Financial Report and Registration Document 2010 - Groupe Seb

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CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7
FINANCE COSTS AND OTHER FINANCIAL INCOME AND EXPENSE, NET
(in € millions) 2010 2009 2008
FINANCE COSTS (12.0) (22.6) (37.9)
Interest cost on long-term employee benefit obligations (5.6) (6.4) (6.2)
Exchange gains and losses 4.8 1.7 (0.2)
Income and expenses from financial instruments (0.1) (1.8) (3.8)
Other (3.0) 1.9 (0.5)
OTHER FINANCIAL INCOME AND EXPENSE, NET (3.9) (4.6) (10.7)
The interest cost on long-term employee benefit obligations corresponds
to the difference between the discounting adjustment for the year – arising
from the fact that benefi t payments are one year closer to being paid –
and the expected return on the corresponding plan assets. Discounting
adjustments to other long-term liabilities and provisions are also included
under this caption.
Exchange gains and losses on foreign currency transactions are included in
operating margin. Gains and losses on hedges of foreign currency borrowings
are reported under “Other financial income and expense”.
Income and expenses from financial instruments correspond to amortisation
of the time value of hedging instruments, and derivative instruments for
which the hedging relationship has not been documented.
NOTE 8
INCOME TAXES
8.1. INCOME TAX EXPENSE
(in € millions) 2010 2009 2008
Current taxes 92.0 73.2 55.3
Deferred taxes, net (2.5) (15.1) 11.2
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INCOME TAX EXPENSE 89.5 58.1 66.5
Current income tax expense corresponds to taxes paid or payable in the
short term on profit for the year, based on local tax rates and tax laws in the
Group’s host countries.
Group companies in France, Germany, Italy and the United States have
elected for group relief. The companies in each tax group record in their
accounts the income tax charge or benefit that they would have paid
or received if they had been taxed on a stand-alone basis (Note 32).
Tax savings resulting from the election for group relief are not material; the
main benefit lies in the fact that any tax losses can be set off immediately
against the taxable income of other companies in the tax group.
8.2. EFFECTIVE TAX RATE
The following table provides a reconciliation between the Group’s effective tax rate of 26.9% (26.3% in 2009 and 29.0% in 2008) and the statutory French
tax rate of 34.43%:
(in%) 2010 2009 2008
STATUTORY FRENCH TAX RATE 34.4 34.4 34.4
Effect of different tax rates (8.4) (12.4) (9.6)
Unrecognised and unrelieved tax loss carryforwards 2.0 2.3 3.5
Prior period tax loss carryforwards recognised and utilised during
the period (4.0) (2.7)
Other (a) 2.9 4.7 0.7
EFFECTIVE TAX RATE 26.9 26.3 29.0
(a) The caption “Other” primarily includes unrecognised deferred tax assets other than for tax losses, and changes in deferred tax assets not recognised in prior periods, the change in
value of these items and the impact of the non-deductibility of the impairment loss on All-Clad goodwill (1.5% in 2010 and 3.1% in 2009).
GROUPE SEB
FINANCIAL REPORT AND REGISTRATION DOCUMENT 2010
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