heading in the cash ﬂow statement: “Effect of changes in foreign exchange rates”; – gains or losses arising from the translation of the net assets of foreign consolidated subsidiaries, and those derived from the use of average exchange rates to determine income or loss, are recognized in “Currency translation adjustment” in other comprehensive income and therefore have no impact on earnings, unless all or part of the corresponding investments are divested. They are adjusted to reﬂect long-term unrealized gains or losses on internal Group positions. Translation of Items from the Statement of Financial Position Denominated in Foreign Currencies • Third-Party Receivables and Payables Foreign currency purchases and revenues are booked at the average exchange rate for the month in which they are recorded, and may be hedged. Receivables and payables denominated in foreign currencies are translated at the December 31 exchange rate. Unrealized differences arising from the translation of foreign currencies appear in the income statement. Where a currency has been hedged forward, the translation adjustment reﬂected on the income statement is offset by the change in fair value of the hedging instrument. • Inter-Company Receivables and Payables Translation differences on short-term receivables and payables are included in net income using the same procedure as for third-party receivables and payables. Unrealized translation gains or losses on long-term assets and liabilities, whose settlement is neither scheduled nor probable in the foreseeable future, are recorded as a component of other comprehensive income under the heading “Currency translation adjustment” and have no impact on net income, in compliance with the paragraph “Net Investment in a Foreign Operation” of IAS 21.
Exchange Rate Table for Main Currencies
(equivalent value for one euro)
2014 0.81 0.78 8.19 7.43 140 145 1.33 1.21
2013 0.85 0.83 8.17 8.35 130 145 1.33 1.38
British pound Annual average rate Closing rate Chinese yuan Annual average rate Closing rate Japanese yen Annual average rate Closing rate U.S. dollar Annual average rate Closing rate NOTE 2.28 CONSOLIDATION METHODS
The consolidated ﬁnancial statements include the accounts of the parent company Lectra SA and the subsidiaries the Group controls. A company is deemed to be controlled when the Group has the power to determine, either directly or indirectly, the ﬁnancial and operating policies of the company such as to beneﬁt from the said company’s operations. Subsidiaries are fully consolidated from the date of transfer of control over them to the Group. They are removed from consolidation from the date at which it ceases to control them or at which these entities are liquidated. Lectra SA holds more than 99% of the voting rights of the fully-consolidated companies. They are designated FC (fully consolidated) in the schedule of consolidated companies below. Certain sales and service subsidiaries not material to the Group, either individually or in the aggregate, are not consolidated. Most of these subsidiaries’ sales activity is billed directly by Lectra SA. They are designated NC in the schedule. Companies are consolidated on the basis of company documents and ﬁnancial statements drawn up in each country and restated in accordance with the aforementioned accounting rules and methods. All intra-Group balances and transactions, together with unrealized proﬁts arising from these transactions, are eliminated upon consolidation. All consolidated companies close their annual ﬁnancial statements at December 31.