Annual Report 2010 (PDF, 5.2MB) - Panalpina Annual Report 2012

Consolidated and Annual Financial Statements 2010
based on gross profit and operating result (EBIT). Income tax expenses, finance income and costs as well as special items are not
assessed by segment. Certain headquarter activities are reported as “Corporate”. These consist of corporate headquarters, including the
Corporate Executive Committee, corporate communications, corporate operations, corporate human resources, corporate finance,
including treasury, taxes and pension fund management.
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Transfer prices between operating segments are set out at arm’s-length basis. Operating assets and liabilities consist of property, plant
and equipment, goodwill and intangible assets, trade receivables / payables, other assets and liabilities such as provisions and current
income taxes, which can be reasonably attributed to the reported operating segments. Non-operating assets and liabilities mainly include
deferred income tax balances, post-employment benefit assets / liabilities and financial assets / liabilities such as marketable securities
and investments.
Foreign currency
Functional currency
Most Group companies use their local currency as their functional currency. Certain Group companies use other currencies (such as US
dollars or euros) as their functional currency where this is the currency of the primary economic environment in which the entity or branch
operates.
Transactions and balances
Local transactions in other currencies are initially reported using the exchange rate at the date of the transaction or reporting date. Gains
and losses from the settlement of such transactions and gains and losses on transactions of monetary assets and liabilities denominated
in other currencies are included in the income statement, except when they arise on monetary items that, in substance, form part of the
Group’s net investment in a foreign entity. In such cases the gains and losses are deferred into other comprehensive income.
Non-monetary items that are measured in terms of historical cost in foreign currency are translated using the exchange rate as of the dates
of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates on the
date on which the fair value is determined.
Changes in fair value of securities denominated in foreign currency classified as available-for-sale are split into components resulting from
changes in the amortized cost of the security and other changes in the carrying amount of the security. Foreign exchange remeasurement
differences related to changes in amortized cost are recognized in profit or loss, and other changes in the carrying amount are recognized
in equity.
Presentation currency
Upon consolidation, assets and liabilities of Group companies using functional currency other than Swiss francs are translated into Swiss
francs using a year-end rate of exchange. Income, expenses and net income and cash flows are translated at the average rates of
exchange for the year. Translation differences due to the changes in exchange rates between the beginning and the end of the year and
the difference between net incomes translated at the average and year-end exchange rates are recognized as a separate component
of other comprehensive income.
The income and expenses of foreign operations in hyperinflationary economies are translated to Swiss francs at the exchange rate on the
reporting date. Prior to translating the financial statement of foreign operations in hyperinflationary economies, their financial statements
are restated to account for changes in the general purchasing power of the local currency. The restatement is based on relevant price indices
on the reporting date. Foreign currency differences are recognized directly in comprehensive income in the foreign currency translation
reserve.
On disposal of a foreign entity, the identified cumulative currency translation differences within equity relating to that foreign entity are
recognized in the income statement as part of the gain or loss on divestment.
Any goodwill arising on the acquisition is treated as assets and liabilities of the foreign operation and translated at the closing rate.
The most important exchange rates used in the reported financial statements are:
Statement of
Financial
Position
2010 2009
Income
Statement
Statement of
Financial
Position
Income
Statement
EUR 1.25134 1.37870 EUR 1.48429 1.51006
USD 0.93670 1.04137 USD 1.02940 1.08465
HKD 0.12049 0.13403 HKD 0.13274 0.13992
CNY 0.14177 0.15385 CNY 0.15078 0.15877
CAD 0.93820 1.01107 CAD 0.97917 0.95269
GBP 1.45170 1.60781 GBP 1.66053 1.69541
Panalpina Annual Report 2010