$118$/ 5(3257 - Permasteelisa Group

$118$/5(3257
Consolidated Financial Statements
for the year ended 31 December 2008
One Island East - Hong Kong, P.R. of China
Index:
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17
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50
52
55
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60
63
Administration and Controlling Boards
Group Structure
Management Report to the Consolidated Financial Statements and to the Statutory Financial
Statements
- Performance for the period
- Overview of ongoing projects and main project acquisitions
- Main risks and uncertainties to which Permasteelisa S.p.A. and the Group are exposed
- The Group’s organisational structure
- Research and innovation
- Human Resources
- Shareholders
- Treasury shares
- Corporate Governance
- Remuneration plan
- Transactions with related parties
- Significant events subsequent to year end and outlook
- Other disclosures
- Operating performance and financial position of Permasteelisa S.p.A.
- Approval of the Statutory Financial Statements and allocation of 2008 net profit
65
66
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69
71
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130
133
Permasteelisa Group – Consolidated Financial Statements for the year ended 31 December 2008
- Consolidated profit and loss account
- Consolidated balance sheet
- Consolidated statement of cash flows
- Consolidated statement of Net equity changes
- Notes to the Consolidated Financial Statements
- Appendix I: Permasteelisa Group’s companies
- Appendix II: Information required under Article 149-duodecies of the “Regolamento Emittenti”
issued by Consob
135
ATTESTATION IN RESPECT OF THE CONSOLIDATED FINANCIAL STATEMENTS UNDER ARTICLE
154-BIS OF LEGISLATIVE DECREE 58/98
137
AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
Date of issue: March 31st, 2009
This information sheet can be downloaded from Internet on:
www.permasteelisa.com
Company name
Permasteelisa S.p.A.
Registered Office
Via E. Mattei, 21/23
31029 Vittorio Veneto (TV) - ITALY
Share Capital
Euro 6,900,000 fully paid in
Treviso REA (Economic and Administrative Repertory) enrolment no. 169833
3
California Academy of Science - San Francisco, USA
Administration and Controlling Boards
Board of Directors
Chairman
Davide Croff
Chief Executive Officer
Nicola Greco
Vice Chairman
and Managing Director
Lucio Mafessanti
Managing Directors
Giampiero Alessandrini (effective date of resignation: 31/05/2008)
Giancarlo Iovino (effective date of resignation: 31/01/2008)
Directors
Marcello Agnoli (1) (2)
Rosario Bifulco (1) (2)
Andrea C. Bonomi
Claudio Figini (1) (effective date of resignation: 01/07/2008)
Dimitri Goulandris
Ambrogio Lualdi (effective date of appointment: 23/09/2008)
Cesare Piovene Porto Godi(1) (effective date of appointment: 23/09/2008)
Dante Razzano (2)
(1) Member of the Internal Controlling Committee
(2) Member of the Committee on Remuneration
Board of Auditors
Statutory Auditors
Pierluigi De Biasi – Chairman
Massimo Gallina
Renato Pastorelli
Standing Auditors
Andrea Parolini
Raoul Francesco Vitulo
Independent Auditors
KPMG S.p.A. (until 29/04/2008, when the appointment expires)
PricewaterhouseCoopers S.p.A. (from 29/04/2008, date of appointment)
5
Aldar HQ - Abu Dhabi, UAE
Group Structure
(The graph only shows the main companies that are controlled either directly or indirectly by the Parent Company Permasteelisa
S.p.A.)
PERMASTEELISA S.p.A.
(ITALY)
100%
100%
PERMASTEELISA
INTERNATIONAL B.V.
(Italy)
(Netherlands)
54.25%
SCHELDEBOUW B.V.
(Netherlands)
Netherlands)
70%
100%
10%
PERMASTEELISA
POLSKA Sp.z.o.o.
(Poland)
PERMASTEELISA UK
Ltd. (UK)
40%
GLOBAL WALL MALAYSIA
.Sdn. Bhd. (Malaysia)
JOSEF GARTNER
& Co. UK
Ltd (UK)
100%
GARTNER TORE +
SERVICE
GmbH (Germany)
100%
PERMASTEELISA
CENTRAL EUROPE
GmbH (Germany)
100%
TOWER
INSTALLATION LLC (USA)
Inc.(Canada)
100%
Cladding Technology
Italia (CTI)
(Italy)
PERMASTEELISA
NORTH AMERICA
CORP.
(USA)
PERMASTEELISA
SINGAPORE PTE LTD
(Singapore)
100% DONGGUAN PERMASTEELISA
CURTAIN WALL Co. Ltd.
(China)
100%
0,0025%
(Germany)
SCHELDEBOUW UK
Ltd. (UK)
BLEU TECH MONT.
100%
JOSEF GARTNER GmbH
Ltd. (Singapore)
100%
100%
8.9%
PERMASTEELISA
PACIFIC HOLDINGS
100%
FCC S.r.l. (Italy)
91.1%
100%
43.99%
PERMASTEELISA
INTERIORS S.r.l
PERMASTEELISA
ELECTRIC S.r.l.
(Italy)
31/12/2008
31/12/2008
99.9975%
75%
GARTNER JAPAN K.K.
(Japan)
JOSEF GARTNER
CURTAIN WALL (SHANGHAI)
Co. Ltd (China)
100%
100%
JOSEF GARTNER
& Co. HK Ltd (China)
JOSEF GARTNER
SWITZERLAND AG
(Switzerland)
JOSEF GARTNER
QATAR Llc (Qatar)
100%
49%
PERMASTEELISA
100%
IRELAND Ltd (Ireland)
99.99%
83.1 %
99.995%
PERMASTEELISA
ESPANA S.a. (Spain)
PERMASTEELISA
FRANCE S.a.s.
(France)
BLUE TECH
PHILIPPINES (INC.
(Philippines)
PERMASTEELISA TAIWAN
Ltd (Taiwan)
16.9%
96%
0.005%
100%
JOSEF GARTNER (MACAU)
LIMITED (Macau)
GARTNER CONTRACTING
Co., Limited (China)
99.99%
100%
99.99%
GLOBAL ARCHITECTURAL
Co. Ltd. (Thailand)
PERMASTEELISA
THAILAND Co. Ltd. (Thailandia)
76%
PERMASTEELISA (INDIA)
Private Limited. (India)
70%
GLOBAL TECH DESIGN
Pte. Ltd (Singapore)
100%
PERMASTEELISA
HONG KONG Ltd. (China)
99%
PERMASTEELISA
MACAU Limited (Macau)
7
45.83% PERMASTEELISA PTY Ltd.
(Australia)
54.17%
0.2%
PERMASTEELISA JAPAN
KK (Japan)
99.8%
100%
© Lafferty Design Studio
Grand Canal Square - Dublin, Ireland
PERMASTEELISA S.p.A.
Management Report to the Consolidated
Financial Statements and to the
Statutory Financial Statements
Management Report to the Consolidated Financial Statements
and to the Statutory Financial Statements
Dear Shareholders,
this is the report for the Consolidated Financial Statements and for the Statutory Financial Statements of
Permasteelisa S.p.A. for the year ended 31 December 2008.
The purpose of this report is to provide you with an overview of the Parent Company and the Group’s
operations in reference to the financial year which has just ended, in addition to its future prospects. The
Notes to the Consolidated Financial Statements and to the Statutory Financial Statements will provide you
with any additional information you may require on the numerical data supplied in the balance sheet, the
profit and loss account, the statement of cash flows and the statement of the net equity changes.
The Group’s results for the financial year 2008 are summarised here below:
31 December
20082008
31 December
2007
1,137,040
1,140,188
Ordinary activity result
56,407
5.0%
35,015
3.1%
9,318
3.3%
Operating result
%
58,750
5.2%
35,015
3.1%
6,720
2.3%
Result before tax
%
54,869
4.8%
23,154
2.0%
Net result (including minority)
%
44,852
3.9%
9,109
0.8%
31December
December
31
2008 2008
31December
December
31
2007 2007
95,459
(16,678)
101,268
78,419
(20,461)
(20,591)
58,320
159,096
(130,267)
(18,923)
188,587
178,019
Coverage
58,320
159,096
Capital expenditure on tangible and intangible
assets
13,814
14,036
6,049
5,656
4th Quarter
2008
4th Quarter
2007
327,778
286,609
19,629
6.0%
9,318
3.3%
19,629
6.0%
16,994
5.2%
(Euro/thousand)
Operating revenues
Non-current assets (1)
Net working capital (2)
Severance indemnity fund, pension funds and other
employee benefits (3)
Net invested capital
Net financial debt/(Net cash surplus) (4)
Shareholders’ equity (including minority interests) (5)
Average workforce
10
(1) sum of the captions recorded in the consolidated balance sheet under “Non-current assets”, excluding “Deferred tax assets”.
(2) sum of the captions recorded in the consolidated balance sheet under “Current assets”, excluding “Cash and cash equivalents”,
plus “Deferred tax assets” under “Non-current assets”, the captions under “Current liabilities”, excluding “Amounts payables to
banks and other financial creditors”, and the captions under “Non-current liabilities”, excluding “Amounts payables to banks and
other financial creditors”, “Severance indemnity fund” and “Pension funds and other employee benefits”.
(3) sum of the captions recorded in the consolidated balance sheet under “Non-current liabilities”.
(4) difference between the caption “Cash and cash equivalents “ recorded in the consolidated balance sheet under “Current assets”
and the sum of the captions “Amounts payables to banks and other financial creditors” recorded in the consolidated balance sheet
under both “Current liabilities” and “Noncurrent liabilities”.
(5) equal to the corresponding caption in the consolidated balance sheet.
Performance for the period
Permasteelisa is an internationally operating Group specialising in the field of the design, production and
installation of architectural components (curtain walls, partition walls) and interior fittings; in the financial
year 2008 it consolidated its position as unchallenged global leader in its reference market.
In addition to its leadership, the financial year 2008 restated and consolidated the positive strategy
whereby Permasteelisa has gradually improved its operating results for the period and has also
strengthened its financial and equity positions.
The most significant parameters testifying to this positive trend include the following:
the operating result, which had doubled in 2007 compared to 2006, has now increased by some
68% against 2008, testifying an approximate 240% growth in two years;
the net financial position that was already back in the positive range at the end of 2007 has furthe
improved in 2008 for some Euro 100 million;
the orders backlog, that had reached a historical mark in 2007 when it stood at some 1.5 times the
turnover, reached a similar record level in 2008 despite the clear market crisis faced by all the
organisations working in this field.
As to the ongoing corporate streamlining initiative, 2008 was mainly characterised by the disposal through
a Management Buy-Out operation of the subsidiary Belgo Metal N.V., that was no longer considered
strategic to the Group’s future prospects. This disposal did not result in a contraction in the Group’s
overall business, as testified by the 2008 consolidated turnover that is fully in line with the figures for 2007,
despite a decrease for some Euro 59 million, due to the worse average exchange rate considered for the
consolidation compared to the previous year. The delisting of the subsidiary Permasteelisa Pacific Holdings
Ltd. from the Singapore Stock Exchange was successfully completed.
Financial year 2008 saw the resignation of the Managing Directors Giancarlo Iovino and Giampiero
Alessandrini, in addition to the Director Claudio Figini. As a result Ambrogio Lualdi and Cesare Piovene
Porto Godi were appointed to the Administrative Body.
The reorganisation of the Business areas is now consolidated and has resulted in 5 fully operational
Business Units/Product lines:
Europe and the Middle East
Gartner
Asia
North America
Interiors
Also worth noting is the continuation of the reduction of the number of Companies fully or partly held by
the Group as a result of a simplification process that will continue throughout financial year 2009 in order
to cut overheads and ensure leaner and more controllable operations.
11
Performance on the market: new orders, backlog, Group positioning
In financial year 2007 the Group reached the maximum historical value of acquired orders. Although the
recession hindered the achievement of similar results in 2008, the year was nevertheless successful, with
new orders covering the amount of the turnover, thus ensuring a similar level of orders backlog despite
the cancellation of some work in progress.
As shown in the table here below providing a breakdown by product range, new orders for Curtain walls
accounted for Euro 978 million and those for Interiors and Other products to Euro 168 million. The last
figure especially shows the solidity of the sector that has consolidated the new orders acquisition levels
achieved in 2007.
In thousands of Euro
4th Quarter
4th Quarter
31 December
2008
2007
2008
%
31 December
2007
%
Variation
Variation %
147,589
2,289
157,788
893
Curtain walls Aluminium
Curtain walls - Steel
949,199
29,086
82.8
2.5
1,287,632
17,836
87.3
1.2
-338,433
11,250
-26.3
63.1
149,878
158,681
Subtotal
Curtain walls
walls
978,285
85.3
1,305,468
88.5
-327,183
-25.1
7,122
20,193
Partitions
49,994
4.4
54,252
3.7
-4,258
-7.8
17,893
10,027
Shops
104,402
9.1
101,701
6.9
2,701
2.7
25,015
30,220
Subtotal Interiors
154,396
13.5
155,953
10.6
-1,557
-1.0
4,511
4,733
13,324
1.2
13,851
0.9
-527
-3.8
179,404
193,634
1,146,005
100.0
1,475,272
100.0
-329,267
-22.3
Other products
Total Orders
Breakdown of the Curtain walls by geographical area:
In thousands of Euro
4th Quarter
4th Quarter
31 December
31 December
2008
2007
2008
%
2007
%
Variation
Variation %
-11,389
5,489
North America
186,220
19.0
298,690
22.9
-112,470
-37.7
21,042
51,602
UK + Ireland
241,741
24.7
332,366
25.5
-90,625
-27.3
-67.4
2,696
7,079
Benelux
31,868
3.3
97,741
7.5
-65,873
28,919
3,949
Germany
84,878
8.7
102,600
7.8
-17,722
-17.3
12,439
17,065
Other Europe
6,124
0.6
80,960
6.2
-74,836
-92.4
65,096
79,695
Subtotal Europe
364,611
37.3
613,667
47.0
-249,056
-40.6
71,206
39,215
Middle East
168,992
17.3
86,179
6.6
82,813
96.1
3,326
5,480
2,519
-471
2,006
29,575
-134
-159
1,829
15,419
-186
43
24,965
34,282
149,878
158,681
Australia
22,176
2.3
49,868
3.8
-27,692
-55.5
Hong Kong + Macau
90,637
9.3
159,137
12.2
-68,500
-43.0
Singapore
59,266
6.1
46,950
3.6
12,316
26.2
India
29,686
3.0
12,031
0.9
17,655
146.7
China
29,769
3.0
15,773
1.2
13,996
88.7
Other Asia
26,928
2.7
23,173
1.8
3,755
16.2
Subtotal Asia
258,462
26.4
306.932
23.5
-48,470
-15.8
Total Curtain walls
978,285
100.0
1,305,468
100.0
-327,183
-25.1
12
Breakdown of the Interiors by geographical area:
In thousands of Euro
4th Quarter
4th Quarter
31 December
2008
2007
2008
%
2007
%
Variation
Variation %
10,490
5,253
47,325
30.7
74,344
47.7
-27,019
-36.3
3,855
3,697
171
285
4,035
8,041
309
10,553
2,160
934
10,530
23,510
36
351
North America
31 December
UK + Ireland
8,781
5.7
15,293
9.8
-6,512
-42.6
Benelux
2,791
1.8
1,015
0.7
1,776
175.0
16,199
10.4
29,014
18.6
-12,815
-44.2
2,702
1.8
15,581
10.0
-12,879
-82.7
Other Europe *
33,763
21.9
6,447
4.1
27,316
423.7
Subtotal Europe
64,236
41.6
67,350
43.2
-3,114
-4.6
843
0.5
1,279
0.8
-436
-34.1
122.6
Italy
Spain
Middle East
1,159
472
Hong Kong+Macau
14,848
9.6
6,670
4.3
8,178
1,836
584
China
17,204
11.1
4,725
3.0
12,479
264.1
620
-1
Japan
3,997
2.6
149
0.1
3,848
2582.6
Other Asia
344
51
5,943
3.9
1,436
0.9
4,507
313.9
3,959
1,106
Subtotal Asia
41,992
27.2
12,980
8.3
29,012
223.5
25,015
30,220
Total Interiors
154,396
100.0
155,953
100.0
-1,557
-1.0
* of which Georgia Euro 25 million
The expected decrease in orders on Western markets for both Outdoor and Interiors is offset by an
increase in the Asian markets: the performance achieved in acquiring new orders in the Outdoor area in
the Middle East is especially important as it was one of the strategic aims for 2008 to react against the
crisis.
As at 31 December 2008 the orders backlog not including the Interiors was estimated to be Euro 1,400
million, meaning that it is consistently in a range similar to the historical mark achieved by the Group in
2007. These figures are shown in the table here below, broken down by geographical area:
BACKLOG
31 December
2008
%
31 December
2007
%
Europe
567.9
40.1
673.9
47.3
Middle East
173.7
12.2
65.9
4.6
America
342.6
24.2
397.5
27.9
Asia
333.1
23.5
287.9
20.2
1,417.3
100
1,425.2
100
31 December
2008
%
31 December
2007
%
46.3
Euro/million
Total
BACKLOG – CURTAIN WALLS
Euro/million
Europe
542.6
39.4
640.0
Middle East
173.7
12.6
64.2
4.6
America
341.8
24.8
397.5
28.8
Asia
319.0
23.2
280.0
20.3
1,377.1
100
1,381.7
100
Total
13
BACKLOG INTERIORS
Euro/million
31 December
2008
%
31 December
2007
%
25.3
62.9
33.9
77.9
3.9
Europe
Middle East
0
-
1.7
0.8
2.0
0
-
Asia
14.1
35.1
7.9
18.2
Total
40.2
100
43.5
100
America
The orders backlog as at 31.12.2008, to which we should add a pre-backlog well above Euro 300 million
(contracts that were assigned and/or are being finalised but not yet effective), confirms and consolidates
the Permasteelisa Group’s leadership on the global market. Further efforts will be necessary from financial
year 2009 to maintain and increase this position:
on the commercial side, there has been an acceleration on the North African market (Libya and
Algeria), in Central Asia, South America (Brazil) and Russia;
on the technological side, it will be crucial to further enhance research and development activities
to realise innovative products and processes, especially in the area of optimising energy
consumption.
As to our competitors, Permasteelisa faces the crisis aware that it is backed by an unrivalled global
structure which provides it with a head start in its ability to expand the accessible market. It is no surprise
that amongst its traditional competitors, all of whom are struggling to acquire new orders, only Yuanda
has shown a similar ability to react, backed as it is by a strong internal market despite the crisis. In the
large job assignments segment our Group maintains its leadership especially with its international clients
as not many companies can match our ability to ensure a constant presence or our technical/logistical
organisation, both of which are essential to complete large jobs.
Operating performance - Results
Operating revenues
A better understanding of the Group’s business trend is provided in the table below, where the operating
revenues are broken down by type of product and geographical area against 2007.
In 2008 the operating revenues was Euro 1,137,040 thousand, a figure that is basically in line with the
previous period (Euro 1,140,188 thousand in 2007). This result was achieved regardless of decrease in
gains resulting from the disposal of the Belgian subsidiary Belgo Metal N.V. in the first quarter of the
financial year:
Operating revenues broken down by product is shown below:
In thousands of Euro
4th Quarter
4th Quarter
31 December
2008
2007
2008
%
2007
%
268,773
232,762
925,347
81.4
875,723
76.8
49,624
5.7
9,376
14,982
30,338
2.7
57,132
5.0
-26,794
-46.9
278,149
247,744
955,685
84.1
932,855
81.8
22,830
2.4
Curtain walls - Aluminium
Curtain walls - Steel
Subtotal Curtain walls
Partitions
31 December
Variation
Variation %
21,673
8,864
63,110
5.5
56,184
4.9
6,926
12.3
24,247
25,903
Shops
105,520
9.3
136,929
12.0
-31,409
-22.9
45,920
34,767
Subtotal Interiors
168,630
14.8
193,113
16.9
-24,483
-12.7
3,709
4,097
12,725
1.1
14,220
1.3
-1,495
-10.5
327,778
286,608
1,137,040
100.0
1,140,188
100.0
-3,148
-0.3
Other products
Total Operating revenues
14
The same figures are shown below, broken down by geographical area:
In thousands of Euro
4th Quarter
4th Quarter
31 December
2008
2007
2008
%
31 December
2007
%
61,238
66,762
North America
228,254
23.9
238,707
25.6
71,732
60,038
UK + Ireland
240,931
25.2
239,271
25.6
1,660
0.7
19,257
23,609
Benelux
86,797
9.1
94,150
10.1
-7,353
-7.8
Variation Variation %
-10,453
-4.4
18,625
11,833
Germany
54,872
5.7
54,821
5.9
51
0.1
10,392
26,046
Other Europe
55,189
5.8
101,589
10.9
-46,400
-45.7
120,006
121,526
437,789
45.8
489,831
52.5
-52,042
-10.6
23,586
8,961
Middle East
68,221
7.1
28,614
3.1
39,607
138.4
7,338
9,037
Australia
33,950
3.6
29,778
3.2
4,172
14.0
34,888
22,750
104,788
11.0
72,321
7.7
32,467
44.9
14,002
6,130
Singapore
34,192
3.6
23,923
2.6
10,269
42.9
6,112
3,486
India
14,215
1.4
13,654
1.5
561
4.1
4,579
4,863
China
16,619
1.7
18,836
2.0
-2,217
-11.8
6,400
4,229
Other Asia
17,657
1.9
17,191
1.8
466
2.7
73,319
50,495
Subtotal Asia
221,421
23.2
175,703
18.8
45,718
26.0
278,149
247,744
Total Curtain walls
955,685
100.0
932,855
100.0
22,830
2.4
Subtotal Europe
Hong Kong + Macau
In thousands of Euro
4th Quarter
4th Quarter
31 December
2008
2007
2008
%
2007
%
Variation
Variation %
13,480
16,735
North America
63,300
37.5
109,008
56.5
-45,708
-41.9
3,879
4,344
UK + Ireland
11,699
7.0
25,864
13.4
-14,165
-54.8
-78
249
1,878
1.1
5,068
2.6
-3,190
-62.9
4,436
6,125
Italy
25,897
15.4
27,232
14.1
-1,335
-4.9
3,206
800
Spain
16,217
9.6
2,515
1.3
13,702
544.8
11,276
2,333
Other Europe
20,799
12.3
9,645
5.0
11,154
115.6
22,719
13,851
Subtotal Europe
76,490
45.4
70,324
36.4
6,166
8.8
-244
-64
1,126
0.7
453
0.2
673
148.6
4,413
2,606
Hong Kong+Macau
10,584
6.3
7,651
4.0
2,933
38.3
3,635
963
China
11,223
6.7
3,737
1.9
7,486
200.3
634
-1
Japan
2,909
1.7
136
0.1
2,773
2,039.0
1,283
677
Other Asia
2,998
1.7
1,804
0.9
1,194
66.2
9,965
4,245
Subtotal Asia
27,714
16.4
13,328
6.9
14,386
107.9
45,920
34,767
Total Interiors
168,630
100.0
193,113
100.0
-24,483
-12.7
Benelux
Middle East
31 December
The figures in the tables confirm the Western markets’ weaker position which is offset by the Asian markets.
15
Profitability
Margins have positively benefited of the greater selectivity adopted in the area of job assignments and a
more careful management; the operating result stands at Euro 58,750 thousand, having increased
approximately 68% over the previous period (Euro 35,015 thousand). The operating result accounts for
5.2% of the total income, against 3.1% for 2007. The increase in profitability stems from the remarkable
improvement witnessed by curtain walls whereas the performance of Interiors worsened.
The net result for the period ascribable to the Group (Euro 44.3 million) accounts for almost 4% of the
turnover, showing a clear growth against the 0.7% recorded in financial year 2007. This net result arise
from the newly streamlined financial management (costs for up to approximately 0.3% of turnover against
1% in the previous period) and a tax rate lower than 20%. Both improvements stem from a remarkable
optimisation effort in terms of cash management and the associated international pooling system, in
addition to the rationalisation of the Group’s structure.
Financial performance - Results
The consolidated capital assets for Euro 95,459 thousand have remained basically unchanged; the decrease
compared to the closing figures for the previous period for Euro 101,268 thousand is mainly ascribable to
the de-consolidation of the subsidiary Belgo Metal N.V. that was assigned in April 2008.
The consolidated working capital records negative values for Euro 16,678 thousand, showing a clear
progress compared to the closing figures for the previous period at Euro 78,419 thousand; this is
ascribable to the improvement of the working capital (i.e. the sum of the items “assets for contracts workin-progress”, “inventories” and “trade receivables” minus “payables for contracts work-in-progress”,
“advances from customers” and “trade payables”) with figures now standing at Euro 27,482 thousand
against the previous Euro 113,102 thousand; the decrease in working capital stems from the large down
payments made on job order achieved in 2008 and is mirrored in the Group’s net financial position that at
year end recorded a positive balance for Euro 130,267 thousand against the previous period’s Euro 18,923
thousand.
The consolidated net equity (including minority interests) rose from Euro 178,019 thousand to Euro 188,587
thousand; the positive difference for Euro 10,568 thousand is mainly ascribable to:
a Euro 20,598 thousand decrease stemming from the buyback of treasury shares by the Parent
company;
a Euro 7,947 thousand decrease ascribable to the distribution of dividends;
a decrease for Euro 5,520 thousand for the Group’s acquisition of 7.43% of the subsidiary
Permasteelisa Pacific Holdings Ltd. in the framework of the company’s delisting that occurred in
2008;
a Euro 44,852 thousand increase resulting from the recognition of the results for the period
(including minority).
Investments
The trend of technical investments at Group level was as follows:
In thousands of Euro
2008
2007
Land and buildings
Machinery and equipment
Equipment
Other tangible fixed assets
Fixed Assets in Progress
607
4,260
2,416
3,317
789
405
5,449
1,443
4,538
221
1 1,3 8 9
1 2,0 5 6
Total inves tmen ts
The main increases were recorded in Germany (approximately Euro 2.7 million), in Italy (approximately
Euro 2.3 million), in Dubai (approximately Euro 1.3 million), in the USA (approximately Euro 1.2 million),
in Holland (approximately Euro 1 million) and in Hong Kong (approximately Euro 1 million). Investments
mainly aimed at enhancing production capacity and replacing or renewing plant and equipment.
No major asset disposals occurred during the period.
16
Overview of ongoing projects and main project acquisitions
Permasteelisa Group’s main ongoing projects for 2008 have been broken into the Group’s two reference
sectors:
Curtain walls
•
Interiors
•
CURTAIN WALLS
Projects are broken down into three areas:
Main project acquisitions
•
Main ongoing projects
•
Main projects completed
•
Within each area the projects are listed per Business Unit/Product line.
a) Main project acquisitions for 2008
Business Unit North America
•
WTC2, New York (United States)
Project acquired by Permasteelisa North America Corp. and designed by the architects Foster & Partners.
The project entails 105,000 sqmt of curtain wall. The area on which the building will be built is Ground
Zero, in New York.
17
•
Tishman Hotel, New York (United States)
Project made by Tishman Construction and designed by Gensler architects studio. The job was acquired
in early 2008 by Permasteelisa North America Corp. that has been put in charge of completing more than
14,000 sqmt of curtain wall on the hotel, situated in the centre of New York. The expected end date is
February 2010.
•
Revel II, Atlantic City - Diamond Tower, New York (United States)
These two projects were acquired in 2008 and were subsequently cancelled.
Europe - Middle East Business Unit
•
Gran Canal Square, Dublin (Ireland)
Job order acquired by Permasteelisa Ireland Ltd. on a project by arch. Daniel Libeskind. It includes two
sections:
offices buildings for 24,000 sqmt of curtain walls;
theatre requiring 9,000 sqmt of walls in steel and glass.
-
18
•
Nido Spitalfields, London (United Kingdom)
Job order acquired by Permasteelisa UK Ltd., entailing 20,000 sqmt of curtain wall on a project by ORMS
Architecture Design. Expected date of completion: May 2010.
•
St. Botolphs, Spitalfields, London (United Kingdom)
Job order acquired by Permasteelisa UK Ltd., for 28,000 sqmt of curtain walls on a project by Grimshaw &
Partners. Expected date of completion: May 2010.
19
•
New Doha International Airport Phase II, Doha (Qatar)
Project acquired by Josef Gartner Qatar Llc., second part of the airport that is already under construction.
The supply includes 37,100 sqmt of curtain wall and louvers. Expected date of completion: April 2010.
•
Yas Island Racing Hotel, Abu Dhabi (United Arab Emirates)
Project acquired by the Dubai branch of Josef Gartner Gmbh, entailing 25,000 sqmt of curtain wall.
Completion of a hotel inside a Formula 1 circuit. Date of completion: November 2009.
20
Product Line Gartner
•
Project Blue - Deutsche Bank, Frankfurt (Germany)
The project requires the supply of 53,000 sqmt of cladding wall attaching special attention to energy and
environmental issues while leaving the aesthetics of the building unaltered. Activities will include the
removal and re-positioning of the walls starting from the last floor of the building and ending with the
podium. The building will still be in used while the works are ongoing.
•
One New Change, London (United Kingdom)
Project acquired by Josef Gartner & Co. UK Ltd. 31,000 sqmt of complex-geometry double-skin curtain
wall, on a project by Jean Nouvelle. Expected date of completion: August 2010.
21
•
Cannon Place, London (United Kingdom)
Project acquired at the end of 2008 as a result of a PCSA (Pre Construction Services Agreement). 14,500
sqmt of curtain walls designed by FOGGO Associates Architects’ Studio of London. The full installation is
expected to be completed by 2011.
•
Deutsche Börse, Eschborn (Germany)
A building of 40,000 sqmt designed by KSP Engel und Zimmermann Architects’ Studio of Frankfurt. It is
expected to be installed between May 2009 and April 2010.
22
•
Daniel Swarovski Corporation (DSC), Männedorf (Switzerland)
Job acquired at the end of 2008. It envisages 4,800 sqmt of curtain wall to be installed between July 2009
and February 2010.
Business Unit Asia
•
Rui Ming Office, Shanghai (China)
Project acquired by J. Gartner Curtain Wall (Shanghai,) Co. Ltd.; the end client is Shanghai Rui Ming Real
Estate Co. Ltd. and the project envisages 83,500 sqmt of curtain wall. It is expected to be completed in
2010.
23
•
HK Politech University, Hong Kong (China)
Project acquired by Permasteelisa Hong Kong Ltd.. 27,000 sqmt of walls. Expected date of completion:
during 2010.
•
Mappletree Business City, Singapore
Project acquired by Permasteelisa Singapore Pte Ltd. 95,000 sqmt of walls. The job order will be realised
between 2009 and 2010.
24
•
DIA Building, Yokohama (Japan)
Project acquired by Permasteelisa Japan K.K., 21,500 sqmt of walls. Main Contractor Takenake
Corporation. End client Mitsuibishi Logistics.
•
HQ Leighton, Brisbane (Australia)
Project acquired by Permasteelisa Pty Ltd., 16,000 sqmt of walls. Estimated date of completion: January
2010.
25
•
Vrindavan Tech Village Phase II, Bangalore (India)
Project acquired by Permasteelisa (India) Private Ltd., 25,000 sqmt of walls. Estimated date of completion:
during 2009.
b) Main ongoing projects in 2008
Permasteelisa Group’s main ongoing projects in 2008 are described below.
Business Unit North America
•
300 North La Salle, Chicago (United States)
48,000 sqmt of curtain walls designed by the architect Pickard Chilton and realised by Clark Construction.
Expected to be completed in 2009.
26
•
Beekman Tower, New York (United States)
Project by Frank O’Gehry and developed by FC Beekman Associates in New York. It entails 40,000 sqmt of
curtain wall that has required the support of 3D systems for the design phase. Expected to be completed
by the end of 2010.
Europe - Middle East Business Unit
•
Heron Tower, London (United Kingdom)
Job order being performed by Scheldebouw B.V. It consists in the supply of 47,000 sqmt of cladding wall.
The project applies B.I.PV. (Building Integration of PhotoVoltaic) technology developed by the R&D team.
Expected end date: early 2011.
27
•
Rabobank, Utrecht (Holland)
The project is ongoing and requires the supply of 20,000 sqmt of curtain walls. Job order acquired by the
affiliate company Scheldebouw B.V. that is expected to be completed during 2010.
•
Aldar HQ, Dubai (United Arab Emirates)
Building of 30,000 sqmt acquired by Josef Gartner Gmbh Gartner, Dubai branch, designed by MZ &
Partners. The jobs to be performed in this worksite will be completed by the end of 2009.
28
Product Line GARTNER
•
Opernturm, Frankfurt (Germany)
38,000 sqmt of curtain wall and stone cladding designed by the architect Christoph Mäckler. End client
Tishman Speyer. Installation activities are expected to be completed by April 2009.
•
Wallbrook Minerva, London (United Kingdom)
Designed by Foster + Partners of London architects’ studio and realised by Skanska Construction UK.
It entails 12,000 sqmt of curtain walls. Expected to be completed by 2009.
29
•
Watermark Place, London (United Kingdom)
The project is expected to be completed towards mid 2009. The supply includes 23,000 sqmt of curtain
wall, double-skin walls and skylights. The building was designed by Fletcher Priest Architects of London
and was developed by Sir Robert Mc Alpine.
Business Unit ASIA
•
International Commercial Center (Megatower), Hong Kong (China)
Job order acquired by Permasteelisa Hong Kong Ltd. The project has been developed by Kohn Pedersen
Fox Architects and consists in the supply of 126,000 sqmt of cladding wall. Expected to be completed by
2010.
30
•
One Central, Macau
Job order acquired by Permasteelisa Macau Ltd. Project developed by Wong & Tung International Ltd.
The supply of required the 21,000 sqmt of cladding wall is expected to be completed during 2009.
•
One Island East (O.I.E.), Hong Kong (China)
Job order acquired by Josef Gartner & Co. (HK) Ltd. Project (Podium and tower for a total of 59,000 sqmt
of curtain wall) developed by Wong & Ouyang (HK) Ltd . Expected to be completed during 2009.
31
c) Main projects completed in 2008
The main projects completed by Permasteelisa Group in 2008 are described here below.
Business Unit North America
•
Art Museum Western Virginia, Roanoke (United States)
Project by architect Randall Stout and developed by Balfour Beatty Construction. Completed in December
2008.
32
Europe - Middle East Business Unit
•
Nozar T2, Madrid (Spain)
Job completed by Permasteelisa España S.A. in 2008. Designed by Galan/Lubasher Arquitectos, it includes
9,000 sqmt of double-skin glass walls.
•
Darwin Centre II, London (United Kingdom)
Project completed in 2008 by Permasteelisa UK Ltd, envisaging the extension of the existing Natural
History Museum. The project required the supply of 7,500 sqmt of glass walls.
33
Product Line GARTNER
•
Bishopgate and Broadgate, London (United Kingdom)
52,000 sqmt of curtain wall developed by Skidmore Owings & Merrill. The project was completed by Josef
Gartner & Co. UK Ltd. and is made up of three parts: Bishopsgate, Broadgate and the Gallery.
•
Novartis, Basel (Switzerland)
Project designed by the architect Frank O’Gehry and realised in Basel for the pharmaceutical industry
Novartis. Works were completed by Josef Gartner Gmbh in 2008. It entailed 7,500 sqmt of walls that
necessarily required the use of 3D systems during the design stage.
34
Business Unit ASIA
•
Shanghai World Financial Center, Shanghai (China)
Project completed in 2008 by Josef Gartner Curtain Wall (Shanghai) Co. Ltd. and developed by Kohn
Pedersen Fox Architects. 115,000 sqmt di curtain wall, including 15,000 sqmt for the podium and 100,000
sqmt for the tower.
35
INTERIORS
The main projects ongoing or completed in 2008 and involving the Interiors Business Unit are broken
down into the following product lines:
Partition / Glazed Metal Work
•
EPC (Engineering Procurement Contract)
•
Shops / Retail - Museum
•
Partition / Glazed Metal Work
•
Repsol Tower, Madrid (Spain) - Ongoing
Supply for interior glass cladding (36 floors above ground floor, 2 auditoriums and 5 basement floors),
cladding in wood and doors for bathrooms, micro-perforated metal panels for the Auditorium, reception
desk, 1132 fire doors and other doors.
36
•
Reed Smith, London (United Kingdom) - Ongoing
Client: Reed Smith
Main Contractor: ISG plc
Architect: Gensler
Scope of the supply:
Indoor partitions and associated doors for 12 floors of the building;
Bleached oak wardrobes and shelves.
-
37
EPC (Engineering Procurement Contract)
•
T’bilisi, Georgia - Ongoing
The project consists in the erection of the Presidential Building.
Scope of the supply:
plan, supply and install all windows, French windows and walls of the building (external work);
•
plan, supply and install structures, walls and indoor finishing from the floor to the plumbing and
•
illumination works (internal work).
Client: President Administration of Georgia
Architect: aMDL
Works are expected to be completed during 2009
38
Shops / Retail - Museum
The specialty area of the Permasteelisa Interiors S.r.l. Shops/Retail department is to supply engineering,
production and installation services for all furnishing required in a shop, working alongside customers
from the early design stages.
Shops / Retail (United States)
Projects completed in 2008 for consolidated customers:
•
•
•
•
•
Brooks Brothers: 40 shops;
LensCrafter’s: 71 shops;
Sunglass Hut: 33 shops;
Tumi: 37 shops;
Ermenegildo Zegna: 3 shops;
39
Shops / Retail EUROPE
Projects completed in 2008 for consolidated clients:
•
•
•
•
•
Ermenegildo Zegna: 69 shops of which
Stores 31
Underwear 4
Corner 27,
Duty Free Stores 7
Bally: 11 shops;
Geox: turnkey solution for 6 shops and supply and installation of furnishing alone for 54 shops;
Salvatore Ferragamo: 11 shops;
Missoni: 17 shops;
Others Clients
•
•
•
•
•
•
•
•
Nespresso
Max Mara
Dainese
Walt Disney
Phard
Zippo Fashion
Piazza Sempione
Bose
40
41
Natural History Museum – Fondaco dei Turchi, Venice (Italy) – Ongoing
Scope of the supply: preparation of the exhibition halls on the first floor of the Natural History Museum,
including:
moving exhibits;
•
erection of new counter walls and flooring;
•
installation of new showcases and exhibition stands;
•
refurbishment of plant and illumination systems;
•
installation of new sound and video-projection systems;
•
42
Shops / Retail ASIA
Projects completed in 2008 for consolidated clients:
•
•
•
•
•
•
•
Louis Vuitton: 70 projects;
Chanel: 6 projects;
Christian Dior: 8 projects;
Hermes: 10 projects;
Dolce & Gabbana: 2 projects;
Bally: 4 shops;
Marlboro Classics: 8 shops.
43
44
Other projects acquired during 2008:
•
•
•
•
•
Cartier
HSBC
Gucci
Omega
Geox
45
Main risks and uncertainties to which Permasteelisa S.p.A. and the Group
are exposed
Risks associated with general economic conditions
The Permasteelisa Group is known for being a global partner on its reference market: as a result it has
been affected to a certain extent by the storms affecting the market in almost all global scenarios. On the
other hand the Group is certainly in a better position to shift its attention to geographical areas and to
markets that have been less affected by the crisis. Despite the general drop in the market, it has nevertheless
been able to focus on areas, such as the Middle East or the Far East, where the consequences of the crisis
were felt later on and to a lesser extent. The flexibility that the Group has achieved as a result of its newly
streamlined structure will continue to be a trump to effectively rise to the world market crisis, even if it
should last longer than expected. This flexibility has also benefited Permasteelisa S.p.A., which is the
Group company that has most contacts with the companies working in different Countries.
Risks associated with the Group’s results
The Group’s results for financial year 2009 are mainly associated to projects that it has already been
assigned and/or that are ongoing. As of today, the new market conditions have not had any significant
negative effects on the expected figures for results. Consequently the risk, if any, is that a prolonged
market deterioration could gradually deplete the production units leading to an associated increase in
overheads. This risk is at yet hard to quantify; nevertheless, its impact on 2009 would not be enormous.
Risks associated with financing requirements
Permasteelisa Group’s financial position has evolved along very positive lines over the last 24 months: as
a result it is currently one of the Group’s strengths. No significant drop is expected in the short term in
this item, that is constantly monitored and under special scrutiny by all the management. Risks associated
to bad customer debts are real but not dramatically so, also as a result of the careful “exposure” risk
management strategy adopted some time ago as a criterion for selecting offers and contracts. Indeed, if
the market does not show signs of recovery for a long time, we would be forced to accept less favourable
conditions. In this case the financial risk could increase. In any case this is not a scenario that we believe
requires urgent consideration.
Risks associated with fluctuating exchange and interest rates, commodity prices and
the cancellation of assigned job orders
As an international player on the global market, Permasteelisa Group is naturally exposed to market risks
associated to fluctuating exchange and interest rates, and the prices of the commodities that characterise
its business (aluminium). This kind of risk is hedged through tools aimed at stabilising exchange rates
(currency swaps) and commodity prices (commodities swap) as soon as the jobs are assigned. As to
commodities, these risks are faced also through the careful management of transactions with reference
suppliers. As a result, the “exchange rate risk” and the “commodity price risk” are upheld and managed
with the customer for the sole duration of the offer until the assignment, except if the offer (but this only
happens rarely) is calculated in current exchange rate/prices. Facing the higher risks associated to exchange
rates (and the interest rates on so-called “forward” exchange rates) and commodities, another risk that
needs consideration is associated to the hedging operations on job orders that are cancelled after their
start date. This risk is still rather low and is included within the right to the reimbursement to all costs
borne for cancelled job orders.
Furthermore, in the framework of the consolidation of its accounts, Permasteelisa Group is exposed to
“translation” risks as a result of the variation of the Euro vis-à-vis the main currencies of payment other
than the Euro. This is nevertheless a risk that is inherently part of a global company’s profit and loss structure
and has not become more critical as a result of the current general crisis on the markets.
Risks associated with relationships with suppliers
Today’s challenging market can differently impact the Group’s usual suppliers. Such an impact can range
from increasing competitiveness (which can in turn benefit the Group’s competitiveness) to financial and
structural fragility: the solution is to diversify the sources from which we supply and ongoing monitoring.
In any case it is an impact that can be controlled up to a certain extent, at least as the scenario has currently
been forecast.
46
Risks associated with management
This risk is always present and is not especially affected by the current market conditions (quite the opposite).
Nevertheless, as the Executive Managers’ skills and drive are the main keys to success, the ability to attract
and retain suitably able managers is a crucial factor that must be considered especially when the markets
start to show early signs of recovery.
Risks associated with competitiveness in the areas the Group works in
For Permasteelisa Group, maintaining and increasing its competitive edge in the markets in which it already
is the leader is definitely of the essence: this entails on the one hand the ability to be perceived by clients
and architects alike as “Best Performer”, on the other it requires attention to be attached to emerging
competitors from less qualified layers of the market. The latter risk is always there in a market where the
barriers to entering the sector can easily be overcome. The Group’s reaction to this risk is to promote the
continuous technical and technological improvement of processes, systems and human resources, while
continuing to invest on the Group’s extraordinary worldwide presence, an area in which even its most
advanced competitors are no match.
Risks associated with environmental policies
The Group’s environmental policy should be considered an opportunity rather than a risk: indeed, more
restrictive regulations and procedures especially in the area of bioclimatic and environmentally sustainable
architecture in addition to more restrictive laws on energy saving will translate into more favourable
market conditions for the company and the Group’s products and advanced technologies.
*******
As Parent company, Permasteelisa S.p.A. is basically exposed to the same risks and uncertainties described for the Group.
Further details, including more technical information on the management of some of the business risks illustrated here, are provided
in the dedicated Notes to both the Consolidated Financial Statements and of the Statutory Financial Statements for the year.
47
The Group’s organisational structure
The tables here below provide a summary overview of main information on the reorganisation and
streamlining of the Group’s structure, as resolved by the Company’s Board of Directors:
USA
Merger of the following 8 US companies into the sub-holding Permasteelisa North America Corp.:
1. Allied Bronze LLC;
2. Permasteelisa Cladding Technologies LP;
3. Permasteelisa Cladding Technologies Management Company;
4. Josef Gartner USA LP;
5. Josef Gartner USA Management Company;
6. Permasteelisa CS Corp.;
7. Glassalum Erectors Inc.;
8. Diamond Installation Inc.
This operation was completed and became effective as from 29 February 2008.
EUROPE
a) Merger of Josef Gartner France S.a.s. into Permasteelisa France S.a.s.:
This operation was completed and became effective as from 1 April 2008.
b) Completed the wind-up of the following companies:
1. Virtual City S.r.l. – closed on 8 February 2008
2. Permasteelisa Engineering B.V. – closed on 15 August 2008.
c) Company undergoing wind-up:
1. Permasteelisa Epitoipari KFT (Hungary).
It is worth noting that in January 2008 the company Gartner Management GmbH was closed after having
transferred its activities to the company J. Gartner GmbH.
d) Disposal of the affiliate company Belgo Metal N.V., together with its subsidiaries Belgo Fixing S.A. and
F.E.A. Design and Engineering N.V. This operation was completed on 8 April 2008.
Within the reorganisation process, in December 2008 the company Permasteelisa Central Europe Gmbh
and Josef Gartner Switzerland AG were transferred from the direct management respectively of Scheldebow
B.V. and International B.V. and are now directly controlled by Josef Gartner Gmbh.
During the early months of financial year 2009, the company Blue Tech Philippines Inc. is expected to be
transferred from the direct control of Permasteelisa International B.V. to that of Permasteelisa Pacific
Holdings Ltd.
ASIA
a) Completed the wind-up of the following companies:
1. Shanghai Permasteelisa Architectural Products Co. Ltd (China) – closed on 4 May 2008
2. Gartner Contracting PTE Ltd (Singapore) – closed on 29 December 2008
3. Global Wall (Thailand) Co. Ltd. – closed on 4 December 2008
b) Company undergoing wind-up:
1. Iljin Pisa Co. Ltd.
48
c) Delisting of the company Permasteelisa Pacific Holdings Ltd.
The delisting process was completed in June with the acquisition of 7.43% of shares of the subsidiary
Permasteelisa Pacific Holdings Ltd. by the subsidiary Josef Gartner Gmbh: in subsequent months, the
latter purchased more shares brining its equity share up to 98.24% as at 31 December 2008.
Please note that in the framework of the operations envisaged in the reorganisation and simplification of
the Group’s organisational structure, in December 2008 Josef Gartner & Co. Uk Ltd transferred 29.09% of
its shares in Permasteelisa Pacific Holdings Ltd to Josef Gartner Gmbh.
d) Further operations continue for the purpose of simplifying the organisational structure, including:
1. merger of Gartner Japan K.K. into Permasteelisa Japan K.K.
2. transfer of the assets of Permasteelisa Singapore Pte Ltd. to Permasteelisa Pacific Holdings Ltd.
49
Research and innovation
The research and development activities performed in 2008 mainly focussed on the launch of the organic
photovoltaic project, on the completion and Group-wide dissemination of a range of projects on energy
saving and renewable energy sources, safety and advanced IT systems for engineering. Some projects
have already resulted in some early practical applications.
The publication of a 6-monthly internally distributed newsletter on new R&D developments has helped to
promote the dissemination of information.
As to development costs, note that the overall costs incurred in the last financial year entered into the
Group’s profit and loss account was Euro 2,041 thousand (2007: Euro 1,716 thousand) of which Euro 289
thousand (2007: Euro 294 thousand) for depreciation and amortization for costs capitalised in previous
financial years under the “Development costs” item in Intangible assets.
With reference to the research and development activities associated to the PMF project, that will be
described in further detail in the next paragraph, please note that in 2007 the amount entered under
“Intangible assets in progress and advances” was Euro 456 thousand.
Organic photovoltaic
This strategically important project was launched in 2008.
Permasteelisa and ERG Renew (ERG Group) are co-partners in a research and development project for an
advanced technology for the production of non-silicon based solar panels.
The other partners in the project include the Rome Tor Vergata University, the University of Ferrara and the
University of Turin that will perform the research side. Another industrial partner is the Australian Dyesol
through its Italian subsidiary Dyesol Italy, leader in the supply of material and technology.
The project entails the use of an innovative technology: unlike the traditional silicon cells, the new panels
will convert light, including diffused light, into electricity thanks to the combination of an organic dye which
is sensitive to light and a thin film of nano-particles of titanium dioxide. The new panels require simpler
production processes that use less energy and have a lower impact on the environment at lower prices.
At the end of the research, ERG Renew and Permasteelisa will start up production and trading of these
new latest-generation panels. The project will require an overall investment for approximately Euro 10
million.
Energy saving and renewable energy sources
In the area of renewable energy sources, the project BIPV (Building Integration of PhotoVoltaics) - which
was completed in 2007 - has been implemented in some early applications, more specifically for two jobs
carried out in the UK area by the Group Company Scheldebouw B.V. (150 Cheapsite and Heron Tower)
where photovoltaic cells were integrated into the curtain walls.
In 2009 the potential of other renewable energy sources will be assessed in further detail and special
attention will be attached to wind energy.
The new pressurised walls project has also been completed: it is a solution that provides remarkable
advantages in terms of better exploiting interiors and also in terms of lower maintenance costs compared
to the traditional double-skin walls.
Assessments continued in the area of
the EPBD (Energy Performance of Buildings Directive) project focussing on designing highly
energy-efficient buildings (European regulation class A);
the integration of air-conditioning systems into the cladding wall.
-
Safety
In the area of “Bomb-blast resistant” products, the existing technical solutions have been further
consolidated to provide our Group with an unchallenged competitive edge. Several examples have
been successfully implemented in the US and European markets.
50
The “mobile fire screen” project has been completed and provides advantages in terms of aesthetics
(enables the use of a full-glass cladding wall) and in terms of the little space required in height.
Employment of new materials
The Alternario project is also in progress: its focus is to develop an evolved quaternary system to provide
better thermal performance associated to design and the use of innovative polymer materials for our field
of industry. The project will be completed in 2009.
The research on the use of glass fibre reinforced composite materials (FRP Fiber Reinforcement Plastic) in
the walls also continued. Technical and commercial agreements are currently being negotiated with some
partners. The first prototype has been completed and the project is expected to end in 2010.
Advanced IT systems applied to engineering
Advanced IT tools were developed for the purpose of performing calculations and assessments on
structure and thermal performance to significantly increase the effectiveness and efficiency of
engineering activities.
All in-house-built software (belonging to the Permasteelisa Group’s know how) has been made safe through
the use of suitable source code protections (obfuscators).
Technical Support Group
In 2008, the Technical Support Group (i.e. TSG, the Group-wide knowledge management centre) worked in
close contact with Human Resources to pursue its technical knowledge communication and dissemination
mission amongst the group companies.
Co-operation agreements were set up with several universities.
Education activities (Company Academy) to be carried out during 2009 were also organised.
Information Technology
In 2008, Permasteelisa continued the integration of its international companies into the ERP corporate
systems based on SAP ERP. Implementation was completed in the United States with the merger of
existing companies and roll-out continued in Asia. In Asia, installation was completed in Australia at the
beginning of 2008, in Thailand by mid year and will start in Singapore at the beginning of 2009. The
implementation plan will continue throughout 2009 to extend to Canada and the remaining Asian
nations. A unified and centralised system was introduced downstream from the job order cost calculation
system in order to provide an estimate of job order costs and to assess cost variations during implementation
and the estimate of the same costs at the end of the job. This system has been validated on a number of
pilot projects and will be gradually extended to all new projects as they are launched. The ability to
monitor the costs of a project and estimate costs at the end of the job, in addition to the management of
consolidated projects (to be realised by several companies at the same time), enables a remarkable
simplification of the controlling and the results assessment systems.
In 2008, Permasteelisa signed an agreement with Autodesk for the implementation of the PMF Project
(Permasteelisa Moving Forward) the aim of which is to support the whole process through automated
calculation and planning systems, including drawing up the offer and preparing the associated diagrams
for approval, designing the wall and the automatic production of associated designs, the manufacturing of
cells and their final installation. The early prototypes were developed towards year end, while the core of
the project will be developed in 2009 and 2010. In 2008 Permasteelisa set up a WAN (Wide Area Network)
which is a geographically integrated network that joins all the organisation’s main locations. This enables
safer and faster communication and the exploits central systems at best. The plan is to extend the network
to the smaller locations in the early months of 2009.
In addition, in order to centralise and increase the safety of all e-mail systems, Permasteelisa outsourced
all e-mail services to Google Inc. This provides a solution to the need for an e-mail disaster recovery plan
and to have one dominion in use by all subsidiaries. The migration to the new e-mail services has been
completed in Asia and North America and is expected to be completed in Europe in 2009.
51
Human Resources
The tables here below provide the exact end-of-year and the average figures on the workforce employed
by the Group compared with the previous year:
Workforce at year end
Area
3 1 December
2008
3 1 December
2007
V aria tion
2 0 0 8 -2 0 0 7
919
1,436
2,019
635
77
864
1,527
1,881
266
90
55
(91)
138
369
(13)
1,113
1,266
(153)
6,1 9 9
5,8 9 4
305
3 1 December
2008
3 1 December
2007
V aria tion
2 0 0 8 -2 0 0 7
892
1,482
1,950
451
84
1,190
839
1,507
1,796
214
92
1,208
53
(25)
154
237
(8)
(18)
6,0 4 9
5,6 5 6
393
Italy
Rest of Europe
Asia
Middle East
Australia
Usa
Total
Average workforce during the period
Area
Italy
Rest of Europe
Asia
Middle East
Australia
Usa
Total
The tables here below provide the exact end-of-year and the average figures on the workforce employed
by the Parent Company Permasteelisa S.p.A. compared with the previous year:
Workforce at year end
3 1 December
2008
3 1 December
2007
Blue-collars
White collars
205
365
220
326
Total
570
546
Average workforce during the period
2008
2007
Blue-collars
White collars
213
346
219
313
Total
559
532
52
The Parent company continued its education and training activities in line with the following guidelines:
Development of the middle-management’s managerial skills;
Enhancement of management skills in key positions such as the Project Manager and the Design
Manager.
Enhancing language training, with special reference to the English language.
The main projects are listed here below:
Permasteelisa Campus - The company’s in-house training school
This project is tuned to young school leavers mainly with a technical diploma. It envisages a 5-week
multi-disciplinary training programme aimed at developing technical skills through a 100 hour dedicated
training course on the use of Autocad, at providing an overall vision of the in-house processes and of the
life cycle of a job order. Permasteelisa Campus was established to recruit so-called entry level resources
to overcome the technical, financial and organisational issues associated in the past with the inclusion of
new hires. The project is broken down into 8 modules for a total 184 hours of training. The aim is to supply
young hires with an overall view of the process, starting from drawing up an offer for the acquisition of a
job order, passing through the planning and installation stages and ending with the handover phase to
the client.
It also includes a description of the most commonly used materials to manufacture cells (especially glass,
aluminium and steel) and the structural issues that can arise from their use.
The course also envisages a more specifically technical part with some 100 hours of dedicated training on
the use of Autocad, in order to enable new hires to use the program independently and to reduce design
errors once they are fully integrated into the workforce.
Between 10 and 20 people are involved in the project, in line with internal requirements. Their final integration
in the company will depend on their ability to pass a final test that includes a set of multiple-choice and
open-ended questions on the training programme developed over the five weeks of the course.
As of today, 54 people were trained in total and 48 were integrated into the design departments. In 2008,
36 people were trained, of which 30 were integrated into the workforce.
Manager training
An assessment performed on the training requirements of “key positions” in the company has proved the
need to develop a managerial training course in line with the organisation’s objectives of increasing and
consolidating achieved results. The project is based on a main concept: our past success does not necessarily
imply future success.
To persevere and continue to invest in skills and routines that delivered success in the past can, at times,
lead to the inability to “look beyond one’s points of strength” and restricts the continuous improvement
that we should strive for. Feeling that we are the “experts” can at times hinder performance in the event of
fast and structural change: the experts often realise that change has happened when it is too late and are
unable to adapt in the required times.
Strengths can hide shortcomings and weaknesses that were negligible in the past, but which today have
become fundamental problems.
That is why we set up what we have called the “Passion for Excellence” training course. The aim is to promote
organisational sense, favour integration between functions and information management, develop managerial
skills associated to job management, prepare job order projects that are in line with the set objectives,
manage resources (both human and non) involved in the projects, manage project planning and work in
process while fulfilling time plans and budget parameters and use IT tools for project management.
This course started in April 2008 and was completed in December: 32 employees participated, including 17
Project Managers and 15 Design Managers. Each group attended a 120 hour course with a cross-disciplinary
curriculum. It encouraged learning methods based on experimentation and hands-on use of theoretical
models applied to the real cases that the participants are called upon to tackle in their normal job and which
are impacted by their daily work. In 2009 the training course will touch on further issues.
A dedicated course was simultaneously organised for Area Managers, who participated in the organisation
of the course and benefited of the same curriculum even before the “Passion for Excellence” course was
held. The training for Area Managers also had a special focus on the assessment of co-workers.
The aim of the project has been to supply useful tools to assess and manage the feedback provided by
co-workers. This requires the acquisition of new skills in addition to the abilities needed to support the
53
area: these are considered two crucial attributes for leadership.
Technical and specialised training
Technical training requirements were covered through the organisation of courses on Autocad Mechanical,
Catia, Bomb Blast and on the Technical Directives.
Specialisation and in-depth courses were also supplied on material hedging, VAT management, economics
and project control, in addition to the courses on worksite prevention, health and safety.
Language training
The training initiatives for 2008 included individual and team lessons aimed at enhancing the staff’s
knowledge of the English language, or to encourage the learning of a second language (German, Spanish
and French).
Training for the Manufacturing Staff
Training courses were supplied on the following:
assembly
mounting
silicone sealing
waste management
packaging and expediting
fire prevention
Law 626
-
Funding for training
In 2008, Permasteelisa S.p.A. applied for funding for Euro 100 thousand, of which 52 thousand have already
been allocated.
54
Shareholders
The Company’s main Shareholders as at 31.12.2008 are (Source CONSOB: www.consob.it):
Declaran t
Direct shareholder
% ownership
Amber Capital LP
Cimolai Luigi
Credit Suisse Group
International Architecture SA
Global Architecture SA
Amber Capital LP
D.I.T.D Holding SA
Credit Suisse Securities (Europe) Limited
14.950%
6.792%
15.087%
10.001%
5.657%
Permasteelisa Spa
Mafessanti Lucio (*)
Allianz SE
Capital Research and Management Company
Banca d'Italia
Permasteelisa Spa
Andimahia SA
Allianz Lebensversicherungs AG
Capital Research and Management Company
Banca d'Italia
5.046%
4.397%
2.264%
2.174%
2.019%
31.613%
100%
Bi-Invest International Holdings Ltd (*)
Market
TOTAL
(*) Shareholders in a shareholders' agreement
Please note that the CONSOB figures are updated upon exceeding specific ownership percentages; as
a result, the data shown in the table may not mirror the actual percentages owned as at 31 December
2008.
Treasury shares
During the period, the Company bought back 1,711,898 treasury shares, namely 6.203% of the Share
Capital made up of 27,600,000 ordinary shares, each having a nominal value of Euro 0.25. The overall
value of this operation amounted to Euro 20,566,615.
The Shareholders’ Meeting resolved to authorised the buyback and the disposal of treasury shares in
order to enable the Board of Directors to:
act in compliance with the provisions in force to limit any anomalous quotation trends as a result
of events unrelated to the company’s business trend that could cause an excess of volatility or a
low liquidity rate;
enable the performance of extraordinary financial operations requiring the transfer or the disposal
of treasury shares (i.e. as a result of a merger, de-merger, exchange, swap, conferment, issuance
of convertible bonds or warrants, etc.);
enable other forms of investment, if necessary, also in reference to the available liquidity.
The go-ahead for the operation is valid for a maximum period of 18 months starting from 7 November
2007 (date in which the Meeting’s resolution was undertaken); the authorisation to transfer bought back
treasury shares, if any, is not subject to any restrictions in time.
The unit purchase price must be included between a minimum value which is the previous day’s official
Stock Exchange price (closing price) reduced by 10% (ten percent) and a maximum price which is the
previous day’s official Stock Exchange price (closing price) increased by 10% (ten percent).
The sale price per unit may not be lower than the lowest purchase prices. This minimum amount shall not
be applicable if the disposal is not performed by the sale thereof: more specifically, it does not apply in
the event of an exchange, swap, conferment or any other form of disposal for the performance of extraordinary
financial operations.
No maximum sale price has been determined.
The buyback of treasury shares started on 23 November 2007.
As at 31 December 2008, the Company owned no. 1,900,790 treasury shares, i.e. 6.887% of the share capital,
which were acquired for Euro 23,088,066.
As of today, the Company owns 1,986.456 treasury shares, namely 7.197% of the Share Capital. The overall
value of the purchase amounts to Euro 23,892,949.
Please note that the subsidiary companies do not own any company shares, either directly or indirectly.
55
Corporate Governance
With reference to the disclosures requested pursuant to art. 123-bis of the Financial Consolidation Act
(TUF), please refer to the Report on Corporate Governance and Report on Ownership annexed hereto and
available in the website www.permasteelisa.com in the Corporate Governance section.
56
57
Managing
Director
Chairman
Chief
Executive
Officer
Vice
Chairman
and
Managing
Director
Position
/
N/A
N/A
12.5%
N/A
N/A
/
/
27.5%
12.5%
/
7.5%
N/A
N/A
(b)
(b)
(b)
(b)
28%
9%
/
/
/
/
/
/
/
/
/
/
(b)
(b)
/
/
/
/
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Number of
options
Average
market
price for
the
period
Average
Average
Number
price
price
Average
of
for the maturity
for the
options
period
period
Number
of
options
(a)
Number Average
of
price
Average
options for the maturity
(a)
period
Op tions
e xpired
during the
financial
y e ar
Op tions ex ercised during
th e financial ye ar
26.5%
9%
/
12.5%
27.5%
7.5%
Number
of
options
/
/
/
/
/
/
Average
price for
the
period
(b)
(b)
/
(b)
(b)
(b)
Average
maturity
Op tions held at y e ar end
(a) The Remuneration Plan resorting to financial instruments envisages the allocation of a monetary bonus for a maximum overall value of up to Euro 13,000,000, allocated in two instalments
as follows:
- the first instalment for a maximum amount of Euro 3,000,000;
- the second instalment for a maximum amount which is equal to the difference between Euro 13,000,000 and the amount of the first instalment.
(b) These instalments will reach maturity based on increasing percentages proportional to the increase of the market price of company shares, calculated as the weighted average of the
official market price in the 60 days prior to the first or second maturity date. The first instalment, for a maximum amount of Euro 3,000,000, will reach maturity on the date the Company’s
Financial Statements are approved for the year ending on 31 December 2008; the second instalment, the maximum amount of which is the difference between Euro 13,000,000 and the
amount of the first instalment, will reach maturity upon the date the Company’s Financial Statement are approved for the year ending on 31 December 2009.
(*) As a result of his resignation, the options assignable to Giampiero Alessandrini at year end are null although the options previously assigned to him had not expired during the period.
(**) The options assignable to the Group’s Key Managers at year end are less than those assigned to them during the same financial year, as a result of the resignation of one of them
from the Group.
Lucio
Mafessanti
Giampiero
Alessandrini
(*)
Key Managers
of
Permasteelisa
Spa
Key Managers
of other
group
companies
(**)
Nicola Greco
Davide Croff
Name and
surname
Op tions assigned during
th e financial ye ar
Op tions held at th e
beginning of the financial
y e ar
Permasteelisa S.p.A. has issued a Remuneration Plan resorting to financial instruments, as approved by the Shareholders’ Meeting on 7 November
2007. It envisages a monetary bonus standardised to the trend of the Permasteelisa S.p.A. stock and due to Directors with powers of attorney and the
Key managers of Permasteelisa S.p.A. and other group companies. The bonus is distributed based on the table provided here below and prepared
based on the requirements of Annex 3C of the Consob Regulation on Issuers:
Remuneration plan
Shares held by directors, auditors and managers with strategic responsibilities
The information that follows is supplied pursuant to article no. 79 of Regulation no. 11971 implementing
Legislative Decree no. 58/98 and concerns the direct or indirect equity investments held by the directors
and the auditors in the company’s share capital as at 31 December 2008.
No such equity investments are held by general managers.
NAME AND
SURNAME
POSITION
Lucio Mafessanti
Vice Chairman and
Managing Director
Rosario Bifulco
Director
Dimitri J
Goulandris
Director
Giancarlo Iovino
Claudio Figini
Managers with
strategic
responsibilities
Managing Director
until 31/01/2008
Managing Director
until 01/07/2008
COMPANY IN
WHICH SHARES
ARE HELD
(Permasteelisa
S.p.A. or its
subsidiaries)
Permasteelisa
S.p.A.
Permasteelisa
S.p.A.
Permasteelisa
S.p.A.
Permasteelisa
S.p.A.
Permasteelisa
S.p.A.
Permasteelisa
S.p.A.
(a) Equity investment held through the Company Andimahia S.A.
58
No. owned
No.
No. sold
shares as at purchased
shares
31.12.2007
shares
No. owned
shares as at
31.12.2008
1,213,452 (a)
/
/
1,213,452 (a)
1,571
1,429
/
3,000
13,500
/
/
13,500
2,500
5,700
/
8,200
/
3,237
/
3,237
/
800
/
800
Transactions with related parties
The details of any transactions with related parties, including transactions with other Group companies,
are provided in the dedicated section of the Notes to the Consolidated Financial Statements and the
Statutory Financial Statements for the year.
Unconventional or unusual operations
No entries or transactions were recorded resulting from unconventional or unusual operations during
financial year 2008 having any relevance on the statutory, financial and economic standing of the Group
and of the Parent company Permasteelisa S.p.A. for the period. Please note that a number of agency
contracts agreed in previous periods with a counterparty in a Middle Eastern country have now been
negotiated; the fees for these services were much higher than those normally applied in the field.
Significant events subsequent to year end and outlook
Significant events subsequent to year end
No significant events have occurred after the end of the financial year.
Outlook
Despite the weakened markets, the level of outstanding orders is stable and has enabled a suitable
turnover; these are the expectations also for 2009 during which the operating revenues and the other most
significant management are expected to remain at constant levels.
It is of course essential to make reference to the general crisis on the markets that the Permasteelisa Group
has managed to face by enhancing commercial scenarios as a means to significantly expand the market it
has access to. Once again, the basic commercial targets for the year include:
expansion towards other Countries (more specifically Saudi Arabia), and increase growth efforts
•
on Middle-Eastern markets following the success achieved in Dubai and Qatar;
ensure a suitable follow-up to the openings that are starting to become clear on the Russian
•
markets as a result of the commercial initiatives started up in 2008;
continue commercial promotion and quotation activities in Latin America, with special reference
•
to Brazil;
further the commercial efforts mad to continue expansion in northern Africa, with special reference
•
to airport terminals;
more forcefully drive the assessments of commercial opportunities in Central Asia;
•
continue to investigate business areas that are pertinent to the Group’s traditional business, with
•
special reference to the opportunities there may be, maybe even as a Joint Venture, as a General
Contractor for buildings featuring a special and particular architecture or technology.
The implementation of the listed commercial guidelines is expected to ensure that the virtuous management
that characterised past years will be continued in the future. It is also expected to confirm the ability shown
to suitably react to the weakness of today’s markets.
Other disclosures
Pursuant to Leg. Decree 196/03 and the Technical Regulations (Annex B of Leg. Decree 196/2003), the
Company has approved a Security Policy Document (DPS) providing minimum security levels as required
by the regulations in force. The Security Policy Document (DPS) includes the documents “Corporate Risk
Assessment” and “Minimum security measures” were approved on 27 March 2008 and filed at the
company’s registered offices where it can be consulted freely.
The company does not have any branch offices.
59
Operating performance and financial position of Permasteelisa S.p.A.
The prospects supplied were prepared based on the Statutory Financial Statements for the year ending
on 31 December 2008 which we invite you to consult. The Statutory Financial Statements were drawn
up in compliance to the International Financial Reporting Standards (“IFRS”) issued by the International
Accounting Standard Board (“IASB”) and certified by the European Union, in addition to the provisions
issued pursuant to Art. 9 of Leg. Decree no. 38/2005.
Operating performance
The Parent Company’s profit and loss account for financial year 2008 shows a net result of Euro 8,841
thousand against the previous year that closed with a net result of Euro 4,663 thousand.
The summary results are as follows:
3 1 December 3 1 December
2007
2008
In thousands of Euro
Revenues
Other operating income
92,760
15,604
100,388
10,590
1 0 8,3 6 4
1 1 0,9 7 8
(37,926)
(26,856)
(29,550)
(3,283)
(1,030)
(1,696)
(459)
0
(54,958)
(24,845)
(26,805)
(2,902)
(739)
(725)
(189)
93
(1 0 0, 8 0 0 )
(1 1 1, 0 7 0 )
7,5 6 4
(9 1 )
34,361
(26,403)
18,707
(13,743)
N e t financial income/(e xpenses)
7,9 5 8
4,9 6 4
Revaluation of equity investments
Write-downs of equity investments
0
(5,386)
0
(20)
1 0,1 3 6
4,8 5 3
Income tax expense
(1,295)
(190)
Profit/(loss) a fte r ta x
8,8 4 1
4,6 6 3
Total opera ting rev enues
Raw materials and consumables used
Services expenses and use of third party assets
Personnel expenses
Depreciation, amortization and impairment losses
Bad debts provision
Provision for risks and charges
Other operating expenses
In-house enhancement of fixed assets
Total opera ting expenses
Opera ting result
Financial income
Financial expenses
Profit/(loss) be fore ta x
The operating result benefited from the improved profitability of job orders in progress during the period.
Also the gains from financial activities benefited from the dividends received from subsidiary companies
that were remarkably higher than the previous year’s (Euro 15,115 thousand versus Euro 10,000 thousand);
the result before tax and consequently the net result were however negatively affected by a remarkable
write-downs on investments that partly offset the improvements affecting the operating result and the net
balance between financial income/expenses.
60
Financial position
The Parent Company’s financial position is summarised in the table below:
In thousands of Euro
Non-current assets (1)
Net working capital (2)
Severance indemnity fund (3)
N e t inv ested capital
Net financial debt/(Net cash surplus) (4)
Shareholders’ equity (including minority interests) (5)
Cov erage
C apital e xpenditure on tangible and intangible assets
Average workforce
3 1 December
2008
3 1 December
2007
121.980
16.077
(2.227)
133.441
31.849
(2.374)
1 3 5.8 2 9
16 2. 9 1 6
79.625
56.205
86.643
76.273
1 3 5.8 2 9
1 6 2.9 1 6
4.0 9 4
1.9 9 2
559
532
(1) sum of the captions recorded in the balance sheet under “Non-current assets”, excluding “Deferred tax assets” and “Financial
receivables from subsidiaries”.
(2) sum of the captions recorded in the balance sheet under “Current assets”, excluding “Cash and cash equivalents” and “Financial
receivables from subsidiaries”, plus “Deferred tax assets” under “Non-current assets”, the captions under “Current liabilities”,
excluding “Amounts payables to banks and other financial creditors” and “Financial payables to subsidiaries”, and the captions
under “Non-current liabilities”, excluding “Amounts payables to banks and other financial creditors” and “Severance indemnity
fund”.
(3) sum of the captions recorded in the balance sheet under “Non-current liabilities”.
(4) difference between the captions “Cash and cash equivalents“ and “Financial receivables from subsidiaries” recorded in the
balance sheet under “Current assets” and the sum of the caption “Amounts payables to banks and other financial creditors” recorded
in the balance sheet under both “Current liabilities” and “Non-current liabilities”, and the caption “Financial payables to subsidiaries”
recorded under “Current liabilities”.
(5) equal to the corresponding caption in the balance sheet.
The overview of the financial position shows a clear improvement in the net working capital as a result of
the improvement of the overall working capital (understood as the sum of the items “contracts
work-in-progress”, “inventories” and “trade receivables” minus “excess of progress billings over
work-in-progress”, “advances from customers” and “trade payables”).
The decrease in non-current assets is due to the decreased value of the equity investment in a subsidiary
following a dividend distribution that partially involved the distribution of the subsidiary’s capital reserve
and partially the reduction of the financial indebtedness.
The net equity decreased despite the net result for the period, mainly due to the company’s buyback of
treasury shares for approximately Euro 20.6 million.
61
Reconciliation between net result and net equity of the Parent Company and of the
Group
Pursuant to the requirements of the Consob Communication of 28 July 2006, the following table provides
a reconciliation between net result and net equity of the Parent company Permasteelisa S.p.A. for the year
ended 31 December 2008 and the same values on a consolidated basis (attributable to the Group):
N e t result
2008
N e t equity
as a t 3 1
December
2008
N e t result
2007
N e t equity
as a t 3 1
December
2007
B alance as per the Paren t company’s
S ta tu tory Financial S ta tem en ts
8.8 4 1
5 6.2 0 5
4.6 6 3
7 6.2 7 3
Share of the net equity and the net result of
the consolidated subsidiaries, net of the book
value of related equity investments
69.244
140.905
19.655
107.730
In thousands of Euro
Reversal of inter-group dividends
(30.681)
(10.909)
Group jobs margin adjustment
(1.477)
(2.837)
(504)
(1.350)
Effect of other consolidation entries
(1.074)
(5.687)
(3.796)
(4.634)
(570)
(2.289)
(694)
(7.919)
4 4.2 8 3
1 8 6.2 9 7
8.4 1 5
1 7 0.1 0 0
Share ascribable to minority
B alance as per the Consolidated Financial
S ta te m en ts
62
Approval of the Statutory Financial Statements and allocation of 2008 net
profit
Shareholders,
the Statuory Financial Statements for the period that ended on 31 December 2008 with a net result for the
period of Euro 8,840,657 are submitted to you for approval.
The results for the period and the Group’s financial position enable the allocation of part of the net result
to dividends. However, the Board of Directors cannot fail to highlight the general concern on the market as
to our clients’ liquidity and the generally restrictive attitude towards credit issued by the main banks. This
scenario invites us to caution. So the suggestion is to carry forward the net result and eventually reassess
the issue when the international credit situation will gradually stabilise, as it seems it will.
As a result, in consideration of the law requirements and the Company by-laws, our suggestion is to carry
forward the net profit for the financial year.
26 March 2009
On behalf of the Board of Directors
The Chief Executive Officer
Nicola Greco
The Chairman of the Board of Directors
Davide Croff
63
Reed Smith - London, UK
©G
Gensle
l r - Ph
P O
Ph.
Owen
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Rag
a g
gett
ttt 20
200
009
PERMASTEELISA GROUP
Consolidated Financial Statements
for the year ended 31 December 2008
Consolidated profit and loss account
for the year ended 31 December 2008
No te
2008
2007
Revenues
Other operating income
1
4
1,128,025
9,015
1,131,846
8,342
Total opera ting rev enues
1
1,1 3 7, 0 4 0
1,1 4 0, 1 8 8
Raw materials and consumables used
5
5
6
(431,777)
(436,710)
(378,406)
(237,784)
( 835)
(12,113)
(1,968)
(13,518)
(6,498)
1,431
(416,197)
(224,124)
(1, 0 8 0, 6 3 3 )
(1, 1 0 5, 1 7 3 )
5 6,4 0 7
3 5,0 1 5
2,343
0
5 8,7 5 0
3 5,0 1 5
In thousands of Euro
Services expenses and use of third party assets
Personnel expenses
- of which non recurring costs
Depreciation, amortization and impairment losses
Bad debts provision
Provision for risks and charges
Other operating expenses
In-house enhancement of fixed assets
7
8
9
10
Total opera ting expenses
Ordinary acti vi ty result
11
Gain (loss) on the disposal of investments
Opera ting result
(11,984)
(1,970)
(9,201)
(6,263)
1,276
Financial income
Financial expenses
12
12
53,970
(57,622)
19,938
(31,541)
N e t financial income (e xpenses)
12
(3, 6 5 2 )
(1 1, 6 0 3 )
Revaluation of equity investments
Write-downs of equity investments
13
14
6
(235)
10
(268)
5 4,8 6 9
2 3,1 5 4
(10,017)
(14,045)
4 4,8 5 2
9,1 0 9
44,282
570
8,415
694
4 4,8 5 2
9,1 0 9
1.723
0.307
Profit/(loss) be fore ta x
15
Income tax expense
Profit/(loss) a fte r ta x
Attributable to:
Group
Minority
Profit/(loss) for the period
31
Earnings per share (Euro)
The table does not highlight the value of transactions with related parties as the latter mainly relate to
remuneration to members of the Board of Directors and to auditors of Permasteelisa S.p.A., and also to
the Group’s managers with strategic responsibilities: they are not significant at Group level.
The value of transactions is shown in detail in the note 44 which is entirely dedicated to operations with
related parties.
66
Consolidated balance sheet
as at 31 December 2008
In thousands of Euro
No te
Assets
Intangible assets
Tangible assets
Equity investments in not consolidated subsidiaries
Equity investments in associates companies
Other equity investments
Other non-current assets
Deferred tax assets
16
17
18
19
20
21
22
3 1 December 3 1 December
2008
2007
20,317
74,681
99
11
130
220
18,733
20,430
80,489
196
11
58
83
14,610
1 1 4,1 9 1
1 1 5,8 7 7
214,598
12,405
278,276
5
69
118
2,575
39,928
148,952
0
224,612
12,471
243,699
68
66
79
2,866
24,210
75,822
0
Total current assets
6 9 6,9 2 6
5 8 3,8 9 3
Total asse ts
8 1 1,1 1 7
6 9 9,7 7 0
Total non-current asse ts
Contracts work-in-progress
Inventories
Trade receivables from third parties
Trade receivables from not consolidated subsidiaries
Trade receivables from associated companies
Financial receivables from not consolidated subsidiaries
Income tax receivables
Other current assets
Cash and cash equivalents
Assets classified as held for sale
23
23
24
25
26
25
27
28
29
2
Equity
Share capital
Legal reserve
Share premium
Revaluation reserve
Extraordinary Reserve
Treasury shares
Hedging reserve for risks
Translation reserve
Other reserves
30
30
30
30
30
30
30
30
30
6,900
1,653
26,790
3,523
25,963
(23,119)
7,110
(26,774)
6,913
6,900
1,653
26,790
3,523
29,218
(2,521)
4,436
(23,858)
6,217
Retained earnings
30
157,339
117,742
1 8 6,2 9 8
1 7 0,1 0 0
Total equity a t tributable to the Group
Minority interes ts
30
2,2 8 9
7,9 1 9
Total equity
30
1 8 8,5 8 7
1 7 8,0 1 9
Liabilities
Amounts payables to banks and other financial creditors
Severance indemnity fund
Pension funds and other employee benefits
Provisions for risks and charges
Deferred tax liabilities
32
33
34
35
22
5,376
3,439
17,022
25,280
6,360
17,943
3,497
17,094
24,469
4,276
5 7,4 7 7
6 7,2 7 9
Total non-current liabilities
67
Amounts payables to banks and other financial creditors
Excess of progress billings over work-in-progress
Advances from customers
Trade payables to third parties
Trade payables to not consolidated subsidiaries
Trade payables to associated companies
Income tax payables
Other current liabilities
32
23
23
36
37
38
39
40
13,309
168,333
100,195
209,113
160
69
15,895
57,979
38,956
116,234
23,373
221,412
237
65
12,625
41,570
Total current liabiliti es
5 6 5,0 5 3
4 5 4,4 7 2
Total liabilities
6 2 2,5 3 0
5 2 1,7 5 1
Total net equity and liabiliti es
8 1 1,1 1 7
6 9 9,7 7 0
(*) The table does not show the balance of receivables and payables for operations with related parties, except for those relating to
(non consolidated) subsidiary companies and associated companies which are stated in the consolidated balance sheet adopted by
Permasteelisa S.p.A., as their value was not significant at Group level.
The balance is described in detail in the note 44 which is entirely dedicated to operations with related parties.
68
Consolidated statement of cash flows
for the year ended 31 December 2008
In thousands of Euro
No te
3 1 December
2008
3 1 December
2007
54,869
23,154
(3,303)
2,482
12,113
37
(2,343)
13,518
1,968
229
(415)
357
(973)
(10)
859
82
(1,719)
5,330
11,984
165
0
9,201
1,970
258
(748)
383
(904)
(3)
(264)
3
24,601
25,656
3,185
138,405
(46,185)
(10,237)
(8,176)
(2,312)
3,310
4,433
83,498
(36,692)
(4,791)
(8,671)
(5,797)
1,722
(4,714)
73,276
(999)
32,703
1 5 2,7 4 6
8 1,5 1 3
C ash flows from opera ting activities
Profit/(loss) before tax
Adjustments made to reconcile the result be fore ta x with
th e cash flow changes genera ted (used) by opera ting
activities:
- Interest income
- Interest expense
- Depreciation and amortization expenses and impairment losses
- Gain/loss on disposal of tangible and intangible assets
- Gain/loss on disposal of assets classified as held for sale
- Provision for risks and charge
- Bad debts provision
- Equity investments write-downs/(revaluations)
- Severance indemnity fund payments to employees
- Severance indemnity fund expenses
- Pension fund payments
- Other employee benefits payments
- Pension fund expenses
- Other employee benefits expenses
Total adjustments
Changes in opera ting activities:
- Changes in hedging reserve
- Changes in contracts work-in-progress (net)
- Changes in the other captions of working capital (*)
- Changes in the other captions of operating capital
- Income tax paid
- Interests paid
- Interest received
- Effect of exchange rate changes on operating activities cash
- flows
Total changes
N e t cash flows from opera ting activities (A )
C ash flows from inves ting activities
Losses on investments
Purchases of tangible and intangible assets
Proceeds from disposal of tangible and intangible assets
Effect of Belgo Metal N.V. disposal, net of cash surplus
disposed
Changes in other fixed assets
Changes in not consolidated subsidiaries, associated
companies and other equity investments
N e t cash flows from inves ting activi ties (B )
C ash flows from financing activities
Treasury shares buyback
7
11
9
8
13-14
33
6
34
34
6
6
0
10
(13,814)
137
(13,933)
690
6,142
(137)
0
10
(71)
(7,7 4 3 )
17
(1 3, 2 0 6 )
(20,598)
(2,521)
Changes in interest risk hedging reserve
(50)
50
Lease obligation payments (principal)
Lease obligation payments (interest)
(34)
(8)
(37)
(9)
69
Dividends paid to Permasteelisa S.p.A.’s shareholders
Dividends paid to minority
Minority acquisition
Other minor effects on minority
Other minor effects
Changes in financial receivables/payables from/to not
consolidated subsidiaries
Changes in receivables/payables from/to other finance
companies
Borrowings and other medium/long term loans taking out
Borrowings and other medium/long term loans reimbursement
(7,918)
(29)
(5,520)
(29)
0
(8,280)
(207)
0
19
63
(253)
(23)
14
0
(22,962)
0
15,000
(43,689)
(5 7, 3 8 7 )
(3 9,6 3 4 )
N e t increase/ (decre ase ) in cash surplus/(de ficit) ( A+B+C )
8 7,6 1 6
2 8,6 7 3
N e t cash surplus/(de ficit) as a t 1 J anuary (D )
5 9,8 8 6
3 5,2 4 9
740
(4, 0 3 7 )
1 4 8,2 4 2
5 9,8 8 5
148,830
122
(710)
75,683
139
(15,937)
1 4 8,2 4 2
5 9,8 8 5
N e t cash flows from financing activities (C )
Effec t of e xchange ra te changes on balances held in
foreign currency (E )
N e t cash surplus/(de ficit) as a t 3 1 December (A+ B +C+D+E)
N e t cash surplus/(de ficit) includes:
Bank and post current accounts and deposits
Cash in hand
Bank overdrafts and other short-term loans
29
29
32
(*) The caption includes trade receivables and payables from/to third parties and from/to not consolidated subsidiaries and
associated companies; the change of trade receivables and payables from/to not consolidated subsidiaries and associated
companies was (13) in 2008 and (113) in 2007.
70
71
0
1.653
0
0
0
6.900
0
0
0
0
1.653
Legal
reserve
Share capital
6.900
0
1.653
0
0
0
1.653
Legal
reserve
0
6.900
0
0
0
6.900
Share capital
(*): included in the item "Other reserves" in the Balance sheet
(**): included in the item "Hedging reserve for risks" in the Balance sheet
Please refer to note 30
Balance as at 31 December 2008
Other net equity variations:
Minority interests acquisition
Incorporation of new companies
Other variations
Roundings
Net result for the period
Total Income (expenses) for the period
Transactions with shareholders:
Dividends
Treasury shares buy-back
Balance as at 1st January 2008
Income (expenses) recognized directly in equity:
Translation differences
Foreign exchange risk hedging reserve variation
Commodities risk hedging reserve variation
Interest rate risk hedging reserve variation
In migliaia di Euro
Balance as at 31 December 2007
Other net equity variations:
Minority interests acquisition
Incorporation of new companies
Other variations
Roundings
Treasury shares buy-back
Dividends
Transactions with shareholders:
Total Income (expenses) for the period
Net result for the period
Interest rate risk hedging reserve variation
Commodities risk hedging reserve variation
Foreign exchange risk hedging reserve variation
Translation differences
Income (expenses) recognized directly in equity:
Balance as at 1st January 2007
In thousands of Euro
Net Equity Changes
0
3.523
0
0
0
3.523
Revaluation
reserve
0
29.218
(4.160)
(4.160)
0
0
33.378
Extraordinary
reserve
0
26.790
0
0
0
26.790
0
3.523
0
0
0
3.523
0
25.963
(3.255)
(3.255)
0
0
29.218
Share Revaluatio Extraordin
premium n reserve
ary
reserve
0
26.790
0
0
0
26.790
Share
premium
For the year ended 31 December 2008
0
5.347
0
0
0
5.347
Other
reserves
(*)
0
5.347
223
223
0
0
5.124
Other
reserves
(*)
Consolidated statement of Net equity changes
0
(26.774)
0
(2.916)
(10)
11.218
(10)
0
5.839
5.839
(167)
6.006
(2.916)
(2.916)
5.389
(23.858)
(70)
(4.108)
(70)
0
(3.035)
(3.035)
(2.772)
(263)
(1.003)
0
0
0
(50)
(50)
(50)
50
Interest risk
hedging
reserve (**)
0
50
50
50
0
Translation Foreign exchange Commodi-ties
risk hedging
risk hedging
reserve
reserve (**)
reserve (**)
0
(1.437)
(1.437)
(1.390)
(47)
434
Interest risk
hedging
reserve (**)
0
50
0
5.389
0
5.975
5.975
5.977
(2)
(586)
Commodities
risk hedging
reserve (**)
0
(1.003)
0
(23.858)
0
(7.315)
(7.315)
(7.315)
(16.543)
Translation Foreign exchange
risk hedging
reserve
reserve (**)
0
(23.119)
(20.598)
(20.598)
0
0
(2.521)
696
1.566
696
0
0
0
870
(23)
1
(22)
157.339
(4.663)
(4.663)
0
44.282
44.282
117.742
Retained
earnings
Treasury Consolidati
shares on reserve
reserve
(*)
184
(4.343)
(4.343)
8.415
8.415
0
113.486
Retained
earnings
184
117.742
0
0
0
870
Consolidation
reserve (*)
0
870
0
(2.521)
(2.521)
(2.521)
0
0
0
Treasury
shares
reserve
(23)
1
594
186.298
616
(7.918)
(20.598)
(28.516)
(3.346)
6.006
(2.772)
(50)
(162)
44.282
44.120
170.100
Group net
equity
0
184
0
184
170.100
(2.521)
(10.801)
(8.280)
8.415
5.688
(2.727)
50
(1.390)
5.977
(7.364)
175.029
Group net
equity
(6.142)
2.289
(6)
(6.136)
(29)
0
(29)
20
6
(55)
0
(29)
570
541
7.919
Minority
interests
22
7.919
19
3
0
(207)
(207)
694
188
(506)
0
(129)
(24)
(353)
7.916
Minority
interests
(29)
1
(5.548)
188.587
(5.520)
(7.947)
(20.598)
(28.545)
(3.326)
6.012
(2.827)
(50)
(191)
44.853
44.662
178.019
Total
19
187
0
206
178.019
(2.521)
(11.008)
(8.487)
9.109
5.876
(3.233)
50
(1.519)
5.953
(7.717)
182.945
Total
Notes to the Consolidated Financial Statements
Company’s information
Permasteelisa S.p.A. (hereinafter referred to as the “Company” or “Parent Company” is a company
domiciled in Italy that operates internationally both directly and indirectly through its subsidiaries in the
field of the design, production and installation of architectural components (curtain walls, partition walls
and doors) and interior design. The company’s Consolidated Financial Statements for the year ending 31
December 2008 include the Company and its subsidiaries involved in the consolidation (hereinafter
referred to as the “Group”) which are listed in the table annexed in the appendix to the Notes to the
Consolidated Financial Statements entitled “Permasteelisa Group’s companies”. This table also highlights
the Group’s equity investments in non-consolidated subsidiaries, associated and other companies.
The Consolidated Financial Statements of the Permasteelisa S.p.A Group have been drawn up in Euro,
which is the currency of the economic area in which the Company operates.
The Consolidated Financial Statements were approved by the Board of Directors on 27 March 2008.
These financial statements were audited by PricewaterhouseCoopers S.p.A.
Financial tables
The tables provided for the balance sheet, profit and loss account, statement of cash flows and net equity
changes used for the period closed as at 31 December 2008 are prepared in thousands of Euro and are the
same as those used for the Consolidated Financial Statements as at 31 December 2007. The only variation
added to the balance sheet is the addition of the entries “Income tax receivables” and “Income tax
payables” and the elimination of the entries “Tax receivables” and “Tax payable” and a more detailed
overview of the reserves in the Group shareholders’ equity.
Balance sheet, profit and loss account, statement of cash flows and net equity changes are characterised
as follows:
Balance sheet
The methods whereby assets and liabilities are broken down into “current and non-current” was adopted.
Profit and loss account
The adopted method breaks costs down based on their nature.
Statement of cash flows
The indirect method was employed.
Net equity changes
The statement that shows all the changes of the net equity was adopted.
Other information
Please note that Consob (National Commission for companies and stock exchange) decision no. 15519 of
27 July 2006 requires the financial statements to state the amounts for any item relating to positions or
transactions with related parties, if the amounts are significant. As a result, such positions and transactions
are recorded in dedicated entries in the balance sheet, the profit and loss account and the statement of
cash flows only if the amounts are significant and affect the overall balance of the financial statements.
The sole exceptions are the entries associated to receivables from and payables to (non consolidated)
subsidiaries and associated companies that are in any case highlighted in the consolidated balance sheet
adopted by Permasteelisa S.p.A, even if these amounts are not particularly significant.
Another point is that the figures as at 31 December 2007, provided for comparative purposes in the tables
of the balance sheet, of the profit and loss account and in the following Notes, a number of figures have
been reclassified and have changed with reference to those issued in the Consolidated Financial Statement
as at 31 December 2007.
These variations have not affected the result of the ordinary activity, the operating result, the net result or
the consolidated net equity. The reclassifications performed include:
Balance sheet
- reclassification of Euro 6,492 thousand from “Trade payables to third parties” to the “Provision for risks
and charges”;
72
Profit and loss account
- reclassification of Euro 411 thousand from “Raw materials and consumables used” to “Provisions for
risks e charges”;
These reclassifications performed in the balance sheet and in the profit and loss account led to the
following changes in the statement of cash flows as at 31 December 2007:
the item “Provisions for risks and charges” entered to the adjustments made to reconcile
the result before tax with the cash flow changes generated (used) by operating activities
increased from Euro 8,790 thousand to Euro 9,201 thousand;
the item “Changes in the other captions of working capital” dropped from minus Euro
37,048 thousand to minus Euro 36,692 thousand;
the item “Changes in the other captions of the operating capital” dropped from minus Euro
4,025 thousand to minus Euro 4,791 thousand.
Also, in the Statement of cash flows as at 31 December 2007, Euro 292 thousand have been reclassified
from the “Effect of exchange rate changes on balances held in foreign currency” to “Effect of exchange
rate changes on operating activities cash flows”.
Finally, having introduced into the balance sheet the item “Income tax receivables” and “Income tax
payables” and eliminated the entries “Tax receivables” and “Tax payables”, the item “Tax receivables”,
that as at 31 December 2007 amounted to Euro 11,088 thousand has been reclassified as follows:
- Euro 2,866 thousand have been entered into the new item “Income tax receivables”;
- the residual amount as been entered to the item “Other current assets”
and the item “Tax payables” that as at 31 December 2007 was Euro 24,751 thousand has been reclassified
as shown:
- Euro 12,625 thousand have been reclassified to the new item “Income tax payables”;
- the remaining amount has been ascribed to the item “Other current liabilities”.
Accounting principles
(a) Statement of compliance
The Permasteelisa Group adopts the IFRS International Accounting Standards issued by the International
Accounting Standards Board (“IASB”) and endorsed by the European Union. IFRS is understood to include
also the International Accounting Standards (“IAS”) that are currently in force in addition to the
interpretations made available by the International Financial Reporting Interpretations Committee (“IFRIC”),
previously known as the Standing Interpretations Committee (“SIC”). These Consolidated Financial
Statements were prepared in accordance with the accounting standards described in the paragraphs
below, namely the same standards that were used to draw up the Consolidated Statements as at 31
December 2007.
(b) Basis of preparation
The financial statements are presented in Euro, rounded to the nearest thousand. They are prepared on
the historical cost basis except for the following assets and liabilities are stated at their fair value: derivative
financial instruments, financial instruments held for trading, financial instruments classified as availablefor-sale.
The preparation of financial statements in conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under the circumstances, the
results of which form the basis of making the judgements about carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the revision affects both current and future
periods.
73
The accounting principles exposed in the following paragraphs have been consistently applied for all the
periods included in this Consolidated Financial Statements.
These accounting principles have generally been applied consistently by the Group companies in the
preparation of the financial statements for consolidation purposes; but, where necessary, specific
adjustments have been applied by the Company to make these financial statements in compliance with
IFRS.
(c)
Basis of consolidation
(i)
Subsidiaries
Subsidiaries are entities controlled directly or indirectly by the Company. Control exists when the
Company has the power, directly or indirectly, to govern the financial and operating policies of an entity
so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are
exercisable or convertible are taken into account.
The subsidiaries are consolidated using the line by line method.
The financial statements of subsidiaries are included in the Consolidated Financial Statements from the
date that control commences until the date that control ceases.
All subsidiaries are included in the Consolidated Financial Statements, unless some considered not material.
Not consolidated subsidiaries are stated at their fair value.
Receivables and payables, income and expenses and all relevant transaction occurred between
consolidated companies, are eliminated in preparing the Consolidated Financial Statements, unless they
are immaterial; in particular intragroup gains deriving from contracts work-in-progress realized in the
Group are eliminated.
The minority interests and the result attributable to minority are indicated separately in the consolidated
balance sheet and in the consolidated profit and loss account.
All consolidated subsidiaries close their financial year as at 31 December, except for Permasteelisa India
Private Limited whose financial period ends as at 31 March; consequently, a specific financial statements
for consolidation purposes is prepared by this subsidiary as at 31 December.
(ii)
Associated companies
Associates are those entities in which the Group has significant influence, but not control, over the financial
and operating policies (generally accompanied by a percentage of ownership is between 20% and 50%).
The Consolidated Financial Statements include the Group’s share of the total recognised gains and losses
of associated companies on an equity accounted basis, from the date that significant influence commences
until the date that significant influence ceases. When the Group’s share of losses exceeds its equity investment
in an associated company, the Group’s carrying amount is reduced to nil and recognition of further losses
is discontinued except to the extent that the Group has incurred legal or constructive obligations or made
payments on behalf of an associated company.
Unrealised gains arising from transactions with associated companies are eliminated to the extent of the
Group’s equity investment in the entity. Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of impairment.
(d)
Foreign currency
(i)
Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date
are translated to Euro at the foreign exchange rate ruling at that date. Foreign exchange differences arising
on this translation are recognised in the income statement. Non-monetary assets and liabilities that are
measured in terms of historical cost in a foreign currency are translated using the exchange rate at the
date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are
stated at fair value are translated to Euro at foreign exchange rates ruling at the dates the fair value was
determined.
(ii)
Financial statements of foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
consolidation, are translated to Euro at foreign exchange rates ruling at the balance sheet date. The
revenues and expenses of foreign operations, are translated to Euro at rates approximating to the foreign
exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation
are recognised directly in a separate component of equity.
74
The exchange rates used for the closing as at 31 December 2008 and the comparative exchange rates of
the previous year are as follows:
3 1 December 20 0 8
Currency
Thai Bath
Norwegian Krone
Dubai Dirham
Australian Dollar
Canadian Dollar
Hong Kong Dollar
Singapore Dollar
Taiwan Dollar
Usa Dollar
Hungarian Forint
Swiss Franc
Croatian Kuna
Pataca Macau
Philippine Peso
Chinese Renminbi
Malayan Ringitt
Riyal Qatar
Indian Rupia
Israeli Shekel
Pound Sterling
Korean Won
Japanese Yen
Polish Zloty
3 1 December 20 0 7
Exchange
ra te a t th e
balance
shee t da te
Average
e xchange
ra te of th e
y e ar
Exchange
ra te a t th e
balance
shee t da te
Average
e xchange
ra te of th e
y e ar
48.285
9.75
5.1118
2.0274
1.6998
10.7858
2.004
45.6608
1.3917
266.7
1.485
7.3555
11.1091
65.93
9.4956
4.8048
5.06816
67.636
5.278
0.9525
1,839.13
126.14
4.1535
48.455975
8.224847
5.401284
1.741599
1.559285
11.452672
2.076145
46.275175
1.470595
251.73775
1.587084
7.224185
11.797067
65.128308
10.224710
4.887937
5.353269
63.701167
5.257003
0.796542
1,605.90
152.30667
3.515098
43.8
7.958
5.40656
1.6757
1.4449
11.48
2.1163
47.7521
1.4721
253.73
1.6547
7.3308
11.824
60.724
10.7524
4.8682
5.35894
58.021
5.66514
0.73335
1,377.96
164.93
3.5935
44.213342
8.018288
5.033399
1.635573
1.468948
10.692817
2.063618
45.017417
1.370641
251.3245
1.642673
7.338093
11.012475
63.018783
10.418592
4.707603
4.988543
56.5888
5.625969
0.684551
1,273.33
161.24075
3.783135
(iii)
Net investment in foreign operations
Exchange differences arising from the translation of the net investment in foreign operations, and of
related hedges are taken to a specific reserve. They are released into the income statement upon
disposal.
(e)
Derivative financial instruments
The Group uses derivative financial instruments (generally forward exchange contracts and swaps) only
to hedge its exposure to foreign currency risk, to commodities risk and interest risk coming from its
operating and financial activities in currencies other than Euro.
According to its treasury policy, the Group does not hold or issue derivative financial instruments for
trading purposes. Anyway, derivative financial instruments for which the criterion to record the operations
as hedging operations are not respected, are recorded as trading instruments.
Derivative financial instruments are recognised initially at cost. Subsequent to initial recognition,
derivative financial instruments are stated at fair value. The gain or loss on re-measurement to fair value is
recognised immediately in profit or loss account. However, where derivatives qualify for hedge accounting,
recognition of any resultant gain or loss depends on the nature of the item being hedged (see the accounting
policy described in f).
The fair value of forward exchange contracts is their quoted market price at the balance sheet date, being
the present value of the quoted forward price.
(f)
Hedging
(i)
Cash flow hedging (foreign currency risk)
The Group uses derivative financial instruments to hedge its exposure to foreign currency risk coming
from its operating and financial activities in currency other than Euro.
In particular, the Group uses derivative financial instruments to hedge the foreign currency risk related to
75
the contracts work-in-progress cash flows. When the Group acquires a job whose future cash flows are
denominated in foreign currency, specific forward exchange contracts or swaps on foreign currency are
concluded to hedge the foreign currency risk existing on those future cash flows; therefore these hedging
operations are related to highly probable future transactions as the job that is hedged is effectively acquired
when the hedging contract or contracts are concluded. Considering the length of the Group contracts, the
estimation of the timing of the future cash flows is very difficult and subject to changes that can be also
relevant; as a consequence, the Group policy consists in making an initial hedging of future cash flows
based on an rough estimation of the future cash flows timing and subsequently in:
- rolling over the forward exchange contracts or swaps on foreign currency if at the expiry date the
correspondent cash flows related to the job does not occur;
- in concluding another forward exchange contract or swap on foreign currency, of opposite sign and
same expiry date of the existing hedging contracts, if the cash flow related to the job occurs in advance
with respect to the expiry date of the existing hedging contracts.
The gains and losses deriving from the roll-over operation of these derivative financial instruments and
from their evaluation at fair value are recognised directly in the net equity in a specific reserve for the
effective part; these gains and losses are removed from the net equity and recorded in the profit and loss
account in the same period or periods during which the hedged forecast transaction affects profit or loss
account; they are included in the operating revenues or operating expenses if related to hedging
operations of job contracts cash flows.
The ineffective part of any gain or loss is recognised immediately in the income statement.
The Group does not measure the prospective effectiveness of its hedging operations as, on the basis of
the method used for hedging the future cash flows related to contracts work-in-progress in foreign currency,
the Group considers that it always included in the range requested by IAS 39 (80%-125%); any
ineffectiveness can occur retrospectively only if the roll-over operations or the closing in advance of a
forward exchange contract or swap on foreign currency are not performed correctly; the measurement
of the retrospective ineffectiveness is therefore made continuously monitoring that these cases do not
occur.
If the hedged transaction is no longer expected to take place, the cumulative unrealised gains or losses
recognised in equity are recognised immediately in the income statement as financial components.
Finally, according to the Group policy the foreign currency risk hedging is made on the spot rate; as a
consequence, the difference between spot rate and forward rate recorded when a roll-over operation is
performed and the interest component included in the fair value of the forward contracts or swaps on
foreign currency, are always recorded in the profit and loss account in the financial components as
hedging expenses/revenues.
(ii)
Hedge of monetary assets and liabilities
The Group uses derivative financial instruments also to hedge economically the foreign exchange
exposure of a recognised monetary asset or liability as the loans in foreign currency; in this case no hedge
accounting is applied and any gain or loss on the hedging instrument is recognised in the income
statement.
(iii)
Cash flow hedging (Commodities Risk)
The Group uses derivative financial instruments also to hedge price risk on commodities coming from its
operating activities.
In particular, the Group uses derivative financial instruments to hedge the price risk related to aluminium
purchase for the contracts work-in-progress. When the Group acquires a job whose future cash flows are
related to aluminium purchase, specific forward exchange contracts or swaps on foreign currency are
concluded to hedge the price risk existing on this commodity; therefore these hedging operations are
related to highly probable future transactions as the job that is hedged, with regard to the aluminium
purchase, is effectively acquired when the hedging contract or contracts are concluded. In consideration of
the variability of the price of aluminium, the aim of hedging is to freeze this price already since the
acquisition of the order itself; subsequently, as the aluminium order, as well as the relevant price are
agreed with the supplier, the Group shall complete the aluminium forward purchase by completing a
transaction of opposite sign. If, upon expiry of the transaction, the order has not been defined yet for the
supplier, the hedging contract(s) shall be rolled over.
The gains and losses deriving from the regulation of the operations on maturity, including the effect of
the possible roll-over operation of these derivative financial instruments and from their evaluation at fair
value are recognised directly in the net equity in a specific reserve for the effective part; these gains and
76
losses are removed from the net equity and recorded in the profit and loss account in the same period or
periods during which the hedged forecast transaction affects profit or loss account (arrival of the goods);
they are included in the operating expenses.
The ineffective part of any profit or loss is recognised immediately in the financial entries of the profit and
loss account.
The Group does not measure the prospective effectiveness of its hedging operations as, on the basis of
the method used for hedging of the price risk on the future cash flows payments related to aluminium
purchases on contracts work-in-progress, the Group considers that it always included in the range
requested by IAS 39 (80%-125%); any ineffectiveness can occur retrospectively only if the roll-over
operations or the closing in advance of an hedging contract by operation of the opposite sign when the
order to the supplier is fixed are not performed correctly; the measurement of the retrospective
ineffectiveness is therefore made continuously monitoring that these cases do not occur.
If the hedged transaction is not expected to occur again in the future, the losses or profit on the accumulated
price difference entered in the net equity are immediately acknowledged and entered into its financial
items.
Finally, according to the Group policy the price risk on commodities is made on the spot rate; as a
consequence, the difference between spot rate and forward rate recorded when a roll-over operation is
performed and the interest component included in the fair value of the forward contracts or swaps on
foreign currency, are always recorded in the profit and loss Account in the financial components as
hedging expenses/revenues, regardless whether the contract does or does not comply with the
equirements for being considered as such.
(iv)
Hedge of net investment in foreign operation
The portion of the gain or loss on an instrument used to hedge a net investment in a foreign operation that
is determined to be an effective hedge is recognised directly in equity. The ineffective portion is recognised
immediately in profit or loss.
(g)
Tangible assets
(i)
Owned tangible assets
Items of property, plant and equipment are stated at cost less accumulated depreciation (depreciation
criteria are reported below) and impairment losses (see accounting policy n). The cost of self-constructed
assets includes the cost of materials, direct labour, and the initial estimate, where relevant, of the costs of
dismantling and removing the items and restoring the site on which they are located, and an appropriate
proportion of production overheads.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for
as separate items of property, plant and equipment according to the “component approach”.
(ii)
Leases assets
Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are
classified as finance leases. The owner-occupied property acquired by way of finance lease is stated at an
amount equal to the lower of its fair value and the present value of the minimum lease payments at
inception of the lease, less accumulated depreciation (depreciation criteria are reported below) and
impairment losses. Lease payments are accounted for as described in accounting policy v.
(iii)
Subsequent costs
The Group recognises in the carrying amount of an item of property, plant and equipment the cost of
replacing part of such an item when that cost is incurred if it is probable that the future economic benefits
embodied with the item will flow to the Group and the cost of the item can be measured reliably. All other
costs are recognised in the income statement as an expense as incurred.
(iv)
Depreciation
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of
each part of an item of property, plant and equipment. Depreciation is applied from the date the tangible
assets are available for use. Land is not depreciated. The estimated useful lives are as follows:
•
buildings
20-40 years
•
plant and machinery
5-25 years
•
equipment
4-5 years
77
•
other assets
4-8 years
The useful lives and the residual value, if significant, are annually revised.
(h)
Intangible assets
(i)
Goodwill
All business combinations are accounted for by applying the purchase method. Goodwill represents
amounts arising on acquisition of subsidiaries, associated companies and joint ventures. In respect of
business acquisitions that have occurred since 1 January 2004, goodwill represents the difference between
the cost of the acquisition and the fair value of the net identifiable assets acquired.
In respect of acquisitions prior to this date, goodwill is included on the basis of its deemed cost, which
represents the amount recorded under previous GAAP. The classification and accounting treatment of
business combinations that occurred prior to 1 January 2004 has not been reconsidered in preparing the
Group’s opening IFRS balance sheet at 1 January 2004, in accordance with IFRS 1.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cashgenerating units and is no longer amortised but is tested annually for impairment (see accounting policy
n). In respect of associated companies, the carrying amount of goodwill is included in the carrying amount
of the investment in the associated company.
Negative goodwill arising on an acquisition is recognised directly in profit or loss account.
(ii)
Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical
knowledge and understanding, is recognised in the income statement as an expense as incurred.
Expenditure on development activities, whereby research findings are applied to a plan or design for the
production of new or substantially improved products and processes, is capitalised if the product or
process is technically and commercially feasible and the Group has sufficient resources to complete
development. The expenditure capitalised includes the cost of materials, direct labour and an appropriate
proportion of overheads. Other development expenditure is recognised in the income statement as an
expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortization
(amortization criteria are reported below) and impairment losses (see accounting policy n).
(iii)
Other intangible assets
Other intangible assets that are acquired by the Group are stated at cost less accumulated amortization
(amortization criteria are reported below) and impairment losses (see accounting policy n).
Expenditure on internally generated goodwill and brands is recognised in the income statement as an
expense as incurred.
(iv)
Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future
economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as
incurred.
(v)
Amortization
Amortization is charged to the income statement on a straight-line basis over the estimated useful lives of
intangible assets unless such lives are indefinite. Goodwill, intangible assets with an indefinite useful life
and intangible assets not yet available to be used are systematically tested for impairment at each balance
sheet date. Other intangible assets are amortised from the date they are available for use. The estimated
useful lives are as follows:
•
rights to use intellectual property (software) 3-5 years
•
trademarks and similar rights 3 years
•
capitalised development costs 5 years
(i)
Trade receivables to third parties
Trade receivables are recognised initially at fair value and subsequently recorded at the amortised cost,
78
using the effective interest method, net of impairment losses related to amounts considered recoverable,
recorded as provision. The estimation of the recoverable amounts is based of future expected cash
flows.
Trade receivables, whose expiry date is within ordinary trade terms, are not discounted.
(j)
Contracts work-in-progress
Contracts work-in-progress are reported in accordance with the progress stage (or completion percentage)
of the works, according to which the costs, revenues, and margin are recognised based on the progress
of the productive activity. The policy adopted by the Group is the completion percentage determined by
applying the “incurred cost” (cost to cost) criterion.
The valuation reflects the best estimate of the contracts made as at the reporting date. Periodically, the
assumptions underlying the evaluations are updated. Any economic effect is recorded in the financial year
in which the updates have been made.
The contract revenues include the payments agreed upon by contract, work changes, price revision,
incentives, and any claims, to the extent that these are likely to be reliably valuated. In particular, the
valuation of claims was guided, based on certain technical and legal analysis, towards the positive results
that could reasonably be achieved from disputes with the customers.
The contracts costs include all the costs that refer directly to the project, the costs that may be attributed to
the contract activity in general and that may be allocated to the said project, in addition to any other costs
that may be specifically charged to the customer based on the contractual clauses.
The contract costs also include the pre-operative costs, which is to say the costs incurred in the initial
phase of the contract before the construction activity is began (costs or preparing, tenders, design costs,
costs for organization and start-up of production, construction site installation costs) and the postoperative costs that are incurred after the contract is closed (removal of the construction site, return of
plant/equipment to base, etc.).
Should the completion of a project be forecast to lead to a loss, this shall be recognised in its entirety in
the financial year in which it may be reasonably expected.
The contracts in progress are set out net of any depreciation fund and/or final losses, as well as the
progress billings for the contract being carried out.
This analysis is carried out on a contract by contract basis: should the difference be positive (due to
contracts in progress greater than the amounts of the progress billings), it is classified among the assets
(contracts work-in-progress); on the other hand, should the difference be negative, it is classified among
the liabilities (liabilities for contracts work-in-progress).
Should the final losses fund for the individual contract exceed the value of the work entered in the assets,
this excess is classified under the provision for risks and charges.
Contracts with payment denominated in foreign currency other than the functional currency (Euro for the
Group) are valuated by converting the accrued share of payments determined based on the completion
percentage method, at the exchange rate ruling at the reporting date for the portion yet not invoiced, and
at the exchange rate ruling at the transaction date for the portion already invoiced.
(k)
Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated
selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
The cost determining method selected as a Group principle is the weighted average cost and includes
expenditure incurred in acquiring the inventories and bringing them to their existing location and
condition. In the case of manufactured inventories and works in progress, cost includes an appropriate
share of overheads based on normal operating capacity.
(l)
Other financial assets
Other financial assets that the Group intends and is able to hold until maturity are recorded at the fair
value of the initial consideration given in exchange plus the related transaction costs. Subsequently, they
are valued on an amortised-cost basis using the original effective interest method.
Financial assets are derecognised when, following their sale or settlement, the Group is no longer
involved in their management and has transferred all risks and rewards of ownership.
(m)
Cash and cash equivalents
Cash and cash equivalents include bank and post current accounts and deposits. Bank overdrafts, advances
79
and other short-term loans which are repayable on demand and form an integral part of the Group’s cash
managements are considered as components of cash surplus or deficit for cash flow statement
purposes.
(n)
Impairment of tangible and intangible assets
The carrying amounts of tangible and intangible are reviewed at each balance sheet date to determine
whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount
is estimated.
Even if there are no indication of impairment, for goodwill, assets that have an indefinite useful life and
intangible assets that are not yet available for use, the recoverable amount is estimated at each balance
sheet date.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount. Impairment losses are recognised in the income statement.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying
amount of any goodwill allocated to cash-generating units (group of units) and then, to reduce the
carrying amount of the other assets in the unit (group of units) on a pro rata basis.
(i)
Calculation of recoverable amount
The recoverable amount of an asset is the greater of their net selling price and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined
for the cash-generating unit to which the asset belongs.
(ii)
Reversal of impairment
An impairment loss, except if in respect of goodwill, is reversed and recorded in the profit and loss
account, only if the reasons for the impairment loss ceases to exist.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortization, if no impairment
loss had been recognised.
(o)
Equity
(i)
Share capital
Share capital includes the subscribed and paid up Company’s share capital.
(ii)
Dividends
Dividends are recognised as a liability in the period in which they are declared.
(iii)
Earnings per share
The calculation of earnings per share is based on the profit attributable to ordinary shareholders times
the weighted average number of ordinary shares of the period. Treasury shares were not included in the
calculation
(iv)
Treasury shares
Treasury shares are entered as a write-down of the shareholder’s equity. The original cost of treasury
shares and the income arising from their subsequent sale, if pertinent, are entered as movements in the
shareholder’s equity.
(p)
Amounts payable to banks and other financial creditors
Amounts payable to banks and other financial creditors are recognised initially at fair value less
attributable transaction costs. Subsequent to initial recognition, they are stated at amortised cost with any
difference between cost and redemption value being recognised in the income statement over the period
of the borrowings or loans on an effective interest basis.
80
(q)
Pension funds and other employee benefits
(i)
Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in the
income statement as incurred.
(ii)
Defined benefit plans
The Group’s net obligation in respect of defined benefit pension plans is calculated separately for each
plan by estimating the amount of future benefit that employees have earned in return for their service in
the current and prior periods; that benefit is discounted to determine its present value, and the fair value
of any plan assets is deducted. The discount rate is the yield at the balance sheet date on AAA credit rated
bonds that have maturity dates approximating to the terms of the Group’s obligations. The calculation is
performed by a qualified actuary using the projected unit credit method.
When the benefits of a plan are improved, the portion of the increased benefit relating to past service by
employees is recognised as an expense in the income statement on a straight-line basis over the average
period until the benefits become vested. To the extent that the benefits vest immediately, the expense is
recognised immediately in the income statement.
All actuarial gains and losses are recognized immediately in the profit and loss account as the Group
decided to not adopt the “corridor approach”.
(iii)
Severance indemnity fund
The severance indemnity fund, compulsory for the Italian Group companies according to law n. 297/1982,
is considered under IFRS a defined benefit plan and therefore it is calculated according to the method
described in the previous paragraph.
(iv)
Other long-term benefits
The Group’s net obligation in respect of other long-term service benefits, other than pension plans, is the
amount of future benefit that employees have earned in return for their service in the current and prior
periods. The obligation is calculated using the projected unit credit method and is discounted to its
present value and the fair value of any related assets is deducted. The discount rate is the yield at the
balance sheet date on AAA credit rated bonds that have maturity dates approximating to the terms of the
Group’s obligations.
(v)
Remuneration through shares
The cost borne to remunerate the members of the Parent Company’s Board of Directors and key staff
through a cash-settled share-based payment plan is determined on the fair value of the options they were
granted on the date of assignment. The system used to determine this fair value takes into account all the
features characterising the options (duration, price and conditions of the financial year, etc.), in addition to
the value of the Permasteelisa stock on the date of allotment, its volatility and the interest rate trend, again
on the date of assignment, consistent with the length of the plan. The adopted options pricing model is
the Monte Carlo method. The cost is acknowledged in the profit and loss account throughout the period
in which the granted rights mature, bearing in mind the best possible estimate of the number of options
that will in fact be exercised.
(r)
Provision for risks and charges
A provision is recognised in the balance sheet when the Group has a present legal or constructive
obligation as a result of a past event, and it is probable that an outflow of economic benefits will be
required to settle the obligation and a reliable estimation of the obligation amount can be done.
Provisions are recorded on the basis of the best estimation of the amount that the Group would pay to
settle the obligation or to transfer it to third parties at the reporting period.
If the effect is material, provisions are determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time value of money and, where appropriate,
the risks specific to the liability.
(s)
Trade payables to third parties
Trade payables are recorded at the amortised cost, using the effective interest method.
Trade payables, whose expiry dates are within the ordinary trade terms, are not discounted.
81
(t)
Other financial liabilities
The other financial liabilities are initially recorded at cost, net of any transaction costs directly attributable
to their creation. Following initial recording, financial liabilities are valued on an amortised-cost basis
using the effective interest method.
Financial liabilities are derecognised when, following their sale or settlement, the Group is no longer
involved in their management and has transferred all risks and rewards of ownership.
(u)
Revenue recognition
(i)
Contracts work-in-progress
As soon as the outcome of a contract can be estimated reliably, contract revenue and expenses are
recognised in the income statement in proportion to the stage of completion of the contract that is
calculated as based on the between costs effectively incurred and total costs included in the contract
budget. An expected loss on a contract is recognised immediately in the income statement.
(ii)
Goods sold and services rendered
Revenue from the sale of goods is recognised in the income statement when the significant risks and
rewards of ownership have been transferred to the buyer. Revenue from services rendered is recognised
in the income statement in proportion to the stage of completion of the transaction at the balance sheet
date. The stage of completion is assessed checking the work performed. No revenue is recognised if there
are significant uncertainties regarding recovery of the consideration due, associated costs or the possible
return of goods.
(v)
Expenses
(i)
Operating lease payments
Payments made under operating leases are recognised in the income statement on a straight-line basis
over the term of the lease. Lease incentives received are recognised in the income statement as an integral
part of the total lease expense.
(ii)
Finance lease payments
Minimum lease payments are apportioned between the finance charge and the reduction of the
outstanding liability. The finance charge is allocated to each period during the lease term so as to produce
a constant periodic rate of interest on the remaining balance of the liability.
(iii)
Net financial expenses
Net financing costs comprise interest payable on borrowings calculated using the effective interest rate
method, dividends, foreign exchange gains and losses except for those related to cash flow hedging
operations that are included in the operating revenues or expenses, and premiums and discounts related
to all forward exchange contracts and swaps on foreign currency.
Interest income is recognised in the income statement as it accrues, using the effective interest method.
Dividends income is recognised in the income statement on the date the entity’s right to receive payments
is established. The interest expense component of finance lease payments is recognised in the income
statement using the effective interest rate method.
(w)
Income tax
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised
in the income statement except to the extent that it relates to items recognised directly in equity, in which
case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous
years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The following temporary differences are not provided for:
goodwill not deductible for tax purposes,
82
the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences
relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable
future.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance
sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be
available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no
longer probable that the related tax benefit will be realised.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as
the liability to pay the related dividend.
Additional income taxes arising from the distribution of dividends are recognised when the liability
associated to the payment of the same dividend is acknowledged. This is justified by the fact that the
Group is able to manage the time plan for the distribution of the reserves and it is quite possible that they
will not be distributed in the foreseeable future.
(x)
Segment reporting
A segment is a distinguishable component of the Group that is engaged either in providing products or
services (business segment), or in providing products or services within a particular economic
environment (geographical segment), which is subject to risks and rewards that are different from those
of other segments.
(y)
Non-current assets held for sale and discontinued operations
Immediately before classification as held for sale, the measurement of the assets (and all assets and
liabilities in a disposal group) is brought up-to-date in accordance with applicable IFRS. Then, on initial
classification as held for sale, non-current assets and disposal groups are recognised at the lower of
carrying amount and fair value less costs to sell.
Impairment losses on initial classification as held for sale are included in profit or loss, even when there is
a revaluation. The same applies to gains and losses on subsequent re-measurement.
A discontinued operation is a component of the Group’s business that represents a separate major line of
business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria
to be classified as held for sale, if earlier. A disposal group that is to be abandoned may also qualify.
(z)
New accounting principles
Accounting principles, amendments and interpretations applied in 2008
On 30 November 2006 IASB issued accounting principle IFRS 8 “Operating Sectors” to be applied as from
1 January 2009 to replace the current IAS 14 “Segment reporting”. The new accounting principle requires
the company to base the disclosures provided under Segment reporting on the criteria used by management
to take its business decisions; as a result it requires the identification of operating sectors based on the
internal reporting that is periodically assessed by the management in order to allocate resources to the various
segments and assess their associated relative performance. This new principle was adopted by the Group
as from 1 January 2009 and will have no consequences on the measurement of the entries stated in the
financial statements, nor will it have any particular impact on the disclosures supplied broken down by
sector and geographical area.
Interpretations applicable from 1 January 2008 that do not affect the Group
On 5 July 2007 IFRIC issued interpretation document IFRIC 14 on IAS 19 – The Limit on a Defined Benefit
Asset, Minimum Funding Requirements and Their Interaction which is retroactively applicable from 1 January
2008. The interpretation supplies the general guidelines on how to determine the threshold amount set by
IAS 19 to acknowledge the assets serving the plans; it also supplies an explanation on the consequences
on accounting caused by any hedging clause in the plan. The adoption of this interpretation has
not led to the recognition of any accounting effects as the case studies supplied are not significant for
83
the Group.
On 13 October 2008 IASB issued an amendment to IAS 39 - Financial instruments: Recognition and
Measurement and to IFRS 7 – Financial instruments: additional disclosures that in rare circumstances
enable the reclassification of some financial assets, other than derivatives, from the accounting class
“measured at fair value through profit and loss”.
The amendment also allows the transfer of loans and receivables from the “available-for-sale” class to the
accounting class “held to maturity”, if the company intends and is able to hold said instruments for a certain
period in the future. The amendment is applicable from 1 July 2008. However, it adoption has not led to
the recognition of any accounting effects in these financial statements since the case studies supplied are
not significant for the Group.
Interpretation IFRIC 12 – Service Concession Arrangements (applicable as from 1 January 2008 and not yet
endorsed by the European Union) covers events and examples that are not pertinent for the Group.
Accounting principles, amendments and interpretations that are not applicable, as yet
On 29 March 2007, IASB issued the revised version of IAS 23 Borrowing costs that is applicable as from
1 January 2009. In the new version of the principle it is now prohibited to account in the profit and loss
account for these borrowing costs incurred against assets that normally take some time to be ready for
use or for sale. The principle will be applicable in the future to borrowing costs associated to capitalised
assets as from 1 January 2009.
On 6 September 2007, IASB issued the revised version of IAS 1 – Presentation of financial statements
applicable as from 1 January 2009. The new version requires all variations arising from transactions with
shareholders to be presented in an overview of the variation in the net shareholder’s equity. All transactions
arising with third parties (comprehensive income) must, on the contrary, be recorded in a single overview
of the comprehensive income or in two separate prospectuses (profit and loss account and comprehensive
income). In any case, the variations arising from transactions with third parties cannot be acknowledged
in the overview of the variation of the net shareholder’s equity. The adoption of this principle will not bear
any consequences on the measurement of the entries in the financial statements.
On 10 January 2008, IASB issued the revised version of IFRS 3 – Business combinations, and emended IAS
27 – Consolidated and separate financial statements. The main changes to IFRS 3 are that there is no
longer the obligation to measure subsidiaries’ individual assets and liabilities at fair value in every subsequent
acquisition, in the event of a gradual acquisition of subsidiary companies. In these cases, the goodwill
is determined as the difference between the value of the equity just before the acquisition, the amount
relating to the transaction and the value of the net assets taken over. In addition, if the company does not
purchase 100% of the equity, the share of net equity ascribable to minority can be measured either at fair
value, or using the method already envisaged in IFRS 3. The reviewed version of the principle also envisages
the entry into the profit and loss account of all costs associated to the corporate aggregation and the
recognition, on the date of the acquisition, of the liabilities for payments subject to conditions.
In the amendment to IAS 27, IASB has established that the changes in the shareholding that do not lead
to the loss of control must be treated as equity transactions, and as a result must be disclosed in the net
equity. The amendment also determines that if a parent company loses control over a subsidiary, while
continuing to hold equity in the same company, the remaining equity is entered at fair value and any profit
or loss arising from the assignment of the subsidiary must be disclosed in the profit and loss account.
Finally, the amendment to IAS 27 requires all losses assignable to minorities to be allocated to the third
party net equity, even if said amounts exceed their owned share in the subsidiary. These new rules are
applicable as from 1 January 2010. When these financial statements were drawn up, the competent bodies
of the European Union had not yet completed the certification procedure needed to apply the principle and
the amendment.
On 17 January 2008, IASB issued the revised version of IFRS 2 – Share based payment whereby, for
measuring the share-based payment instruments, the satisfaction of service conditions and performance
conditions alone are considered to be the criteria to assess whether the remuneration plan has come to
maturity. The amendment also informs that if the plan is cancelled, the same accounting principles have
to be applied, regardless of whether it is ascribable to the company or to the counterpart.
84
The amendment will be applied retroactively by the Group from 1 January 2009; the Group considers that
the adoption of this amendment will not have any significant consequences.
On 22 May 2008, IASB issued a series of changes to the IFRS (“improvement”); those quoted are the
variations that IASB considers will require a change in the way in which entries are presented, recognised
and measured in the financial statements. We have not included those that will simply require changes in
definition or editorial changes that will have a minimum impact in accounting terms or that refer to issues
that are not pertinent for the Group.
- IFRS 5 – Non-current assets held for sale and discontinued operations: to be implemented as from 1
January 2010 for future periods, it states that if a company is currently engaged in an assignment plan that
will lead to the loss of control over a subsidiary, all the subsidiary’s assets and liabilities must be
reclassified under the assets held for sale, even if the company will continue to hold a minority interest in
the subsidiary after the sale.
- IAS 1 – Presentation of financial statements (reviewed in 2007): the change is applicable from 1 January
2009 to future periods and requires that the assets and liabilities arising from derivative tools that are
not held for negotiation purposes have to be classified in the financial statements making a distinction
between current and non-current assets and liabilities. The adoption of this amendment will have no
consequences in terms of the measurement of the financial statement entries.
- IAS 19 – Employee benefits: the amendment is applicable as from 1 January 2009 to future variations in
benefits occurring after the date of implementation. It clarifies the definitions of costs/income from past
work relationships and sets out that if a plan is cut the amount to be recorded immediately in the profit and
loss account is the amount of benefit reduction with reference to future period. The effects of a reduction
arising from past employee relationships is to be considered a negative cost item associated to past work
relationships. The Board has also reviewed the definition of short and long term benefits and has changed
the definition of the return on assets, stating that this item must be entered net of any administrative charges
that were not already included in the value of the security.
- IAS 23 – Borrowing costs: the change is to be implemented from 1 January 2009 and has reviewed the
definition of borrowing costs.
- IAS 28 – Investments in associates: the change is to be applied (even only for future occurrences) from
1 January 2009 and sets out that in the event of equity investments measured according to the equity
method, any loss in value should not be ascribed to individual assets (and more specifically to the goodwill)
that contribute to the book value of the equity investments, but to the overall value of the associate. As a
result, if there are the conditions for a recovery of said value, this recovery must be fully acknowledged.
- IAS 36 – Impairment of assets: the change is to be applied from 1 January 2009 and requires additional
disclosures if a company determines the recoverable value of a cash generating unit using the value in
use method.
On 3 July 2008, IFRIC issued interpretation IFRIC 16 – Hedges of a net investment in a foreign operation
that eliminates the option of resorting to hedge accounting to hedge translation differences between the
currency used by the foreign subsidiary and the currency in which the Consolidated Financial Statements
are presented. The interpretation clarifies that in the event of hedges of a net investment in a foreign operation,
the hedging tool can be held by any company in the Group and that, in the event of the assignment of the
interests, the value to be reclassified from the net equity to the profit and loss account is assessed resorting
to IAS 21 – Changes in foreign exchange rate. This interpretation is applicable from 1 January 2009. When
these financial statements were drawn up, the competent bodies of the European Union had not yet
completed the certification procedure required for its application.
On 31 July 2008, IASB issued an amendment to IAS 39 – Financial instruments: recognition and measurement
that has to be applied retroactively from 1 January 2010. The amendment clarifies the application of the
principle to define the hedged instrument in particular circumstances. When these financial statements
were drawn up, the competent bodies of the European Union had not yet completed the certification
procedure required for its application.
The Group is also assessing the possible impact of the presentation of IFRIC 15 – Agreements for the
construction of real estate (to be implemented on 1 January 2009 but not yet certified by the European
Union).
85
Accounting principles, amendments and interpretations not applicable to the Group
It is worth mentioning that the following amendments and interpretations were issued on issues and
cases that are not pertinent for the Group at the time of publishing these financial statements:
- Improvement to IAS 16 – Property, plant and equipment: changes must be retroactively implemented
from 1 January 2009. It sets out that companies whose core business is renting have to reclassify to inventory
the assets that cease to be rented and have been earmarked for sale; as a result, the amounts paid for
their assignment are to be recognised as income. The amounts paid to build or purchase estate to rent to
others, in addition to the amounts collected from the future sale of said property constitute, in the Statement
of cash flow, cash flows from operations (not investments). The adoption of this change will have no
consequences on the measurement of the entries in the financial statements.
- IAS 20 – Accounting for government grants and disclosure of government assistance: the change is to
be applied to future occurrences from 1 January 2009. It states that the benefits arising from state loans
granted at an interest rate lower than the market rate must be treated as government assistance and
follow the recognition rules of IAS 20.
- Improvement to IAS 38 – Intangible assets: this change is to be implemented retroactively from 1 January
2009 and states the recognition in the profit and loss account of promotional and advertising costs. It also
sets out that if the company bears costs that will provide future economic benefits not recorded under
Intangible assets, these benefits must be entered to the profit and loss account as soon as the company
has the right to access said assets, if assets are purchased, or when the service is provided, if services
are purchased. The principle has been changed also to enable companies to use the units-of-work-performed
method to determine the amortization of Intangible assets with a finite useful life. On the date these
financial statements were issued, the Group was measuring the effects arising from the adoption of this
amendment.
- Improvement to IAS 28 – Investments in associates, and IAS 31 – Interests in joint ventures: these
amendments are to be implemented from 1 January 2009 and state that additional disclosures must be
supplied also for investments in associates and joint venture assessed at fair value based on IAS 39. As a
result, changes were made to IFRS 7 – Financial instruments: disclosures and IAS 32 – Financial
instruments: presentation.
- Improvement to IAS 29 – Financial reporting in hyperinflationary economies: the previous wording of the
standard failed to reflect the fact that some assets and liabilities in the financial statements may or must
be measured based on a current value rather than a historical value. This amendment to the standard is to
be applied to future occurrences from 1 January 2009.
- Improvement to IAS 39 – Financial Instruments: recognition and measurement: the amendment is to be
implemented retroactively from 1 January 2009. It clarifies how the new actual rate of return on a financial
instrument should be recognised after a fair value hedging transaction has been settled; it clarifies also
that the prohibition to reclassify financial instruments by adjusting their fair value in the profit and loss
account does not apply to derivative financial instruments, which can no longer be qualified as hedging
instruments or which become hedging instruments. Finally, to avoid inconsistencies with the new IFRS 8 –
Operating sectors any reference to the designation of a sector-specific hedging instrument is eliminated.
- Improvement to IAS 40 – Investment property: this amendment, to be applied to future occurrences from
1 January 2009, specifies that investment property under construction falls within the scope of IAS 40,
rather than IAS 16.
- On 14 February 2008 IASB issued an amendment to 32 – Financial instruments: presentation and to IAS
1 – Presentation of financial statements: puttable instruments and obligations arising on liquidation. This
amendment requires companies to classify puttable financial instruments as net equity instruments, and
the same holds true for financial instruments that impose an obligation on the company to deliver a share
of equity investments in the company to a third party. This amendment is to be applied to future occurrences
from 1 January 2009.
- IFRIC 13 – Customer Loyalty Programmes (to be applied from 1 January 2009).
86
Notes to the Consolidated Financial Statements
1.
Segment reporting
Segment information is presented in respect of the Group’s business and geographical segments. The
primary format, business segments, is based on the Group’s management and internal reporting
structure.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis. Unallocated items comprise mainly cash and cash equivalents,
income-earning assets and related revenues, interest-bearing loans, borrowings and related expenses, tax
receivables and payables, deferred tax assets and liabilities and related income tax.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are
expected to be used for more than one period.
Business segments
The Group comprises the following main business segments:
•
•
•
•
Curtain wall
Interiors
Gates
Other.
Inter-segment revenues are not significant and therefore they have not been included in the table reported
below.
All segments relate to current Group assets.
Geographical segments
The above business segments are managed on a worldwide basis, but operate in the geographical areas
showed in the following table.
In presenting information on the basis of geographical segments, segment revenue is based on the
geographical location of customers. Segment assets are based on the geographical location of the
assets.
87
88
2008
183
139
0
1,559
(671)
(944)
378
103
0
1,984
896
632
8,593 10,184
0
0
0
0
0
0
2008
Unallocated assets
Total liabilities
Severance indemnity fund
Provision for risks and charges
Excess of progress billings work-in-progress
and advances from customers
Trade payables from third parties and from not
consolidated subsidiaries
Other current liabilities
Unallocated liabilities
Total asse ts
202,928
15,193
224,153
30,821
940
49,912
189,054
25,186
173,135
41,284
3,126
32,225
900
48
15,996
5 1 0,6 8 9 3 8 9,9 2 9 5 2,2 9 5
2,374
38,276
135,039
2,228
41,561
252,481
5 3 9,7 4 1 5 2 4,7 2 2 8 4,5 7 5
18,918
77,847
0
209,836
19,071
71,851
146
193,699
3 7,3 9 1
2,477
29,486
903
16
4,509
6 4,5 2 3
635
36,264
1,4 4 2
125
656
0
629
32
2,1 8 9
0
413
1,4 2 9
121
671
0
619
18
1,8 1 8
0
506
4,1 2 1
445
3,326
311
20
19
5,8 0 5
52
3,872
3,1 5 5
391
2,503
220
0
41
6,6 6 1
61
4,135
0
0
0
0
2007
1,137,040 1,140,188
2008
0
0
0
(8,478)
9 0,5 1 7
6 4,8 8 5
0
0
0
0
0
0
0
0
102,046
8 1 1.1 1 7
44,980
242,570
209,342
3,439
42,258
268,528
6 9 9,7 7 0
28,175
267,866
221,714
3,497
38,911
139,607
6 9 9,7 7 0
178,807
8 1 1,1 1 7
15,889
243,833
31,813
278,350
20,430
80,489
0
237,083
9,1 0 9
35,015
0
(11,603)
(258)
(14,045)
(5,865)
6 2,0 6 5
4 0,8 8 0
0 1,137,040 1,140,188
2007
20,317
74,681
146
227,003
0
39
0
1,273
65
46
2007
8,593 10,184
2008
Consolida ted
Intangible assets
Tangible assets
Financial assets
Contracts work-in progress and other
inventories
Trade receivables from third parties and from
not consolidated subsidiaries
Other current assets
5
159
0
1,612
(171)
(161)
4,036
4,036
2007
Elimina tions
4 4,8 5 2
1,134
2,500
0
23,990
10,809
10,114
4,132
4,132
2008
O th er
Profit/(loss) for the period
1,058
2,532
0
30,133
2,899
2,190
193,113
193,113
2007
G a tes
56,407
2,343
(3,652)
(229)
(10,017)
50,295
30,088
932,855 168,630
932,855 168,630
2007
Interiors
Operating result before non recurring costs
Non recurring costs/revenues
Net financial expenses
Revaluation/write-downs of equity investments
Income tax expense
Unallocated expenses
88,460
63,800
955,685
Total revenues
S egment result be fore depreciation and
amortiz a tion and impairment losses
S egment result
955,685
2008
Curtain walls
Revenues from external customers
Inter-segment revenues
In thousands of Euro
Business Segments
89
13,495
1,789
All segments refer to the Group's continuous activities.
Provision for risks and charges
Bad debts provision
Impairment losses reversed
0
11,164
Depreciation and amortization
Impairment losses
12,858
Capital expenditure
9,198
1,733
424
10,585
12,821
Curtain walls
0
69
0
709
670
0
166
0
695
1,159
Interiors
3
0
(12)
191
G a tes
3
14
0
16
31
20
110
0
252
95
O th er
26
0
57
0
264
Elimina tions
1 3.5 1 8
1.9 6 8
0
1 2.1 1 3
1 3.8 1 4
9,2 0 1
1,9 7 0
424
1 1,5 6 0
1 4,0 3 7
Consolida ted
Geographical segments
R e v enues from
e x ternal customers
In thousands of Euro
S egment asse ts
C apital
e xpenditure
2008
2007
2008
2007
2008
2007
USA + Canada
291,554
347,716
116,090
127,482
1,340
5,248
Benelux
France
Germany
Italy
Poland
Spain
Switzerland
Uk
Ireland
88,675
29,521
61,907
43,313
249
27,849
9,836
215,315
37,406
99,239
47,800
58,769
59,218
223
23,392
16,805
234,347
30,829
105,793
19,323
59,633
108,826
1,860
18,998
372
25,678
9,427
110,334
25,366
45,918
113,792
2,124
15,465
199
31,928
5,646
1,084
60
2,768
4,481
15
32
18
88
21
1,512
97
1,554
2,860
3
288
31
80
90
Other European Countries (*)
11,191
3,667
0
0
Dubai
Qatar
45,811
23,535
16,870
11,501
22,721
12,670
12,212
8,111
1,335
127
409
97
Australia
China
Japan
Hong Kong
India
Korea
Russia
Singapore
Taiwan
Thailand
Macau
34,111
27,842
18,758
54,205
15,195
455
1,783
34,843
1,606
903
61,127
29,861
22,574
12,090
73,350
13,654
191
45
24,561
3,258
2,607
6,604
9,552
12,934
9,162
40,408
9,767
51
156
125
24,282
179
12,375
11,989
12,922
9,775
3,351
41,024
7,080
54
0
8,254
1,288
9,862
5,216
527
3
176
259
16
595
291
0
0
137
0
164
41
50
1,017
220
321
33
88
0
0
178,807
102,046
Other Asiatic Countries
Not allocated
Total
1,1 3 7, 0 4 0 1,1 4 0,1 8 8
8 1 1,1 1 7 6 9 9,7 7 0
0
1,043
509
49
1 3,8 1 4 1 4,0 3 6
(*) 10,304 Euro in Georgia in 2008
2.
Assets classified as held for sale
As at 31 December 2008, there were no non-current assets classified as held for sale in the Group.
3.
Acquisitions of subsidiaries
No acquisitions incurred during the period. Between June and December 2008, in the framework of the
de-listing of the subsidiary Permasteelisa Pacific Holdings Ltd, the Group nevertheless purchased 8.44% of
this company’s shares, having paid out some Euro 5,520 thousand: this value is basically in line with the
part of net equity referring to this amount.
90
4.
Other operating income
In thousands of Euro
2008
2007
Contributions
Costs recovery
Gains on tangible and intangible assets disposal
Rental income
Insurance indemnities
Write off of prior years
Sale of scrap
Other revenues
477
82
67
965
79
2,569
3,028
1,748
172
87
134
968
833
1,268
2,570
2,310
9,0 1 5
8,3 4 2
5.
Raw materials and consumables used and services expenses and use of
third party assets
With reference to the Group’s activity, the comparison between periods of the value of raw materials and
consumables used and services expenses and use of third party assets is not very significant as it depends
on the different way costs are made up for the job orders executed in each period.
The way the item raw materials and consumables used affects the total operating revenues has basically
remained unchanged while the percentage impact of the item services expenses and use of third party
assets over the total operating revenues fell from previous period from 36.5% to 33.3%.
It is worth highlighting that the item services expenses and use of third party assets includes remuneration
due to the auditors amounting to Euro 183 thousand (Euro 165 thousand in 2007) and costs relating to the
consulting agreement signed with the former Managing Director Giancarlo Iovino after leaving the Group:
the latter is a two-year contract effective from 1 February 2008 for Euro 120 thousand for each year to be
paid in anticipated six-monthly instalments for Euro 60 thousand that reach maturity on 15 February and
15 August each year in 2008 and 2009.
6.
Personnel expenses
In thousands of Euro
Wages and salaries
Social contributions
Contributions to defined contribution plans
Increase in liability for severance indemnities fund
Severance indemnities assigned to pension funds or Inps
Increase in liability for defined benefit plans
Increase in liability for other long-term benefits
Termination benefits
Other personnel costs
2008
2007
193,494
29,820
36
357
1,837
859
82
19
11,280
188,792
28,233
144
383
1,332
(264)
3
179
5,322
23 7, 7 8 4
22 4,1 2 4
Overall, the impact of this item on the operating revenues has increased by approximately 1.5%.
This item includes non-recurring costs for Euro 835 thousand, of which Euro 485 thousand paid to the
former Managing Director Giancarlo Iovino and Euro 350 thousand to a former executive with a strategic
responsibilities in the Company who left the Group respectively at the end of January 2008 and end of
April 2008.
The item Other personnel costs increased remarkably compared to the balance in the previous period as
a result of the measurement of costs borne in association to the incentives plan that was first introduced
in 2007.
The average staff count for the period was 6,049 units (2007: 5,656).
91
7.
Depreciation, amortization and impairment losses
In thousands of Euro
2008
2007
10,624
1,489
0
10,364
1,196
424
12,1 1 3
11,9 8 4
In thousands of Euro
2008
2007
Bad debts provision
1,968
1,970
1,9 6 8
1,9 7 0
Intangible assets amortization
Tangible assets depreciation
Impairment losses
8.
Bad debts provision
The write-downs for the period have not changed significantly compared to the same period in the
previous financial year.
9.
Provision for risks and charges
In thousands of Euro
2008
2007
Provision for disputes and legal actions
Provision for warranties
Provision for jobs
Other provisions
2,200
6,482
4,828
8
1,531
3,291
4,363
16
13,5 1 8
9,2 0 1
In thousands of Euro
2008
2007
Other taxes
Custom duties
Losses on tangible and intangible assets disposal
3,933
301
104
4,376
877
299
Trade receivables written-off
Other expenses
1,180
980
213
498
6,4 9 8
6,2 6 3
10.
11.
Other operating expenses
Gain (loss) on the disposal of investments
These figures refer exclusively to the income earned from the disposal of the company Belgo Metal N.V.
in April 2008. It was sold for Euro 15.5 million: Euro 9 million were settled on signing the deed of disposal
and the remaining amount was settled in three instalments for Euro 2.5 million, Euro 2 million and Euro 2
million respectively, falling due on 31 December 2008, 31 December 2009 and 31 December 2010.
As the company was sold in April 2008, its profit and loss account was consolidated in the first quarter of
2008 and the main figures are provided here below:
-
operating revenues Euro 9,246 thousand (2007: Euro 58,735 thousand)
92
operating expenses: Euro 9,996 thousand (2007: Euro 57,499 thousand)
operating result: loss for Euro 750 thousand (2007: profit for Euro 1,236 thousand)
financial income and expenses: income for Euro 73 thousand (2007: expenses for Euro 225
thousand)
result for the period: loss for Euro 680 thousand (2007: profit for Euro 851 thousand)
On the date of its disposal, Belgo Metal N.V. had recorded the following assets and liabilities:
tangible and intangible assets: Euro 6,111 thousand
equity investments: Euro 97 thousand
inventories and contracts work-in-progress: Euro 5,903 thousand
trade receivables: Euro 13,890 thousand
trade receivables from Group subsidiaries: Euro 3,299 thousand
other assets: Euro 886 thousand
cash and cash equivalents, net: Euro 42 thousand
trade payables: Euro 10,062 thousand
trade payables to Group subsidiaries: Euro 481 thousand
excess of progress billings over work-in-progress and advances from customers: Euro
5,307 thousand
other liabilities: Euro 1,647 thousand
We wish to highlight that the disposal agreement includes a purchase option for Permasteelisa S.p.A.
should the purchaser decide to sell Belgo Metal N.V. within three years from the effective date of the contract.
The sale of Belgo Metal N.V. has not been viewed by the Group as the disposal of a crucial independent
branch of activities or geographical area: as a result, the values relating to these discontinued operations
have not been stated in a dedicated section in the profit and loss account.
-
12.
Net financial income (expenses)
2008
2007
1
0
52
4
3,250
47,503
130
3,034
1,715
17,112
0
1,107
53, 9 7 0
19,9 3 8
2
5
2,004
49,433
328
8
611
105
468
4,655
8
4,545
19,155
0
9
656
611
772
5,751
37
Total financial expenses
57, 6 2 2
31,5 4 1
Total net financial expenses
(3,6 5 2 )
(1 1, 6 0 3 )
In thousands of Euro
Dividends and other income
Interest income from not consolidated subsidiaries and
associated companies
Interest income
Exchange rate gains
Commodities gains
Hedging incomes and other commissions
Total financial income
Interest expenses from not consolidated subsidiaries and
associated companies
Bank interests expenses
Exchange rate losses
Losses on commodities
Lease interests expenses
Bank charges
Bond commissions
Other interests
Hedging expenses
Other commissions
The remarkable decrease in net financial expenses is the main result of the Group’s improved net financial
position. The exchange rate loss for Euro 1,930 thousand basically mirrors the effects of the anticipated
closure of exchange rate hedging resulting from the loss of the underlying hedged item as a result of the
financial crisis.
Please note that the profit and losses on exchange shown in the table respectively include a profit for Euro
18,786 thousand (2007: Euro 5,374 thousand) arising from the end-of-year valuation and losses for Euro
17,808 thousand (2007: Euro 8,394 thousand) arising from the end-of-year valuation.
93
13.
Revaluation of equity investments
In thousands of Euro
2008
2007
Alcom S.r.l.
0
Gartner Management Gmbh
Ontario Limited - winding up
0
3
3
8
2
0
0
6
10
Ri.Isa d.o.o
Revaluations of equity investments are the consequence of the fair value valuation of equity investments
in non-consolidated subsidiaries and of the valuation based on the net equity method of associated
companies.
14.
Write-downs of equity investments
In thousands of Euro
Gartner Gesellschaft fur Konstruktion und Montageleistungen Gmbh
Gartner Israel Ltd.
Gartner Polka Sp.zo.o
Ri.Isa d.o.o
Virtual City S.r.l. - winding up
2008
2007
3
214
18
0
0
0
85
15
165
3
23 5
26 8
Write-downs of equity investments are the consequence of the fair value valuation of equity investments
in non-consolidated subsidiaries and of the valuation based on the net equity method of associated
companies.
15.
Income tax expense
Taxes recognised in the profit and loss account
In thousands of Euro
Current ta x e xpense
Current year
Adjustments for prior years (*)
De ferred ta x e xpense
Origination and reversal of temporary differences
Ordinary tax rates change
Irap (regional corporate tax) rate change
Adjustments for prior years (**)
Tax losses
Total income ta x e xpense in the profi t and loss account
(*) includes appropriations for tax checks and inspections.
(**) includes write-downs or advance taxes booked to previous periods.
94
2008
2007
11,954
(1,495)
18,026
1,728
10,459
19,754
(933)
4
0
41
446
(6,009)
553
3
751
(1,007)
(442)
(5,709)
1 0,0 1 7
1 4,0 4 5
Reconciliation of effective tax rate
In thousands of Euro
2008
Profit before tax
2008
2007
5 4,8 6 9
Income tax using the domestic corporation tax rate (IRES)
Effect of tax rates in foreign jurisdictions
Non-deductible expenses
Effect of majored tax rate on specific gains
Tax exempt revenues
Tax benefits not recognised in the income statement (tax losses)
Tax benefits recognised but not utilised
Effect of tax benefits utilised not recognized in prior years
Changes in tax rate
Write down of deferred tax assets recognized in prior years
Under /(over) provided in prior years
Irap (Italian Group companies)
Other taxes
Provisions for tax checks and inspections
Other
2007
2 3,1 5 4
27.5%
-5%
1%
0%
-4%
4%
-4%
-2%
0%
0%
15,089
(2,667)
604
0
(1,943)
2,285
(2,175)
(1,177)
4
41
33%
-3%
6%
0%
-6%
18%
-4%
-5%
2%
4%
7,641
(768)
1,414
90
(1,370)
4,193
(1,007)
(1,267)
553
904
-3%
(1,495)
-2%
(535)
3%
0%
0%
1,608
39
0
8%
2%
9%
1,794
429
2,110
-0%
(196)
-1%
(136)
18%
1 0,0 1 7
61%
1 4,0 4 5
The remarkable drop in the tax expense results from a variety of factors: higher sales were recorded in
areas where the tax rate is zero (Dubai) or very low (Qatar and Hong Kong); provisions for tax checks were
released as they were found to be overestimated based on the determination made in previous years;
where positive results made that possible - unlike in previous years - provisions were made for pre-paid
taxes in the USA in accordance with the International Accounting Standards; in general the tax rate was
lower in Europe.
95
96
Intangible assets
920
15,700
(1,967)
16,747
(1,947)
16,747
(633)
19,327
345
(731)
(289)
(2)
1,920
1,674
762
246
1
(30)
634
(15)
1,674
(767)
(294)
634
1,316
445
695
Rights to use
intellec tual
property
709
113
106
Goodwill Dev elopment
costs
34
(20)
50
4
(1)
50
(18)
69
Licences and
trade -m arks
21
1,410
(449)
834
988
16
(37)
834
(117)
(1)
149
840
O th er intangible
assets
908
(254)
491
671
491
(403)
(786)
1,098
582
Intangible asse ts
in progress and
adv ances
(*) entry of advance taxes associated to the reduction of the goodwill, for fiscal losses borne before the acquisition of the US company formerly called Glassalum
Balance at 31 December 2008
Balance at 1 January 2008
Acquisitions
Other increases
Disposals
Deconsolidation of Belgo Metal N.V.
Other decreases
Amortization
IAS 12 effect
Impairment losses
Exchange rate differences on translation
Balance at 31 December 2007
Balance at 1 January 2007
Acquisitions
Other increases
Disposals
Other decreases
Amortization
IAS 12 effect
Impairment losses
Exchange rate differences on translation
In thousands of Euro
16.
939
20,317
20,430
2,425
262
1
(30)
(254)
(1,489)
(1,967)
0
(2,000)
20,430
22,668
1,980
801
(1)
(786)
(1,196)
(633)
(403)
Total
97
15,700
345
2,407
(2,062)
634
16,747
23,010
(7,310)
2,621
(1,987)
634
16,747
23,657
(6,910)
2,621
(1,987)
709
19,327
23,657
(6,910)
2,412
(1,703)
26,344
(7,017)
1,920
9,860
(7,940)
1,674
9,485
(7,811)
1,674
9,485
(7,811)
1,316
9,280
(7,964)
34
848
(814)
50
824
(774)
50
824
(774)
69
184
(115)
1,410
4,198
(2,788)
834
1,167
(333)
834
1,167
(333)
149
366
(217)
908
908
491
491
0
491
491
1,098
1,098
0
20,317
41,231
(20,914)
20,430
38,245
(17,815)
20,430
38,245
(17,815)
22,668
39,684
(17,016)
As to development costs, please note that the overall costs entered to the profit and loss account amount to Euro 2,041 thousand (2007: 1,716 thousand)
of which Euro 289 thousand (2007: 294 thousand) for depreciation and amortization associated to costs capitalised under “Development Costs”.
Note that the PFM project is also considered as a development activity. In 2008 the amount entered under “Intangible assets in progress and advances”
was Euro 456 thousand.
The increase under “Other intangible assets” is mainly result of the three-year non-competition agreement entered into with the former Managing
Director Giancarlo Iovino as from 1 February 2008 after his resignations.
The increases for the period mainly refer to the software category under the item “Industrial and other patent rights” and are associate to the cost for
new licences purchased for the 3D project as a follow-up of the expansion of ERP SAP in Asia and the US and the construction of the intranet portal.
The item Other increases in the same area include the SAP licenses purchased in 2007 and installed this year in Asia and the US.
The main increases recorded under “Intangible assets in progress and advances” stem from the PFM project (Permasteelisa Moving Forward), managed
with AUTODESK, to create an integrated product planning and engineering tool; it also includes new management developments in the ERP SAP
software that are expected to be completed in 2009.
Cost
Accumulated amortization
At 31 December 2008 attributable to:
Cost
Accumulated amortization
At 1 January 2008 attributable to:
Cost
Accumulated amortization
At 31 December 2007 attributable to:
Cost
Accumulated amortization
At 1 January 2007 attributable to:
Impairment losses and subsequent reversal
No remarkable depreciation events have occurred as a result of which the Group was forced to measure
the recoverable value of Intangible assets.
The loss of value for Euro 403 thousand for financial year 2007 refers to the Vacusteel development project
for which Euro 403 thousand were entered under Intangible assets not yet in progress as at 31 December
2006. It emerged from the impairment test performed compliant to the requirements of IAS 36 for assets
that are not yet available for use, that at the end of financial year 2007 it was necessary to depreciate assets
for the full amount thereof. The depreciation regarded the “curtain walls” business area.
Impairment tests for cash-generating units containing goodwill
The following units have significant carrying amounts of goodwill:
In thousands of Euro
Permasteelisa North America (ex Glassalum)
Other units without significant goodwill
2008
2007
14,461
15,530
1,239
1,217
1 5,7 0 0
1 6,7 4 7
The estimated recoverable value of the “cash-generating unit” ex Glassalum was calculated based on the
current value, bearing in mind the merger of all the US Companies, with the exception of Tower Installation
Llc, into one single entity called Permasteelisa North America Corp. that became effective as from 29
February 2008.
The measurement referred to the cash flow projections based on actual operating results and on the
management plan for 2009-2011, drawn up based on the historical trends and on the strategies set for the
same period. The cash flows for the period after 2009 were extrapolated considering an 0% growth rate, as
was considered both appropriate and prudential considering the reference business area and the
current economic scenario caused by the crisis. Future cash flows discounting has been made based on
the weighted average cost of capital (WACC) of 10.5%, based on the following parameters:
a)
b)
c)
d)
e)
f)
risk free rate of return:
market premium:
beta levered:
tax rate:
cost of debt:
debt/equity ratio:
2.24%
6%
0.844
41.00%
4.24%
20/80
Risk free rate of return refers to most actively traded 10 year T-Bond.
Cost of debt has been calculated as risk free rate of return increased of 200 basis points (net of tax
effect).
On the basis of the impairment test performed, the carrying amount of the goodwill related to the “cashgenerating unit” ex Glassalum is fully recoverable.
Please note that the decreasing variation for Euro 1,069 thousand of ex Glassalum goodwill against the
previous period arises from the Euro 898 thousand increase from translation differences in the translation
of the subsidiary company’s financial statements and a decrease for Euro 1,967 thousand in the advance
taxes entry directly reducing the goodwill entry compliant to IAS 12.
98
99
Tangible assets
(3,792)
(346)
(2,400)
179
100
(642)
18,002
(4,390)
(2,306)
42,729
4,260
429
(15)
(175)
607
338
(5)
(5,569)
Acquisitions
Other increases
Disposals
Other decreases
Depreciation
Impairment losses
Exchange rate differences on translation
Acquisitions
Balance at 31 December 2008
17,793
50,306
17,793
(98)
(182)
50,306
5,449
16,580
Plant and
machinery
405
52,304
L and and buildings
Balance at 1 January 2008
Balance at 31 December 2007
Acquisitions
Other increases
Transfer to non-current assets held for sale
Disposals
Other decreases
Depreciation
Impairment losses
Balance at 1 January 2007
In thousands of Euro
17.
5,121
152
(1,322)
2,416
182
(74)
3,767
3,767
(161)
(1,284)
1,443
3
(316)
4,082
Equipments
7,997
37
(81)
(337)
(745)
(2,606)
3,317
8,412
8,412
(2,888)
(21)
(350)
4,538
49
(197)
7,281
O th er tangible
assets
832
43
(211)
789
211
211
(11)
(60)
(49)
221
110
Tangible asse ts in
progress and
adv ances
74,681
80,489
11,389
949
(175)
(6,081)
(956)
(10,624)
0
(310)
80,489
80,357
12,056
52
(853)
(49)
(10,364)
(21)
(689)
Total
100
Cost
Accumulated depreciation
At 31 December 2008, attributable to:
Cost
Accumulated depreciation
At 1 January 2008 attributable to:
Cost
Accumulated depreciation
55,498
(37,496)
18,002
42,729
17,793
50.306
90,643
(47,914)
55,408
(37,615)
17,793
50,306
96,865
(46,559)
55,408
(37,615)
52,304
96,865
(46,559)
16,580
(44,164)
Accumulated depreciation
At 31 December 2007, attributable to:
(34,879)
96,468
51,459
18,002
Cost
At 1 January 2007 attributable to:
42,729
At 31 December 2008
17,793
17,793
50,306
50,306
16,580
52,304
At 1 January 2008
At 31 December 2007
At 1 January 2007
Carrying amounts
5,121
22,780
(17,659)
3,767
20,816
(17,049)
3,767
20,816
(17,049)
4,082
(16,916)
20,998
5,121
3,767
3,767
4,082
7,997
30,378
(22,381)
8,412
31,689
(23,277)
8,412
31,689
(23,277)
7,281
(24,141)
31,422
7,997
8,412
8,412
7,281
832
832
211
211
0
211
211
110
0
110
832
211
211
110
74,681
200,131
(125,450)
80,489
204,989
(124,500)
80,489
204,989
(124,500)
80,357
200,457
(120,100)
74,681
80,489
80,489
80,357
The most important increases were recorded in Germany (approximately Euro 2.7 million), in Italy
(approximately Euro 2.3 million), in Dubai (approximately Euro 1.3 million), in the USA (approximately
Euro 1.2 million), in Holland (approximately Euro 1 million) and Hong Kong (approximately Euro 1 million)
resulting both from an increased manufacturing capacity and the replacement and renewal of plant and
equipment.
No significant asset disposals occurred during the period.
Impairment losses and subsequent reversal
At the reporting date there have not been particular indications of impairment losses related to tangible
assets.
Leased plant and machinery
The Group has no significant leased plant and machinery; please refer to note 32 related to payables to
banks and other financial creditors.
As at 31 December 2008 the Group holds leased plant and machinery for an amount of Euro 256 thousand
(2007: Euro 235 thousand).
Tangible assets in progress
As at 31 December 2008 the Group have no significant tangible assets in progress.
Other information
As at 31 December 2008 the Group doesn’t have mortgages on buildings and other tangible assets, please
refer to the note 43 related to contingencies.
18.
Equity investments in not consolidated subsidiaries
The Group has the following equity investments in not consolidated subsidiaries:
% ownership
In thousands of Euro
Belgo Fixing S.A.
Fea Design and Engineering N.V.
Gartner Gesellschaft fur
Konstruktion und
Montageleistungen Gmbh
Gartner Management Gmbh
J. Gartner Israel Ltd
J. Gartner & Co. Polska Sp.zo.o.
Permasteelisa Epitoipari KFT
Ri.Isa d.o.o
Virtual City S.r.l. - winding up
C arrying amount
Country
3 1 December
2008
Belgium
Belgium
0.00%
0.00%
99.92%
80.00%
0
0
83
14
100.00%
0.00%
100.00%
100.00%
100.00%
98.55%
0.00%
100.00%
100.00%
100.00%
100.00%
100.00%
98.55%
80.00%
39
0
0
0
15
45
0
42
0
0
0
15
42
0
99
196
Germany
Germany
Israel
Poland
Hungary
Croatia
Italy
3 1 December 3 1 December 3 1 December
2007
2007
2008
The variation compared to 31 December 2007 is mainly ascribable to the deconsolidation of Belgo Fixing
S.A. and Fea Design and Engineering N.V. as a result of the disposal of the subsidiary Belgo Metal N.V.
101
Summary financial information on not consolidated subsidiaries - 100%:
In thousands of Euro
Assets
3 1 December 20 0 8
Gartner Gesellschaft fur Konstruktion und
Montageleistungen Gmbh
Gartner Management Gmbh
J. Gartner Israel Ltd
J. Gartner & Co. Polska Sp.zo.o.
Permasteelisa Epitoipari KFT
Ri.Isa d.o.o
In thousands of Euro
Liabilities N e t Equity
R e v enues
Profit / (Loss)
45
0
19
135
15
226
6
0
1,094
179
3
182
39
0
(1,075)
(44)
12
44
3
0
0
0
0
794
(3)
0
(139)
(25)
(2)
3
440
1,4 6 4
(1, 0 2 4 )
797
(1 6 6 )
Liabilities N e t Equity
R e v enues
Profit / (Loss)
Assets
3 1 December 20 0 7
Belgo Fixing S.A.
Fea Design and Engineering N.V.
Gartner Gesellschaft fur Konstruktion und
Montageleistungen Gmbh
Gartner Management Gmbh
J. Gartner Israel Ltd
J. Gartner & Co. Polska Sp.zo.o.
Permasteelisa Epitoipari KFT
Ri.Isa d.o.o
Virtual City S.r.l. - winding up
19.
85
17
1
0
84
17
0
1
1
(0)
45
0
10
179
15
224
4
3
0
882
205
3
183
14
42
0
(872)
(26)
12
41
(10)
2
20
2
0
0
704
0
0
3
(95)
(14)
(2)
(165)
(6)
579
1,2 9 1
(7 1 2 )
729
(2 7 8 )
Equity investments in associated companies
% ownership
C arrying amount
Country 3 1 December 3 1 December 3 1 December 3 1 December
2007
2007
2008
2008
Permasteelisa Megafirst Sdn Bhd
Unifront B.V.
Malaysia
Holland
49%
26%
49%
26%
0
11
0
11
11
11
Summary financial information on associated companies - 100%:
In thousands of Euro
Assets
Liabilities
N e t Equity R e v enues
Profit / (Loss)
221
210
11
251
11
221
210
11
251
11
Assets
Liabilities
N e t Equity R e v enues
Profit / (Loss)
258
565
(307)
2,157
86
258
565
(307)
2,157
86
3 1 December 20 0 8
Unifront B.V.
In thousands of Euro
3 1 December 20 0 7
Unifront B.V.
The financial data for the company Permasteelisa Megafirst Sdn Bhd are not entered as this is a dormant company.
102
20.
Other equity investments
In thousands of Euro
3 1 December
2008
3 1 December
2007
0
130
0
58
13 0
58
0
0
13 0
58
Non-current investm ents
Securities held to maturity
Equity securities available-for-sale
Current inves tmen ts
Debt securities held-to-maturity
The balance as at 31 December 2008 includes Euro 66 thousand for the Parent company’s equity
investment in Consorzio Interaziendale Prealpi, Euro 25 thousand for the Group’s 50% equity investment
in the consortium Cladding Technology Italy (CTI) and Euro 39 thousand for the company’s 18% equity
investment in Interoxyd AG.
21.
Other non-current assets
In thousands of Euro
3 1 December 3 1 December
2007
2008
Financial receiv ables
Performance deposits held as guarantee
O th er securities
Other securities
22.
146
0
146
0
74
83
74
83
22 0
83
Deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Assets (- )
In thousands of Euro
Tangible assets
Intangible assets
Other investments
Inventories
Trade receivables
Pension funds and other
Employee benefits
Provisions for risks and charges
Trade payables
Hedging
Other items
Tax value of loss carry-forwards
Tax (assets ) / liabilities
Set off
N e t ta x (asse ts) / liabilities
Liabilities (+ )
Net
2008
2007
2008
2007
2008
2007
(1,298)
(3,053)
680
(138)
(1,400)
(446)
(1,290)
(159)
0
(2,061)
(282)
393
145
0
270
346
(618)
(3,191)
0
1,021
(315)
(897)
(14)
0
(1,791)
64
(887)
(1,002)
(2,420)
(1,049)
(1,062)
(6,849)
(929)
(292)
(1,950)
(301)
(1,273)
(6,744)
0
1,525
0
1,293
975
0
(887)
(280)
(2,420)
989
177
(6,849)
(929)
1,233
(1,950)
992
(298)
(6,744)
(1 9, 4 6 6 )
(1 5, 2 8 1 )
4,9 4 7
(1 2, 3 7 3 )
(1 0, 3 3 4 )
2,421
131
722
2,038
1,239
7,0 9 3
733
671
(733)
(671)
0
0
(1 8, 7 3 3 )
(1 4, 6 1 0 )
6,3 6 0
4,2 7 6
(1 2, 3 7 3 )
(1 0, 3 3 4 )
103
The assets from advance taxes on tax losses acknowledged in the financial statements and entered in the
table above with reference both to 31 December 2007 and 31 December 2008 are mainly ascribable to the
American subsidiary Permasteelisa North America Corp. and fall due after 2020.
In reference to the Group companies overall, with the sole exclusion of the US company on which details
are provided in the Notes below, no assets were acknowledged for advance taxes relating to:
2008
Deductible
temporary
differences
In thousands of Euro
1,5 9 5
Tax losses
2007
Deductible
temporary
differences
4 3,2 0 8
1,0 9 3
Tax losses
3 6,8 8 3
With reference to the US companies, please note the entry for federal tax losses for approximately Euro 64
million (applicable tax rate: 34%). These tax losses can be used over a timeframe of 20 years and mainly
fall due between 2020 and 2026.
Temporary differences amount to some Euro 7.1 million: the applicable federal tax rate is 34% and the
applicable federal tax rate is approximately 6%.
Offsetting these figures, a total amount of Euro 9.4 million for assets from advance taxes have been
entered into the financial statements against federal tax losses against the total amount of temporary
differences.
No entries were recorded for advance taxes on state tax losses for which the theoretical fiscal benefit is
for Euro 4.2 million but was not entered due to the difficulty in measuring this figure as the tax losses are
broken down between a number of American states in which the American company will not necessarily
do business in the current year.
According to the tax law in force, deductible temporary differences generally do not expire.
The assets for advance taxes on the aforementioned temporary differences on tax losses were not booked
as the required conditions were not in place, pursuant to the criteria envisaged by the international
accounting principles, hinting at a probable future taxable income on which the Group may use the
benefits arising there from.
Movement in temporary differences during the year
In thousands of Euro
Tangible assets
Intangible assets
Other investments
Inventories
Trade receivables
Financial payables
Pension funds and other
Employee benefits
Provisions for risks and
charges
Trade payables
Hedging
Other items
Tax value of loss
carry-forwards
B alance 1 R ecognised R ecognised
Exchange
O th er
J anuary
in income
in equity differences changes
2007
sta te m ent
(1,257)
(26)
(1,786)
7,741
544
0
360
9
1,786
(9,541)
(462)
(246)
(683)
(876)
(1,624)
194
(87)
2,109
(327)
233
(314)
(7,855)
1,121
(5,2 7 8 )
(5, 7 0 9 )
104
0
3
B alance 3 1
December
2007
(897)
(14)
0
(1,791)
64
0
9
(18)
(929)
965
965
1,233
(1,950)
992
(298)
1
1
103
(401)
623
(633)
(6,744)
722
(1,0 3 4 )
(1 0,3 3 4 )
In thousands of Euro
Tangible assets
Intangible assets
Other investments
Inventories
Trade receivables
Financial payables
Pension funds and other
Employee benefits
Provisions for risks and
charges
Trade payables
Hedging
Other items
Tax value of loss
carry-forwards
23.
B al ance 1 R ecognised R ecognised
Exchange
O th er
J anuary
in income
in equity differences changes
2008
sta te m ent
(897)
(14)
0
(1,791)
64
0
611
(3,005)
35
(172)
(367)
2,693
(473)
1
29
118
65
(929)
42
1,233
(1,950)
992
(298)
(1,511)
(829)
(648)
482
(6,744)
2,331
(1 0, 3 3 4 )
(3 0 7 )
B al ance 3 1
December
2008
(618)
(3,191)
0
1,021
(315)
0
(887)
(2)
92
(2)
267
(635)
(8)
(280)
(2,420)
989
177
(237)
(2,199)
(6,849)
(2 5 6 )
(2, 7 5 9 )
(1 2, 3 7 3 )
1,280
3
1,2 8 3
Assets and liabilities for contracts work-in-progress, inventories and advances
from customers
Assets for contracts work-in-progress and inventories
In thousands of Euro
Assets for contracts work-in-progress
Raw materials and consumables used
Works in progress
Finished goods
Advances
3 1 December
2008
3 1 December
2007
214,598
7,986
32
17
4,370
224,612
8,611
85
262
3,513
22 7, 0 0 3
23 7,0 8 3
Liabilities for contracts work-in-progress and advances from customers
In thousands of Euro
Liabilities for contracts work-in-progress
Advances from customers
3 1 December
2008
3 1 December
2007
168,333
100,195
116,234
23,373
26 8,5 2 8
13 9, 6 0 7
Contracts work-in-progress
3 1 December 3 1 December
2008
2007
In thousands of Euro
Costs incurred on uncompleted contracts
Estimated earnings
Less billings to date
Assets for contracts work-in-progress
Liabilities for contracts work-in-progress
105
2,618,499
303,511
(2,875,745)
2,525,217
215,108
(2,631,947)
46,2 6 5
10 8,3 7 8
214,598
(168,333)
224,612
(116,234)
46,2 6 5
10 8,3 7 8
24.
Trade receivables from third parties
In thousands of Euro
Trade receivables from third parties
Bad debts provision
3 1 December
20 0 8
3 1 December
2007
285,791
(7,515)
251,069
(7,370)
2 7 8,2 7 6
2 4 3,6 9 9
As at 31 December 2008 trade receivables include guarantee retentions for Euro 58,197 thousand (Euro
49,547 thousand as at 31 December 2007) related to contracts work-in-progress, of which Euro 27,676
thousand expiring more than year 2008 (Euro 24,694 thousand at 31 December 2007). The increase
witnessed for this item partly follows the increase in turnover and must in any case be considered together
with the other items of the working capital where the improvement is of approximately Euro 92 million.
The following table shows the changes of the Provision for bad debts during the year.
In thousands of Euro
3 1 December
20 0 8
3 1 December
2007
Balance at 1 January
Reclassifications
Utilizations
Reversals
Provisions
Exchange rate differences on translation
7,370
131
(1,306)
(250)
1,968
(398)
6,093
7
(140)
(532)
1,970
(28)
Balance at 31 December
7,5 1 5
7,3 7 0
In addition to the write-downs for the year highlighted in the changes of the provision for bad debts (trade
receivables) versus third parties, other major receivable write-downs were entered in the profit and loss
account for some Euro 1,180 thousand, mainly ascribable to the Interiors business in the US.
25.
Amounts receivables from not consolidated subsidiaries
In thousands of Euro
3 1 December
20 0 8
3 1 December
2007
Trade receivables
5
68
Ri.isa. D.o.o.
5
68
0
0
118
0
3
12
50
14
118
79
123
147
3 1 December
20 0 8
3 1 December
2007
10
59
10
56
69
66
Gartner Israel Ltd.
J. Gartner Polska Sp.zo.o
Ri.isa. D.o.o.
Virtual City S.r.l. - winding up
26.
Trade receivables from associated companies
In thousands of Euro
Unifront B.V.
Permasteelisa Megafirst Sdn Bhd
106
27.
Income tax receivables
In thousands of Euro
Tax income receivables
3 1 December
20 0 8
3 1 December
2007
2,575
2,866
2,5 7 5
2,86 6
This item should be assessed together with the income tax payable item described in note 39.
28.
Other current assets
In thousands of Euro
VAT receivables
Advances to employees
Other receivables
Accrued liabilities and deferred income
3 1 December
20 0 8
3 1 December
2007
7,999
210
27,439
4,280
8,222
149
13,038
2,801
39, 9 2 8
24,2 1 0
3 1 December
20 0 8
3 1 December
2007
22,359
5,080
0
0
8,592
4,375
5
66
27,4 3 9
13,0 3 8
The caption “Other receivables” includes:
Forward assets
Other receivables
Loans to other third parties
Receivables from minority
The asset item on the “fair value” valuation of derivative instruments is ascribable for Euro 272 thousand
to operations on commodities (2007: Euro 160 thousand), and for Euro 22,087 thousand to operations on
currencies (2007: Euro 8,364 thousand) and for Euro 0 thousand to a single ongoing operation to hedge
the interest rate (2007: Euro 68 thousand)
29.
Cash and cash equivalents
In thousands of Euro
Bank and post current accounts and deposits
Cash in hand
3 1 December
2008
3 1 December
2007
148,830
122
75,683
139
14 8, 9 5 2
75,8 2 2
The balance of bank and post current accounts and deposits includes Euro 894 thousand bound as surety
for the settlement on expiry of the operations performed by the Group on the commodities market of the
London Metal Exchange.
107
30.
Net equity
Net equity changes
Please refer to the relevant table preceding the Notes.
Share capital
On 31 December 2008, the Share Capital amounted to Euro 6,900 thousand and includes 27,600,000
ordinary shares issued (2007: 27,600,000) having a nominal value of Euro 0.25, of which 1,900,790 held by
the company
Dividends
In thousands of Euro
2008
2007
Euro 0.30 for each share (2007: Euro 0.30)
7,918
8,280
7,9 1 8
8,28 0
The holders of ordinary shares (ordinary shares issued net of treasury shares) are entitled to receive
dividends as declared from time to time and are entitled to one vote per share at meetings of the
Company. All shares are equal since there are no preference shares.
Legal and share premium reserves
This item refers to the Parent Company’s legal reserve, the share-premium reserve and the revaluation. No
changes occurred with respect to 31 December 2007.
Extraordinary Reserve
It includes the Parent Company’s extraordinary reserve that decreased by Euro 3,255 thousand as a result
of the distribution of dividends during the period.
Treasury shares
As stated already in the Notes in section dedicated to the accounting principles, the purchase of treasury
shares is entered as a write-down of the net equity.
Other reserves
These include the Parent Company’s Other reserves for Euro 5,347 thousand and the consolidation reserve
for Euro 1,566 thousand. The consolidation reserve increased by Euro 696 thousand during the financial
year as a result of the purchase of 8.44% of shares in the subsidiary Permasteelisa Pacific Holdings Ltd.
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the
financial statements of the foreign subsidiaries. The negative change shows in the net equity changes
table is mainly due to US dollar and British pound trend.
Hedging reserve for risks
This includes the foreign exchange risk hedging reserve, commodities risk hedging reserve and the
interest risk hedging reserve.
The foreign exchange risk hedging reserve and the commodities risk hedging reserve include an effective
portion of the net differences accrued in the “fair value” of the hedging instruments respectively on
currencies and commodities, associated to hedged and not yet performed transactions.
Please note that the positive foreign exchange risk hedging reserve as at 31 December 2007 (Euro 5,376
thousand), taking into account the minority interests in the net equity of the same was released to the
profit and loss account during the period for Euro 3,620 thousand and benefited of a positive figure for
Euro 9,449 thousand. In financial year 2007, the negative foreign exchange risk hedging reserve as at 31
December 2006 (Euro 573 thousand), also including the minority interests in the net equity of the same,
was released to the profit and loss account during the period for Euro 148 thousand and benefited of a
positive figure of Euro 5,801 thousand.
108
The negative commodities risk hedging reserve as at 31 December 2007 (Euro 1,088 thousand), also
including the minority interests in the net equity of the same, received in financial year 2008 a negative
amount for Euro 4,104 thousand, and was released to the profit and loss account for Euro 1,010 thousand.
In financial year 2007 the positive reserve as at 31 December 2006 (Euro 483 thousand), also including the
minority interests in the net equity of the same, received a negative amount for Euro 1,317 thousand, and
was released to the profit and loss account for Euro 253 thousand.
The interest risk hedging reserve is fully ascribable to the Group and includes a positive amount of Euro
50 thousand that has been fully entered into the profit and loss account for the period.
All the amounts associated to the hedging reserves for risk are shown net of the associated tax effect.
Capital management
In the area of capital management, the Group aims at adding value for the Shareholders, safeguard the
continuity of the business and support the development of the Group. The Group has thus tried to keep a
suitable capitalisation level to enable both the achievement of a suitable return on capital for the
Shareholders and ensure the accessibility in economic terms of external financing sources, also by achieving
a suitable rating.
The Group constantly monitors its level of indebtedness in reference to the net equity and especially the
net level of indebtedness and the cash generation from operations.
To this end, the Group pursues the ongoing improvement of profitability in its business areas. It may also
sell part of its own assets to reduce the value of debt, while the Board of Directors may suggest to the
Shareholders’ Meeting to reduce or increase the share capital or, if legally viable, distribute the reserves.
In this framework the Group also proceeds to buying back treasury shares, clearly within the limits authorised
by the Shareholders’ Meeting, following the same approach aimed at adding value compatible with the
aims of achieving a balanced financial standing and improve the rating.
The capital is understood to be the value added by the Shareholders (share sapital and the share-premium
reserve, net of the value of the treasury share), and generated by the Group in terms of the results achieved
by the management (legal reserve and profit carried over included in the results for the financial year),
excluding the profit and loss entered directly into the net equity and minority interests.
31.
Earnings per share
The calculation of basic earnings per share at 31 December 2008 and at 31 December 2007, indicated at
the foot of the profit and loss, was based on the profit/loss attributable to ordinary shareholders and a
weighted average number of ordinary shares outstanding during each period calculated as follows:
Profit/Loss attributable to ordinary shareholders
In thousands of Euro
Profit/(loss) for the period
Profit/ (loss) a ttributable to ordinary shareholders
2008
2007
44,282
8,415
4 4,2 8 2
8,4 1 5
2008
2007
27,600
(1,901)
0
27,600
(189)
25, 6 9 9
27, 4 1 1
Weighted average number of ordinary shares
In thousands of Euro
Issued ordinary shares at 1 January
Effect of treasury shares held
Effect of shares issued in the period
Weighted average number of ordinary shares at 31
December
0
As at 31 December 2008, the earnings per share amounted to 1.723; net of the capital gain from the sale of
Belgo Metal N.V it would have amounted to 1.632.
109
32.
Amounts payables to banks and other financial creditors
In thousands of Euro
3 1 December 3 1 December
2 0 0 72 0 0 7
2 0 0 82 0 0 8
Amounts pay ables to banks and other financial
creditors non- current
Secured bank borrowings
Medium/long term bank loans (*) (**)
Finance lease liabilities
Other financial payables
Amounts pay ables to banks and other financial
creditors current
Current portion of secured bank borrowings
Current portion of finance lease liabilities
Current portion of other financial payables
Medium/long term bank loans (**)
Bank current accounts, advances and other short
term loans (**)
(*) all loans fell due within 5 years
(**) balances mainly in Euro
0
5,247
120
9
0
17,759
183
0
5,3 7 6
17,9 4 2
0
76
4
12,519
0
51
0
22,968
710
15,937
13, 3 0 9
38,9 5 6
Note that most short-term loans are managed centrally: they mainly refer to loans reaching maturity
within 1 to 3 months and that may be renewed for 6 months at the most, granted at a Euribor rate suitable
to their duration (1-3 months) + a spread that ranges between a minimum of 0.50% to a maximum of 0.75%
depending on the Bank.
Please note that as at 31 December 2008 the following medium-term loans were in place, the specifications
of which are described as follows:
36-month unsecured loan raised in 2006 with Banca Nazionale del Lavoro for Euro 15,000
thousand to be paid back in six-monthly fixed contributions to capital from 30 November 2007 at
a six-monthly Euribor rate + 0.35% spread;
30-month unsecured loan raised in 2006 with Montepaschi di Siena for Euro 15,000 thousand to be
paid back in six-monthly fixed contributions to capital for Euro 3,750 thousand starting from 30
September 2007 at a six-monthly Euribor rate + 0.65% spread;
36-month unsecured loan raised in during the period with Unicredit (ex Banca di Roma) for Euro
15,000 thousand to be paid back in constant monthly rates starting from 31 May 2008 at a sixmonthly Euribor rate + 0.5% spread;
During the financial year, the 48-month unsecured loan raised with Veneto Banca for Euro 5,000 thousand
and to be paid back in constant six-monthly rates as from 31 December 2006 at a six-month Euribor rate
+ 0.65% spread was settled in advance; the residual amounts due at 31 December 2007 was Euro 3,227
thousand that were fully paid in January 2008.
In reference to the Group’s consolidated bank debts, please note that any pejorative trend in the rating of
Permasteelisa or default shall not prompt any automatic obligation to reimburse.
As to the obligation to comply with the minimum/maximum levels of specific financial ratios (financial
covenants), this obligation is only envisaged in reference to the aforementioned medium and long-term
loans with Banca Nazionale del Lavoro, Montepaschi di Siena and Unicredit (ex Banca di Roma).
The financial covenants to be fulfilled are listed hereafter:
- loans raised with Banca Nazionale del Lavoro:
ratio between the consolidated net financial position and consolidated net shareholders’ equity
lower or equal to 0.5 as at 31 December 2006;
ratio between the consolidated net financial position and consolidated net shareholders’ equity
lower or equal to 0.6 as at 31 December 2007 and 31 December 2008.
110
- loans raised with Monte dei Paschi di Siena:
ratio between the consolidated net financial position and consolidated net shareholders’ equity
lower or equal to 0.7 on the date of the financial statements;
ratio between the consolidated net financial position and gross operating margin (Ebidta) lower or
equal to 2.9 on the date of the financial statements;
- loans raised with Unicredit (ex Banca di Roma):
ratio between the consolidated net financial position and consolidated net shareholders’ equity
lower or equal to 3 on the date of the financial statements;
ratio between the consolidated net financial position and gross operating margin (Ebidta) lower or
equal to 5 on the date of the financial statements.
As at 31 December 2008, there was full compliance to the financial covenants required in reference to that
date.
The first half of 2008 saw the settlement of the interest rate swap operation hedging the medium-longterm loan described above with Banca Nazionale del Lavoro.
As to the mortgages on real estate or other fixed assets owned by the Group, please refer to note 43.
Finance lease liabilities
Finance lease liabilities as at 31 December 2008 are payable as follows:
In thousands of Euro
Minimum
paymen ts
2008
Interest
Principal
2008
85
135
0
220
Expiry date:
Less than 1 year
Between one and five years
More than five years
Interest
2008
Minimum
paymen ts
2007
9
15
0
76
120
0
58
215
6
7
36
1
24
196
27 9
44
2007
The weighted average effective interest rate in respect of lease obligation at the balance sheet date is
4.53% (2007: 4.85%).
Net financial position
To complete the information reported in these Notes, the Group financial position as at 31 December 2008
is reported below.
In thousands of Euro
3 1 December 3 1 December
2007
2008
Cash and cash equivalents
Amounts payables to bank
Amounts payables to other financial creditors (leasing)
Other financial payables
N e t financial position – short term
Amounts payables to bank
Amounts payables to other financial creditors (leasing)
Other financial payables
N e t financial position – medium/long term
Total net financial position (* )
148,952
(13,229)
(76)
(4)
75,822
(38,905)
(51)
0
1 3 5,6 4 3
3 6,8 6 6
(5,247)
(120)
(9)
(17,760)
(183)
(5,3 7 6 )
(1 7,9 4 3 )
1 3 0,2 6 7
1 8,9 2 3
(*) the net financial position does not include financial receivables from non-consolidated subsidiaries as this item is insignificant.
111
The clear improvement of the Group’s net financial position against the previous year end arises from
the improved net working capital, stemming also from the remarkable financial down payments on job
acquired in 2008.
The average rates recorded by the Group during the period are as follows:
a) current account deposits and bank deposits: 3.090% (2007: 2.920%)
b) short-term loans: 5.650% (2007: 4.818%)
c) mortgages and medium- long-term loans: 5.320% (2007: 4.657%)
d) liabilities on financial leasing: 4.530% (2007: 4.850%).
The actual average rate over overall indebtedness stood at 5.560% (2007: 4.792%).
The variation increase of loan costs is basically ascribable to the rates trend recorded in 2008. Indeed the
3-month Euribor stood at a yearly average of 4.650% against the 4.280% of 2007 while the 6-month Euribor
recorded an average of 4.730% against 4.350% in 2007.
33.
Severance indemnity fund
In thousands of Euro
3 1 December 3 1 December 3 1 December
2007
2006
2008
Present value of the defined benefit obligation
Unrecognised actuarial gains and losses
Recognised liability for severance indemnity fund
3,439
0
3,497
0
3,862
0
3,43 9
3,4 9 7
3,8 6 2
Movements of the severance indemnity fund
In thousands of Euro
Net recognised liability at 1 January
Severance indemnity costs transferred to pension
funds
Severance indemnity costs assigned to Inps
Payments
Movements
Assignments and pension fund
Receivables from Inps
Expense recognised in the income statement
Net recognised liability at 31 December
3 1 December 3 1 December 3 1 December
2007
2006
2008
3,497
3,862
3,901
686
438
0
1,129
(415)
0
(686)
(1,129)
357
879
(748)
0
(438)
(879)
383
0
(840)
(26)
0
0
827
3,43 9
3,4 9 7
3,8 6 2
Expense recognised in the income statement
In thousands of Euro
3 1 December 3 1 December 3 1 December
2007
2006
2008
Current service costs
Actuarial (Profit)/Loss recognised
Interest on obligation
112
97
106
154
254
(42)
171
732
(63)
158
35 7
38 4
82 7
Principal actuarial assumption (as weighted average):
3 1 December 3 1 December 3 1 December
2007
2006
2008
Actuarial rate as at 31 December
Future salary increases rate
Inflation rate
Average retirement age
34.
5.00%
n/a
2.10%
60
5.00%
n/a
2.00%
60
4.75%
3.50%
1.90%
60
Pension funds and other employee benefits
In thousands of Euro
3 1 December 3 1 December
2007
2008
Pension funds
Other employee benefits
16,451
571
16,584
510
17, 0 2 2
17, 0 9 4
3 1 December
2008
3 1 December
2007
3 1 December
2006
15,428
15,598
16,610
Pension funds
In thousands of Euro
Gartner Gmbh pension fund
Other minor pension funds
1,023
986
1,028
16,4 5 1
16,5 8 4
17,6 3 8
3 1 December
2008
3 1 December
2007
3 1 December
2006
15,428
0
15,784
(186)
16,610
0
15,4 2 8
15,5 9 8
16,6 1 0
3 1 December
2008
3 1 December
2007
3 1 December
2006
15,598
16,610
16,397
(16)
0
(948)
794
299
(186)
(890)
(235)
0
0
(879)
1,092
1 5,4 2 8
1 5,5 9 8
1 6,6 1 0
Gartner Gmbh pension fund
In thousands of Euro
Present value of the defined benefit obligation
Reinsurance
Recognised liability for the defined benefit
obligations
Gartner Gmbh pension fund movements
In thousands of Euro
Net liability for defined benefit obligations at 1
January
Transfers from non-consolidated controlled
companies
Reinsurance
Payments
Expense recognised in the income statement
Net liability for defined benefit obligations at 31
December
113
Expense recognised in the income statement
In thousands of Euro
3 1 December
2008
3 1 December
2007
3 1 December
2006
159
(168)
803
189
(1,165)
741
180
181
731
794
(2 3 5 )
1,0 9 2
3 1 December
2008
3 1 December
2007
3 1 December
2006
5.8 5 %
2.6 0 %
5.2 5 %
1.9 0 %
4.5 0 %
1.7 5 %
3 1 December
2008
3 1 December
2007
446
125
431
79
571
510
3 1 December
2008
3 1 December
2007
510
(10)
0
82
525
(3)
(6)
3
(11)
(9)
571
510
Current service costs
Recognised actuarial (gains)/losses
Interest on obligation
Principal actuarial assumptions at the balance sheet date
(expressed as weighted averages):
Discount rate at 31 December
Future salary increases
Other employee benefits
In thousands of Euro
Dutch"Jubilee" fund
Other
Other employee benefits movements
In thousands of Euro
Net liability for defined benefit obligations at
1 January
Payments
Movements
Expense recognised in the income statement
Exchange rate differences on translation
Net liability for defined benefit obligations at 31
December
The Dutch “Jubilee” fund is related to the liability for the contractual amount to be recognized to
employees of certain Dutch subsidiaries when they reach the 25th and 40th presence anniversary in the
company; the liability has been calculated based on a discounting rate of 5% and on the estimation of
probability the employees reach the abovementioned anniversaries.
114
35.
Provision for risks and charges
In thousands of Euro
Provision W arran ty
for losses provision
on equity
inves tmen ts
Balance at 1 January 2008
Deconsolidation of Belgometal NV
Movements
Provisions made during the year
Provisions used during the year
Provisions reversed during the year
Unwind of discount
Exchange rate differences on
translation
B alance a t 3 1 December 20 0 8
Provision
for risks
on
ongoing
jobs
Provision
O th er
for ta x provision
Total
39
0
0
18
(11)
(3)
0
13,902
(462)
172
6,482
(3,672)
(1,740)
0
5,743
0
(417)
4,828
(3,172)
(550)
0
2,614
0
0
0
(1,219)
(1,395)
0
2,171
0
444
2,250
(990)
(29)
0
24,469
(462)
199
13,578
(9,064)
(3,717)
0
0
143
100
0
34
277
43
14,8 2 5
6,5 3 2
0
3,8 8 0
25,2 8 0
Provision for losses on equity investments
The provision is made up as follow:
In thousands of Euro
1428509 Ontario Limited - winding up
J. Gartner & Co. Polska Sp.zo.o.
Virtual City S.r.l. - winding up
3 1 December
2008
3 1 December
2007
0
43
0
3
25
11
43
39
Warranty provision
A provision for warranty is recorded in the financial statements when the job is completed.
The provision is based on historical data on warranties and on the consideration of all possible outcomes
for their probability.
Provision for risks on ongoing jobs
The utilization of the period arose from the occurrence of risks for which a dedicated provisions had been
made at the end of the previous financial year; as to the provisions for the period, the main allocations are
ascribable to the risks on a job in Qatar (Euro 1 million) and Taiwan (Euro 1.6 million).
Tax risk fund
The decrease of the tax risk fund is mainly ascribable to the final stages of the tax review to which the
company Josef Gartner Gmbh. was subjected in the previous period. As at 31 December 2007, Euro 2,500
thousand were allocated against this risk; once the issues raised by the local tax authority were solved,
Euro 1,109 thousand were used as settlement and the remaining amount was entered to the profit and
loss account.
Other provision
The amount is related to provision for risks on ongoing disputes that are considered probable. The
increase in this item is mainly due to provisions for Euro 1,173 thousand made by the Parent company and
another Euro 768 thousand for provisions made by a German subsidiary.
115
36.
Trade payables to third parties
In thousands of Euro
Trade payables to third parties
3 1 December
2008
3 1 December
2007
209,113
221,412
20 9,1 1 3
22 1,4 1 2
As at 31 December 2008, trade payables include invoices to be received for Euro 46,236 thousand (2007:
Euro 45,116 thousand) and retentions for Euro 7,027 thousand (2007: Euro 6,763 thousand), expiring
mostly more than year 2008.
37.
Trade payables to not consolidated subsidiaries
In thousands of Euro
Trade pay ables
Belgo Fixing
Gartner Gesellschaft fur Konstruktion und
Montageleistungen Gmbh
Ri.isa. D.o.o.
38.
3 1 December
2007
0
60
42
43
118
134
160
237
3 1 December
2008
3 1 December
2007
69
65
69
65
3 1 December
2008
3 1 December
2007
15,895
12,625
1 5,8 9 5
1 2,6 2 5
Trade payables to associated companies
In thousands of Euro
Trade pay ables
Permasteelisa Megafirst Sdn Bhd
39.
3 1 December
2008
Income tax payables
In thousands of Euro
Tax income payables
This item, net of the item “Income tax receivables” mentioned under note 27, saw a variation of the debit
position from Euro 9,759 thousand to Euro 13,320 thousand.
116
40.
Other current liabilities
In thousands of Euro
VAT payables
Employees taxation payables
Other indirect taxes payables
Amounts payable to social agencies
Amounts payable to employees
Performance deposits payable
Other liabilities
Payables to minority
Accrued liabilities and deferred income
3 1 December
2008
3 1 December
2007
4,307
3,306
275
3,907
23,249
2
20,565
0
2,368
8,367
3,409
350
3,814
18,161
1
5,543
75
1,850
5 7,9 7 9
4 1,5 7 0
With reference to the official financial statements as at 31 December 2007, an amount of Euro 1 million has
been reclassified from Other payables to Amounts payable to employees.
The caption “other liabilities” includes:
3 1 December 3 1 December
2007
2008
In thousands of Euro
Forward liabilities
Other liabilities
17,559
3,006
3,433
2,110
2 0,5 6 5
5,5 4 3
Liabilities for the fair value assessment of derivatives are referred for Euro 5,533 thousand to commodity
transactions (2007: Euro 1,187 thousand) and for Euro 12,026 thousand to foreign currency transactions
(2007: Euro 2,246 thousand).
41.
Risk management
Exposure to credit, interest rate and currency risks arises in the normal course of the Group’s business.
Historically, derivative financial instruments are used by the Group to hedge its exposure to fluctuations
in foreign exchange rates.
From the first six-month period of 2006, the Group has started to make a few limited hedging transactions
also for the commodities price risk.
Credit risk
Credit risk is the risk that a customer or counterparty may fail to meet commitment when it falls due and
cause the Group to incur in a financial. The Group’s primary exposure to credit risk arises through its
contract receivables. The Group has implemented a specific Risk management system to analysis each
specific tender; a rating is given to each project and customer and specific measures are applied to
minimize the company’s risk; the system in place also allows to monitor subsequently the credit risk
exposure on an ongoing basis.
Other financial assets of the Group with exposure to credit risk include cash and cash equivalents and
derivative financial instruments to hedge the Group exposure to foreign currency risk. Transactions
involving derivative financial instruments are allowed only with counterparties that are of high credit
quality. As such, the management does not expect any counterparty to fail to meet their commitments.
At the balance sheet date there were no significant concentrations of credit risk on specific customers
or on specific geographical areas. The maximum exposure to credit risk is represented by the carrying
amount of each financial asset, including derivative financial instruments, in the balance sheet.
117
With reference to trade receivables, the maximum exposure to credit risks broken down by geographical
area is shown here below:
Europe
Asia
Australia
America
Middle East
Total gross receivables broken down by geographical area
Provision for bad debt
Differences from exchange rate
Total net recei v ables broken down by geographical are a
145,155
51,653
1,805
83,324
3,526
120,859
40,677
2,995
85,785
636
2 8 5,4 6 3
2 5 0,9 5 2
(7,515)
328
(7,370)
117
2 7 8,2 7 6
2 4 3,6 9 9
In reference to the age of the receivables shown above, please note that as at 31 December 2008 the
receivables that had not yet reached maturity, net of the Provision for bad debt, amounted to 71% of the
total (2007: 70%) and the credit due for over one year amounted to 9% (2007: 5%).
Interest rate risk
The Group’s exposure to changes in interest rates relates primarily to interest-earning assets and interestearning liabilities (amounts receivable from banks and other financial institutions or amounts payable to
banks and other financial institutions). Interest rate risk is actively managed at central level to guarantee
that interests payments are within acceptable levels and consistent with the Group’s business strategies.
The Group does not generally use derivative financial instruments to hedge its exposure to interest rate
risk.
During the first half of 2006, an interest rate swap agreement was entered into to hedge a medium-long
term loan raised with Banca Nazionale del lavoro; as described in detail in note 32, this operation was
settled in advance in the first half of 2008.
Sensitivity analysis
A variation of 100 basis points in interest rates on the year end date would have determined the increase
(decrease) of the net equity and the results for the period as shown below. This analysis was performed
considering that all other variables, more specifically foreign currency exchange rates, were stable. The
analysis was performed on the same basis compared to the previous period.
Opera ting results
+10 0 bp
- 1 0 0 bp
In thousands of Euro
3 1 December 20 0 8
Variable rate loans
Interest rate swap (IRS)
(282)
0
282
0
(282)
0
282
0
(2 8 2 )
28 2
(2 8 2 )
28 2
Opera ting results
+10 0 bp
- 1 0 0 bp
In thousands of Euro
3 1 December 20 0 7
Variable rate loans
Interest rate swap (IRS)
N e t equity
+10 0 bp
- 1 0 0 bp
N e t equity
+10 0 bp
- 1 0 0 bp
(396)
162
396
(162)
(396)
162
396
(162)
(2 3 4 )
23 4
(2 3 4 )
23 4
Please not that the Group does not have any fixed rate loans ongoing.
Liquidity risk
Policies and procedures have been established to monitor and control liquidity, at both central level and
individual subsidiary level, on a daily basis adopting a cash flow management approach.
118
The table below shows the detail of the future contractual flows of financial liabilities held by the Group,
broken down into financial liabilities not associated to derivative tools and financial liabilities associated
to derivative tools.
In thousands of Euro
3 1 December 20 0 8
C arrying Contrac tual
v alue C ash Flows
Contractual
Cash Flows
less than 1
year
Contractual Contractual
Cash Flows Cash Flows
between 1 exceeding 5
years
and 5 years
Financial liabilities other than
deriva ti v es
Trade payables
Financial leasing payables
Other financial payables
Bank loans and overdrafts
2 0 9,1 1 3
196
13
1 8,4 7 6
2 0 9,1 1 3
221
13
1 9,1 4 0
208,786
86
4
13,717
327
135
9
5,423
Total booked value
2 2 7,7 9 8
2 2 8,4 8 7
2 2 2,5 9 3
5,8 9 4
In thousands of Euro
3 1 December 20 0 7
C arrying Contrac tual
v alue C ash Flows
Contractual
Cash Flows
less than 1
year
Contractual Contractual
Cash Flows Cash Flows
between 1 exceeding 5
years
and 5 years
Financial liabilities other than
deriva ti v es
Trade payables
Financial leasing payables
Bank loans and overdrafts
2 2 1,4 1 2
235
5 6,6 6 5
2 2 1,4 1 2
279
5 9,2 8 7
221,081
59
40,642
331
215
18,645
5
0
Total booked value
2 7 8,3 1 2
2 8 0,9 7 8
2 6 1,7 8 2
1 9,1 9 1
5
Exposure to the liquidity risk associated to financial liabilities other than derivative instruments
In thousands of Euro
3 1 December 20 0 8
C arrying
v alue
Contrac tua
l Cash
Flows
Contractual
Cash Flows
less than 1
year
Contractual
Cash Flows
between 1
and 5 years
(2 2, 0 8 7 )
(2 2, 0 8 7 )
(20,330)
(1,757)
(239,040)
(231,760)
(7,280)
216,953
211,430
5,523
Contractual
Cash Flows
exceeding 5
years
Assets (- ) / Liabilities (+ )
Assets from fair-value valuation on
forward contracts on currencies
- in flows
- out flows
Liabilities from fair-value valuation on
forward contracts on currencies
1 2,0 2 6
- in flows
- out flows
Assets from fair-value valuation of
commodities
(2 7 2 )
- in flows
- out flows
Liabilities from fair-value valuation of
commodities
11,931
95
(192,750)
(1,762)
206,538
204,681
1,857
(2 7 2 )
(272)
0
(546)
(546)
274
274
5,5 3 3
3,898
1,635
- in flows
(8,029)
(5,582)
(2,447)
- out flows
13,562
9,480
4,082
(4, 8 0 0 )
(4,773)
(27)
Total booked value
5,5 3 3
1 2,0 2 6
(194,512)
(4, 8 0 0 )
119
0
3 1 December 20 0 7
In thousands of Euro
C arrying
v alue
Contrac tua
l Cash
Flows
Contractual
Cash Flows
less than 1
year
Contractual Contractual
Cash Flows Cash Flows
between 1 exceeding 5
years
and 5 years
Assets (- ) / Liabilities (+ )
Assets from fair-value valuation on
forward contracts on currencies
(8,3 6 4 )
(6,917)
(1,447)
(280,665)
(240,984)
(39,681)
272,301
234,067
38,234
(8,3 6 4 )
- in flows
- out flows
Liabilities from fair-value valuation on
forward contracts on currencies
2,2 4 6
- in flows
2,2 4 6
2,029
217
(126,720)
(119,641)
(7,079)
128,966
121,670
7,296
- out flows
Assets from fair-value valuation of
commodities
(1 6 0 )
- in flows
- out flows
Liabilities from fair-value valuation of
commodities
1,1 8 7
- in flows
- out flows
Total booked value
(5,0 9 1 )
(1 6 0 )
(160)
(2,162)
(2,162)
2,002
2,002
1,1 8 7
1,187
(14,027)
(14,027)
15,214
15,214
(5,0 9 1 )
(3,861)
(1,230)
0
Please note the value of assets and liabilities shown in the tables above are provided for information only;
indeed, the derivative contracts do not in fact lead to the actual outlay or collection of the stated amounts
which, on the contrary, are subject to differential adjustment.
Also note that to correctly assess the liquidity risk, it is necessary to bear in mind the financial assets held
by the Group to offset the future cash flows arising from the aforementioned financial liabilities:
a)
cash and cash on hand for Euro 148,952 thousand and Euro 75,822
thousand respectively as at 31 December 2008 and 31 December 2007;
b)
trade receivables for Euro 278,276 thousand and Euro 243,699 thousand
respectively as at 31 December 2008 and 31 December 2007.
Foreign currency risk
The Group incurs foreign currency risk on contract revenues and purchases and on borrowings and loans
denominated in a currency other than Euro. The foreign currencies giving rise this risk are primarily United
State dollars, British pounds, Japanese yens, Singapore dollars and Hong Kong dollars.
Generally the contracts are hedged for the total amount denominated in foreign currency or for a
percentagehigher than 90%; see paragraph f for a detailed description of the way used by the Group to
hedge its job contracts in foreign currency.
In respect to monetary assets and liabilities held in foreign currency other that those related to the
contracts, the Group’s policy consists in minimizing the net exposure to change in interest rates by specific
medium/short-term forward exchange contracts, rolled over at maturity if necessary.
A 10% decrease of the Euro against the following currencies as at 31 December 2008 would have led to the
following increase (decrease) of the results for the period and the net equity.
120
The analysis has been performed considering that all the other variables, more specifically the
interest rates, had remained constant. The analysis was performed on the same basis compared to the
previous period.
In thousands of Euro
3 1 December 20 0 8
GBP
USD
HKD
SGD
THB
AUD
Others
In thousands of Euro
3 1 December 20 0 7
GBP
USD
HKD
SGD
AUD
Others
Opera ting
results
N e t equity
481
(1,249)
114
(337)
(172)
(136)
995
481
(1,249)
114
(337)
(172)
(136)
995
Opera ting
results
N e t equity
(125)
1,091
(156)
(318)
(159)
664
(125)
1,091
(156)
(318)
(159)
664
A 10% increase of the Euro against the following currencies as at 31 December 2008 would have led to the
same but opposite effect, again supposing that all other variables had remained constant.
Please note that the analysis did not take into account receivables, payables and future trade flows against
which the hedging operations were performed. It is reasonable to believe that the variation of the exchange
rates may lead to an opposite financial effect for this item, for a same or higher amount, on the hedged
transactions.
Commodities price risk
The Group has a price risk exposure, including the relevant foreign exchange risk, particularly on aluminium
purchases, which are one of the main work order cost items for the Group.
As far as managing the aluminium price risk is concerned, the Group’s policy is oriented towards minimizing
the need to resort to financial markets for hedging, by conducting relations with the suppliers in order to
fix the price for specific time frames.
However, in the first six-month period of 2006 the rather swinging trend of the aluminium price has encouraged
the Group to launch a limited and selective aluminium price hedging policy for a few specific orders,
where freezing the price with the supplier, for the whole period of the order, was merely impossible or not
immediate in any case.
For a detailed description of the Group’s practices of commodity hedging management on its own orders,
please refer to paragraph f of “Accounting Principles”.
121
Fair value
There are no financial assets or liabilities whose fair value significantly differs from their carrying
amount.
Fair value estimation
The main methods and assumptions used to estimate the fair value are as follows.
Not consolidated subsidiaries
The amount deriving from the valuation of these companies by the equity method is considered a good
approximation of their fair value.
Securities
The Group presently does not hold significant amounts of securities held for trading or available for sale
of held until their maturity.
Derivative contracts
Forward exchange contracts are marked to market using listed market prices.
Amounts payables to banks and other financial institutions
The fair value is calculated based on discounting of future cash flows with reference to principal and interest
amounts.
Financial leases
As described in note 32, the Group does not hold significant liabilities for financial leases.
Trade receivables and payables and other receivables and payables
Receivables and payables with expiring date less than one year, their carrying amount is considered to
approximate their fair value.
All the other receivables and payables with expiring date greater than one year are discounted to determine
their fair value, except for those related to contracts monies retention; the Groups considers that retentions
do not represent in any way a financing transaction with the customer due to the fact that the payments
terms are beyond one year, as retentions, in the different geographical areas in which the Group operates,
are within the normal applied trade conditions; consequently there is no necessity to apply any discounting.
As at 31 December 2008 the Group considers that there not retentions out of normal market conditions.
42.
Commitments
As the balance sheet date, the Group has the followings commitments:
Operating leases
3 1 December 3 1 December
2007
2008
In thousands of Euro
Payable:
less than 1 year
within 1 to 5 years
after 5 years
12,376
13,833
389
9,103
13,534
911
26,5 9 8
23,5 4 8
The Group leases a number of production sites, offices, warehouse and factory facilities under operating
leases. The leases have variable length, some of them with an option to renew the lease after the expiry
date. Usually lease payments are periodically increased to reflect market rental conditions.
122
Forward contracts
In thousands of Euro
3 1 December 3 1 December
2007
2008
Commitments for forward foreign exchange contracts
Commitments for forward contracts on commodities
Total commitmen ts for forward contracts
Commitments for forward foreign exchange contracts (buy)
Commitments for forward foreign exchange contracts (sell)
Commitments for forward contracts on commodities (buy)
Commitments for forward contracts on commodities (sell)
446,559
14,059
407,207
17,373
4 6 0,6 1 8
4 2 4,5 8 0
197,884
248,675
118,586
288,621
4 4 6,5 5 9
4 0 7,2 0 7
13,516
543
15,212
2,161
1 4,0 5 9
1 7,3 7 3
As described in the section on the accounting standards, hedging derivative operations on currency and
commodities are assessed on their “fair value”.
As at 31 December 2008, the assessment of the “fair value” of currency hedging led to the entry of profits
for Euro 22,087 thousand (2007: Euro 8,364 thousand) and losses for Euro 12,026 thousand (2007: Euro
2,246 thousand), booked respectively under the items “forward assets” (note 28) and “forward liabilities”
(note 40). Note that the stated amounts of Euro 2,241 thousand (2007: Euro 601 thousand) and Euro 6,952
thousand (2007: Euro 794 thousand) refer, respectively, to the valuation of financial currency hedging
transactions, namely those covering foreign currency assets and liabilities of financial nature.
On the same date, the “fair value” valuation of hedging transactions on commodities led to the entry of
profits for Euro 272 thousand (2007: Euro 160 thousand) and losses for Euro 5,533 thousand (2007: Euro
1,187 thousand), entered respectively under the items forward assets” (note 28) and “forward liabilities”
(note 40).
Other commitments
As at 31 December 2008 there are no other relevant commitments to mention.
43.
Contingent assets and liabilities
At the balance sheet date, the Group has provided the following guarantees in respect of third parties:
3 1 December 3 1 December
2007
2008
In thousands of Euro
Guarantees issued to third parties:
Guarantees to banks mainly in respect of successful performance
of job orders
Insurance guarantees mainly in respect of successful
performance of job orders
Payment guarantees
Total guarante es issued to third parties
410,662
274,771
231,667
5,875
283,771
7,537
6 4 8,2 0 4
5 6 6,0 7 9
Please note that a claim is ongoing with a minority holder in a subsidiary, which is not expected to lead to
the Group having to pay any actually significant costs.
Having solved the tax dispute associated to a German company of the Group, as of today there are no
ongoing tax disputes considered significant in terms of the possible liabilities incurred by the Group
overall. There are no further relevant potential liabilities to highlight.
123
44.
Transactions with related parties
Relationships with not consolidated subsidiaries and associated companies
During the period, the Parent Company and other Group companies entered into relationships with nonconsolidated subsidiaries and associated companies. The financial effects of these relationships are stated
in the table provided here below while their effects on equity are described in notes 25, 26, 37 and 38 on
payables and receivables from subsidiaries and associated companies. They refer to trade and financial
transactions entered into as part of the normal management and were administered as normal, at normal
market conditions.
Operating revenues to not consolidated subsidiaries
In thousands of Euro
3 1 December
2008
%
3 1 December
2007
%
Ri-isa D.o.o. Rijeka
6
0.0%
1
0.0%
Total
6
0.0 %
1
0.0 %
Total opera ting rev enues
1,1 3 7,0 4 0 1 0 0.0 %
1,14 0, 1 8 8 1 0 0.0 %
Operating costs from not consolidated subsidiaries
In thousands of Euro
3 1 December
2008
%
3 1 December
2007
%
Alcom S.r.l. - winding up
Ri-isa D.o.o.
Unifront BV
0
761
0
0.0%
0.1%
0.0%
15
684
11
0.0%
0.1%
0.0%
Total
761
0.1 %
710
0.1 %
Total opera ting costs before
non recurring costs
1,0 8 0, 6 3 3 1 0 0.0 %
1,1 0 5,1 7 3 1 0 0.0 %
The operating costs highlighted in the table above are mainly included in the item “raw materials and
consumables used” and “services expenses and use of third-party assets”.
Financial income to not consolidated subsidiaries
In thousands of Euro
3 1 December
2008
% 3 1 December
2007
%
Alcom S.r.l. - winding up
Gartner Israel Ltd.
Ri-isa D.o.o.
0
43
9
0.0%
0.1%
0.0%
1
0
3
0.0%
0.0%
0.0%
Total
52
0.1 %
4
0.0 %
53,9 7 0
100%
19,9 3 8
1 0 0.0 %
Total financial income
124
Financial expenses from not consolidated subsidiaries
In thousands of Euro
3 1 December
2008
% 3 1 December
2007
%
J. Gartner Gesellschaft fur Konstruktion und
Montageleistungen Gmbh
Gartner Management Gmbh
2
0
0.0%
0.0%
2
3
0.0%
0.0%
Total
2
0.0 %
5
0.0 %
57,6 2 2
100%
Total financial expenses
31,5 4 1 1 0 0.0 %
As shown by the stated amounts, the weight of these transactions on the Group’s statutory, financial and
economic position is insignificant in percentage values.
125
126
Santa Croce Srl (Company controlled by a
family member of A. Fregonese, Company
manager)
Cortina Glass LLC (Ralf Jr Lamo Chief
Operation Manager of Tower Installation LLC
is General Manager of Cortina Glass LLC)
Permasteelisa North America Corp.
Permasteelisa North America Corp.
Orsolini Maria (Spouse of the Chairman of the
B.o.D. of FCC S.r.l.)
ECIE IMPACT Pvt Ltd (shareholder of the
Company)
ECIE IMPACT Pvt Ltd (shareholder of the
Company)
Officine Campardo (company associated to an
employee of Permasteelisa S.p.A.)
FCC S.r.l.
Permasteelisa (INDIA) Pvt Ltd
Permasteelisa (INDIA) Pvt Ltd
Permasteelisa S.p.A.
EURO
INR
INR
EURO
EURO
USD
USD
USD
Local
currency
(1,240,625)
(458,896)
169,850
0
0
(90,000)
(2,936,879)
(334,651)
(1,240,625)
(3,533,660)
2,666
c o st/ paya b le
reve n u e/ re c eiva b le
(7,204)
2,666
0
0
(61,200)
(1,997,069)
(227,562)
(588,601)
(138,510)
0
14,986
16,909
0
(291,123)
24,316
49,367
(799,834)
(588,601)
(2,048)
0
14,986
16,909
0
(209,185)
17,472
R e v enue/(Cost) R eceiv able/ (Pa y able ) R e v enue/(Cost) R eceiv able/(Pa y able )
y e ar 2 0 0 8
as a t 3 1 December
in Euro
in Euro
y e ar 2 0 0 8
as a t 3 1 December
2008
2008
The highlighted costs and revenues do not significantly affect the total, respectively, of the Group’s operating expenses and operating revenues; the
same goes for the highlighted receivables and payables for total trade receivables and payables of the Group.
Orsolini Maria (Spouse of the Chairman of the
B.o.D. of FCC S.r.l.)
Permasteelisa Electric S.r.l.
Tower Installation LLC (Ralf Jr LBI (Ralf Jr Lamo Chief Operation Manager of
Lamo- Chief Operating Manger of Tower Installation LLC is shareholder of LBI)
Tower)
R ela ted parti es
Group company
The table below shows the statutory and financial consequences of a number of relationships entered into during the period by Group companies with
related parties, other than those described above. They refer to trade transactions entered into as part of the normal management and were
administered as normal, at normal market conditions. Amounts are stated in units
Other relationships with other related parties in the context of the Permasteelisa Group
Transactions with key management personnel
The key management personnel compensations, as defined by IAS 24, are as follows:
In thousands of Euro
2008
2007
Short-term employee benefits
Post-employment benefits
Other benefits
4,624
66
818
5,131
55
545
5,5 0
08
8
5,5
5,7
5,7 3
31
1
In thousands of Euro
2008
2007
General manager
Chief executive officer and other members of the Board of Directors
Holding function manager
2,091
2,661
756
1,671
2,813
1,247
5,5 0 8
5,7 3 1
45.
Significant, non-recurring events and transactions
There are no events or significant non-recurring transactions to mention in addition to the ones described
in note 6.
46.
Positions or transactions deriving from unconventional and/or unusual operations
No entries or transactions were recorded resulting from unconventional or unusual operations during
financial year 2008 having any relevance on the statutory, financial and economic standing of the Group
for the period. Please note that a number of agency contracts agreed in previous periods with a
counterparty in a Middle Eastern country have now been negotiated; the fees for these services were
much higher than those normally applied in the field.
47.
Subsequent events
No major events have occurred after the end of the financial year.
127
Bally - Xiamen, P.R. of China
PERMASTEELISA S.p.A.
Appendices to the Consolidated
Financial Statements
Appendix I: Permasteelisa Group’s companies
The following list is supplied pursuant to Consob Decision no. 11971 dated 14 May 1999 and subsequent
amendments (art. 126 of the Regulation) and provides the integrated list of companies and equity
investments that are significant for the Group.
Companies are listed broken down by type of controlling relationship and consolidation method. For each
company, information is also provided on the its scope, headquarters, nation of origin and share capital
in the original currency.
The percentage of consolidation in the Group is also shown in addition to the percentage ownership held
by Permasteelisa S.p.A. or other subsidiaries.
List of subsidiaries consolidated using the line-by-line method:
COM PANY NAME
P are nt c om p a n y
Permasteelisa S.p.A.
S u b s i d i ary c o m p a n ie s
Bleu Tech Montreal Inc.
Blue Tech Philippines Inc.
Dongguan Permasteelisa
Curtain Wall Co. Ltd
FCC S.r.l.
Gartner Contracting Co Ltd
Gartner Japan K.K.
Gartner Tore+Service
GmbH
Global Architectural Co.Ltd
R E G IS T E R ED
OFFIC E
Vittorio Veneto
(TV) Italy
CAD
100.00 Scheldebouw B.V.
10,200,000
PHP
5,304,888
CNY
98,800
EUR
99.99 Permasteelisa
International B.V.
98.24 Permasteelisa Pacific
Holdings Ltd.
100.00 Permasteelisa S.p.A.
21,429,500
HKD
10,000,000
JPY
500,000
EUR
35,800,000
THB
100,000
SGD
1,000,000
MYR
400,000,000
KRW
70,000
HKD
20,000
GBP
10,098,885
CNY
Macao (China)
25,000
MOP
Arlesheim
(Switzerland)
Gundelfingen
(Germany)
Doha (Qatar)
Würzburg
(Germany)
Vittorio Veneto
(TV) Italy
Madrid (Spain)
100,000
Petaling Jaya
(Malaysia)
Seoul (Korea)
Josef Gartner & Co. (HK)
Ltd
Josef Gartner & Co. UK Ltd
Hong Kong
(China)
Londonra (UK)
Josef Gartner Curtain Wall
(Shanghai) Co. Ltd
Josef Gartner (Macau) Ltd
Shanghai (China)
Permasteelisa France S.a.s.
Permasteelisa North
America Corp.
Permasteelisa Hong Kong
Limited
Permasteelisa Interiors S.r.l.
O W N E RSHIP
100
St. Laurent Quebec
(Canada)
Pasig City
(Philippines)
Guang Dong
(China)
Vittorio Veneto
(TV) Italy
Hong Kong
(China)
Tokyo (Japan)
Global Wall Malaysia Sdn.
Bhd
Iljin-Pisa Co. Ltd
Permasteelisa Espaa S.A.
% OF
CO NS OL IDATIO N
EUR
Global Tech Design Pte Ltd
Josef Gartner Qatar Llc
Permasteelisa Central
Europe GmbH
Permasteelisa Electric S.r.l.
CURR E N CY
6,900,000
Gundelfingen
(Germany)
Chonburi Province
(Thailand)
Singapore
Josef Gartner Switzerland
AG
Josef Gartner GmbH
SHARE
CAPI TAL
Gennevilliers
(France)
Windsor (USA)
Hong Kong
(China)
Vittorio Veneto
(TV) Italy
Permasteelisa (India) Private Bangalore (India)
Limited
% O W N E RSHIP
R E G IS T RATI O N
100.00
99.99
100.00
100.00
98.24 Josef Gartner &
Co.(HK) Ltd
98.24 Permasteelisa Pacific
Holdings Ltd
100.00 Josef Gartner GmbH
100.00
98.24 Permasteelisa Pacific
Holdings Ltd
68.77 Permasteelisa Pacific
Holdings Ltd
68.77 Permasteelisa Pacific
Holdings Ltd
49.22 Permasteelisa Pacific
Holdings Ltd
98.24 Permasteelisa Pacific
Holdings Ltd
100.00 Josef Gartner GmbH
100.00
75.00
CHF
73.68 Permasteelisa Pacific
Holdings Ltd
94.31 Josef Gartner & Co.
(HK) Ltd
100.00 Josef Gartner GmbH
100.00
10,000,000
EUR
100.00 Permasteelisa S.p.A.
100.00
200,000
500,000
QAR
EUR
97.00 Josef Gartner GmbH
100.00 Josef Gartner GmbH
49.00 (*)
100.00
10,000
EUR
100.00 Permasteelisa S.p.A.
100.00
174,290
EUR
16.90
1,644,337
EUR
100.00 Permasteelisa
International B.V.
Permasteelisa S.p.A.
100.00 Permasteelisa
International B.V.
Permasteelisa S.p.A.
Scheldebow B.V.
100.00 Permasteelisa S.p.A.
Josef Gartner GmbH
98.24 Permasteelisa Pacific
Holdings Ltd
100.00 Permasteelisa S.p.A.
130
USD
2,000,000
HKD
1,033,000
EUR
9,999,900
INR
130
74.66 Permasteelisa Pacific
Holdings Ltd
100.00
100.00
70.00
70.00
50.10
100.00
100.00
96.00
83.10
0.004
99.995
0.001
91.10
8.90
100.00
100.00
76.00
Permasteelisa (India) Private
Limited
Permasteelisa International
B.V.
Permasteelisa Ireland Ltd
Bangalore (India)
9,999,900
INR
Middelburg
(Holland)
Dublin (Ireland)
5,583,309
EUR
50,000
EUR
Permasteelisa Japan K.K.
Tokyo (Japan)
165,000,000
JPY
Permasteelisa Macau
Limited
Permasteelisa Pacific
Holdings Ltd
Macao (China)
100,000
MOP
30,941,800
SGD
Permasteelisa Polska
Sp.zo.o.
Warsaw (Poland)
200,000
PLN
Permasteelisa PTY Limited
Sydney (Australia)
15,434,956
AUD
Singapore
Permasteelisa Singapore
Pte Ltd
Permasteelisa (Victoria) Pty
Ltd
Permasteelisa Taiwan Ltd
Taipei (Taiwan)
Permasteelisa (Thailand)
Ltd
Permasteelisa UK Ltd
Chonburi Province
(Thailand)
London (UK)
Scheldebouw B.V.
Middelburg
(Holland)
London (UK)
St. Clinton, NJ
(USA)
Scheldebouw UK Ltd
Tower Installation Llc
Singapore
1,500,000
SGD
2
AUD
5,000,000
TWD
20,000,000
THB
10,000
GBP
3,040,326
EUR
1,000
N/A
GBP
USD
Victoria (Australia)
74.66 Permasteelisa Pacific
Holdings Ltd
100.00 Permasteelisa S.p.A.
100.00 Permasteelisa
International B.V.
98.24 Permasteelisa Pacific
Holdings Ltd
Permasteelisa Pty
Ltd
97.26 Permasteelisa Hong
Kong Limited
98.24 Permasteelisa
International B.V.
Josef Gartner GmbH
100.00 Permasteelisa
International B.V.
Scheldebouw B.V.
98.24 Permasteelisa Pacific
Holdings Ltd
Permasteelisa Hong
Kong Limited
98.24 Permasteelisa Pacific
Holdings Ltd
100.00 Permasteelisa PTY
Limited
98.23 Josef Gartner & Co.
(HK) Ltd
98.23 Global Architectural
Co. Ltd
100.00 Permasteelisa
International B.V.
100.00 Permasteelisa
International B.V.
100.00 Scheldebouw B.V.
100.00 Permasteelisa North
America Corp.
76.00
100.00
100.00
99.80
0.20
99.00
54.25
43.99
99.99975
0.00025
54.17
45.83
100.00
100.00
99.99
99.99
100.00
100.00
100.00
100.00
* 97% in terms of the right to the sharing of profit and of losses.
List of jointly controlled subsidiaries:
COM PANY NAME
R E G IS T E R ED
OFFIC E
Cladding Technology Italia
(CTI)
Milano (Italy)
SHARE
CAPI TAL
CURR E N CY
N/A (*)
% OF
CO NS OL IDATIO N
EUR
-
O W N E RSHIP
Permasteelisa S.p.A.
Permasteelisa
Interiors S.r.l.
% O W N E RSHIP
R E G IS T RATI O N
40.00
10.00
(*) The Consortium Capital Fund amounts to Euro 50,000
On 12 September 2008 the group companies Permasteelisa S.p.A. and Permasteelisa Interiors S.r.l joined
forces with the companies C.N.S. S.p.A. and Technical Services S.r.l. to establish a consortium called
Cladding Technology Italia (CTI). The aim is to set up synergies for commercial and implementation
purposes in the curtain walls market and associated sectors, along lines of common interest.
Considering the little impact of this new venture as at 31 December 2008, the Group’s investment in the
consortium have been entered into the financial statements under the item “Other equity investments”.
List of non-consolidated subsidiaries:
COM PANY NAME
R E G IS T E R ED
OFFIC E
Josef Gartner & Co. Sp. Z.o.o.
Warsaw (Poland)
J.Gartner (Israel) Ltd
Tel Aviv (Israel)
J. Gartner Gesellschaft für
Konstruktion und Montageleistungen
GmbH
Permasteelisa Épitipari Kft – winding
up
RI.ISA D.o.o.
Gundelfingen
(Germany)
Budapest
(Hungary)
Rijeka (Croatia)
SHARE
CAPI TAL
CURR E N CY
O W N E RSHIP
% O W N E RSHIP
R E G IS T RATI O N
200,000
PLN
Scheldebouw B.V.
100
ILS
Josef Gartner GmbH
100.00
25,565
EUR
Josef Gartner GmbH
100.00
3,000,000
HUF
Pemasteelisa International B.V.
100.00
55,200
HRK
Pemasteelisa International B.V.
98.55
131
100.00
List of associated companies (over 10% held):
COM PANY NAME
R E G IS T E R ED
OFFIC E
Interoxid AG
Altenrhein
(Switzerland)
Kuala Lumpur
(Malaysia)
Ulft (Holland)
Permasteelisa Mega First Sdn. Bhd (*)
Unifront B.V.(*)
SHARE
CAPI TAL
CURR E N CY
O W N E RSHIP
% O W N E RSHIP
R E G IS T RATI O N
50,000
CHF
Scheldebouw B.V.
18.00
1,500,000
MYR
49.00
143,500
EUR
Permasteelisa Pacific Holdings
Ltd
Scheldebouw B.V.
26.27
(*) companies considered in the financial statements under “Equity investments in associated companies”
The variation in the consolidation area compared to 31 December 2007 included:
the exit of the company Belgo Metal N.V. following its disposal on 8 April 2008; in line with the
rules envisaged in the reference accounting principles, the company’s profit and loss account for
the first quarter of the financial year was consolidated;
the exit of the Asian companies Global Wall (Thailand) Co. Ltd, Shanghai Permasteelisa
Architectural Product Co. Ltd (China), Gartner Contracting PTE Ltd (Singapore) following their
wind-up;
the exit of the company Permasteelisa Engineering B.V. following its wind-up.
We would also like to bring to your attention:
the merger through incorporation into the sub-holding Permasteelisa North America Corp. of the
following 8 American companies:
•
•
•
•
•
•
•
•
Allied Bronze LLC;
Permasteelisa Cladding Technologies LP;
Permasteelisa Cladding Technologies Management Company;
Josef Gartner USA LP;
Josef Gartner USA Management Company;
Permasteelisa CS Corp.;
Glassalum Erectors Inc;
Diamond Installation Inc.
and the merger of Gartner France S.a.s into Permasteelisa France S.a.s.
The companies included in the list of non-consolidated subsidiaries have been excluded in the consolidation
area because they are not material and they have been valued at “fair value”. These companies were
excluded from the consolidation area also as at 31 December 2007, with the sole exception of Gartner
Management GmbH that was closed down in January 2008 after its assets were sold to the company J.
Gartner Gmbh on 31 December 2007.
The Consortium Cladding Technology Italia (CTI) was valuated with the equity method.
132
Appendix II: Information required under Article 149-duodecies of the
“Regolamento Emittenti” issued by Consob
The prospectus provided hereafter has been prepared pursuant to Art. 149-12 of the Consob Regulation on
Issuers and highlights the amounts accrued in financial year 2008 for auditing services and services other
than auditing provided by the same Independent Auditing Firm and by entities of its network.
In Euro
Supplier of the S ervice
B ene ficiary
Au diti n g
P r i c ewater h o u seC o o p e r s
S. p .A.
P are nt c om p a n y –
P erma steeli sa S. p .A.
66,000
S u b s i d i ary c o m p a n ie s
15,000
S u b s i d i ary c o m p a n ie s
682,366
P r i c ewater h o u seC o o p e r s
S. p .A.
Networ k
P r i c ewater h o u seC o o p e r s
Certificati o n
Servi ce s
P r i c ewater h o u seC o o p e r s
S. p .A.
P r i c ewater h o u seC o o p e r s
S. p .A.
Networ k
P r i c ewater h o u seC o o p e r s
Ot her se rvi c e s
P are nt c om p a n y –
P erma steeli sa S. p .A.
S u b s i d i ary c o m p a n ie s
S u b s i d i ary c o m p a n ie s
P r i c ewater h o u seC o o p e r s
S. p .A.
P are nt c om p a n y –
P erma steeli sa S. p .A.
Networ k
P r i c ewater h o u seC o o p e r s
P are nt c om p a n y –
P erma steeli sa S. p .A.
P r i c ewater h o u seC o o p e r s
S. p .A.
Networ k
P r i c ewater h o u seC o o p e r s
Amounts accrued in
financial ye ar 2 0 0 8
S u b s i d i ary c o m p a n ie s
S u b s i d i ary c o m p a n ie s
T otal
(1)
7,476
770,843
(1) Fiscal consulting services and others
133
125 Old Broad Street, London - UK
PERMASTEELISA S.p.A.
Attestation in respect of the
Consolidated Financial Statements
under Article 154-bis
of Legislative Decree 58/98
Attestation in respect of the Consolidated Financial Statements
under Article 154-bis of Legislative Decree 58/98
1. The undersigned Nicola Greco in his capacity as the Chief Executive Officer and Rossella Pagot as the
executive officer responsible for the preparation of the financial statements of Permasteelisa Spa,
pursuant to the provisions of Article 154-bis, clauses 3 and 4, of Legislative Decree no. 58 of 24 February
1998 hereby attest:
the adequacy with respect to the Company structure and
the effective application,
of the administrative and accounting procedures applied in the preparation of the Consolidated Financial
Statements for the year ended on 31 December 2008.
2. The assessment of the adequacy of the administrative and accounting procedures used for the preparation
of the Consolidated Financial Statements for the year ended on 31 December 2008 was based on a process
defined by Permasteelisa in accordance with the Internal Control – Integrated Framework model issued
by the Committee of Sponsoring Organizations of the Treadway Commission, an internationally-accepted
reference framework.
3. The undersigned moreover attest that:
3.1 the Consolidated Financial Statements as at 31 December 2008:
- have been prepared in accordance with the International Financial Reporting Standards, as endorsed by
the European Union through Regulation (EC) 1606/2002 of the European Parliament and Counsel, dated 19
July 2002 as implemented in Italy by Article 9 of Legislative Decree no. 38/2005;
- correspond to the amounts shown in the Company’s accounts, books and records;
- provide a fair and correct representation of the financial and operating condition of the Company and its
consolidated subsidiaries;
3.2 The management report includes a reliable operating and financial review of the Company and of the
Group as well as a description of the main risks and uncertainties to which they are exposed.
Vittorio Veneto, 26 March 2009
Nicola Greco
(Chief Executive Officer)
Rossella Pagot
(Executive Officer responsible for the preparation of
the Company’s Financial Statements)
136
137
138