ZURICH, SWITZERLAND, Jul 20 (MARKET WIRE) —
Barry Callebaut AG / Barry Callebaut welcomes decision of SIX Swiss
Exchange Sanction Commission processed and transmitted by Hugin AS. The
issuer is solely responsible for the content of this announcement.
Zurich/Switzerland, July 20, 2010 – Barry Callebaut AG, the world’s
leading manufacturer of high-quality cocoa and chocolate products,
welcomes the decision by the Sanction Commission of SIX Swiss Exchange
announced today, under which Barry Callebaut is cleared of all charges
relating to application of IFRS in its consolidated financial statements
for fiscal year 2007/08.
Expert opinions differ regarding application of IAS 2 and IAS 39
On November 6, 2008, Barry Callebaut published the 2007/08 consolidated
financial statements audited by KPMG AG (KPMG). KPMG confirmed that the
consolidated financial statements gave a fair presentation of the
company’s financial position and financial performance in accordance with
International Financial Reporting Standards (IFRS). SIX Exchange
Regulation, as the regulatory authority for listed companies, also
reviewed the financial statements and concluded that two standards had
been violated: IAS 2 in connection with the valuation of inventories and
IAS 39 in connection with treatment of inventories as hedging instruments
in a fair value hedge accounting model. In response, Barry Callebaut
submitted an opinion by KPMG in the subsequent sanction proceedings
stating that the reporting method selected offered the best possible way
to provide information about the business model. In addition, Barry
Callebaut submitted an opinion from the Institute of Accounting,
Controlling and Auditing at the University of St. Gallen that also
confirms that the accounting model used by Barry Callebaut is consistent
with IFRS rules. The Sanction Commission mandated a partner of
PricewaterhouseCoopers AG (PwC) to provide an expert opinion as an
additional expert. This opinion represents a third view of how IAS 2 and
IAS 39 can best be applied to Barry Callebaut’s business model.
As a result, the Sanction Commission held that different recognized
experts had arrived at different results regarding application of IFRS
and had reached different opinions as to the best way to report
information to investors. According to the Commission, the company had
obviously relied to a considerable degree on expert knowledge in order to
achieve adequate compliance with IFRS. As a consequence, the Sanction
Commission cleared Barry Callebaut and its representatives of all charges
and did not issue a sanction or require payment of the costs of the
proceedings.
In the view of Barry Callebaut, both the method favored by KPMG and the
method favored by the PwC expert for valuing inventories and applying
hedge accounting would ultimately lead to the same result. Accordingly,
the profit figures reported by Barry Callebaut in the audited 2007/08
annual report are correct.
Change in the application of IAS 2 and IAS 39 as of fiscal year 2010/11
Due to the fact that acknowledged experts arrived at different
interpretations regarding the accounting model to be used, Barry
Callebaut has decided to modify the accounting model used to date.
In the revised model, inventories will be valued at the lower of cost and
net realizable value. In the future, the broker-trader exemption,
according to which inventories are fair valued, will no longer be applied
nor will such inventories be designated as hedging instruments to hedge
firm sales commitments for chocolate. The latter will consequently no
longer be fair valued. The cocoa price risks related to inventories
exceeding these firm sales commitments will be hedged with cocoa futures
in a fair value hedge relationship.
This revised model, which will be introduced prospectively as from fiscal
year 2010/11, will produce essentially the same result with regard to
presentation in the income statement as the accounting model used to
date. The differences will involve only some changes in the presentation
of the balance sheet and disclosures provided in the notes. In accordance
with IFRS, prior-year figures will not be restated.
* * *
About Barry Callebaut (www.barry-callebaut.com):
With annual sales of about CHF 4.9 billion for fiscal year 2008/09,
Zurich- based Barry Callebaut is the world’s leading manufacturer of
high-quality cocoa and chocolate – from the cocoa bean to the finished
product on the store shelf. Barry Callebaut is present in 26 countries,
operates more than 40 production facilities and employs about 7,500
people. The company serves the entire food industry, from food
manufacturers to professional users of chocolate (such as chocolatiers,
pastry chefs or bakers), to global retailers. Barry Callebaut is the
global leader in cocoa and chocolate innovations and provides a
comprehensive range of services in the fields of product development,
processing, training and marketing. The company is actively engaged in
initiatives and projects that contribute to a more sustainable cocoa
supply
chain.
* * *
Contacts
For investors and financial analysts: For the media:
Evelyn Nassar Gaby Tschofen
Head of Investor Relations VP Corporate Communications
Barry Callebaut AG Barry Callebaut AG
Tel.: +41 43 204 04 23 Tel.: +41 43 204 04 60
evelyn_nassar@barry-callebaut.com gaby_tschofen@barry-callebaut.com
The complete news release can be downloaded from the following link:
[HUG#1432547] — End of Message —
Barry Callebaut AG
P.O. Box Zurich null
WKN: 914661;ISIN: CH0009002962;
News Release (PDF): http://hugin.info/100441/R/1432547/378689.pdf
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Source: Barry Callebaut AG via Thomson Reuters ONE
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