Annual - Aramex

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Notes (Continued) 3- Significant accounting policies (Continued) Basis of consolidation <strong>Annual</strong> Report 2008 Subsidiaries Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Refer to note 34 for the list of significant subsidiaries included in these consolidated financial statements. Special purpose entities Special purpose entities (“SPEs”) are consolidated if, based on an evaluation of the substance of the relationship of the entity with the Group and the SPEs risks and rewards, the Group concludes that it controls the SPEs. Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in full in preparing the consolidated financial statements. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment. Foreign currency Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the respective functional currencies at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies, which are stated at historical cost, are translated to the functional currency at the exchange rate ruling on the date of the transaction. Realized and unrealized exchange gains and losses are accounted for in the income statement. Foreign operations The financial statements of foreign subsidiaries where the local currency is their functional currency (substantially all stations) are translated into AED using exchange rates in effect at the reporting date for assets and liabilities and average exchange rates during the reporting period for results of operations. Adjustments resulting from translation of financial statements are reflected as a separate component of shareholders’ equity. Exchange gains and losses resulting from transactions of the Group which are made in currencies different from their own are included in the income statement as they occur. The revenue and expenses of foreign operations in hyperinflationary economies are translated to AED at the exchange rates ruling at the balance sheet date. Prior to translating the financial statements of foreign operations in hyperinflationary economies, the financial statements are restated to account for changes in the general purchasing power of the local currency. Foreign exchange gains and losses arising from a monetary item receivable from or payable to a foreign operation, the settlement of which is neither planned nor likely in the foreseeable future, are considered to form part of the net investment in a foreign operation and are recognised directly in equity. Revenue Revenue represents the value of services rendered to customers and is stated net of discounts and sales taxes or similar levies. Revenue recognition Express revenue is recognized upon receipt of shipment from the customer. Freight forwarding revenue is recognized upon the delivery of freight to the destination or to the air carrier. Catalogue shopping and shop ‘n’ ship services revenue is recognized upon the receipt of the merchandise by the customers. Revenue from magazines and newspapers distribution is recognized when it is delivered to the customers. Revenue from logistics and document storage services is recognized when the services are rendered. Cash and cash equivalents Cash and cash equivalents comprises cash balances, short term deposits, call deposits and current account with banks. For the purpose of the consolidated statement of cash flows, bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents. Restricted cash primarily represented by margin deposits are not included within cash and cash equivalents. 11
<strong>Annual</strong> Report 2008 12 Notes (Continued) 3- Significant accounting policies (Continued) Property, plant and equipment Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses (see accounting policy on impairment), if any. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self constructed assets includes cost of material and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Subsequent costs The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The cost of the day to day servicing of property, plant and equipment are recognised in the income statement as incurred. Depreciation Depreciation is charged in the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease terms or their useful lives. Land is not depreciated. The estimated useful lives for the current and comparative periods are as follows: Leasehold improvements Life (years) 4-7 Building 14-15 Furniture and fixtures 5-10 Office equipment 3-7 Computers 3-5 Vehicles 4-5 The depreciation methods, useful lives and residual values are reassessed at the reporting date. Intangible assets Goodwill Goodwill (including negative goodwill) arises on acquisition of subsidiaries, associates and joint ventures. On acquisition of subsidiaries, goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree at the date of acquisition. Negative goodwill arising on an acquisition is recognized immediately in the income statement. Cost of acquisition also includes contingent consideration. A liability is recognised for contingent consideration as soon as the payment becomes probable and the amount can be measured reliably. The purchase price is subsequently adjusted against goodwill or negative goodwill if the estimate of the amount payable is revised. Goodwill arising on the acquisition of minority interest in a subsidiary represents the excess of the cost of the additional investment over the carrying amount of net assets acquired at the date of exchange. Subsequent to the initial measurement, goodwill is measured at cost less accumulated impairment losses. Other intangible assets Intangible assets, other than goodwill, that are acquired by the Group and which have finite useful lives, are stated at cost less accumulated amortization and accumulated impairment losses, if any. Amortisation is recognized in the income statement on a straight line basis over the estimated useful lives of intangible assets. The estimated useful life of the other intangible assets is between 3 to 10 years. Prepaid agency fees Amounts paid in advance to agents to purchase or alter their agency rights are accounted for as prepayments. As these amounts are paid in lieu of annual payments they are expensed to the income statement over the period equivalent to the number of years of agency fees paid in advance.
Page 4: Mission and Purpose Mission To be r
Page 7: Reach has no limits We continue our
Page 11: Tomorrow has no limits The year fol
Page 14 and 15: Innovation has no limits Our innova
Page 16 and 17: Hope has no limits We contribute to
Page 18 and 19: and our support of the Arab Fund fo
Page 20 and 21: Selected Financial Data Annual Repo
Page 22 and 23: Annual Report 2008 Wholesale expres
Page 24 and 25: Year 2007 Description International
Page 26 and 27: Aramex PJSC and its subsidiaries Co
Page 28 and 29: Directors’ Report Dear Shareholde
Page 30 and 31: Aramex PJSC and its subsidiaries Co
Page 32 and 33: Consolidated statement of cash flow
Page 34 and 35: Consolidated statement of changes i
Page 38 and 39: Notes (Continued) 3- Significant ac
Page 40 and 41: Notes (Continued) 3- Significant ac
Page 42 and 43: Notes (Continued) 4- Financial risk
Page 44 and 45: Notes (Continued) 7- Cost of servic
Page 46 and 47: Notes (Continued) 12- Income taxes
Page 48 and 49: Notes (Continued) 14- Goodwill 2008
Page 50 and 51: Notes (Continued) 19- Trade receiva
Page 52 and 53: Notes (Continued) 24- Loans and bor
Page 54 and 55: Notes (Continued) 28- Other current
Page 56 and 57: Notes (Continued) 33- Information a
Page 58 and 59: Notes (Continued) 35- Financial ins

Annual - Aramex

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