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new
horizons
2009-2010
FINANCIAL report
For all the trains in the world
contents
2
113
30
114
Management report
of the Management Board
FAIVELEY TRANSPORT
Consolidated financial statements
30
32
33
34
35
36
Consolidated Balance Sheet
Consolidated Income Statement
Statement of comprehensive income
Consolidated cash flow statement
Consolidated Statement of Changes in equity
Notes to the consolidated financial statements
93
Statutory Auditors’ report
on the consolidated financial statements
94
Faiveley Transport
Parent Company Financial Statements
94
96
97
98
112
Balance Sheet
Income Statement
Cash flow statement
Notes to the parent company financial statements
Faiveley Transport 5 year financial summary
on the financial statements
Statutory Auditors’ special report
on regulated agreements
115
DRAFT RESOLUTIONS TO BE SUBMITTED
TO THE COMBINED GENERAL MEETING
120
Corporate governance
122
130
132
142
Chairman of the Supervisory Board’s report
Statutory Auditors’ report on the report prepared by the Chairman of the Supervisory Board
Date of appointment and positions held by Directors
Directors’ remuneration
146
Other information
148
150
151
Faiveley Transport Group simplified legal structure
Certificate of persons responsible for the Annual Report
Statutory Auditors’ fees
Faiveley transport
2009/2010 FINANCIAL REPORT
MANAGEMENT REPORT
OF THE MANAGEMENT BOARD
MANAGEMENT REPORT
OF
THE
MANAGEMENT
BOARD
TO THE ANNUAL GENERAL MEETING OF 13 SEPTEMBER 2010
•• Newly incorporated companies:
––Faiveley Transport Canada (Toronto tramway project);
––Faiveley Transport Metro Technology Singapore and Faiveley Transport
Metro Technology Taiwan (Platform Doors and Gates business);
––FMRP (joint venture for the manufacturing of braking equipment in
the Middle East).
We have convened this Ordinary General Meeting in compliance with
legal and regulatory requirements, to submit for your approval the
Faiveley Transport annual and consolidated financial statements as of
31 March 2010.
These financial statements have been prepared in accordance with
Articles L 232-1 and L 233-16 of the Commercial Code.
The parent company and consolidated financial statements have
been approved by the Management Board on 11 June 2010 and were
presented to the Supervisory Board and approved at its meeting of
11 June 2010.
This report has been compiled by applying Articles L 232-1 paragraph 2
and L 233-26 of the Commercial Code. It is available to the shareholders
prior to the Meeting in accordance with legal and regulatory
requirements.
The annual financial statements of Faiveley Transport and the
consolidated financial statements have been compiled in conformity
with legal and regulatory rules of presentation and valuation.
•• Change of company name:
The Combined General Meeting held on 22 September 2009 endorsed
the change of company name of Faiveley S.A. to Faiveley Transport,
which better reflects the Group’s commercial identity worldwide.
•• C
hanges in Group governance:
–– Following the Combined General Meeting of 22 September 2009,
the Supervisory Board elected a new Chairman, with François
Faiveley giving up his position to Philippe Alfroid. Mr. Faiveley
considered that this choice would improve the company’s
governance and submitted it for approval by other Supervisory
Board members, who endorsed it. Mr. Faiveley was elected ViceChairman of the Supervisory Board.
–– The Supervisory Board also appointed Thierry Barel as member of
the Management Board. Mr. Barel joined the Group July 2009 as
Chief Operative Officer.
–– The Management Board now comprises four members: Robert
Joyeux, Chairman and Chief Executive Officer, Thierry Barel, Chief
Operating Officer, Erwan Faiveley and Etienne Haumont, Chief
Financial Officer of the Group.
•• T
he Combined General Meeting of 22 September 2009 delegated to
the Management Board its powers in relation to:
–– granting share subscription and/or purchase options;
–– issuing shares or marketable securities giving right to new or
existing shares of the Company, with, in cases new shares are
granted, the cancellation of the pre-emption right.
2
At its meeting of 23 November 2009, the Management Board
decided to allocate, from that date and up to 23 November 2017,
options giving right to subscribe for new shares of the Company,
to be issued as part of a capital increase, for a total amount not
exceeding €144,000, corresponding to 144,000 new shares of a par
value of €1 each. The new shares will be issued at a price of €54.91
each.
•• P
ursuant to a contract signed on 17 July 2009, Faiveley Transport has
entrusted investment services provider Oddo Corporate Finance
with implementing a liquidity contract, consistent with the Ethics
Code issued by the AFEI, approved by the Autorité des Marchés
Financiers in its ruling of 22 March 2005 and published to the BALO
of 1 April 2005. This liquidity contract was concluded for an initial
period running from 1 July 2009 to 31 December 2009 and will be
renewed by tacit agreement for successive twelve month periods. As
part of the implementation of the contract, the Company allocated
€500,000 and 10,000 shares to the liquidity contract.
A. GROUP OPERATIONS 2009/2010 –
CONSOLIDATED FINANCIAL STATEMENTS
As required by law, the financial statements of companies under direct
or indirect control of Faiveley Transport were consolidated at 31 March
2010 with those of the parent company. The principles and conditions
of this consolidation for the financial year 2009/2010, the related scope
of consolidation and the restatements undertaken in accordance with
the accounting techniques of consolidation are presented in the notes
to the Consolidated Financial Statements.
A.1. Consolidation methods
The year ended on 31 March 2010 and had a standard duration of 12
months.
A.2. Change in group structure
•• T
wo mergers were carried out over the year 2009/2010. On the
one hand, Faiveley Transport Leipzig GmbH & Co.KG was merged
into Faiveley Beteiligungs GmbH (subsequently renamed Faiveley
Transport Leipzig GmbH) and on the other hand, Sab Iberica S.A.
was merged into Faiveley Transport Iberica S.A.. These two mergers
took effect retroactively from 1 April 2009 for accounting and tax
purposes.
4.1. Published financial statements
•• Income statement
2009/2010 2008/2009 2007/2008
A.3. Subsidiaries operations
Ladies and gentlemen,
A.4. IFRS consolidated financial statements
of Faiveley Transport
The financial year was marked by strong business growth in China,
in particular for Shanghai Faiveley Railway Technology and entities
in charge of the Platform Doors and Gates business (Faiveley
Transport Far East and Faiveley Metro Technology Shanghai). Faiveley
Transport India also experienced strong growth due to the faster
pace of deliveries in relation to the Delhi line 2 underground, as well
as Faiveley Transport Australia. The Asia-Pacific region as a whole
achieved sales growth of 51%.
Europe noted a slight decrease in sales, in particular for Faiveley
Transport Leipzig, which had experienced strong growth the previous
year due to the accelerated delivery of major contracts.
Sales
875,948
852,024
692,860
EBITDA (*)
% of sales
134,223
15.3%
129,151
15.2%
101,727
14.7%
Profit from operations
% of sales
118,851
13.6%
114,498
13.4%
90,363
13.0%
Operating profit
% of sales
118,247
13.5%
113,787
13.4%
88,414
12.8%
Net finance cost
(15,538)
(14,445)
(5,063)
Share of profit from
associates
Income tax
The US subsidiary, Ellcon National, reported moderate sales growth. US
freight did not recover over the financial year.
Net profit from continuing
operations
% of sales
•• Annual sales
Net profit from discontinued
operations
Analysis of contribution to sales 2009/2010 2008/2009 2007/2008
France
225,054
215,684
193,134
Europe (excluding France)
413,822
461,905
380,546
62,809
58,704
30,879
Asia – Pacific
174,263
115,732
88,301
TOTAL GROUP
875,948
852,024
692,860
Americas
In line with forecasts made early in the year, full-year sales increased
moderately by 2.8% to €876 million. On a like-for-like basis, growth
was 1.9%.
•• Sales by activity
Air conditioning
Couplers
2009/2010
2008/2009
17%
18%
2%
2%
31%
31%
Electromechanical systems
3%
3%
Electronics
5%
6%
Brakes
24%
24%
On-board doors
14%
12%
4%
4%
Customer Services
Platform Doors and Gates
The relative significance of operations within the Group remained
stable.
-
-
-
(27,852)
(28,095)
(25,723)
74,857
8.5%
71,247
8.4%
57,628
8.3%
-
-
-
Net profit
74,857
71,247
57,628
Minority interests
(3,738)
(19,764)
(21,312)
Net profit - Group share
% of sales
71,119
8.1%
51,483
6.0%
36,316
5.2%
5.04
4.06
2.98
Net earnings per share
(*) Operating profit + amortisation and depreciation
•• Operating profitability
Profit from operations totalled €118.9 million, which is 13.6% of sales.
This is a continuing improvement compared to the previous year (up
3.8%).
After deducting restructuring costs and adding net proceeds from the
disposal of non-current assets, operating profit was up 3.9% compared
to 2008/2009 to €118.2 million. The operating margin was thus 13.5%.
The various items making up operating profit may be analysed as
follows:
2009/2010 2008/2009 2007/2008
Sales
875,948
852,024
692,860
Gross profit
247,031
242,291
198,073
Administrative costs
(68,758)
(73,938)
(60,401)
Sales and marketing costs
(46,107)
(38,451)
(34,751)
R&D costs
(11,425)
(12,864)
(13,022)
Other current operating
income and expenses
(1,890)
(2,540)
464
118,851
114,498
90,363
Non recurring income and expenses
(604)
(711)
(1,949)
118,247
113,787
88,414
Operating profit
3
Faiveley transport
MANAGEMENT REPORT
––Gross profit
––Non-recurring operating income and expenses
––Minority interests
––Acquisition goodwill:
The Group’s gross profit amounted to €247 million at 31 March 2010
(28.2% of sales), compared with €242.3 million (28.4% of sales) at
31 March 2009 and €198.1 million (28.6% of sales) at 31 March 2008.
The majority of non-recurring operating expenses was due to
restructuring costs and gains and losses from the disposal of property,
plant and equipment and intangible assets.
The minority interests break down as follows:
Acquisition goodwill increased by €4.1 million, from €535.9 at 31 March
2009 to €540 million at 31 March 2010.
Over the financial year, Ellcon National finalised the alignment of
its costs structure in line with Group rules. This was reflected in the
recognition of indirect production costs against gross profit (previously
recognised as administrative costs). The impact of this reclassification
on gross profit was a negative 0.2%. Excluding this reclassification, the
2009/2010 gross profit would have been stable at 28.4% of sales.
Restructuring costs amounted to €0.3 million over the period,
compared with €0.5 million the previous year and €1.9 million at
31 March 2008. Over the 2009/2010 financial year, these restructuring
costs primarily related to the merger of Sab Iberica into the Faiveley
Transport Iberica subsidiary and the restructuring of Ellcon National.
––Administrative costs
Administrative costs amounted to €68.8 million over 2009/2010,
compared with €73.9 million over the previous financial year and
€60.4 million over 2007/2008, which was a decline of 7% over the year,
compared to an increase of 22.4% over the 2008/2009 period. These
costs represented 7.8% of sales, compared to 8.7% at 31 March 2009
and 2008.
Administrative costs decreased over the year due to the indirect
production costs reclassified by Ellcon National, as well as cost cutting
and other reclassifications to sales and marketing costs.
––Sales and marketing costs
The loss on disposal of non-current assets was €0.3 million over the
period, compared with €0.2 million at 31 March 2009 and €0.1 million
at 31 March 2008.
––Consolidated net profit
The consolidated net profit was €74.9 million, compared with
€71.2 million in the previous financial year, which is an increase of 5.1%.
Net profit was influenced by the following items:
•• Net finance cost
The net finance cost amounted to €15.5 million at 31 March 2010,
compared with €14.4 million at 31 March 2009. This increase was
analysed as follows:
Sales and marketing costs were €46.1 million over 2009/2010,
compared with €38.5 million over the previous financial year and
€34.7 million over 2007/2008, which was an increase of 19.9% over the
period and 10.6% over the 2008/2009 period. They represented 5.3% of
sales at 31 March 2010, compared with 4.5% at 31 March 2009 and 5%
at 31 March 2008.
•• interest relating to borrowings taken out as part of the December
2008 reorganisation of the Group’s bank debt had an adverse
impact on the net finance cost of €11.9 million;
The increase in sales and marketing costs primarily resulted from
higher staff numbers during the year and the full-year impact of
personnel recruited the previous year. This recruitment drive enabled
the Group to significantly increase its order book.
•• o
ther financial charges and income, comprising sundry bank
charges, leasing interest, interest on overdraft and other borrowings
taken out by the subsidiaries, the interest expense on pension
commitments, offset by other financial income was a net expense
of €3.4 million.
––Research and Development costs
Research and Development costs are taken to the balance sheet if they
meet the capitalisation criteria set by IAS 38. If not, they are recognised
as expenses.
The Group’s research and development costs that were recognised as
expenses represented €11.4 million over the 2009/2010 financial year,
being 1.3% of sales, compared with €12.9 million, being 1.5% of sales at
31 March 2009 and €13 million, being 1.9% of sales at 31 March 2008.
The apparent decrease over 2009/2010 was primarily due to the fact
that a higher portion of R&D costs met the capitalisation criteria of
IAS 38.
––Other operating income and expenses
Other operating income and expenses correspond to a net expense of
€1.9 million over the period, compared with a net expense of €2.5 million
at 31 March 2009 and net income of €0.5 million at 31 March 2008.
––Profit from operations
As a result, profit from operations increased by 3.9% compared with
the previous year to €118.2 million, being 13.5% of sales. It had totalled
€114.5 million (13.4% of sales) at 31 March 2009 and €90.4 million
(13.0% of sales) at 31 March 2008.
•• t he slightly unfavourable realised and unrealised foreign exchange
loss on financial transactions, after deducting the value of derivative
instruments, was €0.2 million;
Interest charges relating to borrowings increased moderately, since
the first year of full-year recognition since the restructuring of the
Group’s shareholding was partly offset by the decline in interest rates
and a lower applicable bank margin.
––Income tax
The income tax charge was €27.9 million at 31 March 2010, which was
a 0.9% decrease compared to the previous financial year (€28.1 million
at 31 March 2009, up 9.2% from 2007/2008).
The effective tax rate was 27.1%, compared with 28.3% at 31 March
2009 and 30.9% at 31 March 2008.
The current income tax rate was 25.9%, compared with 29.9% at
31 March 2009 and 24.4% at 31 March 2008.
The Group benefited both from lower tax rates in China in relation to
three subsidiaries, due to their status as high-tech companies, and tax
savings made following the use of retained losses.
––Net profit from discontinued operations:
None.
(€ millions)
2009/2010 2008/2009 2007/2008
35.86% held by Sagard in
Faiveley Transport
-
17.1(1)
19.9
2.40% held by the
management in Faiveley
Transport
-
1.2(1)
1.3
Other (2)
3.7
1.5
0.1
Minority interests
3.7
19.8
21.3
(1) Share of profit attributable to Sagard and the management at 23 December 2008, the
date their shares were purchased.
(2) At 31 March 2010,“other” primarily related to the share attributable to minority interests in
Faiveley Transport Lekov a.s. (75% owned), Nowe GmbH (75% owned) and Shanghai Faiveley
Railway Technology (51% owned).
The significant increase in minority interests in 2009/2010 was due
to the good operating performance of Shanghai Faiveley Railway
Technology.
•• Net profit - Group share
After taking account of the above items, the Group reported a
consolidated net profit of €71.1 million, compared with €51.5 million in
the previous year and €36.3 million in 2007/2008.
Net earnings per share was €5.04, compared with €4.06 at 31 March
2009 and €2.98 at 31 March 2008, a growth of 24%. Net earnings
per share was calculated after deducting the treasury shares held by
Faiveley Transport, which totalled 283,889 at 31 March 2010, compared
to 331,195 shares at 31 March 2009 and 337,915 shares at 31 March 2008.
At the end of this first full financial year after the restructuring of the
Group shareholding, the earnings enhancing effect of this transaction
was 32%.
•• Summarised balance sheet
2008/2009 2008/2009 2007/2008
2009/2010 Restated * Published Published
Acquisition goodwill
540,013
536,988
535,871
241,369
Net non-current
assets
123,589
125,123
125,551
86,237
31,591
28,909
28,845
19,496
Current assets
399,555
365,291
365,562
330,178
Cash and cash
equivalents
196,705
164,077
164,077
114,434
-
-
-
-
1,291,453
1,220,388
1,219,906
791,714
Deferred tax assets
Assets held for disposal
Total assets
Equity
376,666
296,921
296,921
286,757
Provisions
109,753
105,210
105,305
103,041
23,466
20,125
19,745
15,235
Financial debt
442,688
479,403
479,403
109,688
Current liabilities
338,880
318,729
318,532
276,993
Liabilities held for
disposal
-
-
-
-
Deferred tax liabilities
Total EQUITY AND
LIABILITIES
1,291,453
1,220,388
1,219,906
This growth was primarily due to:
•• the adjustment of Ellcon National’s acquisition goodwill during the
allocation period. The value of this acquisition goodwill increased
from €24.4 million at 31 March 2009 to €25.2 million at 1 April 2009,
an increase of €0.8 million. This was due to inventories (down
€0.2 million), provisions for guarantees (up €0.1 million), deferred tax
(down €0.3 million) and the earn-out charge (€0.4 million);
•• the translation adjustment of the Ellcon National goodwill (assessed
in USD on the acquisition date) had a €0.3 million negative impact;
•• the adjustment of the acquisition goodwill during its allocation
period, resulting from the acquisition of minority interests in Faiveley
Transport generated an increase of €0.2 million;
•• the recognition of a €1 million increase in the acquisition goodwill
of Faiveley Transport Lekov, following the appraisal of the put option
that minority shareholders hold in respect of their shares;
•• the recognition of a €2.8 million increase in the acquisition goodwill
of Nowe following the appraisal of the put option that minority
shareholders hold in respect of their shares;
•• the recognition, as a reduction of the acquisition goodwill of Sab
Wabco, of tax savings achieved over the financial year, relating to the
subsidiaries originating from Sab Wabco’s former group structure,
which had tax losses carried forward at the time of their acquisition
by Faiveley Transport Group, for a total of €0.4 million.
Acquisition goodwill had increased by €294.5 million from
€241.4 million at 31 March 2008 to €535.9 million at 31 March 2009.
This growth was primarily due to:
•• the recognition of the acquisition goodwill resulting from the
purchase of the minority interests in Faiveley Transport from Sagard
and the management, for a total of €265.6 million;
•• the recognition of the acquisition goodwill resulting from the
purchase of the minority interests in Sab Iberica from CAF and
Alstom for a total of €0.3 million;
•• the acquisition of Faiveley Transport Gennevilliers, for a total of
€1 million;
•• the acquisition of Ellcon National Inc. and Ellcon Drive LLC (“Ellcon”)
for a total of €28.6 million;
•• the recognition, as a reduction of the acquisition goodwill of Sab
Wabco, of tax savings achieved over the financial year, relating to the
subsidiaries originating from Sab Wabco’s former group structure,
which had tax losses carried forward at the time of their acquisition
by Faiveley Transport Group, for a total of €0.8 million;
•• the write-off of Faiveley Transport’s goodwill following the merger
with Faiveley S.A., for an amount of €0.2 million.
––Net non-current assets:
Net non-current assets decreased from €125.6 million at 31 March
2009 to €123.6 million at 31 March 2010, a decrease of €2 million.
Net non-current assets had changed from €86.2 million at 31 March
2008 to €125.6 million at 31 March 2009, an increase of €39.4 million.
The constituents of non-current assets are detailed in § 1.2.6, Notes E.2,
E.3, E.4 and E.5, respectively, to the consolidated financial statements.
791,714
(*) Restated following the adjustment of Ellcon National’s acquisition goodwill during the
year of allocation.
4
5
Faiveley transport
MANAGEMENT REPORT
––Working capital requirements (WCR)
At 31 March 2010, the net WCR(1) was €53.3 million, compared to
€43.8 million at 31 March 2009. After restatement for the disposal of
receivables deconsolidated, movements in losses on completion and
the impact of IAS 32/39 on projects, the WCR increased by €8.1 million.
The volume effect relating to sales growth was €6.1 million based on
similar WCR component ratios as in the previous year. The interest rate
effect was €1.9 million.
Due to the Group’s involvement in a number of major projects, the
value of work in progress recognised pursuant to IAS 11 significantly
increased and was offset by advances received from customers.
At 31 March 2009, net WCR was €43.8 million, which was a face value
improvement of €7.1 million over the financial year. After restatement
for additions to the group structure, movements from the transfer
of receivables deconsolidated (which increased by €40.7 compared
with the previous year), movements in losses on completion and the
impact of IAS 32/39 on projects, the WCR increased by €26.4 million.
The volume effect relating to sales growth was €25.8 million based on
similar WCR component rates as in the previous year. The interest rate
effect was €0.6 million.
At 31 March 2008, WCR declined by €3.8 million. The volume effect
was positive by €14.2 million and the interest rate effect negative by
€20.4 million.
––Cash and cash equivalents
Analysis of cash and cash equivalents at 31 March 2010:
Short-term investments
€40,944 thousand
Factoring
€59,220 thousand
Banks (available cash)
€96,373 thousand
Cash
€168 thousand
Total cash and cash equivalents
€196,705 thousand
In December 2008, on implementing the new bank debt, the Group
negotiated additional flexibility in terms of factoring and disposal
of deconsolidated receivables with the banking pool. The maximum
amount of receivables that can be transferred to the factor rose from
€60 million to €100 million, thereby improving applicable margins
on bank borrowings. At 31 March 2010, the amount of factoring was
€59.2 million, compared to €44.6 million at 31 March 2009. No funds
were drawn from the factoring facility at 31 March 2010. The Group
completed the deconsolidation process by disposing of receivables
on one-off bases (forfeiting) totalling €38.6 million, compared to
€49.2 million at 31 March 2009.
––Equity
Equity amounted to €376.7 million at 31 March 2010, compared with
€296.9 million at 31 March 2009, which is an increase of €79.7 million.
This movement is primarily due to the impact of:
•• Net profit for the year: €74.9 million;
•• the payment of a cash dividend to shareholders in the parent
company and other minority shareholders: (€14.1 million);
•• the movement in translation difference: €21.9 million;
•• the movement in minority interests, for (€2.3 million), following the
appraisal of the put option held by minority interests in Faiveley
Transport Lekov and Nowe.
Equity amounted to €296.9 million at 31 March 2009, compared
with €286.8 million at 31 March 2008, which was an increase of
€10.1 million.
This movement is primarily due to the impact of:
•• net profit for the year: €71.2 million;
•• the payment of a cash dividend to shareholders in the parent
company and other minority shareholders: (€4.9 million);
•• the movement in translation difference: (€21.0 million);
•• a share capital increase of €1.9 million and share premium of
€86.2 million, and the IFRS restatement of the transfer premium for
(€1 million);
•• the variance in minority interests, for (€121.7 million).
––Provisions
At 31 March 2010, provisions totalled €109.8 million, compared with
€105.3 million at 31 March 2009, a net increase of €4.5 million.
The various items comprising this movement may be analysed as
follows:
•• €8.7 million increase in provisions for completed contracts;
•• €1.8 million decrease in provisions for pension commitments;
•• €0.7 million decrease in provisions for restructuring;
•• €1.7 million decrease in other provisions for liabilities and charges.
At 31 March 2009, provisions totalled €105.3 million, compared with
€103 million at 31 March 2008, a net increase of €2.3 million.
The various items comprising this movement may be analysed as
follows:
•• €8.1 million increase in provisions for completed contracts, of which
€5.5 million in relation to Ellcon National being added to the group
structure;
•• €5.2 million decrease in provisions for pension commitments;
•• €1.2 million decrease in provisions for restructuring;
•• €0.6 million increase in other provisions for liabilities and charges.
––Net financial debt
Net financial debt, as defined in § 1.2.6, Note E.15.4 to the consolidated
financial statements, decreased by €76.2 million, from €301.6 million at
31 March 2009 to €225.5 million at 31 March 2010.
This change was due to:
•• a €43.1 million decrease in financial debt;
•• a €32.6 million increase in cash and cash equivalents;
•• a €0.5 million increase in financial receivables.
As a result, the Group’s financial structure changed over the year:
•• the net debt to EBITDA ratio underlying the level of bank margin fell
from 2.33 at 31 March 2009 to 1.73 at 31 March 2010;
•• the net debt to equity ratio (gearing ratio) was 59.9% at 31 March
2010, compared with 101.6% at 31 March 2009;
•• the net debt to sales ratio decreased from 35.4% at 31 March 2008 to
25.7% at 31 March 2010.
From an economic point of view, Group equity includes treasury shares,
which are held for transfer as part of the share option plan. The exercise
of share options (240,095 at the end of March 2010) would result in an
improvement of Group cash and cash equivalents by €7.7 million. The
value of treasury shares not allocated amounted to €2.6 million at the
31 March 2010 share price (including treasury shares held as part of the
liquidity contract).
•• Cash flow statement
––Net cash used in investing activities:
2009/2010 2008/2009 2007/2008
Net profit
74,857
71,247
57,628
+ Movements in amortisation,
depreciation and provision
charges and others
24,457
6,537
6,698
Self-financing capacity
99,314
77,784
64,326
+ Changes in WCR
(9,160)
28,757
8,098
Net cash from operating
activities
90,154
106,541
72,424
(16,838)
(15,863)
(15,849)
(221)
218
5,756
Purchase of PPE and
intangible assets
Movement in other financial
assets
Net cash from (used in)
acquisitions/sales of
subsidiaries and minority
interests
-
(457,607)
(2,080)
Net cash used in investing
activities
(17,059)
(473,252)
(12,173)
Proceeds from issuance of
share capital
-
1,875
-
Sale (purchase) of treasury
shares
1,833
(43)
355
Change in share premium
-
85,244
-
(2,230)
(1,257)
-
Cash dividends paid
Other equity movements
(14,069)
(4,859)
(10,263)
Movement in loans
(29,065)
345,946
(30,032)
Net cash from (used in)
financing activities
(43,531)
426,906
(39,940)
17,033
(30,961)
(4,239)
(51)
4,256
(1,522)
Cash and cash equivalents
at start of period
145,180
111,690
97,140
Cash and cash equivalents at end of period
191,726
145,180
111,690
Net foreign exchange
difference
Impact of increase/(decrease)
in value of cash
––Self-financing capacity:
At 31 March 2010, the self-financing capacity was €99.3 million,
a significant 27.6% increase compared with the previous year
(€77.8 million), which had already increased by 21% compared with the
year-end at 31 March 2008. This significant change was primarily due
to the net profit for 2009/2010, which was €74.8 million, compared to
€71.2 million the previous year, as well as the €17.2 million favourable
movement in provisions for liabilities and charges and deferred
taxation, as amortisation and depreciation charges were similar in the
two financial years.
Investments in property, plant and equipment and intangible assets
were virtually stable over the past three years.
––Net cash from (used in) financing activities:
The Faiveley Transport Group distributed a cash dividend of €14.1 million
over the period, compared with €4.8 million the previous year. The
change in borrowings was primarily due to the repayment of the debt
taken out in December 2008 as part of the minority interest purchase
programme of the “former” Faiveley Transport, totalling €26.2 million.
4.2. Economic comments
As announced at the start of the financial year, the Group reported
a slight growth in full-year sales, following significant growth in the
previous year (up 23%).
The Asia-Pacific region experienced very strong growth (up 51%),
resulting from a dynamic market and the sales and marketing drive
of previous years.
The freight business did not register any recovery this year.
As in previous years, the Group’s business model enabled the Group to
maintain a stable level of capital expenditure.
4.3. Research and development
The majority of the research and development conducted within
the Group falls within the framework of the engineering included
in contracts and is therefore primarily sold to customers (Faiveley
Transport retaining the intellectual property rights).
The financial year saw a significant increase in development
activities outside projects, primarily in France, Germany and the US. In
application of IFRS standards, €3.8 million in development costs was
capitalised at 31 March 2010, compared to €2 million at 31 March 2009,
and €1.9 million in March 2008. A €1.9 million amortisation charge
was recognised at 31 March 2010, compared to €1.8 million at 31 March
2009 and €1.9 million in March 2008.
At 31 March 2010, the total development costs recognised in balance
sheet assets were €7.5 million. The main contributing subsidiaries were:
Faiveley Transport Tours for €4.2 million, Faiveley Transport Witten for
€1.3 million, Faiveley Transport NSF for €0.6 million and Ellcon National
for €0.5 million.
Development costs taken to the balance sheet are amortised over 3
years.
Public operating grants are recognised in the income statement of the
separate financial statements under “operating subsidies”. Under IFRS,
if certain costs incurred can be capitalised pursuant to IAS 38, operating
subsidies are offset against the “investment grant” item of equity in
accordance with IAS 20. Subsequently, the “investment grant” item is
taken to the income statement, also over a period of three years, in line
with the amortisation charge applied to development costs previously
capitalised.
––Net cash from operating activities:
Excluding changes in transfers of deconsolidated receivables and the
impact of IAS 32/39, WCR increased by €9.2 million. This was primarily
due to the volume effect resulting from strong sales growth.
1 Calculated based on net balance sheet values, on a constant group structure and foreign exchange basis and after deducting losses on completion up to the value of projects in progress. The
WCR used in the cash flow statement presented in Note E.12 to the consolidated financial statements was calculated excluding changes in group structure, movements in foreign exchange and
without deducting provisions for losses on completion deducted from the asset.
6
7
Faiveley transport
4.4. Business developments since the year-end
4.4.1. Significant events after the year-end
None.
4.4.2. 2010/2011 outlook
•• Order book at 31 March 2010
The slight increase in 2009/2010 sales fails to indicate how buoyant
the Passenger market is, as it enabled the Group to increase its order
book by 14.2% to €1,301 million.
MANAGEMENT REPORT
has already had major successes. In light of calls for tender in progress,
the Group expects sales to remain well-oriented over 2010/2011.
Orders won for new train models initially generate significant
engineering activity, with equipment sales being recorded at least
twelve months later. As a result, the Group is forecasting a year of
transition for 2010/2011, stable at sales level, followed by renewed
strong sales growth over the following financial years.
China remains the market that offers the soundest growth prospects
and the Group is stepping up resources in this country in order to win
a significant market share.
All geographic regions noted a marked increase in their order book.
In particular in North America (Toronto contract) and Asia.
A number of delays noted for certain projects and the postponement
of calls for tenders in a few programmes due to funding difficulties, do
not call into question our sales outlook.
•• Organisation
4.5. Cash and capital
The Moving Forward project is aimed at improving the Group’s
performance by uniting its IT systems (infrastructures, technical data,
Enterprise Resource Planning). Within this framework, the Group
continued to redefine its operational processes and develop the
organisation of certain sites, in particular from an industrial point of
view (supply chain, purchasing, quality).
•• Enterprise Resource Planning System (ERP)
The basic configuration is being implemented and stabilised in one of
the major sites (Leipzig).
•• Budget
The market structure is in an atypical phase, with fewer repeat orders
for train models that are a few years old, and more launches of new train
models as part of large-scale contracts, for which Faiveley Transport
4.5.1. Capital
A/ Share capital of Faiveley Transport
See chapter C. Information on the share capital.
B/ Shareholders of Faiveley Transport
Reminder of transactions of 23 December 2008:
The Extraordinary General Meeting of 23 December 2008 approved
the transactions, as presented in the document E registered with
the Autorité des Marchés Financiers under number E.08-115 on 25
November 2008. The implementation of these agreements resulted
in particular in the contribution and merger transactions carried out
between 23 December 2008 and 31 March 2009. Lastly, Sagard sold on
the market, in February 2009, all their equity investment in Faiveley
S.A. This investment was held following the contribution transactions
approved by the General Meeting of 23 December 2008.
Faiveley S.A. was renamed Faiveley Transport on the occasion of the Annual General Meeting of 22 September 2009. Following these transactions,
the Group’s shareholding is now structured as follows:
4.5.2. Financing conditions
The average rate applied to net debt over the 1 April 2009 - 31 March
2010 period was 2.67% and 3.12% on the euro and US dollar debt,
respectively. These average rates take account of the hedging in place.
A/ Long-term loans
•• Bank financing
Following the reorganisation of its shareholding and the overall
refinancing of the existing bank debt, the Faiveley Transport Group
finalised, on 23 December 2008, a credit agreement with a pool of nine
banks in relation to a term loan of €407 million and USD 50 million,
drawn down when the transaction was signed. A revolving credit
line of €49 million was also established to fund the Group’s general
financing requirements. At 31 March 2010, in accordance with the
repayment schedule, the outstanding portion of these loans was
€384 million and USD 45 million. No drawdowns had been made on
the revolving credit facility.
This debt is subject to a number of covenants, of which the two most
important relate to the Group’s profitability and financial structure:
––“Leverage Ratio”, which designates, over a period of 12 moving months
ending at each half-year close, Consolidated Net Debt to Consolidated
EBITDA (based on definitions specific to the loan documentation).
At each of the following dates, the Group must maintain this ratio
below or equal to the following levels:
Dates
Leverage ratio
31 March 2010
3.00
30 September 2010
3.00
31 March 2011
2.50
30 September 2011
2.50
31 March 2012
2.00
30 September 2012
2.00
31 March 2013
2.00
30 September 2013
2.00
At 31 March 2010, the ratio was 1.73.
––The “gearing ratio”, which designates, at each half-year end,
Consolidated Net Debt to Consolidated Equity.
At each of the following dates, the Group must maintain this ratio
below or equal to the following levels:
Dates
Gearing ratio
31 March 2010
1.50
30 September 2010
1.50
31 March 2011
1.50
30 September 2011
1.50
31 March 2012
1.50
30 September 2012
1.50
31 March 2013
30 September 2013
The cost of the new bank debt is estimated at 3.08% over 2010/2011,
including hedges and margins for the euro debt, and 2.93% for the
USD–denominated debt.
B/ Analysis of Faiveley Transport Group net debt
At 31 March 2009, the Group had borrowings of €301.6 million,
comprising financial debt taken out from banks totalling €473.7 million,
offset by financial receivables of €8 million and cash and cash
equivalents of €164.1 million.
At 31 March 2010, Group debt was €225.5 million, comprising
financial debt taken out from banks totalling €430.7 million, offset by
financial receivables of €8.5 million and cash and cash equivalents of
€196.7 million.
Talking into account the existing financing arrangements, the main
ratios are:
31 March 2010 31 March 2009 31 March 2008
Net debt/equity
59.9%
101.6%
0
Net debt/sales
25.7%
35.4%
0
It should be noted that Faiveley Transport holds 283,889 treasury
shares that are designated, for almost their entirety, to be purchased
by managers who benefit from a stock option plan. These shares are
currently deducted from equity. The exercise of these stock options
(240,095 at end March 2010) would result in a cash inflow for the Group
of €7.7 million. Unallocated treasury shares were valued at €2.6 million
at the stock market price of 31 March 2010 (including treasury shares
held as part of the liquidity contract).
4.5.3. Restriction to the use of capital
The documentation of the debt established in December 2008
includes limitations in terms of existing or new bilateral debt and
similar financing.
The ceilings were set as follows:
bilateral debt
€40 million
lease finance
€15 million
disposal of receivables
€100 million
various financing
€10 million
1.50
overdraft pursuant to a cash
pooling agreement
€10 million
1.50
seller credit authorised
At 31 March 2010, the ratio was 0.60.
The new bank debt bears interest indexed on Euribor and USD Libor,
with a margin that varies depending on the leverage ratio.
8
In line with financing agreements, the Group put into place a hedging
strategy based on swaps and options. The hedging level varies between
76% and 87% of the debt drawn in euro, depending on euro interest
rates over the 2010/2011 period. The USD-denominated debt is fully
hedged.
up to 25% of the selling price.
In addition, off-balance sheet commitments (bank guarantees on
long-term contracts) may not exceed 22% of the Group’s order book
in each financial year.
Subsidiaries’ borrowings (excluding joint ventures) must not exceed
20% of the Group’s gross debt.
9
Faiveley transport
4.5.4. Financing of operations and expected sources
Cash flow generation and available finance currently cover the Group’s
recurring industrial investment requirements.
The Group’s debt ratios allow for further bilateral financing to be put
into place if rendered necessary by the size of certain acquisitions.
A €49 million revolving credit can be used for the Group’s general
funding needs. It was unused at 31 March 2010.
Euro-denominated amortisable repayments are funded by cash flow
generated outside the US and the US dollar repayments by cash flow
generated by Ellcon National, with the bullet portion (fifth year, or end
2013) to be refinanced when required.
The conditions for the early repayment of Group debt notably include
the loss of majority control of voting rights by the Faiveley Family and
failure to comply with financial ratios.
A.5. Environmental information
The Group’s production activities, by their nature, generate little
waste in the environment. The optimisation of the protection of the
environment is one of the priorities for the Group whether in France or
through its foreign subsidiaries. To this end, the Group takes initiatives
to integrate environmental concerns into the management of its
operations and facilities, in order to:
•• c omply with the legal and regulatory requirements that apply to all
sites;
•• fi
nd solutions that limit the impact of operations on the environment,
prevent pollution and ensure continuous improvement in economic
competitiveness;
•• r educe non renewable energy consumption and improve the quality
of waste gases as well as improving waste sorting;
•• c ontribute to the business and social aspects of sustainable
development.
The procedures aimed at correctly applying environmental, health and
safety regulatory provisions are decentralised and controlled by each
of the main industrial sites. Environmental, health and safety costs
are budgeted at site or unit level and recognised in the consolidated
income statement. In all other subsidiaries, aspects liable to have an
impact on the environment are integrated in the decision making
and implementation structures of the management system. The year
2009/2010 saw the continuing implementation of procedures and
methods aimed at providing better management of legal provisions,
objectives and rules in terms of environmental management.
The sites continued to take steps with a view to achieve ISO 14001
certification. This process is essential to meet customers’ expectations
and improve the public authorities and shareholders’ trust in the
Group.
At 31 March 2010, 11 entities, including the Group’s main industrial
sites, were undergoing ISO 14001 certification in relation to their
environmental management.
10
MANAGEMENT REPORT
5.1. Measures taken to ensure compliance with
legislative requirements
5.2. Specific measures to limit damage to
the biological balance
The Group seeks to associate all French and foreign sites in a regular
and genuine gathering of environmental information. This collective
commitment led to the setting up of a general surveillance programme
at the sites.
In addition to the exercise of these controls, various new measures
were introduced during the year just ended:
––installation of heat exchangers and heat economisers;
––use of bio-degradable oils;
––increase in the number of waste containers;
––environmental analysis of new projects (% recyclable, % recycled,
etc.);
––energy assessment of the Group’s major French industrial sites;
––additional investment (€420 thousand) for the painting room of
the Saint-Pierre des Corps site, of which 15% was directly related to
environmental protection.
The Company’s process is decentralised: each unit is responsible for
its environmental self-assessment, for defining an action plan and
associated objectives and for reporting its own environmental data.
As part of this monitoring, possible irregularities and potential sources
of nuisance or energy waste are specifically targeted for observation:
an example of this is the battle against noise and the particular
measures taken to remedy this issue.
The Quality Safety Environment staff at production sites have a
duty to follow the applicable legislation and to analyse action plans
implemented in order to conform. The effects of the Regulation Reach
N°1907/2006 of 18 December 2006, which came into force on 1 June
2007 for the use of chemical substances by the Group that were
included in the field of application of this text, were taken into account
in their entirety. The Group is committed to providing a positive
contribution to the sustainable development of the European rail
industry. The Company has voiced its intent to maintain and expand its
operations in accordance with the founding principles of sustainable
development.
The Group is thus fully aware of these requirements and has dedicated
the necessary human and financial resources to face up to its
responsibilities and meet its targets.
Relative to the implementation of Directive 2002/95/CE of the
restrictions on the use of dangerous substances and the Directive
2002/96/CE in respect of west electronic and electrical equipment
(WEEE), it appears that the Group’s operations are not precisely covered
by the categories stated in the various EU and national texts and it is
not required to meet a deadline to conform.
Concerning the use of metals such as cadmium and lead, the
various European production sites have adopted an approach to
progressively eliminate these metals from products manufactured.
The requirement to limit the use of these metals remains a medium
term objective, to the extent that Article 5 of the Directive 2002/95/CE
expressly provides an exemption where substitution is technically or
scientifically impossible or exempt from total safety compared to the
final solution.
Despite the fact that the constraints imposed by the texts more
particularly target mass market electronic and electrical products,
specific attention is paid to these issues.
Lastly, the Group seeks to make all suppliers aware by auditing their
sustainable development policies.
•• Water consumption at the main industrial sites over the financial
year ending 31 March 2010:
Entity
Water (m3)
Shanghai Faiveley Railway Technology
34,282
Shijiazhuang Jiaxiang
9,031
Faiveley Transport Leipzig
2,443
Nowe
74
Faiveley Transport India
5,579
Faiveley Transport Lekov
3,861
Faiveley Transport Italia
18,445
Faiveley Transport Iberica
2,788
A reduction in environmental impact was observed following the
investment by the Landskrona site in a cleaning machine that resulted
in reduced water and solvent consumption and waste.
Faiveley Transport Amiens
2,214
Faiveley Transport Gennevilliers
5,062
The Group took the full measure of the environment public liability
Directive 2004/35/CE, adopted on 21 April 2004, on environmental
responsibility in respect of the prevention and restoration of
environmental damage. By this text, which was transferred into
French law by the law n°2008-757 of 1 August 2008, a Group operation
that damages fauna or flora requires restoration of the damage done
or to support the costs (at the discretion of the public authorities).
Faced with this new regulation, the Group increased its attention to
the protection of the environment and implemented with its insurers
the various options to cover this new area of liability.
Faiveley Transport NSF
5,300
Faiveley Transport Tours
5,808
5.3. Reduced energy intensity and greenhouse gas
emissions and other environmental impacts
The Group has for a number of years sought to collect data on the
energy consumption in its industrial processes. This information
enables the Group to be in keeping with greenhouse gas emissioncutting objectives, decided at an international level, notably within the
framework of the European Union’s commitments.
•• Energy consumption at the main industrial sites over the financial
year ending 31 March 2010:
Entity
Shanghai Faiveley Railway Technology
Faiveley Transport Witten
Nowe
Gas
(KWh)
Electricity
(KWh)
-
3,414,368
104,579
540,800
2,081,485
1,553,703
-
3,612,837
39,797
23,350
-
984,337
2,572,522
1,338,943
226,231
1,687,035
-
1,150,576
2,300,919
2,044,456
4,784,537
2,680,079
7,638,128
4,592,794
ESPAS
335,140
297,076
155,315
206,754
ESPAS
60
The general trend noted within the major production units (except
for China) has today led to a reduction in water (down nearly 50%
for Faiveley Transport Italia and Faiveley Transport Lekov) and energy
consumption (down nearly 10% for Faiveley Transport Italia and
Faiveley Transport Gennevilliers) compared to the previous year.
For instance, the Italian subsidiary replaced its continuous flow
fountains with better performing equipment and improved its lighting
by installing bulbs that used less energy. It also acquired a variable
speed compressor to save on electricity consumption. It also optimised
its gas savings by using a new generation of heating equipment.
5.4. Expenses incurred as part of the policy
of preventing environmental risks
Expenses incurred by Group subsidiaries to prevent the consequences
of their industrial operations to the environment keep increasing.
For instance, the following subsidiaries incurred the following
expenses:
––Faiveley Transport Tours: €14 thousand, excluding waste processing
costs. Industrial investment totalled €76.4 thousand;
––Faiveley Transport Amiens: €83 thousand, of which €38 thousand for
the acquisition of a variable speed compressor to save on electricity
consumption;
––Faiveley Transport Iberica: €54 thousand;
––Faiveley Transport Italia: €18.4 thousand expense;
––Lekov: €17.8 thousand in expenses and €22 thousand for industrial
investments;
––Faiveley Transport India: €10.4 thousand industrial investment;
––Faiveley Transport Witten: €75 thousand;
––Faiveley Transport Leipzig: €20 thousand expenses and €21 thousand
industrial investment;
––Shanghai Faiveley Railway Technology: €26 thousand.
11
Faiveley transport
A.6. Risk factors
6.1. Market risks
As part of its business, the Faiveley Transport Group is exposed to
various types of market risks, notably exchange, interest rate, raw
material, credit and liquidity risks. A description of these risks is
provided below, and additional information is disclosed in note E.16 of
the notes to the consolidated financial statements.
The Group’s programme for exchange rate, interest rate and raw
material management seeks to minimise the potential unfavourable
effect of the financial markets on the Group’s financial performance.
The Group uses derivative financial instruments to cover its exposure
to fluctuations in foreign currency exchange rates. Within the
framework of its hedging policy, the Group may use currency swaps,
hedges, exchange rate options and structured products.
The Faiveley Transport Group covers its exposure to interest rate risk by
the use of swaps and options.
The Group hedges its raw material exposure through raw material
swap contract and structured products.
The Group does not use derivatives for speculation purposes.
––Exchange risk
The main currencies concerned are the US Dollar, Pound Sterling,
Japanese Yen, Czech Koruna, Swedish Krona and Chinese Yuan.
The management of the exchange risk of commercial contracts, where
permitted by regulatory requirements is centralised by the Group
Treasury Department and comprises two parts: the certain and the
uncertain risk.
•• Exchange risk management relating to tenders in foreign
currencies (uncertain risk):
The Faiveley Transport Group is required to submit tenders
denominated in foreign currencies. The Group’s hedging policy is not
to use financial instruments to cover during the offer phase, unless
when specifically decided by Management. The aim is to manage
the exchange risk through normal commercially available means. If
necessary, the Group Treasury Department uses mainly exchange
options and export insurance contracts.
•• Exchange risk management relating to commercial contracts
(certain risk):
Commercial contracts in foreign currencies (most often successful
tenders) are hedged by the Group Treasury Department from
contractual commitment with derivative instruments (mainly forward
purchases and sales, and also exchange swaps and options).
Information concerning derivative financial instruments currently in
place to hedge the exposure to exchange risks for future purchases and
sales is disclosed in the notes to the consolidated financial statements
(note E.16 –Financial instruments and financial risk management).
The Group is exposed to the foreign exchange risk. The Group’s policy
is to systematically hedge against these currencies, except for certain
very long-term contracts, which are faced with the technical limitations
and prohibitive cost of hedging.
12
MANAGEMENT REPORT
At 31 March 2010, the Group thus had the following exposure over all
its commercial contracts:
Currency
Unhedged amount
US Dollar
USD 0.7 million
Pound Sterling
GBP 7.9 million
The GBP 7.9 million amount is part of the SSL project, for which GBP
36.6 million remains outstanding.
Recurring commercial exposure, excluding the subsidiaries’ projects
are hedged, based on the Treasury’s annual budgetary approach,
through forward purchase or sale contracts.
Intra-group financing contracts are hedged by Treasury, through
exchange swap contracts.
––Interest rate risk
The Faiveley Transport Group does not own any significant interestbearing assets; therefore interest rate fluctuations have only a
negligible impact on its profit or loss and operating cash. The interest
rate risk to which the Group is exposed arises as a result of its longterm borrowings.
Finance is indexed on variable Euribor and US Libor interest rates. The
credit agreement commits the Group to hedge against at least 60% of
the principal amount due until December 2012.
To manage its risk, the Treasury Department has implemented a
hedging strategy using swaps, tunnels, caps and options.
The exposure to Euro interest rates is covered for between 76% and 87%
of the total debt drawn down based on Euro interest rate fluctuations
for the 2010/2011 period, to an average maximum rate of 3.08%. The
exposure to US Dollar interest rates is 100% hedged against for the
2010/2011 period at an average maximum rate of 2.93%.
––Raw material risk
The Faiveley Transport Group is exposed to increases in the costs of
raw materials such as steel, copper and aluminium and to increases in
transportation costs.
The Group has already anticipated these effects, both in terms of its
purchasing policy and in the preparation of its tenders. As regards
contracts relating to projects, price indexation mechanisms enable the
Group to absorb a large part of the increases in raw material costs by
passing them on to customers and therefore the risk associated with
raw material cost increases is limited.
However, the Faiveley Transport Group’s sintered brake activity is
exposed to fluctuations in the price of copper. This information is
disclosed in the notes to the consolidated financial statements (Note
E.16.5.c Raw material risk).
The electronic component market is going through a difficult cyclical
situation early in 2010, due to insufficient production capacities. The
Group has put into place a specific policy to monitor this procurement
risk.
––Credit risk
The Group only enters into commercial relationships with third parties
whose financial position is known to be healthy. The Group’s policy is
to verify the financial health of those customers wishing to obtain
credit. The Group has set itself the objective of putting into place
a credit management policy. In the case of derivative instruments
and transactions that generate cash when they are unwound, the
counterparties are limited to high-quality financial institutions.
Due to particular market conditions, the provision for bad debts
significantly increased over the financial year, as the Group opted
for a cautious approach. The Group also made use of factoring and
forfeiting. A description and data is provided in the Notes to the
consolidated financial statements (Notes E.9 Current receivables and
E.16.6 Credit risk).
––Liquidity risk
The Company carried out a specific review of its liquidity risk and
considers that it is in a position to meet future repayments.
The Group’s Finance Department monitors the Group’s liquidity and
guarantees the Group’s capacity to meet its financial commitments
by maintaining a level of cash, cash equivalents and financing facilities
that are commensurate with its size.
On 23 December 2008, Faiveley Transport subscribed to a credit
agreement with a pool of nine banks in relation to a term loan of
€407 million and USD 50 million, which enabled it to reorganise is
shareholding structure and refinance its existing bank debt. At 31 March
2010, in accordance with the amortisation schedule, €384 million and
USD45 million were outstanding.
A €49 million revolving credit was also subscribed in 2008 to fund the
Group’s general financing needs; it had not been drawn at 31 March
2010.
This debt was subject to a number of financial ratios. At 31 March
2010, the Group complied with all covenants required by the credit
agreement. The details of these covenants are disclosed in the notes
to the consolidated financial statements (note E.15 – loans and
borrowings).
6.2. Legal risk
This heading provides a limited overview of the various forms of legal
risks arising from the Group’s operations and also the execution of
its contractual requirements. The Group considers that sufficient
provisions charges have been recognised to date to cover all risks and
litigations.
––Risk of non-conformity:
The Faiveley Transport Group may be confronted by the usual risks
encountered by all industrialists that produce and sell manufactured
products: these are contractual liability put forward by another
professional (car builder, operator, and maintenance) in the event of
non conformity of products delivered or non respect by the seller of
contractual commitments in terms of timescale, reliability, life, etc.
The guarantees concerning the proper operation of products delivered
are granted for longer or shorter periods (between 12 or 36 months on
average) according to the demands of the final customer, the type of
product and its specific features. The risk related to this contractual
guarantee is evaluated upstream and included in the price of the
product.
The risk of cancellation for fault is low due to the technical feasibility
study and understanding of the project by a specialised and dedicated
team within the design office, as well as the selection of dualsource suppliers to avoid any sudden interruption in the delivery of
components or materials.
In order to limit the risk of non-conformity, the Group also uses the
contractual technique that restricts certain types of damages, and
even eliminates some of them (loss of profit, damage to image, loss of
customer base or sales).
When it occurs, litigation is very frequently settled out of court and
under conditions that do not endanger future relationships between
the parties.
Note E.16.7 to the consolidated financial statements provides additional
information of the available cash and cash equivalents position at
31 March 2010.
In addition, the Faiveley Transport Group uses insurers to cover
operational civil liability and products adapted to its business and in
compliance with customer demands.
The Group had the following cash and cash equivalents at 31 March
2010 (in-house source):
It should be noted that, arising from the railway business, the Group
and its subsidiaries are contractually bound to maintain equipment
with a life span of several decades. A specific plan is set up to manage
obsolescence of each project, with the participation of the constructor
and/or operator. The requirement to keep equipment operational and
reliable during this time period imposes on the equipment supplier
the need to ensure leading edge technology and to set up a stock
of spare parts in order to avoid a sudden break in supply. Draconian
contractual obligations (duty of alert, end of life orders, selection of a
second source, etc) are imposed on the Group’s own suppliers.
31 March 2010
Available credit lines (a)
85,205
Parent company’s cash (b)
36,883
Subsidiaries’ cash and cash equivalents (c)
158,539
Available cash and cash equivalents (1) = (a+b+c)
280,627
Borrowings due in less than one year (d)
56,021
Available credit lines maturing in less than one year (e)
89,272
Net cash and cash equivalents available
over the next year (1-d- e)
135,334
––Share risk
The Group does not hold a share portfolio but deposits part of its cash.
At 31 March 2010, it had SICAV deposits of €32.3 million and certificates
of deposits of €8.6 million.
At 31 March 2010, a €24.9 million provision for risk of noncompliance of
products sold was recognised in the financial statements. These risks
were estimated by project managers and engineers.
One of the risks was legal proceedings instituted against the Group’s
US subsidiary, Faiveley Transport USA.
The SICAVs used are regular French money market funds with day-today liquidity. The risk of these SICAVs is deemed low. The certificates of
deposit share the same features.
13
Faiveley transport
The Faiveley Transport, Faiveley Transport USA and Faiveley Transport
Malmö companies had a writ issued against them by the Bombardier
– Alstom consortium in the New York courts on 7 August 2008, as
part of proceedings seeking redress for damage caused by faults
(fine cracks) observed on brake discs partly supplied by the German
subsidiary Faiveley Transport Witten (formerly BSI) in the years 1996
to 2000 to Knorr-Bremse. These were equipped on the Acela Amtrak
operator’s trains operating between Washington DC and Boston. The
other brake supplier was the US company Wabtec. BSI had supplied
equipment totalling USD 1,248,243. The manufacturer consortium,
as well as the Knorr Bremse company reached an out-of-court
settlement on the issue with the operator. These three companies
then turned against the suppliers of the product they deemed the
cause of the fault, i.e. Wabtec and Faiveley Transport. Wabtec accepted
an out-of-court settlement. Faiveley Transport Group denies having
any responsibility in this issue. As a result, the Group was summoned,
through its above-mentioned subsidiaries, before the courts of New
York and subsequently South Carolina in February 2009. The amount
of damages sought by the consortium, which represents the interests
of all parties involved, is USD 55 million. The Supreme Court of the State
of New York, in its ruling of 24 March 2010, dismissed the consortium’s
claims in full and took into consideration the arguments of the Faiveley
Transport’s counsels. Proceedings pending before the Court of South
Carolina, to which the consortium referred the matter to retain their
right of action in the event the New York Court was to declare itself
not competent, even though the merits of the case have not been
considered. The ruling of the New York Court may have a favourable
impact for Faiveley Transport as part of this second procedure. The
consortium has not appealed the ruling of the New York Court and
the judgement is thus final. Faiveley S.A. considered throughout this
action that its product, which complied with specifications and was
free from hidden defects, was not the cause of the observed faults.
––Risk of counterfeit
In the area of intellectual property, the Faiveley Transport Group
holds a portfolio of patents and brands that provide it with beneficial
competitive advantages. Every entity with a design office has set up
a process to monitor technology to detect all inventions patented by
third parties that may constrain its future developments.
Groups within the leading technical project staff have been organised
internally to detect every risk related to counterfeiting of intellectual
and/or industrial property rights that may be held in third parties.
The Group avoids granting licences to countries where counterfeiting
is not easily punished.
Across the selection of specialists in intellectual property, the Group
has built a portfolio of patents and brands that is regularly analysed
and evaluated. These specialists carry out, on behalf of the Group,
surveillance of all similar patents and/or brands and take the necessary
steps to protect the Group’s rights in that area, both in France and
abroad.
The technology, as well as the know-how held by the Group are
automatically protected by secrecy, which is reflected in the signature
of confidentiality agreements with both customers and suppliers, very
early in the pre-contract relationship.
In October 2007, Faiveley Transport Group’s Swedish subsidiary
simultaneously launched two proceedings, one in the US seeking a
preliminary injunctive relief from the New York courts, the other to
the International Chamber of Commerce (ICC), with a view to have
14
MANAGEMENT REPORT
unfair competition and counterfeiting acts committed by the Wabtec
company cease and punished, in relation to products under licence
that expired on 31 December 2005. In spite of the cancellation of this
licence by the Group’s Swedish subsidiary, Wabtec had continued to
manufacture and sell the products concerned (Brake Friction Cylinders
– Tread Brake Units Actuators).
On 22 August 2008, the First Circuit Court of New York issued a
preliminary ruling stating that Faiveley Transport Malmö was the
owner of trade secrets underlying the design of sintered brake
cylinders (BFC TBU) and considered that Wabtec had made illegal use
of Faiveley Transport Malmö’s intellectual property in order to develop
and market competing BFC TBU products. Wabtec was enjoined by
the Court to refrain from bidding for or enter into any manufacturing,
procurement or selling agreement involving BFC TBU brakes or
components, until a final ruling is given under the auspices of the ICC
by an arbitration committee in Sweden. Wabtec appealed this ruling
on 24 October 2008. On 9 March 2009, the Second Circuit Court
of New York confirmed Faiveley Transport Malmö’s right of action
without however recognising the urgency of a serious and imminent
risk of spreading of its industrial expertise and secrets (suspension of
the preliminary injunctive relief).
In addition, Faiveley Transport Malmö had sought a conviction and
the payment of damages by Wabtec, as part of the same arbitration
procedure, for the misappropriation by Wabtec, since 1 January 2006,
of intellectual property for the BFC TBU brakes, as well as two other
braking products that are unique to Faiveley Transport (PB and PBA
actuators). On 24 December 2009, the arbitration, carried out under
the auspices of the International Chamber of Commerce, was released
by the arbitration committee: the arbitration award confirmed that
Faiveley Transport is still the owner of trade secrets in relation to
the manufacture of the products, and that Wabtec had breached
the license agreement once it had been cancelled, as well as certain
obligations resulting from this agreement. Furthermore, the award
confirmed that certain aspects of the reverse engineering process
implemented by Wabtec to obtain a product that is utterly different
from Faiveley Transport’s may be deemed tainted.
Faiveley Transport Malmö was awarded USD 3.9 million in damages
plus interest from Wabtec.
Wabtec is also ordered to pay the royalties that Faiveley Transport
should have received in respect of products sold by Wabtec on orders
resulting from contracts signed before the licence expired and
delivered from 2006. In addition, Wabtec was ordered to cease using
manufacturing drawings and other documents relating to these
products, except for those that enable Wabtec to fulfil orders resulting
from contracts signed before the licence agreement was revoked.
The enforcement order of the arbitration award in the US was granted
by a New York Court on 10 May 2010.
In May 2008, the US company Wabtec Corporation issued a writ
against Faiveley Transport USA in the Pennsylvania courts for unfair
competition in the US territory. No figure has been put on their claim
to date. This proceeding is in response to the above-described two
procedures, launched on the initiative of the Faiveley Transport Group.
Defence conclusions were filed on behalf of Faiveley Transport USA on
22 October 2008, rejecting Wabtec’s demands in full and highlighting
the close connection with the above-described procedures.
–– Tax risk
The Group has set up the rules required to understand the subject in
an international context and uses external consultants, case by case,
country by country, to best protect its interests.
Every Group subsidiary is led by a local team that must ensure that
their business is conducted in compliance with the local regulation in
force.
A tax audit has been ongoing since the start of 2008 on Faiveley
Transport. A rectification proposal was issued on 15 July 2008 by the
tax administration. The corrections considered relate to an additional
income tax payment of about €190 thousand. These corrections were
disputed by Faiveley Transport.
Four additional tax audits arose during the 2009/2010 financial year
were still ongoing at 31 March 2010. They relate to Faiveley Transport
Tours, Faiveley Transport Witten, Ellcon National and Faiveley Transport
USA.
––Other risks
•• A
nti-competition risks: the Group’s business sector is not
significantly exposed to this type of risk. In fact, the modest number
of players as well as the system for public tenders is not open to this
kind of illegal behaviour.
•• Corruption risk: certain contractual requirements have been
considered and prepared to protect the Group against any abuse in
this area.
6.3. Industrial and environmental risk
In this area, the Group has identified exactly and fully the various
classes of risks it may confront by the nature of its business.
These classes are the following:
––Product risk:
Even though the Faiveley Transport Group is positioned in the sector
for the production and sale of certain parts described as safety for the
railway industry (brakes, doors, etc.) and thus, inherently exposed to
contractual or criminal liability in respects of “product”, the Group’s
level of exposure to such risks is considered to be medium by the
civil liability insurance players. The evaluation takes into account
the process of product design as well as the type and content of the
markets operating between the manufacturers and the operators.
The legal liability for hidden defects also applies throughout the life
of the product even if, between professionals, its application may be
expressly excluded by contract.
Liability as a result of product defects may also have an effect in terms
of risk, even if the user often only knows the operator, while the chain
of contract prevails between the operator, the manufacturer and the
equipment supplier.
The organisation and management of quality, the selection and
monitoring of suppliers and subcontractors, the follow up of
complaints and the contractual environment are adapted to the
nature and potential scale of the exposures.
Production is in short runs. Orders for supply of raw materials and
components are realised by project. The most unfavourable case
would thus be a design error impacting an entire project. This may
represent an average of several thousand parts. The nature of the fault
may be rapidly understood due to the expertise of the teams and the
possibility of dispatching technicians on site to find the best technical
solutions for operators.
In 2007, a Continuous Improvement Department was established to
accelerate the development of this culture of prevention throughout
the Group to deal with product risk in a more effective manner.
On some sites the AMDEC system (Analysis of Modes of Defects and
the Effects and Critical nature) has been set up to verify design work.
This system can be accessed via the Group’s Intranet.
As regards suppliers, a selection process exists covering, in addition to
the criteria of financial stability, an audit of selection by the supplier’s
quality department and follow up of performance.
Every return or rejected component leads to the organisation of a
Group team dedicated to resolving the problem, to analyse the causes
and take a decision as to changes to be made to avoid a recurrence of
the same problem.
Design and development are carried out under the guidance of
Technical Management as part of a customer project or at the time of
in-house R&D developments, initiated by the Group. For each project
identified as critical, a formal plan is prepared, split into fundamental
tasks, implemented and updated by the project manager and project
coordinators. The features at the start of the project are functional
and performance requirements, regulatory and legal requirements
where applicable, information from previous similar designs and all
other requirements required for the design and development. Project
reviews are carried out and reports produced. The verification of the
designs comprises execution of calculations, the realisation of AMDEC
as well as verification of the plans.
The internal validation of the design is carried out by test laboratories
for the prototype stage on the basis of a formalised validation plan.
Prototypes are validated by the customer with certification trials and/
or types followed by FAI (First Article Inspection).
Every new order for parts is subject to a material check, dimension
check, and verification of compliance with legal and regulatory
requirements and an environmental analysis.
All products are identified. The products carry an identification plate
showing an identification number and series number, enabling the
date of construction to be found and the trial notes with the name
of the related operator. The series number of devices comprising a
sub-assembly is identified from these notes. Small parts are traced by
production batch.
Additional information, concerning a methodology of evaluating
provisions for customer risks, is described in the notes to the
consolidated financial statements (§C-Consolidation principles and
methods, note 15.2).
Provisions for guarantees are calculated based on a specific percentage
for each product manufactured and the reliability experienced over
time. Percentages vary between 1% and 6% depending on products
and are applied to sales achieved, project by project.
At 31 March 2010, the provisions for guarantees totalled €42.2 million.
15
Faiveley transport
The amount provided in respect of the warranty and After-Sales-Service,
as well as litigation declared by our customers and penalties payable,
is disclosed, for the last three years, in the notes to the consolidated
financial statements (Note E 14.3).
––Health and safety risk:
MANAGEMENT REPORT
––Dependence on suppliers and/or subcontractor
As part of its business, the major operating entities of the Group may
be confronted with a state of dependence on certain suppliers and/or
subcontractors for certain commodities, or with certain suppliers and/
or subcontractors being dependent on the Group.
On most of the European industrial sites, a security coordinator
manages all aspects of site “health, safety and environment” on a
daily basis, making the necessary checks in the factory, studying and
recording the product received, updating the job files and organising
training.
The implementation of best purchasing and management purchasing
practices by type of commodity and by supplier enable us to accurately
assess these risks of dependence and take the necessary steps.
The objective of general management is to integrate safety into
the management system for quality and the environment (QHSE
approach), an approach heavily sustained and supported by the Group
insurers.
–– Increased cost of raw material and transport risk
The job files summarising the risks of various activities and specifying
the required individual protection equipment are displayed at all work
stations. Every accident with work stoppage is subject to a detailed
analysis of the circumstances and causes and where necessary, leads
to action being taken to prevent any recurrence.
At French sites, a single administrative document was established and
a fire work permit was instituted for all third parties liable to work
using hot spots on the premises.
Taking account of the number of employees of external companies,
improvements were made at the level of the storage point for
chemicals and paint.
––Continuity of business after a disaster:
The French sites have strengthened the internal intervention teams
in the last two years and reduced the combustible materials in the
production areas.
Each industrial site has identified potential emergency and accident
situations and set up regularly tested emergency plans.
Concerning the risks of production interruption following a fire or
flood, it should be noted that the major industrial sites have set up
emergency procedures describing the steps to take following a large
scale incident that could fully or partly paralyse the operation of the
site concerned.
A survival plan should be set up shortly at the Group’s major sites in
order to take the necessary steps and reduce the consequences, as soon
as possible after an incident. The list of companies that can provide
repair equipment as well as those specialising in decontamination of
electrical devices is being prepared.
Those in charge of taking the major steps after an incident have been
designated beforehand to find the most adequate response. Taking
account of the size of these sites as well as occasionally the proximity
of other Group establishments in the same geographical area, it
is necessary to consider specific and rapid solutions to reduce the
consequences of a large scale incident.
The majority of production tasks can be easily subcontracted and are
for the most part manual. The machines, though expensive, can be
acquired relatively rapidly. In addition, the interdependence of sites is
limited.
16
Increased monitoring, due to the international economic crisis, was
put into place in order to anticipate any major suppliers’ failure.
The Group is exposed to increased costs of raw materials such as
steel, copper and aluminium, as well as increased costs for transport.
Difficulties surrounding the procurement of electronic components
should also be taken into consideration.
These risks are managed as part of the preparation of tenders. At the
level of contracts relative to projects, price indexation enables the
absorption of a large part of the increase in raw materials.
Vulnerability to raw material purchases is taken into consideration
when preparing purchasing budgets. Price movements are rigorously
monitored throughout the year by the purchase teams to limit their
impact.
At 31 March 2010, the Group did not deem it necessary to put into place
raw material hedging.
––Environmental risk
The industrial sector,where the Group operates,is subject to compliance
with restrictive and multiple environmental standards. The production
processes require the use of chemical products (paint, glue, surface
treatment, etc.) that may pose a risk for the environment.
The major French sites are ICPE classified (classified sites for the
protection of the environment) and subject to a declaration system,
and even authorisation for some of them, from the competent regional
authorities.
The administrative authorities may also require steps to be taken
to prevent or cure, up to the closure of sites in the event of serious
violations of applicable regulations in the area of labour and/or
environmental law.The Faiveley Transport Group may also be held liable
by third parties under the regulations protecting the environment and
the general principle of criminal liability.
The Group has fully understood the importance of managing
compliance with regulations in the area of the environment by
dedicating a senior engineer to the aspects of safety – health –
environment, who must verify every day whether the site he is
responsible for is compliant with the various standards applicable.
Audits carried out by the insurers have disclosed some weaknesses in
the manner of understanding this risk. Even though the quantity of
pollutants used in the business is very small, the Group may be called
on to pay rehabilitation costs, fines or damages-interest relative to the
non compliance with environmental standards.
The factories of Saint-Pierre-des-Corps and Amiens are both in
industrial parks with a SEVESO classified site that stores oil and
chemical products. In the event of problems on these sites close to
the Group’s production units, this could have a negative effect on their
production capacity.
The sites of Saint-Pierre-des-Corps (Electromechanical) and La-Villeaux-Dames (Electronics) are situated in the flood plain of the rivers
Loire and Cher. According to the map of risks and the IGN69 system,
the two sites are in an area of medium level risk (water depth of 1 to
2 metres with modest to nil speed or less than 1 metre with medium
speed). The two sites at Saint-Pierre-des-Corps are in a Natura 2000
area.
As the constraints of safety, environment and pollution are becoming
ever greater, the Group is conscious that it may be obliged to incur
expenditure notably to enhance the procedures for monitoring soil,
water and air pollution. However, these investments would not be
significant for the Group.
In addition, in order to comply with European Directive n° 2004/35,
the Group wished to avail, from 31 March 2009, from additional
guarantees in terms of insurance. Environmental damage and soil and
water clean up guarantees were added to the accidental and gradual
environmental damage policies.
The Group is already committed to areas of improvement in the storage
of products posing a danger to the environment (retention tank,
anti-fire cabinets, management of condensates from compressors,
elimination of PCB transformer, etc.) and the reduction in the emission
of volatile organic compounds. The use of toxic products for surface
treatment such as chromic acid, hydrofluoric acid, requires adequate
and regular monitoring (once a quarter) which is carried out by each
site concerned.
Below are specific matters which the Group is confronting at the
moment.
––Faiveley Transport Amiens, as the last operator of classified
installations at Sevran, 4 boulevard Westinghouse, a site occupied
by Sab Wabco until 1999 for the production of cylinders for braking
systems, was declared to be a polluted site and in this respect likely
to create a nuisance or ongoing risks for people or the environment,
under an order from the Prefect on 11 April 2005. This order requested
Faiveley Transport Amiens to conform to certain instructions to
rehabilitate this site. It should be noted here that the land concerned
was sold on 16 September 2002 by Faiveley Transport Amiens and
that the acquirer in an express condition of the transfer document,
agreed to make it his personal business and to incur exclusively
all potential clean up work that is deemed necessary under the
administrative procedure launched by the Prefecture of Seine SaintDenis and whose completion was the notification of the above
mentioned order. The acquirer and his successors were regularly
informed and associated with the procedure in progress. The site was
again sold under a legal deed signed on 16 December 2009. The new
owner committed to carry out the rehabilitation, pollution cleanup
and soil improvement of the site, under his own responsibility and
at his own expense, in line with the current and future indications,
formal notices and administrative rulings that have or are liable to be
taken against Faiveley Transport Amiens (formerly Sab Wabco) and
deal with any complaint, legal action, claim or proceedings relating
to the environmental condition of the building, its soil and subsoil.
The new owner is a specialist in this type of work.
––In 2003, the Brazilian subsidiary of the Sab Wabco Group, not yet
acquired by the Faiveley Transport Group, sold land to the company
Cyrela. A risk of pollution to the soil was identified in 2004, subsequent
to the purchase of the Sab Wabco Group by Faiveley Transport, as a
result of which the latter supported the costs of decontamination of
the soil. Due to this risk of pollution, Cyrela retained a part of the sale
price (BRL 3,779 thousand, with €1,572 thousand to be collected).
The situation is currently as follows:
•• W
ork to picket the contaminated area has been completed. An
environmental audit will soon be completed;
•• B
ased on this audit, Cyrela will apply for a new planning permission.
After these permits have been issued, the payments withheld will
be released.
At 31 March 2010, a provision of BRL 681 thousand had been recognised
in relation to this issue.
6.4. IT risks
The Group’s unwavering concern is to protect its IT infrastructures,
date and application software. Centralised applications are hosted
with several partners who ensure the physical security of the hardware
and software protection access within a “Service Level Acceptance”
agreement.
Having developed application software that make communication
and mobility increasingly easier, the Group attaches great attention
to anti-intrusion systems (firewalls) and information access security
profiles.
The Group is committed to a major project “Moving Forward” that
aims to integrate the information system of the entire Group.
This project covers:
––infrastructure optimisation;
––unification of the communication policy;
––integration of the industrial operation of the Group via a single ERP
(Enterprise Resource Planning).
To secure the rollout of a single ERP, the Group management has set
up a project platform at the Group level, and called upon external
consultants. To control these risks, the Group elected to have a
pilot phase that will set the Group configuration before rolling out
progressively to all subsidiaries.
The finalisation of the base solution at the first major site is a long
and essential phase. It confirms the big developments that will be
brought to the Group and calls upon all of the attention of the Group’s
management and the project team.
17
Faiveley transport
MANAGEMENT REPORT
1.2. Balance sheet
B. REPORT ON THE PARENT COMPANY
FINANCIAL STATEMENTS OF Faiveley
Transport AT 31 March 2010
2009/2010 2008/2009 2007/2008
Net non-current assets
B.1. Parent company financial statements
(French GAAP)
1,111
248,958
234,655
11,427
1,256,983
1,268,161
40,403
213,081
185,841
27,213
1,972
2,548
266
1,005,117
1,038,257
11,800
Other liabilities
36,812
41,515
1,124
Total EQUITY
AND LIABILITIES
1,256,983
1,268,161
40,403
Total ASSETS
48,565
1,402
1,410
146
0.3%
(3,482)
(248.4%)
(212)
(15.0%)
% of sales
(235)
(0.5%)
(3,484)
(248.5%)
(216)
(15.3%)
Operating loss
% of sales
(235)
(0.5%)
(3,484)
(248.5%)
(216)
(15.3%)
Net finance income/(cost)
37,156
75,161
(274)
(244)
-
9
Exceptional income
27,865
52,512
Equity
2009/2010 2008/2009 2007/2008
EBITDA (*)
% of sales
980,994
44,384
Cash
1.1. I ncome statement
Sales
963,641
Current assets
Income tax
4,630
5,210
2,635
Net profit
41,308
76,887
2,154
(*) Operating profit plus amortisation and depreciation.
Faiveley Transport (formerly Faiveley S.A.) continues to provide
services for the Group, as the holding and management company.
The €48.6 million sales achieved in 2009/2010 was a significant
increase compared with the previous year (€1.4 million). During the
previous financial year, the transfer of all assets and liabilities of the
former Faiveley Transport company had had no impact on the parent
company income statement.
As in the past, Faiveley Transport rebilled a significant portion of
its expenses to its subsidiaries. The operating loss was €0.2 million,
compared with a loss of €3.5 million in 2008/2009. This improvement
was primarily due to fees and commissions of €3 million incurred in
2008/2009 as part of the transactions related to the acquisition of
minority shareholdings in Faiveley Transport.
The net finance income was €37.1 million, compared to €75.2 million in
the previous year. This movement was primarily due to lower dividends
received over the period, at €45.6 million, compared to €78.7 million in
2008/2009.
The net financial income was also affected by the €11.8 million (over
12 months) interest charged on borrowings, relating to the new bank
debt taken out on 23 December 2008, compared to €3.5 million in
2008/2009 (3 months only).
The €4.6 million income tax refund recognised at 31 March 2010
reflects the tax grouping gain achieved over the period.
Provisions
Financial debt
Following the transactions of 23 December 2008, Faiveley Transport
(formerly Faiveley S.A.) opted for the wind-up, without liquidation, of
Faiveley Management and Faiveley Transport.
The assets and liabilities of these companies were transferred in
January and February 2009 to the financial statements of Faiveley S.A.,
which was renamed Faiveley Transport in September 2009.
As a result, net non-current assets take account of the recognition
of a €384.8 million technical deficit, observed on the transfer of
Faiveley Transport and Faiveley Management’s assets and liabilities to
Faiveley S.A., and the shares and receivables attached to these shares
transferred, valued at €562.8 million.
At 31 March 2010, receivables from subsidiaries decreased by
€8.9 million and current accounts by €11.6 million. Concurrently,
investment expenses incurred in relation to the “Moving Forward”
project increased by €3.3 million.
Current assets decreased by €8.1 million over the year. This decline
was primarily due to the €4 million and €4.2 million decreases in
trade receivables and other receivables, respectively, offset by a slight
€0.1 million increase in other items.
Cash and cash equivalents grew by €14.4 million over the year. This
was due to an €8.1 million increase in marketable securities and a
€6.2 million increase in cash.
Equity rose from €185.8 million at 31 March 2009 to €213.1 million
at 31 March 2010. This €27.3 million favourable movement may be
analysed as follows:
––profit for the year: €41.3 million;
––payment of dividends: €14 million.
Provisions decreased by €0.6 million and those were primarily related
to the provision for foreign exchange losses, which totalled €1.4 million
at 31 March 2010, compared to 1.9 million the previous year.
Financial debt was valued at nominal value and comprised:
––Proposed allocation of net profit:
•• t he €417.4 million loan granted by the banking pool, with a view to
reorganising the Faiveley Transport’s shareholding;
We would ask you to approve the annual financial statements (balance
sheet, income statement and notes) as presented to you, showing a
net profit of €41,307,869.15.
•• c urrent bank and cash pooling overdrafts (Group cash management)
for €200.2 million;
•• the loan subscribed from the Faiveley Transport Malmö subsidiaries,
for €37.1 million;
•• credit current account with Group companies, for €350.1 million;
•• accrued interest in relation to the above financial debt, for
€0.2 million;
•• the balance of the special reserve for employee profit sharing, which
is remunerated at the base lending rate, for €65 thousand.
Other liabilities also decreased by €4.7 million over the year. This
movement was primarily due to a €10.4 million decline in the liability
translation adjustment, offset by the increase in the tax grouping.
No significant event occurred after the end of the financial year.
None in the Faiveley Transport financial statements.
€61,882,675.36
€103,190,544.51
€0
€(17,285,653.20)
The balance of €85,904,891.31 will be allocated in full to “Retained
earnings”.
The dividend will be payable with effect from 17 September 2010.
Over the last three financial years, the following sums were paid in
dividends: €14,404,711 for the financial year 2008/2009, €4,385,354.75
for the financial year 2007/2008 and €10,023,668 for financial year
2006/2007.
B.4. Change of method during the year
None.
C . INFORMATION ON THE SHARE CAPITAL
B.5. Information on non-tax deductible changes
Non tax-deductible charges at 31 March 2010 amounted to €23,050.
B.6. Information on payment terms
At 31 March 2010, trade payables posted to the balance sheet totalled
€13,878 thousand, of which €11,093 thousand related to international
intercompany invoices, due in 60 days at end of month, payable on the
5th of the month.
The aged analysis was as follows:
30 days
60 days
> 60 days
Total
1,677
1,274
10,927
13,878
B.7. Treasury shares
The company directly holds 1.97% of the share capital.
B.8. Analysis of results and allocation
of the 2009/2010 net profit
––Table of results of Faiveley Transport for the last five years:
attached to the present report, pursuant to the provisions of Article
R225‑102 of the Commercial Code, is the table of the results of the
Company for each of the last five years.
18
€41,307,869.15
If at the time of the payment, the company holds treasury shares,
the profit distributable corresponding to the unpaid dividend due to
the holding of the shares, shall be allocated to the account “retained
earnings”.
B.3. Research and development costs
Trade payables
Profit for the year Increased by:
Retained earnings Distributable profit: - Allocation to the legal reserve: - Dividend distribution, i.e. €1.20 per share:
Taking account of the allocation, the equity of the company amounts
to €195,795,733.93.
B.2. Subsequent events after 31 March 2010
(€ thousands)
We would also ask you to approve the following allocation of net profit
for the financial year ended 31 March 2010:
C.1. Bylaws conditions governing revisions
to the share capital and corporate rights
The share capital is increased, either by the issue of new shares, or by
an increase in the nominal value of existing shares.
New shares are fully paid, either in cash, or by offset against current
liabilities of the company, or by incorporation of reserves, profits or
share premium, or by transfer in kind, or by conversion of bonds. New
shares are issued at their nominal value, or at that amount increased
by a share premium.
An Extraordinary General Meeting is the only competent body to
decide, on a report by the Management Board, to increase the share
capital. A reduction in share capital is authorised or decided by an
Extraordinary General Meeting that may delegate to the Management
Board all powers to carry it out. A capital increase must be completed
within five years from the date of the General Meeting that decided
or authorised it.
C.2. Capital issued and capital authorised
but unissued
2.1. Capital issued
At 31 March 2010, the share capital of the company was €14,404,711. It
comprises 14,404,711 shares of €1 nominal value each, fully paid, all of
the same class.
19
Faiveley transport
MANAGEMENT REPORT
•• Revision to the share capital and rights attached to shares
Every revision to the share capital or rights attached to securities that
comprise it, is subject to the law; the bylaws do not provide for specific
requirements.
•• Form and registration of shares
Shares are in nominative or bearer form at the choice of the shareholder.
Both these categories are subject to the law that relates to them.
•• Existence of thresholds in the bylaws
Apart from the requirement to inform the holding company of certain
fractions of the share capital, there is no particular requirement in the
bylaws.
•• Identification of bearer shareholders
Except in instances specified by the law, fully paid up shares are either
held in nominative or bearer form, at the shareholders’ discretion.
Shares are registered in accordance with the terms and conditions
provided by law.
The company is authorised to use, at any time, the legal provisions in
respect of identification of holders of securities giving, immediately or
in time, the right to vote at shareholders’ meetings.
•• Company share registrar
The company has delegated its share registrar service to Société
Générale Securities Services: 32, rue du Champ de Tir – BP 81236 – 44312
Nantes Cedex.
•• Transfer of shares
The transfer of Company shares between living persons or by death
can be done freely. Company shares are transferred with regard to
third parties and the Company by a transfer order from account to
account. Shares in the Company that are not fully paid in respect of
payments due cannot be transferred.
2.2. Capital authorised but not issued
Delegation of authority to increase the share capital
On the occasion of the Combined General Meeting of 22 September
2009, a resolution (tenth resolution) was approved by the shareholders
in relation to an authorisation to be given to the Management Board
to issue shares or marketable securities giving the right to allocate new
or existing shares in the Company with, in the event of the allocation of
new shares, the facility to cancel the pre-emption right to subscribe.
This resolution was adopted by qualified majority.
Pursuant to Article L.225‑136 of the Commercial Code, which was
derived from the Order of 22 January 2009 and came into force on
1 April 2009, the Management Board was authorised to increase the
share capital, with cancellation of the pre-emption right, with the
facility of carrying it out in one or more offerings in accordance with
section 2 of Article L.411-2 of the Monetary and Financial Code not
exceeding 10% of the share capital of the Company.
This authorisation was given for a period of 26 months from
22 September 2009.
The Management Board, in the event it would decide to use the
authorisation bestowed on it, would request prior approval from
the Supervisory Board and would report to the following Annual
Ordinary General Meeting, in accordance with the law and applicable
regulations, about the use made of authorisations granted by this
resolution.
This authorisation has not been implemented by the Management
Board to date.
C.3. Analysis of shareholders and voting rights at 31 March 2010
3.1. According to the information supplied by Société Générale, amongst which, the register of nominative shareholders and the identification of
a certain number of bearer shareholders, the shareholder and the voting rights in the company at 31 March 2010, were as follows:
33.50
29.45
3.3 . Share capital of the Company subject to pledges
Name of shareholder as pure
nominative form
Beneficiaries
Start date
of pledge
Expiry date
of pledge
24/03/2006
31/03/2016
Full repayment
of loan granted
70,400
0.49
François Faiveley Participations
Société Générale
and Crédit Lyonnais
24/03/2006
30/03/2013
Full repayment
of loan granted
2,031
0.014
C.4. Movements in the share capital during the last six years
Date
Transactions
31 March 2004
Exercise of options to subscribe
31 March 2005
Nil
27 September 2005
Exercise of options to subscribe
12,529,585
31 March 2007
Nil
Nil
12,529,585
12,529,585
Nil
12,529,585
12,529,585
1,875,126
14,404,711
14,404,711
31 March 2008
Nil
23 December 2008
Issuance of new shares
31 March 2009
Nil
Nil
14,404,711
14,404,711
31 March 2010
Nil
Nil
14,404,711
14,404,711
C.5. Employee interest in the Company’s share capital
163,400
1.13%
155,400
8,000
171,400
0.79%
215,190
1.49%
215,190
-
215,190
0.99%
5,000
0.03%
5,000
-
5,000
0.02%
10
0.00%
14,813,752
68.06%
Directors and senior executives (*)
274,876
1.91%
156,268
118,608
393,484
1.81%
Treasury shares
283,889
1.97%
-
-
-
0.00%
Nominative shares (**)
852,243
5.92%
394,449
457,794
1,310,037
6.02%
5,248,644
36.43%
5,248,669
-
5,248,669
24.11%
14,404,711
100.00%
6,475,702
7,645,120
21,765,942
100.00%
12,529,585
12,529,585
Employee shareholding represented 1.69% of the share capital of the
Company at 31 March 2010.
5
12,439,585
12,529,585
8.58%
7,068,718
2,487,917
2,505,917
12,529,585
57.69%
-
Nil
90,000
Nil
1,867,665
676,316
12,439,585
Nil
12,554,487
0.00%
2,487,917
Reduction in nominal value of shares
804,750
53.77%
Capital (€)
3,000
Nil
6,255,963
5
Cumulative
number of shares
15 March 2006
42,561
7,745,034
Increase
in capital (€)
31 March 2006
258,165
Thierry Faiveley
% of capital
pledged
and Crédit Lyonnais
7.38%
François Faiveley
Condition
Number of
for release of shares pledged
pledge at 31 March 2010
Financière Faiveley
43.73%
1,062,915
TOTAL
41.06
FCPE Faiveley Shares held 17,400 shares (0.12%) in the company at
31 March 2010.
6,298,524
General public
70.55
Public
% voting
rights
François Faiveley Participations (F.F.P)
Total Faiveley Family
2007/2008% of capital
66.50
Total
voting rights
Erwan Faiveley
58.94
Double
voting rights
% of
capital
Faiveley indivision
Nominative shares
Single
voting rights
Number of
shares
Principal shareholders at 31 March 2010
3.2. Analysis of the share capital over the last three years
C.6. Shareholders’ agreements concerning
the securities comprising the share capital
of the Company
As part of the reorganisation of the Group’s shareholding, carried out in
December 2008, the executive shareholders of Faiveley Management
SAS and Faiveley M2 received Faiveley S.A. (renamed Faiveley Transport)
shares in exchange for shares in these two companies, which were
transferred to Faiveley S.A..
The 557,233 Faiveley S.A. shares held by the former shareholders
of Faiveley Management SAS are subject to a lock up clause, from
23 December 2008, relating to all of the shares received for a period of
2 years and 2/3 of the shares for a period of 3 years. In addition, over a
period of 6 years from that date, any disposal by a former shareholder
of Faiveley Management SAS of a block of more than 10,000 Faiveley
shares is subject to a Faiveley Transport pre-emption right.
The 147,893 Faiveley Transport shares held by the former shareholders
of Faiveley M2 are subject to a vesting clause, which specifies the
conditions for the purchase by Faiveley Transport, in case of a manager’s
departure from the Company before 12 September 2010, and were also
subject to a lock up clause until 23 December 2011.
In addition, over a period of 6 years from 23 December 2008, any
disposal by a former shareholder of Faiveley M2 of a block of more
than 3,000 Faiveley shares is subject to a Faiveley Transport preemption right.
(*) of which shareholders acting as directors of Faiveley Transport: Robert Joyeux, Chairman of the Management Board of Faiveley Transport (145,211 shares), Etienne Haumont, member of the
Management Board (58,588 shares), Philippe Alfroid, Vice-Chairman of the Supervisory Board (25 shares), Edmond Ballerin, member of the Supervisory Board (71,050 shares)
(**) excluding shareholders already mentioned above
To the knowledge of the Company, no other shareholder held over 5% of the share capital or the voting rights at 31 March 2010.
20
21
Faiveley transport
D . CORPORATE INFORMATION RELATIVE
TO THE GROUP
D.1. Human resources policy
Faiveley Transport is a group with an international culture and
dimension. Its business is reflected in long-term contractual
relationships with its customers. In order to capitalise on knowledge
acquired throughout the life of these projects, the Faiveley Transport
Group has resources enabling it to ensure staff loyalty over time.
The Faiveley Transport Group provides real prospects of development
by regular geographical mobility and shared expertise.
The Human Resources Department has been strengthened to
standardise the human resources policy on all sites, to rationalise costs,
to encourage staff mobility and to optimise career management.
Since the start of 2008, new indicators have been put in place by the
Human Resources Department, in all geographic locations, which are
45 sites in 23 countries. Today, the consolidation and analysis of these
indicators provides better visibility of the needs and allows arbitrating
priorities in the best way possible.
1.1. Ensure career development
The policy adopted by the Human Resources Department is based
on the dynamics of mobility and exchange of experiences. The more
skills are transferred and good practices exchanged among the various
entities in the world, the greater the level of the Group’s know-how
will be.
Bolstered by this conviction, Faiveley Transport encourages the
development of technical and project teams as close as possible to
their customers. Technical knowledge acquired by the Faiveley staff,
based in the four corners of the world, enables them to support their
customers better and respond to their needs.
Using the strength of its expertise at a local level, the Group thus
benefits from its international scale.
MANAGEMENT REPORT
Since March 2009 for instance, a common policy was implemented
for holding annual performance review interviews; a common
performance review form for all entities was prepared in consultation
with local Human Resources officers. All sites must now use this form
and apply this procedure.
At the same time, in order to support managers in this process, training
will be provided on how to hold these interviews.
In 2010, this thought process continued and a Group-wide induction
booklet was produced. This document is intended to provide every
new hire with a comprehensive overview of Faiveley Transport Group,
as well as all practical local information necessary to their integration.
This is also a mean of strengthening the sense of belonging to Faiveley
Transport.
In this context of continuous change in the economic environment of
the companies in the Faiveley Transport Group, the maintenance and
development of employees’ expertise is an essential feature of the
growth and overall performance of the Group.
Professional training constitutes in this respect a major area of our
Human Resources policy. In 2009/2010, the training programmes
continued at all levels.
In addition to making people aware of safety measures and quality
standards, the largest part of the training budget is used to update
technical skills. In this area, the needs have been defined by department
managers together with the Human Resources departments.
Improving our understanding of English is fundamental training,
frequently offered to all Group employees.
The training policy is entirely translated at the local level in line with
the issues of each site.
However, decentralisation does not rule out control. The Group
remains vigilant and ensures that training is consistent from one
site to another; practice standardisation must be done the right way:
suitable training for each category of personnel to meet the needs of
all entities.
The Group seeks to retain its human capital, that of its engineers as
well as all employees, to respond better to the overriding requirements
of reliability, safety and long life of its equipment.
The objectives of the training indicators implemented since 2008
are to follow up on the training budget of each entity, monitor the
percentage of trained employees and managers and lastly, monitor
what types of training are organised.
It is for this reason that the Group encourages internal mobility, on a
professional and geographic basis. This can provide a solution to the
need to adapt employment levels as well as to integrate the aspirations
of the employees.
In France, it was decided to work in close relationship with an authorised
collecting organisation in order to rationalise the administrative
operation of training, and above all optimise the training budget of
each site.
Internal mobility also provides employees with career opportunities
that encourage their professional development by the acquisition of
new expertise and qualifications.
In order to promote this internal mobility, a website was set up on the
Group intranet portal where everyone can consult, in priority, the list
of positions open on all sites in the world. It is only thereafter that job
offers are distributed externally.
In the same vein, the Group was committed for 2009/2010, with all
local Human Resources executives, to continue the consideration of
the tools and practices in use, to improve the contents and to ensure
that in each country there is a common Group standard (in the area of
training, annual performance review, etc).
22
Region
% of payroll dedicated
to training (1)
France
1.88%
Europe (excl. France)
1.18%
Americas
Asia Pacific
1.2. Strengthening a common culture
•• Respect for cultures and standardisation of processes
In 2004, Faiveley Transport acquired Sab Wabco to create one of the
leading equipment manufacturers in the world for railways. Following
this transaction, a number of steps were taken to facilitate the
integration of the Swedish group that already had a strong international
culture. This was reflected by even greater internationalisation of
cultures within the new Group; the position adopted was to respect
the diversity of each country and to allow the local customer the
possibility of retaining a local contact. Being part of group logic creates
an open culture.
The objective was the following: every site retained its identity while
respecting common values which are: quest for performance and
results, stimulation of creativity and sharing experience.
By a general and systemised exchange of good practices, common
rules were established. The standardisation of processes is a feature
of a pragmatic approach giving everyone a clear perception of their
action plan and success expected.
Management uses key performance indicators, focuses its efforts on
performance improvement and ensures the greatest motivation of all
employees.
For this, Faiveley Transport also uses the development of the industrial
excellence system based on the “Lean manufacturing” method. This
method consists of seeking industrial performance, by permanent and
continuous improvement and the elimination of waste. It is based on
two principal concepts: just in time and autonomation.
The just in time tools are the production with continuous and driven
flows, the rapid change of tools and the integration of logistics. The
automation tools automatically stop production, and are the methods
of elimination of causes of errors and the analysis of problems.
The rollout of these techniques is based on the human resources of
the business and their integration into the areas of improvement
carried out, in most cases in the field.
The following programmes deserve a special mention: QRQC and TOP5
launched in 2007 that encourage the staff to exchange all their ideas
and develop action plans for improvement. The objective of this type of
initiative is to offer solutions to the operational problems identified.
The QRCQ method (Quick Response Quality Control) enables rapid
solutions to be put in place for quality or other problems. The
involvement of the personnel in the resolution of quality problems
facilitates relations between departments and enables operators to
improve their working conditions.
In the principal sites, the working day starts now with a 5 minute
meeting on site.This is an opportunity to disclose problems encountered
at their work station and to propose ideas for improvement that may
be rewarded on certain sites. This daily meeting enables them also to
have a complete view of their results as well as the objectives to be
achieved during the day.
•• Development of internal communication
The FaiveleyTransport Group also continues to rollout its various internal
communication tools to enrich dialogue, promote communication
among everyone and to distribute Group information.
Within the Group, information circulates up and down the organisation,
via various communication tools, amongst which:
––an intranet portal accessible by all Group subsidiaries;
––a Group internal newsletter launched in 2008;
––an intranet network for each entity;
––a monthly information letter within certain companies;
––organisation of exchange meetings at the level of operating
companies;
––organisation of annual business seminars (HR seminar, Finance
seminar, Engineering seminar, etc.);
––organisation of annual meetings among the various Group
managers;
––regular individual meetings organised between employees and their
immediate superior.
D.2. Analysis and development of workforce
At the end of March 2010, the Faiveley Transport Group had 4,865 employees spread across 23 countries worldwide. The movement in employees
(permanent and contract employees) during the last 3 years was as follows:
31 March 2010
31 March 2009
31 March 2008
France
1,261
1,178
1,064
Europe (excl. France)
1,861
1,851
1,728
331
376
150
Americas
Asia / Pacific
1,412
1,214
1,019
TOTAL Faiveley transport Group
4,865
4,619
3,961
1%
0.63%
(1) only teaching costs are included.
23
Faiveley transport
MANAGEMENT REPORT
Of which were women at 31 March 2010:
Year 2009/2010
France
Europe
excluding France
Americas
Asia/Pacific
TOTAL
Women executives
1
-
-
-
1
Women managers
113
32
3
25
173
Number of days stoppage
Women supervisors
66
227
34
129
456
Number of accidents with no work stoppage
Region
Women operatives
TOTAL
68
63
15
33
179
248
322
52
187
809
2.3. Recognition of employee benefits
Analysis of workforce by function:
Function
31 March 2010 31 March 2009
Production
2,135
2,121
Purchasing, logistics and storage
710
688
Sales and marketing
448
392
Design office
709
665
Project Management
241
213
Finance
175
171
62
61
Human resources and
Communications
IT
Administration
Research and development
TOTAL
53
56
254
179
80
73
4,865
4,619
2.1. Organisation of the working week
In France, the reduction and organisation of working time effective
within the Group are subject to the law and various collective
agreements. The steps taken to reduce the working time make
overtime non significant.
In the rest of the world, the organisation of working time and the
management of overtime are governed by the law in each country
concerned.
2.2. Remuneration policy
Efforts undertaken to control payroll expenses were continued, while
retaining the principle of individualised remuneration, based on results
and performance.
Generally speaking, the financial resources available for wage and
salary increases within the Group are negotiated annually with
personnel representatives on behalf of all staff.
The remuneration policy for staff is as follows:
––individual increase as a function of the results and performance of
each person;
––a variable annual bonus which is given to staff and managers as a
function of Group and individual objectives, in all Group companies.
Employee benefits, mainly comprising pension commitments are
recorded in the consolidated financial statements in accordance with
IFRS. These amounted to €35.3 million, at 31 March 2010, compared to
€37.1 million at 31 March 2009.
2.4. Gender equality
Faiveley Transport is committed to promote, on a comparable basis,
equality between men and women in their career development, access
to training, salaries and position within the business.
D.3. Work accidents/health and safety conditions
Health and safety conditions are priorities for the Faiveley Transport
Group.
The various risks encountered in its business and the steps taken to
deal with them are described in the chapter “A.6.3 Industrial and
Environmental risks – “§ Health and Safety Risks”.
The Health and Safety committees set up in France meet quarterly.
During these meetings, critical situations are discussed and priorities
defined. The cost of any required action is also reviewed and the result
of such steps is assessed.
Not only does the Group hold these meetings in accordance with
applicable local legislation, it ensures that staff have an updated
brochure containing information on health and safety measures
within the company and on proper staff behaviour. Fire exit drills are
conducted on a regular basis.
In addition to the steps implemented by the various committees,
progress groups are continuing to work within the various companies
of the Group, focusing on diverse areas of interest in order to improve
risk prevention and pursue the safety training policy.
The occurrence of work accidents is followed, analysed and
communicated on a monthly basis to the health and safety committee,
through a number of indicators. Encouraging results in terms of
employee safety were registered as a result of total commitment by
the Group’s senior management.
Region
France
Europe (excl.
France)
Americas
Asia Pacific
TOTAL
21
67
-
20
108
132
375
-
388
895
12
94
10
5
121
Number of accidents with work stoppage
D.4. Corporate information concerning companies
of the Faiveley Transport Group
Faiveley Transport Group makes sure of organising the meetings at
different sites every time. The objective is to enable the representatives
of these committees to make the most of these events and visit other
industrial sites and thus discover other practices and cultures.
4.1. Collective agreements
The French companies of the Faiveley Transport Group are all subject
to the national collective agreement in the metal industry.
4.2. Personnel representative
Most subsidiaries of the Faiveley Transport Group have personnel
representatives.
Faiveley Transport Group has a European works council that meets
twice a year, as well as a Group committee in France that meets once
a year.
4.3. Employment and integration of disabled workers
All Group companies for which local laws provide for employing a
given percentage of handicapped employees, comply with such local
legal requirements.
Some of these subsidiaries employ a higher number of handicapped
workers than required by law.
The Human Resources Department pays particular attention to this
issue and decided in 2010 to ask its staff to think about how to best
broach this subject within the Company.
Legal obligation to employ disabled workers
Sites
Annual legal
obligation = BU*
equivalent
Obligation met
Disabled people
employed
BU* equivalent
Use of sheltered
workshops
BU* equivalent
Faiveley Transport
3.0
0.0
0.0
0.0
Y
0.03
Espas
4.0
3.0
1.0
1.0
Y
2.0
0.13
4.0
2.1
2.0
2.0
Y
19.0
19.7
13.0
13.0
Y
6.7
40.7
35.6
19.8
19.8
Y
15.8
4.0
0.1
1.0
0.1
N
0.0
(*) Beneficiary Units
4.4. Outsourcing
D.5. Personnel profit-sharing
For the Group as a whole, outsourcing for the financial year 2009/2010
was valued at €33.1 million compared to €23.7 million in the previous
year.
An audit of employee saving plans was carried out in France during
2008/2009, with a view to simplifying and standardising practices.
The Group ensures that its subsidiaries comply with the fundamental
provisions of working conditions in their relationships with
subcontractors.
4.5. Charitable activities
It should be noted that the vast majority of the entities in the Faiveley
Transport Group allocate a significant budget to various charitable
activities. For example the support of orphans in Cambodia.
The objective was:
––to ensure that all agreements comply with legal provisions (especially
since the new provisions laid down by the law on employee savings
plans of 3 December 2008);
––to standardise profit-sharing calculation formulae from one site to
another, while at the same time respecting the specific features of
each site.
Today, the Group has put into place a Group savings plan that is
common to all French sites.
The management’s objective is to maintain an increase in salaries
throughout Group companies.
24
25
Faiveley transport
In 2010, the Human Resources Department decided to continue
optimising its group savings policy in the following areas:
––implementation of a Group-wide retirement savings plan;
––comparison of the services of the plan manager with others in the
market, and choice of financial instruments that provide a satisfactory
level of performance: the best managers and best instruments were
selected within an open environment.
5.1. Bonus scheme agreements
Bonus scheme agreements were signed in the subsidiaries subject to
the requirement to implement such agreements.
5.2. Profit-sharing agreements
All our French subsidiaries have implemented a profit-sharing
agreement.
5.3. Health and welfare benefit plans
An audit of health and welfare benefit plans throughout France with
a view to simplifying, standardisation and optimising costs is now
complete.
Today, following the results of this audit carried out in 2008 and after
informing and consulting with our personnel representatives, a single
insurance provider was selected. The Group now benefits in France
from standardised guarantees for all the personnel of the Group’s
French companies, with no distinction being made between categories
of employees.
5.4. Employee shareholding: share option and
subscription plans
Faiveley Transport has set up a long-term motivation plan for
employees. The objective is to enable certain employees to become
shareholders in the company and drive improvement.
•• Share option plan of 27 September 2005:
Since the acquisition of Sab Wabco, Faiveley Transport has implemented
a share option plan for the benefit of the Group’s key managers
(excluding the managers who had invested in Faiveley Management
S.A.S.).
This share option plan, covering a maximum of 325,000 Faiveley S.A.
shares, was approved by the General Meeting of 27 September 2005
and implemented by the Management Board.
In order to meet its future obligation to transfer these shares to
beneficiaries, Faiveley Transport began a share buyback programme
on the market at the end of 2005.
––the Management Board of 24 November 2005 awarded 221,760
options to 38 employees or managers of Faiveley Transport;
––the Management Board of 29 December 2005 awarded 6,720 new
options to one new beneficiary;
––the Management Board of 22 June 2006 awarded 31,360 options to
6 new beneficiaries;
MANAGEMENT REPORT
––the Management Board of 15 November 2006 awarded 4,480
options to a new beneficiary;
––the Management Board of 1 December 2006 awarded 11,200 options
to 2 new beneficiaries;
––the Management Board of 2 April 2007 awarded 26,880 options to 5
new beneficiaries;
––the Management Board of 19 February 2008 awarded 26,880 options
––the Management Board of 29 March 2008 awarded 13,440 options
––the Management Board of 16 July 2008 awarded 22,600 options to
1 new beneficiary.
Options granted that were neither exercised nor cancelled cover
240,095 shares.
Options can be exercised from the second anniversary of their date
of grant by the Chairman of the Management Board, subject to the
presence of the beneficiary within the Faiveley Transport Group on the
day of exercise and their acceptance of the option regulations. It should
be noted that 80,425 options had been exercised at 31 March 2010. The
securities can only be disposed of from the fourth anniversary of the
grant of the purchase option. No Director of Faiveley Transport was
granted any share options as part of this plan.
•• Share subscription plan of 22 September 2009:
A new share purchase and/or subscription plan was approved by
the Annual General Meeting of 22 September 2009, for the benefit
of senior executives and employees. This plan was implemented in
accordance with recent regulatory developments, in particular the
law of 3 December 2008 on earned income and the AFEP-MEDEF
recommendations of October 2008.
This plan was put forward in accordance with agreements concluded
as part of the restructuring of the share capital of Faiveley Transport
carried out in December 2008 and was intended to motivate and
encourage the loyalty of Directors and senior executives to the Group.
The Management Board decided at its meeting of 23 November 2009
to grant, on the same date and up to 23 November 2017, options giving
right to subscribe for new shares in the Company, to be issued through
a share capital increase not exceeding an overall nominal amount of
€144,000, corresponding to 144,000 new shares at a par value of €1
each. The new shares will be issued at a price of €54.91.
The terms and conditions of exercise of the options were posted
or provided to the beneficiaries in a document listing the option
plan regulations. Since one of the beneficiary is a member of the
Management Board and therefore a senior executive, a retention
obligation relating to one third of the shares exercised in excess of the
number required to fund the full exercise of options allocated and the
payment of tax on the corresponding capital gains was specifically
provided. The main features of the share option and subscription plans
at 31 March 2009 are specified in Note E.13-Equity to the consolidated
financial statements.
E. CORPORATE BODIES AND MANAGEMENT
The Supervisory Board and the Management Board of the company
comprise the people referred to in the appendix, which discloses the
terms of office and the functions of the people concerned over the last
five years.
E.1. Corporate governance
1.1. Composition of the Management Board
The Management Board comprises four members selected or not
from among the shareholders and appointed by the Supervisory Board
which confers on one of them the position of Chairman.
The members of the Management Board must be individuals.
The Management Board is appointed for a period of three years by
the Supervisory Board that may replace members who die or resign, in
accordance with the law.
No one may be appointed as a member of the Management Board if
they do not meet the conditions of qualification required by Directors
of public limited companies, if they have been held incompatible, in
default or subject to a prohibition forbidding them access to these
functions, if they are a statutory auditor to the company, was or are a
parent or related under the conditions set by Article L. 225‑224 of the
Commercial Code, if they are a member of the Supervisory Board, if
they already have two other positions on the Management Boards of
other companies or if they chair two other public limited companies.
Every member of the Management Board must be under 65 years old.
If in office this age limit is reached, the Director concerned is considered
to have resigned and a new Director will be appointed as provided by
the present article.
Every Director may be linked to the company by an employment
contract that remains in force during the term of office and at its
expiry. Members of the Management Board may be reappointed.
In accordance with the bylaws, the Chairman who is granted the
power to represent the company carries the title “Chairman and Chief
Executive Officer”.
1.2. Composition of the Supervisory Board
The Supervisory Board comprises at least five members and ten at
the most. They are appointed for a period of six years by the General
Meeting of shareholders and are eligible for re-election.
Every shareholder, individual or corporate, may be elected as a member
subject to holding at least one share in the Company (article 19 of the
bylaws).
The Supervisory Board elects from among its own members a Chairman
and a Vice-Chairman who must be individuals. The Chairman and Vice
Chairman are charged with calling board meetings and directing
discussions.
Where a legal entity assumes the function of a member of the
Supervisory Board,it is required to designate a permanent representative
who is subject to the same conditions and requirements and who has
the same civil and personal liability as if they were a member of the
Board in their own name.
Members of the Management Board, as well as current or former
statutory auditors and their parents or relatives under the laws, may
not be members of the Supervisory Board.
The training and professional experience of members of the Board are
very varied, all having had high level of responsibility in business.
With regard to the six independence criteria defined by the Supervisory
Board in line with those recognised by Euronext, at 31 March 2010 three
of the current seven members are independent: Christian Germa,
Philippe Alfroid and Maurice Marchand-Tonel.
At 31 March 2010, the Supervisory Board comprised seven members.
The average age of the members was 58 years.
E.2. Reappointment of members
The terms of office of all members of the Supervisory Board were
renewed by the Annual General Meeting of 17 September 2008. Since
Supervisory Board members are appointed for a period of 6 years, the
next reappointments will take place at the General Meeting called to
approve the financial statements for the year ending 31 March 2014.
E.3. Ratification of the appointment of one new
member
Didier Alix was co-opted as member of the Supervisory Board at
the Board meeting held on the 27 November 2009, following the
resignation of Christian Baffy. His term of office ends at the close of the
Ordinary General Meeting called to approve the financial statements
for the year ended 31 March 2014. Ratification of the appointment of
Mr. Alix as member of the Supervisory Board will be submitted for
approval to the next General Meeting of the Company.
F. REMUNERATION OF CORPORATE BODIES
F.1. Remuneration and directors’ fees
During 2009/2010, the total remuneration, direct and indirect, of
all kind received by members of corporate bodies of the company
amounted to €1,619,483.
Pursuant to Article L. 225‑102-1 of the Commercial Code, we disclose
the remuneration and benefits in kind of every nature received by
every senior executive, during the year, from companies controlled in
the sense of Article L. 233-16 of the Commercial Code:
––the Management Board of 25 October 2006 awarded 6,720 options
to one new beneficiary;
26
27
Faiveley transport
MANAGEMENT REPORT
Remuneration
Fixed
Variable
Deferred
Directors’ fees
paid by Group
companies
Philippe Alfroid
Chairman of the Supervisory Board
-
-
-
32,800
-
François Faiveley
Vice-Chairman of the Supervisory Board
-
-
-
13,600
-
Edmond Ballerin
Member of the Supervisory Board
-
-
-
1,600
-
Maurice Marchand-Tonel
-
-
-
12,800
-
Christian Germa
-
-
-
22,000
-
Stéphane Volant
-
-
-
3,200
-
Christian Baffy (*)
-
-
-
1,600
-
Denis Grand-Perret (*)
-
-
-
1,600
-
Name
Benefits in kind
Robert Joyeux
Chairman of the Management Board
456,209
347,630
-
-
Company
car
Etienne Haumont
Member of the Management Board
207,415
107,530
-
-
Company
car
Erwan Faiveley (**)
105,200
-
-
11,400
Housing
allowance
Thierry Barel
294,899
-
-
-
Company
car
(*) Denis Grand-Perret resigned his position as member of the Supervisory Board in June 2009, Christian Baffy in November 2009.
(**) Erwan Faiveley receives Director’s fees for participating in various steering committees and for his contribution in the Supervisory Board’s work.
You will also find, in the appendices to this report, a detailed description of total remuneration received by directors of the Company, in accordance
with AMF recommendations.
You should also decide on the total amount of Directors’ fees paid to the Supervisory Board and the Management Board for the current year, which
we propose to set at €175,000.
F.2. Summary of transactions in 2009/2010 in Faiveley Transport shares by senior executives and individuals
referred to in Article L 621-18-2 of the Monetary and Financial Code
Financial
instruments
Nature
of transaction
Number
of transactions
Value
François Faiveley
Shares
Disposal
1
€900,014
Dario Barberis
Member of the Executive Committee
Shares
Exercise/disposal
of stock-options
2
€19,989
Ulysse Wurtz
Member of the Executive Committee
Shares
Exercise/disposal
of stock-options
2
€180,029
François Faiveley
Participations
Shares
Disposal
37
€11,879,374
Director/senior executive
28
G. PURCHASE BY THE COMPANY
OF ITS OWN SHARES
The previous share buyback programme expired on 19 March 2009. As
a result, the Management Board approving the financial statements
proposed to the Annual General Meeting of 22 September 2009 to put
in place a new programme.
At 31 March 2010, the Company held 283,889 of its own shares (including
6,550 shares held as part of the liquidity contract) representing 1.97%
of its share capital. The book value of these shares was €8,072,753 and
their market value was €17,149,734.
The Combined General Meeting of 22 September 2009 was called to
approve, in its eighth resolution, a new share buyback programme.
A description of this programme, prepared in accordance with the
provisions of Article 241-2 of the AMF general regulations, is presented
hereafter, as provided by Article 241-3-III of the same regulations. As a
result, it will not be subject to a specific publication.
•• Objectives of the share buyback programme authorised by the
Combined General Meeting of 22 September 2009:
Shares may be bought back to:
––ensure the liquidity and support the market for the Faiveley Transport
share by an investment services provider via a liquidity contract
that conforms to the ethics charter recognised by the Autorité des
Marchés Financiers;
––grant them to employees and management of the Group according
to the terms and conditions of the law (options to purchase shares,
employee profit-sharing, allocation of free shares);
––cancel them by way of reduction in capital within the limits set by
law;
––retain them within the limit of 5% of the capital and use them in
exchange or payment, notably as part of acquisitions initiated by the
Company, by way of public offer of other;
––implement all other market practice that is permitted by the Autorité
des Marchés Financiers and more generally all transactions that
conform to the regulations in force.
•• Maximum percentage of the share capital, maximum number
and features of shares the Company is proposing to buy back and
minimum purchase price:
Purchase of shares in the Company may relate to a number of shares
such that the number of shares held following these purchases
does not exceed 10% of the shares comprising the share capital of
the company, knowing that the percentage will apply to the capital
adjusted as a function of transactions that may occur subsequent to
the present Meeting.
The maximum purchase price is set at €90 per share.
Taking account of the 283,889 shares already directly or indirectly
held by the Company at 31 March 2010, the maximum number of
shares that the Company may acquire as part of this share buyback
programme would be 1,156,582.
•• Term of the share buyback programme
This authorisation remains valid for eighteen months with effect from
this day, until 22 March 2011.
This programme had not been implemented at 31 March 2010.
On the occasion of the Combined General Meeting to be held on
13 September 2010, a draft resolution (seventh resolution) will be
submitted to the shareholders’ vote in relation to the renewal of this
share buyback programme for a new period of eighteen months.
H. CONTRACT TO STIMULATE TRADING
OF THE Faiveley Transport SHARE
Since 22 September 2009, a liquidity contract has been implemented
between the Company and Oddo Corporate Finance, an investment
service provider that operates in full independence to stimulate the
market. The Company allocated 10,000 shares and €500,000 to Oddo
as part of this contract.
At 31 March 2010, Oddo Corporate Finance bought 100,064 shares and
sold 101,660 on behalf of the Company. The average price of the shares
bought during the year was €57.16 and €57.43 for shares sold.
At 31 March 2010, the Company held 6,550 shares (being 0.04% of its
share capital), through the market stimulation contract, for a market
value of €395,685.50, i.e. a price per share of €60.41. Oddo billed fees
of €29,900 inclusive of VAT in 2009/2010 in respect of the Faiveley
Transport market stimulation contract.
After having considered the report presented to you by the Statutory
Auditors on this subject, your Board invites you to adopt the resolutions
submitted to you for a vote whose text appears in appendix 5 to the
present report.
APPENDICES TO THE MANAGEMENT REPORT
Appendix 1
Information on senior executives
Appendix 2
Internal regulations of the Supervisory Board
Appendix 3
5-year financial results
Appendix 4
Chairman of the Supervisory Board’s report on the operation of the Supervisory Board and on internal control within Faiveley Transport
Appendix 5
Draft resolutions submitted for approval by the General Meeting
The total amount allocated to the repurchase programme is
€129 million.
29
Faiveley transport
Consolidated Financial Statements
Faiveley Transport Group
Consolidated Financial
Statements
at 31 March 2010
1.2.1. Consolidated Balance Sheet
31 March 2010
Gross
Amort.,
depn. and
provision
charges
-
-
-
-
-
-
1
540,013
-
540,013
536,988
535,871
241,369
Other
2&4
78,378
25,425
52,953
48,966
48,966
27,807
Property, plant and equipment:
3&4
5,579
229
5,350
5,331
5,331
4,859
76,082
48,535
27,547
30,493
30,493
19,222
126,556
104,066
22,490
22,553
22,553
15,475
42,609
31,736
10,873
10,503
10,503
14,428
ASSETS (€ thousands)
Notes
Subscribed uncalled share capital(I)
31 March
2009
Net
Net
IFRS Restated (*)
31 March
2009
Net
IFRS
31 March
2008
Net
IFRS
Intangible assets:
Land
Buildings
Plant and machinery
Other
Financial investments:
5
Shareholdings in unconsolidated subsidiaries
852
622
230
211
211
272
-
-
-
-
-
-
4,624
477
4,147
7,066
7,494
4,174
31,591
-
31,591
28,909
28,845
19,496
906,284
211,090
695,194
691,020
690,267
347,102
7
149,313
15,027
134,286
135,821
136,092
118,316
5,740
-
5,740
8,185
8,185
2,075
Trade receivables
9.1
171,579
6,994
164,585
149,548
149,548
149,657
Other operating receivables
9.2
79,176
-
79,176
61,243
61,243
50,524
Other receivables
9.3
1,586
-
1,586
1,343
1,343
1,577
6,811
-
6,811
5,938
5,938
5,733
Current financial assets
10
7,370
-
7,370
3,213
3,213
2,296
Current investments
11
40,946
2
40,944
26,790
26,790
6,186
Cash
11
155,761
-
155,761
137,287
137,287
108,248
-
-
-
-
-
-
618,282
22,023
596,259
529,368
529,639
444,612
1,524,566
233,113
1,291,453
1,220,388
1,219,906
791,714
Shareholdings in associates
Other
Deferred tax assets
6
TOTAL NON-CURRENT ASSETS (II)
Inventories
Advances
Taxation receivable
Assets of discontinued operations / held for sale
TOTAL CURRENT ASSETS (III)
TOTAL ASSETS (I + II + III)
(*) Restated following the adjustment to the acquisition goodwill of Ellcon National in the year of allocation (see Notes to the consolidated financial statements note D.4)
EQUITY AND LIABILITIES
(€ thousands)
Notes
31 March 2010 31 March 2009 31 March 2009 31 March 2008
IFRS
Restated (*)
IFRS
IFRS
Equity:
Share capital
14,121
14,073
14,073
12,191
Share premium
88,739
86,955
86,955
2,802
Translation differences
(14,417)
(36,034)
(36,034)
(8,117)
Consolidated Reserves
208,411
173,595
173,595
126,708
Net profit for the year
71,119
51,483
51,483
36,316
367,973
290,072
290,072
169,900
Share of subsidiaries’ equity
5,437
5,349
5,349
95,545
Share of subsidiaries’ profit for the year
3,256
1,500
1,500
21,312
EQUITY ATTRIBUTABLE TO HOLDERS
OF PARENT COMPANY EQUITY
Minority interests:
8,693
6,849
6,849
116,857
13
376,666
296,921
296,921
286,757
TOTAL MINORITY INTERESTS:
TOTAL EQUITY (I)
Provisions for non-current liabilities and charges
14.1 & 14.2
38,812
42,423
42,423
46,981
6
23,466
20,125
19,745
15,235
Non-current borrowings
15
TOTAL NON-CURRENT LIABILITIES (II)
Current provisions for liabilities and charges
Current borrowings
14.3
15
Advances and prepayments received
Operating liabilities
17.1
Tax payable
Other liabilities
17.2
Liabilities of discontinued operations/held for sale
TOTAL CURRENT LIABILITIES (III)
TOTAL EQUITY AND LIABILITIES (I + II + III)
369,422
419,984
419,982
45,273
431,700
482,532
482,150
107,489
70,941
62,787
62,882
56,060
64,415
73,266
59,421
59,421
100,513
77,863
77,863
68,776
210,354
213,928
213,733
183,857
13,929
14,625
14,625
19,224
14,084
12,311
12,311
5,136
-
-
-
-
483,087
440,935
440,835
397,468
1,291,453
1,220,388
1,219,906
791,714
(*) Restated following the adjustment to the acquisition goodwill of Ellcon National in the year of allocation (see Notes to the consolidated financial statements note D.4)
The attached notes are an integral part of the consolidated financial statements.
30
31
Faiveley transport
1.2.2. Consolidated Income Statement
(€ thousands)
1.2.3. Statement of comprehensive income
Notes
IFRS
IFRS
IFRS
Sales (excl. VAT)
20
875,948
852,024
692,860
Cost of sales
21
(628,917)
(609,733)
(494,787)
GROSS PROFIT
247,031
242,291
198,073
Administrative costs
(68,758)
(73,938)
(60,401)
Sales and marketing costs
(46,107)
(38,451)
(34,751)
Research and development costs
(11,425)
(12,864)
(13,022)
Other operating income
22
7,684
2,595
4,425
Other expenses
22
(9,574)
(5,135)
(3,961)
118,851
114,498
90,363
(288)
(455)
(1,896)
(316)
(256)
(53)
-
-
-
118,247
113,787
88,414
PROFIT FROM OPERATIONS
Restructuring costs
Gains/(losses) on disposals of non-current assets
23
Other non-operating income
OPERATING PROFIT
Amortisation and depreciation charges included in operating profit
4
15,976
15,364
13,314
Operating profit and amortisation and depreciation charges
134,223
129,151
101,728
Net cost of financial debt
(13,956)
(17,685)
(6,403)
34,396
42,181
17,842
(35,978)
(38,941)
(16,501)
(15,538)
(14,445)
(5,062)
102,709
99,342
83,352
(27,852)
(28,095)
(25,724)
74,857
71,247
57,628
Other finance income
Other finance costs
NET FINANCE COST
24
PROFIT BEFORE TAX
Income tax
25
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS
Share of profit of associates
PROFIT FOR THE YEAR OF CONTINUING OPERATIONS
Profit/(loss) for the year of discontinued operations
PROFIT FOR THE YEAR
Minority interests
26
-
-
-
74,857
71,247
57,628
-
-
-
74,857
71,247
57,628
3,738
19,764
21,312
71,119
51,483
36,316
14,120,822
12,667,172
12,191,670
Earnings per share
5.04
4.06
2.98
Diluted earnings per share
5.04
4.06
2.98
Earnings per share
5.04
4.06
2.98
5.04
4.06
2.98
Earnings per share
0.00
0.00
0.00
0.00
0.00
0.00
Net profit - Group share
Number of shares
(€ thousands)
Year 2009/2010
Year 2008/2009
Year 2007/2008
Net profit for the year
74,857
71,247
57,628
Translation difference
21,865
(20,957)
(5,175)
-
Financial assets held for sale
-
-
(3,232)
(1,256)
Actuarial differences
-
-
-
Share of gains and losses of equity accounted companies recorded directly in equity
-
-
-
Movement in the revaluation reserve for non-current assets
-
-
-
599
645
832
-
-
-
Other elements of comprehensive income, after tax
19,232
(21,568)
(4,343)
Total comprehensive income
94,089
49,679
53,285
90,115
37,359
33,828
3,974
12,320
19,457
Gains/(losses) on financial hedging instruments
Other
Tax on other elements of Comprehensive Income
of which:
- Group share
- minority interests
Earnings per share, in €:
Net earnings per share, in € - continuing operations:
Net earnings per share, in € - discontinued operations
The calculation of earnings per share takes account of the deduction of all treasury shares held by Faiveley Transport, being a total of 283,889
shares at 31 March 2010, 331,195 shares at 31 March 2009 and 337,915 shares at 31 March 2008.
32
33
Faiveley transport
1.2.4. Consolidated cash flow statement
(€ thousands)
1.2.5. Consolidated statement of Changes in equity
Notes
IFRS
IFRS
IFRS
Cash flow from operating activities:
Profit for the year – Group share
Minority interests’ stake in subsidiaries’ profit for the year
71,119
51,483
36,316
3,738
19,764
21,312
Adjustments for non-cash flow items:
- Depreciation and amortisation charges
15,976
15,359
13,314
-
5
-
- Net movements in provisions
7,106
(7,406)
(12,044)
- Deferred tax
1,273
(1,565)
5,364
335
256
129
(233)
(112)
(65)
- Share of profit/(loss) from associates
-
-
-
- Dilution profit
-
-
-
99,314
77,784
64,326
(9,160)
28,757
8,098
90,154
106,541
72,424
- Asset impairment (including acquisition goodwill impairment)
- Net gains on asset disposals
- Grant income
Self-financing capacity
Changes in working capital
12
Net cash generated from operating activities
Cash flow from investing activities:
Purchase of intangible assets
(7,732)
(6,397)
(3,049)
Purchase of property, plant and equipment
(9,269)
(9,741)
(13,028)
-
-
-
163
275
228
(741)
(1,073)
(1,554)
520
1,291
7,310
Cash and cash equivalents of acquired subsidiaries
-
(457,607)
(2,755)
Cash and cash equivalents of disposed subsidiaries
-
-
675
(17,059)
(473,252)
(12,173)
-
1,875
-
1,833
(43)
355
Proceeds from grant
Proceeds from disposal of PPE and intangible assets
Purchase of financial investments
Proceeds from sale of financial investments
Net cash generated/(used) from investing activities
Increase in capital or transfers
Buyback of treasury shares
Movement in share premium
Other movements in equity (cash flow hedge)
Cash dividends paid to equity holders of the parent company
Cash dividends paid to minority interests
Proceeds from new borrowings
-
85,244
-
(2,230)
(1,257)
-
(14,069)
(4,269)
(9,744)
-
(590)
(519)
1,081
392,926
4,458
Repayment of borrowings
(30,146)
(46,980)
(34,490)
Net cash generated/(used) from financing activities
(43,531)
426,906
(39,940)
17,033
(30,961)
(4,239)
(51)
4,256
(1,522)
Net foreign exchange difference
Impact of increase/(decrease) in value of cash equivalents
Net increase/(decrease) in total cash
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
34
11
46,546
33,490
14,550
145,180
111,690
97,140
191,726
145,180
111,690
(€ thousands)
Share
capital
Share
premium
Balance at 31 March 2007
12,180
7,966
101,311
Allocation of 2006/07 profit
-
-
29,215
-
(5,509)
(4,235)
11
345
-
Dividends paid
Issue of shares (share options)
Profit for
the year
Total
Group
share
Minority
interests
TOTAL
(5,109)
29,215
145,563
97,860
243,423
-
(29,215)
-
-
-
-
-
(9,744)
(519)
(10,263)
-
-
356
-
356
Translation
Reserves differences
Treasury shares
-
-
-
-
-
-
Changes in group structure
-
-
(103)
-
-
(103)
59
(44)
Profit for the year
-
-
-
-
36,316
36,316
21,312
57,628
Other elements of comprehensive income
-
-
520
(3,008)
-
(2,488)
(1,855)
(4,343)
Total income and expense recognised
-
-
520
(3,008)
36,316
33,828
19,457
53,285
12,191
2,802
126,708
(8,117)
36,316
169,900
116,857
286,757
36,316
-
(36,316)
-
-
-
(2,060)
(2,209)
-
-
(4,269)
(590)
(4,859)
Dividends paid
7
-
186
-
-
-
193
-
193
(229)
-
-
-
(229)
-
(229)
1,875
86,256
13,978
(14,991)
-
87,118
(121,739)
(34,621)
Profit for the year
-
-
-
-
51,483
51,483
19,764
71,247
-
-
(1,198)
(12,926)
-
(14,124)
(7,444)
(21,568)
-
-
(1,198)
(12,926)
51,483
37,359
12,320
49,679
14,073
86,955
173,595
(36,034)
51,483
290,072
6,849
296,921
-
-
51,483
-
(51,483)
-
-
-
Treasury shares
Dividends paid
-
-
(14,069)
-
-
(14,069)
-
(14,069)
63
1,770
-
-
-
1,833
-
1,833
(15)
14
-
-
-
-(1)
-
(1)
-
-
23
-
-
23
(2,130)
(2,107)
Profit for the year
-
-
-
-
71,119
71,119
3,738
74,857
-
-
(2,621)
21,617
-
18,996
236
19,232
Treasury shares
-
-
(2,621)
21,617
71,119
90,115
3,974
94,089
14,121
88,739
208,411
(14,417)
71,119
367,973
8,693
376,666
At 31 March 2010, Faiveley Transport held 283,889 treasury shares, being 1.97% of share capital
35
Faiveley transport
1.2.6. Notes to the consolidated financial
statements
A. Accounting information
Faiveley Transport is a French limited liability company (société
anonyme) with a Management Board and a Supervisory Board. Its
registered office is at 143, boulevard Anatole France, Carrefour Pleyel,
93200 Saint Denis, France.
The consolidated financial statements are prepared under the
responsibility of the Management Board and submitted for approval
to the shareholders in the General Meeting.
The financial statements for the year ended 31 March 2010 were
approved by the Management Board on 11 June 2010. They were
presented to and reviewed by the Supervisory Board at its meeting on
11 June 2010.
They will be submitted for approval to the General Meeting of the
shareholders on 13 September 2010.
The financial statements have been prepared on the basis that the
Faiveley Transport Group operate as a going concern.
The Group’s functional and presentation currency is the euro. Figures
are expressed in thousands of Euros unless indicated otherwise.
B. Highlights
2. Share option plan
•• Accounting policy changes:
––Revised IAS 23 “Borrowing costs”: Prior to 1 January 2009, the Group
recognised directly as an expense all borrowing costs. From 1 January
2009 and in application of revised IAS 23, the Group capitalises
borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset in the cost of this
asset, providing that the starting date for the capitalisation of the
borrowing costs to the cost of the said asset is 1 April 2009 or later.
The Group has not identified financing attributable to a newly
recognised eligible asset since 1 April 2009 where interest should be
capitalised. The adoption of this change of accounting policy had no
effect on the consolidated financial statements.
The Extraordinary General Meeting of Faiveley S.A. (renamed Faiveley
Transport) held on 27 September 2005 approved the establishment of
a share option plan to be served by the authorised buyback of 325,000
shares at a maximum purchase price of €180 (before five for one stock
split).
At 31 March 2010, 240,095 options had been allocated and had neither
been cancelled nor exercised to date. Note that 80,425 purchase
options have been exercised to date (see E.13.1 below).
The Combined General Meeting of 22 September 2009 delegated to
––granting share subscription and/or purchase options;
––issuing shares or marketable securities giving right to new or existing
shares of the Company, with, in cases new shares are granted, the
cancellation of the pre-emption right.
At its meeting of 23 November 2009, the Management Board decided
to allocate, from that date and up to 23 November 2017, options giving
right to subscribe for new shares of the Company, to be issued as
part of a capital increase, for a total amount not exceeding €144,000,
corresponding to 144,000 new shares of a par value of €1 each. The
new shares will be issued at a price of €54.91 each.
1. Significant events
C. Consolidation principles and methods
•• C
hange of company name:
–– The Combined General Meeting held on 22 September 2009
endorsed the change of company name of Faiveley S.A. to Faiveley
Transport, which better reflects the Group’s commercial identity
worldwide.
1. Basis of preparation
•• C
hanges in Group governance:
–– Following the Combined General Meeting of 22 September 2009,
the Supervisory Board elected a new Chairman, with François
Faiveley giving up his position to Philippe Alfroid. Mr. Faiveley
considered that this choice would improve the company’s
governance and submitted it for approval by other Supervisory
Board members, who endorsed it. Mr. Faiveley was elected ViceChairman of the Supervisory Board.
–– The Supervisory Board also appointed Thierry Barel as member of
the Management Board. Mr. Barel joined the Group July 2009 as
Chief Operating Officer.
he Management Board now comprises four members: Robert
T
Joyeux, Chairman and Chief Executive Officer, Thierry Barel, Chief
Operating Officer, Erwan Faiveley and Etienne Haumont, Chief
Financial Officer of the Group.
•• P
ursuant to a contract signed on 17 July 2009, Faiveley Transport has
entrusted investment services provider Oddo Corporate Finance
with implementing a liquidity contract, consistent with the Ethics
Code issued by the AFEI, approved by the Autorité des Marchés
Financiers in its ruling of 22 March 2005 and published to the BALO
of 1 April 2005. This liquidity contract was concluded for an initial
period running from 1 July 2009 to 31 December 2009 and will be
renewed by tacit agreement by successive twelve months periods. As
part of the implementation of the contract, the Company allocated
€500,000 and 10,000 shares to the liquidity contract.
36
In application of regulation 1606/2002 of the European Union (EU), the
consolidated financial statements of the Faiveley Transport Group are
prepared in accordance with IFRS (International Financial Reporting
Standards), as adopted by the European Union.
New standards and application interpretations which are obligatory
in the case of consolidated financial statements for the year ended
31 March 2010:
•• Change in presentation
Revised IAS 1 “Presentation of financial statements”: the main change
introduced to this revised standard is an additional option to:
––either include in the income statement income and expense items
that were previously directly taken to equity in accordance with
other standards (translation adjustments, movements in the value
of cash flow hedging instruments);
––or include these items in a new statement entitled “statement of
comprehensive income”, to be presented immediately after the
income statement.
The Group opted for the second option and included a “statement
of comprehensive income” in its consolidated financial statements
at 31 March 2010. Comparative data was restated to comply with the
revised standard.
––IFRS 8 “Operating segments”, which replaced IAS 14 “Segment
reporting”: the new IFRS 8 standard on segment reporting defines
an operating segment as a component of an entity:
–– that engages in business activities from which it may earn
revenues and incur expenses;
–– whose operating results are reviewed regularly by the entity’s chief
operating decision maker to make decisions about resources to be
allocated to the segment and assess its performance;
–– and for which discrete financial information is available.
––revised IFRS 3 “Business combinations” and amendments resulting
from IAS 27 “Consolidated and separate financial statements”, IAS 28
“Accounting for investments in associates” and IAS 31 “Financial
reporting of investments in joint ventures”: the significant number
of changes introduced by these standards may cause significant
variances between the processing of business combinations carried
out before 31 March 2010 and subsequent ones;
––amendment to IAS 39 “Financial instruments: recognition and
measurement”: this amendment specifies the terms and conditions
of eligibility of certain types of risks for hedge accounting;
––amendment to IAS 32 “Classification of rights issues” whose
application is mandatory for financial years starting on or after 1
February 2010;
––interpretation IFRIC 16 “Hedges of a net investment in a foreign
operation”, applicable to financial years starting on or after 1 July
2009;
––interpretation IFRIC 17 “Distributions of non-cash assets to owners”,
applicable to financial years starting on or after 1 July 2009.
This interpretation does not apply to the consolidated financial
statements since the Group does not distribute non-cash assets;
In light of these criteria, the Group confirms the segmentation selected
for IAS 14. As a result, the application of the standard had no impact on
the information disclosed at 31 March 2010 by the Group.
––interpretation IFRIC 18 “Transfers of assets from customers”,
applicable to financial years starting on or after 1 July 2009.
––Amendments to IFRS 7 “Improvements to financial instruments
disclosure”: these amendments are applicable from the financial
year ending 31 March 2010 and notably include the presentation
of financial assets and liabilities at fair value by level within the fair
value hierarchy.
IFRS 9 “Financial instruments”: the publication of this standard is the
first step of the overhaul of IAS 39 and relates to the reclassification and
measurement of financial instruments. The date of first mandatory
application is 1 April 2013;
•• Other standards and amendments
The other amendments to standards and interpretations that have
come into force do not apply to the Group and had no significant
impact on the consolidated financial statements prepared at 31 March
2010:
––amended IAS 1 and IAS 32 – Puttable instruments and obligations
arising on liquidation;
––amended IFRS 2 – Share-based payments - Vesting Conditions and
Cancellations;
––amendment to IAS 39 and IFRS 7 – Reclassification of financial
assets;
––IFRIC 11 – Group and Treasury Share Transactions;
––IFRIC 13 – Customer Loyalty Programmes;
––IFRIC 14 – The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction;
––other amendments of the annual IFRS improvement procedure,
published in May 2008.
Other standards and interpretations that came into force at 1 April 2010:
the other texts adopted by the European Union at 31 March 2010
listed below, whose application is mandatory for financial statements
starting on or after 1 July 2009 were not applied early by the Group
in the preparation of its consolidated financial statements where the
option was provided:
Standards not yet approved by the European Union:
IFRIC 15 – “Agreements for the construction of real estate”, not adopted
as yet by the European Union.
2. Consolidation scope and methods
The Group consolidates, using the full consolidation method, those
companies over which it directly or indirectly exercises exclusive
control. In accordance with IAS 27, exclusive control is deemed to be
present when more than one half of the company’s voting rights are
held or when other means of control are in place.
Companies over which the Faiveley Transport Group exercises joint
control are consolidated using the proportional consolidation method.
Companies over which the Faiveley Transport Group exercises
significant influence over financial and operational policy are accounted
for using the equity method. Significant influence is presumed when
the Group holds more than 20% of the voting rights of a company.
Acquisitions or disposals arising during the financial year are reflected
in the consolidated financial statements from the date on which
effective control is transferred, unless the impact is not material to
the income statement in the case of acquisitions carried out at the
end of the financial year. Intra-Group balances and transactions are
eliminated for all consolidated companies.
Faiveley Transport Group companies that are consolidated are listed
in Note G.1 to the consolidated financial statements. Note G.2 lists
companies that were not consolidated due to their insignificant impact
on the Faiveley Transport Group’s consolidated financial statements.
37
Faiveley transport
3. Use of estimates
In order to be able to prepare consolidated financial statements
that comply with IFRS, the finance management is obliged to make
certain estimates and use assumptions that it considers realistic and
reasonable. These estimates and assumptions affect the carrying
amount of the assets, liabilities, equity and results, and any contingent
assets and liabilities, as presented at the balance sheet date. The
finance management regularly reviews its estimates on the basis
of the information available to it. When events and circumstances
are not in line with expectations, actual results may differ from such
estimates.
The main accounting methods whose application necessitates the use
of estimates relate to the following items:
•• Recognition of the margin on long-term building and service
contracts and the related provisions (see C-6.1)
Revenue from long-term building and service contracts is recognised in
proportion to the stage of completion of the contracts (see B-6 below).
Project reviews are organised on a regular basis so that the stage of
completion and proper completion of the contract can be monitored.
If the project review identifies a negative gross margin, a provision is
immediately raised in respect of the loss relating to the work not yet
carried out.
The total estimated income and expenses in respect of the contract
reflect management’s best estimate of the future benefits and
obligations under the contract. The assumptions used to determine
the current and future obligations take into account technological,
commercial and contractual constraints measured on a contract-bycontract basis.
The obligations under building contracts may result in penalties for
delays in a contract’s implementation schedule or an unexpected
cost increase due to amendments to the project, a supplier’s or subcontractor’s failure to comply with its obligations or delays caused by
unforeseen events or circumstances. Similarly, warranty obligations
are affected by product failure rates, equipment wear and tear and the
cost of action needed to return to normal service.
Although the Group measures risks on a contract by contract basis, the
actual costs resulting from the obligations associated with a contract
may prove to be greater than the amount initially estimated. It may
therefore prove to be necessary to re-estimate the costs to completion
when a contract is still in progress or to re-estimate provisions when a
contract is completed.
•• Measurement of deferred tax assets (cf. C-16)
The determination of the carrying amounts of deferred tax assets
and liabilities and the amount of deferred tax assets to be recognised
requires the finance management to exercise its judgement as to the
level of future taxable profits to be taken into consideration.
•• Measurement of assets and liabilities in respect of retirement
and similar benefits (see C-15.1)
The measurement by the Group of the assets and liabilities relating
to the defined benefit schemes requires the use of statistical data
and other parameters used to predict future trends. Such parameters
include discount rate, expected return on plan assets, salary increase
rate, staff turnover rate and mortality rate. When circumstances
or actuarial assumptions prove to be significantly different from
actual data subsequently observed, this could result in a substantial
amendment to the amount of the charge for retirement and similar
benefits, the actuarial gains and losses and the assets and liabilities
stated in the balance sheet relating to these commitments.
•• Measurement of property, plant and equipment and intangible
assets (see C-9)
Goodwill is tested for impairment each year on 31 March or more
frequently if there are indications of impairment. The discounted
future cash flow model used to determine the fair value of the cash
generating units utilises a certain number of parameters including
estimated future cash flows, discount rates and other variables, and
consequently requires the exercise of judgment to a significant
degree.
The assumptions used to carry out impairment tests are the same
for property, plant and equipment and intangible assets. Any future
deterioration in market conditions or the achievement of poor
operating performances could result in the Group being unable to
recover the current carrying amount of such assets.
•• Measurement of financial investments
Details of the method used to measure financial investments are
provided in § C-10.3.
•• Inventories and work-in-progress (see C-12)
Inventories and work-in-progress are measured at the lower of
cost and net realisable value. Write-downs are calculated on the
basis of an analysis of foreseeable trends in demand, technology
and market conditions, the aim of which is to identify inventories
and work-in-progress that are obsolete or surplus to requirements.
If market conditions worsen to a greater degree than was forecast,
additional write downs of inventories and work-in-progress may prove
necessary.
•• Stock-options
Share subscription or purchase options granted to certain senior
executives and employees of the Group are recognised in accordance
with IFRS 2. Options were measured at the allocation date. The Group
uses the Black & Scholes mathematical model. The value of options is a
function of the expected life, exercise price, current price of underlying
shares, expected volatility and share price. This value is recognised as
personnel cost between the date of grant and the end of the vesting
period and offset under equity (issue premium).
•• General provisions
Details of the method used to measure other provisions for liabilities
and charges are provided in § C-15.2.
38
4. Translation methods
Foreign currency denominated subsidiary financial statements are
translated into Euros at the following exchange rates:
4.1 Foreign currency denominated transactions
Foreign currency denominated transactions are translated at the
exchange rate on the date of the transaction when recorded. Any
gain or loss arising from the movement in exchange rates between
this date and the subsequent balance sheet date for all foreign
currency denominated assets and liabilities are recorded in the income
statement. Changes in the fair value of hedging instruments are
recognised in accordance with the treatment described in § C-11.
4.2 Foreign currency denominated subsidiary financial
statements
Foreign currency denominated subsidiary financial statements are
prepared in the currency that is most representative of their economic
environment This currency is deemed to be their functional currency
pursuant to IAS 21.
•• c losing rate: all balance sheet items, with the exception of the
components of equity which continue to be translated at historical
exchange rates (translation rates used on the date the subsidiary
was acquired by the Group);
•• a
verage rate for the period: income statement and cash flow
statement items.
Translation differences arising in respect of the profit or loss and
shareholders’ equity are recognised directly in shareholders’ equity
under the heading “Translation differences” in the case of the Group’s
share, with the balance being recorded in minority interests.
On the disposal of a foreign subsidiary, the translation differences
relating to it and recognised in shareholders’ equity after 1 April 2004
are recognised in the income statement.
Translation exchange rates used in the consolidation
31 March 2010
Closing rate
31 March 2009
31 March 2008
31 March 2010
Average rate
31 March 2009
31 March 2008
Thai Baht
€0.022937
€0.021176
€0.020087
€0.020971
€0.020696
€0.022361
Swedish Krona
€0.102950
€0.091408
€0.106417
€0.096368
€0.099987
€0.107474
Czech Koruna
€0.039308
€0.036512
€0.039471
€0.038424
€0.039250
€0.036855
US Dollar
€0.741895
€0.751428
€0.632431
€0.707357
€0.703601
€0.705240
Australian Dollar
€0.678380
€0.520400
€0.576901
€0.600070
€0.549628
€0.612661
Canadian Dollar
€0.730620
-
-
€0.649335
-
-
Hong Kong Dollar
€0.095554
€0.096956
€0.081251
€0.091219
€0.090458
€0.090440
Singapore Dollar
€0.530166
-
-
€0.495923
-
-
Taiwan Dollar
€0.023371
-
-
€0.021727
-
-
Pound Sterling
€1.123848
€1.074345
€1.256597
€1.128969
€1.198783
€1.415743
Iranian Rial
€0.000074
-
-
€0.000070
-
-
Brazilian Real
€0.415921
€0.325024
€0.362529
€0.378526
€0.359985
€0.380184
Russian Rouble
€0.025192
-
-
€0.025167
-
-
Indian Rupee
€0.016525
€0.014839
€0.015845
€0.014908
€0.015256
€0.017526
Korean Won
€0.000656
€0.000543
€0.000638
€0.000586
€0.000585
€0.000755
Chinese Yuan
€0.108689
€0.109960
€0.090192
€0.103570
€0.102390
€0.094691
Polish Zloty
€0.258578
€0.213288
€0.283930
€0.237863
€0.266923
€0.269905
5. Balance sheet date
All companies are consolidated on the basis of financial statements
drawn up at 31 March 2010.
6. Income statement presentation
6.1 Sales revenue and cost of sales recognition
Sales arising from contracts of less than one year in duration, which
primarily relate to the sale of spare parts (Customer Services), are
recorded upon transfer of title, which is generally at the moment of
product delivery to the customer and/or completion of the provision
of the service.
Sales arising from contracts of more than one year in duration are
recognised using the percentage of completion method in accordance
with IAS 11. Percentage of completion is measured on the basis of
relating actual sales billed to the total contract sales value or by
relating the actual costs incurred to the total costs estimated for the
contract.
The total estimated cost of completion includes direct costs (such as
raw materials, labour and engineering) relating to the contracts. This
includes costs already committed and future costs, including warranty
costs and costs specific to the probable risks. Provision charges for losses
to completion and other provisions on contracts are recorded to cost of
sales in the income statement if, during the review of the contracts, it
seems probable that the costs to which they relate will arise.
39
Faiveley transport
All changes in the conditions of contract fulfilment and all changes
to margins at completion are recorded to cost of sales in the income
statement in the period in which they are identified.
Where this difference is negative, it is taken directly to the income
statement. When this difference is positive, it is recognized in the
balance sheet.
Warranty provisions are valued based on contract terms and an
assessment of risks based on sector knowledge.
Acquisition of minority interests in subsidiaries that are already fully
consolidated
6.2. Profit from operations
The Group elected to recognise additional acquisition goodwill which
corresponds to the difference between acquisition cost of securities
and the additional share in consolidated equity that these securities
represent.
This is the profit before restructuring costs, gains and losses on
disposals of intangible assets and property, plant and equipment and
exceptional accounting adjustments.
6.3. Finance income and expenses
Finance income and expenses comprise:
––interest income and expense on the consolidated net debt, which
consists of borrowings, other financial liabilities (including liabilities
in respect of finance leases) and cash and cash equivalents;
––dividends received from unconsolidated equity investments;
––the effect of discounting financial provisions;
––changes in financial instruments;
––foreign exchange gains and losses on financial transactions.
6.4. Profit or loss from operations held for sale and
discontinued operations
The net of tax profit or loss from operations held for sale and
discontinued operations that meet the criteria of IFRS 5 is presented
under a separate heading in the income statement. It includes the net
profit or loss of such activities during the year and up to their date of
disposal, as well as the net gain or loss on the disposal itself.
6.5. Earnings per share
Basic earnings per share is calculated based on the weighted average
number of shares in circulation during the financial period. Since
the shares of the consolidating entity held by it are deducted from
shareholders’ equity, these shares are excluded from the weighted
average number of shares in circulation as from the 31 March 2008
year end.
Diluted earnings per share is calculated based on the weighted average
number of shares in circulation during the financial period adjusted
for the number of shares that would be generated by the exercise
of share subscription options as per the conditions of IAS 33.45 and
subsequent.
7. Intangible assets
7.1. Acquisition goodwill
Accounting treatment of put options on minority interests:
by analogy with the accounting treatment used for acquisitions of
minority interests, and until revised IFRS 3 and revised IAS 27 come into
force, the Group opted to recognise additional goodwill as part of the
recognition of put options on minority interests (see 10.6 below).
7.2. Intangible assets acquired separately or pursuant to a
business combination
Intangible assets acquired separately are recorded in the balance sheet
at their historical cost.
Intangible assets (primarily brands) resulting from the valuation of
assets of acquired companies are recorded in the balance sheet at
their fair market value, determined generally on the basis of appraisals
by external experts when significant in value.
Intangible assets, other than those with indefinite useful lives, are
amortised on a straight-line basis over their estimated useful lives,
which are as follows:
Software
1 to 3 years
Patents
5 to 15 years
Development costs
3 years, when valued at their fair value
7.3. Internally generated intangible assets
Research costs are immediately expensed when incurred.
Development costs on new projects are capitalised if all of the
following criteria are strictly met:
––the project is clearly identifiable and its related costs are separately
identified and reliably measured;
––the technical feasibility of the project has been demonstrated and
the Group has the intent and financial capability to complete the
project and use or sell the products derived from this project;
––it is probable that the project will yield future economic benefits for
the Group.
On each acquisition, the Group identifies and assesses the fair value
of all assets and liabilities acquired, particularly intangible assets and
property, plant and equipment, brands, inventories, work-in-progress
and all provisions for liabilities and charges.
Capitalised project development costs are amortised on a straight-line
basis over 3 years.
The unallocated difference between the cost of securities in companies
acquired and consolidated and the fair value of assets and liabilities is
recorded as acquisition goodwill.
Property, plant and equipment are measured at their acquisition cost or
at their fair value when they are measured pursuant to the acquisition
of a company that is consolidated. Depreciation is calculated separately
8. Property, plant and equipment
for each of the assets’ components that has a distinct useful life. The
useful lives of the assets concerned are deemed to be as follows:
Buildings
15 to 25 years
Fixtures and improvements
10 years
Industrial machinery and equipment
5 to 20 years
Tools
3 to 5 years
Vehicles
3 to 4 years
Office equipment and furniture
3 to 10 years
Finance leases
Assets acquired under finance leases are recorded as assets when
the lease agreement transfers to the Group all the risks and rewards
inherent to ownership of an asset. Lease agreements for which the
risks and rewards of ownership are not transferred to the Group
are treated as operating leases, with corresponding lease payments
expensed on a straight-line basis over the lease term.
On initial recognition, a financial instrument is valued at its fair market
value, adjusted for issue costs:
––fair value as defined by the applicable IAS corresponds as a general
rule to transaction value, with exceptions discussed below;
––under the IAS, the term“issue costs”is used to mean all of the accessory
costs directly attributable to the acquisition or implementation of
the financial instruments.
In certain specific cases, e.g. loans, borrowings, operating receivables
and liabilities, which are interest-free or at beneficial rates, fair value
does not correspond to the fair value on initial recognition. In such
cases, fair value is calculated by discounting, using the market rate
increased by a risk premium, the cash flows associated with the
financial instrument.
9. Impairment of asset values
At future balance sheet dates, financial instrument assets and liabilities
are recorded at either their amortised cost or fair value based on the
class of assets or liabilities to which they belong.
Goodwill and intangible assets with indefinite useful lives are tested
for impairment each year.
The accounting treatment of identified financial instruments is as
follows:
Intangible assets and property, plant and equipment with finite useful
lives are tested for impairment as soon as there is any indication that
such assets may have become impaired. Where relevant, a provision for
impairment is recognised.
10.1. Trade receivables and payables
Impairment testing involves comparing the recoverable amount of
the asset with its carrying amount. Recoverable amount is the higher
of fair value less costs to sell and value in use.
Assessments are carried out on the basis of Cash Generating Units
(CGUs) to which these assets are associated. A CGU is a homogeneous
group of assets whose continuous utilization generates cash inflows
that are largely independent of cash inflows generated by other asset
groupings.
The value in use of a CGU is determined based on the present value
of the estimated future cash flows to arise from these assets, within
the framework of economic assumptions and operating conditions
anticipated by Group executive management. The measurement
carried out is based mainly on the Group’s three-year plan. Cash flows
beyond that timeframe are extrapolated by applying a stable growth
rate.
The recoverable amount is the sum of the present value of the cash
flows and the present value of the terminal residual value. The discount
rate is determined using the sector’s weighted average cost of capital.
When this value is less than the carrying amount of the CGU, an
impairment loss, first allocated to acquisition goodwill, is recognised.
In the event of an indication of a recovery in value, this impairment loss
may eventually be reversed to the extent that it does not exceed the
carrying amount of the asset at the same date had it not been subject
to a write-down. Impairment losses recorded on acquisition goodwill
may not be reversed.
10. Financial instruments
Pursuant to IAS 32 and IAS 39, financial instrument assets and
liabilities comprise operating receivables and liabilities, financial loans
and debts, shareholdings in unconsolidated companies, marketable
40
securities, borrowings and other financial debts and derivative financial
instruments.
In accordance with IAS 11, work-in-progress on long-term contracts is
treated as trade receivables.
At each balance sheet date, the Group assesses whether there is an
objective indication of impairment of a receivable. If there are objective
indications of impairment in respect of assets recognised at amortised
cost, the amount of the impairment loss is equal to the difference
between the carrying amount of the asset and the net present value
of the estimated future cash flows discounted at the original effective
interest rate. The carrying amount of the asset is reduced via the use
of an impairment account. The amount of the impairment loss must
be recognised in the income statement.
If the amount of the impairment reduces during a subsequent
accounting period, and if such reduction can be objectively linked to
an event that occurred after the recognition of the impairment, the
impairment loss previously recognised must be reversed to the extent
that the carrying amount of the asset does not exceed the amortised
cost on the date the impairment loss is reversed. Any subsequent
reversal is recognised in the income statement.
In the case of trade receivables, an impairment loss is recognised when
there is an objective indication (such as a probability of the debtor
suffering bankruptcy or significant financial difficulties) that the
Group will be unable to recover the amounts due in accordance with
the contractual terms of the invoice. The carrying amount of the trade
receivable is reduced via the use of a value adjustment account.
Within the framework of the factoring of trade receivables, an analysis
of the risks and rewards relating to the transfer of such receivables
must be conducted pursuant to IAS 39 (credit risk and interest rate risk
primarily):
––if the risks and rewards are substantially transferred, the receivables
are removed from the balance sheet against cash;
––if the risks and rewards are substantially retained, the receivables
are maintained on the balance sheet with a corresponding liability
being recognised, the operation being accounted for as a borrowing
guaranteed by receivables;
41
Faiveley transport
––if the risks and rewards relating to a portion of the receivables are
retained, as described above, the said portion of the receivables is
retained on the balance sheet.
Movements in the fair value of options, except for discounting effects,
which are taken to the income statement, are also recognised as
offsetting acquisition goodwill.
10.2 Financial receivables and loans
11. Derivative financial instruments
These financial instruments are also recorded at their amortised cost.
They are subject to valuation tests which are realised when there is
an indication that their recoverable amount is less than their carrying
amount, in accordance with the same principles as those described in
note C.10.1. The impairment loss is recorded to the income statement
as are any loss reversals.
The Group uses derivative financial instruments to manage its
exposure to movements in interest rates and in the exchange rates of
foreign currencies. As part of its hedging policy, the Group uses interest
rate swaps and contracts for forward purchases and sales of currencies.
The Group may also use caps, floors and options.
10.3 Shareholdings in unconsolidated companies
The Group operates in foreign countries and is therefore exposed to
exchange risk as a result of its exposure to a number of currencies. The
management of exchange risk is centralised by the parent company’s
Treasury department and comprises two parts:
These financial instruments are classified as assets held for sale.
They are unlisted shares for which the fair value cannot be reliably
determined and therefore the carrying amount at which they are
recognised is their acquisition cost.
In the event of an objective indication of impairment of the financial
asset (notably a significant and sustained drop in its value), the
impairment loss is recognised in the income statement and may
not be reversed in a subsequent period other than on the sale of the
shareholding concerned.
10.4 Cash, marketable securities and cash equivalents
Cash and marketable securities comprise cash, bank account balances,
term deposits due within three months, publicly traded shares and
mutual funds units. They are considered by the Group as financial
assets held for trading and are valued at their fair market value,
with any movements in fair value recorded directly to the income
statement.
Exchange risk
––exchange risk management relating to tenders in foreign currencies
(uncertain risk);
––exchange risk management relating to commercial contracts
(certain risk).
The Group’s policy is to hedge all expected future transactions in each
major currency.
Interest rate risk
The Group manages its interest rate cash flow risk through the use
of variable rate against fixed rate swaps or caps and tunnels. From an
economic point of view, the effect of these interest rate swaps or caps
is to convert variable-rate borrowings into fixed-rate borrowings. The
Group may also use structured instruments that do not qualify for
hedge accounting.
In the case of highly liquid short-term investments (duration not
exceeding three months) it is reasonable to assume that their fair
value is equal to their carrying amount (capitalised interest included).
Such items are therefore classified as cash equivalents.
A detailed description of the exchange and interest rate risks is provided
in Note E.16 to the financial statements: “Financial instruments and
financial risk management”.
10.5 Borrowings and other financial liabilities
The majority of derivative instruments used by the Group qualify
for accounting purposes as hedges if the derivative is eligible to be a
hedging instrument and if the hedging is documented according to
the principles of IAS 39. In practice, the derivative financial instruments
not qualified as hedging by the Faiveley Transport Group are the
following:
Borrowings and other financial liabilities are stated at amortised cost.
10.6 Put options held by minority shareholders in Group
subsidiaries
In accordance with IAS 32, put options held by minority shareholders in
Group subsidiaries are recognised as financial liabilities if associated
risks and rewards are not transferred to the consolidating entity.
The amount posted to the balance sheet corresponds to the fair
value of these minority interests at the balance sheet date, measured
according to the discounted future cash flow method. This value is
reviewed on an annual basis.
The Group opted for the recognition of financial liabilities to be
offset by:
––the cancellation of corresponding minority interests;
––and an increase in goodwill allocated to the companies concerned,
for the surplus.
The payment of dividends to minority interests are offset by an
increase in acquisition goodwill.
42
Derivative financial instrument accounting
––foreign exchange options to cover tenders;
––structured interest rate swaps.
The derivative hedging instruments are recorded in the balance sheet
at their fair value. The recognition of movements in the fair value of
derivative instruments depends on the following three classifications:
•• f air value hedging: the movements in the fair value of the derivative
are taken to the income statement and offset, to the extent of the
effective part, the movements in fair value of the underlying asset,
liability or firm commitment, also recorded in the income statement.
For example, forward exchange transactions and exchange swaps
that cover certain commitments and financial assets and liabilities
denominated in foreign currencies are considered as fair value
hedges.
•• h
edging of future flows: the movements in fair value are recorded
in equity for the effective part and reclassified in income when the
item covered affects the latter. The ineffective part is taken directly to
financial income and expense. Interest rate derivative instruments,
as well as budget cash flow hedges are treated as future cash flow
hedges.
•• t ransaction derivatives: the movements in the fair value of the
derivative are recorded in financial income and expense.
12. Inventories and work-in-progress
Inventories and work-in-progress include raw materials, work-in
progress and finished products. They are stated at the lower of
production cost and estimated net realisable value.
Raw materials are measured using the weighted average cost
method.
Work-in-progress and finished products are measured at their
production cost. The cost of inventories includes the direct raw
material costs and, where relevant, the direct labour costs as well as
overheads incurred in bringing the inventories to their present location
and condition.
Write downs are recorded to take into account the risk of
obsolescence.
13. Non-current assets held for sale and
discontinued operations
IFRS requires the separate disclosure in the balance sheet of the
total value of assets and liabilities of operations held for sale and
discontinued without any offset. IFRS also requires the separate
disclosure in the income statement of the total after tax profit realised
from discontinued operations.
Non-current assets held for sale may no longer be depreciated or
amortised. They are valued at the lower of their carrying amount and
fair market value net of disposal costs.
14. Treasury shares
Faiveley Transport parent company shares held by the subsidiaries or
the parent company are deducted from Group equity, with any gains
or losses on their disposal being directly allocated to equity.
15. Provisions for liabilities and charges
15.1. Provisions for retirement benefits and other personnel
commitments
In accordance with the laws and practices of each country, Faiveley
Transport Group participates in retirement benefit plans, social
security plans, medical plans and employment termination indemnity
schemes, with benefits based on several factors including seniority,
wages and payments made into mandatory general plans.
These plans may be defined benefit or defined contribution plans.
•• Post-employment benefits – defined benefits
Following retirement, Group employees receive benefits (pension or
allowance) funded by a number of Group companies. These defined
benefit plans primarily concern the United Kingdom, Germany, France
and Italy.
In the United Kingdom and Germany, the majority of these plans
involve supplementary pension plans. In the United Kingdom,
commitments are pre-financed by plan assets.
In France, employees are granted, by law, a retirement benefit for an
amount that varies according to the applicable collective agreement,
seniority of employment and final salary. This benefit is paid by the
employer when the employee retires.
In Italy, the law provides for the payment by companies of the
“Trattamento di Fine Rapporto” (Severance pay) or TFR to employees.
The TFR is funded by a 7.4% contribution paid by the employer and is
accumulated so as to provide the employee with a lump sum when
leaving the company. The impact of the TFR reforms have been
integrated since 31 March 2008.
Commitments for defined benefit plans are calculated based on
the “projected unit credit” actuarial method, based on actuarial
assumptions (such as discount rate, rate of salary increase, life tables,
etc.).
Actuarial differences (resulting from changes in assumptions or
experience variances) are recognised according to the corridor method.
That portion of actuarial gains or losses exceeding 10% of the higher of
the value of future benefits and the value of plan assets is amortised
over the average remaining employment life of participants in the
plan.
•• Post-employment benefits – defined contributions
Contributions into defined contribution plans are expensed when
made.
•• Other long-term benefits
Other long-term benefits primarily concern Germany (seniority
bonuses and early retirement schemes) and France (seniority awards).
Actuarial differences for this type of plan are expensed when they
arise.
The net expense for retirement commitments and similar benefits is
broken down between cost of sales and fixed costs, according to the
distribution of the Company workforce.
15.2 Other provisions for liabilities and charges
In accordance with IAS 37, the Faiveley Transport Group recognises a
provision when an obligation to a third party arises that will result in a
probable loss or liability that can be reasonably measured. The Group
reports a contingent liability as an off-balance sheet commitment
when there is only a possibility of a resulting loss or liability or when it
cannot be reasonably measured.
These provisions are determined based on the best knowledge
available concerning risks incurred and their probability of realisation
and are allocated to specific risks. They cover, in particular:
•• probable after sales service expenditures arising from mechanical
warranties;
•• probable expenditures for industrial risks covered by contractual
guarantees. The measurement of the provision amount is based on
such factors as the products’ technical complexities, their innovative
nature, geographical proximity etc;
•• litigation risks;
•• losses on completion for the part exceeding the amounts due by the
customer;
43
Faiveley transport
•• r estructuring costs when the restructuring has been officially
announced and is the subject of a detailed plan or whose execution
has already begun;
These provisions are valued at their present value when their impact is
significant and their measurement reasonably reliable.
Provisions for guarantees are calculated according to the percentage
related to the type of product produced and experience gained of its
reliability over time. The percentages vary from 1 to 6% according to
the products and are applied to the sales achieved by project.
16. Deferred tax
Deferred tax reflects timing differences between the accounting
and tax treatments of consolidated revenues and expenses, and the
unrealised tax relating to assets and liabilities revaluations arising
during business combinations.
As a result, the application of IFRS 8 had no impact on the information
presented at 31 March 2010 by the Group.
Segment information is presented in note E.19.
18. Specific mechanisms linked to Faiveley Transport
shareholding
Former managers of Faiveley Management (“Manager FM”) and
Faiveley M2 (“FM2 Managers”) have undertaken the following
commitments in relation to their shareholding in Faiveley Transport
(formerly Faiveley S.A.).
•• FM Managers commitments
FM Managers all agreed to a lock-up commitment of all their Faiveley
Transport shares for 2 years and two thirds of their shares for 3 years
from 23 December 2008.
It also reflects temporary differences arising from certain consolidation
restatements, in order to standardise the different valuation methods
in use at the Group’s subsidiaries.
In addition, over a period of 6 years from 23 December 2008, any
disposal by a Manager of FM of a block of more than 10,000 Faiveley
Transport shares is subject to a Faiveley Transport pre-emption right.
Deferred tax is calculated using the liability method that takes into
account tax rules known at the end of the financial year.
•• FM2 Managers commitments
Deferred tax assets arising from tax losses carried forward are
recognised when it is probable that the Group will realise sufficient
taxable profits in the next financial year to offset against the tax loss
incurred.
Deferred tax assets that are not recognised on the acquisition of
subsidiaries that had generated tax losses prior to their acquisition are
recognised when the tax saving is realised, by way of a reduction to
goodwill in accordance with IFRS 3.
17. S
egment reporting
IFRS 8 “Operating segments” has replaced IAS 14 “Segment reporting”.
In light of criteria defined by IFRS 8 (§ C.1) and considering the Group’s
in-house organisation and the structure of the market, the Group
opted, in application of IFRS 8, for a similar presentation as to IAS 14.
In addition, it was deemed appropriate to retain an analysis by
geographic region.
Every FM2 manager has entered into a unilateral undertaking to
sell their Faiveley Transport shares to Faiveley Transport, which may
be exercised in the event they leave their duties with the Faiveley
Transport Group.
FM2 managers all agreed to a lock-up commitment of all their Faiveley
Transport shares for 3 years from 23 December 2008.
In addition, over a period of six years from 23 December 2008, any
disposal by an FM2 manager of a block of more than 3,000 Faiveley
Transport, is subject to a Faiveley Transport pre-emption right.
•• Faiveley Transport – repurchase of minority interests
On 23 December 2008, the Shareholders’ General Meeting approved the purchase by Faiveley S.A. of all minority interests (direct and indirect) in
its Faiveley Transport subsidiary.
•• Detailed calculation of acquisition goodwill relating to minority interests:
Acquisition price of the shares:
At 1 April 2009
(€ thousands)
383,767
-
383,767
2,963
195
3,158
(121,148)
-
(121,148)
265,583
195
265,778
Fair value
at 1 April 2009
Acquisition expenses (fees):
Share of equity acquired:
•• Impact of Ellcon National joining the Group:
Ellcon National (*)
Carrying amount
Adjustments
Fair value
Restatements
within goodwill
allocation
deadlines
7,190
5,120
12,310
-
12,310
511
3,562
4,073
54
4,127
Inventories
7,358
73
7,431
(231)
7,200
Trade receivables
6,669
-
6,669
-
6,669
892
(362)
530
-
530
1,146
-
1,146
-
1,146
Non-current assets:
Intangible assets and property, plant and equipment
Deferred tax assets
Current assets:
Cash
Non-current liabilities:
1. Newly created companies
––Faiveley Transport Canada (Tramway Toronto Project).
Non-current provisions
-
-
-
-
-
-
(2,599)
(2,599)
(324)
(2,923)
––Faiveley Transport Metro Technology Singapore and Faiveley Transport
Metro Technology Taiwan (Platform doors and gates).
Non-current borrowing
(1,559)
-
(1,559)
-
(1,559)
(430)
(5,544)
(5,974)
81
(5,893)
Current borrowings
(429)
(10)
(438)
-
(438)
(2,200)
51
(2,149)
-
(2,149)
-
-
-
-
-
19,148
292
19,440
(420)
19,020
2. Acquisitions
Current liabilities:
Current provisions
Other liabilities
None.
Total
Summary of acquisitions during the last three financial years:
Main business
Acquisition date
% owned
Acquisition cost
2008/2009:
Design and manufacture of sintered friction materials
1 April 2008
100%
€24,400
Ellcon National Inc.
Brake components
31 July 2008
100%
USD 71,000
2007/2008:
Nowe GmbH
Sanding systems
1 January 2008
75%
€1,959
Shijiazhuang Jiaxiang Precision Machinery Co. Ltd
Production of compressors
20 December 2007
50%
€854
3. Disposals and companies no longer consolidated
Restatements
within allocation
deadlines
At 31 March 2009
(€ thousands)
Other receivables
D. CHANGES IN CONSOLIDATION SCOPE
––FMRP (joint venture for the manufacturing of braking systems in the
Middle East).
Companies acquired
4. Movement in acquisition goodwill within the allocation period
Acquisition expenses
(972)
-
(972)
Goodwill
24,393
786
25,179
Acquisition cost
42,861
366
43,227
(*) Amounts in € thousands translated at the exchange rate on the acquisition date (31 July 2008): €0.640574
These financial statements have been prepared in accordance with
IFRS. We have not identified any material difference in the fair value of
the amounts disclosed above.
•• Movement in the acquisition goodwill of Ellcon National:
The value of the acquisition goodwill of Ellcon National increased from
€24,393 thousand at 31 March 2009 to €25,179 thousand at 1 April
2009, which was an increase of €786 thousand. This increase was due
to the following items:
Inventories:
Provisions for guarantees
Impact of deferred tax:
(€231 thousand)
€81 thousand
(€270 thousand)
Nil.
44
45
Faiveley transport
E. Notes to the consolidated financial statements
and accompanying tables (in € thousands)
1. Goodwill
To expand its product range, the Faiveley Transport Group has acquired
specialised companies. The main acquisitions include the Sab Wabco
Group (acquired in 2004), which focuses on brake products and
couplers, Faiveley Transport NSF (acquired in 2005), which specialises in
air conditioning equipment, Espas (acquired in 2006), which specialises
in electronic products, Nowe GmbH (acquired in 2008), which designs
sanding systems, ShiJiaZhuang JiaXiang Precision Machinery Co. Ltd (of
which 50% was acquired in 2007), which develops and manufactures
compressors, Ellcon National (acquired in 2008), which specialises in
brake components for the rail freight market and the sintered brake
pads activity of Carbone Lorraine on 1 April 2008. When it acquired
these companies, the Group allocated the goodwill and intangible
assets with indefinite useful lives to the companies concerned. The
allocation of these goodwill amounts has not subsequently been
amended.
At the time of Faiveley Transport’s (formerly Faiveley S.A.) acquisition
of the entire minority shareholdings (both direct and indirect) in
its subsidiary, Faiveley Transport, goodwill was recognised in the
consolidated financial statements.
The following table provides details of the unallocated goodwill as at 31 March 2010:
Gross
Accumulated
impairment losses
Net
31 March 2010
Net
31 March 2009
Net
31 March 2008
Sab Wabco Group
219,604
-
219,604
219,997
220,751
Faiveley Transport Minorities
265,778
-
265,778
265,583
10,057
10,057
-
10,057
10,057
Ellcon National
29,162
-
29,162
28,614
-
6,061
-
6,061
6,061
6,061
Espas Group
Nowe GmbH
4,757
-
4,757
1,978
2,043
1,013
-
1,013
1,013
-
102
-
102
102
102
3,479
-
3,479
2,466
2,355
540,013
-
540,013
535,871
241,369
Others
Total
Change 2009/2010
Gross
1 April 2009
Adjustments
to opening
goodwill
Acquisitions
Disposals
Impairment
Sab Wabco Group
219,997
-
-
-
-
265,583
195
-
-
-
-
265,778
10,057
-
-
-
-
-
10,057
Ellcon National
28,614
922
-
-
-
Espas Group
6,061
-
-
-
-
Nowe GmbH
1,978
-
-
-
-
1,013
-
-
-
-
-
1,013
102
-
-
-
-
-
102
Others
Total
Other
Gross
movements 31 March 2010
(393)(1)
(375)(2)
2 779(3)
2,466
-
-
-
-
1,014(3)
535,871
1,117
-
-
-
3,025
(2) Translation adjustment on acquisition goodwill of Ellcon National (USD 39,307).
Sab Wabco Group
Ellcon National
Gross
1 April 2008
Adjustments
to opening
goodwill
Acquisitions
Disposals
Impairment
220,751
-
-
-
-
-
-
265,583
-
-
-
265,583
10,057
-
-
-
-
-
10,057
6,061
3,480
540,013
219,997
-
-
28,614
-
-
-
28,614
-
-
-
-
-
6,061
Nowe GmbH
2,043
(65)
-
-
-
-
1,978
-
-
1 013
-
-
-
1,013
Shijiazhuang Jiaxiang Precision
Machinery Co. Ltd
102
-
-
-
-
-
102
2,355
-
298
-
-
(187)
2,466
241,369
(65)
295,508
-
-
(941)
535,871
Others
Total
(1) This movement relates to the recognition, as a deduction of the acquisition goodwill of Sab Wabco, of tax savings achieved over the financial year in relation to subsidiaries of the former
Sab Wabco Group structure (Faiveley Transport do Brasil, Faiveley Transport Birkenhead Ltd and Sab Wabco Investments Ltd.), which had tax losses carried forward at the time of its acquisition
by Faiveley Transport Group.
The Group reviewed the carrying amounts of acquisition goodwill
and other operating non-current assets at 31 March 2010. This review
was conducted by asset groups belonging to the same activity, based
on cash flows forecast from these assets as determined within the
framework of a strategic analysis, performed particularly in relation to
the preparation of the budget and long-term business plan.
The assumptions concerning sales growth correspond to the visibility
of the markets over three years (order book). The rate of 2.5% is used for
the subsequent two years. Beyond five years and to infinity, the growth
rate used is 1.5%, which is a relatively prudent assumption in relation to
the growth rates expected in this market.
The calculation of the free cash flow incorporates standard data for
the entity in terms of changes in working capital requirement and
capital expenditure.
The reference pre-tax WACC (Weighted Average Cost of Capital) is
10.8% for the euro zone and 11.7% for the US. It is calculated using
corresponding parameters:
•• Market data:
––risk-free rate on 10-year French government bonds (3.046%);
––levered beta of sector (0.62);
––market risk premium (11.3% for the euro zone, and 3.24% for the US).
•• The entity’s parameters:
––estimated cost of debt: 3.10% for the 2009/2010 year(including
hedges and margins);
––equity/debt ratio at the balance sheet date;
––a standard tax rate 33.33%.
The carrying amount at 31 March 2010 of acquisition goodwill and other
non-current assets grouped together with other assets by activity, was
compared to their value in use calculated using the aforementioned
method. No impairment was recognised following this review.
A 10% variation in the discount rate (or another key assumption) would
not change the result of the impairment tests.
2. Other intangible assets
Gross
Accumulated
amortisation
Net
31 March 2010
Net
31 March 2009
Net
31 March 2008
Incorporation and development costs
14,450
6,952
7,498
5,043
4,832
Patents, trademarks and licences
41,320
16,748
24,572
25,949
22,176
Business goodwill
12,511
-
12,511
12,483
25
Other intangible assets
10,097
1,725
8,372
5,491
774
Total
78,378
25,425
52,953
48,966
27,807
At 31 March 2010, intangible assets were broken down as follows:
––incorporation and development costs: only include development
costs incurred as part of research programmes and that comply
with the IFRS capitalisation criteria. These costs are amortised over
a maximum of 3 years;
46
(754)(1)
6,061
29,161
4,757
Other
Gross
Espas Group
219,604
(1) This change corresponds to the recognition as a reduction in the Sab Wabco goodwill of the tax savings achieved during the year relating to the subsidiaries of the former Sab Wabco group
(Faiveley Transport do Brasil, Faiveley Transport Birkenhead and Sab Wabco Investments) and which had tax losses carried forward at the time of their acquisition by the Faiveley Transport
Group.
(3) Increase in acquisition goodwill of Nowe GmbH and Faiveley Transport Lekov a.s. relating to the recognition of put options on shares held by minority interests.
Change 2008/2009
––Patents, trademarks and licences: primarily includes the Sab Wabco
brand, which was valued at 31 March 2005, on the acquisition of the
Sab Wabco Group (€20,000 thousand), patents acquired on the take
over of Carbone Loraine’s sintered brake business (€4,000 thousand),
and computer software amortised over a maximum of 5 years.
47
Faiveley transport
––Goodwill: comprises the goodwill generated by the acquisition of
Carbone Loraine’s sintered brake business (€12,457 thousand);
project, a significant IT system integration programme, launched in
2007, whose objective is to optimise our organisations, industrial
processes, equipment and the sharing of technical data within the
Faiveley Transport Group.
––Other intangible assets: primarily includes the €8,098 thousand in
costs already incurred on the implementation of the Moving Forward
Change
in Group
structure
Acquisitions
Disposals
10,601
-
3,776(1)
-
73
14,450
40,601
-
598
(14)
135
41,320
Business goodwill
12,483
-
28
-
-
12,511
7,107
-
3,329
(215)
(124)
10,097
70,792
-
7,731
(229)
Total
Other
movements
84(2)
Gross
31 March 2010
78,378(3)
(1) Development costs capitalised over the period
(2) Including impact of exchange differences of €270 thousand and reclassifications of €(186) thousand.
- Brands and patents: - Development costs:
Other
Under construction
Total
Change
in Group
structure
Acquisitions
Disposals
8,713
-
1,988(1)
(92)
(8)
10,601
Business goodwill
Total
Other
Gross
34,756
4,360
1,634
(148)
(1)
40,601
25
12,458
-
-
-
12,483
2,187
-
2,477
(72)
2,515
7,107
45,681
16,818
6,099
(312)
2,506(2)
70,792(3)
- Brands and patents:
- Development costs
€20,000 thousand
€962 thousand
3. Property, plant and equipment
Gross
Under construction
Accumulated
depreciation
Net
31 March 2010
Net
31 March 2009
Net
31 March 2008
5,579
229
5,350
5,331
4,859
76,082
48,535
27,547
30,493
19,222
126,556
104,066
22,490
22,553
15,475
41,170
31,736
9,434
9,454
8,493
1,439
1,049
5,936
66,260
68,880
53,985
1,439
250,826
Total
(2) Including fair value adjustments:
- Land
- Buildings
- Construction
- Plant and machinery
TOTAL :
5,556
-
-
-
-
23
5,579
76, 213
-
-
930
(513)
(548)
76,082
120,102
-
-
4,689
(1,281)
3,046
126,556
38,542
-
-
2,481
(1,012)
1,159
41,170
1,049
-
-
1,165
(33)
(742)
1,439
241,462
-
-
9,265
(2,839)
2,938
250,826(2)
Change
in Group
structure
Acquisitions
Disposals
408
16
-
53
(1)
1,458
5,733
2,818
1,019
11,028
Gross
1 April 2008
Adjustments
to opening
goodwill
5,079
-
Land
Buildings
Plant and machinery
Other
Under construction
Total
Other
Gross
5,556
62,346
-
9,772
1,098
(277)
3,274
76,213
100,775
-
15,683
4,755
(2,424)
1,313
120,102
34,640
106
1,523
3,434
(1,322)
161
38,542
5,936
-
-
610
(29)
(5,468)
1,049
208,776
106
27,386
9,913
(4,052)
(667)
(1)
241,462(3)
(2)
(1) Relates mainly to the inclusion of Ellcon National (see paragraph D.4)
- 184,566
- Land
- Buildings
- Construction
- Plant and machinery
TOTAL :
1,436
5,807
2,818
1,019
11,080
Property, plant and equipment acquired under finance leases
The following table provides an analysis of property, plant and equipment acquired under finance leases:
Software licences
Land
Buildings
Plant and machinery
Transportation equipment
Total
48
Other
Gross
(1) Including €2,898 thousand related to exchange differences and €40 thousand related to reclassifications.
(2) Including fair value adjustments:
(2) Including impact of exchange differences of €(46) thousand and reclassifications of €2,552 thousand.
Other
Disposals
(2) Including €1,885 thousand related to exchange differences and €(2,552) thousand related to reclassifications.
(1) Development costs capitalised over the period
Plant and machinery
Acquisitions
Change 2008/2009
€20,000 thousand
€962 thousand
Gross
1 April 2008
Buildings
Change
in Group
structure
Plant and machinery
Change 2008/2009
Land
Adjustments
to opening
goodwill
Buildings
Gross
1 April 2009
(3) Of which allocated acquisition goodwill:
Gross
1 April 2009
Land
Change 2009/2010
(3) Of which allocated acquisition goodwill:
Change 2009/2010
Gross
Accumulated
depreciation
Net
31 March 2010
Net
31 March 2009
Net
31 March 2008
1,079
-
1,079
1,079
1,079
925
-
925
925
925
9,070
5,770
3,300
3,467
3,679
416
353
63
116
111
52
-
52
-
-
11,352
6,123
5,229
5,587
5,794
49
Faiveley transport
4. Accumulated amortisation and depreciation of property, plant and equipment and intangible assets
Change 2009/2010
Gross
1 April 2009
Restatement
of opening
goodwill
Acquisitions
Disposals
763
-
-
-
89
-
-
-
-
-
-
Other financial investments
8,112
(430)
284
(2,914)
(428)
4,624
Total
8,875
(430)
284
(2,914)
(339)(1)
5,476
Change 2009/2010
As at
1 April 2009
Change in Group
structure
Additions
-
-
-
-
-
5,558
-
1,394
-
6,952
14,652
-
1,991
105
16,748
-
-
-
-
-
1,616
-
119
(10)
1,725
Business goodwill
Land
Reductions/
other movements
As at
31 March 2010
225
-
4
-
229
Buildings
45,720
-
3,185
(370)
48,535
Plant and machinery
97,549
-
6,216
301
104,066
Other PPE
29,088
-
3,067
(419)
31,736
194,408
-
15,976
(393)
209,991
Total
(1)
(1) Including €2,172 thousand in respect of translation differences and €(2,565) thousand in respect of asset disposals.
Change 2008/2009
As at
1 April 2008
Change in Group
structure
Additions
-
-
-
-
-
3,881
-
1,769
(92)
5,558
12,580
329
2,044
(301)
14,652
-
-
-
-
-
1,413
-
176
27
1,616
220
-
5
-
225
Buildings
43,124
-
2,667
(71)
45,720
Plant and machinery
85,300
8,640
5,937
(2,328)
97,549
Other PPE
26,147
1,299
2,767
(1,125)
29,088
172,665
10,268
15,365
(3,890)
194,408
Business goodwill
Land
Total
Reductions/ other
movements
(1)
As at
31 March 2009
(1) Including €(55) thousand in respect of translation differences and €(3 835) thousand in respect of asset disposal.
Net
31 March 2009
Net
31 March 2008
Gross
Provisions
852
622
230
211
272
-
-
-
-
-
4,624
477
4,147
7,494
4,174
Total
5,476
1,099
4,377
7,705
4,445
Gross
31 March 2010
852
(1) Including €446 thousand in respect of translation differences and €(785) thousand in respect of reclassifications.
Change 2008/2009
Gross
1 April 2008
Change
in Group
structure
Acquisitions
Disposals
915
(37)
-
-
(115)
763
-
-
-
-
-
-
5 028
2 935
796
(735)
88
8 112
Total
5 943
2 898
796
(735)
(27)(1)
8 875
Charges to
provisions
Reversals of
provisions
Other
movements
Impairment
provisions as
at 31 March
Investments in unconsolidated subsidiaries
Investments in associates
Other
Gross
Movements 31 March 2009
(1) Including €202 thousand in respect of translation differences and €(229) thousand in respect of reclassifications.
Changes in impairment provisions against non-current financial assets:
Impairment
provisions as
at 1 April
Change
in Group
structure
31 March 2010
1,170
-
-
(236)
165
1,099
31 March 2009
1,497
-
100
(285)
(142)
1,170
31 March 2008
1,917
-
6
(3)
(423)
1,497
Maturity date of other financial investments:
1 to 5 years
Other fixed investments
Guaranteed deposits and securities
Net
31 March 2010
Loans
5. Non-current financial assets
Investments in unconsolidated
subsidiaries (1)
Investments in unconsolidated subsidiaries
Other
Movements
More than
5 years
TOTAL
31 March 2010
TOTAL
31 March 2009
TOTAL
31 March 2008
7
-
7
7
8
515
638
1,153
1,286
1,725
402
253
655
1,415
1,314
Other financial receivables (1)
2,387
422
2,809
5,404
1,981
Total
3,311
1,313
4,624
8,112
5,028
(1) Analysis of other financial receivables:
- Balance of sale financing on sale of SW KP GmbH
- Receivable re sale of land to Cyrella (Brazil)
- Guarantee against liabilities (Ellcon National subsidiary)
- Other
190
2,365
3,073
444
443
1,679
462
TOTAL
2,809
5,404
1,368
170
1,981
(1) Full details of unconsolidated subsidiaries are provided in note G.2.
50
51
Faiveley transport
6. Deferred tax
Change 2009/2010
Change 2008/2009
As at
1 April 2009
Change
in Group
structure and
restatement
of opening
goodwill(3)
Impact
on income
statement
Other
movements
As at
31 March 2010
Provisions for inventory impairment
2,118
100
(368)
133
1,983
Provisions for trade and other receivables impairment
1,284
-
173
11
1,468
1,309
15
Provisions for contracts
7,369
(35)
945
60
8 339
5 082
1,963
282
-
(6)
(6)
270
58
158
Provisions for retirement benefits and seniority awards
3,013
-
166
46
3 225
Other provisions and restatements
7,311
-
2,816
37
10,164
614
-
996
-
Elimination of inventory margins (Intra-Group)
1,126
-
282
Restatements under IAS 32 and IAS 39 (cash flow)
5,112
-
(2,430)
73
-
10 693
Provisions for restructuring
Change
in Group
structure(3) and
restatement
As at
of opening
1 April 2008
goodwill (4)
1,226
563
Impact on
income
statement
236
Other
As at
93
2,118
(53)
13
1,284
(104)
428
7,369
39
27
282
3,005
99
(78)
(13)
3,013
5,592
1,465
4
250
7 311
1 610
Percentage of completion method (IAS 11)
1,359
-
(791)
46
614
23
1,431
Elimination of inventory margins (Intra-Group)
1,078
-
71
(23)
1,126
-
2 682
-
-
5,112
-
5,112
1
5
79
-
(1,832)
621
9,482
(10 150)
-
1,561
(553)
(9,142)
Tax losses carried forward but not recognised (1)
28,845
65
2,304
377
31,591
TOTAL DEFERRED TAX ASSETS (a)
634
-
540
17
1,191
31
-
9
-
40
1,059
-
(119)
-
940
129
-
2
-
131
7,607
380
79
120
8,186
Regulated provisions
1,152
-
20
-
1,172
496
-
(177)
14
333
Capitalisation of development costs
1,529
-
662
-
2,191
Sab Wabco brand
5,600
-
-
-
5 600
1,109
-
2 148
-
3,257
399
-
20
6
425
19,745
380
3,184
157
23,466
Finance leases
Tax losses carried forward
Tax losses carried forward but not recognised (1)
TOTAL DEFERRED TAX ASSETS (a)
Finance leases
TOTAL DEFERRED TAX LIABILITIES (b)
Impact on goodwill(2) (c)
Impact on income statement (a)-(b)+(c)
(393)
(1,273)
(1) The amount of deferred tax assets corresponding to tax losses not recognised due to the risk of non-recovery.
(2) The tax savings achieved during the year, relating to the subsidiaries of the former Sab Wabco group and which had tax losses carried forward on the date of their acquisition by the Faiveley
Transport Group, have been recognised as a deduction from Sab Wabco goodwill for an amount of €393 thousand.
Finance leases
Tax losses carried forward
75
-
4
(6)
73
12,772
(40)
(1,636)
(403)
10,693
(12,060)
-
1 496
414
(10 150)
19,496
4,223
4,300
826
28,845
78
539
(72)
89
634
115
-
(95)
11
31
2,140
-
(1,081)
-
1,059
145
-
(16)
-
129
2,580
2 060
2,844
123
7,607
592
-
560
-
1,152
481
-
34
(19)
496
Capitalisation of development costs
1,470
-
59
-
1,529
Sab Wabco brand
5,600
-
-
-
5,600
1,666
-
(557)
-
1,109
368
-
38
(7)
399
15,235
2,599
1,714
197
19,745
Finance leases
TOTAL DEFERRED TAX LIABILITIES (b)
Impact on goodwill(2) (c)
Impact on income statement (a)-(b)+(c)
(1 071)
1,515
(1) The amount of deferred tax assets corresponding to tax losses not recognised due to the risk of non-recovery.
(3) Adjustment to the Ellcon National acquisition goodwill in the year of allocation (see note D.4).
(2) The tax savings achieved during the year, relating to the subsidiaries of the former Sab Wabco group and which had tax losses carried forward on the date of their acquisition by the Faiveley
Transport Group, have been recognised as a deduction from Sab Wabco goodwill for an amount of €754 thousand. The difference, of €317 thousand, relates to the deferred tax charge linked to
the restatement of acquisition expenses of €950 thousand in acquisition goodwill relating to the sintered brake pad activity.
On the basis of the budget and three-year plan, the Group is confident as to the recovery of the net deferred tax balance of €8.1 million.
(4) Restatement to the Nowe GmbH acquisition goodwill in the year of allocation (see note D.2.3).
(3) Ellcon National and Faiveley Transport Gennevilliers joined the Group.
On the basis of the budget and three-year plan, the Group is confident as to the recovery of the net deferred tax balance of €9.1 million.
52
53
Faiveley transport
7. Inventories
8. Long term contracts in progress
The accounting methods used to measure inventories (including the method for determining the cost used) are described in paragraph C.12.
“Amounts due from customers on long term contracts” and “amounts due to customers on long term contracts” are presented within the balance
sheet items “other operating receivables” and “current provisions for liabilities and charges” respectively.
Gross
Provisions
Net
31 March 2010
Net
31 March 2009
Net
31 March 2008
Raw materials
89,367
11,287
78,080
77,967
74,671
Work-in-progress
23,093
611
22,482
25,382
25,306
Finished products
25,783
1,902
23,881
25,637
12,926
Merchandise
11,070
1,227
9,843
7,106
5,413
149,313
15,027
134,286
136,092
118,316
60,789
-
60,789
38,988
31,993
210,102
15,027
195,075
175,080
150,309
Total excluding building contracts
Project work-in-progress (1)
Totals
(1) Includes amounts due from/to customers in respect of building contracts (see note E.8)
Movements in provisions 2009/2010:
Provisions Restatement
as at
of opening
1 April 2009
goodwill
Raw materials
Change
in Group
structure
Charges to
provisions
Reversals:
provisions
used
Reversals:
provisions
not used
Provisions
Other
as at
11,772
271
-
2,730
(2,873)
(917)
304
11,287
Work-in-progress
442
-
-
219
(71)
(174)
195
611
Finished products
1,067
-
-
1,582
(159)
(254)
(334)
1,902
891
-
-
288
-
(107)
155
1,227
14,172
271
-
4,819
(3,103)
(1,452)
320
15,027
Merchandise
Total
(1)
31 March 2010
31 March 2009
31 March 2008
64,084
43,240
29,681
(614)
(561)
(995)
Total
63,470
42,679
28,686
Work-in-progress on long term contracts (gross)
60,789
38,988
31,993
-
-
-
Receivables on long term contracts
6,135
6,526
2,095
Provisions for long term contracts
(3,454)
(2,835)
(5,402)
Total
63,470
42,679
28,686
Amounts due from customers on long term contracts
Amounts due to customers on long term contracts
Work-in-progress on long term contracts (provisions)
In the financial statements, the heading “project work-in-progress” is used in such a way as to recognise the good level of margin, based on the
stage of completion of each project. The application of this accounting principle results in “work-in-progress assets” and in some cases “work-inprogress liabilities” being valued.
These credit positions were recorded in liabilities within “trade payables”.
At 31 March 2010, this restatement totalled €10.8 million, compared to €10.9 million at 31 March 2009 and €10.5 million at 31 March 2008.
9. Receivables
9.1 Trade receivables
(1) Including €320 thousand in respect of translation differences.
Gross
Provisions
Net 31 March 2010
Net 31 March 2009
Net 31 March 2008
Trade receivables
267,658
6,994
260,664
247,554
206,913
During the year ended 31 March 2010, old inventories and inventories that had become obsolete were scrapped. Provisions of 64.1% of the value of
these inventories had previously been raised. The impact on the income statement for the year ended 31 March 2010 was a loss of €1.6 million.
Receivables sold to a
factor
(96,079)
-
(96,079)
(98,005)
(57,256)
Total
171,579
6,994
164,585
149, 548
149,657
Movements in provisions 2008/2009:
Provisions Restatement
as at
of opening
1 April 2008
goodwill
Raw materials
Change
in Group
structure
Charges to
provisions
Reversals:
provisions
used
Reversals:
provisions
not used
Provisions
Other
as at
11,300
(20)
1,450
2,488
(3,211)
(362)
127
11,772
Work-in-progress
443
-
-
51
-
(41)
(11)
442
Finished products
1,292
-
152
558
(554)
(141)
(240)
1,067
449
-
-
505
(115)
(91)
143
891
13,484
(20)
1,602
3,602
(3,880)
(635)
Merchandise
Total
19(1)
14,172
(1) Including €19 thousand in respect of translation differences.
During the year ended 31 March 2009, old inventories and inventories that have become obsolete were scrapped. Provisions of 74.4% of the value
of these inventories had previously been raised. The impact on the income statement for the year ended 31 March 2009 was a loss of €1.2 million.
––Movements in provisions for doubtful trade receivables:
Year ended:
Provisions as at Change in Group
1 April
structure
Charges to
provisions
Reversals:
provisions used
Reversals:
provisions not
used
Other
movements
Provisions as at
31 March
31 March 2010
3,498
-
4,706
(273)
(1,022)
85
6,994
31 March 2009
3,634
42
1,375
(587)
(1,020)
54
3,498
31 March 2008
4,532
9
1,470
(1,498)
(867)
(12)
3,634
A provision for doubtful trade receivables is raised when there is an objective indication of the Group’s inability to recover all or part of the amounts
due under the terms initially laid down in respect of the transaction. Significant financial difficulties encountered by the debtor, the probability
that the debtor will become bankrupt or undergo a financial restructuring, or payment default are indications of the impairment of a receivable.
Due to particular market conditions, the provision for bad debts increased over the financial year, as the Group opted for a cautious approach.
––Trade receivables (gross value)*:
Trade
receivables
Gross
value
Receivables
not yet due
Total
Less than
60 days
31 March 2010
171,579
140,808
30,771
31 March 2009
153,046
125,674
27,372
31 March 2008
153,291
124,981
28,310
Receivables due
Between
60 and 120 days
Between 120
and 240 days
More than
240 days
14,947
5,205
2,412
8,207
15,351
3,782
4,607
3,632
17,339
5,075
2,708
3,188
(*)Excluding receivables in respect of contracts recognised in accordance with the percentage of completion method
Receivables remaining unpaid beyond the contractual due date represent, in most cases, amounts confirmed by customers but in respect of which
payment is subject to the retentions identified when work was inspected.
54
55
Faiveley transport
9.2. Other receivables
13. Equity
Gross
Provisions
Net
31 March 2010
Net
31 March 2009
Net
31 March 2008
Receivables on projects
60,789
-
60,789
38,988
31,993
Provisions for termination losses
(2,840)
-
(2,840)
(2,274)
(4,407)
869
-
869
1,004
353
10,741
-
10,741
12,135
14,300
Prepaid expenses
3,482
-
3,482
4,864
6,190
Accrued income
6,135
-
6,135
6,526
2,095
79,176
-
79,176
61,243
50,524
Gross
Provisions
Net
31 March 2010
Net
31 March 2009
Net
31 March 2008
92
-
92
-
50
Other receivables
1,494
-
1,494
1,343
1,527
Deferred charges
-
-
-
-
-
1,586
-
1,586
1,343
1,577
Supplier credit notes
Social security and tax receivables
Total
9.3. Other receivables
Dividends receivable
Total
10. Current financial assets
Guaranteed deposits and securities
Other financial receivables
Current accounts
31 March 2010
31 March 2009
31 March 2008
3,934
351
68
437
188
63
-
- 6
13.1. Share capital
As at 31 March 2010, the Company’s share capital totalled €14,404,711 divided into 14,404,711 shares of €1 each, fully paid up. Shares registered in the
name of the same shareholder for at least two years have double voting rights.
As regards its capital management, the Faiveley Transport Group’s main aim is to ensure the retention of a good credit risk rating and sound capital
ratios in order to facilitate its activity and maximise value for its shareholders.
The Group manages its capital by ensuring that it maintains three financial ratios within the limits defined by the credit agreement relating to
the reorganisation of its shareholding structure and the refinancing of its bank borrowings, i.e. the leverage ratio, the gearing ratio and total bank
guarantees (see note E.15).
The Group manages its capital structure and makes adjustments depending on changes in economic conditions. With a view to maintaining or
amending its capital structure, the Group may adjust the payment of dividends to its shareholders, redeem part of its capital or issue new shares.
The management objectives, policies and procedures remained unchanged in 2010, 2009 and 2008.
•• Composition of the share capital
Shares
Nominal
value 31 March 2008 31 March 2009
New shares
issued
Shares
redeemed
31 March 2010
Ordinary
1
4,391,516
6,291,902
-
-
6,59,591
Redeemed
-
-
-
-
-
-
With preferred dividends
-
-
-
-
-
-
With double voting rights
1
8,138,069
8,112,809
-
-
7,645,120
Total
1
12,529,585
14,404,711
-
-
14,404,711
•• Breakdown of share capital and voting rights
31 March 2010
Main shareholders
% of capital
% of voting
rights
53.77
31 March 2009
31 March 2008
% of capital
% of voting
rights
% of capital
% of voting
rights
68.06
55.91
70.10
64.75
78.06
Fair value of derivatives – Assets
2,999
2,673
2,159
François Faiveley Group and the Faiveley family
Total
7,370
3,213
2,296
Treasury shares
1.97
-
2.30
-
2.70
-
Registered securities
7.83
7.83
8.29
8.15
3.10
3.79
36.43
24.11
33.50
21.75
29.45
18.15
11. Closing cash and cash equivalents (gross amounts)
General public
31 March 2010
31 March 2009
31 March 2008
40,946
26,792
6,709
155,761
137,287
108,248
Bank overdrafts
(3,696)
(18,094)
(2,186)
Invoices factored and not guaranteed
(1,285)
(805)
(1,081)
191,726
145,180
111690
Short term investments
(1)
Cash
Total
•• Share purchase option plans
Faiveley Transport implemented a share purchase option plan for the benefit of key Faiveley Transport Group management (excluding the
managers who invested in Faiveley Management S.A.S.).
This share option plan, covering a maximum of 325,000 Faiveley Transport shares, was approved by the Extraordinary General Meeting of 27
September 2005 and implemented by the Management Board. The authorisation, which was granted for a period of three years, expired on 27
September 2008.
(1) Certificates of deposit: €8.6 million and short-term mutual funds meeting the criteria specified by IAS 7, which enables them to be classified as cash equivalents: €32.3 million.
In order to meet its future obligation to transfer these shares to the plan beneficiaries, Faiveley Transport began a share buyback programme at the
end of 2005 and currently holds 283,889 treasury shares, of which 277,339 registered shares and 6,550 in relation to the liquidity contract.
12. Working capital requirement
If the share purchase options were exercised, they would result in the purchase of existing Faiveley Transport ordinary shares.
Change in inventories and work-in-progress
Change in advances paid
31 March 2010
31 March 2009
31 March 2008
4,471
(5,861)
(17,166)
2,290
(5,762)
(29)
(30,330)
2,046
(15,366)
Change in advances received
21,437
7,613
13,863
Change in trade and other payables
(7,028)
30,721
26,796
Total
(9,160)
28,757
8,098
Change in trade and other receivables
56
57
Faiveley transport
•• Share subscription option plans
––Principal characteristics of the current share purchase option plan:
Grant of shares
Date of Management Board meeting
Exercise price in € (*)
n°1
n°2
n°3
n°4
n°5
n°6
n°7
n°8
n°9
n°10
24/11/2005 29/12/2005 22/06/2006 25/10/2006 15/11/2006 01/12/2006 02/04/2007 19/02/2008 29/03/2008 17/07/2008
26.79
29.75
30.48
33.77
34.13
34.01
42.80
32.31
34.08
40.78
Date from which options can be exercised
24/11/2007 29/12/2007 22/06/2008 25/10/2008 15/11/2008 01/12/2008 02/04/2009 19/02/2010 29/03/2010 17/07/2010
Expiry date
23/11/2012 28/12/2012 21/06/2013 24/10/2013 14/11/2013 30/11/2013 01/04/2014 18/02/2015 28/03/2015 16/07/2015
Initial number of beneficiaries
38
1
6
1
1
2
5
4
3
1
Adjusted initial number
30
-
5
-
-
-
-
-
-
-
221,760
6,720
31,360
6,720
4,480
11,200
26,880
26,880
13,440
22,600
Total number of options exercised
80,425
-
-
-
-
-
-
-
-
-
Total number of options cancelled
47, 040
Total number of options granted
Number of options remaining to be exercised at 31 March 2010
94,295
-
Number of shares that
may be subscribed by the
members of the Management
Board and Supervisory Board
-
Conditions of exercise
6,720
4,480
26,880
6,720
4,480
11,200
26,880
26,880
13 ,440
22,600
The Management Board decided at its meeting of 23 November 2009 to grant, to 15 beneficiaries, options giving right to subscribe for new shares
in the Company, to be issued through a share capital increase not exceeding an overall nominal amount of €144,000, corresponding to 144,000
new shares at a par value of €1 each. The new shares will be issued at a price of €54.91.
––Main features of the current share subscription plan:
Share subscription features
n°1
Management Board meeting
23/11/2009
Exercise price in € (*)
54.91
Options exercisable from
22/11/2013
Options lapse on
22/11/2017
Initial number of beneficiaries
15
Restated initial number
-
Total number of options granted
144,000
Total number of options exercised
-
Total number of options cancelled
-
Number of options outstanding 31 March 2010
Percentage of share capital that could be created
at 31 March 2010
Number of shares that
could be subscribed by the
members of the Executive
Committee
-
The Combined General Meeting of Faiveley Transport, held on 22 September 2009, authorised the Management Board to grant share purchase
and/or subscription options, up to a maximum of 1% of the share capital at 22 September 2009.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Percentage of share capital at 31 March 2010 liable to be issued
-
-
-
-
-
-
6,720
-
22,600
100% of
100% of
100% of
100% of
100% of
100% of
100% of
100% of
100% of
100% of
options
options
options
options
options
options
options
options
options
options
exercisable exercisable exercisable exercisable exercisable exercisable exercisable exercisable exercisable exercisable
as from
as from
as from
as from
as from
as from
as from
as from
as from
as from
24/11/2007 29/12/2007 22/06/2008 25/10/2008 15/11/2008 01/12/2008 02/04/2009 19/02/2010 29/03/2010 17/07/2010
(*) The exercise price is equal to the average of the 20 trading days preceding the date of the Management Board meeting that decided to grant the options, less a discount of 5%.
Following the departure of certain beneficiaries since the plan was implemented by the Management Board, options in respect of 240,095 shares
have been granted to 41 beneficiaries at 31 March 2010.
1%
Number of shares liable to be subscribed by members of the Management Board and the Supervisory Board
40,000
Number of shares liable to be subscribed by members of the Executive Committee
128,500
Terms and conditions of exercise
31,360
144,000
100% of options exercisable from 22/11/2013
(*) The exercise price is the average of the last twenty trading days preceding the Management Board meeting that approved the allocation, without discount.
On the allocation date, the fair value of options granted was estimated at €2.8 million, based on the Black & Scholes mathematical model, taking
account of the terms and conditions of option allocation.
Calculation assumptions:
––Faiveley Transport share price on the allocation date: €55.39;
––expected maturity of option: 5 years;
––exercise price: €54.91 per option;
––no risk rate known on allocation date: 3.4%;
––full-year volatility of the Faiveley Transport share at 23 November 2009: 33%.
Based on these features, the value of the option is €19.58. In addition, it was assumed that no dividend would be paid over the period.
In the knowledge that the options will become exercisable from the second anniversary of the date of their granting by the Chairman of the
Management Board, subject to the requirement that the holder of the options continues to be employed by the Faiveley Transport Group at the
time of exercise and accepts the option scheme rules, 80,425 options have been exercised to date.
Taking account of the purchase value of Faiveley Transport shares acquired to service the share option plan, as well as exercise prices and the
value of the Faiveley Transport share at 31 March 2010, applied to options that have not yet been granted, the unrealised capital gain on the share
purchase option plan was €587 thousand.
––Changes to the plan
31 March 2010
31 March 2009
31 March 2008
372,040
372,040
349,440
Options cancelled
51,520
51,520
47,040
Options exercised
80,425
17,920
11,200
240,095
302,600
291,200
Options granted
Options outstanding
58
59
Faiveley transport
13.2. Translation differences
14. Provisions for liabilities and charges
Translation differences comprise mainly the gains and losses resulting from the translation of the equity of subsidiaries whose functional currency
is other than the euro.
14.1. Non-current provisions:
Breakdown of translation differences by currency:
TOTAL
31 March 2010
Thai Baht
TOTAL
31 March 2009
TOTAL
31 March 2008
11
(1)
3
(13,867)
(30,844)
(6,037)
Czech Koruna
1,454
810
932
US Dollar
2,179
2,268
434
Swedish Krona
Australian Dollar
459
317
51
Hong-Kong Dollar
(171)
(226)
(432)
(4,506)
(5,300)
(1,538)
8
-
-
Brazilian Real
(548)
(807)
(545)
Chinese Yuan
574
403
(79)
Indian Rupee
273
(1,587)
(726)
Korean Won
(235)
(797)
(293)
Polish Zloty
(48)
(270)
111
(14,417)
(36,034)
(8,117)
Pound Sterling
Others
Total
Change 2009/2010
Provisions for retirement and other employee benefits
Other provisions
Total
As at
1 April 2009
Restatement of
opening
goodwill
Change
in Group
structure
Charges to
provisions
Reversals:
provisions
used
37,087
-
-
1,794
(4,091)
-
535
35,325
5,336
-
-
671
(763)
(1,774)
17
3,487
42,423
-
-
2,465
(4,854)
(1,774)
(1)
552
38,812
As at
1 April 2008
Restatement of
opening
goodwill
Change
in Group
structure
Charges to
provisions
Reversals:
provisions
used
Reversals:
provisions
Other
not used movements
As at
31 March
2009
42,307
-
296
1,759
(4,158)
(1,190)
(1,927)
37,087
4,674
-
-
(216)
53
5,336
-
46,981
-
296
(4,158)
(1,406)
Reversals:
provisions
Other
not used movements
(1) Including exchange differences of €659 thousand and reclassifications of €(107) thousand
Change 2008/2009
Provisions for retirement and other employee benefits
Other provisions
Total
825 2,584
(1,874)(1)
42,423
(2) Including exchange differences of €(1,885) thousand and reclassifications of €11 thousand
13.3. Reserves and results
31 March 2010
31 March 2009
31 March 2008
1,440
388
280
Distributable reserves
(1,886)
(1,886)
(1,886)
Reserves for derivative instruments
and for financial assets available for sale
(4,488)
(1,256)
-
213,345
176,349
128,314
71,119
51,483
36,316
279,530
225,078
163,024
Legal reserve
Other reserves
Net profit – Group share
Group equity
13.4. Minority interests
The minority interests break down as follows:
(In € millions)
2009/2010
2008/2009
14.2. Provisions for retirement benefits (All amounts in these notes are in millions of Euros unless indicated otherwise)
Charges for the year in respect of defined contribution schemes totalled €17.8 million for the year to 31 March 2010, compared to €12.7 million for
the year to 31 March 2009 and €12.8 million for the year to 31 March 2008.
•• Summary of provisions:
The provisions as at 31 March 2010 of those countries with the most significant commitments are shown in the following table:
31 March 2010
Other
countries
Total
31 March
2009
Total
31 March
2008
Total
France
Germany
United
Kingdom
Post-employment benefits
5.2
15.0
9
3.4
32.6
34.3
38.6
Provisions for other long-term benefits
0.4
1.7
- 0.5
2.6
2.4
2.5
Total
5.6
16.7
9
3.9
35.2
36.7
41.1
2007/2008
35.86% held by Sagard in Faiveley Transport (1)
-
- 104 100
2.40% held by the management in Faiveley Transport (1)
-
- 6 605
Other (2)
8,693
6,849
6,152
Total
8,693
6,849
116,857
(1) The minority shares held by Sagard funds and by management were repurchased on 23 December 2008.
(2) As at 31 March 2010, the “Other” minorities mainly related to the minority shares in the company Shanghai Faiveley Railway Technology (in which a 51% share is held).
60
As at
31 March
2010
61
Faiveley transport
•• Information regarding the actuarial liability:
Provision for retirement commitments:
Movements in actuarial liability by geographic region
31 March 2010
31 March 2010
Total
31 March
2008
Total
France
Germany
Actuarial liability at start of period
4.8
13.3
33.4
3.9
55.4
66.2
83.2
Cost of services rendered
0.3
-
-
-
0.3
0.5
0.5
Interest on actuarial liability
0.3
0.7
2.4
0.2
3.7
3.8
4.0
-
-
-
-
-
-
-
(0.3)
(1.0)
(2.3)
(0.5)
(4.1)
(3.3)
(3.9)
-
-
-
-
-
(1.1)
-
(0.1)
-
-
-
(0.1)
-
-
-
-
-
-
-
0.2
0.1
0.5
1.5
13.3
0.2
15.5
(5.0)
(9.9)
Of which experience (gains)/losses
-
0.1
(1.2)
-
(1.1)
0.1
0.2
Exchange differences
-
-
1.5
-
1.5
(5.9)
(7.8)
Other
0.1
-
-
-
0.1
-
-
Actuarial liability at end of period
5.7
14.5
48.3
3.9
72.3
55.4
66.2
-
-
48.3
0.6
48.9
33.9
44.5
5.7
14.5
-
3.3
23.4
21.5
21.7
31 March
2008
Total
Employee contributions
Benefits paid
Settlement of the liability
Scheme amendments
Acquisitions/transfers/companies joining the Group
Actuarial (gains)/losses
Of which: funded schemes
unfunded schemes
Other
countries
31 March
2009
Total
United
Kingdom
Movements in plan assets by geographic region:
31 March 2010
France
Germany
United
Kingdom
Total
31 March
2009
Total
5.7
14.5
12.3
3.5
36.0
28.5
32.1
(0.5)
0.5
(3.9)
(0.1)
(4.0)
5.2
6.1
0.1
-
-
-
0.1
-
-
-
-
0.6
-
0.6
0.6
0.4
Net provision
5.2
15.0
9.0
3.4
32.6
34.3
38.6
Of which provisions for commitments
5.2
15.0
9.0
3.4
32.6
34.3
38.6
-
-
-
-
-
-
-
Financial cover
Actuarial gains (losses) not recognised
Past service cost not recognised
Impact of capping of assets
Of which surplus plan assets
Other
countries
Past data relating to financial cover and actuarial experience differences:
31 March 2010
Total
31 March 2009
Total
31 March 2008
Total
Discounted value of commitments
72.3
55.4
66.2
Fair value of scheme assets
36.3
26.8
34.1
Financial cover
36.0
28.5
32.1
Experience gains/(losses) in relation to liabilities
1.1
(0.1)
(0.2)
Experience gains/(losses) in relation to assets
6.2
(5.3)
(3.0)
Experience gains/(losses) in relation to liabilities, as % of commitment
2%
0%
0%
17%
(20%)
(9%)
Experience gains/(losses) in relation to assets, as % of Plan assets
•• Income statement items:
France
Germany
United
Kingdom
Other
countries
Total
31 March
2009
Total
Fair value of assets at start of period
-
-
26.5
0.4
26.9
34.1
42.1
Employer contributions
-
-
2.7
-
2.7
3.2
0.7
Employee contributions
-
-
-
-
-
-
-
Benefits paid
-
-
(2.3)
-
(2.3)
(1.5)
(2.0)
Settlement of the liability
-
-
-
-
-
(0.9)
-
Expected financial revenue
-
-
1.6
-
1.6
1.8
2.1
Actuarial gains/(losses)
-
-
6.2
-
6.2
(5.3)
(3.0)
Of which experience gains/(losses)
-
-
6.2
-
6.2
(5.3)
(3.0)
Acquisitions/transfers/companies joining the Group
-
-
-
-
-
0.2
-
Exchange differences
-
-
1.2
-
1.2
(4.6)
(5.9)
Other
Fair value of assets at end of period
-
-
35.9
0.4
36.3
26.8
34.1
Net charge
0.8
Breakdown of net pension costs
31 March 2010
France
Germany
United
Kingdom
Total
31 March
2009
Total
Cost of services rendered
0.4
-
-
-
0.4
0.5
0.6
Interest on actuarial liability
0.3
0.7
2.4
0.2
3.6
3.8
4.0
Expected financial revenue
-
-
(1.6)
-
(1.6)
(1.7)
(2.1)
Amortisation of actuarial gains/losses
-
-
(0.1)
-
(0.1)
(0.1)
-
Amortisation of past service cost
-
-
-
-
-
-
-
Reduction/liquidation/transfer of the
scheme
-
-
-
-
-
(0.5)
0.2
-
-
-
-
-
0.2
-
0.1
-
-
-
0.1
-
-
0.7
0.7
0.2
2.4
2.2
2.7
Impact of capping of assets
Other
countries
The actual return on investments was €7.8 million in the year to 31 March 2010 (compared to a loss of €3.6 million for the year to 31 March 2009).
Contributions in respect of defined benefit schemes in the United Kingdom, Belgium and India were estimated to total €2.8 million for 2010.
The expected return on investments is estimated at €1.9 million in 2010. A one point increase in the assumed percentage rate of return would
generate €0.4 million in additional income.
62
31 March
2008
Total
63
31 March
2008
Total
Faiveley transport
•• Actuarial assumptions:
The expected return for each category of assets is as follows:
The actuarial assumptions used to measure commitments take into account the demographic and financial conditions specific to each country
or Group company.
Discount rates are determined by reference to the yields on AAA bonds with similar durations to those of the commitments as at the measurement
date.
- The assumptions used for those countries with the most significant commitments are shown in the following table:
31 March 2010
31 March 2009
31 March 2008
France
Germany
United
Kingdom
France
Germany
United
Kingdom
France
Germany
United
Kingdom
Discount rate
4.6%
4.6%
5.7%
5.5%
5.5%
7.0%
5.5%
5.5%
6.7%
Inflation rate
2.0%
2.0%
3.8%
2.0%
2.0%
3.2%
2.0%
2.0%
3.8%
Average salary increase rate
3.0%
1.6%
5.3%
3.0%
3.0%
4.7%
3.0%
3.9%
5.3%
NA
NA
5.3%
NA
NA
5.7%
NA
NA
5.3%
Expected return on investments
––The sensitivity of commitments at 31 March 2010 and the cost of services rendered for the next year to a 25 basis point change in the discount
rate are summarised as follows:
0.25% increase in
discount rate
0.25% decrease in
discount rate
Effect on the value of commitments
(2.697)
2.862
Effect on the cost of services rendered
(0.024)
0.025
––The sensitivity of commitments at 31 March 2010 and the cost of services rendered for the next year to a 25 basis point change in the salary
increase rate are summarised as follows:
0.25% increase in
discount rate
0.25% decrease in
discount rate
Effect on the value of commitments
0.204
(0.195)
Effect on the cost of services rendered
0.018
(0.017)
31 March 2010
Shares
6.3%
Bonds
4.4%
Other assets
4.3%
Total
5.3%
14.3 Current provisions:
Change 2009/2010
As at Restatement
1 April of opening
2009
goodwill
Provisions for penalties, after sales
service and guarantees
Provision for termination losses
Total contract provisions
Provisions for subsidiaries’ risks
Currently the investment portfolio contains no Group securities.
The structure of the investment portfolio is as follows:
31 March 2010
31 March 2009
31 March 2008
Shares
45.3%
46.0%
45.0%
Bonds
52.6%
50.7%
52.9%
2.1%
3.3%
2.1%
100.0%
100.0%
100.0%
Other assets
Total
64
Reversals:
provisions
used
-
33,552
(17,252)
(96)
Reversals:
provisions
Other
not used movements
(8,308)
673
As at
31 March
2010
67,098
561
-
-
-
-
-
53
614
59,090
(96)
-
33,552
(17,252)
(8,308)
726
67,712
-
-
-
-
-
-
-
-
1,938
-
-
222
(854)
(84)
(17)
1,205
Provisions for other risks
1,854
-
-
65
(56)
(50)
211
2,024
Total other provisions
3,792
-
-
287
(910)
(134)
194
3,229
62,882
(96)
-
33,839
(18,162)
(8,442)
920
(1)
70,941
Change
in Group
structure
Charges to
provisions
Reversals:
provisions
used
Reversals:
provisions
Other
not used movements
As at
31 March
2009
5,528
32,090
(20,754)
Total
(1) Including exchange differences of €927 thousand and reclassifications of € (7 thousand)
Change 2008/2009
As at Restatement
1 April of opening
2008
goodwill
Provisions for penalties, after sales
service and guarantees
Provision for termination losses
the expected long-term rate of return on plan assets in the United Kingdom, Belgium and India was determined by taking into account the
structure of the investment portfolio.
Charges to
provisions
Total contract provisions
––Structure of the investment portfolio:
58,529
Change
in Group
structure
Provisions for subsidiaries’ risks
50,004
-
(9,444)
1,105
58,529
995
-
-
-
-
-
(434)
561
50,999
-
5,528
32,090
(20,754)
(9,444)
671
59,090
-
-
-
-
-
-
-
-
3,154
-
446
1,038
(1,700)
(1,077)
77
1,938
Provisions for other risks
1,907
-
-
449
(240)
(169)
(93)
1,854
Total other provisions
5,061
-
446
1,487
(1,940)
(1,246)
(16)
3,792
56,060
-
5,974
33,577
(22,694)
(10,690)
655
62,882
Total
(1)
(1) Including exchange differences of €1,090 thousand and reclassifications of €(434) thousand
Current provisions primarily relate to provisions for guarantees and after-sales service granted to our customers and litigations and claims on
completed contracts. The methods underlying the recognition of these provisions are specified in Note C.15.2.
65
Faiveley transport
15. Borrowings
15.3. Breakdown by interest rate of non-current and current borrowings
Under the credit agreement relating to the reorganisation of the shareholding structure and the refinancing of bank borrowings, the Faiveley
Transport Group must comply with the following three financial conditions:
•• leverage ratio (net consolidated borrowings/consolidated EBITDA): must not exceed 3.0 at 31 March 2010. At this date, the ratio was 1.73;
•• gearing ratio (net consolidated debt/consolidated equity): must not exceed 1.50 at 31 March 2010. At this date, the ratio was 0.60;
•• total bank guarantees must not exceed 22% of the order book. At 31 March 2010, they represented 17.5%.
2009/20010
Non-current portion
1 to 5 years
Over 5 years
TOTAL
2008/2009
2007/2008
53,401
366,882
-
420,283
448,868
97,701
541
1,245
1,276
3,062
3,723
5,306
65
-
-
65
65
65
162
-
-
162
63
323
1
19
-
20
11
11
Credit current accounts
2,111
-
-
2,111
2,122
2,132
Bank overdrafts
3,696
-
-
3,696
18,094
2,186
-
-
-
-
-
-
12,004
-
-
12,004
5,654
884
1,285
-
-
1,285
805
1,081
73,266
368,146
1,276
442,688
479,405
109,689
Employee profit sharing
Various other borrowings
Guarantees, deposits and securities received
Short-term facilities (credit balance)
Fair market value of derivatives – liabilities
Invoices factored – not guaranteed
Total
15.2. Breakdown by currency of non-current and current borrowings
Euro
Czech Koruna
US Dollar
TOTAL
31 March 2010
TOTAL
31 March 2009
TOTAL
31 March 2008
401,890
432,667
101,973
1,863
2,179
1,772
35,023
39,512
4
Brazilian Real
250
209
258
Chinese Yuan
3,587
4,838
5,682
Russian Rouble
Indian Rupee
52 23 442,688
Total
66
At 31 March 2008
2,416
Variable-rate borrowings (1)
425,337
470,679
106,389
Total Borrowings (2)
430,683
473,750
108,805
At 31 March 2010
At 31 March 2009
At 31 March 2008
369,422
419,984
45,273
56,280
34,867
60,265
Bank overdrafts
3,696
18,094
2,186
Invoices factored – not guaranteed
1,285
805
1,081
430,683
473,750
108,805
15.4. Calculation of net borrowings
Under 1 year
Finance leases
3,071
(2) Excluding fair market value of derivatives – liabilities
15.1. Breakdown and maturity of non-current and current borrowings
Loans
At 31 March 2009
5,346
(1) Before implementing hedging instruments
Non-compliance with one of these covenants may result in the debt becoming immediately repayable.
Current portion
At 31 March 2010
Fixed-rate borrowings
- - 479,405
Current borrowings
Total Financial debt (a)
-
3,263
443
Loans
Receivables from investments
1,417
1,218
w1,535
Guarantees, deposits and securities paid
4,586
1,766
1,382
Various other receivables
2,512
1,711
960
-
-
6
Current accounts
8,515
8,028
4,326
Cash and cash equivalents (c)
196,705
164,077
114,434
NET BORROWINGS/(RECEIVABLES) (a-b-c)
225,463
301,645
(9,955)
Equity
376,666
296,921
286,757
59,9%
101,6%
-
875,948
852,024
692,860
25,7%
35,4%
-
Total financial receivables, net (b)
Gearing ratio
Sales
Net borrowings/sales ratio
In economic terms, net debt should be reduced by the value of treasury shares held. For accounting purposes, the value of treasury shares held is
deducted from equity under IFRS; this amounted to €8 million at 31 March 2010, €9.5 million at 31 March 2009 and €9.7 million at 31 March 2008.
109,689
67
Faiveley transport
16. Financial instruments and financial risk management
16.2. Financial instruments at 31 March 2009
Fair value classification
of instruments (*)
Breakdown by category
At 31 March 2010
Shareholdings in unconsolidated
subsidiaries
Carrying
amount
NonAt fair value
financial
Loans,
through
assets and receivables profit and
liabilities and debts
loss
Available
for sale
financial
assets
Fair value
Level 1
Level 2
Level 3
-
-
229
229
-
-
229
4,148
-
4,148
-
-
-
-
-
-
Total non-current assets
4,377
-
4,148
-
229
229
-
-
229
Trade receivables
243,762
68,435
175,327
-
-
-
-
-
-
Other receivables
1,585
1,585
-
-
-
-
-
-
-
4,371
-
4,371
-
-
-
-
-
-
Fair value of derivatives - Assets
2,999
-
-
2,999
-
2,999
-
2,999
-
40,944
-
-
40,944
-
40,944
40,944
-
-
Cash
155,761
-
155,761
-
-
-
-
-
-
Total current assets
449,422
70,020
335,459
43,943
-
43,943
40,944
2,999
Total assets
453,799
70,020
339,607
43,943
229
44,172
40,944
2,999
369,422
-
369,422
-
-
-
-
-
-
Total non-current liabilities
7,495
7,705
Trade receivables
Other receivables
Current investments
229
369,422
-
369,422
-
-
-
-
-
-
Current borrowings
61,262
-
61,262
-
-
-
-
-
-
Fair value of derivatives - Liabilities
12,004
-
-
12,004
-
12,004
-
5,935
6,069(1)
210,354
12,495
197,859
-
-
-
-
-
-
14,084
12,470
1,614
-
-
-
-
-
-
Total current liabilities
297,704
24,965
260,735
12,004
-
12,004
-
5,935
Total liabilities
667,126
24,965
630,157
12,004
-
12,004
-
5,935
Other liabilities
-
-
210
At 31 March 2009
229
Current investments
Carrying
amount
Non-financial
assets and
liabilities
(*) Revised IFRS 7 requires that fair value measurements be classified in three levels. The levels of fair value hierarchy reflect the significance of data used for the measurements:
Level 1: prices (unadjusted) of identical assets or liabilities listed on active markets.
Level 2: other data than listed prices covered by Level 1, that can be noted for the asset or liability concerned, either directly (i.e. prices) or indirectly (i.e. data derived from prices).
Level 3: data relating to the asset or liability, not based on observable market data (unobservable data).
(1) This amount corresponds to the financial commitment noted on the recognition of put options held by minority shareholders in Nowe and Faiveley Transport Lekov.
Fair value
210
210
-
-
-
7,495
-
-
-
-
7,495
-
210
210
210,791
49,108
161,683
-
-
-
1,343
1,343
-
-
-
-
3,213
-
540
2,673
-
2,673
26,790
26,790
-
-
26,790
-
137,287
-
137,287
-
-
-
379,424
50,451
299,510
29,463
-
29,463
Total assets
387,129
50,451
307,005
29,463
210
29,673
419,984
-
419,984
-
-
-
419,984
-
419,984
-
-
-
Current borrowings
59,421
-
53,767
5,654
-
5,654
213,733
9,410
204,323
-
-
-
Other liabilities
12,311
10,343
1,968
-
-
-
285,465
19,753
260,058
5,654
-
5,654
Total liabilities
705,449
19,753
680,042
5,654
-
5,654
Carrying
amount
Non-financial
assets and
liabilities
Available for
sale financial
assets
Fair value
272
-
272
272
4,174
4,446
Trade receivables
At 31 March 2008
Loans,
At fair value
receivables through profit
and debts
and loss
-
-
-
4,174
-
-
-
-
4,174
-
272
272
200,181
36,224
163,957
-
-
-
Other receivables
1,577
1,527
50
-
-
-
2,296
-
137
2,159
-
2,159
Current investments
6,186
-
-
6,186
-
6,186
Cash
108,248
-
108,248
-
-
-
318,488
37,751
272,392
8,345
-
8,345
Total assets
322,934
37,751
276,566
8,345
272
8,617
45,273
-
45,273
-
-
-
45,273
-
45,273
-
-
-
Current borrowings
64,416
-
63,532
884
-
884
183,857
13,277
170,580
-
-
-
5,136
3,420
1,716
-
-
-
253,409
16,697
235,828
884
-
884
Total liabilities
298,682
16,697
281,101
884
-
884
Other liabilities
68
Available for
sale financial
assets
Cash
6,069
6,069
Loans,
At fair value
receivables through profit
and debts
and loss
69
Faiveley transport
16.4. Financial risk management
The Faiveley Transport Group’s cash policy is based on overall financial
risk management principles and provides specific strategies for areas
such as exchange risk, interest rate risk, raw materials risk, credit risk
and liquidity risk.
The Group also uses derivative instruments, mainly forward purchases
and sales of currencies, interest rate swaps or caps and exchange rate
contracts or raw material swaps. The aim of these instruments is to
manage the exchange, interest rate and raw material risks associated
with the Group’s activities and financing.
The Group’s policy is not to enter into derivative instruments for
speculative purposes.
The Supervisory Board of Faiveley Transport examines risk management
principles as well as policies covering certain specific fields such as
exchange risk, interest rate risk, raw materials risk, credit risk and
liquidity risk.
These policies are summarised below.
The market values of interest rate and foreign exchange derivative
instruments were measured based on year-end market prices. They
were appraised by an independent expert.
16.5. Market risks
a) Exchange risk
The Group operates in foreign countries and is therefore exposed to
exchange risk as a result of its exposure to a number of currencies.
The major currencies concerned are the US Dollar, the Pound Sterling,
the Japanese Yen, the Czech Koruna, the Swedish Krona, the Chinese
Yuan and the Indian Rupee.
•• Forward sales hedging financial and commercial transactions as
at 31 March 2010
Nominal value
Pound Sterling
Dollar US
Chinese Yuan
Singapore Dollar
Swedish Krona
Swiss Franc
Australian Dollar
Japanese Yen
Czech Koruna
TOTAL
(local currency
Fair value
(€ thousands)
thousands) (€ thousands)
39,186
24,382
26,225
15,417
12,170
3,499
1,180
904
116
34,818
33,218
239,467
29,080
119,262
5,143
1,828
116,017
3,000
123,079
95
(451)
(305)
(96)
(108)
(36)
(18)
(2)
(921)
148,076
29,810
25,156
19,208
13,923
133
TOTAL
236,306
(local currency
Fair value
thousands) (€ thousands)
1,448,385
40,210
22,438
507,830
129,280
258
1,037
105
41
665
310
41
2,199
The management of exchange risk on commercial contracts is
centralised by the parent company’s Treasury department and
comprises two parts: the certain and the uncertain risk.
•• A tunnel option for the value of CZK 108.4 million, of which the
fair value at 31 March 2010 was €132 thousand.
•• Exchange risk management relating to tenders in foreign
currencies (uncertain risk):
The following table presents, at 31 March 2010, the sensitivity of Group
profit before tax to a reasonable movement in the most significant
currencies. This sensitivity is due to certain derivative instruments
not being eligible for hedging as well as the non-hedging of certain
monetary items:
The Faiveley Transport Group is required to submit tenders
denominated in foreign currencies. The Group’s hedging policy is not
to use financial instruments to cover during the offer phase, unless
when specifically decided by Management. The aim is to manage
the exchange risk through normal commercially available means.
If necessary, the Group Treasury department uses mainly exchange
options and export insurance contracts.
•• Exchange risk management relating to commercial contracts
(certain risk):
Commercial contracts in foreign currencies (most often successful
tenders) are hedged by the Group Treasury Department from
contractual commitment with derivative instruments (mainly forward
purchases and sales, and also exchange swaps and options).
The Group’s policy is to negotiate contract terms in respect of derivative
instruments that correspond to those of the hedged items so as to
minimise risk and to hedge all expected future transactions in each
major currency. Various flows are hedged against, at a minimum of
80%, based on the annual budget.
70
•• Sensitivity analysis
US Dollar
Australian Dollar
Czech Koruna
Hong-Kong Dollar
Swedish Krona
Pound Sterling
Swiss Franc
The interest rate risk to which the Group is exposed arises as a result of
its long-term borrowings.
Movement
in currency
Effect on
operating
profit
(before tax)
Effect
on reserves
in equity
10%
(10%)
10%
(10%)
10%
(10%)
10%
(10%)
10%
(10%)
10%
(10%)
10%
(10%)
826
(826)
188
(188)
255
(255)
301
(301)
637
(637)
97
(97)
(254)
254
960
(960)
(576)
576
-
To manage its risk, the parent company’s Treasury department has
implemented a hedging strategy using swaps, tunnels, caps and
options for interest rates and options.
The exposure of interest rates on loans in Euros is covered for between
76% and 87% of the total debt drawn down in Euro depending on
interest rate fluctuations for the 2010/2011 period with an average
maximum rate of 3.08%. The exposure of interest rates on loans in
US Dollar is 100% covered for the 2010/2011 period with an average
maximum rate of 2.93%.
•• Instruments recognised in equity
On euro loan
Nominal
(€ thousands)
On USD loan
Fair value
Nominal
Fair value
(€ thousands) (USD thousands) (USD thousands)
Nominal
(€ thousands)
Fair value
(€ thousands)
Swap
115,000
(2,141)
46,947
(718)
34,830
(533)
Tunnel
140,000
(1,551)
-
-
-
-
50,000
(193)
-
-
-
-
305,000
(3,885)
46,947
(718)
34,830
(533)
Total
Nominal value
Swedish Krona
Dollar US
Pound Sterling
Czech Koruna
Chinese Yuan
Australian Dollar
b) Interest rate risk
Cap
•• Forward purchases hedging financial and commercial
transactions as at 31 March 2010
(€ thousands)
The impact of fluctuations in the Euro against the other currencies is
not material.
The Group has implemented a diversified interest rate risk management policy aimed at limiting the impact of potential interest rate increases
on its cash flow. As at 31 March 2010, the projected servicing of net borrowings based on the hedging put in place would limit the impact of a 1%
increase in interest rates to €1.2 million. The impact on equity is €0.5 million with a 0.5% interest rate increase.
c) Risk on raw materials
The Faiveley Transport Group is exposed to increases in the costs of raw materials such as steel, aluminium and copper, and to increases in
transportation costs.
The Group has already anticipated these effects, both in terms of its purchasing policy and in the preparation of its tenders. As regards contracts
relating to projects, price indexation mechanisms enable the Group to absorb a large part of the increases in raw material costs by passing them
on to customers and therefore the risk associated with raw material cost increases is limited.
However, the Faiveley Transport Group’s sintered brake pads activity is exposed to fluctuations in the price of copper. The Treasury Department may
hedge part or all of the annual volume (170 tons) purchased through Euro denominated exchange contracts or raw material swaps.
A 1% increase in the price of copper would have a negative impact of €11 thousand on EBITDA.
d) Derivative instruments
•• The fair value of derivative instruments for hedging exchange, interest rate and raw materials risks is recorded on the balance sheet thus:
Interest rate
hedging
Financial instruments - Assets
Financial instruments - Liabilities
Unrealised gains and (losses) in equity
31 March 2010
Exchange rate
hedging
Raw materials
hedging
Total
-
2,999
-
2,999
4,324
1,612
-
5,936
(4,493)
5
-
(4,488)
Interest rate
hedging
Exchange rate
hedging
Raw materials
hedging
Total
31 March 2009
-
2,646
27
2,673
1,724
3,929
1
5,654
(2,612)
1,329
26
(1,257)
71
Faiveley transport
A/ Available cash and cash equivalents
31 March 2008
Interest rate
hedging
Exchange rate
hedging
Raw materials
hedging
Total
187
1,972
-
2,159
838
46
-
884
-
-
-
-
•• Movement of the reserve in equity
Amount
1 April 2009
Interest rate hedging
Movement Amounts recycled to
in the year income statement
Amount
31 March 2010
(2,612)
(1,075)
(806)
(4,493)
Exchange rate hedging
1,329
(1,317)
(7)
5
Raw materials hedging
26
(26)
-
-
(1,257)
(2,418)
(813)
(4,488)
Movement Amounts recycled to
in the year income statement
Amount
31 March 2009
TOTAL
Amount
1 April 2008
Interest rate hedging
-
(2,839)
227
(2,612)
Exchange rate hedging
-
1,329
-
1,329
Raw materials hedging
-
26
-
26
TOTAL
-
(1,484)
227
(1,257)
31 March 2010
31 March 2009
31 March 2008
Available credit lines (a)
85,205
68,143
49,055
Parent company cash (b)
36,883
27,660
2,074
Subsidiaries cash and cash equivalents (c)
158,539
135,614
111,802
Available cash and cash equivalents (1) = (a+b+c)
280,627
231,417
162,931
Borrowings due in less than one year (d)
56,021
34,793
60,998
Available credit lines maturing in less than one year and bank overdrafts (e)
89,272
55,715
78,353
135,334
140,909
23,580
Net cash and cash equivalents available
over the next year (1d- e)
Cash and cash equivalents include unused factoring cash of €57.94 million (net of non guaranteed receivables factored).
The improvement in cash and cash equivalents was due mainly to the new funding structure and the increase in authorised overdrafts.
Financial debt of less than one year is disclosed in paragraph 15.1 (excluding bank overdraft, fair value of derivatives and invoices factored and not
guaranteed).
Available credit lines represent credit lines granted by the banks and available immediately to the subsidiaries or the parent company. At 31 March
2010, €3.7 million was used in respect of a bank overdraft.
B/ Maturity dates of financial liabilities
Carrying
amount
Under 1 year
1 to 5 years
420,024
53,142
3,062
541
65
65
162
20
Bank overdrafts
At 31 March 2010
•• Horizon for release of amounts recorded in equity at
31 March 2010:
of default or bankruptcy on the part of customers or other debtors to
the factor.
Liability financial instruments:
The amount recorded in equity, in respect of exchange rate derivatives
(€5 thousand) will be recycled to the income statement in the year
ending 31 March 2011.
At 31 March 2010, receivables sold without recourse totalled
€96 million, and the amount of receivables sold and not guaranteed
was €1.3 million.
Finance leases
The amount recorded in equity, in respect of interest rate derivatives
(-€4,493 thousand) will be released to the income statement between
31 March 2010 and 31 March 2014 according to the maturity of the
flows hedged.
As regards the risk associated with financial assets, the Group’s
maximum exposure is equal to their carrying amount.
16.6. Credit risk
Via its commercial activities, the Faiveley Transport Group is exposed to
credit risk, in particular the risk of default on the part of its customers.
The Group only enters into commercial relationships with third parties
whose financial position is known to be healthy. The Group’s policy is
to verify the financial health of those customers wishing to obtain
credit.
In the case of derivative instruments and transactions that generate
cash when they are unwound, the counterparties are limited to highquality financial institutions.
In addition, the Faiveley Transport Group makes use of factoring
arrangements in France, Germany, Spain and Italy. Factoring enables the
Group to sell, without recourse, part of its receivables to the factoring
company and to banks. This selling without recourse has enabled the
Group to improve trade receivables recovery and to transfer the risk
16.7. Liquidity risk
Prudent liquidity risk management requires the Group to retain a
sufficient level of cash and securities that can be traded on a market,
to have adequate financial resources due to the implementation of
appropriate credit facilities and to be in a position to unwind positions
on the market. Due to the dynamism of the Group’s activities, the
Treasury department aims to maintain financial flexibility by retaining
open but unused credit lines.
At 31 March 2010, the Group respected all the covenants specified by
the credit agreement relating to the reorganisation of it shareholding
structure and the refinancing of its existing bank borrowings (see
note E.15).
The Group estimates that the cash flows generated by its operating
activities, cash and funds available via existing credit lines will be
sufficient to cover the expenditure and investment necessary for its
operations, to service its debt and to pay dividends. However the Group
may need to borrow to finance potential corporate acquisitions.
Borrowings Employee profit sharing
Fair value of derivatives – liabilities
Other liabilities
Interest on liabilities
Total
Non-financial
liabilities
366,882
-
-
1,245
1,276
-
-
-
-
162
-
-
-
1
19
-
-
2,111
2,111
-
-
-
3,696
3,696
-
-
-
12,004
12,004
-
-
-
1,285
1,285
-
-
-
210,354
197,859
-
-
12,495
14,084
1,614
-
-
12,470
259
259
-
-
-
667,126
272,739
368,146
1,276
24,965
Value
Under 1 year
1 to 2 years
2 to 3 years
Over 3 years
422,776
53,142
49,572
49,414
270,648
3,062
541
457
258
1,806
•• Future cash flows:
At 31 March 2010
Borrowings Finance leases
72
Over 5 years
65
65
-
-
-
161
161
-
-
-
1
1
-
-
-
2,111
2,111
-
-
-
73
Faiveley transport
16.8. Contribution to net finance income
•• Forecast future cash flows of interest and interest rate hedges:
At 31 March 2010
Cash flow from liability financial instruments
At 31 March 2009
Value
Under 1 year
1 to 2 years
2 to 3 years
Over 3 years
30,361
6,197
8,159
9,215
6,790
3,753
2,795
1,152
(194)
-
Revaluation
At 31 March 2010
Loans and receivables
Payables at amortised cost
Carrying
amount
Under 1 year
1 to 5 years
Over 5 years
Non-financial
liabilities
Instruments measured at fair value
through profit or loss
Assets held for sale
448,794
31,965
416,829
-
-
Other
3,723
569
2,426
728
-
65
65
-
-
-
Total
63
61
2
-
-
Guarantees, deposits and securities
received
11
11
-
-
-
At 31 March 2009
2,122
2,122
-
-
-
18,094
18,094
-
-
-
5,654
5,654
-
-
-
805
805
-,
-
-
213,733
204,323
-
-
9,410
12,311
1,968
-
-
10,343
74
74
-
-
-
Total
705,449
265,711
419,257
728
19,753
At 31 March 2008
Carrying
amount
Over 5 years
Non-financial
liabilities
Bank overdrafts
Fair value of derivatives liabilities
Other liabilities
Under 1 year
1 to 5 years
Guarantees, deposits and securities
received
-
-
-
-
-
-
-
-
(223)
-
4,220
(244)
(27,604)
108
10,171
14,032
-
-
-
-,,
-
-
-
(1,976)
11
-
-
-
-
(1,965)
(15,561)
11
4,220
(244)
108
(4,072)
(15,538)
Exchange gain
or loss
Disposals
and other
Net finance
income
Revaluation
(14,243)
Interest
Dividends
Profits
Losses
1,938
-
-
-
-
(15,251)
-
-
-
-
(4,895)
-
-
(4,067)
24,424
11,110
(389)
(14,108)
(23,459)
-
-
-
-
-
-
-
Other
(2,119)
23
-
-
-
-
(2,096)
Total
(20,328)
23
-
(4,067)
(389)
10,316
(14,445)
Exchange gain
or loss
Disposals
and other
Net finance
income
Revaluation
At 31 March 2008
Interest
Dividends
Profits
Losses
1,909
-
-
-
-
(9,473)
-
-
-
-
3,855
-
1,519
-
-
-
-
-
(2,976)
(10,540)
359
739
6,472
-
-
-
-
5,306
763
2,809
1,734
-
65
65
-
-
-
323
305
18
-
-
Other
(1,440)
14
-
-
-
431
(994)
-
Total
(5,149)
14
1,519
-
359
(1,806)
(5,062)
11
11
-
-
2,132
-
-
-
2,186
-
-
-
884
884
-
-
-
1,081
1,081
-
-
-
183,857
170,580
-
-
13,277
Other liabilities
5,136
1,716
-
-
3,420
1,691
1,691
-
-
-
298,682
236,712
43,050
2,223
16,697
74
1,255
(14,616)
Net finance
income
489
2,132
Total
Losses
40,223
2,186
Profits
55,298
Bank overdrafts
Dividends
96,010
Fair value of derivatives liabilities
Interest
Exchange gain
or loss
Disposals
and other
75
Faiveley transport
17. Current liabilities
19.1. By business segment
17.1. Operating liabilities
•• 2009/2010 financial year
TOTAL
31 March 2010
TOTAL
31 March 2009
TOTAL
31 March 2008
143,117
151,315
126,692
54,742
53,008
43,888
Accrued credit notes
1,791
1,698
2,173
Deferred income
2,949
1,984
1,673
Accrued expenses
7,755
5,728
9,431
210,354
213,733
183,857
Trade payables
Tax and social security liabilities
Total
At 31 March 2010, “Trade payables” were increased by €10.8 million of work-in-progress creditors, compared to €10.9 million at 31 March 2009 and
€10.5 million at 31 March 2008 (see note E.8).
17.2. Other liabilities
TOTAL
31 March 2010
TOTAL
31 March 2009
TOTAL
31 March 2008
Due to suppliers of non-current assets
425
407
256
Dividends payable
147
122
55
Other operating liabilities
13,512
11,782
4,825
Total
14,084
12,311
5,136
Income Statement
31 March 2010
Continuing operations:
-
Sales
875,948
Operating profit
118,247
(15,538)
Income tax
(27,852)
74,857
Profit for the period from continuing operations
Discontinued operations:
-
Profit before tax
-
Income tax
-
Gain (loss) on disposal
-
Net profit of discontinued operations
-
Consolidated net profit
74,857
Depreciation and amortisation for the period
15,976
Balance Sheet
31 March 2010
18. Factoring
Property, plant and equipment and intangible assets, net
In order to optimise the cost of the Group’s bank financing, Faiveley Transport Tours, Faiveley Transport Amiens, Faiveley Transport Gennevilliers,
Espas, Faiveley Transport NSF, Faiveley Transport Italia, Faiveley Transport Iberica, Faiveley Transport Leipzig and Faiveley Transport Witten sell their
trade receivables to a factor.
Non-current financial assets
Sub-total non-current assets
695,194
Accordingly, factoring resulted in a €96,079 thousand reduction in trade receivables at 31 March 2010. In addition, available and uncalled cash with
the factor amounted to €59,220 thousand and is included in cash. However, the portion of receivables sold and not guaranteed was recorded as
financial debts under “current borrowings” for an amount of €1,285 thousand. The risk incurred by the Group in respect of receivables sold and not
guaranteed relates to the non-collection of these receivables.
Inventories and receivables (excluding tax)
383,787
19. Segment reporting
In all tables summarising segment information, the column “Others” represented the activities of the parent company Faiveley S.A., including
IFRS restatements and before the elimination of inter-company transactions.
At 31 March 2008, Faiveley S.A. only held shares in Faiveley Transport and had no relation with the operating subsidiaries.
Following the transactions completed on 23 December 2008, Faiveley S. A. decided to proceed with the procedure for the dissolution of Faiveley
Transport without liquidation. At 31 March 2009, the net assets of Faiveley Transport were contributed into Faiveley S. A. (subsequently renamed
Faiveley Transport) by a simple merger transaction by means of a complete transfer of its assets and liabilities, therefore eliminating all intermediate
companies between the parent company and the operating companies of the Group. Due to this, the segment reporting as at 31 March 2010 only
concerns the railway sector.
659,226
4,377
Deferred tax assets
31,591
Other current assets
15,767
196,705
Sub-total current assets
596,259
1,291,453
Total assets
Equity
376,666
Employee benefits and other non-current provisions
38,812
23,466
369,422
Sub-total non-current liabilities
431,700
Current provisions
70,941
Current borrowings
73,266
Advances, prepayments and liabilities (excluding tax)
310,867
Other current liabilities
28,013
483,087
Sub-total current liabilities
1,291,453
Total equity and liabilities
Acquisitions of property, plant and equipment and intangible assets (excluding goodwill) for the period
16,998
Workforce
76
4,865
77
Faiveley transport
Income statement
Income Statement
Railway systems
Sales
31 March 2009
Others
Eliminations
Total
851,996
28
-
852,024
Sales
31 March 2008
Railway systems
Others
Eliminations
Total
692,822
38
-
692,860
Operating profit
114,902
(1,115)
-
113,787
Operating profit
88,686
(272)
-
88,414
(13,449)
77,704
(78,700)
(14,445)
(4,853)
(210)
-
(5,063)
Income tax
(35,198)
7,103
-
(28,095)
Income tax
(28,358)
2,635
-
(25,723)
-
-
-
-
66,255
83,692
(78,700)
71,247
-
-
-
-
-
-
-
-
55,475
2,153
-
57,628
-
Profit before tax
-
-
-
-
Profit before tax
-
-
-
-
Income tax
-
-
-
-
Income tax
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
66,255
83,692
(78,700)
71,247
55,475
2,153
-
57,628
15,362
2
-
15,364
13,310
4
-
13,314
Railway systems
Others
Eliminations
Total
322,969
4
188
323,161
13,843
27,834
(37,232)
4,445
Deferred tax assets
19,496
-
-
19,496
Balance Sheet
Balance Sheet
Railway systems
31 March 2009
31 March 2008
Others
Eliminations
Total
140,174
272,167
241,376
653,717
37,678
540,845
(570,818)
7,705
Deferred tax assets
23,560
5,285
-
28,845
201,412
818,297
(329,442)
690,267
356,308
27,838
(37,044)
347,102
367,281
43,301
(55,514)
355,068
320,174
1,246
(849)
320,571
359,648
63,037
(412,191)
10,494
9,589
17
1
9,607
136,417
27,660
-
164,077
112,883
1,551
-
114,434
863,346
133,998
(467,705)
529,639
442,646
2,814
(848)
444,612
1,064,758
952,295
(797,147)
1,219,906
Total assets
798,954
30,652
(37,892)
791,714
Equity
Total assets
399,403
78,676
(181,158)
296,921
296,395
17,632
(27,270)
286,757
Equity
42,046
377
-
42,423
46,930
51
-
46,981
16,446
3,299
-
19,745
15,235
-
-
15,235
124,987
445,822
(150,825)
419,984
582,891
528,165
(331,983)
779,073
45,273
9,773
(9,773)
45,273
107,438
9,824
(9,773)
107,489
56,060
Current provisions
62,567
315
-
62,882
Current provisions
56,013
47
-
Current borrowings
67,140
388,979
(396,698)
59,421
Current borrowings
62,387
2,028
-
64,415
323,384
23,757
(55,546)
291,595
252,560
921
(848)
252,633
Workforce
78
28,776
11,079
(12,920)
26,935
481,867
424,130
(465,164)
440,833
1,064,758
952,295
(797,147)
1,219,906
16,013
-
-
16,013
4,566
53
-
4,619
24,164
200
-
24,364
395,124
3,196
(848)
397,472
798,954
30,652
(37,892)
791,714
16,294
-
-
16,294
3,957
4
-
3,961
Workforce
79
Faiveley transport
19.2. By geographic region
Sales contribution by business segment and original geographic region:
Contribution by business segment and original geographic region:
Americas
Asia/
Pacific
Total
413,822
62,809
174,263
875,948
62,804
32,581
14,352
9,476
119,213
Acquisition of property, plant and equipment and intangible assets (excluding goodwill)
7,964
5,026
1,458
2,550
16,998
Amortisation and depreciation of property, plant and
equipment and intangible assets (excluding goodwill)
5,730
7,061
1,179
2,006
15,976
Sales
Closing balance of property, plant and equipment and intangible assets (excluding goodwill)
France
Europe
(excl. France)
225,054
Railway systems
France
Rest of Europe
Americas
Asia – Pacific
Total
Rest of Europe
Americas
France
Others
Total
28
215,684
461,905
- 58,704
115,732
Total
851,996
Rest of Europe
31 March 2009
215,656
Asia – Pacific
- - 28
461,905
58,704
115,732
Railway systems
31 March 2009
Others
Total
France
54,005
6,584
60,589
Americas
14,295
-
14,295
Asia – Pacific
34,356
-
8,606
111,262
Total
-
6,584
34,356
8,606
Railway systems
France
Rest of Europe
Americas
Asia – Pacific
Total
Others
Total
6,990
-
6,990
714
-
714
6,208
-
6,208
2,101
-
2,101
16,013
-
16,013
Depreciation of property, plant and equipment and amortisation of intangible assets (excl. goodwill) by business segment and geographic region:
Railway systems
France
Rest of Europe
Americas
Asia – Pacific
Total
80
31 March 2009
Others
Total
6,332
2
6,334
812
-
6,810
-
Asia – Pacific
Total
193,096
38
193,134
30,879
-
30,879
380,546
-
88,301
380,546
-
692,822
88,301
38
692,860
31 March 2009
Others
Total
37,956
4
37,960
522
-
35,947
-
7,361
81,787
35,947
522
-
7,361
4
81,791
Acquisitions of property, plant and equipment and intangible assets, net (excl. goodwill) by business segment and units’ original geographic region:
Railway systems
France
Rest of Europe
Americas
Asia – Pacific
Total
31 March 2009
Others
Total
6,717
-
6,717
124
-
124
6,186
-
3,266
16,293
6,186
-
3,266
-
16,293
Depreciation of property, plant and equipment and amortisation of intangible assets (excl. goodwill) by business segment and geographic region:
117,846
Acquisitions of property, plant and equipment and intangible assets, net (excl. goodwill) by business segment and units’ original geographic region:
31 March 2009
Americas
852,024
losing balance of property, plant and equipment and intangible assets, net (excluding goodwill) by business segment and units’ original
C
geographic region:
Rest of Europe
Total
Railway systems
Railway systems
France
Others
losing balance of property, plant and equipment and intangible assets, net (excluding goodwill) by business segment and units’ original
C
geographic region:
Sales contribution by business segment and original geographic region:
31 March 2009
Railway systems
France
Rest of Europe
Americas
Asia – Pacific
Total
31 March 2009
Others
Total
4,814
4
4,817
259
-
7,230
-
1,007
7,230
259
-
1,007
13,310
4
13,314
31 March 2010
31 March 2009
31 March 2008
846,348
819,209
659,352
20. Sales
Sales of products associated with contracts
Sales of services
Total(1)
29,600
32,815
33,508
875,948
852,024
692,860
(1) of which sales of “Customer services” related products €274 million at 31 March 2010, €263 million at 31 March 2009, and €226 million at 31 March 2008.
6,810
812
1,408
-
1,408
15,362
2
15,364
81
Faiveley transport
21. Cost of sales
24. Net finance income/(cost)
31 March 2010
31 March 2009
31 March 2008
Direct labour
(61,655)
(61,402)
(54,609)
Raw materials
(369,377)
(369,173)
(289,716)
Structural costs
(57,600)
(56,587)
(46,046)
Cost of supplies
(39,218)
(35,925)
(33,751)
Engineering costs
(48,467)
(43,353)
(39,793)
Other direct costs
(33,445)
(29,102)
(21,977)
6,706
5,695
4,731
(25,245)
(22,644)
(16,846)
(616)
2,758
3,220
(628,917)
(609,733)
(494,787)
Change in projects in progress
Net change in project provisions (charge/reversal)
Net change in provision for losses to completion
Total cost of sales
31 March 2010
31 March 2009
31 March 2008
860
992
1,346
Doubtful debts
1,019
974
690
Write-backs of provisions for other liabilities
1,824
386
809
123
71
103
Other income
3,858
172
1,477
Total other income
7,684
2,595
4,425
(26)
(6)
-
(4,706)
(1,348)
(1,459)
(737)
(970)
(280)
(4,105)
(2,811)
(2,222)
Insurance compensation
Royalties
Doubtful debts
Charges to provisions for other liabilities
Inventory write downs
Other expenses
-
-
-
Total other expenses
(9,574)
(5,135)
(3,961)
Total net
(1,890)
(2,540)
464
23. Gains and losses on disposals of property, plant and equipment and intangible assets
31 March 2010
31 March 2009
31 March 2008
163
275
228
Carrying amount of assets sold
(479)
(531)
(281)
Total
(316)
(256)
(53)
Sales price of assets sold
Income from cash and cash equivalents
31 March 2010
31 March 2009
31 March 2008
(14,752)
(19,065)
(8,981)
796
1,380
2,578
(13,956)
(17,685)
(6,403)
Financial instrument income
14,372
252
8,964
Income linked to exchange differences
19,206
40,432
7,046
-
-
32
Proceeds from sale of investments
112
110
475
Reversal of financial provisions
236
806
-
Income from balance of sale financing (disposal of GHH)
271
496
347
Net cost of debt
Proceeds from sale of marketable securities
Dividends received
11
23
14
188
62
964
34,396
42,181
17,842
(338)
(19,368)
(3,895)
(33,449)
(16,008)
(10,022)
(1,248)
(1,505)
(864)
(4)
(499)
(148)
-
(100)
(505)
Charges on bank guarantees
(728)
(614)
(576)
Other finance costs
(210)
(847)
(491)
Other finance costs
(35,978)
(38,941)
(16,501)
Net finance cost
(15,538)
(14,445)
(5,062)
22. Other operating income (expense)
Royalties
Gross cost of debt
Financial instrument charges
Charges linked to exchange differences
Interest charges on retirement commitments
Carrying amount of investments sold
Charges to financial provisions
The increase in the net finance cost was due to:
––interest and restructuring charges for the bank debt at 23 December 2008, as part of the reorganisation of Group’s shareholdings, which had a
financial cost of €11.9 million;
––the slight actual and unrealised exchange loss from financial transactions, after deduction of the value of derivative instruments, for
€0.2 million;
––the other financial income and expense items comprise various bank charges, interest on leasing, interest on the bank overdraft and other loans
contracted by subsidiaries, the interest charge on pension commitments, offset by other financial income for a net negative of €3.4 million.
25. Income tax
a) Analysis by type
Current tax – continuing operations
Deferred tax – continuing operations
Total income tax – continuing operations
Tax on discontinued operations
TOTAL TAX
31 March 2010
31 March 2009
31 March 2008
26,579
29,661
20,359
1,273
(1,565)
5,364
27,852
28,095
25,723
-
-
-
27,852
28,095
25,723
For the year ended 31 March 2010, the effective tax rate was 27.1% (compared with 28.3% for the year ended 31 March 2009 and 30.8% for the year
ended 31 March 2008) and the current income tax rate was 25.9% (compared with 29.9% for the year ended 31 March 2009 and 24.4% for the year
ended 31 March 2008).
82
83
Faiveley transport
b) Effective tax rate
27. Payroll costs and workforce at 31 March 2010
31 March 2010
31 March 2009
31 March 2008
102,709
99,342
83,351
Pre-tax profit from continuing operations
Pre-tax profit from operations sold or held for sale
-
Statutory tax rate of the parent company
Theoretical tax credit / (charge)
Salaries
Social security charges
33.33%
33.33%
33.33%
Retirement and other post-employment benefits
(34,233)
(33,111)
(27,781)
Charges associated with share-based payments
Impact of:
TOTAL PAYROLL COSTS
31 March 2010
31 March 2009
31 March 2008
155,026
139,595
122,380
43,955
41,789
38,003
6,775
5,942
5,308
118
(216)
-
205,874
187,110
165,691
permanent differences between profits for accounting purposes and taxable profits
(574)
1,929
(3,434)
Managers
1,004
952
782
differences between the tax rates applicable to the parent company and to the subsidiaries
2,999
3,224
1,674
Supervisors and foremen
1,949
1,775
1,594
Operatives
1,912
1,892
1,585
161
(255)
(1,741)
TOTAL WORKFORCE
4,865
4,619
3,961
the liability method (changes in tax rates)
tax saving achieved through offset of tax losses carried forward
1,851
713
3,811
tax saving recognised as a reduction in the Sab Wabco goodwill
(393)
(754)
(2,805)
28. Post balance sheet events
21
(1,591)
(1,452)
None.
1,015
501
3,646
deferred tax assets in respect of tax losses carried forward not recognised for the period
change in deferred tax assets not recognised
cancellation of non-recognition of deferred tax in earlier periods
52
568
799
577
507
372
tax adjustments in respect of earlier periods
1,008
(383)
567
other differences
(336)
557
621
(27,852)
(28,095)
(25,723)
27.1%
28.3%
30.8%
tax credits
Tax charge
Effective tax rate
c) Breakdown of tax losses carried forward (tax bases) by expiry date
Year ended
31 March 2010
31 March 2009
31 March 2008
Losses expiring within 4 years
669
1,499
985
Losses expiring in 5 years and over
368
8,175
6,009
Losses expiring in over 20 years
The aim of this note is to present the material transactions entered into between the Group and its related parties as defined by IAS 24.
The parties related to the Faiveley Transport Group are the consolidated companies (including those companies that are proportionally consolidated
and those consolidated using the equity method), the entities and people that control Faiveley Transport and the Group’s senior management.
Transactions entered into between the Faiveley Transport Group and its related parties are at arm’s length terms.
29.1 Transactions with related companies
A list of consolidated companies is provided in note G.
Transactions carried out and balances outstanding with fully consolidated companies at the balance sheet date are fully eliminated on
consolidation.
Only the following are included in the notes below:
––data relating to such intra-Group transactions, when they involve companies over which the Group exercises joint control (proportionally
consolidated) and those over which the Group has significant influence (accounted for using the equity method) concerning the portion not
eliminated on consolidation;
1,326
2,194
Losses that may be carried forward indefinitely
30,353
24,488
31,795
Total
31,390
35,488
40,982
Tax losses not recognised as deferred tax assets
29,530
33,586
38,417
1,860
1,902
2,565
•• With joint ventures:
1,036
1,899
1,193
––Qingdao Faiveley Sri Rail Brake Co. Ltd.: 50/50 joint venture formed in 2006 to enable the Group to penetrate the Chinese brake market;
824
3
1,372
––Datong Faiveley Couplers System Co. Ltd.: 50/50 joint venture formed in 2007 with Datong Yida Foundry Co Ltd, with the aim of manufacturing
and selling couplers;
Tax losses recognised as deferred tax assets
29. Related party transactions
Limits on the use of tax losses recognised as deferred tax assets:
Losses expiring within 5 years
Losses that may be carried forward indefinitely
26. Share of profit/(loss) from operations sold or held for sale
Nil.
84
––material transactions with other Group companies.
29.1.1. Transactions with consolidated companies:
The joint ventures are proportionally consolidated companies:
––ShiJiaZhuang JiaXiang Precision Machinery Co. Ltd.: on 20 December 2007, the Group acquired 50% of the shares of this Chinese company
which specialises in the development and production of compressors for the railway market.
85
Faiveley transport
•• Transactions with joint ventures not eliminated on consolidation:
––Fraction of financial investments, receivables, debts, expenses and income pertaining to these related companies:
The consolidated financial statements include transactions carried out by the Group with its joint ventures as part of its normal business
activities.
These transactions are normally carried out on arm’s length terms.
(€ thousands)
31 March 2009
31 March 2008
Sales
4,781
421
6,839
Cost of sales
(585)
(43)
(2)
Other income
315
434
346
-
(6)
-
4,142
1,480
4,261
(1,495)
(1,284)
(9)
Trade receivables
Non-current assets
31 March 2010
31 March 2009
31 March 2008
1,474
1,259
814
11,718
7,930
6,443
(680)
(294)
(1,790)
19
4
-
5,864
5,431
Sales
10,238
,
9,844
11,545
8,519
Cost of sales
(7,825)
(9,034)
(7,990)
384
818
(349)
12
229
(269)
Current assets
Equity
Other non-current liabilities
Current liabilities
Operating profit
Tax
(59)
(6)
17
Net profit/(loss) for the period
337
1,042
(601)
Net profit/(loss) - Group share
337
1,042
(371)
Financial expenses
(1,873)
(1,833)
(1,793)
(10)
(109)
(104)
3
3
3
(365)
(365)
(347)
-
-
-
(23)
(73)
(83)
29.2 Senior management remuneration
It is the Remuneration Committee that determines the remuneration to be allocated to corporate officers; it is responsible for assessing and
determining the variable portion of the remuneration of the members of the Management Board, which is based on performance targets and the
financial statements audited by the Statutory Auditors.
The following table provides details, in aggregate and for each category, of the components of the remuneration of the senior management:
(€)
Short-term benefits
(1)
Termination benefits
Post-employment benefits (2)
Share-based compensation (3)
Other long-term benefits
Directors’ fees
Total
2009/2010
2008/2009
2007/2008
6,376,930
5,559,586
5,459,880
989,449
-
-
75,927
44,084
76,275
-
-
-
(643)
411
1,791
100,600
66,200
55,000
7,542,263
5,670,281
5,592,946
(1) This category comprises fixed and variable remuneration (including employers’ costs), profit sharing and incentive payments, supplementary contributions and benefits in kind paid during
the period
(2) Change in retirement provisions
Memorandum of understanding with managers
•• With Francois Faiveley Participations
––Contract of assistance
Under the terms of a contract of assistance, Faiveley Transport recognised the following amounts in its expenses and income for the financial year,
corresponding to the rebilling of rent and the provision of services.
86
Financial income
1
––With Robert Joyeux and Etienne Haumont
29.1.2. With the companies that control Faiveley Transport
Re-billing of rent and utility expenses
Provision of services
2007/2008
1
•• Agreements entered into with senior management
None.
Contract of assistance, provision of services
Rebilling of rents
2008/2009
1
(3) Expense recognised in the income statement
•• With associates:
(€)
Trade payables
2009/2010
Senior management comprises mainly the members of the Management Board, Supervisory Board and Executive Committee.
•• Contribution of joint ventures to the consolidated financial statements
(€ thousands)
Trade receivables
Borrowings
31 March 2010
Other expenses
(€ thousands)
Faiveley Transport expenses
Faiveley Transport income
365,000
1,020
-
2,150
In accordance with the memorandum of understanding entered into on 18 October 2008 between Faiveley S.A. and the managers of Faiveley
Management (amended by the addendum of 17 November 2008), every manager who had received Faiveley S.A. shares in exchange for Faiveley
Management shares committed to retain them, and thus committed not to sell, and more generally transfer, directly or indirectly, at once or at a
later date, the said Faiveley S.A. shares without the prior approval in writing of Faiveley S.A., under the following terms and conditions:
(i) up to one third of shares granted as consideration for the contributions, for a period of 2 (two) years from the effective date of the transaction;
(ii) for the remaining shares granted as consideration for the contributions (two thirds), for a period of 3 (three) years à from the effective date of
the transaction.
It should be noted that the transaction was approved by the Extraordinary General Meeting of 23 December 2008, the effective date of the
transaction. On this occasion, Robert Joyeux and Etienne Haumont were granted 140,610 and 58,588 Faiveley S.A. shares, respectively, in exchange
for their Faiveley Management shares.
87
Faiveley transport
•• With Robert Joyeux
•• Finance leases
Memorandum of understanding entered into with managers relating to the merger of Faiveley M2 into Faiveley S.A. (subsequently Faiveley
Transport from 22 September 2009).
Finance leases relate to property, plant and equipment (see note E.3 above). The minimum outstanding lease charges in respect of irrevocable
finance leases are shown in the following table, analysed according to their due dates:
As part of the transactions relating to the reorganisation of its capital structure, Faiveley Transport concluded a memorandum of understanding
on 16 October 2008 with the shareholders of the company Faiveley M2, providing for the terms and conditions of the merger of the company
Faiveley M2 into Faiveley Transport.
In application of the said memorandum, a merger agreement was signed on 17 November 2008, relating to the merger of Faiveley M2 into Faiveley
Transport.
Every Faiveley M2 manager has entered into a unilateral undertaking to sell their Faiveley Transport shares to Faiveley Transport, which may be
exercised in the event they leave their duties with Faiveley Transport Group.
The Faiveley M2 managers committed to retain all their Faiveley Transport shares for 3 years from 23 December 2008.
In addition, for a period of six years from 23 December 2008, any disposal by a manager of Faiveley M2 of a block of more than 3,000 Faiveley
Transport shares is subject to a Faiveley Transport pre-emption right.
30. Dividends paid and proposed
On 26 September 2009, a dividend of €1 per share was paid in respect of 14,067,549 shares, i.e. a total dividend of €14,067,549 for the year ended
31 March 2009. The difference between the number of shares in respect of which dividends were paid and the total shares making up the share
capital, i.e. 327,162 shares, corresponds to the treasury shares owned by Faiveley Transport at the time of the distribution of the dividend.
Number of shares
Ordinary shares
6,291,902
Shares with double voting rights
8,112,809 Treasury shares
Number of shares
to which
dividends paid
Dividends paid
337,162
5,954,740
5,954,740
8,112,809
8,112,809
-
337,162
14,067,549
14,404,711
14,067,549(1)
(1) Including €6,280,843 to Financière Faiveley and €1,262,915 to François Faiveley Participation (F.F.P.).
In respect of the year ended 31 March 2010, the General Meeting will be asked to approve the payment of a dividend to shareholders: €17,285,653.20,
being €1.20 per share. This distribution will be taken from the account “Retained Earnings”. It will be payable with effect from 17 September 2010. It
was not recognised as a liability as at 31 March 2010.
F. Off-balance sheet commitments (in €thousands)
1. Leases
2009/2010
Under 1 year
2008/2009
2007/2008
620
805
867
1 to 5 years
1,383
1,767
2,340
Over 5 years
1,333
2,128
2,121
Total future rentals
3,336
4,648
5,328
Less interest
(273)
(925)
(932)
Outstanding liability in respect of finance leases
3,063
3,723
4,396
2009/2010
2008/2009
2007/2008
Guarantees, securities and bank guarantees given to customers
228,488
167,269
139,077
Guarantees and securities given by the parent company to customers
205,962
217,008
197,249
8,556
289,317
1,037
-
8,892
325,578
6,837
-
328,814
9,958
-
2. Other commitments given
Borrowings guaranteed by pledges:
Mortgages of buildings
Share pledge (*)
Trade receivables pledged
Materials pledged
(*)The pledge of certain equity investments as guarantee for the bank loans.
The off-balance sheet commitments above entitled “guarantees, securities and bank guarantees” is related to guarantees or securities provided
to the banks essentially in favour of customers with whom commercial contracts have been signed. These guarantees are generally issued for
defined periods and for defined amounts. These are principally guarantees for the repayment of deposits and guarantees for the satisfactory
completion of the contracts. The bank counter guarantees are issued for the benefit of banks supplying credit lines and the issue of guarantees for
the benefit of certain subsidiaries of the Group.
The off-balance sheet commitments above entitled “guarantees and securities given by the parent company” are guarantees agreed by the parent
company Faiveley Transport in favour of customers who have signed commercial contracts with subsidiaries of the Group. As for bank guarantees,
these guarantees are issued for defined periods and for defined amounts and essentially relate to guarantees for the repayment of deposits and
guarantees for the satisfactory completion of the contracts.
The shares that have been pledged in relation to the credit agreement relating the reorganisation of the shareholding structure and the refinancing
of bank borrowings are as follows:
Operating leases
The operating leases entered into by the Faiveley Transport Group relate mainly to buildings and furniture.
Shares pledged (€ millions)
The income and expenses recognised in respect of operating leases over the last three financial years break down as follows:
20,000
29,398
23,111
Operating lease expenses
Sub-letting income
Total
2009/2010
2008/2009
2007/2008
(8,631)
(8,467)
(6,492)
411
428
424
(8,220)
(8,039)
(6,068)
The future minimum payments to be made in respect of operating leases which are non-cancellable and had not expired as at 31 March 2010 are
as follows:
Total future rents
Under 1 year
1 to 5 years
Over 5 years
8,243
25,662
27,155
Carrying value of shares
Faiveley Transport Verwaltungs
29
Faiveley Transport KG Holding
90,010
Faiveley Transport Witten
74,500
1,390
37,827
Faiveley Transport USA
13,052
289,317
Total
3. Commitments received
As part of Faiveley Transport Gennevilliers’ acquisition of the sintered brake activity, Carbone Lorraine has committed to repay all costs that Faiveley
Transport Gennevilliers may incur which relate to the period prior to the acquisition date (1 April 2008).
88
89
Faiveley transport
G. Listing of Group-owned companies and consolidation method
Entity
1. Listing of consolidated companies and consolidation methods
Faiveley Transport is the Group holding company.
The following companies, in which Faiveley Transport controls directly or indirectly more than 50% of the share capital, were fully consolidated.
Entity
COUNTRY
% Control
% Interest
Parent company
FAIVELEY TRANSPORT
Full consolidation
FAIVELEY TRANSPORT LEIPZIG GmbH & Co. KG
Germany
100.00
100.00
FAIVELEY TRANSPORT WITTEN GmbH (1)
Germany
100.00
100.00
FAIVELEY TRANSPORT VERWALTUNGS GmbH (1)
Germany
100.00
100.00
FAIVELEY TRANSPORT HOLDING GmbH & Co. KG (1)
Germany
100.00
100.00
NOWE GmbH (1)
Germany
75.00
75.00
FAIVELEY TRANSPORT AUSTRALIA Ltd.
Australia
100.00
100.00
FAIVELEY TRANSPORT BELGIUM NV
Belgium
100.00
100.00
Brazil
100.00
100.00
FAIVELEY TRANSPORT CANADA Ltd.
Canada
100.00
100.00
FAIVELEY TRANSPORT FAR EAST Ltd.
China
100.00
100.00
SHANGHAI FAIVELEY RAILWAY TECHNOLOGY Co. Ltd.
China
51.00
51.00
FAIVELEY METRO TECHNOLOGY SHANGHAI Ltd.
China
100.00
100.00
FAIVELEY TRANSPORT RAILWAY TRADING (Shanghai) Co. Ltd.
China
100.00
100.00
FAIVELEY TRANSPORT ASIA PACIFIC Co. Ltd.
China
100.00
100.00
FAIVELEY TRANSPORT KOREA Ltd.
Korea
100.00
100.00
FAIVELEY TRANSPORT IBERICA S.A.
Spain
100.00
100.00
TRANSEQUIPOS S.A.
Spain
100.00
100.00
FAIVELEY TRANSPORT USA Inc.
USA
100.00
100.00
ELLCON NATIONAL Inc.
USA
100.00
100.00
ELLCON DRIVE LLC.
USA
100.00
100.00
FAIVELEY TRANSPORT AMIENS
France
100.00
100.00
FAIVELEY TRANSPORT NSF
France
100.00
100.00
FAIVELEY TRANSPORT TOURS
France
100.00
100.00
ESPAS
France
100.00
100.00
FAIVELEY TRANSPORT GENNEVILLIERS
France
100.00
100.00
FAIVELEY TRANSPORT BIRKENHEAD Ltd.
United Kingdom
100.00
100.00
FAIVELEY TRANSPORT TAMWORTH Ltd.
United Kingdom
100.00
100.00
SAB WABCO Ltd.
United Kingdom
100.00
100.00
SAB WABCO DAVID & METCALF Ltd.
United Kingdom
100.00
100.00
SAB WABCO DAVID & METCALF PRODUCTS Ltd.
United Kingdom
100.00
100.00
SAB WABCO INVESTMENTS Ltd.
United Kingdom
100.00
100.00
SAB WABCO PRODUCTS Ltd.
United Kingdom
100.00
100.00
SAB WABCO UK Ltd.
United Kingdom
100.00
100.00
FAIVELEY TRANSPORT INDIA Ltd.
India
100.00
100.00
F.M.R.P.
Iran
51.00
51.00
FAIVELEY TRANSPORT ITALIA Spa
Italy
100.00
98.70
Poland
100.00
100.00
(1)
FAIVELEY TRANSPORT DO BRASIL Ltda.
FAIVELEY TRANSPORT POLSKA z.o.o.
90
COUNTRY
% Control
% Interest
FAIVELEY TRANSPORT Plzen s.r.o.
Czech Republic
100.00
100.00
FAIVELEY TRANSPORT TREMOSNICE s.r.o.
Czech Republic
100.00
100.00
FAIVELEY TRANSPORT LEKOV a.s
Czech Republic
75.00
75.00
Russia
100.00
73.50
o.o.o. FAIVELEY TRANSPORT
FAIVELEY TRANSPORT METRO TECHNOLOGY SINGAPORE Ltd.
Singapore
100.00
100.00
FAIVELEY TRANSPORT ACQUISITION AB
Sweden
100.00
100.00
FAIVELEY TRANSPORT MALMÖ AB
Sweden
100.00
100.00
FAIVELEY TRANSPORT NORDIC AB
Sweden
100.00
100.00
FAIVELEY TRANSPORT METRO TECHNOLOGY THAILAND Ltd.
Thailand
100.00
100.00
Taiwan
100.00
100.00
FAIVELEY TRANSPORT METRO TECHNOLOGY TAIWAN Ltd.
Proportional consolidation
QINGDAO FAIVELEY SRI RAIL BRAKE Co. Ltd.
China
50.00
50.00
DATONG FAIVELEY COUPLERS SYSTEMS Co. Ltd.
China
50.00
50.00
SHIJIAZHUANG JIAXIANG PRECISION MACHINERY Co. Ltd.
China
50.00
50.00
Accounted for under the equity method
NONE
(1) Faiveley Transport Leipzig, Faiveley Transport Leipzig GmbH & Co. KG, Faiveley Transport Witten GmbH, Faiveley Transport Verwaltungs GmbH, Faiveley Transport KG Holding GmbH and
Nowe GmbH, as subsidiaries of the Faiveley Transport Group responsible for the preparation of the consolidated financial statements, made use of the provisions of paragraph 264b of the
German Commercial Code as regards the year ended 31 March 2010 and the annual report, given that the financial statements and annual report will not be published.
Legal developments arising during the financial year
•• T
wo mergers were carried out over the year 2009/2010. On the one hand, Faiveley Transport Leipzig GmbH & Co.KG was merged into Faiveley
Beteiligungs GmbH (subsequently renamed Faiveley Transport Leipzig GmbH and Co. KG) and on the other hand, Sab Iberica S.A was merged
into Faiveley Transport Iberica S.A. .These two mergers took effect retroactively from 1 April 2009 for accounting and tax purposes.
•• Newly incorporated companies:
––Faiveley Transport Canada (Toronto tramway project).
––Faiveley Transport Metro Technology Singapore et Faiveley Transport Metro Technology Taiwan (Platform Doors and Gates business).
––FMRP (joint venture for the manufacturing of braking equipment in the Middle East).
2. List of non-consolidated companies as at 31 March 2010
(€ thousands)
SUECOBRAS (Brazil)
SAB WABCO SHARAVAN Ltd. (Iran)
SOFAPORT (France)
Carrying amount of investment
Gross
Impairment
Net
Equity
Loss for
financial year
100
794
(603)
181
213
(16)
49
10
(10)
-
-
-
59.50
47
-
47
52
(19)
% owned
91
Faiveley transport
Statutory Auditors’ report on
the consolidated financial statements
H. Statutory auditors fees
Fees payable to the Statutory Auditors and members of their network as part of assignments relating to the closing of accounts at 31 March 2010,
as well as fees paid at 31 March 2009 and 31 March 2008 were as follows:
(€ thousands)
ECA
2009/2010
2008/2009
2007/2008
2009/2010
Parent Company
237
334
30
Subsidiaries
287
212
287
DELOITTE
2008/2009
2007/2008
234
309
30
76
205
293
Audit:
Statutory Auditors, certification, review
of individual and consolidated financial
statements:
Other assignments directly related to the audit
assignment
-
-
-
-
-
-
524
546
317
310
515
323
-
-
-
-
-
-
Legal, tax, corporate
-
-
-
-
-
-
Other
-
-
-
-
-
-
-
-
-
-
-
-
524
546
317
310
515
323
Sub-total audit fees
Other services:
Sub-total other services
TOTAL
The Company considers that the disclosures required by Article 222-8 of the General Regulations and Order n°2006-10 of the AMF sufficiently meet
the provisions introduced by Decree n°2008-10 of the AMF, as well as the provisions introduced by Decree n° 2008-1487 of 30 December 2008.
I. Financial communication
The consolidated financial statements are available in German and French and registered with the relevant local administration.
Statutory
Auditors’ report
on the consolidated financial statements
For the year ended 31 March 2010
This is a free translation into English of the statutory auditors’ report issued in French and is provided solely for the convenience of English speaking users.
The statutory auditors’ report includes information specifically required by French law in such reports, whether modified or not. This information is presented
below the opinion on the consolidated financial statements and includes an explanatory paragraph discussing the auditors’ assessments of certain significant
accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the consolidated financial statements taken
as a whole and not to provide separate assurance on individual account captions or on information taken outside of the consolidated financial statements.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
To the Shareholders,
In compliance with the assignment entrusted to us by your Annual
General Meeting, we hereby report to you, for the year ended 31 March
2010, on:
––the audit of the accompanying consolidated financial statements of
Faiveley Transport;
––the justification of our assessments;
––the specific verification required by law.
These consolidated financial statements have been approved by
the Management Board. Our role is to express an opinion on these
consolidated financial statements based on our audit.
I. Opinion on the consolidated financial statements
We conducted our audit in accordance with professional standards
applicable in France; those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement.
An audit involves performing procedures, using sampling techniques
or other methods of selection, to obtain audit evidence about the
amounts and disclosures in the consolidated financial statements.
An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made,
as well as the overall presentation of the consolidated financial
statements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the consolidated financial statements give a true and
fair view of the assets and liabilities and of the financial position of the
Group as at 31 March 2010 and of the results of its operations for the
year then ended in accordance with International Financial Reporting
Standards as adopted by the European Union.
Without qualifying our opinion, we draw your attention to the matter
set out in Note C-1 to the consolidated financial statements regarding
the change of accounting method related to the implementation
of IFRS 8 “Operating segments”, IAS 1 “Presentation of financial
statements” and IAS 23 “Borrowing Costs”.
––The Group recognizes income generated on contracts using the
percentage of completion method in accordance with the terms
and conditions described in Note C-6-1 to the consolidated financial
statements. These results are dependent on estimates on contract
completion performed by contract managers under the supervision
of Executive Management. Based on the information that you have
provided to us, our procedures consisted in assessing the financial
information and assumptions upon which these evaluations of
income on contract completion have been performed, reviewing
the calculations performed by the Company and examining the
procedures used by Executive Management to approve these
estimates.
––The Group records provisions to cover miscellaneous liabilities and
losses as described in Note C-15-2. Our work notably consisted in
assessing the financial information and the assumptions on which
these estimates have been based, in reviewing, on a test basis,
the calculations performed by the Company and in examining
the procedures used by Executive Management to approve these
estimates. On this basis, we assessed the reasonableness of estimates
made.
––Notes C-15 and E-14-2 specify the valuation methods used to measure
pension and other similar related obligations. These obligations have
been evaluated by actuaries. Our procedures consisting in examining
the financial information used, assessing the assumptions adopted
and verifying that Notes C-15 and E-14-2 to the consolidated financial
statements provide appropriate disclosure.
––These assessments were made in the context of our audit of the
consolidated financial statements taken as a whole, and therefore
contributed to the opinion we formed which is expressed in the first
part of this report.
II. Justification of our assessments
III. Specific verification
In accordance with the requirements of Article L. 823-9 of the French
Commercial Code (Code de Commerce) relating to the justification of
our assessments, we bring to your attention the following matters:
As required by law, we have also verified in accordance with
professional standards applicable in France the information presented
in the Group’s management report. We have no matters to report as to
its fair presentation and its consistency with the consolidated financial
statements.
––At the year-end, the Group systematically performs impairment
testing on goodwill and intangible assets with indefinite lives in
Deloitte Marque & Gendrot
Bénédicte Sabadie-Faure
92
accordance with the terms and conditions described in Note E-1
to the consolidated financial statements. We have reviewed the
methods for implementing this impairment testing as well as the
cash flow forecasts and assumptions used and have verified that
Note E-1 provides appropriate disclosure.
Neuilly-sur-Seine and Dijon, 20 July 2010
The Statutory Auditors
Expertise Comptable et Audit
Jérôme Burrier
93
Faiveley transport
financial statements
Faiveley Transport
Parent Company Financial
Statements
at 31 March 2010
1.4.1. Balance Sheet
31 March 2010
ASSETS
(€ thousands)
Notes
Gross
Amortisation,
depreciation,
and provision
charges
Net
31 March 2009 31 March 2008
Net
Net
NON-CURRENT ASSETS
Note 1
389,900
4,158
385,742
386,060
2
Property, plant and equipment
Buildings
Note 1
106
83
23
29
1
Plant and machinery
Note 1
65
1
65
65
-
Other
Note 1
597
293
304
358
-
Assets in progress
Note 1
7,095
-
7,095
3,782
-
Equity investments
Note 2
412,663
-
412,663
412,497
27,862
Loans receivable from equity investments
Note 2
157,316
-
157,316
177,829
-
Other equity investments
Note 2
434
-
434
375
-
Financial assets
968,176
TOTAL (I)
4,535
963,641
980,994
27,865
CURRENT ASSETS
Receivables
Advances and payments on account
Note 3
56
-
56
46
36
Trade receivables
Note 3
36,990
-
36,990
41,109
709
Other receivables - advances and payments on account
Note 3
3,476
-
3,476
7,710
103
Tax grouping
Note 3
1,744
-
1,744
1,354
-
Marketable securities (1)
Note 4
40,012
1
40,011
31,957
11,227
Cash
Note 4
208,947
-
208,947
202,698
201
Prepaid expenses
Note 11
690
-
690
346
262
TOTAL (II)
TOTAL ASSETS (I + II )
Notes
31 March 2010
before allocation
31 March 2009
before allocation
31 March 2008
before allocation
Share capital
Note 5
14,405
14,405
12,530
Share premium
Note 5
94,045
94,045
11,970
Legal reserve
Note 5
1,440
388
280
Regulated reserves
Note 5
-
-
-
Other reserves
Note 5
-
-
-
Retained earnings
Note 5
61,883
116
279
Net profit for the period
Note 5
41,308
76,887
2,154
Note 6
-
-
-
213,081
185,841
27,213
1,972
2,548
266
1,972
2,548
266
EQUITY
Intangible assets
EQUITY AND LIABILITIES
(€ thousands)
1,428
-
1,428
1,947
-
293,343
1
293,342
287,167
12,537
1,261,519
4,536
1,256,983
1,268,161
40,403
TOTAL EQUITY (I)
PROVISIONS FOR LIABILITIES AND CHARGES
Note 6
TOTAL (II)
LIABILITIES
Loans and borrowings
Loans and borrowings from credit institutions
Note 7
617,810
657,485
170
Other loans and borrowings
Note 7
387,307
380,772
11,631
Trade payables
Note 8
15,633
16,554
750
Note 8
6,821
4,983
325
Other payables
Note 8
8,479
3,633
39
Deferred income
Note 11
10
-
9
5,870
16,345
-
TOTAL (III)
1,041,929
1,079,772
12,923
TOTAL EQUITY AND LIABILITIES (I + II + III )
1,256,983
1,268,161
40,403
Other liabilities
(1) Including €7,675 thousand in treasury shares and €397 thousand in treasury shares held as part of the liquidity contract.
94
95
Faiveley transport
1.4.2. Income Statement
1.4.3. Cash flow statement
(€ thousands)
Notes
31 March 2010
31 March 2009
31 March 2008
Sales (exc. VAT)
Note 12
48,565
1,402
1,410
(42,233)
(251)
(195)
6,332
1,151
1,216
(6,541)
(4,803)
(1,531)
Other income
135
195
128
Other expense
(161)
(27)
(29)
-
-
-
(235)
(3,484)
(216)
Amortisation and depreciation charges included in operating project
381
2
4
LOSS FROM OPERATIONS AND AMORTISATION
AND DEPRECIATION CHARGES
146
(3,482)
(212)
37,156
75,161
(274)
36,921
71,677
(490)
(244)
-
9
-
-
-
4,630
5,210
2,635
41,308
76,887
2,154
Cost of sales
GROSS PROFIT
Non-productive fixed costs
Restructuring costs
OPERATING LOSS
Note 15
PROFIT/(LOSS) FROM ORDINARY ACTIVITIES
EXCEPTIONAL INCOME
Note 16
Employee profit-sharing
Income tax
Note 17
NET PROFIT
(€ thousands)
Notes
Cash flow from operating activities:
Net profit
Adjustment for non-cash flow items:
•Depreciation and amortisation charges
31 March 2009
31 March 2008
41,308
76,887
2,154
381
2
4
•Provision charges
1,429
67
552
•Provision reversals
(2,005)
(523)
(1)
•Gains/(losses) on asset disposals
Self financing capacity
Changes in working capital:
* Receivables decrease/(increase)
* Operating liabilities increase/(decrease)
-
-
(9)
41,113
76,433
2,700
19,720
4,531
244
(4,702)
(9,831)
(2,753)
56,131
71,133
191
(3,315)
(388,882)
-
-
-
-
Purchase of financial investments
(1,780)
(4)
(45)
Proceeds from sale of financial investments
10,476
30
185
-
(8,842)
-
Cash flow from investing activities
Purchase of PPE and intangible assets
Proceeds from disposal of PPE and intangible assets
Cash arising from acquisitions of subsidiaries
5,381
(397,698)
140
Proceeds from issuance of share capital
-
1,875
-
Other movements in equity
-
84,135
-
(14,069)
(4,269)
(9,744)
7,552
292,146
-
(32,009)
(480)
-
Cash dividends paid
Proceeds from new borrowings
Repayment of borrowings
Movement in Group current accounts
3,623
(36,405)
3,665
Net cash generated/(used) from financing activities
(34,903)
337,002
(6,079)
Net increase (decrease) in cash and cash equivalents
26,609
10,437
(5,748)
Cash and cash equivalents at start of period
22,217
11,780
17,529
48,826
22,217
11,780
Cash and cash equivalents at end of period
96
31 March 2010
Note 4
97
Faiveley transport
1.4.4. NOTES TO THE PARENT COMPANY
FINANCIAL STATEMENTS
Notes to the parent company financial statements at 31 March 2010.
Total assets on this date amounted to €1,256,983 thousand, and the
income statement recorded a net profit of €41,308 thousand. The
financial period was of 12 months and covered the period from 1 April
2009 to 31 March 2010.
A. Significant events
•• Change of company name:
The Combined General Meeting held on 22 September 2009 endorsed
the change of company name of Faiveley S.A. to Faiveley Transport.
•• Changes in Group governance:
Following the Combined General Meeting of 22 September 2009, the
Supervisory Board elected a new Chairman, with François Faiveley
giving up his position to Philippe Alfroid. Mr. Faiveley considered that
this choice would improve the company’s governance and submitted
it for approval by other Supervisory Board members, who endorsed it.
Mr. Faiveley was elected Vice-Chairman of the Supervisory Board.
The Supervisory Board also appointed Thierry Barel as member of the
Management Board. Mr. Barel joined the Group last July as Deputy
Chief Executive Officer. The Management Board now comprises four
members: Robert Joyeux, Chairman and Chief Executive Officer, Thierry
Barel, Deputy Chief Executive Officer, Erwan Faiveley and Etienne
Haumont, Chief Financial Officer of the Group.
•• Share option plan
he Combined General Meeting of 22 September 2009 delegated to
T
––issuing shares or marketable securities giving right to new or existing
shares of the Company, with, in cases new shares are granted, the
At its meeting of 23 November 2009, the Management Board decided
to allocate, from that date and up to 23 November 2017, options giving
right to subscribe for new shares of the Company, to be issued as
part of a capital increase, for a total amount not exceeding €144,000,
corresponding to 144,000 new shares of a par value of €1 each. The
new shares may be exercised for four years but no later than eight
years after the initial grant. They shares will be issued at a price of
€54.91 each.
•• Liquidity contract:
Pursuant to a contract signed on 17 July 2009, Faiveley Transport has
entrusted investment services provider Oddo Corporate Finance with
implementing a liquidity contract, consistent with the Ethics Code
issued by the AFEI, approved by the Autorité des Marchés Financiers in
its ruling of 22 March 2005 and published to the BALO of 1 April 2005.
This liquidity contract was concluded for an initial period running from
1 July 2009 to 31 December 2009 and is renewed by tacit agreement
by successive twelve months periods. As part of the implementation
of the contract, the Company allocated €500,000 and 10,000 shares
to the liquidity contract.
98
B. Accounting rules and methods
1. Application of accounting rules & methods
The financial statements at 31 March 2010 were prepared in accordance
with accounting rules applicable in France:
––the law of 30 April 1983 and its application decree of 29 November
1983;
––the French General Accounting Plan 1999 as described by regulation
1999-03 of the Comité de la Réglementation Comptable and
subsequent amendments.
The financial statements and the analyses for the year ending 31 March
2010 were prepared and presented in accordance with accounting
rules and in compliance with the principles of:
––prudence;
––independence of years;
––going concern;
––consistency of methods.
The historic cost method was used to determine accounting values.
2. Change of methods during the year
No changes of methods were introduced by the Company during the
year.
3. Measurement methods
The measurement methods described below were used for the various
items included in financial statements.
The financial statements were prepared taking account of the
following provisions applicable to financial years beginning on or after
1 January 2005:
––CRC regulation n°2002-10 on asset amortisation and impairment;
––CRC regulation n°2004-06 on the definition, recognition and
measurement of assets.
3.1. Non-current assets
Non-current assets are recognised at their acquisition cost or their
transfer value in the case of those related to the restructuring
operations of previous financial years. In order to recognise an
unfavourable technical variance, the latter must be assessed at each
year-end. In case there is an indication of impairment, a writedown
charges must be recognised in the financial statements.
3.2. Amortisation and depreciation of non-current assets
Depreciation and amortisation of non-current assets acquired before
1 April 1993 are measured either on a declining-balance or on a
straight-line basis, in accordance with tax requirements. Subsequent
acquisitions are amortised or depreciated solely on a straight-line
basis, in order to match economic reality more closely. Accelerated tax
depreciation is recognised as far as permitted by tax regulations.
The principal periods of amortisation and depreciation are as follows:
•• Intangible assets:
––Software
––Patents
•• Property, plant and equipment
––Buildings
––Misc. equipment and fittings
––Equipment and industrial equipment
––Vehicles
––Office equipment
––IT equipment
––Furniture
1 to 3 years
9 to 15 years
15 to 20 years
10 years
3 to 8 years
4 years
3 to 10 years
3 to 5 years
5 to 10 years
3.3. Equity investments
Equity investments are measured at their purchase and/or contribution
value. At the end of the financial year, a provision for impairment is
established when the realisable value is lower than its acquisition
value. The realisable value is the value in use for the Group, measured
on the basis of future discounted cash flows.
3.4. Receivables from equity investments
Receivables from equity investments correspond to loans provided
to Group companies, as well as current accounts receivable from
subsidiaries (excluding current tax receivables resulting from the
Group tax return). A provision is established whenever there is a risk
of non-recovery.
3.5. Accounts receivable and payable
Accounts receivable and payable are recorded at nominal value.
Provisions have been made for bad and doubtful debts according to
the likelihood of non-recovery, as estimated at the end of the financial
year. Old accounts for which non-recovery has become a certainty are
reported as an expense and the corresponding provisions reversed
through the income statement.
3.6. Marketable securities
Marketable securities are recognised at their fair value on the basis of
their quoted price or their liquidation value at the year-end. Marketable
securities are subject to impairment when their liquidation value at
the financial year end is lower than their acquisition value.
Treasury shares are included in this caption in accordance with CRC
Regulation 2008-15 on treasury shares.
3.7. Share capital
All capital increases are registered at the nominal value of the shares
issued. Should the issue price be greater than the nominal value, the
difference is recorded in the share premium reserve.
3.8. Provisions for liabilities and charges
Provisions represent liabilities whose due date or amount have not
been precisely determined. At 31 March 2010, the provisions amounted
to €1.7 million (excluding the provision for the stock options plan for
€0.2 million) and were composed of provisions for litigation-related
expenses of €0.3 million and provisions for foreign exchange losses
of €1.4 million (based on foreign currency accounts receivable and
payable valued at the exchange rate on the balance sheet date).
3.9. Share purchase option plan of 27 September 2005
When share purchase option plan beneficiaries exercise their rights,
a capital loss will be recognised in Faiveley Transport’s financial
statements. This loss has been estimated at €599 thousand at
31 March 2009. Since the plan will run over 7 years, a provision had
been recognised in the financial statements for the year ending
31 March 2009. During the 2009/2010 financial year, 62,505 options
were exercised by the beneficiaries. On this occasion, an exceptional
expense of €244 thousand was recognised. As a result, the provision
for capital losses relating to outstanding options was updated, and
amounted to €226 thousand at 31 March 2010.
3.10. Financial borrowings and liabilities
Financial liabilities and borrowings are valued at their nominal value
and comprise:
––a loan of €417.5 million provided by the bank pool to finance the
reorganisation of Faiveley Transport‘s shareholding structure;
––accrued interest on borrowings of €0.2 million;
––bank overdrafts and cash pooling (managed by the Group treasury
department) of €200 million;
––a loan of €37.1 million from its subsidiary Faiveley Transport Malmö;
––current accounts with Group companies of €350.1 million;
––the balance on the special reserve for employee profit sharing.
3.11. Financial Instruments
•• Exchange risk
As part of its operations, Faiveley Transport is exposed to exchange
risks arising from its holding company activities (including exchange
hedging for the benefit of subsidiaries) or loan agreements and on
inter-company balances.
In 2009/2010, the major currencies concerned are the US Dollar, the
Pound Sterling, the Japanese Yen, the Czech Koruna, the Swedish
Krona and the Chinese Yuan. The risks are hedged through forward
purchases or sales of currencies and tunnel options.
These external hedge transactions aim to protect the Group against
unfavourable fluctuations in foreign currencies that could affect
the profit on a contract and are subject to an internal counterpart
agreement with subsidiaries.
Information on financial derivatives currently in place to hedge against
exchange risk on forward purchases or sales are detailed in the notes
to the consolidated financial statements (see note E.16 – Financial
instruments and financial risk management).
•• Interest rate risk
The interest rate risk to which the company is exposed arises as a
result of its long-term borrowings. Faiveley Transport concluded a
credit agreement with a pool of nine banks resulting in fixed-term
borrowings of €407 million and USD 50 million.
This credit agreement is based upon variable Euribor and US Dollar
Libor interest rates. The agreement commits the company to cover
itself on at least 60% of the principal due until December 2012.
99
Faiveley transport
To manage its risk, the Treasury Department has implemented a
hedging strategy using swaps, tunnels and caps for interest rates
and options.
The exposure of interest rates on loans in Euros is covered for
between 76% and 87% of the total debt on Euro interest rate
depending on fluctuations for the 2010/2011 period to a maximum
rate of 3.08%. The exposure of interest rates on loans in US Dollar
is 100% covered for the 2010/2011 period to a maximum average
rate of 2.93%, .
•• Foreign exchange transactions
Income and expenses in foreign currencies are recorded at the
exchange rate on the transaction date.
Foreign currency denominated borrowings, receivables and cash are
recorded in the balance sheet at the exchange rate on the balance
sheet date. Any exchange difference arising from the revaluation
of these items at these exchange rates is taken to “translation
differences”.
A provision for exchange risk is set up for unrealised exchange
losses derived from overall exchange rates on existing assets and
liabilities.
3.12. Income statement
2. Financial investments
Faiveley Transport continues its activities of providing services to the
Group as the holding company. Sales of €48.6 million for the year
ended 31 March 2010, increased greatly compared to the previous year
(€1.4 million). This significant increase was primarily due to the transfer
of all assets and liabilities of Faiveley Transport, dated 31 March 2009.
•• Movement in the year:
As in the past, Faiveley Transport rebilled a significant portion of
its expenses to its subsidiaries. The operating loss was €0.2 million,
compared with a loss of €3.5 million at 31 March 2009. This movement
was primarily due to fees and commissions of €3 million incurred in
2008/2009 as part of the transactions related to the acquisition of
minority shareholdings in Faiveley Transport.
The net finance income was €37.1 million, compared to €75.2 million in
the previous year. This movement was primarily due to lower dividends
paid over the period, at €45.6 million, compared to €78.7 million in
2008/2009.
The net financial income was also affected by the €11.8 million (over
12 months) interest charged on borrowings, relating to the new bank
debt taken out on 23 December 2008, compared to €3.5 million in
2008/2009 (3 months only).
The €4.6 million income tax refund recognised at 31 March 2010 reflects
the €5,651 thousand tax grouping gain achieved for the financial year,
offset by the €1,021 thousand tax charge incurred by the German
subsidiary, Faiveley Transport Holding Gmbh & Co KG.
Gross at 1 April
2009
Acquisitions/
Increases
Disposals/
Decreases
Gross at
31 March 2010
Equity investments
412,497
166
-
412,663
Loans receivable from equity investments
177,828
1,546
(22,058)
157,316
375
115
(56)
434
590,700
1,827
(22,114)
570,413
Less than 1 year
Between 1 and 5
years
More than 5 years
Net at
31 March 2010
42,671
78,944
35,701
157,316
160
225
49
434
42,831
79,169
35,750
157,750
Less
than 1 year
More
than 1 year
Net at
31 March 2010
Net at
31 March 2009
Net at
31 March 2008
TOTAL
•• Maturity of receivables:
Loans and receivables from equity investments
TOTAL
3. Receivables
36,990
-
36,990
41,109
709
C. Notes to the balance sheet and income statement
Other receivables – advances and
payments to account
3,532
-
3,532
7,756
140
Tax grouping
1,744
-
1,744
1,354
-
1. Non-current assets
TOTAL
42,266
-
42,266
50,219
849
•• Changes in the period:
Intangible assets (1)
General fittings, fixtures and miscellaneous
Equipment, office and computer equipment, furniture
Assets in progress
Advance and deposit on non-current assets
TOTAL
Gross at
1 April 2009
Acquisitions
Disposals
Gross at
31 March 2010
389,915
-
(15)
389,900
1,138
2
(511)
,629
228
-
(89)
139
3,782
3,313
-
7,095
-
-
-
-
395,063
3,315
(615)
397,763
(1) This caption includes the €384.8 million unfavourable technical variance recognised as part of the transfer of all assets and liabilities of Faiveley Transport and Faiveley Management during
the financial year ended 31 March 2009. This technical variance was subject to an impairment test at 31 March 2010, which did not highlight the need for a writedown charge to be recognised
in the financial statements.
At 1 April 2009
Charges
Decreases
At 31 March 2010
3,855
318
(15)
4,158
General fittings, fixtures and miscellaneous
720
52
(511)
261
Equipment, office and computer equipment, furniture
194
11
(89)
116
4,769
381
(615)
4,535
TOTAL
4. Cash and marketable securities (gross)
31 March 2010
Marketable securities
(1)
Cash
Bank overdrafts
TOTAL
31 March 2008
40,012
31,959
11 750
208,947
202,698
201
(200,133)
(212,440)
(170)
(48,826)
(22,217)
11,781
5. Equity
Share capital
Share
premium
Reserves
Retained
earnings
Profit
for the year
Total
27,213
12,530
11,970
280
279
2,154
-
-
108
2,046
(2,154)
-
Dividends paid
-
(2,060)
-
(2,209)
-
(4,269)
76,887
Profit for the year
-
-
-
-
76,887
1,875
84,135
-
-
-
86,010
14,405
94,045
388
116
76,887
185,841
-
-
1,052
75,835
(76,887)
Dividends paid
-
-
-
(14,068)
Profit for the year
-
-
-
-
41,308
41,308
Other movements
-
-
-
-
-
-
14,405
94,045
1 440
61,883
41,308
213,081
Other movements
100
31 March 2009
(1) of which treasury shares €7,675 thousand, increased by €397 thousand in treasury shares held as part of the liquidity contract.
•• Amortisation, depreciation and writedowns:
Intangible assets
Trade and other accounts receivable
(14,068)
101
Faiveley transport
5.1 Share capital
•• Option plans to purchase shares of 22 September 2009
At 31 March 2010, the share capital of the company was €14,404,711, divided into 14,404,711 shares of €1 each, fully paid. Nominative shares recorded
in the name of the same holder for at least two years (7,645,120 shares at 31 March 2010) benefit from a double voting right.
The Combined General Meeting of 22 September 2009 delegated to the Management Board its powers in relation to:
––issuing shares or marketable securities giving right to new or existing shares of the Company, with, in cases new shares are granted, the
•• Analysis of Share Capital
Shares
31 March 2009
Ordinary
Created
Repaid
31 March 2010
Nominal value
6,291,902
-
-
6,759,591
1
Amortised
-
-
-
-
-
With priority dividends
-
-
-
-
-
8,112,809
-
-
7,645,120
1
14,404,711
-
-
14,404,711
1
With double voting rights
TOTAL
•• Treasury shares
At its meeting of 23 November 2009, the Management Board decided to allocate, from that date and up to 23 November 2017, options giving right
to subscribe for new shares of the Company, to be issued as part of a capital increase, for a total amount not exceeding €144,000, corresponding
to 144,000 new shares of a par value of €1 each. The new shares will be issued at a price of €54.91 each.
•• Main features of the current share subscription option plan:
Date of allocation
Number of shares Of which Executive
allocated
Committee
23 November 2009
144,000
128,500
TOTAL
144,000
128,500
Subscription
price
Options
cancelled
Options Number of options
exercised
outstanding
54.91
-
-
144,000
-
-
144,000
The company held directly and indirectly 1.97% of its share capital.
5.2 Issue Premium
•• Employee participation in the share capital of the company
FCPE Faiveley held 17,400 shares (0.12%) in the company.
The issue premium represents the difference between the nominal value of securities and the amount, net of costs, received in cash or kind at the
time of the issue. There were no movements over the 2009/2010 financial year.
•• Option plans to purchase shares of 27 September 2005
6. Regulated provisions and provisions for liabilities and charges
On request from Faiveley Transport, Faiveley S.A. (now called Faiveley Transport) implemented a share option plan for the benefit of key Faiveley
Transport Group management (excluding the managers who invested in Faiveley Management).
1 April 2009
Charges
Reversals
Reclassifications
31 March 2010
This share option plan, covering a maximum of 325,000 Faiveley S.A. shares, was approved by the General Meeting of 27 September 2005 and
implemented by the Management Board. Granted for a period of 3 years, this authorisation lapsed on 27 September 2008.
Accelerated depreciation
-
-
-
-
-
-
-
-
In order to meet its obligation to transfer these shares to the plan beneficiaries, Faiveley S.A. (now called Faiveley Transport) began a share buyback
programme at the end of 2005 and currently holds 283,889 treasury shares (including 6,550 shares via its liquidity contract). The options to
purchase shares if exercised will give rise to the purchase of existing ordinary shares in Faiveley Transport.
1,977
1,428
(1,947)
-
1,458
Provisions for taxes
-
-
-
-
-
Provisions for litigation
7
-
-
272
280
•• Principle features of the current option plan to purchase shares :
Provisions for option plan
284
-
(58)
-
226
Provisions for employee compensation
280
-
-
(272)
8
2,548
1,428
(2,005)
-
1,972
Less than 1 year
More than 1 year
31 March 2010
31 March 2009
31 March 2008
249,406
368,404
617,810
657,485
170
Date of allocation
24 November 2005
29 December 2005
Number of shares Of which Executive
allocated
Committee
221,760
31,360
Subscription
price
Options
cancelled
26.79
47,040
Options Number of options
exercised
outstanding
80,425
94,295
6,720
-
29.75
-
-
6,720
31,360
-
30.48
4,480
-
26,880
25 October 2006
6,720
-
33.77
-
-
6,720
15 November 2006
4,480
-
34.13
-
-
4,480
1 December 2006
11,200
-
34.01
-
-
11,200
2 April 2007
26,880
-
42.80
-
-
26,880
19 February 2008
26,880
6 720
32.31
-
-
26,880
29 March 2008
13,440
-
34.08
-
-
13,440
16 July 2008
22 600
22 600
40.78
-
-
22,600
372,040
60,680
51,520
80,425
240,095
22 June 2006
TOTAL
(*) The exercise price is equal to the average price of the twenty trading days prior to the Management Board deciding on the allocation, less a discount of 5%.
Following the departure of certain holders since the Management Board implemented the plan and options exercised by that date, options
granted at 31 March 2010 relate to 240,095 shares and 41 beneficiaries.
Provisions for liabilities
Provisions for liabilities and charges
-
7. Loans and borrowings
Loans and borrowings from credit
institutions
Employee profit-sharing
-
65
65
65
65
8,562
28,558
37,120
34,208
9,773
Credit balance
350,122
-
350,122
346,499
1,793
TOTAL
608,090
397,027
1,005,117
1,038,257
11,801
Other borrowings (1)
(1) Other borrowings at 31 March 2010, corresponds to the loan contracted with its subsidiary Faiveley Transport Malmö for €37.1 million.
During the financial year, loans and borrowings from credit institutions decreased by €39.6 million. This decline primarily related to a €27.3 million
repayment of the loans taken out on 23 December 2008. This debt is subject to a number of financial conditions relative to the Group’s financial
structure and profitability.
The option can be exercised from the second anniversary of their grant date by the Chairman of the Management Board, subject to the presence
of the beneficiaries within the Faiveley Transport Group on the day of exercise and their acceptance of the option regulations. To date, 80,425
options have been exercised.
Taking account of the acquisition value of the Faiveley Transport shares to service this option plan to purchase shares, the exercise price granted
and the value of the Faiveley Transport share at 31 March 2010 applicable to options not yet exercised the unrealised capital gain amounts to
€587 thousand.
102
103
Faiveley transport
11. Prepaid expenses
The Faiveley Transport Group must comply with the following three financial conditions:
––leverage ratio (net consolidated borrowings/consolidated EBITDA): must not exceed 3.0 at 31 March 2010. At this date, the ratio was 1.73;
––gearing ratio (net consolidated borrowings/consolidated equity): must not exceed 1.50 at 31 March 2010. At this date, the ratio was 0.60;
––total bank guarantees must not exceed 22% of consolidated order book. At 31 March 2010, this was 17.50%.
Operating expenses
Non-compliance with one of these conditions could make the outstanding debt repayable immediately.
2009/2010
2008/2009
2007/2008
690
346
262
Financial expenses
-
-
-
The €12.3 million decline in bank overdrafts was the other reason for the reduction in loans and borrowings from credit institutions.
Exceptional expenses
-
-
-
“Other borrowings” increased by €2.9 million. This was due to the Swedish Krona-denominated loan taken out with the Faiveley Transport Malmö
subsidiary, the currency of which increased in value over the year. At year-end, the translation of this loan resulted in a €7.5 million increase in
borrowings, which was nonetheless offset by a €4.6 million repayment made during the year.
Prepaid expenses
690
346
262
Operating income
10
-
9
Financial income
-
-
-
Exceptional income
-
-
-
Deferred income
10
-
9
2009/2010
2008/2009
2007/2008
48,559
799
862
Credit current account balances increased by €3.6 million at 31 March 2010.
8. Other liabilities
Less than 1 year
More than 1 year
31 March 2010
31 March 2009
31 March 2008
15,633
-
15,633
16,554
750
Tax and social security liabilities (1)
6,821
-
6,821
4,983
325
Group tax payable
2,923
-
2,923
1,060
-
Other
5,556
-
5,556
2,573
39
TOTAL
30,933
-
30,933
25,170
1,114
Trade payables
(1) The tax liability relating to the company Faiveley Transport Holding Gmbh KG and Co KG was recorded under Other liabilities at 31 March 2009, in the amount of €1,282 thousand. At 31 March
2010, this liability was reclassified under Tax and social security liabilities, for €1,621 thousand.
9. Deferred expenses
None.
Accrued expenses included in the following balance sheet captions
Loans and borrowings
2009/2010
2008/2009
2007/2008
312
2,534
136
Trade payables
1,755
2,107
260
5,738
3,538
87
Liabilities for non-current assets
-
-
-
Other
475
1,435
30
TOTAL
8,280
9,614
513
Accrued income included in the following balance sheet captions
2009/2010
2008/2009
-
-
Trade receivables
245
1,574
401
Other receivables
183
163
-
Supplier receivables
581
6
-
18
31
-
-
-
152
1,027
1,774
553
TOTAL
104
Rental/hire
TOTAL
Geographic area
6
603
548
48,565
1,402
1,410
2009/2010
2008/2009
2007/2008
France
16,887
1,402
1,410
EU
24,912
-
-
6,766
-
-
48,565
1,402
1,410
13. Research and Development costs
None in Faiveley Transport’s parent company financial statements.
14. Personnel costs
2009/2010
2008/2009
2007/2008
Salaries
9,455
199
141
Social security charges
3,042
51
54
12,497
250
195
2009/2010
2008/2009
2007/2008
45,673
78,700
-
491
34
230
(9,858)
(3,456)
229
TOTAL
15. Financial income and charges
10.2 Accrued income
Cash
TOTAL
10.1 Accrued expenses
Tax and social security receivables
Segment
Non EU
10. Accrued expenses and accrued income
Receivables from associates
12. Analysis of sales by segment and geographic area
2007/2008
Cash dividends received
Income from marketable securities
Interest on current accounts, loans, borrowings and overdrafts
Realised foreign exchange gains and losses
829
-
-
Charges and reversals on financial investments
577
522
(522)
(556)
(639)
(211)
37,156
75,161
(274)
Other financial income and charges
Total
105
Faiveley transport
16. Exceptional income and expenses
18. Translation differences
2009/2010
2008/2009
2007/2008
Income/(expense) on disposals of financial investments
-
-
9
Other (1)
(244)
-
-
Total
(244)
-
9
(1) Exceptional expenses related to options exercised over the year.
17.1. Analysis of income tax between the current tax charge, exceptional income and accounting profit
Exceptional income/(expense)
Type of translation difference
Foreign currency denominated bank accounts
17. Income tax
Profit from ordinary activities
Positive and negative translation differences arise on the translation of trade receivables and payables and on borrowings, loans and foreign
currency denominated bank accounts at balance sheet date exchange rates.
Tax
After tax
36,922
-
36,922
(244)
-
(244)
Effect of tax grouping
-
4,630
4,630
Accounting profit
36,678
4,630
41,308
17.4. Deferred and unrealised tax position
Description
Amount
Taxes payable on:
Regulatory provisions:
Provisions for price increases
-
Total increase
-
Prepaid tax on:
Non deductible temporary timing differences on expenses (deductible in subsequent year):
--Provision for Directors’ fees
--Paid holidays
--Liability translation adjustment
100
296
5,870
Total decrease
6,317
Net deferred tax position
6,317
--Other (organic, construction work)
106
68
93
-
-
-
1,191
-
1,191
5,696
Foreign currency denominated current accounts
38
-
38
12
Foreign currency denominated trade payables
98
-
98
1
1,428
-
1,428
5,870
TOTAL
D. Other information
2. Information on non-tax deductible expenses
Non-tax deductible expenses totalled €23,050 at 31 March 2010.
3. Average workforce
The average workforce significantly increased due to the transfer of employees of Faiveley Transport as part of the transfer of all assets and
liabilities of this company which occurred on 31 March 2009. The workforce of foreign offices is included.
2009/2010
2008/2009
2007/2008
57
-
-
Supervisors
9
3
2
Employees
-
-
2
66
3
4
Managers
None
101
-
No significant event occurred after the year end.
17.3. Exceptional tax assessments
-
-
Faiveley Transport heads a tax grouping that comprises Faiveley Transport Tours, Faiveley Transport Amiens, Faiveley Transport Gennevilliers,
Faiveley Transport NSF and Espas.
At 31 March 2010, tax loss carry forward of €1.2 million remained. Since these losses originated prior to the merger between Faiveley S.A. and
Faiveley Transport, they may be offset in the future against Faiveley Transport’s profits.
101
-
1. Post balance sheet events
Without the tax grouping, the taxable profit of Faiveley Transport alone, which was a loss of €16.8 million, would not have attracted any income
tax.
Unrealised
gains (liability)
Subsidiary loans
17.2. Tax grouping
Tax savings recognised as part of this tax grouping are recognised and retained by the parent company. At 31 March 2010, the tax grouping
generated a tax saving of €5.6 million, offset by the €1 million tax charge of its German subsidiary.
Provision
for exchange loss
Subsidiary borrowings
Bank borrowings
Before tax
Unrealised
losses (asset)
Translation
differences
covered by
hedge contracts
TOTAL
4. Directors’ remuneration
Management and Supervisory Board members received a total of €100,600 thousand in attendance fees.
5. Identity of parent company
Faiveley Transport fully consolidates the subsidiaries in which it holds, directly or indirectly, over 50% of the share capital. Companies in which
Faiveley Transport exercises joint control, whether directly or indirectly, are proportionally consolidated.
51
107
Faiveley transport
6. Transactions with related parties
C/ Hedging commitments
Share of financial investments, receivables, payables, income and expenses concerning related parties:
•• Interest rate risk
2009/2010
2008/2009
2007/2008
Equity investments
412,663
412,497
27,487
Receivables from associates
157,316
177,829
-
Trade receivables
36,990
41,108
697
Other receivables
2,509
1,211
-
387,242
380,707
11,565
11,890
11,811
-
Loans and other borrowings
Trade and other payables
Other liabilities
3,702
3,082
-
48,559
798
-
Financial expenses
2,252
76
83
50,247
78,869
312
Financial income
7. Off-balance sheet commitments
Guarantees – securities-collateral given to financial institutions
2009/2010
2008/2009
2007/2008
60,907
42,427
-
Retirement benefits (1)
Parent company guarantees
Debts guaranteed by collateral:
565
377
48
205,962
217,008
-
-
-
-
289,317
325,578
-
Mortgage over buildings
Shares pledged
Pledge of equipment
-
-
-
(1) Retirement assumptions:
The discount rates are determined by reference to the yields on AAA bonds for the equivalent periods to the commitments at the date of valuation.
The assumptions adopted to calculate the retirement commitments are disclosed in the table below:
Discount rate
Inflation rate
Average rate of salary increase
Yield expected on investments
2009/2010
2008/2009
2007/2008
4.60%
5.50%
5.50%
2.00%
2.00%
2.00%
3.00%
3.00%
3.00%
N/A
N/A
N/A
B/ Finance lease commitments
Description
Materials and
Other
equipment non-current assets
Buildings
Opening value
-
-
-
1,079
1,079
Depreciation and amortisation
-
-
-
-
-
Net value
-
-
-
1,079
1,079
Lease payments for the current period
-
-
-
422
422
Total
-
-
-
422
422
Total
1 year or less
-
-
-
495
495
1 to 5 years
-
-
-
258
258
over 5 years
-
-
-
-
-
-
-
-
753
753
Lease payments:
108
––Instruments recognised under equity
Nominal value
(€ thousand)
Euro borrowings
USD borrowings
Fair value
(€ thousand)
Nominal value
(USD thousand)
Fair value
(USD thousand)
Nominal value
(€ thousand)
Fair value
(€ thousand)
46,947
(718)
34,830
(533)
Swap
115,000
(2,141)
Tunnel
140,000
(1,551)
-
-
-
-
50,000
(193)
-
-
-
-
305,000
(3,885)
46,947
(718)
34,830
(533)
Cap
Total
The Group operates in foreign countries and is therefore exposed to exchange risk as a result of various foreign currency exposures.
The principal currencies concerned are the US Dollar, the Pound Sterling, the Japanese Yen, the Czech Koruna, the Swedish Krona, the Chinese Yuan
and the Indian Rupee. The instruments primarily used are forward purchases and sales. The Treasury Department may also use swaps, options and
tunnels.
––Forward sales used to hedge business transactions at 31 March 2010:
Nominal value
Fair value
(€ thousands)
(€ thousands)
Pound Sterling
39,186
34,818
95
US Dollar
24,382
33,218
(451)
Chinese Yuan
26,225
239,467
(305)
Singapore Dollar
15,417
29,080
-
Swedish Krona
(€ thousands)
12,170
119,262
(96)
Swiss Franc
3,499
5,143
(108)
Australian Dollar
1,180
1,828
(36)
Japanese Yen
904
116,017
(18)
Czech Koruna
116
3,000
(2)
TOTAL
Land
Total
The exposure to interest rates on Euro-denominated borrowings is covered for between 76% and 87% of the total debt drawn down based on Euro
interest rate fluctuations for the 2010/2011 period, to an average maximum rate of 3.08%. The exposure to US Dollar interest rates is 100% hedged
against for the 2010/2011 period at an average maximum rate of 2.93%.
•• Exchange risks
A/ Commitments given
To manage its interest rate risk, the Treasury Department has implemented a hedging strategy using swaps, tunnels, caps and options.
123,079
(921)
––Forward purchases used to hedge business transactions at 31 March 2010:
Nominal value
Swedish Krona
Fair value
(€ thousands)
(€ thousands)
148,076
1,448,385
(€ thousands)
1,037
105
US Dollar
29,810
40,210
Pound Sterling
25,156
22,438
41
Czech Koruna
19,208
507,830
665
Chinese Yuan
13,923
129,280
310
133
258
41
Australian Dollar
TOTAL
236,306
2,199
––A tunnel option valued at CZK 108.4 million, with a negative fair value of €134 thousand at 31 March 2010.
109
Faiveley transport
9. List of subsidiaries and equity investments (in thousands of euro)
•• Derivative instruments
The fair value of derivative instruments used to hedge against foreign exchange, interest rate and raw material risks was recognised in the balance
sheet as follows:
31 March 2010
Unrealised capital gains/(losses) taken to equity
Interest rate hedge
Foreign exchange
hedge
Raw material
hedge
-
2,999
2,999
4,324
1,612
5,936
(4,493)
5
(4,488)
Total
D/ Commitments received
None.
Subsidiary
Faiveley Transport Nsf
Espas
Faiveley Transport
Gennevilliers
Sofaport
E/ Individual right to training
The employees of Faiveley Transport are entitled to request additional training. This year, no continuing education hours were used. At 31 March
2010, a total of 2,429 unused training hours had been accumulated.
F/ Share purchase option plans of 27 September 2005
On request from Faiveley Transport, Faiveley S.A. implemented, a share purchase option plan for the benefit of key Faiveley Transport Group
management (excluding the managers who invested in Faiveley Management S.A.S.).
This share option plan, covering a maximum of 325,000 Faiveley S.A. shares, was approved by the General Meeting on 27 September 2005 and was
implemented by the Management Board. The table in Note C.5.1 “Share capital”, details the share allocations. As at 31 March 2010, 240,095 shares
were outstanding.
The options are exercisable as of the second anniversary date of their allocation by the Chairman of the Management Board, provided the
beneficiary is still employed by the Faiveley Transport Group on the day of exercise and has accepted the options terms and conditions. The shares
are not transferable until the 4th anniversary of the allocation of purchase options. It should be noted that 80,425 share purchase options were
exercised as at 31 March 2010.
G/ Share subscription plan of 22 September 2009
The Combined General Meeting of 22 September 2009 delegated to the Management Board powers in relation to:
- granting share subscription and/or purchase options;
- issuing shares or marketable securities giving right to new or existing shares of the Company, with, in cases new shares are granted, the
The Management Board decided at its meeting of 23 November 2009 to grant, on the same date and up to 23 November 2017, options giving right
to subscribe for new shares in the Company, to be issued through a share capital increase not exceeding an overall nominal amount of €144,000,
corresponding to 144,000 new shares at a par value of €1 each. The new shares will be issued at a price of €54.91.
8. Statutory Auditors’ fees
Statutory Auditors’ fees are included in Note H of the 2009/2010 consolidated financial statements.
Faiveley Transport Acquisition Ab
Share
Capital
Equity
(other
than
share
capital)
% of
share
capital
held
8,100
44,836
983
9,194
29,398
340
Guarantees and
commitSales
ments excluding
issued
tax
Value of
shares
held
Net
value of
shares
held
Loans
and
advances
100
20 000
20 000
-
249
103,781
9,604
-
100
12,758
12,758
-
3,486
26,752
2,636
-
37,308
100
29,398
29,398
-
342
134,019
12,893
-
10,228
100
10,024
10,024
-
-
12,756
1,952
-
5 000
(750)
100
5 000
5 000
19,633
-
14,644
609
-
96
(44)
60
36
36
-
-
-
-
-
114
21,381
100
156,409
156,409
34,169
-
-
(865)
-
Net
profit Dividends
or loss received
Faiveley Transport Plzen
8
396
100
6
6
133
-
2,946
108
-
Faiveley Transport Usa Inc.
1
12,433
100
13,052
13,052
40,380
9,450
,-
(910)
-
3,261
(677)
50
1,486
1,486
-
7,882
4,086
(549)
-
543
19
50
237
237
-
-
1,745
68
-
1
(7)
100
-
-
860
-
-
(1)
-
15,062
16 000
100
23,111
23,111
-
38,274
87,219
(3,603)
45 000,
125
1,059
75
2,007
2,007
155
-
5,897
792
-
10
149,904
100
90,010
90,010
-
-
-
5,464
-
3,913
2,081
50
1,892
1,892
-
-
10,404
1,585
448
871
27,558
100
1,390
1,390
22,971
5,398
103,318
8,485
-
Faiveley Transport do Brasil Ltda.
8,666
5,029
100
4,258
4,258
2,049
-
20,086
3,767
-
Faiveley Transport Italia Spa.
1,424
63,105
98,70
37,827
37,827
31,260
21,504
111,039
4,006
-
56
5,309
100
66
66
-
-
7,116
679
-
Qingdao Faiveley Sri Rail Brake Co. Ltd.(1)
Datong Faiveley Couplers
Systems Co. Ltd. (1)
Faiveley Transport Asia Pacific Co. Ltd.
Faiveley Transport Leipzig Gmbh & Co Kg
Nowe Gmbh
Faiveley Transport Holding Gmbh & Co Kg
Precision Machinery Co. Ltd.
Faiveley Transport Iberica S.A.
Faiveley Transport Tamworth Ltd.
Faiveley Transport Far East Ltd.
Faiveley Transport Lekov a.s.
FMRP
Faiveley Transport Canada Ltd.
2
7,276
100
-
-
3,204
8,847
19,838
2,408
-
2,099
7,320
75
3,529
3,529
-
-
23,650
1,670
-
363
(32)
48
166
166
-
-
-
(300)
-
-
-
100
-
-
-
30,630
161
-
-
(1) Data reported at the local 31 December 2009 year-end
110
111
Faiveley transport
on the financial statements
1.4.5. FAIVELEY TRANSPORT 5 YEAR FINANCIAL SUMMARY
on
the
financial
statements
for the year ended 31 march 2010
2005/2006
2006/2007
2007/2008
2008/2009
2009/2010
a. Share capital
12,529,585
12,529,585
12,529,585
14,404,711
14,404,711
b. Number of ordinary shares in issue
12,529,585
12,529,585
12,529,585
14,404,711
14,404,711
c. Share par value
1
1
1
1
1
d. Number of preference dividend shares (without voting rights) in issue
-
-
-
-
-
e. Maximum number of shares to be issued
1. by conversion of bonds
2. by exercise of subscription rights
3. by exercise of equity warrants
-
-
-
-
-
1,622,968
2,352,315
1,410,338
1,401,867
48,564,676
II. Justification of assessments
(27,050,652)
71,130
73,880
71,223,334
36,482,013
841,095
-
-
(5,209,593)
(4,630,407)
In accordance with our appointment as auditors at your Annual
General Meeting, we hereby report to you for the year ended 31 March
2010 on:
-
-
-
-
-
Pursuant to Article L. 823-9 of the French Commercial Code (Code de
Commerce) relating to the justification of our assessments, we bring
to your attention the following matters:
(6,717,889)
38,626
2,153,971
76,886,871
41,307,869
6,264,793
10,023,668
4,385,355
14,404,711
17,285,653
I. Share capital at year end
II. Operations and results for the financial year
a. Sales (ex VAT)
b. Profit before tax, amortisation, depreciation (and provisions charges and profit-sharing)
c. Income tax
d. Employee profit-sharing for the period
e. Profit after tax, amortisation, depreciation (and provisions charges and profit-sharing)
f. Cash dividends paid
III. Earnings per share
a. Earnings per share after tax, but before amortisation,
depreciation and provision charges
(2.23)
0.01
0.01
5.31
2.85
b. Earnings per share after tax and amortisation, depreciation and provision charges
(0.54)
0.00
0.17
5.34
2.87
0.50
0.80
0.35
1.00
1.20
6
5
4
3
66
b. Total payroll for the period
525,357
909,731
141,148
199,443
9,447,515
c. Total sums paid as social welfare over the period (charities, social security contributions, etc.)
115,823
230,223
53,599
51,164
3,049,558
c. Cash dividend per share
IV. Workforce
a. Average workforce for the period
––the audit of the accompanying financial statements of Faiveley
Transport,
––the justification of our assessments,
––the specific procedures and disclosures required by law.
These financial statements have been approved by the Management
Board. Our role is to express an opinion on these financial statements,
based on our audit.
I. Opinion on the financial statements
We conducted our audit in accordance with professional standards
applicable in France; those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
involves performing procedures, using sampling techniques or other
methods of selection, to obtain audit evidence about the amounts
and disclosures in the financial statements. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made, as well as the overall
presentation of the financial statements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
In our opinion, the financial statements give a true and fair view of the
financial position and the assets and liabilities of the Company as of 31
March 2010 and the results of its operations for the year then ended in
accordance with accounting principles generally accepted in France.
112
As indicated in Note B.3.3. to the financial statements, non-consolidated
investments are valued at their value in use for the Company at
the year-end. Our procedures consisted in assessing the financial
information and assumptions on which these estimates are based
and reviewing the calculations performed by the Company. On this
basis, we assessed the reasonableness of estimates made.
These assessments were performed as part of our audit approach
for the financial statements taken as a whole and contributed to the
expression of the unqualified opinion in the first part of this report.
III. Specific procedures and disclosures
We have also performed, in accordance with professional standards
applicable in France, the specific verifications required by French law.
We have no comment to make as to:
––The fair presentation and consistency with the financial statements
of the information given in the Management Board’s report and
in the documents addressed to shareholders with respect to the
financial position and the financial statements,
––The fair presentation of the information given in the Management
Board’s report on the compensation and benefits paid to relevant
corporate officers as well as commitments granted in their favour
when they assumed, changed or terminated duties or subsequent
thereto.
Pursuant to the law, we have verified that the Management Board’s
report contains the appropriate disclosures as to the identity of and
percentage interests and votes held by shareholders.
Jérôme Burrier
113
Faiveley transport
DRAFT RESOLUTIONS
STATUTORY AUDITORS’
SPECIAL
REPORT
ON REGULATED AGREEMENTS
With Robert Joyeux and Etienne Haumont
In our capacity as Statutory Auditors of your Company, we hereby
present you our report on regulated agreements and commitments.
Memorandum of agreement with the managers and amendment
n°1 – Sale and transfer of Faiveley Management shares to Faiveley S.A.
(which became Faiveley Transport on 22 September 2009)
Pursuant to Article L.225‑88 of the French Commercial Code (Code de
Commerce), we have been advised of the following agreements and
commitments that received the prior authorisation of your Supervisory
Board.
The terms of our engagement do not require us to identify such
agreements and commitments, if any, but to communicate to
you, based on information provided to us, the principal terms and
conditions of those agreements and commitments brought to our
attention, without expressing an opinion on their usefulness and
appropriateness. It is your responsibility, pursuant to Article R. 225‑38
of the French Commercial Code to assess the interest involved in
respect of the conclusion of these agreements and commitments for
the purpose of approving them.
We conducted our procedures in accordance with the professional
guidelines of the French National Institute of Statutory Auditors
(Compagnie nationale des commissaires aux comptes) relating to this
engagement. Those procedures consisted in verifying the information
provided to us with the relevant source documents.
With the Czech company Faiveley Transport Lekov a.s.
Amendment to the shareholder agreement extending the validity of
the shareholder agreement signed on 30 October 2002
Directors concerned: Robert Joyeux and Thierry Barel (Supervisory
Board meeting of 23 October 2009)
This amendment signed on 15 December 2009 extended until 31
January 2015 the effects of the shareholder agreement and reviewed
the conditions concerning the mutual rights to purchase and sell
shares held by the minority shareholder.
Agreements and commitments authorised during previous
years and having continuing effect during the year
In addition, pursuant to the French Commercial Code, we have been
advised that the following agreements and commitments authorised
in previous years have had continuing effect during the fiscal year.
114
As part of its capital restructuring operations, Faiveley Transport signed
a memorandum of understanding (MOU) on 16 October 2008 and an
amendment to this MOU on 17 November 2008 with the managers
and their spouses who are shareholders of Faiveley Management SAS.
As part of this MOU,Robert Joyeux and Etienne Haumont as well as
their spouses have sold their Faiveley Management shares to Faiveley
Transport as follows:
Number
Number
of Faiveley
of shares Transport shares
transferred
received
Persons concerned
Robert Joyeux (and his spouse)
Etienne Haumont
FOR THE YEAR ENDING 31 MARCH 2010
I RESOLUTIONS IN THE ORDINARY SESSION
Agreements and commitments authorized during the year
DRAFT RESOLUTIONS
TO BE SUBMITTED TO THE
COMBINED
GENERAL
MEETING
OF 13 SEPTEMBER 2010 TO CONSIDER THE FINANCIAL STATEMENTS
164,430
140,610
68,513
58,588
According to the provisions of Article 243(ii) of the General Tax Code,
the General Meeting notes the amount of dividends distributed in the
last three financial years:
FIRST RESOLUTION
Approval of the company financial statements for the year ending
31 March 2010
Year
The General Meeting with the quorum and majority for Annual
General Meetings, having considered the management report of the
Management Board and the observations of the Supervisory Board,
on the operations of the Company for the financial year ending
31 March 2010 and on the financial statements of that year, and
having considered the Statutory Auditors’ report on the execution
of their remit for this financial year, approves the company financial
statements for the year ending 31 March 2010, as presented, showing
a profit of €41,307,869.15, and the transactions recorded in these
financial statements and summarised in these reports.
2006/2007
€0.80
2007/2008
€0.35
2008/2009
€1.00
Consequently, the General Meeting discharges the Management
Board for the execution of their duties for this financial year.
SECOND RESOLUTION
Robert Joyeux and Etienne Haumont are committed to retaining all
their Faiveley Transport shares for 2 years with effect from 23 December
2008 and two thirds of their shares for 3 years with effect from 23
December 2008.
Allocation of profit for the year ending 31 March 2010
In addition, during a period of six years with effect from 23 December
2008, any disposal of a block of over 10,000 shares in Faiveley Transport
is subject to a preference right of Faiveley Transport.
Profit for the financial year:
€41,307,869.15
Retained earnings from prior year: €61,882,675.36
Distributable profit: €103,190,544.51
With Francois Faiveley Participations SAS
In the execution of the technical, commercial and administrative
assistance agreement concluded between FFP and Faiveley Transport
on 26 June 2004, and in respect of the reinvoicing of rents and services
provided, Faiveley Transport recorded the following amounts as income
and expense in respect of the year.
In €
Assistance agreement and provision of services
Expenses
Faiveley
Transport
Income
Faiveley
Transport
365,000
1,020
-
2,150
Reinvoicing of rents and charges
General Meetings, on the proposal of the Management Board, agrees
to allocate the profit for the year ending 31 March 2010 as follows:
- Transfer to legal reserve: - Cash dividend of €1.20 per share:
€0
(€17,285,653.20)
The balance of €85,904,891.31 will be transferred in full to retained
earnings.
Taking account of this allocation, the Company had shareholders’
equity of €195,795,733.93.
The dividend will be payable with effect from 17 September 2010.
Pursuant to Article 158 of the General Tax Code, as modified by the
2006 Finance Act, the dividend distributed will give an entitlement,
to individual shareholders only, to a rebate of 40% on the amount
received.
Dividend
If at the time of the payment, the Company holds treasury shares,
the profit distributable corresponding to the unpaid dividend due to
the holding of the shares shall be allocated to the account “retained
earnings”.
THIRD RESOLUTION
Approval of the Consolidated Financial Statements for the year ending
31 March 2010
The Annual General Meeting with the quorum and majority for
Annual General Meetings, having considered the management report
of the Management Board and the observations of the Supervisory
Board, on the operations of the Group for the financial year ending on
31 March 2010, and on the financial statements of that year, and having
considered the report on the Consolidated Financial Statements from
the Statutory Auditors in the execution of their remit for this financial
year, approves the Consolidated Financial Statements of the year
ending 31 March 2010, as presented, and the transactions recorded in
these financial statements and summarised in these reports.
FOURTH RESOLUTION
Directors’ fees
The General Meeting with the quorum and majority for Annual General
Meetings sets the amount for fees allocated to the Supervisory Board
for the financial year ending 31 March 2010 at €175,000.
FIFTH RESOLUTION
Approval of the transactions and agreements under Articles L.225‑86
and subsequent of the Commercial Code
General Meetings, having considered the Statutory Auditors’ special
report on the agreements covered by Articles L.225‑86 and subsequent
of the Commercial Code, notes and approves the terms of this report
and the agreements mentioned therein.
Jérôme Burrier
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Faiveley transport
SIXTH RESOLUTION
Ratification of the appointment of a member of the Supervisory
Board
The Annual General Meeting with the quorum and majority for Annual
General Meetings, ratifies the appointment of Didier Alix, as member
of the Supervisory Board to replace Christian Baffy who resigned, for
a term of office of three years (subject to the adoption of the twelfth
resolution).
SEVENTH RESOLUTION
Authorisation given to the Management Board to trade in the shares
of the Company
The General Meeting with the quorum and majority for Annual General
Meetings, having considered the report of the Management Board,
authorises the Management Board, with the facility to subdelegate
to its Chairman and/or one of its members, with the agreement of
the Chairman and within the law, pursuant to Articles L.225‑207 to
L.225‑217 of the Commercial Code, to purchase shares in the Company.
The General Meeting decides that the acquisition of shares may be
made to:
––ensure the liquidity and support the market for the Faiveley Transport
share by an investment services provider via a liquidity contract
that conforms to the ethics charter recognised by the Autorité des
Marchés Financiers;
––grant them to employees and management of the Group according
to the terms and conditions of the law (options to purchase shares,
employee profit-sharing, allocation of performance-based shares);
––cancel them by way of reduction in capital within the limits set by
law;
––retain them within the limit of 5% of the capital and use them in
exchange or payment, notably as part of acquisitions initiated by the
Company, by way of public offer or other;
––implement all other market practice that is permitted by the Autorité
des Marchés Financiers and more generally all transactions that
conform to the regulations in force.
Purchase of shares in the Company may relate to a number of shares
such that the number of shares held following these purchases
does not exceed 10% of the shares comprising the share capital of
the Company, knowing that the percentage will apply to the capital
adjusted as a function of transactions that may occur subsequent to
the present Meeting.
The purchase, disposal, exchange or transfer may be made by all
means, on the market or principal to principal, including by acquisition
or disposal of blocks, or by recourse to derivative financial instruments,
under the conditions provided by the market authorities and the
regulations. The maximum part of the capital acquired, disposed,
exchanged or transferred by of a block of securities may relate to the
entire buyback programme.
The maximum purchase price is set at €90 per share.
The General Meeting delegates to the Management Board, the power
to adjust the above purchase price in order to take account of the
incidence of possible financial transactions on the value of the share.
Notably in the event of an increase in capital by incorporation of
reserves and the issue of free shares, the price indicated above will be
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DRAFT RESOLUTIONS
adjusted by a coefficient of a multiplier equal to the ratio of the number
of securities comprising the share capital before the transaction and
the number after the transaction.
The total amount allocated to the repurchase programme is
€129.6 million.
This authorisation remains valid for eighteen months with effect from
this day.
The General Meeting confers all powers to the Management Board,
with facility for delegation to decide and implement the buyback
programme, and notably to issue stock exchange instructions, conclude
all agreements, carry out all formalities and make declarations to the
Autorité des Marchés Financiers and every other organisation, proceed
with the adjustment provided by Article R225‑ 138 of the Commercial
Code in the event of share purchases at a price higher than the stock
market price and in general, do everything necessary to complete the
transactions carried out under the present authorisation.
This resolution cancels and replaces the authorisation granted by
the eighth resolution adopted at the Combined General Meeting of
22 September 2009.
EIGHTH RESOLUTION
Appointment of the member of the Supervisory Board representing
employee shareholders
General Meetings, having considered the report of the Management
Board, appoints Serge CHOUMAKER as a member of the Supervisory
Board representing employee shareholders for a term of office of three
years (subject to the adoption of the twelfth resolution).
TENTH RESOLUTION
Authorisation to the Management Board to grant options to subscribe
and/or to purchase shares
The General Meeting with the quorum and majority for Extraordinary
Board and the special report of the Statutory Auditors, authorises the
Management Board, pursuant to Articles L.225‑177 and subsequent
of the Commercial Code, to issue, for the benefit of corporate
management, defined by law and certain members of the personnel
of the Company and the companies related to it, according to Articles
L.225‑185 and subsequent, L225‑186-1 and L225‑197-6 of the Commercial
Code, options giving the right to subscribe for new shares in the
Company or purchase existing shares arising from repurchases carried
out in accordance with the law.
This authorisation, that may be used on one or more occasions, is
given for a period of thirty eight months with effect from the present
Meeting.
However, the grant of options to executive management will only
be made on the proposal of the Remuneration Committee and the
decision of the Supervisory Board.
The General Meeting decides that the allocation of options will be
within a common ceiling to all shares arising from the exercise of
options that will be granted by virtue of the present resolution and/or
those that will be allocated free by virtue of the authorisation arising
from the eleventh resolution to the present Meeting and, sets this
ceiling at 1% of the share capital on the day of the present General
Meeting.
The General Meeting notes that the present authorisation carries,
for the benefit of beneficiaries of options, the express waiver by
shareholders to their pre-emption right to subscribe to shares that will
be issued in respect of the exercise of options.
Capital increases arising from the exercise of options to subscribe for
shares will be considered final by the declaration of the exercise of the
option together with the related payment in cash or by offset against
liabilities of the Company.
Pursuant to Article L.225‑184 of the Commercial Code, the Management
Board, in a special report, will inform the shareholders every year, at the
time of the Annual General Meeting, of the transactions carried out as
part of the present authorisation.
ELEVENTH RESOLUTION
Authorisation to the Management Board to proceed with the
allocation of free shares, called performance shares, that exist or are
to be issued
Board and the special report of the Statutory Auditors, authorises the
Management Board, pursuant to Articles L.225‑197-1 and subsequent
of the Commercial Code to proceed on one or more occasions, with the
allocation of free ordinary shares in the Company, that exist or are to
be issued, to the benefit of executive management defined by law and
certain members of the personnel of the Company and companies
related to it.
NINTH RESOLUTION
•• in the event of grant of options to subscribe, the subscription price
of shares by the beneficiaries will be set by the Management Board
the day the options are granted, within the legal limits;
The General Meeting sets the period of acquisition at the end of the
which the acquisition of ordinary shares by the beneficiaries becomes
final, subject to possible conditions determined by the Management
Board, to a minimum period of 2 years and sets the period of compulsory
retention of the shares by the beneficiaries, at a minimum of 2 years
with effect from the final allocation date of the shares.
Article L.225‑129-6 paragraph 2 of the Commercial Code: Capital
increase under the conditions provided by Articles L.3332-18 and
subsequent of the Labour Code
•• in the event of grant of options to purchase, the purchase price of
shares by the beneficiaries will be set by the Management Board
the day the options are granted, within the legal limits.
This authorisation can be used on one or more occasions and is given
for a period of thirty eight months with effect from the present
Meeting.
The Extraordinary General Meeting decides that the Management
Board will set the period(s) of exercise of options thus granted, subject
to legal prohibition, it being noted that the options may not be valid for
a period in excess of 8 years from their date of grant. The Management
Board may also prohibit the immediate sale of shares subscribed
or acquired, without the timeframe imposed for the retention of
securities exceeding three years from the exercise of the option.
The General Meeting decides that the Management Board may only
proceed with these allocations within the ceiling common to all shares
that will be allocated free by virtue of the present resolution and/or
those that arise from the exercise of options granted by virtue of the
authorisation arising from the tenth resolution of the present Meeting
and, sets the ceiling at 1% of the share capital on the day of the present
General Meeting.
The Extraordinary General Meeting delegates all powers to the
Management Board to implement the present resolution and establish
the regulations of the option plan within the legal and regulatory
limits, and notably to:
The General Meeting notes that shares allocated free may be existing
shares, or shares to be issued and authorises the Management Board,
in the event of an allocation of performance-based shares to be
issued, to increase the capital, at the end of the acquisition period, by
incorporation of reserves, profits or issue premiums to the benefit of
the beneficiaries of the said shares, this decision carries the full waiver
by shareholders of their pre-emption right to subscribe for the benefit
of beneficiaries of free shares from the reserves, profit and premiums
thus incorporated, it being noted that the increase in capital will be
carried out by the sole fact of the final allocation of shares to the
beneficiaries. Existing shares that may be allocated free in respect of
the present authorisation must be acquired by the Company pursuant
to Article L.225‑208 of the Commercial Code.
II RESOLUTIONS IN THE EXTRAORDINARY SESSION
Pursuant to Article L.225‑129-6 paragraph 2 of the Commercial Code,
an Extraordinary General Meeting must be called every three years
to consider a draft resolution designed to increase the capital under
the conditions provided by Articles L.3332-18 to L.3332-24 of the Labour
Code if, in view of the report presented to the General Meeting by
the Management Board, under Article L.225‑102, the shares held by
personnel of the Company and the companies related to it represent
less than 3% of the share capital.
General Meetings authorises the Management Board to proceed with
this increase in capital within the limit of 1% of the share capital and
decides to delegate to the Management Board all powers to ensure its
completion. The General Meeting notes that these decisions include
the waiver by shareholders of their pre-emption right to subscribe for
the benefit of employees for whom the increase in capital is reserved.
This authorisation, that can be used in one or several occasions, is
given for a period of twenty six months with effect from the present
Meeting and cancels any previous authorisations with the same
nature and same purpose.
The General Meeting decides that:
•• approve the list or categories of the beneficiaries;
•• set the period(s) of exercise of the options.
However, the list and categories of beneficiaries whose identity will
be determined by the Management Board, the conditions of grant,
the release and exercise must meet the characteristics set by the
Remuneration Committee and approved by the Supervisory Board,
according to which it will consider the most appropriate to ensure
motivation and loyalty of the beneficiaries of these options.
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Faiveley transport
The General Meeting grants all powers to the Management Board
that will be supported by the Remuneration Committee, within the
limits set above to:
––set the conditions and where appropriate, the allocation criteria for
ordinary shares;
––set within the legal conditions and limits, the dates at which the
allocation will proceed;
––determine the identity of beneficiaries, the number of ordinary
shares allocated to each of them and the means of allocation or
ordinary shares.
The Management Board will inform the Annual General Meeting every
year of transactions carried out by virtue of the present authorisation,
in a special report, pursuant to Article L.225‑197-4 of the Commercial
Code.
TWELFTH RESOLUTION
Revision to the term of office of members of the Supervisory Board
and the related amendment of the Company’s bylaws
Board decides to revise the term of office of members of the Supervisory
Board, which will now be for a period of three years and to proceed
with the related revision of Article 19 of the Company’s bylaws which
will now read as follows:
“The Supervisory Board comprises at least 5 members and no more
than ten. Pursuant to the law, this number, equal to a minimum of
three members, may not exceed eighteen members subject to the
derogation provided by law in the event of a merger.
I. – Appointment
The members of the Supervisory Board, individual or corporate persons,
are elected by the Annual General Meeting of shareholders from
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DRAFT RESOLUTIONS
among its members, by a simple majority, for a period of three years. They are eligible for re-appointment. They take the title of “Director”.
In the event of a merger or a demerger, the appointment may be made
by an Extraordinary General Meeting.
…..
II. – Re-appointment
The Board is renewed every year or every two years, on the basis of
a number of members so that the renewal will be total after three
years. For the application of this rule, the first members to leave will
be appointed by alphabetical order of their surname.
….
V. Member of the Supervisory Board representing employee
shareholders
….
Their term of office is 3 years.
...
The member of the Supervisory Board representing employee
shareholders will be appointed to the vacant position for a further
period of 3 years.
…
III RESOLUTION RELATIVE TO BOTH MEETINGS
THIRTEENTH RESOLUTION
Power for formalities
The General Meeting confers full powers to the bearer of copies or
extracts of the minutes recording its decisions, to carry out the legal
formalities of publication.
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Faiveley transport
Corporate
governance
120
121
Faiveley transport
Chairman of the
Supervisory
Board’s report
on the operation of the Supervisory Board
and on internal control within Faiveley Transport
Treasury Management of the Ministry of Finance, where he carried out
the duties of Deputy Secretary General to the Comité Interministériel
de Restructuration Industrielle (Inter-Ministerial Committee for
Industrial Restructuring). He joined the Vinci Group in 2002, where he
is today responsible for public-private partnerships.
Business address: Vinci Construction France 61, avenue Jules Quentin,
92730 Nanterre.
•• Edmond Ballerin (born 6 January 1943)
Mr. Ballerin was appointed member of the Supervisory Board at the
Combined General Meeting of 27 September 2005. His term of office
ends at the close of the General Meeting called to approve the financial
statements for the year ended 31 March 2014.
Dear shareholders,
Pursuant to the provisions of Article L.225‑68, of the Commercial Code,
I hereby inform you by the present report:
––of the conditions for the preparation and organisation of the work
of your Supervisory Board during the financial year ended 31 March
2010;
––the principles and rules agreed by the Board to determine the
remuneration and benefits of all kind granted to senior executives;
––of the internal control procedures implemented by the Company;
––other information required by Article L.225‑68 of the Commercial
Code;
The current report was discussed and approved by the Supervisory
Board at its meeting of 11 June 2010.
1. Preparation and organisation of the work
of the Supervisory Board
1.1. Composition of the Supervisory Board
Pursuant to the bylaws, the Supervisory Board comprises at least five
members and ten members at most. They are elected for a period of
six years by the General Meeting and may be re-elected.
The Company having adopted the form of a public limited company
with a Management Board and a Supervisory Board at the time of
the General Meeting held on 27 September 2005, the first members,
formerly Directors of the Company constituted as a public limited
company with a Board of Directors, were appointed for an initial period
of three years and were reappointed by the Annual General Meeting
held on 17 September 2008 for a period of 6 years, in accordance with
the Company bylaws.
Every shareholder, individual or corporate, may be elected as a member
subject to holding at least one share in the Company (Article 19 of the
bylaws).
The Supervisory Board elects, from among its own members, a
Chairman and a Vice-Chairman, who are individuals, otherwise their
appointment is null and void. The Chairman and Vice Chairman are
charged with calling board meetings and directing discussions.
Where a legal entity assumes the function of a member of
the Supervisory Board, it is required to designate a permanent
representative who is subject to the same conditions and
requirements and who has the same civil and personal liability as if
they were a member of the Board in their own name.
122
Members of the Management Board, as well as current or former
statutory auditors and their parents or relatives under the laws, may
not be members of the Supervisory Board.
The training and professional experience of members of the Board are
very varied, all having had high level of responsibility in business.
With regard to the six independence criteria defined by the Supervisory
Board in line with those recognised by Euronext at 31 March 2010,
three of the current seven members may be qualified as independent:
Christian Germa, Philippe Alfroid and Maurice Marchand-Tonel.
At 31 March 2010, the Supervisory Board was comprised of seven
members. The average age of the members at 31 March 2010 was 58.
The members appointed by the General Meeting are the following:
•• Philippe Alfroid (born 29 August 1945)
Mr. Alfroid was appointed Chairman of the Supervisory Board on 22
September 2009. His term of office ends at the close of the General
Meeting called to approve the financial statements for the year ended
31 March 2014.
Mr. Philippe Alfroid is an engineer from ENSEHRMA-Grenoble and
holds a Master of Science from Massachusetts Institute of Technology
(MIT). Philippe Alfroid worked as a consultant for the company PSDI.
He then joined Essilor in 1972, where he was Chief Executive Officer
between 1996 and 2009.
•• François Faiveley (born 26 April 1951)
Mr. Faiveley was appointed Vice Chairman of the Supervisory Board on
22 September 2009. His term of office ends at the close of the General
31 March 2014.
Mr Faiveley is a graduate from ESCAE (Business School) in Dijon. He has
served in operational and management positions within the Faiveley
Transport Group since the start of the 1990s.
Business address: Bourgognes Faiveley, 8 rue du Tribourg, 21700 Nuits
Saint Georges.
•• Christian Germa (born 11 February 1970)
Mr. Germa was appointed member of the Supervisory Board at the
Combined General Meeting of 27 September 2005. His term of office
Christian Germa is a graduate of the Ecole Polytechnique and he
is qualified as an ‘Ingénieur des Ponts’. He started his career in the
Mr. Edmond Ballerin is a graduate from Ecole des Cadres. He started his
career with DIM as assistant to the advertising manager before joining
the Bristol Myers Group and then Ciba-Geigy. He joined Faiveley in 1971,
where he held successively the positions of Market Manager, Product
Manager, then Communication Manager.
•• Maurice Marchand-Tonel (born 14 February 1944)
Mr. Marchand-Tonel was appointed member of the Supervisory Board,
by the General Meeting held on 22 September 2009. His term of office
Mr. Maurice Marchand-Tonel is an independent consultant. On
leaving Harvard Business School he started his career with the
Boston Consulting Group with whom he is co-founder of their French
and German offices. Following this, he was appointed Chairman
of Compagnie Olivier, and subsequently Chief Executive Officer of
Sommer and Chairman of Givenchy. He then managed Ciments
Français International, before becoming Chairman of Transalliance
until 1999. In 2000, he became a partner with Arthur Andersen, which
has since become BearingPoint, where he is Senior Advisor since 2004.
Maurice Marchand-Tonel is Chairman of the European American
Chamber of Commerce.
Business address: BearingPoint, Tour EDF, 20 Place de la Défense –
92050 Paris La Défense.
•• Didier Alix (born 16 August 1946)
Mr. Alix was co-opted as a member of the Supervisory Board at its
Board Meeting held on 27 November 2009 following the resignation
of Christian Baffy. His term of office ends at the close of the General
31 March 2014. The ratification of the appointment of Mr Alix as
member of the Supervisory Board will be proposed at the next General
Meeting of the Company.
Didier Alix joined Société Générale in 1971, where he held a number of
positions notably within the Inspection Générale then as Manager of
Central risk Control. He was also manager of branches before being
promoted General Manager of Franfinance, then Manager of Réseau
France. In 1998, he became Deputy General Manager for Individuals
and Businesses. In 2006, he became Deputy Chief Executive Officer
of Société Générale. He currently is Advisor to the Chairman and Chief
Executive Officer.
Business address: Société Générale, DGLE C 35° Etage – 17 cours Valmy
Paris La Defense 7.
•• Christopher Spencer (born 4 November 1962)
Mr. Spencer was appointed member of the Supervisory Board at
the Combined General Meeting of 22 September 2009. His term of
office ends at the close of the General Meeting called to approve the
financial statements for the year ended 31 March 2014. Mr. Spencer was
previously a Director of Faiveley Transport (November 2004 – February
2009).
Mr. Spencer holds both a French and German degree in higher
management studies (ESC Reims and Fachhochschule Reutlingen)
and is a Chartered Accountant. After an experience of over 20 years
in private equity in Europe, of which the last 6 years with the Sagard
funds, which he contributed to establish in the French market, Mr.
Spencer has focused since the start of 2010 on his private investment
activities and as a Business Angel.
Mr. Xavier de Lavallade, responsible for the legal matters of the Group
assumes the role of Corporate Secretary.
The members of the Supervisory Board may be contacted at 143
Boulevard Anatole France, 93200 Saint-Denis.
1.2. Functioning of the Board
The Supervisory Board continuously ensures, by all appropriate means,
the control of the management of the Management Board. The
Supervisory Board is regularly informed by the Management Board by
quarterly reports on the businesses and operations of the Company
and its subsidiaries.
As part of its legal duties, the Board exercises continuous control over
the management of the Company by the Management Board. At all
times of the year, it carries out verifications and checks it considers
appropriate and may request the documents it considers useful to the
completion of its assignment. The Management Board presents an
operating report to the Supervisory Board at last once a quarter.
The Supervisory Board appoints the members of the Management
Board and sets their remuneration. It can also dismiss them in
accordance with the bylaws. It appoints the Chairman of the
Management Board and possibly the Chief Executive(s).
The Supervisory Board checks and monitors the parent company
and consolidated financial statements for the half-year and full year
prepared by the Management Board.
It presents to the Ordinary Annual General Meeting a report containing
its observations on the report by the Management Board as well as
the financial statements for the year.
The Supervisory Board approves the medium and long-term strategy
as presented by the Chairman of the Management Board and
monitors its execution. It oversees the quality of information provided
to shareholders as well as the markets, via financial statements or at
the time of major transactions.
In addition to the provisions of the bylaws, the Supervisory Board
must approve beforehand all significant transactions in respect of
the scope of the Company’s business (acquisitions, disposals, internal
restructuring) or outwith the approved strategy of the business. It is
regularly informed of the financial position, the cash position as well
as the commitments of the Company.
The Chairman calls the Supervisory Board as often as required in the
interests of the Company and at least once a quarter in the fifteen
days following the release of the periodic report by the Management
Board.
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Faiveley transport
The Board may not deliberate validly unless at least half its members
are present and decisions are taken by a majority of members present.
In the event of a tied vote, the Chairman has the casting vote.
At any one meeting, no Director may hold more than one power of
attorney received from a Director who could not be present.
In order to conform to the corporate governance code for listed
companies of AFEP-MEDEF of December 2008, the Supervisory Board
added to the agenda of its meeting on 22 April 2010 the revision to its
internal regulations providing and specifying:
––its powers;
––its operational rules;
––the terms and conditions of meetings, the organisation and
preparation of the work of the Board;
––the information required by members of the Supervisory Board in
the exercise of their duties.
Due to their legal assignments, every member of the Supervisory
Board is bound by fundamental obligations of loyalty, confidentiality
and diligence.
The Board adopted a Charter for members of the Supervisory Board
that defines the criteria adopted to qualify as an Independent Director,
as well as the obligations of members of the Supervisory Board. This
Charter is also available at the registered office of the Company.
It is specifically stated that at least half of the members of the
Supervisory Board must meet the qualification of Independent
Director.
Without prejudice to the requirements for expertise and experience
required, a member of the Supervisory Board is deemed independent
where he/she has no direct or indirect relationship, of whatever
nature, with the Company, its group or its management that may
compromise the exercise of freedom of judgment and participation in
total objectivity in the work of the Supervisory Board.
To be considered an Independent Director, a member of the Supervisory
Board must satisfy the following criteria:
•• m
ust not be or have been an employee or executive of the Company
or an employee or director of a company that it consolidates during
the past five years;
•• n
ot be a senior executive of a company where the Company holds
directly or indirectly a position as Director or has an employee
appointed as such, or a senior executive of the Company (currently
or was in the last five years) is holding the position of Director;
•• m
ust not be a customer, supplier, commercial partner, merchant
banker, financing banker of:
–– significance to the Company or its group,
–– or where the Company or its group represent a significant part of
the activities;
•• m
ust not be directly or indirectly related, nor been directly or indirectly
related during the last five years, to such a customer, supplier,
commercial partner, merchant banker or investment banker;
•• m
ust not have any close family relationship with a senior executive
of the Company;
124
•• m
ust not have been an auditor to the business during the previous
five years;
•• m
ust not be member of the Supervisory Board for more than twelve
years;
•• m
ust not hold, directly or indirectly, a shareholding equal to 10% or
greater in the share capital or voting rights of the Company or in
any one of the companies of its Group, nor be related in any way
whatever to a shareholder holding more than 10% of the Capital or
the voting rights of the Company or a company of its Group.
Every year, at the meeting to consider the financial statements of
the year just ended, the Supervisory Board examines case by case
the position of each of its members with regard to the criteria of
the present clause, and brings to the attention of the shareholders
in its annual report the conclusions of its examination so that the
Independent Directors are identified.
1.3. Frequency of meetings
During the last financial year, the Supervisory Board met five times.
The agendas of the Board meetings were as follows.
•• 2 6 June 2009, with the following agenda:
–– approval of the minutes of the previous meeting;
–– presentation by the Management Board and Supervisory Board’s
observations on the Consolidated and Parent Company Financial
Statements for the financial year ended 31 March 2009;
–– presentation and approval of the report of the Supervisory Board
on the management report prepared by the Management Board
for the Annual General Meeting;
–– presentation and approval of the Chairman’s Report on Internal
Control procedures and conditions of preparation and organisation
of the Board’s work, to be presented to the Annual General
Meeting;
–– consider draft resolutions submitted by the Management Board
at the time of the Annual General Meeting;
–– consider the terms and conditions of the implementation of a
new plan to purchase shares;
–– the list of regulated agreements for the year just ended pursuant
to Article L.225‑86 of the Commercial Code;
–– the list of current agreements concluded under normal conditions
in the year just ended;
–– resignation of a member of the Supervisory Board and co-option
of a new member;
–– governance:
–– creation of Audit and Remuneration Committees, composition,
role – revision of internal rules of the Supervisory Board;
–– composition of the Management Board – revision of the bylaws;
–– representation of employee shareholders on the Supervisory Board
(Article L.225‑71 of the Commercial Code) – revision of the bylaws;
–– other.
•• 22 September 2009, with the following agenda:
–– Approval of the minutes of the previous meeting;
–– Resignation of the Chairman of the Supervisory Board –
appointment of a new Chairman and related remuneration;
–– Composition and operation of the Management Board –
Remuneration of members of the Management Board;
–– Composition of the Audit and Remuneration Committees –
appointment of members and chairmen;
–– Implementation by the Management Board of a new stock option
plan: type of plan, terms and conditions, eligibility, performance
criteria – role of the Remuneration Committee;
–– Launch of a process for the election of a representative of employee
shareholders to the Supervisory Board;
–– Trading update for the quarter;
–– Other.
•• 2 3 October 2009, with the following agenda:
–– Remuneration of members of the Management Board;
–– Implementation by the Management Board of a new stock option
plan: type of plan, terms and conditions, eligibility, performance
criteria;
–– Other.
•• 2 7 November 2009, with the following agenda:
–– Presentation and approval of the half-year financial statements
approved by the Management Board of 27 November 2009;
–– Resignation of Mr. Christian Baffy and co-option of a new member
of the Supervisory Board;
–– Other.
•• 1 8 February 2010, with the following agenda:
–– Annual authorisation of deposits, securities and guarantees
granted to the Management Board;
–– Other.
1.4. Convening meetings of Supervisory Board
Members
In accordance with Article 20-III of the bylaws, the advance notice
required for formal meetings of the members of the Supervisory Board
is four days.
Each member has the option to be represented at the Board meetings
by another member.
The meetings are chaired by the Chairman of the Supervisory Board, or
in his absence, by the Vice-Chairman.
1.5. Information for Supervisory Board Members
Before a meeting, each member receives Group financial information
and a file detailing the items included in the agenda for the meeting.
1.6. Directors’ fees
The details are provided in the Management Report of the
Management Board.
1.7. Location of meetings
In general, meetings of the Supervisory Board take place at the
registered office, however, occasionally, certain meetings are held in
other locations.
1.8. Minutes of meetings
Minutes of Supervisory Board meetings are drafted at the end of each
meeting and are immediately forwarded to Board members upon
request.
1.9. Summary of activity 2009/2010
During the year ended 31 March 2010, the Board met five times. The
attendance rate was 85.7%. All five meetings were chaired by the
Chairman of the Supervisory Board, two by François Faiveley and three
by Philippe Alfroid.
During the financial year, all Management Board members attended
meetings and presented items on the agenda to the Supervisory Board
within their respective areas of expertise.
Group legal counsel has attended all Board meetings and performed a
secretarial role at the meetings.
Pursuant to Article L.225‑238 of the Commercial Code, the Statutory
Auditors were invited to the Board meetings at which the interim and
year end financial statements were presented and approved.
1.10. Rules governing Directors’ remuneration and
other benefits
Directors’ remuneration, as specified in the Management Report, is set
by the Remuneration Committee and the Supervisory Board.
The setting and granting of Directors’ fees is decided at a meeting
between the Chairman and the Vice-Chairman of the Supervisory
Board, which notably take account of the following criteria:
––attendance rate to Board meetings;
––work carried out as part of the various committees;
––time given;
––personal expertise and contribution to the Board’s deliberations.
Directors’ fees totalling €100,600 had been allocated in respect of the
financial year ending 31 March 2009.
In its decision dated 28 November 2008, the Supervisory Board adopted
the Corporate Governance Code derived from the AFEP-MEDEF. This
Code includes:
––the corporate governance code of quoted companies of October
2003;
––the October 2008 recommendations on Directors’ remuneration.
The Supervisory Board has reserve concerning the ban on the
combination of a term of office and an employment contract: it
chose the solution of suspending the employment contract of senior
executives at the time of their appointment as Chairman and Chief
Executive Officer or as Chief Executive Officer, where their seniority in
the business is at least ten years at the time of their appointment.
The terms of office of Management Board members were renewed for
a period of three years following a Supervisory Board’s decision dated
28 November 2008. Mr. Thierry Barel, the Deputy Chief Executive of
the Company, was appointed as member of the Management Board
on 22 September 2009 for a period of three years.
125
Faiveley transport
Management Board members do not benefit from specific
remuneration attached to their term of office as Directors of the
Company.
The meeting of the Management Board of 29 December 2005
approved the terms of its internal regulations which are binding on
every member. The internal regulations notably specify the powers
and duties of the Management Board, the methods governing
meetings and decision taking. The internal regulations are available at
the registered office of the Company. It is now envisaged that, during
the course of next year, some revisions will be made concerning for
example the role and assignments of the Audit Committee as well as
the ethics charter for the members of the Board.
With regards to third parties and according to the bylaws, only the
Chairman of the Management Board may represent the Company,
unless decided otherwise by the Supervisory Board. Mr Robert Joyeux,
Chairman of the Management Board, is the sole Chief Executive Officer
and this without specific limit to his powers.
1. Internal control procedures and risk management
––to ensure the correct internal distribution of relevant and reliable
information that enables each participant to fulfil his/her
responsibilities;
––to establish an organisation with clearly defined responsibilities,
adequate resources and expertise and drawing from appropriate IT
systems, operating procedures or methods, tools and practices;
––to compile and analyse major identifiable risks in the light of the
Company’s objectives and to ensure that procedures are implemented
to manage these risks;
––to ensure that published financial statements and other information
disclosed to the market is reliable.
One of the main objectives or the internal control system is to anticipate
and control the risks inherent to the Company’s area of business and
the risks of errors or fraud, particularly in the area of accounting and
finance.
Internal control is an integral part of the Group’s corporate governance
strategy. The executives of the Faiveley Transport meet every month,
in the form of a steering Committee to follow in the most detailed
and regular manner the operational and financial performance of the
railway business, in addition to the specialised committees described
below.
The Company has developed internal control procedures to ensure
rigorous financial management and control of the risks associated
with its business activities. The procedures also aim to ensure the
drafting of reliable information on the Company’s financial situation
and financial statements for transmission to shareholders.
2.2. Internal control procedures and risk
management
The benchmark for internal control adopted by the Company is that
of the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). In this document, internal control is a process
designed to provide reasonable assurance to achieve the following
objectives: the realisation and optimisation of transactions, reliability
of financial information and compliance with the law and regulations
in force. As with all systems of internal control, it cannot provide an
absolute guarantee that all risks will be eliminated. As a result, the
system of internal control of the Group respects the framework of the
functions recognised by COSO: organisation and principles of control,
process for the evaluation of risks, control activities, documentation
and communication of rules of control, supervision of the systems of
internal control.
The Group has set up an organisation, procedures and processes with
an objective to identify, evaluate and reduce risks. The objective is also
to allocate the resources necessary to control risks, in line with the
strategic and operational objectives of the Group.
In the area of internal control, the Company uses the general principles
defined by the AMF (French Financial Market Authority).
2.1. Group objectives for internal control
procedures and risk management
The purposes of internal control procedures implemented within the
Faiveley Transport Group, which represents 100% of Group sales, are
as follows:
––to establish accurate, reliable information on the Company’s
accounting and financial information;
––to ensure that the information forwarded to the Supervisory Board
of Faiveley Transport and to General Meetings is reliable and is a true
picture of the Company’s business;
––to ensure that the operations carried out within the Company
comply with current legislation and regulations in force and with the
objectives laid down by General Management;
126
The objective of internal control is to ensure the prevention and
control of risks arising from the operations of Group entities and the
risk of errors or fraud, particularly of a financial and accounting nature.
It seeks to ensure compliance with the law and applicable regulations
and the reliability of financial and accounting information.
However, as with all system of internal control, it can only provide
reasonable assurance but cannot in any case provide an absolute
guarantee that these risks will be totally eliminated.
The internal control mechanisms and the risk management in place
within the Group are thus aimed at promoting:
•• internal control in terms of the control environment: the Group’s
control environment is based on:
–– reference documents comprising, among others, a body of rules
summarised in a ‘Corporate Manual’ comprising the rules of best
practice regarding management, submission of tenders, quality
procedures, human resource management, insurances and
finance;
–– “Financial and Accounting Policies”, a standardised benchmark
document for the Group, covering accounting standards,
accounting rules and practices, consolidation and reporting
procedures;
•• a
clear internal organisation appropriate to the Group’s business
model;
•• information systems adapted to the Group’s business and
organisation;
•• identification of major Group risks (market, industrial and
environmental risks);
enhancement of IT security directly related to accounting and financial
information. •• p
rotection and monitoring activities: the protection of IT,
implementation of corrective action plans by operational entities as
part of continuous improvement;
In 2007, the Group started to work on the harmonisation and the
gradual updating of all its technical and IT architecture. It adopted a
rollout approval in the operating unit, of standard IT tools (ERP). The
improvement in IT tools thus contributed to the structure of internal
control and led in time to the achievement of productivity gains.
•• internal communication: the Group endeavours to distribute
relevant and reliable information notably via the Group Intranet site.
An internal newsletter is issued regularly within the Group.
In addition, the Supervisory Board now follows, in its control functions,
the principles set down by the Code of Governance for listed companies
published by the Afep-Medef in December 2008.
2.3. Implementation of internal control
In order to meet the objectives and to structure internal control
activities, the Group has two types of procedures:
––operational procedures;
––internal control procedure relating to the preparation and processing
of financial and accounting information.
2.3.1. Content of operating procedures
The principal standardised operating procedures are as follows:
•• a
“Corporate” manual whose major components concern:
–– management organisation, and the roles and responsibilities of
the main function leaders;
–– key performance indicators;
–– key processes: “management reviews” and “projects reviews”;
–– sales-related procedures;
–– financial procedures;
–– quality management;
–– health, safety and environmental procedures;
–– human resources procedures;
•• c ompilation of Quality instructions describing certain common
processes of operation for the entire Group;
•• a
n “Insurance” manual, which was redrafted following the
placement of all Group policies for civil liability and damages with
the same broker;
•• a
collection of procedures and rules implemented by most Group
subsidiaries as part of ISO certification. These rules relate to the
management of production and purchasing.
2.3.2. Internal control procedures in respect of the
preparation and processing of financial and accounting
information
Since 2006, a reporting and consolidation package integrated into
Hyperion has been in operation. This constitutes a very significant
improvement, both in terms of timing and quality of data production,
as well as in terms of the evaluation of the subsidiaries’ performance
and projects.
2.3.3. Risk management tools
The identification of risks was significantly stepped up in 2008 as
structures were gradually set up: work undertaken was designed to
both define the rules of internal control, and the standardisation and
The importance of the changes to be brought about currently call
upon a close follow-up by the Group’s management of the processes
and roll-out of the base configuration.
The Group has already set up framework procedures to enhance
its internal control, to harmonise practices within the Group and to
optimise its operation.
The management of human resources has the particular attention of
the Group that has set up procedures to manage the remuneration of
operational managers with the assignment of stated objectives and
the measurement of their achievement, thus enabling an assurance
of the permanence of objectives and the remuneration policy of
managers in the entire Group.
Reporting by the subsidiaries on a monthly basis is consolidated by a
unique tool (Hyperion) within the Group’s control and management
function.
The Group has set up a number of key performance and financial
indicators to enable monitoring in a common language within the
Group. It also set up a budgetary process that changed significantly
in 2005. This process is carried out with the participation of
operational management and with strategic overviews decided by the
Management Board. Budgetary reviews are carried out by legal entity
with the involvement of the Executive Committee.
A benchmark of key controls is in course of preparation and the objective
is to identify all the essential controls of the group on the processes
considered as critical by group Management (Faiveley Management
System). This comprises dividing the business into key processes and
sub-processes, considered applicable in the entire business, at a central
level. This process is already in force within industrial management
and shall be rapidly rolled out within the finance function.
Lastly, a process of approval of tenders was set up at the commercial
and financial level to monitor the conditions under which the various
product lines offer their equipment and services to customers.
2.4. Internal control procedures and risk
management for the preparation and
processing of accounting and financial
information
The accounting and financial function, described in the quality
manual is assured by Financial Management for the parent company,
subsidiaries and every establishment.
This department is responsible for:
––supplying General Management, at all times, with relevant
documents and indicators to manage the company’s operations;
––continually anticipate and contribute to the definition of action plans,
their implementation and ongoing monitoring with the company’s
General Management;
127
Faiveley transport
––ensuring the reliability of information supplied by the company’s
accounting and financial information system.
The financial statements are drawn up according to:
––IFRS applicable to listed companies;
––rules laid down by Faiveley Transport, regarding the drafting of
interim and annual financial statements for the parent company
and subsidiaries.
Within the framework of the changeover to IFRS within the Group,
Financial Management has already introduced a number of
accounting procedures and regulations, which are part of the internal
control framework and are covered by the audits conducted by Group
and local auditors.
The preparation of accounting and financial information is carried
out within Financial Management by the consolidation department
that summarises accounting data and produces the Group’s financial
statements.
It forwards to plants and subsidiaries a timetable of tasks and checks
to be carried out for the end of each accounting period. The timetable
also schedules the work of Statutory Auditors to ensure certification
within an acceptable timeframe to allow for the approval of the
financial statements by the Board of Directors.
Working under the direction of Group Financial Controller, the
headquarters controllers supervise the control and reporting of
the subsidiaries and projects in their area. They have the power to
investigate and take action in conjunction with the subsidiary finance
managers and controllers.
Their work results in reports which provide a view of the accounting
and financial position of subsidiaries and projects, compliance with
Group procedures and the definition of improvement plans to be
carried out.
2.5. Internal control players
During the year ending 31 March 2010, the various internal control
players operated as follows:
•• The Steering Committee:
The Steering Committee includes the members of the Management
Board of the Company and certain members of the Supervisory
Board. They meet monthly to evaluate the operational and financial
performance, to discuss matters and to define the major strategic
direction of the Group in its various businesses and in different markets,
and each year, to supervise the preparation of the annual budget.
•• The Remuneration Committee:
The Remuneration Committee comprises three members. It is chaired
by an Independent Director, Mr. Philippe Alfroid, and has Mr. François
Faiveley and Mr. Christopher Spencer as members.
This committee does not follow precise rules; it meets at least twice
annually and its task is to determine the remuneration of general
management and the main senior managers of the Faiveley Transport
Group.
The Remuneration Committee deals specifically with the remuneration
of senior executives; its task is to understand and confirm the
128
allocation of the variable part of the remuneration of the Chairman
of the Management Board of Faiveley Transport, based on individual
performance objectives and on financial statements audited by the
Statutory Auditors.
•• The Audit Committee:
The Audit Committee comprises four members: Christian Germa
(Chairman), Maurice Marchand-Tonel, Philippe Alfroid and Christopher
Spencer.
Its specific task is to examine the interim and annual financial
statements and the internal control procedures of the Faiveley
Transport Group.
•• The Head of Departments’ Committee
This is led by the Managing Director of each industrial subsidiary.
It highlights Group indicators and deals with problems raised at
previous meetings, looking at the solutions implemented. It meets
once a month.
•• The Quality Department
The quality system is steered by a quality department within
every industrial subsidiary and involves the senior management
of each establishment and subsidiary. It is the subject of structured
documentation, bringing together the description of processes as well
as quality procedures.
In order to carry out this assignment, the Audit Committee interviewed
the Statutory Auditors and the Chief Financial Officer of the Group,
it examined the scope of the consolidated companies, it called on
external experts where necessary, proceeded also with an examination
of the risks and significant off-balance sheet commitments, examined
the fees of the Statutory Auditors and the terms and conditions of
their reappointment.
The monitoring of the quality system is carried out by a steering
committee for continuous improvement.
The Audit Committee meets to approve the interim and year end
financial statements. It issues recommendations and prepares a report
to the Supervisory Board of Faiveley Transport.
A monthly management report, D+3 then D+7, is provided to the
parent company by each subsidiary. The parent company then decides
to launch any appropriate action depending on the information
received.
•• The Management Board of Faiveley Transport:
It is responsible for the organisation and the implementation of
accounting and financial internal control, as well as the preparation of
the financial statements prior to their approval.
The Management Board approves the financial statements and
the Supervisory Board carries out the verification and checks on the
financial statements that it deems necessary.
•• The Executive Committee:
Other than the Committees described above, there is an Executive
Committee for the business comprising the General Management,
the Chief Financial Officer, operational and functional managers. It
deals with all subjects concerning the market and the operations of
the Company and it meets once a month.
Depending on the agenda prepared at the previous meeting, people
external to the committee are invited to deal with matters within their
area of responsibility.
•• Financial Management:
Its contribution to internal control primarily comprises:
––management control: monitoring of the budgeting control process;
––accounting and consolidation:monitoring of the quality and reliability
of subsidiaries’ financial statements and of the consolidated financial
statements;
––treasury: reliability of cash generation, delegation of authority, and
management of exchange rate and interest rate risk;
––legal department: monitoring of contractual and insurance risk.
2.6. Monitoring of subsidiaries
Faiveley Transport has a majority or joint shareholding in each of its
subsidiaries.Therefore it has a strong presence on the Board of Directors
and within the managerial structure of each of its subsidiaries.
2.7. Standardisation of Information Technology
Systems
In spring 2007, Group Management decided to commit to a programme
for the integration of IT systems for the whole Group, a change that
will roll out over five to six years.
A global “Moving Forward” programme was initiated to:
––reduce the complexity of the organisation of the Group and to gain
speed;
––standardise processes and share information;
––create more added value for the Group and its customers
This programme is divided into five major projects each one led by a
project manager, and uses tools that are common to all sites (Enterprise
Resource Planning, Product Data Management, Infrastructure,
Business Intelligence and Reporting).
2.8. External controls
External control is carried out by certification agencies. The majority
of the companies within the Group have ISO 9001-2000 certification
and the Group quality management system is regularly audited by an
external agency.
At 31 March 2010, eleven Group entities, including the Group’s main
industrial sites were subject to ISO 14001 certification in relation to
environmental safety management systems.
2.9. Work of the Statutory Auditors
The Statutory Auditors are Deloitte and ECA. They act as Statutory
Auditors to certain subsidiaries included in the consolidation and may
carry out a review of other subsidiaries. This coverage has enabled
the harmonisation of controls carried out for the entire group and
to facilitate the reporting of information made at the time of on-site
checks. The work of the Statutory Auditors is the subject of numerous
and regular exchanges with Financial Management and the Audit
Committee.
2.10. Shareholders’ information
All information on specific terms and conditions relating to shareholders’
participation in general meetings is featured in the Company’s bylaws,
in particular under Title V, Articles 26 and subsequent.
Note also that items likely to have an impact in the event of a public
offer, pursuant to Article L225‑100-3, notably feature in chapter 6 of the
Company’s Reference Document.
2.11. Action plan for the forthcoming financial year
Operational and financial management of Faiveley Transport are
continuing to introduce the new corporate procedures and rules
within the Group. With regard to this, the Moving Forward project
will result in a redefinition of key processes of the business, and as a
consequence, to changes in responsibilities and in organisation. These
actions are designed to improve the Group’s performance.
Operational Management continues to be strengthened to support
the Group’s growth and to improve its performance.
Financial Management focuses its efforts on supporting the “Moving
Forward“ programme and Treasury management.
The preparations for the roll-out of the new ERP “M3” will speed up
the implementation of homogeneous processes within the various
activities and will benefit internal audit.
The Group pays particular attention to the implementation of its
procedures that have been prepared or adapted to changes in the
organisation. Efforts made will be continued and stepped up in
2010/2011.
Management control is undertaken by a team of controllers, at head
office and in each subsidiary. Financial Management organises periodic
reviews to monitor industrial activities and business projects. Every
month it issues a report for General Management and Operational
Management and Product Line Directors.
129
Faiveley transport
Statutory
Auditors’ report
prepared in accordance with Article L. 225-235 of the French Commercial
Code (Code de Commerce), on the report prepared by the Chairman of
the Supervisory Board
for the Year ended 31 March 2010
This is a free translation into English of the statutory auditors’ report issued in French prepared in accordance with Article L.225-235 of the French Commercial Code
on the report prepared by the Chairman of the Supervisory Board on the internal control procedures relating to the preparation and processing of accounting and
financial information issued in French and is provided solely for the convenience of English speaking users.
This report should be read in conjunction with, and construed in accordance with, French law and the relevant professional standards applicable in France.
In our capacity as Statutory Auditors of Faiveley Transport and in accordance with Article L.225-235 of the French Commercial Code (Code de
Commerce), we hereby present our report on the report prepared by the Chairman of your Company in accordance with Article L.225-68 of the
French Commercial Code (Code de Commerce) for the year ended on 31 March 2010.
It is the Chairman’s responsibility to prepare, and submit to the Supervisory Board for approval, a report on the internal control and risk management
procedures implemented by the Company and containing the other disclosures required by Article L.225-68 of the French Commercial Code (Code
de Commerce), particularly in terms of corporate governance.
It is our responsibility:
––to report to you on the information contained in the Chairman’s report in respect of the internal control and risk management procedures
relating to the preparation and processing of the accounting and financial information, and
––to attest that this report contains the other disclosures required by Article L. 225-68 of French company law (Code de Commerce), it being specified
that we are not responsible for verifying the fairness of these disclosures.
We conducted our work in accordance with professional standards applicable in France.
Information on the internal control and risk management procedures relating to the preparation and processing
of accounting and financial information
The professional standards require that we perform the necessary procedures to assess the fairness of the information provided in the Chairman’s
report in respect of the internal control and risk management procedures relating to the preparation and processing of the accounting and
financial information. These procedures consisted mainly in:
––obtaining an understanding of the internal control and risk management procedures relating to the preparation and processing of the accounting
and financial information on which the information presented in the Chairman’s report is based and the existing documentation;
––obtaining an understanding of the work involved in the preparation of this information and the existing documentation;
––determining if any significant weaknesses in the internal control procedures relating to the preparation and processing of the accounting and
financial information that we would have noted in the course of our engagement are properly disclosed in the Chairman’s report.
On the basis of our work, we have nothing to report on the information in respect of the Company’s internal control and risk management
procedures relating to the preparation and processing of accounting and financial information contained in the report prepared by the Chairman
of the Supervisory Board in accordance with Article L. 225-68 of the French Commercial Code (Code de Commerce).
Other disclosures
We hereby attest that the Chairman’s report includes the other disclosures required by Article L. 225-68 of the French Commercial Code (Code de
Commerce).
130
Jérôme Burrier
131
Faiveley transport
Date of appointment and
positions
held
by
Directors
over the last five years
Name and position held
Philippe Alfroid
Date of
appointment
Term of current
mandate
27/09/2005
AGM 2014
2009/2010
2008/2009
Chairman of:
Essilor of America Inc.
Chairman of:
Essilor of America Inc.
Omega Optical Holdings, Inc.
2007/2008
2006/2007
2005/2006
Chairman of:
Bacou Dalloz
Chairman of
the Supervisory Board of:
Faiveley Transport
Deputy CEO of:
Essilor International
Deputy CEO of:
Deputy CEO of:
Deputy CEO of:
Vice-Chairman
of the Supervisory Board of:
Faiveley S.A. (until 22.09.09)
Vice-Chairman
Faiveley S.A.
Vice-Chairman
Faiveley S.A.
Vice-Chairman
Faiveley S.A.
Board member of:
Sperian Protection
Faiveley Transport
Essilor of America
Gentex Optics
EOA Holding Co
EOA Investment Inc
Omega Optical Holding
Essilor Canada LTEE/Ltd,
Pro-Optic Canada,
Shanghai Essilor Optical Company
Board member of:
Sperian Protection
Faiveley Transport
Essilor of America
Gentex Optics
EOA Holding Co
EOA Investment Inc
Pro-Optic Canada,
Board member of:
Bacou Dalloz
Faiveley Transport
Essilor of America
Gentex Optics
EOA Holding Co
EOA Investment Inc
Pro-Optic Canada,
Board member of:
Bacou Dalloz
Faiveley Transport
Essilor of America
Gentex Optics
EOA Holding Co
EOA Investment Inc
Visionweb
Pro-Optic Canada,
Chairman of
Faiveley S.A. (until 22.09.09)
Chairman of
Faiveley S.A.
Chairman of
Faiveley S.A.
Chairman of:
Faiveley S.A.,
Faiveley Transport Tamworth
Board member of:
Board member of:
Faiveley Transport,
Board member of:
Faiveley Transport,
Board member of:
Faiveley Transport,
Board member of:
Faiveley Transport,
Member of the
Supervisory Board of:
Faiveley Transport
Member of the
Faiveley S.A.
Member of the
Faiveley S.A.
Member of the
Faiveley S.A.
Member of the
Faiveley S.A.
Board member of:
Faiveley Transport
Board member of:
Faiveley Transport
Board member of:
Faiveley Transport
Board member of:
Faiveley Transport
Member of the
Faiveley S.A.
Member of the
Faiveley S.A.
Member of the
Faiveley S.A.
Member of the
Faiveley S.A.
Board member of:
Sperian Protection
Essilor of America
Eurogerm
François Faiveley
Christian Germa
Edmond Ballerin
132
27/09/2005
27/09/2005
27/09/2005
AGM 2014
AGM 2014
AGM 2014
Vice-Chairman
Faiveley Transport
Member of the
Faiveley Transport
133
Faiveley transport
Christopher Spencer
134
Date of
appointment
Term of current
mandate
20/03/2009
AGM 2014
26/06/2009
AGM 2014
2009/2010
2008/2009
2007/2008
Member of the
Faiveley Transport
Member of the
Du Pareil au même
Faiveley S.A.
Member of the
Du Pareil au même
2006/2007
2005/2006
Chairman of the Board
of Directors of:
European American Chamber of Commerce (Paris)
of Directors of:
of Directors of:
European American Chamber of Commerce
of Directors of:
of Directors of:
Board member of:
European American Chamber of Commerce (New York)
Board member of:
European American Chamber of Commerce (New York)
Faiveley Transport
Board member of:
Financière Huysmans
Groupe Souchier
Faiveley Transport
Board member of:
Groupe Souchier
DT 2000
Faiveley Transport
Board member of:
Groupe Souchier
DT 2000
Faiveley Transport
Member of the
Faiveley Transport
Member of the
Faiveley S.A.
Member of the
Capsag Holding SAS
AFE SAS
Nil
Chairman of the
Supervisory Board:
Cougard Management
Chairman of the
Supervisory Board:
Cougard Management
Vice-Chairman of the
Supervisory Board:
Cougar Investissments SAS
Vice-Chairman of the
Supervisory Board:
Cougar Investissments SAS
Chairman of:
Cougard International
Chairman of:
Cougard International
Board member of:
SGD
Olympia
Faiveley Transport
Board member of:
SGD
Olympia
Faiveley Transport
Board member of:
Olympa Group of Companies
Faiveley Transport
135
Faiveley transport
Didier Alix *
Date of
appointment
Term of current
mandate
27/11/2009
AGM 2014
2009/2010
2008/2009
2007/2008
2006/2007
2005/2006
Deputy CEO of:
(until 30 September 2009)
Deputy CEO of:
Deputy CEO of:
Deputy CEO of:
Deputy CEO of:
Chairman
and Chief Executive Officer of:
Sogébail
Chairman
Sogébail
Chairman
Sogébail
Chairman
Sogébail
Chairman
Sogébail
Chairman
Komercni Banka
Chairman
Komercni Banka
Chairman
Komercni Banka
Vice-Chairman
Komercni Banka
Vice-Chairman
Komercni Banka
Member of the
Faiveley Transport
Société Générale Marocaine de Banques
Member of the
Member of the
Member of the
Groupama Banque
Member of the
Groupama Banque
Board member of:
Crédit du Nord
Franfinance
Yves Rocher
Banque Roumaine de Développement
National Société Générale Bank SAE (NSGB)
Société Générale de Banques au Cameroun
Société Générale de Banques au Sénégal
SG Private Banking Suisse
SGBT Luxembourg
Board member of:
Crédit du Nord
Franfinance
Yves Rocher
Société Générale au Liban
Board member of:
Crédit du Nord
Franfinance
Yves Rocher
Board member of:
Franfinance
Yves Rocher
MISR International Bank
Sogessur
Fiditalia
Board member of:
Franfinance
Yves Rocher
MISR International Bank
Sogessur
Fiditalia
Board member
and Vice-Chairman of:
Société Générale de Banques en Côte d’Ivoire
Board member
Board member
Board member
Board member
Permanent representative
of Salvepar
on the Supervisory Board of:
Latécoère
of Salvepar
Latécoère
of Salvepar
Latécoère
of Salvepar
Latécoère
of Salvepar
Latécoère
* Mr. Christian Baffy resigned his position as Director in November 2009, Mr Didier Alix was co-opted by the Supervisory Board on 27 November 2009 as replacement for Mr. Baffy.
136
137
Faiveley transport
Robert Joyeux
Erwan Faiveley
138
Date of
appointment
Term of current
mandate
27/09/2005
2011
27/09/2005
2011
2009/2010
2008/2009
2007/2008
2006/2007
2005/2006
Chairman of the Management
Board of:
Faiveley Transport
Board of:
Faiveley S.A.
Board of:
Faiveley S.A.
Board of:
Faiveley S.A.
Board of:
Faiveley S.A.
of Directors of:
Faiveley Transport USA Inc
Faiveley Transport Acquisition AB
Faiveley Transport Malmö AB
Faiveley Transport Nordic AB
Faiveley Transport Ibérica
of Directors of:
Faiveley Transport,
of Directors of:
Faiveley Transport,
of Directors of:
Faiveley Transport,
Faiveley Transport Acquisition AB,
Faiveley Transport Malmö AB,
Faiveley Transport Nordic AB,
Faiveley Transport Tamworth,
Faiveley Transport Ibérica,
of Directors of:
Faiveley Transport,
Faiveley Transport Malmö AB,
Faiveley Transport Nordic AB,
Faiveley Transport Tamworth,
Faiveley Transport Ibérica,
Chairman of SAS:
Faiveley Transport Tours SAS
Chairman of SAS:
Faiveley Management SAS
Chairman of SAS:
Chairman of SAS:
Chairman of SAS:
Board member of:
Qingdao Faiveley Sri Rail Brake Co. Ltd
Datong Faiveley Coupler Systems Co. Ltd
Sab Ibérica S.A.
Sab Wabco UK Ltd
Sab Wabco Investment Ltd
Sab Wabco D&M Ltd
Sab Wabco Products Ltd
SW D&M Products Ltd
Sab Wabco Sales Ltd
Faiveley Transport Birkenhead
Faiveley Transport Belgium NV
Faiveley Transport Korea
Shanghai Faiveley Railway
Technology
Transequipos
Ellcon National Inc.
CIM
Board member of:
Sab Ibérica S.A.
Sab Wabco UK Ltd,
Sab Wabco Sales Ltd
Sab Wabco D&M Ltd
SW D&M Products Ltd
Technology
Transequipos
CIM
Board member of:
Sab Ibérica S.A.
Sab Wabco UK Ltd,
Sab Wabco Sales Ltd
Sab Wabco D&M Ltd
SW D&M Products Ltd
Technology
Transequipos
CIM
Board member of:
Sab Ibérica
Faiveley Transport Amiens,
Sab Wabco UK Ltd, Sab Wabco Sales Ltd,
Sab Wabco Investment Ltd,
Sab Wabco D&M Ltd,
Sab Wabco Products Ltd,
SW D&M Products Ltd,
Faiveley Transport Birkenhead,
Faiveley Transport Belgium NV,
Faiveley Transport Korea,
Faiveley Transport Italia,
Technology,
Transequipos
CIM
Board member of:
Sab Ibérica
Faiveley Transport Amiens,
Sab Wabco Investment Ltd,
Sab Wabco D&M Ltd,
Sab Wabco Products Ltd,
SW D&M Products Ltd,
Faiveley Transport Birkenhead,
Faiveley Transport Belgium NV,
Faiveley Transport Korea,
Faiveley Transport Italia,
Technology,
Transequipos
CIM
Manager of:
Faiveley Transport Beteiligungs GmbH
Faiveley Transport Verwaltungs GmbH
Faiveley Transport Leipzig GmbH &
Co.KG
Manager of:
Sofaport
Manager of:
Sofaport
Manager of:
Sofaport
Manager of:
Sofaport
Member of the Management
Board of:
Faiveley Transport
Board of:
Faiveley S.A.
Board of:
Faiveley S.A.
Board of:
Faiveley S.A.
Board of:
Faiveley S.A.
Chairman of SA:
Chairman of SA:
Chairman of SA:
Chairman of SA:
Chairman of SA:
Chairman of SAS:
François Faiveley Participations,
Consortium Viticole & Vinicole de Bourgogne
Chairman of SAS:
Chairman of SAS:
Chairman of SAS:
Chairman of SAS:
Permanent representative of:
FFP chez Société Bourguignonne
d’Exploitation Viticoles
Manager of:
Faiveley Frères, Société Civile Viticole Faiveley, SCI du Dauphiné, SCI Voir Venise,
SCI du 13 square Henri Pâté
Manager of:
Faiveley Frères, Société Civile Viticole
Faiveley, SCI du Dauphiné, SCI Voir Venise,
Manager of:
Manager of:
Manager of:
139
Faiveley transport
Étienne Haumont
Thierry Barel
Date of
appointment
Term of current
mandate
27/09/2005
2011
22/09/2009
2012
2009/2010
2008/2009
2007/2008
2006/2007
2005/2006
Board of:
Faiveley Transport
Board of:
Faiveley S.A.
Board of:
Faiveley S.A.
Board of:
Faiveley S.A.
Board of:
Faiveley S.A.
Board member of:
Transequipos
Sab Wabco UK Ltd, Sab Wabco Sales Ltd
Sab Wabco D&M Ltd
SW D&M Products Ltd
Faiveley Transport India Ltd
Faiveley Transport Tremosnice sro
Faiveley Transport Polska
Board member of:
Transequipos
Sab Wabco D&M Ltd
SW D&M Products Ltd
Board member of:
Transequipos
Sab Wabco D&M Ltd
SW D&M Products Ltd
Board member of:
Sab Wabco D&M Ltd
SW D&M Products Ltd
Transequipos
Board member of:
Sab Wabco D&M Ltd
SW D&M Products Ltd
Transequipos
Manager of:
Manager of:
Manager of:
Manager of:
Manager of:
Faiveley Transport Witten GmbH
Faiveley Transport Remscheid GmbH Faiveley Transport Remscheid GmbH
Faiveley Transport Verwaltungs GmbH Faiveley Transport Verwaltungs GmbH Faiveley Transport Verwaltungs GmbH Faiveley Transport Verwaltungs GmbH
Board of:
Faiveley Transport
Board of:
Faiveley S.A. (since 22 September 2009)
Chairman of SAS:
Managing Director:
Board member of:
Faiveley Transport Management
Acquisition AB
Sab Wabco Wabco Uk Ltd
Sab Wabco Ltd
Sab Wabco D&M Ltd
SW D&M Products Ltd
Faiveley Transport Birkenhead Ltd
Faiveley Transport Tresmonice
Faiveley Transport Leipzig GmbH
& Co.KG
Ellcon
Faiveley Transport Pilzen s.r.o
Shijiazhuang Jiaxiang Precision
Machinery Co Ltd
Prontoshop
Transequipos
Chairman of SAS:
KIS (up to 30 April 2009)
Chairman of SAS:
KIS
Board member of:
Photo-Me International (up to 3rd July 2009)
Prontoshop
Board member of:
Photo-Me International
Prontoshop
Manager of:
Faiveley Transport Verwaltungs
GmbH
140
141
Faiveley transport
Directors’
remuneration
Comparative table of the remuneration of each Management Board Member
2008/2009
2009/2010
Amounts due
Amounts paid
Amounts due
Amounts paid
Fixed remuneration (gross before tax)
-
422,308
-
450,092
Variable remuneration* (gross before tax)
-
295,020
-
347,630
-
Robert Joyeux,
Table summarising the remuneration and options and shares granted to each Management Board member
2008/2009
2009/2010
723,551
803,839
Value of options granted during the financial year
-
-
Value of performance-based shares granted during the financial year
-
-
723,551
803,839
405,249
314,945
-
Robert Joyeux, Chairman of the Management Board and CEO
Remuneration during the financial year
TOTAL
Exceptional remuneration (gross before tax)
-
-
-
Directors’ fees
-
-
-
-
Benefits in kind (company car)
-
6,223
-
6,116
TOTAL
-
723,551
-
803,839
-
194,948
-
203,986
-
206,930
-
107,530
-
Étienne Haumont,
-
-
Directors’ fees
-
-
-
-
-
3,371
-
3,429
-
-
TOTAL
-
405,249
-
314,945
405,249
314,945
-
294,899
-
-
-
293,102
-
783,108
-
-
-
-
-
-
-
-
-
1,078,007
123,604
116,600
-
-
Étienne Haumont, Member of the Management Board
TOTAL
Thierry Barel*, Member of the Management Board
TOTAL
Erwan Faiveley, Member of the Management Board
TOTAL
-
-
123,604
116,600
* Thierry Barel, member of the Management Board since 22 September 2009, did not receive any remuneration or benefits of any kind for the year ended 31 March 2009.
Yes
Work
contract
No
Supplementary
pension
plan
Yes
No
Compensation or
benefits due or likely
to be due as a result
of termination or
change of function
Yes
No
Non competition
compensation
Yes
No
Robert Joyeux Chairman of the Management
Board: Start of term of office: 27/09/2005
End of term of office: 2011
X(1)
X
X
X
Étienne Haumont Member of the
Management Board: Start of term of office:
27/09/2005 - End of term of office: 2011
x
x
x
x
Thierry Barel Member of the Management
Board: Start of term of office: 22/09/2009 - End
of term of office: 2012
x
x
x
x
Erwan Faiveley (2) Member of the Management
Start of term of office: 27/09/2005 - End of
term of office: 2011
X
X
X
X
Thierry Barel,
Directors’ fees
-
-
-
-
-
-
1,797
TOTAL
-
-
-
294,899
-
105,204
-
90 000
-
-
-
-
-
-
-
-
Erwan Faiveley,
Directors’ fees**
-
3,200
-
11,400
Benefits in kind (housing allowance)
-
15,200
-
15,200
TOTAL
-
123,604
-
116,600
* The variable part is measured in relation to both Group and individual objectives. Group objectives are based on EBITDA and cash generation. Individual objectives are specified at the start of
each financial year with line supervisors and to the Remuneration Committee in respect of Executive Committee members. A decision on the final vesting of the variable part of remuneration
based on individual objectives (bonus) is reached following individual interviews and, as regards Group objectives, based on the audited financial statements. These recommendations are
subsequently debated within the Remuneration Committee prior to their submission to the Board.
** Erwan Faiveley receives Director’s fees for participating in various steering committees and for contributing in the Supervisory Board’s work.
(1) The employment contract of Mr. Robert Joyeux is suspended for the duration of his term of office
(2) Mr. Erwan Faiveley is an employee of F.F.P.
142
143
Faiveley transport
Directors’ fees and other remuneration received by the Members of the Supervisory Board
Principal characteristics of the share purchase or subscription option plans
Amounts paid during the
2008/2009 financial year
Amounts paid during the
2009/2010 financial year
Philippe Alfroid
Directors’ fees
Other remuneration
29,400
-
32,800
-
François Faiveley
Directors’ fees
Other remuneration
6,400
-
13,600
-
Christian Germa
Directors’ fees
Other remuneration
15,200
-
22,000
-
Edmond Ballerin
Directors’ fees
Other remuneration
1,600
-
1,600
-
10,400
-
12,800
-
Christopher Spencer
Directors’ fees
Other remuneration
-
-
Didier Alix *
Directors’ fees
Other remuneration
-
-
Stéphane Volant *
Directors’ fees
Other remuneration
10,400
-
3,200
-
Christian Baffy *
Directors’ fees
Other remuneration
-
1,600
-
Denis Grand-Perret *
Directors’ fees
Other remuneration
-
1,600
-
63,000
89,200
Members of the Supervisory Board
Directors’ fees
Other remuneration
TOTAL
* Mr. Stéphane Volant resigned as Director in March 2009, Mr. Denis Grand-Perret resigned as Director in June 2009 and Mr. Christian Baffy resigned as Director in November 2009.
** Mr. Didier Alix was co-opted as a member of the Supervisory Board on 27 November 2009 following the resignation of Mr. Christian Baffy. He did not receive any remuneration in respect of
the year ended 31 March 2009.
Share subscription and purchase options granted to each Management Board member by the issuer and all Group companies
Number
and date
of plan
Nature of
options
Value of options
using the
method per the
consolidated
financial
statements
Robert Joyeux
None
None
None
None
None
None
Étienne Haumont
None
None
None
None
None
None
23/11/2009
Subscription
€19.58
40,000
€54.91
23/11/2017
None
None
None
None
None
None
Name of Management Board
members
Thierry Barel
Erwan Faiveley
144
Number
of options
granted during
the period
Exercise
price
Exercise
period
Information on share purchase or subscription options
Date of Meeting
Date of Management
Board Meeting
27/09/05
24/11/05
29/12/05 22/06/06 25/10/06
15/11/06
22/09/09
01/12/06 02/04/07 19/02/08 29/03/08 16/07/08
23/11/09
Total number of shares
which may be subscribed
221,760
6,720
31,360
6,720
4,480
11,200
26,880
26,880
13,440
22,600
144,000
Of which the number
which may be purchased
by members of the
Management Board:
Thierry Barel
-
-
-
-
-
-
-
-
-
-
40,000
Date from which options
can be exercised
24/11/07 29/12/07 22/06/08 25/10/08 15/11/08 01/12/08 02/04/09 19/02/10 29/03/10 16/07/10 23/11/13
Expiry date
23/11/12 28/12/12 21/06/13 24/10/13 14/11/13 30/11/13 01/04/14 18/02/15 28/03/15 15/07/15 23/11/17
Exercise price*
€26.79
€29.75
€30.48
€33.77
€34.13
€34.01
€42.80
€32.31
€34.08
€40.78
€54.91
Number of options
subscribed at 31 March 2010
80,425
-
-
-
-
-
-
-
-
-
-
Number of options
cancelled or expired
47,040
-
4,480
-
-
-
-
-
-
-
-
Options remaining at the
end of the period
94,295
6,720
26,880
6,720
4,480
11,200
26,880
26,880
13,440
22,600
144 000
*The exercise price is equal to 95% of the average 20 trading days preceding the date of the Management Board meeting at which the options were granted.
Options to subscribe or purchase shares granted to the non executive employees holding the highest number of shares and options
exercised by the latter
Total
number
of options
granted/ Weighted
shares average
subscribed
price 24/11/05 29/12/05 22/06/06 25/10/06
15/11/06 01/12/06 02/04/07 19/02/08 29/03/08 16/07/08 23/11/09
Options granted by the
issuer and all companies
in the scope of the share
option plan, to the 10
employees holding the
highest number of share
options.
189,180
47.76 31,360
-
-
-
-
-
-
6,720
Options held on the
issuer and all groups
included in the scope of
the share option plan
during the period, by the
10 employees holding the
highest number of share
options.
19,160
26.79 19,160
-
-
-
-
-
-
-
- 22,600 128,500
-
-
145
-
Faiveley transport
Other information
other
Information
146
147
Faiveley transport
Other information
Group
structure
FAIVELEY TRANSPORT Group simplified structure 1 April 2010
Faiveley Transport
Datong Faiveley Coupler Systems Co Ltd
Faiveley Management Acquisition Ab
50%
100%
100%
100%
100%
Parent Company
ESPAS
FT Group – Majority shareholder
50% owned subsidiaries
FT Group – Minority shareholder
Faiveley Transport Australia
100%
100%
Faiveley Transport Korea Ltd
100%
100%
Faiveley Transport Nordic A.B
Faiveley Transport Polska Z.O.O
100%
100%
Faiveley Transport Tresmonice s.r.o
Sab Wabco Sharavan
2%
F.M.R.P
Complementary partner
100%
Faiveley Transport N.S.F
49%
48%
Faiveley Transport Asia Pacific Ltd
100%
100%
100%
100%
100%
Faiveley Transport Canada Ltd
Faiveley Transport Railway Trading Co Ltd
Faiveley Transport Far East Ltd
F.M.T Shanghai Co Ltd
100%
100%
F.T.M.T Singapore Pte Ltd
F.T.M.T Taiwan Ltd
100%
49%
F.T.M.T Thailand Co Ltd
Faiveley Transport Lekov A.S.
75%
100%
98%
Faiveley Transport Holding Gmbh & Co Kg
Faiveley Transport Witten Gmbh
o.o.o Faiveley Transport
100%
100%
Faiveley Transport Birkenhead Ltd
Faiveley Transport Iberica SA
Faiveley Transport Belgium
Transequipos S.A.
100%
42,73%
100%
Faiveley Transport Do Brasil
100%
57,27%
100%
100%
72%
28%
Faiveley Transport Leipzig Gmbh & Co Kg
Faiveley Transport Verwaltungs Gmbh
Sab Wabco Uk Ltd
51%
Shanghai Faiveley Railway Technology Co Ltd
100%
Faiveley Transport Italia Spa
Faiveley Transport Tamworth Ltd
98,7%
100%
100%
100%
Faiveley Transport Plzen
Faiveley Transport USA
100%
Ellcon National Inc
Qingdao Faiveley Sri Rail Brake Co Ltd
148
100%
75%
50%
50%
Nowe Gmbh
Shijiazhuang Jiaxiang Precision Machinery Co Ltd
149
Faiveley transport
Other information
Certificate
of persons responsible
for the Annual Report
“We confirm that, to our knowledge, the financial statements have been prepared pursuant to the applicable accounting standards and provide
a true and fair view of the assets, financial position and profit of Faiveley Transport and all the companies included in the consolidation, and that
the management report provides a fair presentation of the business, the results and financial position of Faiveley Transport and all the companies
included in the consolidation as well as a description of the principal risks and uncertainties they confront.”
Chairman of the Management Board Faiveley Transport
Member of the Management Board of Faiveley Transport
Chairman and CEO of Faiveley Transport
Chief Financial Officer of Faiveley Transport
Robert Joyeux
Etienne Haumont
Statutory
Auditors’ fees
Article 222-8 of the general regulations of the AMF
(Autorité des marchés financiers)
Fees payable to the Statutory Auditors and members of their network, within the framework of assignments relating to the closing of accounts at
31 March 2010, as well as fees paid at 31 March 2009 and 31 March 2008 were as follows:
ECA
2009/2010
2008/2009
Parent Company
237
Subsidiaries
287
Deloitte
2007/2008
2009/2010
2008/2009
2007/2008
334
30
234
309
30
212
287
76
205
293
-
-
-
-
-
-
524
546
317
310
515
323
Legal, tax, corporate
-
-
-
-
-
-
Other
-
-
-
-
-
-
Sub-total other services
-
-
-
-
-
-
524
546
317
310
515
323
Audit :
Statutory Auditors, certification, review
of individual and consolidated financial
statements:
Other assignments directly related to the audit
assignment
Sub-total audit fees
Other services:
TOTAL
150
151
Design:
Photo: Christophe Recoura
Translation: RWM Translation Services
LimitedLiabilityCompanywithaManagementBoard
andaSupervisoryBoard
withasharecapitalof€14,404,711
CarrefourPleyel-143,boulevardAnatole-France
FR-93285Saint-DenisCedex-France
Tel.:+33(0)148136500
Fax:+33(0)148136554
www.faiveleytransport.com
E-mail:[email protected]

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