Matth. Hohner AG

Group Management Report for Fiscal Year 2010/2011
Personnel expenses, other expenses and income as well as depreciation and amortization
The total of personnel expenses, other expenses and income as well as depreciation and amortization
increased by EUR 1.7 million to EUR 26.1 million. Mainly personnel costs increased due to the reduction of
short-time work by about 4.4 %.
Income Taxes
Compared to the prior year, taxes on income decreased by TEUR 884 from TEUR 1,402 to TEUR 518.
However, it has to be considered that about EUR 0.4 million of the income tax in the previous year are
attributable to additions to accruals for tax risks resulting from tax field audits at three Group companies.
• 3 Net Assets
Non-current assets
Intangible assets increased by TEUR 6 to TEUR 322. This development results from the fact that amortization
of intangible assets (TEUR 80) was lower than the capital investments of TEUR 60, the subsequent acquisition
costs of assets due to the audit (TEUR 22), the reclassification of a nearly complete depreciated software
(historical asset cost TEUR 81) and exchange rate effects of TEUR 1. The intangible assets disposed had a
remaining net book value of TEUR 1.
Property, plant and equipment decreased by TEUR 589 to TEUR 9,400 as compared to prior year. Capital
investments of TEUR 540 and subsequent acquisition costs of assets due to the audit of TEUR 69 were lower
than the sum of depreciation (TEUR 1,050). Simultaneously, mainly property, plant and equipment of Hohner
Inc. decreased by TEUR 4 on account of the lower closing rate and the reclassification of a nearly complete
depreciated software (historical asset cost TEUR 81).
The decrease in shareholdings by TEUR 5 to 324 TEUR results from exchange rate influences.
The other receivables decreased by TEUR 56 to TEUR 383. They are particularly comprised of reinsurance
claims.
The deferred tax assets increased by TEUR 336 from TEUR 1,861 to TEUR 2,197. This increase partly results
from the higher capitalization of deferred tax assets to existent loss carry forward on an adjusted five-year
planning due to a slightly positive income planning as a result of the beginning recovery of the markets. For
the other part, the increase of deferred tax assets was due to the deviating valuation for the inventories in the
tax balance sheet.
Current assets
Inventories decreased by TEUR 884 to TEUR 13,242, whereas an amount of about TEUR 252 results from the
translation of the inventories of Hohner Inc. at a lower rate, effective as at balance sheet date. Like in the
previous year, extensive measures for inventory reduction were implemented in all group companies. Due to
these measures inventories could further significantly be reduced, mainly at Hohner S.A. (-14 %) and Hohner
Musikinstrumente GmbH & Co. KG (-28 %). A decrease in inventories of TEUR 89 further resulted from the
decreased activation of administration costs compared to previous year.
Trade receivables increased from TEUR 6,577 to TEUR 6,646. Thereof, a decrease of about TEUR 138 results
from the translation of trade receivables of Hohner Inc. with a lower exchange rate as at balance sheet date.
The other receivables (including other tax claims) decreased by TEUR 11 to TEUR 290.
Cash and cash equivalents increased by TEUR 1,490 to TEUR 10,911, notably on account of the positive profit
development.
Prepayments increased by TEUR 35 to TEUR 197.
Equity
Group equity increased by TEUR 1,153 from TEUR 22,133 to TEUR 23,286. Hence, the equity ratio increased
from 50.6 % to 52.7 %. This increase, which is by TEUR 331 lower than the net income for the year of TEUR
1,484, results from the adjustment item from currency translation (TEUR -306), from actuarial losses for
pension accruals (TEUR -56) as well as from the marked-to-market valuation of hedging instruments (TEUR
+31).
Liabilities
Payables to affiliated companies decreased by TEUR 921 to TEUR 5,571, on account of the repayments
(TEUR 1,300, of which TEUR 260 relate to interest of the reporting year) in comparison to the interest for the
business year 2010/2011 (TEUR 379).
Liabilities to banks were reduced from TEUR 2,308 to TEUR 2,122, notably on account of the positive cash
flow from operating activities of Hohner Inc.
The provisions and accruals decreased by about TEUR 193 to TEUR 5,201. The development notably results
from accruals for pensions (TEUR 155) and the reduction of the accruals for personnel expenses
(TEUR -433 – notably due to the reduction of the accrual for the phased retirement scheme).
Trade payables as well as other liabilities increased by TEUR 934 to TEUR 6,832.
Group ManaGeMent report Group ManaGeMent report
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