Annual Report Carl Zeiss Group 2008/09 - KU Leuven3 The Carl Zeiss Group Carl Zeiss is an...

Annual Report Carl Zeiss Group

2008/09

2008/09 2007/08 2006/07

EUR mill. % EUR mill. % EUR mill. %

Sales revenues 2,101 100 2,731 100 2,604 100

Domestic (Germany) 364 17 449 16 432 17

Foreign 1,737 83 2,282 84 2,172 83

EbIT –67 –3 343 13 394 15

Consolidated net result –161 –8 178 7 233 9

Income taxes 1 – –100 –3 –142 –5

Result before taxes –162 –8 278 10 375 14

Depreciation/amortization of fixed assets

net of post-capitalization/write-ups 140 7 134 5 146 6

Changes in the provisions for pensions and

other noncurrent provisions1) 19 1 20 1 7 –

Adjustment for non-cash and

unusual cash-relevant expenses

and income of a material nature 79 4 64 2 21 1

Cash flows before income taxes2) 76 4 496 18 549 21

Cash flows from operating activities 102 266 386

Cash flows from investing activities –139 –212 -545

Cash flows from financing activities 154 –46 140

Total assets 3,447 100 3,591 100 3,433 100

Property, plant and equipment 537 16 555 15 528 15

Capital expenditure 80 118 107

Depreciation 95 99 114

Inventories 770 22 829 23 718 21

Equity 1,004 29 1,197 33 1,041 30

Net liquid assets3) 478 615 612

Number of employees as of balance sheet date

(September 30) 12,872 13,060 12,257

Domestic (Germany) 8,307 8,440 7,965

Foreign 4,565 4,620 4,292

1) Adjusted for investment in CTA in Germany and investments in plan assets abroad2) Determined following the recommendation of the German Financial Analysis Association/Schmalenbach-Gesellschaft3) Cash, cash equivalents and fixed-term investments net of credit liabilities

Financial Highlights(IFRS)

3

The Carl Zeiss Group

Carl Zeiss is an international group of companies in the optical and optoelectronic industries. The company has representatives in more than 30 countries. Carl Zeiss is a stock corporation which is wholly owned by the Carl Zeiss Stiftung (Carl Zeiss Foundation).

The products and services from Carl Zeiss set the standards in the Medical and Research Solutions, Industrial Solutions and Lifestyle Products markets. The ZEISS brand has stood for innovative ideas, precision and quality for more than 160 years.

Around 13,000 employees work for Carl Zeiss around the world. During fiscal year 2008/09, they generated revenues of EUR 2.1 billion.

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Business Groups of the Carl Zeiss Group

Increasingly powerful microchips are needed for small, compact laptops, digital

cameras and cell phones. Carl Zeiss is a market leader in lithography optics – the basic

technology required for microchip production. Carl Zeiss is also a pioneer in electron

and ion beam technology: scanning and transmission electron microscopes as well as

ion beam systems make even the tiniest structures visible.

Industrial

Metrology

Carl Zeiss helps make airplanes safer, cars faster, small plastic parts more resilient and

wind turbines more efficient – with innovative, leading-edge solutions. Measuring

machines and software from Carl Zeiss ensure maximum standards of quality wherever

high precision is a must.

Consumer

Optics/Optronics

Carl Zeiss brings the night sky to planetariums and breathtakingly crisp images to the

silver screen. Binoculars deliver perfect details for nature observation and opto-

electronic solutions from Carl Zeiss ensure more security. Millions of people around the

world value the quality and precision of optics from Carl Zeiss in their digital cameras

or camera phones.

Carl Zeiss Vision

(Joint Venture)

Carl Zeiss Vision is the world number two in the eyeglass market. Around the globe,

two people per second decide to purchase eyeglass lenses from Carl Zeiss Vision.

Carl Zeiss Vision is a joint venture of Carl Zeiss AG and the EQT private equity group.

Semiconductor

Technology

Medical systems from Carl Zeiss are used in ophthalmology, neurosurgery, and ear,

nose and throat surgery. Office-based doctors also put their trust in the know-how of

Carl Zeiss. The diagnostic and therapy systems help healthcare professionals to achieve

better treatment outcomes. In this way, patients also benefit from the innovative,

leading-edge technology produced by Carl Zeiss.

Medical Systems

Microscopy In biology, medicine, pharmacy or chemistry, microscopes from Carl Zeiss help scientists

acquire new knowledge. In industry, the systems are used for materials analysis and

quality inspection. School and university students can use special instruments to

experience the fascination of microscopy.

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Table of Contents

6 Our Inspiration

Foreword

16 ForewordoftheExecutiveBoard

20 ReportoftheSupervisoryBoard

Management Report

24 BusinessandGeneralConditions

26 NetAssets,FinancialPosition

andResultsofOperations

31 RiskReport

35 Outlook

36 EventsaftertheEndoftheFiscalYear

Business Groups

38 MarketsoftheFuture

40 SemiconductorTechnology

44 MedicalSystems

48 Microscopy

52 IndustrialMetrology

56 ConsumerOptics/Optronics

60 CarlZeissVision

(JointVenture)

From the Group

62 ResearchandDevelopment

64 HumanResources

At Your Service

66 TheCarlZeissFoundation

68 ExecutiveBoardandSupervisoryBoard

70 OrganizationalStructure

73 MajorSubsidiaries

andAssociatedCompanies

Consolidated Financial Statements

78 ConsolidatedIncomeStatement

79 ConsolidatedBalanceSheet

80 StatementofChangesinConsolidatedEquity

81 ConsolidatedCashFlowStatement

82 NotestotheConsolidated

FinancialStatements

120 Auditor’sReport

Cover photo:There are people who want to see for themselves. It is these people we work for. Anyone that wants to see and discover more will find the right solution for new perspectives and insights in the high-quality optics and opto-electronic systems from Carl Zeiss.

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Therearepeoplewhoonlytrustwhattheycansee.It is these people we work for.

Hardfactsareneededtomakeareliableassessment.Inmanyareasimportantdataisbasedonopticalandmeasuringinformation.Thisappliesjustasmuchtomaterialsanalysisandsecuritytechnologyastotheobservationofnaturalphenomenaorvirology.CarlZeissdevelopstechnologiesforpeoplewho,throughtheireverydayobservations,maketheworldthatlittlebitsafertolivein.

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Therearepeoplewhoarefightingdeatheverydayalthoughtheyareperfectlyhealthy.It is these people we work for.

Healthandthequalityoflifeareasinseparableasresearchandmedicine.SolutionsfromCarlZeissmakeiteasiertodiscover,investigateandtreatdisease.Whetherscientists,researchersordoctors–wefocusonhelpingthesepeopledetectandidentifymoreintheireverydaywork.

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Therearepeoplewhosimplywanttoknowmore.It is these people we work for.

Educationandresearchformthebasisofmodernsociety.Withouthighlyqualified,up-and-comingyoungspecialists,noprogresscanbemade.Wefirmlybelievethatthethirstforknowledgecanbeinstilledinyoungpeople.Toachievethisgoal,wearefullycommittedtoattractingschoolandcollegestudentstothefascinatingworldofscienceandoptics.

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As the pioneer of science in optics, we continue to challenge the limits of man’s imagination.

OurMission

13

With our passion for excellence we create value for our customers and inspire the world to see in new ways.

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We make it visible.

16

Dr. Dieter Kurz Dr. Michael KaschkeDr. Hermann Gerlinger

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Ladies and Gentlemen,

Dear Friends of Carl Zeiss,

Welookbackonafiscalyearthatsawtheworstglobaleconomiccrisisindecades.Thecrisisalso

leftitsmarkonCarlZeiss.Weoperateinhighlydynamicmarketsthatnotonlyenablestrong

growthrates,butalsoexperiencedynamicdownwardtrends–inthesemiconductorindustry,for

example.Wewereandcontinuetobepreparedforthesedevelopmentsspecifictoourmarkets.

However,theglobalrecessionintensifiedandacceleratedmarketmovementtoanunforeseeable

extent,requiringfastandconsistentcountermeasuresfromthecompany.Insuchturbulenttimesin

whichmanychangesoccur,vigilanceandvisionareofkeyimportance.CarlZeissdemonstrated

bothofthesequalitiesinthepastfiscalyear.

Itwasourgoaltoovercomethecrisisandthereforesafeguardtheeconomicsustainabilityofthe

companyandsecureasmanyjobsaspossible.Wehaveaccomplishedthisgoal.Weactedswiftly

and,togetherwithouremployees,havemasteredthedifficultsituationconfrontingus.Wehave

quicklyadaptedourcoststructuretothesalestrendandincomingorders.Inaddition,employees

andexecutivesinGermanyhaveagreedtoforgopartoftheircompensation–alsoinareasofthe

companythatremainedstableinfiscalyear2008/09.Inreturn,wegrantedaguaranteeof

employmentfortheGermansitesuntilSeptember2010.

Despiteoursavingsstrategy,wearenotlosingsightofourgoals.Weareinvestinginthefuture

withforesight–inresearchandtechnology,newproducts,salesandcustomerservice.Wearealso

continuingourcommitmenttotrainingandeducation.

Thegeneralgrowthdriversinourmarketsremainunchangedastheyarefocusedonmega-trends

ofthefuture.Theseinclude,forexample,healthandthequalityoflife,securityandmobility.None

ofthesekeyissueswascalledintoquestionbytheglobaleconomiccrisis.Withitssharpfocuson

theseissues,CarlZeisscontinuestohavegoodgrowthopportunitiesforthefuture.

OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUS INESS GROUPS FROMTHE GROUP AT YOURSERV ICE F INANCIAL STATEMENTS FOREWORDOF THE EXECUT IVE BOARD

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CarlZeissisfullyownedbytheCarlZeissFoundation.Thisenablesustomanagewithlong-term

perspectivesregardlessofshort-termcapitalmarketinterests.Asinthepast,weonceagain

achievedthisgoalinthereportingyear.

Inrecentyearswesucceededincreatingasolidfoundationforsustainedsuccess:thankstoits

broadportfolioandglobalfootprint,CarlZeissiswellandflexiblypositionedinitsmarkets.

Wedemonstratedthisflexibilityinfiscalyear2008/09.Thismakesusconfidentandstrongfor

thefuture.Wewillalsosuccessfullyrisetothechallengesahead–togetherwithourcustomers,

businesspartnersandemployees.

Oberkochen,December2009

Dr.DieterKurz Dr.MichaelKaschke Dr.HermannGerlinger

President&CEO MemberoftheExecutiveBoard MemberoftheExecutiveBoard

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“DespitetheeconomiccrisisCarlZeisshasmadeastrongstarttothenewdecade–adecadeinwhichwewillcontinueworkingonsolutionsforthenearandmoredistantfuture.Thisisanexcitingchallengeandamajorresponsibilitywithwhichwearecontributingtotheongoingadvancementofoursociety.”

Dr. Dieter Kurz

“Theglobalrecessiontriggeredbythefinancialcrisishasshownhowimportantitistohaveasolidfinancialbase.CarlZeisshasalreadyweatherproofeditsbalancesheetinrecentyears.Therefore,wewereandcontinuetobewellpreparedforstormytimes.”

Dr. Michael Kaschke

“Morethanalmostanyothercompany,CarlZeissstandsforinnovation.Weconstantlyinvestinresearchanddevelopment–notonlymoneybutalso,andaboveall,inknow-howandpassion.”

Dr. Hermann Gerlinger

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Dr. h. c. Eggert Voscherau

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Report of the Supervisory Board to the Annual General Meeting

Ladies and Gentlemen,

TheSupervisoryBoardperformedthedutiesentrustedtoitinaccordancewiththelawandthe

articlesofassociationwithgreatdiligenceinthereportingperiod.WeadvisedtheExecutiveBoard

inthemanagementofthecompanyandmonitoredtheconductofthecompany’sbusiness.The

SupervisoryBoardwasdirectlyinvolvedinalldecisionsoffundamentalimportancetothecompany.

TheExecutiveBoardprovidedusbothinwritingandverballywithcomprehensiveinformation

aboutallrelevantaspectsofcorporateplanning,thecourseofbusinessandthepositionofthe

Group.Wediscussedimportanttransactionsindetailinplenarysessions.

Asfaraswasrequiredbythelawandtherulesofinternalprocedure,theSupervisoryBoardgave

itsconsenttotheExecutiveBoard’sreportsandproposalsondecisionsafterthoroughexamination

andconsultation.InadditiontotheworkinplenarysessionsandSupervisoryBoardcommittees,

IastheChairmanoftheSupervisoryBoardwasinregularcontactwiththeExecutiveBoard,where

Ireceivedregularinformationoncurrentbusinessdevelopmentsandmaterialtransactions.Three

ordinaryandtwoextraordinarySupervisoryBoardmeetingswereheldinthe2008/09fiscalyear.

Fixedelementsoftheplenaryconsultationswerethedevelopmentofthesales,revenueand

employmentsituationintheCarlZeissGroupanditsfinancialposition.Thereportingyearwas

dominatedbytheglobalrecessionandthecyclicaldownturninthesemiconductorindustry.The

comprehensivecostreductionandcashoptimizationprogramandthemeasurestosecurethe

long-termeconomicfutureofthecompanythereforereceivedparticularattention.

Akeyissueatboththeordinaryandextraordinarymeetingswasananalysisofthesituationand

optionsforthestrategicdevelopmentofCarlZeissVision,CarlZeissAG’slargestinvestment.

Atoneoftheordinarymeetings,theSupervisoryBoardpreparedtheefficiencyauditofitsactivities

whichistobeperformedinfiscal2009/10.

Tobeabletoperformitstasksefficiently,theSupervisoryBoardsetupthreecommittees.These

committeespreparedecisionsandtopicstobediscussedintheplenarysessions.Thecommittee

chairmenreportedregularlyinthosesessionsonthecontentsandresultsofcommitteemeetings.

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TheChairman’sCommitteemetonceinthereportingperiod.Itsdeliberationscoveredthe

ExecutiveBoard’svariablecompensationfor2007/08andgoalsfor2008/09aswellasthe

preparationsforextendingDr.HermannGerlinger'scontract.

TheMediationCommitteeinaccordancewithSection27Paragraph3CodeterminationAct

(MitbestG)didnotneedtobeconvenedinthefiscalyearjustended.

TheAuditingCommitteemetthreetimes.Itsworkfocusedontheannualandconsolidated

financialstatements,theauditor’sreports,thefurtherdevelopmentoftheriskmanagementsystem

andtheexpansionoftheCarlZeissGroup'scomplianceorganization.TheCommitteeissuedthe

instructionsfortheauditandspecifieditskeyaspects.TheauditortookpartinalloftheCommit-

tee’smeetingsandreportedonmaterialfindingsandoccurrencesresultingfromtheaudit.The

AuditingCommitteeconsideredindepththerequirementsofthelegislationonthemodernization

ofcompanyannualaccounts(BilMoG)andtranslatedthemintospecialrulesofinternalprocedure

foritsownactivities.

TheKPMGAGWirtschaftsprüfungsgesellschaft,Berlin,auditedthefinancialstatementsprepared

inaccordancewiththerulesoftheGermanCommercialCode(HGB)forthefiscalyearfrom

October1,2008toSeptember30,2009andthemanagementreportofCarlZeissAG.The

AuditingCommitteehadgiveninstructionsfortheauditinaccordancewiththeresolutionofthe

AnnualGeneralMeetingofApril27,2009.Theauditorissuedanunqualifiedauditor'sreport.

TheconsolidatedfinancialstatementsofCarlZeissAGwerepreparedonthebasisoftheInter-

nationalFinancialReportingStandards(IFRS).Theauditoralsoissuedanunqualifiedauditor’s

reportfortheconsolidatedfinancialstatementsandcorporatemanagementreport.

Allreportsandthepapersfortheannualfinancialstatementswereprovidedtoallmembersof

theSupervisoryBoardingoodtime.TheywerediscussedthoroughlyattheAuditingCommittee

meetingofJanuary26,2010,andthemeetingoftheSupervisoryBoardonFebruary11,2010.

Theauditorparticipatedintheseconsultationsandexplainedthematerialresultsoftheaudit.

Followingourownexaminationoftheannualandcorporatefinancialstatements,themanage-

mentreportandthecorporatemanagementreport,weagreedwiththeresultoftheauditand

approvedtheannualandcorporatefinancialstatementsinaccordancewiththerecommendation

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oftheAuditingCommitteeatthemeetingofFebruary11,2010.Theannualfinancialstatements

havethereforebeenadopted.WeagreewiththeExecutiveBoard’sproposalfortheuseofnet

income.

TheSupervisoryBoard’speriodofofficeexpiredattheendoftheAnnualGeneralMeetingon

April27,2009.Followinganelectionwhichwaspartlyrequiredbythechangeinthecodetermina-

tionregime,theSupervisoryBoardisnowstructuredinaccordancewithSection7Paragraph1

No.2MitbestGandcontains16(previously12)members.Theshareholderandtheemployees

eachappointeightmembers.ThefollowingnewSupervisoryBoardmemberswereelected:

Dr.KlausDieterichandProfessorGünterStockasrepresentativesoftheshareholderandHariolf

Abele,HellmuthAeugle,ReinhardDickehuthandKarl-HeinzSchusterasrepresentativesofthe

workforce.EmployeerepresentativesHans-JürgenHeinickeandDr.WinfriedScherlelefttheBoard.

Wewouldliketothankbothofthemfortheircontributionsandeffortsasmembers.Theconstitu-

tivemeetingoftheSupervisoryBoardwasheldonMay27,2009.Iwasre-electedasChairman

andJürgenDömelasDeputyChairmanoftheSupervisoryBoard.

TheSupervisoryBoardextendedtheappointmentofDr.HermannGerlingerasamemberofthe

ExecutiveBoardofCarlZeissAGuptoSeptember30,2014atthemeetingheldinFebruary2009.

TheSupervisoryBoardwouldliketoexpressitsthanksandappreciationtotheExecutiveBoard,

employeesandemployees’representativesfortheirhardworkinthepastfiscalyear.

Oberkochen,February2010

FortheSupervisoryBoard

Dr.h.c.EggertVoscherau

Chairman

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Corporate Management Report

Infiscalyear2008/09theworldeconomyexperiencedthebiggestcrisissinceWorldWarII.CarlZeissalsofelttheimpact:revenuesandearningsaresignificantlybelowlastyear'sfigures.TheCarlZeissGroupoptimizeditscoststructureandadaptedittothereducedsalesvolumewithacorporate-widecostreductionprogram.

Thecompanyuseditsflexiblepersonneltoolstocushionthe

impactofthefluctuationsresultingfromthecurrenteconomic

climateandordersituation:thetimeaccruedinflextime

accountswasreduced,employeesweredeployedinother

businessgroupsandshorterworkinghourswereintroduced.

InJune2009,CarlZeissandemployeerepresentativesagreedon

an“overallpackagetoovercomethecurrenteconomicsituation”

fortheGermansitesboundbycollectivewagebargainingsettle-

ments.Thisdocumentstipulatedthatthe2.1percentincrease

inpayratesscheduledforMay2009wouldbepostponedto

March2010andthataplannedone-timebonuspaymentwould

nolongerbemade.Inaddition,employeesagreedtoforgo

75percentoftheirvacationbonusandboththeirvacationand

Christmasbonusesinfiscalyear2009/10.Employeesnotsubject

tothecollectivelyagreedpayratesandseniorexecutivestaff

madeanequivalentcontribution.Inreturn,theCarlZeissGroup

willnotlayoffanypersonnelinGermanyintheperiodto

September30,2010.

Withthisoverall,corporate-widepackage,CarlZeissachievedits

aspiredgoalofreducingpersonnelcostsintheshortterm.The

companyachievedamajorpartofthesavingsthankstothe

willingnessofemployeestoforgospecialbonuspaymentsand

acceptapostponementofthescheduledpayincrease.Another

contributoryfactoristheuseofflexibleHRtoolssuchasthe

workingofshorterhours,theexpiryoftemporaryemployment

contractsandpartialretirementschemes.

Targeted Portfolio Expansion

Infiscalyear2008/09CarlZeissimplementedtargetedmeasures

toexpanditsportfolio.

Business and General Conditions

Business Trend

Infiscalyear2008/09theworstglobaleconomiccrisisfor

decadeshadastrongimpactonimportantmarketsofthe

CarlZeissGroup.Thissubstantiallyreducedyear-on-year

revenuesandearnings.

TheIndustrialMetrologyandSemiconductorTechnologyGroups

wereparticularlyaffectedbytheglobalfallindemand.The

downturnalreadyevidentinthesemiconductorindustrysince

thepreviousyearwasworsenedbythegeneralrecession.

IndustrialMetrologystartedfiscalyear2008/09withanincrease

inrevenues.Fromthesecondquarteronwards,thebusiness

groupincreasinglyfelttheeffectsofthesharpdropinsalesin

themechanicalengineeringandautomotiveindustriesand

theirassociatedreluctancetoinvest.

Incontrast,theMedicalSystemsandMicroscopyGroups

reportedastable,positivedevelopment.However,thisdidnot

sufficetocompensateforthedownturninrevenuesrecorded

bytheCarlZeissGroup.

Cost Structure Optimized

InthepastfiscalyearCarlZeissrigorouslycounteredtheeffects

oftheglobalrecession:thecompanyoptimizeditscoststructure

andadaptedtothereducedvolumeofbusiness.Nevertheless,

CarlZeisscontinuedtomaketargetedinvestments–inanex-

pansionofthesalesandservicestructure,forexample.Through

ongoinghighinvestmentinresearchanddevelopment,CarlZeiss

isconsolidatingandexpandingitstechnologyleadership.

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EffectiveOctober1,2008,CarlZeiss3DMetrologyServices

GmbH,Aalen,Germany,acquiredonepercentofthesharesin

CarlZeiss3DAutomationGmbH,Essingen,Germany,andnow

holds51percentofitsequity.

SinceNovember2008,CarlZeisshasbeenrepresentedin

Istanbul,Turkey,byitsownIndustrialMetrologybranchoffice.

Thecompanyholdsamajorityinterestinthenewlyfounded

companyCarlZeissÖlçümCihazlarıTicaretLimitedSirketi.

InDecember2008CarlZeissIndustrielleMesstechnikGmbH,

Oberkochen,Germany,acquiredHolometricTechnologies

Forschungs-undEntwicklungs-GmbHandHolometricTechnolo-

giesSoftwareentwicklungs-undConsultingGmbH,bothbased

inEssingen,Germany.

Environmental Protection Firmly Enshrined in Core Values

Environmentalprotectionisfirmlyenshrinedinthecorevaluesof

thecompany:theresponsibleuseofnaturalresourcesisaway

oflifeatCarlZeiss.Fromthedevelopmentandmanufactureof

productsrightuptotheirshipment,CarlZeisstakesenvironmen-

talaspectsintoaccountatalltimes.Thecompanyhasalso

definedenvironmentalprotectionrequirementsforitssuppliers.

AllGermanproductionsitesandanumberofforeignsubsidiaries

arecertifiedtointernationalenvironmentalmanagement

standardISO14001.

Infiscal2008/09,CarlZeissinvestedEUR9millioninenviron-

mentalprotection(lastyear:EUR8million).

Further Expansion of Technology Lead

CarlZeissisatechnologyleaderinmanyareasoftheopticaland

opto-electronicindustries.Tofurtherincreasethislead,the

companyinvestsinresearchanddevelopmentonanongoing

basis:infiscalyear2008/09R&Dexpendituretotaled

EUR284million(lastyear:EUR321million).Thiscorresponds

to14percentofrevenues(lastyear:12percent).

CarlZeissgeneratesaround60percentofitsrevenueswith

productsnotolderthanfiveyears.Duringthereportingyearthe

companyappliedfor346newpatents(lastyear:422).Overall,

CarlZeissholdsapproximately3,600patentsforover1,200

inventionsaroundtheglobe.

Growth Factors Remain Unchanged

Despitetheglobaleconomiccrisis,thecentralgrowthdriversof

theCarlZeissGroupremainunchanged.Thecompany’sfocuson

themarketsforMedicalandResearchSolutions,IndustrialSolu-

tionsandLifestyleProductscontinuestooffermanyopportuni-

tiesforthefuture.

Health,qualityoflifeandefficiencyinhealthcarearethekey

driversoftheMedicalandResearchSolutionsmarket.Thedemo-

graphictrendandtheincreasingdevelopmentofemerging

economiesarefurtheraspectswhichwillstabilizethedemand

formedicaltechnologysolutionsinthelongterm.

Digitizationisthemainpropellingforcebehindgrowthagainthis

year:mobility,flexibility,availabilityofinformation,safety,

networkingandnanotechnologyarethedriversoftheIndustrial

Solutionsmarket.

2008/092007/082006/072005/062004/05

230 254 290 321 284 EUR million

10 10 11 12 14 in % of revenues

Expenditure on research and development

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2008/092007/082006/072005/062004/05

108 118 107 118 80 EUR million

Investments in property, plant and equipment

FortheLifestyleProductsmarket,CarlZeissdevelopsoptical

systemsandmoduleswhichpromotepersonalcreativityand

challenginghobbies,communicateknowledgeandentertain.

Themarketdriversareinnovative,leading-edgeconsumer

electronicsproducts,equippedwithexcellentoptics.

Net Assets, Financial Position and Results of Operations

Net Assets

DuringthereportingyearthetotalassetsfellbyEUR144million

toEUR3,477million.

Intangible Assets

TheintangibleassetsincludegoodwillintheamountofEUR169

million.Theimpairmenttestsconductedinthereportingperiod

didnotleadtoanyamortizationofthegoodwillonthebalance

sheet.

TheEUR19milliondecreaseinintangibleassetstoEUR294

millioncanlargelybeexplainedbyamortizationinthereporting

period.

Property, Plant and Equipment

Inthe2008/09fiscalyear,thecompanyinvestedatotalof

EUR80millioninproperty,plantandequipment(lastyear:

EUR118million).Depreciationonproperty,plantandequipment

amountedtoEUR95million(lastyear:EUR99million).

ThemainfocusoftheCarlZeissGroup’sinvestmentswasstate-

of-the-artproductionfacilities.Investmentswerealsomadein

infrastructuralimprovements,suchasmodernizationprojectsin

thecontextoftheinfrastructurestrategyforthecompany’s

headquartersinOberkochen.

Investments Accounted for Applying the Equity Method

ThebookvalueoftheinvestmentinCarlZeissVisionHolding

wasfullyamortizedinthereportingperiod.Inaddition,thevalue

ofCarlZeissVisionHolding’sprofit-participatingcertificateshad

tobereducedbyEUR58millioninaccordancewiththeequity

method,leavinganetbookvalueofEUR12million.CarlZeiss

VisionHolding’sprofit-participatingcertificatesarerecognized

underothernoncurrentassets.

Other Noncurrent Financial Assets

OthernoncurrentassetsincreasedbyEUR11millionoverthelast

year.Thisisprimarilyattributabletothepurchaseofcorporate

bondstotalingaroundEUR75million.Asdescribedabove,a

contraryeffectresultedfromtheimpairmentoftheprofit-partici-

patingcertificates.

Working Capital

InventoriescametoEUR770millionasofthebalancesheetdate

(lastyear:EUR829million).Thedecreasemustbeseenpartly

inthecontextofthelowervolumeofbusinesscomparedtothe

previousyear.Inaddition,inventorieswerereducedthrough

muchmoreintensiveworkingcapitalmanagementinthe

reportingperiod.

AtEUR439million,tradereceivablesalsofellwellbelowlast

year'svalueofEUR515million.Thisdevelopmentcanbeex-

plainedbythereducedsalesrevenueandtheeffectsofworking

capitaloptimizationinthereportingperiod.TheEUR133million

fallincurrentassetswasessentiallyduetoreducedfixed-term

depositsmaturinginmorethan90days.Liabilitiestoward

suppliersasofthebalancesheetdatewereEUR103million(last

year:EUR156million).Thelowerfigureismainlyduetothe

reductioninthebusinessvolume.

27

2008/092007/082006/072005/062004/05

17 22 30 33 29 in % of total assets

Equity ratio

Provisionsarevirtuallyunchangedcomparedtothepreviousyear

andmainlyincludeprovisionsforincometaxesaswellashuman

resources-andsales-relatedprovisions.

Equity Ratio Still Strong

Theequityratiowentdowninthereportingperiodbyfour

percentagepointsto29percent(lastyear:33percent).The

crucialfactorherewasthenetlosspostedforthe2008/09fiscal

year.Furthermore,intheappropriationofprofitsfor2007/08,

CarlZeissAG–inaccordancewiththefoundation’sconstitution

–paidadividendofEUR10milliontotheCarlZeissFoundation.

CarlZeissMeditecAGalsomadeadividendpaymentofEUR15

million,withEUR6milliongoingtominorityinterests.

External Financing of Pension Obligations Continues

ThewayinwhichtheCarlZeissGroup’spensionobligations

werefinancedwasrestructuredin2005/06.Thecompany’s

pensioncommitmentsremainunchanged.

Thecompanytransferredfundsforitspensionobligations

towardactiveemployeesinGermanytoadedicatedtrust,the

CTA(ContractualTrustArrangement),thusclearlyseparatingthe

resourcesforbusinessoperationsfromthepensionobligations.

Thisincreasesthetransparencyandinternationalcomparability

offinancialreporting.Thelegallyindependenttrustinveststhe

assetstransferredtoitunderanappropriatelong-terminvest-

mentstrategy.

Duetocontinuedallocationstothetrustandthesuccessful

investmentofitsassetsseparatelyfrombusinessoperations,the

companyoncemoresucceededinfinancingallpensionobliga-

tionstowardactiveemployeesinGermanyexternallyinthe

reportingperiod.Thesehadatotalvalueofapproximately

EUR370millionasofthebalancesheetdate.

Pensionobligationstowardsretireeswillcontinuetobeshownin

fullonthebalancesheetofCarlZeissAGanditsGerman

subsidiaries.ForeignsubsidiariesoftheGroupalsohavepension

obligationstowardemployees.PensionprovisionsofEUR834

millionarerecognizedintheconsolidatedbalancesheet(last

year:EUR856million).Asinthepreviousyear,thiscorresponds

to24percentoftotalassets.

Profit-participating Certificates

Theprofit-participatingcertificatescomprisethoseofseries

2004-D,2005-D,2006-D,2007-Dand2008-D,allwithatermof

fiveyears.EachcertificatehasaparvalueofEUR250.

Theprofit-participatingcertificatesarerecognizedinthe

consolidatedfinancialstatementsoftheCarlZeissGroupas

liabilities.Althoughtheprofit-participatingcertificatesborea

yieldof20percentineachofthepastfouryears,alosspartici-

pationunderthetermsofthecertificateshadtobewrittenfor

fiscal2008/09becauseoftheGroup’sresults.Theliabilityfrom

theprofit-participatingcertificateswasaccordinglyreducedin

theincomestatementbyEUR0.9million.

Financial Position

Continued Stable Net Cash Position

TheCarlZeissGroup’scashpositioncanberegardedashighly

stable,regardlessofthecontinuingeffectsoftheglobal

economiccrisis.Inaddition,thecompanyrefinancedsuccessfully

inthereportingperiodthroughtheplacementoftwopromissory

noteloanstotalingEUR160million,despitethedifficultcapital

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28

marketenvironment.TheCarlZeissGrouphasadiverseand

flexibletoolkitatitsdisposalforfinancingitsbusinessopera-

tions.Thisincludesinparticularpromissorynoteloansandcredit

linearrangementswithbanks.

Acashflowbeforeincometaxes1)ofEUR76million(lastyear:

EUR496million)wasrecognizedinthereportingperiod,

amountingtofourpercentofrevenues.

Theoutflowoffundsforinvestments,acquisitionsandthe

financingofpensionobligationsthroughtheContractualTrust

Arrangement(CTA)wasnotfullycoveredbytheinflowoffunds

fromoperatingactivities.

ThefallincashflowfromoperatingactivitiesbyEUR164million

toEUR102million(lastyear:EUR266million)wassubstantially

determinedbythenegativenetresultfortheyear.Apositive

countereffectwasproducedbythereductionincurrentassets

andtradereceivables;theimpactofintensifiedworkingcapital

managementinthereportingperiodwasevidenthere.

ThecashflowfrominvestingactivitiescametominusEUR139

millioninthereportingperiod(lastyear:minusEUR212million).

Investmentsinproperty,plant,equipmentandintangibleassets

werelowerthaninthepreviousyear.Inaddition,theoutflowof

fundsforacquisitionswassubstantiallybelowthatof2007/08.

ThecashflowfromfinancingactivitieswasEUR154million(last

year:minusEUR46million)andincludedpromissorynoteloans

totalingEUR160millionwhichwereplacedinthereporting

period.

Thecashandcashequivalents2)cametoEUR977millionasof

thebalancesheetdate(lastyear:EUR950million).Netcash3)

wasEUR478million(lastyear:EUR615million).TheCarlZeiss

Group’scashpositioncanthereforebeconsideredhighlystable

despitetheinvestmentsmadeduringthereportingperiod,

offeringasoundplatformforrealizingthecompany’slong-term

growthstrategy.

Results of Operations

Economic Crisis Depresses Revenues and Profits

TheCarlZeissGrouppostedanetlossforfiscalyear2008/09of

EUR161million,havingachievedanetprofitofEUR178million

inthepreviousyear.Theresultsofoperationsforthereporting

periodwereseverelyaffectedbythedifficulteconomicenviron-

ment,particularlyinindustrialbusiness.

DuetothesteepdeclineindemandintheSemiconductor

TechnologyandIndustrialMetrologyGroupsinthewakeofthe

generalrecession,theCarlZeissGroup’srevenuesfellby

23percenttoEUR2,101million(lastyear:EUR2,731million).

Adjustedforcurrencyinfluences,thiswouldhaveamountedto

adropinrevenuesof25percent.Increasedrevenueswere

achievedintheMicroscopyandMedicalSystemsGroupsinthe

reportingperiod.

2008/092007/082006/072005/062004/05

340 410 549 496 76 EUR million

15 17 21 18 4 in % of revenues

Cash flow before income taxes

1) DeterminedfollowingtherecommendationoftheGermanFinancialAnalysis

Association/Schmalenbach-Gesellschaft2)Cash,cashequivalents,securitiesandfixed-terminvestments3)Cashandcashequivalentslesscreditliabilities

29

Foreign business accounted for 83 percent (last year: 84 percent)

of revenues. Despite the generally difficult overall economic

situation, the Group succeeded in achieving two-digit revenue

growth in Asia in 2008/09. The absolute revenue volume in

America was held stable at the previous year’s level.

The problematic business development in the Semiconductor

Technology and Industrial Metrology Groups due to the reces-

sion was reflected in incoming orders as well as revenues. New

orders fell by 34 percent compared to the previous year, coming

to EUR 2,111 million.

The Carl Zeiss Group’s other operating income decreased to

EUR 115 million, after EUR 122 million the year before. The

decline in other operating expenses from EUR 588 million in the

previous year to EUR 511 million mainly resulted from a corpo-

rate-wide cost reduction program.

In the reporting period material expenses fell by 19 percent to

EUR 801 million and should be seen in the light of the lower

revenue level.

Personnel expenses were reduced to EUR 849 million, a differ-

ence of EUR 28 million compared to the previous year. This can

be explained principally by the effects of the “overall package to

overcome the economic situation” and the equivalent contribu-

tion from employees not subject to the collectively agreed pay

rates and senior executive staff.

09.30.0909.30.0809.30.0709.30.0609.30.05

471 275 612 615 478 EUR million

Net cash

2008/09

2007/082006/072005/062004/05

128 167 233 178 – 161 EUR million

Net result

2008/092007/082006/072005/062004/05

2,217 2,433 2,604 2,731 2,101 EUR million

82 84 83 84 83 Outside Germany in %

Revenues

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Comparedtothepreviousyear,amortizationanddepreciationin

theGroupincreasedbyEUR6milliontoEUR140million,

includingaroundEUR16millionasaconsequenceofrecording

assetsinthecontextofpurchasepriceallocation.

TheEbITDA(EarningsbeforeInterest,Taxes,Depreciationand

Amortization)for2008/09cametoEUR73million(lastyear:

EUR477million).

TheCarlZeissGroup’sEbIT(EarningsbeforeInterestandTaxes)

wasminusEUR67million,EUR410millionbelowthecompa-

rablefigureforthepreviousyear.

ThefinancialresultwasminusEUR95million(lastyear:minus

EUR65million),significantlyhigherinthisreportingperiodthan

thepreviousyearduetotheresultsfrominvestmentsaccounted

forapplyingtheequitymethod.Thisamountincludedminus

EUR70millionresultingfromthepartialrecognitionofthe

CarlZeissVisionGroup’snetlossforfiscalyear2008/09.

Inaddition,interestincomefellbelowthepreviousyear'slevel

duetoloweraveragenetcashandlowerinterestrates.

Taxexpensesforfiscalyear2008/09wereoffsetinfullby

deferredtaxesandresultedintaxincomeofEUR0.7million.

ThisledtoanetlosstotalingEUR161millionforthereporting

period.

Theresultsofoperationsshowedsevereeffectsfromthegeneral

recessioninthereportingperiod.TheCarlZeissGrouphas

successfullyovercomethecrisissofarand,thankstoitsstable

netassetsandfinancialsituation,hasastableplatformforthe

future.

Employees

Asofthebalancesheetdate,theCarlZeissGrouphad12,872

employees(lastyear:13,060)aroundtheglobe.Changestothe

scopeofconsolidationadded51employeestothistotalinthe

reportingperiod.

Thecompanyhasaworkforceof4,565peopleoutsideGermany

(lastyear:4,620).451apprenticesandtrainees(lastyear:441)

wereworkinginGermanyasofthebalancesheetdate,giving

CarlZeissthesamefivepercenttraineeratioaslastyear.

General Recession Impacts Corporate Value

InthereportingyearCarlZeisswasunabletorepeatthepositive

trendincorporatevalueenhancementreportedinprevious

years.TheEVA®(EconomicValueAdded)indicator,whichserves

asaninternalbarometerofbusinesssuccess,amountedtominus

EUR169millionforfiscalyear2008/09.Thiswasparticularly

attributabletothesubstantiallynegativeresultpostedbythe

SemiconductorTechnologyGroupasaresultoftherecession.

TheMedicalSystemsandConsumerOptics/OptronicsGroups

wereonceagainabletoincreasetheircorporatevalue.This

performanceindicatorresultsfromnetoperatingprofitminus

thecostofcapital.Therateusedtodeterminethecostofcapital

rangesbetweeneightandtwelvepercentwithintheCarlZeiss

Group.

2004/05 2005/06 2006/07 2007/08 2008/09

EURmill EURmill EURmill EURmill EURmill

EbITDA 369 437 540 477 73

EbITDAmargin 17% 18% 21% 17% 3%

EbIT 250 313 394 343 –67

EbITmargin 11% 13% 15% 13% –3%

Netresult 128 167 233 178 –161

MANAGEMENT REPORT NET ASSETS , F INANCIAL POS IT IONANDRESULTS OF OPERAT IONS

31

Goals and Principles of Financial Management

TheCarlZeissGroup’sglobalfinancialmanagementsystem

incorporatesallsubsidiariesandiscentrallycoordinatedatthe

corporatelevelbyCarlZeissFinancialServicesGmbH.

Financialmanagementisgearedtotheoperationalandstrategic

stipulationsofCarlZeissAG:theprimeobjectivesaretoprovide

liquidfundsforbusinessoperations,tosecurefinancialflexibility

forfurtherexpansionofbusinessactivityandtominimize

financialrisks.

Currencyriskswhicharenotcoveredlocallybyproductionand

procurementinthevariouscountriesandcurrenciesarehedged

usingderivativefinancialinstruments.Financialinvestmentsare

madeexclusivelyinsecuritieswithsolidinvestmentgraderatings.

Risk Report

Risk Management

RiskmanagementatCarlZeissisanimportantcomponentof

value-andperformance-orientedmanagement.Itiscoordinated

fromthecorporatecenterandconsolidatedatGrouplevel.

Operationalandstrategicrisksarecapturedandassessedas

negativevariances.Inaddition,countermeasuresaredefinedfor

allrisksandtheirimplementationisconstantlymonitored.

Themanagementoftheindividualbusinessunitsisresponsible

fortheearlyidentification,communicationandcontrolofrisks.

Riskcoordinatorsinthecompany’sdivisionsensureuniform

reporting.

TheExecutiveBoardofCarlZeissAGconstantlyevaluatesthe

risks,countermeasuresandeffectivenessofthesemeasures.The

ExecutiveBoardalsocontinuallyreviewstheeffectivenessofthe

riskcontrolsystemsandoptimizesthemonanongoingbasis.

TheAuditingCommitteeandtheauditorconfirmtheadequacy

oftheCarlZeissriskmanagementsystemaftercheckingits

structureandfunction.

General Risks

Externalfactorsmayinfluencethefuturedevelopmentofthe

company.Theseinclude,forexample,changesintheglobal

politicalarena,naturaldisasters,pandemicsoracontinuationof

theglobalrecession.

Iftheglobalrecessionalsoreachesthosemarketsthatwere

stablein2008/09,CarlZeissmustexpectafurthernegative

impactonrevenuewhichcannotbefullyoffseteitherbycost

reductionmeasuresorwiththeaidofthebroadbusinessand

productportfolio.Inaddition,thepersistenceoftheglobal

recessionincreasestheriskofinsolvencyforkeysuppliersor

customers,withtheresultingnegativeeffectsonCarlZeissasa

business.

Thegeneraldeclineindemandisintensifyingcompetition,

leadingtopricepressureandincreasedriskstoprofitmargins.

CarlZeisshaslaiddownawrittenCodeofConductwhichis

bindingupontheentireorganization.Employeeshavereceived

comprehensiveinformationaboutitscontent.Thecompanyis

alsoholdingtrainingcoursesonthesubject.TheCodeof

Conductisavailabletothepubliconthecompany'swebsite.

09.30.0909.30.0809.30.0709.30.0609.30.05

11,049 11,249 12,257 13,060 12,872 Total

3,363 3,406 4,292 4,620 4,565 Outside Germany

Employees

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32

InthereportingyeartheComplianceOrganizationwasrestruc-

turedattheGrouplevel.Clearresponsibilitiesandreporting

channelsweredefinedinordertoidentify,evaluateandcounter

risksthroughoutthecompany.

Financial and Liquidity Risks

AsCarlZeiss'fundsalsoincludesuitablecashreservesfor

financinggrowth,thereisnourgentneedforcredit.Therefore,

thecompanyisonlyaffectedbythechangedcredittermsand

morerestrictivebanklendingtoalimitedextent.

Withtwopromissorynoteloansissuedinfiscal2008/09,

CarlZeissunderscoredthatthecompanyisinapositiontorefi-

nanceitsoperationsindependentlyoftraditionalbankloans.

Thankstoitsverygoodratingbyfinancialinstitutions,CarlZeiss

alsosucceededinplacingthepromissorynoteloansdespitethe

difficultenvironmentresultingfromthefinancialmarketcrisis.

CarlZeisshassolidfinancialstructuresandpursuesaconserva-

tive,value-preservinginvestmentstrategy.Investmentsaremade

exclusivelyinsecuritieswithsolidinvestmentgraderatings.

Possiblerisksresultingfromchangesinexchangerates,interest

ratesorthevalueofassetsonthefinancialmarketsarecentrally

quantifiedbyCarlZeissFinancialServicesGmbH,managed

withintheframeworkoffinancialriskmanagementandhedged

inlinewiththedefinedriskstrategy.Allfinancialactivitiesofthe

CarlZeissGroupareconductedonthebasisofcorporate-wide

directives.

Bankswhoseexistenceisunderthreatduetothefinancialcrisis

wereengagedonlytoaminorextentatCarlZeiss.Asaresult,

CarlZeissisnotdirectlyaffectedbythecrashesinthebanking

sector.

Risksmayresultfromacquisitions,strategicalliancesand

investments.CarlZeisscheckstheserisksandminimizesthem

throughanestablishedmerger&acquisitionprocess.Thefocal

pointofthisprocedureisduediligencetesting,inwhichevery

transactionissystematicallyassessedforitsvalueandsynergy

potential.Theintegrationofacquiredcompaniesisconductedin

post-mergerprojectswhichareaimedatrealizingtheexpected

synergypotential.

GoodwillofEUR169millionfromacquisitionsisshowninthe

balancesheetoftheCarlZeissGroupandissubjectedtoregular

impairmenttests.CarlZeisscannotruleoutthepossibilitythat

impairmentsforindividualorallacquiredcompaniesmayprove

tobenecessaryduetochangesintheeconomicconditionsorto

amendmentstothebusinessmodel.

IntheyearunderreviewthebusinessoperationsoftheCarlZeiss

VisionGroupcontinuedtobestablewithavirtuallyconstant

levelofrevenuecomparedtothepreviousyear.Thecurrenthigh

debt-equityratiodominatesthefinancialpositionandresultsof

operationsoftheCarlZeissVisionGroup.Thismayresultinrisks

totheCarlZeissGroup'sinvestment.

CarlZeisshastransferreditspensionobligationstowardactive

employeesinGermanytotheCTAdescribedabove.Trendsinthe

capitalmarketsandinterestratesinfluencethedevelopmentof

theCTA'sassets.TheCTA’sdevelopmentismonitoredthrougha

clear,long-terminvestmentstrategyandpermanentriskcontrol.

Theinvestmentportfolioiscontinuouslyoptimizedandadjusted

tocurrentfinancialmarketconditionswithinthedefined

investmentstrategy.

33

Procurement Risks

TheprocurementrisksconfrontingCarlZeissincludethe

shortageofcommoditiesandenergyoranincreaseintheir

prices.Duetotheeconomiccrisisthereisalsoanincreasedrisk

oflosingsuppliers,throughinsolvency,forexample.Tominimize

theserisks,rigoroussupplychainmeasuresarebeingimple-

mented.Byexpandingasystemforstrategicsuppliermanage-

mentandusingseveralsupplysources,thecompanyreducesthe

riskofdependencyonindividualsuppliers.

CarlZeissisreliantontheavailabilityofitsITinfrastructure.An

externalstrategicpartneroperatesthecompany’sITsystems.

ResponsibilityfortheITstrategyandtherelevantdirectivesand

theirmonitoringlieswithCarlZeiss.Anychangetothecompa-

ny’scollaborationwiththeexternalpartnermayleadtodisrup-

tionsintheoperationalexecutionofITservices.CarlZeiss

addressesthisriskthroughsystematicprojectmanagementand

governancerules.

Personnel Risks

Thedemographictrendisworseningthegeneralshortageof

skilledandmanagementstaff.CarlZeissisalsoaffectedbythis

development.Thecompany'sattractivenessasanemployeris

becomingadecisivefactorinthecompetitionforqualified

personnel.Withtargetedmeasuresandprograms,CarlZeissis

endeavoringtotrainoracquirespecialiststaffandthenbind

themtothecompanyinthelongterm.Inthisway,thecompany

isstillabletomeetitsrequirementsforspecialistandmanage-

mentstaff.

Legal Risks

Overall,thereiscurrentlynopendinglitigationthatcouldpose

anysubstantialdangertoanyareaofthecompanyortothe

CarlZeissGroup.

Protectedpatentsandintellectualpropertyarekeyfactorsfor

CarlZeiss’stechnologyleadandthereforeitscompetitive

position.CarlZeisssafeguardsthesecompetitivefactorsthrough

acomprehensiveindustrialpropertyrightsstrategy.

DuringandafterdevelopmentprocessesCarlZeissalsosystem-

aticallycheckswhetherthepropertyrightsorpatentsofathird

partycouldbeviolated.

Risks for Business Groups

Asasupplierofthesemiconductorindustry,CarlZeissis

subjectedtothetypicalcyclesandvolatilityofthissector.This

resultsinrisksforthebusinessoftheSemiconductorTechnology

Group.Furthermore,alargeproportionofrevenuesisdependent

ononelargecustomerhere.Duringthereportingyearthe

downturnintheindustrywasintensifiedbytheglobalrecession.

Inresponsetothisdevelopment,theSemiconductorTechnology

Groupadapteditscoststructuretothefallinrevenuesandthe

changedmarketconditions.Nevertheless,CarlZeisscontinued

withitstargetedinvestments,e.g.inthefurtherdevelopmentof

thenexttechnologygeneration–EUVlithography–whichhas

yettobecomeestablishedinthemarket.WiththisnewEUV

lithography,thecompanyisexpandingthedevelopmentlead

whichitachievedinrecentyears.Therefore,arapid,unexpected

shifttoadifferentmicrochipproductiontechnologycouldhave

anegativeimpactonthisbusinessgroup.

OUR INSP IRAT ION FOREWORD MANAGEMENT REPORT BUS INESS GROUPS FROMTHE GROUP AT YOURSERV ICE F INANCIAL STATEMENTS R ISK REPORT

34

Liketheotherbusinessgroups,MedicalSystemsisaffectedby

theglobaleconomyandtherecession,althoughtoalesser

extentandstartingatalatertime.Inphasesofeconomic

weakness,customersmayreactbycurbingand/orpostponing

theirinvestmentsintonewandinnovativeproducts.

Innovativenessandrapidproductdevelopmentarekeycompeti-

tivefactorsintheMedicalSystemsGroup.Itssuccesstherefore

alsodependsontherapiddevelopmentofinnovativeand

marketableproductsandontheearlyrecognitionandimplemen-

tationofnewtechnologytrendsintheformofnewproducts.In

manycountriesmedicaltechnologyproductsrequireofficial

approvalorcertification.Althoughtherelevantlegalrequire-

mentsareincorporatedinallstagesofdevelopment,production

anddistribution,therecanbenoguaranteethatapprovalswill

begrantedatallorattherighttime.Furtherrisksmayresult

fromhealthcarereformsandtheassociatedcostreductions.

Ontheotherhand,macrofactorssuchastheincreasingworld

populationandthedemographictrendinindustrializedcountries

offergoodgrowthoptions.Economicdevelopmentsinthe

emergingeconomies,aswellastheincreasingdemandsbeing

madeonthemedicaldevicesusedforthediagnosisandtherapy

ofage-relateddiseases,areprovidinggrowthopportunitiesto

thebusinessgroup.

Governmentbudgetrestrictionsmayinfluencethebusinessof

theMicroscopyGroup–when,forexample,stimuluspackages

focusedspecificallyonpromotingeducationandresearchinthe

fieldsofbiotechnologyandthelifesciencesexpire.Afurtherrisk

factorforMicroscopyisexchangeratefluctuations–fromwhich

AsianandUScompetitorsinparticularmaybenefit.Theglobal

economiccrisishasledtoadecreaseinsalesofmicroscopesfor

industrialapplications.Ifthissituationcontinuesunchanged,it

mayleadtoafurtherdownturninrevenuesinthissegment,

whichwillbeincreasinglydifficulttooffsetthroughbusiness

withresearchsystems.

Thegeneraltrendinthecapitalgoodsindustry–andinthe

automotiveandsupplyindustryinparticular–isoneoftherisks

facingtheIndustrialMetrologyGroup:ifdemanddoesnot

recoveronthesemarkets,afurtherdeteriorationinrevenuesis

possible.Byexpandingitsproductportfolio,thebusinessgroup

isopeningupnewcustomersegmentsinordertoreduceits

dependencyonindividualindustries,e.g.theplasticsand

consumergoodsindustries,inwhichmultisensorsystemsor

computertomographycanbeused.Inaddition,thebusiness

groupisconstantlyexpandingtheservicesitofferstoits

customers.

Dependenceongovernmentbudgetsandthelongdurationof

projectsaretypicalfeaturesofthebusinesswithsecurityand

defensesystems.TheOptronicsDivisionofCarlZeissaddresses

theserisksthroughoptimizedapproachestoproject,inventory

andsupplychainmanagement.

OneriskareafortheCameraLensDivisionisthemovieindustry

whichiscuttingorcompletelycancelingitsbudgetsinresponse

totherecession.Thisisleadingtoafallinthedemandforcine

lenses.Inaddition,theswitchfromanalogtodigitaltechnology

isresultinginincreasedcompetitivepressurefromnewplayers.A

fallinthedemandforconsumerelectronicssuchascellphones

ordigitalcamerasmayhaveanegativeeffectonthesuccessof

thedivision’slicensebusiness.

MANAGEMENT REPORT R I SK REPORT

35

RisksfortheSportsOpticsDivisionare,aboveall,thereduced

consumerconfidenceevidentintheUSAandthestrong

competitiveandpricepressure.CarlZeissisaddressingthese

riskswithaninnovativeproductportfolio.

Businesswithplanetariumsisoftendependentongovernment

budgetsorprivatedonations.Iftheglobaleconomiccrisis

continues,thereisariskthatbudgetswillbereducedor

cancelledandplanetariumconstructionprojectswillnotbe

implemented.

Overall Risk Situation

Asaresultoftheinitiatedandplannedmeasures,noindividual

risksarediscerniblethat,onthebasisoftheinformation

availabletothecompanyatthetimewhenthisreportwas

compiled,couldsignificantlyjeopardizethenetassets,financial

positionandresultsofoperationsoftheCarlZeissGroupinthe

nearfuture.However,thereisariskthattheglobalrecessionwill

continuetonegativelyinfluencethecompany’sprofitability.

Outlook

Global Economic Expectations

Afterasignificantslowdownintheeconomyin2008/09,there

arenowinitialsignsofacautiousrecoveryin2010.Individual

CarlZeissbusinessgroupsarebenefitingtovaryingdegreesfrom

theexpansionofgovernmentinvestmentstakingplaceinmany

countries.Asin2009,thebusinessgroupswillbeimpactedto

varyingextentsbyeconomicdevelopments.Duetothecontinu-

ingglobaleconomiccrisisandthetensesituationonthe

financialmarkets,forecastsforthecomingfiscalyearsarestill

subjecttoahighdegreeofuncertainty.

Market Forecasts

Inthesemiconductormarketthedownturnappearstohave

bottomedout:fromfiscalyear2009/10,CarlZeissexpectsa

significantmarketrecovery,withdemandfocusedprimarilyon

productsofthelatesttechnologygeneration.

CarlZeissanticipatesalargelystablebusinesstrendinthe

MedicalSystemsGroup.However,theimpactoftheglobal

economiccrisismaytemporarilyreducecustomers'willingness

andabilitytoinvest.Inthemid-term,CarlZeissexpectsthe

businesstogrowconsiderablysincetheunderlyingmacro-trends

haveremainedunchanged.Thesemacro-trendsincludethe

agingpopulation,improvedhealthcareinnewlyindustrialized

countries,andthepersonalinvestmentsbeingmadebyindividu-

alstoimprovetheirqualityoflife.

CarlZeissexpectsgovernmentstimuluspackages,particularlyin

theUSA,toboostitsMicroscopybusinessatthebeginningof

thefiscalyear.Thecompanyassumesthatgovernmentand

researchbudgetswillremainalmoststableforthetimebeing.

Averysubduedtrendisstillevidentinthematerialsmicroscopy

market.

CarlZeissassumesthatdemandinthecapitalgoodsindustrywill

remainatalowlevelforthetimebeing.Thecompanydoesnot

predictanypositiveeffectsontheIndustrialMetrologybusiness

beforemid-2010.

CarlZeissseesfurthergrowthinthesecuritytechnologymarket,

whilethebusinessoftheSportsOpticsDivisionwillbemarked

byincreasingcompetitionandpricepressure.

OUR INSP IRAT ION FOREWORD MANAGEMENT REPORT BUS INESS GROUPS FROMTHE GROUP AT YOURSERV ICE F INANCIAL STATEMENTS OUTLOOK

36

Thecompanyexpectsthat,despitethedifficulteconomic

scenario,thedemandforcameraandcinelenseswilllargely

remainstable.Thecompanyanticipatesadownturninthe

licensebusinessoftheCameraLensDivision.

Development of the Carl Zeiss Group

DespitethedifficulteconomicconditionstheCarlZeissGroup

seesfurtheropportunitiesforgrowthinthecomingfiscalyears,

asthemaingrowthdriversremainunchanged.Initialrecoveryis

alreadyevidentinthechipindustry.Alargenumberofnew

productsfromtheCarlZeissGroupwillincreasecompetitiveness

andensurefurthergrowthin2010.

Aftertheeconomicallydifficult2008/09fiscalyear,weexpectan

improvementintheeconomicsituationoftheCarlZeissGroupin

thefollowingyear.IntheSemiconductorTechnologyGroup

revenues,whichsufferedacyclicaldeteriorationfurtherintensi-

fiedbythegeneralrecession,willrecoverthroughgrowingsales

volume.Duetothecurrentuncertainoutlookfortheautomotive

andmechanicalengineeringsectorsnomajorstimuliforgrowth

canyetbediscernedfortheIndustrialMetrologyGroup.Inthe

company’sestimation,theMedicalSystems,Microscopyand

ConsumerOptics/OptronicsGroupswillstrengthentheCarlZeiss

Group’seconomicpositionwithastablevolumeofsales.

Opportunitiesmayemergeforthesebusinessgroupsinparticular

asaresultofgovernmentstimulusandaidprogramsforthe

educationsectorandtargetedinfrastructuredevelopmentsinthe

fieldsofresearchandhealthcare.ThisappliestoGermany,the

USAandAsia,inparticulartothegrowthmarketChina.

TheCarlZeissGroupexpectstograduallymakeupforthe

downturninsalesvolumeandrevenuesrecordedduringthe

reportingperiodinthecomingfiscalyears.Asaresult,the

companypredictsaslightlypositiveearningssituationinthe

comingfiscalyear.TheCarlZeissGroupwillregainitsprofitability

ofpreviousyearsinthefollowingyears.

Events after the End of the Fiscal Year

TheManagementandSupervisoryBoardsofCarlZeissMeditecAG

proposethepaymentofadividendofEUR14.6million

(EUR0.18perstock).Theshareofaround35percentaccruingto

minorityshareholdersofCarlZeissMeditecAGwillreducethe

equityoftheCarlZeissGroupaccordingly.Theannualgeneral

meetingforfiscalyear2008/09hasyettoapprovethisproposal.

CarlZeissVision'scorporateresultin2008/09hasledtoa

technicaldefaultrelatingtotheancillaryconditionsofthecredit

agreements.Basedonabusinessreviewbyanindependent

thirdparty,CarlZeissVisioniscurrentlyinnegotiationswith

bankstorestructureitsfinancesandarrangeanappropriate

standstillagreement.Thetwoshareholdersofthecompany,

CarlZeissAGandtheprivateequitycompanyEQT,areinvolved

inthenegotiations.

MANAGEMENT REPORT EVENTS AFTER THE ENDOF THE F I SCAL YEAR

38

Medical and Research Solutions

Thepopulationaroundtheworldisaging,andthepercentage

ofelderlypeopleisincreasingrapidly.Doctorsandpatients

relyonstate-of-the-artdiagnosticandtherapyproductsthat

providetherequiredassistancetocombatimpairmentsinboth

healthandthequalityoflife.Thepharmaceuticalindustryand

thelifesciencesareworkingintensivelytodiscoverthedrugs

andtreatmentmethodsoftomorrow–researchersdependon

high-performancemicroscopesandimagingprocedurestomake

thishappen.Theincreasingexpectationsnowbeingmadeon

modernmedicaltechnologyandleading-edgeresearchsystems

offergooddevelopmentprospectsforCarlZeiss.

Markets of the Future

Withtrendsettinginnovations,CarlZeissdrivesglobalprogressinopticsandoptoelectronics.Thecompanyfocusesonmarketsthatoffersustainedpotentialforgrowth:MedicalandResearchSolutions,IndustrialSolutionsandLifestyleProducts.

39

Industrial Solutions

Digitization,automationandnanotechnologiesaredriving

industrialdevelopment.GloballyleadingopticsfromCarlZeiss

providethefoundationfortheproductionofhigh-performance

microchipswithhighlycomplexnanostructures,whichare

indispensablefortheinformationsocietyoftodayandtomor-

row.Withproductsandintegratedsolutionsformeasuring,

analyticalandsecuritytechnologyaswellasforindustrial

production,CarlZeissoffersoptimalsolutionsandsetstechno-

logicalstandardsthatexpandthespectrumfarbeyondour

powersofimaginationandcurrentconceptionsofprecision.

Lifestyle Products

Formorethan160years,CarlZeisshasbeenapioneerin

technologiesthatopenupnewdimensionsofperception.

ZEISSproductsenablemillionsofpeopletoseeandexperience

theworldintotallydifferentwayseveryday.Inmanyplane-

tariumsaroundtheglobe,ZEISSplanetariumprojectorsmagi-

callyrecreatetheworldofstarsonthedomesandfascinate

audienceswithunforgettableinsightsintothesecretsofthe

universe.ZEISScinelensesareusedtofilmHollywoodmovies

thatthrillaudienceswiththeirbrilliantimages.Thecinemizer

videogogglesenablemobilecinemaforthefirsttime.Lenses

forcamerasandmobileradiodevices,binocularsandspotting

scopesfromCarlZeissenrichlifewithZEISSquality.

OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUSINESS GROUPS FROMTHE GROUP AT YOURSERV ICE F INANCIAL STATEMENTS MARKETS OF THE FUTURE

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BusinessGroupSemiconductor Technology

Duringfiscalyear2008/09,theSemiconductorTechnologyGroupgeneratedrevenuesofEUR386million.Duetothegeneraldownturninthesemiconductorindustry,businesswithlithographyopticswasfarbelowthelevelreportedlastyear.However,businesswithscanningelectronmicroscopesremainedstable.

“WearepleasedtoworkwiththeZEISSphotomaskrepairtoolwhichisbasedonelectronbeamtechnology.Ithasenableddrasticyieldenhancementforusaskeytowinmarketshareinseverecompetition.”

Shingo Kanamitsu, Research Scientist, Advanced Lithography Process Development, Toshiba Corporation Semiconductor Company, Japan

41

Sales revenues

(EURmill)

2008/09 386

2007/08 1,018

2006/07 1,042

2005/06 864

2004/05 658

Employees

(Full-timeequivalents)

30SEP2009 2,530

30SEP2008 2,670

30SEP2007 2,496

30SEP2006 2,199

30SEP2005 1,977

TheSemiconductorTechnologyGroupconcludedthefiscalyear

withacleardecreaseinsalesof62percentandgenerated

revenuestotalingEUR386million(lastyear:EUR1,018million).

Themassivedownturninthesemiconductorindustrythat

alreadybeganinthesummerof2008wasworsenedbythe

globaleconomiccrisis:chipmanufacturersbarelyinvestedin

productionequipmentduringthereportingyear.Thisleftits

markonincomingbusinessandsalesrevenuesoftheSemicon-

ductorTechnologyGroup.

Thebusinessgroupreactedtothemajorchallengesposedbythe

changedconditionswithoutlosingsightofitsmid-termgoals:

usewasmadeofflexibleHRtools–suchasthereductionofthe

timeaccruedinflextimeaccounts,ashorterworkingweek,the

loanofmanpowerfromotherareasoftheCarlZeissGroupand

short-timeworking.Inaddition,thebusinessgroupachieved

asustainableoptimizationinitscoststructureandproduction

processesandimplementedaconsistentcost-cuttingprogram.

Investmentsinresearchanddevelopmentremainedatahigh

level.

New Technology on the Verge of Volume Production

Inthereportingyear,CarlZeisscontinuedtodrivethedevelop-

mentofextremeultravioletlithography(EUV).Thisnew

technologyformicrochipproductionenablesstructuresinthe

20nanometerrange–forevensmaller,evenmorepowerful

chipsandaclearreductioninproductioncosts.

Overall,theLithographyOpticsDivisionoftheSemiconductor

TechnologyGrouphasbeenworkingonthedevelopmentofEUV

lithographyforabout15yearsandhasinvestedatotalofEUR

100milliontodate.Thetechnologywasfundedwithasumof

overEUR20millionbytheGermanFederalMinistryofEducation

andResearchandataEuropeanlevel.

AttheendoftheyearunderreviewthegroupsuppliedASML

withthefirstopticscomprisingbothilluminationandprojection

forEUVlithography.TheDutchcompanyistheleadingmanufac-

turerofopticallithographysystems.CarlZeissisitssolesupplier

oflithographyoptics.TwoEUVsystemsforprocessdevelopment

arecurrentlyinoperationaroundtheglobe.Theinstallationof

thefirstproductionsystematamicroscopemanufactureris

scheduledforthesecondhalfof2010.Theuseofthetechnol-

ogyforthevolumeproductionofmicrochipsisthereforedraw-

ingcloser:CarlZeisshascurrentlyreceivedaroundtenordersfor

theEUVsystems.

Numerous Awards for High Performance Microscopes

Infiscalyear2008/09theNanoTechnologySystemsDivision

expandeditsproductportfolioandlaunchedanewscanning

electronmicroscopeandanewCrossBeam®system.Thedivision

isthereforeexpandingitspositionasatechnologyleader.During

thedevelopmentofthenewsystem,specialattentionwas

giventoprovidingsimple,convenientuserguidance.Numerous

awardsreceivedforhighperformancemicroscopesofthe

SemiconductorTechnologyGroupunderscoretheoutstanding

performanceofthesystems.

Joint Development with Customers

CarlZeisshascontinuallyenhancedtheORION®helium-ion

microscopelaunchedin2007.ORION®deliversthreetofour

timeshigherresolution,greaterdepthoffieldandclearlybetter

contrastthanscanningelectronmicroscopes.Tooptimallyuse

thisperformance,CarlZeissisdrivingapplicationdevelopment

OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUSINESS GROUPS FROMTHE GROUP AT YOURSERV ICE F INANCIAL STATEMENTS SEMICONDUCTORTECHNOLOGY

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BusinessGroupSemiconductor Technology

Carl Zeiss develops high performance optics used for microchip production.

43

togetherwithpilotcustomers–formaterialexaminationsin

semiconductortechnologyorinbiomedicalresearch,for

example.

Brain Mapping

Duringthereportingyear,CarlZeisspresentedanewapplication

forbrainresearch:brain mapping.Withhighresolution,

electron-microscopicimages,thissolutionprovidesresearchers

withathree-dimensionalviewofthestructuresandconnections

ofthesynapsesinthebrain.Inthisway,scientistsaimtoobtain

informationaboutdiseasessuchasautismorschizophreniaand

abouttheeffectofdrugs.In2009CarlZeisspresentedanew

softwaresolutionandspecialdetectorsystemsforthispurpose,

whicharenowalreadyinuseatcustomers.

Optimizing Interfaces: Correlative Microscopy

DuringthereportingyeartheMicroscopyandSemiconductor

TechnologyGroupspresentedajointdevelopment:correlative

microscopyformaterialsanalysis.Aspecialspecimenholderand

anewsoftwarepackagecombinelightmicroscopyandscanning

electronmicroscopy.Inthisway,specificareasofthespecimen

canbeautomaticallyrelocatedandanalyzedunderthelightand

electronmicroscopes.ThismakesCarlZeisstheonlycompanyin

theworldtooffersuchaworkflowfromasinglesource.

Expansion of Technology Leadership

TheSemiconductorMetrologySystemsDivisionsawamarked

recoveryinthereportingyear.Despitethegeneraldownturnin

thesemiconductorindustry,revenuesinthisdivisionshoweda

favorabledevelopment.Semiconductorandmaskmanufacturers

areinvestinginproductsfortheinspection,repairandoptimiza-

tionofphotomasksforsemiconductorproduction.Attheend

ofthefiscalyearthedivisionfelttheeffectsoftheslowrecovery

takingplaceinthesemiconductormarketinAsiaatanearly

stage.

Inaddition,theproductsdevelopedforthefabricationof

photomasksofthe32nanometernodewereverywellreceived

bythemarket.CarlZeissdeliveredthefirstAIMS™ 32-193i

systemsformaskinspectionandMeRiT® HR32systemsfor

photomaskrepairtotheUSAandJapan.Furthersystemswill

enterservicein2010.

PixerTechnology,acompanybasedinKarmiel,Israel,and

acquiredin2008,wassuccessfullyintegratedandexpandsthe

productportfoliowithphotomaskoptimizationsystems.

Laser Optics Expands Product Portfolio

TheSemiconductorTechnologyGroupalsoincludestheLaser

OpticsDivisionwhichproducescomponentsforlasersusedas

lightsourcesinlithography,andopticsforautomatedwafer

inspection.

Thedownturninthesemiconductorindustryalsoimpactedthe

division’sbusiness.Inthesecondhalfofthereportingperiod,

CarlZeissnotedaslightrecoveryinbusiness.Inparticular,the

demandforlasersparepartsstabilized.Thisbusinessisakey

sourceofrevenueforthedivision.Inaddition,CarlZeissinitiated

newproductdevelopmentprojectstogetherwithkeycustomers

andisthereforeconstantlyexpandingtheproductofferingof

theLaserOpticsDivision.

OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUSINESS GROUPS FROMTHE GROUP AT YOURSERV ICE F INANCIAL STATEMENTS SEMICONDUCTORTECHNOLOGY

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BusinessGroupMedical Systems

“Mypatientsentrustmewiththeirvision.IbringsurgicalexpertiseandlooktoZEISStoprovideprecision,reliabilityandinnovationintheequipmentthatallowsmetodeliverresults.”

Dr. Patrick Versace, Medical Director of Vision Eye Institute, Sydney, Australia

Infiscalyear2008/09theMedicalSystemsGroupdevelopedpositivelyinachallengingenvironment.RevenuesincreasedtoEUR706million.Thebusinessgroup'sactivitiesarelargelybundledundertheumbrellaoftheTecDAX-listedcompanyCarlZeissMeditecAG.CarlZeissAGholdsa65percentinterestinthecompany.

45

Sales revenues*

(EURmill)

2008/09 706

2007/08 661

2006/07 638

2005/06 631

2004/05 552

Employees*


30SEP2009 2,785

30SEP2008 2,759

30SEP2007 2,467

30SEP2006 2,274

30SEP2005 2,177

TheMedicalSystemsGroupconcludedthefiscalyearwithan

increaseinsalesofsevenpercentandgeneratedrevenues

totalingEUR706million(lastyear:EUR661million).

TheAsia/Pacificregionreportedthehighestgrowthinfiscal

year2008/2009.

TheMedicalSystemsGroupactsinaccordancewiththethree

principlesofPrecision,SimplicityandOutcomes.

Precision: The Ultimate in Accuracy for Exact Diagnosis

and Therapy

CarlZeisssupportsdoctorsandsurgeonswithmedicalsystems

thatfunctionwiththeutmostprecisionandvisualizeeventhe

smalleststructures.

WiththeCirrus™ HD-OCT,theMedicalSystemsGroupoffersa

high-resolutioncoherencetomographysystemthatgenerates

imagesoftheretinaandotherstructuresoftheeyedowntothe

micrometerrange.Thisextremelyhighprecisionenhancesthe

diagnosisofdiseasesandimprovestheplanningandfollow-up

ofsurgicalprocedures.CarlZeissintroducedOpticalCoherence

Technology(OCT)tothemarketin1995.

LastfiscalyearthebusinessgrouplaunchedaRetina Worksta-

tion.ThiscombinestheCirrus™ HD-OCTcoherencetomography

systemswiththeVISUCAMNM/FAfunduscameraandtheFORUM®

datamanagementsolutiontoprovideacompleteretinasolution.

MaximumprecisionisalsoofferedbyCarlZeisssurgicalmicro-

scopes.WiththeintroductionofStereoCoaxialIllumination(SCI)

technologyfortheOPMI Lumera®,surgeonscanvisualizedetails

intheeyethatcouldnotberecognizedinthepast.Theproduct

seriesissupplementedwiththeOPMI Lumera®700andthe

RESIGHTfundusimagingsystemthatcanimagetheeyewith

maximumdetail.

WiththeOPMI® Pentero®,CarlZeissoffersahighlyprecise

surgicalmicroscopeforneurosurgerythat,togetherwiththe

additionalBLUE 400module,enablesasafe,gentleandefficient

surgicaltechnique.BLUE 400makesthemarginsofamalignant

tumorvisible,allowingclearerdifferentiationfromhealthytissue

andmoreexacttreatmentbythesurgeon.

Simplicity: User-friendliness in Focus

Tobesuccessfulinthefieldofmedicaltechnology,theincreas-

inglycomplexsystemsmustbedesignedtobeuser-friendly.

Optimalnetworkingwithexaminationandtherapysystems

decreasestheeffortrequiredfordatamanagementsothat

doctorscanconcentrateontheirworkonpatients.Recent

decadeshaveseenastrongincreaseinthenumberofIT-assisted

examinationandtherapysystems.

Tomanagelargequantitiesofdiagnosticdataineverydayoffice

andhospitalwork,doctorsneedsimplesolutionstoensure

optimaluseandarchivingoftheinformationprovided.With

FORUM®,theMedicalSystemsGrouplaunchedahighlymodern

imageandreportmanagementsystemthatensuressmooth

processesandoptimizedworkflows.ThankstoDICOMstandard,

connectiontoexistingexaminationandmanagementsystems

(electronicmedicalrecordsystems)ispossible.Inthisway,

*ThevaluesdeviatefromthepublishedfiguresofCarlZeissMeditecAGasa

resultofdifferentconsolidationmodels.

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BusinessGroupMedical Systems

Thanks to its innovative illumination system, the OPMI Lumera® surgical microscope makes even the finest structures in the eye visible.

47

patientmasterdataandexaminationworklistscanbetrans-

ferredquicklyandsimplyfromtheelectronicmedicalrecordto,

forexample,theIOLMaster®foreyemeasurement,the

Cirrus™ HD-OCTopticalcoherencetomographysystemorthe

CALLISTO®eyeORmanagementsystem.

ThroughfurtherdevelopmentoftheOPMI®Pentero®surgical

microscope,neurosurgeonsreceiveexcellentsupportfor

complexproceduressuchasaneurysmsurgery:forthissystem,

additional,clinicallyrelevantfunctionsarebeingconstantly

developed,e.g.theINFRARED 800module.Thisincorporatesthe

fluorescencemethodand,atthepushofabutton,visualizes

bloodflowwithgreaterprecisionduringvascularbrainsurgery.

Outcomes: A Key Measure of Success

CarlZeissseestheoutcomeoftherapyasakeyindicatorofthe

efficacyofourproducts.ThisisthereasonwhytheMedical

SystemsGroupconstantlydevelopsclinicalsolutionsthathelp

doctorsachieveoptimaldiagnosticandtreatmentoutcomes.

Thebusinessgroupoffersitsclientsthebestpossiblesupport

fordiagnosisandtherapyand,thankstoitshighperformance

productsandtailor-madesolutions,ensuresabalancedcost-

benefitratio.WithAT LISA,themedicaltechnologywingof

CarlZeissoffersanartificialmultifocalintraocularlensthatisused

forhighprescriptionsandincataractsurgery.Thenewgenera-

tionoftheseartificiallensesprovidespatientswithfullvisual

acuityaftersurgery,enablingthemtoreadordriveduringthe

dayandatnightwithouttheneedforanyadditionalvisualaids.

AfurtherinnovationintheMedicalSystemsGroup’sproduct

portfolioisthenewVisuMax®femtosecondlasersystem.It

enablesdoctorstoperformfaster,moreexactandtherefore

gentlersurgeryonthehumaneye.

A Look at the Future

Despitetheincreasinglydifficulteconomicscenario,alsoforthe

MedicalSystemsGroup,andthecost-containmentmeasures

implementedinthehealthcaresector,thebusinessgroupseesa

positivedevelopmentinthedemandforCarlZeissdiagnosticand

therapysystems.Thisislargelyattributabletobasicunderlying

trendssuchastheconstantincreaseintheageoftheworld

population.Thisappliestobothophthalmologyandmicrosur-

geryandcreatesfavorablesellingconditionsfortheproducts.

CarlZeissanticipatesastablebusinesstrendintheMedical

SystemsGroup.However,theimpactoftheuncertaineconomic

developmentmaytemporarilyreducecustomers'willingnessto

invest.Theprimarygoalofthebusinessgroupissustained,

long-termvalueenhancementthroughgrowth.

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TheMicroscopyGroupconcludedfiscalyear2008/09withaconsiderableincreaseinrevenues.Withsuperresolutionlightmicroscopy,CarlZeississettingnewstandardsandunderscoringitsleadingroleinthefieldofmicroscopyanditsinnovativestrength.

BusinessGroupMicroscopy

“Recentlyweacquiredamicroscopysystem.ZEISScustomerserviceandsupporthavefarexceededourexpectations.Weareveryexcitedtohavethenewsystemandarealsodelightedtohaveahighlytrainedgroupofprofessionalstoprovideservice,trainingandadvice.Keepupthegoodwork!”

Shawn Williams, Manager High Resolution Imaging Facility, University of Alabama, Birmingham, USA

49

Duringfiscalyear2008/09,theMicroscopyGroupgenerated

revenuestotalingEUR365million,agrowthofeightpercent

overthepreviousyear(EUR339million).

Aparticularlypositivetrendwasreportedforbusinesswith

microscopesandsolutionsforresearchapplications.The

businessgroupgrewinallregions:theCarlZeissMicroscopy

GroupwasparticularlysuccessfulinAsiaandwonadditional

marketshare.

Infiscalyear2008/09thebusinessgroupfurtherexpandedits

productofferinginthemidandlowerpricesegments.Asa

result,CarlZeissnowcoverstheentirespectrumofmicroscopy:

inadditiontohigh-endsystemsusedinbiomedicalresearch,

thecompanyalsoofferssimplemicroscopesforroutinetasksor

forschoolanduniversitystudents.

Expanded Portfolio for Industrial Applications

Fiscalyear2008/09sawaslightdropinsalesofmicroscopesand

softwaresolutionsforindustrialapplicationsasmanycustomers

postponedtheirinvestmentsduetotheconditionsintheglobal

economy.

DuringtheyearunderreviewCarlZeissinvestedintheexpansion

andoptimizationoftheproductportfolioforindustrialapplica-

tions:newanalyticalcapabilitiesarerequiredinmaterials

researchandindustrialqualityinspectiontokeeppacewiththe

ongoingdevelopmentofmaterials.InDecember2008CarlZeiss

launchedtheLSM 700/matlaserscanningmicroscope.This

versatilemicroscopesystemallowstheexaminationofawide

varietyofmaterialswithmaximumresolution–suchassemicon-

ductors,metal,glass,polymersandplastics–whicharebeing

increasinglyusedinautomotiveconstruction,theaerospace

industryandinthemedicalsector.

Combining Light and Electron Microscopy

InApril2009,togetherwiththeSemiconductorTechnology

Group,whichalsodevelopsanddistributesscanningelectron

microscopes,theMicroscopyGrouppresentedcorrelative

microscopy:aspecialspecimenholderandanewsoftware

packagenowcombinelightmicroscopywithscanningelectron

microscopy.Inthisway,specificareasofthespecimencanbe

automaticallyrelocatedandanalyzedunderthelightand

electronmicroscopes.ThisShuttle & Findsolutionprovidesnew

analyticalcapabilitiesformaterialsanalysisinresearchandfor

manyroutineapplicationsintheindustrialenvironment.With

thisnewproduct,CarlZeissisunderscoringitsleadingposition

inthefieldofmaterialsmicroscopy.

Key Contribution to Biomedical Research

Allovertheworld,researchersarefocusingtheirworkon

understandingthecausesofcancerorcardiovascularanddegen-

erativedisorders.Theirresearchisaimedatimprovingdiagnosis

anddevelopingeffectivetherapies.MicroscopesfromCarlZeiss

makeanimportantcontributiontothisprocess:theyalso

providedeepinsightsintolivingcells.Observingtheinteraction

ofdifferentcellcomponentshelpsprovideabetterunderstand-

ingofprocessesandreactionsinthetissue.

Averypositivetrendwasreportedforbusinesswithmicroscope

solutionsforresearchapplications.CarlZeissalsofeltthe

favorableimpactofnationalstimuluspackagesforthepromo-

tionofresearch.TheLSM 700andtheLSM 7MPwereparticu-

larlysuccessfulonthemarket.TheLSM 700isextremelyflexible:

Sales revenues

(EURmill)

2008/09 365

2007/08 339

2006/07 323

2005/06 340

2004/05 299

Employees


30SEP2009 1,677

30SEP2008 1,731

30SEP2007 1,758

30SEP2006 1,562

30SEP2005 1,617

OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUSINESS GROUPS FROMTHE GROUP AT YOURSERV ICE F INANCIAL STATEMENTS MICROSCOPY

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BusinessGroupMicroscopy

Deep insights into living cells: microscopes allow researchers to gain new knowledge into the causes of diseases and develop new approaches to therapy.

51

itsfieldsofapplicationextendfromsimpleroutineexaminations

tomultidimensionalphotosinbiomedicalresearch.TheLSM 7MP

laserscanningmicroscope,whichdelivershighresolutionmicro-

scopeimages,canbeusedformanydifferentexperimentsin

basicresearch.

Examining Developments in Living Cells

Alzheimer’s,forexample–adiseaseinwhichmentalfunctions

suchasmemoryororientationarelost–cancurrentlyonlybe

reliablydiagnosedatanadvancedstage.Scientistsareresearch-

ingintothecausesofthedisorderandareseekinganswersto

thequestions"WhattriggersAlzheimer's?"or"Whatgenetic

changestakeplaceinthebodybeforethediseasebreaksout?".

Untilnow,itisknownhowtissuechangeswhenthediseasehas

actuallyerupted.ResearcherscanusetheLSM 710 NLOlaser

scanningmicroscopefromCarlZeisstoexamineprocessesand

developmentsinlivingorgansandcells.Thismakesitpossibleto

identifychangesthatarepotentialcausesofthedisease.

Thediscovererofthedisease–theneurologistAloisAlzheimer

–conductedhisresearchwithmicroscopesfromCarlZeiss.In

1907,hewasthefirsttodescribethesymptomsofthedisease.

Actively Supporting Cancer Research

AccordingtoforecastsoftheWorldHealthOrganization(WHO),

cancerwillsoonbetheworld'smostfrequentcauseofdeath.

Scientistsaroundtheglobeareendeavoringtoinvestigatethe

mechanismsbehindtheoccurrenceofthediseaseandidentify

possibleriskfactors.Forabouttwoyearsnow,CarlZeisshas

beensupportingtheresearchworkoftheGermanCancer

ResearchCenter(DKFZ)inHeidelbergandoperatinganapplica-

tioncenterinthefacility.Researchersuselightandstereo

microscopesaswellasalaserscanningmicroscopefrom

CarlZeiss,andanalyzecomplexdynamiccellprocesses.

LightmicroscopesystemssuchastheCell Observer®playan

importantrolehere:rapidchangesincellsandcellstructuresin

severaldimensionscanbeobserved,analyzedanddocumented.

Scientistsusetheresultsobtainedintheseexaminationsto

developnewapproachesfortheprevention,diagnosisand

treatmentofcancer.

Super Resolution for More Insight and Understanding

Withsuperresolutionlightmicroscopy,CarlZeisshassetanew

milestoneinmicroscopy.Duringthereportingyearthecompany

deliveredthefirstmicroscopestocustomerswhohaveshown

particularinterestinsuperresolutionandareusingandtesting

thesystemspriortotheintroductionofserialsystems.CarlZeiss

offeredtheseearlyadoptersanextensiveservicepackage.This

includedprofessionalapplicationsupportandaworkshopduring

whichtheycandiscusstheirexperienceswiththesystem.The

customersprovidedCarlZeisswithalargeamountofinforma-

tionforfurtherdevelopmentofthesystemtothepointof

volumeproduction.

Withsuperresolutionmicroscopy,whichdeliversresolutionten

timeshigherthanthatofstandardmicroscopes,researcherscan

observethepositionofmoleculesinthenanometerrange,for

example.Thisyieldsnewpossibilitiesforidentifyingandbetter

understandinginteractionsincellstructures.

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BusinessGroupIndustrial Metrology

TheIndustrialMetrologyGroupconcludedfiscalyear2008/09withrevenuestotalingEUR304million.Theimpactoftheglobalrecessionandthedecliningdemandinthemechanicalengineeringsectorwereclearlyfeltinthisbusinessgroup.

“LikeCarlZeiss,ourbrandstandsforexcellentqualityandmaximumprecision.Onthiscommonbasisweworktogetherverysuccessfullyandachieveoptimalresults.”

Thomas Schäfer, Quality Manager, IWC Schaffhausen, Branch of Richemont International SA, Switzerland

53

ThemeasuringtechnologywingofCarlZeissgotofftoapositive

startinfiscalyear2008/09.Inthefallandwinterof2008

customersstillinvestedveryheavilyinnewmachines.Fromthe

secondquarterofthefiscalyear,therewasasharpdropin

demand,butthegroupwasabletobenefitfromitslargevolume

ofunfilledorders.Overall,theIndustrialMetrologyGroup

generatedrevenuesofEUR304millioninthereportingyear,

correspondingtoadeclineof19percentoverthepreviousyear

(EUR374million).

Thegrouphadalreadyachievedaconstantimprovementinits

processesduringthepreviousfiscalyears.Withadditional

optimizationofitscoststructure,areductioninthetimeaccrued

inflextimeaccountsanduseofthepossibilitiesofferedbya

shorterworkingweek,thegroupsuccessfullycounteredthe

globalrecessionandthedownturnindemand.Thestabilityof

theservicebusiness,whichthegrouphassetupandestablished

inrecentyears,madeamajorcontributiontothisachievement.

Continuity and Dynamism in One

Infiscalyear2008/09theCarlZeissIndustrialMetrologyGroup

celebratedits90thanniversaryandpresentedmanynewsolutions

atControl2009,theindustry’sleadingshow.Thecompany

communicatedaclearmessagetothemarket:measuring

technologyfromCarlZeisshasstoodforprecisionandquality

for90years.However,thecompanyisnotrestingonitslaurels

bysimplypridingitselfonitspastsuccessandachievements:

itconstantlyworksonthedevelopmentofnewandbettermeas-

uringsolutions.Inthisway,theIndustrialMetrologyGroup

combinestrust,continuityandtraditionwithdynamismand

innovation.

Three Strategic Pillars as the Basis of Success

Thisbusinessgroup’sbusinessissustainedbythreestrategic

pillars:internationalorientation,aninnovativeportfolioand

constantexpansionofthesolutionandserviceofferings.

International Orientation for More Independence

CarlZeissoperatesmanufacturingfacilitiesforindustrial

measuringtechnologyinGermany(Oberkochen),theUSA

(Minneapolis)andChina(Shanghai).Withitsinternational

productionsites,aglobalnetworkofserviceengineersandits

ownmeasuringhousesaroundtheworld,theIndustrial

MetrologyGroupisalwaysclosetoitscustomers.Theresulting

greaterindependencefromexchangeratesisafurtheradvan-

tageofthisinternationalorientation.

Measuring Up Every Time

OneoftheproductspresentedbyCarlZeissinthereportingyear

wasthenewlydevelopedACCURA®3Dcoordinatemeasuring

machine.Themultisensormeasuringsystemhasamodular

structure:ifrequirementsgrow,theACCURA® growswiththem.

Inthisway,customerscanconfiguretheirownpersonal

measuringmachineandmatchittotherespectivetaskandto

theavailablebudget.

Environmentally and Health Friendly Materials

ThenewMETROTOM® 800computertomograph–which

combinesmetrologyandtomography–istheoptimalsolution

formanufacturersintheplastics,medicalengineeringand

electronicsindustries:itcanbeusedtoinspecttheinterior

structuresandqualityofsmall,complexpartsmadeof,for

example,plasticorceramicmaterials.Thesystemdeliversa

Sales revenues

(EURmill)

2008/09 304

2007/08 374

2006/07 316

2005/06 278

2004/05 247

Employees


30SEP2009 1,749

30SEP2008 1,803

30SEP2007 1,509

30SEP2006 1,286

30SEP2005 1,260

OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUSINESS GROUPS FROMTHE GROUP AT YOURSERV ICE F INANCIAL STATEMENTS INDUSTR IAL METROLOGY

54

BusinessGroupIndustrial Metrology

Focusing on users: Carl Zeiss offers the right software solutions for its measuring machines. Major emphasis during development is given to intuitive user guidance.

55

complete3Dmeasurementoftheworkpieceandoffersthe

possibilityofcomparingthisdatawithCADdata.Thisenables

fasterqualitycontroland,inpart,considerablyshorterdevelop-

mentandreleasetimesthanwithtraditionaltechniques.

ThecabinoftheMETROTOM® 800chieflyconsistsofconcrete

polymer;practicallynoleadisused.Byusingthesemodern

materials,CarlZeisshelpsminimizeexposureoftheuserto

harmfuleffectsandreduceenvironmentalpollution.

Online Service Portal: for and with the Customer

TheIndustrialMetrologyGroupusedthepastfewyearsto

establishandexpanditscustomerservices.Theofferingincludes

technicalsupportformeasuringsystems,applicationtrainingand

providingcustomerswithassistanceinthefieldofsoftware

solutionsandcustomizedprogramming.Duringthereporting

year,CarlZeissaddedtheCarl Zeiss Web Academy®tothis

offering.Inthiscommunity,usersofZEISSmeasuringsolutions

canexchangetheirknowledgeandexperienceinforumsand

blogsandutilizetheknow-howofCarlZeissmeasuringexperts.

Inaddition,thecompanyusesthisplatformtooffersoftware

updatesandadditions.

CarlZeissconstantlydrivesthedevelopmentofsoftware

solutionsformetrologyapplications.Intuitiveuserguidanceis

thefocusofattentioninthedevelopmentofnewmeasuring

programs.Infiscalyear2008/09theIndustrialMetrologyGroup

presentedmyCALYPSO®,anextensionoftheCALYPSO®

measuringsoftwarealreadyestablishedonthemarket.Thanks

toasimpleuserinterface,myCALYPSO®canbeutilizedquickly

andefficientlywithminimumtrainingrequirements.Alink

totheCarl Zeiss Web Academy®onlineportaloftheIndustrial

MetrologyGroupmakesitpossibletodownloadprogramsfor

measuringtasksandexchangethemwithotherusers.

Close Relationship with Customers

TheservicesoftheIndustrialMetrologyGroupincludecontract

programmingandcontractmeasurements.Duringthereporting

yearCarlZeisscreatedalltestrecordsfortheproductionfacility

ofanautomotivegroupinChina.Thisexampleshowsthemany

benefitsofclosecollaborationwiththecustomer:theprerequi-

siteforsuchaprojectisadeepunderstandingofthecustomer’s

application,processesandpartsinordertoprovidetheoptimal

solutionforhisneeds.

New Fields of Application – New Opportunities

ThebusinessoftheIndustrialMetrologyGrouphasalong-term

perspective.Theimportanceofqualityassurancewillgrowinthe

future.Trendsnotonlyintheautomotiveindustry,mechanical

engineeringandtheenergysector,butalsoinmedicaltechnol-

ogyandtheplasticsindustryopenupnewopportunitiesfor

CarlZeiss.Forexample,newchallengesresultinqualityinspec-

tionwithmeasuringsolutionsusedinthedevelopmentofnew

drivetechnologies(downsizing)orintheincreasingminiaturiza-

tionofcomponentsinmechanicalengineering.

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BusinessGroupConsumer Optics/Optronics

Planetariums,cameraandcinelenses,securitytechnology,binocularsandspottingscopes–theConsumerOptics/OptronicsGrouppossessesabroadportfolioofproducts.Infiscalyear2008/09,thebusinessgrouppostedrevenuestotalingEUR304million.

“ARRI’songoingpartnershipwithCarlZeisshasresultedinsomeofthefinestmotionpicturelensesevermanufactured.Thisuniquerelationshipissustainedbythecompanies’sharedstrengthsofcutting-edgetechnology,unsurpassedknowledgeofthecinemato-graphymarketsandconstantinnovation.”

Dr. Martin Prillmann (left) and Franz Kraus,

Managing Directors of Arnold und Richter Cine Technik (ARRI), Munich, Germany

57

RevenuesintheConsumerOptics/OptronicsGroupwere

EUR304millionandremainedpracticallystableincomparisonto

lastyear(EUR309million).Incomingorderswereclearlyabove

lastyear’sfigure.Thisislargelyattributabletothesuccessof

theOptronicsDivision.Infiscalyear2008/09thedivision,which

developsanddistributessecuritysystems,reportedagrowth

trendandpostedincreasesinbothrevenuesandincomingorders

overlastyear.

Biggest Order in Recent Corporate History

Theworldisbecomingalessandlesssafeplacetolive.State

spendingonconflictpreventionandmanagementisrising

constantly.Withitssystemsformoresecurity,CarlZeiss

numbersamongthepreferredpartnersforclientsinthefields

ofdefenseandnationalsecurity.Forexample,thecompany

suppliesoptronicintelligencesystemsforpolicehelicoptersas

wellasoptronicandopticalsystemsforthenew“Puma”

armoredvehicleoftheGermanArmy.Thisorderisoneofthe

largesteverreceivedinthecompany’shistory.Overthepast

fiveyears,atwenty-strongresearchteamdevelopedoneof

themostadvancedandpowerfulopticalandoptronicsystems

forarmoredvehiclesaspartofthisproject.

Optronics Make Flying Safer

InJanuary2009theOptronicsDivisionlaunchedtheMivotherm

birdstrikewarningsystem.Thismakesitpossibletopredict

theflightofbirdsoverrivers,valleysorcoastlinesandtherefore

protectaircraftagainstcollisions.InMay2009,Mivotherm

receivedthecovetedLilienthalAwardpresentedbytheGerman

aerospaceindustry.

A Milestone in Communications

Tomaketheworldasaferplace,informationisrequiredthat

canbetransmittedquicklyandsecurelyoverlongdistances.

CarlZeisshasdevelopedanew,pioneeringtechnologyforthis

purpose:lasercommunication.Modulatedlaserlighttransmits

largeamountsofdata–upto1,000megabitsasecond–faster

thantraditionalsystemsandisnotdependentoncablesorradio

frequencies.Inthefallof2009CarlZeisslaunchedtheworld’s

firstfullystabilizedlasercommunicationterminalontheworld

market.

Additional Market Share in the USA and Asia

TheCameraLensDivisionreportedastableupwardtrendinthe

reportingyear.Thedivisionwonmarketshare,aboveall,inthe

USandAsia.Businesswithlensesformovieproductionswasthe

onlyareatoremainbelowthelevelreportedlastyear.Salesof

lensesfordigitalSLRcamerasandopticsforindustrialapplica-

tions,ontheotherhand,showedverypositivedevelopments.

Two Lenses Every Second

Aroundtheglobe,twopeopleeveryseconddecidetopurchase

amobilephone,awebcamoracamerafeaturingopticsfrom

CarlZeiss.InApril2009CarlZeissandtheSONYelectronics

groupextendedtheircollaborationbyaperiodoffiveyears.For

thepast13years,SONYhasbeenofferingdigitalcameras

andcamcordersequippedwithZEISSlensesand,since2006,

interchangeablelensesfortheSonyAlphaDSLRsystem.

CarlZeissalsocollaborateswiththeNOKIAtelecommunications

groupandthecomputeraccessorymanufacturerLogitech:

NOKIAusesZEISSOpticsforitscellphones;Logitechequipsits

premiumwebcamswithopticsfromCarlZeiss.

Sales revenues

(EURmill)

2008/09 304

2007/08 309

2006/07 245

2005/06 234

2004/05 280

Employees


30SEP2009 1,524

30SEP2008 1,510

30SEP2007 1,504

30SEP2006 1,203

30SEP2005 1,357

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BusinessGroupConsumer Optics/Optronics

More security: helicopters with modern camera optics from Carl Zeiss.

More possibilities: Carl Zeiss offers lenses for analog and digital cameras.

More enjoyment: discover nature with ZEISS binoculars and spotting scopes.

More black: VELVET® projects pure black onto the planetarium dome – for brilliant images with outstanding contrast.

59

Lens Offering Adapted to Market Requirements

Duetotherecession,themarketforlensesusedinthemovie

industryshrank.Moviebudgetswerecutorcancelled,reducing

thepossibilitiesofmanufacturingcompaniesandrentalhouses

toinvestinadditionalnewequipment.CarlZeisshasaddednew

productstoitscineproductoffering:theCompact Primeline

introducedbythecompanyinApril2009isprimarilyaimedat

up-and-comingmoviemakersandlow-budgetproductions.In

addition,CarlZeisshasdevelopedanewpremiumcinelens:the

Master Macroalsoofferstheoutstandingperformanceofthe

Master Primeseriesformacroapplicationsandistherefore

uniqueonthemarket.Byexpandingitslenslineinthelowerand

upperpricesegments,CarlZeisscannowofferasuitablelens

foranyrequirement.

Great Interest in the VELVET® Video Projector

ThePlanetariumDivisionreportedastabletrendinfiscalyear

2008/09–revenuesandincomingorderswereclearlyabovelast

year’sfigures.TheVELVET® videoprojectormetwithaparticularly

highlevelofinterest:itcanprojectpureblackandtherefore

generatebettercontrastthanothersystems.ThefirstVELVET®

projectorswillbeinstalledinBochum,WolfsburgandBerlinat

thebeginningof2010.

InthefieldofplanetariumtechnologyCarlZeissoffersaunique

combinationoftraditionalstarprojectorswithdigitalsystems

thatcanbeoperatedviathecentralpowerdome®controlunit.

Technology Tailored to Customer Wishes

Theoutstandingflexibilityofthetechnologymakesitpossibleto

turnanyplanetariumintoamultimediacenter.Themodular

designofthetraditionalstarprojectorsallowscustomized

combinationofopticalanddigitallyprojectedfunctionsandcan

thereforebetailoredtothedifferentinvestmentbudgetsof

customers.

Additional Electronic Systems Are In Demand

IntheyearunderreviewtheSportsOpticsDivisionreportedan

increaseinrevenues–despiteadifficulteconomicenvironment.

Withconsistentsalesandinnovationmanagement,thedivision

wasabletocompensateforlossesinrevenueinindividual

regionsandmarkets.

Fiscalyear2008/09sawacontinuationofthepositivetrendin

businesswithbinocularsandhuntingopticsfeaturingadditional

electronicfunctionssuchaslaserrangefinders.

Outstanding Design

Inthehighlycompetitiveandprice-aggressivemarketfor

binoculars,spottingscopesandhuntingoptics,CarlZeiss

successfullyexpandeditspositionasatechnologyleader.With

thePhotoscope™,forexample.Thisspottingscopefeatures

anintegrateddigitalcameracontainingasupertelelens,

allowingsimultaneousviewingandphotography.Thesystem

washonoredwiththe2009reddotDesignAward.

Brilliantoptics,outstandingeaseofuseandfunctionaldesign–

thisisallcombinedinbinocularsfromCarlZeiss.Thishasbeen

confirmedbynumerousawardssuchasthenominationofthe

Victory RFbinocularsforthe2010DesignPrizeoftheGerman

Government,thecountry’smostcoveteddesignaward.

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JointVentureCarl Zeiss Vision

Dive into the world of ZEISS when buying eye- glasses: with a new brand initiative, Carl Zeiss Vision is making the ZEISS brand something that patients of eye care professionals can actively experience

CarlZeissistheworld’ssecondlargesteyeglasslensmanufacturer.ThecompanyisequallyownedbyCarlZeissandtheprivateequityfirmEQT.TheCarlZeissVisionGroupisvaluedbytheequitymethodinthefinancialstatementsoftheCarlZeissGroup.

61

CarlZeissVisionconcludedfiscalyear2008/09withrevenues

totalingEUR879million.Adjustedforcurrencyinfluences,this

representsafallofthreepercentoverthepreviousyear

(EUR892million).

Furtherintensifiedbytherecession,themarketenvironmentwas

characterizedbyadownturnindemand,increasingpricepressure

andconsolidations.Thankstotheconsistentimplementation

ofthecorporatestrategy,CarlZeissVisiondevelopedbetterthan

themarketandincreaseditsmarketshareinallkeymarkets.

Inthereportingperiod,CarlZeissVisioncontinuedtoimplement

itsrestructuringmeasuresaroundtheglobe:theefficiencyof

manufacturinganddistributionwasincreasedandpartsof

productionwereconcentratedincountrieswithconsiderably

lowermanufacturingcosts.Inthefuture,massproductionwill

beperformedatthreeinsteadoftensites.Inthecoremarkets,

theproductionofprescriptionlenseswillbestrengthenedin

combinationwithhigh-qualityproductofferings,whileglobal

researchanddevelopmentaswellasmarketingwillbeexpanded

atheadquartersinAalen.Asaresultofthisprogram,thenumber

ofemployees(full-timeequivalents)decreased:onthebalance

sheetdate,thecompanyhadaglobalworkforceof11,659

employees(lastyear:12,830),including1,138(lastyear:1,187)

inGermany.

Well Positioned in the American Market

CarlZeissVisionfocusesonfourcompetitivebenefits:theZEISS

brand,innovativeindividualizedandfreeformeyeglasslenses,

high-qualitycoatingsandexpandingitsnetworkofprescription

labs.InSouthAmerica,CarlZeissVisionwonmarketshareand

expandeditsnetworkofprescriptionlabs.InMexicoanew

factorywasopenedtosupplyproductstolargecustomers.

Duringthereportingyear,CarlZeissenteredintoastrategic

partnershipwithamajorUShealthinsurer.Thegoalistojointly

operateprescriptionlabsanddistributeeyeglasslenses.

Growth in Asia

CarlZeissVisionachievedconsiderablegrowthInJapan,China

andIndiaduringtheyearunderreview.Towinadditionalmarket

shareinthesegrowthmarketsinthefuture,thecompany

developedaspeciallensthatcanbeoptimallymatchedtothe

shapeoftheAsianface:theGT2® 3D ASIANAprogressivelens.

Focus on Quality and Innovations in Europe

CarlZeissVisionhassignificantlyimprovedqualityanddelivery

performanceforallEuropeancustomers.Inordertocounterthe

increasingpricepressure,thecompanyisfocusingoninnova-

tionsthatstrengthentheZEISSbrandinthecompetitivearena

andmakeitsomethingthatpatientsofeyecareprofessionals

canactivelyexperience.

Sinceitsintroductionin2007,CarlZeissVisionhasverysuccess-

fullysoldthei.Profiler®–theleading-edgesystemusedto

measurei.Scription®eyeglasslensesthatenablemaximum

adaptationtothepersonalvisualrequirementsofthewearer.Eye

careprofessionalsusingthissystemhaveachievedanaverage

increaseinsalesofaround20to30percent.

Duringthefiscalyear,CarlZeissVisionpresentedthe“Experience

ZEISS”conceptforeyecareprofessionals,providingthemwith

extensivesupporttooptimizetheirbusinesssuccess.Withthe

VisionAnalysismodule,theShopSystem–aconceptcomprising

brand-compatiblefurnishingsfortheeyecareprofessional–

andmarketingpackages,ZEISSlensesareoptimallypositionedas

outstandingbrandnameproductsinthesellingprocess.

Sales revenues

(EURmill)

2008/09 879

2007/08 892

2006/07 844

2005/06 845

2004/05 789

Employees


30SEP2009 11,659

30SEP2008 12,830

30SEP2007 10,293

30SEP2006 10,626

30SEP2005 9,995

*Proformarevenues

OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUSINESS GROUPS FROMTHE GROUP AT YOURSERV ICE F INANCIAL STATEMENTS CARL ZE ISS V IS ION ( JO INT VENTURE )

*

62

ResearchandDevelopmentTurning Ideas into Business Success

CarlZeissinvestedaroundEUR284million,orabout14percentofsalesrevenues,intoresearchanddevelopment.Theresult:morethan300patentapplicationsduringfiscalyear2008/09.Thepatentsareincorporatedinproductsnotolderthanfiveyearswhichaccountedforaround60percentoftotalsalesrevenuesinthereportingyear.

Doesthepartdisplaythespecifiedsurfacequality?Anddoesit

havetherightcurvature?–Questionslikethesehavetobe

answeredeverydayintheautomotiveindustryorinthemanu-

factureofconsumerelectronics.Todothis,anemployeeexamines

thepart,holdsitupagainstthelight,rotatesitandturnsitover.

Thismanualvisualinspectionhasitsdrawbacks:itissubjective,

anditisneitherreproduciblenorquantifiable.Intimesofin-

creasingqualityrequirements,thisisanunsatisfactorysolution.

Successful Test with Pilot Customers

Thesolutionis:OIM–shortforOpticalInlineMetrology.Ayoung

subsidiaryofCarlZeiss–CarlZeissOIMGmbH–iscurrentlyin

theprocessoflaunchingthissystemonthemarket.Thesystem

performsthesurfacetestingof3Dtestpieceswiththeaidofa

processknownasphase-measuringdeflectometry.Aftersuc-

cessfultestswithpilotcustomers,CarlZeissisnowopeningupa

newmarketsegmentwiththisleading-edgeproduct.Thequality

ofasurfaceanditsappearancecannowbemeasuredforthe

veryfirsttime.Inotherwords,CarlZeisshasturnedapioneering

ideaintoanewfieldofbusiness.

Bringing New Ideas to Market Maturity

CarlZeissOIMisthefirstcompanytobenefitfromfast,unbu-

reaucraticstart-upfinancingprovidedbythecompanyCarlZeiss

VentureBeteiligungsgesellschaft.CarlZeissfoundedthis

companyduringfiscalyear2007/08inordertoimprovethe

opportunitiesavailableforinnovativeideaswithclearlydefined

risksandimplementthemintheformofmarketableproducts.

Itfinancesnewtechnologiesandproductconceptswithhigh

marketpotential.Intheselectedprojectsemployeesaccept

entrepreneurialresponsibilityandreceivesupportfromexperi-

encedexecutivesinthecompany.Centraldivisionsofthe

companyperformaccountingandHRmanagementfunctionson

theirbehalf.

New Technologies on the Radar

Beforeastart-upcompanycanbefounded,however,good

ideasarerequired.Likesuccess,goodideasarelesstheresultof

luckandtalentthanofhardwork.Thisworkisknownasthe

NewBusinessGenerationProcess.Here,newapproachesand

solutionsareinvestigatedanddevelopedforthedifferentareas

ofthecompany.

Theprocessstartswiththequestion:Onwhatfuture-oriented

ideasandissuesareuniversities,scientists,institutesandother

companiesrelevanttoCarlZeisscurrentlyworking?Toensure

thatthesearch,or“radar”asitisalsocalled,iskeptasclear

andconciseaspossible,thedivisionsandCorporateResearch

jointlydefineradartopics.Theselectioncriteriaincludehigh

developmentdynamics,highcustomerormanufacturerbenefit

andmarketmaturitywithinthreetotenyears.Oneexampleof

sucharadarprojectisnewmetrologymethodsthataresuitable

inparticularforapplicationsrangingfromindustrialprocess

controltouseontheproductionline.Technologiesandtechnol-

ogytrendsaresystematicallypursued,andtheiropportunities

andrisksevaluated.Thegoalisalwaystofindandimplement

technologicaldevelopmentsandbusinessoptionsattheright

time.

Expand and Utilize Networks

Inadditiontothestructuringofasearchfieldandthemonitor-

ingofdevelopmentsinscienceandindustry,technologytransfer

63

anddevelopmentprojectsareidentifiedforindividualdivisions

orprojectswithmajorpotentialfortheentireCarlZeissGroup.

Needlesstosay,thecompanyalsousestheradarstobuildits

ownknow-how.Almostbytheway,therefore,radaremployees

workinginCorporateResearchsetupnetworkstosafeguardthe

futureviabilityofthecompany.

Thenetworkswhicharealreadyinplacespantheentireglobe.

Theyrangefromon-sitecollaborationwithuniversities,the

FriedrichSchillerUniversityinJenaforexample,andEuropean

partnerssuchastheSwissFederalInstituteofTechnologyin

Zurich,Switzerland,toHarvardUniversityintheUSA.

Successfulproductsregularlyresultfromthenetworks.Correla-

tive microscopyisjustoneexample.Thistermisusedtodescribe

thecombinationoflightandscanningelectronmicroscopy.The

keyelementsofthissolutionarethejointspecimenholderand

adapteraswellasanewlydevelopedsoftwarepackageforfast,

automatedrelocationandexaminationofoneandthesame

specimenareaunderbothalightandanelectronmicroscope.

OrELYRA™,asuperresolutionmicroscopelaunchedlast

October.Thesearetwoexcellentexamplesthatillustratehow

usefultheinternationalnetworkscanbe.

InvestinginInnovation–abusinessthatpaysoffforCarlZeiss.

2008/092007/082006/072005/062004/05

399 368 384 422 346 Patent applications

Patents

2008/092007/082006/072005/062004/05

230 254 290 321 284 EUR million

10 10 11 12 14 in % of revenues

Expenditures for research and development

2008/092007/082006/072005/062004/05

1,605 1,748 1,935 2,009 2,058 Employees

14 16 16 15 16 in % of totalworkforce

Employees in research and development

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Onthebalancesheetdate(September30,2009),CarlZeisshad

12,872employeesaroundtheworld,1.5percentfewerthanlast

year(13,060).8,307peopleworkforthecompanyinGermany

(lastyear:8,440).Around16percentoftheworkforceis

employedinresearchanddevelopment(lastyear:15percent).

Inrecentyearsthecompanycreated500newjobsonaverage

perfiscalyear.Thereportingyearsawaslowingofthistrend

duetotheglobaleconomiccrisis.ThefocusofHRmanagement

infiscalyear2008/09wastokeephighlyqualifiedemployees

inthecompany.Toachievethisgoal,theCarlZeissGroup

useditsflexibleHRtools:timeaccruedinflextimeaccountswas

reducedandtemporaryemploymentcontractswerenot

renewed.Employeesfromareasinwhichtherewasasharpdrop

indemandweredeployedinotherbusinessgroups.Asthese

measuresdidnotsuffice,however,CarlZeissmadetargeteduse

ofshorterworkinghoursinsomeareasofthecompany.

Overall Package Approved

InJune2009,afternegotiationswithemployeerepresentatives

inGermany,anoverallpackagewasapprovedtoovercomethe

economicsituation.ThenegotiatingpartiesagreedthatCarlZeiss

wouldnotlayoffanypersonnelbefore30September2010.

TheemployeesofthecompaniesinGermanyboundbycollective

wagebargainingagreementsconsentedtoforgo75percent

oftheirvacationbonusandthe2.1percentincreaseinpay

ratesandone-timebonuspaymentscheduledforMay2009.In

addition,therewillbenopaymentofChristmasorvacation

bonusesinfiscalyear2009/10.Executivesandemployeesnot

subjecttotheagreedpayrateswillmakeanappropriate

equivalentcontribution.Throughadditionalmeasures–suchas

HumanResourcesDeveloping Employees

Competenceandknow-how,motivationandpassion–employeesatCarlZeisshaveoutstandingqualities.Theirknowledgeandskillslaythefoundationforthecompany'stechnologyleadership.Inordertosafe-guardthiscompetitiveedge,CarlZeisspursuesatargetedandsustainablepolicyofpotentialdevelopmentandinvestsinawiderangeoftrainingprogramsonanongoingbasis.

theexpansionofshorterworkinghours,ashorterworkweek,

thediscontinuationoftemporaryemploymentcontracts,and

modelsforpartialandearlyretirement–CarlZeissachievedits

aspiredgoalofreducingpersonnelandsafeguardingmany

jobsatthesametime.

High-quality Training as a Sound Foundation

Inordertocountertheincreasingshortageofskilledstaff,

CarlZeissoffersin-house,need-basedtraining.Onthebalance

sheetdate,451youngpeoplewerelearningatechnicalor

commercialoccupation(lastyear:447).Thiscorrespondstoa

trainingquotaofaroundfivepercentfortheGermansites.

WiththeTop Trainee Program,thecompanyoffersgraduatesan

opportunitytotakethefirststepintotheirfuturecareers.Overa

periodtotaling15months,theseyoungpeopleexperience

variousareasoftheCarlZeissGroupandbecomeacquainted

withthecompany.Inthisway,theseupcomingjuniorexecutives

areoptimallypreparedforthetaskstheywillperformafter

completionoftheprogram.

Targeted Promotion of Potential

CarlZeissfocusessharplyontargetedandsustainedpersonnel

development.Thecompanyhasestablishedvariousprograms

forthispurpose.

TheJunior Leadership Programpreparesyoungpeoplefor

managementtasks.Around150employeeshavenowsuccess-

fullycompletedtheprogramaroundtheglobe.Around

80percentoftheparticipantshavesuccessfullyenteredthe

nextstageintheircareers.

65OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUS INESS GROUPS FROM THE GROUP AT YOURSERV ICE F INANCIAL STATEMENTS HUMANRESOURCES

Withthetechnicalladder,CarlZeissoffersaspecialcareer

possibilitytoemployeeswithspecialisttechnicalorscientific

knowledge:liketheclassicmanagementladder,thereareseveral

careerlevels,butthereisnomanagementresponsibility.Inthis

way,theexpertscandevotetheircompleteattentiontotheir

specialistareaofactivity.

ThecompanypromotesinternationalexchangewithitsGlobal

Mobility Program:employeescanworkatadifferentsitesofthe

company,inadifferentcountryoronadifferentcontinent.

Allformalitiesfortheorganizationoftheforeignassignmentare

performedbythecompany.

Top Priority: Ongoing Training

CarlZeissattachesgreatimportancetotheongoingtrainingof

itsemployees.Thecompanycontinuallyinvestsinmeasuresto

expandandintensifytheskillsandknow-howofitsworkforce.

Despitethesavingsprogram,over9,000employeesattended

specialisttechnicalandcommercialseminarsandcoursesin

languagesandhealthpromotionduringthereportingyear.For

employeesaffectedbyshorterworkinghours,CarlZeissorgan-

izedadditionalcoursessuchastrainingintheleanprincipleor

presentationtechniques.

Attractive Employer

TheZEISSbrand,themanydifferentadvancedfieldsofactivity

offeredbythecompany,itsmanytraininganddevelopment

possibilitiesanditsgoodsocialbenefitsmakeCarlZeissan

attractiveemployer.Thisisunderscoredbynumerousawards

andthegoodratingsinemployerrankingsconductedbycareer

magazines.Here,thecompanywasalsorankedhighlyinthe

yearunderreview.

Production 36 %

Service and Distribution 34 %

Research and Development 16 %

Administration 14 %

Manpower Structure (30 September 2009)

09.30.0909.30.0809.30.0709.30.0609.30.05

11,049 11,249 12,257 13,060 12,872 Total

3,363 3,406 4,292 4,620 4,565 Outside Germany

Manpower

66

ShareholderThe Carl Zeiss Foundation

TheCarlZeissFoundation(CarlZeissStiftung)isthesoleshareholderofCarlZeissAG.Itgivestheenterprisebothindependenceandalong-termperspective.Createdin1889,thefoundationpromotesscienceandresearchinthefieldsofnaturalandengineeringsciences.

TheCarlZeissFoundationisthesoleownerofCarlZeissAG,

Oberkochen,andSCHOTTAG,Mainz.Itgivesbothcompanies

thesecurityoflong-termownership:thesaleofshares,for

examplethroughaninitialpublicoffering,isruledoutbythe

foundation’sconstitution.Intheirmanagementofthecompa-

nies,theExecutiveBoardscanconcentrateonthesustainedand

strategicdevelopmentofthecompanies.

ThemainobjectiveofphysicistErnstAbbe,whocreatedthe

Foundationin1889,wastopromoteresearchandteachingin

thenaturalandmathematicalsciences.Atthesametime,the

foundationwasintendedtosecuretheeconomicfutureofthe

companiesCarlZeissundSCHOTT,meetsocialobligations

towardtheemployeesandrepresentthegeneralinterestsofthe

precisionengineeringindustry.

Thefoundationwasextensivelyreformedin2004.TheCarlZeiss

Foundationmodernizeditsconstitutionandthelegalformof

thetwooperatingenterprises.Theywerebothtransformedinto

stockcorporations.

TodaytheCarlZeissFoundationadvertisesprogramstopromote

up-and-comingyoungscientistsandtostrengthenresearch

structuresatuniversities.Inaccordancewiththeconstitution,

thepromotionalactivityislimitedtotheGermanfederalstatesof

Baden-Wuerttemberg,Rhineland-PalatinateandThuringia,where

thefoundationanditsoperatingenterprisesarebased.

ThefundsprovidedbytheCarlZeissFoundationforthispurpose

arefinancedfromdividendpaymentsoftheenterprisesCarlZeiss

andSCHOTT.InrecentyearsCarlZeisshastransferredaround

EUR30milliontotheCarlZeissFoundation.

FROM THE GROUP CARL ZE ISS FOUNDAT ION

Carl Zeiss Stiftung(Carl Zeiss Foundation)

HeidenheimanderBrenzandJena

Foundationactingasashareholder

Foundationenterprise

Carl Zeiss AGOberkochen

Subsidiaries

Carl Zeiss Group

Foundationenterprise

SCHOTT AGMainz

Subsidiaries

SCHOTT Group

100%100%

6767

CarlZeissAGExecutive Board Supervisory Board

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68

Executive Board and Supervisory Board of Carl Zeiss AG

Carl Zeiss AG Executive Board

Hermann Gerlinger, Dr. rer. nat.

Aalen,Germany

MemberoftheExecutiveBoardrespon-

sibleforSemiconductorTechnology,

Production,BusinessProcessExcellence,

BusinessServicesandInfrastructure,and

CorporatePurchasing,aswellasPresident

andCEOofCarlZeissSMTAG.

BorninBadMergentheim,Germany,in

1953.1973–1979Studiesofphysicsat

theUniversityofWürzburg.Subsequent

doctorateatthesameuniversity.Appoint-

menttotheAcademicCommitteein1984.

JoinedCarlZeissin1984.ProjectManager

andheadofaproductarea;Project,

DevelopmentandOperationsManagerin

theLithographyOpticsDivision,Executive

VicePresidentandGeneralManager

oftheSemiconductorTechnologyGroup.

Since2001,PresidentandCEOof

CarlZeissSMTAG.SinceOctober1,2006,

MemberoftheCarlZeissAGExecutive

Board.

Michael Kaschke, Dr. sc. nat.

Oberkochen,Germany

MemberoftheExecutiveBoardrespon-

sibleforMedicalSystems,Microscopyand

CorporateFinances,Controllingand

Taxes,andPresidentandCEOofCarlZeiss

MeditecAG.

BorninGreiz,Germany,in1957.1979

-1983StudiesofphysicsattheFriedrich

SchillerUniversityinJena.Subsequently

scientificassistantanddoctorate;guest

scientistattheMaxPlanckInstitutein

Göttingenandmemberofthescientific

staffatIBMintheUSA.

JoinedCarlZeissin1992.Management

positionsindevelopment,research,and

generalmanagement,VicePresidentand

GeneralManageroftheSurgicalProducts

DivisionandExecutiveVicePresidentand

GeneralManageroftheMedicalSystems

Group.SinceOctober1,2000,Member

oftheCarlZeissAGExecutiveBoard.

SinceJuly2008PresidentandCEOof

CarlZeissMeditecAG.

Dieter Kurz, Dr. rer. nat.

Aalen,Germany

President & CEO and Labor Director

MemberoftheBoardresponsiblefor

IndustrialMeasuringTechnology,Consum-

erOptics/Optronics,StrategicCorporate

Development,CorporateResearchand

Technology,CorporateCommunications,

CorporateHumanResources,Corporate

AuditingandRiskManagement,and

CorporateLegalandPatents.

BorninTübingen,Germany,in1948.

1969-1974Studiedphysicsatthe

EberhardKarlsUniversityinTübingen,

followedbydoctorateinthefieldof

semiconductortechnologyandelectron

beamtechnology.

JoinedCarlZeissin1979.Management

positionsindevelopment,research,

marketing,salesandgeneralmanage-

ment;workedfortwoyearsinNorth

America.VicePresidentandGeneral

ManageroftheSemiconductorOptics

Division,andExecutiveVicePresidentand

GeneralManageroftheSemiconductor

TechnologyGroup.Memberofthe

ExecutiveBoardsinceJanuary1,1999.

PresidentandChiefExecutiveOfficer

ofCarlZeisssinceJanuary1,2001;

PresidentandCEOofCarlZeissAGsince

September6,2004.

69

Carl Zeiss AG Supervisory Board

Dr. Michael Claus 1)

Aalen

FirstDeputyChairmanoftheGroup

EmployeeRepresentativeCouncilof

CarlZeissAG,Oberkochen

Prof. Dr. Dres. h.c.

Adolf G. Coenenberg

Stadtbergen

FormerChairofAuditingandControlling,

FacultyofBusinessAdministration,

UniversityofAugsburg

Reinhard Dickehuth 1) 3)

Friedland

ChairmanoftheEmployeeRepresentative

CouncilattheGöttingenlocationof

CarlZeissMicroImagingGmbH,Jena

Dr. Klaus Dieterich 3)

Stuttgart

PresidentCorporateResearchand

Development,RobertBoschGmbH,

Stuttgart

Roland Hamm 1)

Aalen

FirstAuthorizedRepresentativeofIG

Metallunion,AdministrationOffice,Aalen

Hans-Jürgen Heinicke 1) 2)

Aalen

HeadofProductDataManagement,

CarlZeissOptronicsGmbH,Oberkochen

Dr. Mathias Kammüller

Gerlingen

ExecutiveVicePresident,TRUMPFGmbH

+Co.KG,Ditzingen

Hermann-Josef Lamberti

KönigsteinimTaunus

MemberoftheBoardofManaging

Directors,DeutscheBankAG,Frankfurt

amMain

Dr. Winfried Scherle 1) 2)

Aalen

VicePresidentandGeneralManagerof

theCameraLensDivision,CarlZeissAG,

Oberkochen

Karl-Heinz Schuster 1) 3)

Königsbronn

MemberoftheEmployeeRepresentative

Councilexemptedfromnormalduties,

CarlZeissSMTAG,Oberkochen

Dr. Michael Rogowski

HeidenheimanderBrenz

ChairmanoftheShareholders'Committee

ofVoithandoftheSupervisoryBoardof

VoithAG,HeidenheimanderBrenz

Prof. Dr. Dr. h. c. Günter Stock 3)

Berlin

PresidentoftheBerlin-Brandenburg

AcademyofSciencesandHumanities,

Berlin

Prof. Dr. Klaus-Dieter Vöhringer

Baden-Baden

FormerMemberoftheBoardofManag-

ingDirectors,DaimlerChryslerAG,

Stuttgart

Chairman's Committee

Dr.h.c.EggertVoscherau(Chairman),

JürgenDömel,RolandHamm,Dr.Michael

Rogowski

Mediation Committee

Dr.h.c.EggertVoscherau(Chairman),

ReinhardDickehuth4),JürgenDömel,

Hans-JürgenHeinicke2),Hermann-Josef

Lamberti

Auditing Committee

Prof.Dr.Dres.h.c.AdolfG.Coenenberg

(Chairman),HellmuthAeugle4),

Dr.MichaelClaus,Dr.WinfriedScherle2),

Dr.h.c.EggertVoscherau

1)Employeerepresentative2)UntilApril27,20093)SinceApril27,20094)SinceMay27,2009

Committees of the Supervisory Board of Carl Zeiss AG

Dr. h. c. Eggert Voscherau

Wachenheim

Chairman

ChairmanoftheSupervisoryBoardof

BASFSE,Ludwigshafen;Chairmanofthe

ShareholderCounciloftheCarlZeiss

Foundation,HeidenheimanderBrenz/

Jena;ChairmanoftheGermanFederal

Employers’AssociationfortheChemical

Industry(BAVC);VicePresidentofthe

GermanFederalEmployers’Associations

Jürgen Dömel 1)

Jena

Deputy Chairman

ChairmainoftheGroupEmployee

RepresentativeCouncilofCarlZeissAG,

Oberkochen

Hariolf Abele 1) 3)

Aalen

Softwaredeveloperfornewtechnologies

atCarlZeissIMTGmbH,Oberkochen

Hellmuth Aeugle 1) 3)

Königsbronn

SeniorVicePresident,BusinessServicesand

Infrastructure,CarlZeissAG,Oberkochen

PD Dr. Martin Allespach 1)

Kelkheim-Fischbach

SecretaryforKeyIssuesandSocialPolicy

ontheBoardofDirectorsofIGMetall,

FrankfurtamMain

OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUS INESS GROUPS FROMTHE GROUP AT YOUR SERVICE F INANCIAL STATEMENTS EXECUT IVE BOARDANDSUPERV ISORYBOARD

70

CarlZeissGroupOrganizational Structure September30,2009

Medical Systems Semiconductor Technology Microscopy

Laser

Optics

Semiconductor

Metrology

Systems

Nano

Technology

Systems

Lithography

Optics

IndustrialBioSciencesMicrosurgerySurgical

Ophthalmology

Ophthalmology

Systems

Corporate Management

CorporateFunctionsandServiceDivisions

StrategicBusinessUnits

BusinessGroups

Markets

Carl Zeiss AG, Oberkochen

CarlZeissJenaGmbH,Jena

CarlZeissFinancialServicesGmbH,Oberkochen

Medical and Research Solutions Industrial Solutions

CarlZeissMeditecAG

Jena

CarlZeissMicroImagingGmbH

Jena

CarlZeissSMTAG

Oberkochen

71

PlanetariumsSportsOpticsCamera

Lenses

OptronicsIndustrialMetrology

Lifestyle Products

CarlZeissIndustrielle

MesstechnikGmbH

Oberkochen

CarlZeiss

OptronicsGmbH

Oberkochen

CarlZeissAG,

Oberkochen

CameraLens

Division

CarlZeissSports

OpticsGmbH

Wetzlar

CarlZeissAG,

Planetarium

Division

Jena

CarlZeissVision

HoldingGmbH1)

Aalen

Carl Zeiss Vision

(JointVenture)

Consumer Optics/OptronicsIndustrial Metrology

1)consolidatedatequity

OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUS INESS GROUPS FROMTHE GROUP AT YOUR SERVICE F INANCIAL STATEMENTS STRUCTURE OF THE CARL ZE ISS GROUP

72

Germany

10productionsites

5salesandservicelocations

Europe (including Germany)

15productionsitesin5countries

26salesandservicelocationsin17countries

Americas

3productionsitesin1country


Asia/ Australia

2productionsitesin1country


Africa/ Middle East

2productionsitesin2countries


73

Major Subsidiaries and Associated CompaniesSharepercentagerelativetoentireGroup

September30,2009

OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUS INESS GROUPS FROMTHE GROUP AT YOUR SERVICE F INANCIAL STATEMENTS MAJORSUBS ID IAR IES ANDASSOCIATEDCOMPANIES

1)Productionunit(generallyhasownsalesarea)

Medical Systems

Carl Zeiss Meditec AG 1)

Jena(listed)65.1%Germany

Carl Zeiss Surgical GmbH 1)

Oberkochen65.1%Germany

*Acri.Tec GmbH 1) Hennigsdorf65.1%Germany

Carl Zeiss Meditec S.A.S.1)

LaRochelle65.1%France

HYALTECH Ltd.1)

Livingston,Scotland65.1%UnitedKingdom

Carl Zeiss Meditec Inc.1)

Dublin65.1%USA

Sales and service companies

Carl Zeiss Meditec Vertriebsgesellschaft mbHJena65.1%Germany

Carl Zeiss Meditec France S.A.S. LePecq65.1%France

Carl Zeiss Meditec Iberia SATresCantos(Madrid)65.1%Spain

Carl Zeiss Meditec Co., Ltd.Tokyo82.2%Japan

Microscopy

Carl Zeiss MicroImaging GmbH 1)

Jena100%Germany

Carl Zeiss Imaging Solutions GmbHMunich100%Germany


Carl Zeiss MicroImaging S.L.SantJustDesvern(Barcelona)100%Spain

Carl Zeiss MicroImaging Inc.Thornwood100%USA

Carl Zeiss MicroImaging Co., Ltd.Tokyo100%Japan

74


September30,2009

Semiconductor Technology

Carl Zeiss SMT AG 1)

Oberkochen100%Germany

Carl Zeiss Laser Optics GmbH 1)


Carl Zeiss SMS GmbH 1)

Jena100%Germany

Carl Zeiss NTS GmbH 1)


NaWoTec GmbH 1)

Jena100%Germany

Carl Zeiss SMT Ltd.1)

Cambridge100%UnitedKingdom

Pixer Technology Ltd.1)

Karmiel100%Israel

Carl Zeiss SMT Inc.1)

Peabody,MA100%USA


Carl Zeiss SMT S.A.S.Nanterre100%France

Carl Zeiss SMT Pte. Ltd.Singapore100%Singapore

Industrial Metrology

Carl Zeiss Industrielle Messtechnik GmbH 1)


Junker & Partner GmbH 1)

Tholey75.1%Germany

Carl Zeiss 3D Automation GmbH 1)

Essingen51.1%Germany

Carl Zeiss IMT Corporation 1)

Minneapolis100%USA

Carl Zeiss IMT (Shanghai) Co. Ltd.1)

Shanghai100%People'sRepublicofChina


Carl Zeiss 3D Metrology Services GmbHAalen100%Germany

Dr. Wolf & Beck GmbH 2)

Wangen100%Germany

Carl Zeiss 3D Metrology Services GmbH StuttgartOstfildern72%Germany

Carl Zeiss Innovations- zentrum für Messtechnik GmbH 2)

Dresden51%Germany

Carl Zeiss Industrielle Messtechnik Austria GmbHGraz100%Austria

Carl Zeiss Quality Services s.r.l.Novara100%Italy

Carl Zeiss IMT Iberia S.L.U.TresCantos(Madrid)100%Spain

Saphir 3D S.à.r.l.SablésurSarthe76%France

P.S.M.C. S.à.r.l.LePecq100%France

Carl Zeiss Ölçüm Cihazlari Ticaret 2)

Istanbul80%Turkey

75

1)Productionunit(generallyhasownsalesarea)2)Notconsolidated3)consolidatedatequity4)Proportionofvotingrights

Consumer Optics/Optronics

Carl Zeiss Sports Optics GmbH 1)

Wetzlar100%Germany

Carl Zeiss Sport Optikai Hungaria Kft.1)

Mátészalka100%Hungary

Carl Zeiss Optronics GmbH 1)


Carl Zeiss Optronics (Pty.) Ltd.1)

Centurion70%SouthAfrica


Carl Zeiss Optical Inc.Chester100%USA

Eyeglass Lenses

Carl Zeiss Vision Holding GmbH 3)

Aalen50%4)

Germany

OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUS INESS GROUPS FROMTHE GROUP AT YOUR SERVICE F INANCIAL STATEMENTS MAJORSUBS ID IAR IES ANDASSOCIATEDCOMPANIES

76

Other affiliated companies

Carl Zeiss Jena GmbH 1)

Jena100%Germany

Carl Zeiss Financial Services GmbHOberkochen100%Germany

Zeiss-BelOMO OOO 1) 2)

Minsk60%Belarus

Carl Zeiss Inc.Thornwood100%USA

Carl Zeiss Suzhou Co., Ltd.SuzhouCity100%People'sRepublicofChina

Cross-Group sales and service companies

Carl Zeiss Argentina S.A.2)

BuenosAires100%Argentina

Carl Zeiss Pty. Ltd.NorthRyde100%Australia

Carl Zeiss N.V.-S.A.Zaventem100%Belgium

Carl Zeiss do Brasil Ltda.SãoPaulo100%Brazil

Carl Zeiss Shanghai Co. Ltd.Shanghai100%People'sRepublicofChina

Carl Zeiss OyTuusula100%Finland

Carl Zeiss S.A.S.LePecq100%France

Carl Zeiss Ltd.WelwynGardenCity100%UnitedKingdom

Carl Zeiss Far East Co. Ltd.Kowloon100%HongKong

Carl Zeiss India (Bangalore) Private LimitedBangalore100%India

Carl Zeiss S.p.A.Arese100%Italy

Carl Zeiss Co. Ltd.Tokyo100%Japan

Carl Zeiss Canada Ltd.Toronto100%Canada

Carl Zeiss d.o.o.2)

Zagreb100%Croatia

Carl Zeiss Sdn. Bhd.KualaLumpur100%Malaysia

Carl Zeiss de México S.A. de C.V.MexicoCity100%Mexico

Carl Zeiss (N.Z.) Ltd.Auckland100%NewZealand

Carl Zeiss B.V.Sliedrecht100%Netherlands

Carl Zeiss ASOslo100%Norway

Carl Zeiss GmbH Vienna100%Austria

Carl Zeiss Sp. z o. o.Posen100%Poland

Carl Zeiss Instruments s.r.l.2)

Bucharest100%Romania

Carl Zeiss ABStockholm100%Sweden

Carl Zeiss AGFeldbach100%Switzerland

Carl Zeiss Pte. Ltd.Singapore100%Singapore

ANASPEC (Pty.) Ltd.Gauteng/Johannesburg51%SouthAfrica

Carl Zeiss (Pty.) Ltd.Randburg100%SouthAfrica

Carl Zeiss Co. Ltd.Seoul100%SouthKorea

Carl Zeiss Co. Ltd.Bangkok49%Thailand

Carl Zeiss s.r.o.Prague100%CzechRepublic

Carl Zeiss Technika Kft. 2)

Budapest100%Hungary


September30,2009

1)Productionunit(generallyhasownsalesarea)2)Notconsolidated

77

CarlZeissGroupConsolidated Financial Statements

OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUS INESS GROUPS FROMTHE GROUP AT YOURSERV ICE FINANCIAL STATEMENTS

78

Consolidated Income Statement October 1, 2008 to September 30, 2009

Notes 2008/09 2007/08

EURthou EURthou

Sales revenues 7 2,101,158 2,730,716

Changeinfinishedgoodsandworkinprogress –27,995 30,041

Ownworkcapitalized 52,216 52,746

Total operating performance 2,125,379 2,813,503

Otheroperatingincome 8 115,037 122,219

Costofmaterials 9 801,277 987,647

Personnelexpenses 10 849,361 877,765

Depreciationofproperty,plantandequipment andamortizationofintangibleassets 11 140,178 134,082

Otheroperatingexpenses 12 510,905 588,196

Othertaxes 13 6,102 5,116

Result before interest and taxes (EbIT) –67,407 342,916

Resultfrominvestmentsaccountedforapplyingtheequitymethod 14 –71,931 –42,931

Interestincome 14 38,985 56,083

Interestexpenses 14 102,488 84,083

Otherfinancialresult 14 40,913 5,639

Financial result –94,521 –65,292

Result before taxes –161,928 277,624

Incometaxes 15 715 –99,440

Consolidated net result –161,213 178,184

Minorityinterestsinincome 20.152 21,154

Interestsoftheparentcompany‘sshareholderinincome –181,365 157,030

FINANCIAL STATEMENTS CONSOL IDATED INCOMESTATEMENT

79

Assets Notes Sept. 30, 2009 Sept. 30, 2008

EURthou EURthou

Noncurrent assets

Intangibleassets 16 293,752 312,858

Property,plantandequipment 17 537,192 555,414

Investmentsaccountedforapplyingtheequitymethod 18 2,841 6,467

Othernoncurrentfinancialassets 19 135,373 124,288

969,158 999,027

Deferredtaxes 15 178,988 145,987

Othernoncurrentnon-financialassets 20 18,448 16,836

1,166,594 1,161,850

Current assets

Inventories 21 770,287 829,003

Tradereceivables 22 438,864 515,462

Taxrefundclaims 14,764 9,389

Othercurrentassets 23 436,489 569,707

Securities 24 39,153 40,359

Cash/cashequivalents 25 580,736 464,865

2,280,293 2,428,785

3,446,887 3,590,635

Consolidated Balance Sheet as of September 30, 2009

Liabilities and equity Notes Sept. 30, 2009 Sept. 30, 2008

EURthou EURthou

Equity 26

Commonstock 120,000 120000

Additionalpaid-incapital 52,770 52,770

Consolidatedretainedearnings 705,897 904,885

Cumulativeotherreserves –40,068 –25,483

Minorityinterests 165,049 144,538

1,003,648 1,196,710

Noncurrent liabilities

Provisionsforpensionsandsimilarobligations 27 833,650 856,328

Othernoncurrentprovisions 28 100,362 88,649

Noncurrentfinancialliabilities 29 422,481 362,576

Othernoncurrentnon-financialliabilities 31 21,434 30,584

1,377,927 1,338,137

Deferredtaxes 15 58,568 73,494

1,436,495 1,411,631

Current liabilities

Currentprovisions 28 261,465 270,894

Currentfinancialliabilities 29 123,692 32,249

Tradepayables 30 102,850 155,964

Currentliabilitiesfromincometaxes 13,595 7,462

Othercurrentliabilities 31 505,142 515,725

1,006,744 982,294

3,446,887 3,590,635

OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUS INESS GROUPS FROMTHE GROUP AT YOURSERV ICE FINANCIAL STATEMENTS CONSOL IDATEDBALANCE SHEET

80

Statement of Changes in Consolidated Equityduring the 2008/09 Fiscal Year1)

Common Additional ConsolidatedCumulativeotherreserves Equity Minority Consolidated stock paid-in retained Resultsof interests equity capital earnings Foreign measurement exchange offinancial translation instruments IAS392)

EURthou EURthou EURthou EURthou EURthou EURthou EURthou EURthouOctober 1, 2007 120,000 52,770 762,751 –35,555 4,159 904,125 136,684 1,040,809

Dividends – – –10,000 – – –10,000 –12,286 –22,286

Change in scope of consolidation – – 272 – – 272 –1,949 –1,677

Other changes – – –5,168 – – –5,168 1,874 –3,294

Consolidatednetresult – – 157,030 – – 157,030 21,154 178,184

Otherreserves – – – –3,102 9,015 5,913 –939 4,974

Consolidated comprehensive result – – 157,030 –3,102 9,015 162,943 20,215 183,158

September 30, 2008 120,000 52,770 904,885 –38,657 13,174 1,052,172 144,538 1,196,710

Dividends – – –10,000 – – –10,000 –5,612 –15,612

Change in scope of consolidation – – – – – – –516 –516

Other changes – – –7,623 – – –7,623 7,874 251

Consolidatednetresult – – –181,365 – – –181,365 20,152 –161,213

Otherreserves – – – 2,675 -17,260 –14,585 –1,387 –15,972

Consolidated comprehensive result – – –181,365 2,675 -17,260 –195,950 18,765 –177,185

September 30, 2009 120,000 52,770 705,897 –35,982 –4,086 838,599 165,049 1,003,648

1)Forfurtherdetailsofthechangesinequityseethe

NotestotheConsolidatedFinancialStatements2) Marketvaluationofavailable-for-salesecuritiesin

accordancewithIAS39

FINANCIAL STATEMENTS STATEMENTOF CHANGES IN CONSOL IDATEDEQUITY

81

2008/09 2007/08

EURthou EURthou

Additional information on the Consolidated Cash Flow Statement

Paymentsof

Incometaxes1) 46,391 127,007

Interest1) 14,221 13,795

Dividends2) 15,612 22,286

Proceedsfrom

Incometaxes1) 8,661 10,354

Interest1) 30,402 46,215

Dividends2) 497 820

1)consideredincashflowsfromoperatingactivities2)consideredincashflowsfromfinancingactivities

Consolidated Cash Flow StatementOctober 1, 2008 to September 30, 2009

Notes 2008/09 2007/08

EURthou EURthou

Consolidatednetresult –161,213 178,184

Depreciation/amortizationoffixedassetsnetofwrite-ups 16,17 139,805 133,291

Resultfrominvestmentsaccountedforapplyingtheequitymethod 18 71,931 42,931

Othermaterialnonoperatingincomeandexpenses(net) –13,076 31,507

Increaseofprovisionsforpensionsandsimilarobligations 27 10,850 7,394

Increase(lastyear:decrease)inotherprovisions 28 1,927 –14,554

Lossfromthedisposaloffixedassets(net) 16,17 440 353

Incomefromthedisposalofcurrentsecurities(net) –335 –966

Decrease(lastyear:increase)ininventories 21 58,775 –110,191

Decrease(lastyear:increase)inreceivables 22 65,723 –1,125

Changeindeferredtaxes 15 –50,700 –8,046

Changeinotherassets 60,649 –23,463

Decreaseinpayables 30 –52,780 –571

Changeinotherliabilities –30,038 31,324

Cash flows from operating activities 101,958 266,068

Proceedsfromthedisposalofproperty,plantandequipmentandintangibleassets 16,17 4,623 1,178

Purchasesofproperty,plantandequipmentandintangibleassets 16,17 –98,760 –140,404

Proceedsfromthedisposaloffinancialassets 16,17 2,865 4,322

Netcashoutflowfor(lastyear:inflowfrom)theacquisitionoffinancialassetsincludingfixed-terminvestmentsandsecuritiesmaturingin>90days –19,934 12,595

Netcashinflowfromthesale(lastyear:outflowfromtheacquisition)ofconsolidatedcompanies(netofcashacquiredamountingtoEUR0;lastyear:EUR2,422thou) 2,500 –62,037

InvestmentintoContractualTrustArrangementandotherplanassetsabroad 27 –29,830 –27,593

Cash flows from investing activities –138,536 –211,939

DividendtotheCarl-Zeiss-Stiftung 26 –10,000 –10,000

Paymentstoothershareholders –5,612 –12,286

Proceedsfrom(financial)loansacquired 192,349 6,219

Repaymentsof(financial)loansandbondsacquired(lastyear) –23,015 –29,637

Cash flows from financing activities 153,722 –45,704

Cash and cash equivalents provided by operating, investing and financing activities 117,144 8,425

Changesincashandcashequivalentsfromexchangeratemovementsandchanges inthescopeofconsolidation –1,273 –4,565

CashandcashequivalentsasofOctober1 464,865 461,005

Cash and cash equivalents as of September 30 580,736 464,865

OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUS INESS GROUPS FROMTHE GROUP AT YOURSERV ICE FINANCIAL STATEMENTS CONSOL IDATEDCASHFLOWSTATEMENT

82

Notes to the Consolidated Financial Statements for the 2008/09 Fiscal Year

Principles and Methods

1 General Accounting Principles

CarlZeissAGisanon-listedstockcompanyincorporatedunder

Germanlaw,headquarteredatCarl-Zeiss-Strasse22,73447

Oberkochen,Germany,andoperatinggloballyintheMedical

andResearchSolutions,IndustrialSolutionsandLifestyle

Productssegments.CarlZeissAG'ssolestockholderisthe

CarlZeissStiftung(CarlZeissFoundation),Heidenheimander

BrenzandJena,Germany.

CarlZeissAGexercisestheoptionunderSection315aPara.3

GermanCommercialCode(HGB)whichallowsnon-capital

market-orientedcompaniestopreparetheirconsolidated

financialstatementsinaccordancewithInternationalFinancial

ReportingStandards,onthebasisoftheoptionforMember

StatesenabledbytheEUregulationofJuly19,2002.

TheconsolidatedfinancialstatementsofCarlZeissAG,

Oberkochen,comprisingtheConsolidatedIncomeStatement,

theConsolidatedBalanceSheet,theConsolidatedEquity

Statement,theConsolidatedCashFlowStatementandtheNotes

totheConsolidatedFinancialStatements,havebeenpreparedin

accordancewiththeInternationalFinancialReportingStandards

(IFRS)andtheinterpretationsoftheInternationalFinancial

ReportingInterpretationsCommittee(IFRIC),asapplicableinthe

EU,andthesupplementaryrulesapplicableunderSection315a

Para.1HGB.AllmandatorypronouncementsoftheInternational

AccountingStandardsBoard(IASB)havebeenobserved.

TheamendmentstoIAS39FinancialInstruments:Recognition

andMeasurementandIFRS7FinancialInstruments:Disclosures

permitanentitytoreclassifynon-derivativefinancialassetsout

ofthe‘fairvaluethroughprofitandloss’categoryintoother

categoriesinwhichfinancialinstrumentsaremeasuredat

amortizedcost.However,theCarlZeissGroupdidnotmakeuse

ofthisreclassificationoptioninthereportingperiod.

Inanumberofprojects,theIASBandtheIFRIChaveadopteda

numberofstandardsandinterpretationsandissuednew

standardsandinterpretationswhichareeffectiveforfiscalyears

beginningonorafterJanuary1,2009.CarlZeissAGhasnot

appliedthesestandardsaheadoftime.

Thefollowingnewaccountingstandardswereendorsedbythe

EuropeanUnioninthereportingperiod:

InMay2008,theIASBissueditsfirstomnibusofamendmentsto

itsstandards,ImprovementstoIFRSs,primarilywithaviewto

removinginconsistenciesandclarifyingwordingin20existing

standards.Unlessotherspecificprovisionshavetobeapplied,

theamendmentsareeffectiveforfiscalyearsbeginningonor

afterJanuary1,2009.

Revision of IAS 1 Presentation of financial statements

TherevisedIAS1wasissuedinSeptember2007.Differences

haveessentiallyresultedfromtheseparatepresentationof

changesinequityresultingfromtransactionswithownersand

otherchanges.Inaddition,thetitlesofsomecomponentsof

financialstatementshavechanged.Theamendedstandardmust

beappliedinfiscalyearsbeginningonorafterJanuary1,2009.

Amendment to IAS 23 Borrowing costs

Theamendmentappliestothecapitalizationofborrowingcosts

directlyrelatedtotheacquisition,constructionorproductionof

aqualifyingasset.Thealternativetreatmentofrecognizing

borrowingcostsimmediatelyinincomehasthusbeendiscontin-

ued.Thechangeiseffectiveforfiscalyearsbeginningonorafter

January1,2009.

Amendment to IAS 27 Consolidated and separate financial

statements

IAS27(rev.2008)specifiesthattheacquisitionorsaleof

minorityintereststhatdoesnotleadtoalossofcontrolmustbe

includedinequitywithoutaffectingnetincome.Thechangeis

effectiveforfiscalyearsbeginningonorafterJuly1,2009.

Amendment to IFRS 1 First-time adoption of International

Financial Reporting Standards and IAS 27 Consolidated and

separate financial statements

Thestandardsproviderulestoeasethemeasurementof

investmentsinthecourseoftheinitialpreparationofstatutory

financialstatementsaccordingtoIFRS.Thechangesapplyforthe

firsttimeinfiscalyearsbeginningonorafterJuly1,2009.

83

IFRS 8 Operating segments

Thechangesapplyforthefirsttimeinfiscalyearsbeginning

onorafterJuly1,2009.Thisstandardneednotbeapplied

bytheCarlZeissGroup,sinceasanon-capitalmarket-oriented

companyitisnotobligedtopreparesegmentreporting.

Amendment to IFRS 2 Share-based payment

Thechangesrelatetotransactionsinwhichanemployee

receivesaconsiderationequivalenttothevalueoftheequity

instrumentsoftheparentcompanyorsubsidiaryandthe

subsidiaryisnotobligedtopaycash.Thechangesapplyforthe

firsttimeinfiscalyearsbeginningonorafterJanuary1,2010.

Revision of IFRS 3 Business combinations and IAS 27

Consolidated and separate financial statements

RevisedversionsofIFRS3andIAS27wereissuedinJanuary

2008,concludingtheBusinessCombinationsIIprojectwhich

startedinNovember2001andwhichwascarriedoutbythe

IASBinclosecooperationwiththeUSstandardsetter.Major

changesarerelatedtotheapplicationofthepurchasemethod.

Therevisedstandardsareeffectiveforfiscalyearsbeginningon

orafterJuly1,2009.

Amendments to IFRS 7 Financial instruments: disclosures

Theamendmentsrequireenhanceddisclosuresaboutfairvalue

measurementsandliquidityrisk.Amongotherthings,the

amendmentsintroduceathree-levelhierarchyforfairvalue

measurementdisclosures.Thishierarchyreferstotheinputsto

thevaluationtechniquesthatareusedtomeasurefairvalueand

explainstheextenttowhichobservablemarketinputsare

availableinordertodeterminethefairvalue.Inaddition,the

amendmentsclarifyandenhancetheexistingrequirementsfor

thedisclosureofliquidityrisk.Thisisaimedatclearlystatingthe

scopeofliabilitiestobeincludedinthematurityanalysis.The

changesareeffectiveforfiscalyearsbeginningonorafter

January1,2009.

Amendments to IFRS 32 Financial instruments: presentation

Thechangesrelatetotheclassificationofsubscriptionrights.Itis

nowspecifiedthatcertainsubscriptionrightsaswellasoptions

andwarrantsinforeigncurrencies(i.e.currenciesotherthanthe

functionalcurrency)mustbecarriedhenceforthasequityandno

longerasderivativeliabilitiesinthebalancesheetoftheissuerto

whoseequityinstrumentstherightsrelate.Thecurrencyin

whichtheexercisepriceisdenominatedisirrelevanthere.The

changesapplyforthefirsttimeinfiscalyearsbeginningonor

afterFebruary1,2010.

TheEuropeanUnionendorsedthefollowingnewIFRICinterpre-

tationsinthereportingperiod:

Amendments to IFRIC 9 Reassessment of embedded

derivatives and IAS 39 Financial instruments: recognition

and measurement

Anentityisrequiredtoassesswhetheranembeddedderivative

hastobeseparatedfromahostcontractwhentheentity

reclassifiesahybrid(combined)financialassetoutofthe‘fair

valuethroughprofitandloss’categoryaccordingtothe

amendmenttoIAS39ofOctober2008.Ifthederivativehasto

beaccountedforseparately,butitsfairvaluecannotbereliably

measured,orifanentitycannotcarryoutthetest,thetotal

hybridfinancialinstrumentmustremainintheabove-mentioned

category.Thechangesareeffectiveretroactivelyforfiscalyears

beginningonorafterJune30,2009.Theamendmentstillhasto

beendorsedbytheEuropeanUnionunderthecomitology

procedure.

IFRIC 12 Service concession arrangements

IFRIC12appliestoconcessionoperatorsandexplainshowto

accountfortheobligationsundertakenandrightsreceivedin

serviceconcessionarrangementsunderexistingIFRSs.IFRIC12is

effectiveforfiscalyearsbeginningonorafterMarch23,2009.

Thisinterpretationhasnoimpactontheconsolidatedfinancial

statementsoftheCarlZeissGroup.

IFRIC 13 Customer loyalty programmes

IFRIC13explainshowtoaccountforcustomerloyaltyaward

creditprogramsoperatedbymanufacturersorserviceproviders

themselvesorthirdparties.IFRIC13iseffectiveforfiscalyears

beginningonorafterJanuary1,2009.Therehasbeennoimpact

onthemeasurementprinciplesoftheCarlZeissGroup.

OUR INSP IRAT ION FOREWORD MANAGEMENTREPORT BUS INESS GROUPS FROMTHE GROUP AT YOURSERV ICE FINANCIAL STATEMENTS NOTES TOTHE F INANCIAL STATEMENTS

84

IFRIC 18 Transfers of assets from customers

IFRIC18clarifiestherequirementsofIFRSforagreementsin

whichanentityreceivesfromacustomeranitemofproperty,

plantandequipmentwhichtheentitymustusetoconnectthe

customertoanetworkortoprovidethecustomerwithongoing

accesstoasupplyofgoodsorservices.Theinterpretation

addressesinparticularthecriteriafortherecognitionof

contributionsfromcustomersandthetimingandamountofthe

recognitionofrevenuesfromsuchtransactions.IFRIC18is

effectiveforfiscalyearsbeginningonorafterJuly1,2009.

Theconsolidatedfinancialstatementshavebeencompiledin

euros.Unlessstatedotherwise,allamountsaregiveninthou-

sandsofeuros(EURthou).

Forthesakeofclarity,individualitemsarecombinedinthe

consolidatedbalancesheetandtheconsolidatedincome

statementandshownseparatelyinthenotes.Theconsolidated

incomestatementispreparedinaccordancewiththenatureof

expensesmethod.

TheconsolidatedfinancialstatementspreparedasofSeptember

30,2009,andthecorporatemanagementreportwereapproved

bytheExecutiveBoardonDecember22,2009,forsubmissionto

theSupervisoryBoard.

ThelistofsharesheldbytheGroup,theconsolidatedfinancial

statements,thecorporatemanagementreportandthereportof

theSupervisoryBoardwillbepublishedintheelectronic

Bundesanzeiger.

2 Scope of Consolidation

TheconsolidatedfinancialstatementsincludeCarlZeissAGand

allofitssubsidiaries,jointventuresandassociatedcompanies.

Subsidiariesarecompaniesthatareunderthedirectorindirect

controlofCarlZeissAGandareincludedinfullinthescopeof

consolidation.Jointventuresarecompaniescontrolledjointlyby

CarlZeissAGtogetherwithothercompanies.Associated

companiesarecompaniesoverwhichCarlZeissAGexercisesa

significantinfluencebutwhichareneithersubsidiariesnorjoint

ventures.Associatedcompaniesandjointventuresareincluded

intheconsolidatedfinancialstatementsinaccordancewiththe

equitymethod.

IFRIC 14 The limit on a defined benefit asset, minimum

funding requirements and their interaction

IFRIC14providesguidanceontheinteractionbetweenan

existingobligationasofthebalancesheetdatetopayadditional

sumsintoapensionplan(minimumfundingrequirement)and

theprovisionsofIAS19ontheupperlimitofapositivebalance

betweentheplanassetsandthedefinedbenefitobligation(asset

ceiling).IFRIC14isapplicableintheEUnolaterthanthestartof

thefirstfiscalyearbeginningonorafterJanuary1,2009.

IFRIC 15 Agreements for the construction of real estate

IFRIC15explainshowtoaccountforthesaleofpropertiesand

clarifieswhenandhowrevenueandrelatedexpensesfromthe

saleofrealestateshouldberecognizedifanagreement

betweenadeveloperandabuyerisreachedbeforeconstruction

iscomplete.First,theinterpretationprovidesguidelineson

howtodeterminewhetheranagreementiswithinthescopeof

IAS11orIAS18.Furthermore,itdefineswhatdisclosuresare

requiredinthenotes.IFRIC15iseffectiveforfiscalyears

beginningonorafterJanuary1,2010.

IFRIC 16 Hedges of a net investment in a foreign operation

IFRIC16providesguidanceontheaccountingforahedgeofa

foreignoperation,including:

–Whatistherisktobehedged?

–Whatisthemaximumamountthatcanbehedged?

–Whichentitywithinthegroupisallowedtoholdthehedging

instrument?

–Howshouldtheaccountingbehandledupondisposalofthe

foreignoperation?

IFRIC16iseffectiveforfiscalyearsbeginningonorafterJune

30,2009.Thisinterpretationhasnoimpactontheconsolidated

financialstatementsoftheCarlZeissGroup.

IFRIC 17 Distributions of non-cash assets to owners

IFRIC17clarifiesthatanentityshouldmeasurethedividend

payableatthefairvalueofthenetassetstobedistributedand

thatanentityshouldrecognizethedifferencebetweenthe

dividendpaidandthecarryingamountofthenetassets

distributedinprofitandloss.Therecognitionoftheobligation

andanychangestothefairvalueoftheassetinquestionmust

berecordedinequity.IFRIC17iseffectiveforfiscalyears

beginningonorafterJuly1,2009.

85

TheconsolidatedfinancialstatementscontainCarlZeissAGand

34(lastyear:33)domesticand64(lastyear:63)foreign

companieswhosebusinessactivitiesarecontrolledbyCarlZeiss

AGorwhereitdirectlyorindirectlyholdsamajorityvoting

interest.Thecompaniesareincludedintheconsolidated

financialstatementsfromthetimeatwhichCarlZeissAG

obtainedthepowerofcontrol.

Inaddition,asinthepreviousyear,twodomesticjointventures

andoneforeigninvestmenthavebeenaccountedforapplying

theequitymethod.

Thescopeofconsolidationchangedasfollowsinthereporting

period:

3 Business Combinations

Business combinations in the 2008/09 fiscal year

EffectiveOctober1,2008,CarlZeiss3DMetrologyServices

GmbH,Aalen,Germany,acquiredanadditional1%oftheshares

inCarlZeiss3DAutomationGmbH,Essingen,Germany,ata

purchasepriceofEUR0.2million.Thistransactionincreasedthe

shareheldbyCarlZeiss3DMetrologyServicesGmbHto51.1%,

sothatCarlZeiss3DAutomationGmbHwasincludedinfullin

theconsolidatedfinancialstatementsforthefirsttimeinthe

reportingperiod.Theobjectsofthecompanyaretheplanning,

development,design,assemblyandcommissioningofautomat-

edsystemsaswellastheirdistribution,particularlyforcoordi-

natemeasuringtechnologyandrelatedfields,andallother

associatedtransactions.

Theacquisitionofthesharesinfiscalyear2008/09hadno

materialimpactontheassetsandliabilitiesoftheCarlZeiss

Group.AssetstotalingEUR3,879thousandandliabilitiesofEUR

2,372thousandwererecognized.Theinitialconsolidation

resultedingoodwillintheamountofEUR184thousand.The

consolidatedfinancialstatementscontainsalesrevenuesofEUR

5,715thousandandaresultbeforeinterestandtaxesofEUR

619thousandfromCarlZeiss3DAutomationGmbH.

Thepurchasepriceallocationconductedfortheinitialconsolida-

tionisbasedonprovisionalestimatesbythecompanywhich

couldthereforechangeuptothefinalassessmentandauditof

thefairvaluesoftheacquiredintangibleassets,deferredtaxes

andgoodwill.

OnNovember5,2008,CarlZeissMeditecInc.,Dublin,USA,

concludedapurchasecontractwiththeOEMsupplierWelch

AllynInc.,NewYork,USA,fortheacquisitionofallassets

associatedwiththemanufactureoftwoproductsforglaucoma

diagnosis.Theassetsacquiredaremainlyindustrialproperty

rightsandcopyrights,productionrights,softwareanddesign

know-how.TheacquisitioncostscametoEUR11,688thousand,

includingexpensesofEUR120thousand.

AssetstothevalueofEUR9,334thousandandnoliabilitieswere

addedthroughthispurchase.TheidentifiedgoodwillofEUR

2,354thousandresultingfromtheacquisitionoftheassetsand

Germany Other countries Total

30SEP2008 34 63 97

Additionsinthereportingperiod 1 3 4

Disposalsinthereportingperiod – 2 2

30 SEP 2009 35 64 99

Thefollowingcompanieswerewithdrawnfromthescopeof

consolidationinthereportingperiod:

–CarlZeissSMTGmbH,St.Gallen,Switzerland

(liquidatedinfiscal2008/09)

–CarlZeissMicroImagingAISInc.,AlisoViejo,USA

(liquidatedinfiscal2008/09)

Thefollowingfourcompanieswereincludedintheconsolidated

financialstatementsforthefirsttimeinthereportingperiod:

–CarlZeiss3DAutomationGmbH,Essingen,Germany

(firstinclusion)

–P.S.M.C.S.à.r.l.,LePecq,France(firstinclusion)

–Saphir3DS.à.r.l.,SablésurSarthe,France(firstinclusion)

–CarlZeissIndia(Bangalore)PrivateLimited,Bangalore,India

(newformation)

Thechangestothescopeofconsolidationinthereporting

periodshownherehadnomaterialeffectsonthenetassets,

financialpositionorresultsofoperationsoftheCarlZeissGroup.

Anyeffectswhichappearrelevanttoindividualitemsare

explainedattheappropriatepoints.


86

liabilitiesismainlyrelatedtotheexpectedsynergyeffectsfrom

theintegrationofthetwoproductionlinesintotheexisting

OphthalmicSystemsbusiness.Theacquisitionhadnoother

materialimpactontheassetsandliabilitiesoftheCarlZeiss

Group.Thefairvaluesoftheidentifiedassetsandliabilitiesatthe

timeoftheacquisitionandthecorrespondingcarryingamounts

shouldbeconsideredprovisional.

Theconsolidatedfinancialstatementsincludesalesrevenues

amountingtoEUR5,498thousandandaresultbeforeinterest

andtaxesofEUR-514thousandfromtheacquisition.Assuming

thattheacquisitionhadtakenplaceatthestartofthefiscalyear,

salesrevenueswouldhavebeenEUR5,998thousandandthe

resultbeforeinterestandtaxesEUR-560thousand.

Business combinations in the 2007/08 fiscal year

Thefollowingcompanieswereacquiredinthe2007/08fiscalyear:

EffectiveOctober1,2007,CarlZeissMeditecAG,Jena,Germany,

acquired100%ofthesharesin*Acri.TecAG,basedinHennigs-

dorf,Germany,throughasubsidiary.Thecompanyspecializesin

innovativeimplants(intraocularlenses,IOL)andotherproducts

(viscoelasticsolutionsandproductsforvitreoretinalsurgery)for

ophthalmicsurgery.Asofthebalancesheetdate,thecompany's

namewas*Acri.TecGmbH.CarlZeissAGholdsonly65.1%of

theequityofCarlZeissMeditecAG.

LikewiseeffectiveOctober1,CarlZeiss3DMetrologyServices

GmbH,Aalen,acquired75.1%oftheequityofJunker&Partner

GmbH,Tholey,Germany.Junker&PartnerGmbHisapartnerto

theautomotiveandaviationindustriesspecializinginthedesign,

developmentandproductionofsophisticatedmeasuringdevices

forautomotiveparts,thuscomplementingtheportfolioofthe

IndustrialMetrologybusinessgroup.

TheSouthAfricansubsidiaryCarlZeiss(Pty.)Ltd.,Randburg,

SouthAfrica,acquiredamajoritystake(51.0%oftheshares)in

AnaspecCC,Gauteng,SouthAfrica,inMay2008.Thecompany,

whichhasbranchofficesinSouthAfricaandAustralia,isnow

knownasANASPEC(Pty.)Ltd.andwillofferbothlocalmarkets

andsomedevelopingcountriestechnicalservicesandcarefor

thefast-growingcustomerbaseoftheNanoTechnologySystems

(NTS)division.ANASPEC(Pty.)Ltd.alsoofferstechnicalservices

fortheproductsoftheIndustrialMetrologybusinessgroupand

someproductsoftheMedicalSystemsbusinessgroupinSouth

AfricaandthesouthernAfricancountries.

ACarlZeissSMTAGsubsidiaryacquiredPixerTechnologyLtd.,

Karmiel,Israel,asofAugust28,2008.Theacquiredcompany

developsuniquesolutionsforthecorrectionoferrorsinphoto

masksforsemi-conductorproductiononaglobalbasis.Withthis

move,theSemiconductorTechnologybusinessgroupaimsto

furtherstrengthenitspositionasaleadingtechnologyprovider

forthesemiconductorindustrywithlithographyandlaseroptics,

particle-beamsystemsandqualityassuranceandprocess

optimizationsystems.PixerTechnologyLtd.willbeintegrated

intotheSemiconductorMetrologySystems(SMS)Division.

4 Principles of Consolidation

Theconsolidatedfinancialstatementsarebasedontheannual

financialstatementsofthesubsidiariesincludedintheconsoli-

datedfinancialstatementspreparedasofSeptember30,2009,

inaccordancewithuniformaccountingpolicies.

SinceMay14,2002,capitalconsolidationbythepurchase

methodinaccordancewithIFRS3Business Combinationshas

beenappliedupontheinitialconsolidationofsubsidiaries.

Accordingly,theidentifiableassetsandliabilitiesarerecognized

attheirfairvaluesontheacquisitiondate.Minorityinterests

(sharesheldbyotherstockholders)areconsequentlyassessedat

theamountoftheirshareinthefairvaluesoftheassetsand

liabilities.Theacquisitioncostsofthesharesacquiredareoffset

againsttheGroup'sshareofthesubsidiary'sequityatfairvalue.

Ifadifferenceremainsontheassetssideafterthecalculation,it

isrecognizedasgoodwillunderintangibleassets.Liabilities-side

differencesarerecognizedthroughtheincomestatement.

ForacquisitionsbeforeMay14,2002,theoptioninIFRS1.15

wasusedtotheeffectthatthesebusinesscombinationswere

accountedforintheconsolidatedfinancialstatementsinaccord-

ancewithIFRSsimilarlytotheHGBaccountingmethod.Trans-

actions under common controlareaccountedforatbookvalue.

Theresultsofthesubsidiariesacquiredinthereportingperiod

areincludedintheconsolidatedincomestatementfromthetime

whenpowerofcontroliseffectivelyobtained.

Asubsidiaryisremovedfromthescopeofconsolidationatthe

timewhenCarlZeissAGlosescontrolofthecompany.

87

Theequitysharesheldbyoutsideshareholdersarerecognizedin

theconsolidatedfinancialstatementswithintheconsolidated

equitycapitalunderminorityinterests.

CompaniesundercommoncontrolwithinthemeaningofIAS31

Interests in Joint Venturesareaccountedforapplyingtheequity

method,inaccordancewiththealternativetreatmentinIAS31.38.

WhentheequitymethodinaccordancewithIAS28Investments

in associatesisapplied,thesharesarerecognizedatpurchase

costinthebalancesheetuponinitialassessment.Thesecostsare

adjustedinsubsequentvaluationsforchangesintheGroup's

shareintheequity(netassets)aftertheacquisitiondateandfor

lossesduetoimpairment.

Receivablesandpayablesbetweenconsolidatedcompaniesare

eliminated.Anyresultingcurrencydifferencesareincludedin

cumulativeotherreserves.

Intercompanyprofitsandlossesresultingfromgoodsand

servicestransactionsareeliminated.

Theincometaxaspectsoftheconsolidationaredealtwithby

applyingdeferredtaxation.

Intheconsolidatedincomestatement,intercompanysalesand

otherinternalgainshavebeenoffsetagainstcorresponding

expensesorhavebeenreclassifiedaschangesininventoryor

ownworkcapitalized.

5 Foreign Exchange Translation

Theconsolidatedfinancialstatementsaredenominatedineuros,

thefunctionalandreportingcurrencyoftheGroup.Inthe

individualstatements,receivablesandpayablesinforeign

currenciesarevaluedattherateapplicableonthedateofthe

transaction.Changesinexchangeratesareaccountedforby

revaluationattheaveragerateofexchangeasofthebalance

sheetdate,theresultinggainsorlossesarerecognizedinthe

consolidatedincomestatementunderfinancialresults.

Theannualfinancialstatementsofconsolidatedsubsidiaries

preparedinforeigncurrenciesaretranslatedonthebasisofthe

conceptofthefunctionalcurrencyinaccordancewithIAS21

The Effects of Changes in Foreign Exchange Rates.Thismeans

thatallassetsandliabilitiesaretranslatedintoeurosataverage

ratesofexchangeasofthebalancesheetdate,buttheequityis

convertedathistoricrates.

Theincomeandexpensesintheincomestatementsareconvert-

edatannualaverageratesofexchange.

Differencesarisingfromtheforeignexchangetranslationare

includedundercumulativeotherreserveswithinequity,outside

profitorloss.

TheconsolidatedfinancialstatementsofSeptember30,2009

and2008werebasedonthefollowingexchangeratesfor

foreigncurrencieswithamaterialinfluence:

Rates as of balance sheet date Average rates

EUR 1 = 30 SEP 2009 30 SEP 2008 2008/09 2007/08

UnitedKingdom GBP 0.9100 0.7961 0.8754 0.7636

Japan JPY 131.2650 150.5600 128.6271 161.6225

USA USD 1.4665 1.4340 1.3529 1.5037

6 Principles of Accounting and Valuation

Theannualfinancialstatementsofthecompaniesincludedinthe

consolidationhaveallbeenpreparedinaccordancewiththe

accountingandvaluationprinciplesapplicabletotheGroup.In

caseswherethelocalfinancialstatementsofindividualcompa-

niesdepartfromtheseprinciples,thenecessaryadjustments

havebeenmade.

Thesameprinciplesofaccountingandvaluationhavebeen

appliedtothisyearandlastyear.

Forsubsidiarieswhosebalancesheetdatediffersfromthatof

theGroup,interimfinancialstatementsareusedasabasisfor

consolidation.

Use of estimates

InordertopreparefinancialstatementsaccordingtoIFRS,

estimatesarerequiredwhichinfluencenotonlythevaluationof

theassetsandliabilities,thenatureandscopeofcontingent

liabilitiesandconcretereferencestopurchasecommitmentsas

ofthebalancesheetdate,butalsotheamountofincomeand

expenditureinthereportingperiod.Theassumptionsand


88

Thecostsdirectlyattributabletoadevelopment,including

reasonabledevelopment-relatedoverhead,arerecognizedas

manufacturingcosts.Capitalizeddevelopmentcostsare

amortizedbythestraight-linemethodfromthetimeatwhich

thedevelopmentsarereadyforuseovertheexpectedproduct

lifecycle,orinrelationtotheunitvolumeslaiddowninthe

relevantbusinessplans.Researchcostsanddevelopmentcosts

thatcannotbecapitalizedarerecognizedasexpensesatthe

timetheyareincurred.

Depreciationisbasedonthefollowingrangesfortheuseful

lives:

Useful life

Patents,industrialpropertyrights,licenses,software 2to20years

Developmentcosts 2to10years

Otherintangibleassets 2to15years

estimateschieflyrelatetotheapplicationofstandardusefullife

periodsacrosstheGroupaswellasthemeasurementparameters

fortheimpairmentteststobeperformed,particularlyforthe

goodwillrecognized.Inaddition,estimateshavetobemadein

ordertoassessthevalueoftheinventory,thecollectabilityof

receivables,accountingforandvaluingprovisionsandthe

possibilityofrealizingfuturetaxrelief.Theactualresultsmay

differfromtheseestimates.Changesarerecognizedinthe

incomestatementwhenbetterinformationbecomesavailable.

Specificvaluationrisksareexplainedindetailinthenotestothe

relevantbalancesheetitems.

Intangible Assets

Purchasedandself-createdintangibleassetsareonlycapitalized

accordingtoIAS38Intangible Assetsifitisprobablethatfuture

economicbenefitsareattributabletotheassetsandthepurchase

ormanufacturingcostoftheassetcanbemeasuredreliably.

Theseassetsarerecognizedinitiallyatcost(purchaseormanu-

facturingcost).Subsequently,intangibleassetswithafinite

usefullifearemeasuredatcostlesscumulativeamortizationand

impairment.Theamortizationiscalculatedusingthestraight-line

methodovertheeconomicusefullifeoftheasset.

Intangibleassetswithanindefiniteusefullifeandgoodwillare

notamortizedandarethereforeassessedatcostlessimpairment

losses.

Developmentcostshavebeencapitalizedwhereverthecriteria

statedinIAS38.57werefulfilledonacumulativebasis.The

criteriatobefulfilledincludethefactthatthecompletionofthe

intangibleassetinquestionmustbetechnicallyfeasiblesothatit

canbeavailableforsaleoruse.Furthermore,theintentionand

theabilitytocompletetheintangibleassetandtouseitorsellit

inthefuturearerequired.Inaddition,itmustbepossibletouse

orselltheself-createdintangibleasset.Aneconomicbenefitto

thecompanymustalsoarisefromthis.

ThecompaniesoftheCarlZeissGroupcarryoutdevelopment

thatstretchestechnologytoitslimits,settingnewtechnological

benchmarks.Forthisreason,onlyasmallproportionofdevelop-

mentcostsiscapitalizedintheCarlZeissGroup,sincethe

capitalizationcriteriaareonlycumulativelyfulfilledatarelatively

latepointintime.

Useful life

Buildings 2to45years

Technicalequipmentandmachinery 2to21years

Otherequipment,plantandofficeequipment 1to23years

Property, plant and equipment

Property,plantandequipmentaremeasuredinaccordancewith

IAS16Property, Plant and Equipment,atcostlessaccumulated

depreciationandimpairment.Themanufacturingcostofself-

createdassetsincludesnotonlydirectcosts,butalsoreasonable

overheadcostsformaterialsandproduction.Borrowingcosts

arenotincluded.Theassetsaredepreciatedbythestraight-line

methodovertheireconomicusefullives.

Depreciationisbasedonthefollowingrangesfortheusefullives:

Impairment of intangible assets and property, plant and

equipment

IAS36Impairment of Assetsdemandsareviewasofevery

balancesheetdateofwhetherthereareanyindicationsof

impairmentinthevaluesofassetscarriedinthebalancesheet.

Ifsuchindicationsareidentifiableorifanannualreviewis

mandatory,asinthecaseofintangibleassetswhichdonothave

afiniteusefullifeandgoodwill,animpairment testiscarried

89

out.Therecoverableamountoftheassetorofacashgenerating

unit(CGU)isestimatedtodeterminewhetheritsbookvalue

needstobeadjusted.Therecoverableamountisthehigherof

theindividualasset’sorcashgeneratingunit’sfairvalueless

coststosellanditsvalueinuse.Todeterminethevalueinuse,

theestimatedfuturecashflowsarediscountedtothepresent

valuebyarisk-adjustedrateaftertaxusingthediscountedcash

flowmethod.Thisrisk-adjusteddiscountratelieswithinarange

of7.7%to9.2%fortheCarlZeissGroup,dependingonthe

CGU.Iftheanalysisisperformedbeforetax,therangeforthe

risk-adjusteddiscountrateisfrom8.3%to9.8%.Thediscount

ratesaredeterminedbytheWeightedAverageCostofCapital

(WACC)method.Thedetailedplanningperiodforthefuture

cashflowsisfivefiscalyears.Forthefiscalyearsthereafter,the

cashflowforthefifthyearofdetailedplanningiscarriedforward

withnogrowthfactor.Thevalueofanassethastobeadjusted

downwardsifthebookvalueoftheassetorcashgeneratingunit

exceedsthehigherofthefairvaluelesscoststosellandthe

valueinuse.Animpairmentlossisrecognizedimmediatelyinthe

incomestatement.

Animpairmentlossrecognizedinpreviousyearscanbecorrected

intheincomestatementifthereasonsfortheimpairmentno

longerexist,forallassetsexceptgoodwill.However,thewrite-

upcanonlybemadetotheextentthatthevalueoftheasset

doesnotexceedthebookvaluethatwouldhavearisenthrough

depreciationiftheimpairmenthadnotbeenrecognizedin

previousyears.Write-upsofgoodwillareprohibited.

Government grants

Governmentgrantsarerecognized,inaccordancewithIAS20

Accounting for Government Grants and Disclosure of Govern-

ment Assistance,onlywhenthereisreasonableassurancethat

theentitywillcomplywithanyconditionsattachedtothegrant

andthegrantwillbereceived.Investmentgrantsarealwaysrec-

ognizedasaccrualsontheliabilitiessideandamortizedoverthe

lifeoftheasset.Profit-andloss-relatedgrantsarerecognizedin

theperiodinwhichthecorrespondingexpensesareincurred.

Leases

Leasesareclassifiedasfinanceleasesiftheytransfersubstantially

alltherisksandrewardsincidenttoownershiptothelessee.All

otherleasesareclassifiedasoperatingleases.

Leasedassetswhichneedtobeclassifiedasfinanceleases

accordingtoIAS17Leases,sothatineconomictermsthey

actuallytaketheformofpurchasesofassetswithlong-term

financing,arerecordedatthecommencementoftheleaseterm

atthelowerofthefairvalueoftheassetorthepresentvalueof

theminimumleasepayments.Thecorrespondingliabilityis

recognizedinthebalancesheetasaleaseliability.Theassetis

depreciatedovertheshorterofthelifeoftheassetorthelease

termifitisnotcertainwhetherthelesseewillobtainownership

attheendofthelease.

Financeleasepaymentsareapportionedbetweenthefinance

chargeandthereductionoftheoutstandingliability,inaccor-

dancewiththeirfinancingcharacter.Thefinancechargeis

recognizedasaninterestexpenseintheincomestatement.

Foroperatingleases,theleasepaymentsarerecognizedas

expensesintheperiodinwhichtheyareincurred.

AssetsunderoperatingleaseswherecompaniesoftheCarlZeiss

Grouparethelessorarerecognizedintheassets.Suchoperating

leasearrangementsmainlyexistinconnectionwithbuildings.

IfcompaniesoftheCarlZeissGroupactaslessorsinthecontext

offinanceleases,receivablesarecapitalizedatthetimeofinitial

recognitionintheamountofthenetinvestmentvalue.

Financial instruments

Afinancialinstrumentisacontractthatgivesrisetoafinancial

assetofoneentityandafinancialliabilityorequityinstrumentof

anotherentity.

AccordingtoIAS39Financial Instruments: Recognition and

Measurement,financialinstrumentsfallintothefollowing

categories:

–Financialassetsandliabilitiesvaluedatfairvaluethroughprofit

orlossorfinancialassetsandliabilitiesheldfortrading;

–Available-for-salefinancialassets;

–Held-to-maturityinvestmentsand

–Loansandreceivables

Financialinstrumentsarerecognizedatthetimewhenthe

obligationtopurchaseorsellanassetisenteredinto.Theyare


90

measuredatfairvalueoramortizedcost,dependingontheir

classification.

Thefairvaluegenerallycorrespondstothemarketvalue.Ifthere

isnoactivemarket,thefairvalueisdeterminedbyadequate

valuationmethods(e.g.discountedcashflowsoroptionpricing

models).

Theamortizedcostisthepurchasecosttakingintoaccount

repayments,impairmentsandtheamortizationofapremiumor

discount.

ThefairvalueoptiondescribedinIAS39isnotusedbythe

CarlZeissGroup.

Thefinancialassetsheldfortradingaresolelyderivativefinancial

instruments,whichareusedintheCarlZeissGroupmainlyinthe

contextofinterestandcurrencyhedging.Theyarevaluedatfair

value.Themethodofrecognizingprofitandlossdependson

whetherthereisahedgingrelationshipbetweenthehedging

instrumentandthehedgeditem,i.e.whetherso-calledhedge

accountingapplies.Ifnot,changesinthefairvaluearerecog-

nizedthroughprofitandloss.

Ifhedgeaccountingisapplied,arelationshipbetweenthe

hedginginstrumentandthehedgeditemiscreated.Hence,the

offsettingeffectsofchangesinthefairvaluesofthehedging

instrumentandthehedgeditemarerecognizedsimultaneously

inthenetresultfortheyear.Thecriteriaforhedgeaccounting

are:thehedgeinstrumentishighlyeffectiveincompensating

changesinthefairvalueorthecashflowofthehedgeditem,

theeffectivenessofthehedgecanbereliablydeterminedand

thehedgingrelationshipmustbeformallydesignatedand

documentedattheinceptionofthehedge.Thismustinclude

identifyinganddocumentingtheriskmanagementobjective,the

hedgeditemaswellasthehedginginstrument.Furthermore,

aprospectiveeffectivenesstestisperformedattheinceptionof

thehedgeandthereafteraprospectiveaswellasretrospective

effectivenesstestareperformedonaquarterlybasisinorder

todocumentthatthehedgeishighlyeffectiveincompensating

changesinthefairvalueorthecashflowofthehedgeditem.

HedgeaccountingisonlyusedintheCarlZeissGroupinthe

contextofinterestratehedgesinordertoavoidcashflow

fluctuationsresultingfromchangesininterestrates.Changesin

thefairvalueofthehedginginstrumentwhichrelatetothe

effectivepartofthehedgearerecognizedincumulativeother

reserves,aseparateitemwithinequity,lessdeferredtaxes.The

accumulatedgainsandlossesonthehedginginstrumentthat

havebeenpostedinthecumulativeotherreservesarefinally

recognizedintheconsolidatedincomestatementinthesame

periodastheoffsettinglossesandgainsonthehedgeditem,i.e.

whenfinancialexpensesorincomearerecognizedintheincome

statement.Theineffectivepartofthehedgeisrecognized

immediatelyintheperiodinwhichitisincurred.Theamounts

accumulatedinequityareaccountedforinprofitandlossinthe

periodinwhichthehedgedunderlyingtransactionisrecognized

intheconsolidatedincomestatement,inotherwordswhen

financialexpensesorincomearerecognizedintheincome

statement.

Otherinvestmentsaswellassecuritiesandholdingsinequityor

bondfundsareclassifiedas‘available-for-sale’andaretherefore

measuredatfairvalue.Ifthereisnoactivemarketforinvest-

mentssothatthemarketvaluecannotbeestimatedreliably,

thesearecarriedatamortizedcost.Lowerfairvaluesareapplied

ifindicated.Unrealizedprofitsandlossesarerecordedoutside

profitandlossinaseparateitemunderequity,takingdeferred

taxationintoaccount.Iftheassetisdisposedoforintheevent

ofaprobablypermanentimpairmentofmarketvaluetoalevel

belowcost,thechangesinmarketvaluearerecordedasaprofit

orloss.Increasesinthemarketvalueofequityinstrumentsare

alwaysrecordedoutsideofprofitorloss,evenifapriorallow-

anceforimpairmenthasbeenpostedtotheincomestatement.

Held-to-maturityinvestments,loansandreceivablesandcurrent

andnoncurrentfinancialliabilitiesaremeasuredatamortized

cost.Thesearegenerallyloans,tradereceivablesandcurrentand

noncurrentotherfinancialassetsandliabilities.Interest-freeor

low-interestloansarecarriedattheirpresentvalueandmarked

upovertheperiodtotheirmaturity.

Inventories

Rawmaterials,suppliesandmerchandiseforresalearevaluedat

cost,whichisalwaysdeterminedbytheaverage-costmethod.

Unfinishedandfinishedproductsarevaluedatmanufacturing

cost.Thisincludesnotonlythecostofmaterialsandwages,but

alsoreasonablefactoryoverheadcostsformaterialsand

91

production,production-relateddepreciationandproduction-

relatedadministrativecosts.Borrowingcostsarenotcapitalized.

Anallowanceismadeforimpairmentoninventoriesifthecostis

higherthantheexpectednetrealizablevalue.Inventory,sales

andrevenuerisksarethereforetakenadequatelyintoaccount.

Receivables and other assets

Receivablesandotherassetsarecarriedattheirnominalvalueor

atcost.Perceivabledefaultrisksaretakenintoaccountby

individualadjustments.

Customized manufacturing orders

Customizedmanufacturingordersarecarriedaccordingtothe

percentage-of-completion(PoC)method.Apercentageofsales

revenuesaswellasthesalescostsincurred,basedoncontracts

concludedwithcustomers,arerecognizedinaccordancewith

thelevelofcompletionasofthebalancesheetdateassoonas

theoutcomeofaproductionordercanbereliablyestimated.

Completionisdeterminedonthebasisoftheprojectcosts

incurredasofthebalancesheetdateinrelationtothetotal

costsoftheproject(cost-to-costmethod).Thesalesrecognized

inaccordancewiththePoCmethodarerecordedundertrade

receivablesinthebalancesheet,afterdeductionofadvance

paymentsreceived.

Iftheoutcomeofaproductionordercannotbereliablyestimat-

ed,revenuesareonlyrecordedintheamountofthecosts

incurredfortheorderwhichareprobablyrecoverable.Expected

lossesonanorderarerecognizedimmediatelyandinfullasan

expense.

Cash and cash equivalents

Cashinhandandatbankandallfundsoriginallyrepayable

withinthreemonthsarerecognizedasliquidassets.

Pension plan provisions and other post-employment benefits

ThecompaniesoftheCarlZeissGrouphavedifferentpension

plans.Moreover,foreignsubsidiarieshaveenteredintocommit-

mentstoprovideacertainlevelofmedicalcareafteremploy-

menthasterminated.

Paymentsfordefinedcontribution-basedcommitmentsand

contributionstostatutorypensioninsuranceschemesare

recordedasexpensesfortheperiodinwhichtheyareincurred.

Obligationsarisingfromdefinedbenefitplansarecalculatedby

theprojectedunitcreditmethodtakingexpectedfuturein-

creasesinsalariesandpensionbenefitsintoaccount,inaccor-

dancewithIAS19Employee Benefits.

Theprovisionsforpensionsandotherpost-employmentbenefits

ofthedomesticcompaniesarebasedonactuarialcomputations

andthe2005GmortalitytablescompiledbyProfessorDr.Klaus

Heubeck.Atforeignsubsidiaries,provisionsforpensionsand

otherpost-employmentbenefitsarerecognizedonthebasisof

country-specificparameters.

Differencesbetweenthedefinedbenefitobligation(DBO)and

externalplanassetsandthepensionprovisionsinthebalance

sheetmainlyresultfromactuarialgainsorlossesinconnection

withchangesintheportfolioandthedivergenceofrealtrends

fromtheparametersassumedinthecalculation.

Inrecognizingtheseactuarialgainsorlosses,theCarlZeiss

Groupusesthecorridormethodinaccordancewiththe

alternativetreatmentunderIAS19.Inotherwords,actuarial

gainsandlossesthatlieoutsidearangeof10%ofthehigherof

theDBOorthefairvalueoftheplanassetsatthebeginningof

thefiscalyearareamortizedovertheexpectedaverageremain-

ingserviceperiodofthebeneficiaries.

Theservicecostsarerecognizedunderpersonnelexpenses,the

interestcomponentoftheallocationstoprovisionsandthe

expectedreturnontheplanassetsarerecordedinfinancial

results.

Deferred compensation

TheGroupallowspermanentemployeestouseuntaxedearnings

towardsoldageprovisions.Onthebasisofindividualcontracts,

everyemployeecanconvertamaximumofthreemonths’salary.

Theamountsconvertedarepaidintoapensionliabilityinsurance

policyandtheassociatedbenefitsarepledgedtotheemployees.

Theclaimagainsttheinsurancepolicymaturesatthesametime

astheobligationtowardstheemployees.Shouldthefuture


92

benefitsfromthepensionliabilityinsurancebehigherthanthe

agreedbenefits,theemployeesreceivethesurplus.

Theamountofthebenefitdependsontheageoftheemployee

atthetimetheincomeisconvertedandontheemployee’s

decisionastowhetherhewishestohavethedeferredcompen-

sationpaidoutasalumpsumorasapension.Inadditionto

thesimpleconversionofincome,thedeferredincomesystem

includesentitlementstoinvaliditybenefitorsurvivingdepen-

dents’pension,dependingonthemodelselected.

Other provisions

InaccordancewithIAS37Provisions, Contingent Liabilities and

Contingent Assets,presentobligationstothirdpartiesresulting

frompasteventsarerecognizedunderotherprovisionsif

settlementisexpectedtoresultinanoutflowofresourcesof

whichtheamountcanbemeasuredwithreasonablecertainty.

Provisionsarecarriedatfullcost.

Ifthediscounteffecthasamaterialimpactontheamountofthe

provisionandtheremainingperiodoftheobligationscanbe

determinedwithcertainty,noncurrentprovisionsarerecognized

attheirdiscountedpresentvalue.Insuchcases,theaccretionof

theprovisionovertimeisrecordedasaninterestexpense.

Provisionsforpartialretirementschemes,anniversarybonuses

anddeathbenefitaredeterminedandvaluedonthebasisof

actuarialopinionsorsimilarparameters.

Restructuring provisions

Restructuringprovisionsarerecognizedifadecisionona

restructuringprogramhasbeentakenortheeconomicnecessity

forsuchaprogramexistsbeforethebalancesheetdate,anda

restructuringplanhasbeendrawnupbeforethebalancesheet

datewhichgivesdetailsofthebusinessareaorlocationaffected,

theapproximatenumberofemployeesaffectedandtheperiod

ofimplementation,andtheemployeesconcernedortheir

representativeshavebeeninformed.Theamountofthe

provisionwillincludeallexpensesdirectlyrelatedtotherestruc-

turingprogramwhichwillnecessarilybeincurredinthecourse

ofrestructuringandwhicharenotrelatedtothepresentor

futureactivitiesofthecompany.

Provisions for warranties

Warrantyorguaranteeobligationsmayariseforlegalreasonsor

fromcontractualtermsorgoodwill.Provisionsarerecognizedfor

expectedpaymentsunderwarrantyorguaranteeobligations.

Useofsuchprovisionsistobeexpectedifthewarrantyperiod

hasnotyetexpired,ifwarrantyexpenseshavebeenincurredin

thepastorifthereisreasontobelievethatactualwarrantycases

willarise.Dependingonthesituation,thewarrantyriskis

derivedfromeitherindividualestimatesorpastempiricalvalues

andprovisionsaremadeaccordingly.

Provisions for litigation risks

Provisionsarerecognizedforrisksarisingfromlitigationinwhich

companiesoftheCarlZeissGrouparethedefendants.They

coverthecoststhatthecompanywillincurifthecourtfinds

againstitandifthereisagreaterchanceofanegativethana

positivedecision.Thissumincludespaymentstobemadebythe

company,inparticulardamagesandcompensation,aswellas

theexpectedcostsoflitigation.Wherethecompanyisthe

plaintiff,provisionsareonlymadeforthecostsoflitigation.

Deferred taxes

Deferredtaxesarerecognizedonthebasisoftheliabilitymethod

inaccordancewithIAS12Income Taxes.

Deferredtaxassetsandliabilitiesarerecognizedforalltemporary

differencesbetweenthecarryingamountinaccordancewith

IFRSandthetaxbalancesheetvaluesofthecompaniesincluded,

aswellasforconsolidationmeasures.

Inaddition,deferredtaxassetsarerecognizedforfuturebenefits

arisingfromunusedtaxlossesandunusedtaxcreditstothe

extentthattheiruseisprobable.

Thecarryingamountofdeferredtaxassetsisreviewedasof

eachbalancesheetdateandreducedtotheextentthatitisno

longerprobablethatsufficienttaxableprofitwillbeavailableto

allowthebenefitofthosedeferredtaxassetstobeutilized.

Anysuchreductionisalsoreviewedannuallyandsubsequently

reversedtotheextentthatitbecomesprobablethatsufficient

taxableprofitwillbeavailableforthebenefittobeutilized.

Deferredtaxliabilitiesarenotrecognizediftheyarisefrom

temporarydifferencesrelatingtoinvestmentsinsubsidiaries

93

whereCarlZeissisabletocontrolthetimingofthereversalof

thedifferencesanditisprobablethatthereversalwillnotoccur

intheforeseeablefuture.

Deferredtaxesrelatingtotemporarydifferencesthatare

recognizeddirectlyinequityarealsorecordedunderequityand

notshownintheincomestatement.

Deferredtaxassetsanddeferredtaxliabilitiesarenettedoffin

thebalancesheetiftheenterprisehasthelegalrighttosettleon

anetbasisandthetaxesareleviedbythesametaxingauthority

onthesameentity.Accordingly,deferredtaxassetsanddeferred

taxliabilitiesarealsonettedoffwithinthecombinedtaxreturns.

Liabilities

Liabilitiesarerecognizedinthebalancesheetatamortizedcost

usingtheeffectiveinterestmethod.

Recognition of revenue and other income

Thecompanyrecognizesrevenuefromthesaleofgoodsonthe

basisofappropriatecontractsassoonasallpartsoftheproduct

havebeendelivered,riskhaspassedtothebuyer,paymenthas

beenagreedorcanbedetermined,nosignificantobligations

towardsthecustomerareoutstandingandcollectionofthe

receivablecanbeconsideredprobable.Salesrevenuesare

measuredafterdeductionofalldiscounts,pricereductionsand

customerbonuses.Ifthesaleincludessubsequentservicesor

maintenancecontracts,therevenuepertainingtotheseis

recognizedintheperiodinwhichitisearnedandinaccordance

withthestageofcompletionoftheservicesorprorataoverthe

periodofthecontract.

Iftherighttoreturngoodsisagreedinthecaseofproductsales,

therevenueisonlyrecognizedifthecompanyhasappropriate

historicdataavailable.Onthebasisofthisdata,thevalueof

probablereturnscanbeestimatedandrecognizedasanexpense

againstrevenueintheperiodinwhichtheexpenseisincurred.

Interestincomeisrecordedovertimeusingtheeffectiveinterest

method.Dividendsarenotrecognizeduntilthelegalrightto

paymentarises.Iflicensefeesarepayableundermulti-period

contracts,therevenueisgenerallyrecognizedonastraight-line

basis.

Recognition of expenses

Ingeneral,expensesarerecordedwherethereisaprobabilityof

anoutflowofeconomicresourcesfromthecompany.

Researchanddevelopmentcostsarerecordeddirectlyas

expensesfortheperiod,unlesstheycanbecapitalized.Grants

towardsresearchanddevelopmentcostsareoffsetagainst

expensesiftheentitlementarisesforworkthathasalreadybeen

performedandthereforepaidfor.

Thecompanyisliabletowardsthebuyerfortheflawless

functioningoftheproductssoldduringthecontractualwarranty

period.Appropriateprovisionsforwarrantiesarerecordedunder

otheroperatingexpensesatthetimewhentherevenuefromthe

salesisrecognized.

Notes to the Consolidated Income Statement

7 Sales Revenues

Sumsinvoicedtocustomersforgoodsandservicesarereported

insalesrevenues.Deductionssuchasdiscountsareoffsetagainst

thesesales.

Salesrevenuesweregeneratedwithproductsandtechnicaland

otherservicesforbiomedicalresearchandmedicalsystems,

systemsolutionsforthesemiconductor,automotiveand

mechanicalengineeringindustries,planetariumsandhigh-end

consumerarticlessuchascameralensesandbinoculars.

Thesalesrevenuescanbebrokendownbygeographicmarkets

asfollows:

2008/09 2007/08

EURthou % EURthou %

Germany 364,146 17 448,679 16

Europe(excludingGermany) 730,805 35 1,331,977 49

America 530,141 25 529,844 19

Asia,otherregions 476,066 23 420,216 16

2,101,158 100 2,730,716 100


94

8 Other Operating Income

Thisitemincludeson-chargedoverhead,researchanddevelop-

mentgrantsandincomefromrentalsandleases.

Otheroperatingincomealsoincludes:

Theincreaseintheallowancesforimpairmentoninventoriesis

mainlyduetothedifficulteconomicsituationinthe2008/09

fiscalyear.

10 Personnel Expenses

2008/09 2007/08

EURthou EURthou

Incomefromlicenseagreements 7,527 9,179

Insurancecompensation 2,393 1,137

Releaseofotherprovisions 34,139 28,518

Gainsfromthedisposalofnoncurrentassets 738 815

Write-upsofnoncurrentassets 373 791

Releaseofvalueadjustmentsonreceivables 4,603 2,485

11 Depreciation of Property, Plant and Equipment and

Amortization of Intangible Assets

2008/09 2007/08

EURthou EURthou

Costofrawmaterials,consumablesandsupplies,andofpurchasedmaterials 741,294 924,379

Allowancesforimpairmentoninventories 13,512 4,124

Costofpurchasedservices 46,471 59,144

801,277 987,647

2008/09 2007/08

EURthou EURthou

Wagesandsalaries 700,669 724,609

Socialsecuritycosts 128,608 121,341

Pensioncosts 19,627 31,274

Otherbenefits 457 541

849,361 877,765

2008/09 2007/08

EURthou EURthou

Amortizationofintangibleassets 45,012 35,560

Depreciationofproperty,plantandequipment 95,166 98,522

140,178 134,082

ofwhichimpairmentsinaccordance withIAS36 15,241 107

Intotal,theotheroperatingincomecontainsincomefrom

outsidetheperiodunderreviewintheamountofEUR39,851

thousand(lastyear:EUR32,609thousand).

Insurancecompensationmainlycomprisesthereimbursementof

shippingdamages.

Theincomefromthereleaseofotherprovisionsmainlyincludes

thereleaseofprovisionsforrisksresultingfromtradeandother

risks.

Asintheyearbefore,thegainsfromthedisposalofnoncurrent

assetsshownforthereportingperiodmainlyresultfromthesale

oftechnicalequipmentandmachinery.

GovernmentgrantsfortheyearofEUR6,066thousand(last

year:EUR7,362thousand)werewrittentoincome.

9 Cost of Materials

EUR26,554thousand(lastyear:EUR23,389thousand)ofthe

amortizationofintangibleassetsrelatestopatents,industrial

propertyrights,licensesandsoftware,EUR14,410thousand

(lastyear:EUR8,799thousand)todevelopmentcostsand

EUR4,048thousand(lastyear:EUR3,372thousand)toother

intangibleassets.EUR8,735thousandoftheimpairmentsin

accordancewithIAS36relatetointangibleassetsand

EUR6,506thousandtoproperty,plantandequipment.

12 Other Operating Expenses

Otheroperatingexpensesconsistprimarilyofadministration

costs,salescosts,professionalfeesandallocationstoother

provisions.

95

Alsoincludedare:

2008/09 2007/08

EURthou EURthou

Lossesfromthedisposalofnoncurrentassets 1,178 1,168

Maintenance 35,345 41,523

Representatives’commissions 30,356 40,209

Licensefees 12,310 11,449

Warrantycosts 13,895 22,049

13 Other Taxes

Othertaxesconsistoftaxexpensesandgainsarisingindepen-

dentlyofincome.

14 Financial Result

Result from investments accounted for applying the equity

method

Thenotesonthissubjectaretobefoundinsection18“Invest-

mentsaccountedforapplyingtheEquityMethod.”

Net interest income

InvestmentincomeincludesincomeofEUR4,921thousand

(lastyear:EUR352thousand)attributabletosubsidiaries.

Theotherfinancialresultsalsoincludethefollowingexpenses

andincome:

2008/09 2007/08

EURthou EURthou

Other interest and similar income 38,985 56,083

attributabletosubsidiaries 218 287

Interest and similar expenses 102,488 84,083

attributabletosubsidiaries 794 75

interestcosts(pensions) 69,313 62,564

–63,503 –28,000

2008/09 2007/08

EURthou EURthou

Investmentincome 5,314 1,121

Incomefromprofittransferagreements 133 332

Expensesfromlossabsorption 3,033 3,485

Taxeschargedtosubsidiaries 74 99

2,488 –1,933

Thechangesinincomeandexpensesfromexchangerate

differencesandincomeandexpensesfromchangesinmarket

valueisduetothehighvolatilityofcurrencyparitiesinthe

reportingperiod.

Theotherfinancialresultsforthereportingperiodalsoinclude

incomefromthesaleofaforeigninvestmentintheamountof

EUR9,048thousand.Furthermore,animpairmentofEUR7,314

thousand(lastyear:EUR21,420thousand)isrecognizedin

theotherfinancialresults.Thisrelatestoafinancialassetwhich

isunconnectedwiththecompany’soperatingactivitiesandis

thereforeshownunderthisitem.

15 Income taxes

TheincometaxesincludeGermanandforeignincometaxes,the

releaseofprovisionsfortaxes,taxrefundsanddeferredtaxes.

Theincometaxescanbebrokendownasfollowsaccordingto

theirorigin:

2008/09 2007/08

EURthou EURthou

Expenses/incomefromexchangeratedifferences –2,420 11,585

Income/expensesfromchangesinmarketvalue 5,025 –4,442

Expectedreturnonplanassets(pensions) 24,708 26,400

Depreciationoffinancialassets 129 658

Incomefromthedisposalofcurrentsecurities 335 966

Theinterestcostsforpensionshavetobeviewedinconnection

withtheexpectedreturnonplanassetsshownbelowinother

financialresults.Thebalanceofthesetwofiguresrepresentsthe

CarlZeissGroup’snetfinancingexpensesforpensions.

Other financial results

Results from investments

2008/09 2007/08

EURthou EURthou

Currenttaxexpenseslesstaxrefundsandreleaseoftaxprovisions 44,652 109,405

Deferredtaxexpenses – –

Deferredtaxincome 45,367 9,965

Income taxes – 715 99,440


96

Deferredtaxesarecalculatedonthebasisofthestatutoryrates

oftaxthatapplyorthatwillveryprobablyapplyintheindividual

countriesattheexpectedtimeofrealization.Thecurrent

corporateincometaxrateinGermanyis15.0%.Takinginto

accountthesolidaritysurchargeandthedifferenttradetaxrates,

thetaxratesfordomesticcompaniesrangedfrom27.7%to

33.0%(unchangedfromlastyear).Theseratesformthebasisfor

calculatingthecurrenttax.

Therateapplicabletothetaxreconciliationaccountisa

consolidatedtaxrateof31.1%(unchangedfromlastyear).

ThenominaltaxratesapplicableoutsideGermanyinthe

reportingperiodliebetween10.0%and43.0%

(lastyear:15%-44.2%)

Theincometaxexpensesdonotincludeanyincomeorexpenses

arisinginconnectionwithchangestoaccountingpoliciesin

accordancewithIAS8Accounting Policies, Changes in Account-

ing Estimates and Errors.

ThedeferredtaxassetsandliabilitiesasofSeptember30canbe

assignedtoindividualbalancesheetitemsasfollows:

30 SEP 2009 30 SEP 2008

Assets Liabilities Assets Liabilities

EURthou EURthou EURthou EURthou

IntangibleAssets 784 26,187 764 31,908

Property,plantandequipment 5,554 66,232 5,788 70,229

Othernoncurrentassets 20,776 33,820 17,586 35,806

Inventories 23,578 7,736 22,568 5,257

Receivablesandothercurrentassets 12,189 21,310 14,608 18,700

Noncurrentliabilities 140,640 2,724 155,043 2,753

Currentliabilities 69,988 8,100 47,961 14,242

Retainedearnings – 2,083 – 1,740

Taxlosscarryforwards 35,836 – 3,052 –

Total deferred taxes 309,345 168,192 267,370 180,635

Impairment 20,733 – 14,242 –

Netting 109,624 109,624 107,141 107,141

Deferred taxes (net) 178,988 58,568 145,987 73,494

2008/09 2007/08

EURthou EURthou

Earningsbeforeincometaxes –161,928 277,624

Expected income tax expenses (= 31.1% x earnings before income taxes; last year: = 31.1% x earnings before income taxes) – 50,360 86,341

Differencesarisingfromdifferenttaxrates 12,708 –10,843

Effectsofchangesintaxrates –470 –353

Effectsofresultsfrominvestmentsaccountedforapplyingtheequitymethod 22,371 13,352

Effectsofnon-deductibleexpenses 3,020 12,567

Effectsoftax-freeincome –3,887 –6,379

Effectsunrelatedtotheaccountingperiod –276 1,478

Other 16,179 3,277

Actual income tax expenses – 715 99,440

Asofthebalancesheetdate,theCarlZeissGrouphasunused

taxlosscarryforwardsavailabletooffsetagainstfutureprofits.

DeferredtaxassetsamountingtoEUR35,836thousand(last

year:EUR3,052thousand)asofthebalancesheetdatewillbe

formedfortheusabletaxlosscarryforwards.Theincreasearises

mainlyfromthedeferredtaxassetsfromtaxlosscarryforwards

fortheGermantaxscopeofconsolidationintheamountofEUR

32,700thousandduetotheloss-makingpositioninthefiscal

year.InadditiontoGermany,usabletaxlosscarryforwardswere

alsocapitalizedinthefollowingcountries:France,Austria,Spain,

SwedenandJapan(lastyear:Germany,France,Austriaand

Japan).

TherearelosscarryforwardsintheamountofEUR53,575thousand

(lastyear:EUR17,948thousand).Mostofthesecanbeoffset

forlongerthanfiveyearsoraretotallyunforfeitable.Theseloss

carryforwardswereclassifiedasprobablyunusableasofthe

balancesheetdate.

ConsolidationhasresultedinEUR14,807thousandofdeferredtax

assets(lastyear:EUR13,789thousand)andEUR41,034thousand

ofdeferredtaxliabilities(lastyear:EUR54,740thousand).

Thereconciliationoftheexpectedincometaxexpensesbasedon

theresultbeforetaxesonincomeataconsolidatedtaxrateof

31.1%,asinthepreviousyear,forthereportingperiodof

EUR–50,360thousand(lastyear:EUR86,341thousand)andthe

actualtaxexpensesshownintheconsolidatedincomestatement

isasfollows:

97

Afiveyearperiodwastakenasthebasisforthecapitalizationof

deferredtaxassetsastaxlosscarryforwardsintheGermanscope

ofconsolidationfortaxpurposes.Duetothistimerestriction,

thelosscarryforwardsfullydeferredinthereportingperiodhad

tobeadjustedattheparentcompanyonthecorporatelevel.

Theitementitledothersessentiallycontainstheamountofthis

adjustment.

Notes to the Consolidated Balance Sheet

16 Intangible Assets

Thegoodwill,intheamountofEUR169,002thousand(lastyear:

EUR166,524thousand),issubjectedtoanimpairmenttestevery

yearatthelevelofthecashgeneratingunits.

Thecashflowsusedforthecalculationarebasedondetailed

planswithaplanninghorizonoffiveyears.Forthesubsequent

fiscalyears,thecashflowforthelastyearofdetailedplanningis

carriedforward.Nogrowthfactorwasassumedhere.The

discountratesappliedareweightedaveragecostsofcapitalafter

taxesbetween7.7%and9.2%(8.3%to9.8%beforetaxes),

dependingonthecashgeneratingunit.

Likelastyear’s,theimpairmenttestsinthereportingperioddid

notleadtoanyallowancesagainstthegoodwillonthebalance

sheet.

Thefollowingtableshowsthemostimportantgoodwillitems

carriedintheconsolidatedbalancesheetpersegment.

ThechangeingoodwillfromtheacquisitionsofALISCorp.,

LDTInc.,SMTPte.Ltd.andPixerTechnologiesresultsfromthe

valuationofforeigncurrencyinaccordancewithIAS21.47.

Apartfromtheregisteredtrademarkswithabookvalueof

EUR817thousand(lastyear:EUR836thousand)whichwere

capitalizedduringthepurchasepriceallocationofLDTInc.,

theGroupdoesnotshowanyfurtherintangibleassetswithan

indefiniteusefullife.Theusefullifewasdefinedasindefinite

becausepermanentusecanbeassumeduntilmorereliable

informationisobtained.

AtotalofEUR284million(lastyear:EUR321million)was

investedintoresearchanddevelopmentinthereportingperiod.

Ofthetotalamount,proprietarydevelopmentexpensesinthe

amountofEUR6,507thousand(lastyear:EUR10,245thousand)

ofthetotalwerecapitalized,sincethecriteriaofIAS38weremet.

Onedomesticsubsidiaryusessoftwareunderleasingagreements

thatareclassifiedasfinanceleasesinaccordancewithIAS17,

witheconomicownershipoftheassetbeingassignedtothe

lessee.SoftwarewithanetbookvalueofEUR17thousand(last

year:EUR534thousand)iscarriedunderintangibleassetsinthe

consolidatedbalancesheetasaresultoftheseleases.

Goodwill

Transaction 30 SEP 2009 30 SEP 2008 Segment

EURmill EURmill

AcquisitionofIOLTECH 49.5 49.5 Medicaland ResearchSolutions

Reverseacquisition MedicalandCarlZeissMeditecAG 10.4 10.4 ResearchSolutions

AcquisitionofP.A.L.M. 7.8 7.8 Medicaland ResearchSolutions

AcquisitionofLDTInc. 6.6 6.8 Medicaland ResearchSolutions

Acquisitionof*Acri.Tec 5.3 5.3 Medicaland ResearchSolutions

Acquisitionof MedicalandCarlZeissMicroImagingAISInc. 2.2 2.2 ResearchSolutions

AssetDealWelchAllynInc. 2.4 – Medicaland ResearchSolutions

AcquisitionofPixerTechn. 27.0 26.7 IndustrialSolutions

AcquisitionofNaWoTec 22.2 22.2 IndustrialSolutions

AcquisitionofALISCorp. 20.1 20.6 IndustrialSolutions

AcquisitionofCarlZeiss3DAalen 5.7 5.7 IndustrialSolutions

AcquisitionofSMTPte.Ltd. 2.1 2.2 IndustrialSolutions


98

Patents, industrial property rights, Other licenses, Development intangible software Goodwill costs assets Total

EURthou EURthou EURthou EURthou EURthou

Purchase/manufacturing costs Oct. 1, 2007 171,866 135,397 40,738 19,389 367,390

Changeinscopeofconsolidation 15,466 34.347 – 12,210 62,023

Additions 7,218 – 10,245 4,160 21,623

Disposals 1,493 – – 1,275 2,768

Transfers 4,345 – – –4,328 17

Foreignexchangedifferences 345 –274 – 16 87

Sept. 30, 2008 197,747 169,470 50,983 30,172 448,372 Amortization/impairment Oct. 1, 2007 67,946 2,963 18,091 8,756 97,756

Changeinscopeofconsolidation 421 – – 162 583

Additions 23,389 – 8,799 3,372 35,560

Disposals 1,023 – – 1,466 2,489

Write-ups 63 – – – 63

Transfers 1 – – – 1

Foreignexchangedifferences 4,210 –17 – –27 4,166

Sept. 30, 2008 94,881 2,946 26,890 10,797 135,514

Book values Sept. 30, 2008 102,866 166,524 24,093 19,375 312,858 Purchase/manufacturing costs Oct. 1, 2008 197,747 169,470 50,983 30,172 448,372

Changeinscopeofconsolidation 1,033 3,542 – 6,840 11,415

Additions 4,194 426 6,507 6,221 17,348

Disposals 780 – – 6 786

Transfers 4,637 – – –4,637 –

Foreignexchangedifferences –6,514 –1,525 –106 –532 –8,677

Sept. 30, 2009 200,317 171,913 57,384 38,058 467,672 Amortization/impairment Oct. 1, 2008 94,881 2,946 26,890 10,797 135,514

Changeinscopeofconsolidation 116 – – – 116

Additions 26,554 – 14,410 4,048 45,012

Disposals 635 – – – 635

Write-ups – – – – –

Transfers – – – – –

Foreignexchangedifferences –5,716 –35 –45 –291 –6,087

Sept. 30, 2009 115,200 2,911 41,255 14,554 173,920

Book values Sept. 30, 2009 85,117 169,002 16,129 23,504 293,752

99

Land and equivalent rights and Other Advance buildings including Technical equipment, payments and buildings on land equipment and plant and office construction owned by third parties machinery equipment in progress Total


Purchase/manufacturing costs Oct. 1, 2007 402,996 407,828 531,730 21,588 1,364,142

Changeinscopeofconsolidation 2,298 8560 4,312 237 15,407

Additions 16,942 33,602 45,059 23,178 118,781

Disposals 1,232 10,071 20,113 346 31,762

Transfers 2,009 2,769 12,732 –17,527 –17

Foreignexchangedifferences 460 –230 –536 3 –303

Sept. 30, 2008 423,473 442,458 573,184 27,133 1,466,248 Amortization/impairment Oct. 1, 2007 153,684 288,839 393,836 – 836,359

Changeinscopeofconsolidation 385 2,680 2,368 – 5,433

Additions 10,575 31,955 55,992 – 98,522

Disposals 983 9,613 18,550 – 29,146

Write-ups – 1 – – 1

Transfers 45 –1,314 1,268 – –1

Foreignexchangedifferences 194 –113 –413 – –332

Sept. 30, 2008 163,900 312,433 434,501 – 910,834

Book values Sept. 30, 2008 259,573 130,025 138,683 27,133 555,414 Purchase/manufacturing costs Oct. 1, 2008 423,473 442,458 573,184 27,133 1,466,248

Changeinscopeofconsolidation 24 571 1,104 – 1,699

Additions 14,136 20,282 31,595 15,399 81,412

Disposals 292 4,302 10,697 323 15,614

Transfers 1,255 –3,711 23,567 –21,111 –

Foreignexchangedifferences 775 25 –1,171 114 –257

Sept. 30, 2009 439,371 455,323 617,582 21,212 1,533,488 Amortization/impairment Oct. 1, 2008 163,900 312,433 434,501 – 910,834

Changeinscopeofconsolidation 1 239 298 – 538

Additions 11,134 27,398 56,634 – 95,166

Disposals 196 1,911 7,210 – 9,317

Write-ups – – – – –

Transfers 167 –4,667 4,500 – –

Foreignexchangedifferences 125 –5 –1,045 – –925

Sept. 30, 2009 175,131 333,487 487,678 – 996,296

Book values Sept. 30, 2009 264,240 121,836 129,904 21,212 537,192

17 Property, Plant and Equipment


100

30 SEP 2009 30 SEP 2008

EURthou EURthou

Landandbuildings 123,712 125,979

Technicalequipmentandmachinery 20,330 21,720

Otherequipment,plantandofficeequipment 1,137 1,605

Country Stockholding

30 SEP 2009 30 SEP 2008

CarlZeissVisionHoldingGmbH Germany 48% 48%

AdvancedResearchInstituteGmbH Germany 49% 49%

TCZPte.Ltd. Singapore 40% 40%

Thebookvaluesincludethefollowingamountsfromfinance

leaseswiththeCarlZeissGroupasthelessee:

Thebookvaluesaboveincludeonedomesticproductionfacility

whichwasclassifiedunderIAS17asafinanceleaseandis

carriedintheconsolidatedbalancesheetasofthebalancesheet

datewithabookvalueofEUR131,269thousand(lastyear:

EUR135,727thousand).Furthermore,asale-and-lease-back

transactionbyaUSsubsidiaryisalsoclassedasafinanceleasein

accordancewithIAS17,sothattheland,buildingsandimprove-

mentscontinuetobeonthebalancesheetofthelesseeand

depreciatedthere.TheyarecarriedatabookvalueofEUR6,952

thousand(lastyear:EUR7,139thousand).Sale-and-lease-back

transactionswerealsoconcludedfortechnicalequipmentand

machineryandotherequipment,plantandofficeequipmentin

thereportingperiod.ThesearecarriedatEUR3,378thousand

andEUR353thousandintheabovebookvalues.

ThetechnicalequipmentincludesassetsofEUR2,094thousand

fromfinanceleasesinwhichtheCarlZeissGroupactsasthe

lessor.ThegrossvalueofthereceivableswasEUR2,655

thousandasofthebalancesheetdate.

Furtherdetailsoftheleasesaretobefoundinsection29

FinancialLiabilities.

Property,plantandequipmentwithanetbookvalueof

EUR5,631thousandaresubjecttorestraintsondisposalorserve

ascollateralforliabilities.

TheGrouphadenteredintocontractualobligationsof

EUR5,940thousandforthepurchaseofproperty,plantand

equipmentasofthebalancesheetdate.

18 Investments Accounted for Applying the

Equity Method

CarlZeissAGhasvaluedoneassociatedcompanybytheequity

methodintheseconsolidatedfinancialstatements.Inaddition,

itssharesinCarlZeissVisionHoldingGmbHandtheAdvanced

ResearchInstituteGmbH,whichrepresentjointventuresin

accordancewithIAS31,arealsocarriedinaccordancewiththe

equitymethodonthebasisoftheirconsolidatedorindividual

financialstatementsusingthealternativetreatmentpermittedby

IAS31.38.

TheCarlZeissGroupholds50%ofthevotingstockofCarlZeiss

VisionHoldingGmbH,Aalen,Germany.

Byashareholders’resolutionofNovember10,2008,acash

capitalincreasetotalingEUR35milliontookplaceatCarlZeiss

VisionHoldingGmbH,Aalen,inthesamemonth.Thejoint

ventureshareholders,CarlZeissAGandtheprivateequity

investorEQT,contributedfundsonafifty-fiftybasis.CarlZeiss

VisionManagementBeteiligungsGmbH&Co.KG,Oberkochen,

didnottakepartinthecapitalincrease.

TheCarlZeissGroup’sshareinthelossesoftheabove-mentioned

companies,amountingtoEUR71,931thousand(lastyear:

EUR42,931thousand)isshownintheconsolidatedincome

statementunderresultsfrominvestmentsaccountedforapplying

theequitymethod.

DuetothecumulativelossesofCarlZeissVisionHoldingGmbH

thathavealreadybeenrecognizedinthepastbasedonthe

equitymethodandtherespectiveCarlZeissGroupshare,the

bookvalueoftheinvestmentwascompletelyamortizedinthe

reportingperiod.Furthermore,thevalueoftheprofit-participat-

ingcertificatesissuedbyCarlZeissVisionHoldingGmbHhad

101

Assets Liabilities Equity Sales EbIT Result revenues

EURmill EURmill EURmill EURmill EURmill EURmill

2008/09 1,300 1,410 –110 879 –72 –145

2007/08 1,336 1,321 15 892 52 –90

30 SEP 2009 30 SEP 2008

EURthou EURthou

Sharesinsubsidiaries 6,204 14,120

Loanstosubsidiaries 2,057 2,784

Profit-participatingcertificates 12,214 70,000

Investments 11,481 12,555

Securities 78,337 627

Othernoncurrentfinancialassets 25,080 24,202

135,373 124,288

tobereducedbyEUR57,804thousandinthereportingperiod

followingtheprinciplesofvaluationbytheequitymethod.

Thechangesinequityoutsideofprofitandlossintheconsoli-

datedfinancialstatementsoftheCarlZeissVisionGroupdueto

thefirst-timeapplicationofhedgeaccountinginaccordance

withIAS39hadtoberecognizedintheequityoftheCarlZeiss

GroupaccordingtotheshareheldbytheCarlZeissGroup.

Summaryofthefinancialinformationforinvestmentsaccounted

forapplyingtheequitymethod(base100%;September30):

19 Other Noncurrent Financial Assets

Thedeclineinsharesinsubsidiariesmainlyresultsfromthesale

ofasubsidiarypreviouslyaccountedforatfairvalue.

Theprofit-participatingcertificatesrelatesolelytotheCarlZeiss

VisionGroup.

Theincreaseinsecuritiesresultsfromthepurchaseofcorporate

bondswhichwereclassifiedasavailable-for-salesecurities.The

securitiesaretobevaluedatfairvalueandamountedasofthe

balancesheetdatetoEUR75,537thousand.

Theremainingnoncurrentfinancialassetsmainlyconsistof

assetsofforeigncompaniesrelatingtothefinancingofpension

commitmentsaswellasloansandrentdepositaccountswhich

arepayableinmorethanoneyear.Inaddition,trusteeaccounts

inconnectionwiththeacquisitionofacompanyarecarriedin

thisitem.

20 Other Noncurrent Non-financial Assets

Theothernoncurrentnon-financialassetsofEUR18,448thou-

sand(lastyear:EUR16,836thousand)chieflyconsistofthe

assetsforpensionliabilityinsurancepoliciestocoverdeferred

compensation.

21 Inventories

30 SEP 2009 30 SEP 2008

EURthou EURthou

Rawmaterialsandsupplies 190,444 215,659

Unfinishedgoods,otherworkinprogress 343,904 347,243

Finishedgoodsandgoodsforresale 231,091 259,150

Advancepaymentsmade 4,848 6,951

Inventories 770,287 829,003

ThebookvaluesincludeimpairmentsofEUR152,659thousand

(lastyear:EUR125,735thousand).Theincreaseismainlydue

toimpairmentsasaresultofthegenerallydifficulteconomic

situation.Ofthetotalamount,inventoriesintheamountof

EUR309,593thousand(lastyear:EUR338,872thousand)were

recognizedatanetrealizablevaluebelowcost.

Impairmentsoninventory,whicharerecordedasanexpense

andshownintheconsolidatedincomestatementundercost

ofmaterials,amounttoEUR23,260thousandinthereporting

period(lastyear:EUR14,838thousand).Write-upsof

EUR9,748thousand(lastyear:EUR10,714thousand)were

recordedintheincomestatement.

PurchaseobligationstowardssuppliersworthEUR38,721thou-

sand(lastyear:EUR44,303thousand)spreadoveranumberof

yearsexistedasofthebalancesheetdate.


102

2008/09 2007/08

EURthou EURthou

Oct. 1 19,186 17,426

Changeinscopeofconsolidation – 173

Consumption –4,250 –3,164

Release –3,076 –2,337

Additionsincludingreclassification 5,392 7,381

Foreignexchangeeffects 48 –293

Sept. 30 17,300 19,186

30 SEP 2009 30 SEP 2008

EURthou EURthou

Trade receivables (net) 438,864 515,462

ofwhichneitheroverduenorimpaired asofthebalancesheetdate 284,303 330,422

ofwhichnotimpairedalthough overduewithinthefollowingranges asofthebalancesheetdate:

upto30days 41,570 52,892

31to90days 16,456 23,139

91to180days 14,244 19,901

181to360days 7,427 14,341

361daysandover 6,190 5,254

30 SEP 2009 of which 30 SEP 2008 of which due due after more after more than than one year one year


Receivablesfromsubsidiaries 14,724 1 12,088 100

Receivablesfromassociatedandrelatedcompanies 56,831 – 44,295 –

Othercurrentfinancialassets 320,823 – 466,278 –

Othercurrentnon-financialassets 44,111 – 47,046 –

436,489 1 569,707 100

ThetradereceivablesasofSeptember30,2009includereceiv-

ablesintheamountofEUR478thousandfrombillingsofmanu-

facturingordersaccordingtothepercentage-of-completion

method.Advancepaymentsreceivedfortheseprojects(EUR

29,937thousand)arealsoconsideredinthistotal.EUR11,126

thousandofrevenuesfromproductiontoorderwererecognized

inthereportingperiod.Thetotalrevenuesfromprojectsin

progressasofthebalancesheetdateareEUR38,580thousand.

Theindividualvalueadjustmentsandthelump-sumindividual

valueadjustmentsontradereceivablesdevelopedasfollows:

23 Other Current Assets

Receivablesfromsubsidiariesresultfromcashmanagementand

fromtradereceivablesfromcompaniesnotincludedinCarlZeiss

AG’sconsolidatedfinancialstatements.

Theothercurrentfinancialassetsmainlyshowfixed-term

depositsmaturinginmorethan90daysandfinancialderivatives

withapositivemarketvalue.Thedeclineinthereportingperiod

principallyresultsfromthereclassificationoftheinvestmentof

fixed-termdepositsdueinmorethan90daysintoothernon-

currentfinancialassets.

Theothercurrentnon-financialassetschieflyshowtaxcredits

fromnon-incometaxesandprepaidexpenses.

Thefollowingtableprovidesinformationonthecreditrisks

associatedwiththereceivablesfromsubsidiariesandfrom

associatedandrelatedcompanies.

Thefollowingtableprovidesinformationonthecreditrisks

associatedwiththetradereceivables:

Furtherinformationonfinancialrisksandtypesofriskisprovided

insection37“FinancialInstrumentsandRiskProvisioning”. 30 SEP 2009 30 SEP 2008

TEUR T EUR

Trade receivables (gross) 456,552 533,366

(Lump-sum)individualvalueadjustments 17,300 19,186

Valueadjustmentsforforeigncurrencies –388 1,282

Trade receivables (net) 438,864 515,462

ofwhichdueaftermorethanoneyear 5,906 6,921

22 Trade Receivables

103

30 SEP 2009 30 SEP 2008

EURthou EURthou

Receivablesfromsubsidiaries 14,724 12,088

Receivablesfromassociatedandrelatedcompanies 56,831 44,295

71,555 56,383

ofwhichneitheroverduenorimpaired asofthebalancesheetdate 14,090 51,663

ofwhichnotimpairedalthough overduewithinthefollowingranges asofthebalancesheetdate:

upto30days 6,429 1,250

31to90days 1,822 472

91to180days 3,575 93

181to360days 5,414 245

361daysandover 40,214 2,650

AnimpairmentofEUR7,314thousandwasrecognizedinthe

receivablesfromassociatedandrelatedcompanies(lastyear:

EUR21,420thousand).

Furtherinformationonfinancialrisksandtypesofriskisprovided

insection37“FinancialInstrumentsandRiskProvisioning”.

24 Securities

Theothersecuritiesarelargelymadeupofcommercialpaper

maturinginlessthanoneyearorintendedforsalewithinone

year.

25 Cash and Cash Equivalents

Liquidassetsincludechecks,cashinhandandcashatbank.

Theeffectiveratesofintereston90-daycashatbankgenerally

liebetween0.25%and1.5%(lastyearbetween4%and5%).

Thesecuritiesreferalmostentirelytocommercialpaperacquired

inthereportingperiod.

26 Equity

Asinthepreviousyear,thecommon stockofCarlZeissAG

amountstoEUR120,000 thousandandisdividedinto

120,000,000par-valuestockswhichareallheldbythe

Carl-Zeiss-Stiftung.Thedividendpaidinthereportingperiod

cametoEUR10,000thousand.

Additional paid-in capitalisconstantatEUR52,770thousand.

Theconsolidated retained earningsincludethestatutory

reservesofCarlZeissAG,amountingtoEUR5,950thousand,

retainedearningsfromconsolidatedsubsidiaries,liabilities-side

differencesarisingfromcapitalconsolidation,theprovisions

fromthefirst-timeapplicationofIFRSandthecumulativecur-

rencydifferencesasofOctober1,2004,whichwerereclassified

asofthetransitiondateinaccordancewiththealternative

treatmentpermittedbyIFRS1.22.Inaddition,goodwillresulting

fromthecapitalconsolidationofsubsidiariesconsolidatedin

previousyearshasbeendeductedfromthisitem.

Thecumulative other reservescontainthedifferencesarising

fromthetranslationoutsideprofitandlossoftheforeigncur-

renciesusedforthefinancialstatementsofforeignsubsidiaries

fromthetimeofthefirstapplicationofIFRSonwards.Likewise,

theeffectsofthevaluationoutsideprofitandlossoffinancial

instrumentsclassedasavailable-for-saleisreflectedhere.The

changesinequityoutsideprofitandlossfromthefirst-time

applicationofhedgeaccountingweretakenintoaccounthere.

Minority interestsconsistofthird-partysharesintheequityof

domesticandforeignsubsidiaries.

Thedevelopmentoftheconsolidatedequityisshowninthe

equitystatement,whichisbasedontherulesofIAS1

Presentation of Financial Statements.

27 Pension Provisions

ThepensionprovisionsincludecommitmentsofCarlZeissAG

andvarioussubsidiariesforcurrentpensionsandforfuture

pensionentitlements.Thisitemalsoincludestheprovisions

recognizedbyourUScompaniesforpost-retirementhealthcare

liabilities.

30 SEP 2009 30 SEP2008

EURthou EURthou

Liquidassets 565,411 464,284

Securitiesmaturinginlessthan90daysfromthetimeofacquisition 15,325 581

580,736 464,865


104

Germany Other countries

2008/09 2007/08 2008/09 2007/08

% % % %

Discountrate 6.0 6.4 1.3–8.25 1.5–9.4

Trendinsalaries 3.0 3.0 2.0–4.3 2.0–7.0

Trendinpensions 2.0 2.0 1.0–5.0 1.0–5.0

Trendincostofmedicalcare – – 3.5–8.8 9.0

Expectedreturnonplanassets 5.0 5.0 1.3–7.5 1.7–7.6


30 SEP 2009 30 SEP 2008 30 SEP 2009 30 SEP 2008


Presentvalueofdefinedbenefitobligationsnotfinancedbyafund 703,581 678,026 10,701 1,769

Presentvalueofdefinedbenefitobligationswhollyorpartlyfinancedbyafund 371,393 322,824 144,407 124,457

Total present value of defined benefit obligations 1,074,974 1,000,850 155,108 126,226

Fairvalueofplanassets 370,208 337,005 93,457 90,016

Net obligations 704,766 663,845 61,651 36,210

Unrecognizedpastservicecost – – – 72

Unrecognizedactuarialgains/losses 89,602 155,306 –22,369 895

794,368 819,151 39,282 37,177

TheCarlZeissGrouphasbothdefinedcontributionanddefined

benefitpost-employmentbenefitsystems.

Withthedefinedcontributionplans,theobligationofthe

companiesinquestionislimitedtothepaymentoftheagreed

sums.

Theexpensesfordefinedcontributionplanscameto

EUR43,574thousandinthereportingperiod(lastyear:

EUR45,744thousand).

Definedbenefitplansentailacommitmenttowardsbeneficiaries

–bothactiveandformeremployees–andtheirsurviving

dependentstopaytheagreedbenefits.TheCarlZeissGrouphas

suchcommitmentsinrespectofbothdomesticandforeign

Groupcompanies.TheCarlZeissGroupfinancesdefinedbenefit

planspartlyfromprovisionsandpartlyfromexternalfunds.

The2005/06fiscalyearsawtheintroductioninGermanyofa

ContractualTrustArrangement(CTA),underwhichassetsare

transferredtoalegallyindependenttrustsothatplanassetsare

createdwhichareentirelydedicatedtomeetingpension

obligations.TheseassetsmeetthecriteriaofIAS19.7forplan

assets,whichallowsthemtobenettedoffagainstthepension

obligationsintheseconsolidatedfinancialstatements.Ifthe

planassetsexceedtheunderlyingassuredbenefits,thesurplusis

recognizedundernoncurrentfinancialassets.

Actuarialassumptionsareunavoidableinanydefinedbenefit

pensionsystem.Inadditiontolifeexpectancy,whichisobtained

inGermany,forexample,fromthe2005Gmortalitytables

compiledbyProfessorDr.KlausHeubeck,thefollowingassump-

tionswereadoptedintheactuarialcalculations:

Inthecurrentfiscalyear,wehaveadjustedourestimateofthe

assumedmarketrateofinterestforthedeterminationofthe

DBOinaccordancewithIAS19becauseofthevolatilityofthe

financialmarkets.Thehighquality(AA-rated)corporatebonds

underlyingtheestimatewereadjustedforindividualcorporate

bondswithspecific,non-representativecharacteristics.The

reductionintheassumedinterestrateandtheincreaseinthe

DBOresultingfromthisadjustmentofthebasisfortheestimate

doesnothaveanyeffectontheaccruedpensionobligation

becausethecorridormethodinaccordancewithIAS19is

appliedtoactuarialgainsandlosses.

Theexpectedreturnonplanassetsisderivedfromtheportfolio

structureoftheplanassetsinconjunctionwiththemarket

returnsoncomparableinvestments.

Thefinancingstatusofthedefinedbenefitplansaccordingto

IAS19isasfollows:

105


2008/09 2007/08 2008/09 2007/08


Currentservicecost 15,414 23,047 3,985 3,841

Interestcost 61,074 55,213 8,239 7,351

Expectedreturnonplanassets –17,817 –18,259 –6,891 –8,141

Pastservicecost – 3,884 –153 6

Amortizationofactuarialgains/losses –5,637 –640 1,617 –1,305

Other – – 89 –325

Net expenses for the fiscal year 53,034 63,245 6,886 1,427


2008/09 2007/08 2008/09 2007/08


Consolidated pension provisions on Oct. 1 819,151 838,034 37,177 38,396

Foreignexchangedifferences – – 3,117 –293

Changesinscopeofconsolidation 234 90 – –

Netexpensesforthefiscalyear 53,034 63,245 6,886 1,427

Pensionbenefitspaid –60,340 –61,766 –499 –5,908

InvestmentinContractualTrustArrangementandotherinvestmentsinplanassetsoutsideGermany –19,949 –20,397 –9,881 –7,196

Effectofchangeinnon-nettablecomponents 2,238 –55 2,482 10,751

Consolidated pension provisions on Sept. 30 794,368 819,151 39,282 37,177

Theconsolidatedincomestatementcontainsthefollowing:

Thepension provisionshavedevelopedasfollows:

Theplan assetshavedevelopedasfollows:

ThemarketvalueoftheplanassetsinGermanyrecognized

aboveisbasedonthesituationonthevaluationdateof

September22,2009.ThemarketvaluewasEUR966thousand

loweronthebalancesheetdate.Thisdifferencewouldonly

haveaffectedthecumulativeactuarialgainsandlossesand

thereforehasnoinfluenceonthevaluesrecognized.

Inaddition,planassetsofEUR15,078thousand(lastyear:

EUR11,382thousand)existwhichareinexcessoftheunderlying

assuredpensionentitlementsorarenotclassifiedasplanassets

withinthemeaningofIAS19Employee Benefits.Thisamount

consequentlydoesnotformpartoftheplanassets,butis

recognizedundernoncurrentfinancialassets.Thepartresulting

fromemployer’scontributionsinthereportingperiodisshownin

thecashflowstatementunderPaymentsforInvestmentsin

FinancialAssetsandnotas“InvestmentintoContractualTrust

ArrangementandOtherPlanAssetsoutsideGermany.”

Theemployer’scontributionstotheplanassetsforthe2009/10

fiscalyearwillprobablybeEUR14,247thousand.


2008/09 2007/08 2008/09 2007/08


Plan assets on Oct. 1 337,005 345,139 90,016 119,699

Foreignexchangedifferences – – –5,876 –7,922

Changesinscopeofconsolidation 79 77 – –

Actualreturnonplanassets 17,564 –28,663 6,265 –13,170

Employers’contributions 19,949 20,397 9,881 7,196

Employees’contributions – – 520 169

Pensionpayments –2,151 – –4,867 –5,205

Effectofchangeinnon-nettablecomponents –2,238 55 –2,482 –10,751

Plan assets on Sept. 30 370,208 337,005 93,457 90,016


106

Increase by Reduction by 1 percentage 1 percentage point point

EURthou EURthou

Totalofthecurrentpastservicecostandinterestexpensecomponentsofthenetcostsfortheperiodofpost-employmenthealthcare 315 –251

Cumulativeobligationsrelatingtohealthcarecostsforpost-employmentbenefits 4,145 –3,083


30 SEP 2009 30 SEP 2008 30 SEP 2009 30 SEP 2008


Stocks 91,168 24,975 30,397 29,702

Securities 203,512 195,235 42,127 35,987

Realestate – – 2,891 –

Cash 64,737 108,184 2,064 2,795

Others 10,791 8,611 15,978 21,532

370,208 337,005 93,457 90,016

Portfolio Structure of the Plan Assets

Changesintheassumedcosttrendsinhealthcare,whichrelate

solelytotheUSsubsidiaries,wouldhavethefollowingimpact:

30 SEP 2009 30 SEP 2008 30 SEP 2007 30.9.2006 30.9.2005


Presentvalueofdefinedbenefitobligation 1,230,082 1,127,076 1,234,331 1.376.500 1.327.311

Fairvalueofplanassets 463,665 427,021 464,838 356.156 109.566

Plandeficit –766,417 –700,055 –769,493 –1.020.344 –1.217.745

Empiricaladjustmentofplanliabilitiesasofthebalancesheetdate 93,508 –126,495 –133,044 –65.380 11.645

Empiricaladjustmentofplanassetsasofthebalancesheetdate –879 –68,233 6,574 1.922 7.559

107

30 SEP 2009 of which 30 SEP 2008 of which due in due in one year one year or less or less


Provisionsforincometaxes 46,530 46,530 55,049 55,049

Provisionsforpersonnel-relatedobligations 115,911 51,358 111,602 62,655

Provisionsforsales-relatedobligations 130,735 130,735 130,245 130,245

Otherprovisions 68,651 32,842 62,647 22,945

361,827 261,465 359,543 270,894

1 OCT 2008 Change in Consumption Release Additions Accretion Foreign 30 SEP 2009 scope of including re- exchange consolidation classification differences

EURthou EURthou EURthou EURthou EURthou EURthou EURthou EURthou

Provisionsforincometaxes 55,049 – 9,214 557 1,238 – 14 46,530

Provisionsforpersonnel-relatedobligations 111,602 484 76,982 625 81,018 89 325 115,911

Provisionsforsales-relatedobligations 130,245 – 65,569 26,956 92,774 – 241 130,735

Otherprovisions 62,647 9 17,979 6,558 28,414 1,536 582 68,651

359,543 493 169,744 34,696 203,444 1,625 1,162 361,827

30 SEP 2009 of which of which 30 SEP 2008 of which of which due in maturing due in maturing one year in more one year in more or less than or less than five years five years

EURthou EURthou EURthou EURthou EURthou EURthou

Profit-participatingcertificates 9,043 1,530 – 7,930 – –

Liabilitiestobanks 430,347 104,048 2,177 335,155 22,279 19,700

Liabilitiesarisingfromfinanceleases 24,216 2,833 11,167 22,906 2,500 13,098

Otherfinancialliabilities 82,567 15,281 22 28,834 7,470 44

546,173 123,692 13,366 394,825 32,249 32,842

28 Other Provisions Thetaxprovisionsincludeamountsfortaxesnotyetfinally

assessed.

Personnel-relatedprovisionsareforobligationsunderpartial

retirementschemes,anniversaryexpensesandvacationnotyet

taken,thetimingorvolumeofwhichcannotyetbeprecisely

determined.Inaddition,thisitemincludesaccruedprovisionsfor

earlyretirementschemesinthisfiscalyear.Sales-relatedpro-

visionsmainlyincludewarranties,servicesstilltoberendered

andanticipatedlossesfromonerouscontracts.Theotherpro-

visionsmainlyincludeamountsforenvironmentalrisks,restruc-

turingandtheriskoflitigationcosts.

Theyalsocontainprovisionsrecognizedforapurchaseprice

allocationfrompreviousyears.

29 Financial Liabilities


108

Profit-participating certificates

Theprofit-participatingcertificatescomprisethoseofseries

2004-D,2005-D,2006-D,2007-Dand2008-D,allwithatermof

fiveyears.EachcertificatehasaparvalueofEUR250.The

arrangementmayonlybecancelledbyeitherpartyinnarrowly

definedexceptionalcases.

Theyieldisonavariablescalefrom0%to20%,dependingon

theCarlZeissGroup’sreturnonsalesinaccordancewiththe

termsofthecertificates.

Theprofit-participatingcertificatesarerecognizedinthecon-

solidatedfinancialstatementsofCarlZeissAGasliabilities.Due

tothelossesgeneratedinthe2008/09fiscalyear,alosspartici-

pationinaccordancewiththetermsofthecertificatesoccurred

forthefirsttimeinthatyear.Theliabilityfromtheprofit-partici-

patingcertificatesthereforehadtobereducedintheincome

statementbyEUR861thousand.

Promissory note loans

UnderagreementsdatedJune16,2005,CarlZeissAGtookup

twopromissorynoteloansintheamountofEUR80millionand

EUR170million,maturingonJune24,2010,andJune25,2012

respectively.Fixedinterestof3.25%and3.625%respectivelyis

payableannually.

TwopromissorynoteloanstoatotalvalueofEUR160million

wereplacedinthefiscalyearunderreviewundercontractsof

May4,2009.Oneofthetwo,intheamountofEUR128.5million,

bearsafixedrateofinterestandtheother,worthEUR31.5million,

bearsvariableinterest.Aninteresthedgingtransactionwas

concludedforthelatter.Bothloansarerepayableatparvalue

onMay12,2014.

EUR347.1million(lastyear:EUR244.4million)oftheseloansis

includedintheliabilitiestobanks.AnotherEUR62.5million(last

year:EUR5.0million)isshownunderotherfinancialliabilities,as

thelendersofthisamountareinsurancecompaniesandfinancial

servicescompanies.

Liabilities to banks

Thisitemalsorecognizesliabilitiesarisingfromafinancelease

transaction.Intheyear2001,twoGroupcompaniesconcluded

severalleasesandsub-leaseswithtwopropertyleasingcompa-

niesforalargeproductionfacility.Theleasesandsub-leaseswill

expirenolaterthanDecember31,2013.

TheyareclassifiedasfinanceleaseswithinthemeaningofIAS17

Leases.Theleasingcompaniescarryoutrefinancingthrough

bankloans.Therefore,theconsolidatedbalancesheetshowsnot

onlytheproductionfacilitybutalsotheliabilitiestobanks,which

asofthebalancesheetdatewereEUR64,213thousand(last

year:EUR80,220thousand),andbear6%(lastyear:6%)

interest.ThecurrentportionamountstoEUR12,096thousand

(lastyear:EUR16,076thousand).Thecreditorshavecollateral

fortheloansintheformofthelandacquiredwiththecredit

facilityincludingthebuildingserectedonit,theydonothave

anyrightofrecourseagainstcompaniesoftheCarlZeissGroup.

Theloansarebeingrepaidinmonthlyinstallmentsandrun

until2013.

Liabilities arising from finance leases

TheCarlZeissGrouphasconcludedfinanceleasesforanumber

offixedassets,mainlyforpremisesabroad,technicalequipment

andmachineryandsoftware.

Themostsignificantliabilityarisingfromafinanceleaseresults

fromasale-and-lease-backtransactionataUSsubsidiary.On

September28,1999thecompany,basedinDublin(CA),USA,

soldexistingland,buildingsandimprovementsandleasedthem

back.Thelease-backtransactionisclassifiedasafinancelease

accordingtoIAS17Leases.Theleasewillrunforaperiodof

20years.Whentheoriginalleaseexpiresintheyear2019,the

lesseewillbegrantedtherighttotwoextensionsoffiveyears

each.Inaddition,theagreementcontainsaclauseallowingthe

leasepaymentstobeincreasedby13%everyfiveyears.

109

30 SEP 2009 of which of which 30 SEP 2008 of which of which due in due in due in due in one year more than one year more than or less five years or less five years

EUR thou EUR thou EUR thou EUR thou EUR thou EUR thou

Future minimum lease payments 32,810 4,355 13,671 32,626 3,955 16,588

Share of interest / future cost of finance 8,594 1,522 2,504 9,720 1,455 3,490

Present value of future minimum lease payments 24,216 2,833 11,167 22,906 2,500 13,098

30 SEP 2009 of which 30 SEP 2008 of which due in due in one year one year or less or less

EUR thou EUR thou EUR thou EUR thou

Accrued personnel liabilities 64,470 64,470 88,323 88,323

Accruals in sales 147,408 147,408 142,495 142,495

Other accruals 5,659 5,659 7,423 7,423

Liabilities to subsidiaries 26,055 26,055 15,652 15,652

Liabilities to associated and related companies 1,472 1,472 4,676 4,676

Advance payments received on orders 202,101 187,104 204,570 178,327

Tax liabilities (non-income) 13,053 12,972 12,608 12,608

Wage tax withheld 8,378 8,378 9,348 9,348

Liabilities for social security 4,929 4,929 5,390 5,390

Deferred income 41,140 35,123 37,483 33,391

Other non-financial liabilities 11,911 11,572 18,341 18,092

526,576 505,142 546,309 515,725

Furthernotesonthecontractuallyagreed,undiscountedcash

outflowsassociatedwiththeprimaryfinancialliabilitiesandthe

derivativefinancialinstrumentsaretobefoundinsection37

“FinancialInstrumentsandRiskProvisioning.”

30 Trade payables

EUR128thousand(lastyear:EUR627thousand)ofthetrade

payablesaredueinmorethanoneyear.




“FinancialInstrumentsandRiskProvisioning.”

31 Other Liabilities

Theliabilitiescanbebrokendownasfollows:


110

30 SEP 2009 30 SEP 2008

EURthou EURthou

Note liability – 124

Contingent guarantees 1,287 1,594

attributabletosubsidiaries – 1,412

Contingencies arising from collateral put up to secure liabilities – 78

Other contingent liabilities 2,100 4,128

Theothercontingentliabilitiesmainlyincludeenvironmentaland

litigationrisksforwhichnoprovisionshavebeenrecognized

sincetheiruseisheldtobehighlyimprobable.

34 Other Financial Obligations / Operating Leases

Otherfinancialobligationsarisefromrentcontractsandleases

forofficepremisesandequipment.Thesearrangementsrunfor

termsbetweenoneandmorethanfiveyears.Someofthem

entailoptionsforextensionsorpurchaseandpriceadjustment

clauses.

Expensesarisingfromleases,rentcontractsandsimilararrange-

mentsinthereportingperiodcametoEUR34,617thousand

(lastyear:EUR32,547thousand).

sheetitemsconcernedthereforecannotbereconciledwiththe

correspondingfiguresinthepublishedconsolidatedbalance

sheet.

EUR133thousand(lastyear:EUR350thousand)ofthecashand

cashequivalentsissubjecttoarestraintondisposalortransfer.

33 Contingent Liabilities

Thedecreaseinaccruedpersonnelliabilitiesisconnectedwith

the“overallpackageforovercomingthecurrenteconomic

situation”agreedinJune2009andtheeffectofthereductionin

theincomeofemployeesabovethecollectivelyagreedsalary

scaleandseniorexecutivesasanequivalentcontribution.

Theaccrualsinsalesaremainlyrelatedtooutstandinginvoices

andbonusandcommissionpayments.

Liabilitiestosubsidiariesincludeliabilitiesfromcashmanagement

andfromtradepayablestocompaniesnotincludedinCarlZeiss

AG’sconsolidatedfinancialstatements.Governmentgrantsof

EUR594thousand(lastyear:EUR294thousand)arerecognized

asdeferredincomeforthisyearasofthebalancesheetdate.




“FinancialInstrumentsandRiskProvisioning”.

Other Information

32 Notes to the Consolidated Cash Flow Statement

Theconsolidatedcashflowstatementshowshowthecashand

cashequivalentsoftheCarlZeissGrouphavechangeddueto

inflowsandoutflowsinthecourseofthefiscalyear.Inaccor-

dancewithIAS7Statement of Cash Flows,adistinctionismade

betweencashflowsfromoperating,investingandfinancing

activities.

Thecashandcashequivalentsconsideredinthecashflow

statementcompriseallcashandcashequivalentscarriedinthe

balancesheet.

Cashflowsfrominvestingandfinancingactivitiesaredetermined

onthebasisofpayments.Theoperatingcashflow,incontrast,is

derivedindirectlystartingfromtheconsolidatednetresultfor

theyear.Withtheindirectmethod,adjustmentsaremadefor

changesrecordedinbalancesheetitemsinconnectionwithop-

eratingactivitiesthatarisefromtheeffectsofforeignexchange

translationandchangesinthescopeofconsolidation.Non-oper-

atinginfluencesarealsoeliminated.Thechangesinthebalance

111

2008/09 2007/08

Heads Heads

Germany 8,299 8,208

Europe(excludingGermany) 1,535 1,483

Americas 1,622 1,671

Asia,otherregions 1,460 1,275

12,916 12,637

Trainees/interns 409 404

13,325 13,041

Period EURthou

Oneyearorless 19,948

Between1and5years 23,479

Morethan5years 8,280

Theproperty,plantandequipmentitemincludesassetswith

futureminimumrentandleasepaymentsundernon-cancelable

operatingleasesduewithinthefollowingperiods:

35 Events after the Balance Sheet Date

Carl Zeiss Meditec AG Dividend

TheExecutiveBoardandSupervisoryBoardofCarlZeissMeditec

AGproposethepaymentofadividendofEUR14,636thousand

(EUR0.18perstock).Theshareofaround35%accruingto

minorityshareholdersofCarlZeissMeditecAGwillreducethe

equityoftheCarlZeissGroupaccordingly.Theannualgeneral

meetingforfiscalyear2008/09hasyettoapprovethisproposal.

Noothertransactionsofmaterialsignificancetotheassessment

ofthenetassets,financialpositionorresultsofoperationsofthe

CarlZeissGrouphaveoccurred.

36 Average Number of Employees for the Year

Period EURthou

Oneyearorless 7,480

Between1and5years 1,014

Morethan5years –

Theemployeesarethoseworkingforthecompaniesincludedin

thescopeofconsolidation.Theabovenumbersalsoincludethe

relevantproportionsofemployeesworkingpart-timeandthose

withtemporaryemploymentcontracts.

OfthetotalincreaseintheemployeeheadcountinGermany,

37employeesareduetochangesinthescopeofconsolidation.

37 Financial Instruments and Risk Provisioning

Financialinstrumentsarecontractsthatgiverisetoafinancial

assetofoneentityandafinancialliabilityorequityinstrumentof

anotherentity.InaccordancewithIAS32,theyincludeonthe

onehandprimaryfinancialinstrumentssuchastradereceivables

andpayables,andontheotherhandfinancialassetsand

liabilities.Theyalsoincludederivativefinancialinstrumentsthat

areusedtohedgeagainstforeignexchangerisks.

Financialassetsandfinancialliabilitiesareconsideredinthe

consolidatedbalancesheetfromthedateonwhichtheGroup

becomesacontractingpartyforthefinancialinstrument.

Financialassetsthatareacquiredorsoldatmarketconditions,

however,aregenerallyaccountedforonthesettlementdate.

Thefollowingappliestotheperformancerelationshipsunderly-

ingallprimaryfinancialinstruments:dependingonthetypeand

amountoftherespectiveperformance,tominimizethedefault

riskcollateralisrequired,creditinformation/referencesare

obtainedorhistoricaldatafromthepreviousbusinessrelation-

ship,inparticularpaymentpatterns,isused.Ifdefaultrisksare

perceivedfortheindividualfinancialassets,theyarecoveredby

allowances.

Thefutureminimumrentandleasepaymentsundernon-cancel-

ableoperatingleasescometo:


112

Financial assets Book value of which Fair value30 SEP 2009 Loans and Held-to- Assets valued Available- Financial receivables maturity at fair value for-sale instruments investments through the financial outside income assets IAS 39 statement

EUR thou EURthou EURthou EURthou EURthou EURthou EURthou

Sharesinsubsidiaries 6,204 – – – 6,204 – 6,204

Investmentsandsecurities 128,971 – – – 128,971 – 128,971

Tradereceivables 438,864 438,864 – – – – 438,864

Otherfinancialreceivables 71,555 71,555 – – – – 71,555

Otherfinancialassets 360,174 336,488 – 23,686 – – 372,766

ofwhichderivativesnotincluded inhedgeaccounting 23,686 – – 23,686 – – 23,686

Cashandcashequivalents 580,736 – – – – 580,736 580,736

Total 1,586,504 846,907 – 23,686 135,175 580,736 1,599,096

Book Values and Fair Values by Measurement Categories

Thefollowingtableshowsthebookvaluesandfairvaluesof

financialinstrumentsinaccordancewiththemeasurement

categoriesofIAS39Financial Instruments: Recognition and

Measurement.

Financial assets Book value of which Fair value30 SEP 2008 Loans and Held-to- Assets valued Available- Financial receivables maturity at fair value for-sale instruments investments through the financial outside income assets IAS 39 statement

EUR thou EURthou EURthou EURthou EURthou EURthou EURthou

Sharesinsubsidiaries 14,120 – – – 14,120 – 14,120

Investmentsandsecurities 53,541 – – – 53,541 – 53,541

Tradereceivables 515,462 515,462 – – – – 515,462

Otherfinancialreceivables 56,383 56,383 – – – – 56,383

Otherfinancialassets 563,265 557,404 – 5,861 – – 566,482

ofwhichderivativesnotincluded inhedgeaccounting 5,861 – – 5,861 – – 5,861

Cashandcashequivalents 464,865 – – – – 464,865 464,865

Total 1,667,636 1,129,249 – 5,861 67,661 464,865 1,670,853

113

Financial liabilities Book value of which Fair value30 SEP 2009 Financial Liabilities valued Financial liabilities at at fair value instruments amortized cost through the outside IAS 39 income statement

EUR thou EURthou EURthou EURthou EURthou

Liabilitiestobanks 430,347 430,347 – – 434,174

Tradepayables 102,850 102,850 – – 102,850

Otherfinancialliabilities 119,138 116,741 2,397 – 120,692

ofwhichderivativesnotincluded inhedgeaccounting 2,356 – 2,356 – 2,356

ofwhichderivativesincluded inhedgeaccounting 40 – 40 – 40

Liabilitiesarisingfromfinanceleases 24,216 – – 24,216 24,216

Total 676,551 649,938 2,397 24,216 681,932

Financial liabilities Book value of which Fair value30 SEP 2008 Financial Liabilities valued Financial liabilities at at fair value instruments amortized cost through the outside IAS 39 income statement

EUR thou EURthou EURthou EURthou EURthou

Liabilitiestobanks 335,155 335,155 – – 325,613

Tradepayables 155,964 155,964 – – 155,964

Otherfinancialliabilities 46,051 41,696 4,355 – 46,051

ofwhichderivativesnotincluded inhedgeaccounting 4,355 – 4,355 – 4,355

ofwhichderivativesincluded inhedgeaccounting – – – – –

Liabilitiesarisingfromfinanceleases 22,906 – – 22,906 22,886

Total 560,076 532,815 4,355 22,906 550,514


114

Net result 2007/08 of which from from from interest subsequent disposal measurement

EUR thou EURthou EURthou EURthouFromloansandreceivables 20,850 38,439 –17,589 –

Fromavailable-for-saleassetsandliabilities 1,631 671 – 960

Financialassetsandliabilitiesvaluedatfairvaluethroughtheincomestatement – 3,458 222 –3,686 6

Fromfinancialliabilitiescarriedatamortizedcost –10,861 –10,858 –3 –

Mostofthecashandcashequivalentsandtradereceivablesare

duewithinashorttime.Theirbookvaluesthereforecorrespond

totheirfairvaluesonthebalancesheetdate.

Theotherfinancialreceivablesincludereceivablesfromsubsid-

iariesandfromassociatedandrelatedcompanies.Theirbook

valuescorrespondtothefairvaluesinthereportingperiod.

Tradeliabilitiesareduewithinashorttimeasarule;thevalues

carriedthereforerepresentthefairvalue.

Thefairvaluesofliabilitiestobanksandotherfinancialliabilities

aredeterminedaspresentvaluesofthepaymentsassociated

withthedebtsbasedonthecurrentinterestyieldcurve.

Net results by measurement categories

Thetablebelowshowstheimpactoffinancialinstruments

carriedinincome,classedaccordingtothecategoriesinIAS39

Financial Instruments: Recognition and Measurement,netted:

Net result 2008/09 of which from from from interest subsequent disposal measurement

EUR thou EURthou EURthou EURthouFromloansandreceivables 22,377 31,815 –9,438 –

Fromavailable-for-saleassetsandliabilities 3,308 2,973 – 335

Financialassetsandliabilitiesvaluedatfairvaluethroughtheincomestatement 8,382 –181 8,563 –

Fromfinancialliabilitiescarriedatamortizedcost – 22,600 –22,172 –428 –

Theeffectsonequitycapitalresultingfromthemarketvaluation

ofavailable-for-salefinancialinstrumentsareshownseparatelyin

theequitystatement.

Capital Management

ThesuperordinategoalofcapitalmanagementattheCarlZeiss

Groupistosecurethecontinuityofthefirm.Thekeyissuehere

istohavesufficientfinancialscopeatourdisposaltoachievethe

targetedgrowth,whiletakinganoptimizedbalancesheetstruc-

tureintoaccount.Apartfromacquisitionsandstrategicalliances,

theprincipalgrowthoptionscomefromongoinginvestmentsin

innovativeness.Capitalmanagementisconstantlymonitoredon

thebasisofanumberoffinancialratios.

General Information on Financial Risks and Risk Provisioning

TheCarlZeissGroup'soperationalbusinessisexposedtomarket

pricerisksthroughchangesinforeignexchangeratesandinter-

estrates.TheGroupisalsosubjecttocreditorliquidityrisks

whicharisemainlyfromthetradereceivablesandinconnection

withmarketpricerisks.Ourbusinesspolicyaimstominimize

theserisksbyhedgingactivities,whicharecarriedoutatthe

corporatecenter.

Bindinginternalregulationsanddirectivesdeterminethescope

ofactionandaccountabilitiesininvestmentandhedgingtrans-

actions.Hedgingtransactionsareconductedonlywithbanks

holdingfirst-classcreditratingsfromleadingagencies.Value-at-

riskanalysessupplementedbyscenario,sensitivityandstress-test

analysesareusedtoquantifythemarketrisksintheareaof

currenciesforriskmanagementandmonitoringpurposes.The

ExecutiveBoardhassetalimitonthemaximumacceptedmarket

riskintheformofaconstantlymonitoredriskpotential.In

addition,ahedgequotaisdeterminedforallrelevantcurrencies

forthepurposeofdetailedoperationalmanagement.Thisquota

lieswithintherelevantrangesapprovedbytheExecutiveBoard.

Furthermore,risklimitshavebeendeterminedforcounterparties

andtypesoftransaction.Allcontractsarewithreputable

internationalfinancialinstitutions.

Thetransactionsareexecutedwithstrictsegregationofduties

intofrontoffice(trading),backoffice(execution,documentation)

andmiddleoffice(controlling,financialriskmanagement)tasks.

115

Credit risks

Creditriskoccursifthebusinesssituationofthecompany'sbor-

rowersorcounterpartiesdeteriorates,resultinginthedangerof

partialorcompletedefaultoncontractuallyagreedpaymentsor

performancesontheonehand,andofreductionsinthevalueof

financialinstrumentsduetolowercreditworthinessontheother.

Liquid assets

Theliquidassetsmainlyconsistofcashandcashequivalents.The

CarlZeissGroupisexposedtocreditrisksinconnectionwiththe

investmentofliquidassetsiffinancialinstitutionsarenolonger

abletomeettheircommitments.Themaximumriskposition

fromliquidassetscorrespondstothebookvaluesoftheseassets

inthebalancesheet.Financialcreditrisksarelimitedbymaking

investmentsatanumberofdifferentcreditinstitutions,setting

limitsperassetcategory,issuerorbank,andrequiringthat

businesspartnershavehighratings.

Trade receivables

Tradereceivablesresultalmostentirelyfromthebusinessgroups’

salesactivitiesinbothavarietyofmarketsandanumberof

industryandcustomersegments.

ThisriskislimitedbytheGroupcompaniessettingcreditlimits

forcustomersandconstantlycheckingthattheyareobserved.In

addition,alargeproportionofthetradereceivablesarehedged

invariousforms,somespecifictothecountriesinquestion.The

mostfrequentlyselectedformofhedgingisretentionoftitle.

Inaddition,valueadjustmentsaremadefortheriskinherentin

tradereceivables.Themaximumriskpositionintradereceivables,

statingoverdueandimpairedreceivablesseparately,isshownin

section22“TradeReceivables.”

Derivative financial instruments

TheCarlZeissGroupusesderivativefinancialinstrumentssolely

forinterestandcurrencyhedging.Interestrateswaps,plain-

vanillacurrencyoptionsandforwardexchangedealsare

employedforthispurpose.TheycovertheGroupcompanies’

underlyingtradetransactionsandtheprimary(underlying)

financialtransactions.

Theforeignexchangehedgingcontractsrelateinparticularto

plain-vanillacurrencyoptionsandforwardexchangedeals.They

arechieflyusedtohedgereceivablesandpayablesthatare

alreadycarriedinthebalancesheet,transactionsinthecurren-

ciesofmajorindustrializedcountriesaswellasthecurrency

exposurederivedfromarolling12-monthplanthatiscontinu-

ouslyupdated.

Thenominalvaluesrepresentthetotalofallpurchaseandsales

contractsforderivativefinancialtransactions,withoutnettingoff.

Themarketvaluesarederivedfromtheamountsatwhichthe

relevantderivativefinancialinstrumentsweretradedorquoted

asofthebalancesheetdate,withoutoffsettingdevelopmentsin

theunderlyingtransactions.Wherenomarketvaluesareavail-

able,theyarecalculatedbyacceptedmethods(includingthenet

presentvaluemethodandoptionpricingmodels).

Theinteresthedgesservetocovertheinterestriskresultingfrom

thevariable-interestshareofthepromissorynoteloanplacedin

fiscal2008/09.

TheCarlZeissGroup’smaximumriskpositionasofthebalance

sheetdateisthebookvalueofthefinancialassetsshownas

financialinstruments.Thedefaultriskislimitedbyensuringthat

counterpartieshavefirst-classcreditratingsfromexternalrating

agencies.Concentrationrisksarelimitedandcontrolledby

concludinghedgingcontractswithavarietyofcreditinstitutions.

Other receivables and assets

Themaximumcreditriskpositionfromotherreceivablesand

assetsisthebookvalueoftheseinstruments.TheCarlZeiss

Group’sexposuretocreditriskfromotherreceivablesandassets

islow.


116

Undiscounted cash outflows Book value up to 31 to 91 to 181 to more than Total 30 SEP 2009 30 days 90 days 180 days 360 days 360 days 30 SEP 2008

EUR thou EURthou EURthou EURthou EURthou EURthou EUR thouProfit-participatingcertificates 7,930 – – – – 7,930 7,930

Liabilitiestobanks 335,155 4,507 2,896 4,291 10,848 339,473 362,015

Leaseliabilities 22,906 449 789 1,201 1,516 28,671 32,626

Otherfinancialliabilities 28,834 1,075 1,335 2,843 2,216 24,167 31,636

ofwhichderivativefinancial instrumentswithnegative marketvalue 4,355 551 897 915 1,353 639 4,355

Tradepayables 155,964 126,089 28,979 1,442 1,144 1,098 158,752

Liabilitiestoassociatedandrelatedcompanies 4,676 4,158 518 – – – 4,676

Liabilitiestosubsidiaries 15,652 10,613 537 4,588 – – 15,738

Liquidity risk

TheCarlZeissGroup’sliquidityriskconsistsofCarlZeissAG

orasubsidiarybeingunabletomeetitsfinancialobligations

(e.g.repaymentofloans,interestpayments).

TheCarlZeissGroupgeneratescashandcashequivalentsmainly

fromitsoperatingbusiness.Ifnecessaryorstrategicallyoppor-

tune,externalfinanceisalsoadded.Suchfinanceismainly

representedbythepromissorynoteloan.Furthermore,CarlZeiss

MeditecAGhastheadditionaloptionoffinancingthroughthe

capitalmarket.

LiquidityisensuredbyCarlZeissFinancialServicesGmbHwith

ongoing,Group-wideliquiditymonitoringandplanninganda

diversifiedandcarefullytimedinvestmentpolicy.Inaddition,

appropriatebankcreditlinesareavailable.

FurtherdetailsoftheCarlZeissGroup’sfinancialliabilitiesare

providedinsection29“FinancialLiabilities.”

Thetablebelowpresentsthecontractuallyagreed,undiscounted

cashoutflowsarisingfromtheprimaryfinancialliabilitiesand

derivativefinancialinstrumentswithnegativemarketvalue:

Undiscounted cash outflows Book value up to 31 to 91 to 181 to more than Total 30 SEP 2009 30 days 90 days 180 days 360 days 360 days 30 SEP 2009

EUR thou EURthou EURthou EURthou EURthou EURthou EUR thouProfit-participatingcertificates 9,043 – – – 1,530 7,513 9,043

Liabilitiestobanks 430,347 8,000 3,773 3,326 102,531 359,095 476,725

Leaseliabilities 24,216 361 754 1,078 2,161 28,456 32,810

Otherfinancialliabilities 82,567 1,370 470 374 16,479 81,438 100,131

ofwhichderivativefinancial instrumentswithnegative marketvalue 2,396 507 331 257 536 765 2,396

Tradepayables 102,850 72,539 28,132 1,730 265 184 102,850

Liabilitiestoassociatedandrelatedcompanies 1,472 1,008 399 125 – – 1,472

Liabilitiestosubsidiaries 26,055 7,596 134 4,500 – 14,666 26,896

117

TheliquidassetsheldandcreditlinesarrangedgivetheCarlZeiss

GroupsufficientflexibilitytocovertheGroup’srefinancing

requirements.Becausethesourcesoffinanceandthecashand

cashequivalentsarediversified,theCarlZeissGroupisnot

exposedtoconcentrationriskinthisarea.

Financial market risks

TheCarlZeissGroupisexposedtomarketpricerisksthrough

changesinforeignexchangeratesandinterestratesbecauseof

itsglobalbusinessactivities.

TheCarlZeissGroupusesvalue-at-riskanalysesaspartofitsrisk

management.Intheseanalyses,theriskpositionisregularly

measuredagainstchangesinforeignexchangeratesandinterest

ratesbycalculatingamaximumlossbasedonastipulated

confidencelevelandholdingperiod.Thevalue-at-riskiscalcu-

latedonthebasisofhistoricdatatakingintoaccountthecor-

relationsbetweenthetransactionsconsidered.Thevalue-at-risk

calculatedthereforeshowsthemaximumlosswhichwillnotbe

exceededwithintendayswithaprobabilityof95%(historic

simulation).

Currency risk

AsaconsequenceoftheCarlZeissGroup’sglobalorientation,

theoperatingbusinessandthereportedfinancialresultsand

cashflowsareexposedtorisksfromexchangeratefluctuations,

mainlyintheUSdollar,theJapaneseyenandtheBritishpound.

Thecurrencyriskarisesprimarilyintheoperatingbusinesswhen

salesrevenuesaregeneratedinacurrencydifferentfromthatin

whichtheassociatedcostsareincurred.Inordertoreducethe

impactofexchangeratefluctuationsonbusinessoperations,

currencytransactionrisksareextensivelyhedgedusingplain-

vanillacurrencyoptionsandforwardexchangedealswithfinan-

cialinstitutionswithfirst-classcreditratings.

Theriskpositionofalloperationaltransactionsinforeigncurren-

ciesisdeterminedthroughcash-flowaccountingindifferent

currenciesandbudgeting.Value-at-riskanalysessupplemented

byscenario,sensitivityandstress-testanalysesareusedforrisk

monitoring.Theseriskanalysesandtheresultsofhedgingare

calculatedmonthlyandreportedtotheExecutiveBoard.

Theriskofexchangeratefluctuationsismonitoredforpurposes

ofexternalcontrolonthebasisofavalue-at-riskrelatingto

thepositionsincurrenciesotherthanthefunctionalcurrency.

Thevalue-at-riskoftheforeignexchangehedgingcontracts

increasedinthefiscalyearjustendedcomparedwiththepre-

viousyear,amountingtoEUR3.0millionasofSeptember30,

2009(lastyear:EUR2.6million).Theincreaseislargelydueto

highmarketvolatility.

Interest rate risk

Interestraterisksbasicallyarisefrompossiblefluctuationsinthe

valueofafinancialinstrumentduetochangesinmarketinterest

rates.

TheCarlZeissGroupholdsanumberofinterestrate-sensitive

assetsandliabilities,partlytomeettheliquidityrequirementsof

theday-to-daybusiness,andisthereforeexposedtointerestrate

riskinthecontextofassetandliabilitymanagement.Mostofit

resultsfromshort-terminvestments.

TheCarlZeissGroup’sinterestrateriskisanalyzedandcontrolled

centrallybyCarlZeissFinancialServicesGmbH.TheCarlZeiss

Groupbearsthefollowingcashflowandfairvalueriskonthe

basisofthevariable-andfixed-interestinstruments.

Cashflowrisk:Thevariable-interestinstrumentsheldbythe

CarlZeissGroupwouldhaveanimpactonincomeintheevent

ofachangeof+/100basepointsof+/-EUR8.7million(last

year:+/-EUR9.4million).

Fairvaluerisk:Inthecaseoftheavailable-for-salefixed-interest

instruments,achangeof+/100basepointswouldhavean

impactonequityintheamountof+/-EUR2.7million(lastyear:

+/-EUR0.1million).

Afive-yearinterestrateswapwasconcludedtohedgethe

interestrateriskinconnectionwiththevariable-interestpartof

thepromissorynoteloanissuedinthe2008/09fiscalyear.

Thisinterestrateswapwasdesignatedasacashflowhedge,

observingtherulesforhedgeaccounting.Theperiodtomaturity

ofthehedginginstrumentcorrespondstothatofthebullet-

maturityhedgeditem.


118

ThenominalamountofthehedginginstrumentisEUR31,500

thousand,correspondingtothevariable-interestportionofthe

promissorynoteloan.Theinterestrateswapshowsanegative

fairvalueasofthebalancesheetdateofEUR40thousand,not

includingaccruedinterest.Theconsolidatednetresultfor

2008/09containsnetlossesbeforetaxesofEUR40thousand

fromthemeasurementoftheinterestrateswap.

Other price risks

TheCarlZeissGroupisnotexposedtosignificantotherprice

risks,whicharealsonumberedamongthefinancialmarketrisks.

38 Information on Related Party Transactions

Theterm"relatedparty"comprisestheCarlZeissStiftung,

HeidenheimanderBrenzandJena,theoperatingenterprise

SCHOTTAG,Mainz,andnon-consolidatedsubsidiaries.Business

relationswiththesecompaniesarehandledongenerallyac-

ceptedmarkettermsandconditions.Relationshipswithasso-

ciatedcompaniesandjointventuresarealsodealtwithonthis

basis.Theresultingeffectsontheconsolidatedfinancialstate-

mentsarenegligible,withtheexceptionofthebrandlicense

agreementandtheagencyagreementswiththeCarlZeissVision

Group.Theabove-mentionedagreementsarereflectedinthe

consolidatedfinancialstatementsintheincomefromlicenses

(EUR7,500thousand,unchangedfromlastyear),otheroperat-

ingincome(EUR5,997thousand;lastyear:EUR3,665thousand)

aswellasreceivablesfromassociatedandrelatedcompanies

(EUR56,360thousand;lastyear:EUR43,418thousand).Inthe

contextofthereformofthefoundationandtheassociated

movetobecomelegallyindependentoftheCarlZeissStiftung,a

loanofEUR5,000thousandwasgrantedtoCarlZeissAGwhich

isshownintheconsolidatedbalancesheetunderliabilities

tosubsidiaries.Inaddition,twofurtherloanswereissuedbythe

CarlZeissStiftunginthereportingperiod,ofEUR6,500

thousandandEUR7,300thousand.

Norelationshipsexistwithkeypersonsexercisingamaterial

influence.

39 Corporate Governance Code

TheExecutiveBoardandtheSupervisoryBoardofCarlZeiss

MeditecAG,Jena,alistedcompanyincludedintheconsolidated

financialstatements,haveissuedadeclarationontherecom-

mendationsofthe“GovernmentCommissionontheGerman

CorporateGovernanceCode”inaccordancewithSection161of

theGermanStockCorporationAct(AktG).Thisdeclarationis

availabletostockholdersonthecompany’swebsite

(www.meditec.zeiss.de).

40 Remuneration of the Executive Board and the

Supervisory Board

Theshort-termbenefitsduetotheMembersoftheExecutive

BoardamountedtoEUR2,706thousandinthe2008/09fiscal

year(lastyear:EUR5,047thousand).EUR508thousand

(lastyear:EUR496thousand)wasspentonpost-employment

benefits.

AfeeofEUR502thousandwaspaidtotheMembersofthe

SupervisoryBoardfortheirsupervisoryactivitiesinthereporting

period(lastyear:EUR329thousand).

119

As of the balance sheet date, pension obligations towards former

members of the Executive Board and their surviving dependents

totaled EUR 18,606 thousand (last year: EUR 15,858 thousand).

They received EUR 1,208 thousand in post-employment benefits

and EUR 186 thousand in other noncurrent benefits in the

reporting period.

The Members of the Executive Board and Supervisory Board are

listed on pages 68 and 69.

Oberkochen, December 22, 2009

Executive Board of Carl Zeiss AG

Dr. Dieter Kurz

Dr. Hermann Gerlinger

Dr. Michael Kaschke

OUR INSP IRAT ION FOREWORD MANAGEMENT REPORT BUS INESS GROUPS FROM THE GROUP AT YOUR SERV ICE FINANCIAL STATEMENTS NOTES TO THE F INANCIAL STATEMENTS

120

Auditor's Report

We have audited the consolidated financial statements prepared

by Carl Zeiss AG, Oberkochen, comprising the balance sheet, the

income statement, statement of changes in equity, cash flow

statement and the notes to the consolidated financial state-

ments, together with the corporate management report for the

fiscal year from October 1, 2008, to September 30, 2009.

The preparation of the consolidated financial statements and

the group management report in accordance with the IFRSs, as

adopted by the EU, and the additional requirements of German

commercial law pursuant to §315a Abs. 1 HGB [Handelsgesetz-

buch “German Commercial Code"] are the responsibility of the

parent company's management. Our responsibility is to express

an opinion on the consolidated financial statements and on the

group management report based on our audit.

We conducted our audit of the consolidated financial statements

in accordance with §317 HGB and German generally accepted

standards for the audit of financial statements promulgated by

the Institut der Wirtschaftsprüfer (IDW). Those standards require

that we plan and perform the audit such that misstatements

materially affecting the presentation of the net assets, financial

position and results of operations in the consolidated financial

statements in accordance with the applicable financial reporting

framework and in the group management report are detected

with reasonable assurance. Knowledge of the business activities

and the economic and legal environment of the Group and

expectations as to possible misstatements are taken into account

in the determination of audit procedures. The effectiveness of

the accounting-related internal control system and the evidence

supporting the disclosures in the consolidated financial state-

ments and the group management report are examined primarily

on a test basis within the framework of the audit.

The audit includes assessing the annual financial statements of

those entities included in consolidation, the determination of

entities to be included in consolidation, the accounting and

consolidation principles used and significant estimates made by

management, as well as evaluating the overall presentation of

the consolidated financial statements and group management

report. We believe that our audit provides a reasonable basis for

our opinion.

Our audit has not led to any reservations.

In our opinion, based on the findings of our audit, the consolida-

ted financial statements comply with IFRSs, as adopted by the

EU, the additional requirements of German commercial law

pursuant to §315a Abs. 1 HGB and give a true and fair view of

the net assets, financial position and results of operations of the

Group in accordance with these requirements. The group

management report is consistent with the consolidated financial

statements and as a whole provides a suitable view of the

Group’s position and suitably presents the opportunities and risks

of future development.

Stuttgart, December 22, 2009

KPMG AG

Wirtschaftsprüfungsgesellschaft

Held

Wirtschaftsprüfer

von Hohnhorst

Wirtschaftsprüfer

FINANCIAL STATEMENTS AUDITOR’S REPORT

Contact

For Journalists

Carl Zeiss AG

Corporate Communications

Phone +49 (0)7364 20-3242

[email protected]

For Financial Services Providers

and Investors

Carl Zeiss Financial Services GmbH

Phone +49 (0)7364 20-3470

[email protected]

For Applicants

www.zeiss.de/career

Phone +49 (0)7364 20-4456

Additional Information

www.zeiss.de/en

Publisher

Carl Zeiss AG

73346 Oberkochen

Germany

Design and Editing

Carl Zeiss AG


Karin Gretz,

Corporate Finance/Controlling

Andreas Kopf

Visual Design and Layout

Carl Zeiss AG


Ansgar Seelen,

Communications Services

Andreas Schwab

Translation

Carl Zeiss AG

Communication Services

Clive Poole, Paul Soos

Photographic Credits

Carl Zeiss

Print

Wahl-Druck GmbH, Aalen

Disclaimer

This annual report contains information relating to the

future. This is based on an assessment of future

developments at the time when the report was being

compiled. Such information entails risks and uncer-

tainties that, to a large extent, cannot be influenced

by Carl Zeiss or precisely assessed. This includes, for

example, future economic developments and market

conditions, the behavior of other market players,

the achievement of expected synergy effects and legal

or political decisions. Should the mentioned or other

factors occur or if the assumptions on which the

future-related information is based prove to be incor-

rect, the actual results may differ from the expecta-

tions described in the Annual Report. Carl Zeiss will

not correct or update the future-related information in

order to adapt it to current developments and events

occurring after the reporting date.

Product descriptions and names which are the

property of Carl Zeiss are marked accordingly. Other

product and company names given in this report may

be brands of the respective owner.

The Annual Report of the Carl Zeiss Group can be

accessed at www.zeiss.de/annualreport. The English

text is a translation of the German original. If the texts

differ, the German report takes precedence.

Carl Zeiss AG

73446 Oberkochen, Germany

Phone +49 (0)73 64 20-0

Fax +49 (0)73 64 20-68 08

www.zeiss.de/en

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