Print this page
Financial Statements
Notes to the corporate balance sheets and statements of income
ACCOUNTING POLICIES FOR VALUATION AND DETERMINATION OF RESULT TNT N.V.
The corporate financial statements for the year ended 31 December 2006 have been prepared in accordance with Part 9 of Book 2 of the Dutch Civil Code. We have applied the option in Article 362 (8) to use the same principles of valuation and determination of result for the corporate financial statements as the consolidated financial statements.
Our corporate balance sheets and statements of income have been adjusted to reflect the adoption of IFRS. This has impacted our equity and the carrying value of the investments in group companies by €12 million as at 1 January 2004 and €560 million as at 31 December 2004. As at 1 January 2005 the adoption of IAS 32 and IAS 39 resulted in a decrease of €9 million relating to the valuation of a put option.
Our investments in group companies are carried at net asset value. For the principles of valuation of assets and liabilities and for the determination of results reference is made to the notes to the consolidated balance sheet and statements of income.
The balance sheet as of 31 December 2005 and the statements of income over 2005 and 2004 have been restated following a reassessment of the risks and rewards related to the Dutch pension plans. These pension plans are to be regarded as group plans which should, in accordance with IAS 19.34a, be accounted for at TNT N.V. level. As a result of the revised position the balance sheet of TNT N.V. as of 31 December 2005 was restated with retrospective effect whereby Pension assets of €383 million were recorded against a corresponding decrease of €383 million in the Investments in group companies balance. There was no impact on equity or results since the costs of the pension plans did not change at a consolidated level. In order to reflect the difference between the net benefit costs for TNT N.V. and the costs recharged to the subsidiaries based on the contribution payable, results from investments were lowered by €105 million and €151 million for 2005 and 2004 respectively. Other income and expense over 2005 and 2004 were increased by the corresponding amounts. From a fiscal unity perspective the tax effects are accounted for at subsidiary level.
ο 38 Total financial assets: 3,733 MILLION (2005: 4,476)
| Save this Table as Excel | |||||
| Statement of changes financial fixed assets | Investments in group companies | Investments in associates | Deferred tax assets | Prepayments & accrued income | Total |
| Balance at 31 December 2004 | 3,895 | 32 | 3 | 3,930 | |
| Adoption IAS 32/39 | (9) | (3) | (12) | ||
| Balance at 1 January 2005 | 3,886 | 32 | 3,918 | ||
| Changes in 2005 | |||||
| Results | 634 | (2) | 632 | ||
| Acquisitions/additions | 13 | 5 | 18 | ||
| Disposals/decreases | (111) | (111) | |||
| Withdrawals/repayments | |||||
| Exchange rate differences | 19 | 19 | |||
| Other changes | |||||
| Total changes | 542 | 11 | 5 | 558 | |
| Balance at 31 December 2005 | 4,428 | 43 | 5 | 4,476 | |
| Changes in 2006 | |||||
| Results | 736 | (6) | 730 | ||
| Acquisitions/additions | 647 | 19 | 666 | ||
| Disposals/decreases | (2,138) | (2,138) | |||
| Withdrawals/repayments | |||||
| Exchange rate differences | (1) | (1) | |||
| Other changes | |||||
| Total changes | (756) | 13 | (743) | ||
| Balance at 31 December 2006 | 3,672 | 56 | 5 | 3,733 | |
|
|||||
Investments in group companies include our investments in our discontinued freight management business.
ο 39 pension asset 495 million (2005: 383)
TNT N.V. is the sponsoring employer for two Dutch pension plans, which are externally funded and are covering the majority of TNT’s employees in the Netherlands. In accordance with IAS19.34a the net defined benefit cost is recognised in the corporate financial statements of TNT N.V. The other group companies recognise the costs equal to the contribution payable for the period in their financial statements. For TNT NV the contributions received from other group entities offset the pension expense. The impact of the contributions is represented as participant contributions in the table below.
The table below reconciles the opening and closing balances of the present value of the defined benefit obligation and the fair value of plan assets for the TNT N.V.- sponsored group pension plans.
| Save this Table as Excel | ||
| 2006 | 2005 | |
| CHANGE IN BENEFIT OBLIGATION | ||
| Benefit obligation at beginning of year | (4,502) | (3,953) |
| Service costs | (137) | (135) |
| Interest costs | (198) | (193) |
| Amendments | 8 | |
| Prior service costs/termination benefit costs | (52) | |
| Curtailments/settlements | 9 | |
| Actuarial (loss)/gain | 271 | (242) |
| Benefits paid | 81 | 73 |
| Benefit obligation at end of year | (4,468) | (4,502) |
| CHANGE IN PLAN ASSETS | ||
| Fair value of plan assets at beginning of year | 4,179 | 3,615 |
| Actual return on plan assets | 382 | 477 |
| Participant contributions | 122 | 160 |
| Benefits paid | (81) | (73) |
| Fair value of plan assets at end of year | 4,602 | 4,179 |
| FUNDED STATUS AS at 31 DECEMBER | ||
| Funded status | 134 | (323) |
| Unrecognised net actuarial loss | 322 | 653 |
| Unrecognised prior service costs | 39 | 53 |
| Pension assets | 495 | 383 |
| COMPONENTS OF EMPLOYER PENSION EXPENSE | ||
| Service costs | (137) | (135) |
| Interest costs | (198) | (193) |
| Expected return on plan assets | 342 | 298 |
| Amortisation of actuarial loss | (24) | (25) |
| Curtailment gain | 8 | |
| Other costs | (1) | |
| Participant contributions | 122 | 160 |
| Total post employment benefit income/(expenses) | 112 | 105 |
| WEIGHTED AVERAGE ASSUMPTIONS AS AT 31 DECEMBER | ||
| Discount rate | 4.7% | 4.3% |
| Expected return on plan assets | 7.9% | 7.9% |
| Rate of compensation increase | 2.0% | 2.0% |
| Rate of benefit increase | 2.0% | 2.0% |
|
||
For additional details on the Dutch pension plans we refer to note 10.
ο 40 EQUITY: 1,983 MILLION (2005: 3,262)
| Save this Table as Excel | |||||||
| Issued share capital | Additional paid in capital | Cumulative translation adjustment | Hedging reserve | Other reserves | Retained earnings | Total shareholders’ equity | |
| Balance at 31 December 2004 | 230 | 1,421 | (35) | 1,052 | 657 | 3,325 | |
| Effect on adoption of IAS 32/39 | (268) | (268) | |||||
| Balance at 1 January 2005 | 230 | 1,421 | (35) | 784 | 657 | 3,057 | |
| Profit for the year | 659 | 659 | |||||
| Gains/(losses) on cashflow hedges, net of tax | (12) | (12) | |||||
| Currency translation adjustment | 19 | 19 | |||||
| Total recognised income for the year | 19 | (12) | 659 | 666 | |||
| Final dividend previous year | (168) | (168) | |||||
| Appropriation of net income | 489 | (489) | |||||
| Interim dividend current year | (100) | (100) | |||||
| Repurchases of shares | (231) | (231) | |||||
| Share based compensation | 10 | 10 | |||||
| Other | 28 | 28 | |||||
| Total direct changes in equity | 296 | (757) | (461) | ||||
| Balance at 31 December 2005 | 230 | 1,421 | (16) | (12) | 1,080 | 559 | 3,262 |
| Profit for the year | 670 | 670 | |||||
| Gains/(losses) on cashflow hedges, net of tax | (9) | (9) | |||||
| Currency translation adjustment | (1) | (1) | |||||
| Total recognised income for the year | (1) | (9) | 670 | 660 | |||
| Final dividend previous year | (173) | (173) | |||||
| Appropriation of net income | 386 | (386) | |||||
| Interim dividend current year | (109) | (109) | |||||
| Repurchases of shares | (27) | (176) | (1,533) | (1,736) | |||
| Share based compensation | 13 | 13 | |||||
| Other | 12 | 54 | 66 | ||||
| Total direct changes in equity | (27) | (176) | 12 | (1,080) | (668) | (1,939) | |
| Balance at 31 December 2006 | 203 | 1,245 | (5) | (21) | 0 | 561 | 1,983 |
|
|||||||
See note 9 for additional details on equity.
ο 41 WAGES AND SALARIES
(No corresponding financial statement number)
TNT N.V. does not have any employees. Hence no salary and social security costs were incurred. In accordance with IAS19.34 the net defined benefit cost shall be recognised in the corporate financial statements of TNT N.V. For the pension costs reflected we refer to note 39.
ο 42 COMMITMENTS NOT INCLUDED IN THE BALANCE SHEET
(No corresponding financial statement number)
Declaration of joint and several liability
As at 31 December 2006 TNT N.V. has issued a declaration of joint and several liability for some of its group companies in compliance with article 403, Book 2 of the Dutch Civil Code.
Those group companies are:
- Royal TNT Post B.V.
- TNT Holdings B.V.
- TNT Express Holdings B.V.
- TNT Headoffice B.V.
Fiscal unity in the Netherlands
TNT N.V. forms a fiscal unity with several Dutch entities for corporation tax purposes. The full list of Dutch entities which are part of the fiscal unity is included in the list containing the information referred to in article 379 and article 414, Book 2 of the Dutch Civil Code, which is filed at the office of the Chamber of Commerce in Amsterdam. In accordance with the standard conditions a company and its subsidiaries that form part of the fiscal unity are jointly and severally liable for taxation payable by the fiscal unity.
Guarantees
Parental support in the form of a guarantee has been provided by TNT N.V. relating to its subsidiary TNT Finance B.V. for a syndicated loan (€1 billion), various loan facilities including a €1 billion commercial paper programme, €250 million cash pooling credit facility and for various international swaps and derivatives association (ISDA) agreements.
In addition, we had issued a guarantee for the syndicated loan entered into by our indirect subsidiary TNT Canada Inc. (€222 million). This pertains to our discontinued logistics business. As the loan was repaid prior to the disposal of the logistics business, TNT N.V. was released of its obligations under the guarantee.
A further guarantee of €23 million was issued for a credit facility of an indirect Chinese subsidiary.
Parental support in the form of a letter of guarantee and a subscription letter has been provided by TNT Holdings B.V. to its indirect subsidiary TNT Pty. Ltd. in relation to a capital reduction of TNT Pty. Ltd. in 1999.
Parental support in the form of an indemnity has been provided by TNT N.V. to its indirect subsidiary TNT Holdings (UK) Ltd. and its subsidiaries in connection with the acquisition of TNT PTY Ltd. in 1996 and the financing of this acquisition and as a result of the restructuring of the group in the course of 1997 as a direct consequence of this acquisition.
ο 43 SUBSIDIARIES AND ASSOCIATED COMPANIES AT 31 DECEMBER 2006
(No corresponding financial statement number)
The full list containing the information referred to in article 379 and article 414, Book 2 of the Dutch Civil Code is filed at the office of the Chamber of Commerce in Amsterdam.
Amsterdam, 26 February 2007
Board of Management
M.C. Lombard
M.P. Bakker (Chairman)
C.H. Van Dalen
H.M. Koorstra
Supervisory Board
J.H.M. Hommen (Chairman)
R.J.N. Abrahamsen
J.M.T. Cochrane
R. Dahan
V. Halberstadt
G. Kampouri Monnas
R. King
W. Kok
S. Levy
R.W.H. Stomberg
TNT N.V.
Neptunusstraat 41-63
2132 JA Hoofddorp
P.O Box 13000
1100 KG Amsterdam
The Netherlands