Notes
Recognition and Valuation Principles
Like the consolidated financial statements as of December 31, 2006, the unaudited consolidated interim financial statements as of March 31, 2007 have been prepared in accordance with the International Financial Reporting Standards (IFRS), which are endorsed by the European Union. Reference should be made as appropriate to the notes to the consolidated financial statements as of December 31, 2006. The interim financial statements have been prepared using the standards and interpretations in effect as of January 1, 2007. IAS 34 (Interim Financial Reporting) has been applied in addition.
Scope of Consolidation
The consolidated financial statements of the LANXESS Group include the parent company LANXESS AG and all material domestic and foreign subsidiaries.
LANXESS Buna LLC, Orange, Texas, United States, has been consolidated for the first time. The object of this newly formed U.S. company is the marketing of technical rubber products and related services.
In February 2007, LANXESS acquired the Dow Chemical Group’s 50% interest in Chrome International South Africa (Pty.) Ltd., Newcastle, South Africa, thus completing the takeover of the chrome chemical activities initiated in December 2006. This company, formerly a joint venture, is now fully consolidated. Pursuant to IAS 31, it was included in the consolidated financial statements by proportionate consolidation until the acquisition date in line with the 50% interest held. No material effects on the financial condition or results of operations of the LANXESS Group resulted from this acquisition.
Fifty-eight companies are fully consolidated in the financial statements of the LANXESS Group as of March 31, 2007. Bayer Industry Services GmbH & Co. OHG is included at equity, as in the financial statements as of December 31, 2006.
LANXESS is currently exploring possible options for the Lustran Polymers business unit. The restructuring carried out over the past two years has been successful in improving the unit’s competitiveness, and on this basis the company plans to continue developing the business, possibly with a partner. It is intended to reach a decision on this within the next few months.
Changes in Risk Profile
There have been no material changes in the LANXESS Group’s risk profile since December 31, 2006. For more information please refer to the relevant section of the 2006 Annual Report.
Employees
The LANXESS Group had 16,486 employees as of March 31, 2007, compared with 16,481 as of December 31, 2006. The continued elimination of positions in the course of global restructuring, particularly in Germany and the Americas region, was offset by the first-time inclusion of the employees of Chrome International South Africa (Pty.) Ltd. and LANXESS Korea Ltd. In addition, the number of employees in China was increased according to plan.
Earnings per share
Earnings per share for the first quarters of fiscal 2006 and 2007 were calculated by dividing Group net income by the 84,620,670 shares currently admitted to trading on the Frankfurt Stock Exchange.