1 Disclosures on the principles applied in the annual financial statements

These annual financial statements of TX Group AG, Zurich were prepared in compliance with the Swiss Code of Obligations (CO). The following significant principles were applied in the annual financial statements:

Cash and cash equivalents

Cash and cash equivalents include cash on hand, postal and bank account balances and time deposits with an original term of around three months, which are measured at nominal value.

Trade accounts receivable

Trade accounts receivable are recognised at their nominal value. Provision is made for the credit risk using any specific valuation allowances and the general valuation allowances permitted under tax law.

Financial assets

Current financial assets are measured at market price, and non-current financial assets are measured individually at cost less valuation allowances. Borrowings are measured individually at their nominal value less valuation allowances. Impairment testing is performed as of the balance sheet date in each case.

Investments in other companies

Investments are measured individually at cost less valuation allowances.

Property, plant and equipment and intangible assets

Property, plant and equipment and intangible assets are capitalised at cost and are depreciated/amortised indirectly. The straight-line method is used for depreciation and amortisation. Any immediate depreciation/amortisation within the limits permitted under tax law is carried out at the discretion of the company. The minimum capitalisation limit is CHF 5,000. Small acquisitions and investments that do not reach this amount are recognised directly as an expense.

Revenue recognition

Revenue from goods is recognised when the risks and rewards of ownership of the goods sold have been transferred to the buyer. Revenue from services is recognised at the time the service is rendered and is accrued at the end of the year, provided that this revenue is invoiced in another period.

Barter transactions

Services rendered in barter transactions are recognised in revenues. Services received in barter transactions are recognised under other operating expenses.

Forward exchange transactions

Forward exchange transactions are entered into to hedge the currency risk of the purchase of newsprint and magazine paper in a foreign currency. Negative market values of forward exchange transactions are recognised as current or non-current liabilities. Changes in measurement are disclosed in financial income.