
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Exchange losses | 385 | 430 |
| Cost of premises | 414 | 423 |
| Insurance premiums, contributions, levies |
145 | 202 |
| Vehicle expenses | 215 | 262 |
| Advertising costs, travel expenses | 139 | 254 |
| Delivery costs | 417 | 346 |
| Maintenance and repairs | 344 | 215 |
| Miscellaneous operating expenses | 1,068 | 2,212 |
| 3,127 | 4,344 |
| Note | 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|---|
| Post-employment benefits | 31 | 474 | 475 |
| Other personnel expenses | 4,406 | 6,348 | |
| 4,880 | 6,823 |
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Current tax expense | 10 | 77 |
| Deferred taxes relating to the recognition and reversal of |
||
| temporary differences | 31 | -669 |
| 41 | -592 |
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Interest income: | ||
| Balances on bank accounts | 194 | 405 |
| Financial assets held for trading | 0 | 27 |
| 194 | 432 |
Breakdown of investment in financial assets by valuation class:
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Loans and receivables (including cash and balances on bank accounts) |
194 | 405 |
| Financial assets held for trading | 0 | 27 |
| 194 | 432 |
Note 7 contains information on the income from financial assets recognized at fair value.
| 31.12.2009 in TEUR |
31.12.2008 in TEUR |
|
|---|---|---|
| Interest on overdrafts and bank loans |
500 | 524 |
| Interest on finance leases | 29 | 60 |
| 529 | 584 |
The following reconciliation shows a breakdown of tax expense among income items in the fiscal year:
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Income before taxes | -830 | -3,925 |
| Theoretical tax income | -247 | -1,170 |
| Tax effect of loss offset | 0 | 95 |
| Impact of tax-exempt income/ non-deductible expenses |
287 | 378 |
| Impact of unused tax loss carryforwards not recognized as deferred tax assets |
0 | 28 |
| Impact of different tax rates applied to subsidiaries in different tax jurisdictions |
1 | 77 |
| 41 | -592 |
The tax rate used for the above reconciliation for 2009 and 2008 is the tax rate of around 30% payable by companies in Germany on taxable income in accordance with the applicable tax legislation.
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Deferred tax assets | ||
| Translation of foreign business operations |
91 | 91 |
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Current claims for tax refunds | 91 | 128 |
| Balance sheet | Equity | Income statement | ||||
|---|---|---|---|---|---|---|
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
| Deferred tax assets | ||||||
| Relating to the issue of shares | 401 | 401 | 0 | 0 | ||
| Capital consolidation | 0 | 3 | 0 | 0 | ||
| Tax loss carryforwards | 1,318 | 1,086 | -232 | -923 | ||
| Relating to interim profits | 0 | 0 | 0 | 96 | ||
| Total | 1,719 | 1,490 | ||||
| Deferred tax liabilities | ||||||
| Capitalization of non-current assets |
1,465 | 1,247 | 0 | 0 | 218 | 130 |
| Finance leases | 435 | 390 | 45 | 41 | ||
| Currency translation differences relating to foreign subsidiaries |
91 | 91 | 0 | 91 | 0 | 0 |
| Fair value measurement of financial assets held for trading |
0 | 0 | 0 | 0 | 0 | -13 |
| Total | 1,991 | 1,728 | ||||
| Total deferred taxes | 0 | 91 | 31 | -669 |
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| The following deferred tax assets were not recognized on the reporting date: |
||
| Taxable losses | 0 | 96 |
Further, deferred taxes were not recognized for "outside basis differences" because the company is not planning to divest its shares in associated companies.
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Depreciation of property, plant and equipment |
2,160 | 2,355 |
| Impairment write-downs on intangible assets |
200 | 0 |
| Amortization of intangible assets | 1,158 | 1,327 |
| 3,518 | 3,682 |
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Research and development costs expensed immediately |
282 | 291 |
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Impairment write-downs of trade receivables |
47 | 49 |
Earnings and the weighted average number of ordinary shares used to calculate basic and diluted earnings per share are shown below:
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Net income (loss) | -870 | -3,333 |
| Weighted average ordinary shares (in thousand units) |
4,037 | 4,224 |
| Earnings per share (in EUR) | - 0,22 | - 0,78 |
The weighted average number of ordinary shares takes account of the purchase/sale of treasury stock (Note 19).
| In EUR'000 | Real estate, buildings |
Technical equipment and machinery |
Other facilities, furniture and office equipment |
Advance payments and construction in process |
Total |
|---|---|---|---|---|---|
| Cost of acquisition | |||||
| or production | |||||
| As of January 1, 2008 | 4,457 | 13,094 | 800 | 876 | 19,227 |
| Additions | 90 | 2,505 | 153 | 141 | 2,889 |
| Transfers | 0 | 364 | 54 | -418 | 0 |
| Disposals | 0 | -483 | -35 | 0 | -518 |
| Translation differences | -32 | -55 | 0 | 0 | -87 |
| As of December 31, 2008 / January 1, 2009 |
4,515 | 15,425 | 972 | 599 | 21,511 |
| Additions | 117 | 754 | 218 | 1,142 | 2,231 |
| Transfers | 3 | 51 | 66 | -101 | 19 |
| Disposals | 0 | 0 | -22 | 0 | -22 |
| Translation differences | 68 | 36 | 5 | 0 | 109 |
| As of December 31, 2009 | 4,703 | 16,266 | 1,239 | 1,640 | 23,848 |
| Depreciation | |||||
| As of January 1, 2008 | 53 | 2,778 | 279 | 0 | 3,110 |
| Depreciation | 192 | 2,003 | 160 | 0 | 2,355 |
| Transfers | 0 | -1 | 1 | 0 | 0 |
| Disposals | 0 | -199 | -21 | 0 | -220 |
| Translation differences | 1 | -60 | -1 | 0 | -60 |
| As of December 31, 2008 / January 1, 2009 |
246 | 4,521 | 418 | 0 | 5,185 |
| Depreciation | 180 | 1,758 | 222 | 0 | 2,160 |
| Disposals | 0 | 0 | 9 | 0 | 9 |
| Translation differnces | 2 | 1 | -12 | 0 | -9 |
| As of December 31, 2009 | 428 | 6,280 | 637 | 0 | 7,345 |
| Balance sheet value as of December 31, 2009 |
4,275 | 9,986 | 602 | 1,640 | 16,503 |
| Balance sheet value as of December 31, 2008 |
4,269 | 10,904 | 554 | 599 | 16,326 |
In addition, the group's liabilities under finance leases (see Note 25) are secured through the lessor's rights to the leased assets. The carrying amount of the leased assets is EUR 1,748 thousand (2008: EUR 2,198 thousand).
| Self-created intangible |
Other intangible |
||
|---|---|---|---|
| In EUR'000 | assets | assets | Total |
| Cost of acquisition or production | |||
| As of January 1, 2008 | 4,404 | 337 | 4,741 |
| Additions | 1,863 | 92 | 1,955 |
| As of December 31, 2008 / January 1, 2009 |
6,267 | 429 | 6,696 |
| Additions | 2,014 | 19 | 2,033 |
| Transfers | 0 | -19 | -19 |
| Translation differences | 0 | 3 | 3 |
| As of December 31, 2009 | 8,281 | 432 | 8,713 |
| Amortization | |||
| As of January 1, 2008 | 1,031 | 143 | 1,174 |
| Amortization | 1,231 | 96 | 1,327 |
| As of December 31, 2008 / January 1, 2009 |
2,262 | 239 | 2,501 |
| Amortization | 1,268 | 90 | 1,358 |
| Translation differences | 0 | 2 | 2 |
| As of December 31, 2009 | 3,530 | 331 | 3,861 |
| Balance sheet value as of December 31, 2009 |
4,751 | 101 | 4,852 |
| Balance sheet value as of December 31, 2008 |
4,005 | 190 | 4,195 |
For one development project, amortization includes an impairment write-down of EUR 200 thousand (2008: zero) in addition to regular amortization. The impairment write-down is due to the fact that, contrary to the original forecasts, the customer will not be placing further orders. The carrying amount of the development expenses has been written down entirely because even sale of the project would not be expected to generate positive net proceeds.
Details of subsidiaries as of December 31, 2009 are presented below:
| Name of subsidiary |
Head office | Stake in % |
Voting rights in % |
Equity in EUR'000 |
Earnings in EUR'000 |
Main business activity |
|---|---|---|---|---|---|---|
| InTiCa Systems Ges.m.b.H. | Austria | 100 | 100 | 40 | 17 | Tool-making |
| (2008: | 100 | 100 | 22 | -98) | ||
| InTiCa Systems s.r.o. | Czech Republic | 100 | 100 | 3,656 | -641 | Production |
| (2008: | 100 | 100 | 4,379 | -1,504) |
The Group liquidated its Greek subsidiary InTiCom Components GmbH on July 20, 2009. The business operations of this company had been transferred to the Czech subsidiary in 2008. Deconsolidation did not result in any disposals of assets or liabilities. Liquidation did not result in an inflow of cash or cash equivalents. The liquidation result was minus EUR 4 thousand (2008: 0).
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Other assets recognized at depreciatied cost |
3 | 143 |
| Advance payments made | 2 | 0 |
| VAT | 160 | 0 |
| Prepaid expenses and deferred charges |
68 | 80 |
| 233 | 223 |
Age structure of overdue but non-impaired receivables:
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| 1-30 days | 227 | 636 |
| Between 30 and 60 days | 70 | 263 |
| More than 60 days | 240 | 114 |
| 537 | 1,013 |
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Status at start of year | 49 | 253 |
| Amounts written down as uncollectable |
0 | -253 |
| Amounts received during the fiscal year for impaired receivables |
-49 | 0 |
| Impairment write-downs on receivables |
47 | 49 |
| Status at year-end | 47 | 49 |
All changes in the creditworthiness of customer between the date on which the payment terms were granted and the reporting date are taken into account when testing trade receivables for impairment. There are no significant cluster risks as the customer base is diversified and there is no correlation. The management is therefore convinced that no risk provisioning is necessary beyond the impairment write-downs already recognized.
| Capital stock | ||
|---|---|---|
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
| 4,287.000 fully paid-up ordinary shares |
4,287 | 4,287 |
| Treasury stock | -210 | -264 |
| 4,077 | 4,023 |
| Treasury stock | ||
|---|---|---|
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
| Status at start of year | 264 | 0 |
| Shares sold | -54 | 0 |
| Shares repurchased | 0 | 264 |
| Status at year-end | 210 | 264 |
The fully paid-up ordinary shares have a theoretical nominal value of EUR 1. Each share confers one voting right and all shares are eligible for dividend payments.
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Raw materials and supplies | 2,816 | 1,644 |
| Work in process | 546 | 267 |
| Finished goods | 613 | 675 |
| 3,975 | 2,586 |
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Trade receivables | 4,378 | 4,929 |
| Impairment write-downs | -47 | -49 |
| 4,331 | 4,880 |
Payment terms for products sold are normally 30-90 days. Impairment write-downs are recognized on trade receivables that have been outstanding for more than 180 days on the basis of historical experience of defaults.
The Group conducts a creditworthiness test before accepting new customers and sets individual credit limits. The customer's creditworthiness and the credit limit are reviewed once a year. On the reporting date, trade receivables totalling EUR 1,694 thousand (2008: EUR 2,712 thousand) were due from the group's biggest customers. Trade receivables amounting to more than 5% of total trade receivables were due from three customers.
Impairment write-downs were not recognized for trade receivables amounting to EUR 537 thousand (2008: EUR 1,013 thousand) which were overdue on the reporting date because no material change in the creditworthiness of the debtors had been identified and the amounts due are expected to be paid. The Group does not have any security for these open items.
The Board of Directors is authorized by a resolution of the Annual General Meeting of May 24, 2007 to increase the capital stock with the Supervisory Board's consent, up to May 24, 2012, by a total of up to EUR 1,672,500.00 in return for cash or contributions in kind under exclusion of shareholders subscription rights (authorized capital 2007/1).
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| General capital reserve | 14,808 | 14,650 |
| Profit reserve | 1,792 | 2,663 |
| Currency translation reserve | 229 | 142 |
| a) Capital reserve | 16,829 | 17,455 |
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
| Status at start of year | 14,650 | 15,088 |
| Sale of treasury stock | 158 | 0 |
| Share buy-back | 0 | -428 |
| Cost of share buy-back | 0 | -10 |
| Status at year-end | 14,808 | 14,650 |
| b) Profit reserve | ||
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
| Status at start of year | 2,663 | 5,996 |
| Net income (loss) | -870 | -3,333 |
| Status at year-end | 1,793 | 2,663 |
| Rounding difference | (-1) | (0) |
| c) Currency translation reserve | ||
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
| Status at start of year | 142 | 498 |
| Translation of foreign business operations |
87 | -265 |
| Deferred taxes on the translation of foreign business operations |
0 | -91 |
| Status at year-end | 229 | 142 |
Translation differences arising from translation from the functional currency of foreign business operations to the Group's reporting currency (EUR) are recognized directly in the translation reserve.
| Non-current | Current | ||
|---|---|---|---|
| 31.12.2009 | 31.12.2008 | 31.12.2009 | 31.12.2008 |
| in EUR'000 | in EUR'000 | in EUR'000 | in EUR'000 |
| amortized cost | ||||
|---|---|---|---|---|
| Overdrafts | 0 | 0 | 15 | 982 |
| Loans | 9,500 | 9,750 | 250 | 250 |
| Total | 9,500 | 9,750 | 265 | 1,232 |
| amortized cost | ||||
|---|---|---|---|---|
| Overdrafts | 0 | 0 | 868 | 0 |
| Finance leases | 0 | 0 | 290 | 1,014 |
| Total | 0 | 0 | 1,158 | 1,014 |
| Total financial | ||||
| liabilities | 9,500 | 9,750 | 1,423 | 2,246 |
Summary of financing agreements:
Overdrafts are subject to variable interest during the year. Interest on current loans is 1.7% p.a. (2008: 2.72% p.a.).
Non-current loans incur interest at a fixed rate averaging 4.6% p.a. (2008: 4.6% p.a.).
The effective interest rate on finance leases was 5.0 % p.a. (2008: 4.2% p.a.).
| 1.1.2009 in EUR'000 |
Utilized in EUR'000 |
Reversed in EUR'000 |
Additions in EUR'000 |
31.12.2009 in EUR'000 |
|
|---|---|---|---|---|---|
| Provisions | |||||
| Outstanding invoices (i) | 331 | 331 | 0 | 280 | 280 |
| Personnel expense (ii) | 145 | 145 | 0 | 100 | 100 |
| Other | 129 | 129 | 0 | 86 | 86 |
| Total | 605 | 605 | 0 | 466 | 466 |
(i) Provisions for goods and services procured for which an invoice has not yet been received.
(ii) The provision for personnel expense includes employees' annual vacation entitlement and expected contributions to the employer's liability insurance association amounting to EUR 11 thousand.
Average payment terms of 14 – 30 days are granted for the purchase of certain goods. The Group has financial risk management arrangements in place to ensure that all payables are settled within the term granted.
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Accrued expenses | 4 | 4 |
| VAT | 0 | 68 |
| Other current liabilities | 267 | 259 |
| of which recognized at amortized cost: EUR 136 thousand (2008: EUR 129 thousand) |
||
| Total | 271 | 331 |
The Group has finance lease agreements relating to machinery and technical equipment with terms of one year. The Group has an option to purchase such machinery and equipment at nominal value at the end of the agreed term of the lease. The liabilities relating to finance leases are secured by the lessor's title to ownership of the leased assets.
| Present value of | |||||
|---|---|---|---|---|---|
| Minimum lease payments | minimum lease payments | ||||
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
||
| Remaining term up to 1 year | 305 | 1,042 | 290 | 1,014 | |
| Less: Future financing costs |
-15 | -28 | 0 | 0 | |
| Total | 290 | 1,014 | 290 | 1,014 |
The fair value of liabilities relating to finance leases is roughly equivalent to their carrying amount.
The Group manages its capital with a view to maximizing the return on investment for its stakeholders in order to optimise the ratio of equity to debt. At the same time, it ensures that all Group companies are able to operate as going concerns.
The Group's capital structure comprises interest-bearing debt, cash and cash equivalents and equity. Equity comprises paid-in shares, the capital reserve and profit reserves.
The Group's risk management system monitors gearing on a monthly basis. The key indicator is the equity ratio shown on the balance sheet. The Group specifies that the equity ratio may not drop below 45%. At year-end the equity ratio was as follows:
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Equity | 20,906 | 21,478 |
| Total assets | 36,652 | 40,189 |
| Equity ratio | 57.0 % | 53.4 % |
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Financial assets | ||
| Loans and receivables, including cash and cash equivalents |
9,282 | 15,385 |
| of which | ||
| Other current receivables | 3 | 143 |
| Trade receivables | 4,331 | 4,880 |
| Cash and cash equivalents | 4,948 | 10,362 |
| Financial liabilities | ||
| Other financial liabilities measured at amortized cost |
13,154 | 16,175 |
| of which | ||
| Financial liabilities | 10,923 | 11,995 |
| Trade payables | 2,095 | 4,051 |
| Other liabilities | 136 | 129 |
Loans and receivables are valued at amortized cost. In view of their short-term nature, there are no differences between initial measurement and fair value.
Financial instruments constituting financial liabilities are carried at amortized cost. Their carrying amount on the balance sheet essentially reflects their fair value.
Financial risk management comprises monitoring and managing the financial risks associated with the Group's operating units through internal risk reporting, which analyses the level and extent of risk factors. Risk factors comprise market risk (including the risk of changes in exchange rates, prices and interest rates), default risk and liquidity risk.
The Group endeavours to minimize the impact of these risks through its risk management system. A detailed description of the risk management system can be found in the Management Report.
Certain business transactions undertaken by the Group are denominated in foreign currencies. From the Group's viewpoint, given the low level of business involved and the fluctuations in the exchange rates involved, the associated exchange rate risk is deemed to be low since the main deliveries and sales are transacted in euros.
Interest rate risk comprises the risk that the value of a financial instrument could change due to changes in market interest rates.
The Group only has current assets classified as "loans and receivables, including cash and cash equivalents" with a term of up to three months. In view of their short-term nature, liabilities bearing interest at a variable rate are not exposed to any major risk of changes in exchange rates.
The market risk associated with fixed-interest financial instruments only impacts earnings if they are measured at fair value. Consequently, financial instruments recognized at amortized cost are exposed to a fair value risk.
The Group did not have any securities or equity interests classified as held for trading on the reporting date. Consequently, it was not exposed to any equity price risk as of this date.
Default risk is the risk that the Group will incur a loss if a contractual party fails to perform its contractual obligation. This results in a risk of full or partial default on contractually agreed payments. The main default risks relate to trade receivables. To minimize the risk of loss resulting from non-performance of obligations, the management stipulates that business relationships may only be entered into with creditworthy contractual parties. Regular customer reviews are conducted to ensure this. Current transactions are monitored continuously and aggregate exposure through transactions is managed by setting limits for each contractual party. In addition, continuous credit analyses are carried out on the financial status of receivables.
The Group is not exposed to any material default risks from a single contractual party or a group of contractual parties with similar characteristics. The maximum default risk is the carrying amount of trade receivables after recognition of impairment write-downs.
The Group manages its liquidity risk through appropriate reserves, credit lines with banks and other credit facilities and continuous monitoring of forecast and actual cash flows. This is complemented by matching the maturity profile of financial assets and liabilities. Note 29 lists the additional credit lines available to the Group to reduce future liquidity risk.
The following overview shows the term to maturity of the Group's non-derivative financial liabilities. The table is based on undiscounted cash flows relating to financial liabilities, based on the earliest date on which the Group is required to make payments. The table shows both interest and repayment instalments.
| Up to 1 and up to than 5 1 year in 5 years years in EUR'000 in EUR'000 EUR'000 |
Total in EUR'000 |
|---|---|
| 2009 | |
| Variable-interest liabilities 900 0 0 |
900 |
| Fixed-interest loans and liabilities 706 9,750 1,262 |
11,718 |
| Total 1,606 9,750 1,262 |
12,618 |
| 2008 | |
| Variable-interest liabilities 1,006 0 0 |
1,006 |
| Fixed-interest loans and liabilities 1,743 2,706 8,998 |
13,447 |
| Total 2,749 2,706 8,998 |
14,453 |
Non-Executive Director of Wincanton plc, Chippenham, UK Chairman of the Supervisory Board of Wincanton GmbH, Mannheim
Member of the Supervisory Board of W.E.T Automotive Systems AG, Odelzhausen
Member of the Supervisory Board of Otto M. Schröder Bank AG, Hamburg
Member of the Advisory Board of MAINKA Bauunter nehmung August Mainka GmbH & Co., Lingen
Passau, management consultant
The total remuneration of the Board of Directors in fiscal 2009 was EUR 354 thousand (2008: EUR 710 thousand).
The basic remuneration, which is not performance-related, comprises fixed salaries, supplementary payments for social security contributions, payments in kind comprising the use of company cars, and pension contributions.
The performance-related components comprise bonuses paid upon attainment of personal targets agreed with the Board of Directors.
| Performance | |||
|---|---|---|---|
| Basic | related | ||
| remuneration | remuneration | Total | |
| in EUR'000 | in EUR'000 | in EUR'000 | |
| 2008 | |||
| Maria Grohs (until December 31, 2008) | 223 | 0 | 223 |
| Dr. Paul Grohs (until December 31, 2008) | 223 | 0 | 223 |
| Walter Brückl (from April 1, 2008) | 173 | 0 | 173 |
| Christian Schubert (until May 20, 2008) | 91 | 0 | 91 |
| Total | 710 | 0 | 710 |
| 2009 | |||
| Walter Brückl | 207 | 0 | 207 |
| Günter Kneidinger | 147 | 0 | 147 |
| Total | 354 | 0 | 354 |
Total remuneration for former members of the Board of Directors was zero (2008: EUR 519 thousand).
There are no loans to members of the Board of Directors or former members of the Board of Directors.
Sec. 11 of the Articles of Incorporation of InTiCa Systems sets out the remuneration of the Supervisory Board. The remuneration comprises a fixed payment and an allowance for attending meetings of the Supervisory Board.
| Basic | |||
|---|---|---|---|
| remuneration | Attendance fee | Total | |
| in EUR'000 | in EUR'000 | in TEUR | |
| 2008 | |||
| Dr. Walter Hasselkus (from November 1, 2008) | 3 | 0 | 3 |
| Dr. Horst Rüdiger Hollstein (ab 1. Januar 2008) | 16 | 8 | 24 |
| Dr. Wulfdieter Braun | 19 | 9 | 28 |
| Harald Nöth (until October 31, 2008) | 8 | 8 | 16 |
| Total | 46 | 25 | 71 |
| 2009 | |||
| Dr. Walter Hasselkus | 21 | 6 | 27 |
| Dr. Horst Rüdiger Hollstein | 18 | 6 | 24 |
| Dr. Wulfdieter Braun | 10 | 6 | 16 |
| Total | 49 | 18 | 67 |
The above amounts are net amounts excluding statutory value-add ed tax. There are no loans to members of the Supervisory Board or former members of the Supervisory Board.
The cash and cash equivalents shown on the cash flow statement comprise cash on hand, balances on bank accounts and investments in money market instruments, less outstanding overdrafts. The reconciliation of cash and cash equivalents shown in the cash flow statement as of year-end and the balance sheet is as follows:
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Cash and balances on bank accounts |
4,948 | 10,362 |
| Overdrafts | -883 | -983 |
| Total | 4,065 | 9,379 |
The Group's employees belong to a state pension plan which is managed by the state authorities. The parent company and subsidiaries are required to pay a certain percentage of personnel expense into the pension plan to fund benefits. The only obligation relating to this pension plan is the payment of these defined contributions. In addition to this, voluntary payments are made to insurance companies for some employees and the Board of Directors. The expenses included in the consolidated statement of comprehensive income (Note 7) comprise the amounts payable by the Group to these insurance plans based on the defined premiums.
No reportable events have occurred since year-end.
Credit lines
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Credit lines: | ||
| Amounts drawn | 883 | 982 |
| Undrawn amounts | 2,417 | 1,618 |
| 3,300 | 2,600 |
Operating lease agreements relate to business and operating equipment and have terms of between 1 and 10 years, with extension options for up to 10 years. The Group has the option of purchasing the leased asset at market value when the lease agreement ends.
| 31.12.2009 in EUR'000 |
31.12.2008 in EUR'000 |
|
|---|---|---|
| Payments recognized as expenses: |
||
| Minimum lease payments | 361 | 389 |
| Term of lease payments: Up to 1 year |
314 | 362 |
| More than 1 year and up to 5 years |
1,029 | 800 |
| More than 5 years | 135 | 539 |
| 1,478 | 1,701 |
The Board of Directors submitted the financial statements to the Supervisory Board on March 12, 2010 and the Supervisory Board will probably decide on their publication at its meeting on April 19, 2010.
The annual financial statements and management report of InTiCa Systems AG and the consolidated annual financial statements and Group management report for fiscal 2009 will be published in the electronic Federal Gazette.
In fiscal 2009 InTiCa Systems AG received the following notifications of reportable investments in accordance with sec. 21 paragraph 1 of the German Securities Trading Act (WpHG):
On February 12, 2009 TFG Capital AG Unternehmensbeteiligungsgesellschaft, Düsseldorf, Germany, notified us pursuant to sec. 21 paragraph 1 WpHG that its share of the voting rights in InTiCa Systems Aktiengesellschaft, Passau, Germany, ISIN: DE0005874846, WKN: 587484 dropped below the 3% threshold on February 10, 2009 and that as of this date it holds 0.06% (corresponding to 2,429 voting rights).
On February 25, 2009 UBS Global Asset Management (Deutschland) GmbH, Frankfurt am Main, Germany, notified us pursuant to sec. 21 paragraph 1 WpHG that its share of the voting rights in InTiCa Systems Aktiengesellschaft, Passau, Germany, ISIN: DE0005874846, WKN: 587484 dropped below the 3% threshold on February 20, 2009 and that as of this date it holds 4.45% (corresponding to 190,822 voting rights).
On April 30, 2009 Wochenblatt Verlagsgruppe Beteiligungs GmbH, Landshut, Germany, notified us pursuant to sec. 21 paragraph 1 WpHG that its share of the voting rights in InTiCa Systems Aktiengesellschaft, Passau, Germany, ISIN: DE0005874846, WKN: 587484 exceeded the 5% threshold on April 17, 2009 and that as of this date it holds 5.004% (corresponding to 214,523 voting rights). 5.004% of these voting rights (corresponding to 214,523 voting rights) are attributable to Wochenblatt Verlagsgruppe Beteiligungs GmbH pursuant to sec. 22 paragraph 1 sentence 1, no. 1 WpHG. The voting rights attributable to Wochenblatt Verlagsgruppe Beteiligungs GmbH are held by the following company under its control, whose share of the voting rights of InTiCa Systems AG is 3% or more:
On April 30, 2009 Wochenblatt Verlagsgruppe GmbH & Co KG, Landshut, Germany, notified us pursuant to sec. 21 paragraph 1 WpHG that its share of the voting rights in InTiCa Systems Aktiengesellschaft, Passau, Germany, ISIN: DE0005874846, WKN: 587484 exceeded the 5% threshold on April 17, 2009 and that as of this date it holds 5.004% (corresponding to 214,523 voting rights).
2.15% of these voting rights (corresponding to 92,273 voting rights) are attributable to Wochenblatt Verlagsgruppe GmbH & Co KG pursuant to sec. 22 paragraph 1 sentence 1, no. 1 WpHG.
On April 30, 2009 Dr. Axel Diekmann, Germany, notified us pursuant to sec. 21 paragraph 1 WpHG that his share of the voting rights in InTiCa Systems Aktiengesellschaft, Passau, Germany, ISIN: DE0005874846, WKN: 587484 exceeded the 5% threshold on April 30, 2009 and that as of this date he holds 5.004% (corresponding to 214,523 voting rights). 5.004% of these voting rights (corresponding to 214,523 voting rights) are attributable to Dr. Axel Diekmann pursuant to sec. 22 paragraph 1 sentence 1, no. 1 WpHG. The voting rights attributable to Dr. Axel Diekmann are held by the following companies under his control, whose share of the voting rights of InTiCa Systems AG is 3% or more:
The principal shareholders on the reporting date were:
| Shareholding in % | ||
|---|---|---|
| 2009 | 2008 | |
| KST Beteiligungs AG, Stuttgart | more than 5 | more than 5 |
| UBS Fund Management (Switzerland) AG |
more than 5 | more than 5 |
| Dr. Axel Diekmann | more than 5 | more than 3 |
| Karl Kindl | more than 3 | more than 3 |
| UBS Global Asset Management (Deutschland) GmbH |
more than 3 | |
| Dr. Paul and Maria Grohs | more than 3 | |
| InTiCa Systems AG | more than 3 | more than 3 |
| TFG Capital AG Unternehmens beteiligungsgesellschaft |
| more than 3 |
Shareholdings by members of the Board of Directors and Supervisory Board (including related parties):
The Board of Directors and Supervisory Board of InTiCa Systems AG annually issue a declaration of the extent to which they comply with and have complied with the recommendations of the Government Commission on the German Corporate Governance Code published by the Federal Ministry of Justice in the electronic Federal Gazette.
The Board of Directors and Supervisory Board have issued the declaration required by sec. 161 of the German Stock Corporation Act (AktG). It is permanently available to shareholders in the internet at www.inticasystems.de "Investor Relations / Corporate Governance".
Passau, March 12, 2010
| No. of shares | |||
|---|---|---|---|
| 2009 | 2008 | ||
| Dr. Paul and Maria Grohs | n.a. | 151,000 | |
| Dr. Wulfdieter Braun | 26,015 | 26,015 | |
| Walter Brückl | 14,500 | 9,500 |
The Board of Directors
Walter Brückl Günther Kneidinger Chairman of the Board of Directors Member of the Board of Directors
The average number of employees in fi scal 2009 was 244 (2008: 24).
| 31.12.2009 | 31.12.2008 | |
|---|---|---|
| Salaried employees | 63 | 5 |
| Industrial employees | 16 | 183 |
| Trainees | 2 | 3 |
| Lowwage parttime staff | 3 | 4 |
| 244 | 247 |
The fees charged by the auditor Nischl, Grössl & Koll. GmbH Wirtschaftsprüfungsgesellschaft, Eging, for fi scal 2009 comprise the following:
| in EUR'000 | 31.12.2009 | 31.12.2008 |
|---|---|---|
| Audit services | 45 | 47 |
The audit fees comprise fees for the audit of the consolidated fi nancial statements and the fi nancial statements of the parent company.
To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated fi nancial statements give a true and fair view of the assets, liabilities, fi nancial position and profi t or loss of the Group, and the Group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group.
Passau, March 19, 2010
The Board of Directors
Walter Brückl Günther Kneidinger Chairman of the Board of Directors Member of the Board of Directors
Responsibility
Auditor´s Certifi cate
In compliance with sec. 31 HGB, we have conducted our audit in accordance with the German accounting principles established by the Institut der Wirtschaftsprüfer (IDW). These principles require the audit to be planned and performed in such a way that inaccuracies and violations which materially affect the disclosure of fi nancial position and results from operations as presented by the consolidated fi nancial statements and the group management report and with regard to applicable accounting provisions are identifi ed with suffi cient reliability.
In establishing the audit procedures, knowledge of the business activities, the group's economic and legal framework, and an anticipation of possible mistakes are taken into consideration. Within the context of the audit, the effectiveness of the internal accounting control system as well as proof for the disclosures made in the consolidated fi nancial statements and the group management report are examined predominantly on the basis of random sampling. The audit contains assessments of the fi nancial statements of the companies included in the consolidated fi nancial statements, the defi nition of the basis of consolidation, the accounting and consolidation principles applied, and the material estimates made by the Board of Directors, as well as an evaluation of the overall presentation of the consolidated fi nancial statements and the group management report. It is our opinion that our audit provides a suffi ciently reliable basis for our assessment.
Our audit has not resulted in any objections.
According to our assessment based on the conclusions from our audit, the consolidated financial statements are compliant with the IFRS as applicable in the European Union and the additional provisions of commercial law as applicable according to sec. 315a para. 1 HGB, and they communicate – with regard to these provisions – a presentation of the group's financial position and results from operations which corresponds to the actual conditions. The group management report is consistent with the consolidated financial statements, communicates an overall correct impression of the situation of the group, and describes the chances and risks of the future development coherently.
Eging am See, March 29, 2010
Nirschl, Grössl & Koll. GmbH Wirtschaftsprüfungsgesellschaft
G. Nirschl Wirtschaftsprüfer (Auditor)
ADSL Asymmetric Digital Subscriber Line; broadband technology on the basis of conventional telephone lines allowing higher data transmission rates for downloads than for uploads.
ADSL2 The maximum data rate of ADSL2 is higher than the one provided by ADSL, leading to higher relative data rates for a given distance due to improved signal processing and coding. The data transmission rate of ADSL2 is theoretically as high as up to 12 Mbit/s downstream and 1 Mbit/s upstream at a bandwidth of 1.1 MHz.
ADSL2+ New transmission standard allowing for higher downstream speed than previously possible. ADSL2+ expands the bandwidth of the ADSL signal to 2.2 MHz and thus increases the maximum data rate to 24 Mbit/s downstream and 1 MBit/s upstream. This is possible only via relatively short and highgrade phone lines and therefore not available everywhere.
Antennas Antennas in the sense of RFID technology are sender as well as receiver antennas on the basis of winding technology (inductive components or coils).
Automation technology Automation technology aims at making a machine or plant work completely autonomously and independent of human input. The closer you get at reaching this goal, the higher is the degree of automation. Often human staff is needed for supervision, supplies, conveyance of fi nished goods, maintenance, and similar jobs. Automation technology addresses the most diverse issues of building and plant automation, e.g. measuring, controlling, monitoring, defect analysis, and the optimization of process sequences.
Technical glossary
Bit Binary Digit; Smallest digital information unit, or rather a computer's smallest memory unit. It can assume the values one or zero.
Coil See under inductive components or Inductors
Customizing Customizing is the term for adjusting a series product, e.g. automobiles or computer software, to a customer's requirements.
Download Download means the transfer of all kinds of data from the Internet to a computer.
DSL Digital Subscriber Line: broadband technology (fast data transfer via the Internet) on the basis of conventional Telefone lines. With a download speed of 768 kbit and more per second, it is much faster than both analog modems and ISDN (using one line). The upload speed of 128 kbit/s is as high as the parallel use of both ISDN lines.
Ferrites Ferrites are poorly or non-electroconductive ferrimagnetic ceramic materials consisting of ferric oxide hematite (Fe2O3), less commonly magnetite (Fe3O4) and other metallic oxides. If not saturated, ferrites conduct the magnetic flux very well and provide a high magnetic permeability. These materials thus usually provide low magnetic resistance.
Filter, Filter coils See under inductive components; electronic component for the separation of different signal sources.
High-end-manufacturers High-end manufacturers manufacture goods using particularly advanced technologies.
Hub magnets Hub magnets are magnetic actuators finding preferred use for valve control and other applications.
Hybrid vehicles Hybrid vehicles are cars containing at least two transducers and two installed energy storage systems for the purpose of powering the vehicle. Transducers are for instance electric motors and Otto and diesel engines, energy storage systems are for instance batteries and gas tanks.
Immobilizers Immobilizers are devices installed in vehicles for preventing unauthorized operation. There are mechanical, electronic and involuntary immobilizers.
Inductors, Solenoid, Coil Inductors are inductive components in the realm of electrical engineering and electronics. The terms inductor and solenoid or coil are not clearly defined and used synonymously.
Inductive components Inductive components usually consist of a ferrite core, a plastic coil body and copper wire for the transmission, filtering, and sending or receiving of electric signals. They are functional independent of external energy input.
Inductivity, High-tech inductivity Inductivity is an electric property of an energized electric conductor due to the environing magnetic field created by the current flow. It describes the ratio between the magnetic flux linked with the counductor and the current flowing through the conductor.
Industrial weighing technology Industrial scales contain a multitude of electronic components. Particularly weight sensors and voltage supply are interesting applications for spezial inductive components.
Internet The term was initially derived from "interconnecting network", i. e. a network that connects separate networks with each other. Today the Internet consists of an immense number of regional and local networks all over the world, together creating the "networks' network". The Internet applies a uniform addressing scheme as well as TCP/IP protocols for the transfer of data. Initially this global digital network used to primarily interconnect computers in research centers.
Inverter An inverter is an electronic device converting direct tage into alternating voltage or direct current into alternating current. Depending on the circuit, inverters can come equipped for the generation of single-phase alternating current or threephase alternating current (rotary current).
IPTV IPTV (Internet Protocol Television) stands for the digital transmission of broadband applications such as TV programs and movies via a digital data network. The Internet Protocol (IP) is applied for the transmission of those data.
ISDN Integrated Services Digital Network. ISDN uses the existing telephone lines, only the transfer of all data is digital instead of analog as previously. By a concerted use of several channels, a transmission rate of 128 kbit/s is achieved.
KBit/s Kilo bits per second; unit for the transmission rate or speed of data transfer.
Keyless Entry, Keyless Go, Remote Keyless Entry New technology for locking and unlocking vehicles; instead of a key there is only a chip card that exchanges signals with the vehicle. As soon as the card holder approaches the car or touches the door handles, the door will open. The motor is started by touching a pushbutton or starter button.
MDF Main distribution frame technology; the telecommunication companies' network nodes for subscriber connections.
Photovoltaic power plants Photovoltaic (solar) power plants are power stations transforming a part of the solar radiation into electric power by means of solar cells. This immediate way of energy conversion is called photovoltaics.
Powerline Powerline technology facilitates data transfer on the Internet via the public power supply system.
RFID Radio Frequency Identification; wireless transmission system for the detection of objects.
Sensor A sensor is a technological component that is able to detect certain physical or chemical properties (e.g. thermal radiation, temperature, humidity, pressure, sound, brightness, or acceleration) and/or the material condition or texture of its environment with respect to quality or quantity, as a measurand. These factors are detected by the use of physical or chemical effects and transformed into other processible quantities (mostly electric signals).
Solar inverter The inverter transforms the direct current generated by the solar modules into an alternating current comparable to the conventional electricity network. This makes it possible to feed the self-produced solar energy in the public power supply system.
Splitter Electronic component for merging or separating voice and data signals.
Time to Market Time to market (TTM) means the period of time from product development to placing the product in the market.
Transmitter A transmitter is a device for creating and radiating electromagnetic waves. It basically consists of at least one oscillator and one transmitting antenna. If its intended use is telecommunication, a device for oscillation modulation is required as well.
Triple Play TP is a marketing term introduced around 2005 in telecommunications for the combined offer of the three communication services audiovisual entertainment (television, video-on-demand), (IP) telephony, and Internet.
U-ADSL Universal Asymmetric Digital Subscriber Line; VDSL and U-ADSL are advancements of the present DSL system for realizing higher data transmission rates – both systems are still at the developing stage.
Upload Upload means transferring data from a computer to the Internet.
VDSL Very High Data Rate Digital Subscriber Line; is a DSL technology that provides signficantly higher data transmission rates via conventional phone lines than for instance ADSL or ADSL2+.
VDSL2 (see under VDSL) VDSL2 bases on the transmission procedure Discrete Multitone (DMT) and provides theoretically attainable data transmission rates of up to 200 Mbit/s for both upstream and downstream at a cut-off frequency of 30 MHz.
VoIP (Voice over Internet Protocol) IP telephony means telephoning via computer networks set up according to Internet standards. Information typical for telecommunication, i.e. voice signals as well as information required for establishing the connection, is transmitted over a network otherwise used for data transfer as well. Either computers, special IP telephony terminals, or conventional phones plugged in with a spezial adapter can be used at the subscriber side for providing the connection to the phone network.
xDSL Collective term for the data transmission technologies DSL, ADSL, VDSL, U-ADSL, etc.
| 22.03.2010 | Preliminary fi gures fi nancal year 2009 |
|---|---|
| 22.04.2010 | Announcement of Consolidated Financial Statements for 2009 |
| 22.04.2010 | Conference Call |
| 20.05.2010 | Announcement of Interim Financial Statements for Q12010 |
| 09.0.2010 | Annual General Meeting in Passau |
| 19.08.2010 | Announcement of Interim Financial Statements for H12010 |
| 22.11.2010 | Announcement of Interim Financial Statements for Q32010 |
| 22.–24.11.2010 | German Equity Forum in Frankfurt |
InTiCa Systems AG Spitalhofstraße 94 94032 Passau / Germany
Tel. +49 (0) 851 9 66 920 Fax +49 (0) 851 9 66 9215
[email protected] www.inticasystems.de
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