(35) Notes on Group reporting by segment
As of January 1, 2008, IFRS 8 “Operating segments” was applied ahead of schedule in the Group. IFRS 8 stipulates the disclosure of information on business segments of the Group. The standard replaces IAS 14 “Segment reporting” and applies the “management approach” for segment reporting pursuant to IFRS, as is the case in accordance with US-GAAP as per SFAS 131. Accordingly, the division of the Group into reporting segments is to follow the composition of segments used in the internal reporting system.
For the purpose of segment reporting according to IAS 14 “Segment reporting”, the MLP Group was subdivided into the following (primary) segments until December 31, 2007:
- Consulting and sales
- Banking
- Wealth management
- Internal services and administration
With the merger of MLP Finanzdienstleistungen Aktiengesellschaft and MLP Bank AG in 2007, the internal reporting has been adapted for 2008. There is no longer a distinction between the business segments “consulting and sales” and “banking”. Under application of the management approach they both form the reporting object “financial services”.
Due to the amended report structure, since January 1, 2008, the MLP Group is subdivided into the following reportable business segments for the purpose of segment reporting pursuant to IFRS 8 “Operating segments”:
- Financial services
- Feri
- Holding
In line with IFRS 8.12, MLP has merged the operating segments of financial services and old-age provision into one operating segment “Financial services”.
In order to form the reportable operating segment “Feri,” MLP has merged the operating segments Feri Family Trust, Feri Institutional Advisors and Feri EuroRating Services.
The Financial services operating segment consists of consulting services for academics and other discerning clients, particularly with regard to insurance, investments, occupational pension provision schemes and loans of all kinds, as well as the brokering of contracts concerning these financial services. This segment also includes finance portfolio management, the trustee credit business and the loan and credit card business. With 2,428 consultants and a comprehensive range of services, MLP currently caters for approximately 730,000 clients in the named segments. The financial services segment, which focuses on the brokerage business, is made up of MLP Finanzdienstleistungen AG, Wiesloch, TPC THE PENSION CONSULTANCY GmbH (formerly: BERAG Beratungsgesellschaft für betriebliche Altersversorgung und Vergütung mbH), Bremen, and the associate MLP Hyp GmbH, Schwetzingen.
The discontinued operations of the financial services operating segment are MLP Private Finance plc., London, UK, MLP Private Finance Correduria de Seguros S.A., Madrid, Spain, MLP Private Finance AG, Zurich, Switzerland, and MLP Finanzdienstleistungen AG, Vienna, Austria. You can find further details on discontinued operations in note 36).
The business operations of the Feri segment cover wealth and investment consulting. This segment consists of Feri Finance AG für Finanzplanung und Research, Bad Homburg v.d. Höhe, Feri Family Trust GmbH (formerly: Feri Wealth Management GmbH), Bad Homburg v.d. Höhe, Feri Institutional Advisors GmbH, Bad Homburg v.d. Höhe and Feri EuroRating Services AG (formerly: Feri Rating & Research GmbH), Bad Homburg v.d. Höhe.
The Holding operating segment consists of MLP AG, Wiesloch. The main internal services and activities are combined in this segment. Intrasegment supplies and services are settled in principle at normal market prices. In the case of intra-group allocations, an appropriate general overhead surcharge is levied on the direct costs actually incurred.
The management makes decisions on the allocation of resources and determines segment performance on the basis of the income statement for that segment. MLP employs the accounting policies applied in the consolidated financial statements to determine financial information on the segments.
All segments perform their economic activities predominantly in Germany.
The “Financial services” and “Holding” operating segments generated sales revenue of € 191,670 thsd (previous year: € 210,579 thsd) from two clients.