Notes to the balance sheet

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4.11 cash and cash equivalents
4.12 financial instruments
4.13 receivables
4.14 trade accounts receivable
4.15 construction contracts
4.16 inventories
4.17 financial assets
4.18 non-current assets held for sale
4.19 tangible assets in 2009
4.20 intangible assets in 2009
4.21 further details on tangible assets
4.22 investment property
4.23 investments
4.24 trade payables
4.25 financial liabilities
4.26 other current liabilities
4.27 provisions
4.28 retirement benefit obligations
4.29 deferred income tax
4.30 share capital
4.31 retained earnings

4.11 cash and cash equivalents



in CHF '000 at 31 December	2009	2008

Cash at bank and in hand	26,844	34,867

Short-term bank deposits	92	–

Total cash and cash equivalents	26,936	34,867

The actual interest rate for bank balances and for short-term bank deposits ranged between 0.125% and 3.58% (2008: 0.125% and 6.71%). Bank deposits have an average maturity period of 60 days.

For the purpose of the cash flow statement, the fund “cash and cash equivalents” encompassed liquid assets. Current account credits were not part of the fund “cash and cash equivalents”.

4.12 financial instruments

Financial assets and financial liabilities can be allocated to the following categories:

financial assets



in CHF '000 at 31 December	2009	2008

Held for trade

Marketable securities	13	15

Derivative financial instruments	74	986

Total held for trade	87	1,001

Loans and receivables

Trade accounts receivable	30,175	32,501

Financial assets	16,744	18,610

Other non-current assets	979	902

Total loans and receivables	47,898	52,013

Held to maturity

N/A	–	–

Total held to maturity	–	–

Available for sale

Investments (refer to note 4.23)	2,110	2,497

Total available for sale	2,110	2,497

Total financial assets	50,095	55,511

financial liabilities



in CHF '000 at 31 December	2009	2008

At amortised costs

Trade payables	30,711	31,606

Financial payables	13,976	9,434

Other current payables	7,625	8,841

Total at amortised costs	52,312	49,881

At fair value through profit and loss

Derivative financial instruments	296	596

Total at fair value through profit and loss	296	596

Total financial liabilities	52,608	50,477

The contractual undiscounted cash flow of financial liabilities is as follows:

contractual undiscounted cash flow of financial liabilities



in CHF '000 at 31 December
	Liabilities from borrowings, trade payables and other cur- rent liabilities	Liabilities from finance lease	Total 2009	Liabilities from borrowings, trade payables and other cur- rent liabilities	Liabilities from finance lease	Total 2008

From current financial liabilities

Due within 6 months	49,041	160	49,201	46,388	185	46,573

Due between 6 and 12 months	146	173	319	156	199	355

Total from current financial liabilities	49,187	333	49,520	46,544	384	46,928

From non-current financial liabilities

Due between 1 and 2 years	271	361	632	216	429	645

Due between 2 and 5 years	63	1,192	1,255	–	1,334	1,334

Due later than 5 years	625	1,152	1,777	645	1,585	2,230

Total from non-current financial liabilities	959	2,705	3,664	861	3,348	4,209

Total contractual undiscounted cash flow of financial liabilities	50,146	3,038	53,184	47,405	3,732	51,137

The fair value of marketable securities, derivative financial instruments and financial instruments available for sale is determined based on a three-level hierarchy as disclosed in paragraph 2.17 of the accounting principles. For each level different calculation methods are used to estimate the fair value of the recorded financial instruments.

fair value of financial assets

in CHF '000 at 31 December

Level 1

Level 2

Level 3

Total
2009

Level 1

Level 2

Level 3

Total
2008

Held for trade

Marketable securities

–

Currency option contracts

–

277

–

277

Forward foreign exchange rate

–

709

–

709

Total held for trade

–

986

–

1,001

Available for sale

Investments

–

2,110

–

2,497

Total available for sale

–

2,110

–

2,497

fair value of financial liabilities

in CHF '000 at 31 December

Level 1

Level 2

Level 3

Total
2009

Level 1

Level 2

Level 3

Total
2008

Held for trade

Currency option contracts

–

Forward foreign exchange rate

–

296

–

296

–

596

–

596

Total held for trade

–

296

–

296

–

596

–

596

The Group has included a participation in the retailer cooperation Schweizer Buchzentrum as financial instruments on level 3. According to IAS 39 such participation needs to be stated as financial instrument “available for sale”. As no direct or indirect observable market information is available to calculate the fair value the valuation is based on the purchase cost deducted by impairments, if any. The Orell Füssli Group considers the carrying amount of the investment of CHF 2,110,000 (2008: CHF 2,497,000) as corresponding to its approximate fair value. It is not planned to sell the position in the near future.

As per 31 December 2009 and 31 December 2008, several option contracts are stated in the tables above as financial instruments held for trade. All of them expire within the coming twelve months and are linked to transactions which fall due with high probability during the year 2010. As the Group forgoes hedge accounting, any gain or loss of valuation will be directly included in the financial result and, on maturity, adjusted by the effective realised gain or loss through the same accounts. The calculation of the fair value as per balance sheet date is based on observable market information (level 2).

The contract values as disclosed in the following table do not represent the market risks; they solely provide indications on the upcoming transaction volume on the balance sheet date. The fair value at 31 December is based on market values or based on calculations supported by standardised option-pricing models using market prices.

contract value of derivative financial instruments



in CHF '000 at 31 December	2009	2008

Currency option contracts

Currency option contracts in SGD	–	4,326

Total currency option contracts	–	4,326

Forward foreign exchange rate

Forward foreign exchange rate contracts in SGD	18,964	9,954

Forward foreign exchange rate contracts in EUR	–	12,063

Forward foreign exchange rate contracts in other currencies	3,356	308

Total foreign exchange rate contracts	22,320	22,325

Total contract value of derivative financial instruments	22,320	26,651

4.13 receivables



in CHF '000 at 31 December	2009	2008

Trade accounts receivable gross	32,000	35,470

Provisions for doubtful trade accounts receivable	–1,825	–2,969

Total trade accounts receivable net	30,175	32,501

Prepayments to suppliers	546	2,172

Receivables from related parties	2,858	1,278

Accrued income and deferred expenses	5,077	1,888

Other receivables	4,145	3,853

Total other receivables	12,626	9,191

Total receivables	42,801	41,692

The carrying amounts of the accounts receivable comply with their fair values.

4.14 trade accounts receivable

Taking into account the terms and conditions established with customers, the following table sets forth details of the age of trade accounts receivable:

aging structure of trade accounts receivable



in CHF '000 at 31 December	2009	2008

Not overdue	16,219	23,124

Past due not more than 30 days	8,647	5,738

Past due from 31 to 60 days	2,515	1,259

Past due from 61 to 90 days	592	641

Past due from 91 to 180 days	1,058	2,541

Past due more than 180 days	2,969	2,167

Total trade accounts receivable gross	32,000	35,470

Provisions for doubtful trade accounts receivable	–1,825	–2,969

Total trade accounts receivable net	30,175	32,501

Provisions for doubtful trade accounts receivable are based not only on decisions by individual judgment taking into account the different customer structure in each division, but also on updated information about past experience. The loss was included in the income statement as “other operating expenses”.

provision for doubtful trade accounts receivable



in CHF '000	2009	2008

At 1 January	–2,969	–2,876

Increase in provisions for doubtful trade accounts receivable	–1,687	–1,775

Utilisation of provisions	1,682	1,270

Reversal of provisions	1,164	116

Translation effects	–15	296

At 31 December	–1,825	–2,969

Part of provisions for doubtful trade accounts receivable are individual allowances in an amount of CHF 896,000 (2008: CHF 2,226,000). The effective loss on accounts receivable within the past five years has always been less than 0.5% of the annual turnover.

Trade accounts receivable include amounts denominated in the following currencies:

trade accounts receivable by currencies



in CHF '000 at 31 December	2009	2008

CHF	12,503	15,924

EUR	15,225	14,813

USD	1,842	1,168

GBP	541	596

Other	64	–

Total trade accounts receivable net	30,175	32,501

In the 2009 financial year, certain European subsidiaries of the Group forfeited receivables in an amount of CHF 1,752,000 (2008: CHF 3,029,000).

4.15 construction contracts

Revenue from construction contracts by using the PoC-method during the year ended 31 December 2009 was CHF 17,315,000 (2008: CHF 29,464,000). The aggregate amount of costs incurred and the recognised profits (less recognised losses) for all construction contracts in progress was as disclosed on the balance sheet date.

4.16 inventories



in CHF '000 at 31 December	2009	2008

Raw materials, auxiliary materials and supplies	19,212	19,519

Semi-finished and finished goods	17,742	14,408

Trading goods	7,952	11,009

Work-in-progress	7,008	7,660

Total inventories	51,914	52,596

The cost of inventories recognised as expense and included in the income statement amounted to CHF 135,204,000 (2008: CHF 150,476,000). The write-down on inventories recognised in the income statement during the financial year ended at 31 December 2009, was CHF –95,000 (2008: CHF 523,000).

4.17 financial assets

Current and non-current financial assets consist of receivables from finance lease and finance contracts as well as from loan contracts. The financial assets comprise:

financial assets



in CHF '000 at 31 December
	Current financial assets	Non-current financial assets	Total 2009 financial assets	Current financial assets	Non-current financial assets	Total 2008 financial assets

Financial assets

Loan assets	4,342	12,083	16,425	4,022	12,403	16,425

Lease and finance contracts	174	124	298	291	656	947

Other current financial assets	21	–	21	1,238	–	1,238

Total financial assets	4,537	12,207	16,744	5,551	13,059	18,610

Certain foreign subsidiaries enter finance lease contracts with their clients in connection with special production facilities. The following details can be disclosed with regard to finance lease assets:

finance lease assets



in CHF '000 at 31 December
	Gross investments in finance lease	Present value of future minimum lease payments	Unrealised interest income 2009	Gross investments in finance lease	Present value of future minimum lease payments	Unrealised interest income 2008

Current finance lease assets

Due within 6 months	110	101	9	161	146	15

Due between 6 and 12 months	79	73	6	160	145	15

Total current finance lease assets	189	174	15	321	291	30

Non-current finance lease assets

Due between 1 and 2 years	134	124	10	332	307	25

Due between 2 and 5 years	–	–	–	377	349	28

Due later than 5 years	–	–	–	–	–	–

Total non-current finance lease assets	134	124	10	709	656	53

Total finance lease assets	323	298	25	1,030	947	83

No contingent finance lease assets relating to production output are recorded and no provision on finance lease assets was made.

4.18 non-current assets held for sale

In the 2009 financial year, the Orell Füssli Group sold a property in St. Gall that was no longer in operational use. The asset was classified as tangible, as management decided on the disposal after the half-year financial report 2009 was issued. Therefore, no prior reclassification to non-current assets held for sale was recorded. At 31 December 2009 and 2008, there are no non-current assets held for sale by the Group.

4.19 tangible assets in 2009



in CHF '000
	Land and buildings	Machinery and technical installations	Other tangible assets	Assets under construction	Total 2009

Cost at 1 January	108,531	104,231	38,509	17,220	268,491

Change in scope of consolidation	–	–	–	–	–

Additions¹	2,096	4,355	1,617	5,341	13,409

Disposals	–15,055	–1,171	–2,125	–2	–18,353

Reclassification	7,233	6,798	7,294	–21,431	–106

Exchange differences	–31	78	–4	5	48

Cost at 31 December	102,774	114,291	45,291	1,133	263,489



Accumulated depreciation and impairment at 1 January	–68,474	–65,122	–23,992	–	–157,588

Change in scope of consolidation	–	–	–	–	–

Depreciation on disposals	12,559	1,170	1,829	2	15,560

Depreciation	–2,852	–2,241	–4,727	–	–9,820

Impairment	–271	–	–483	–	–754

Reclassification	–	–	–	–	–

Exchange differences	19	–83	12	–	–52

Accumulated depreciation and impairment at 31 December	–59,019	–66,276	–27,361	2	–152,654



Net book value at 31 December	43,755	48,015	17,930	1,135	110,835



Insured value at 31 December					295,867

Net book value of tangible assets under finance lease	3,656	63	7	–	3,726

Committments for purchases of property, plant and other equipment					275

tangible assets in 2008

in CHF '000

Land
and buildings

Machinery
and technical
installations

Other
tangible assets

Assets under
construction

Total
2008

Cost at 1 January

112,028

88,124

37,177

2,075

239,404

Change in scope of consolidation

–

–6

–1,595

–

–1,601

Additions¹

193

26,283

2,860

20,252

49,588

Disposals

–1,747

–8,954

–2,659

–

–13,360

Reclassification

349

–

4,514

–5,068

–205

Exchange differences

–2,292

–1,216

–1,788

–39

–5,335

Cost at 31 December

108,531

104,231

38,509

17,220

268,491

Accumulated depreciation and impairment at 1 January

–67,274

–70,813

–24,368

–

–162,455

Change in scope of consolidation

–

1,094

–

1,100

Depreciation on disposals

1,726

8,889

2,530

–

13,145

Depreciation

–3,922

–4,275

–4,242

–

–12,439

Impairment

–38

–11

–279

–

–328

Reclassification

–

Exchange differences

1,034

1,082

1,273

–

3,389

Accumulated depreciation and impairment at 31 December

–68,474

–65,122

–23,992

–

–157,588

Net book value at 31 December

40,057

39,109

14,517

17,220

110,903

Insured value at 31 December

255,979

Net book value of tangible assets under finance lease

3,729

–

3,790

Committments for purchases of property, plant and other equipment

10,317

¹ Additions include additions by cash purchase, by capitalised costs and by acquisitions.

4.20 intangible assets in 2009



in CHF '000
	Software and developments	Rights and licenses	Other in- tangible assets	Total 2009

Cost at 1 January	5,462	1,690	850	8,002

Change in scope of consolidation	–	–	–	–

Additions¹	152	125	–	277

Disposals	–86	–	–	–86

Reclassification	106	–	–	106

Exchange differences	–3	–	–	–3

Cost at 31 December	5,631	1,815	850	8,296



Accumulated depreciation and impairment at 1 January	–3,223	–1,667	–844	–5,734

Change in scope of consolidation	–	–	–	–

Depreciation on disposals	86	–	–	86

Depreciation	–631	–38	–2	–671

Reclassification	–	–	–	–

Exchange differences	6	–	1	7

Accumulated depreciation and impairment at 31 December	–3,762	–1,705	–845	–6,312



Net book value at 31 December	1,869	110	5	1,984

intangible assets in 2008



in CHF '000
	Software and developments	Rights and licenses	Other in- tangible assets	Total 2008

Cost at 1 January	8,156	1,761	939	10,856

Change in scope of consolidation	–2,968	–13	–	–2,981

Additions¹	545	31	8	584

Disposals	–132	–88	–	–220

Reclassification	205	–	–	205

Exchange differences	–344	–1	–97	–442

Cost at 31 December	5,462	1,690	850	8,002



Accumulated depreciation and impairment at 1 January	–4,740	–1,761	–939	–7,440

Change in scope of consolidation	2,242	13	–	2,255

Depreciation on disposals	127	88	–	215

Depreciation	–1,039	–7	–2	–1,048

Reclassification	–	–	–	–

Exchange differences	187	–	97	284

Accumulated depreciation and impairment at 31 December	–3,223	–1,667	–844	–5,734



Net book value at 31 December	2,239	23	6	2,268



¹ Additions include additions by cash purchase, by capitalised costs and by acquisitions.

4.21 further details on tangible assets

The workings and installations in the building of the Orell Füssli Group’s head office could be finalised as planned in the 2009 financial year. The expenditures included investments in production facilities and machineries for the security printing division.

Bank borrowings are secured on land and buildings for the value of CHF 577,000 (2008: CHF 0).

Lease rentals amounting to CHF 11,024,000 (2008: CHF 8,370,000), while CHF 846,000 (2008: CHF 868,000) are related to other leased tangible assets. Operating lease expenses are included in the income statement.

4.22 investment property



in CHF '000	2009	2008

Cost at 1 January	466	466

Exchange differences	–117	–144

Cost at 31 December	349	322



Accumulated depreciation and impairment at 1 January	–232	–319

Depreciation	–18	–21

Exchange differences	–19	108

Accumulated depreciation and impairment at 31 December	–269	–232



Net book value at 31 December	80	90



Fair value of investment property at 31 December	285	280



Amounts recognised in the income statement

Rental income	79	93

Direct operating expenses arising from investment property generating rental income	–14	–13

Direct operating expenses arising from investment property not generating rental income	–14	–13

The fair values of investment property are based on the appraisal by an independent valuer. The appraisal is also based on the market value.

There is no commitment or obligation on repairs and maintenance of the investment property.

4.23 investments



in CHF '000 at 31 December	2009	2008

Investments in associated companies	305	305

Participation in cooperatives	2,110	2,497

Other investments	64	64

Total investments	2,479	2,866

At 31 December 2009 and 2008, investments encompass the participation in Orell Füssli Kartographie Ltd. of 24% and in Travel Book Shop Ltd. of 35%. The investment is accounted for an investment in associates in the consolidated financial statements. At balance sheet date the carrying amount was CHF 270,000 (2008: CHF 270,000) for Orell Füssli Kartographie Ltd. and CHF 35,000 (2008: CHF 35,000) for Travel Book Shop Ltd. The investments do not include any goodwill either at 31 December 2009 or at 31 December 2008. Neither is a listed company.

According to IAS 39, the participation in the retailer cooperative Schweizer Buchzentrum needs to be classified as a financial instrument “available-for-sale” (refer to note 4.12).

4.24 trade payables

The trade accounts payable can be allocated to the following currencies at their net book values:

trade payables by currencies



in CHF '000 at 31 December
	Trade payables third parties	Trade payables related parties	Total 2009	Trade payables third parties	Trade payables related parties	Total 2008

CHF	21,695	13	21,708	22,957	21	22,978

EUR	7,625	991	8,616	7,337	902	8,239

USD	348	–	348	258	–	258

GBP	39	–	39	22	–	22

Other	–	–	–	109	–	109

Total trade payables	29,707	1,004	30,711	30,683	923	31,606

4.25 financial liabilities

The carrying amount of financial liabilities corresponds approximately with its fair value. The maturities are as follows:

maturities of financial liabilities



in CHF '000 at 31 December
	From borrowings	Liabilities from finance lease	Total 2009	From borrowings	Liabilities from finance lease	Total 2008

From current financial liabilities

Due within 6 months	10,405	157	10,562	5,345	182	5,527

Due between 6 and 12 months	139	167	306	150	191	341

Total current financial liabilities	10,544	324	10,868	5,495	373	5,868

From non-current financial liabilities

Due between 1 and 2 years	246	335	581	198	396	594

Due between 2 and 5 years	53	1,025	1,078	–	1,142	1,142

Due later than 5 years	600	849	1,449	614	1,216	1,830

Total non-current financial liabilities	899	2,209	3,108	812	2,754	3,566

Total financial liabilities	11,443	2,533	13,976	6,307	3,127	9,434

Interest expenditure from finance lease liabilities was in an amount of CHF 227,000 (2008: 267,000).

No secured liabilities are included in the 2009 or 2008 financial liabilities. Finance lease liabilities are secured effectively as the rights to the lease asset revert to the lessor in the event of a breach of contract.

The carrying amounts of financial liabilities are denominated in the following currencies. The amounts are translated into Swiss Francs at the exchange rate of the balance sheet date.

financial liabilities by currencies



in CHF '000 at 31 December
	From borrowings	Liabilities from finance lease	Total 2009	From borrowings	Liabilities from finance lease	Total 2008

CHF	600	62	662	687	62	749

EUR	10,843	2,471	13,314	5,620	3,065	8,685

Total financial liabilities	11,443	2,533	13,976	6,307	3,127	9,434

effective interest rates on financial liabilities



Per cent	2009	2008

CHF	0.83–6.25%	2.65–5.00%

EUR	1.42–7.75%	4.30%

4.26 other current liabilities



in CHF '000 at 31 December	2009	2008

Accrued expenses and deferred income	7,567	9,050

Derivative financial instruments (refer to note 4.12)	296	596

Other current payables	7,627	8,841

Total other current liabilities	15,490	18,487

In connection with the derivative financial instruments reference is made to note 4.12. The Orell Füssli Group concluded several currency option contracts in order to hedge certain currency risks. Due to different maturities the contract values will be reduced continuously over the next twelve months.

4.27 provisions

Provisions are considered for restructuring, warranties, outstanding commissions and projects that need to be finished. Provisions for restructuring refer to obligations due to the social compensation plan of 1992. No provision was made for legal claims either in 2009 or 2008. The maturities of the stated provisions as per balance sheet date were as follows:

maturities of provisions



in CHF '000 at 31 December
	Due within 12 months	Due between 1 and 5 years	Due later than 5 years	Total 2009	Due within 12 months	Due between 1 and 5 years	Due later than 5 years	Total 2008

Provisions for legal claims	–	–	–	–	–	–	–	–

Provisions for restructuring	4	18	–	22	5	20	1	26

Warranty provisions	246	–	–	246	447	–	–	447

Other provisions	204	274	122	600	130	360	110	600

Total provisions	454	292	122	868	582	380	111	1,073

The development of the stated provisions in the 2009 and 2008 financial year is stated below:

movement in provisions



in CHF '000	2009	2008

At 1 January	1,073	683

Additions (charged to income statement)	251	600

Reversals (charged to income statement)	–213	–69

Utilisation during the year	–245	–84

Exchange differences	2	–57

At 31 December	868	1,073

4.28 retirement benefit obligations

The pension plans of the Orell Füssli Group are related to retirement benefits for the employees. At 31 December 2009, the Group’s balance sheet includes pension fund assets of CHF 4,805,000 (2008: CHF 3,309,000) and pension fund liabilities of CHF 457,000 (2008: CHF 398,000). The calculation according to IAS 19 results in a net pension asset of CHF 4,348,000 (2008: CHF 2,911,000). The analysis of the pension fund liability and the amounts recognised in the income statement are as follows:

fair value of plan assets



in CHF '000	2009	2008

At 1 January	117,618	133,274

Expected return on plan assets	4,411	4,998

Employer’s contribution	3,056	3,125

Employees’ contribution	2,887	3,160

Curtailments, settlements, plan amendments	–	–10,420

Benefits paid	–5,171	–4,278

Actuarial gain/(loss) on plan assets	–1,299	–12,241

At 31 December	121,502	117,618

present value of benefit obligations



in CHF '000	2009	2008

At 1 January	–119,105	–130,273

Service costs	–5,539	–6,104

Interest costs	–4,169	–4,560

Curtailments, settlements, plan amendments	–	13,067

Benefits paid	5,171	4,278

Actuarial gain/(loss) on benefit obligations	–1,090	4,487

At 31 December	–124,732	–119,105

amount recognised in personnel expenses



in CHF '000	2009	2008

Service costs	–5,539	–6,104

Interest costs	–4,169	–4,560

Expected return on plan assets	4,411	4,998

Curtailment gain	–	1,845

Adjustment due to IAS 19.58	851	86

Net periodic benefit cost	–4,446	–3,735

Employees’ contribution	2,887	3,160

Total amount recognised in personnel expenses	–1,559	–575

The actual return on the plan assets was 10.4% (2008: –9.7%)

The movement in the pension fund liability is as follows:

movement in pension fund liability

in CHF '000

Switzerland

Abroad

Total 2009

Switzerland

Abroad

Total 2008

At 1 January

4,174

–1,263

2,911

1,624

–1,443

181

Total expense charged to income statement

–1,559

–60

–1,619

–575

180

–395

Employer’s contribution

3,056

–

3,056

3,125

–

3,125

At 31 December

5,671

–1,323

4,348

4,174

–1,263

2,911

Over the past five years, the development of the overfunding/underfunding and the actuarial gain/loss was as follows:

overfunding/underfunding over five years



in CHF '000 at 31 December	2009	2008	2007	2006	2005

Fair value of plan assets	121,502	117,618	133,274	121,750	118,461

Present value of pension obligations	–124,732	–119,105	–130,273	–119,937	–120,702

Overfunding/(underfunding)	–3,230	–1,487	3,001	1,813	–2,241

Limitation of assets according IAS 19.58	–	–850	–1,260	–1,360	–2,336

Unrecognised actuarial (gains)/losses	8,901	6,511	–117	542	4,263

Asset/(liability) in the balance sheet – net	5,671	4,174	1,624	995	–314

Pension obligations abroad	–1,323	–1,263	–1,443	–1,391	–1,308

Total overfunding/(underfunding)	4,348	2,911	181	–396	–1,622

actuarial gain/loss over five years



in CHF '000	2009	2008	2007	2006	2005

Experience adjustments on plan liabilities	3,106	4,487	–7,547	2,967	–7,308

Change in assumptions adjustment on plan liabilities	–4,197	–	7,833	2,635	–

Experience adjustments on plan assets	–1,299	–12,241	181	–2,556	3,571

Total actuarial gain/(loss)	–2,390	–7,754	467	3,046	–3,737

The principal actuarial assumptions used were as follows:

actuarial assumptions



Per cent	2009	2008

Discount rate	3.25%	3.50%

Expected return on assets	3.75%	3.75%

Future salary increases	2.00%	2.00%

Future pension increase	0.25%	0.25%

Life expectancy on the basis of EVK 2000 plus	4.50%	4.00%

The expected returns of each asset class are based on the risk premium concept. Thereby it is supposed that the market compensates investors by higher expected returns for bearing risk that cannot be eliminated by diversification. Based on actual risk premiums and market outlook the expected risk premium for each asset class is estimated. The portfolio return results from the weighted sum of the asset class returns less charges.

asset allocation



Per cent	2009	2008

Cash and cash equivalents	9.3%	9.8%

Bonds	46.1%	47.3%

Shares	23.2%	18.5%

Properties	16.8%	15.9%

Other	4.6%	8.5%

Total	100.0%	100.0%

The expected employer’s contribution will be in an amount of CHF 3,102,000 in the 2010 financial year.

4.29 deferred income tax

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset them and then the deferred income taxes relate to the same tax authority. The details of deferred taxes assets and liabilities as well as the changes in the deferred income taxes (net) are disclosed in the following tables:

deferred income tax assets and liabilities

in CHF '000 at 31 December

Deferred
income tax
assets

Deferred
income tax
liabilities

Balance 2009

Deferred
income tax
assets

Deferred
income tax
liabilities

Balance 2008

Cash and cash equivalents and receivables

463

–676

–213

724

–100

624

Inventories

1,657

–523

1,134

2,301

–570

1,731

Construction contracts

–

–4,878

–

–4,449

Non-current assets

257

–3,411

–3,154

881

–2,091

–1,210

Current liabilities

3,277

–3

3,274

1,645

–4

1,641

Non-current liabilities

–45

–5

–44

–1

Tax loss carry-forward

2,518

–

2,518

254

–

254

Effects from offsetting

–5,310

5,310

–

–4,778

4,778

–

Total deferred income tax

2,902

–4,226

–1,324

1,070

–2,480

–1,410

changes in deferred income taxes



in CHF '000	2009	2008

At 1 January	1,410	1,796

Effects of currency translation	214	–161

Change in scope of consolidation	–	–

Charges to income statement	–300	–225

At 31 December	1,324	1,410

maturities of deferred income taxes

in CHF '000 at 31 December

Current
due within
12 months

Non-current
due later than
12 months

Total
2009

Current
due within
12 months

Non-current
due later than
12 months

Total
2008

Deferred tax assets

547

2,355

2,902

534

536

1,070

Deferred tax liabilities

–2,686

–1,540

–4,226

–1,287

–1,193

–2,480

Deferred tax assets/(liabilities) net

–2,139

815

–1,324

–753

–657

–1,410

Deferred income tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the related tax benefit through the future taxable profits is probable. The Group did not recognise deferred tax income assets of CHF 153,000 (2008: CHF 363,000) in respect of losses amounting to CHF 727,000 (2008: CHF 1,728,000) that can be carried forward against future taxable income.

The following table shows the expiry of tax loss carry-forwards which have not been used for the recognition of deferred income tax assets. The applicable tax rate in case of realisation would be at 21% in the 2009 and 2008 financial years.

tax loss carry-forwards not recognised in the balance sheet



in CHF '000 at 31 December	2009	2008

Due within 12 months	285	495

Due between 1 and 2 years	68	667

Due between 2 and 3 years	11	192

Due between 3 and 4 years	311	11

Due between 4 and 5 years	52	311

Later than 5 years	–	52

Total tax loss carry-forwards not recognised in the balance sheet	727	1,728

4.30 share capital

The number of approved ordinary shares is 1,960,000 (2008: 1,960,000). They are exclusively registered shares with a par value of CHF 1 per share (2008: CHF 1 per share). All shares are fully paid.

4.31 retained earnings

in CHF '000

Balance
2009 gross

Exchange
differences

Balance
2009 net

Balance
2008 gross

Exchange
differences

Balance
2008 net

Retained earnings at 1 January

170,496

–5,776

164,720

132,334

–652

131,682

Change

–981

367

–614

38,162

–5,124

33,038

Retained earnings at 31 December

169,515

–5,409

164,106

170,496

–5,776

164,720

The exchange differences relate to the translation of the separate financial statements of the Group’s subsidiaries into Swiss Francs. All associated companies prepare their financial statements in Swiss Francs.