12.05
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Accounting principles for consolidation, valuation, determination of results and cash flow
DESCRIPTION OF OUR BUSINESS
Our operations can be divided amongst our three primary business divisions: mail, express and logistics. The mail division primarily provides services for collecting, sorting, transporting and distributing domestic and international mail. The express division provides demand door-to-door express delivery services for customers sending documents, parcels and freight worldwide. The logistics division provides supply chain management services on a contract-by-contract basis to customers worldwide in various business sectors including the automotive, publishing, and fast moving consumer goods industries.
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING PRINCIPLES
The financial statements have been prepared in accordance with the provisions of Part 9, Book 2 of the Dutch civil code and accounting principles as described in the “Guidelines for Annual Reporting in the Netherlands” (“Dutch GAAP”).All amounts in the financial statements are stated in euros, unless otherwise indicated.
Capital is determined on the basis of historical cost. Assets and liabilities are included at nominal value unless otherwise indicated.
CHANGES IN ACCOUNTING POLICIES
Starting from the financial year 2003 dividend payable amounts have been reclassified from “Other current liabilities” to “Shareholders’ equity”, (2002: 119; 2001: 114), in accordance with RJ160 of “Guidelines for Annual Reporting in the Netherlands”.
CONSOLIDATION PRINCIPLES
Group companies, which are companies that form an organisational and economic entity with our company and in which we have a controlling interest, are fully consolidated. The minority participating interests in group equity and in net income are disclosed separately. Companies are consolidated from the date the Group has control over the company and divested companies are included in the consolidated financial statements up to the date the Group ceases to have control over the company.These accounting principles apply to the balance sheets and the statements of income and to the group companies included in the consolidation. All significant intercompany balances and transactions have been eliminated on consolidation.
The Group’s share in the results of an affiliated company is computed on the basis of TPG’s equity portion in that particular affiliated company.
In the consolidated balance sheet, shares in affiliated companies are reported separately under financial fixed assets. The book value of the shareholdings changes to reflect TPG’s share in net income of the respective companies, reduced by dividends received. If the Group’s share of any accumulated losses exceeds the acquisition value of the shares in the company, the book value is reduced to zero and the reporting of losses ceases, unless the Group is bound by guarantees or other undertakings in relation to the affiliated company.
Joint ventures are defined as companies in which TPG, jointly with another partner through agreement, has a joint decisive influence over operations. Joint ventures are reported in accordance with the proportional consolidation method. In applying the proportional consolidation method, the Group’s percentage share of the balance sheet and statement of income items are included in the consolidated financial statements of TPG N.V.
The consolidated financial statements include the financial statements of TPG N.V. and its consolidated companies. A complete list of subsidiaries and affiliated companies included in our consolidated financial statements is publicly filed at the office of the commercial register of the Chamber of Commerce in Amsterdam. This list has been prepared in accordance with the provisions of Article 379, Paragraph 1 and Article 414, Part 9, Book 2 of the Dutch civil code.
FOREIGN CURRENCIES
Revenues and expenses in foreign currencies are included in the statements of income at the rate on the date incurred (cash value or at an average exchange rate for accounting purposes). If a forward contract has been entered into, the forward exchange rate is applied.Accounts receivable, liabilities, cash and cash equivalents denominated in foreign currencies are translated into euro at the rate of exchange at the balance sheet date or at the forward exchange rate if a forward contract has been entered into.
Exchange rate differences are included in the statements of income under interest and similar income or interest and similar expenses.
Assets and liabilities of foreign companies with functional currencies other than euro have been translated into euro at the rate of exchange at the balance sheet date. The resulting exchange rate differences are added to or charged against the cumulative translation reserve, which forms part of equity. The exchange result on loans or other financial instruments used to hedge the company’s exposure with respect to its net investment in foreign companies denominated in foreign currencies is also added to or charged against the cumulative translation reserves. Revenues and expenses of foreign companies with functional currencies other than euro have been translated at the average rate for the year. Exchange differences arising on foreign currency liabilities in entities whose functional currency is the euro are added to or charged against cumulative translation reserve where the liability has the nature of a permanent investment.
Goodwill, other intangible assets, property, plant and equipment and inventory (non-monetary assets) of direct foreign activities are translated at historical exchange rates. Accounts receivable, liabilities, cash and cash equivalents (monetary assets and liabilities) of direct foreign activities are translated at the rate of exchange at the balance sheet date. The resulting exchange rate difference from these translations is included in the statements of income under interest and similar income or under interest and similar expenses.