Siegfried Annual Report 2009

to 20.5% (2008: 17.7%) and 13.4% (2008: 11.3%) of
the aggregate trade receivables. The customers concerned
are major pharmaceutical companies with first class credit
ratings.
Credit risks on other financial assets are controlled by a
policy of limiting the exposure only to partners with high
credit ratings, by on-going review of credit ratings and
by limiting individual aggregate balances. At 31.12.2009
CHF 5 million/62% in cash was invested with a single
financial institution (2008: CHF 8.1 million/55%).
Capital risk The capital of the Siegfried Group is managed
with a view to ensuring the continuation of operations,
to earning an adequate yield for the shareholders and to
optimizing the capital structure in order to reduce the cost
of capital.
The capital structure can be influenced by changing the dividend
distribution, by repayments of capital, capital increases,
by sales of assets and repayment of liabilities.
Similarly to other companies the Siegfried Group monitors
the capital structure by reference to the net debt ratio. The
net debt is expressed as a percentage of the aggregate capital.
The net debt is calculated as the sum of the interest
bearing liabilities, the trade payables, the on-account payments
and the other current liabilities less cash. The aggregate
capital is calculated as the sum of the net debt and the
reported equity. Overall the net debt has increased slightly
compared with the prior year.
In 1 000 CHF 2009 2008
Net debt ratio
Financial liabilities 71 336 86 127
Trade payables 23 581 21 657
On account payments 1 100 302
Other current liabilities 7 756 6 221
./. Cash –8 083 –14 937
Net debt 95 690 99 370
Equity 327 346 352 013
Aggregate capital 423 036 451 383
Net debt ratio (percent) 22.6% 22.0%
Derivative financial instruments To manage currency
and interest rate exposure Siegfried uses forward exchange
contracts as well as interest rate and currency swaps or put
options. All derivative financial instruments are measured at
their fair value when the contract is concluded and subsequently.
For qualifying cash flow hedges the portion of fair
value changes that is determined to be an effective hedge is
recognized in equity, the remaining ineffective portion in the
financial result. Gains and losses on cash flow hedges that
were initially recognized directly in equity are transferred to
the Income Statement in the period when the hedge transaction
is recognized in the Income Statement. Any changes
in the fair value of other financial instruments are recognized
in the Income Statement of the reporting period.
Fair value estimation Effective 1 January 2009, the
Siegfried Group adopted the amendment to IFRS 7 for financial
instruments that are measured at fair value. This requires
disclosure of fair value measurements by level of the following
fair value measurement hierarchy:
The fair value of financial instruments traded in active markets
is based on quoted market prices at the balance sheet
date (level 1). The fair value of financial instruments that are
not traded in an active market is determined by using valuation
techniques. The use of observable market data is preferred
compared to entity specific estimates. If all significant
inputs are observable, the instrument is included in level 2. If
one or more of the significant inputs is not based on observable
market data, other valuation techniques, such as discounted
cash flow analysis are used and the instrument is
included in level 3.
Financial Statements Siegfried Group 83