15 Deconsolidation of medmix Poland
On May 16, 2022, the group announced a suspension of operations at its manufacturing site in Wroclaw, Poland, as a result of sanctions levied by the Polish government on the medmix local affiliate. The Polish government wrongly assumed that medmix’ indirect minority shareholder, Viktor Vekselberg, would have control of medmix Poland, which is false. Viktor Vekselberg has neither control nor ownership of any medmix entities and is deprived of all his economic rights in medmix.
On May 23, 2022, the Polish Ministry of the Interior and Administration denied the group’s urgent request for removal from the Polish sanctions list. The group therefore started to build production capacity in other countries. Appeals against the decision by the Polish administration continued. medmix has received the full support of the Swiss government.
As of December 31, 2022, the group assessed whether it still controls medmix Poland and concluded that the group lost control at the end of April 2022, the date the sanctions were levied by the Polish government. As a result, the group stopped consolidation of medmix Poland retrospectively as of April 30 by derecognizing the assets and liabilities of the subsidiary, including any components of other comprehensive income (OCI) attributable to the entity. Total net assets at the time of deconsolidation amounted to CHF 12.5 million and currency translation differences accumulated in OCI amounted to CHF 3.0 million, which resulted in a total loss from deconsolidation of CHF 15.4 million as stated below. The group also remeasured the investment in medmix Poland to its fair value, which was assessed to be zero at initial recognition and as of December 31, 2022.
On January 11, 2023, the group announced that it was seeking to sell its Polish entity, following its decision not to resume operations in Wroclaw, Poland.
On May 31, 2023, the group received an amount of CHF 2.0 million for the sale of the former subsidiary medmix Poland to a third party, resulting in a profit recognized in other operating income (note 9) and a cash flow in the amount of CHF 2.0 million.
The group received from the Polish government the approval to purchase inventory, plant and equipment of the former subsidiary medmix Poland. As a result of the purchase of inventory, plant and equipment, the group reduced the total net exposure against the former subsidiary medmix Poland and released accumulated impairments in the amount of CHF 5.2 million.
The group contractually agreed to a net equity guarantee with the buyer. The group assessed the risk of the net equity guarantee based on the most likely outcome and recognized a provision in the amount of CHF 3.0 million. In total, the group recognized other operating income in the amount of CHF 2.2 million as a result of the change of impairments and provisions against medmix Poland (note 9).
Net assets derecognized
|
millions of CHF |
|
April 30, 2022 |
|
Other intangible assets |
|
0.0 |
|
Property, plant and equipment |
|
15.0 |
|
Lease assets |
|
4.8 |
|
Deferred income tax assets |
|
0.2 |
|
Other non-current assets |
|
–0.0 |
|
Cash and cash equivalents |
|
2.0 |
|
Inventory |
|
7.8 |
|
Trade accounts receivable |
|
2.5 |
|
Other current assets |
|
–0.0 |
|
Borrowings |
|
–11.5 |
|
Lease liabilities |
|
–4.5 |
|
Provisions |
|
–0.1 |
|
Other liabilities |
|
–3.9 |
|
Net assets derecognized |
|
12.5 |
Loss on net assets derecognized and retained investment
|
millions of CHF |
|
April 30, 2022 |
|
Net assets derecognized |
|
–12.5 |
|
Currency translation differences recycled into the income statement |
|
–3.0 |
|
Fair value on retained investment |
|
– |
|
Loss on net assets derecognized and retained investment |
|
–15.4 |
Exposure against former subsidiary medmix Poland
|
|
|
2023 |
||||
|
millions of CHF |
|
Gross amount |
|
Impairments |
|
Net book value |
|
Non-current financial assets |
|
– |
|
– |
|
– |
|
Trade accounts receivable |
|
1.7 |
|
–0.7 |
|
1.0 |
|
Other current receivables and prepaid expenses |
|
– |
|
– |
|
– |
|
Current provisions |
|
–3.0 |
|
– |
|
–3.0 |
|
Trade accounts payable |
|
–2.3 |
|
– |
|
–2.3 |
|
Total exposure against former subsidiary medmix Poland |
|
–3.6 |
|
–0.7 |
|
–4.3 |
|
|
|
2022 |
||||
|
millions of CHF |
|
Gross amount |
|
Impairments |
|
Net book value |
|
Non-current financial assets |
|
11.2 |
|
–4.7 |
|
6.5 |
|
Trade accounts receivable |
|
2.3 |
|
–1.1 |
|
1.2 |
|
Other current receivables and prepaid expenses |
|
0.3 |
|
–0.1 |
|
0.2 |
|
Current provisions |
|
– |
|
– |
|
– |
|
Trade accounts payable |
|
–2.0 |
|
– |
|
–2.0 |
|
Total exposure against former subsidiary medmix Poland |
|
11.8 |
|
–5.9 |
|
5.9 |