22. Contingent liabilities and commitments
Galenica is subject to a variety of risks. These risks include, but are not limited to, risks regarding product liability, patent law, tax law, competition laws and anti-trust laws. A number of Group companies are currently involved in administrative proceedings, legal disputes and investigations relating to their business activities. The results of ongoing proceedings cannot be predicted with certainty. Management has established appropriate provisions for any expenses likely to be incurred. These projections, however, are also subject to uncertainty. Galenica does not expect the results of these proceedings to have a significant impact on the financial statements.
In March 2017, the Swiss Competition Commission (COMCO) issued a ruling, which imposed a fine of up to CHF 4.5 million on Galenica. The ruling relates to an investigation from 2012. Galenica regards the ruling issued by COMCO as incorrect in fact and in law. Galenica has taken the ruling to the Federal Administrative Court. With a decision delivered in February 2022, the Federal Administrative Court reduced the fine to around CHF 3.8 million. Galenica has taken this case to the Swiss Federal Supreme Court and does not expect the proceedings to result in a sanction against Galenica.
In September 2020, the Swiss Competition Commission (COMCO) opened an investigation against Markant Handels- und Industriewaren-Vermittlungs AG and its customers, inter alia Galexis Ltd. Galenica does not expect the proceedings to result in a sanction against Galexis Ltd., however, a fine cannot be ruled out entirely.
Galenica entered into various obligations regarding the purchase of services, goods, and equipment as part of its ordinary business operations.
Galenica signed purchase agreements to acquire property, plant and equipment and intangible assets totalling CHF 15.9 million (previous year: CHF 16.7 million). The payments under these purchase commitments become due in 2023.
Furthermore, there are guarantees of CHF 8.6 million (previous year: CHF 3.9 million) and subordinated loans of CHF 1.4 million (previous year: none) to third parties.
There are no unusual pending transactions or risks to be disclosed.
Accounting principles contingent liabilities and commitments
A contingent liability is disclosed for an obligation where it is not probable that an outflow of resources will be required or where the amount of the obligation cannot be estimated with sufficient reliability.