ANNUAL REPORT 2008 | 2009 - SinnerSchrader AG

Joint Status Report of SinnerSchrader AG27interest rates as a result of the worldwide financialcrisis which began in September 2008. The 1-monthEuribor and 3-month Euribor listed over the entireprevious year reached average values of 4.4 % and4.7 %, respectively, while the comparable figures forthe 2008/2009 financial year were 2.1 % and 2.5 %,respectively. This collapse in interest rates at the shortend of the interest curve led to a moderate increasein the duration of the investment portfolio throughinvestments in fixed-interest securities with aremaining term of up two years. The decline ininvestment earnings can also be attributed to thefact that the average liquidity available for investmentdecreased by € 1.7 million from the previous year to€ 7.6 million on account of the investments made overthe course of the year.The income tax liability of € 0.3 million in the2008/2009 financial year was € 0.4 million lower thanin the previous year. This was primarily an effect ofthe significantly lower pre-tax profit in the year of thereport. This decrease was also due in part to the factthat the effective tax rate fell by around 6 percentagepoints from 31 % to 25 %, which was mainly a resultof what is, in accordance with IFRS rules, a permanentdifference in the treatment of an amortisation in connectionwith the acquisition of the newtention group.When the newtention group was purchased, considerabletax loss carry-forwards were taken over, which,according to the Citizens’ Relief Act passed in thesummer in contrast to the legal situation in force whenthe transaction was concluded, have probably not beenlost with the majority takeover by SinnerSchrader. Inlight of the uncertainties remaining regarding theapplicability of the new legal regulations to thenewtention acquisition, no positive tax effects wereactivated as of 31 August 2009.With nearly 11.3 million outstanding shares, adecrease of 0.2 million compared to the year beforeon account of the share buy-backs, SinnerSchraderachieved earnings of € 0.11 per share for its shareholdersin the 2008/2009 financial year. In 2007/2008,SinnerSchrader achieved € 0.14 per share.4.4 Cash FlowsThe change in the liquid funds and cash equivalentsreported in the 2008/2009 Statements of Cash Flowsis € 5.9 million. This includes a reallocation of financialinvestments in the amount of € 4.7 million to investmentinstruments that could no longer be assignedto liquid funds and cash equivalents because of theirremaining term and structure. Adjusted by this reallocationinto marketable securities, for which therewas no comparable procedure in the previous year,the liquid funds in the year of the report fell by € 1.1million. In the previous year, SinnerSchrader had usedcash in the amount of € 1.4 million.Once again, SinnerSchrader generated funds of over€ 2 million from operating business, but, with cashflows from operating activities of € 2.3 million, failed tomeet the previous year’s value by a good € 0.4 million.This fall is also a consequence of the establishmentof new fields of business. This development of the netcurrent assets and the accrued expenses results in apositive contribution to cash flows from operatingactivities of € 0.7 million, mainly caused by theestablishment of tax reserves.The outflows of funds to pay the dividend in December2008 of just under € 1.4 million, for buying backtreasury stock in the amount of € 0.4 million, and forinvestments in the replacement or organic expansionof property and equipment and in intangible assetsin the amount of € 0.4 million were financed from theoperating cash flows.In the 2008/2009 financial year, SinnerSchraderused funds in the amount of € 1.2 million for investmentsin inorganic business expansion. Of this, € 0.8million was accounted for by the acquisition of thenewtention group and € 0.3 million by the payment ofthe first of four earn-out instalments for the acquisitionof the spot-media group, which was completed in the2007/2008 financial year. Another € 0.1 million, whichis part of the cash flow for the acquisition of intangibleassets and property and equipment, was paid as thefirst of three instalments for the acquisition of acustomer relationship in the 2008/2009 financial year.