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Company outline
Retail Company in Dusseldorf, Germany. Specialized in Warehouses/Hypermarkets /Electronics/Department stores Divisions: Metro Cash and Carry, Real, Media Markt, Saturn, Galeria Kaufhof and Praktiker Traded on Frankfurt Stock Exchange as MEO Key people: Olaf Koch(CEO); Mark Frese (CFO) Revenue (2011):66.702 Bn euro Profit: 641 Mln euros Assets: 33.98 Bn / Total equity: 6.437 Bn euro
Metro Ag, disclosed the statement of comprehensive income in two stages: 1.Income statement 2.Statement of comprehensive income(IAS1) Net profit is attributed to the Group in itself and to the rest of the noncontrolling interests. METRO AG defines earnings per share as earnings per ordinary share. In 2010, holders of preference shares of METRO AG were entitled to a dividend of 1.485 that was 0.135 higher than that paid to holders of ordinary shares. The company also presents tax effects as OCI, but registers no deferred taxes.
Interest rate risks are caused by changes in interest rate levels. Interest rate swaps and interest limitation agreements are used to cap these risks. Interest rate derivatives that are not part of a qualified hedging transaction under IAS 39 are recognized at fair value in other financial result and, through resulting interest flows, in interest income. Further, Metro elaborates on the treatment of interest rate risk and how interest rate derivatives such as swaps and limitation agreements are recognized.
Currency risk The currency derivatives are used primarily for pound sterling, Danish Krone, Japanese Yen, Polish Zoty, Romanian leu, Russian rouble, Swiss franc, Czech koruna, Turkish lira, Hungarian forint as well as US dollar. Hedging transactions that, according to IAS 39, are not part of a hedge are recognized at their fair value. Value changes are recognized directly in income. Even if no formal hedging relationship was created, these are hedging transactions that are closely connected to the underlying business and whose impact on earnings will be netted by the underlying transaction (natural hedge). In this note Metro Group elaborates on currency hedging and how these hedging instruments are accounted for.
Note 42 continued: Management of liquidity risk Financial instruments utilized include money and capital market products (time deposits, call money, commercial papers, promissory note loans and bonds/EMTNs sold as part of ongoing issue programmes) as well as bilateral and syndicated loans. Cash pooling is also used because it allows the surplus liquidity of individual Group companies to be used to fund other Group companies internally. This note explains how the company protects itself from liquidity risk, a very important precaution in the retail and wholesale business. They are using regular trading assets as under IAS 32 and IAS 39, recognized at fair value on the income statement.