In Germany, Weltweit Reisen GmbH and Sport Küpper GmbH ceased to be included in the consolidated financial statements as the result of a merger.
As of September 13, 2007, 100 percent of the shares in Pohland GmbH & Co. Herrenkleidung, Cologne were sold and ceased to be included in the consolidated financial statements. Up to the point when it ceased to be included in the consolidated financial statements, the subsidiary had generated a loss of –8.1 million EUR on sales of 53.7 million EUR. The company was sold for 1.0 million EUR, which involved a loss on the balance sheet of 15.1 million EUR when it ceased to be included in the consolidated financial statements. The purchase price had not yet been paid at the time the consolidated financial statements were being prepared. The assessment of the usability of Pohland’s corporate tax loss carryforwards has changed since the interim statement as of June 30, 2007. In
view of the intention to dispose of the company becoming concrete in the fourth quarter of the fiscal year, the deferred tax assets were written off.
It is not possible to state IFRS carrying amounts of assets and liabilities at the time of acquisition, because the newly acquired companies did not prepare their financial statements according to IFRS.
In total, the changes to the Group of consolidated companies had the following
impact on the consolidated balance sheet:
buch.de internetstores AG, Münster (35.2 percent interest) is carried at equity based on interim financial statements as of September 30, 2007. The balance sheet date is December 31, and thus not identical to the balance sheet date in the DOUGLAS Group. Based on the stock market price on September 30, 2007, buch.de has a proportionate market capitalization of 14.9 million EUR (previous year: 14.7 million EUR). The equity method was not used for six associated companies (including one company domiciled abroad) as these are of minor importance for the DOUGLAS Group's financial position and results of operations. These are carried at cost. Due to the business volume, these companies do not set up interim financial statements. Therefore no information on assets, liabilities and earnings exists as of balance sheet date.
These investments are companies whose services are used by the DOUGLAS Group in individual cases, and a company with confectionery stores in Portugal. The fair value of these companies cannot be reliably determined. The balance sheet dates of these companies differ from the DOUGLAS Group’s balance sheet date.
The following table provides an overview of the key financial data of the companies carried at equity in the consolidated financial statements (all figures as of December 31):
| in EUR mill. | 09/30/07 | 09/30/06 | ||
|---|---|---|---|---|
| Non-current assets | 11.1 | 11.9 | ||
| Current assets | 16.5 | 14.9 | ||
| Non-current liabilities | 0.4 | 0.4 | ||
| Current liabilities | 6.7 | 7.1 | ||
| Net assets | 20.5 | 19.3 |
The company SA L.P.G., Clermont-Ferrand/France, in which a 50 percent interest is
held, is included proportionately in the consolidated financial statements due to the percentage of share.
The impact on the Group was as follows:
| in EUR mill. | 09/30/07 | 09/30/06 | ||
|---|---|---|---|---|
| Non-current assets | 0.6 | 0.6 | ||
| Current assets | 0.3 | 0.4 | ||
| Non-current liabilities | 0.0 | 0.0 | ||
| Current liabilities | 0.5 | 0.4 | ||
| Net assets | 0.4 | 0.6 |
CONSOLIDATION METHODS
The financial statements of the companies included in consolidation have been
prepared as of September 30, 2007. The individual financial statements are combined using the following principles:
Capital is consolidated by offsetting acquisition costs with the Group’s interest in the consolidated subsidiary’s net assets on the date of the acquisition. Any positive differences that result are capitalized as goodwill and tested annually for impairment. Any negative differences are recognized in income in the income statement.
Any hidden reserves and liabilities due to minority shareholders are carried as minority interests.
Goodwill resulting from new acquisitions after October 1, 2004 is not subject to
scheduled amortization but subject to an annual impairment test. If there are reasons to suspect impairment, corresponding impairment tests are also conducted during the year.
During preparation of the opening IFRS accounts as at October 1, 2004, retroactive application of IFRS 3 has been waived, and the simplification option offered under IFRS 1 has been used. As a result, the goodwill in the opening IFRS accounts have been offset against the revenue reserves as in the HGB (German Commercial Code) consolidated financial statements.
Receivables from and corresponding liabilities to consolidated companies are netted. Material intra-Group profits from the provision of goods and services within the Group were eliminated in the consolidated financial statements to the extent that these have not yet been realized in sales with third parties. Sales and other income from deliveries of goods and services within the group are netted with the corresponding expenses.
The share of profits or losses from associated companies is netted with the carrying amount of the respective participating interest in line with the equity method. Nonrealized gains and losses between Group companies and associated companies are eliminated.