Annual Report 2009 - melitta.info

56 Melitta Group Annual Report 2009 Consolidated Balance Sheet
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with, individual asset items – and amortized over an expected useful life of no more than
15 years. This consolidation method is also used for investments in associated
companies.
Investments in associated companies are consolidated using the book value method.
Inter-group trading profits from transactions with associated companies were not
eliminated.
Debt was consolidated according to Sec. 303 (1) HGB, while income and expenditure
were consolidated pursuant to Sec. 305 (1) HGB and unrealized results eliminated in
accordance with Sec. 304 (1) HGB.
Uniform valuation of assets throughout the Group is guaranteed by the application of
corporate guidelines, valid for all members of the Melitta Group. These corporate guidelines
correspond to commercial law regulations.
The annual statements of foreign Group companies were translated as of December 31,
2009 using the current rate method, while positions of the profit and loss accounts were
translated using average annual exchange rates of 2009.
Intangible assets are valued at cost, while property, plant and equipment is valued at
acquisition or production cost; they are written down using the straight-line or diminishing
balance method. In addition to direct costs, production costs also include a proportionate
amount of overhead costs and depreciation. Financial assets are valued at the
lower of cost and fair value.
Inventories are valued at acquisition or production cost. Raw materials, supplies and
merchandise are valued at the lower of average purchase prices and current values.
Unfinished and finished goods are valued at production cost, which also includes a reasonable
amount of necessary overhead cost and depreciation. Production costs are lowered
accordingly, should this be necessary to avoid valuation losses. Suitable allowances
are made to cover inventory risk.
Advanced payments, accounts receivable and other assets are carried at their nominal
values or the lower buying rate for foreign currencies and the lower rate in the case of
recognizable risks. Lump-sum allowances have been made to cover general credit risks.
Accruals for pensions are made on the basis of actuarial calculations in Germany and in
accordance with tax regulations. A total of € 664k (prior year: € 753k) for pension commitments
made before January 1, 1987 (Art. 28 EGHGB) is not considered in the balance
sheet.
Other accruals cover all recognizable risks and uncertain commitments.
Liabilities are carried at their current repayment values.
In all other cases, foreign currency receivables and payables or assets acquired in foreign
currencies and the resulting income and expenses are always translated at the exchange
rates valid on the date of acquisition or incurred, or at average monthly rates.
The Melitta Group has issued internal binding guidelines regulating responsibilities,
scope and control with regard to the use of derivative financial instruments.
Derivative financial instruments are used by the Melitta Group to secure its operating
business and the related risks. The instruments used are marketable options, foreign
exchange futures and swaps.
As of December 31, 2009, we held the following derivative positions:
Nominal volumes Market values
in € million 12-31-2009 12-31-2008 12-31-2009 12-31-2008
Foreign exchange futures and swaps 81 114 2.2 5.6
Foreign exchange options 131 71 5.8 7.6
Raw material swap 27 24 4.0 – 1.6
239 209 12.0 11.6
Market value figures are based on prices quoted by the banks.
Financial instruments held to reduce currency risks are mainly in US dollar.
Accruals of € 0.1 million (prior year: € 3.1 million) were formed for impending losses
from financial derivatives. An amount of € 0.2 million (prior year: € 0.0 million) was
written down for paid option bonuses.