2007 - Pinguely Haulotte

Consolidated financial statements of December 31st, 2007
(finance leases). The sale of the platform
to the financial institution followed
by a leaseback is only carried out if a
sub-lessee or end user is found.
The arrangements are considered as
finance leases under IAS 17 and
accounted for as follows:
- The transfer of the equipment to a
financial institution is treated as a
guaranteed loan recognized as debt
under liabilities in the balance sheet;
- The lease payments to the financial
institution under the lease are broken
down between financial charges under
"cost of goods sold" in the income
statement and repayment of the capital
(note 31);
- The sale of the equipment is recognized
under “sales and revenue” when the
sublease agreement is concluded with
the end user. This type of arrangement
is treated as a finance lease;
- A trade receivable payable by the end
user is recognized under current assets
for the portion payable within one year
with the balance recognized under
non-current assets;
- Lease payments received are broken
down between received investment
income under “sales and revenue” of
the income statement and repayment
of the receivable.
Following the global refinancing of lease
agreements of the Group with financial
institutions initiated in 2005 and finalized
in 2006, receivables and payables in
connection with back-to-back
arrangements are no longer strictly
matched.
In consequence, payables to the finance
lease company are replaced by debt
obtained by the Group for refinancing
while the repayment of this debt replaces
the lease payments to the financial
institution.
Financial charges in connection with this
debt are presented in the income
statement under "cost of net financial debt".
3.8 Borrowings
Borrowings are initially recognized at fair
value of the amount received less
transaction costs. Borrowings are
subsequently stated at amortized cost
calculated according to the effective
interest rate method.
3.9 Employee benefits
The Group records provisions for employee
benefits and other employee-related
obligations as well as long service awards.
The Haulotte Group also has defined
benefit plans. The corresponding
obligations are measured according to
the projected unit credit method for endof-career
severance benefits. The
calculation of this obligation takes into
account the provisions of the laws and
collective bargaining agreements and
actuarial assumptions concerning notably
staff turnover, mortality tables, salary
increases and inflation. This calculation for
defined benefit obligations for the period
was performed by an independent
actuary.
Actuarial gains and losses from
adjustments based on actual benefit rates
and modifications of actuarial assumptions
are recorded in the income statement in
the period incurred.
3.10 Provisions
In general a provision is recorded when:
- The Group has a present legal or
constructive obligation as a result of a
past event;
- It is probable that an outflow of resources
embodying economic benefits will be
required to settle the obligation and;
- A reliable estimate can be made of the
amount of the obligation.
Accordingly, the Group grants clients a
manufacturer's warranty. The estimated
cost of warranties on products already
sold is covered by a provision statistically
calculated on the basis of historical data.
Other provisions are also recorded in
accordance with the above principles to
cover risks related to litigation, site closures,
when applicable, or any other event
meeting the definition of a liability. The
amount recognized as a provision
represents the best estimate of the
expenditure required to settle the
obligation.
3.11 Deferred taxes
Deferred taxes are recognized for all
timing differences between the tax bases
of assets and liabilities and their carrying
amount in the consolidated financial
statements, for adjustments to
consolidated financial statements as
well as tax loss carryforwards. They are
calculated using the liability method by
the company on the basis of tax rates of
subsequent financial periods.
Deferred income tax assets from timing
differences or tax loss carryforwards are
recognized if there exists a real probability
they will be charged against future
taxable profits within a foreseeable
horizon.
Deferred tax assets and liabilities are offset
if the entities belong to the same tax
group and are entitled to do so under
enforceable provisions.
3.12 Cash and cash equivalents
Cash and cash equivalents includes cash
in hand and other short-term investments.
The latter consist primarily of money
market funds and term deposits.
Money market funds whose market value
is close to the carrying value are recorded
at purchase price. When the carrying
value is lower than the stock market value,
or failing this, the probable realizable
value, a provision for impairment is
recorded for the difference.
Accrued interest has been calculated for
term deposits for the short period from
the date of subscription to the closing
date.
ENGLISH