Annual Report 2010 - Melitta

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52 Melitta Group Annual Report 2010 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. Accounting and valuation principles Uniform valuation of assets throughout the Group is guaranteed by the application of corporate guidelines, valid for all members of the Melitta Group – with the exception of those companies consolidated using the equity method. These corporate guidelines correspond to commercial law regulations. Intangible assets are valued at cost, while property, plant and equipment are 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 no higher than at acquisition cost, or the lower fair value. In the case of permanent impairment, fixed assets are subjected to non-scheduled depreciation. 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, other assets and cash and cash equivalents 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. Pursuant to Sec. 306 HGB, deferred tax assets and liabilities are formed for consolidation entries with an effect on income. Deferred tax assets were formed in accordance with Sec. 274 HGB for tax loss carryforwards for which it can be assumed with adequate probability that they will be used in future, as well as for temporary differences between the commercial and tax balance sheet, and were netted with deferred tax liabilities. For the measurement of deferred taxes, the individual tax rates of the parent company and the affiliated companies included in consolidation were considered. The option pursuant to Sec. 306 Sentence 6 HGB was utilized. Accruals for pensions are calculated using the projected unit credit method. Pension accruals are measured with an interest rate of 5.17 percent as at September 30, 2010. There were no significant deviations between interest rates as at September 30, 2010 and as at December 31, 2010. In accordance with the simplifying provision of Sec. 253 (2) Sentence 2 HGB, a standard remaining term of 15 years was assumed for the obligations. Future pay increases were taken into account at a rate of 3 percent p.a. Standard consideration throughout the Group was also given to the relevant biometric calculation basis (including the RT 2005 G mortality chart) and other calculation principles for the settlement amount to be used. Other accruals cover all recognizable risks and uncertain commitments in the amount of the respective settlement amount. Accruals with maturities of over one year were measured in accordance with Sec. 253 (2) HGB. Subject to the fulfillment of the corresponding prerequisites, transactions expected with a high level of probability (hedged items) are placed together with derivative financial instruments in hedging relationships in order to balance contrasting value changes or cash flows from the acceptance of comparable risks. Such hedging relationships are presented in the financial statements using the net hedge presentation method.
Financial instruments are measured using generally accepted valuation models and mathematical procedures based on current market data. Liabilities are carried at their current repayment values. Currency translation Assets and liabilities denominated in foreign currencies are translated at the spot rate as of the balance sheet date, providing there are no hedging transactions. The balance sheet items of foreign Group companies were translated at the prevailing rate on the balance sheet date of December 31, 2010, while items of the income statement were translated at average rates for the year 2010. Derivative financial instruments and hedges The Melitta Group uses derivative financial instruments (forward, option and swap transactions) for hedging pur- Consolidated Balance Sheet poses. They are mainly used to hedge against the risks arising from currency and raw materials transactions expected with a high degree of probability in the years 2011 and 2012. Responsibilities, controls and the scope of action with regard to the conclusion and processing of such financial instruments are defined in binding internal guidelines. The market values of the above mentioned financial derivatives correspond to the price for the dissolution or replacement of the transactions and are as follows as at December 31, 2010: € million Foreign exchange futures – 1.6 Foreign exchange options 6.7 Raw material swaps 3.5 Raw material futures and differentials 2.3 10.9 The effectiveness of hedging relationships is examined using the critical terms match method. This method is used as all key valuation parameters of the underlying and hedging transactions match each other. 53
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www.melitta.info Annual Report 2010
Page 3 and 4: Contents 2 Foreword of the Manageme
Page 5 and 6: The past months have also seen a nu
Page 7 and 8: China Japan EUROPE Belgium Lokeren
Page 9 and 10: e beneficial if the respective targ
Page 11 and 12: way - some things simply are what t
Page 13 and 14: Melitta HouseholdNavigation Product
Page 15 and 16: Our brand for coffee enjoyment. sup
Page 17 and 18: Cofresco Freshkeeping Products Euro
Page 19 and 20: The key to freshness and flavour, i
Page 21 and 22: Melitta Navigation Coffee Subnaviga
Page 23 and 24: Our brand for coffee enjoyment. Out
Page 25 and 26: Melitta Navigation SystemService Su
Page 27 and 28: Our brand for coffee enjoyment. The
Page 29 and 30: Melitta has been offering a range o
Page 31 and 32: Our brand for coffee enjoyment. Our
Page 33 and 34: Melitta has been active on the US m
Page 37 and 38: Melitta Canada markets coffee and c
Page 41 and 42: Wolf PVG is a highly specialized sy
Page 43 and 44: The brand for vacuum cleaner bags a
Page 45 and 46: Melitta Neu Haushaltsprodukte Kalis
Page 47 and 48: Outlook 2011: Expansion of market s
Page 49 and 50: in sales of filter papers in Europe
Page 51 and 52: Melitta counters raw material price
Page 53: Explanatory notes on the consolidat
Page 57 and 58: 4. Trade receivables in € ’000
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Annual Report 2010 - Melitta

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