Group - L. Possehl & Co. mbH

Equity is consolidated under the equity method by offsetting the
carrying amount of the investment with the share of equity held at the
time of acquisition. A positive difference between the carrying amount
of the investment and the shares of equity held (goodwill) is offset
against retained earnings in accordance with § 309 Para. 1 Sentence 3
HGB. A negative difference is recognized in retained earnings if it is
attributable to equity and as a separate item in provisions if it is
predominantly an expense.
Equity investments accounted for as associates are recognized in
the consolidated financial statements with the share of equity under
the equity method at the time of acquisition or at the time of initial
consolidation. A positive difference is offset against retained earnings.
If the share of equity is higher at the time of initial consolidation, only
cost is recognized. In following years, the carrying amount is adjusted
for the share of profit or loss from these companies and the difference
is recognized in the income statement. Dividend payments for prior
years are deducted, but not recognized in the income statement. Uniform
equity accounting is not conducted for foreign companies.
Receivables and liabilities as well as sales, expenses and income
between consolidated companies are eliminated. Interim profits from
trading are eliminated. Income from internal sales of the company’s
own products are reclassified to capitalized own work or changes in
inventories.
Letter from the Executive Board
Company Boards
Report of the Controlling Boards
Successful over the Long Term
Group Management Report
Consolidated Financial Statements
Further Information
As they are of minor importance for the financial and earnings position
of the Group, no interim profits from trading with associates need
to be eliminated.
Any impairment losses on intra-Group receivables recognized in
the individual financial statements and impairment losses on shares in
consolidated companies are reversed.
Deferred tax assets and/or liabilities are recognized as necessary
for consolidation procedures with effect on the income statement. In
the consolidated financial statements, deferred tax assets and liabilities
are offset against each other.
CUrrENCy traNSLatioN
The reporting currency of L. Possehl is the Euro. Currency translation
of carrying amounts for subsidiaries in non-Euro countries takes
place on a uniform basis at the middle rate on the balance sheet date.
Any differences from a change in the exchange rate compared to the
previous balance sheet date are recognized directly in equity.
Translation of expenses and income, including the results for the
year, takes place at average rates for the month. Currency differences
from the use of different rates for translating the balance sheet and income
statement are recognized in equity without effect on profit and
loss in accordance with German Accounting Standard (GAS) 14.
The following exchange rates were applied for the translation of the
main foreign currencies in use in the Group:
Rates in e as per
balance sheet date Average rates in e
Country Currency 2007 2006 2007 2006
USA USD 0.67930 0.75930 0.73074 0.79722
China RMB 0.09300 0.09728 0.09604 0.09997
Hong Kong HKD 0.08711 0.09765 0.09374 0.10258
Malaysia MYR 0.20541 0.21510 0.21259 0.21735
Singapore SGD 0.47252 0.49500 0.48478 0.50164
Translation differences for the opening amounts in the fixed asset
schedule and provisions schedule and the schedule of changes in impairment
losses between the exchange rate as of December 31, 2007
and the previous balance sheet rate are recognized in retained earnings
without effect on the income statement.
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