financial report and registration document 2011 - Groupe SEB

6 Notes
Company fi nancial statements
to the Company fi nancial statements
account advances to and from the cash pool pay interest at the overnight
rate for the currency concerned plus or minus 0.15 bps.
Commercial paper is issued in euros under a €600 million programme
rated A2 by Standard & Poor’s and is converted into the functional
currency of the subsidiaries concerned outside the euro zone by means
of swaps, thereby limiting the Company’s exposure to currency risks on
these fi nancing transactions. A provision may be set aside to cover the
unhedged portion of the risk.
� SEB S.A. sets the exchange rates for intercompany import and export
transactions on behalf of its subsidiaries. Net currency positions (arising
when exports exceed imports) are hedged by forward foreign exchange
contracts, allowing the hedged transactions to be recognised directly in
the subsidiary’s local currency at the hedging rate. The unrealised gain
or loss, i.e. the difference between the hedging rate and the closing rate,
is recognised in the fi nancial statements of SEB S.A. at the period-end.
Any unrealised losses arising on such transactions are recognised on
the assets side of the balance sheet under “Conversion losses” and lead
to the recognition of a provision for contingencies. Unrealised gains are
recognised in liabilities under “Conversion gains” without affecting profi t
for the year.
The contango or backwardation on currency swaps is recorded in the
income statement when the swaps expire.
NOTE 2 MOVEMENTS IN NON-CURRENT ASSETS
Note 2.1. INTANGIBLE ASSETS
There were no material acquisitions or disposals of intangible assets during
the year.
Note 1.6. CONVERSION AND MEASUREMENT
OF CASH AND SHORT-TERM BANK
LOANS IN FOREIGN CURRENCY
Cash and short-term bank loans denominated in foreign currency at the
period-end are converted into local currency at the exchange rate on the
last business day of the period, and conversion differences are recognised
in profi t for the period under “Foreign exchange gains” or “Foreign exchange
losses”.
Note 1.7. INCOME TAX
SEB S.A. and its French subsidiaries fi le a consolidated tax return under the
group relief system provided for in Article 223 1 to U of the French Tax Code
(Code Général des Impôts).
No group relief agreement has been signed and each member of the tax
group therefore calculates the income tax charge or benefi t they would
have paid or received if they had been taxed on a stand-alone basis. As
the parent company, SEB S.A. recognises in its income statement any tax
savings or additional tax expense arising on the consolidation of the French
subsidiaries’ taxable results. Tax savings resulting from group relief for tax
losses incurred by companies in the tax group are initially recognised by
SEB S.A. and are transferred back to the companies concerned when they
return to profi t.
Note 2.2. PROPERTY, PLANT AND EQUIPMENT
There were no material acquisitions, disposals or retirements of property,
plant and equipment during the year.
144 GROUPE SEB Financial Report and Registration Document 2011