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P U R E S I L I C O N
ANNUAL REPORT 2002
ANNUAL REPORT 2002
Photos: MIC, Søren Wesseltoft, BP Solar, Nokia, Bendix, TeknoGrafik and SunPower.
INFRAREDPOWER WIRELESS AUTOMOTIVE DETECTOR MEMS
Contents
Page
Company details 4
Statement by the Management on the annual report 5
Auditors’ report 6
Financial highlights 7
Calculation of ratios 8
Financial review 2002 9
Accounting policies 14
Income statement for 2002 20
Balance sheet at 31 December 2002 21
Statement of changes in equity for 2002 23
Cash flow statement for 2002 24
Notes 25
P U R E S I L I C O N
Company details
Board of Directors:
Other Directorships and Management Positions held bythe Board of Directors and Management:
Christian Buhl, Non-Executive Director,Chairman
Director of:GPV Industri A/SL.M. Ericsson A/SRambøll, Hannemann og Højlund A/STopsil International A/S (Chairman)
Doris Hsu, Non-Executive Director,Vice Chairman
Vice President of Sino-American Silicon Products Inc., Taiwan
Paul Decraemer,Non-Executive Director
Managing Director of Sustainable Energy Ventures, Belgium
Jon Wulff Petersen,Non-Executive Director
Vice Director of Risø National Laboratory
Staff Representatives:
Maibrit Thomsen, Team Leader
Hans Jepsen, Operator
Management:
David Packness Meyer,Managing Director
Director of:Cerama A/SDanish Sound Technology A/SNanion ApS (Chairman)Topsil International A/S, Director and Managing Director
Company auditors:Deloitte & Touche Statsautoriseret RevisionsaktieselskabAnders O. Gjelstrup, State Authorised Public Accountant
KPMG. C. JespersenJ.P. Bærentsen, State Authorised Public Accountant
The Annual General Meeting adopted the annual report on 22 May 2003.
Chairman
ANNUAL REPORT 2002
4
Statement by the Management on the annual report
We have today presented the annual report of Topsil Semiconductor Materials A/S for 2002.
The annual report has been presented in accordance with the Danish Financial Statements Act, Danish Ac-counting Standards and the financial reporting requirements of the Copenhagen Stock Exchange. We con-sider the applied accounting policies appropriate for the annual report to provide a true and fair view of theCompany’s assets, equity and liabilities, financial position, results and cash flows.
We recommend the annual report for adoption at the Annual General Meeting.
Please note that this translation is provided for convenience only. The Danish version shall prevail in case ofdiscrepancies.
Frederikssund, 25 march 2003
Management:
David Packness MeyerManaging Director
Board of Directors:
Christian BuhlChairman
Doris HsuVice Chairman
Paul Decraemer
Jon Wulff Petersen Maibrit Thomsen Hans Jepsen (Staff Representatives)
P U R E S I L I C O N
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Auditors’ report
To the shareholders of Topsil Semiconductor Materials A/S
We have audited the annual report of Topsil Semiconductor Materials A/S for the financial year 2002.
The annual report is the responsibility of the Company’s Management. Our responsibility is to express anopinion on the annual report based on our audit.
Basis of opinionWe conducted our audit in accordance with Danish Auditing Standards. Those standards require that weplan and perform the audit to obtain reasonable assurance that the annual report is free of material mis-statement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures inthe annual report. An audit also includes assessing the accounting policies used and significant estimatesmade by the Management, as well as evaluating the overall annual report presentation. We believe that ouraudit provides a reasonable basis for our opinion.
Our audit has not resulted in any qualification.
OpinionIn our opinion, the annual report gives a true and fair view of the Company’s financial position at 31 Decem-ber 2002 as well as of the results of its operations and its cash flows for the financial year 2002 in accor-dance with the Danish Financial Statements Act and Danish Accounting Standards.
Copenhagen, 25 March 2003
D E L O I T T E & T O U C H E KPMG C. JespersenStatsautoriseret Revisionsaktieselskab
Anders O. Gjelstrup J. P. BærentsenState Authorised Public Accountant State Authorised Public Accountant
ANNUAL REPORT 2002
6
Financial highlights
5 years’ key figures, DKK ’000 2002 2001 2000 1999 1998_______ _______ _______ _______ _______
Revenue 111,883 132,102 116,787 64,114 98,642
Operating profit/loss 2,866 2,085 (34,313) (25,258) (17,139)
Net financials 2,472 (6,584) (13,526) (12,418) (10,494)
Profit or loss from ordinary activitiesafter tax 5,350 (4,499) (33,839) (37,676) (27,633)
Net profit/loss for the year 5,350 (4,499) (33,839) (37,676) (27,633)
Fixed assets 56,020 53,343 66,778 90,314 97,225
Inventories 48,584 63,294 58,395 66,559 66,386
Trade receivables 13,086 8,939 29,283 10,542 9,876
Equity 77,164 24,845 28,221 18,318 47,551
Provisions 0 1,313 5,758 1,500 1,000
Long-term liabilities other thanprovisions 26,335 10,750 16,764 40,987 49,510
Short-term liabilities other thanliabilities 58,663 110,609 114,859 110,136 70,341
Balance sheet total 162,162 147,517 165,602 170,941 178,922
Ratios
Profit margin (%) 2.6 1.6 (29.4) (39.4) (17.4)
Cash-to-current-liabilities ratio 181 85 86 73 116
Return on equity (%) 10.5 (17.0) (145.4) (114.4) (58.1)
Equity ratio (%) 47.6 16.8 17.0 10.7 26.6
Earnings Per Share (EPS) 0.02 (0.08) (0.59) (109.48) (106.40)
Equity value 0.30 0.43 0.50 53.23 183.09
Quoted price *0.35 1.63 *3.24 92.54 135.00
Dividends per share 0 0 0 0 0
Price/equity value 1.17 3.79 6.48 1.74 0.74
Average number of staff 88 92 128 128 167
1998 and 1999 comprise the consolidated figures for Topsil Inc. and Riotech Inc.
In 2000, the subsidiary Riotech Inc. was sold, which means that all key figures are for Topsil Semiconductor MaterialsA/S/the parent.
The financial highlights for 2001 have been restated to comply with the changed accounting polities.
* At the Extraordinary General Meeting on 10 August 2000, the Company changed the denomination of its shares fromDKK 100 nominal to DKK 1.00 nominal, and at the Annual General Meeting on 15 May 2002 the denomination waschanged from DKK 1.00 nominal to DKK 0.25 nominal.
P U R E S I L I C O N
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Calculation of ratios
Profit margin Net profit/loss before interest, etc. x 100 Revenue
Cash-to-current-liabilities ratio Current assets x 100Short-term liabilities other than liabilities
Equity ratio Equity at year-end x 100Total liabilities and equity at year-end
Profit/loss for analytical purposes Profit/loss from ordinary activities less tax on profit orloss from ordinary activities
Return on equity Profit/loss for analytical purposes x 100 Average equity
Earnings Per Share (EPS) Profit/loss for analytical purposes Average number of shares
Equity value at year-end Equity at year-endNumber of shares at year-end
Quoted price at year-end Price of quoted shares at year-end
Dividends per share Dividend rate x nominal value of the share 100
Price/Equity value Quoted priceEquity value at year-end
The ratios have been compiled in accordance with the guidelines on calculation of ratios issued by the Dan-ish Society of Financial Analysts.
ANNUAL REPORT 2002
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Financial review 2002
The Company produces and sells monocrystalline float zone silicon. Production takes place by transformingraw silicon from polycrystalline into monocrystalline material through melting and re-crystallisation.
The Company’s revenue for 2002 reached DKK 111.9m, which is a decrease of approx. 15% compared with2001, when revenue was DKK 132.1m. The decrease has been caused by the general decline in the floatzone silicon market that continued into the first quarter of 2003.
The operating profit for the year is DKK 2.9m against one of DKK 2.1m in 2001.
The net profit for the year is DKK 5.4m against a loss of DKK 4.5m in 2001.
Compared to previous forecasts of overall results for the year, adjustments have been made because of theimpact of the US dollar rate and the write-down of obsolete and slow-moving inventories.
The Board of Directors and Management consider the net profit for the year to be acceptable, taking themarket situation in consideration.
Results are positively affected by DKK 7.7m in financial income from write-down of debt in connection with afinancial restructure in the fourth quarter of 2002. In 2002, a number of productivity-improving projects werecarried out, and together with a change in depreciation rates this has affected results positively. Results arenegatively affected by the development of the US dollar rate and write-down of obsolete and slow-movinginventories.
The Board of Directors recommends the Annual General Meeting not to pay dividend for the financial year2002.
Share capital and cash flowAs the Company had lost more than half of its share capital, the Ordinary General Meeting decided on 15May 2002 to reduce the share capital by 75% by reducing the nominal value of the share from DKK 1.00 toDKK 0.25.
At the same time, the Company’s cash flow has been under pressure due to the volatile electronics marketand an increase in the investment level. By the end of the first quarter of 2002, the Company had credit fa-cilities placed at its disposal to cover its needs in the short run.
In the fourth quarter, the Company entered into an agreement with two new investors, Sino-American SiliconProducts Inc. and Sustainable Energy Ventures, and Kommunernes Pensionsforsikring (pension fund forlocal authorities) and Lønmodtagernes Dyrtidsfond (Employees Capital Pension Fund in Denmark) about acapital investment of DKK 50m which was carried out by a pre-emption issue in December 2002. The twonew investors are members of the Company’s Board of Directors.
As a consequence of the capital increase, the Company’s capital base for its future operations is ensured.DKK 22m of the proceeds from the issue has been spent on reducing the interest-bearing debt and tradepayables, and some DKK8m has been earmarked for expanding production capacity into the solar cell mar-ket in 2003.
In January 2003, the interest-bearing debt was further reduced through payment of a liability of DKK 9.6m,which will positively affect results for 2003 by DKK 3.1m before tax.
The issue secured the necessary financial resources for the Company to expand its production capacity.
InventoriesInventories have been reduced from DKK 63m to DKK 49m due to an improvement of the inventory man-agement through planning and optimisation.
P U R E S I L I C O N
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Research and development activitiesThe Company continues to focus on optimising the production processes and developing new products tomeet the demand of the power market. The Company has also continued to further develop high resistivityproducts for the communication market and has a unique position on this market.
As a consequence of the Company’s analysis of the future sales prospects for FZ silicon, the Company hassince 2000 developed FZ silicon for the solar cell market which has over the past few years been character-ised by high growth rates. According to the trade association of the solar cell industry, EPIA (EuropeanPhotovoltaic Industry Association), the production of solar cells increased globally by 40% in 2001 and by38% and 32% in 2000 and 1999 respectively.
During 2002, the Company continued its development and maturing of high performing FZ material (PV-FZ) for solar cells. The development was carried out in close cooperation with a US manufacturer of solarcells, and other major manufacturers of solar cells are testing the Company’s solar cell material.
The Company aims at the high efficiency solar cell market. As silicon is one of the main elements in a solarcell the Company sees a future potential in producing silicon for the solar cell industry.
The Company is a member of a consortium financially supported by the EU which carries out research anddevelopment of materials for solar cells. The objective of the project is to develop monocrystalline silicon forsolar cells with an efficiency of at least 20%.
The Company has developed new sophisticated production equipment in order to manufacture cost efficientmaterial. The Company has applied for a patent on the equipment.
Intellectual capital resourcesThe Company focuses on further development of its employees, and annual appraisal interviews are heldwith all the employees. These interviews show competences, cooperation relations and training needs inrelation to the Company’s objectives. 2002 has had 823 internal and external training days.
Furthermore, the incentive program introduced in 2001 for the management team was continued in 2002.The incentive program is based on a bonus scheme according to which measurement is primarily made ofthe results before tax. The Company will continue and extend the incentive program in 2003.
Environmental performanceTo further increase the focus, the Company started a project about environmental management, and theobjective is an ISO 14001 approval.
The project that is subsidised by the authorities is expected to be carried out before the end of the thirdquarter of 2004.
OutlookAccording to the trade association SEMI, the total silicon market is expected to grow by approx. 11% in2003. The increase will primarily take place in the third and the fourth quarters. The solar cell market is ex-pected to become a real opportunity for the Company in 2003.
The Company expects all year revenue to be slightly higher than 2002 and in line with the market inclusive ofmoderate sales of solar cell material.
The Company expects the profit to be distributed unevenly over the financial year. For the first quarter of2003 the Company expects break even including a profit of DKK 3.1m before tax upon redemption of a debtof DKK 9.6m.
In 2003, the Company expects a pre-tax profit in line with the profit for 2002.
At 1 March 2003, the orders on the books totalled about DKK 40m against DKK 33m at 1 March 2002.
ANNUAL REPORT 2002
10
Forsknings- og udviklingsaktiviteter Der er fortsat fokus på optimering af produktionsprocesserne samt udvikling af nye produkter til imødegåelse af power markedets krav. Selskabet har ligeledes videreudviklet højresistive produkter til kommunikations-markedet, og har en unik position på dette marked. Som et resultat af selskabets analyse af de fremtidige afsætningsmuligheder for FZ-silicium har selskabet siden 2000 udviklet FZ-silicium til solcellemarkedet, der i de seneste år har oplevet høje vækstrater. Ifølge solcelleindustriens brancheforening EPIA (European Photovoltaic Industry Association) steg produktionen af solceller globalt i 2001 med 40% og i de to foregående år med hhv. 38% og 32%.
Selskabet har i 2002 fortsat udvikling og produktmodning af højtydende FZ-materiale (PV-FZ) til solceller. Udviklingen er foretaget i tæt samarbejde med en amerikansk solcelleproducent, og selskabets solcellema-teriale bliver testet af andre store solcelleproducenter. Selskabet sigter mod højeffektdelen af solcellemarkedet. Da silicium er ét af hovedelementerne i en solcelle, ser selskabet et fremtidigt potentiale i produktion af silicium til solcelleindustrien. Selskabet deltager i et EU-støttet konsortium, der forsker i og udvikler materialer til solceller. Projektets mål er at udvikle monokrystallinsk silicium til solceller med en effektivitet på minimum 20%. Selskabet har investeret i nyt avanceret produktionsudstyr med henblik på produktion af konkurrencedygtige produkter. Udstyret er patentanmeldt. Videnressourcer Selskabet fokuserer på videreudvikling af medarbejderne, og der afholdes medarbejdersamtaler med alle medarbejdere. Samtalerne afdækker kompetencer, samarbejdsrelationer og uddannelsesbehov i relation til selskabets mål. Der har i løbet af 2002 været 823 interne og eksterne uddannelsesdage. Endvidere er incitamentsaflønningen, der blev indført i 2001 for direktion og ledende medarbejdere, videre-ført i 2002. Incitamentsaflønningen er baseret på en bonusordning, hvor der primært måles på resultat før skat. Selskabet vil fortsætte og udvide bonusprogrammet i 2003. Miljøforhold For yderligere at øge fokus har selskabet i februar 2003 påbegyndt et projekt vedrørende miljøledelse, hvor målet er en ISO 14001 godkendelse. Projektet, der er etableret med offentlige tilskud, forventes gennemført inden udgangen af 3. kvartal 2004. Forventet udvikling Ifølge brancheorganisationen SEMI forventes det totale siliciummarked at vokse med ca. 11% i 2003. Stig-ningen vil primært ske i 3. og 4. kvartal. Solcellemarkedet forventes at blive en god mulighed for selskabet i 2003. Selskabet forventer en omsætning for hele året, der er lidt højere end i 2002 og på linie med markedet, inkl. mindre leverancer af solcellematerialer. Selskabet forventer at resultatet bliver fordelt uensartet over året. Der forventes et break even resultat i 1. kvartal 2003 inkl. en fortjeneste på 3,1 mio.kr. før skat i forbindelse med indfrielse af en gældspost på 9,6 mio.kr. For året 2003 forventes et positivt resultat på linie med resultatet for år 2002. Selskabets ordrebeholdning udgjorde primo marts 2003 ca. 40 mio.kr., mod ca. 33 mio.kr. primo marts 2002.
Particular risks
Operating risksA significant part of the Company’s sales has been made to less than 25 customers of which no single cus-tomer takes more than 20% of the Company’s total sales. The sales to the Company’s 10 largest customersaccount for about DKK 90m.
Access to raw silicon is crucial to the Company’s production. There are only eight producers of raw siliconworldwide for which reason stable supply requires a strong bargaining position. However, new capacity isanticipated to emerge in the market if security of supply cannot be guaranteed. Today, the Company usesdifferent suppliers who are able to supply raw silicon of a quality that has been approved by the Company,and negotiations are in progress with other suppliers. Dependency therefore exists in relation to these sup-pliers.
Today, the Company uses three or four different subsuppliers for cutting and reprocessing of silicon ingots.The largest subsupplier is SAS, who is one of the Company’s principal shareholders. All contracts with SASare concluded on an arm’s length basis.
The Company is a small player among large competitors and the fourth largest supplier of float zone silicon.If the competitors target the Company very focused, this could be a risk in medium term.
The capital base may turn out to be insufficient if the political uncertainty prevailing worldwide results in adevelopment of the markets which differs significantly from what the analysts predict at the moment.
Financial exposureThe proceeds from the issue carried out have ensured a sounder capital base. The proceeds will also coverthe expected initial investments when the silicon production is to be upscaled to the solar cell market. If thedemand increases significantly, the Company should contemplate further investments in production capacity,which could mean an increase of the Company’s capital requirements.
Credit riskCredit risks related to financial assets correspond to the values recognised in the balance sheet. Invoice-discounted claims are insured through a factoring company.
The banks have guaranteed the present credit limit of the Company’s credit facilities until November 2003,but considering its present and expected development, the risk is considered to be limited.
Currency exposureThe Company does not use derivative financial instruments to hedge currency exposure. Instead, a com-mercial hedge is used, balancing the Company’s inflow and outflow of currency. USD account for about 50%of the currency flow, and the maximum currency exposure is estimated to account for +/- DKK 50,000 amonth if the USD rate fluctuates by +/- DKK 0.50.
Interest rate exposureThe Company’s total debt with floating interest rate accounts for about DKK 10m. A change in the interestrate level of 1 percentage point will affect the Company’s results by +/- DKK 0.1m p.a.
Changes in accounting policies as a consequence of the new Danish Financial Statements ActThe Company’s accounting policies have been changed in a number of areas as a consequence of theadoption of the new Danish Financial Statements Act. We refer to the section about accounting policies.
Events after the balance sheet dateNo events have occurred after the balance sheet date to this date which would influence the evaluation ofthis annual report.
P U R E S I L I C O N
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P U R E S I L I C O N
List of stock market releases in 2002 & 2003Topsil Semiconductor Materials A/S has issued the following notifications to the Copenhagen Stock Ex-change:
2002:24.01 Financial calendar 200225.03 Postponement of annual report for 200127.03 Cash flow situation and announcement of annual report for 200102.05 Notice convening the Annual General Meeting15.05 Quarterly report – Q1 200215.05 Summary of Annual General Meeting 200225.06 Notification of negotiations with potential investors20.08 Interim report 200228.08 Notification of signature on a letter of intent on investment of capital of DKK 50m.09.09 Notice convening an Extraordinary General Meeting and notification of warrant and bond holders.23.09 Publication of names of investors23.09 Summary of Extraordinary General Meeting02.10 Notification of capital increase in connection with conversion of convertible bonds and execution of
warrants01.11 Notification of prospectus01.11 Adjustment of notification of prospectus13.11 Quarterly report – Q3 200213.11 Adjustment of quarterly report21.11 Notice convening an Extraordinary General Meeting02.12 Result of pre-emption issue18.12 Summary of Extraordinary General Meeting18.12 Quarterly list of shareholdings20.12 Statement of shareholdings held by insiders at 19 December 200220.12 Purchase of treasury shares20.12 Financial calendar 2003
2003:14.01 Redemption of debt25.03 Announcement of annual report for 2002
Financial calendar 200322.05 Quarterly report – Q1 200322.05 Annual General Meeting20.08 Interim report – six months13.11 Quarterly report – Q3 2003
Please direct any questions about notifications to the Copenhagen Stock Exchange to:
Christian Buhl, Chairman – phone +45 45 80 72 16David P. Meyer, Managing Director – phone +45 47 36 56 12
Pursuant to the Company’s internal rules and Executive Order No 774 (section 6(4)) of the Danish FinancialSupervisory Authority, quarterly statements of shareholdings held by insiders will be filed no later than threetrading days after expiry of the allowed six-week trading period following the publication of quarterly reports,interim reports and notifications of annual reports.
ANNUAL REPORT 2002
12
Topsil shares and warrants held by the Board of Directors and the Managing Director
Christian Buhl 164,250 shares of DKK 0.25 nominal25,000 convertible bonds of DKK 0.25 nominal
Jon Wulff Petersen 107,500 shares of DKK 0.25 nominal37,200 convertible bonds of DKK 0.25 nominal
Maibrit Thomsen 40,000 shares of DKK 0.25 nominalDavid Packness Meyer 157,355 shares of DKK 0.25 nominal
13,000 convertible bonds of DKK 0.25 nominal
Annual general meetingThe Annual General Meeting will be held at 11.00 on Thursday, 22 May at the Company’s premises.
OwnershipThe Company’s share capital amounts to DKK 64,827,845 distributed on 259,311,380 shares in denomina-tions of DKK 0.25 nominal.
Shareholders Number of shares Capital DKK Capital % Votes %At 31 December 2002
Sino-American Silicon Products Inc. 100,000,000 25,000,000.00 38.56 38.56
Sustainable Energy Ventures 60,000,000 15,000,000.00 23.14 23.14
EHP-Toftlund A/S 28,600,000 7,150,000.00 11.03 11.03
Lønmodtagernes Dyrtidsfond 17,326,604 4,331,651.00 6.68 6.68
Other registered shareholders 36,748,574 9,187,143.50 14.17 14.17
Non-registered shareholders 15,836,202 3,959,050.50 6.11 6.11
Total excluding treasury shares 258,511,380 64,627,845.00 99.69 99.69
Treasury shares* 800,000 200,000.00 0.31 0.31
Total 259,311,380 64,827,845.00 100.00 100.00
* Pursuant to the notification to the Copenhagen Stock Exchange of 20 December 2002, the Company has acquired800,000 treasury shares corresponding to a nominal value of DKK 200k at the price of DKK 0.25 per share. The shareswhich were acquired by order of the Annual General Meeting are to be used to cover future bonus programs for execu-tives. In accordance with the accounting policies, the acquisition price of DKK 200k for treasury shares has been takendirectly to equity.
The Company has not at its own expense acquired or sold any other treasury shares in 2002.
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Accounting policies
The annual report has been prepared in accordance with the provisions of the Danish Financial StatementsAct governing reporting class D enterprises, Danish accounting standards and the financial reporting re-quirements of the Copenhagen Stock Exchange.
At 31 December 2002, Topsil Semiconductor Materials A/S owns the subsidiaries Topsil Inc. and Topsil In-ternational A/S which are both inactive and do not have material assets or liabilities. Consequently, no con-solidated financial statements have been prepared for 2002.
Changes in accounting policiesAs a consequence of the new Danish Financial Statements Act, the accounting policies have been changedas follows:
Assets held under finance leasesAssets held under finance leases and related liabilities are recognised in the balance sheet under property,plant and equipment and liabilities other than provisions, respectively. Formerly, these assets were not rec-ognised in the balance sheet, and the liabilities were solely disclosed in a note.
Financial liabilitiesAt the time of borrowing, financial liabilities are measured at the proceeds received less transaction costsincurred, and they are subsequently measured at amortised cost, corresponding to the capitalised valueusing the effective interest method. Formerly, financial liabilities were measured at nominal value, and anydebt discounts were recorded as an asset in the balance sheet and amortised over the term of the loan.
Indirect production costs of inventoriesIndirect production costs comprise indirect materials and labour costs, costs of maintenance of and depre-ciation and impairment losses on machinery, factory buildings and equipment applied for the manufacturingprocess as well as costs of factory administration and management. Financing costs are not included in cost.
Treasury sharesAcquisition and selling prices as well as dividends on treasury shares are classified directly as equity underretained earnings.
Effect of the changes in accounting policiesThe aggregate effect of these changes in accounting policies is a decrease of DKK 494k on pre-tax profit forthe year. The year’s tax resulting from the changes amounts to DKK (148)k, after which the net profit for theyear is impaired by DKK 346k. The balance sheet total is increased by DKK 7,164k, whereas equity at 31December 2002 has gone up by DKK 5,102k. The effect of each change is specified below:
DKK ’000Pre-tax
profit/loss
Tax onprofit/loss
for the year
Netprofit/loss
for the year
Balancesheettotal Equity
Before change of accounting policies 2001 (4,769) 0 (4,769) 137,560 19,250
Indirect production costs of inventories (887) 0 (887) 7,180 7,180Assets held under finance leases etc. 1,157 0 1,157 2,777 (1,585)
Total restatements for 2001 270 0 270 9,957 5,595
After change of accounting policies 2001 (4,499) 0 (4,499) 147,517 24,845
Before change of accounting policies 2002 5,832 (136) 5,696 154,998 72,062
Indirect production costs of inventories (1,038) 311 (727) 6,142 6,142Assets held under finance leases etc. 544 (163) 381 1,022 (1,040)
Total restatements for 2002 (494) 148 (346) 7,164 5,102
After change of accounting policies 2002 5,338 12 5,350 162,162 77,164
ANNUAL REPORT 2002
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Consistently with the changes in accounting policies, the definition of operating, investing and financing ac-tivities has been changed in the cash flow statement to the effect that cash flows from finance lease con-tracts are now reflected as cash flows from financing activities. For 2002, cash flows from financing activitieshave decreased by DKK 2,038k whereas cash flows from operating activities have increased accordingly.
Apart from the above policies, the annual report has been presented applying the same accounting policiesas were used last year. However, the language and terms used in the income statement and balance sheethave been adjusted, and a few items have been subjected to reclassification.
Comparative figures and the financial highlights shown on page 7 have been restated to reflect the changesin accounting policies.
Changes in accounting estimatesThe net profit for the year has been positively affected by DKK 975k before tax because of changes in the esti-mated useful lives of certain machinery included under the item plant and machinery.
Recognition and measurementAssets are recognised in the balance sheet when it is probable that future economic benefits will flow to theCompany, and the value of the asset can be measured reliably.
Liabilities are recognised in the balance sheet when the Company has a legal and constructive obligation asa result of a prior event, and it is probable that future economic benefits will flow out of the Company, and thevalue of the liability can be measured reliably.
On initial recognition, assets and liabilities are measured at cost. Measurement subsequent to initial recogni-tion is effected as described below for each item.
Anticipated risks and losses that arise before the time of presentation of the annual report and that confirm orinvalidate affairs and conditions existing at the balance sheet date are considered at recognition and meas-urement.
Income is recognised in the income statement when earned, whereas costs are recognised by the amountsattributable to this financial year. Value adjustments of financial assets and liabilities are recorded in the in-come statement as financial income or financial expenses.
Foreign currency translationOn initial recognition, foreign currency transactions are translated applying the average exchange rates thatdo not vary materially from the rates at the transaction date. Receivables, payables and other monetaryitems denominated in foreign currencies that have not been settled at the balance sheet date, are translatedusing the exchange rate at the balance sheet date. Exchange differences that arise between the rate at thetransaction date and the one in effect at the payment date, or the rate at the balance sheet date, are recog-nised in the income statement as financial income or financial expenses. Fixed assets purchased in foreigncurrencies are translated using historical rates.
Derivative financial instrumentsOn initial recognition in the balance sheet, derivative financial instruments are measured at cost and subse-quently at fair value. Derivative financial instruments are recognised under other receivables or other pay-ables.
Changes in the fair value of derivative financial instruments classified as and complying with the require-ments for hedging of the fair value of a recognised asset or a recognised liability are recorded in the incomestatement together with changes in the value of the hedged asset or the hedged liability.
Changes in the fair value of derivative financial instruments classified as and complying with the require-ments for hedging future transactions are recognised directly on equity. When the hedged transactions arerealised, the changes are recognised in the relevant items.
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For derivative financial instruments that do not comply with the requirements for being treated as hedginginstruments, changes in fair value are recognised currently in the income statement as financial income orfinancial expenses.
Changes in the fair value of derivative financial instruments applied for hedging net investments in inde-pendent foreign subsidiaries or associates are classified directly as equity.
Income statementRevenueRevenue is recognised in the income statement when delivery is made, and risk has passed to the buyer.Revenue is recognised net of VAT, duties and sales discounts.
Other operating income and expensesOther operating income and expenses comprise income and expenses of a secondary nature to the Com-pany’s primary activities.
Other external expensesOther external expenses comprise expenses for distribution, sale, marketing, administration, premises, baddebts, etc.
Staff costsStaff costs comprise salaries and wages as well as social security costs, pension contributions etc. for theCompany’s staff.
Costs of raw materials and consumablesCost of raw materials and consumables comprises direct costs incurred to earn revenue. Cost of raw materi-als and consumables also includes costs of development projects that do not meet the criteria for recognitionin the balance sheet.
Financial income and expensesThese items comprise interest income and expenses, the interest portion of finance lease payments, realisedand unrealised capital gains and losses on securities, payables and transactions in foreign currencies as wellas mortgage amortisation premium.
Extraordinary itemsExtraordinary items comprise income and expenses which stem from events outside the Company’s ordinaryactivities, and which are therefore expected to be non-recurring.
Income taxesTax for the year, which consists of current tax for the year and changes in deferred tax, is recognised in theincome statement by the portion attributable to the profit/loss for the year and recognised directly on equityby the portion attributable to entries directly on equity. The portion of the tax taken to the income statement,which relates to extraordinary profit/loss for the year, is allocated to this entry whereas the remaining portionis taken to the year’s profit/loss from ordinary activities.
The current tax payable or receivable is recognised in the balance sheet, stated as tax calculated on thisyear’s taxable income, adjusted for prepaid tax.
Deferred tax is recognised and measured applying the liability method on all temporary differences betweenthe carrying amount and tax-based value of assets and liabilities. The tax-based value of the assets is cal-culated based on the planned use of each asset.
Deferred tax assets, including the tax base of tax loss carryforward, are recognised in the balance sheet attheir estimated realisable value, either as a set-off against deferred tax liabilities or as net tax assets.
ANNUAL REPORT 2002
16
Balance sheet
Development projectsDevelopment projects consist of development of products and production processes. Development projectson clearly defined and identifiable products and processes, for which the technical rate of utilisation, ade-quate resources and a potential future market or development opportunity in the enterprise can be estab-lished, and where the intention is to manufacture, market or apply the product or process in question, arerecognised as intangible assets. Other development costs are recognised as costs in the income statementas incurred.
Development costs comprise costs such as salaries and amortisation that are directly and indirectly attribut-able to the development projects.
On completion of the development project, the development costs are amortised straight-line over its esti-mated useful life. The amortisation period is usually 5 years, but it may be up to 20 years if the longer amor-tisation period is considered to better reflect the Company’s benefit from the developed product, etc. Fordevelopment projects, protected by intangible rights, the maximum period of amortisation amounts to theremaining duration of the relevant rights, however, maximum 20 years.
Development projects, including projects in progress, patents and licences, are written down to the lower ofrecoverable amount and carrying amount.
Property, plant and equipmentLand and buildings, plant and machinery as well as other fixtures and fittings, tools and equipment aremeasured at cost less accumulated depreciation and impairment losses. Land is not depreciated.
Cost comprises the acquisition price, costs directly attributable to the acquisition, and preparation costs ofthe asset until the time when it is ready to be put into operation. For company-manufactured assets, costcomprises direct and indirect costs of materials, components, subsuppliers and labour costs. For assets heldunder finance leases, cost is the lower of the asset’s fair value and present value of future lease payments.
Interest expenses on loans for financing the manufacture of property, plant and equipment are included incost if they relate to the manufacturing period. All other financing costs are recognised in the income state-ment.
The basis of depreciation is cost less estimated residual value after the end of useful life. Straight-line depre-ciation is made on the basis of the following estimated useful lives of the assets:
Buildings 20 yearsInstallations 6 yearsPlant and machinery 10-20 yearsOther fixtures and fittings, tools and equipment 3-6 years
Assets costing below the tax base limit of immediate write-off per unit are recognised as costs in the incomestatement at the time of acquisition.
Property, plant and equipment are written down to the lower of recoverable amount and carrying amount.
Profits and losses from the sale of property, plant and equipment are calculated as the difference betweenselling price less selling costs and carrying amount at the time of sale. Profits or losses are recognised in theincome statement together with depreciation and impairment losses or under other operating income if theselling price exceeds original cost.
P U R E S I L I C O N
17
Investments in subsidiariesInvestments in subsidiaries are recognised and measured under the equity method. This means that thebalance sheet investments are measured at the pro rata share of the enterprises’ equity.
Net revaluation of investments in subsidiaries and associates is taken to reserve for net revaluation underthe equity method if the carrying amount exceeds cost.
InventoriesInventories are measured at the lower of cost using the FIFO method and net realisable value.
Cost of raw materials and consumables consists of purchase price plus transportation costs. Cost of manu-factured goods and work in progress consists of costs of raw materials, consumables and direct labour costsas well as indirect production costs.
Indirect production costs comprise indirect materials and labour costs, costs of maintenance of and depre-ciation and impairment losses on machinery, factory buildings and equipment applied for the manufacturingprocess as well as costs of factory administration and management. Financing costs are not included in cost.
The net realisable value of inventories is calculated as the estimated selling price less completion costs andcosts incurred to execute sale.
ReceivablesReceivables are measured at amortised cost, usually equalling nominal value less provisions for bad debts.
PrepaymentsPrepayments comprise incurred costs relating to subsequent financial years. Prepayments are measured atamortised cost which usually corresponds to the nominal value.
EquityDividends are recognised as a liability at the time of adoption at the general meeting. The proposed divi-dends for the financial year are disclosed as a separate item under equity.
Acquisition and selling prices as well as dividends on treasury shares are classified directly as equity underretained earnings.
Other provisionsOther provisions are recognised and measured as the best estimate of the expenses required to settle theliabilities at the balance sheet date.
Mortgage debtAt the time of borrowing, mortgage debt is measured at cost which corresponds to the proceeds receivedless transaction costs incurred. It is subsequently measured at amortised cost which corresponds to thecapitalised value applying the effective interest method.
Lease commitmentsLease commitments relating to assets held under finance leases are recognised in the balance sheet asliabilities other than provisions and are measured at amortised cost after initial recognition. The interest por-tion of lease payments is recognised over the term of the contracts as financial costs in the income state-ment.
Other financial liabilitiesOther financial liabilities are recognised at amortised cost which usually corresponds to nominal value.
Deferred incomeDeferred income comprises received income for recognition in subsequent financial years. Deferred incomeis measured at amortised cost which usually corresponds to the nominal value.
ANNUAL REPORT 2002
18
Cash flow statementThe cash flow statement of the Company is presented using the indirect method and shows cash flows fromoperating, investing and financing activities as well as the Company’s cash and cash equivalents at the be-ginning and the end of the financial year.
Cash flows from operating activities are calculated as the operating profit/loss adjusted for non-cash operat-ing items, working capital changes and income taxes paid.
Cash flows from investing activities comprise payments in connection with the purchase and sale of intangi-ble assets, property, plant and equipment as well as fixed asset investments.
Cash flows from financing activities comprise changes in the size or composition of the Company’s sharecapital and related costs as well as the raising of loans, instalments on interest-bearing debt, and payment ofdividends.
Cash and cash equivalents comprise cash and short-term securities with insignificant price risk less short-term bank debt.
Segment informationDisclosures are provided on business segments (primary segment) and geographical markets (secondarysegment) pursuant to section 5 in Departmental Order No 841 of 11 October 2002 on exemptions from theDanish Financial Statements Act. The segmental disclosures comply with the Company’s accounting policiesand internal financial management.
Fixed assets in the segments include assets used directly in the operation of each segment, including intan-gible assets, property, plant and equipment, and investments in subsidiaries and associates.
Segment liabilities include liabilities and provisions deriving from the operation of each segment, includingtrade payables and other payables. Deferred tax is not included in segment liabilities.
P U R E S I L I C O N
19
Income statement for 2002
Note DKK ’000 2002 2001
1,2 Revenue 111,883 132,102
Change in inventory (12,695) 5,195
Work performed for own account 2,888 2,587
3 Other operating income 206 1,415
Costs of raw materials and consumables (52,354) (87,959)
Other external expenses (11,647) (13,273)
4 Staff costs (27,323) (28,147)
5 Depreciation and impairment losses on fixed assets (8,092) (9,837)
Operating profit/loss 2,866 2,085
14 Income from investments in group enterprises and associates 15 13
6 Impairment of financial assets and debt 8,420 2,785
7 Financial expenses for group enterprises (17) (1,033)
8 Other financial expenses (5,946) (8,349)
Profit/loss from ordinary activities 5,338 (4,499)
9 Tax on profit or loss from ordinary activities 12 0
Profit or loss from ordinary activities after tax 5,350 (4,499)
Net profit/loss for the year 5,350 (4,499)
Proposed distribution of profit/loss
The Board of Directors proposed the result for the year dis-tributed as follows
Transferred to revaluation reserve 11
Retained earnings 5,339
5,350
ANNUAL REPORT 2002
20
Assets
Balance sheet at 31 December 2002
Note DKK ’000 2002 2001
10 Completed development projects 15,097 14,134
10 Development projects in progress 6,576 1,367
Intangible assets 21,673 15,501
11 Land and buildings 14,608 16,253
11 Plant and machinery 5,876 9,077
11 Other fixtures and fittings, tools and equipment 805 977
11 Property, plant and equipment in progress 12,511 10,999
Property, plant and equipment 33,800 37,306
12 Investments in group enterprises 524 513
12 Other investments 23 23
Fixed asset investments 547 536
Fixed assets 56,020 53,343
Raw materials and consumables 3,795 6,865
Work in progress 8,198 8,961
Manufactured goods and goods for resale 36,591 47,468
Inventories 48,584 63,294
13 Trade receivables 13,086 8,939
Other receivables 5,130 5,352
Prepayments 189 167
9 Deferred tax assets 14,422 14,000
Receivables 32,827 28,458
Cash 24,731 2,422
Current assets 106,142 94,174
Assets 162,162 147,517
P U R E S I L I C O N
21
Liabilities
Balance sheet at 31 December 2002
Note DKK ’000 2002 2001
14 Share capital 64,828 58,115
15 Revaluation reserve 7,500 7,500
16 Reserve for net revaluation according to the equity method 24 13
17 Retained earnings 4,812 (40,783)
Equity 77,164 24,845
18 Other provisions 0 1,313
Provisions 0 1,313
Mortgage debt 6,229 7,762
Other credit institutions 19,201 0
Convertible and profit-sharing debt instruments 905 925
Lease commitments 0 2,063
19 Long-term liabilities other than provisions 26,335 10,750
19 Mortgage debt 1,533 1,482
Bond loan 0 2,520
19 Other credit institutions 12,187 43,643
Trade creditors 20,115 25,733
20 Payables to group enterprises 526 19,519
Other payables 22,239 15,415
Lease commitments 2,063 2,297
Short-term liabilities other than provisions 58,663 110,609
Liabilities other than provision 84,998 121,359
Equity and liabilities 162,162 147,517
24-26 Contingent liabilities
27-28 Other notes
ANNUAL REPORT 2002
22
Statement of changes in equity for 2002
DKK ’000Sharecapital
Revalua-tion
reserve
Reserve fornet revalua-
tion ofinvestments
Retainedearnings Total
Equity at 1 January 2001 56,993 7,500 0 (41,596) 22,897
Effect of change in accounting policies 0 0 0 5,325 5,325
Adjusted equity at 1 January 2001 56,993 7,500 0 (36,271) 28,222
Capital increase by cash payment 289 0 0 0 289
Bond conversion 833 0 0 0 833
Net profit/loss for the year 0 0 13 (4,512) (4,499)
Equity at 31 December 2001 58,115 7,500 13 (40,783) 24,845
Capital reduction (43,587) 0 0 43,587 0
Bond conversion 300 0 0 0 300
Capital increase 50,000 0 0 0 50,000
Purchase of treasury shares 0 0 0 (200) (200)
Costs of prospectus 0 0 0 (3,541) (3,541)
Tax effect of costs of prospectus 0 0 0 410 410
Net profit/loss for the year 0 0 11 5,339 5,350
Equity at 31 December 2002 64,828 7,500 24 4,812 77,164
P U R E S I L I C O N
23
Cash flow statement for 2002
Note DKK ’000 2002 2001
Operating profit/loss 5,350 (4,499)
21 Adjustments (2,163) 18,078
22 Working capital changes 7,367 10,350
Cash flows from operating activities 10,554 23,929
Interest income etc. received 8,420 2,785
Interest expenses etc. paid (5,963) (9,381)
Cash flows from operating activities 13,011 17,333
Acquisition of property, plant and equipment andintangible assets (10,842) (10,710)
Sale of property, plant and equipment 155 0
Fixed asset investments (subsidiary) 0 (500)
Cash flows from investing activities (10,687) (11,210)
Instalments on liabilities other than provisions (11,598) (1,404)
Capital increase less expenses 46,460 289
Instalments on lease commitment (2,297) (2,948)
Borrowing 0 5,519
Purchase of treasury shares (200) 0
Cash flows from financing activities 32,365 1,456
Cash flows for the year 34,689 7,579
Net cash at 1 January 2002 (20,872) (28,451)
Value adjustments of cash equivalentsat the beginning of the year 0 0
23 Net cash at 31 December 2002 13,817 (20,872)
ANNUAL REPORT 2002
24
Notes
1. RevenueThe Company’s entire revenue stems from exports. The primary sales areas are Europe, USA and the Far East. Byfar the majority of the transactions in the Company are performed in foreign currencies: EURO, USD and JPY. TheCompany’s currency policy is to gain flexibility in the individual settlement currencies in order to obtain continuousbalance on payments.
2. Segment informationNet profit/loss for the year concerns the activity electronics (FZ). The balance sheet contains assets attributable tothe solar cell production of a total of DKK 14,230k which is allocated by DKK 4,874k to intangible assets and DKK9,356 to property, plant and equipment.
3. Other operating incomeOther operating income primarily concerns gain from sale of fixed assets.
4. Staff costsDKK ’000 2002 2001
Salaries and wages 26,051 27,048Pension contributions 1,105 931Other social security costs 167 168
27,323 28,147
Of this total remuneration for:Management 1,744 1,642
Board of Directors 375 375
Average number of employees 88 92
An agreement on bonus based on performance has been entered into with the management team. The bonus isrecognised in the financial statement by DKK 500k for 2002 (for 2001: DKK 170k)
5. Depreciation and impairment lossesCompleted development projects 2,209 1,950Buildings 1,645 1,949Plant and machinery 3,490 4,903Other fixtures and fittings, tools and equipment 748 1,035
8,092 9,837
6. Impairment of financial assets and debtReversal of write-down 0 1,985Remission of debt 7,700 0Interest on bank deposit 49 71Other interest 25 2Exchange adjustments 646 727
8,420 2,785
The reversal of write-down in 2001 concerns a receivable written off in 2000 which was sold in 2001 to the ExportCredit Fund. In 2000, this write-off was recognised under extraordinary expenses.
P U R E S I L I C O N
25
7. Financial expenses for group enterprisesDKK ’000 2002 2001
Interest to EHP-Toftlund A/S 0 1,014Interest to Topsil International A/S 17 19
17 1,033
In 2002, EHP-Toftlund A/S brought down its ownership share so that it is no longer a group enterprise. Interestsconcerning EHP-Toftlund A/S are therefore included in the item other financial expenses. EHP-Toftlund A/S is stilla related party, and for this reason transactions in 2002 and outstanding balances at 31 December 2002 are dis-closed in the note concerning related parties.
8. Financial expensesInterest on bank debt 3,792 5,858Interest portion of financial lease payments 285 520Interest on mortgage debt 317 561Other interests and fees 1,552 1,410
5,946 8,349
9. Tax on profit or loss from ordinary activitiesCurrent tax 0 0This year’s change in recognised deferred tax asset 17 0Tax in group enterprises (5) 0
12 0
Income tax for the year can be explained as follows:Calculated 30% tax on profit or loss from ordinary activities (1,601) 0Tax effect of:- equity items 410 0- non-tax deductible costs and expenses (6) 0- tax base value of not previously recognised portion of tax asset 1,209 0Total income tax for the year (income) 12 0
Deferred tax asset can be specified as follows:Recognised tax asset at 1 January 2002 14,000 0Additions during the year concerning equity entries 410 0Additions during the year recognised in the income statement 12 0Recognised tax asset at 31 December 2002 14,422 0
DKK 10,100k of the tax asset is attributable to tax losses available for carryforward and approx. DKK 4,300k fortemporary differences, primarily of fixed assets.
10. Intangible assets
DKK ’000
Completeddevelopment
projects
Developmentprojects inprogress
Cost at 1 January 2002 23,638 1,367Additions 3,172 8,381Disposals 0 (3,172)
Cost at 31 December 2002 26,810 6,576
Amortisation 1 January 2002 (9,504) 0Amortisation (2,209) 0
Amortisation at 31 December 2002 (11,713) 0
Carrying amount at 31 December 2002 15,097 6,576
Carrying amount at 31 December 2001 14,134 1,367
ANNUAL REPORT 2002
26
11. Property, plant and equipment
DKK ’000Land andbuildings
Plant andmachinery
Other fixturesetc.
Other plantunder
construction
Cost at 1 January 2002 27,943 55,267 4,517 10,999Additions 0 289 660 1,801Disposals 0 (168) (289)
Cost at 31 December 2002 27,943 55,556 5,009 12,511
Revaluation at 1 January 2002 7,500 0 0 0
Revaluation at 31 December 2002 7,500 0 0 0
Depreciation at 1 January 2002 (19,190) (46,190) (3,540) 0Depreciation (1,645) (3,490) (748) 0Depreciation regarding disposals of the year 0 0 84 0
Depreciation at 31 December 2002 (20,835) (49,680) (4,204) 0
Carrying amount at 31 December 2002 14,608 5,876 805 12,511
Carrying amount at 31 December 2001 16,253 9,077 977 10,999
Carrying amount at 31 December 2002includes recognised leased assets 1,022
Disclosure on value according to the publicland assessment of real property:Carrying amount of properties 14,608
Value according to public assessment ofreal property at 1 January 2001 27,500
On measurement of land and buildings at cost, the carrying amount at 31 December 2002 would amount to DKK11,646k, as the non-depreciated part of the revaluation amounts to DKK 2,962k (DKK 3,337 at 31 December 2001)
12. Fixed asset investments
DKK ’000
Investmentsin group
enterprisesOther
investments
Cost at 1 January 2002 500 23
Cost at 31 December 2002 500 23
Net revaluation at 1 January 2002 13 0Net share of profit/loss for the year 11 0
Net revaluation at 31 December 2002 24 0
Carrying amount at 31 December 2002 524 23
Carrying amount at 31 December 2001 513 23
Investments in group enterprises comprise:Topsil International A/S, Frederikssund, wholly ownedTopsil Inc., Arizona, USA, wholly owned
The group enterprises are dormant. Net profit/loss for the year in group enterprises solely comprises interest in-come less tax.
13. Trade receivablesThe Company applies factoring in connection with trade receivables. Trade receivables at 31 December 2002 in-clude deposits in cover-for-liabilities account of a total of DKK 6,399k (at 31 December 2001: DKK 5,104k) in thefactoring company applied. Receivables are geared by 85%.
P U R E S I L I C O N
27
14. Share capitalShare capital consists of 259,311,380 shares at DKK 0.25. The shares have not been divided into classes.
Change in share capital in the period 1 January - 31 December 2002:
DKK ’000 2002 2001
Share capital at 1 January 2002 58,115 56,993Capital increase by cash payment 50,000 289Bond conversion 300 833Disposal at capital decrease (43,587) 0
Share capital at 31 December 2002 64,828 58,115
Treasury shares:Holding at 1 January 2002 0 0Acquisition in 2002 200 0
Holding at 31 December 2002 200 0
Pursuant to the resolution passed at the General Meeting, the Company may only acquire treasury shares of DKK6,483k nominal, corresponding to 10% of the share capital until 15 November 2003. Treasury shares are acquiredwith the purpose of covering future bonus schemes for the management team. In 2002, the Company has acquiredtreasury shares of DKK 200k nominal (0.3% of the share capital) at the price of DKK 0.25, equal to DKK 200k.
15. Revaluation reserveBalance at 1 January 2002 7,500 7,500
Balance at 31 December 2002 7,500 7,500
Revaluation reserves concern:Land and buildings 7,500 7,500
7,500 7,500
16. Reserve for net revaluation according to the equity methodBalance at 1 January 2002 13 0Profit for the year allocated to reserve 11 13
Balance at 31 December 2002 24 13
17. Retained earningsBalance at 1 January 2002 (40,783) (36,271)Capital reduction 43,587 0Costs of capital increase after tax (3,131) 0Purchase of treasury shares (200) 0Amount allocated from profit for the year 5,339 (4,512)
Balance at 31 December 2002 4,812 (40,783)
18. Other provisionsProvision for exchange losses on restructuring of activities 0 1,313
0 1,313
The provision at 31 December 2001 concerned anticipated loss on forward exchange transactions. At 31 December2002, the provision after adjustments for the year is included under other payables, as it complies with the criteriafor recognition as a liability other than provisions at the balance sheet date.
ANNUAL REPORT 2002
28
19. Long-term liabilities other than provisions
DKK ’000Maturity
within 1 yearMaturity after
1 yearTotal
amortised debtTotal nomi-
nal debt
Mortgage debt 1,533 6,229 7,762 8,025Credit institutions etc. 1,273 20,106 21,379 21,379Long-term liabilities other than provisionsat 31 December 2002 2,806 26,335 29,141 29,404Long-term liabilities other than provisionsat 31 December 2002 33,435 10,750 44,185 44,563
Due after more than five years:Mortgage debt etc. 8,194
8,194
20. Payables to group enterprisesDKK ’000 2002 2001
EHP-Toftlund A/S 0 19,000Topsil International A/S 526 519
526 19,519
In 2002, EHP-Toftlund A/S brought downs its ownership share so that it is no longer a group enterprise. Payablesconcerning EHP-Toftlund A/S are therefore included in the item other payables with DKK 9,642k. EHP-Toftlund A/Sis still a related party and for this reason transactions in 2002, and outstanding balances at 31 December 2002 aredisclosed in the note concerning related parties.
21. AdjustmentsDepreciation, amortisation and impairment losses 8,092 11,779Net financials (10,172) 6,597(Gain)/loss from sale of fixed assets (71) (298)Income taxes (12) 0
(2,163) 18,078
22. Working capital changesChange in inventories 14,710 (6,839)Change in debtors (3,947) 25,077Change in trade payables, etc. (3,396) (7,888)
7,367 10,350
23. Cash and cash equivalentsCash 24,731 2,422Short-term liabilities other than provisions owed to credit institutions (10,914) (23,294)
13,817 (20,872)
24. Assets chargedMortgage debt is secured by way of mortgage on properties. The mortgage also com-prises the plant and machinery deemed part of the property.Bank debt is secured by way of a deposited mortgage deed registered to the mortga-gor on properties of DKK 75,000 nominal and a deposit mortgage deed registered tothe mortgagor on plant of DKK 19,600 nominal.
Carrying amount of mortgaged properties 14,608 16,253
Carrying amount of mortgaged plant 5,876 9,077
Deposit on cover-for-liabilities account in factoring company 6,399 5,104
P U R E S I L I C O N
29
25. Lease commitmentsDKK ’000 2002 2001
For the years 2003-2007, operating lease agreements have beenconcluded on IT equipmentAnnual average expense of operating lease agreements 307 325
26. Recourse guarantee commitments and contingent liabilitiesPursuant to section 6 of the Danish Financial Statements Act, the subsidiary Topsil International A/S does not pre-sent an annual report, as this company is dormant. Consequently, Topsil Semiconductor Materials A/S is liable forthe subsidiary’s liabilities.
At the balance sheet date, Topsil International A/S has no liabilities apart from tax of DKK 5k for the year.
At 31 December 2002 Topsil Semiconductor Materials A/S has an unused currency derivative facility of DKK30,000k.
27. Fee to appointed auditorsDeloitte & Touche:Audit 250 250Non-audit services 462 64
712 314
KPMG C. Jespersen:Audit 50 50Non-audit services 256 48
306 98
28. Related partiesTopsil Semiconductor Materials A/S has no related parties with controlling influence.Other related parties with whom Topsil Semiconductor Materials A/S has had transactions in 2002:Board of DirectorsManagementSino-American Silicon Products Inc.Sustainable Energy VenturesEHP-Toftlund A/S
Transactions between related parties and Topsil Semiconductor Materials A/S in 2002:DKK ’000
Sino-American Silicon Products Inc.:Sale of 100 million shares at share issue 25,000Sale of goods 19,342Purchase of goods 10,376Trade payables at 31 December 2002 4,488Sustainable Energy Ventures:Sale of 60 million shares at share issue 15,000EHP-Toftlund A/S:Interest expense on outstanding balances 578Loans 5,764Instalments on loans 8,000Remission of debt 7,700Payables at 31 December 2002 9,642
Other remuneration etc. paid to the Management and Board of Directors are disclosed in note 4,staff costs.
All related party transactions have been conducted on an arm’s length basis.
ANNUAL REPORT 2002
30
P U R E S I L I C O N
SOLAR
Topsil is dedicated to produc-
tion of float zone products
and is recognised as the flexi-
ble supplier to all applications
and customers.
It is Topsil’s mission to meet
the electronics industry’s need
for FZ silicon. Our customers
demand constant improve-
ments in terms of quality,
reliability and co-operation.
Consequently, our top
priorities are R&D, process
improvements and education.
Cre
avision 4
050
Semiconductor Materials A/SLinderupvej 4DK-3600 FrederikssundDenmark
Telephone: +45 4736 5600Telefax: +45 4736 5601E-mail: [email protected]
www.topsil.comCVR-NO. 24932818
