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2012 / 2013 FINANCIAL REPORT
2
Faiveley Transport 2012/2013 Financial report
CONTENTS
FINANCIAL REPORT
1.
1.1
1.2
1.3
1.4
1.5
Management report
of the Management Board
Group operations 2012/2013 and consolidated
financial statements
Report on Faiveley Transport’s parent company
financial statements at 31 March 2013
Information on the share capital
Corporate and management bodies
Corporate and environmental responsibility
Faiveley transport
4
6
SOCIAL
AND ENVIRONMENTAL
RESPONSIBILITY
7
8.
Environmental information
8.1
134
8.4
Energy savings, water management
and biodiversity: key indicators
Practical measures implemented to limit
environmental damage
The latest technical innovations that protect
the environment
Corporate and social improvements
9.
Workforce information
138
9.1
9.2
138
9.3
9.4
Human resources indicators
Work-related accidents, health and safety
conditions and arduous nature of work
Anti-discriminatory policy
Labour relations
10.
Corporate responsibility
146
10.1 Local, economic and social impact
10.2 Integration of environmental issues
into supplier relations
146
20
22
25
35
2.
Faiveley Transport consolidated
financial statements
36
2.1
2.2
2.3
2.4
2.5
2.6
Consolidated balance sheet
Consolidated income statement
Statement of comprehensive income
Consolidated cash flow statement
Consolidated statements of changes in equity
Notes to the consolidated financial statements
36
38
39
40
41
42
3.
Statutory Auditors’ report
on the consolidated financial statements
92
Faiveley Transport
parent company financial statements
94
4.
4.1
4.2
4.3
4.4
4.5
Balance sheet
Income statement
Cash flow statement
Notes to the parent company financial statements
Faiveley Transport five-year financial summary
5.
Statutory Auditors’ report on the parent
company financial statements
6.
7.
94
96
97
98
115
8.2
8.3
CORPORATE
GOVERNANCE
11.
116
Report by the Chairman
of the Supervisory Board
11.1 Preparation and organisation
of the Supervisory Board’s work
11.2 Internal control and risk management procedures
Statutory Auditors’ special report
on related-party agreements
and commitments
118
Draft resolutions
120
12.
13.
132
132
136
137
143
144
145
146
148
150
150
154
on the report prepared by the Chairman
158
Directors’ remuneration
160
OTHER INFORMATION
14.
126
164
Certificate of persons responsible
for the annual report
166
15.
Statutory Auditors’ fees
167
16.
Organisation chart
168
2012/2013 Financial report Faiveley Transport
3
j FINANCIAL
REPORT
4
1.
Management report
of the Management Board
1.1
Group operations 2012/2013 and consolidated
Report on Faiveley Transport’s parent company
financial statements at 31 March 2013
Information on the share capital
Corporate and management bodies
Corporate and environmental responsibility
20
22
25
35
2.
Faiveley Transport consolidated
financial statements
36
2.1
2.2
2.3
2.4
2.5
2.6
Consolidated balance sheet
Consolidated income statement
Statement of comprehensive income
Consolidated cash flow statement
Consolidated statements of changes in equity
Notes to the consolidated financial statements
36
38
39
40
41
42
3.
92
4.
Faiveley Transport
parent company financial statements
94
4.1
4.2
4.3
4.4
4.5
Balance sheet
94
Income statement
96
Cash flow statement
97
Notes to the parent company financial statements 98
Faiveley Transport five-year financial summary
115
5.
Statutory Auditors’ report on the parent
company financial statements
116
Statutory Auditors’ special report
on related-party agreements
and commitments
118
Draft resolutions
120
1.2
1.3
1.4
1.5
6.
7.
6
7
5
j
FINANCIAL REPORT
1. MANAGEMENT REPORT
OF THE MANAGEMENT BOARD
To the Combined General Meeting of 12 september 2013
Ladies and gentlemen,
We have convened this General Meeting, in compliance with legal and
regulatory requirements, to submit for your approval the Faiveley Transport
annual and consolidated financial statements for the year ended 31 March
2013.
•
In accounting terms, the Wabtec accrued income was recorded in
the balance sheet under “Other current assets” for an amount of
€12.3 million (US$15.8 million). In the income statement, only the
portion corresponding to damages for the period between 2007
and the end of March 2013 was recognised, i.e. €8.6 million (before
expenses). The balance of €3.7 million, corresponding to damages
for future periods, was recognised as a liability in the balance sheet
under “Current liabilities”. The total positive impact on the 2012/2013
operating profit was €6.2 million, after taking into account legal costs.
This positive impact is composed of €1.7 million corresponding to
the refund of costs incurred in the past and recognised under “other
income”, and €4.5 million corresponding to net damages recognised
under gross profit.
•
The Combined General Meeting of 14 September 2012 delegated
authority to the Management Board to proceed with the allocation
of free ordinary shares in the Company, either in existing shares or
shares to be issued, within the limit of 1% of the share capital on the
date of the General Meeting.
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 were approved
by the Management Board on 31 May 2013, and were presented to the
Supervisory Board and approved at their meeting of 31 May 2013.
This report has been compiled pursuant to Articles L. 232-1 paragraph 2
and L. 233-26 of the Commercial Code. It was made available to the
shareholders prior to the General Meeting in accordance with legal and
regulatory requirements.
The annual financial statements of Faiveley Transport and the consolidated
financial statements have been compiled in accordance with legal and
regulatory rules of presentation and valuation.
Highlights:
•
•
6
To partly refinance the acquisition of US company Graham-White
Manufacturing Co., completed on 3 February 2012, and diversify its
financing sources, on 12 April 2012 the Group finalised its first private
placement bond issue in the US with two institutional investors, for a
total of US$75 million. This bond issue was made up of two tranches:
one for US$30 million, with a 10-year final maturity and redeemable
between 2017 and 2022, and a US$45 million bullet loan with a 10year maturity. The average fixed interest is 4.91% per year.
Faiveley Transport won its legal action against Wabtec in the United
States. On 6 February 2013, the New York Court of Appeals upheld
the jury’s verdict against Wabtec, awarding the companies Faiveley
Transport USA, Faiveley Transport Nordic, Faiveley Transport Amiens
and Ellcon National US$15 million plus US$0.8 million in interest. This
decision particularly punishes the trade secret misappropriation, acts
of unfair competition and unjust enrichment relating to the manufacture
of brake cylinders and actuators that make up brake systems.
As its meeting held on 24 October 2012, the Management Board
decided to implement this delegation and to allocate 10,000 free
performance-based shares to a beneficiary.
At its meeting held on 3 December 2012, the Management Board also
decided to implement this delegation and to allocate free shares. This
decision was made as part of an employee shareholding plan aimed
at a broader population of executives. The programme provides that
an employee holding shares in the Company in a personal capacity
will be granted two free shares for every share held, not exceeding a
limit set for each level of management.
At its meeting held on 15 January 2013, the Management Board
established the final list of beneficiaries and the number of free shares
to be granted. A total of 72,386 shares are thus to be granted to
179 beneficiaries. The allocation of the shares will be final at the end
of a two-year vesting period, or four years for non-French residents.
Thierry Barel and Guillaume Bouhours, both beneficiaries of free shares
under this plan, are subject to an additional retention condition in their
capacity as corporate officers. They must retain at least 50% of shares
granted to them by the Management Board under this new plan after
the end of the vesting period defined by plan regulations. This rule will
apply as long as they do not hold shares of the Company, acquired in
the various plans to grant stock options or free shares of the Company,
worth at least the equivalent of one year’s net salary.
FINANCIAL REPORT
1. Management report of the Management Board
1.1 GROUP OPERATIONS 2012/2013 AND CONSOLIDATED FINANCIAL
STATEMENTS
In accordance with legal provisions, the financial statements of companies
under direct or indirect control of Faiveley Transport were consolidated
at 31 March 2013 with those of the parent company. The principles and
conditions of this consolidation for the financial year 2012/2013, the related
consolidation scope and the restatements undertaken in accordance with
the accounting techniques of consolidation are presented in the notes to
the consolidated financial statements.
1.1.1
E
in Europe, organic sales growth was 3%, with a strong business activity
in Italy, as well as an increase in project deliveries, especially in France,
in the UK and in Benelux;
•
sales in the Asia-Pacific region grew by 5%, primarily driven by the
significant increase in project deliveries in Russia, as well as by growth
in South-East Asia and India. Sales to China were virtually unchanged
during the financial year;
•
North and South America reported organic growth of 4%, thanks
to the delivery of projects in the “Transit” segment, which offset the
decline in the “Freight” segment.
The Services activity achieved an excellent year with sales growth of 22%,
including organic growth of 9% and the contribution of the acquisition of
Graham-White (primarily a Service business).
CHANGE IN GROUP STRUCTURE
The financial year saw a merger between Faiveley Transport Ibérica SA
(acquiring company) and Transequipos SA. For accounting and tax
purposes, this merger is retroactive to 1 April 2012.
1.1.3
•
CONSOLIDATION METHODS
The year ended 31 March 2013 had a normal duration of 12 months.
The Group’s functional and presentation currency is the Euro. Figures are
expressed in thousands of Euros unless indicated otherwise.
1.1.2
On a like-for-like basis, this sales growth reflects the following
developments by region:
SUBSIDIARY OPERATIONS
During the financial year, revenues from the original equipment business
were stable on a like-for-like basis.
The growth experienced by the Group confirms both the strength and
balance of its strategic business model, with a presence in all geographic
regions and all market segments and a wide product range, both in original
equipment and in services.
E
SALES BY ACTIVITY
ANNUAL SALES
2012/2013
By region of delivery
2012/2013
2011/2012
Europe
563,225
544,978
Americas
155,368
106,263
Asia-Pacific
262,640
243,043
6,473
6,239
987,706
900,523
Rest of World
TOTAL GROUP
Faiveley Transport generated sales of €988 million for the full 2012/2013
financial year, an increase of 9.7% compared to the previous year. On a
like-for-like basis, organic growth was 3.3%, in line with forecasts made
at the beginning of the year. Over the year, the acquisition of GrahamWhite had a positive contribution of 4.5% and there was a positive foreign
exchange effect of 1.9%.
2011/2012
Energy & Comfort
22%
19%
Brakes & Safety
20%
26%
Access & Information
17%
19%
Services
41%
36%
The Services activity achieved sales growth of 22% during the financial
year, including organic growth of 9%, and now accounts for 41% of the
Group’s total sales. This significant increase reflects the success of sales
initiatives aimed at expanding the Group’s range of services, as well as
buoyant Italian and French markets and the contribution of the recent
acquisition of Graham-White (primarily a Services business).
Within original equipment operations, Energy & Comfort experienced a
year of strong growth whilst the relative share of Brakes & Safety fell, due
in particular to the slowdown in the American freight market and the fall
in the number of locomotive deliveries in China.
7
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FINANCIAL REPORT
1.1.4
CONSOLIDATED IFRS
FINANCIAL STATEMENTS
OF FAIVELEY TRANSPORT
The various items making up operating profit may be analysed as follows:
1.1.4.1 Published financial statements
INCOME STATEMENT
2012/2013
2011/2012
Sales
987,706
900,523
EBITDA(1)
% of sales
127,454
12.9%
108,219
12.0%
Profit from recurring operations
% of sales
112,299
11.4%
94,689
10.5%
Operating profit
% of sales
111,110
11.2%
93,272
10.4%
Net finance cost
(13,628)
(15,185)
Income tax
(33,871)
(26,912)
Net profit from continuing
operations
% of sales
63,611
51,175
6.4%
5.7%
Net profit
63,611
51,175
Minority interests
(4,333)
(3,747)
59,278
6.0%
47,428
5.3%
14,232,102
14,012,090
4.17
3.38
GROUP SHARE OF NET PROFIT
% of sales
Average number of shares(2)
Net earnings per share
(1) Operating profit + amortisation and depreciation.
(2) Excluding treasury shares.
Operating profit
Profit from recurring operations totalled €112.3 million, or 11.4% of sales.
After allocation of restructuring costs and net proceeds from the disposal
of non-current assets, the Group’s operating profit increased by 19% to
€111.1 million, or 11.2% of sales, a year-on-year increase of 0.8 margin
percentage point. Sales growth and strict control over sales, general
and administrative costs led to this significant increase despite a decline
in the gross margin rate. The main events of the financial year include
the positive effect of the successful trial against Wabtec in the US (with
a €6.2 million positive impact on operating profit out of a total net gain
of €10 million) and a major loss provision booked on the RER Brussels
project, due to technical difficulties in the development of sliding steps
and on-board doors.
2012/2013
2011/2012
Sales
987,706
900,523
Gross profit
248,335
233,801
Administrative costs
(76,532)
(78,719)
Sales and marketing costs
(43,790)
(39,898)
R&D costs
(13,363)
(11,111)
(2,351)
(9,384)
112,299
94,689
(1,189)
(1,417)
111,110
93,272
Other income and expenses
from recurring operations
Net expense from non-recurring
operations
OPERATING PROFIT
RECOGNITION OF DAMAGES AND INTEREST AWARDED IN THE WABTEC
TRIAL
Compensation of €8.6 million recognised in the income statement was
€6.2 million after taking account of lawyers’ fees incurred during the
financial year. €4.5 million of this net income was recognised under “Gross
Profit” (compensation for past damage) and €1.7 million in “Other income
and expenses from recurring operations” (reimbursement of lawyers’ fees
incurred in previous financial years).
GROSS PROFIT
The Group’s gross profit for the year ended 31 March 2013 totalled
€248.3 million (25.1% of sales) compared to €233.8 million (26.0% of
sales) for the year to 31 March 2012.
As in the first half of the year, an improved harmonisation in expense
allocation between fixed costs and cost of sales accounted for a
0.2 percentage point decline in gross margin, with no impact on operating
profit. Excluding this effect, the 0.7 percentage point decline in gross
margin was primarily due to the ramp-up of the major new platforms
incurring significant engineering costs and, for some of these platforms,
technical development issues.
SALES, GENERAL AND ADMINISTRATIVE COSTS
Sales, general and administrative costs were €120.3 million in the
2012/2013 financial year, compared to €118.6 million in the previous
year, which was a year-on-year increase of 1.4%.
These costs accounted for 12.2% of sales, compared to 13.2% at
31 March 2012.
On a constant consolidation scope (excluding the acquisition of GrahamWhite and the harmonisation of expense allocation) and foreign exchange
rates, these costs decreased by 2.3% due to continuation of the cost
cutting policy implemented by the Group since 2009/2010.
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 were €13.4 million (1.4% of sales) during the 2012/2013
financial year, compared to €11.1 million (1.2% of sales) for the year
ended 31 March 2012.
OTHER OPERATING INCOME AND EXPENSES
Other operating income and expenses correspond to a net expense
of €2.4 million during the financial year compared to a net expense of
€9.4 million for the year ended 31 March 2012.
8
FINANCIAL REPORT
The reduction in this item during the financial year was primarily due to
lower non-contract related provisions, as well as to the recognition of
€1.7 million in compensation awarded in the Wabtec case (income that
corresponds to the reimbursement of costs incurred in previous financial
years).
•
PROFIT FROM RECURRING OPERATIONS
for the French subsidiaries, the tax law no longer allows a 100%
deduction of financial charges but now rather an 85% deduction,
a new 3% tax on dividends has been introduced and the relative
significance of the CVAE charge, which has been recognised as
income tax since the 2010/2011 financial year, increased with similar
amounts in both years (approximately €2 million).
The income tax rate paid was 30.3%, compared with 38.1% for the year
to 31 March 2012.
As a result, profit from recurring operations increased by 18.6% compared
to the previous financial year. It totalled €112.3 million (11.4% of sales)
compared to €94.7 million (10.5% of sales) the previous financial year.
NET PROFIT FROM DISCONTINUED OPERATIONS
NET EXPENSE FROM NON-RECURRING OPERATIONS
Nil.
The majority of the net expense from non-recurring operations was due
to restructuring costs and the net proceeds from the disposal of property,
plant and equipment and intangible assets.
Restructuring costs amounted to €1 million during the period compared
to €1.2 million the previous financial year. During the 2012/2013 financial
year, these costs primarily related to the Chinese platform door subsidiary.
As at 31 March 2012, the loss on the disposal of non-current assets for
the period was €0.2 million.
Consolidated net profit
The consolidated net profit was €63.6 million compared to €51.2 million
the previous financial year, an increase of 24.3%.
Net profit was influenced by the following items:
NET FINANCE COST
Net finance cost improved to €13.6 million at 31 March 2013, compared
to a net cost of €15.2 million at 31 March 2012. This charge is analysed
as follows:
•
•
•
•
the net cost of financial debt for the year, which totalled €10.6 million
compared to €10.7 million the previous financial year. The sharp fall
in market rates combined with improved hedging offset the additional
interest burden related to the debt incurred to acquire Graham-White;
financial instruments resulted in a net negative impact of €1.4 million;
a favourable impact on the realised and unrealised exchange
adjustments for €1.1 million;
other financial income and expenses resulting in a net negative impact
of €2.8 million, comprising interest on bank guarantees, interest on
pension commitments, the effects of the reversal of discounting the
value of minority shareholder put options and other financial income
and expenses.
MINORITY INTERESTS
Minority interests comprise shares held by minority shareholders in
Shanghai Faiveley Railway Technology (51%-owned), Faiveley Transport
Schweiz AG (80%-owned), Nowe GmbH (75%-owned) and Amsted RailFaiveley LLC (67.5%-owned).
Group share of net profit
Taking the above-mentioned items into account, the Group’s consolidated
net profit for the year increased by 25% to €59.3 million, compared to
€47.4 million the previous year.
Net earnings per share was €4.17 compared to €3.38 for the year to
31 March 2012, an increase of 23%. Net earnings per share is calculated
after deducting treasury shares held by Faiveley Transport at the end of the
financial year, i.e. 382,050 shares at 31 March 2013 and 427,528 shares
at 31 March 2012.
SUMMARISED BALANCE SHEET
2012/2013
2011/2012
Goodwill
651,235
648,981
Net non-current assets
120,260
114,752
44,816
43,598
Current assets
482,715
457,151
Cash and cash equivalents
174,958
210,247
Deferred tax assets
TOTAL ASSETS
1,473,984
1,474,729
Equity
559,860
505,145
Current and non-current provisions
116,918
116,566
Deferred tax assets
Current and non-current financial
debt
INCOME TAX
Current liabilities
Income tax was €33.9 million compared to €26.9 million for the year to
31 March 2012. This rise was due to the increase in profit before tax from
€78 million for the year to 31 March 2012 to €97.5 million for the year
to 31 March 2013. As a percentage, the effective tax rate was 34.7%
for the year compared to 34.4% for the previous year. This increase is
analysed as follows:
TOTAL EQUITY
AND LIABILITIES
•
the poor results recorded by the Chinese subsidiaries, in particular
by the two platform door subsidiaries, FTMT Shanghai and Faiveley
Transport Far East, which benefit from a reduced tax rate;
28,271
22,090
377,441
448,285
391,494
382,643
1,473,984
1,474,729
Goodwill
Goodwill increased by €2 million, from €649 million at 31 March 2012 to
€651 million at 31 March 2013.
This change was primarily due to:
•
the €0.5 million (US$0.6 million) adjustment of Graham-White’s
acquisition goodwill during the allocation period;
•
the translation adjustments of the Ellcon National, Amsted Rail and
Graham-White Manufacturing Co. goodwill (assessed in US$) totalling
€4.6 million;
9
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FINANCIAL REPORT
•
the downward adjustment of Nowe GmbH’s acquisition goodwill
totalling €2.8 million, following the discounting of the put option held
by minority shareholders.
This movement is primarily due to the impact of:
•
•
the net profit for the year: €63.6 million;
Net non-current assets increased from €114.8 million at 31 March 2012
to €120.3 million at 31 March 2013, an increase of €5.5 million.
•
the movement in translation differences: €4.3 million.
The constituents of non-current assets are detailed in the Notes E.2, E.3
and E.4, respectively, to the consolidated financial statements.
Current and non-current provisions
Working capital requirements (WCR)
the payment of a cash dividend to shareholders of the parent company
and other minority shareholders: €(15.4) million;
At 31 March 2013, current and non-current provisions totalled
€116.9 million, compared to €116.6 million at 31 March 2012, a net
increase of €0.3 million.
2012/2013
2011/2012
144,453
144,000
98,524
91,048
3,893
3,811
184,193
179,402
42,304
29,563
Advances and prepayments
received
(120,860)
(124,674)
Net financial debt
Current liabilities
(270,634)
(257,969)
81,873
65,181
Net financial debt, as defined in Chapter 3.3.6 Note E.13.4 to the
consolidated financial statements, decreased by €36.8 million, from
€213.4 million at 31 March 2012 to €176.5 million at 31 March 2013.
Inventories
Work-in-progress on projects
Advances and prepayments paid
Trade receivables
Other current assets
WORKING CAPITAL
REQUIREMENTS
At 31 March 2013, the net WCR was €81.9 million, an increase of
€16.7 million compared to 31 March 2012. This change was primarily due
to an increase in work-in-progress on projects (up €7.5 million) following
the launch or continuation of the engineering phase of numerous projects,
a €4.4 million increase in trade receivables, a €12.7 million increase in trade
payables, a €3.8 million decline in customer advances and the recognition
of accrued income related to the compensation from the Wabtec legal
action under other assets, totalling €12 million.
2012/2013
2011/2012
Short-term investments
22,035
41,080
Factoring (uncalled cash)
46,875
50,205
105,925
118,817
133
144
174,958
210,246
TOTAL CASH AND CASH
EQUIVALENTS
€5.2 million increase in provisions on contracts;
€2.3 million decrease in provisions for pension commitments;
€1 million decrease in provisions for restructuring;
€1.6 million decrease in other provisions for risks and charges.
•
•
•
a €72.3 million decrease in financial debt;
a €35.3 million decrease in cash and cash equivalents;
a €0.2 million decrease in financial receivables.
From a financial point of view, this decrease in net financial debt during
the year was due to the strong level of cash generation, with a free cash
flow of €49 million during the 2012/2013 financial year.
As a result, the Group’s financial structure strengthened during the year:
Cash
•
•
•
•
This change was due to:
(1)
Banks (available cash)
The various items comprising this movement may be analysed as follows:
The programme to sell receivables under non-recourse agreements
totalled €92.8 million at 31 March 2013, the same level as the previous
year. This included €48.1 million from factoring (€46,9 million net of
holdbacks) and €44.7 million from the sale of receivables.
•
the net debt to EBITDA ratio was 1.47 at 31 March 2013 compared
to 1.77 at 31 March 2012;
•
the net debt to equity ratio (gearing ratio) was 31.5% at 31 March
2013, compared to 42.2% at 31 March 2012.
From a financial point of view, Group equity includes treasury shares,
which are held for transfer as part of the share purchase or subscription
option plans. The exercise of share options (179,996 at the end of
March 2013) would result in an increase of €8.9 million in Group cash
and cash equivalents. The value of treasury shares not allocated to stock
option plans amounted to €5.9 million at the 31 March 2013 share price
(including treasury shares held as part of the liquidity contract). The total
value of treasury shares therefore came to €14.9 million, compared to
€17.5 million at 31 March 2012.
Equity
Equity amounted to €559.9 million at 31 March 2013, compared to
€505.1 million at 31 March 2012, an increase of €54.8 million.
(1) Calculated based on net balance sheet values, on a current 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 the consolidated financial statements has been calculated excluding changes in the consolidation scope,
movements in foreign exchange and before provisions for losses on completion deducted from the asset.
10
FINANCIAL REPORT
CASH FLOW STATEMENT
Net profit
2012/2013
2011/2012
63,611
51,175
+ Movements in amortisation, depreciation and provision charges and other
27,929
19,997
Self-financing capacity
91,540
71,172
+ Changes in WCR
(19,929)
(4,030)
Net cash from operating activities
71,611
67,142
Purchase of PPE and intangible assets
(20,426)
(16,920)
Movement in other financial assets
264
204
-
(77,608)
(20,162)
(94,324)
-
-
523
932
Net cash from (used in) acquisitions/sales of subsidiaries and minority interests
Net cash used in investment activities
Proceeds from issue of share capital
Sale (purchase) of treasury shares
Change in share issue and merger premium
-
-
163
(1,936)
Cash dividends paid
(15,381)
(18,094)
Movement in borrowings
(78,218)
57,707
Net cash from (used in) financing activities
Other equity movements
(92,913)
38,609
Net foreign exchange difference
(3,060)
1,169
Impact of increase/(decrease) in value of cash equivalents
3,614
1,516
Cash and cash equivalents at start of period
206,823
192,711
CASH AND CASH EQUIVALENTS AT END OF PERIOD
165,913
206,823
Self-financing capacity
Net cash used in investment activities
At 31 March 2013, self-financing capacity was €91.5 million, a significant
increase of 28.6% compared to the year-end at 31 March 2012
(€71.2 million).
Investments in property, plant and equipment and intangible assets
increased by €3.5 million during the year. Financial investments were
stable compared to the previous year (€0.2 million).
This change was due to the increase in 2012/2013 net profit, i.e.
€63.6 million, compared to €51.2 million in the previous year, offset by a
€6 million increase in deferred tax. Amortisation and provision charges
increased by €1.4 million during the year and the cost of share-based
payments rose by €0.5 million.
Net cash from (used in) financing activities
Net cash from operating activities
Cash flow from operating activities rose by €4.5 million over the
financial year, to €71.6 million. This increase is a result of a €20.4 million
improvement in self-financing capacity, offset by the €15.9 million change
in working capital requirements.
The change in working capital requirements was primarily impacted by
the accrued compensation income following the successful legal action
against Wabtec, recognised for an amount of €12.3 million under other
current assets.
Apart from this effect, the operating working capital requirement increased
slightly, up €7.6 million, primarily due to:
•
the €7.5 million increase in work-in-progress on projects due to the
launch or continuation of the engineering phase of numerous contracts
secured on new train platforms over the last three years;
•
•
•
the €4.4 million increase in trade receivables;
The Faiveley Transport Group distributed cash dividends of €15.4 million,
compared to €18.1 million in the previous year. In addition, stock options
valued at €0.5 million were exercised during the year.
The change in borrowings was primarily due to the annual repayment
of €34 million on the syndicated loan signed in December 2008 and
reduced drawdowns on short-term credit facilities over the latter part of
the 2012/2013 financial year.
1.1.4.2 Research and Development
The majority of the research and development conducted within the Group
falls within the engineering included in contracts and is recognised as
cost of sales.
In application of IFRS standards, €2.7 million in development costs was
capitalised during 2012/2013, compared to €2.9 million in the previous
year. The amortisation charge was €2.2 million for the year to 31 March
2013, compared to €1.9 million for the year to 31 March 2012.
At 31 March 2013, the total development costs recognised in balance
sheet assets were €10.4 million, compared to €9.5 million at 31 March
2012. Development costs are amortised over 3 years.
the €12.7 million increase in trade payables;
the €3.8 million reduction in customer advances.
11
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FINANCIAL REPORT
1.1.4.3 Business developments since
year-end
POST-BALANCE SHEET EVENTS
On 17 May 2013, Faiveley Transport acquired 100% of Schwab
Verkehrstechnik AG, a leading designer and manufacturer of couplers and
buffers for freight and rail transit markets. This company, which reported
sales of CHF 23 million in 2012, is based in Schaffhausen (Switzerland)
and has 42 employees.
NON-BANK FINANCING
To partly refinance the acquisition of US company Graham-White
Manufacturing Co. and diversify its financing sources, on 12 April 2012
the Group launched its first private placement bond issue in the US with
two institutional investors, for a total of US$ 75 million, made up of two
tranches:
•
a first tranche of US$ 30 million with a 10-year final maturity,
redeemable between 2017 and 2022;
•
a second tranche of US$ 45 million of bullet loan with a 10-year
maturity.
2013/2014 OUTLOOK
The average fixed rate is 4.91% per year.
Order book at 31 March 2013
FINANCIAL CONDITIONS
The Group posted an order book of €1,616 million at 31 March 2013,
reflecting a decline of 4.4% compared to 31 March 2012, down 5.2%
on a like-for-like basis.
The above financing facilities are subject to a number of financial
conditions, including three main ones:
•
Enterprise Resource Planning System (ERP)
The basic configuration has been implemented at three pilot sites (Leipzig,
Plzen and Gennevilliers). Following a stabilisation phase, a standardised
version will be deployed throughout the Group, starting in 2013/2014.
At 31 March 2013, the ratio was 1.47;
•
Outlook
The Group expects organic growth between 0% and 3% for the 2013/14
financial year, with the following sales outlook by region:
•
Europe should achieve moderate growth, particularly due to the start
of serial production deliveries of certain major projects awarded to the
Group over the last few years;
•
Asia-Pacific sales should be broadly stable, with an acceleration of
locomotive deliveries in China that should offset the decline in the
Group’s metro projects in this country. In Russia, the level of activity
should be consolidated after two years of very strong growth. India
is targeting significant sales growth due to the delivery of metro
equipment;
•
in North America, the freight market is expected at approximately
35,000 cars per year, in line with the level of business activity noted
in the past few months. Against this backdrop, the Group will seek to
pursue its development initiatives, particularly in the locomotive and
service segments.
leverage ratio, which refers to Consolidated Net Debt/Consolidated
EBITDA over a 12-month moving average to the end of each half-year
accounting period, must not exceed 2.5.
gearing ratio, which refers to Consolidated Net Debt/Consolidated
Equity, must not exceed 1.5 at the end of each half-year accounting
period.
At 31 March 2013, the ratio was 0.31;
•
the “Consolidated EBITDA/Net Cost of Consolidated Financial Debt”
ratio, which must not fall below 3.5 at the end of each half-year
accounting period.
At 31 March 2013, this ratio was 11.6.
b) Analysis of Faiveley Transport Group net debt
At 31 March 2012, Group debt was €213.4 million, comprising financial
debt taken out from banks and two institutional investors totalling
€433.5 million, offset by financial receivables of €9.9 million and cash
and cash equivalents of €210.2 million (including short-term investments
of €41 million and cash of €169.2 million).
At 31 March 2013, Group debt was €176.5 million, comprising financial
debt taken out from banks totalling €361.2 million, offset by financial
receivables of €9.7 million and cash and cash equivalents of €174.9 million
(including short-term investments of €22 million and cash of €152.9 million).
1.1.4.4 Cash and capital
Cash of €152.9 million included €46.9 million of uncalled factoring and
€106 million of available cash.
SHARE CAPITAL OF FAIVELEY TRANSPORT
It should be noted that Faiveley Transport holds 382,050 treasury shares
that are designated, in their majority, to be purchased by managers within
the share purchase or subscription option plans or to be allocated to
managers who benefit from the free share allocation plans.
See chapter 1.3 Information on the share capital.
FINANCING CONDITIONS
a) Loans
SHORT-TERM BANK FINANCING
During the first half of the year, a new €25 million revolving facility was
negotiated to meet the Group’s general requirements. This facility was
secured for a period of one year and was renewed in April 2013.
12
These shares are currently deducted from equity. The exercise of these
stock options (179,996 at the end of March 2013) would result in a cash
inflow for the Group of €8.9 million. Unallocated treasury shares were
valued at €5.9 million at the 31 March 2013 stock market price (including
treasury shares held as part of the liquidity contract).
FINANCIAL REPORT
RESTRICTIONS ON THE USE OF CAPITAL
The debt documentation includes limitations in terms of:
•
•
•
•
•
•
lease finance;
disposal of receivables;
various financing;
overdraft pursuant to a cash pooling agreement;
seller loan;
bank guarantees on long-term contracts.
FINANCING OF OPERATIONS AND EXPECTED SOURCES
Cash flow generation and available finance currently cover the Group’s
recurring capital expenditure requirements.
The recent financing transactions ensure the availability of medium-term
resources.
Euro-denominated amortisable repayments are funded by cash flow
generated outside the US, and the US dollar repayments by cash flow
generated by the American subsidiaries, with the bullet portion due in
June 2016 to be refinanced when required.
The conditions for the early repayment of Group debt notably include
the loss of the majority control of voting rights by the Faiveley Family and
failure to comply with financial ratios.
1.1.5
RISK FACTORS
can have a relatively lengthy lifespan, linked to the life of the train or the
metro which they are equipping. Risks related to the development of new
technologies must be taken into account along with those linked to the
obsolescence of components.
Sales and the profitability of projects depend on elements that sometimes
fall outside the Group’s control, such as the occurrence of unforeseen
technical problems relating to the equipment provided, deferrals or delays
in the execution of contracts, and financial difficulties faced by customers
or suppliers. Profit margins on projects may also differ from those originally
envisaged insofar as the costs and the productivity expected may vary
during the execution of the contract. Accordingly, the profitability of certain
contracts may significantly affect the Group’s results and cash flow over
a given period. Although these cases remain highly unusual, Faiveley
Transport could be faced with bank guarantees payable on first demand
from its customers for potentially large sums.
The Group has implemented strict risk control procedures that apply from
the submission of the bid through to the performance phase of contracts.
These risk control rules and procedures are formalised in the Group’s
Internal Control Manual.
Faiveley Transport cannot however guarantee that all these measures will
be sufficient. Certain contracts may be subject to additional costs, delays
or poor technical performance leading to the payment of penalties or
compensation. Such difficulties may have a negative effect on the Group’s
results and financial position.
During the 2012/2013 financial year, the Group faced technical
development problems relating to certain new train platform contracts
secured over the previous three years. These problems led to substantial
provisions, in particular on the RER Brussels contract for on-board doors.
SUPPLIER RISK
1.1.5.1 Market risks relating to Group
operations
The Group’s long-term operations depend on multiple factors such as
global economic growth, public policy relating to public transport as well
as the price of raw materials.
Government measures to control public spending that are related to the
high level of debt of certain states could result in a reduction in public
investment in the rail transport market, with the risk of a heightened tax
burden at a local level.
The Group also faces strong competition from both its traditional rivals and
new contenders from emerging countries, particularly Asian, which benefit
from cheaper labour. The impact of this increased competition could have
an effect on the prices, payment terms, lead times and performance
expected by the customer. Faiveley Transport has adjusted its industrial
strategy in line with this new landscape and has adapted its product range
to better meet its customers’ expectations.
The Group remains competitive in most markets and considers that its
order book, as well as all the measures taken, in particular its cost cutting
plans and its plans to adapt the workforce to meet changing demand
and its geographical coverage, should enable it to remain profitable and
to withstand the competition.
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 of potential risks.
As regards suppliers, a selection process is in place that includes,
in addition to the criteria of financial stability, a selection audit by the
subsidiary’s supplier Quality Department and a follow-up of performance.
Every return or rejected component leads to the setting up of a working
group dedicated to resolving the issue, in order to analyse the causes
and make a decision as to changes to be made to prevent the same
problem from reoccurring.
The production series are short. Orders for supply of raw materials and
components are carried out by project. The most unfavourable case would
thus be a design error impacting an entire project. This may represent
several thousand parts. The nature of the fault can be rapidly understood
due to the expertise of the teams who can recommend the relevant
technical solutions.
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 components, or with certain suppliers or
subcontractors being dependent on the Group.
CONTRACT EXECUTION RISK
The implementation of best purchasing practices and the management of
purchases by type of commodity and by supplier enables us to accurately
assess these risks of dependence and take the necessary steps.
Faiveley Transport’s activity involves the signing of complex contracts
where obligations regarding the reliability, safety and durability of equipment
Increased monitoring, due to the international economic crisis, was put
into place in order to pre-empt the financial failure of any major supplier.
13
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FINANCIAL REPORT
RISK RELATED TO THE DEVELOPMENT OF NEW PRODUCTS
Faiveley Transport designs and develops products with high-added
technological value. The Group has to develop, within increasingly short
time frames, new products that are both sophisticated and complex. The
products must be adapted to any new regulatory standards within their
markets. The time available for testing is steadily decreasing, whilst the
risks may increase. It is sometimes necessary to modify products during
the manufacturing process or when customers begin operating them.
Design and development are carried out as part of a customer project
or in-house R&D programmes initiated by the Group. For each
development project, a formal plan is prepared, split into fundamental
tasks, implemented and updated by the project manager and project
coordinators. The features taken into account 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 necessary for design and development. Project
reviews are carried out and reports produced. The verification of the
designs comprises execution of calculations, the completion of FMEA
(Failure Mode Effects Analysis) as well as verification of the plans.
1.1.5.2 Financial risks and market risks
As part of its business, the Faiveley Transport Group is exposed to
various types of market risks, in particular foreign 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.14 to
the consolidated financial statements.
The Group’s management of foreign exchange, interest rate and raw
material risks seeks to minimise the potentially unfavourable effects of the
financial markets on the Group’s operating performance.
The Group uses derivative financial instruments to cover its exposure to
fluctuations in foreign currency exchange rates. As part of its hedging
policy, the Group may use currency swaps, forward hedges, exchange
rate options and structured products.
The 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
contracts.
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 through an FAI (First Article Inspection).
The Group does not use derivatives for speculative purposes.
Every new order for parts is subject to a material check, dimension check,
verification of compliance with legal and regulatory requirements and an
environmental analysis.
The main currencies concerned are the US Dollar, Hong Kong Dollar,
Czech Koruna, Swedish Krona, Pound Sterling and Chinese Yuan.
The products carry an identification plate showing an identification number
and serial number, enabling the date of construction to be found and the
trial notes with the name of the related operator. The serial number of
devices comprising a sub-assembly is identified from these notes. Small
parts are traced by production batch.
EXCHANGE RISK
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.
•
The Faiveley Transport Group is required to submit tenders
denominated in foreign currencies. The Group’s hedging policy is not
to put into place hedge instruments 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.
Given the degree of technology involved in certain products, Faiveley
Transport cannot guarantee that it will not encounter fresh problems or
delays, despite the technical validation process introduced within the
Group.
When issues arise, there is no guarantee that the total final costs will be
absorbed by the amounts provided for, with a potential negative effect on
the Group’s financial performance and financial position.
Warranty provisions 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 2013, the warranty provisions totalled €44.9 million.
The amounts provided in respect of the warranty and Customer Services,
as well as litigation declared by customers and penalties payable
are disclosed in the notes to the consolidated financial statements
(Note E.12.3).
Exchange risk management relating to tenders in foreign currencies
(uncertain risk):
•
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. Instruments used
mainly include forward purchases and sales and exchange swaps.
Group Treasury may also use 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.14
– Financial instruments and financial risk management).
The Group’s policy is to systematically hedge against currencies, except
for certain very long-term contracts and certain currencies, which are
faced with the technical limitations of hedging or prohibitive cost.
14
FINANCIAL REPORT
Recurring commercial exposure, excluding the subsidiaries’ projects are
hedged by Group Treasury based on an annual budgetary approach and
through forward purchase or sale contracts.
The Group’s exposure resulting from all its commercial contracts is detailed
in the consolidated financial statements (Note E.14.4).
Intra-Group financing contracts are hedged by Treasury through exchange
swap contracts.
•
the vulnerability of raw material purchases is taken into account when
developing the purchasing budgets. These price changes are subject
to rigorous control throughout the year by purchasing teams to limit
their impact.
This information is disclosed in the notes to the consolidated financial
statements (Note E.14.4.c).
CREDIT RISK
Impacts on the income statement due to variations in the Euro (+/-10%)
against major foreign currencies and on items not hedged against and
recorded at 31 March 2013 are presented in the consolidated financial
statements (Note E.14.4).
The Group 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.
INTEREST RATE RISK
In the case of derivative instruments and cash transactions, counterparties
are limited to the high-quality financial institutions that currently finance
the Group.
The interest rate risk to which the Group is exposed is mainly due to longterm loans amounting to €361.2 million at 31 March 2013 (see details in
the consolidated financial statements, Note E.13), of which €292.6 million
related to the syndicated debt.
The syndicated debt, excluding the revolving facility, is indexed on variable
USD Euribor and Libor interest rates and can be hedged in accordance
with the Group’s interest rate risk policy. All revolving facilities, drawn or
undrawn, bear a variable rate and are not subject to interest hedges.
The same applies to the US private placement bond issue, which bears
a fixed rate.
To manage this risk, the Treasury Department has implemented a hedging
strategy using interest rate swaps, tunnels, caps and options.
The Group also practices debt factoring and the sale of receivables. Details
of this are provided in the notes to the consolidated financial statements
(Notes E.8 Current receivables and E.14.5 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 its maturities.
The Group’s Finance Department monitors all of the Group’s liquidity in
order to honour its financial commitments by maintaining a sufficient level
of cash and financing facilities.
The exposure to Euro interest rates is covered for between 77% and
83% of the total debt drawn down based on interest rate fluctuations for
the 2013/2014 period.
Manufacturing Co. and diversify its financing sources, in the first half
of the financial year, the Group was granted US$75 million via a private
placement in the US.
The syndicated debt denominated in US dollars is no longer being hedged.
However, taking into account the “US private placement” bond issue,
exposure to interest rate changes is limited to 26% of the debt for the
period 2013/2014.
In addition, a new €25 million credit facility with a one-year maturity was
negotiated at the start of the financial year and renewed at the start of
2013/2014.
The estimated cost of syndicated debt in 2013/2014 is 1.94%, including
hedges and spreads for the debt in Euros. For the debt in US dollars,
which includes the US Private Placement, the estimated cost is 3.87%.
The total cost of the Group’s debt for 2013/2014 is therefore estimated
at 2.5%.
At 31 March 2013, outstanding Euro-denominated syndicated debt was
€267.4 million, with corresponding interest rate hedges for €192.5 million
of this. The amount of the US dollar-syndicated debt was US$32.1 million.
This debt is subject to a number of financial ratios. At 31 March 2013, the
Group complied with all required ratios. The details of these covenants
are commented in the notes to the consolidated financial statements
(Note E.13 – Borrowings and financial debt).
Note E.14.6 to the consolidated financial statements provides additional
information of the cash and cash equivalents position at 31 March 2013.
The Group had the following cash and cash equivalents at 31 March 2013:
31 March 2013
Net exposure and the sensitivity analysis are described in the notes to
the consolidated financial statements (Note E.14.4.b Interest rate risk).
Available credit lines (a)
RAW MATERIAL RISK
Subsidiaries’ cash and cash equivalents (c)
178,500
The Faiveley Transport Group is exposed to increases in the cost of raw
materials such as steel, cast iron, copper, aluminium and rubber, as well
as to increases in transportation costs.
AVAILABLE CASH
AND CASH EQUIVALENTS (1) = (a+b+c)
318,998
The Group has already anticipated these effects, both in the preparation
of its tenders and in terms of its purchasing policy:
Available credit lines maturing in less than one year
and bank overdrafts (e)
106,928
NET CASH AND CASH EQUIVALENTS
AVAILABLE DURING THE NEXT YEAR (1-d-e)
174,759
•
certain contracts relating to projects include price indexation
mechanisms that enable the Group to absorb a large part of the
increases in raw material costs;
Parent company cash (b)
Financial liabilities due in less than one year (d)
145,244
(4,746)
37,311
The “table of future cash flows”, presented in the consolidated financial
statements (Note E.14.6.b) provides a breakdown of future liabilities by
maturity.
15
j
FINANCIAL REPORT
SHARE RISK
The Group does not hold a share portfolio but deposits excess cash
balances. At 31 March 2013, it had certificates of deposits of €8.2 million,
and fixed-term deposits of €13.8 million.
The risk of these instruments is deemed low.
1.1.5.3 Legal risks
This section provides a limited overview of the various forms of legal risks
arising from the Group’s operations and the execution of its contractual
requirements. The Group considers that sufficient provision charges have
been recognised to date to cover all risks and disputes.
When Faiveley Transport sells its products or signs sales contracts with
the associated maintenance, it may be required to accept binding penalty
clauses related in particular to delays, performance, availability of materials
as well as relatively lengthy guarantee and obsolescence clauses. These
contracts sometimes contain clauses enabling the customer to terminate
the contract or return the product if performance requirements or delivery
schedules are not met. These clauses, as well as the development, design
and manufacturing of new products phase, can, in the event of problems,
result in unforeseen costs related particularly to the application of penalties
for delay and product modification as well as claims and disputes with
the customers concerned.
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, which entail liability for faulty products.
A Group subsidiary may be held liable by another professional (car builder,
operator and maintenance) in the event of non-conformity of products
delivered or non-compliance by the seller of contractual commitments in
terms of timescale, reliability, life, etc. 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 project and its specific features. The risk
related to this contractual guarantee is evaluated upstream and included
in the price of the product.
Product risk is identified very early on, due to the understanding and
technical feasibility study of the project by a specialised and dedicated
team within the design office, as well as the selection of dual source
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 between
professionals, and even eliminates some of them (loss of profit, damage
to image, loss of customer base or sales).
In addition, the Faiveley Transport Group uses insurers to cover operational
civil liability and products adapted to its business and in compliance with
customer requirements.
As part of equipment contracts, the Group’s 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 assistance of the manufacturer and/or operator. The requirement to
16
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. Contractual obligations (duty to alert, end of life orders, selection
of a second source, etc.) are imposed on the Group’s own suppliers.
In French contracts, the legal liability for hidden defects also applies
throughout the life of the product even though, 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 car builder, the equipment
manufacturer and the supplier.
At 31 March 2013, a €30.4 million provision for risk of non-conformity
of products sold was recognised in the financial statements. These risks
were estimated by project managers and engineers.
RISK OF COUNTERFEIT
In the area of intellectual property, the Faiveley Transport Group holds
a portfolio of patents and brands that provide it with 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 thwart its future developments.
Groups within the leading technical project teams have been organised
internally to detect every risk related to the counterfeiting of intellectual
and/or industrial property rights that may be held at third-party premises.
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. On behalf of the Group, these specialists carry out 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 expertise held by the Group, are also
automatically protected by terms of secrecy, which is reflected in the
signature of confidentiality agreements with both customers and suppliers
very early in the pre-contract relationship.
It should be noted here that, as part of an arbitration procedure carried out
under the auspices of the International Chamber of Commerce, Faiveley
Transport Malmö sought the conviction of Wabtec Corporation for the
misappropriation by Wabtec, since 1 January 2006, of intellectual property
relating to friction brake cylinders (BFC- TBU brakes), as well as two
other braking product concepts (PB-PBA actuators) that are unique to
Faiveley Transport. On 24 December 2009, the arbitration was notified to
the parties: 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 US$3.9 million in damages plus
interest from Wabtec.
FINANCIAL REPORT
Wabtec was 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.
OTHER RISKS
•
Anti-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 risks: certain contractual requirements have been
specifically considered and prepared to protect the Group against
any abuse in this area. An ethics charter was set up and the Purchasing
Department has formalised a Code of Conduct for its teams to protect
itself against any abuse in this area.
Following the favourable outcome of the arbitration, on 14 May 2010,
Faiveley Transport initiated a new legal action against Wabtec before
the courts of New York, through its subsidiaries Ellcon National, Faiveley
Transport USA, Faiveley Transport Nordic and Faiveley Transport Amiens,
in compensation for damages suffered in the US on the basis of unfair
competition and the violation of trade secrets. In a ruling on 13 April 2011,
the district court in New York acknowledged that Wabtec was responsible
to the corporate plaintiffs for acts of unfair competition, misappropriation
of confidential and secret information, which was the property of Faiveley
Transport, and unjust enrichment concerning the friction brake cylinders
(BFC-TBU) and PB-PBA actuators.
•
Illegal practices: certain Group companies and/or employees
may be subject to investigations by the judicial authorities. These
investigations could result in the Group being fined. The Group has
internal control rules and procedures to manage the risks related to
these illegal practices, which have been strengthened particularly in
recent years. Within this context, Faiveley Transport has given every
employee an ethics charter which requires strict compliance with the
rules set out in particular to prevent corruption. However, given the
extent of its geographic coverage, Faiveley Transport cannot guarantee
that problems will not arise, or that such difficulties will not have a
significant effect on its image or its financial performance.
On 28 June 2011, a jury in the New York Federal Court rendered a verdict
against Wabtec for damages in the amount of US$18.1 million, plus
interest, to Faiveley Transport USA, Faiveley Transport Nordic, Faiveley
Transport Amiens and Ellcon National for market losses suffered in North
America due to the dishonest conduct of Wabtec Corporation. Wabtec
appealed this ruling on 26 August 2011. At the same time, the plaintiffs
filed a counter-appeal contesting the judge’s decision to reject their
request for punitive damages. The New York Court of Appeals gave its
ruling on 6 February 2013, upholding the order for Wabtec to pay the
sum of US$15 million in compensation to the plaintiffs. The judge set the
interest at US$0.8 million.
•
Risks related to acquisitions, sales and other transactions:
the Group continues to make company acquisitions as well as to
create joint ventures with foreign partners. In February 2012, Faiveley
Transport finalised the acquisition of Graham-White Manufacturing
Company. During the last few financial years, the Group also created
joint ventures, in particular in China and the United States. These
transactions can involve risks linked to the valuation of associated
assets and liabilities, as well as in the integration of staff, operations,
technologies and the products acquired. The Group does not have
total assurance that these operations or companies do not include
any unforeseen liabilities at the time the transaction is completed.
Nevertheless, the Group minimises the risks by requesting that the
seller provide guarantees proportionate to the size of the transaction
as well as conducting extensive investigations with the assistance of
external consultants.
The enforcement order of the arbitration award in the US was granted
by a New York Court on 10 May 2010. Wabtec implemented this final
judgment.
In May 2008, the US company Wabtec Corporation issued a writ against
Faiveley Transport USA in the Pennsylvania courts for unfair competition
on US soil. No figure was attributed to their claim. This proceeding was in
response to the two procedures described above, launched by Faiveley
Transport Group. On 23 September 2011, Wabtec waived the benefit
of this proceeding after it was announced that the Faiveley Transport
Group had obtained a favourable outcome before the New York Courts.
1.1.5.4 Industrial and environmental risks
TAX RISK
In this area, the Group has identified accurately and thoroughly the various
classes of risks it may confront due to the nature of its business.
The Group has set up the rules required to understand the subject in an
international context and regularly uses external consultants, case by
case, country by country, to best protect its interests.
These classes are the following:
A Tax Department was created within the holding company in
January 2013.
Every Group subsidiary is led by a local team that must ensure that their
business is conducted in compliance with the local regulations in force.
The tax audit instituted on Faiveley Transport Leipzig during the 2012/2013
financial year is being finalised. The adjustments notified to date relate
for the most part to temporary items. A provision was recognised in the
financial statements at 31 March 2013.
HEALTH AND SAFETY RISKS
In the countries in which it operates, the Group faces a significant amount
of legislation and standards related to environmental protection that is
increasingly restrictive, particularly in relation to air and water emissions,
the use of hazardous products and waste disposal and decontamination
methods. In the majority of countries in which the Group has industrial
facilities, permits, licences, and/or authorisations or prior notifications are
required for operations. These sites must comply with and are subject to
regular inspections by the competent authorities.
The procedures aimed at ensuring the correct application of environmental,
health and safety regulatory provisions are decentralised and controlled
by each site. Environmental, health and safety costs are budgeted at
site or activity level.
17
j
FINANCIAL REPORT
In each of the Group’s industrial site, a safety 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 products
received, updating the job files and organising training.
The major French sites are ICPE-classified (classified sites for the
protection of the environment) and subject to a declaration system, and
even authorisation from the competent regional authorities for some of
them.
The objective of general management is to integrate safety into the
management system for quality and the environment (QHSE approach),
an approach heavily promoted and supported by the Group’s insurers.
The administrative authorities may also require steps to be taken to
prevent or treat, going as far as ordering 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 job files summarising the risks of various activities and specifying the
required individual protection equipment are displayed at all workstations.
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 has been established
and a fire work permit has been instituted for all third parties liable to work
using hot spots on the premises.
Improvements have been made to the storage of chemicals and paint
to avoid risk of fire.
CONTINUITY OF BUSINESS AFTER A DISASTER
Each industrial site has identified potential emergency and accident
situations and set up regularly tested emergency plans.
Concerning the risk 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 in question.
Business continuity plans are being developed at the Group’s major sites
in order to take the necessary steps and reduce consequences as soon
as possible after an incident. A list of companies that can provide repair
equipment as well as those specialising in decontamination of electrical
devices, has been compiled.
The Group is fully aware of 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 they are responsible for is compliant with the various
applicable standards.
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 sector is very small, the Group may be
called on to pay rehabilitation costs, fines or damages-interest relative to
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.
Any issue on these sites close to the Group’s production units could have
a negative effect on their production capacity.
The sites of Saint-Pierre-des-Corps (Electromechanical) and La Ville-auxDames (Electronics) are situated in the flood plains of the Loire and Cher
rivers. According to the risks map and the IGN69 system, the two sites are
in an area of medium level risk. The two sites at Saint-Pierre-des-Corps
are in a Natura 2000 area.
In addition, the Graham-White sites are located in areas at risk of flooding
especially in the event of severe storms.
Those in charge of taking the major tasks after a disaster have been
designated in advance to design the most adequate response. Taking
account of the size of these sites as well as, in some cases, 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.
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.
The majority of production tasks can be outsourced and are for the most
part manual. The machines, though expensive, can be acquired relatively
rapidly. In addition, the interdependence of sites is limited.
In addition, in order to comply with European Directive n° 2004/35, the
Group has decided to subscribe to additional guarantees in terms of
insurance. Environmental damage and soil and water clean-up cover
was added to the accidental and gradual environmental damage policies.
INCREASED COST OF RAW MATERIAL AND TRANSPORT
RISK
This information is detailed in § 1.1.5.2 and in the notes to consolidated
financial statements (Note E.14.4.c).
ENVIRONMENTAL RISK
The industrial sector in which 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 to the environment.
18
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 and hydrofluoric acid, requires adequate and regular
monitoring (once a quarter), which is carried out by each applicable site.
FINANCIAL REPORT
Below are specific matters facing the Group at present:
•
Faiveley Transport Amiens, as the last remaining operator of classified
facilities in Sevran, at 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 therefore likely to
create pollution or represent an on-going risk for people and the
environment, according to an order from the Prefect on 11 April 2005.
This order requested that Faiveley Transport Amiens conform to certain
procedures to remediate the site. It should be mentioned 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 take full
responsibility for all potential clean-up work deemed necessary under
the administrative proceeding launched by the Prefecture of Seine
Saint-Denis, regarded as complete as of the notification of the order
mentioned above. The site was again sold under a legal deed signed
on 16 December 2009. The new owner committed to carry out the
remediation, pollution clean-up and soil improvement of the site, under
his own responsibility and at his own expense, in line with current
and future guidelines, formal notices and administrative rulings that
have been or are liable to be taken against Faiveley Transport Amiens
(formerly Sab Wabco) and to handle all complaints, legal actions,
claims or proceedings related to the environmental condition of the
building, its soil and subsoil. The new owner is a specialist in this
type of work.
On 21 June 2011, the Administrative Court of Montreuil dismissed
the Commune of Sevran’s claim disputing the implicit decision of the
prefect of Saint-Denis to take no action and to close the investigation
related to the request to remediate the site concerned. This decision
was not appealed in the two months following the notification of the
Administrative Court’s judgment. This proceeding was thus closed.
•
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 soil pollution was identified in 2004, subsequent to the
purchase of the Sab Wabco Group by Faiveley Transport, as a result
of which the latter bore the costs of soil decontamination. Due to this
risk of pollution, Cyrela retained a part of the sale price (R$3.7 million,
or €1.6 million, remains outstanding).
The situation is currently as follows: decontamination work continues
under the agreed conditions. Site meetings are regularly held with the
contractor and local authorities to assess soil quality. On completion
of the work that will allow the contaminated soil to achieve a level of
quality acceptable to local authorities, Cyrela may request building
permits. At the issuance of these permits, the amount withheld may
be released and the payment made.
At 31 March 2013, a provision of R$1.3 million had been recognised
in relation to this issue (€0.5 million).
•
On 19 January 2011, Faiveley Transport Amiens received a prefectural
order requiring it to proceed with monitoring and diagnostic measures
for the water table at its site situated at Zone Industrielle Nord,
Rue André Durouchez, 80000 Amiens, France. It must prepare
a management plan to carry out groundwater monitoring, to look
for sources of soil pollution and proceed with the development of a
management plan for pollution found at its site, in accordance with the
Circular of 8 February. The Company has taken action which allows it
to meet the provisions of this order.
•
On 29 June 2012, Faiveley Transport Amiens received from both SCI
GDLMA and Together, whose interests are related, a summons seeking
to secure the payment of a lump sum of €760 thousand per plaintiff,
liable to be adjusted, on the grounds of failure to meet disclosure
requirements and in relation to the warranty for hidden defects of
plots of land located respectively in Sevran and Livry Gargan, which
the two companies deem to be polluted. These plots were sold in
1989, 1992 and 1993 by Sab Wabco. Faiveley Transport Amiens
sought the inadmissibility of the claims before the competent court
on the grounds that they exceeded the statute of limitation. Status
hearings are in progress.
•
At the end of March 2013, the company Graham-White Manufacturing
Co. incorporated a reserve of US$4.5 million into its accounts,
designed to cover potential environmental risks at its American sites.
Although the Group is involved in the decontamination of certain industrial
facilities or other sites, it considers its sites to be in compliance with their
operating licence and its operations in general to be in line with current
environmental laws and regulations.
1.1.5.5 IT risk
The Group’s unwavering concern is to protect its IT infrastructure, data
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.
The Group’s policy is to roll out more and more centralised applications
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 an ambitious project to be completed by
2016, which primarily covers:
•
further standardising the FAIVELEY network into a single Windows
domain through the rollout of ACTIVE DIRECTORY;
•
virtualising servers and workstations through the use of CITRIX
technologies;
•
streamlining administrative processes through the rollout of a core
solution via a single ERP;
•
implementing a PDM (Product Data Management) system to manage
engineering in the design offices;
•
•
rolling out a CRM (Customer Relationship Management) system;
introducing a shared reporting and performance indicator management
system (Business Intelligence).
To secure the rollout of a single ERP, the Group Management has set up
a project platform at the Group level, and enlisted the help of external
consultants. The pilot phase now being complete, the industrial rollout
will begin in 2013 and will take three years.
19
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FINANCIAL REPORT
1.2 REPORT ON FAIVELEY TRANSPORT’S PARENT COMPANY FINANCIAL
STATEMENTS AT 31 MARCH 2013
1.2.1
1.2.1.2 Balance sheet
PARENT COMPANY FINANCIAL
STATEMENTS (FRENCH GAAP)
1.2.1.1 Income statement
Current assets
2012/2013
2011/2012
Sales
56,747
52,681
TOTAL ASSETS
EBITDA*
% of sales
4,879
8.60%
(681)
(1.29%)
Equity
% of sales
4,061
7.16%
(1,599)
(3.03%)
Financial debt
Operating profit/(loss)
% of sales
4,061
7.16%
(1,599)
(3.03%)
Net finance income/(expense)
27,282
(9,992)
Exceptional income/(expense)
(46)
(243)
(4,534)
835
26,762
(10,999)
Income tax
NET PROFIT/(LOSS)
* Operating profit plus amortisation and depreciation.
Faiveley Transport continues to provide services for the Group, as the
holding and management company. The €56.7 million sales achieved
in 2012/2013 grew by €4 million compared to the previous year
(€52.7 million).
Costs incurred by Faiveley Transport for services provided to subsidiaries
were rebilled. The operating profit was €4 million, compared to a loss
of €1.6 million in the 2011/2012. This improvement is mainly due to
the net proceeds of €1.7 million relating to the Wabtec compensation
received (whilst for the previous financial year €0.6 million in fees had
been recognised) by the rebilling of the final charge of €1.3 million to
the subsidiaries due to the allocation of free shares which ended
in December 2012, as well as by better control of certain expense items.
The net finance income was €27.3 million, compared to a net expense of
€10 million in the previous year. In 2012/2013, dividends of €37.5 million
were collected, compared to €1.3 million in 2011/2012, due to the
implementation of a more active policy relating to the transfer of the
dividends of subsidiaries from the 2012/2013 financial year onwards.
Excluding dividends, the net finance income increased by €1.2 million.
This was primarily due to the €2.1 million decrease in the interest expense,
foreign exchange gains of €0.6 million, a €0.8 million positive movement
in financial provision reversals and charges, offset by the waiver of a
€2.6 million financial liability in relation to its subsidiary o.o.o Faiveley
Transport.
The €4.5 million income tax charge recognised at 31 March 2013 reflects
the tax consolidation charge of €0.6 million recorded during the period,
increased by the €3.9 million corporate tax charge generated by the
German subsidiaries Faiveley Transport Holding GmbH & Co. KG and
Faiveley Transport Leipzig GmbH & Co. KG.
20
Provisions
Other liabilities
TOTAL EQUITY AND
LIABILITIES
2012/2013
2011/2012
1,066,019
1,057,476
81,419
54,288
331,719
334,297
1,479,157
1,446,061
192,508
177,807
2,396
1,884
1,249,122
1,238,275
35,131
28,095
1,479,157
1,446,061
Net non-current assets take account of the recognition of a €384.8 million
technical deficit, registered on the transfer of Faiveley Transport and
Faiveley Management’s assets and liabilities to Faiveley SA, intangible
assets of €17.5 million, property, plant and equipment of €0.7 million,
equity investments of €501.4 million, receivables of €161.2 million attached
to these investments and other financial investments of €0.4 million.
Equity investments increased by €1.5 million during the year. This increase
was due to the payment in full of the capital of the Chinese subsidiary
Faiveley Transport Systems Technology (Beijing). Furthermore, receivables
attached to equity investments increased by €4.5 million, primarily due
to an increase in current accounts. Loans to subsidiaries decreased by
€6 million.
Current assets increased by €27 million during the year. This was primarily
due to the €12 million Wabtec compensation and dividends of €15 million
to be collected from the Swedish subsidiary.
Cash and cash equivalents decreased by €2.6 million during the year.
This resulted from a €10.5 million improvement in cash balances and a
€13.1 million decline in marketable securities. On the liability side, bank
overdrafts increased by €38 million.
Equity increased from €177.8 million at 31 March 2012 to €192.5 million
at 31 March 2013. This €14.7 million positive movement may be analysed
as follows:
•
•
payment of dividends: €12 million;
profit for the year: €26.7 million.
Provisions increased by €0.5 million to €2.4 million. An additional charge
of €0.1 million was booked to serve the share subscription plan and the
free share allocation plan (€0.2 million and €1.4 million, respectively).
Provisions for litigations increased by €0.3 million, showing a balance of
FINANCIAL REPORT
Financial debt was valued at nominal value and comprised:
1.2.2
•
•
•
the €56.9 million bond-type issue (USPP);
On 17 May 2013, Faiveley Transport acquired 100% of Schwab
Verkehrstechnik AG, a Swiss leading designer and manufacturer of
couplers and buffers for freight and rail transit markets.
•
the loan subscribed from the Faiveley Transport Malmö subsidiary,
for €10.2 million;
•
•
•
credit current accounts with Group companies, for €563.4 million;
the €292.6 million syndicated loan granted by a banking pool;
EVENTS AFTER 31 MARCH 2013
current bank and cash pooling overdrafts (Group cash management)
for €324.5 million;
1.2.3
RESEARCH AND DEVELOPMENT
COSTS
None in the Faiveley Transport parent company financial statements.
accrued interest in relation to the above financial debt, for €1.4 million;
the balance of the special reserve for employee profit sharing, for
€65 thousand.
Other liabilities also increased by €7 million during the year. This change
was primarily due to the increase in trade receivables, including legal
fees of €2.3 million relating to the Wabtec dispute, and the increase in
tax liabilities in France for €2.3 million and tax liabilities of the Leipzig and
Witten subsidiaries for €1.2 million.
1.2.4
CHANGE OF METHOD DURING
THE YEAR
Nil.
1.2.5
INFORMATION ON NON-TAX
DEDUCTIBLE CHARGES
Non-tax deductible charges at 31 March 2013 amounted to €16,431.
They generated a tax charge of €5,918.
1.2.6
INFORMATION ON PAYMENT TERMS
At 31 March 2013, trade payables posted to the balance sheet totalled €11,6 million, of which €9,1 million related to international intercompany invoices,
due in 60 days at month-end, payable on the 5th of the month.
The ageing analysis was as follows:
30 days
60 days
+ 60 days
Total
Trade payables at 31 March 2013
2,627
535
8,413
11,575
Trade payables at 31 March 2012
1,361
931
10,073
12,365
1.2.7
TREASURY SHARES
The Company directly and indirectly holds 2.61% of its share capital.
1.2.8
ANALYSIS OF RESULTS AND
ALLOCATION OF THE 2012/2013 NET
PROFIT
TABLE OF RESULTS OF FAIVELEY TRANSPORT FOR THE
LAST FIVE YEARS
Attached to this report, pursuant to the provisions of Article R. 225-102
of the Commercial Code, is the table of the results of the Company for
each of the last five years.
PROPOSED ALLOCATION OF NET PROFIT
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 €26,762,496.06.
We would also ask you to approve the following allocation of net profit
for the financial year ended 31 March 2013:
•
•
Profit for the year
Retained earnings
•
€26,762,496.06
Increased by:
Distributable profit:
− Less dividend payment, i.e. €0.95 per share:
€44,715,256.31
€71,477,752.37
(€13,883,444.40)
The balance of €57,594,307.97 will be allocated in full to “Retained
earnings”.
The dividend will be payable with effect from 19 September 2013.
Taking account of the allocation, the equity of the Company amounts to
€178,624,285.99.
Should the Company hold treasury shares at the time of the payment,
the distributable profit corresponding to the unpaid dividend due to the
holding of the shares will be allocated to the account “Retained earnings”.
It should be noted that over the last three financial years, the following sums
were paid in dividends: €12,422,029.20 for the financial year 2011/2012,
€17,285,653.20 for the financial year 2010/2011 and €17,285,653.20
for the financial year 2009/2010.
21
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FINANCIAL REPORT
1.3 INFORMATION ON THE SHARE CAPITAL
1.3.1
BYLAW 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, in cash, by offset against current liabilities of
the Company, by capitalisation of reserves, profits or share premium, 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 to
increase the share capital, based on a report by the Management Board.
A reduction in share capital is authorised or decided by an Extraordinary
General Meeting that may delegate to the Management Board all powers
to effect the transaction. A capital increase must be completed within five
years from the date of the General Meeting that decided or authorised it.
1.3.2
SHARE CAPITAL ISSUED
AND AUTHORISED UNISSUED
SHARE CAPITAL
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
Company shares may be freely transferred between living persons or
upon the death of the holder. Transfers of Company shares involving third
parties and the Company are completed by way of an account-to-account
transfer order. Shares in the Company that are not fully paid in respect of
payments due cannot be transferred.
1.3.2.2 Authorised unissued share capital
DELEGATION OF AUTHORITY TO INCREASE THE SHARE
CAPITAL
At the Combined General Meeting of 14 September 2011, a resolution
(nineteenth resolution) was approved by the shareholders to delegate
authority to the Management Board to increase the share capital, with
waiver of the pre-emption right, through a private placement to qualified
investors or for the benefit or a restricted circle of investors.
1.3.2.1 Share capital issued
This resolution was adopted by a qualified majority.
At 31 March 2013, the share capital of the Company was €14,614,152.
It comprised 14,614,152 shares of €1 nominal value each, fully paid, all
of the same class.
Pursuant to Articles L. 225-129, L. 225-129-2, L. 225-135 and L. 225136 of the Commercial Code, the Management Board was authorised to
increase the share capital, with waiver of the pre-emption right, with the
facility of effecting the transaction in one or more offerings in accordance
with section 2 of Article L. 411-2 of the Monetary and Financial Code,
and not exceeding 10% of the share capital of the Company on the date
of the General Meeting.
REVISION TO THE SHARE CAPITAL AND RIGHTS ATTACHED
TO SHARES
Any 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.
This authorisation was given for a period of 26 months from 14 September
2011.
FORM AND REGISTRATION OF SHARES
On 3 February 2012, the Management Board implemented this
delegation, having been granted approval of the planned transactions
by the Supervisory Board on 23 November 2011.
Shares are held 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 legal 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 for
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.
22
As part of the acquisition of US company Graham-White Manufacturing
Co., the acquisition contract, concluded on 22 December 2011 and
amended on 10 January 2012, provided for the acquisition price of the
Graham-White Manufacturing Co. shares to be partly paid to the sellers
in new Faiveley Transport shares.
As a result, on 3 February 2012, the Management Board decided to
increase the share capital of the Company by a nominal amount of
€209,441, thereby increasing it from €14,404,711 to €14,614,152 through
the issue of €209,441 new shares in the Company with a par value of €1
each, to be issued at a price of €53.086 per share. The total subscription
price was therefore €11,118,384.93. The issue price corresponds to the
weighted average of the share price over the last three trading days
preceding the date the subscription price of the capital increase is set,
less a discount of 5%.
FINANCIAL REPORT
1.3.3
SHAREHOLDERS AND VOTING RIGHTS AT 31 MARCH 2013
1.3.3.1 Analysis of shareholders and voting rights
According to the list of nominative shareholders provided by Société Générale and the identification of a certain number of bearer shareholders, the
shareholders and the voting rights in the Company at 31 March 2013 were as follows:
Principal shareholders at 31 March 2013
Number
of shares
% of capital
Financière Faiveley
6,315,412
François Faiveley Participations (FFP)
1,159,288
François Faiveley
Thierry Faiveley
Double
voting rights
Total
voting rights
%
voting rights
43.21%
26,237
6,289,175
12,604,587
56.64%
7.93%
208,165
951,123
2,110,411
9.48%
225
0.00%
-
225
450
0.00%
214,524
1.47%
214,524
-
214,524
0.96%
Erwan Faiveley
TOTAL FAIVELEY FAMILY
Single
voting rights
612
0.00%
607
5
617
0.00%
7,690,061
52.62%
449,533
7,240,528
14,930,589
67.09%
152,894
1.05%
17,063
135,831
288,725
1.30%
Directors and senior executives(1)
Treasury shares
382,050
2.61%
-
-
-
0.00%
Nominative shares(2)
724,493
4.96%
79,320
645,173
1,369,666
6.15%
Free float
TOTAL
5,664,654
38.76%
5,664,654
-
5,664,654
25.46%
14,614,152
100.00%
6,210,570
8,021,532
22,253,634
100.00%
(1) Excluding Erwan Faiveley and François Faiveley.
(2) Excluding the Faiveley family, senior executives and treasury shares.
To the knowledge of the Company, no other shareholder held more than 5% of the voting rights at 31 March 2013.
1.3.3.2 Analysis of the share capital over the last three years
2012/2013
% of capital
2011/2012
% of capital
2010/2011
% of capital
Nominative shares
58.06
58.66
60.15
Free float
41.94
41.34
39.85
1.3.3.3 Share capital of the Company subject to pledges
Name of shareholder registered
as pure nominative form
Beneficiaries
Société Générale
and Crédit Lyonnais
François Faiveley Participations
Société Générale
Crédit Lyonnais
Number
of shares
pledged at
31 March 2013
% of capital
pledged
Start date
of pledge
Expiry date
of pledge
Condition for
release of pledge
24/03/2006
31/03/2016
Full repayment
of loan granted
70,400
0.482
October 2012
October 2019
Full repayment
of loan granted
218,818
1.497
24/03/2006
30/03/2013
Full repayment
of loan granted
2,031
0.014
23
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FINANCIAL REPORT
1.3.4
MOVEMENTS IN THE SHARE CAPITAL DURING THE LAST SIX YEARS
Increase in capital (€)
Cumulative number
of shares
Capital (€)
Nil
Nil
12,529,585
12,529,585
Nil
Nil
12,529,585
12,529,585
Date
Transactions
31 March 2007
31 March 2008
31 March 2009
Issue of new shares
1,875,126
14,404,711
14,404,711
31 March 2010
Nil
Nil
14,404,711
14,404,711
31 March 2011
Nil
Nil
14,404,711
14,404,711
3 February 2012
Issue of new shares
209,441
14,614,152
14,614,152
31 March 2012
Nil
Nil
14,614,152
14,614,152
31 MARCH 2013
NIL
NIL
14,614,152
14,614,152
1.3.5
EMPLOYEE INTEREST
IN THE COMPANY’S SHARE CAPITAL
At 31 March 2013, FCPE Faiveley Shares held 15,360 shares (0.10%) in
the Company and employee shareholding accounted for 1.01% of the
share capital.
1.3.6
BUYBACK BY THE COMPANY
OF ITS OWN SHARES
At 31 March 2013, the Company held 382,050 of its own shares,
representing 2.61% of its share capital. The book value of these shares
was €19,190,175.68 and their market value was €14,897,412.73.
The Combined General Meeting of 14 September 2012 was called
to approve a new share buyback programme in its ninth resolution. 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.
1.3.6.1 Objectives of the share
buyback programme authorised
by the Combined General Meeting
of 14 September 2012:
Shares may be bought back to:
•
ensure the liquidity and to support the market for Faiveley Transport
shares 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;
•
24
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 any other market practice that is permitted by the Autorité
des Marchés Financiers and more generally all transactions that
conform to the regulations in force.
1.3.6.2 Maximum percentage of the share
capital, maximum number
and features of shares the Company
is proposing to buy back
and maximum 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 according
to transactions that may occur subsequent to this General Meeting.
The maximum purchase price is set at €70 per share.
The maximum amount allocated to the buyback programme is €51 million.
Taking account of the 382,050 shares already directly or indirectly held
by the Company at 31 March 2013, the maximum number of shares that
the Company may acquire as part of this share buyback programme
would be 1,079,365.
1.3.6.3 Validity of the share buyback
programme
This authorisation will remain valid for eighteen months, i.e. until 14 March
2014.
During the year ended 31 March 2013, the Company did not buy back any
Faiveley Transport shares, excluding those carried out by an investment
service provider through a liquidity contract.
At the Combined General Meeting to be held on 12 September 2013,
a draft resolution providing for the renewal of this buyback programme
for a further period of eighteen months will be submitted to shareholders
for approval.
Should this resolution be adopted at the next General Meeting, the
authorisation granted to the Management Board will supersede that
provided by the General Meeting of 14 September 2012.
1.3.7
CONTRACT TO STIMULATE TRADING
OF THE FAIVELEY TRANSPORT
SHARE
At 30 September 2012, the Company terminated the liquidity contract it
had awarded to Oddo Corporate Finance.
FINANCIAL REPORT
Since 1 October 2012, a liquidity contract complying with the AMAFI
ethics charter and recognised by the Autorité des Marchés Financiers
has been implemented between the Company and Exane BNP Paribas
to stimulate trading.
The resources allocated to the previous liquidity account have been fully
allocated to this new liquidity contract, namely:
•
•
10,000 Faiveley Transport shares;
During the year 2012/2013, Oddo Corporate Finance and Exane BNP
Paribas purchased 126,087 shares and sold 123,763 shares on behalf
of the Company.
The average price of the shares bought during the year was €45.10
and €44.86 for shares sold. At 31 March 2013, the Company held
12,392 shares through the market stimulation contract (being 0.08%
of its share capital) for a market value of €635,311.17, i.e. a price per
share of €51.27.
€492,865.
1.4 CORPORATE AND MANAGEMENT BODIES
1.4.1
CORPORATE GOVERNANCE
1.4.1.1 Composition of the Management
Board
The Management Board comprises between three and seven 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, which may replace members who have died or
resigned, in accordance with the law.
No individual 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 deemed incompatible,
in default or subject to a prohibition forbidding them access to these
functions, if they are a Statutory Auditor to the Company, were 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 this age limit is reached in office, the Director in question is considered
to have resigned and a new Director will be appointed as provided by
this article.
Every member of the Management Board may be linked to the Company
through an employment contract that remains in force during the term
of office and upon 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”.
There are no family relationships between members of the Management
Board.
25
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FINANCIAL REPORT
Members of the Management Board are as follows:
Thierry Barel
Chairman of the Management Board
Born 11 February 1961
Nationality:
French
Number of shares held:
6,391
Date appointed:
1 April 2011 (member of the Management Board since 22 September 2009)
Current term of office expires:
June 2014
Other appointments within the Group:
Member of the Supervisory Board of:
Faiveley Transport Lekov
Chairman of:
Faiveley Transport Amiens
Faiveley Transport NSF
Faiveley Transport Tours
Chairman of the Board of Directors of:
Ellcon National
Faiveley Transport Acquisition
Faiveley Transport Far East
Faiveley Transport Ibérica
Faiveley Transport Malmö
Faiveley Transport Nordic
Faiveley Transport Systems Technology (Beijing)
Faiveley Transport USA
Manager of:
Faiveley Transport Witten
Faiveley Transport Verwaltungs
Director of:
Amsted Rail Faiveley
Datong Faiveley Coupler Systems
Faiveley Transport Asia Pacific
Faiveley Transport Belgium
Faiveley Transport Birkenhead
Faiveley Transport Canada
Faiveley Transport Italia
Faiveley Transport Korea
Faiveley Transport Plzen
Faiveley Transport Rail Technologies India
Faiveley Transport Tamworth
Graham-White Manufacturing
Qingdao Faiveley Sri Brake
Sab Wabco
Sab Wabco D&M
Sab Wabco Investment
Sab Wabco Products
Sab Wabco UK
Shanghai Faiveley Railway Technology
Shijiazhuang Jiaxiang Precision Machinery
SW D&M Products
Terms of office which expired during the last five financial years:
Chief Executive Officer of:
Chairman of:
KIS
Director of:
Photo-Me Internationa*
Prontoshop
Transequipos
Profile:
Thierry Barel graduated from ENSAM as an engineer and holds a degree from IMD.
Before joining the Faiveley Transport Group, from 2007 to 2009 Thierry Barel served as Chief Executive Officer of PhotoMe International, a Group listed on
the London Stock Exchange that manufactures and operates automatic distribution machinery and instant photographic printing. Beforehand, he spent
the greater part of his career with industrial group Staübli, a world leader in mechatronics, where he ultimately held the position of Chief Executive Officer.
* Listed company.
26
FINANCIAL REPORT
Erwan Faiveley
Member of the Management Board
Born 27 July 1979
Nationality:
French
612
Date appointed:
27 September 2005
June 2014
Other current appointments:
Chairman of:
Consortium Viticole & Vinicole de Bourgogne
Permanent representative of:
FFP chez la Société Bourguignonne d’Exploitation Viticoles
Manager of:
Faiveley Frères
Faivinvest SARL
Société Civile Viticole Faiveley
SCI du Dauphiné
SCI Voir Venise
SCI du 13 square Henri Pâté
Profile:
Erwan Faiveley graduated from École Supérieure de Commerce de Paris and holds an MBA from the Columbia Business School. He worked with the
Bacou-Dalloz Group from 2002 to 2004, before his appointment as Chairman and Chief Executive Officer of FFP, Financière Faiveley and CVVB in 2004.
Guillaume Bouhours
Born 3 July 1976
Nationality:
French
6,520
Date appointed:
1 April 2011
June 2014
Other appointments within the Group:
Chairman of the Supervisory Board of:
Manager of:
Director of:
Faiveley Transport Rail Technologies India
Faiveley Transport Systems Technology (Beijing)
Faiveley Transport Tresmonice
o.o.o Faiveley Transport
Sab Wabco
Sab Wabco D&M
Sab Wabco Products
Sab Wabco UK
SW D&M Products
HMY International
Souriau Technologies Holding
Souriau Holding
Souriau
Stromboli Investissements
Director of:
Faiveley Transport
Olympia Group of Companies
Transequipos
Profile:
Guillaume Bouhours graduated from engineering schools Ecole des Mines de Paris and Ecole Polytechnique.
Guillaume Bouhours was a Director of Sagard, a private equity fund and a previous shareholder of Faiveley Transport. In this role, he participated actively
in Sagard’s investment decisions and was involved throughout the decision-making process from the analysis of the investment opportunity through to the
finalisation of the financial and legal aspects of each transaction and the monitoring of companies held by Sagard.
Guillaume Bouhours previously worked in the European Merger & Acquisition Department of investment bank Morgan Stanley.
27
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FINANCIAL REPORT
1.4.1.2 Composition of the Supervisory Board
Pursuant to the bylaws, the Supervisory Board comprises a minimum of
five members and a maximum of ten members.
The Company adopted the form of a public limited company with a
Management Board and a Supervisory Board at 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 at the Annual General Meeting held on 17 September 2008
for a period of 6 years, in accordance with the Company’s bylaws.
The Combined General Meeting of 14 September 2011 amended
Article 19 of the Company’s bylaws. The term of office of Board members
is three years, but as an exception and to allow the implementation and the
maintenance of staggered terms of office for members of the Supervisory
Board, the latter may be appointed by the General Meeting for periods of
one (1) or two (2) years. Board members may be re-appointed.
The option to stagger the terms of office of members of the Supervisory
Board was implemented when terms of office were submitted for approval
by the Combined General Meeting of 14 September 2011. The term of
office of one third of Board members thus expires every year.
Any shareholder, individual or corporate, may be appointed as a Member,
subject to their 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 individual shareholders, otherwise their
appointment is null and void. The Chairman and Vice-Chairman are
responsible for calling Board meetings and leading 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 education and professional experience of Board members are quite
varied, given that they have all held high-level management positions.
With regard to the independence criteria defined by the Supervisory
Board, and after a study of the individual position of each member of the
Supervisory Board, at 31 March 2013 four of the current ten members
may be considered independent: Hélène Auriol-Potier, Nicoletta GiadrossiMorel, Christian Germa and Maurice Marchand-Tonel.
At 31 March 2013, the Supervisory Board comprised ten members,
nine of which are French nationals; Nicoletta Giadrossi-Morel is an Italian
national and Christopher Spencer has dual French and British nationality.
The average age of the members at 31 March 2013 was 58.
The members appointed by the General Meeting are as follows:
Philippe Alfroid
Chairman of the Supervisory Board
Born 29 August 1945
Nationality:
French
200
Date appointed:
22 September 2009 (Member of the Board since 27 September 2005)
September 2015
Director of:
Essilor International*
Essilor of America
Eurogerm
Gemalto
Deputy CEO of:
Essilor International
Director of:
Sperian Protection*
Gentex Optics
EOA Holding
EOA Investment
Omega Optical Holding
Essilor Canada
Pro-Optic CanadaShanghai Essilor Optical Company
Faiveley Transport
Profile:
Philippe Alfroid is an ENSEHRMA-Grenoble engineer 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 from 1996 to 2009.
* Listed company.
28
FINANCIAL REPORT
François Faiveley
Vice-Chairman of the Supervisory Board
Born 26 April 1951
Nationality:
French
225
Date appointed:
27 September 2005
September 2015
Other current appointment:
Director of:
Director of:
Faiveley Transport
Profile:
François Faiveley is a graduate from ESCAE (Business School) in Dijon. He has served in operational positions within the Faiveley Transport Group during
the 1990s.
Didier Alix
Member of the Supervisory Board
Born 16 août 1946
Nationality:
French
200
Date appointed:
13 September 2010
September 2015
Komercni Banka AS
Chairman and Chief Executive Officer of:
Sogébail SA
Société Générale Marocaine de Banques SA
Vice-Chairman of:
Fondation d’entreprise SG pour la solidarité
Director of:
Banque Roumaine de Développement SA
SG Private Banking Suisse SA
Yves Rocher SA
Crédit du Nord SA
Rémy Cointreau SA*
Société de Gestion Saint Jean de Passy SA
CIPM International SA
Fayat SAS
Treasurer of:
Fondation Notre Dame (Non-profit organisation)
Deputy CEO of:
Société Générale*
Director and Vice-Chairman of:
Société Général de Banques en Côte-d’Ivoire
Permanent representative of Salvepar to the Supervisory Board of Latécoère
Director of:
Franfinance
National Société Générale Bank SAE
Société Générale de Banques au Cameroun
Société Générale de Banques au Sénégal
Société Générale au Liban
MISR International Bank
Sogessur
Fiditalia
SG Private Banking Suisse
SGBT Luxembourg
Profile:
Didier Alix joined Société Générale in 1971, where he held a number of roles, notably within the Inspection Générale then as Head of Central Risk Control.
He was also Head of Branch Offices before being promoted to Chief Executive Officer of Franfinance, then Head of Réseau France. In 1998, he became
Deputy Chief Executive Officer for Individuals and Businesses. In 2006, he became Deputy Chief Executive Officer of Société Générale. He was Advisor to
the Chairman and Chief Executive Officer from 2010 to 2012.
* Listed company.
29
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FINANCIAL REPORT
Hélène Auriol-Potier
Independent member of the Supervisory Board
Born 26 November 1962
Nationality:
French
100
Date appointed:
14 September 2011
September 2014
Profile:
Hélène Auriol-Potier graduated as an engineer from the Ecole Nationale Supérieure des Télécommunications in Paris and completed an Executive Programme
from INSEAD. She started her career at France Telecom in the United States and then joined the company Nortel where she held several positions before
becoming Vice-President of the Service & Operations division. She then joined the company Dell where she was responsible for emerging markets in the
Africa and Mediterranean region as Chief Operating Officer and member of the Executive Committee of Dell Emerging Markets. She subsequently joined
Microsoft as Chief Executive Officer – Enterprises and Partners – and a member of the Executive Committee of Microsoft France. She currently is Managing
Director of Microsoft Singapore.
Serge Choumaker
Member of the Supervisory Board representing employee
shareholders
Born 18 September 1959
Nationality:
French
2,574
Date appointed:
13 September 2010
September 2013
Profile:
Serge Choumaker is Head of Accounting & Consolidation within the Faiveley Transport Group. Serge Choumaker holds a D.E.C.S. He joined the Faiveley
Transport Group in September 2001. Previously, Serge Choumaker held management positions as Head of Accounting at the companies Lafarge and
Ferembal.
Christian Germa
Nationality:
French
200
Date appointed:
27 September 2005
September 2013
Director of:
Faiveley Transport
Vodafone SA*
Profile:
Christian Germa is a graduate of the Ecole Polytechnique and he is qualified as an ‘Ingénieur des Ponts et Chaussées’. He began his career in the 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.
* Listed company.
30
FINANCIAL REPORT
Nicoletta Giadrossi-Morel
Born 16 May 1966
Nationality:
Italian
1
Date appointed:
14 September 2011
September 2014
Manager of:
HFM
Director of:
Aker Solutions asa
Chairman of:
SMO SAS
Ramosport
Dresser Rand SA
Dresser Rand SAS
Profile:
Nicoletta Giadrossi-Morel graduated in Mathematics and Economics from Yale University and holds an MBA from the Harvard Business School.
She is currently a Shareholder Representative at Aker Asa, a Norwegian holding company which owns numerous companies in the Offshore Energy and
Engineering sector. She was Vice-Chairman and Chief Executive Officer of Dresser-Rand, EMEA (Europe, Middle-East, Africa) for four years and spent ten
years with General Electric where she held various profit centre management roles, in particular in the “Equipment Management” and “Oil & Gas” divisions.
She also worked as a consultant for Boston Consulting Group and in private equity.
Robert Joyeux
Born 2 September 1947
Nationality:
French
138,831
Date appointed:
14 September 2011
September 2013
Manager of:
RJX Consulting
Chairman of the Management Board of:
Faiveley Transport
Faiveley Transport
Faiveley Transport USA
Faiveley Transport Far East
Chairman of SAS:
Director of:
Qingdao Faiveley Sri Rail Brake
Datong Faiveley Coupler Systems
Sab Ibérica
Sab Wabco UK
Sab Wabco Sales
Sab Wabco D&M
Sab Wabco Products
SW D&M Products
Shanghai Faiveley Railway
Technology
Transequipos
Ellcon National
CIM
Manager of:
Faiveley Transport Beteiligungs
Sofaport
Profile:
Robert Joyeux holds a PhD in electronics and graduated from Sciences Politiques Paris with an economics and finance degree. He held several positions
before joining the Faiveley Transport Group. He worked for the company Thompson (Thales) for 17 years in a variety of industrial roles before joining Tekelec
Airtronic as the General Manager of the Components and Systems Division and then Alstom as General Manager for the Protection, Energy and Control
division and the British group Laird as Chief Executive Officer. Robert Joyeux held the position of Chief Executive Officer of Faiveley Transport from 2001.
He resigned his duties on 31 March 2011 and currently works as a consultant.
31
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FINANCIAL REPORT
Maurice Marchand-Tonel
Nationality:
French
200
Date appointed:
22 September 2009
September 2013
European American Chamber of Commerce (Paris)
Director of:
European American Chamber of Commerce (New York)
Essilor International*
Du pareil au même
Director of:
Faiveley Transport
Financière Huysmans
Groupe Souchier
Profile:
Maurice Marchand-Tonel is an independent consultant. On leaving Harvard Business School, he started his career with the Boston Consulting Group with
whom he co-founded their French and German offices. He was subsequently 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 has been Senior Advisor since 2004. Maurice MarchandTonel is also Senior Adviser of Investcorp (London and New York) and Newbury Piret (Boston). Maurice Marchand-Tonel is Chairman of the Board of Directors
and a Founder of the European American Chamber of Commerce.
*
Listed company.
Christopher Spencer
Born 4 November 1962
Nationalities:
French-British
650
Date appointed:
22 September 2009
September 2014
Chairman of:
Maison d’Uzès SAS
Director of:
Adminium SAS
Cougar Management
Vice-Chairman of the Supervisory Board of:
Cougar Investissements SAS
Chairman of:
Cougar International
Director of:
SGD
Olympia
Faiveley Transport
Profile:
Christopher Spencer holds both French and German degrees in higher management studies (ESC Reims and Fachhochschule Reutlingen) and is a Chartered
Accountant. With an experience of over 20 years in private equity in Europe, the last 6 years of which were spent with Sagard funds, which he helped
establish in the French market, since the start of 2010 Christopher Spencer has focused on his activities in private investment and as a business angel.
Xavier de Lavallade, Legal Counsel for the Group, serves as Secretary of the Board.
Members of the Supervisory Board can be contacted through the Company’s head office: Immeuble Le Delage – Hall Parc – Bâtiment 6A – 3 rue du
19 mars 1962, 92230 Gennevilliers, France.
32
FINANCIAL REPORT
1.4.2
CORPORATE OFFICERS’ REMUNERATION
1.4.2.1 Remuneration and directors’ fees
During 2012/2013, the total remuneration, direct and indirect, of all kind received by members of corporate bodies of the Company amounted to
€1,451,668.
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 corporate
officer during the year from companies controlled pursuant to Article L. 233-16 of the Commercial Code:
Remuneration
Fixed
Variable
Deferred
Directors’ fees paid
by Group companies
Benefits in kind
Philippe Alfroid
-
-
-
46,500
-
François Faiveley
Vice-Chairman of the Supervisory Board
-
-
-
30,500
-
Didier Alix
-
-
-
21,000
-
-
-
-
19,000
-
117,232
19,848
-
-
-
Christian Germa
-
-
-
37,000
-
-
-
-
19,000
-
Robert Joyeux
-
-
-
19,000
-
-
-
-
25,500
-
Christopher Spencer
-
-
-
31,500
-
Thierry Barel(1)
430,822
174,140
-
-
Company car
Erwan Faiveley(2)
107,081
-
-
-
Housing allowance
Guillaume Bouhours(1)
218,959
134,586
-
-
Company car
Name
Serge Choumaker(1)
Member of the Supervisory Board,
representing employee shareholders
(1) On 15 January 2013, the Management Board allocated free shares to a number of Group employees and executives, including 2,200 to Thierry Barel, 1,440 shares
to Guillaume Bouhours and 720 shares to Serge Choumaker.
(2) Erwan Faiveley is an employee of François Faiveley Participations (FFP).
You will also find appended 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 for the year ended 31 March 2013, which we propose
be set at €325,000.
33
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FINANCIAL REPORT
1.4.2.2 Summary of 2012/2013 transactions 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
Helen Balandrau,
Member of the Executive Committee
Shares
Value
Disposal
4
€508,275
Helen Balandrau,
Shares
Purchase
1
€33,444
Marc Jammot,
Shares
Disposal
1
€282,533
Rémi Causse,
Shares
Purchase
1
€34,991
Individual related to Olivier Ravit,
Shares
Disposal
1
€49,900
François Feugier,
Chief Operating Officer and Member of the Executive Committee
Shares
Purchase
1
€14,696
Thomas Feser,
Shares
Purchase
1
€21,858
Guillaume Bouhours,
Shares
Purchase
1
€27,326
Director/Senior Executive
34
FINANCIAL REPORT
1.5 CORPORATE AND ENVIRONMENTAL RESPONSIBILITY
This information is provided in the “Corporate and environmental responsibility” Chapter on page 126 of this document.
Upon consideration of the report presented to you by the Statutory Auditors on this subject, your Management Board invites you to adopt the resolutions
submitted to you for a vote, the text of which appears in appendix 5 to the present report, with the exception of the fourteenth resolution regarding a
capital increase reserved for employees, which does not appear relevant.
35
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FINANCIAL REPORT
2. FAIVELEY TRANSPORT
CONSOLIDATED FINANCIAL
STATEMENTS
At 31 March 2013
2.1 CONSOLIDATED BALANCE SHEET
ASSETS
Notes
31 March 2013 Net
-
-
Goodwill
E.1
651,235
648,981
Intangible assets
E.2
42,953
40,057
(€ thousands)
SUBSCRIBED UNCALLED SHARE CAPITAL (I)
Other intangible assets
Property, plant and equipment
31 March 2012 Net
E.3
Land
5,880
5,848
Buildings
24,558
25,662
Plant and machinery
28,559
27,436
Other property, plant and equipment
12,459
9,966
253
245
-
-
Non-current financial assets
E.4
Shareholdings in unconsolidated subsidiaries
Shareholdings in associates
Other non-current financial assets
Deferred tax assets
E.5
TOTAL NON-CURRENT ASSETS (II)
5,598
5,538
44,816
43,598
816,311
807,331
Inventories
E.6
144,453
144,000
E.7
98,524
91,048
3,893
3,811
Trade receivables
E.8.1
184,193
179,402
E.8.2
34,877
18,515
7,427
11,048
9,348
9,328
Advances and prepayments paid
Taxation receivable
Current financial assets
E.9
E.10
22,035
41,080
Cash
E.10
152,923
169,166
TOTAL CURRENT ASSETS (III)
TOTAL ASSETS (I+II+III)
The attached notes are an integral part of the consolidated financial statements.
36
657,673
667,398
1,473,984
1,474,729
FINANCIAL REPORT
2. Faiveley Transport consolidated financial statements
EQUITY AND LIABILITIES
Notes
31 March 2013
31 March 2012
Share capital
14,232
14,187
Share premium
88,633
86,488
(€ thousands)
Shareholders’ equity
Translation differences
2,782
(198)
Consolidated reserves
362,147
326,238
Net profit for the year
Total equity − Group share
59,277
47,428
527,071
474,143
28,832
27,362
Minority interests
Share of subsidiaries’ equity
Share of subsidiaries’ profit for the year
Total minority interests
TOTAL CONSOLIDATED EQUITY (I)
Provisions for non-current liabilities and charges
E.11
3,957
3,640
32,789
31,002
559,860
505,145
E.12.1 & E.12.2
33,008
36,213
E.5
28,271
22,090
Deferred tax liabilities
Non-current borrowings and financial debt
E.13
TOTAL NON-CURRENT LIABILITIES (II)
Current provisions for liabilities and charges
Current borrowings and financial debt
E.12.3
E.13
Advances and prepayments received
Current liabilities
Tax payable
TOTAL CURRENT LIABILITIES (III)
TOTAL EQUITY AND LIABILITIES (I+II+III)
E.15
314,841
352,865
376,120
411,168
83,910
80,353
62,600
95,420
120,860
124,674
257,871
245,444
12,763
12,525
538,004
558,416
1,473,984
1,474,729
37
j
FINANCIAL REPORT
2.2 CONSOLIDATED INCOME STATEMENT
Notes
(€ thousands)
31 March 2013
31 March 2012
Sales
E.18
987,706
900,523
Cost of sales
E.19
(739,371)
(666,722)
Gross profit
248,335
233,801
Administrative costs(1)
(76,532)
(78,719)
Sales and marketing costs(1)
(43,790)
(39,898)
(13,363)
(11,111)
5,474
2,687
Research and development costs
Other operating income
E.20
Other operating costs
E.20
(7,825)
(12,071)
112,299
94,689
Restructuring costs
E.21
(1,025)
(1,213)
Gain/(loss) on disposal of non current assets
E.21
(164)
(204)
-
-
111,110
93,272
16,344
14,947
Operating profit before amortisation and depreciation charges
127,454
108,219
Net cost of financial debt
(10,583)
(10,700)
Other finance income
13,682
14,330
Other non-operating income/(expenses)
OPERATING PROFIT
Amortisation and depreciation charges included in operating profit
Other finance costs
NET FINANCE COST
(16,727)
(18,815)
E.22
(13,628)
(15,185)
97,482
78,087
E.23
(33,871)
(26,912)
63,611
51,175
PROFIT BEFORE TAX
Income tax
PROFIT FOR THE YEAR FROM CONSOLIDATED ENTITIES
Share of profit from associates
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS
Profit/(loss) of discontinued activities
PROFIT FOR THE YEAR FROM CONSOLIDATED ENTITIES
Minority interests
NET PROFIT − GROUP SHARE
E.23
-
-
63,611
51,175
-
-
63,611
51,175
4,333
3,747
59,278
47,428
14,232,102
14,012,090
Earnings per share
4.17
3.38
Diluted earnings per share
4.17
3.38
Earnings per share
4.17
3.38
4.17
3.38
Earnings per share
-
-
-
-
Average number of shares(2)
Earnings per share, in €:
Net earnings per share, in € − Continuing operations:
Net earnings per share, in € − Discontinued operations:
(1) During the financial year, the management costs of operations were reclassified from sales and marketing costs to administrative costs. To ensure comparability
of these costs, the presentation of the financial statements at 31 March 2012 was restated accordingly (€12.1 million).
(2) Excluding treasury shares.
The calculation of net earnings per share takes account of the deduction of all treasury shares held by Faiveley Transport, being a total of 382,050 shares
at 31 March 2013 and 427,528 at 31 March 2012.
38
FINANCIAL REPORT
2.3 STATEMENT OF COMPREHENSIVE INCOME
(€ thousands)
NET PROFIT FOR THE YEAR
Translation adjustment
Financial assets held for sale
FY 2012/2013
FY 2011/2012
63,611
51,175
4,267
5,443
-
-
143
(3,064)
Actuarial differences
-
-
Share of gain/(losses) recorded directly in equity of associates
-
-
Movement in non-current asset revaluation reserve
-
-
Gains (losses) on financial hedge instruments
Other adjustments
Income tax on items of other comprehensive income
ITEMS OF OTHER COMPREHENSIVE INCOME, AFTER TAX
TOTAL COMPREHENSIVE INCOME
(257)
(210)
34
1,066
4,188
3,235
67,799
54,410
62,177
48,418
5,622
5,992
Attributable to:
• Group share
• minority interests
39
j
FINANCIAL REPORT
2.4 CONSOLIDATED CASH FLOW STATEMENT
Notes
(€ thousands)
31 March 2013
31 March 2012
59,278
47,428
4,333
3,747
16,344
14,947
2,410
1,832
Cash flow from operating activities
Net profit for the year − Group share
Net profit for the year − Minority interests
Adjustments for non-cash items:
• Depreciation and amortisation charges
• Cost of performance-based shares*
• Asset impairment (including goodwill)
-
-
• Net movements in provisions
5,058
5,783
• Deferred tax
4,355
(2,849)
• Net loss/(gain) on asset disposals
164
810
• Grant income
(402)
(526)
-
-
• Share of profit/(loss) of associates
• Dilution profit
SELF-FINANCING CAPACITY
Changes in working capital requirement
Decrease (+) increase (-) of inventories
Decrease (+) increase (-) of trade and other receivables
-
-
91,540
71,172
(19,929)
(4,030)
3,273
(1,417)
(33,980)
1,507
Increase (+) decrease (-) of trade and other payables
6,947
2,431
Increase (+) decrease (-) of income tax
3,831
(6,551)
71,611
67,142
NET CASH FROM OPERATING ACTIVITIES
Cash flow from investment activities
Purchase of intangible assets
Purchase of property, plant and equipment
Proceeds from capital grants
(6,684)
(7,007)
(13,791)
(10,102)
219
46
49
189
Purchase of financial assets
(506)
(1,001)
Proceeds from sale of financial assets
Proceeds from disposal of PPE and intangible assets
551
1,159
Cash and cash equivalents of acquired subsidiaries
-
(77,608)
Cash and cash equivalents of disposed subsidiaries
-
-
(20,162)
(94,324)
NET CASH USED IN INVESTMENT ACTIVITIES
Proceeds from new share issues
Buyback of treasury shares
Movement in share and merger premiums
Other movements in equity (cash-flow hedge)
Cash dividends paid to parent company shareholders
Cash dividends paid to minority interests
-
-
523
932
-
-
163
(1,936)
(12,062)
(16,738)
(3,319)
(1,356)
Proceeds from new borrowings
106,869
101,418
Repayment of borrowings
(185,087)
(43,711)
NET CASH FROM/(USED IN) FINANCING ACTIVITIES
(92,913)
38,609
Net foreign exchange difference
(3,060)
1,169
Impact of increase/(decrease) in value of cash equivalents
3,614
1,516
Net increase/(decrease) in total cash and cash equivalents
(40,910)
14,112
Cash and cash equivalents at start of period
206,823
192,711
165,913
206,823
CASH AND CASH EQUIVALENTS AT END OF THE YEAR
*
40
E.10
For greater clarity, the IFRS 2 charge was reclassified from net cash from financing activities to the self-financing capacity.
For comparability reasons, the €1.8 million charge for the year to 31 March 2012 was similarly restated.
FINANCIAL REPORT
2.5 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(€ thousands)
Share
capital
Share
premium
BALANCE AT 31 MARCH 2011
13,942
74,683
Reserves
Translation
differences
Profit for
the year
Total
Group
share
Minority
interests
TOTAL
266,715
(3,396)
75,683
427,627
25,648
453,275
Allocation of 2010/2011 net profit
-
-
75,683
-
(75,683)
-
-
-
Dividends paid
-
-
(16,738)
-
-
(16,738)
(1,356)
(18,094)
209
10,909
-
-
-
11,118
-
11,118
Issue of shares (stock options)
41
1,215
-
-
-
1,256
-
1,256
Treasury shares
(5)
(319)
-
-
-
(324)
-
(324)
Stock option plans reserved for employees
(value of services provided by staff)
-
-
1,832
-
-
1,832
-
1,832
Changes in Group structure
-
-
954
-
-
954
718
1,672
-
47,428
47,428
3,747
51,175
(2,208)
3,198
-
990
2,245
3,235
Capital increase
Net profit for the year
-
-
Items of other comprehensive income
-
-
Total income and expenses recognised
-
-
(2,208)
3,198
47,428
48,418
5,992
54,410
14,187
86,488
326,238
(198)
47,428
474,143
31,002
505,145
Allocation of 2011/2012 net profit
-
-
47,428
-
(47,428)
-
-
-
Dividends paid
-
-
(12,062)
-
-
(12,062)
(3,319)
(15,381)
Capital increase
-
-
-
-
-
-
-
621
Issue of shares (stock options)
20
601
-
-
-
621
-
Treasury shares
24
1,544
(1,666)
-
-
(97)
-
(97)
Stock option plans reserved for employees
(value of services provided by staff)
-
-
2,408
-
-
2,408
-
2,408
-
-
(120)
-
-
(120)
(515)
(635)
63,610
Net profit for the period
-
-
-
-
59,277
59,277
4,333
Items of other comprehensive income
-
-
(80)
2,980
-
2,900
1,289
4,189
Total income and expenses recognised
-
-
(80)
2,980
59,277
62,177
5,622
67,799
14,232
88,633
362,147
2,782
59,277
527,071
32,789
559,860
At 31 March 2013, Faiveley Transport held 382,050 of its own shares, being 2.61% of share capital
41
j
FINANCIAL REPORT
2.6 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
A.
ACCOUNTING INFORMATION
This positive impact is composed of €1.7 million corresponding to
the refund of costs incurred in the past and recognised under “other
income”, and €4.5 million corresponding to net damages recognised
under gross profit.
Faiveley Transport is a French public limited company (société anonyme)
with a Management Board and a Supervisory Board. At 31 March 2013,
its registered office was located at:
Immeuble le Delage, Hall Parc, Bâtiment 6A
3 rue du 19 mars 1962
92230 − GENNEVILLIERS
2.
Plans to allocate share purchase/
subscription options and free shares
The consolidated financial statements are prepared by the Management
Board and submitted for approval to the shareholders at the General
Meeting.
During the financial year, a new free share allocation plan was established
for the benefit of employees.
The financial statements for 2012/2013 were approved by the
Management Board at its meeting on 31 May 2013. They were presented
to and reviewed by the Supervisory Board at its meeting on 31 May 2013.
FREE SHARE ALLOCATION PLAN OF 14 SEPTEMBER 2012:
They will be submitted for the approval of the Shareholders’ General
Meeting on 12 September 2013.
The financial statements have been prepared on the basis that the Faiveley
Transport Group operates as a going concern.
The Group’s functional and presentation currency is the Euro. Figures are
expressed in thousands of Euros unless indicated otherwise.
The Combined General Meeting of 14 September 2012 delegated the
Management Board powers for the allocation of ordinary shares of the
Company free of charge, either new or already issued, within the limit of
1% of the share capital of the Company on the day of the said General
Meeting.
During the year, this authorization gave rise to:
•
the allocation of free performance-based shares by the Management
Board on 24 October 2012;
•
the implementation of a free share allocation plan as part of an
employee shareholding plan by the Management Board at 3 December
2012.
B. HIGHLIGHTS
Share purchase/subscription option and free share allocation plans granted
in previous years and currently still in force are detailed in Note E.11.1.
1.
•
•
Significant events
To partly refinance the acquisition of US company Graham-White
placement bond issue in the US with two institutional investors, for a
total of US$75 million. This bond issue was made up of two tranches:
one for US$30 million, with a 10-year final maturity and redeemable
between 2017 and 2022, and a US$45 million bullet loan with a 10year maturity. The average fixed interest is 4.91% per year.
Faiveley Transport won its legal action against Wabtec in the United
States. On 6 February 2013, the New York Court of Appeals upheld
the jury’s verdict against Wabtec, awarding the companies Faiveley
Transport USA, Faiveley Transport Nordic, Faiveley Transport Amiens
and Ellcon National US$15 million plus US$0.8 million in interest. This
decision particularly punishes the trade secret misappropriation, acts
of unfair competition and unjust enrichment relating to the manufacture
of brake cylinders and actuators that make up brake systems.
In accounting terms, the Wabtec accrued income was recorded in
the balance sheet under “Other current assets” in the amount of
€12.3 million (US$15.8 million). In the income statement, only the
portion corresponding to damages for the period between 2007
and the end of March 2013 was recognised, i.e. €8.6 million (before
expenses). The balance of €3.7 million, corresponding to damages
for future periods, was recognised as a liability in the balance sheet
under “Current liabilities”. The total positive impact on the 2012/2013
operating profit was €6.2 million, after taking into account legal costs.
42
C. CONSOLIDATION PRINCIPLES
AND METHODS
1.
Basis of preparation
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.
1.1
CHANGES IN ACCOUNTING POLICIES DUE TO NEW
STANDARDS AND INTERPRETATIONS OF MANDATORY
APPLICATION FOR INTERIM PERIODS AND FINANCIAL
YEARS STARTING ON OR AFTER 1 APRIL 2012
The Group’s financial statements were not affected by new standards or
interpretations, revised or amended, of mandatory application on or after
1 April 2012 in the European Union.
1.2
•
NEW STANDARDS AND INTERPRETATIONS
OF MANDATORY APPLICATION
Transfer of financial assets (IFRS 7)
FINANCIAL REPORT
1.3
NEW STANDARDS AND INTERPRETATIONS WHOSE
APPLICATION IS NOT YET MANDATORY
Amendments to IAS 1 − Presentation of items of other
comprehensive income
The Group did not opt for the early application of the amendment to IAS 1
– “Presentation of items of other comprehensive income”.
This amendment requires that items of other comprehensive income that
will be recycled in the income statement be distinguished from those
that will not.
The Group considers that the application of this amendment will have
no material impact on the presentation of the published statement of
comprehensive income.
The Group is currently analysing the impacts expected from the application
of these new standards, specifically IFRS 10 – Consolidated financial
statements and IFRS 11 – Joint arrangements:
IFRS 10 – CONSOLIDATED FINANCIAL STATEMENTS
This standard defines control as being exercised when the investor is
exposed, or has rights, to variable returns and has the ability to affect
these returns through its power over the investee. The impact of the
application of this new standard on the consolidated financial statements
is not expected to be material.
IFRS 11 – JOINT ARRANGEMENTS
This new standard essentially provides for two distinct accounting
treatments:
Amendment to IAS 19 – Employee benefits
•
The Group did not opt for the early application of the amendment to
IAS 19 “Employee benefits”. The Group is currently analysing the impacts
and practical consequences of the application of these standards and
interpretations.
Partnerships considered to be joint operations shall be recognised
based on the share of assets, liabilities, revenue and expenses
controlled by the Group. A joint operation may or may not be effected
through a separate entity;
•
The application of the amended IAS 19 “Employee benefits” will be
mandatory for financial years beginning on or after 1 January 2013,
which is the financial year beginning on 1 April 2013 for the Group. This
amendment introduces several modifications to the recognition of postemployment benefits, including:
Partnerships considered to be joint ventures shall be recognised
according to the equity method, to the extent that they only entitle to
ownership of a portion of the entity’s net assets.
The Group is currently analysing its joint arrangements in light of IFRS 11,
in order to determine whether they should be classified as joint operations
or joint ventures.
•
IFRS 13 – Fair value measurement
the recognition of all post-employment benefits granted to Group
employees in the consolidated balance sheet. The corridor option
and the option to amortise in the income statement the cost of past
services over the average period of acquisition of entitlements by
employees will be cancelled;
•
the calculation of expected return on retirement plan assets will now
be made using the same discount rate as that used for calculating
the obligation under defined benefit schemes;
•
the recognition of the impacts of changes to schemes in the income
statement;
•
the recognition of the impacts of remeasurement in items of other
comprehensive income: actuarial gains and losses on the actuarial
liability, outperformance (underperformance) of plan assets, i.e.: the
difference between returns on plan assets and their yield as measured
based on the discount rate of the actuarial liability, and changes in the
effect of the limit placed on the asset.
The Group did not opt for the early application of IFRS 13 – Fair value
measurement, the application of which is mandatory for the Group as
of 1 April 2013.
IFRS 13 applies to standards that require or permit fair value measurements
or disclosures. This standard introduces a single framework for the
measurement of fair value and requires disclosures on measurements. It
introduces a single definition of fair value based on the notion of exit price
and uses a fair value hierarchy based on valuation derived from market
prices rather that a specific valuation of the entity.
The impact of the application of this new standard on the consolidated
financial statements is not expected to be material.
Amendments to IAS 32 and IFRS 7 – Offsetting financial assets
and financial liabilities
The new provisions introduced by IAS 19 revised will be applied
retrospectively by the Group.
The Group did not opt for the early application of these amendments
adopted by the European Union and whose application will be mandatory
for the Group as of 1 April 2014. These amendments clarify the application
of offsetting rules and related disclosures.
The main impacts on the Group’s consolidated financial statements at
1 April 2012 and 31 March 2013 were estimated as follows:
1.4
•
increases in pension commitments of €4.2 million and €6.8 million,
respectively, at 1 April 2012 and 31 March 2013;
•
decreases in consolidated equity, excluding tax effect, of €4.2 million
and €6.8 million, respectively, at 1 April 2012 and 31 March 2013.
Consolidation standards (IFRS 10, Consolidated financial
statements; IFRS 11, Joint arrangements; IFRS 12, Disclosure
of interests in other entities; IAS 28 revised, Investments in
associates and joint ventures)
The Group did not opt for the early application of the consolidation
standards (IFRS 10, IFRS 11, IFRS 12 and IAS 28 revised), adopted by
the European Union and whose application will be mandatory for the
Group as of 1 April 2014.
•
NEW STANDARDS AND INTERPRETATIONS NOT YET
ADOPTED BY THE EUROPEAN UNION AND WHOSE
APPLICATION IS NOT YET MANDATORY
Financial instruments:
− classification and measurement of financial assets (IFRS 9),
− date of mandatory application and transitional methods (amendments
to IFRS 9 and IFRS 7).
•
•
Transition guidance (amendments to IFRS 10, IFRS 11 and IFRS 12).
Investment entities (amendments to IFRS 10, IFRS 12 and IAS 27).
The impact of the application of these provisions on the consolidated
financial statements is currently being analysed by the Group.
43
j
FINANCIAL REPORT
2.
Consolidation scope and methods
Companies over which the Group directly or indirectly exercises
exclusive control are consolidated using the full consolidation method.
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
control is exercised through any other means.
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 policies 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. Note G.2 lists companies that are not consolidated due to their
insignificant impact on the Faiveley Transport Group’s financial statements.
3.
Use of estimates
In order to be able to prepare consolidated financial statements that
comply with IFRS, Financial Management must make certain estimates
and use assumptions that it considers realistic and reasonable. These
estimates and assumptions affect the book value of the assets, liabilities,
equity and results, and any contingent assets and liabilities, as presented
at the balance sheet date. Financial 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:
3.1
RECOGNITION OF THE MARGIN ON LONG-TERM
BUILDING AND SERVICE CONTRACTS AND 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 § C.6 below).
Project reviews are organised on a regular basis so that the stage of
completion and finalisation 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
the 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-by-contract basis.
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
44
circumstances. Similarly, warranty obligations are affected by product
failure rates, equipment wear and tear and the cost of actions 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
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.
3.2
MEASUREMENT OR DEFERRED TAX ASSETS
(SEE § C.16)
The determination of the book values of deferred tax assets and liabilities
and the amount of deferred tax assets to be recognised requires Financial
Management to exercise its judgement as to the level of future taxable
profits to be taken into consideration.
3.3
MEASUREMENT OF ASSETS AND LIABILITIES IN
RESPECT OF RETIREMENT AND OTHER BENEFITS
(SEE § C.15.1)
The measurement by the Group of the assets and liabilities relating to
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 where
actuarial assumptions prove to be significantly different from actual data
subsequently observed, this could result in a substantial amendment to
the charge for retirement and similar benefits, actuarial gains and losses
and assets and liabilities stated in the balance sheet relating to these
commitments.
3.4
MEASUREMENT OF PROPERTY, PLANT
AND EQUIPMENT AND INTANGIBLE ASSETS
(SEE § C.9)
Goodwill, including intangible assets with an indefinite useful life, 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
book value of such assets.
3.5
MEASUREMENT OF FINANCIAL INVESTMENTS
Details of the method used to measure financial investments are provided
in § C.10.3.
3.6
INVENTORIES AND WORK-IN-PROGRESS (SEE § C.12)
Inventories and work-in-progress are measured at the lower of cost and
net estimated realisable value. Writedowns 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 writedowns of inventories
and work-in-progress may prove necessary.
FINANCIAL REPORT
3.7
STOCK-OPTIONS AND FREE SHARES
At the balance sheet date:
Share subscription and/or purchase options as well as free shares granted
to certain senior executives and employees of the Group are recognised
in accordance with IFRS 2.
Options are measured at the allocation date. The fair value of options is
a function of the expected life, exercise price, current price of underlying
shares, expected volatility and share price.
The fair value of free shares is estimated on the allocation date, specifically
based on their expected life, current price of the underlying shares,
expected volatility and share price and takes into account the terms and
conditions attached to the share allocation.
This value is recognised as personnel cost between the date of grant and
the end of the vesting period and offset under equity.
3.8
GENERAL PROVISIONS
Details of the method used to measure other provisions for liabilities and
charges are provided in § C.15.2.
4.
foreign currency-denominated monetary items must be converted
at the closing rate;
•
foreign currency-denominated non-monetary items valued at historical
cost must be converted at the foreign exchange rate on the transaction
date; and
•
foreign currency-denominated non-monetary items valued at fair value
must be converted using the foreign exchange rate on the date fair
value was determined.
4.2
FOREIGN CURRENCY-DENOMINATED TRANSACTIONS
Transactions not denominated in the functional currency are translated at
the exchange rate on the date when the transaction was first recorded.
FOREIGN CURRENCY-DENOMINATED SUBSIDIARY
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.
Subsidiary financial statements were translated into Euros using the
following exchange rates:
•
closing rate for 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);
•
average rate for the period for income statement and cash flow
statement items.
Translation method
The consolidated financial statements are presented in Euro, the Group’s
reporting currency.
4.1
•
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 portion attributable to third parties being recorded in minority interests.
On the disposal of a foreign subsidiary, the translation differences relating
to such disposal and recognised in shareholders’ equity after 1 April 2004
are accounted for in the income statement.
E
TRANSLATION EXCHANGE RATES USED IN THE CONSOLIDATION
Closing rate
Average rate
31 March 2013
31 March 2012
31 March 2013
31 March 2012
Thai Baht
€0.026722
€0.024285
€0.025239
€0.023728
Swedish Krona
€0.119685
€0.113052
€0.116054
€0.110802
Czech Koruna
€0.038850
€0.040437
€0.039578
€0.040377
US Dollar
€0.780945
€0.748727
€0.776432
€0.725834
Australian Dollar
€0.812480
€0.779059
€0.800870
€0.758366
Hong Kong Dollar
€0.100583
€0.096427
€0.100107
€0.093317
Singapore Dollar
€0.628931
€0.596125
€0.624815
€0.579050
Taiwan Dollar
€0.026846
€0.025421
€0.026416
€0.024664
Swiss Franc
€0.820008
€0.830220
€0.826162
€0.823621
Pound Sterling
€1.182592
€1.199185
€1.226380
€1.158648
Iranian Rial
€0.000065
€0.000061
€0.000064
€0.000067
Brazilian Real
€0.389060
€0.411134
€0.386200
€0.428203
Russian Rouble
€0.025150
€0.025449
€0.024954
€0.024530
Indian Rupee
€0.014375
€0.015183
€0.014278
€0.015183
Korean Won
€0.000702
€0.000654
€0.000696
€0.000654
Chinese Yuan
€0.125628
€0.118922
€0.123507
€0.113450
Polish Zloty
€0.239212
€0.238614
€0.240074
€0.238614
45
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FINANCIAL REPORT
5.
Balance sheet date
All companies are consolidated on the basis of financial statements drawn
up at 31 March 2013.
6.
Income statement presentation
6.1
SALES REVENUE AND COST OF SALES RECOGNITION
In accordance with IAS 18.20, sales arising from contracts of less than
one year in duration, which primarily relate to the sale of spare parts
(“Services”), are recorded upon transfer of risks and rewards, which is
generally at the time of delivery to the customer. The same applies to
short-term service provisions, carried out from time to time.
6.4
INCOME TAX
The Group calculates its income tax in accordance with tax laws applicable
in the country where profits are taxable.
The current tax liability is calculated using the tax laws that have been
enacted or substantively enacted by the balance sheet date in the
countries where the Group’s subsidiaries and associates operate and
generate taxable profits. Management periodically assesses tax positions
taken in light of applicable tax regulations, where the latter are subject to
interpretation, and determines, if applicable, the amounts it expects to
pay to tax authorities.
For services provided over a longer period, sales are recognised based
on the percentage of completion of services.
Temporary differences between the book value of assets and liabilities
and their tax base, tax losses carried forward and unused tax credits
are identified in each taxable entity (or tax group, if applicable). The
corresponding deferred tax is calculated using the tax rates that have
been enacted or substantively enacted for the financial year during which
assets will be realised or liabilities settled (see § C.16).
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 in the large majority of
cases on the basis of relating actual sales billed and delivered to the total
contract sales value or more rarely, by relating the actual costs incurred
(work carried out) to the total costs estimated for the contract (method
used by Faiveley Transport Ibérica for the Barcelona metro platform door
project).
Pursuant to the CNC communication of 14 January 2010 relating to the
accounting treatment of the component based on value added (CVAE) of
the CET tax (Contribution Economique Territoriale) introduced in France
by the 2010 Finance Act of 31 December 2009, following an analysis
carried out by the Group and in light of its specific features, it was decided
to treat the value-added based CVAE as income tax, in order to remain
consistent with the classification of similar taxes in Germany and Italy
(Gewerbesteuer and IRAP, respectively).
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.
All changes in the conditions of contract fulfilment and all changes to
margins at completion are recorded as cost of sales in the income
statement in the period in which they are identified.
Warranty provisions are valued based on contract terms and an
assessment of risks based on sector knowledge.
6.2
PROFIT FROM RECURRING OPERATIONS
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
•
•
•
•
46
PROFIT OR LOSS FROM OPERATIONS HELD FOR
DISPOSAL AND DISCONTINUED OPERATIONS
The net of tax profit or loss from discontinued operations as defined by
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.
6.6
EARNINGS PER SHARE
Basic earnings per share is calculated based on the profit attributable to
holders of ordinary shares of the parent company, divided by the weighted
average number of ordinary shares outstanding during the financial period.
Since the shares of the consolidating entity held by itself are deducted
from shareholders’ equity, these shares are excluded from the weighted
average number of outstanding shares.
Diluted earnings per share is calculated based on the weighted average
number of shares outstanding 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.
FINANCE INCOME AND COSTS
Finance income and costs include:
•
6.5
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.
7.
Intangible assets
7.1
GOODWILL
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.
The unallocated difference between the cost of securities in companies
acquired and consolidated and the fair value of assets and liabilities is
recorded as goodwill. Where this difference is negative, it is taken directly
to the income statement. When this difference is positive, it is recognised
in the balance sheet.
FINANCIAL REPORT
In case of the partial acquisition of a company, goodwill will either be
recognised based on the percentage of ownership of this new entity or
fully consolidated, i.e. taking account of the share attributable to minority
interests.
Acquisitions of minority interests in subsidiaries that are
already fully consolidated
Prior to the application of revised IAS 27, the Group had elected to
recognise additional goodwill, which corresponds to the difference
between the acquisition cost of securities and the additional share in
consolidated equity that these securities represented.
Acquisitions of minority interests are now recognised as a deduction from
the Group’s share of shareholders’ equity.
Accounting treatment of put options on minority interests
Similar to the accounting treatment used for acquisitions of minority
interests, the Group elected to use the option to recognise additional
goodwill as part of the accounting treatment of put options on minority
interests that existed prior to 1 April 2010. Put options granted after
revised IFRS 3 and IAS 27 became applicable are recognised as a
deduction from equity (see below § 10.6).
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
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:
straight line basis 1 to 10 years;
Patents:
straight line basis 5 to 15 years;
Development costs:
7.3
straight line basis 3 years.
INTERNALLY-GENERATED INTANGIBLE ASSETS
Research costs are expensed immediately 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 the financial capability to complete the
project and to use or to sell the products derived from this project;
•
it is probable that the project will yield future economic benefits for
the Group.
These costs related to the purchase of raw materials and labour.
Capitalised project development costs are amortised on a straight-line
basis over 3 years.
8.
Property, plant and equipment are measured at their acquisition cost
or at their fair value when new subsidiaries are acquired. Depreciation
is calculated separately for every asset component that has a distinct
useful life. The useful lives of the assets concerned are generally deemed
to be as follows:
•
•
•
•
•
•
Buildings
Fixtures and fittings
Industrial machinery and equipment
15 to 25 years;
10 years;
5 to 20 years;
Tools
3 to 5 years;
Vehicles
3 to 4 years;
Office equipment and furniture
3 to 10 years.
LEASE CONTRACTS
Assets acquired under finance leases are recorded as assets when the
lease agreement transfers substantially all the risks and rewards inherent
to ownership of an asset to the Group. At each balance sheet date, a
finance lease recognised as an asset gives rise to a depreciation charge
(consistent with the depreciation policy applicable to other depreciable
assets of the same nature). 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.
9.
Impairment of asset values
Goodwill and intangible assets with indefinite useful lives are tested for
impairment each year.
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.
Impairment testing involves comparing the recoverable amount of the
asset with its net book value. Recoverable amount is the higher of fair
value less costs to sell and value in use.
Tests are carried out on the basis of Cash Generating Units (CGUs) to
which these assets are allocated. A CGU is a consistent group of assets
whose continuous utilisation generates cash inflows that are largely
independent of cash inflows generated by other groups of assets.
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 book value of the CGU, an impairment
loss, first allocated to goodwill, is recognised.
47
j
FINANCIAL REPORT
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 net
book value of the asset at the same date had it not been subject to a
writedown. Impairment losses recorded on goodwill may not be reversed.
10. Financial assets and liabilities
Pursuant to IAS 32 and IAS 39, financial assets and liabilities comprise
operating receivables and liabilities, financial loans and liabilities,
shareholdings in unconsolidated companies, marketable securities,
borrowings and other financial liabilities and derivative financial instruments.
On initial recognition, a financial instrument is valued at fair 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 ancillary
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 the balance sheet.
In such cases, fair value is calculated by discounting the cash flows
associated with the financial instrument, using the market rate increased
by a risk premium.
At future balance sheet dates, financial assets and liabilities are recorded
at either their amortised cost or fair value depending on the class of assets
or liabilities to which they belong.
The accounting treatment of identified financial assets and liabilities is
as follows:
10.1 OPERATING 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 book value of the asset is reduced via the use of an impairment
account. The amount of the impairment must be recognised in the income
statement.
•
if the risks and rewards are substantially retained, the receivables
are maintained on the balance sheet with a corresponding liability
being recognised, the transaction being accounted for as a borrowing
guaranteed by receivables.
10.2 FINANCIAL RECEIVABLES AND LOANS
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 value is less than their book value, in
accordance with the same principles as those described in Note C.10.1.
The impairment loss is recorded in the income statement as are any loss
reversals.
10.3 SHAREHOLDING IN UNCONSOLIDATED COMPANIES
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 book value 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 reflected in the balance sheet include
cash balances, bank accounts, term deposits maturing in less than three
months and securities that can be traded on official exchanges. These
short-term instruments comprise money market funds and certificates
of deposit. They are considered by the Group as financial assets held for
trading and are valued at their fair value, with any movements in fair value
recorded to the income statement.
In the case of highly liquid short-term investments (maturity not exceeding
three months), it is reasonable to assume that their fair value is equal to
their book value (capitalised interest included).Such items are therefore
classified as cash equivalents.
10.5 BORROWINGS AND OTHER FINANCIAL LIABILITIES
Borrowings and other financial liabilities are stated at amortised cost.
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 book
value 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 book value 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):
•
48
if the risks and rewards are substantially transferred, the receivables
are removed from the balance sheet against cash;
10.6 PUT OPTIONS HELD BY MINORITY SHAREHOLDERS IN
GROUP SUBSIDIARIES
If the put options held by minority shareholders in Group subsidiaries
have an impact on the transfer of risks and rewards associated with
underlying securities, the put option gives rise to the recognition of a firm
and immediate acquisition of the securities, with their payment being
deferred.
In accordance with IAS 32, put options are recognised as financial liabilities
if they have no impact on the transfer of risks and rewards. The amount
reflected in the balance sheet corresponds to the present value of the
exercise price of put options, measured according to the discounted future
cash flow method. This liability is offset under equity.
Subsequent fair value movements are recognised:
•
•
in equity, for the estimated change in value of the exercise price;
in net financial income (cost) for the reversal of debt discounting.
FINANCIAL REPORT
Specific case of put options granted before 1 April 2010, i.e.
before IFRS 3R and IAS 27R came into force
The difference between the present value of the liability and the book value
of reclassified minority interests is recognised as “goodwill in progress” as
long as the put option has not been exercised or extinguished.
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:
•
fair value hedges: 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. Forward
exchange transactions and exchange swaps that cover certain
commercial contracts and financial assets and liabilities denominated
in foreign currencies are considered as fair value hedges;
•
hedging 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.
When the put option is exercised, goodwill in progress is reclassified as
goodwill.
Subsequent fair value movements are recognised as goodwill in progress
and the impact of the reversal of debt discounting is taken to the income
statement.
11. Derivative financial instruments
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.
11.1 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
management of exchange risk is centralised by the parent company’s
Treasury Department and comprises two parts:
Interest rate derivative instruments, as well as budget cash flow hedges
are treated as future cash flow hedges;
•
transaction derivatives: the movements in the fair value of the derivative
are recorded in finance income and costs.
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.
•
exchange risk management relating to tenders in foreign currencies
(uncertain risk);
Raw materials are measured using the weighted average cost method.
•
exchange risk management relating to commercial contracts (certain
risk)
Work-in-progress and finished products are measured at their production
cost. The cost of inventories includes direct raw material costs and, where
relevant, direct labour costs as well as overheads incurred in bringing the
inventories to their present location and condition.
The Group’s policy is to hedge all expected future transactions in each
major currency.
Writedowns are recorded to take into account the risk of obsolescence.
11.2 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.
A detailed description of the exchange and interest rate risks is provided in
Note E.14 to the financial statements: “Financial instruments and financial
risk management”.
11.3 DERIVATIVE FINANCIAL INSTRUMENT ACCOUNTING
RULES
The majority of derivative instruments used by the Group qualify for
accounting purposes as hedges if the derivative is eligible for hedge
accounting 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:
•
•
13. Non-current assets held for disposal and
discontinued operations
IFRS requires the separate disclosure in the balance sheet of the total value
of assets and liabilities of operations held for disposal 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 disposal may no longer be depreciated or
amortised. They are valued at the lower of their book value 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 consolidated equity, with any gains
or losses on their disposal being directly allocated to equity.
foreign exchange options to cover tenders;
structured interest rate swaps.
49
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FINANCIAL REPORT
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.
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 expenditure arising from mechanical
warranties;
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.
•
probable expenditure 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.;
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.
•
•
litigation risks;
•
restructuring costs when the restructuring has been officially
announced and is subject of a detailed plan or whose execution has
already begun.
Post-employment benefits – defined benefits
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. The 2010 pension reform, which in particular plans
to raise the retirement age from 60 to 62 years by 2017, was taken into
account and treated as an actuarial gain or loss.
In Italy, the law provides for the payment by companies of the “Trattamento
di Fine Rapporto” (Severance pay) or TFR for the benefit of 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 has been integrated since
31 March 2008. The provision established in the Company’s financial
statements relates to rights acquired prior to 1 January 2007. For rights
acquired subsequently, the employer’s commitment is limited to the
payment of contributions to external funds.
Commitments for defined benefit plans are calculated based on the
projected unit credit method. 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.
losses on completion for the part exceeding the amounts due by the
customers;
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 manufactured 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
In accordance with IAS 12, deferred tax is calculated using the balance
sheet liability method (use of tax rates adopted or virtually adopted at the
balance sheet date) for all temporary differences between the accounting
and tax treatments of assets and liabilities of each Group entity noted at
the balance sheet date.
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 is recorded in the income statement, unless it relates to
items directly posted to other items of comprehensive income, in which
case it is also recognised under other items of comprehensive income.
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.
17. Segment reporting
In light of criteria defined by IFRS 8 and given the Group’s internal
organisation (steering of activities by project, with projects generally
comprising several products and involving the participation of several
Group subsidiaries) and the structure of the market, the Group opted for
a presentation similar to IAS 14, pursuant to IFRS 8. In addition, it was
deemed appropriate to retain an analysis by geographic region.
As a result, the application of IFRS 8 had no impact on the information
presented at 31 March 2013 by the Group.
Segment reporting is presented in Note E.17.
50
FINANCIAL REPORT
D. CHANGES IN CONSOLIDATION SCOPE
1.
Newly-created companies
Nil.
2.
Acquisitions
2.1
DETAILS OF NEW ACQUISITIONS
Nil.
2.2
SUMMARY OF ACQUISITIONS DURING THE LAST THREE YEARS
Companies acquired
Main business
Acquisition date
% control
Acquisition cost
3 February 2012
100%
US$118,477 thousand
24 February 2011
80%
€2,926 thousand
2011/2012
Graham-White Manufacturing Co.
and its subsidiaries
Design and manufacture
of compressed air drying technology
and brake components
2010/2011
Faiveley Transport Schweiz AG
(formerly Urs Dolder AG)
3.
Manufacture of electrical heating devices
Disposals and companies no longer consolidated
Nil.
4.
Movements in goodwill during the allocation period
The value of assets contributed by Graham-White Manufacturing Co., following the acquisition of the company by the Group in February 2012, was
restated and offset against goodwill.
This restatement resulted in an increase of US$0.6 million (€0.5 million) in the opening goodwill balance.
E.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AND ACCOMPANYING TABLES
(€ THOUSANDS)
1.
Goodwill
Goodwill mainly arises from the acquisition of subsidiaries and the purchase of minority interests in Faiveley SA by the holding company Faiveley
Transport in 2008; these two companies have since merged into the current Faiveley Transport parent company.
This goodwill was measured in accordance with the partial goodwill method (see Note C.7.1).
Faiveley Group Management monitors its business performance by entity or group of entities, which generally correspond to a major area of specialisation
(see table below). Goodwill has been allocated to the companies or groups acquired, except for goodwill arising from the purchase of minority interests
which is monitored as a whole at Group level.
51
j
FINANCIAL REPORT
The following tables provide details of operating and closing goodwill balances for the reported periods, their change during the period and their
allocation to the various companies or groups of companies corresponding to the cash generating units or groups of cash generating units used by
Faiveley Transport for in-house monitoring:
The following table provides details of unallocated goodwill as at 31 March 2013:
Gross
Accumulated
impairment
Net 31 March
2013
Net 31 March
2012
Faiveley Transport minority interests
265,778
-
265,778
265,778
Sab Wabco Group (brakes and couplers)
234,004
-
234,004
234,004
(compressed air drying and brake components)
76,708
-
76,708
73,087
Amsted Rail-Faiveley LLC/Ellcon National Inc.
(brake components)
35,187
-
35,187
33,736
Faiveley Transport NSF (air conditioning)
10,057
-
10,057
10,057
Nowe GmbH (sanding systems)
4,763
-
4,763
7,581
Faiveley Transport Tours*
6,061
-
6,061
6,061
Faiveley Transport Schweiz AG (formerly Urs Dolder AG)
(heating)
2,264
-
2,264
2,264
13,470
-
13,470
13,470
Faiveley Transport Gennevilliers (sintered brakes)
Other
TOTAL
2,943
-
2,943
2,943
651,235
-
651,235
648,981
* Goodwill recognised following the purchase of Espas Group.
CHANGE 2012/2013
Gross
1 April 2012
Adjustments
to opening
goodwill
Disposals
Impairment
test
Other
movements
Gross
31 March
2013
Acquisitions
Faiveley Transport minority
interests
265,778
-
-
-
-
-
265,778
Sab Wabco Group
(brakes and couplers)
234,004
-
-
-
-
-
234,004
Graham-White
Manufacturing Co.
(compressed air drying
and brake components)
73,087
456
-
-
-
3,165 (1)
76,708
Amsted Rail-Faiveley LLC/
Ellcon National Inc
(brake components)
33,736
-
-
-
-
1,451 (1)
35,187
(air conditioning)
10,057
-
-
-
-
7,581
-
-
-
-
Nowe GmbH
(sanding systems)
(2,818) (2)
10,057
4,763
6,061
-
-
-
-
-
6,061
Faiveley Transport Schweiz
AG (heating)
2,264
-
-
-
-
-
2,264
13,470
-
-
-
-
-
13,470
Faiveley Transport
Gennevilliers
(sintered brakes)
Other
TOTAL
2,943
-
-
-
-
-
2,943
648,981
456
-
-
-
1,798
651,235
(1) These movements are due to the translation difference on goodwill recognised in US Dollars: Graham-White Manufacturing Co. (US$98,224 thousand) and
Amsted Rail-Faiveley LLC/Ellcon National Inc. (US$45,057 thousand).
(2) Adjustment to the goodwill of Nowe GmbH following the discounting of the put option on shares held by minority interests.
52
FINANCIAL REPORT
CHANGE 2011/2012
Gross
1 April 2011
Adjustments
to opening
goodwill
Disposals
Impairment
test
Other
movements
Gross
31 March
2012
Acquisitions
Faiveley Transport minority
interests
265,778
-
-
-
-
-
265,778
Sab Wabco Group
(brakes and couplers)
234,004
-
-
-
-
-
234,004
-
-
74,175
-
-
(1,088) (1)
73,087
Amsted Rail-Faiveley LLC/
Ellcon National Inc.
(brake components)
32,077
(362)
-
-
-
2,021 (1)
33,736
(air conditioning)
10,057
-
-
-
-
-
10,057
7,831
-
-
-
-
(250) (2)
7,581
Graham-White
Manufacturing Co.
(compressed air drying
and brakes)
Nowe GmbH
(sanding systems)
6,061
-
-
-
-
-
6,061
Faiveley Transport Schweiz
AG (heating)
2,264
-
-
-
-
-
2,264
Faiveley Transport
Gennevilliers
(sintered breaks)
1,013
-
-
-
-
Other
TOTAL
12,457 (3)
13,470
2,943
-
-
-
-
-
2,943
562,028
(362)
74,175
-
-
13,140
648,981
(1) These movements are due to the translation difference on goodwill recognised in US dollars: Graham-White Manufacturing Company (US$97,615 thousand)
and Amsted Rail-Faiveley LLC/Ellcon National Inc. (US$45,057 thousand).
(2) Adjustment to the goodwill of Nowe GmbH following the discounting of the put option on shares held by minority interests.
(3) Reclassification of the Faiveley Transport Gennevilliers business goodwill.
At least once a year, at year-end, the Group carries out an impairment test
on groups of cash generating units to which goodwill has been allocated.
This test involves comparing their book value and their recoverable value.
Should the recoverable value fall below the book value, impairment is
recognised for the difference. No impairment was recognised in the current
period nor in the previous period.
The recoverable value of all groups of cash generating units to which
goodwill has been allocated was determined based on their estimated
value in use.
The value in use is measured taking account of future cash flow forecasts
approved by Management and covering a period of 3 years. This period
includes the budget prepared for the year that follows the year for which
financial statements have been prepared and the following two years. The
Group benefits from very high visibility regarding future business activity:
its order book at 31 March 2013 represents the equivalent of 19 months
of sales (29 months in original equipment and 6 months in Services).
In determining the value in use, cash flows are determined based on
standard WCRs, not taking account of potential restructuring and capital
expenditure that may improve asset performance.
Future cash flow forecasts estimated beyond the 3-year period are
extrapolated using a growth rate of:
•
•
2.5% for the two years that follow the last year of the plan,
This rate is deemed prudent given the growth rates expected from the
markets in which the Group operates.
These flows are discounted using the Weighted Average Cost of Capital
as discount rate. This rate differs depending on the geographic location
of the groups of CGUs:
Discount rate before tax
France
United
States
All
countries
13.4%
13%
14.7%
The discount rate is determined based on the following market data:
Market data
Risk-free rate on 10-year
French government bonds
Beta of sector
Market risk premium
France
United
States
All
countries
2.1%
1.8%
3.2%
1.29
1.29
1.29
7.2%
7.2%
7.2%
In addition to market data, Company parameters taken into account in
the calculation of the discount rate include:
•
estimated cost of debt: 1.4% for the 2012/2013 financial year (3year swap rate, i.e. over the average maturity of Faiveley’s debt and
including an average spread of 80 bps);
•
equity/debt ratio at the balance sheet date.
1.5% for the following years and to infinity.
53
j
FINANCIAL REPORT
Given the Group’s business model, the key assumptions that make it
possible to determine the recoverable value are the growth rate and the
discount rate. The Group considers that no reasonably likely change in
key assumptions could lead the recoverable value to equal the book
value. Sensitivity tests have been carried out on the two most significant
goodwill items:
•
•
For the Sab Wabco Group of CGUs , the recoverable value is estimated
at € 579 million, for a net book value of € 204 million.
An increase and a decrease of 1% in the 1.5% growth rate to infinity
would have a positive impact of 4.7% and a negative impact of 4.1%
on recoverable value. Therefore, the recoverable amount would be
€ 608 million and € 554 million.
For the Faiveley Transport CGU minority shareholders, the recoverable
value is estimated at € 1,151 million, with a net book value of
€ 705 million.
An increase and a decrease of 1% in the 14.7% discount rate would
have a negative impact of 7.4% and a positive impact of 8.3%
on recoverable value. Therefore the recoverable value would be
€ 542 million and € 622 million.
An increase or a decrease of 1% in the 1.5% growth rate to infinity
would have a positive impact of 4.7% and negative impact of 4% on
recoverable value Therefore, the recoverable amount would be €
1,211 million and € 1,101 million.
An increase and a decrease of 1% in the 14.7% discount rate would
have a negative impact of 7.2% and a positive impact of 8.4% on
recoverable value. Therefore, the recoverable amount would be
€ 1,078 million and € 1,236 million.
2.
Gross
Accumulated
amortisation
Net
31 March 2013
Net
31 March 2012
Research costs
23,124
12,704
10,420
9,498
Patents, trademarks and licences
25,287
20,352
4,935
3,189
Business goodwill
20
5
15
2,561
28,252
669
27,583
24,809
TOTAL
76,683
33,730
42,953
40,057
At 31 March 2013, intangible assets were broken down as follows:
•
research 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;
•
patents, trademarks and licences: this heading primarily includes
computer software amortised over a maximum of 10 years and patents
acquired as part of the acquisition of Carbone Lorraine’s sintered brake
business (Balance Sheet to € 1 million net);
54
•
other intangible assets: primarily includes intangible assets identified
and measured (in particular, sales agency agreements) as part of the
creation of the Amsted Rail-Faiveley LLC joint venture, for an amount
of €9 million (US$11.5 million), the value of the customer portfolio
contributed by the acquisition of Graham-White Manufacturing Co., for
€2.6 million (US$3.4 million) and costs already incurred of €15.3 million
corresponding to the rollout of the Moving Forward 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.
FINANCIAL REPORT
CHANGE 2012/2013
Gross at 1 April 2012
Research
costs
Patents,
trademarks
and licences
Business
goodwill
Other intangible
assets
TOTAL
20,005
21,963
2,561
25,103
69,632
-
-
-
(505)
(505)
Change in Group structure
Acquisitions
2,713
Disposals
(39)
Other movements
445
GROSS AT 31 MARCH 2013
23,124
Accumulated amortisation at 1 April 2012
(1)
(3)
(10,507)
949
-
3,022
6,684
(152)
-
-
(191)
2,527
(2,541)
632
25,287
20
28,252
76,683
(18,774)
-
(294)
(29,575)
1,063 (2)
-
-
-
-
-
(2,203)
(1,679)
(4)
(365)
(4,251)
Reversal of provision
-
151
-
-
151
Other movements
6
(50)
(1)
(10)
ACCUMULATED AMORTISATION AT 31 MARCH 2013
(12,704)
(20,352)
(5)
(669)
(33,730)
NET AT 31 MARCH 2013
10,420
4,935
15
27,583
42,953
Charges to provision
(55) (2)
(1) Development costs capitalised over the period.
(2) Including impact of exchange differences of €551 thousand.
(3) Of which allocated acquisition goodwill; Development costs: €962 thousand.
3.
Land
Buildings
Plant and machinery
Other
Under construction
TOTAL
Gross
Accumulated
depreciation
Net
31 March 2013
Net
31 March 2012
6,122
242
5,880
5,848
82,577
58,019
24,558
25,662
153,826
125,267
28,559
27,436
40,785
32,997
7,788
8,520
4,671
-
4,671
1,446
287,981
216,525
71,456
68,912
CHANGE 2012/2013
Land
Buildings
Plant and
machinery
Other
Under
construction
Total
6,086
80,562
145,405
39,593
1,446
273,092
-
-
(302)
-
-
(302)
Acquisitions
-
1,026
7,258
1,951
3,820
14,055
Disposals
-
-
(790)
(1,020)
(7)
(1,817)
36
989
2,255
261
(588)
Other movements
2,953 (1)
6,122
82,577
153,826
40,785
4,671
287,981
Accumulated depreciation
at 1 April 2012
(238)
(54,900)
(117,969)
(31,073)
-
(204,180)
-
-
-
-
-
-
(5)
(2,922)
(6,474)
(2,692)
-
(12,093)
-
-
698
947
-
1,645
Other movements
1
(197)
(1,522)
(179)
-
(1,897) (1)
(242)
(58,019)
(125,267)
(32,997)
-
(216,525)
5,880
24,558
28,559
7,788
4,671
71,456
ACCUMULATED DEPRECIATION
AT 31 MARCH 2013
(1) Including €1,006 thousand related to net exchange differences.
55
j
FINANCIAL REPORT
PROPERTY, PLANT AND EQUIPMENT ACQUIRED UNDER FINANCE LEASES
The following table provides an analysis of property, plant and equipment acquired under finance leases:
Gross
Accumulated
depreciation
Net
31 March 2013
Net
31 March 2012
Software licences
1,079
-
1,079
1,079
Land
1,088
-
1,088
1,088
Buildings
8,353
5,855
2,498
2,620
Plant and machinery
TOTAL
412
412
-
12
10,932
6,267
4,665
4,799
FINANCE LEASES
Finance lease contracts relate to property assets and plant and machinery. The future minimum lease payments on non-cancellable leases are shown
in the table below:
31 March 2013
31 March 2012
Less than 1 year
198
227
1 to 5 years
831
863
More than 5 years
TOTAL FUTURE LEASE PAYMENTS
Less financial interest
FINANCIAL LIABILITIES ATTACHED TO FINANCE LEASES
4.
678
928
1,706
2,018
(55)
(172)
1,651
1,846
Non-current financial assets
Investments in unconsolidated subsidiaries*
Investments in associates
Gross
Provisions
Net
31 March 2013
Net
31 March 2012
930
677
253
245
-
-
-
-
Other financial investments
5,623
25
5,598
5,538
TOTAL
6,553
702
5,851
5,783
Investments
in unconsolidated
subsidiaries
Investments
in associates
Other financial
investments
Total
922
-
5,563
6,485
-
-
-
-
Acquisitions
8
-
409
417
Disposals
-
-
(210)
(210)
* Full detail of unconsolidated subsidiaries is provided in Note G.2.
CHANGE 2012/2013
Other movements*
-
-
(139)
(139)
930
-
5,623
6,553
Provisions at 1 April 2012
(677)
-
(25)
(702)
-
-
-
-
-
-
-
-
-
-
-
-
Other movements
-
-
-
-
PROVISIONS AT 31 MARCH 2013
* Translation differences for the period.
56
(677)
-
(25)
(702)
253
-
5,598
5,851
FINANCIAL REPORT
MATURITY DATE OF OTHER FINANCIAL INVESTMENTS
1 to 5 years
More
than 5 years
Total
31 March 2013
Total
31 March 2012
Other non-current investments
151
-
151
154
Loans
142
730
872
1,009
1,044
216
1,260
1,134
Guaranteed deposits and securities
Other financial receivables*
2,897
443
3,340
3,266
TOTAL
4,234
1,389
5,623
5,563
* Including receivable re. sale of land to Cyrela (Brazil): €2,899 thousand at 31 March 2013 and €2,840 thousand at 31 March 2012.
5.
Deferred tax
As at
1 April 2012
Change
in Group
structure (2)
Impact
on income
statement
Other
movements
Impact
on equity
As at
31 March
2013
Provisions for inventory impairment
2,106
153
(353)
38
-
1,945
Provisions for trade and other receivables
impairment
2,073
5
(1,749)
3
-
331
Provisions for contracts
9,987
(4)
3,136
195
-
13,314
467
-
(265)
-
-
202
3,598
-
402
24
-
4,024
Provisions for restructuring
Provisions for retirement benefits
and seniority awards
Other provisions for liabilities
2,352
-
(211)
31
-
2,172
14,502
(391)
(1,196)
224
-
13,139
Percentage of completion method (IAS 11)
986
-
(607)
10
-
389
Elimination of inventory margins (Intra-Group)
946
-
62
1
-
1,009
2,500
Other restatements
Restatements under IAS 32-39 (cash flow)
1,951
-
557
-
(8)
(129)
-
244
(2)
-
113
Tax losses carried forward
10,821
-
(602)
172
-
10,391
Tax losses carried forward
but not recognised(1)
(6,062)
-
1,372
(23)
-
(4,713)
43,598
(237)
790
673
(8)
44,816
237
-
(9)
9
-
238
10
-
36
-
-
46
2,126
-
1,060
-
-
3,186
132
-
(2)
-
-
131
10,908
862
1,370
128
-
13,268
Leases
TOTAL DEFERRED TAX ASSETS (A)
Provisions for inventory impairment
Provisions for trade and other receivables
impairment
Provisions for contracts
Provisions for retirement benefits
and seniority awards
Other provisions and restatements
Regulated provisions
573
-
1,043
32
-
1,648
Percentage of completion method (IAS 11)
3,165
-
1,793
69
-
5,027
Capitalisation of development costs
2,996
-
384
-
-
3,380
Restatements under IAS 32-39 (cash flow)
1,459
-
(460)
-
(39)
960
482
-
(92)
(2)
-
387
22,089
862
5,122
236
(39)
28,271
-
-
(4,332)
-
-
-
Finance leases
TOTAL DEFERRED TAX LIABILITIES (B)
Impact on income statement (a)-(b)+(c)
(1) Amount of deferred tax assets corresponding to tax losses not recognised due to the risk of non-recovery.
(2) See Note D.
On the basis of the budget and business plans, the Group is confident as to the recovery of the net deferred tax balance of €16.5 million.
57
j
FINANCIAL REPORT
6.
Inventories
The accounting methods used to measure inventories (including the method for determining the cost used) are described in paragraph C.12.
Gross
Provisions
Net
31 March 2013
Net
31 March 2012
Raw materials
99,990
11,257
88,733
88,040
Work-in-progress
24,425
1,015
23,410
24,279
Finished products
29,514
1,868
27,647
26,133
5,607
943
4,664
5,548
159,536
15,083
144,453
144,000
Merchandise
TOTAL
MOVEMENT IN PROVISIONS 2012/2013
Provisions at
1 April 2012
Change
in Group
structure
Charges
to provisions
Reversals
provisions
used
Reversals
provisions
not used
Other
movements*
Provisions at
31 March
2013
Raw materials
14,096
-
3,076
(5,298)
(899)
282
11,257
Work-in-progress
750
-
463
(68)
(40)
(90)
1,015
Finished products
1,533
429
917
(480)
(508)
(24)
1,868
Merchandise
TOTAL
918
-
614
(367)
(242)
20
943
17,297
429
5,070
(6,213)
(1,689)
189
15,083
* Translation differences for the period.
During the 2012/2013 financial year, old inventories and inventories that had become totally obsolete were scrapped. Provisions of 70.6% of the value
of these inventories had previously been raised. The impact on the income statement for the year ended 31 March 2013 was a loss of €2.2 million.
7.
At 31 March 2013, net work-in-progress on projects was valued at €98.5 million, compared to €91 million in the previous year. This primarily includes
engineering costs on long-term contracts. At each balance sheet date, the Group assesses its recoverable value. In the event of a loss-making contract,
writedown is recognised as a reduction of contracts in progress.
Gross work-in-progress on projects was €115 million at 31 March 2013, compared to €98 million at 31 March 2012.
Provisions for losses on completion, presented as a reduction of work-in-progress on projects, totalled €16.8 million at 31 March 2013 as against
8.
Current receivables
8.1
TRADE RECEIVABLES
Trade receivables
Gross
Provisions
Net
31 March 2013
Net
31 March 2012
281,963
4,982
276,981
272,603
Sales of receivables
(92,788)
-
(92,788)
(93,201)
TOTAL
189,175
4,982
184,193
179,402
Other
movements
Closing
balance
Movements in provisions for doubtful trade receivables
Opening
balance
Year ended:
Change
in Group
structure
Charges
to provisions
Reversals
provisions
used
Reversals
provisions
not used
31 MARCH 2013
6,193
16
2,045
(444)
(2,915)
87
4,982
31 March 2012
4,881
200
3,232
(1,211)
(1,024)
115
6,193
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.
58
FINANCIAL REPORT
Trade receivables at year end
Gross value
Receivables
not yet due
189,175
(4,982)
184,193
Provisions
NET VALUE
Receivables due
Total
balance
sheet
Total due
Less than
60 days
Between 60
and 120 days
Between 120
and 240 days
More than
240 days
158,944
30,231
18,617
4,595
1,827
5,192
(1,407)
(3,575)
-
(165)
(1,087)
(2,323)
157,537
26,656
18,617
4,430
740
2,869
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.
8.2
OTHER CURRENT ASSETS
Supplier credit notes
Social security and tax receivables
Prepaid expenses
Accrued income
Gross
Provisions
Net
31 March 2013
Net
31 March 2012
775
-
775
1,431
14,149
-
14,149
10,650
5,002
-
5,002
4,478
454
-
454
515
Other receivables
14,614
117
14,497
1,441
TOTAL
34,994
117
34,877
18,515
At 31 March 2013, “Other receivables” included accrued income of €12.3 million (US$15.8 million) relating to the Wabtec compensation.
9.
Current financial assets
Guaranteed deposits and securities*
Other financial receivables
Current accounts
31 March 2013
31 March 2012
3,801
4,021
272
304
29
-
Fair value of derivatives − Assets
5,246
5,003
TOTAL
9,348
9,328
* Under our factoring programs, in order to guarantee the repayment of amounts for which the Group may become liable, a non-interest bearing escrow account was
created representing 10% of transferred receivables outstanding. This rate may potentially be adjusted in the event of an increase in disallowed receivables (credit
notes, disputes, non-payment or discounts).
The outstanding guarantees at 31 March 2013 was €3,727 thousand and €3,834 thousand at 31 March 2012.
10. Closing cash and cash equivalents (gross amounts)
31 March 2013
31 March 2012
22,040
41,085
152,922
169,166
Bank overdrafts
(7,840)
(2,405)
Invoices factored and not guaranteed
(1,209)
(1,023)
165,913
206,823
Cash
TOTAL
The Group does not hold a share portfolio but deposits excess cash balances. At 31 March 2013, it had certificates of deposits of €8.2 million and
fixed-term deposits of €13.8 million. These deposits meet the criteria specified by IAS 7, which enables them to be classified as cash equivalents.
For local regulatory reasons, the cash and cash equivalents held by the Brazilian subsidiary (€4.4 million at the end of March 2013), may not be pooled
with the Group’s other cash resources, or be paid out as dividends until losses carried forward are not settled. As an exception, these cash balances
are invested locally in certificates of deposits with a maturity exceeding 3 months. However, they may be drawn down at any time and do not bear
any capital risk.
59
j
FINANCIAL REPORT
11. Equity
11.1 SHARE CAPITAL
At 31 March 2013, the Company’s share capital totalled €14,614,152
divided into 14,614,152 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
objective 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 its credit agreements (see Note E.13).
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 2013 and 2012.
Composition of the share capital
Shares
Nominal
value
31 March
2012
New shares
issued
Double
voting rights
granted
31 March
2013
Ordinary
1
6,661,370
-
(68,750)
6,592,620
Redeemed
-
-
-
-
-
With preferred dividends
-
-
-
-
-
With double voting rights
1
7,952,782
-
68,750
8,021,532
TOTAL
1
14,614,152
-
-
14,614,152
Breakdown of share capital and voting rights
31 March 2013
Main shareholders
François Faiveley Group and the Faiveley family
31 March 2012
% of capital
% of voting
rights
% of capital
% of voting
rights
52.62
67.09
52.62
66.70
Treasury shares
2.61
-
2.93
-
Registered securities*
5.99
7.44
6.26
8.08
38.78
25.47
38.19
25.22
General public
* Excluding treasury shares and Faiveley Family.
Treasury shares
At 31 March 2013, Faiveley Transport held 382,050 treasury shares, including 369,658 in nominative form and 12,392 through its liquidity contract.
Given the purchase cost of the Faiveley Transport shares acquired to service stock option, share subscription or free share allocation plans, the exercise
prices granted and the price of the Faiveley Transport share at 31 March 2013, applied to unallocated options, the unrealised capital loss on treasury
shares was €4.3 million.
11.2 TRANSLATION DIFFERENCES
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.
60
FINANCIAL REPORT
Breakdown of translation differences by currency
31 March 2013
Thai Baht
31 March 2012
15
17
Swedish Krona
1,490
123
Czech Koruna
1,506
2,028
US Dollar
3,822
1,951
Australian Dollar
1,104
810
(585)
(481)
Pound Sterling
(3,422)
(2,828)
Brazilian Real
(1,430)
(903)
Chinese Yuan
4,561
3,162
Indian Rupee
(4,010)
(3,485)
Korean Won
(81)
(381)
Polish Zloty
(179)
(163)
Hong Kong Dollar
Other
TOTAL
(9)
(48)
2,782
(198)
31 March 2013
31 March 2012
11.3 RESERVES AND NET PROFIT
Legal reserve
1,461
1,440
Distributable reserves
(1,886)
(1,886)
Reserves for derivative instruments
(2,207)
(2,380)
364,779
329,064
59,277
47,428
421,424
373,666
31 March 2013
31 March 2012
Shanghai Faiveley Railway Technology
16,505
14,806
Amsted Rail − Faiveley LLC
15,506
15,541
Other reserves
Net profit − Group share
GROUP RESERVES AND NET PROFIT
11.4 MINORITY INTERESTS
The minority interests break down as follows:
Other minority interests
TOTAL
778
655
32,789
31,002
11.5 FREE PERFORMANCE-BASED SHARES
a) Share purchase option plans
In 2005, 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 SAS). This plan was
approved by the Extraordinary General Meeting of 27 September 2005
for a period of thirty-eight months.
As purchase options are exercisable from the second anniversary of their
allocation by the Chairman of the Management Board, subject to the
beneficiary remaining employed by the Faiveley Transport Group on the
exercise date and his/her acceptance of options terms and conditions,
259,044 options have been exercised to date.
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. Should the share purchase options be exercised, they would
give rise to the purchase of existing Faiveley Transport ordinary shares.
Given the departure of certain beneficiaries and options exercised since
the plans were implemented by the Management Board, at 31 March
2013 56,996 options remained exercisable by 10 beneficiaries.
61
j
FINANCIAL REPORT
E
MAIN FEATURES OF THE CURRENT PURCHASE OPTION PLAN
Options granted
n°1
Date of Management
Board meeting
Exercise price (in €)*
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
17,720
6,720
21,958
6,720
4,480
7,456
11,220
20,560
4,850
-
Total number
of options cancelled
47,040
-
4,480
-
-
-
-
-
4,480
-
Number of options
remaining
to be exercised
at 31 March 2013
-
-
4,922
-
-
3,744
15,660
5,960
4,110
22,600
6,720
-
-
-
-
-
-
-
-
-
13,440
-
-
-
-
-
-
-
-
22,600
Total number
of options granted
Number of shares
that may be
subscribed
by members
of the Management
Board and
Supervisory Board
Number of shares that
could be subscribed
by members
of the Executive
Committee
Conditions of exercise
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 price of the 20 trading days preceding the date of the Management Board meeting that decided to grant the options,
less a discount of 5%.
b) Share subscription option plan
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.
62
FINANCIAL REPORT
E
MAIN FEATURES OF THE PLAN
Subscription options granted
Plan of 22/09/2009
Date of authorisation by the AGM
22/09/2009
Date of Management Board meeting
23/11/2009
Exercise price (in €) (1)
54.91
Exercise period
22/11/2013
22/11/2017
Initial number of beneficiaries
15
Total number of options granted
144,000
Total number of options exercised
-
Total number of options cancelled at 31 March 2013
21,000
Number of options remaining to be exercised at 31 March 2013
123,000
Number of shares that may be subscribed by members of the Management Board and the Supervisory Board
45,500
Number of shares that could be subscribed by members of the Executive Committee(2)
55,000
Conditions of exercise
100% of options
exercisable
as from 22/11/2013
(1) The exercise price is equal to the average price of the twenty trading days preceding the date of the Management Board meeting that decided to grant the options,
with no discount.
(2) Excluding members of the Management Board.
E
PLAN VALUATION
Subscription options granted
Plan of 22/09/2009
Initial fair value of the plan (€ millions)
2.8
Charge for the year (€ millions)
0.7
c) Free performance-based share allocation plan
PLAN AUTHORISED BY THE GENERAL MEETING OF 13 SEPTEMBER 2010
PLAN AUTHORISED BY THE GENERAL MEETING OF 14 SEPTEMBER 2012
Faiveley Transport’s Combined General Meeting of 13 September 2010
authorised the Management Board to allocate free performance-based
shares, either existing or to be issued, within the limit of 1% of the share
capital. The free shares are subject to a retention period of a minimum of
two years after their vesting date.
Management Board powers for the allocation free performance shares
of the Company, either new or already issued, within the limit of 1% of
the share capital. These shares must be retained for a minimum period
of 2 years.
The performance criteria have been set for the 2010/2011 and 2011/2012
financial years.
The performance criteria have been set for the 2012/2013 and 2013/2014
financial years.
The criteria used to reflect wealth creation for the shareholders were:
The criteria used to reflect wealth creation for the shareholders were:
•
growth in operating profit: growth of 4% per year in profit from recurring
operations, before non-recurring items; and
•
growth in operating profit: average growth of 4% per year in profit from
recurring operations and
•
cash flow generation (debt reduction): cumulative cash flow from
operating activities for 2010/2011 and 2011/2012 to represent 85%
of the operating profit target.
•
cash flow generation (debt reduction): cumulative cash flow from
operating activities for 2012/2013 and 2013/2014 to represent 85%
of the operating profit target.
The Management Board of the Company endorsed the partial achievement
of performance criteria:
In the event performance criteria are fully achieved or exceeded, each
beneficiary will receive 100% of the number of shares allocated to them.
•
profit from recurring operations for the year to 31 March 2012 was
€94.7 million, as against a target of €128.6 million;
In the event performance criteria are partly achieved, each beneficiary will
receive a percentage of the number of shares allocated to them:
•
cumulative cash flow from operating activities for the financial years
2010/2011 and 2011/2012 totalled €221.1 million, as against a target
of €214 million.
•
criteria of operating profit growth:
− 0% if growth is nil or negative,
− pro-rata for average growth of between 0% and 4% per year.
•
criteria of cash flow generation:
− 0% if generation is nil or negative,
− pro-rata for cash flow from operating activities of between 0% and
100% of the target.
63
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FINANCIAL REPORT
E
MAIN FEATURES OF THESE PLANS
Plans of 14/09/2011
Allocation of free shares
Plan of 14/09/2012
n° 1
n° 2
n° 3
13/09/2010
13/09/2010
14/09/2012
03/12/2010
24/02/2011
24/10/2012
Date ownership of free shares transferred
03/12/2012
24/02/2013
24/10/2014
Vesting date of free shares
03/12/2014
24/02/2015
24/10/2016
38
5
1
Total number of attributable shares
64,500
5,200
10,000
Total number of shares lapsed
37,850
4,200
-
Total number of shares vested since inception
26,650
1,000
N/A
of which free shares allocated to members of the Management Board
and the Supervisory Board
7,900
-
-
of which free shares allocated to members of the Executive
Committee*
8,750
-
10,000
Total number of shares unexercised at 31 March 2013
Terms and conditions of exercise
-
-
10,000
50% of shares have
been vested
at 03/12/2012
50% of shares have
been vested
at 24/02/2013
Determination of %
of shares finally allocated
at 24/10/2014
* Excluding members of the Management Board.
E
PLANS VALUATION
Plans of 14/09/2010
Plan of 14/09/2012
1.7
0.2
0.3
0.1
d) Free share allocation plan
FREE SHARE ALLOCATION PLAN AUTHORISED BY THE GENERAL
MEETING OF 14 SEPTEMBER 2011
FREE SHARE ALLOCATION PLAN AUTHORISED BY THE GENERAL
Management Board powers for the allocation free of charge of ordinary
shares of the Company, either new or already issued, within the limit of
1% of the share capital on 14 September 2011.
Management Board powers for the allocation free of charge of ordinary
shares of the Company, either new or already issued, within the limit of
At its meeting held on 4 January 2012, the Management Board decided
to implement this delegation and to allocate free shares. This decision
was made as part of an employee shareholding plan aimed at a broader
population of executives. The programme provides that an employee
holding shares in the Company in a personal capacity will be granted
two free shares for every share held, not exceeding a limit set for each
level of management.
At its meeting held on 3 December 2012, the Management Board decided
64
FINANCIAL REPORT
E
MAIN FEATURES OF THESE PLANS
Plan of 14/09/2011
Plan of 14/09/2012
14/09/2011
14/09/2012
05/03/2012
15/01/2013
Date ownership of free shares transferred
05/03/2014
15/01/2015
Vesting date of free shares
05/03/2016
15/01/2017
151
179
79,224
72,386
2,916
-
Total number of attributable shares
Total number of shares lapsed
Total number of shares vested since inception
Total number of shares unexercised at 31 March 2013
of which free shares granted to members of the Management Board and the Supervisory Board
of which free shares granted to members of the Executive Committee*
Terms and conditions of exercise
N/A
N/A
76,308
72,386
6,400
4,360
9,600
7,800
Allocation subject
to personal investment
by beneficiaries, with
two free shares granted
for every share bought
Allocation subject
to personal investment
by beneficiaries, with
two free shares granted
for every share bought
* Excluding members of the Management Board.
E
PLANS VALUATION
Free share allocation
Plan of 14/09/2011
Plan of 14/09/2012
2.3
1.8
1.2
0.2
12. Provisions for liabilities and charges
12.1 NON-CURRENT PROVISIONS
Change 2012/2013
Provisions for retirement
and other employee
benefits
Provisions for charges
TOTAL
As at
1 April 2012
Change
in Group
structure
Charges
to provisions
Reversals
provisions
used
Reversals
provisions
not used
Other
movements*
As at
31 March 2013
32,829
-
2,194
(3,586)
(615)
(269)
30,553
3,384
-
-
(1,069)
(11)
151
2,455
36,213
-
2,194
(4,655)
(626)
(118)
33,008
* Including exchange differences of €33 thousand and reclassifications of €(151) thousand.
12.2 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 €22.5 million for the year to 31 March 2013, compared to €20.6 million for
the year to 31 March 2012.
Summary of provisions
The provisions as at 31 March 2013, of those countries with the most significant commitments are shown in the following table:
31 March 2013
31 March 2012
France
Germany
United Kingdom
Other countries
Total
Total
Post-employment benefits
6.3
13,8
4.9
2.7
27.7
29.5
Provisions for other long-term
benefits
0.4
1.3
-
1.3
3.0
2.8
TOTAL
6.7
15.1
4.9
4.0
30.7
32.3
(€ millions)
65
j
FINANCIAL REPORT
Information regarding the actuarial liability
MOVEMENTS IN ACTUARIAL LIABILITY BY GEOGRAPHIC REGION
31 March 2013
31 March 2012
France
Germany
United Kingdom
Other countries
Total
Total
Actuarial liability at start of period
8.2
15.0
50.7
4.0
77.9
70.3
Cost of services rendered
0.6
-
0.1
-
0.7
0.7
Interest on actuarial liability
0.3
0.6
2.4
0.1
3.4
3.6
-
-
-
-
(0.6)
(1.0)
(3.2)
(0.3)
(5.1)
(3.7)
Employee contributions
Benefits paid
-
Settlement of the liability
-
-
-
(0.4)
(0.4)
-
Scheme amendments
-
-
-
-
-
-
Acquisitions/Transfers/Companies
joining the Group
-
-
-
-
-
-
Actuarial (gains)/losses
0.4
1.1
4.8
0.3
6.6
4.1
of which experience (gains)/losses
(0.2)
(0.6)
(1.7)
-
(2.5)
0.1
-
-
(0.9)
-
(0.9)
2.8
Exchange differences
Other
ACTUARIAL LIABILITY
AT END OF PERIOD
-
-
-
-
-
-
8.9
15.7
54.0
3.8
82.3
77.9
-
-
54.0
0.5
54.5
51.5
8.9
15.7
-
3.2
27.8
26.4
Of which:
Funded schemes
Unfunded schemes
MOVEMENTS IN PLAN ASSETS BY GEOGRAPHIC REGION
31 March 2013
31 March 2012
France
Germany
United Kingdom
Other countries
Total
Total
Fair value of assets at start of period
-
-
44.2
0.5
44.7
39.8
Employer contributions
-
-
1.8
0.1
1.9
1.7
Employee contributions
-
-
-
-
-
-
Benefits paid
-
-
(3.2)
-
(3.2)
(1.8)
Settlement of the liability
-
-
-
(0.1)
(0.1)
-
Expected financial revenue
-
-
2.0
-
2.1
2.1
Actuarial gains/(losses)
-
-
3.8
-
3.8
0.5
of which experience gains/(losses)
-
-
3.8
-
3.8
0.5
Acquisitions/Transfers/Companies
joining the Group
-
-
-
-
-
-
Exchange differences
-
-
(0.8)
-
(0.8)
2.4
FAIR VALUE OF ASSETS
AT END OF PERIOD
-
-
47.9
0.4
48.4
44.7
The actual return on investments was €5.9 million in the year to 31 March 2013 (compared to €2.6 million for the year to 31 March 2012).
Contributions in respect of defined benefit schemes in the United Kingdom and India were estimated to total €1.8 million for 2013.
The expected return on investments is estimated at €2 million in 2013. A one-point increase in the assumed percentage rate of return would generate
€0.5 million in additional income.
66
FINANCIAL REPORT
PROVISION FOR RETIREMENT COMMITMENTS
31 March 2013
31 March 2012
France
Germany
United Kingdom
Other countries
Total
Total
8.9
15.7
6.0
3.3
33.9
33.1
Actuarial gains (losses) not recognised
(1.5)
(1.9)
(1.7)
(0.6)
(5.7)
(3.1)
Past service cost not recognised
(1.1)
-
-
-
(1.1)
(1.2)
-
-
0.6
-
0.6
0.6
NET PROVISION
6.3
13.8
4.9
2.7
27.7
29.4
of which provisions for commitments
6.3
13.8
4.9
2.7
27.7
29.4
-
-
-
-
-
-
Financial cover
Impact of capping of assets
of which surplus plan assets
PAST DATA RELATING TO FINANCIAL COVER AND ACTUARIAL EXPERIENCE DIFFERENCES FOR THE CURRENT AND THE PREVIOUS FOUR FINANCIAL YEARS
Discounted value of commitments
31 March 2013
31 March 2012
31 March 2011
31 March 2010
31 March 2009
Total
Total
Total
Total
Total
82.3
77.9
70.3
72.3
55.4
Fair value of scheme assets
48.4
44.7
39.8
36.3
26.8
FUNDING SHORTFALL
33.9
33.2
30.5
36.0
28.5
Experience gains/(losses) in relation to liabilities
2.5
(0.1)
1.8
1.1
(0.1)
Experience gains/(losses) in relation to assets
3.8
0.5
(0.1)
6.2
(5.3)
Experience gains/(losses) in relation to liabilities,
as % of commitment
3%
0%
3%
2%
0%
Experience gains/(losses) in relation to assets,
as % of plan assets
8%
1%
0%
17%
(20%)
Income statement items
BREAKDOWN OF NET PENSION COSTS
31 March 2013
France
Germany
United Kingdom
31 March 2012
Other countries
Total
Total
Cost of services rendered
0.6
-
0.1
-
0.7
0.7
Interest on actuarial liability
0.3
0.6
2.4
0.1
3.4
3.6
Expected financial income
-
-
(2.0)
-
(2.0)
(2.1)
Amortisation of actuarial gains/losses
-
-
-
-
-
-
Amortisation of past service cost
Reduction/liquidation/transfer
of the scheme
0.1
-
-
-
0.1
0.1
-
-
-
(0.2)
(0.2)
-
Impact of capping of assets
-
-
-
-
-
-
Other
-
-
-
-
-
-
1.0
0.6
0.5
(0.1)
2.0
2.3
NET CHARGE
Actuarial assumptions
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 2013
Discount rate
31 March 2012
France
Germany
United Kingdom
France
Germany
United Kingdom
2.85%
2.85%
4.25%
3.85%
3.85%
4.80%
Inflation rate
2.00%
2.00%
3.30%
2.00%
2.00%
3.15%
Average salary increase rate
2.50%
1.57%
3.65%
3.00%
1.60%
4.65%
NA
NA
4.58%
NA
NA
4.54%
Expected return on investments
67
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FINANCIAL REPORT
•
The sensitivity of commitments at 31 March 2013 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
(2.899)
3.068
Effect on the cost of services rendered
(0.032)
0.033
(€ millions)
•
The sensitivity of commitments at 31 March 2013 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
0.325
(0.312)
Effect on the cost of services rendered
0.032
(0.031)
(€ millions)
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.
Currently the investment portfolio contains no Group securities.
The structure of the investment portfolio is as follows:
31 March 2013
31 March 2012
Shares
49.6%
47.8%
Bonds
48.2%
49.4%
Other assets
TOTAL
•
2.2%
2.8%
100.0%
100.0%
The expected return for each category of assets is as follows:
31 March 2013
31 March 2012
Shares
6.0%
5.7%
Bonds
3.2%
3.5%
Other assets
1.7%
4.3%
TOTAL
4.6%
4.6%
12.3 CURRENT PROVISIONS
Change 2012/2013
As at
1 April 2012
Change
in Group
structure
Charges
to provisions
Reversals:
provisions
used
Reversals:
provisions
not used
Other
movements
As at
31 March
2013
70,946
(12)
44,439
(28,475)
(12,552)
918
75,264
Provisions for losses
on completion
1,407
-
-
-
-
955
2,362
TOTAL CONTRACT
PROVISIONS
72,353
(12)
44,439
(28,475)
(12,552)
1,873
77,626
1,628
-
122
(976)
-
(102)
672
Provisions for guarantees,
after sales service
and penalties
Provisions for restructuring
Provisions for other risks
6,372
-
477
(1,229)
(60)
52
5,612
TOTAL OTHER
PROVISIONS
8,000
-
599
(2,205)
(60)
(50)
6,284
80,353
(12)
45,038
(30,680)
(12,612)
1,823*
83,910
TOTAL
*
Including exchange differences of €969 thousand and reclassifications of €854 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.
68
FINANCIAL REPORT
Provisions for losses on completion are shown here for the amount not allocated as a reduction of work-in-progress on projects.
The amount of provisions for losses on completion in reduction of work-progress on projects (note E.7) is €16.8 million at 31 March 2013. The total
amount of provisions for losses on completion is thus €19.2 million at 31 March 2013.
13. Borrowings and financial debt
Under the credit agreements, the Faiveley Transport Group must comply with the following four financial conditions:
•
•
•
•
leverage ratio (Consolidated Net Debt/Consolidated EBITDA) must not exceed 2.5 at 31 March 2013. At this date, the ratio was 1.47;
gearing ratio (Consolidated Net Debt/Consolidated Equity): must not exceed 1.50 at 31 March 2013. At this date the ratio was 0.31;
total bank guarantees must not exceed 22% of the order book. At 31 March 2013, they represented 13.5%;
“Consolidated EBITDA/Cost of Consolidated Net Debt” must not be less than 3.5. At 31 March 2013, the ratio was 11.6.
Non-compliance with one of these covenants may result in the debt becoming immediately repayable.
13.1 BREAKDOWN AND MATURITY OF NON-CURRENT AND CURRENT FINANCIAL DEBT
2012/2013
Current portion
Borrowings
Finance leases
Employee profit sharing
Various other financial debt
Guarantees and deposits received
Credit current accounts
Bank overdrafts
Non-current portion
Under 1 year
1 to 5 years
Over 5 years
Total
2011/2012
36,857
257,675
55,667
350,199
425,895
185
796
670
1,651
1,846
65
-
-
65
65
7
-
-
7
65
56
34
-
90
56
141
-
-
141
2,112
2,405
7,840
-
-
7,840
Short-term facilities (credit balance)
-
-
-
-
-
Invoices factored – not guaranteed
1,209
-
-
1,209
1,023
TOTAL EXCLUDING FAIR VALUE OF DERIVATIVES
46,360
258,505
56,337
361,202
433,467
Fair market value of derivatives – liabilities
14,674
1,566
-
16,240
14,818
TOTAL
61,034
260,071
56,337
377,442
448,285
13.2 BREAKDOWN BY CURRENCY OF NON-CURRENT AND CURRENT FINANCIAL DEBT
Euro
US Dollar
Total 31 March 2013
Total 31 March 2012
291,848
411,484
85,214
27,366
Brazilian Real
141
211
Chinese Yuan
205
9,181
Indian Rupee
23
20
Czech Koruna
11
20
-
3
377,442
448,285
Russian Rouble
TOTAL
69
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FINANCIAL REPORT
13.3 BREAKDOWN BY INTEREST RATE OF NON-CURRENT AND CURRENT FINANCIAL DEBT
Before implementing hedge instruments
Fixed rate financial debt
At 31 March 2013
At 31 March 2012
60,222
8,120
Variable rate financial debt
300,980
425,347
TOTAL FINANCIAL DEBT*
361,202
433,467
* Excluding fair market value of derivatives − liabilities.
After implementing hedge instruments
At 31 March 2013
At 31 March 2012
Fixed rate financial debt
232,898
227,418
Variable rate financial debt
128,304
206,049
TOTAL FINANCIAL DEBT*
361,202
433,467
At 31 March 2013
At 31 March 2012
314,842
352,865
37,311
77,174
Bank overdrafts
7,840
2,405
Invoices factored – not guaranteed
1,209
1,023
361,202
433,467
* Excluding fair market value of derivatives − liabilities.
13.4 CALCULATION OF NET FINANCIAL DEBT
Non-current financial debt
Current financial debt
TOTAL FINANCIAL DEBT (A)
Receivables from investments
-
-
Loans
1,146
1,302
Guarantees, deposits and securities paid
5,067
5,155
Various other receivables
3,468
3,405
29
-
Current accounts
TOTAL FINANCIAL RECEIVABLES (B)
9,710
9,862
Cash and cash equivalents (c)
174,958
210,247
NET FINANCIAL DEBT (A-B-C)
176,534
213,358
Equity
559,860
505,145
Net debt/equity
Sales
Net debt/sales
31.5%
42.2%
987,706
900,523
17.9%
23.7%
In economic terms, net debt should be reduced by the value of treasury shares held for sale as part of the share purchase/subscription option and
free share allocation plans.
The liquidation value of these shares was €14.9 million at 31 March 2013, given the exercise prices granted for share purchase/subscription options
and the year-end share price for shares not allocated to these plans.
For accounting purposes, the value of treasury shares held is deducted from equity under IFRS; this amounted to €19.2 million at 31 March 2013 and
€21 million at 31 March 2012.
70
FINANCIAL REPORT
14. Financial instruments and financial risk management
14.1 FINANCIAL INSTRUMENTS AT 31 MARCH 2013
Main valuation methods used for financial assets and liabilities:
•
since most of Faiveley Transport’s financial debt bears a variable rate, its fair value (rounded to the nearest credit spread) is equal to nominal values
supplemented by interest not yet due;
•
due to their short maturity profile, the fair value of trade and other receivables, other current financial assets, current financial debt, cash and cash
equivalents and short-term investments is deemed identical to their book value.
Fair value classification
of instruments(1)
Breakdown by category
Book
value
Non
financial
assets
and
liabilities
Loans,
receivables
and
liabilities
At fair
value
through
profit and
loss
Available
for sale
financial
assets
Fair
value
Level 1
Level 2
Level 3
253
-
-
-
253
253
-
-
253
Other non-current financial
investments
5,598
-
5,598
-
-
5,598
-
-
-
TOTAL NON-CURRENT ASSETS
5,851
-
5,598
-
253
5,851
-
-
253
184,193
6,646
177,547
-
-
184,193
-
-
-
34,877
6,255
28,622
-
-
34,877
-
-
-
4,102
-
4,102
-
-
4,102
-
-
-
5,246
-
-
5,246
-
5,246
-
5,246
-
Au 31 March 2013
Shareholdings in unconsolidated
subsidiaries
Trade receivables
22,035
-
-
22,035
-
22,035
22,035
-
-
Cash
152,922
-
-
152,922
-
152,922
-
-
-
TOTAL CURRENT ASSETS
403,375
12,901
210,271
180,203
-
403,375
22,035
5,246
-
TOTAL ASSETS
409,226
12,901
215,869
180,203
253
409,226
22,035
5,246
253
Non-current borrowings and
financial debt
314,841
-
314,841
-
-
314,841
-
-
-
TOTAL NON-CURRENT
LIABILITIES
314,841
-
314,841
-
-
314,841
-
-
-
Current borrowings and financial
debt
46,360
-
46,360
-
-
46,360
-
-
-
Fair value of derivatives − Liabilities
16,240
-
-
16,240
-
16,240
-
11,360
Current liabilities
257,872
20,033
237,839
-
-
257,872
-
-
-
TOTAL CURRENT LIABILITIES
320,472
20,033
284,199
16,240
-
320,472
-
11,360
4,880
TOTAL LIABILITIES
635,313
20,033
599,040
16,240
-
635,313
-
11,360
4,880
4,880(2)
(1) Revised IFRS 7 requires that fair value measurements be classified on 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: data other 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).
(2) This amount corresponds to the financial commitment recognised as part of the recognition of put options held by minority shareholders in Nowe GmbH and
Faiveley Transport Schweiz AG (formerly called Urs Dolder AG) at 31 March 2013.
71
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FINANCIAL REPORT
14.2 FINANCIAL INSTRUMENTS AT 31 MARCH 2012
Fair value classification
of instruments(1)
Breakdown by category
Book
value
Non
financial
assets
and
liabilities
Loans,
receivables
and
liabilities
At fair
value
through
profit and
loss
Available
for sale
financial
assets
Fair
value
Level 1
Level 2
Level 3
245
-
-
-
245
245
-
-
245
Other non-current financial
investments
5,538
-
5,538
-
-
5,538
-
-
-
TOTAL NON-CURRENT ASSETS
5,783
-
5,538
-
245
5,783
-
-
245
179,402
5,311
174,091
-
-
179,402
-
-
-
18,515
7,865
10,650
-
-
18,515
-
-
-
4,325
-
4,325
-
-
4,325
-
-
-
5,003
-
-
5,003
-
5,003
-
5,003
-
41,080
-
-
41,080
-
41,080
41,080
-
-
At 31 March 2012
Shareholdings in unconsolidated
subsidiaries
Trade receivables
Cash
169,167
-
-
169,167
-
169,167
-
-
-
TOTAL CURRENT ASSETS
417,492
13,176
189,066
215,250
-
417,492
41,080
5,003
-
TOTAL ASSETS
423,275
13,176
194,604
215,250
245
423,275
41,080
5,003
245
Non-current borrowings and
financial debt
352,865
-
352,865
-
-
352,865
-
-
-
TOTAL NON-CURRENT
LIABILITIES
352,865
-
352,865
-
-
352,865
-
-
-
Current borrowings and financial
debt
80,602
-
80,602
-
-
80,602
-
-
-
Fair value of derivatives − Liabilities
14,818
-
-
14,818
-
14,818
-
7,643
245,444
20,747
224,697
-
-
245,444
-
-
Current liabilities
7,175 (2)
-
TOTAL CURRENT LIABILITIES
340,864
20,747
305,299
14,818
-
340,864
-
7,643
7,175
TOTAL LIABILITIES
693,729
20,747
658,164
14,818
-
693,729
-
7,643
7,175
(1) Revised IFRS 7 requires that fair value measurements be classified on 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: data other 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).
(2) This amount corresponds to the financial commitment recognised as part of the recognition of put options held by minority shareholders in Nowe GmbH and
Faiveley Transport Schweiz AG (formerly called Urs Dolder AG ) at 31 March 2012.
14.3 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 have been measured based on year-end market prices. They
have been appraised by an independent expert.
14.4 MARKET RISKS
a) Exchange risks
exchange risk as a result of its exposure to a number of currencies.
The major currencies concerned are the US Dollar, the Hong-Kong
Dollar, the Czech Koruna, the Swedish Krona, the Pound Sterling and
the Chinese Yuan.
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.
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 hedge
72
FINANCIAL REPORT
instruments 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.
EXCHANGE RISK MANAGEMENT RELATING TO COMMERCIAL
CONTRACTS (CERTAIN RISK)
tenders) are hedged by the Group Treasury Department from contractual
commitment. The instruments used primarily include forward purchases
and sales. Treasury may also use options.
The Group’s policy is to systematically hedge the full value of future
transactions expected in every major currency. The minimum trigger
threshold for a foreign exchange hedge is €250 thousand.
Various flows are hedged against, at a minimum of 80%, based on the
annual budget.
In addition to commercial contracts, all financial positions and management
fees deemed significant are systematically hedged against.
GROUP EXPOSURE RESULTING FROM COMMERCIAL CONTRACTS AT 31 MARCH 2013
Trade
receivables
(a)
Trade payables
(a)
Commitments
(c)
Net unhedged
position
(d) = a-b+/-c
Hedging instruments
(e)
Net hedged
position
(f) = d-e
AUD
-
-
(2,585)
(2,585)
(2,579)
(7)
CNY
18,951
(1,278)
56,939
74,611
74,457
154
CZK
-
(35)
(750,348)
(750,383)
(750,868)
485
GBP
1,706
(217)
14,666
16,155
11,407
HKD
(8,358)
-
(251,950)
(260,307)
(260,648)
340
INR
-
-
(151,204)
(151,204)
(150,000)
(1,204)
PLN
-
-
3,459
3,459
3,400
59
RUB
-
-
209,705
209,705
209,713
(8)
SEK
(18,085)
4,548
(89,015)
(102,552)
(103,036)
484
SGD
925
-
24,885
25,810
25,822
(12)
USD
13,424
1,900
16,250
31,574
29,149
2,425
Amounts in thousands
of currency
4,748 *
* The £4.7 million amount relates to the SSL project, for which £16 million remains outstanding.
FORWARD SALES HEDGING FINANCIAL AND COMMERCIAL TRANSACTIONS AS AT 31 MARCH 2013
Nominal value
Fair value
€ thousands
Local
currency thousands
€ thousands
4,691
6,048
(198)
Chinese Yuan
18,350
149,180
(259)
Czech Koruna
13,659
349,964
63
Pound Sterling
15,890
13,597
(152)
Hong-Kong Dollar
44,150
452,320
(1,309)
Indian Rupee
905
64,825
1
Polish Zloty
816
3,400
7
Russian Rouble
5,274
209,713
-
Swedish Krona
16,875
142,980
(206)
Singapore Dollar
16,240
25,822
-
US Dollar
155,875
204,254
TOTAL
292,725
Australian Dollar
(3,489)
(5,542)
73
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FINANCIAL REPORT
FORWARD PURCHASES HEDGING FINANCIAL AND COMMERCIAL TRANSACTIONS AS AT 31 MARCH 2013
Nominal value
Australian Dollar
Swiss Franc
Fair value
€ thousands
Local
currency thousands
€ thousands
4,891
6,250
159
244
300
2
Chinese Yuan
43,682
355,645
400
Czech Koruna
49,222
1,256,119
(879)
Pound Sterling
29,300
24,319
(586)
Hong-Kong Dollar
50,083
505,061
700
Indian Rupee
2,086
151,849
58
Polish Zloty
1,837
7,684
(9)
Swedish Krona
54,307
459,662
603
US Dollar
115,918
152,089
2,335
TOTAL
351,570
2,783
SENSITIVITY ANALYSIS
The following table presents, at 31 March 2013, the sensitivity to a 10% positive or negative change in the Euro against other currencies:
•
the effect on pre-tax profit only applies to financial assets and liabilities recognised in the balance sheet, which are denominated in a currency other
than the functional currency of their controlling entity and which are not hedged against.
•
the effect on equity results from the efficient portion of derivative instruments qualifying as cash flow hedges.
Movement in €
exchange rate
Currency
Chinese Yuan
Australian Dollar
Hong-Kong Dollar
Brazilian Real
Swedish Krona
Czech Koruna
Pound Sterling
Russian Rouble
Effect on profit from recurring
operations (before tax)
10%
170
(10%)
(209)
Effect on equity
reserves
10%
(44)
(188)
(10%)
50
188
10%
240
-
(10%)
(180)
-
10%
(315)
-
(10%)
385
-
10%
242
492
(10%)
(322)
(492)
10%
433
-
(10%)
(521)
-
10%
(208)
-
(10%)
210
-
10%
-
137
(10%)
-
(148)
The impact of fluctuations in the Euro against other currencies is not material.
b) Interest rate risk
The syndicated debt, excluding the revolving facility, is indexed on US
Dollar Euribor and Libor variable rates and may be hedged in accordance
with the Group’s interest rate risk policy. None of the revolving facilities,
whether drawn or undrawn, nor the US private placement-type fixed-rate
bond issue are subject to interest rate hedging.
To manage its risk, the Treasury department has implemented a hedging
strategy using interest rate swaps, tunnels and caps and options.
74
The exposure of interest rates on loans in Euros is hedged for between
77% and 83% of the total debt bearing a Euro interest rate, depending
on fluctuations for the 2013/2014 period.
The US dollar-denominated syndicated debt is no longer hedged.
However, taking account of the US private placement bond issue, only
26% of debt for the 2013/2014 period is exposed to movements in
interest rates.
FINANCIAL REPORT
The estimated cost of the Euro-denominated syndicated debt is 1.94% for the 2013/2014 period, hedges and spreads included. The estimated cost
of the US-denominated debt, which includes the US Private Placement is estimated at 3.87%. The total cost of the Group’s debt for 2013/2014 is
therefore estimated at 2.5%.
Considering the amortisation profile of the syndicated facility and interest rate hedges, the net exposure at 31 March 2013 was as follows:
Financial debt
EUR-denominated debt
Hedge instruments
Net exposure
Fixed rate
Variable rate
Fixed rate
Variable rate
Fixed rate
Variable rate
Less than 1 year
-
32,440
32,440
-
-
-
1 to 2 years
-
32,440
32,440
-
-
-
2 to 3 years
-
32,440
15,000
-
-
17,440
More than 3 years
-
170,168
15,000
-
-
155,168
TOTAL EUR
-
267,488
94,880
-
-
172,608*
* Sensitivity analysis of net exposure (€172.6 million):
A 100 basis points increase in the reference “Euribor 3 months” interest rate would result in a full-year increase of €1.6 million in the interest expense.
Given the amortisation profile of the syndicated credit, the US private placement and interest rate hedges, the net exposure of the US dollar-denominated
debt at 31 March 2013 was as follows:
Financial debt
USD-denominated debt
Hedge instruments
Net exposure
Fixed rate
Variable rate
Fixed rate
Variable rate
Fixed rate
Variable rate
Less than 1 year
-
3,580
-
-
-
3,580
1 to 2 years
-
3,580
-
-
-
3,580
2 to 3 years
-
3,580
-
-
-
3,580
More than 3 years
75,000
21,375
-
-
75,000
21,375
TOTAL USD
75,000
32,115
-
-
75,000
32,115*
* Sensitivity analysis of net exposure (USD 32.1 million):
A 100 basis points increase in the reference “Libor USD 3 months” interest rate would result in a full-year increase of USD 0.32 million in the interest expense.
INSTRUMENTS RECOGNISED IN EQUITY
On EUR loans
On USD loans
Nominal
(EUR
thousands)
Fair value
(EUR
thousands)
Nominal
(currency
thousands)
Fair value
(currency
thousands)
Nominal
(EUR
thousands)
Fair value
(EUR
thousands)
160,000
(3,095)
225
(2)
176
(2)
Tunnel
12,500
(212)
-
-
-
-
Cap
20,000
(56)
-
-
-
-
192,500
(3,363)
225
(2)
176
(2)
Swap
TOTAL
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 2013, the servicing of projected debt, net
of hedges put in place, would limit the impact of a 1% increase in interest
rates on debt and hedges to €0.8 million.
The positive impact on equity is €1.4 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 pass on a large part of the increases in raw material costs.
However, the Faiveley Transport Group’s sintered brake pads activity
is exposed to fluctuations in the price of copper. Contracts have been
entered into to hedge 70% of the 2013/2014 financial year exposure
through euro-denominated raw material swaps.
A 1% increase in the price of copper would have a negative impact of
€11 thousand on EBITDA .
75
j
FINANCIAL REPORT
d) Derivative instruments
THE FAIR VALUE OF DERIVATIVE INSTRUMENTS FOR HEDGING EXCHANGE, INTEREST RATE AND RAW MATERIALS RISKS REFLECTED
IN THE BALANCE SHEET WAS AS FOLLOWS:
Financial instruments
− Assets
− Liabilities
Unrealised capital gains/
(losses) taken to equity
Interest rate hedges(1)
-
3,321
(3,261)
Raw material hedges(1)
-
11
(11)
Foreign exchange hedges
5,246
8,030
(35)
• fair value hedges
2,950
4,042
-
• cash flow hedges
38
75
(35)
At 31 March 2013
• not eligible for hedge accounting
2,258
3,913
-
TOTAL
5,246
11,362
(3,307)
− Assets
− Liabilities
Unrealised capital gains/
(losses) taken to equity
-
3,623
(3,557)
(1) Cash flow hedges.
At 31 March 2012
Interest rate hedges
Raw material hedges
-
4
(4)
5,003
4,018
116
3,270
3,006
-
184
78
116
1,549
934
-
TOTAL
5,003
7,645
(3,445)
MOVEMENT IN EQUITY RESERVE (EXCL. DEFERRED TAX)
Amount 1 April 2012
Movement in the year
Amounts recycled
to income statement
Amount 31 March 2013
(3,557)
603
(307)
(3,261)
116
(149)
(2)
(35)
(4)
(7)
-
(11)
(3,445)
447
(309)
(3,307)
Raw material hedges
TOTAL
HORIZON FOR RELEASE OF AMOUNTS RECORDED IN EQUITY
AT 31 MARCH 2013
The amount recorded in equity, in respect of exchange rate derivatives
€(35 thousand), will be recycled to the income statement in the year
ending 31 March 2014.
The amount recorded in equity, in respect of interest rate derivatives
€(3,261 thousand), will be released to the income statement between
31 March 2013 and 31 March 2017 according to the maturity of the
flows hedged.
In addition, the Faiveley Transport Group makes use of factoring
arrangements in France, Germany, Spain, Italy, the UK and China.
Factoring enables the Group to sell, without recourse, part of its
receivables to various factoring companies and banks. This selling without
recourse has enabled the Group to improve trade receivables recovery
and to transfer the risk of default or bankruptcy on the part of customers
or other debtors to the factors.
At 31 March 2013, receivables sold without recourse totalled €92.8 million
and the amount of receivables sold and not guaranteed was €1.2 million.
The amount taken to equity in relation to raw materials €(11 thousand),
will be transferred to the income statement for the year to 31 March 2014.
As regards the risk associated with financial assets, the Group’s maximum
exposure is equal to their book value.
14.5 CREDIT RISK
14.6 LIQUIDITY RISK
Owing to its commercial activities, the Faiveley Transport Group is exposed
to credit risk, in particular the risk of default on the part of its customers.
Prudent liquidity risk management requires the Group to retain a sufficient
level of cash and securities that can be traded in a market, to have
adequate financial resources due to the implementation of appropriate
credit facilities and to be in a position to unwind positions in 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.
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 financial
institutions that finance the Group.
76
To refinance the acquisition of US company Graham-White Manufacturing
Co., and diversify its financing sources, during the first half of the year,
FINANCIAL REPORT
the Group finalised its first private placement bond issue in the US with
two institutional investors, for a total of US$75 million.
Moreover, an additional one-year €25 million credit facility has been
negotiated, with its extension being deemed highly probable.
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. Conversely, the Group may have
to borrow to finance potential acquisitions.
At 31 March 2013, the Group complied with all financial conditions
required by all credit agreements.
a) Available cash and cash equivalents
31 March 2013
31 March 2012
145,244
56,754
(4,746)
27,100
Available credit lines (a)
Parent company cash (b)
Subsidiaries cash and cash equivalents (c)
178,500
182,129
AVAILABLE CASH AND CASH EQUIVALENTS (1) = (a+b+c)
318,998
265,983
37,311
77,174
Available credit lines maturing in less than one year and bank overdrafts (e)
106,928
110,196
NET CASH AND CASH EQUIVALENTS AVAILABLE OVER THE NEXT YEAR (1-d-e)
174,759
78,613
Borrowings due in less than one year (d)
Cash and cash equivalents include unused factoring cash of €45.7 million
(net of non-guaranteed receivables factored).
The increase in available cash and cash equivalents was due to the
refinancing of the acquisition of Graham-White Manufacturing Co., via
the US$75 million private placement, the setting up of the new €25 million
short-term facility and the cash flow generated by the Group.
Financial debt of less than one year is disclosed in paragraph 13.1
(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 2013, €7.8 million was used in respect of a bank overdraft.
b) Maturity dates of financial liabilities at 31 March 2013
At 31 March 2013
Book value
Under 1 year
1 to 5 years
Over 5 years
Non-financial
liabilities
348,760
35,418
257,675
55,667
-
1,651
185
796
670
-
65
65
-
-
-
7
7
-
-
-
90
56
34
-
-
141
141
-
-
-
7,840
7,840
-
-
-
16,242
16,242
-
-
-
Liability financial instruments:
Borrowings
Finance leases
Various other financial liabilities
Bank overdrafts
Fair value of derivatives – liabilities
Current liabilities
Interest on liabilities
TOTAL
1,209
1,209
-
-
-
257,872
237,839
-
-
20,033
1,438
1,438
-
-
-
635,315
300,440
258,505
56,337
20,033
FUTURE CASH FLOW
At 31 March 2013
Borrowings
Finance leases
Value
Under 1 year
1 to 2 years
2 to 3 years
Over 3 years
350,196
36,115
34,494
34,494
245,093
1,651
183
189
196
1,083
65
65
-
-
-
7
7
-
-
-
56
56
-
-
-
141
141
-
-
-
77
j
FINANCIAL REPORT
FORECAST UNDISCOUNTED FUTURE CASH FLOWS OF INTEREST AND INTEREST RATE HEDGES
At 31 March 2013
Value
Under 1 year
1 to 2 years
2 to 3 years
Over 3 years
34,031
5,967
5,927
5,972
16,165
3,335
2,176
969
190
-
Book value
Under 1 year
1 to 5 years
Over 5 years
Non-financial
liabilities
366,811
50,206
316,605
-
-
2,471
616
774
1,081
-
65
65
-
-
-
86
86
-
-
-
57
1
56
-
-
2,451
2,451
-
-
-
Bank overdrafts
4,771
4,771
-
-
-
15,892
15,892
-
-
-
902
902
-
-
-
226,953
211,986
-
-
14,967
Cash flow from liability financial instruments
c) Maturity dates of financial liabilities at 31 March 2012
At 31 March 2012
Liability financial instruments:
Borrowings
Finance leases
Fair value of derivatives – liabilities
Current liabilities
Other liabilities
10,251
221
-
-
10,030
246
246
-
-
-
630,956
287,443
317,435
1,081
24,997
Value
Under 1 year
1 to 2 years
2 to 3 years
Over 3 years
425,560
73,721
36,070
35,902
279,867
1,846
198
183
198
1,276
65
65
-
-
-
65
65
-
-
-
56
-
56
-
-
2,112
2,112
-
-
-
TOTAL
FUTURE CASH FLOWS
At 31 March 2012
Borrowings
Finance leases
FORECAST FUTURE CASH FLOWS OF INTEREST AND INTEREST RATE HEDGES
At 31 March 2012
Value
Under 1 year
1 to 2 years
2 to 3 years
Over 3 years
19,572
4,726
4,425
4,593
5,828
3,468
2,303
1,014
151
-
Cash flow from liability financial instruments
14.7 CONTRIBUTION TO NET FINANCE INCOME/(COST)
Revaluation
At 31 March 2013
Loans and receivables
Payables at amortised cost
Instruments measured at fair value
through profit or loss
Interest
Dividends
Profits
Losses
Disposals
1,409
-
-
-
-
(12,512)
-
-
-
-
(414)
-
931
(4,094)
387
Assets held for sale
Other
TOTAL
78
Exchange
gain or loss
and other
Net
finance
income
1,223
(9,880)
2,023
(1,167)
-
-
-
-
-
-
-
(2,602)
21
-
-
-
-
(2,581)
(14,119)
21
931
(4,094)
387
3,246
(13,628)
FINANCIAL REPORT
Revaluation
Au 31 mars 2012
Loans and receivables
Payables at amortised cost
Instruments measured at fair value
through profit or loss
Assets held for sale
Other
TOTAL
Interest
Dividends
Profits
Losses
Disposals
Exchange
gain or
loss and
other
Net
finance
income
(3,376)
(14,985)
2,225
1,540
-
-
-
-
(13,150)
-
-
-
-
(103)
-
1,294
(52)
926
160
-
-
-
-
-
-
-
(2,436)
11
-
-
-
-
(2,425)
(14,148)
11
1,294
(52)
926
(3,216)
(15,185)
15. Current liabilities
31 March 2013
31 March 2012
175,794
162,987
60,112
61,271
966
843
Trade payables
Tax and social security liabilities
Accrued credit notes
Deferred income
Accrued expenses
Due to suppliers of non-current assets
4,484
594
10,267
12,531
647
384
Dividends payable
1,286
55
Other operating liabilities
4,315
6,779
257,871
245,444
TOTAL
At 31 March 2013, “Trade payables” included €17.4 million of credit workin-progress (compared to €17.7 million at 31 March 2012) and “Deferred
income” includes the Wabtec damages paid in compensation for the
future period, for €3.7 million.
However, the portion of receivables sold and not guaranteed was recorded
as financial debt under “Current borrowings and financial liabilities” for an
amount of €1,209 thousand. The risk incurred by the Group in respect
of receivables sold and not guaranteed relates to the non-collection of
these receivables.
16. Factoring
17. Segment reporting
In order to optimise the cost of the Group’s bank financing, Faiveley
Transport Tours, Faiveley Transport Amiens, Faiveley Transport
Gennevilliers, Faiveley Transport NSF, Faiveley Transport Italia, Faiveley
Transport Ibérica, Faiveley Transport Leipzig, Faiveley Transport Witten
and Faiveley Transport Birkenhead and SFRT sell their trade receivables
to a factor.
Factoring resulted in a €92,788 thousand reduction in trade receivables at
31 March 2013. In addition, available and uncalled cash with the factoring
companies amounted to €46,875 thousand and is included in cash and
cash equivalents.
At 31 March 2008, Faiveley SA only held shares in Faiveley Transport and
had no relationship with the operating subsidiaries.
Following the transactions completed on 23 December 2008, Faiveley SA
decided to proceed with the dissolution of Faiveley Transport without
liquidation. At 31 March 2009, the net assets of Faiveley Transport were
transferred to Faiveley SA (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 Group’s parent company and operating entities.
Due to this, as of 31 March 2010 segment reporting only concerns the
railway sector.
79
j
FINANCIAL REPORT
17.1 BY BUSINESS SEGMENT
Income statement
31 March 2013
31 March 2012
Sales
987,706
900,523
Operating profit
111,110
93,272
Net finance income/(cost)
(13,628)
(15,185)
Income tax
(33,871)
(26,912)
-
-
Continuing operations:
Share of profit of associates
PROFIT FROM CONTINUING OPERATIONS
63,611
51,175
CONSOLIDATED NET PROFIT
63,611
51,175
Depreciation and amortisation for the period
16,344
14,947
31 March 2013
31 March 2012
765,644
757,949
Balance sheet
Property, plant and equipment and intangible assets, net
Non-current financial assets
5,851
5,784
44,816
43,598
SUB-TOTAL NON-CURRENT ASSETS
816,311
807,331
Inventories and receivables (excluding tax)
431,063
418,261
Deferred tax assets
51,652
38,891
174,958
210,246
SUB-TOTAL CURRENT ASSETS
657,673
667,398
1,473,984
1,474,729
559,860
505,145
TOTAL ASSETS
Equity
Employee benefits and other non-current provisions
33,008
36,213
Deferred tax liabilities
28,271
22,090
Non-current financial debt
314,841
352,865
SUB-TOTAL NON-CURRENT LIABILITIES
376,120
411,168
83,910
80,353
Current provisions
Current financial debt
Advances, prepayments and non-financial liabilities (excluding tax)
Other current liabilities
SUB-TOTAL CURRENT LIABILITIES
TOTAL EQUITY AND LIABILITIES
Acquisitions of property, plant and equipment and intangible assets (excluding goodwill) for the period
Workforce
62,600
95,420
378,731
370,118
12,763
12,525
538,004
558,416
1,473,984
1,474,729
20,738
17,369
5,483
5,469
17.2 BY GEOGRAPHIC REGION
2012/2013 financial year
CONTRIBUTION BY BUSINESS SEGMENT AND GEOGRAPHIC REGION OF ORIGIN
France
Europe (excl.
France)
Americas
Asia/Pacific
Total railway
business
230,881
421,151
141,660
194,014
987,706
Closing balance of property, plant and equipment
and intangible assets (excluding goodwill)
41,136
30,015
33,423
9,834
114,408
Acquisition of property, plant and equipment
10,107
6,190
2,345
2,096
20,738
5,361
5,994
2,455
2,534
16,344
Sales
Amortisation and depreciation of property, plant and equipment
80
FINANCIAL REPORT
2011/2012 financial year
CONTRIBUTION BY BUSINESS SEGMENT AND GEOGRAPHIC REGION OF ORIGIN
France
Europe (excl.
France)
Americas
Asia/Pacific
Total railway
business
216,993
395,174
95,781
192,575
900,523
36,463
29,418
33,078
10,009
108,968
Acquisition of property, plant and equipment
9,478
4,053
1,454
2,384
17,369
Amortisation and depreciation of property, plant and equipment
5,856
5,080
1,402
2,609
14,947
Sales
Closing balance of property, plant and equipment
17.3 PRINCIPAL CUSTOMERS
During the 2012/2013 financial year, the Group achieved 27.8% of its sales with the three largest global manufacturers (Alstom, Bombardier and
Siemens) and 50% with its top ten customers (including Stadler, SNCF, Indian Railways, CNR, Trenitalia and Ansaldo).
18. Sales
Sales of products associated with contracts
Sales of services
TOTAL*
31 March 2013
31 March 2012
961,646
86, 885
26,060
36,638
987,706
900,523
31 March 2013
31 March 2012
* Of which sales of “Services” related products of €403 million to 31 March 2013 and €315 million to 31 March 2012.
19. Cost of sales
Direct labour
(80,320)
(76,730)
Raw materials
(408,625)
(377,946)
Fixed costs
(75,940)
(59,053)
Procurement costs
(48,858)
(44,430)
Engineering costs
(60,157)
(59,067)
Other direct costs
(42,491)
(40,482)
Change in projects in progress
17,583
19,870
Net change in project provisions (charge/reversal)
(31,830)
(24,290)
Net change in provisions for losses on completion
TOTAL COST OF SALES
(9,469)
(4,594)
(739,371)
(666,722)
At 31 March 2013, the cost of sales was reduced by €4.5 million due to the recognition of damages awarded following the Wabtec trial.
81
j
FINANCIAL REPORT
20. Other income and expenses from recurring operations
31 March 2013
31 March 2012
Royalties
1,101
1,456
Doubtful debts
1,015
-
487
891
3
47
Writebacks of provisions for other liabilities
Insurance compensation
Other operating income
2,867
293
TOTAL OTHER INCOME
5,473
2,687
-
(162)
Royalties
Doubtful debts
-
(2,475)
(905)
(3,335)
Inventory writedowns
(2,912)
(4,194)
(2,157)
(1,162)
Other expenses
(1,851)
(743)
TOTAL OTHER EXPENSES
(7,825)
(12,071)
NET OTHER INCOME AND EXPENSES FROM RECURRING OPERATIONS
(2,352)
(9,384)
Charges to provisions for other liabilities
At 31 March 2013, “Other income” was favourably affected by a net
income of €1.7 million related to Wabtec composed of the €4.1 million
damages received (income corresponding to the reimbursement of
expenses incurred in previous financial years) and additional fees of €2.4
million related to the same matter, for which a provision was recognised
during the financial year.
21. Restructuring costs and gains and losses on disposal of property, plant and equipment
and intangible assets
RESTRUCTURING COSTS
Restructuring costs for the period totalled €1 million, compared to €1.2 million at 31 March 2012. During the financial year 2012/2013, these restructuring
costs primarily related to the reorganisation of Faiveley Transport Metro Technology Shanghai.
DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Sales price of assets sold
31 March 2013
31 March 2012
49
189
Net book value of assets sold
(213)
(393)
TOTAL
(164)
(204)
82
FINANCIAL REPORT
22. Net finance income/(cost)
Gross cost of financial debt
Income from cash and cash equivalents
NET COST OF FINANCIAL DEBT
Financial instrument income
Income linked to exchange differences
31 March 2013
31 March 2012
(12,016)
(12,968)
1,433
2,268
(10,583)
(10,700)
3,276
4,414
10,021
9,552
Proceeds from sale of marketable securities
-
-
Reversal of financial provisions
-
153
223
96
21
11
Income from vendor loan
Dividends received
Other
141
103
OTHER FINANCE INCOME
13,682
14,330
Financial instrument charges
(4,416)
(3,180)
Charges linked to exchange differences
(8,975)
(12,778)
Interest charges on retirement commitments
(1,160)
(1,046)
Net book value of financial assets sold
Charges on bank guarantees
-
(3)
(1,276)
(725)
Reversal of discounting the value of put options held by minority shareholders
(166)
(665)
Other
(733)
(419)
OTHER FINANCE COSTS
(16,726)
(18,815)
NET FINANCE COST
(13,628)
(15,185)
The net finance cost for the year was primarily due to:
•
•
the net cost of financial debt for the year, i.e. €10.6 million compared
to €10.7 million in the previous year. The significant decline in market
rates, combined with improved hedging offset the additional interest
expense related to the Graham-White acquisition debt;
•
a €1.1 million favourable impact of realised and unrealised exchange
differences;
•
other financial income and expense items, comprising bank
guarantees, interest on pension commitments, the effect of the reversal
of discounting the value of put options held by minority shareholders
and other financial income and expenses, resulting in a negative net
impact of €2.8 million.
a €1.4 million loss on financial instruments;
23. Income tax
23.1 ANALYSIS BY TYPE
31 March 2013
31 March 2012
Current tax − continuing operations
29,516
29,761
Deferred tax − continuing operations
4,355
(2,849)
33,871
26,912
TOTAL INCOME TAX – CONTINUING OPERATIONS
Tax on discontinued operations
TOTAL TAX
-
-
33,871
26,912
The income tax charge was €33.9 million, compared to €26.9 million for
the year to 31 March 2012. This increase was due to the growth in profit
before tax, which rose from €78 million for the year to 31 March 2012 to
€97.5 million for the year to 31 March 2013. As a percentage, the effective
tax rate was 34.7%, compared to 34.5% the previous year. This increase
is analysed as follows:
•
•
The income tax rate paid was 30.3%, compared with 38.1% for the year
to 31 March 2012.
the weak results recorded by the Chinese subsidiaries, in particular
by the two platform door subsidiaries, FTMT Shanghai and Faiveley
Transport Far East, which benefit from a reduced tax rate;
for the French subsidiaries: the tax law no longer allows a 100%
deduction in financial charges but now rather an 85% deduction,
a new 3% tax on dividends has been introduced and the relative
significance of the CVAE charge, which has been reclassified to income
tax since the 2010/2011 financial year with similar amounts in both
years (approximately €2 million).
83
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FINANCIAL REPORT
23.2 EFFECTIVE TAX RATE
Pre-tax profit from continuing operations
Pre-tax profit from operations sold
31 March 2013
31 March 2012
97,482
78,087
-
-
Statutory tax rate of the parent company
34.43%
34.43%
THEORETICAL TAX CREDIT/(CHARGE)
(33,563)
(26,885)
(1,093)
(1)
Impact of:
• permanent differences between profits for accounting purposes and taxable profits
• differences between the tax rates applicable to the parent company and to the subsidiaries
2,815
1,298
• impact of other taxes (CVAE in France and IRAP in Italy)
(3,546)
(3,272)
(273)
(197)
-
-
• the liability method (changes in tax rates)
• tax saving achieved through offset of tax losses carried forward
• recognition of future savings on tax losses and prior temporary differences (FT Brazil and FT USA)
-
5,428
• change in deferred tax assets in respect of tax losses carried forward not recognised for the financial year
134
(1,614)
• change in deferred tax assets not recognised
353
(1,242)
• tax credits
• tax adjustments in respect of earlier periods
• other differences
TAX CHARGE
Effective tax rate
-
113
(530)
(548)
1,832
8
(33,871)
(26,912)
34.7%
34.5%
2012/2013
2011/2012
11,235
7,109
23.3 BREAKDOWN OF TAX LOSSES CARRIED FORWARD (TAX BASES) BY EXPIRY DATE
Losses expiring within 4 years
Losses expiring in 5 years and over
9,353
7,245
Losses that may be carried forward indefinitely
22,811
26,916
TOTAL
43,399
41,270
Tax losses not recognised as deferred tax assets
22,409
24,767
Tax losses recognised as deferred tax assets
20,990
16,503
Losses expiring within 4 years
4,660
5,743
Losses expiring in 5 years and over
7,441
438
Losses that may be carried forward indefinitely
8,889
10,322
Limits on the use of tax losses recognised as deferred tax assets:
24. Share of profit/(loss) from operations sold or held for sale
Nil.
84
FINANCIAL REPORT
25. Payroll costs and workforce
2012/2013
2011/2012
198,738
179,161
55,474
51,127
Retirement and other post-employment benefits
8,580
5,886
Charges associated with share-based payments
-
-
262,792
236,174
Salaries
Social security charges
TOTAL PAYROLL COSTS
Managers
Supervisors and employees
932
953
2,367
2,414
Operatives
2,184
2,102
TOTAL WORKFORCE
5,483
5,469
26. Post-balance sheet events
On 17 May 2013 Faiveley Transport acquired 100% of Schwab
Verkehrstechnik AG, a leading designer and manufacturer of couplers
and buffers for freight and rail transit markets, which reported sales of CHF
23 million in 2012. This company is based in Schaffhausen (Switzerland)
and has 42 employees.
27. Transactions with related companies
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.
•
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.
•
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.
TRANSACTIONS WITH JOINT VENTURES NOT ELIMINATED ON
CONSOLIDATION
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 at arm’s length terms.
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 individuals 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.
27.1 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:
•
•
2012/2013
2011/2012
Sales
4,568
8,187
Operating receivables
3,335
5,520
Operating payables
(1,959)
(379)
(€ thousands)
CONTRIBUTION OF JOINT VENTURES TO THE CONSOLIDATED
(€ thousands)
2012/2013
Non-current assets
Current assets
Equity
Other non-current liabilities
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;
WITH ASSOCIATES
material transactions with other Group companies.
Nil.
Current liabilities
Sales
2011/2012
1,704
1,748
20,128
24,414
8,956
9,202
11
16
9,249
13,328
17,390
30,228
a) Transactions with consolidated companies
b) With the companies that control Faiveley Transport
WITH JOINT VENTURES
WITH FRANCOIS FAIVELEY PARTICIPATIONS
Joint ventures are proportionally consolidated companies:
Contract of assistance:
•
The Supervisory Board of 6 June 2012 authorised the signing of an
amendment to the technical, commercial and administrative assistance
agreement of 26 June 2004. This amendment includes an indexing clause
that permits an annual review of compensation for services provided by
Francois Faiveley Participations to Faiveley Transport.
Qingdao Faiveley Sri Rail Brake Co. Ltd.: 50/50 joint venture formed
in 2006 to enable the Group to penetrate the Chinese brake market.
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FINANCIAL REPORT
Under the terms of the contract of assistance and the rebilling of rent and services provided, Faiveley Transport recognised the following amounts as
expenses and income for the financial year:
(€)
Faiveley Transport
expenses
Faiveley Transport
income
373,094
1,020
-
2,150
2012/2013
2011/2012
Contract of assistance, provision of services
Rebilling of rent and utility expenses
Fraction of financial investments, receivables, debts, expenses and income pertaining to these related companies:
(€ thousands)
Trade receivables
1
1
Borrowings and various financial liabilities
-
(1,938)
Trade payables
-
-
Rebilling of rents
3
4
(373)
(365)
Provision of services
Financial income
Financial costs
-
-
(5)
(30)
27.2 SENIOR MANAGEMENT AND NON-EXECUTIVE OFFICERS’ REMUNERATION
Senior management and non-executive officers comprise mainly the members of the Management Board, the Supervisory Board and the Executive
Committee.
The Remuneration Committee determines the remuneration to be allocated to executive 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 senior management’s remuneration:
(€)
Short-term benefits(1)
(2)
Termination benefits
Post-employment benefits(3)
Share-based compensation(4)
Other long-term benefits
Directors’ fees
TOTAL
2012/2013
2011/2012
5,606,976
6,228,772
400,000
-
21,429
29,781
-
-
397
(291)
249,000
138,400
6,277,802
6,396,662
(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 year.
(2) At 31 March 2013, termination benefits concerned J.C. Roncin, who resigned from his position as Quality Director in August 2012.
(3) Change in retirement provisions.
(4) Expense recognised in the income statement.
27.3 AGREEMENTS ENTERED INTO WITH SENIOR MANAGEMENT
With Thierry Barel
Following the appointment of Thierry Barel as Chairman of the
Management Board and Chief Executive Officer on 1 April 2011, the terms
and conditions governing the termination of his duties have been defined.
Thierry Barel will thus be entitled to compensation based on performance
criteria, not exceeding eighteen months of total gross remuneration, in
the event of his dismissal by the Supervisory Board.
With Robert Joyeux
MEMORANDUM OF UNDERSTANDING WITH MANAGERS
As part of the transactions relating to the reorganisation of its capital
structure, Faiveley Transport concluded a memorandum of understanding
and an amendment to this MOU on 16 October 2008 and 17 November
2008, respectively, with the managers and their spouses who were
partners in Faiveley Management SAS.
86
Within the framework of the MOU of 16 October 2008, Robert Joyeux
received 140,610 Faiveley Transport shares in exchange for the 164,430
Faiveley Management shares that he transferred to Faiveley Transport.
Robert Joyeux also committed to retain all his Faiveley Transport shares
for a period of two years starting on 23 December 2008 and two thirds
of his shares for a period of three years starting on 23 December 2008.
This last clause was not applicable during the financial year. Furthermore,
for a period of six years starting on 23 December 2008, any disposal of
a block of more than 10,000 Faiveley Transport shares is subject to a
Faiveley Transport pre-emption right.
AMENDMENT TO THE CONSULTING AND SUPPORT CONTRACT
OF 22 APRIL 2011
On 27 March 2012, an amendment to extend the consulting assignment
provided by Robert Joyeux to the General Management of the Company
FINANCIAL REPORT
was submitted for approval to the Supervisory Board. The Supervisory
Board authorised the Chairman of the Management Board to sign this
amendment This expired at the end of the 2012/2013 financial year.
With Didier Alix
On 22 July 2011, an amendment to the credit agreement of 22 December
2008, concluded with a pool of nine banks, was presented to and
authorised by the Supervisory Board.
One of the banks involved in the signing of this amendment is Société
Générale. Didier Alix, member of the Company’s Supervisory Board, acts
as an advisor to the Chairman of this bank.
Ordinary shares
Shares with double voting rights
28. Dividends paid and proposed
On 13 September 2012, a dividend of €0.85 per share was paid in respect
of 14,190,432 shares, i.e. a total dividend of €12,061,867.20 for the
2011/2012 financial year.
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. 423,720 shares, corresponds to the treasury shares held by Faiveley
Transport at the time of the distribution of the dividend.
Number
of shares
Treasury shares
Number of shares to which
dividends have been paid
Dividends paid
6,538,272
423,720
6,114,552
5,197,369
8,075,880
-
8,075,880
14,614,152
423,720
14,190,432
6,864,498
12,061,867*
* Including €5,368,104 to Financière Faiveley and €985,395 to François Faiveley Participation (FFP).
In respect of the 2012/2013 financial year, the General Meeting will be asked to approve the payment to shareholders of a dividend of €13,883,444.40,
being €0.95 per share. This distribution will be taken from the account “Retained Earnings”. It will be payable with effect from 19 September 2013.
This dividend was not recognised as a liability at 31 March 2013.
F.
OFF-BALANCE SHEET COMMITMENTS (€ THOUSANDS)
1.
Leases
OPERATING LEASES
The operating leases entered into by the Faiveley Transport Group relate mainly to buildings and furniture.
The income and expenses recognised in respect of operating leases over the last two financial years break down as follows:
Operating lease expenses
Sub-letting income
TOTAL
2012/2013
2011/2012
(11,482)
(10,575)
538
484
(10,944)
(10,091)
The future minimum payments to be made in respect of operating leases which are non-cancellable and had not expired as at 31 March 2012 are
as follows:
Total future rents
2.
Under 1 year
1 to 5 year
Over 5 years
9,207
26,910
17,344
Other commitments given
2012/2013
2011/2012
Deposits, securities and bank guarantees given to customers
217,778
226,377
Guarantees and securities given by the parent company to customers
409,970
403,046
175
7,685
Borrowings guaranteed by pledges:
• Mortgages of buildings
The off-balance sheet commitments above entitled “Deposits, 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 contracts. Bank counter-guarantees may be issued for the benefit of
banks supplying credit lines, and guarantees may also be issued for the
benefit of certain subsidiaries of the Group.
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FINANCIAL REPORT
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 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 contracts.
3.
•
Commitments received
Other guarantees from suppliers: €2,752 thousand.
G. CONSOLIDATION SCOPE AND METHODS
1.
Listing of consolidated companies and consolidation methods
Faiveley Transport is the Group’s holding company.
The following companies, in which Faiveley Transport directly or indirectly controls more than 50% of the share capital, are fully consolidated.
Entity
Country
% control
% interest
Germany
100.00
100.00
Faiveley Transport Witten GmbH
Germany
100.00
100.00
Faiveley Transport Verwaltungs GmbH(1)
Germany
100.00
100.00
Faiveley Transport Holding GmbH & Co. KG
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
Canada
100.00
100.00
Chili
100.00
99.99
Parent company
Faiveley Transport
Full consolidation
Faiveley Transport Leipzig GmbH & Co. KG(1)
(1)
(1)
Faiveley Transport Do Brasil Ltda.
Faiveley Transport Canada Ltd.
Faiveley Transport Chile Ltda.
Faiveley Transport Systems Technology (Beijing) Co. Ltd.
China
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 Transport 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 Ibérica SA
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
Amsted Rail − Faiveley LLC
USA
67.50
67.50
USA
100.00
100.00
Omni Group Corporation
USA
100.00
100.00
Advanced Global Engineering LLC
USA
100.00
55.00
ATR INvestments LLC
USA
100.00
60.00
France
100.00
100.00
France
100.00
100.00
France
100.00
100.00
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FINANCIAL REPORT
Entity
Faiveley Transport Gennevilliers
Faiveley Transport Birkenhead Ltd.
Country
% control
% interest
France
100.00
100.00
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 Rail Technologies India Ltd.
India
100.00
100.00
FMRP
Iran
51.00
51.00
Faiveley Transport Italia Spa
Italy
100.00
98.70
Poland
100.00
100.00
Czech Republic
100.00
100.00
Faiveley Transport Polska z.o.o.
Faiveley Transport Plzen s.r.o.
Faiveley Transport Tremosnice s.r.o.
Czech Republic
100.00
100.00
Faiveley Transport Lekov a.s
Czech Republic
100.00
100.00
o.o.o Faiveley Transport
Russia
100.00
98.00
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 Singapore Ltd.
Faiveley Transport Schweiz AG
Switzerland
80.00
80.00
Thailand
100.00
100.00
Taiwan
100.00
100.00
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
Faiveley Transport Metro Technology Thailand Ltd.
Faiveley Transport Metro Technology Taiwan Ltd.
Proportional consolidation
Accounted for under the equity method
Nil
(1) Faiveley Transport Leipzig GmbH & Co. KG, Faiveley Transport Witten GmbH, Faiveley Transport Verwaltungs GmbH, Faiveley Transport Holding GmbH & Co. KG
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 closing of accounts for the year ended 31 March 2013 and the related annual
report, given that the financial statements and annual report will not be published.
LEGAL DEVELOPMENTS ARISING DURING THE FINANCIAL YEAR
The 2012/2013 financial year saw a merger between Faiveley Transport Ibérica SA (acquiring company) and Transequipos SA. For accounting and
tax purposes, this merger is retroactive to 1 April 2012.
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FINANCIAL REPORT
2.
List of non-consolidated companies at 31 March 2013
Net book value of investment
(€ thousands)
Suecobras (Brazil)
Sab Wabco Sharavan Ltd. (Iran)
% owned
Gross
Impairment
Net
Equity
Net loss
100
863
(666)
197
145
(16)
49
11
(11)
-
-
-
59.50
47
-
47
24
(1)
Faiveley Transport Service Maroc
100
-
-
-
(48)
(51)
Faiveley Transport South Africa
100
-
-
-
-
-
Sofaport (France)
H. STATUTORY AUDITORS’ FEES
Fees payable to the Statutory Auditors and members of their network as part of assignments relating to the financial statements at 31 March 2013
and 31 March 2012 were as follows:
ECA
PWC
2012/2013
2011/2012
2012/2013
2011/2012
• Parent company
161
150
210
200
• Subsidiaries
109
113
692
553
2
2
2
-
272
265
904
753
-
-
16
-
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
Legal, tax, corporate
Other
-
-
29
-
SUB-TOTAL OTHER SERVICES
-
-
45
-
272
265
949
753
TOTAL
I.
FINANCIAL COMMUNICATION
A German version of these consolidated financial statements has been filed with the local administration.
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FINANCIAL REPORT
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FINANCIAL REPORT
3. STATUTORY AUDITORS’ REPORT
(For the year ended 31 March 2013)
This is a free translation into English of the statutory auditors’ report on the consolidated financial statements 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 presented below is the audit 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 balances, transactions or disclosures.
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,
Faiveley Transport SA
Le Delage Building
3 rue du 19 mars 1962
92230 Gennevilliers
In compliance with the assignment entrusted to us by the Annual General Meeting, we hereby report to you, for the year ended 31 March 2013, on:
•
•
•
the audit of the accompanying consolidated financial statements of Faiveley Transport SA;
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 regarding 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 regarding 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 2013 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.
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FINANCIAL REPORT
3. Statutory Auditors’ report
II.
JUSTIFICATION OF OUR ASSESSMENTS
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:
•
At the year-end, the Group performs impairment testing on goodwill and intangible assets with indefinite lives and assesses whether there is an
indication of impairment of non-current assets, in accordance with the terms and conditions described in Notes C.7.1, C.9 and E.1 of the appendix
to the consolidated financial statements. We have reviewed the methods for implementing this impairment testing, the cash flow forecasts and
assumptions used by the management, as well as estimates resulting from the latter. We have also verified that Notes C.7.1, C.9 and E.1 provide
appropriate disclosure.
•
The Group recognises income generated on contracts using the percentage of completion method in accordance with the terms and conditions
described in Note C.6.1 of the appendix to the consolidated financial statements. These results are determined based on costs and revenue
associated with the contracts, as estimated by executive management. Based on the information provided to us, our work consisted in assessing
the financial information and the assumptions on which these estimates have been based, in reviewing the calculations performed by the Group,
in comparing estimates of revenue on completion from previous periods with actual results, and in examining the procedures used by executive
management to approve these estimates.
•
The Group records provisions to cover miscellaneous liabilities and charges as described in Note C.15.2 of the appendix to the consolidated financial
statements. Based on the information available, our work consisted in examining the procedures used by executive management to evaluate and
identify the risk, to appreciate, by sampling, the financial information and the assumptions on which theses estimates have been based, and to
verify that the appendix to the consolidated financial statements disclose appropriate information. On this basis, we assessed the reasonableness
of estimates made.
These assessments were made as part of our audit of the consolidated financial statements taken as a whole, and therefore contributed to the opinion
we have formed, which is expressed in the first part of this report.
III.
SPECIFIC VERIFICATION
As required by law, we 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.
Neuilly-sur-Seine and Dijon, 12 July 2013
The Statutory Auditors
PricewaterhouseCoopers Audit
Expertise Comptable et Audit
Philippe Vincent
Jérôme Burrier
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FINANCIAL REPORT
4. PARENT COMPANY
At 31 March 2013
4.1 BALANCE SHEET
ASSETS
31 March 2013
Notes
Gross
Amort., depr. and
prov. charges
Net
31 March
2012 Net
C. 1
392,853
5,853
387,001
387,289
In progress
C. 1
15,290
-
15,290
12,277
C. 1
-
-
-
-
(€ thousands)
Non-current assets
Intangible assets
Buildings
Plant and machinery
C. 1
39
1
38
38
Other
C. 1
821
159
662
693
-
-
-
-
Equity investments
C. 2
501,427
-
501,427
499,919
Loans and receivable from equity investments
C. 2
161,195
-
161,195
156,705
Other equity investments
C. 2
Financial assets
TOTAL (I)
407
-
407
555
1,072,031
6,012
1,066,019
1,057,476
Current assets
Receivables
Advances and prepayments received
C. 3
27
-
27
47
Trade receivables
C. 3
49,665
-
49,665
47,310
Other receivables(1)
C. 3
29,662
-
29,662
6,246
Tax consolidation
C. 3
1,287
-
1,287
55
Marketable securities (2)
C. 4
18,943
357
18,585
31,653
Cash and cash equivalents(3)
C. 4
313,134
-
313,134
302,644
C. 11
542
-
542
561
Prepaid expenses
Translation difference
TOTAL (II)
TOTAL ASSETS (I + II)
237
-
237
69
413,495
357
413,138
388,585
1,485,527
6,370
1,479,157
1,446,061
(1) Including treasury shares of €18,555 thousand.
(2) Including treasury shares held within the framework of the liquidity contract of €635 thousand.
(3) Including accrued Wabtec compensation of €12,322 thousand.
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FINANCIAL REPORT
4. parent company financial statements
EQUITY AND LIABILITIES
Notes
31 March 2013
before allocation
31 March 2012
before allocation
Share capital
C. 5
14,614
14,614
Share premium
C. 5
104,954
104,954
Legal reserve
C. 5
1,461
1,440
Regulated reserves
C. 5
-
-
Other reserves
C. 5
-
-
Retained earnings
C. 5
44,715
67,796
Net profit/(loss)
C. 5
26,762
(10,999)
Regulated provisions
C. 6
-
-
192,508
177,807
(€ thousands)
Equity
TOTAL EQUITY (I)
Provisions for liabilities and charges
C. 6
TOTAL (II)
2,396
1,884
2,396
1,884
Liabilities
Loans and borrowings
Bond-type issue
C. 7
58,278
-
Loans and borrowings from credit institutions
C. 7
617,164
707,551
Other loans and borrowings
C. 7
573,680
530,724
Trade payables
C. 8
17,526
14,987
Tax and social liabilities
C. 8
11,077
7,321
Other liabilities
C. 8
3,740
2,842
C. 11
-
-
Other liabilities
Deferred income
Translation difference
2,788
2,945
TOTAL (III)
1,284,253
1,266,371
TOTAL EQUITY AND LIABILITIES (I + II + III)
1,479,157
1,446,061
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FINANCIAL REPORT
4.2 INCOME STATEMENT
Notes
(€ thousands)
SALES (EX. VAT)
C. 12
Cost of sales
31 March 2013
31 March 2012
56,747
52,681
(48,256)
(44,859)
Gross profit
8,492
7,822
Non-productive fixed costs*
(4,773)
(10,113)
Other income
741
831
Other expenses
(399)
(138)
-
-
4,061
(1,599)
Restructuring costs
OPERATING PROFIT/(LOSS)
Amortisation and depreciation charges included in operating profit/(loss)
Operating profit/(loss) before amortisation and depreciation charges
Net finance income/(expenses)
C. 15
PROFIT/(LOSS) FROM ORDINARY ACTIVITIES
NET EXCEPTIONAL INCOME/(EXPENSE)
C. 16
Employee profit-sharing
Income tax
C. 17
NET PROFIT/(LOSS)
* Net fixed costs offset by Wabtec compensation income of €4,111 thousand.
96
818
918
4,879
(681)
27,282
(9,992)
31,343
(11,591)
(46)
(243)
-
-
(4,534)
835
26,762
(10,999)
FINANCIAL REPORT
4.3 CASH FLOW STATEMENT
(€ thousands)
Notes
31 March 2013
31 March 2012
26,762
(10,999)
Cash flow from operating activities:
Net profit/(loss)
Adjustment for non-cash items:
• Depreciation and amortisation charges
818
918
• Provision charges
2,510
2,235
• Provision reversals
(2,273)
(681)
-
25
• Gains/(losses) on asset disposals
• Reversal of debt write-off
SELF-FINANCING CAPACITY
2,563
-
30,380
(8,502)
Gross change in operating assets and liabilities:
(27,131)
(7,958)
• Increase/(decrease) in payables and accrued expenses
• Decrease/(increase) in receivables
7,037
(4,918)
NET CASH FROM/(USED IN) OPERATING ACTIVITIES
10,286
(21,378)
(3,512)
(4,313)
Cash flow from investment activities
Purchase of PPE and intangible assets
Proceeds from disposal of PPE and intangible assets
-
-
Purchase of financial investments
(1,508)
(82,038)
Proceeds from sale of financial investments
3,549
11,170
-
-
Cash arising from acquisitions of subsidiaries
NET CASH USED IN INVESTMENT ACTIVITIES
(1,471)
(75,181)
Proceeds from share capital increases
-
-
Other movements in equity
-
-
Cash dividends paid
(12,062)
(16,738)
Proceeds from new borrowings
58,278
94,000
(138,339)
(47,948)
42,659
56,985
NET CASH FROM/(USED IN) FINANCING ACTIVITIES
(49,464)
86,299
Net increase/(decrease) in cash and cash equivalents
(40,649)
(10,260)
48,216
58,476
7,567
48,216
Repayment of borrowings
Movement in Group current accounts
Cash and cash equivalents at the start of the period
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
C. 4
97
j
FINANCIAL REPORT
4.4 NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
Notes to the parent company financial statements at 31 March 2013.
Total assets on this date amounted to €1,479,157 thousand, and the
income statement reflected a net profit of €26,762 thousand. The financial
period was of 12 months and covered the period from 1 April 2012 to
31 March 2013.
A.
SIGNIFICANT EVENTS
Bond issue
placement bond issue in the US with two institutional investors, for a total
of US$75 million. This bond issue was made up of two tranches: one
for US$30 million, with a 10-year final maturity and redeemable between
2017 and 2022, and a US$45 million bullet loan with a 10-year maturity.
The average fixed interest is 4.91% per year.
Wabtec legal action
Faiveley Transport won its legal action against Wabtec in the United States.
On 6 February 2013, the New York Court of Appeals upheld the jury’s
verdict against Wabtec, awarding the companies Faiveley Transport USA,
Faiveley Transport Nordic, Faiveley Transport Amiens and Ellcon National
US$15 million plus US$0.8 million in interest. This decision particularly
punishes the trade secret misappropriation, acts of unfair competition
and unjust enrichment relating to the manufacture of brake cylinders and
actuators that make up brake systems.
In accounting terms, the Wabtec accrued income was recorded in the
balance sheet under “Other receivables” in the amount of €12.3 million
(US$15.8 million) with the €8.2 million portion to be retroceded to the
subsidiaries recorded as other loans and borrowings. In the income
statement, only the amount corresponding to fees incurred by Faiveley
Transport since litigation began was recognised as a reduction of fixed
costs for €4.1 million. This was offset by additional fees of €2.3 million
recognised as fixed costs during the financial year.
Free share allocation plans
authority to the Management Board to proceed with the allocation of
free ordinary shares in the Company, either in existing shares or shares
to be issued, within the limit of 1% of the share capital on the date of the
General Meeting.
During the financial year, this authorization gave rise to:
•
the allocation of free performance-based shares by the Management
Board of 24 October 2012 (10,000 shares);
•
the implementation of a free share allocation plan as part of an
employee shareholding plan by the Management Board of 3 December
2012 (72,386 shares).
The terms and conditions of allocation of the two new plans are set out
in paragraph C. Notes to the balance sheet and the income statement
under 5.1 Share capital.
98
B. ACCOUNTING RULES AND METHODS
1.
Application of accounting rules
and methods
The financial statements at 31 March 2013 have been 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 ended 31 March
2013 have been prepared and presented in accordance with accounting
rules and in compliance with the principles of:
•
•
•
•
prudence;
independence of financial years;
going concern;
consistency of methods.
The historical cost method was used to determine accounting values.
2.
Change of methods during the year
No changes of methods have been introduced by the Company during
the year.
3.
Measurement methods
The measurement methods described below have been used for the
various items included in financial statements.
The financial statements have been 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 at 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 charge must be recognised in
the financial statements.
3.2
AMORTISATION AND DEPRECIATION
OF NON-CURRENT ASSETS
Depreciation and amortisation of non-current assets are measured on a
straight-line basis.
FINANCIAL REPORT
The principal periods of amortisation and depreciation are as follows:
3.8
•
Provisions represent liabilities whose due date or amount has not been
precisely determined. At 31 March 2013, the provisions amounted to
€2,396 thousand and included:
Intangible assets
− Software:
1 to 10 years
− Patents:
9 to 15 years
•
− Buildings:
15 to 20 years
− Misc. equipment and fittings:
− Machinery and industrial equipment:
− Vehicles:
− Office equipment:
− IT equipment:
− Furniture:
3.3
10 years
3 to 8 years
3 to 5 years
5 to 10 years
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’s
tax consolidation). 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 written off 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 at 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.
The value of treasury shares unallocated to the various share purchase and
subscription plans and free share allocation plans is written down based
on the average share price noted over the last month of the financial year.
3.7
•
provisions for stock option and free share allocation plans of
€1,596 thousand;
•
•
provisions for litigations of €554 thousand;
•
seniority awards of €9 thousand.
4 years
3 to 10 years
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.
PROVISIONS FOR LIABILITIES AND CHARGES
unrealised exchange losses of €237 thousand (discounted based on
foreign-denominated liabilities and trade receivables and valued at
the closing rate);
3.9
SHARE PURCHASE OPTION PLAN
OF 27 SEPTEMBER 2005
When beneficiaries of the share purchase option plan 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 and spread over 7 years (the duration of the plan). At 31 March 2013,
this provision was revised to €2 thousand based on options exercised and
outstanding. During the 2012/2013 financial year, 20,039 options were
exercised by their beneficiaries. On this occasion, an exceptional expense
of €46 thousand and a €49 thousand provision reversal were recognised.
3.10 SHARE SUBSCRIPTION OPTION PLAN
When shares are subscribed to, a capital loss will be recognised in Faiveley
Transport’s financial statements in the case the purchase price of the
shares allocated to this plan exceeds the subscription price. This loss
has been estimated at €433 thousand at 31 March 2013, weighted by an
exercise probability of 90% and spread pro rata according to the number
of days which have passed, out of the 8 years of duration of the plan.
At 31 March 2013, a provision of €37 thousand was recognised under
personnel costs, thus increasing this provision to a total of €171 thousand.
3.11 FREE PERFORMANCE-BASED SHARE ALLOCATION
PLAN AUTHORISED BY THE GENERAL MEETING
Shares have been allocated and the €1,665 thousand purchase value
of the shares earmarked for this plan was recognised as a capital loss
under personnel costs in the financial statements of Faiveley Transport.
The €1,257 thousand provision established under personnel costs at
31 March 2012 for the estimated capital loss was reversed. The net
impact for the year 2012/2013 was €408 thousand.
3.12 FREE SHARE ALLOCATION PLAN AUTHORISED
BY THE GENERAL MEETING OF 14 SEPTEMBER 2011
When shares are allocated, a capital loss will be recognised in Faiveley
Transport’s financial statements for the purchase price of the shares
allocated to this plan. This loss has been estimated at €4,597 thousand at
31 March 2013, weighted by a vesting probability of 55% and spread pro
rata according to the number of days which have passed out of the 2- or
4-year vesting periods of the plan. At 31 March 2013, a €1,029 thousand
provision was established under personnel costs, thus increasing this
provision to a total of €1,103 thousand.
99
j
FINANCIAL REPORT
3.13 FREE SHARE ALLOCATION PLAN AUTHORISED BY THE
GENERAL MEETING OF 14 SEPTEMBER 2012
•
Allocation of free performance-based shares by the Management
Board of 24 October 2012
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.14 – Financial
instruments and financial risk management).
allocated to this plan. This loss has been estimated at €602 thousand
at 31 March 2013, weighted by a vesting probability of 55% and
spread pro rata according to the number of days which have passed
out of the 2-year vesting periods of the plan. At 31 March 2013, a
€72 thousand provision was established under personnel costs.
Interest rate risk
Implementation of a free share allocation plan as part of an employee
shareholding plan by the Management Board of 3 December 2012.
To manage its risk, the Treasury Department has implemented a hedging
allocated to this plan. This loss has been estimated at €4,395 thousand
at 31 March 2013, weighted by a vesting probability of 55% and spread
pro rata according to the number of days which have passed out of the
2-year vesting periods of the plan. At 31 March 2013, a €248 thousand
provision was established under personnel costs.
The exposure of interest rates on Euro-denominated syndicated debt is
hedged for between 77% and 83% of the total debt bearing a Euro interest
rate, depending on fluctuations for the 2013/2014 period.
3.14 LOANS AND BORROWINGS
hedges and spreads for the debt in Euros, and 3.87% for the debt in US
dollars, which includes the US Private Placement. The Group’s total cost
of debt for 2013/2014 is therefore estimated at 2.5%.
•
Loans and borrowings are valued at their nominal value and comprise:
•
•
the €56.9 million bond-type issue (US private placement);
•
•
accrued interest on financial debt of €1.4 million;
•
•
•
a loan of €10.2 million from its subsidiary Faiveley Transport Malmö;
a loan of €292.6 million provided by the bank pool to finance the
reorganisation of Faiveley Transport‘s shareholding structure in 2008;
bank overdrafts of €12.2 million and cash pooling (managed by the
Group Treasury Department) of €312.3 million;
current accounts with Group companies of €563.4 million;
the balance on the special reserve for employee profit-sharing of
€0.06 million.
The syndicated debt, excluding the revolving facility, is indexed on variable
USD Euribor and Libor interest rates and can be hedged in accordance
with the Group’s interest rate risk policy. All revolving facilities, drawn or
undrawn, bear a variable rate and are not subject to interest hedges.
The same applies to the US private placement bond issue, which bears
a fixed rate.
However, taking into account the “US private placement” bond issue, the
hedged ratio, i.e.: amount of fixed-rate debt over total USD-denominated
debt, is 74% for the period 2013/2014.
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”.
The unrealised exchange loss resulting from the determination of an overall
foreign exchange position on assets and liabilities held on the balance
sheet date is subject to a provision for foreign exchange risk.
3.15 FINANCIAL INSTRUMENTS
3.16 INCOME STATEMENT
Exchange risk
Faiveley Transport continues its activities of providing services to the Group
as the holding company. Sales of €56.7 million achieved in 2012/2013
represented an increase of €4 million compared to €52.7 million reported
in the previous year.
Due to the nature of its operations, Faiveley Transport is exposed to
exchange risks arising from its holding company activities (including
exchange hedging for the benefit of subsidiaries), from its loan agreements
and on inter-company balances.
In 2012/2013, the major currencies concerned are the US Dollar, the
Pound Sterling, 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.
100
Costs incurred by Faiveley Transport for services provided to subsidiaries
were rebilled. The operating profit was €4 million, compared to a loss of
€1.6 million in 2011/2012. This improvement is mainly due to the net
income of €1.7 million relating to the Wabtec compensation received (whilst
for the previous financial year €0.6 million in fees had been recognised)
by the rebilling of the final charge of €1.3 million to the subsidiaries due
to the allocation of free shares which ended in December 2012, as well
as better control of certain expense items.
FINANCIAL REPORT
The net finance income was €27.3 million, compared to a net expense of
€10 million in the previous year. In 2012/2013, dividends of €37.5 million
were collected, compared to €1.3 million in 2011/2012, due to the
implementation of a more active policy relating to the transfer of the
dividends of subsidiaries from the 2012/2013 financial year onwards.
Excluding dividends, the net finance income increased by €1.2 million.
This was primarily due to the €2.1 million decrease in interest expense,
foreign exchange gains of €0.6 million, a €0.8 million positive movement
in financial provision reversals and charges, offset by the waiver of a
€2.6 million financial liability in relation to its subsidiary o.o.o Faiveley
Transport.
The €4.5 million income tax charge recognised in the year to 31 March
2013 reflects the tax consolidation charge of €0.6 million recorded during
the period, increased by the €3.9 million corporate tax charge generated
by the German subsidiaries, Faiveley Transport Holding GmbH & Co. KG
and Faiveley Transport Leipzig GmbH & Co. KG.
C. NOTES TO BALANCE SHEET AND INCOME STATEMENT
Figures are expressed in thousands of Euros unless indicated otherwise.
1.
Non-current assets
CHANGES IN THE PERIOD
Intangible assets*
Intangible assets in progress
Gross
at 1 April 2012
Acquisitions
Disposals
Gross
at 31 March 2013
392,415
438
-
392,853
12,277
3,013
-
15,290
General fittings, fixtures and miscellaneous
606
4
-
610
Equipment, office and computer equipment, furniture
193
57
-
250
Advances and prepayments on non-current assets
TOTAL
-
-
-
-
405,491
3,512
-
409,003
* 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 2013, which did not highlight
the need for a writedown charge to be recognised in the financial statements.
The remainder of this heading primarily includes IT software development costs.
AMORTISATION, DEPRECIATION AND WRITEDOWNS
At 1 April 2012
Charges
Decreases
At 31 March 2013
5,126
727
-
5,853
General fittings, fixtures and miscellaneous
40
56
-
96
Equipment, office and computer equipment, furniture
29
34
-
63
5,195
817
-
6,012
Gross
at 1 April 2012
Acquisitions/
Increases
Disposals/
Decreases
Gross
at 31 March 2013
-
501,427
(5,308)
161,195
Intangible assets
TOTAL
2.
Financial investments
CHANGES IN THE PERIOD
Equity investments
499,919
1,508*
Loans receivable from equity investments
156,705
9,798
TOTAL
555
45
(193)
407
657,179
11,351
(5,501)
663,029
* This increase was due to the payment in full of the capital of the Chinese subsidiary Faiveley Transport Systems Technology (Beijing) for €1.5 million.
101
j
FINANCIAL REPORT
MATURITY OF RECEIVABLES
Less than 1 year
Between 1
and 5 years
More than
5 years
Net at
31 March 2013
64,116
49,699
47,380
161,195
10
108
289
407
64,126
49,807
47,669
161,602
Less than 1 year
More than 1 year
Net at
31 March 2013
Net at
31 March 2012
Trade and other accounts receivable
49,665
-
49,665
47,310
Other receivables – advances and prepayments*
29,662
-
29,662
6,293
1,287
-
1,287
55
80,614
-
80,614
53,658
31 March 2013
31 March 2012
Loans and receivables from equity investments
TOTAL
3.
Receivables
Tax consolidation
TOTAL
* Including accrued Wabtec compensation of €12,322 thousand, of which €8,211 thousand is to be transferred to subsidiaries.
4.
Cash and marketable securities (gross)
Marketable securities(1)
Cash(2)
Bank overdrafts
TOTAL
18,943
32,285
313,134
302,644
(324,510)
(286,714)
7,567
48,215
(1) Of which treasury shares of €18,555 thousand (gross), including a writedown of €356 thousand calculated in accordance with the method specified in § 3.6.
(2) Including treasury shares held within the framework of the liquidity contract for €635 thousand.
5.
Equity
Share capital
Share
premium
Reserves
Retained
earnings
Profit/(loss)
for the year
Total
14,405
94,045
1,440
86,292
(1,757)
194,425
-
-
-
(1,757)
1,757
-
Allocation of 2010/2011 profit
Dividends paid
-
-
-
(16,737)
-
(16,737)
Profit/(loss) for the year
-
-
-
-
(10,999)
(10,999)
209
10,909
-
-
-
11,118
14,614
104,954
1,440
67,798
(10,999)
177,807
-
-
21
(11,020)
10,999
-
Other movements*
Allocation of 2011/2012 profit
Dividends paid
-
-
-
(12,062)
-
(12,062)
Profit/(loss) for the year
-
-
-
-
26,762
26,762
Other movements
-
-
-
-
-
-
14,614
104,954
1,461
44,716
26,762
192,507
* Capital increase relating to the payment in shares of part of the acquisition of Graham-White Manufacturing Co.’s securities.
5.1
SHARE CAPITAL
At 31 March 2013, the share capital of the Company was €14,614,152, divided into 14,614,152 shares of €1 each, fully paid up. Nominative shares
recorded in the name of the same holder for at least two years (8,021,532 shares at 31 March 2013) benefit from a double voting right.
102
FINANCIAL REPORT
Analysis of share capital
Shares
Nominal Value
31 March 2012
Created
Granted double
voting rights
31 March 2013
Ordinary
1
6,661,370
-
(68,750)
6,592,620
Amortised
-
-
-
-
-
With priority dividends
-
-
-
-
-
With double voting rights
1
7,952,782
-
68,750
8,021,532
TOTAL
1
14,614,152
-
-
14,614,152
Treasury shares
Share purchase option plan of 27 September 2005
At 31 March 2013, the Company held 382,050 treasury shares, including
12,392 through its liquidity contract. These shares accounted for 2.61% of
the share capital. Out of these 382,050 shares, 338,690 were earmarked
for the various stock option and free share plans.
On request from Faiveley Transport, Faiveley SA (now called 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).
Employee shareholding
This share purchase option plan, for a maximum of 325,000 Faiveley SA
shares, was approved by the General Meeting of 27 September 2005.
Granted for a period of thirty-eight months.
FCPE Faiveley Actions holds 15,360 shares (0.1%) in the Company.
The options to purchase shares, if exercised, will give rise to the purchase
of existing ordinary shares in Faiveley Transport.
E
MAIN FEATURES OF THE CURRENT SHARE PURCHASE OPTION PLAN
Number
of options
outstanding
Of which
to Executive
Committee
members(2)
Date of allocation
Number of
shares allocated
Subscription
price(1)
Options
cancelled
Options
exercised
24 November 2005
221,760
26.79
47,040
174,720
-
-
29 December 2005
6,720
29.75
-
6,720
-
-
22 June 2006
31,360
30.48
4,480
21,958
4,922
-
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
-
7,456
3,744
-
2 April 2007
26,880
42.80
-
11,220
15,660
-
19 February 2008
26,880
32.31
-
20,920
5,960
29 March 2008
13,440
34.08
4,480
4,850
4,110
-
16 July 2008
22,600
40.78
-
-
22,600
22,600
56,000
259,044
56,996
22,600
TOTAL
372,040
(1) The exercise price is equal to the average price of the twenty trading days prior to the date of the Management Board deciding on the allocation, less a discount
of 5%.
(2) Including members of the Management Board.
Following the departure of certain option holders since the Management
Board implemented the plan and options exercised until that date,
options exercisable at 31 March 2013 related to 56,996 shares and
10 beneficiaries.
The options 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,
259,044 options have been exercised.
Share subscription plan of 22 September 2009
Management Board powers in relation to:
•
•
granting share subscription and/or purchase options;
issuing shares or marketable securities giving right to the allocation
of new or already issued shares of the Company, with, in the case of
the allocation of new shares, 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.
103
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FINANCIAL REPORT
E
MAIN FEATURES OF THE CURRENT SHARE SUBSCRIPTION OPTION PLAN:
Of which
to Executive
Committee
members*
Date of allocation
Number of
shares allocated
Subscription
price
Options
cancelled
Options
exercised
Number
of options
outstanding
23 November 2009
144,000
54.91
21,000
-
123,000
95,000
TOTAL
144,000
-
21,000
-
123,000
95,000
* Including members of the Management Board.
Free performance-based share allocation plan authorised by
the General Meeting of 13 September 2010
Faiveley Transport’s Combined General Meeting of 13 September 2010
delegated the Management Board powers for the allocation of free
performance-based shares, either existing or to be issued, within the
limit of 1% of the share capital at 13 September 2010.
E
At its meetings of 3 December 2010 and 24 February 2011, the
Management Board allocated a total of 69,700 existing shares to 43
beneficiaries
At its meetings of 3 December 2012 and 24 February 2013, the
Management Board validated the partial achievement of performance
criteria, at the rate of 50%, as well as the final list of beneficiaries. The
free shares vested must be retained for a minimum period of two years
from their vesting date.
MAIN FEATURES OF THE CURRENT FREE PERFORMANCE-BASED SHARE ALLOCATION PLAN
Vesting date
Number of free
shares granted
Free shares
cancelled
Free shares vested
based
on achievement
of performance
criteria
3 December 2010
3 December 2012
64,500
11,200
26,650
15,000
24 February 2011
24 February 2013
5,200
3,200
1,000
-
Allocation date
Of which
to Executive
Committee
members*
•
Free share allocation plan authorised by the General
Meeting of 14 September 2011
The Combined General Meeting of 14 September 2011 delegated to the
Management Board its powers in relation to:
•
setting the conditions and where appropriate, setting the allocation
criteria for ordinary shares;
•
within the legal conditions and limits, setting the dates on which the
allocations will proceed;
E
MAIN FEATURES OF THE CURRENT FREE SHARE ALLOCATION PLAN
Allocation date
determining the identity of beneficiaries, the number of ordinary shares
allocated to each of them and the means of allocation of ordinary
shares.
This authorisation is valid for thirty-eight months (38) and may not exceed
At its meeting of 5 March 2012, the Management Board used this
authorisation and granted a total of 79,224 free shares to 151 beneficiaries.
Number of free
shares granted
Free shares
cancelled
Free shares
in issue
Of which
to Executive
Committee
members*
79,224
2,916
76,308
15,200
5 March 2012
Free share allocation plan authorised by the General
Meeting of 14 September 2012
ALLOCATION OF FREE PERFORMANCE-BASED SHARES
BY THE MANAGEMENT BOARD OF 24 OCTOBER 2012
authority to the Management Board to proceed with the allocation of free
ordinary shares in the Company, either in existing shares or shares to be
issued, within the limit of 1% of the share capital at 14 September 2012.
At its meeting of 24 October 2012, the Management Board allocated
10,000 free shares in issue to one beneficiary. The allocation of these
performance-based shares will be final at the end of a two year vesting
period, subject to the beneficiary remaining employed by the Group and
the partial or full achievement of performance conditions. This period will
be followed by a minimum retention period of 2 years.
104
FINANCIAL REPORT
E
Allocation date
Number of free
shares granted
Free shares
cancelled
Free shares vested
based
on achievement
of performance
criteria
24 October 2012
10,000
-
10,000
IMPLEMENTATION OF A FREE SHARE ALLOCATION PLAN AS PART
OF AN EMPLOYEE SHAREHOLDING PLAN BY THE MANAGEMENT
BOARD OF 3 DECEMBER 2012
At its meeting held on 3 December 2012, the Management Board decided
E
Of which
to Executive
Committee
members
10,000
At its meeting held on 15 January 2013, the Management Board
established the final list of beneficiaries and the number of free shares
to be granted. A total of 72,386 shares are thus to be granted to
179 beneficiaries. The allocation of the shares will be final at the end of a
two-year vesting period, or four years for non-French residents, beginning
on 15 January 2013.
Allocation date
Number of free
shares granted
Free shares
cancelled
Free shares in issue
Of which
to Executive
Committee
members*
15 January 2013
72,386
-
72,386
11,440
5.2
SHARE PREMIUM
The share 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.
6.
Regulated provisions and provisions for liabilities and charges
1 April 2012
Charges
Used reversals
Unused
reversals
Accelerated depreciation
-
-
-
-
-
REGULATED PROVISIONS
-
-
-
-
-
99
237
(69)
-
267
-
-
-
-
-
Provisions for liabilities
Provisions for taxes
Provisions for litigation
Provisions for option plans*
Provisions for employee compensation
PROVISIONS FOR LIABILITIES AND
CHARGES
31 March 2013
262
322
(35)
(25)
524
1,516
1,386
(1,306)
-
1,596
7
2
-
-
9
1,884
1,947
(1,410)
(25)
2,396
* The €1,596 thousand provision for option plans includes €2 thousand relating to the option plan of 27 September 2005, €171 thousand for the subscription option
plan of 22 September 2009, €1,103 thousand for the free share allocation plan of 14 September 2011, €72 thousand for the free performance-based share allocation
plan of 24 October 2012 and €248 thousand for the share allocation plan of 3 December 2012.
105
j
FINANCIAL REPORT
7.
Less than 1 year
Bond-type borrowings
More than 1 year
31 March 2013
31 March 2012
1,351
56,927
58,278
-
359,831
257,333
617,164
707,551
Employee profit-sharing
-
65
65
65
Other financial liabilities*
10,156
-
10,156
20,312
Loans and borrowings from credit institutions
Current trade payables
563,459
-
563,459
510,347
TOTAL
934,797
314,325
1,249,122
1,238,275
* Other borrowings, at 31 March 2013, correspond to the loan of €10.2 million contracted with its subsidiary Faiveley Transport Malmö.
During the financial year, loans and borrowings from credit institutions
decreased by €90.4 million. This decrease resulted from the annual
syndicated facility instalment of €34.1 million, the remainder comprising
lower drawdowns on other credit facilities and bank overdrafts.
For all its sources of financing, the Faiveley Transport Group must comply
with the following four financial conditions:
•
leverage ratio (Consolidated Net Debt/Consolidated EBITDA): must
not exceed 2.5. At 31 March 2013, the ratio was 1.47;
•
gearing ratio (Consolidated Net Debt/Consolidated Equity): must not
exceed 1.50. At 31 March 2013, the ratio was 0.31;
8.
•
total bank guarantees must not exceed 22% of the order book. At
31 March 2013, this was 13.5%;
•
“Consolidated EBITDA/Cost of Consolidated Net Financial Debt” must
not be less than 3.5. At 31 March 2013, the ratio was 11.6.
Other financial liabilities decreased by €10.2 million. This decline was due
to the repayment of the Euro-denominated loan granted by the Faiveley
Transport Malmö subsidiary.
Current trade payable balances increased by €53.1 million at 31 March
2013.
Other liabilities
Less than 1 year
More than 1 year
31 March 2013
31 March 2012
Trade payables
17,526
-
17,526
14,987
Tax and social security liabilities*
11,077
-
11,077
7,321
2,566
-
2,566
2,124
Tax consolidation
Other
TOTAL
1,174
-
1,174
718
32,343
-
32,343
25,150
* The tax liability relating to the company Faiveley Transport Holding GmbH & Co. KG and Faiveley Transport Leipzig GmbH & Co. KG was recorded under tax and
social security liabilities for €1,457 thousand. At 31 March 2012, this liability was €296 thousand.
9.
Deferred expenses
Nil.
10. Accrued expenses and accrued income
10.1 ACCRUED EXPENSES
Accrued expenses included in the following balance sheet captions
2012/2013
2011/2012
1,456
193
Trade payables
5,950
2,622
Tax and social security liabilities
4,952
4,620
Liabilities for non-current assets
-
-
Other
TOTAL
106
697
316
13,055
7,751
FINANCIAL REPORT
10.2 ACCRUED INCOME
Accrued income included in the following balance sheet captions
2012/2013
2011/2012
726
2,113
Trade receivables
27,791
28,216
Other receivables*
27,323
-
Suppliers receivables
-
150
Tax and social security receivables
-
12
-
-
55,840
30,491
2012/2013
2011/2012
Receivables from associates
TOTAL
* Of which €12,322 thousand in respect of the WABTEC compensation and €15,001 thousand in dividends.
11. Prepaid expenses and deferred income
Operating expenses
542
561
Financial expenses
-
-
Exceptional expenses
-
-
PREPAID EXPENSES
542
561
Operating income
-
-
Financial income
-
-
Exceptional income
-
-
DEFERRED INCOME
-
-
2012/2013
2011/2012
56,742
52,677
5
385
56,747
53,062
12. Analysis of sales by segment and geographic area
Segment
Rental/hire
TOTAL
Geographic area
2012/2013
2011/2012
France
17,002
16,626
EU
27,584
31,921
Non EU
12,161
4,134
TOTAL
56,747
52,681
2012/2013
2011/2012
12,258
11,695
4,175
3,983
16,433
15,678
13. Research and development
None in Faiveley Transport’s parent company financial statements.
14. Personnel costs
Salaries*
Social security charges
TOTAL
* Including a €1,387 thousand provision at 31 March 2013 for the future costs of share subscription and free share plans and the €409 thousand impact of the 2010
plan served.
107
j
FINANCIAL REPORT
15. Financial income/(expenses)
Cash dividends received
2012/2013
2011/2012
37,451
1,339
17
26
Income from marketable securities
Interest on current accounts, loans, borrowings and overdrafts
(9,122)
(11,259)
Realised foreign exchange gains and losses
671
67
Charges and reversals on financial investments
156
(599)
Other financial income and charges
672
434
(2,563)
-
27,282
(9,992)
Financial receivable written off (o.o.o Transport subsidiary)
TOTAL
The strong increase in dividends received results from the implementation of a more active policy relating to the transfer of the dividends of subsidiaries
from the 2012/2013 financial year.
16. Exceptional income and expense
2012/2013
Income/(expense) on disposals of financial investments
Other*
TOTAL
2011/2012
(46)
-
-
(243)
(46)
(243)
* The 2011/2012 exceptional expense was an adjustment to the 2008/2009 business tax.
17. Income tax
17.1 ANALYSIS OF INCOME TAX BETWEEN THE CURRENT TAX CHARGE, EXCEPTIONAL INCOME AND ACCOUNTING PROFIT
Before tax
Profit from ordinary activities
Tax
After tax
31,342
-
31,342
(46)
-
(46)
Exceptional income
Effect of tax consolidation
ACCOUNTING PROFIT/(LOSS)
17.2 TAX CONSOLIDATION
Faiveley Transport heads a tax consolidation that comprises Faiveley
Transport Tours, Faiveley Transport Amiens, Faiveley Transport
Gennevilliers and Faiveley Transport NSF.
Tax savings achieved as part of this tax consolidation are recognised and
retained by the parent company. For the year ended 31 March 2013, the
tax consolidation generated a tax saving of €0.6 million, which was added
to the €3.9 million tax charge of the German subsidiaries (corporate tax).
Without the tax consolidation, the taxable profit of Faiveley Transport alone
would have been €0.1 million.
At 31 March 2013, tax losses carried forward were €1.2 million. Since
these losses originated prior to the merger between Faiveley SA and
Faiveley Transport, they may only be offset against Faiveley Transport’s
future profits.
17.3 EXCEPTIONAL TAX ASSESSMENTS
Nil.
108
-
(4,534)
(4,534)
31,296
(4,534)
26,762
17.4 DEFERRED AND UNREALISED TAX POSITION
Description
Amount
Taxes payable on:
Regulated provisions:
-
Provisions for price increases
-
TOTAL INCREASE
-
Prepaid tax on non-deductible temporary
differences (deductible in subsequent year):
• Provision for Directors’ fees
360
• Paid holidays
959
• Liability translation adjustment
• Organic contribution
2,788
29
TOTAL DECREASE
4,136
NET DEFERRED TAX POSITION
4,136
FINANCIAL REPORT
18. Translation differences
Positive and negative translation differences arise on the translation of trade receivables and payables and on borrowings, loans and foreign currencydenominated bank accounts at balance sheet date exchange rates.
Unrealised
losses (asset)
Provision for
exchange of loss
Unrealised gains
(liabilities)
Subsidiary loans
-
-
2,542
Subsidiary borrowings
-
-
-
Type of translation difference
Bank borrowings
Foreign currency-denominated bank accounts
Foreign currency-denominated trade receivables
Foreign currency-denominated trade payables
TOTAL
-
-
-
12
12
124
190
190
110
35
35
13
237
237
2,789
D. OTHER INFORMATION
1.
Post-balance sheet events
On 17 May 2013, Faiveley Transport acquired 100% of Schwab Verkehrstechnik AG, a leading designer and manufacturer of couplers and buffers
for freight and rail transit markets, which reported sales of CHF 23 million in 2012. This company is based in Schaffhausen (Switzerland) and has
42 employees.
2.
Information on non-tax deductible expenses
Non-tax deductible expenses were €16,341 at 31 March 2013.
3.
Average workforce
The average workforce includes employees allocated to international offices.
Managers
2012/2013
2011/2012
77
65
Supervisors
2
2
Employees
10
11
TOTAL
89
78
4.
During the 2012/2013 financial year, members of the Group’s management bodies received a total of €1,451,668 in direct and indirect remuneration
of any nature.
5.
Identity of parent company
Faiveley Transport fully consolidates the subsidiaries in which it directly or indirectly holds over 50% of the share capital. Companies in which Faiveley
Transport exercises joint control, whether directly or indirectly, are proportionally consolidated.
109
j
FINANCIAL REPORT
6.
Transactions with related companies and parties
WITH RELATED COMPANIES
Share of financial investments, receivables, payables, income and expenses concerning related parties:
Related companies
2012/2013
2011/2012
Equity investments
501,427
499,919
Receivables from associates
161,195
156,705
49,540
47,114
Trade receivables
Other receivables
Loans and other borrowings
Trade and other payables
Other liabilities
16,288
75
573,615
530,659
12,077
12,057
2,566
2,124
56,938
52,965
Operating expenses
25,550
23,535
Financial expenses
5,307
4,938
42,227
5,967
Financial income
WITH RELATED PARTIES
Apart from the transactions carried out with related parties and not referred to by the law, no significant transactions were concluded at arm’s length.
Agreements with related parties are set out in a note to the consolidated financial statements (Note E.27 – Transactions with related parties).
7.
Off-balance sheet commitments
7.1
COMMITMENTS GIVEN
Deposits, securities and guarantees given to financial institutions
Retirement benefits*
Parent company guarantees
2012/2013
2011/2012
25,252
38,622
615
500
409,970
403,046
* 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
2012/2013
2011/2012
2.85%
3.85%
2%
2%
Average rate of salary increase
2.5%
3%
Yield expected on investments
N/A
N/A
Motor rental
Total
7.2
LONG TERM LEASE COMMITMENTS
Types of leases
Facilities
IT hardware
Lease payments for the financial year
663
414
146
1,223
TOTAL
663
414
146
1,223
580
554
100
1,234
2,393
514
75
2,982
Lease payments due:
• 1 year or less
• 1 to 5 years
• more than 5 years
2,020
-
-
2,020
TOTAL
4,993
1,068
175
6,236
110
FINANCIAL REPORT
7.3
HEDGING COMMITMENTS
Interest rate risk
The exposure of interest rates on loans in Euros is hedged for between
77% and 83% of the total debt bearing a Euro interest rate, depending
on interest rate fluctuations for the 2013/2014 period.
The syndicated debt, excluding the revolving facility, is indexed on US
Dollar Euribor and Libor variable rates and may be hedged in accordance
with the Group’s interest rate risk policy. None of the revolving facilities,
whether drawn or undrawn, nor the US private placement-type fixed-rate
bond issue are subject to interest rate hedging.
However, taking into account the “US private placement” bond issue, the
hedged ratio, i.e.: amount of fixed-rate debt over total USD-denominated
debt, is 74% for the period 2013/2014.
To manage its risk, the Treasury Department has implemented a hedging
hedges and spreads for the debt in Euros, and 3.87% for the debt in US
dollars, which includes the US private placement. The Group’s total cost
of debt for 2013/2014 is therefore estimated at 2.5%.
INSTRUMENTS RECOGNISED UNDER EQUITY
EUR borrowings
USD borrowings
Nominal
value (EUR
thousands)
Fair value
(EUR
thousands)
Nominal
value (USD
thousands)
Fair value
(USD
thousands)
Nominal
value (EUR
thousands)
Fair value
(EUR
thousands)
160,000
(3,095)
225
(2)
176
(2)
Tunnels
12,500
(212)
-
-
-
-
Caps
20,000
(56)
-
-
-
-
192,500
(3,363)
225
(2)
176
(2)
Swaps
TOTAL
Exchange risks
exchange risk as a result of various foreign currency exposures.
The principal currencies concerned are the US Dollar, the Hong Kong
Dollar, the Czech Koruna and the Swedish Krona, the Pound Sterling
and the Chinese Yuan.
The management of the exchange risk of commercial contracts 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 hedge
instruments 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.
EXCHANGE RISK MANAGEMENT RELATING TO COMMERCIAL
CONTRACTS (CERTAIN RISK)
tenders) are hedged by the Group Treasury Department from contractual
commitment. Instruments used mainly include forward purchases and
sales and exchange swaps. Group Treasury may also use options.
The Group’s policy is to systematically hedge the full value of future
transactions expected in every major currency. The minimum trigger
threshold for a foreign exchange hedge is €250 thousand.
Various cash flows are hedged against for a minimum of 80% of the
annual budget.
In addition to commercial contracts, all financial positions and management
fees deemed significant are hedged against.
FORWARD SALES USED TO HEDGE FINANCIAL AND BUSINESS TRANSACTIONS AT 31 MARCH 2013
Nominal value
Fair value
(EUR thousands)
(thousands of foreign currency)
(EUR thousands)
4,691
6,048
(198)
Chinese Yuan
18,350
149,180
(259)
Czech Koruna
13,659
349,964
63
Australian Dollar
Pound Sterling
15,890
13,597
(152)
Hong Kong Dollar
44,150
452,320
(1,309)
905
64,825
1
Indian Rupee
Polish Zloty
816
3,400
7
5,274
209,713
-
Swedish Krona
16,875
142,980
(206)
Singapore Dollar
16,240
25,822
-
US Dollar
155,875
204,254
(3,489)
TOTAL
292,725
Russian Rouble
(5,542)
111
j
FINANCIAL REPORT
FORWARD PURCHASES USED TO HEDGE FINANCIAL AND BUSINESS TRANSACTIONS AT 31 MARCH 2013
Nominal value
Fair value
(EUR thousands)
(thousands of foreign currency)
(EUR thousands)
4,891
6,250
159
Australian Dollar
Swiss Franc
244
300
2
Chinese Yuan
43,682
355,645
400
Czech Koruna
49,222
1,256,119
(879)
Pound Sterling
29,300
24,319
(586)
Hong Kong Dollar
50,083
505,061
700
Indian Rupee
2,086
151,849
58
Polish Zloty
1,837
7,684
(9)
54,307
459,662
603
US Dollar
115,918
152,089
TOTAL
351,570
Swedish Krona
2,335
2,783
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:
At 31 March 2013
Interest rate hedges(1)
(1)
Raw material hedges
Financial
instruments
Assets
Financial
instruments
Liabilities
Unrealised capital
gains/(losses)
taken to equity
-
3,321
(3,261)
-
11
(11)
5,246
8,030
(35)
2,950
4,042
-
38
75
(35)
2,258
3,913
-
TOTAL
5,246
11,362
(3,307)
At 31 March 2012
Financial
instruments
Assets
Financial
instruments
Liabilities
Unrealised capital
gains/(losses)
taken to equity
-
3,623
(3,557)
(1) Cash flow hedges.
Raw material hedges
-
4
(4)
5,003
4,018
116
3,270
3,006
-
184
78
116
1,549
934
-
TOTAL
5,003
7,645
(3,445)
7.4
COMMITMENTS RECEIVED
7.6
INDIVIDUAL TRAINING RIGHTS (ITR)
On request from Faiveley Transport, Faiveley SA implemented a share
purchase option plan for the benefit of key Faiveley Transport Group
Management (excluding the managers who invested in Faiveley
Management SAS).
Nil.
7.5
The employees of Faiveley Transport are entitled to request additional
training. A total of 66 hours of training in respect of the ITR was requested
by employees during the financial year. At 31 March 2013, a total of
3,879 unused training hours had been accumulated.
112
SHARE PURCHASE OPTION PLAN
This share purchase option plan, for a maximum of 325,000 Faiveley
Transport 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. At 31 March
2013, 56,996 shares were outstanding.
FINANCIAL REPORT
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 fourth anniversary of the allocation
of purchase options. It should be noted that 259,044 share purchase
options have been exercised at 31 March 2013.
7.7
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 the allocation
of new or already issued shares of the Company, with, in the case
of the allocation of new shares, the waiver of the pre-emption right.
At its meeting of 23 November 2009, the Management Board decided to
grant, on this date and up to 23 November 2017, options giving right to
subscribe to 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 number of options was
reduced to 123,000 at 31 March 2013.
7.8
FREE PERFORMANCE-BASED SHARE ALLOCATION
PLAN AUTHORISED BY THE GENERAL MEETING
Management Board powers to allocate free shares of the Company,
either new or already issued. The General Meeting established a minimum
vesting period of two years following which the allocation of ordinary
shares to beneficiaries will be final, subject to the potential terms and
conditions set out by the Management Board, and a retention period of
a minimum of two years from the date of final allocation of the shares.
The Management Board has assigned permanently at its meetings of 3
December 2012 and 24 February 2013 respectively 26,650 and 1,000
shares to beneficiaries after taking into account the partial achievement
of performance criteria.
7.9
FREE SHARE ALLOCATION PLAN AUTHORISED
BY THE GENERAL MEETING OF 14 SEPTEMBER2011
Management Board powers to allocate free shares of the Company,
either new or already issued. The General Meeting established a minimum
vesting period of two years following which the allocation of ordinary
shares to beneficiaries will be final, subject to the potential terms and
conditions set out by the Management Board, and a retention period of
a minimum of two years from the date of final allocation of the shares.
However, the General Meeting authorised the Management Board, to the
extent that the minimum vesting period for some or all of the allocations
would be a minimum of four years, not to impose a retention period for
the shares in question.
In its meeting held on 5 March 2012, the Management Board decided
to implement this authorisation and allocate a total of 79,224 shares to
151 beneficiaries. At 31 March 2013, 2,916 free shares were cancelled.
A balance of 76,308 shares was allocated.
7.10 FREE SHARE ALLOCATION PLAN AUTHORISED
At 31 March 2013, the balance of the free performance-based share
plan was 10,000 shares, with that of the free allocation plan as part of an
employee shareholding plan standing at 72,386 shares.
8.
Statutory Auditors’ fees are included in Note H of the 2012/2013
consolidated financial statements.
In its meetings held on 3 December 2010 and 24 February 2011, the
Management Board decided to allocate a total of 69,700 shares to
43 beneficiaries.
113
j
FINANCIAL REPORT
9.
List of subsidiaries and equity investments (€ thousands)
Share
Capital
Subsidiary
Faiveley Transport
Gennevilliers
Sofaport
Faiveley Transport
Acquisition AB
Equity
(other
than
share
capital)
% of
share
capital
held
Value of
shares
held
Net value
of shares
held
Loans
and
advances
Guarantees
and
commitments
issued
Sales
excluding
tax
Dividends
received
8,100
63,747
100
20,000
20,000
-
9,956
90,556
4,050
983
13,634
100
12,758
12,758
-
1,283
32,520
2,001
39,965
65,458
100
39,422
39,422
-
14,920
159,975
5,995
5,000
304
100
5,000
5,000
13,654
-
12,425
-
96
(72)
60
36
36
-
-
-
-
114
36,381
100
156,409
156,409
37,924
-
-
15,001
Faiveley Transport Pilzen
8
532
100
6
6
-
-
2,675
-
Faiveley Transport USA Inc.
1
32,811
100
36,706
36,706
42,111
9,948
-
-
Qingdao Faiveley SRI Rail
Brake Co. Ltd.(1)
3,769
16,902
50
1,486
1,486
-
10,139
36,140
-
Datong Faiveley Couplers
Systems Co. Ltd. (1)
628
326
50
237
237
-
-
2,594
-
-
(10)
100
-
-
916
-
-
-
16,000
21,981
100
23,111
23,111
-
107,344
129,391
3,000
125
1,508
75
2,007
2,007
583
401
4,362
-
10
160,831
100
90,010
90,010
-
-
-
5,000
4,523
5,020
50
1,892
1,892
-
-
17,379
1,871
Faiveley Transport
Ibérica SA
871
30,284
100
1,390
1,390
12,368
4,991
64,264
-
Faiveley Transport
Do Brasil Ltda.
8,106
10,140
100
4,258
4,258
-
1,945
21,703
-
Faiveley Transport
Italia Spa.
1,424
79,406
98.70
37,827
37,827
23,408
29,149
117,208
-
Faiveley Transport
Tamworth Ltd.
59
7,545
100
66
66
-
-
9,225
-
Faiveley Transport
Far East Ltd.
-
(7,968)
100
-
-
20,004
8,417
25,016
-
Faiveley Transport
Lekov a.s.
2,075
4,339
100
5,884
5,884
2,890
1,366
20,949
-
910
(360)
48
486
486
-
-
907
-
-
(210)
100
-
-
2,425
52,893
1,558
-
82
2,454
80
2,926
2,926
-
-
7,701
533
3,990
(2,303)
100
3,500
3,500
-
5,221
6,193
-
56,248
3,617
99.56
56,000
56,000
-
-
4,971
-
Faiveley Transport Maroc
8
(57)
100
8
8
29
-
65
-
Faiveley Transport South
Africa (2)
-
-
100
-
-
-
-
-
-
Faiveley Transport Asia
Pacific Co. Ltd.
Faiveley Transport
Leipzig GmbH & Co. KG
Nowe GmbH
Faiveley Transport Holding
GmbH & Co. KG
Shijiazhuang Jiaxiang
Precision Machinery Co.
Ltd.(1)
FMRP
Faiveley Transport Canada
Ltd.
Faiveley Transport
Schweiz AG
Faiveley Transport Systems
Technology (Beijing) Co.
Ltd.(1)
Faiveley Transport
Belgium NV
(1) Data reported at the local 31 December 2012 year-end for the four Chinese subsidiaries.
(2) Accounts not closed.
114
FINANCIAL REPORT
4.5 FAIVELEY TRANSPORT FIVE-YEAR FINANCIAL SUMMARY
2008/2009
2009/2010
2010/2011
2011/2012
2012/2013
I.
Share capital at year-end
a.
Share capital
14,404,711
14,404,711
14,404,711
14,614,152
14,614,152
b.
Number of ordinary shares in issue
14,404,711
14,404,711
14,404,711
14,614,152
14,614,152
c.
Share per 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
-
-
-
-
-
1,401,867
48,564,676
48,860,272
52,681,294
56,757,369
II.
Operations and results for the financial year
a.
Sales (ex VAT)
b.
Profit before tax, amortisation, depreciation
and provision charges and profit-sharing
71,223,334
36,482,013
(3,091,896)
(10,825,972)
32,222,843
c.
Income tax
(5,209,593)
(4,630,407)
(741,771)
(834,864)
4,534,414
d.
Employee profit-sharing for the period
-
-
-
-
e.
Profit after tax, amortisation, depreciation
and provision charges and profit-sharing
76,886,871
41,307,869
(1,757,424)
(10,998,977)
26,762,496
f.
Cash dividends paid
14,404,711
17,285,653
17,285,653
12,422,029
13,883,444
III.
Earnings per share
a.
Earnings per share after tax, but before amortisation,
depreciation and provision charges
5.31
2.85
(0.16)
(0.68)
1.89
b.
Earnings per share after tax and amortisation,
depreciation and provision charges
5.34
2.87
(0.12)
(0.75)
1.83
c.
Cash dividend per share
1.00
1.20
1.20
0.85
0.95
IV.
Workforce
a.
Average workforce for the period
b.
Total payroll for the period
c.
Total sums paid as employee benefits over the period
(social security contributions, charities, etc.)
3
66
89
78
89
199,443
9,447,515
11,169,044
11,694,975
12,258,214
51,164
3,049,558
4,108,527
3,982,742
4,174,993
115
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FINANCIAL REPORT
on the parent company financial statements
For the year ended 31 March 2013
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 in the opinion on the 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 financial statements
taken as a whole and not to provide separate assurance on individual account captions or on information taken outside of the financial statements.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
In compliance with the assignment entrusted to us by the Annual General Meeting, we hereby report to you, for the year ended 31 March 2013, on:
•
•
•
the audit of the accompanying financial statements of FAIVELEY TRANSPORT;
the justification of our assessments;
the specific verifications and information 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 regarding 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 regarding 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 opinion.
In our opinion, the financial statements provide a true and fair view of the assets and liabilities and of the financial position of the Company as at 31
March 2013 and the results of its operation for the year then ended in accordance with French accounting principles.
II.
JUSTIFICATION OF OUR ASSESSMENTS
In accordance with the requirements of Article L. 823-9 of the French Commercial Code relating to the justification of our assessments, we bring to
your attention the following matters:
The Notes B.3.1 and B.3.3 to the financial statements present accounting rules and methods used by your Company in order to value and depreciate
the technical loss as well as equity securities. We have assessed the relevance of these methods. We also assessed approaches and assumptions
used by the Company, as described in the financial statements, in order to estimate book values on the basis of the latest available information. We
conducted tests of implementation to assess the application of these methods.
These assessments were made as part of our audit of the financial statements taken as a whole, and therefore contributed to the opinion we formed,
which is expressed in the first part of this report.
116
FINANCIAL REPORT
III.
SPECIFIC VERIFICATIONS AND INFORMATION
We have also performed, in accordance with professional standards applicable in France, the specific verifications required by French law.
We have no matters to report as to the fair presentation and the consistency with the financial statements of the information given in the management
report of the Management Board and in the documents addressed to shareholders with respect to the financial position and the financial statements.
Concerning the information given in accordance with the requirements of Article L. 225-102-1 of the French Commercial Code relating to remunerations
and benefits received by the directors and any other commitments made in their favour, we have verified its consistency with the financial statements,
or with the underlying information used to prepare these financial statements and, where applicable, with the information obtained by your Company
from companies controlling your company or controlled by it. Based on this work, we attest to the accuracy and fair presentation of this information.
In accordance with the French law, we have verified that the required information concerning the identity of shareholders and holders of the voting
rights has been properly disclosed in the management report.
Philippe Vincent
Jérôme Burrier
117
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FINANCIAL REPORT
6. STATUTORY AUDITORS’
SPECIAL REPORT
on related-party agreements and commitments
Annual General Meeting to approve the financial statements for the year ended 31 March 2013
This is a free translation into English of the Statutory Auditors’ special report on related-party agreements and commitments issued in French and is
provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with,
French law and professional auditing standards applicable in France.
In our capacity as Statutory Auditors of your Company, we hereby report to you on related-party agreements and commitments.
It is our responsibility to report to shareholders, based on the information provided to us, on the main terms and conditions of the agreements and
commitments that have been disclosed to us or that we may have identified as part of our engagement, without commenting on their relevance or
substance or identifying any undisclosed agreements or commitments. Under the provisions of Article R.225-58 of the French Commercial Code, it is
the responsibility of shareholders to determine whether the agreements and commitments are appropriate and should be approved.
Where applicable, it is also our responsibility to provide shareholders with the information required by Article R.225-58 of the French Commercial Code
in relation to the implementation during the year of agreements and commitments already approved by the Annual General Meeting.
We performed the procedures that we deemed necessary in accordance with the professional guidelines of the French National Institute of Statutory
Auditors (Compagnie nationale des commissaires aux comptes) applicable to such engagements. These procedures consisted in verifying that the
information given to us is consistent with the underlying documents.
I.
AGREEMENTS AND COMMITMENTS SUBMITTED FOR THE APPROVAL
OF THE ANNUAL GENERAL MEETING
Agreements and commitments authorised during the year
In accordance with Article L. 225-86 of the French Commercial Code, we were informed of the following agreements and commitments authorised
by the Supervisory Board.
WITH FRANCOIS FAIVELEY PARTICIPATIONS SAS
(Erwan FAIVELEY, member of the Management Board, holds the position of Chairman of the Management Board of FFP, which is shareholder of
FAIVELEY TRANSPORT)
(Supervisory Board Meeting of 6 June 2012)
Your Company concluded an amendment number 3 to the agreement for technical, commercial and administrative support agreed between the
Company FFP and FAIVELEY TRANSPORT of 26 June 2004.
By this amendment number 3, the Company FFP and FAIVELEY TRANSPORT have decided to update fee conditions of services provided which fixed
amount of €365,000 exclusive of tax was already set by an amendment number 2 of 30 June 2008.
The annual fee is now revised upwards every year according to the movement of the SYNTEC index. The first revision was on 1 June 2012. The annual
increase cannot exceed 5% of the previous annual fee.
In application of this amendment number 3, the annual fee remuneration for the services provided was set at € 373,094 exclusive of tax for the year
118
FINANCIAL REPORT
6. Statutory Auditors’ special report
II.
AGREEMENTS AND COMMITMENTS ALREADY APPROVED
BY THE ANNUAL GENERAL MEETING
Agreements and commitments approved in previous years which remained in force during the year
In accordance with Article R.225-57 of the French Commercial Code, we were informed that the following agreements and commitments, approved
by your Annual General Meeting in previous years, remained in force during the year ended 31 March 2013.
WITH ROBERT JOYEUX
Memorandum of understanding with the managers and amendment n°1 – Sale and transfer of FAIVELEY MANAGEMENT shares to FAIVELEY
SA (which became FAIVELEY TRANSPORT on 22 September 2009)
As part of its capital restructuring operations, FAIVELEY TRANSPORT signed a memorandum of understanding on 16 October 2008 and an amendment to
this memorandum of understanding on 17 November 2008 with the managers and their spouses who are shareholders of FAIVELEY MANAGEMENT SAS.
Within the framework of the memorandum of understanding of 16 October 2008, Robert JOYEUX received 140,610 FAIVELEY TRANSPORT shares in
exchange for 164,430 FAIVELEY MANAGEMENT shares provided to FAIVELEY TRANSPORT. For a period of six years with effect from 23 December
2008, any disposal of any block of 10,000 shares in FAIVELEY TRANSPORT is subject to a pre-emption right of FAIVELEY TRANSPORT.
Consulting and assistance agreement of 22 April 2011 and amendment number 1 of 28 March 2012
In application of the amendment number 1 of 28 March 2012 added to the consulting and assistance agreement agreed between the Company
RJX Consulting, whose Manager is Robert JOYEUX, and FAIVELEY TRANSPORT, your Company paid €194,000 exclusive of tax for consulting and
assistance fees and €12,000 exclusive of tax for reimbursement of expenses.
WITH THIERRY BAREL
Thierry BAREL, Chairman of the Management Board, may be entitled to compensation based on performance criteria, not exceeding eighteen months
of total gross remuneration, in the event of his dismissal by the Supervisory Board.
The performance criterion for the measurement of this compensation is the rate of achievement of annual goals set by the Supervisory Board. These annual
goals are used for the calculation of the annual variable remuneration. The measurement of this performance criterion is the average of the performance
accomplished by Thierry BAREL during the three years for which results have been published and preceding his dismissal by the Supervisory Board.
WITH FRANCOIS FAIVELEY PARTICIPATION SAS
In application of the technical, commercial and administrative assistance agreement concluded between FFP and FAIVELEY TRANSPORT on 26
June 2004, the Company FAIVELEY TRANSPORT invoiced €3,170 exclusive of tax for rents and services provided to the Company FFP for the year
Philippe Vincent
Jérôme Burrier
119
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FINANCIAL REPORT
7. DRAFT RESOLUTIONS
to be submitted to the Combined General Meeting of 12 September 2013 called to approve
the financial statements for the year ended 31 March 2013
I.
RESOLUTIONS IN ORDINARY SESSION
FIRST RESOLUTION
Approval of the parent company financial statements for the year
ended 31 March 2013
The General Meeting, acting under the quorum and majority conditions
required for Ordinary 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 ended 31 March 2013 and on the financial statements of that year,
and having considered the Statutory Auditors’ report on the execution
of their assignment for this financial year, approves the parent company
financial statements for the year ended 31 March 2013, as presented,
showing a profit of €26,762,496.06, and the transactions recorded in
these financial statements and summarised in these reports.
Pursuant to Article 223 (iv) of the General Tax Code, the General Meeting
approves the non-tax-deductible expenses covered by Article 39-4 of
the said Code totalling €16,431, as well as the corresponding tax which
amounts to €5,918.
Pursuant to Article 158 of the General Tax Code, only individual
shareholders will be entitled under the dividends distributed to a rebate
of 40% on the amount received.
Pursuant to the provisions of Article 243(ii) of the General Tax Code, the
General Meeting notes that the following dividends were paid in respect
of the last three financial years:
Year
Dividend
2009/2010
€1.20
2010/2011
€1.20
2011/2012
€0.85
Where, upon payment of these dividends, the Company holds any treasury
shares, the distributable profit corresponding to the unpaid dividend due
to the holding of the said shares will be allocated to “retained earnings”.
THIRD RESOLUTION
Approval of the consolidated financial statements for the year ended
31 March 2013
SECOND RESOLUTION
Allocation of profit for the year ended 31 March 2013
required for Ordinary General Meetings, on the proposal of the
Management Board, agrees to allocate the profit for the year ended
31 March 2013 as follows:
•
•
Profit for the financial year
€26,762,496.06
Added to:
− Retained earnings from previous years
€44,715,256.31
•
€71,477,752.37
Distributable profit:
− Transfer to legal reserve:
− Cash dividend of €0.95 per share:
€0
(€13,883,444.40)
The balance of €57,594,307.97 will be transferred in full to “retained
earnings”.
Taking account of this allocation, the Company shareholders’ equity will
be €178,624,285.99.
The dividend will be payable from 19 September 2013.
120
management report of the Management Board and the observations of
the Supervisory Board on the operations of the Group for the financial
year ended 31 March 2013 and on the consolidated financial statements
of that year, and having considered the report on the consolidated
financial statements of the Statutory Auditors in the execution of their
assignment during this financial year, approves the consolidated financial
statements for the year ended 31 March 2013, as presented, as well as
the transactions recorded in these financial statements and summarised
in these reports.
FOURTH RESOLUTION
Setting of Directors’ fees
required for Ordinary General Meetings, sets the amount of fees allocated
to the Supervisory Board for the financial year ended 31 March 2013 at
€325,000.
FINANCIAL REPORT
7. Draft resolutions
FIFTH RESOLUTION
NINTH RESOLUTION
Approval of the transactions and agreements referred to under
Articles L. 225-86 and subsequent of the Commercial Code
Vacant position on the Supervisory Board
Statutory Auditors’ special report on the agreements referred to under
Articles L. 225-86 and subsequent of the Commercial Code, notes and
approves the terms of this report and the agreements mentioned therein.
required for Ordinary General Meetings, decides not to fill the vacant
position on the Supervisory Board arising from Robert Joyeux’s term of
office expiring at the end of this General Meeting.
TENTH RESOLUTION
SIXTH RESOLUTION
Renewal of the term of office of a member of the Supervisory Board
required for Ordinary General Meetings, decides to renew the term of office
of Christian Germa as member of the Supervisory Board for a period of
three years, which will expire at the end of the General Meeting called
to approve the financial statements for the year ending 31 March 2016.
Authorisation given to the Management Board to trade in Company
shares
required for Ordinary General Meetings, having considered the report of
the Management Board, authorises the Management Board, with the
option to sub-delegate to its Chairman and/or one of its members, with
the approval of the Chairman and within legal limits, in accordance with
Articles L. 225-209 and subsequent of the Commercial Code, to purchase
or sell shares in the Company.
The General Meeting decides that transactions may be carried out to:
SEVENTH RESOLUTION
•
ensure the liquidity and to stimulate the market of Faiveley Transport
shares by an investment services provider via a liquidity contract
that complies with an ethics charter recognised by the Autorité des
Marchés Financiers;
•
grant them to employees and senior executives of the Group according
to the terms and conditions provided for by law (stock options,
employee profit-sharing, allocation of free shares);
•
cancel them by means of a 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, in particular as part of acquisitions initiated by
the Company, by means of public offering or other;
•
implement any other market practice permitted by the Autorité des
Marchés Financiers and more generally any transaction in compliance
with applicable regulations.
required for Ordinary General Meetings, decides to renew the term of
office of Maurice Marchand-Tonel as member of the Supervisory Board
for a period of three years, which will expire at the end of the General
Meeting called to approve the financial statements for the year ending
31 March 2016.
EIGHTH RESOLUTION
representing employee shareholders
required for Ordinary General Meetings, having considered the report of
the Management Board, decides to renew the term of office of Serge
Choumaker as member of the Supervisory Board representing employee
shareholders for a period of three years, which will expire at the end of
the Annual General Meeting called to approve the financial statements
for the year ending 31 March 2016.
Company shares may be purchased provided the total number of shares
held by the Company following such purchases does not exceed 10% of
the shares comprising the capital of the Company, this percentage being
applied to capital adjusted according to the transactions that may affect
it subsequent to the current General Meeting.
121
j
FINANCIAL REPORT
Purchase, disposal, exchange or transfer transactions may be carried
out by any means, on the market or by private contract, including by
acquisition or disposal of blocks, or by recourse to derivative financial
instruments, under the conditions provided for by market authorities and
in compliance with regulations. The maximum share capital acquired,
disposed of, exchanged or transferred by means of a block of securities
may relate to the entire buyback programme.
The maximum purchase price is set at €70 per share.
The General Meeting delegates to the Management Board the power to
adjust the aforementioned purchase price in order to take account of the
incidence of possible financial transactions on the share value. In particular,
in the event of an increase in capital by capitalisation of reserves and the
allocation of free shares, the price detailed above will be adjusted by a
multiplying factor equal to the ratio of the number of securities comprising
the share capital before and after the transaction.
II.
This authorisation remains valid for eighteen months with effect from this
day.
The General Meeting vests all necessary powers in the Management
Board, with the option to delegate in order to decide on and implement
the buyback programme, and in particular to place any orders on the
stock market, conclude any agreements, perform any formalities and
make any declarations with the Autorité des Marchés Financiers and any
other body, and in general, do whatever is necessary to complete the
transactions carried out under this authorisation.
This resolution replaces and cancels the authorisation granted by the
ninth resolution and approved by the Combined General Meeting of
14 September 2012.
RESOLUTIONS IN EXTRAORDINARY SESSION
ELEVENTH RESOLUTION
Delegation of authority to the Management Board to proceed with
the allocation of free shares, either existing or to be issued
required for Extraordinary General Meetings, having considered the report
of the Management 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 free allocation of ordinary shares in the Company,
either existing or to be issued, for the benefit of corporate officers as
defined by law and of certain employees of the Company and companies
related to it.
The General Meeting sets the vesting period at the end of which the
allocation of ordinary shares to the beneficiaries will become final, subject
to any conditions determined by the Management Board, at a minimum of
two years, and sets the mandatory period during which the shares must
be held by the beneficiaries at a minimum of two years with effect from
the vesting date of the shares.
However, the General Meeting authorises the Management Board not to
impose any retention period for the shares concerned, where the vesting
period for all or part of one or several allocations is a minimum of four
years.
The General Meeting decides that allocations by the Management Board
may not exceed the common limit set for all shares granted free of charge
under this resolution and/or those resulting from the exercise of options
granted under the authorisation resulting from the twelfth resolution to
this Meeting, and sets this limit at 1% of the share capital on the date of
this General Meeting.
122
The maximum amount to be allocated to the buyback programme is
€51 million.
The General Meeting acknowledges that shares allocated free of charge
may be either existing shares or shares to be issued, and authorises the
Management Board, in the event of free allocation of shares to be issued,
to increase the capital at the end of the vesting period, by capitalisation of
reserves, profits or issue premiums for the benefit of the beneficiaries of the
said shares, with this decision including express waiver by shareholders
of their pre-emption right in favour of beneficiaries of free shares on the
portion of reserves, profit or premiums thus capitalised, 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.
The General Meeting grants all necessary powers to the Management
Board, which shall be assisted by the Remuneration Committee, within
the limits set above, to:
•
set the conditions and where applicable, the allocation criteria for
ordinary shares;
•
set, within the legal conditions and limits, the dates on which the
allocations will be effected;
•
determine the identity of beneficiaries, the number of ordinary shares
allocated to each of them and the terms and method of allocation of
ordinary shares.
The General Meeting sets the period of validity of this authorisation at
thirty eight months from this date. This authorisation cancels any amounts
unused by the Management Board by virtue of the previous authorisation
granted by the General Meeting of 14 September 2012.
The Management Board will inform the Ordinary General Meeting every
year of transactions carried out under this authorisation in a special report,
in accordance with Article L. 225-197-4 of the Commercial Code.
FINANCIAL REPORT
TWELFTH RESOLUTION
Delegation of authority to the Management Board to grant share
subscription and/or purchase options
required for Extraordinary General Meetings, having considered the report
of the Management 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
officers as defined by law and of certain employees of the Company and
companies related to it, under the conditions specified by Articles L. 225185 and subsequent and L. 225-186-1 of the Commercial Code, options
giving the right to subscribe for new shares in the Company or to purchase
existing shares previously bought back by the Company in accordance
with the law.
This authorisation, which may be used on one of more occasions, is
granted for a period of thirty-eight months with effect from this General
Meeting and cancels any amounts unused by the Management Board
by virtue of the previous authorisation granted by the General Meeting
of 13 September 2010.
However, the allocation of options to corporate officers will only be made
on the proposal of the Remuneration Committee and will require approval
of the Supervisory Board.
The General Meeting decides that the allocation of options will be within
a limit common to all shares arising from the exercise of options that will
be granted under this resolution and/or those that will be allocated free
of charge under the authorisation arising from the eleventh resolution to
this General Meeting, and sets this limit at 1% of the share capital on the
day of this General Meeting.
The General Meeting notes that this authorisation carries, for the benefit
of beneficiaries of options, the express waiver by shareholders of their
pre-emption right to subscribe to shares that will be issued as the options
are exercised.
Capital increases arising from the exercise of options to subscribe for
shares will be considered final by mere declaration of the exercise of the
option together with the related payment in cash or by being offset against
the Company’s liabilities.
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 Ordinary General Meeting, of the transactions carried out
under this authorisation.
THIRTEENTH RESOLUTION
Delegation of authority granted to the Management Board to
increase the share capital without waiver of pre-emption right
through a private placement for the benefit of qualified investors or
a restricted circle of investors
required for Extraordinary General Meetings, having considered the
report of the Management Board and pursuant of the provisions of the
Commercial Code, and in particular Articles L. 225-129, L. 225-129-2,
L. 225-135 and L. 225-136,
•
delegates to the Management Board, with the option to sub-delegate,
subject to the conditions set by law and by the bylaws, the authority to
decide on one or more increases in the share capital of the Company,
in the proportion and at the times it decides, by the issue, in one or
more offerings as defined by II of Article L. 411-2 of the Monetary and
Financial Code, of ordinary shares, as well as all marketable securities,
either issued for valuable consideration or free of charge, giving access
by all means, immediately and/or in future, to new or existing ordinary
shares in the Company, it being specified that the subscription to these
shares and marketable securities may be made in cash, by offsetting
against current liabilities to be settled in cash, against due and payable
debts, or by capitalisation of reserves, profits or premiums;
•
decides that the maximum nominal increase in share capital likely to
be carried out immediately or in the future under this authorisation is
set at 10% of the share capital at the date of this General Meeting
with the stipulation that in any event, the issue of securities executed
in this context must remain within the limits specified by the law;
if applicable, the nominal amount of any shares potentially issued
in addition to this limit, in the case of new financial transactions to
maintain the rights of holders of securities giving access to capital,
will be added to the said limit;
•
decides that this delegation is given for a period of twenty six months
from the date of this General Meeting;
•
decides to cancel the pre-emption right of shareholders to subscribe
for securities issued under this resolution;
•
notes that, where appropriate, this delegation implies, for the benefit
of holders of marketable securities issued giving access to the capital
of the Company, waiver by shareholders of their pre-emption right to
subscribe to shares to which these marketable securities give the
right, immediately or in the future;
The General Meeting decides that:
•
in the event that subscription options are awarded, 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;
•
in the event that purchase options are awarded, 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.
The 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 allocation. The Management Board may also
prohibit the immediate sale of subscribed or acquired shares, without
however the timeframe imposed for the retention of securities exceeding
three years from the exercise of the option.
The General Meeting delegates all necessary powers to the Management
Board to implement this resolution and establish the regulations of the
option plan within the legal and regulatory limits, and notably to:
•
•
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 be approved by the Supervisory Board, according to
what it considers most appropriate to ensure the motivation and loyalty
of the beneficiaries of these options.
123
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FINANCIAL REPORT
•
•
•
•
decides that the issue price of shares will be calculated in accordance
with legal and regulatory provisions applicable on the date of issue (to
date, the weighted average of the last three stock market trading days
preceding the date of the setting of the subscription price for the capital
increase, less a maximum discount of 5% thereafter, if applicable,
correction of this average in the event of a difference between the
dates of transfer of ownership);
gives all necessary powers to the Management Board, with option to
sub-delegate in accordance with the law and bylaws, to implement this
authorisation and in particular to set the conditions of issue, the nature
and features of the marketable securities giving access to capital, the
methods of allocating the capital securities to which these marketable
securities give the right, as well as the dates on which the rights of
allocation may be exercised, at its sole discretion to allocate the costs
of increase in capital to the related premiums and transfer from this
amount the sums necessary to increase the legal reserve, make any
adjustments to take account of the impact of transactions on the
capital of the Company, conclude any agreements, in particular to
ensure the successful completion of the issues envisaged, note the
completion of any increases in capital, change the bylaws accordingly,
perform the necessary formalities and in general do whatever is
necessary;
notes that, in the event that the Management Board uses the delegation
of authority granted to it by this resolution, the Management Board will
request the prior approval of the Supervisory Board and report to the
next Ordinary General Meeting, pursuant to the law and regulations,
on the use made of the authorisations granted by this resolution;
decides that this delegation replaces the authorisation granted by the
Combined General Meeting of 14 September 2011.
III.
FOURTEENTH RESOLUTION
Delegation of authority granted to the Management Board to
increase the share capital for the benefit of employees of the Group
required for Extraordinary General Meetings, having considered the
report of the Management Board and the special report of the Statutory
Auditors and pursuant to Articles L. 225-129-2, L. 225-138, L. 225-138-1
of the Commercial Code and L. 3332-1 and subsequent of the Labour
Code, and this in order to fulfil the provisions of Article L. 225-129-6,
Paragraphs 1 & 2 of the Commercial Code,
•
delegates to the Management Board, with the option to sub-delegate
under the conditions foreseen by law and the bylaws, the authority to
decide on one or more increases in the Company’s share capital, in
the proportion and at the times it deems appropriate, by issuing shares
or marketable securities giving access to the capital of the Company
and reserved for employees enrolled in a company savings plan of the
Company or a related company, up to a maximum nominal amount
of 1% of the share capital on the day of this Meeting;
•
decides that this authorisation is granted for a period of twenty six
months from the date of this General Meeting;
•
decides to waive the pre-emption right of shareholders to subscribe
for securities issued under this resolution;
•
grants full powers to the Management Board, with the option to
sub-delegate under the conditions set by law and the bylaws, to
implement this delegation and in particular to set the price and terms
of issue, the nature and characteristics of marketable securities giving
access to capital, the method of the allocation of shares to which
these marketable securities give the right as well as the dates on
which the allocation rights may be exercised, at its sole discretion
charge the costs of capital increases against the amount of related
premiums and to deduct from this amount the sums necessary to fund
the legal reserve, to carry out any adjustments to take account of the
impact of transactions on the capital of the Company, to conclude
any agreements in particular to achieve the successful completion of
the proposed issues, to record any capital increases, to amend the
bylaws accordingly, to perform the necessary formalities and generally
do whatever is necessary.
RESOLUTION IN BOTH SESSIONS
FIFTEENTH RESOLUTION
Powers for formalities
The Annual General Meeting confers full powers to the bearer of copies or excerpts of the minutes recording its decisions to carry out all the legal
formalities of publication.
124
FINANCIAL REPORT
125
j SOCIAL AND
ENVIRONMENTAL
RESPONSIBILITY
126
8.
Environmental information
8.1
134
8.4
Energy savings, water management
and biodiversity: key indicators
Practical measures implemented to limit
environmental damage
The latest technical innovations that protect
the environment
Corporate and social improvements
9.
Workforce information
138
9.1
9.2
138
9.3
9.4
Human resources indicators
Work-related accidents, health and safety
conditions and arduous nature of work
Anti-discriminatory policy
Labour relations
10.
Corporate responsibility
146
10.1 Local, economic and social impact
10.2 Integration of environmental issues
into supplier relations
146
8.2
8.3
132
132
136
137
143
144
145
146
127
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SOCIAL AND ENVIRONMENTAL RESPONSIBILITY
CHAIRMAN’S FOREWORD
As an industrial group, Faiveley Transport has a particular duty to be aware
of issues affecting social and environmental responsibility.
Moreover, this year, emphasis has been placed on corporate and business
ethics with an ethics charter improving awareness across the entire
workforce. Likewise, the creation of an Internal Control Department led
to an audit of Group procedures, which are now contained in an internal
control manual, published at the beginning of 2013. All the Group’s site
managers and Finance Directors will receive training in 2013 on the rules
and procedures included in this internal control manual. They will then
be responsible for improving processes and practices at each site in
line with this common internal control framework. Lastly, in addition to
this improvement in internal control, a collection of best practices has
been compiled within the Faiveley Management System in order to
improve internal processes as a whole across all the Group’s businesses
(production, purchasing, logistics, engineering, etc.).
Through its industrial activities, the Group inevitably finds itself at the
centre of current issues related to sustainable development: importation
of materials covered by the REACH regulation, transport related CO2
emissions, waste generation, etc. The Group, which is made up of
subsidiaries based around the world, subject to different laws and
regulations, has determined on a single course of action to be adopted
E
across the entire Group, and which has been incorporated into the
Faiveley Management System. The rollout of this excellence strategy is
underway within the Group’s industrial entities.
Within this framework, the Group has drawn up a set of improvement
commitments, which can be broken down into six distinct areas:
•
increasing carbon footprint assessments within the Group’s industrial
entities;
•
•
•
•
•
innovating for the planet;
avoiding pollution and waste generation;
promoting training;
striving for diversity;
ensuring the integration of young people.
The key indicators for the 2012/2013 financial year are as follows:
•
•
•
•
CO2 emissions;
work-related accidents;
ISO 14001 certified sites;
paper recycling.
CO2 EMISSIONS FROM THE GROUP’S ELECTRICITY CONSUMPTION(1)
2011/2012
2012/2013
18,238
2012/2013 excl. Graham White
13,952
13,258
8,400
5,364
5,519
5,533
5,519
3,420
3,055
Europe
Americas
4,319
Asia-Pacific
4,319
Total
(1) Data obtained from the International Energy Agency’s 2010 framework, quantifying CO2 emissions based on the source of electricity output per country.
128
Chairman’s foreword
E
WORK-RELATED ACCIDENTS RESULTING IN WORK STOPPAGE
2011/2012
69
2012/2013
62
56
54
11
7
2
1
Europe
E
Americas
Asia-Pacific
E
NUMBER OF ISO 14001 SITES
Total
PAPER RECYCLING (IN TONNES)
60
303
16
49
13
2011/2012
2012/2013
Europe
Americas
Asia-Pacific
129
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INTRODUCTION
FAIVELEY TRANSPORT’S CONTEXT
The transport of people and goods generates an impact, not only locally on
air and water quality, but also globally through greenhouse gas emissions.
The transport sector is now responsible for more than a quarter of total
emissions and is one of the few industries to see its worldwide emissions
steadily increasing.
Suffocating towns, congestion, carbon footprint, global warming − for
several years now, the theme of sustainable development cannot be
ignored and is a major political and economic argument in most countries.
In terms of mobility, roads have reached their limits whether in terms of
maximum speed, which is limited in almost every country, or average
speed, because of congestion problems.
The use of rail transport − trains, metros or tramways – is a way of moving
over to sustainable mobility.
In fact, as far as emissions and energy consumption are concerned, rail is
the most sustainable mode of collective transport globally. It generates less
than 1% of the world’s greenhouse gas emissions (GHG). According to a
recent ADEME study, greenhouse gas emissions from rail transport are
estimated to be between 10 and 20 times lower than car or air transport,
per passenger and per kilometre travelled.
The facts are as follows: The IPCC (Intergovernmental Panel on Climate
Change), created in 1988 by the UN, considers that in order to maximise
its chances of limiting global warming to 2°C, the human race must halve
its greenhouse gas emissions by 2050. In Europe, in accordance with
the Lisbon treaty which supports sustainable economic development,
reducing CO2 emissions by 20% before 2020 is a major objective:
•
•
•
20% improvement in energy efficiency;
20% reduction in greenhouse gas emissions compared with 1990;
20% of the European energy mix to be renewable forms.
Rail transport contributes to the achievement of these goals.
Between now and 2015, there will be more than 500 mega-cities
worldwide each with more than a million inhabitants. In Europe, almost
200 cities have limited town centre access to polluting vehicles. The
“Low Emission Zone”, applied in particular in London, Berlin and Lund
(Sweden) is coming to France under the name “Zapa” (priority air quality
zone). European regulations in fact require member states to respect
“PM10” fine particle exposure limits.
Furthermore, rail has a far smaller foothold in geographic terms than the
road sector but its transport capacity is much higher. These factors are
now of paramount importance in urban planning.
For example, making metro trains automated means savings of 10 to 15%
in electricity consumption thanks to optimal speed management as well
as savings on the wear and tear of replacement parts. The installation of
platform doors supplied by Faiveley Transport, fundamental to making
metros automated, contributes to these savings, but also addresses the
problem of heating and air conditioning-related waste in stations.
That said, in addition to climate change, the rail industry, like every other
industry, faces significant challenges, including the scarcity of resources,
the increase in the cost of fossil fuels and raw materials and stricter
regulations relating to emissions, noise and land use.
The entire industry is rallying its employees, its customers and its suppliers
in a drive to recycle and dispose of products at the end of their useful life.
As an example, for SNCF equipment, the objective is to recycle 85% of
train components, to value 90% of them and to use the recycled materials
in their manufacture. As a supplier to most rail vehicle manufacturers
worldwide, Faiveley Transport is making its contribution.
A growing number of customers are requesting energy audits but are
also making demands in terms of sustainable development (low mass,
brake energy regeneration, reduced noise, high recyclability rate, use of
hydro-soluble paints. Faiveley Transport products help to satisfy these
requirements.
The development of the rail market supports the growing needs created
by a growing population, excessive urban concentration, road congestion
and environmental concerns.
Train and rail operators have largely developed a comprehensive roadmap
to achieve a zero carbon impact by 2050. European operators, such
as the SNCF in particular, aim to reduce CO2 emissions by 40% for
passengers and by 33% for the transport of goods (in t/km) by 2020.
The depletion of fossils fuels, rising fuel prices, global warming and global
environmental awareness all promote the rail industry. With the lowest
level of greenhouse gas emissions per kilometre covered, rail transport is
amongst the most environmentally friendly modes of transport. Users are
led to make environmental impact a key factor in their choice of transport.
Sustainable development criteria are increasingly taken into account when
selecting partners (and especially in the case of the leading manufacturers
Alstom, Bombardier and Siemens).
130
All this is leading towards a change in social attitudes, which can only
benefit the rail industry and in which Faiveley Transport Group is naturally
and necessarily involved.
Introduction Faiveley Transport’s context
The Group is increasingly sensitive to the social aspects of sustainable
development, for example those relating to access for the disabled or the
elderly. Due to its high technological standards in these areas, Faiveley
Transport can be involved in all new programmes.
Faiveley Transport seeks to limit the environmental impact of its own
activities and has set itself five targets within this area:
•
•
•
•
•
to reduce its energy consumption;
to reduce its greenhouse gas emissions;
to reduce its water usage;
to effectively sort and recycle its waste;
to increase the number of industrial sites with ISO 14001 certification.
The focus of Faiveley Transport’s activity is at the heart of environmental
concerns aimed in particular at fighting global warming and the reduction
of greenhouse gas emissions.
By turning eco-mobility into the central plank of sustainable development,
most western countries are creating a real opportunity for growth and job
creation in the rail industry.
Therefore, for Faiveley Transport, world leader in equipment for railway
rolling stock, it represents an extraordinary development opportunity.
The aim of this report is therefore to reconcile Faiveley Transport’s strategy
with sustainable development objectives, and to detail what has already
been implemented within the Group, but also to highlight tomorrow’s
methods that will enable it to better satisfy these new demands.
Corporate and environmental performance rests on the commitment
and skills of the workforce. The Group encourages their initiatives, raises
awareness amongst them and oversees their training.
It is important to Faiveley Transport that its teams feel confident in order
to create empathy with customer, supplier or anyone else they are
dealing with. A human resources approach based on the promotion of
diversity and a meaningful dialogue between teams and their superiors
is in place in order to continually improve working conditions in line with
the expectations of each employee. Equally, this requires building upon
the Company’s expertise and ensuring that all employees behave in an
ethical manner. This also requires improvement in the quality of working
life, reduction in heavy manual labour and an increase in wellbeing within
the Company.
131
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8. ENVIRONMENTAL INFORMATION
8.1 ENERGY SAVINGS, WATER MANAGEMENT AND BIODIVERSITY:
KEY INDICATORS
8.1.1
DATA
For a number of years, the Group has been collecting data on the energy consumption of all its sites. This information enables the Group to be in
keeping with greenhouse gas emission reduction objectives, established at an international level, in particular within the framework of the European
Union’s commitments.
E
GAS CONSUMPTION AT THE MAIN INDUSTRIAL SITES DURING THE FINANCIAL YEAR ENDED 31 MARCH 2013 (IN KWH)
Geographic region
Asia-Pacific
Europe
Americas
TOTAL
*
2012/2013
2012/2013*
2011/2012
132,340
132,340
145,492
17,627,394
17,627,394
19,838,395
6,194,577
10,800
8,200
23,954,311
17,770,534
19,992,087
Not including Graham-White Manufacturing Co.’s consumption.
Gas consumption over the financial year fell 11% on a like for like basis.
For the Americas region, the increase in consumption is exclusively due to the integration of Graham-White Manufacturing Co., which was acquired
in February 2012. Anti-leak systems for gas were installed on the industrial sites using primarily this energy source.
E
ELECTRICITY CONSUMPTION AT THE MAIN INDUSTRIAL SITES DURING THE FINANCIAL YEAR ENDED 31 MARCH 2013 (IN KWH)
Geographic region
2012/2013
2012/2013*
2011/2012
4,658,649
4,658,649
6,509,749
Europe
20,380,031
20,380,031
21,357,858
Americas
16,351,640
6,812,000
6,111,820
TOTAL
41,390,320
31,850,680
33,979,427
Asia-Pacific
*
Not including Graham-White Manufacturing Co.’s consumption.
The general trend noted within the major production sites is a decrease in
electricity consumption, despite a cold end to the winter in Europe. For the
Americas region, the increase in consumption is a result of the change in
reporting scope following the acquisition of Graham-White Manufacturing
Co. A significant drop in consumption was reported in China. The sites
132
are constantly improving their lighting and electric heating systems. This
year, the emphasis was put on better management of the settings of air
conditioning devices, with high and low temperatures capped to save on
this source of energy. Faiveley Transport Tours has invested in LED light
bulbs at a cost of €7.5 thousand.
8. Environmental information
E
WATER CONSUMPTION AT THE MAIN INDUSTRIAL SITES DURING THE FINANCIAL YEAR ENDED 31 MARCH 2013 (M3)
Geographic region
2012/2013
Asia-Pacific
42,189
Europe
2012/2013*
2011/2012
42,189
56,975
34,013
23,674
23,674
Americas
162,406
11,532
5,627
TOTAL
228,269
77,395
96,615
* Not including Graham-White Manufacturing Co.’s consumption.
There has been an overall downward trend in water consumption on a like
for like basis, due to the implementation of specific measures by certain
sites, particularly in France and China. The increase in water consumption
in the Americas region is due to the water consumption of Graham-White
Manufacturing Co. being taken into account.
Leak detection devices and leak-proof safety systems have been widely
implemented at the sites.
E
IMPACT OF THE ACTIVITY ON THE ENVIRONMENT
The Group’s production activities, by their nature, generate little waste
in the environment. Nevertheless, the optimisation of environmental
protection is one of the priorities for the Group whether in France or in its
foreign subsidiaries. To that end, the Group takes initiatives to integrate
environmental concerns into the management of its operations and
facilities, in order to:
•
•
comply with the legal and regulatory requirements that apply to all sites;
find solutions that limit the impact of operations on the environment,
prevent pollution and ensure continuous improvement in economic
competitiveness;
•
reduce non-renewable energy consumption and improve the quality
of waste gases as well as improving waste sorting;
•
contribute to the business and social aspects of sustainable
development.
It must be noted that the Group’s activities have very little impact on
biodiversity and the likely causes of an attack on it are easily managed
(retention ponds, elevated tanks, correct storage of solvents and paint). The
Group took full note 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, a Group operation that damages
fauna or flora is required to reverse the damage done or to bear the
associated costs. Faced with this new regulation, the Group increased
its attention to the protection of the environment and implemented the
various options to cover this new area of liability with its insurers.
8.1.2
METHOD
To be fully effective, the procedures aimed at ensuring the correct
application of 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.
The year 2012/2012 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 achieving 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 2013, 16 entities, including the Group’s main industrial sites, have
been awarded ISO 14001 certification in relation to their environmental
management. The Group has around twenty large-scale industrial sites.
Nowe, Faiveley Transport Birkenhead and Faiveley Transport Tamworth
were all awarded certification during the financial year.
In addition, in July 2011 the Group relocated its head office to a building in
Gennevilliers, which has already been certified for HQE (High Environmental
Quality). Faiveley Transport has a representative on the Green Committee
that manages environmental aspects within the building.
The Group seeks to bring all French and foreign sites together in a regular
and genuine gathering of environmental information. This collective
commitment led to the setting up of a general supervision programme
at the sites.
Each of the Group’s main industrial sites has established a set of objectives
to reduce energy, water and raw material consumption, curb local impacts
(noise pollution, etc.) and promote waste recycling. 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.
133
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Every site concerned has implemented regulatory monitoring, carried out
an environmental analysis of its activities and identified actions to ensure
compliance with standard and environmental regulations, such as the
management of waste and chemicals.
As part of this monitoring, possible irregularities and potential sources of
nuisance or unnecessary energy consumption are specifically targeted
for observation: an example of this is the battle against noise and the
particular measures taken to remedy this issue in all the Group’s industrial
sites.
This year Faiveley Transport Tours carried out its first carbon footprint
assessment in accordance with current French legislation. This
assessment is mandatory in France for all corporate bodies under private
law employing more than 500 people. It must be published and updated
every three years.
In 2011, the base year selected, this Group subsidiary, which
specialises in on-board door equipment and mechanisms, passenger
information, and energy sensors and convertors (€140 million sales for
around 650 employees on three sites) generated 2,443 tonnes of CO2
equivalent in greenhouse gas emissions. The main emission items are
the high consumption of natural gas, which is dependent on outdoor
temperature and air humidity conditions, electricity consumption and
mobile consumption (vehicles). Refrigerant leaks also constitute a
considerable source of greenhouse gases. Action has been taken on
the air conditioning systems to limit refrigerant leaks.
This assessment is available in full on the Group’s website.
As regards recycling, some of the Group’s companies, particularly in
Europe and the United States, make use of relevant indicators to monitor
the recycling of the main raw materials used in their industrial operations.
Raw materials
Aluminium
Steel
Ferrous metals
270
738
1,454
Volume recycled (in tonnes) in 2012/2013
The Company does not disclose specific data regarding the consumption
of raw materials within the Group. In fact, the Group’s industrial operations
are mainly based on the purchase of components, equipment and finely
honed parts, and not on the purchase of unprocessed raw materials. In
this context, data relating to the Group’s consumption of raw materials
would be neither relevant nor appropriate to Faiveley Transport’s industrial
operations.
8.2 PRACTICAL MEASURES IMPLEMENTED TO LIMIT ENVIRONMENTAL
DAMAGE
Through its products and its engineering teams, Faiveley Transport is
utterly committed to this sustainable development strategy and is making
it a priority. The potential for making the rail sector more environmentally
friendly by reducing energy consumption is still considerable and is the
subject of significant research within the Group, which is distinguishing
itself by its innovations in the field.
Numerous measures have already been implemented within the Group
across all its main industrial sites. Here is a summary that also gives an
idea of the areas in development:
The Company’s sustainable development strategy is based on the
following principles:
•
•
Receipt of or application for ISO 14001 certification within the Group;
•
Appointment of a QHSE (Quality, Health, Safety and Environment)
engineer or coordinator at the industrial sites, responsible for verifying
compliance with environmental regulations;
Environment
On-going regulatory compliance project (particularly relating to REACH
with the creation of a database). Adoption of a Group strategy;
•
to contribute, through its technical excellence, to bringing to market
products that make the train even more attractive to passengers;
•
to analyse the environmental effects of the life cycle of the products
manufactured;
•
to use recyclable materials and identify the components requiring
special end of life handling;
•
Replacement of certain substances (for example, replacement of
solvent-based paints with hydro-soluble paints);
•
•
to eliminate materials that are hazardous to health or the environment;
•
Preparation for the entry into force of RoHS standards for industrial
products;
•
Integration of environmental criteria into the management system.
•
to ensure suppliers apply the Group’s economic, social and
environmental principles.
to improve energy efficiency and reduce emissions into the atmosphere,
consumption of resources and waste;
134
Energy efficiency
•
Project aimed at discontinuing the use of chrome 6, lead, cadmium
and mercury;
•
•
Action plan to reduce water, energy and paper consumption;
•
Introduction of eco-design training for engineers.
•
Better management of resources, including human. Strategy included
in the Faiveley Management System;
•
Report on the energy efficiency of the European sites, carbon
assessment;
•
•
•
European action plan to reduce waste generation and ensure its
processing;
Project on insulation and reducing noise pollution;
•
•
•
•
•
installation of heat exchangers and heat recovery systems;
•
•
•
•
•
•
•
•
•
water recovery systems;
Working groups on water conservation;
Campaign to identify and stop gas and air leaks from compressors
which result in machine over-consumption.
Waste, packaging, transport
•
In addition to the exercise of the above controls, various new measures
were introduced during the last year:
Use of reusable packaging, for transportation between the Company
and suppliers or customers; reduction in the amount of packaging
used;
Reduction in the volume of waste, specifically in relation to the wooden
delivery crates;
•
Project to optimise transport with deliveries for a single customer
grouped together on a set day;
•
•
•
Project on packaging and ability to recycle;
Logistical resources close to production sites;
Local sourcing of spare parts for the Services activity.
Eco-design
insulation of facilities;
waste containers;
reduction of packaging waste (wood, plastic, cardboard) and all
associated processing costs;
paper recycling;
particle filters to reduce air emissions;
smoke extraction systems;
retention basins and waste water disposal systems;
centralised suction system with filters for sanding and painting booths;
compliance of fire-fighting water retention ponds with standards;
outsourcing of alodine bath treatment (to avoid cyanide releases);
safety device to protect against natural occurrences.
A significant reduction in environmental impact was also noted following
the investment in cleaning machines that resulted in reduced water and
solvent consumption and waste, at the sites dedicated to the Services
activity and also due to substantial investment at the Saint-Pierre-desCorps site to double the production capacity in water-soluble paint and to
comply with regulations on the discharge of Volatile Organic Compounds
(VOCs). The new processes and systems can thus avoid any discharge
of polluting compounds into the atmosphere.
Faiveley Transport Amiens has invested in an automated greasing system
for its devices and machines. The advantages of this system are an
almost 15% reduction of soiled packaging waste and the prevention of
musculoskeletal (MSDs) disorders for operators, who no longer have to
apply grease with a brush.
•
Development of rules for the use of materials in product design and
development;
•
•
Door panels painted without solvent-based paint;
•
•
•
•
•
Design and marketing of nickel free brakes;
•
Installation of platform doors that completely isolate the platform, so
reducing the cost of air conditioning stations;
It should be noted that the Group’s German sites launched a tree planting
campaign close to their plants. More than 40 trees were planted in this
regard on the Nowe site in 2012.
•
Project on door design to make them more lightweight, work in general
to streamline products and improve the energy efficiency of the endproduct;
Lastly, the Group is committed to raising awareness among its suppliers
by assessing their environment credentials.
Retrofitting of former air conditioning systems using less harmful and
more energy efficient products;
Design of leak detection systems on air conditioning systems;
Air quality sensor technologies on air conditioning systems;
Modular and lightweight design of braking systems;
Development and commercialisation of electronic systems for
measuring the power consumption of locomotives, in order to assist
eco-driving;
The Faiveley Transport Tours sites, situated between the Loire and the
Cher rivers, will also be subjected to a vulnerability assessment to define
measures to reduce exposure to flooding. The aim is to identify strategic
areas of the Company, to establish a potential disaster scenario, to define
the weaknesses and rank them in order of significance. The aim is to
implement an emergency procedure which will protect the Company’s
vital interests and at the same time help prevent potential harm to the
environment, such as pollution from solvents, oils, paint, acid, etc.
This entity has also completely updated its solvent management plan
methodology to ensure it conforms to regulations on fugitive emissions.
135
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8.3 THE LATEST TECHNICAL INNOVATIONS THAT PROTECT
THE ENVIRONMENT
The concept of sustainable development involves a long-term vision,
rather than simply taking into account short term goals. This approach
must also enable economic benefits to be made. The first objective is
to finalise compliance with applicable standards, and in particular the
REACH regulation. It is also essential to anticipate future developments by
analysing current trends. The R&D Departments are particularly proactive
in order to satisfy the demands of tomorrow. It is in this way that Faiveley
Transport will maintain its competitive advantage as an industrial group
at the cutting edge of technology.
Faiveley Transport Group is therefore committed to the design and
development of products that contribute to sustainable development.
Here are some concrete examples:
•
•
•
In 2012/2013, the success of the “Green HVAC” project was confirmed
and sales of more environmentally friendly products continue to grow,
together with the following projects, which are amongst the most
important to the Group: Porteur Polyvalent and Métro Montréal for
Alstom Transport, DOSTO FV for Bombardier, and ICX and VELARO
D for Siemens.
In conclusion, the importance of Green HVAC equipment is clear and
understood by the Group’s customers. With this innovative project,
Faiveley Transport has shown that is it looking to the future and is
promoting a sustainable development approach.
•
At the core of its electro-mechanical systems development activity,
the Group has created an energy meter christened “DEMETRA”, an
innovative system that has been patented. It provides an integrated
and optimised solution to the demands of opening the market to
competition. It will be possible to issue an individual electricity invoice
for each train. This system will also enable the development of an aid
for economic driving, which will optimise energy usage.
The “Light Brake C3” project enabled the development of a rail
braking system enabling the streamlining of rolling stock. Thus a more
flexible and more environmentally friendly system has been introduced
meaning the rolling stock can handle a higher load capacity and travel
at higher speeds.
Amongst converter products, the development of KATIUM is an
illustration of the Group’s policy to promote sustainable development.
This patented design allows the manufacture of auxiliary converters
of significantly reduced weight and volume. Thanks to these gains,
substantial energy savings may be made.
The Group’s air conditioning system (“HVAC”) product line is also
committed to respecting the environment, particularly through
its “Green HVAC” programme, which aims to limit the energy
consumption of its products and, as a result, actively fight global
warming. An analysis of the life cycle of trains has shown that, from
production through to the recycling of end of life materials, the train’s
air conditioning alone was currently responsible for 30% of the potential
global warming caused by the train; it is the actual equipment itself
which represents the largest energy consumption within the train,
excluding traction equipment, and as a result, the biggest energy
saving potential.
A full range of Green HVAC equipment is offered to Faiveley Transport
customers: primarily a hot air pump which offers a 44% reduction in
energy consumption over one year, an optimisation system to recover
external air adjustable according to the number of passengers on the
train (trains equipped with a passenger counter), a system to monitor
refrigeration, and an alternative refrigeration mode such as CO2.
136
Over the last four years, Faiveley Transport Amiens has been
committed to a research project entitled “Light Brake C3” (Compact
Caliper Concept). This project was developed within the framework of
the I-Trans global competitive cluster bringing together leaders in the
fields of industry, research and training in the rail sector and ground
transport systems based in the Nord-Pas de Calais and Picardie
regions.
As well as an improvement in energy consumption, the streamlining
of the braking system that was at the heart of the “Light Brake C3”
project also facilitates maintenance and recycling when the parts reach
the end of their useful life.
•
The equipment proposed by Faiveley Transport Gennevilliers as part
of its sintered brake activity (brake shoes and pads) use completely
recyclable raw materials and components. In addition, the techniques
employed allow the axle weight to be reduced, and in consequence,
energy consumption and maintenance costs too.
•
The BURAN type compressors constitute a new generation of oil free
compressors that have now been now approved and adapted to the
various market sectors. This technology has become the standard
reference point in all Faiveley Transport’s offers both for new rolling
stock and for the retrofitting of old equipment, in both Europe and
North America. This new generation has a substantial impact in terms
of recycling, handling and maintenance and therefore helps to protect
the environment.
8.4 CORPORATE AND SOCIAL IMPROVEMENTS
This year the Group has focused on numerous social and corporate
initiatives. Here are the principal initiatives:
Sponsorship and Partnership
•
Management of human resources, safety and
working conditions
•
Providing information to employees on site via emails and leaflets,
raising awareness on waste sorting and paper consumption, with a
monthly reminder;
•
Monthly briefing led by the Site Director on the monitoring of
environmental indicators and safety;
•
Consideration given to employee suggestions via operational or quality
improvement programmes (QRQC, TOP5);
•
Implementation of an initiative to integrate safety into the quality and
environment management system: leader-coordinator presence on
most industrial sites to manage health, safety and environmental issues
on a daily basis;
•
•
Investment in appropriate gripping tools;
Ethics and IT charters.
Supplier commitment
•
Service providers and suppliers to be equally committed to optimising
transport and packaging;
•
Working with the Design Offices to integrate these criteria into the
plans;
•
Addition of an “ISO 14000 certification and social responsibility”
criterion in the “Quality and Quality System Certification” used in the
selection of suppliers;
•
Adherence to the principles of sustainable development proposed
by manufacturers.
University collaboration on eco-design: writing in Sweden of a thesis on
the search for an ecologically viable design and development process;
and the development of pneumatic and dynamic algorithms-based
software to calculate the longitudinal forces between rail vehicles, with
the Tor Vergata University of Rome.
The Group’s ethics charter was rolled out individually across all the sites.
This document helps promote ethical conduct in day-to-day working
relationships particularly with regard to the management of employment
practices, in respect of any form of harassment and of safety. The charter
also sets out clear and detailed guidance on managing any potential
conflicts of interest and illegal or inappropriate payments.
Suggestions from Faiveley Transport employees contribute to the future
wellbeing of passengers. The commitment, expertise and enthusiasm of
employees are the keys to success. To maintain a dynamic and creative
workforce, it is paramount that employees remain individuals highly
qualified in their field, that they are committed to the Company, in addition
to providing them with safe and healthy working conditions. To maintain
its competitive advantage, the Group must attract, develop and retain the
best talents, in Asia, in Europe and in the Americas.
The Group has continued in its efforts to improve its health and safety
performance at all the sites. Each site has expanded the use of key
indicators to improve safety awareness and reinforce the safety culture.
A pragmatic approach to product design in respect of safety, aimed at
identifying, managing, reducing and eliminating work related health risks
right from the initial stages of product development, was implemented
across the Group’s main sites.
All the Group’s sites duly share and respect the principles and provisions
of core International Labour Organisation conventions, and in particular:
•
•
•
•
freedom of association and the right of collective bargaining;
elimination of discrimination in respect of employment and occupation;
banning of forced or compulsory labour;
banning of child labour.
137
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9. WORKFORCE INFORMATION
9.1 HUMAN RESOURCES INDICATORS
9.1.1
ANALYSIS AND CHANGE IN WORKFORCE
At the end of March 2013, the Faiveley Transport Group had 5,483 employees across 25 countries worldwide. The change in the workforce at the
end of the last two years was as follows:
E
GEOGRAPHIC ANALYSIS
31 March 2013
31 March 2012
France
1,262
1,260
Europe (excl. France)
2,032
1,937
Americas
745
784
Asia/Pacific
1,444
1,488
TOTAL
5,483
5,469
E
ANALYSIS OF WORKFORCE BY TYPE OF EMPLOYMENT CONTRACT
31 March 2013
Permanent
31 March 2012
Fixed term
Permanent
Fixed term
France
1,235
27
1,217
43
1,825
207
1,808
129
745
-
749
35
Americas
Asia-Pacific
1,368
76
1,385
103
TOTAL
5,173
310
5,159
310
E
FEMALE EMPLOYEES AT 31 MARCH 2013
France
Europe
(excl. France)
Americas
Asia-Pacific
Female executives
1
-
-
-
1
Female managers
78
23
8
26
135
Female employees
117
268
65
164
614
Female operatives
54
59
66
28
207
Total
TOTAL
250
350
139
218
957
as % of total workforce
20%
18%
19%
15%
18%
The distribution of women across the workforce is uniform within the Faiveley Transport Group. The percentage of women in the Group has remained
stable compared to the previous financial year.
138
9. Workforce information
E
ANALYSIS OF WORKFORCE BY ROLE
Role
31 March 2013
31 March 2012
2,113
2,532
Purchasing, logistics and storage
971
798
Sales and marketing
359
470
Design office
767
749
Project management
180
275
Finance
212
193
Human resources and communications
79
77
IT
78
68
Administration
77
185
Research and development
113
123
After-sales/Field services
488
-
Production
General services
TOTAL
46
-
5,483
5,469
Each job description was redefined over the course of the financial year and was forwarded to the all the Site HR managers. This is why there are
significant differences compared to the previous financial year. In particular, several positions related to general services and after-sales service activities
were created.
E
ANALYSIS OF WORKFORCE BY AGE AT 31 MARCH 2013
Age
France
Europe
(excl. France)
Americas
Asia-Pacific
Total
%
<24
37
66
34
112
249
5%
25-30
160
251
71
463
945
17%
31-35
155
294
82
330
861
16%
36-40
187
310
91
205
793
14%
41-45
244
294
99
124
761
14%
46-50
199
280
105
98
682
12%
51-55
154
247
101
65
567
10%
56-60
112
186
99
38
435
8%
14
104
63
9
190
4%
1,262
2,032
745
1,444
5,483
100%
>60
TOTAL
In order to provide a better picture of the workforce distribution by age, the number of age ranges has been increased and it can therefore be seen
that the breakdown in workforce by age is uniform. 61% of Faiveley Transport Group’s workforce is aged between 25 and 45 years.
139
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E
ANALYSIS OF WORKFORCE BY LENGTH OF SERVICE AT 31 MARCH 2013
France
Europe
(excl. France)
Americas
Asia-Pacific
Total
%
< 2 years
178
401
194
353
1,126
20%
2-5 years
186
424
152
605
1,367
25%
5-10 years
220
360
174
290
1,044
19%
10-15 years
132
299
62
40
533
10%
15-20 years
164
126
59
97
446
8%
20-25 years
181
111
43
13
348
6%
25-30 years
90
97
22
44
253
5%
>30 years
TOTAL
111
214
39
2
366
7%
1,262
2,032
745
1,444
5,483
100%
In order to provide a better picture of the workforce distribution by length of service, the number of ranges denoting length of service has been increased.
45% of the workforce has worked for the Group for less than five years, and more than 26% has worked for the Group for more than 15 years.
E
ABSENTEEISM RATE AT 31 MARCH 2013
Regions
31 March 2013
31 March 2012
France
2.0%
2.2%
3.1%
3.1%
Americas
0.9%
0.7%
Asia-Pacific
1.1%
1.1%
TOTAL
1.9%
1.8%
In most countries, absenteeism at the sites is below the national average for comparable industries. Overall, the Group’s rate is 1.9% (number of hours
of absence/theoretical number of working hours).
E
TURNOVER RATE AT 31 MARCH 2013
Region
Turnover
France
9%
15%
Americas
13%
Asia-Pacific
15%
GROUP TOTAL
13%
Calculation of the turnover rate has been redefined as being the average of the number of employees that left and the number of employees recruited
divided by the number of employees present at the beginning of financial year.
The Group’s turnover rate during the 2012/2013 financial year is 13%.
E
NUMBER OF NEW HIRES PER GEOGRAPHIC REGION AND CATEGORY OF STAFF DURING THE YEAR
Region
Managers
Employees
Operatives
Total
France
62
38
45
145
14
136
135
285
4
28
66
98
Americas
Asia-Pacific
TOTAL
140
31
148
40
219
111
350
286
747
E
NUMBER OF DEPARTURES BY GEOGRAPHIC REGION AND REASON FOR DEPARTURE DURING THE YEAR
Region
Resignation
Redundancy
Retirement
Total
France
34
24
27
85
71
173
38
282
Americas
77
20
12
109
Asia-Pacific
169
8
53
230
TOTAL
351
225
130
706
9.1.2
DEVELOPMENT OF EMPLOYEE
EXPERTISE
This process 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 expertise.
Bolstered by this conviction, Faiveley Transport encourages the
development of technical and project teams, working as closely as
possible with their customers. Technical knowledge acquired by the
Faiveley Transport staff, based at the four corners of the world, enables
them to support their customers better and respond to their needs.
It is with this in mind that several resident engineer positions have been
created, based close to the facilities of the Group’s main customers.
The Group seeks to retain its human capital, that of its engineers as well as
all employees, to provide a better response to the overriding requirements
of reliability, safety and extended life of its equipment.
In 2012, a Group ethics charter was introduced and distributed to
all the subsidiaries. The purpose of this charter is to detail the ethical
commitments and responsibilities in respect of the Company’s business
and activities. It details the values to which all Faiveley Group executives
and employees must adhere and which they are committed to uphold.
The general tenets of the ethics charter are as follows:
•
respecting laws and regulations: apart from the laws specific to
each country, this obligation also includes respecting domestic and
international competition rules;
•
environmental compatibility: The Group is committed to assuring the
quality and features of its manufacturing techniques and processes;
•
models and rules of conduct: the behaviour and relationships of all
persons working for the Group must be guided by transparency,
impartiality and mutual respect.
It is for this reason that the Group encourages internal mobility, both 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.
During the financial year, a new Human Resources Information System
(HRIS) module relating to annual performance reviews was approved. It
is currently in the project phase, with a pilot scheme rollout planned from
April 2013. This module will make it possible to automate annual interview
programmes throughout the Group and in the longer term to automate
skills forecast management (GPEC).
Internal mobility also provides employees with career opportunities that
encourage their professional development by the acquisition of new skills
and qualifications.
In this constantly changing economic environment for Group companies,
maintaining and developing employees’ expertise is an essential feature of
the continuing improvement in the Group’s overall performance.
In order to promote this internal mobility, a section has been created on
the Group’s intranet portal where everyone can preview the positions
open at all sites around the world. It is only thereafter that job offers are
advertised externally.
Professional training constitutes in this respect a major area of the Human
Resources policy. The HRIS tool will automatically collect information
relating to the training needs expressed during reviews.
Similarly, since 2009, in conjunction with all local Human Resources
executives, the Group has been committed to improving the tools and
practices implemented and ensuring that a common Group standard
is used.
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.
At the same time, training was provided on how to conduct these
interviews in order to support managers in this process.
This thought process continued via the creation of a Group-wide induction
booklet. This document is intended to provide every new hire with a
comprehensive overview of the Faiveley Transport Group, as well as all
practical local information necessary to their integration. This is also a
means of strengthening the sense of belonging to Faiveley Transport.
During the year, the training programmes concerned all positions. In
addition to increasing awareness of safety measures and quality standards,
the largest part of the training budget continued to be dedicated to
updating technical skills.
There is also a strong need for Group employees to improve their
proficiency in English.
The training policy is entirely adapted to the local level in line with the
issues encountered at each site. The Group aims to ensure the uniformity
of training across the sites.
The objectives of the training indicators are to monitor the training budget
of each entity, the percentage of trained employees and managers and
the nature of training organised.
141
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E
PERCENTAGE OF GROSS PAYROLL DEDICATED TO TRAINING*
Region
2012/2013
2011/2012
France
0.86%
2.16%
0.96%
1.48%
Americas
1.37%
1.51%
Asia-Pacific
1.31%
1.35%
GROUP TOTAL
0.94%
1.63%
Total
* Only teaching costs are included.
E
NUMBER OF TRAINING HOURS BY CATEGORY OF PERSONNEL, PER YEAR
Executives
Employees
Operatives
France
192
95
153
440
105
724
529
1,358
Americas
12
79
319
410
Asia/Pacific
138
494
298
930
TOTAL
447
1,392
1,299
3,138
57% of Faiveley Transport Group employees received training during the 2012/2013 financial year.
9.1.3
ORGANISATION OF THE WORKING
WEEK
In France, the reduction and structure of the working week effective
within Group companies are subject to the applicable laws and collective
agreements. The steps taken to reduce working hours means overtime
levels are low.
In the rest of the world, the structure of the working week and the
management of overtime are governed by the law in each country.
Profit-sharing schemes
Faiveley Transport has set up a Group savings scheme, which is common
to all French sites.
Since June 2011, all French subsidiaries adhere to a new employee
savings plan, which includes a Group savings plan (PEG) and a Group
joint retirement savings schemes (PERCO). A Group Committee meets
once a year in France to monitor employee savings plans.
Profit-sharing agreements
9.1.4
REMUNERATION POLICY
Efforts undertaken to control payroll costs 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 for all staff.
The remuneration policy for staff is as follows:
•
individual increase depending on the results and performance of each
employee;
•
a variable annual bonus, which is given to executives and managers
depending on Group and individual objectives, in all Group companies.
Management’s objective is to maintain an increase in salaries throughout
Group companies.
Recognition of employee benefits
Employee benefits, mainly comprising pension commitments, are
recorded in the consolidated financial statements in accordance with
IFRS. These amounted to €30.6 million at 31 March 2013, compared to
142
All French subsidiaries have implemented profit-sharing and bonus
agreements.
Welfare benefit plans
In France, the Group has established standardised guarantees for all the
personnel of the Group’s companies, regardless of the category of staff
they belong to.
Employee shareholding policy
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 performance improvement. Faiveley Transport’s
employee shareholding policy is implemented through various plans which
are detailed below.
SHARE OPTION PLAN AUTHORISED BY THE GENERAL
Faiveley Transport has implemented a share option plan approved by the
General Meeting of 27 September 2005. The Company’s Management
Board allocated shares under this plan in ten instances between 2005
and 2008 for the benefit of 62 beneficiaries.
Options can be exercised from the second anniversary of their date of
allocation by the Management Board, subject to the beneficiary being
employed by the Faiveley Transport Group on the day they are exercised
and their acceptance of the option regulations. It should be noted that
259,044 options have been exercised to date. At 31 March 2013,
56,996 shares awarded to 10 beneficiaries remained to be exercised.
The Management Board decided to implement an employee shareholding
plan aimed at a broader population of executives, including a free share
allocation plan (Executive Shareholding Programme). The plan, designed
to increase the loyalty and motivation of key Group executives, brings
the personal interest of employees in line with Group performance and
requires a personal effort from each beneficiary that is commensurate to
their rank within the organisation.
SHARE SUBSCRIPTION PLAN AUTHORISED
Therefore, each beneficiary has the option to invest in Company shares
to be granted two free shares for each share already held under the
Executive Shareholding Programme. Final vesting of the shares will take
place at the end of a period of two or four years following the allocation
date, with a stipulation that the beneficiaries must retain these shares for
a further period of two years after the vesting date.
A share subscription plan was approved by the Annual General Meeting of
22 September 2009. The Management Board allocated 144,000 options
giving the right to subscribe for new shares in the Company to be issued
through a share capital increase, at a price of €54.91 for each new share.
At 31 March 2013, 123,000 shares remained to be exercised.
PLAN FOR THE ALLOCATION OF FREE PERFORMANCEBASED SHARES AUTHORISED BY THE GENERAL MEETING
The Combined General Meeting of 13 September 2010 authorised
the Management Board to proceed with the allocation of free ordinary
shares of the Company. The Management Board allocated 69,700 free
shares to 43 beneficiaries. After a period of two years, the beneficiaries
were allocated 27,650 free shares, in line with the partial achievement
of performance criteria established by the Remuneration Committee.
Beneficiaries are required to comply with a mandatory retention period
of two years from the date of final vesting.
FREE SHARE ALLOCATION PLAN AUTHORISED
BY THE COMBINED GENERAL MEETINGS
OF 14 SEPTEMBER 2011 AND 14 SEPTEMBER 2012
At its meeting held on 5 March 2012, the Management Board allocated
79,224 shares to 151 beneficiaries. At its meeting held on 15 January 2013,
the Management Board allocated 72,386 shares to 179 beneficiaries.
FREE PERFORMANCE-BASED SHARE ALLOCATION PLAN
AUTHORISED BY THE COMBINED GENERAL MEETING
At its meeting held on 24 October 2012, the Management Board used the
authorisation granted by the Combined General Meeting of 14 September
2012 and granted 10,000 free shares subject to performance conditions
to one beneficiary.
The main features of share option purchase plans, share subscription
and free share allocation plans are detailed in the consolidated financial
statements (Note E.11 – Equity).
The Combined General Meeting of 14 September 2011 and 14 September
2012 authorised the Management Board to allocate free ordinary shares
of the Company within the limit of 1% of the share capital.
9.2 WORK-RELATED ACCIDENTS, HEALTH AND SAFETY CONDITIONS
AND ARDUOUS NATURE OF WORK
The prevention of health and safety risks is a priority for the Faiveley
Transport Group.
The various risks encountered in its business and the steps taken to deal
with them are described in Chapter “1.1.5.4. Industrial and environmental
risks − § Health and safety risks” of the Management Report.
The Health and Safety Committees established 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 results
of such steps are analysed.
Not only does the Group hold these meetings in accordance with
applicable local legislation, it also ensures that staff have an updated
brochure containing information on health and safety measures within
the Company and on acceptable staff behaviour. Fire drills are conducted
on a regular basis.
In addition to the steps implemented by the Health and Safety Committees,
progress groups are continuing to work within the various companies
of the Group, focusing on risk prevention and implementing the safety
training policy.
All subsidiaries in France have carried out an analysis to determine the
percentage of employees exposed to arduous working conditions, in order
to put into place the necessary actions to reduce exposure to this risk.
Faiveley Transport considers that the improvement of working conditions
contributes to the Group’s sustainability and development. The prevention
of occupational risks is based on both ethical and legal obligations. It is
strategic to ensure the attractiveness of metalwork as an occupation and
the necessary extension of the working life of employees.
143
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The occurrence of work-related accidents is monitored, analysed and communicated on a monthly basis, through a number of indicators. Encouraging
results in terms of employee safety were recorded as a result of total commitment by the Group’s senior management.
France
Europe
(excl. France)
Americas
Asia-Pacific
Total
2012/2013
Total
2011/2012
20
36
2
11
69
62
Number of accidents with work stoppage
Number of accidents with stoppage >10 days
Number of days of stoppage due to work
accidents
Number of accidents with no stoppage
11
14
1
6
32
-
970
848
8
461
2,287
1,706
9
84
13
19
125
148
9.3 ANTI-DISCRIMINATORY POLICY
9.3.1
GENDER EQUALITY AT WORK
9.3.2
Faiveley Transport is committed to promoting a level playing field of
equality between men and women in their career development access
to training, salaries and in their position within the business.
All subsidiaries in France have implemented an action plan aimed at
ensuring gender equality in the workplace, either through collective
agreements or as a result of a unilateral decision.
EMPLOYMENT AND INTEGRATION
OF DISABLED WORKERS
All Group companies, whose local laws provide for the employment of a
certain percentage of disabled employees, make it one of their priorities.
Some of these subsidiaries employ a higher number of disabled workers
than required by law.
The Human Resources Department recognises that this is a very important
issue and has decided since 2010 to ask its staff to think about how to
best approach this topic within the Company.
Legal obligation to employ disabled workers
Annual legal
obligation =
BU* equivalent
Obligation
met
Faiveley Transport
4
0.83
7
2.12
20
23.16
44
5
Sites
Faiveley Transport Gennevilliers
Disabled
people
employed
BU*
equivalent
Use of
sheltered
workshops
BU*
equivalent
No
-
Yes
0.83
Yes
2
Yes
0.12
Yes
12.58
Yes
10
29.82
Yes
18.62
Yes
11.2
7
Yes
7
No
-
* Beneficiary Units.
9.3.3
AGREEMENT REGARDING OLDER WORKERS.
All the Group’s subsidiaries in France have signed agreements in favour of employing older workers. These agreements will require adapting in 2013
to comply with the new “generational contract” measure.
144
9.4 LABOUR RELATIONS
9.4.1
COLLECTIVE AGREEMENTS
The French companies of the Faiveley Transport Group are all subject to
the national collective agreement in the metal industry.
9.4.2
PERSONNEL REPRESENTATIVES
Most subsidiaries of the Group have personnel representatives.
The Group has a European Works Council that meets twice a year, as
well as a Group Committee in France that meets once a year.
The Group convenes the meetings at a different site each 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.
9.4.3
INTERNAL COMMUNICATION −
OBJECTIVE: STRENGTHENING A
COMMON CULTURE
Respect for cultures and standardisation of
processes
Given the growing internationalisation of the Group, the position adopted
was to respect the diversity of each country and to allow local customers
the possibility of retaining a local contact.
Every site therefore retained its identity, while respecting common values,
which are: quest for performance and results, stimulation of creativity and
sharing of experiences.
The exchange of best practices between sites and the standardisation
of processes is fundamental to a pragmatic approach that enables all
employees to have a clear understanding of their action plan and expected
results.
The QRQC and TOP5 programmes encourage staff members to exchange
ideas and develop action plans for improvement. The objective of this
type of initiative is to offer solutions to the operational problems identified.
The QRQC method (Quick Response Quality Control) enables rapid
solutions to be put in place for quality issues. The involvement of the
personnel in the resolution of quality issues facilitates relations between
Departments and accelerates the resolution of issues.
In the principal sites, the working day now starts with a 15-minute meeting
on site. This is an opportunity to discuss problems encountered at their
workstation 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.
Resources allocated
Faiveley Transport continues to roll out its various internal communication
tools to improve dialogue, promote communication amongst employees
and to distribute Group information.
Within the Group, information circulates both from the bottom-up and
the top-down within the organisation, via various communication tools,
including:
•
•
an intranet portal accessible to all Group subsidiaries;
•
•
•
•
an intranet network for each entity;
•
•
organisation of annual meetings between the various Group managers;
an internal Group newsletter (printed in four languages, including
Chinese);
a monthly information letter within certain companies;
organisation of exchange meetings at operating company-level;
organisation of annual business seminars (HR seminar, Finance
seminar, Engineering seminar, etc.);
regular one-to-one meetings organised between employees and their
immediate supervisor.
To achieve 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-intime tools are the production with continuous and driven flows, the rapid
change of tools and the integration of logistics. The autonomation tools
include tools to automatically stop production, the methods of elimination
of causes of errors and the analysis of problems.
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10. CORPORATE RESPONSIBILITY
10.1 LOCAL, ECONOMIC AND SOCIAL IMPACT
Most of Faiveley Transport’s production sites have been established
for many years in the same region and are well accepted by the local
population. The Group aims to recruit its teams locally and is often
recognised as a major employer in the areas in which it operates.
The Faiveley Transport Group companies are also involved with local
industrial and economic development where they are members of
professional associations and take part in research studies with local
schools and universities and sometimes partnerships with local training
organisations.
The Faiveley Transport Group is also actively involved with local
communities throughout the world, supporting several initiatives. The
Group supports a Senegalese association which has already built a
library and is currently building a school. The Group has also supported
a Cambodian project for the past 10 years, which has resulted in the
opening of a school especially for deaf-mute and blind children and
students. The Group supports its daily activities. Another initiative in India
finances the studies of students suffering from great poverty. When they
complete their Engineering studies, these young people can take up a
position with one of the Group’s local factories.
Faiveley Transport has also taken part in initiatives to support minority
groups, such as those with disabilities or the sick, in several countries.
Through its career management policy, Faiveley Transport promotes
dialogue between communities and respecting diversity is of great
importance to the Group.
10.2 INTEGRATION OF ENVIRONMENTAL ISSUES INTO SUPPLIER RELATIONS
The Faiveley Transport Group aims to establish long-term relationships
with its suppliers. For the Group, it is not a matter of seeking suppliers
but rather partners in order to establish a relationship which brings about
mutual, long-term benefits.
It is the Group’s responsibility to see that all rules and best practices
concerning the protection of people and the environment are implemented.
Key factors in the choice of suppliers are respect for socially responsible
work standards to exclude all forms of discrimination and prohibit the
recruitment of minors, as well as to prevent any favouritism.
The following policies have been implemented in the past two years:
•
The “10 Commitments” Charter for better relationships between
Faiveley Transport and its suppliers:
On 28 June 2010, Faiveley Transport signed the French Charter
proposed by the French government to improve relationships between
large and small to medium-sized companies.
The companies which signed the Charter confirmed that they
are committed to implementing best practices and fulfilling their
responsibilities in an environment of mutual trust with suppliers, based
on full knowledge and respect for the rights and obligations of each
party.
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The “10 Commitments” Charter for responsible purchasing addresses
the following:
1. Ensuring financial equity in relation to suppliers.
2. Promoting collaboration between major customers and strategic
suppliers.
3. Reducing the risk of mutual dependence between customers and
suppliers.
4. Involving major customers in the management of their industry.
5. Assessing the full cost of the purchase.
6. Incorporating environmental issues.
7. Ensuring local responsibility for its company.
8. Purchasing: one function and one process.
9. A Purchasing function responsible for overall management of supplier
relationships.
10. Set a consistent buyers’ remuneration policy.
10. Corporate responsibility
•
Commitment and training of purchasing teams:
Likewise, all members of the Faiveley Transport purchasing team have
signed the “Purchasing Charter” which defines and reminds the team
of the basic values and the behaviour which all Group employees
must adopt.
•
Contractual agreements with suppliers:
The new “Faiveley Transport − supplier agreement” comprises
clear rules which provide for immediate termination of the supplier
relationship where ethical and moral regulations are not complied with.
•
Assessment of suppliers:
Audits of Faiveley Transport suppliers contain a full chapter on
environmental best practices, as well as on health and safety at work.
The Group’s suppliers must not engage in practices which could put
their employers, their customers, the Company or the environment in
danger. As such, no supplier may be classed as a Faiveley Transport
Group supplier unless a supplier audit has been completed.
Thus, external sub-contracting for the 2012/2013 financial year for the
whole Group totalled €43 million compared to €37 million last year.
CONCLUSION*
The debate surrounding carbon footprints and greenhouse gas reduction
is currently working in the rail sector’s favour. More than ever, rail is the
best way of linking all cities, not only on a European scale, but on other
continents too. Railway rolling stock is the answer to pollution and
congestion problems in cities. It is therefore an enormous challenge that
is opening up for Faiveley Transport, but there are also new opportunities.
To work with these new trends, the Group must be ever more innovative.
It is no longer a question of thinking about quality and price, but about
adding new components – sustainable development, energy efficiency
and making its products recyclable. As well as being a necessity, this
diversification of its offering is an opportunity to add value to its activities.
In their operation, the sites are careful in their use of resources so as to
maintain or even reduce their costs. A sustainable development approach
is entirely consistent with reducing operating costs through better
management of resources. Investing in energy efficiency in buildings,
rethinking logistics, investing in human resources by giving them the
means to undertake and follow through actions can only benefit the
Company and civil society.
Being a leading employer in the regions in which it is located, contributing
to economic development at a local level, ensuring the quality of working
life for its employees, supporting equal treatment in professional careers,
shaping tools to encourage good behaviour, and creating and designing
reliable and safe equipment are as much day-to-day measures as they
are objectives for Faiveley Transport.
* The decree establishing the mechanisms for control by an independent third party of social and environmental information was published in the Official Journal
on 14 June, 2013, Faiveley Transport has not been able to achieve this control for the financial year ended 31 March 2013. This verification will be implemented
for the financial year commencing 1 April, 2013.
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GOVERNANCE
148
11.
Report by the Chairman
150
11.1 Preparation and organisation
of the Supervisory Board’s work
150
11.2 Internal control and risk management procedures 154
on the report prepared by the Chairman
158
13.
160
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11. REPORT BY THE CHAIRMAN
OF THE SUPERVISORY BOARD
On the operation of the Supervisory Board and on internal control within Faiveley Transport
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 internal control and risk management procedures implemented
by the Company;
•
of the conditions for the preparation and organisation of the work of
your Supervisory Board during the financial year ended 31 March
2013;
•
other information required by Article L. 225-68 of the Commercial
Code.
•
the principles and rules agreed by the Board to determine the
remuneration and benefits of all kind granted to senior executives;
The current report was discussed and approved by the Supervisory Board
at its meeting of 31 May 2013.
11.1 PREPARATION AND ORGANISATION OF THE SUPERVISORY BOARD’S
WORK
11.1.1 OPERATION OF THE BOARD
The Supervisory Board continuously ensures, by all appropriate means,
control over the Company’s management by the Management Board. The
Supervisory Board is kept up-to-date by the Management Board on a
regular basis through quarterly reports on the businesses and operations
of the Company and its subsidiaries.
As part of its legal duties throughout the year, the Supervisory Board
carries out the verifications and checks that it considers appropriate
and may request documentation it considers useful to the completion of
its duties. The Management Board presents an operating report to the
Supervisory Board at last once per 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 can
also appoint the Chief Executive(s).
The Supervisory Board checks and monitors the half-year and full-year
parent company and consolidated financial statements prepared by the
Management Board.
At the Ordinary General Meeting, it presents a report containing its
observations on the Management Board’s report as well as on the financial
statements for the year.
The Supervisory Board approves and monitors the execution of the
medium and long-term strategy presented by the Chairman of the
Management Board. It monitors the quality of information provided to
shareholders as well as the markets, via the financial statements or when
major transactions are effected.
150
In addition to the provisions of the bylaws, prior approval by the Supervisory
Board is required for all significant transactions in respect of the scope of
the Company’s business (acquisitions, disposals, internal restructuring)
or outside the approved strategy of the business. It is regularly informed
of the financial position, the cash position and 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 per quarter following the
release of the periodic report by the Management Board.
The Supervisory Board’s deliberations are not valid unless at least half its
members are present and decisions are made by a majority of members.
In the event of a tie, the Chairman has the deciding vote.
At any one meeting, Directors may hold no more than one proxy received
from a Director who could not attend.
In order to conform to the AFEP-MEDEF Corporate Governance Code
for listed companies of December 2008, the Supervisory Board added
to the agenda of its meeting on 22 April 2010 a revision to its internal
regulations providing and specifying:
•
•
•
its powers;
•
the information required by members of the Supervisory Board in
carrying out their duties.
its operating rules;
the terms and conditions of meetings and the organisation and
preparation of the work of the Board;
11. Report by the Chairman of the Supervisory Board
Following the recommendation of the AMF of 3 November 2010 on the
prevention of insider trading violations by management, at its meeting
on 24 February 2011, the Supervisory Board decided to clearly define
the trading restriction periods during which management and permanent
insiders are prohibited from effecting transactions on the Company’s
securities. The Supervisory Board also amended its internal regulations
and brought the Company’s Code of Conduct into compliance at the
same meeting. The Supervisory Board’s internal regulations are available
on the Company’s website. A calendar of restriction periods is updated
and forwarded to all members of the Supervisory Board, the Management
Board and permanent insiders of the Company at the beginning of each
financial year.
Moreover, at the meeting held on 24 March 2011, the Supervisory Board
reviewed the provisions of the Law of 27 January 2011 concerning the
fair representation of women and men on Boards of Directors and
Supervisory Boards and decided to comply with the requirements of
this regulation. Hélène Auriol-Potier and Nicoletta Giadrossi-Morel were
appointed members of the Supervisory Board by the General Meeting of
14 September 2011 and may be deemed independent in accordance with
criteria set by the Charter adopted by the Supervisory Board on the matter.
In light of their legal assignments, each member of the Supervisory
Board is bound by the basic obligations of loyalty, confidentiality and
due 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 specifically states that at least two of the members of the Supervisory
Board must meet the qualification of Independent Director.
Aside from the required expertise and experience, 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 their completely objective participation in the work of the
Supervisory Board.
To be considered an Independent Director, a member of the Supervisory
Board must satisfy the following criteria:
•
they must not be or have been an employee or executive of the
Company or an employee or Director of a company that has been
consolidated during the past five years;
•
must not be a senior executive of a company where the Company,
directly or indirectly, holds a position as Director or has an employee
appointed as such, or where a senior executive of the Company holds,
or has held in the last five years, the position of Director;
•
must not be a customer, supplier, commercial partner, merchant
banker or financing banker:
− that is of significance to the Company or its group,
− or where the Company or its group represent a significant part of
the activities;
•
must not be directly or indirectly related, nor have been directly or
indirectly related during the last five years, to such a customer, supplier,
commercial partner, merchant banker or investment banker;
•
must not have any close family relationship with a senior executive
of the Company;
•
must not have been an auditor to the business during the previous
five years;
•
must not have been a member of the Supervisory Board for more
than twelve years;
•
must not hold, directly or indirectly, a shareholding equal to or greater
than 10% 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
whatsoever 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 the position of each
of its members on a case by case basis with regard to the criteria of this
clause, and brings the conclusions of its examination to the attention of
the shareholders in its annual report so that the Independent Directors
are identified. Thus, the members of the Supervisory Board deemed to
be independent are:
•
•
•
•
Hélène Auriol-Potier;
Christian Germa;
Nicoletta Giadrossi-Morel;
Maurice Marchand-Tonel.
Christian Germa was a Director of Faiveley Transport before all the assets
and liabilities of this company were transferred to Faiveley SA (subsequently
renamed Faiveley Transport). Following discussions within the Supervisory
Board, Christian Germa has been deemed an “independent member”.
The Supervisory Board noted that he exercises his professional activities
in a field that is wholly unrelated to the railway industry, that he is neither
related nor connected in a private capacity with the principal shareholder,
and that he is not a key shareholder of the Company.
Finally, beyond the sole statutory requirements, internal regulations require
that each member of the Supervisory Board be a significant shareholder in
a personal capacity. It was decided that each member of the Supervisory
Board should acquire at least two hundred (200) Company shares. Board
members have a period of twelve months after assuming their position
to ensure they comply.
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The Supervisory Board also conducts an annual assessment of its
operation and its work. At the meeting of 29 March 2013, a summary of
this assessment, whose findings were generally positive, was discussed
and the Board adopted the following proposals:
•
•
the next assessment of the Board to be carried out by an external and
independent specialist firm;
creation of a Governance and Appointments Committee to deal
with all aspects of the Group’s governance, including in particular
appointments to the Supervisory Board, the roles and responsibilities
of the various decision-making bodies, and the interaction between
shareholders, the Supervisory Board and the Management Board;
•
the abolition of the Steering Committee to be replaced by a monthly
financial report addressed to all members of the Supervisory Board
by the Chief Financial Officer;
•
the frequency of Supervisory Board meetings will be reduced but their
duration will be extended, it being understood that certain meetings
will be held in the absence of Management Board members;
•
the Chairman of the Supervisory Board will meet each member
annually in order to draw up the list of topics requiring attention.
11.1.3 CONVENING OF THE 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 of being represented by another member
at Board meetings.
The meetings are chaired by the Chairman of the Supervisory Board, or
in his absence, by the Vice-Chairman.
11.1.4 INFORMATION OF SUPERVISORY
BOARD MEMBERS
Before a meeting, each member receives Group financial information and
a file detailing the items included on the agenda for the meeting.
11.1.5 DIRECTORS’ FEES
Details are provided in the management report of the Management Board.
11.1.2 FREQUENCY OF MEETINGS
11.1.6 LOCATION OF THE MEETINGS
During the last financial year, the Supervisory Board met eight times:
•
•
•
•
•
•
•
•
In general, meetings of the Supervisory Board take place at the registered
office, however, occasionally, certain meetings are held in other locations,
in particular, within Group subsidiaries so that Supervisory Board members
may improve their knowledge of operations and products, as well as of
teams working locally.
25 April 2012;
6 June 2012;
19 July 2012;
14 September 2012;
24 October 2012;
11.1.7 MINUTES OF THE MEETINGS
21 November 2012;
29 January 2013;
Minutes of Supervisory Board meetings are drafted at the end of each
meeting and are immediately forwarded to all Board members.
29 March 2013.
The following was presented and discussed by the Board at those
meetings:
•
the key financial elements of the year as well as the press releases
published by the Company;
•
•
the minutes of the various Committees;
•
•
external growth opportunities;
the reports and draft resolutions to be presented to the General
Meeting;
the organisation of Group Operations.
11.1.8 SUMMARY OF 2012/2013 ACTIVITY
During the year ended 31 March 2013, the Board met eight times. The
attendance rate of Board members was 87.50%. Seven meetings were
chaired by Philippe Alfroid, Chairman of the Supervisory Board, and one
by François Faiveley, Vice-Chairman of the Supervisory Board.
During the financial year, all Management Board members attended
meetings and presented items on the agenda within their respective areas
of expertise to the Supervisory Board.
The Group’s Legal Counsel attended all Board meetings and acted as
secretary to 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.
152
11.1.9 RULES GOVERNING DIRECTORS’
REMUNERATION AND OTHER
BENEFITS
Remuneration of executives, as detailed in the Management Board’s
report, is determined by the Remuneration Committee and the Supervisory
Board. All the information required under Article L. 225-102-1 of the
Commercial Code is presented in the Management Board’s report.
The setting and granting of Directors’ fees is decided at a meeting
between the Chairman and the Vice-Chairman of the Supervisory Board,
who specifically take account of the following criteria:
•
•
•
•
Board meeting attendance;
work carried out as part of the various Committees;
time devoted;
personal expertise and contributions to the Board’s deliberations.
The functioning of the Supervisory Board is then assessed by the
Chairman and the Vice-Chairman. The frequency of meetings, the
members’ contribution to work carried out, work methods, governance
rules and the composition of the Board are reviewed carefully in order to
propose the improvements deemed necessary.
Directors’ fees totalling €249,000 were allocated in respect of the financial
year ending 31 March 2012.
In its decision dated 28 November 2008, the Supervisory Board adopted
the principles of the AFEP-MEDEF Corporate Governance Code. This
Code includes:
•
the October 2003 Corporate Governance Code for listed companies,
updated in April 2010;
•
the October 2008 recommendations on Directors’ remuneration.
The Supervisory Board has reservations concerning the rule against
concurrently holding a term of office and an employment contract: it
favours suspending employment contracts of senior executives at the
time of their appointments as Chairman and Chief Executive Officer or
as Chief Executive Officer, where their length of service in the business is
at least ten years at the time of their appointment.
Upon the appointment of Thierry Barel as Chairman of the Management
Board, his contract of employment was terminated. Changes made
upon the termination of Thierry Barel’s contract of employment have
been discussed by the Supervisory Board which granted its prior
approval in accordance with Articles L. 225-86 and L. 225-90-1 of the
Commercial Code. The Supervisory Board has also defined the terms and
conditions for the termination of Thierry Barel’s duties as Chairman of the
Management Board. Thus, should he be dismissed by the Supervisory
Board, Mr Barel may avail of compensation based on performance criteria,
up to a maximum amount of 18 months of total remuneration.
Only Thierry Barel is remunerated in his capacity as Chairman of the
Management Board, the other members of the Management Board
may not receive specific remuneration for their role as member of the
Management Board. In addition, the members of the Management Board
who are also managing directors of Group companies do not receive any
specific benefits for their roles.
The Management Board meeting of 29 December 2005 approved the
terms of its internal regulations, by which all members are individually
bound. The internal regulations specify the powers and duties of the
Management Board and the procedures governing meetings and
decision-making. A copy of the internal regulations is available at the
registered office of the Company.
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. Thierry Barel is the sole Chief
Executive Officer and has no specific limits on his powers.
Management Board members were reappointed for a three-year
term during a meeting of the Supervisory Board on 9 June 2011. The
Management Board is currently made up of three people.
The Supervisory Board is responsible, based on recommendations
of the Remuneration Committee, for defining the share purchase and
subscription option policy, as well as the policy governing the allocation
of free shares to Directors and Executive Officers, in close collaboration
with the Group’s Human Resources Department. This policy is then
implemented by the Management Board, which acts strictly within the
bounds of the delegation granted to it by the Shareholders’ General
Meeting. A report summarising the conditions of use of this delegation is
prepared by the Supervisory Board and presented to the Annual General
Meeting.
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11.2 INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES
The Company has developed internal control and risk management
procedures to ensure rigorous financial management and the control of
risks associated with its business activities. The procedures are also aimed
at ensuring that reliable information is provided regarding the Company’s
financial situation and in the financial statements provided to shareholders.
11.2.1 GROUP STANDARDS
AND OBJECTIVES FOR INTERNAL
CONTROL AND RISK MANAGEMENT
PROCEDURES
The internal control standard adopted by the Company is that of the
Committee of Sponsoring Organizations of the Treadway Commission
(COSO). According to this standard, internal control is a process which
aims to provide reasonable assurance that the following objectives are
met: the realisation and optimisation of transactions, reliability of financial
information and compliance with the law and regulations in force.
Internal control is an integral part of the Group’s corporate governance
strategy. In addition to periodic Audit Committee meetings, Faiveley
Transport Management and the majority of Supervisory Board meet at a
Steering Committee every month in order to thoroughly and consistently
monitor the operational and financial performance of the railway business,
to supplement the specialised Committees referred to hereafter.
11.2.2 INTERNAL CONTROL PROCEDURES
AND RISK MANAGEMENT
The Group has established a structure, procedures and processes
with the purpose of identifying, evaluating and reducing risks, with the
resources necessary to manage risks being allocated in line with the
strategic and operational objectives of the Group. As with all systems of
internal control, it can offer reasonable assurance but cannot provide an
absolute guarantee that these risks will be completely eliminated.
The objectives of the internal control procedures within the Faiveley
Transport Group cover the five key internal control procedures defined
by COSO:
11.2.2.1 Organisation and procedures
1) Organisation and principles of control:
1) a clear internal organisation appropriate to the Group’s business
model, supported by information systems adapted to this organisation.
To establish an organisation with clearly defined responsibilities,
adequate resources and expertise, which relies on appropriate IT
systems, operating procedures and methods, and appropriate tools
and practices;
The Group’s control environment is based on:
Moreover, in its control functions, the Supervisory Board now follows
the principles set down by the new Corporate Governance Code for
listed companies, published by AFEP-MEDEF in December 2008 and
updated in April 2010;
2) Risk assessment procedures:
To compile and analyse major identifiable risks in light of the Company’s
objectives (market, industrial and environmental risks) and to ensure
that procedures are implemented to manage these risks;
3) Actual control procedures:
•
To ensure that the information forwarded to the Supervisory Board
of Faiveley Transport and to General Meetings is reliable and is a true
reflection of the Company’s business;
•
To ensure that published financial statements and other information
disclosed to the market is reliable;
•
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 the Management Board;
To define and communicate standards of control and performance;
2) The “Corporate” manual contains the Group’s operating procedures
and guidelines and is accessible on the Group’s intranet via a dedicated
site called “Core procedures”. Its main components focus on:
•
management organisation, and the roles and responsibilities of their
major duties,
•
•
•
•
•
•
•
key performance indicators,
4) Documentation and communication of the rules of control:
To ensure adequate internal distribution of relevant and reliable
information, enabling each participant to fulfil his/her responsibilities;
As regards internal control, the Company uses the general principles
defined by the AMF.
154
sales-related procedures,
financial procedures,
quality management,
health, safety and environmental procedures;,
human resource procedures.
More particularly, emphasis should be placed on:
•
“Financial and Accounting Policies”, a Group standardised benchmark
document, covering accounting standards, accounting rules and
practices, consolidation, reporting and cash management procedures,
•
the “Site Internal Control Manual” forwarded to subsidiaries in
February 2013 contains the 164 mandatory checks covering all
operating procedures.
5) Supervision of the internal control system:
To ensure, through on-site audits, that the appropriate organisation,
procedures and standards of control and performance are in place.
key processes: “management reviews” and “projects reviews”,
3) Other Group procedures:
It meets at least twice annually and is responsible for making
recommendations regarding the remuneration of Management Board
members, in particular regarding the remuneration of corporate officers;
its task is to evaluate and confirm the 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 “Quality” collection of guidelines detailing certain operating
processes common to the entire Group,
•
the “Faiveley Management System” (FMS) brings together the
performance standards to be implemented by the subsidiaries and
audited on a regular basis by employees independent of the subsidiary
(“FMS correspondents”),
•
the “Insurance” manual, redrafted after all Group policies for civil liability
and damages were placed with the same broker,
The Audit and Risk Committee
•
all the procedures and rules implemented by the majority of Group
subsidiaries as part of ISO certification. These rules relate to the
management of production and purchasing.
The Audit and Risk Committee has four members: Christian Germa
(Chairman), Maurice Marchand-Tonel, Philippe Alfroid and Christopher
Spencer. Serge Choumaker, a member of the Supervisory Board
representing employee shareholders, is also involved due to his role as
the Group’s Director of Accounting & Consolidation.
11.2.2.2 Risk management tools
Since 2006, the Company has been using a reporting and consolidation
tool integrated into Hyperion. This provides an improved overview of
subsidiary performance and shorter timeframes for the reporting of figures.
In 2007, the Group started to work on the standardisation and the gradual
updating of all its technical and IT architecture. Standard IT tools (ERP)
have been rolled out in operational units, which will contribute to the
structuring of internal controls.
A CRM (Customer Relationship Management) tool to improve the sharing
of data when preparing proposals, whilst ensuring their compliance with
Group procedures before being forwarded to customers, was in the final
phase of development at 31 March 2013.
The Group has set up a number key performance and financial indicators
to enable monitoring in a common language within the Group. These
indicators are employed as targets for operational managers and are
integrated into the management of remunerations. They reflect the strategic
overviews decided by the Management Board and are incorporated into
the budgeting process and monthly reviews carried out by legal entity
with the involvement of the Executive Committee.
The operating principles of the Audit and Risk Committee are consistent
with the findings of the Audit Committee’s final report, published by the
AMF in July 2010. Its specific task is to examine the interim and annual
financial statements and the internal control procedures of Faiveley
Transport Group.
In order to carry out this assignment, the Audit and Risk Committee
interviews the Statutory Auditors, the Chief Financial Officer of the Group
and the Director of Internal Control and Audit, it examines the scope of
the consolidated companies, it consults external experts where necessary
and proceeds with an examination of risks and of significant off-balance
sheet commitments.
In addition, it examines the Statutory Auditors’ fees and the terms and
conditions of their reappointment. It reviews the internal audit plan and
the key observations from the internal audit. It is also involved in the
preparation of the Group’s financial communication of the half-year and
full-year financial statements and significant transactions (acquisitions,
disposals, etc.).
The Audit and Risk Committee meets to approve the interim and year-end
financial statements. It issues recommendations and prepares a report
for the Supervisory Board of Faiveley Transport.
11.2.3 INTERNAL CONTROL STAKEHOLDERS
The Management Board of Faiveley Transport
During the year ending 31 March 2013, the various internal control
stakeholders operated as follows:
The Management Board is responsible for the organisation and the
implementation of accounting and financial internal controls, as well as
the preparation of the financial statements prior to their approval.
The Supervisory Board
The Management Board approves the financial statements and the
Supervisory Board carries out the verification and checks what that it
deems necessary on the financial statements.
The Supervisory Board meets on a regular basis to assess operational
and financial performance, to discuss business matters and the strategic
direction of the Group in its various businesses and in different markets,
and each year, to approve the annual budget.
The Remuneration Committee
The Remuneration Committee is chaired by the Chairman of the
Supervisory Board, Philippe Alfroid. François Faiveley and Christopher
Spencer are also members.
The Executive Committee
It comprises the Chairman of the Management Board, Operations
Director, Chief Financial Officer and the heads of the operational and
corporate divisions. It meets once a month and covers any topics related
to the running of the Company and its operation and non-members of
the Committee may be invited to discuss matters within their area of
responsibility.
The Finance Department
The accounting and finance function is managed by the Finance
Department for the parent company, subsidiaries and each establishment.
155
j
This Department is responsible for:
•
providing the Management Board, at any time, with the relevant
documents and indicators to manage the Company’s operations;
•
continuously anticipating and contributing to the preparation of action
plans, their implementation and their monitoring with the Management
Board of the Company;
•
ensuring the reliability of the information provided by the Company’s
accounting and financial information system. The financial statements
are prepared in accordance with the IFRS framework applicable to
listed companies and with the rules set out by Faiveley Transport
relating to the preparation of half-yearly and annual financial statements
of the parent company and subsidiaries.
Its role regarding internal control particularly consists of:
•
•
financial controlling: monitoring the budgeting control processes;
•
treasury: reliability of cash generation, delegation of authority, and
management of exchange rate and interest rate risk;
•
•
Legal Department: management of contractual and insurance risks;
accounting and consolidation: monitoring the quality and reliability of
subsidiaries’ financial statements and of the consolidated financial
statements;
Tax Department: management of fiscal risks and reliability of tax related
financial information.
descriptions as well as quality procedures, is in place. Standard problem
solving processes were rolled out and monitoring of the quality system
takes the form of quality audits conducted internally or through IRIS.
Subsidiary Departments Heads’ Committee
Chaired on a monthly basis by the Managing Director of each industrial
subsidiary, this Committee highlights performance indicators and reviews
solutions with a view to their possible improvement.
11.2.4 MONITORING OF SUBSIDIARIES
Faiveley Transport has a majority or joint shareholding in each of its
subsidiaries. Therefore, it has a strong presence on the Management
Board and within the managerial structure of each of its subsidiaries.
Every subsidiary provides a monthly management report to the parent
company, which then decides on any appropriate action to be taken
based on the information received.
In 2012/2013, the monthly monitoring of the performance of subsidiaries,
overseen by the Activity Directors, was introduced. It enables better
reporting of information and closer monitoring ahead of Activity and
Executive Committee meetings.
Financial controlling is undertaken by a team of controllers at the head
office and in each subsidiary. The Finance Department organises periodic
reviews of subsidiaries to monitor industrial activities and business
projects. Every month it issues a report for the Management Board and
operational and cross-divisional Departments.
11.2.5 THIRD-PARTY RELATIONSHIPS
Internal Control and Audit Committee
At 31 March 2013, sixteen Group entities, including the Group’s main
industrial sites were subject to ISO 14001 certification relating to
environmental safety management systems.
A Director of Internal Control and Audit was appointed in October 2012.
He reports directly to the Group’s Chief Financial Officer and has special
access to the Management Board and to the Audit and Risk Committee.
The Group’s standard controls were reviewed and included in a “Site
Internal Control Manual” which was presented to the Audit and Risk
Committee and distributed in February 2013. All subsidiaries will be trained
to these standards and shall draw up an implementation programme
following a self-assessment. At 31 March 2013, approximately one third
of the main subsidiaries had completed this training.
An internal audit programme was defined for the year 2013/2014: it
provides for reviews of the implementation of standard controls on the
largest sites or those considered to be at risk, and may be updated
based on new situations or Executive Committee requests. All the reports
drafted during these audits will be forwarded to the members of the Audit
Committee and to the Group Chief Executive Officer. A team of around
ten “associated auditors” selected from experienced Group personnel
was created in order to support the Director of Internal Control and Audit
in his assignments.
The Quality Department
A Quality Director reporting to the Operations Director was appointed
in November 2012. He oversees the Quality Departments within each
industrial subsidiary and works with the senior management of each facility
and subsidiary. A structured documentary framework, containing process
156
Supervision is carried out by independent 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.
The auditors are PricewaterhouseCoopers Audit and Expertise Comptable
et Audit (ECA). As part of their audit of annual and consolidated
financial statements of the Company, the auditors are required to make
recommendations regarding internal controls related to accounting and
financial information. In accordance with their professional standards,
the Statutory Auditors inform the Audit and Risk Committee and the
Management Board of their appraisal of the Group’s internal control
mechanisms. Corrective action is undertaken, on a subsidiary-bysubsidiary basis, on the relevant elements. Since the 2011/2012 financial
year, at the request of the Finance Department, the Statutory Auditors
have, as part of their internal control brief, been reviewing a crossgroup process common to all the Group’s subsidiaries. In this regard,
the Statutory Auditors reviewed the project review process during the
2011/12 financial year and the inventory management process during
the 2012/13 financial year.
11.2.6 SHAREHOLDERS INFORMATION
All information on specific terms and conditions relating to shareholders’
participation in General Meetings is included in the Company’s bylaws,
in particular under Title V, Articles 26 and subsequent.
Please also note that items likely to have an impact in the event of a public
offering, pursuant to Article L. 225-100-3 of the Commercial Code, appear
in Chapter 6 of the Company’s Reference Document.
11.2.7 ACTION PLAN FOR
THE FORTHCOMING FINANCIAL YEAR
The Internal Audit and Control Department will complete the training
of the subsidiaries on the standard controls contained in the Manual
in February 2013. Internal audits will be conducted on a regular basis
to ensure the implementation of these controls or to analyse a specific
situation at the request of Management.
As part of the annual closing at 31 March 2014, the auditors will conduct
further reviews of internal controls in order to ensure that corrective actions
taken as a result of their recommendations have been implemented.
The Company project “Faiveley Worldwide Excellence” will be officially
launched by the Management Board in May 2013. This project, which
in three years aims to improve the Group’s performance, particularly
in relation to quality, customer delivery and managing margins, also
incorporates the introduction of standard internal controls and Group
IT tools, thus confirming the commitment of Faiveley Transport’s
Management to Internal Control.
157
j
prepared in accordance with Article L. 225-35 of the French Commercial Code,
on the report prepared by the Chairman of the Supervisory Board of Faiveley Transport
For the year ended 31 March 2013
This is a free translation into English of the statutory auditors’ report issued in the French language and is provided solely for the convenience of English
speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing 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 report to you on the report prepared by the Chairman of your Company in accordance with Article L. 225-68 of the French
Commercial Code for the year ended 31 March 2013.
It is the Chairman’s responsibility to prepare, and submit to the Supervisory Board for approval, a report describing the internal control and risk
management procedures implemented by the company and providing the other information required by Article L. 225-68 of the French Commercial
Code in particular relating to corporate governance.
It is our responsibility:
•
to report to you on the information set out in the Chairman’s report on internal control and risk management procedures relating to the preparation
and processing of financial and accounting information, and
•
to attest that the report sets out the other information required by article L. 225-68 of the French Commercial Code, it being specified that it is not
our responsibility to assess the fairness of this information.
We conducted our work in accordance with professional standards applicable in France.
I.
INFORMATION CONCERNING THE INTERNAL CONTROL AND RISK
MANAGEMENT PROCEDURES RELATING TO THE PREPARATION
AND PROCESSING OF FINANCIAL AND ACCOUNTING INFORMATION
The professional standards require that we perform procedures to assess the fairness of the information on internal control and risk management
procedures relating to the preparation and processing of financial and accounting information set out in the Chairman’s report. These procedures
mainly consisted of:
•
obtaining an understanding of the internal control and risk management procedures relating to the preparation and processing of financial and
accounting information on which the information presented in the Chairman’s report is based, and of the existing documentation;
•
•
obtaining an understanding of the work performed to support the information given in the report and of the existing documentation;
determining if any material weaknesses in the internal control procedures relating to the preparation and processing of financial and accounting
information that we may have identified in the course of our work are properly described in the Chairman’s report.
On the basis of our work, we have no matters to report on the information given on internal control and risk management procedures relating to the
preparation and processing of financial and accounting information, set out in the Chairman of the Supervisory Board report, prepared in accordance
with Article L. 225-68 of the French Commercial Code.
158
II.
OTHER INFORMATION
We attest that the Chairman of the Supervisory Board’s report sets out the other information required by Article L. 225-68 of the French Commercial Code.
Neuilly-sur-Seine and Dijon, le 12 July 2013.
PRICEWATERHOUSECOOPERS AUDIT
EXPERTISE COMPTABLE ET AUDIT
Philippe Vincent
Jérôme Burrier
159
j
13. DIRECTORS’ REMUNERATION
E
TABLE SUMMARISING THE REMUNERATION AND OPTIONS AND SHARES GRANTED TO EACH MANAGEMENT BOARD MEMBER
FY 2011/2012
FY 2012/2013
Remuneration for the financial year
609,629
693,687
Value of free shares granted during the financial year
116,640
54,208
-
-
726,269
747,895
Thierry Barel: Chairman of the Management Board and CEO
Value of performance-based shares granted during the financial year
TOTAL
Erwan Faiveley*: Member of the Management Board
132,200
126,350
-
-
-
-
132,200
126,350
351,339
354,463
46,656
35,482
-
-
397,995
389,945
TOTAL
Guillaume Bouhours: Member of the Management Board
TOTAL
* Erwan Faiveley is an employee of FFP, holding company of the Faiveley family.
160
13. Directors’ remuneration
E
SUMMARY TABLE OF THE REMUNERATION OF EACH MANAGEMENT BOARD MEMBER
FY 2011/2012
FY 2012/2013
Amounts due
Amounts paid
Amounts due
Amounts paid
432,794
432,794
430,822
430,822
174,140
381,300
260,170
174,140
2,695
2,695
2,695
2,695
609,629
816,789
693,687
607,657
96,000
96,000
107,081
107,081
-
-
-
-
Thierry Barel,
Chairman of the Management Board and CEO
Fixed remuneration (gross before tax)
(1)
Variable remuneration (gross before tax)
Benefits in kind (company car)
TOTAL
Erwan Faiveley(2),
Benefits in kind (housing allowance)
TOTAL
36,200
36,200
19,269
19,269
132,200
132,200
126,350
126,350
214,173
214,173
218,959
218,959
134,586
160,833
132,924
134,586
2,580
2,580
2,580
2,580
351,339
377,586
354,463
356,125
Guillaume Bouhours,
(1)
Benefits in kind (company car)
TOTAL
(1) The variable part is measured in relation to both Group (profit from recurring operations and cash flow generation) and individual objectives, which are set out at
the beginning of the year. 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. The Chairman of the Remuneration Committee then presents a summary to the Supervisory Board.
(2) Erwan Faiveley is an employee of FFP, holding company of the Faiveley Family.
161
j
E
DIRECTORS’ FEES AND OTHER REMUNERATION RECEIVED BY MEMBERS OF THE SUPERVISORY BOARD
Amounts paid during
the 2011/2012 financial year
Amounts paid during
the 2012/2013 financial year
45,200
46,500
-
-
19,200
30,500
-
-
15,200
21,000
-
-
Directors’ fees
-
19,000
Other remuneration
-
-
Directors’ fees
-
-
Other remuneration
-
-
22,800
37,000
-
-
Directors’ fees
-
19,000
Other remuneration
-
-
Directors’ fees
-
19,000
Other remuneration
-
-
16,400
25,500
-
-
17,600
31,500
Members of the Supervisory Board
Philippe Alfroid
Directors’ fees
Other remuneration
François Faiveley
Directors’ fees
Other remuneration
Didier Alix
Directors’ fees
Other remuneration
Serge Choumaker
Christian Germa
Directors’ fees
Other remuneration
Robert Joyeux
Directors’ fees
Other remuneration
Christopher Spencer
Directors’ fees
Other remuneration
TOTAL
Employment contract
Yes
No
x(1)
Thierry Barel
Start term of office: 01/04/2011
Supplementary
pension plan
Yes
-
-
138,400
249,000
Compensation or benefits
due or likely to be due
as a result of termination
or change of role
No
Yes
x
x(3)
No
Non-competition
compensation
Yes
No
x
Erwan Faiveley
x(2)
x
x
x
Guillaume Bouhours
x
x
x
x
(1) Thierry Barel’s work contract expired on 1 April 2011, date of his appointment as Chairman of the Management Board and Chief Executive Officer of the Company.
(2) Erwan Faiveley is an employee of FFP, holding company of the Faiveley family.
(3) Following the appointment of Thierry Barel as Chairman of the Management Board and Chief Executive Officer on 1 April 2011, the terms and conditions
governing the termination of his duties have been defined. Thierry Barel will thus be entitled to compensation based on performance criteria, not exceeding
eighteen months of total gross remuneration, in the event of his dismissal by the Supervisory Board.
162
E
INFORMATION ON FREE SHARES ALLOCATED TO MANAGEMENT BOARD MEMBERS DURING THE YEAR
Name of Management
Board members
Number and date
of plan
Value of options,
based on the method
used in the
consolidated
Number of free
shares granted
during the period
Vesting date
Date shares
available
15/01/2013
24.64
2,200
15/01/2015
15/01/2017
Nil
Nil
Nil
Nil
Nil
15/01/2013
24.64
1,440
15/01/2015
15/01/2017
Thierry Barel
Erwan Faiveley
Guillaume Bouhours
E
HISTORY OF ALLOCATIONS OF SHARE SUBSCRIPTION OPTIONS AND FREE SHARES AT 31 MARCH 2013
INFORMATION
ON SUBSCRIPTION
OPTIONS
INFORMATION ON FREE SHARES
Date of AGM
22/09/2009
13/09/2010
14/09/2011
14/09/2012
Date of Management Board
23/11/2009
03/12/2010
05/03/2012
15/01/2013
144,000
64,500
79,224
72,386
40,000
5,000
4,000
2,200
Total number of shares or rights to shares granted
Of which Board members:
• Thierry BAREL
• Serge CHOUMAKER
5,500
800
800
720
-
10,000
1,600
1,440
• Thierry BAREL
-
2,500
-
-
• Serge CHOUMAKER
-
400
-
-
• Guillaume BOUHOURS
Free shares vested after partial achievement
of performance criteria:
• Guillaume BOUHOURS
-
5,000
-
-
23/11/2013
03/12/2012
05/03/2014
15/01/2015
Date of sale of options or free shares
23/11/2013
03/12/2014
05/03/2016
15/01/2017
Expiry date
23/11/2017
N/A
N/A
N/A
€54,91
N/A
N/A
N/A
Date from which options can be exercised or vesting
date of free shares
Exercise price*
* The exercise price is equal to 95% of the average twenty trading days preceding the date of the Management Board meeting at which the options were granted.
E
OPTIONS TO SUBSCRIBE FOR OR PURCHASE SHARES GRANTED TO THE TOP 10 EMPLOYEES NON MEMBERS OF THE BOARDS HOLDING
THE HIGHEST NUMBER OF OPTIONS AND OPTIONS EXERCISED BY THESE AT 31 MARCH 2013
Total
number
of options
granted/ Weighted
shares Average
purchased
price 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 16/07/2008 23/11/2009
285,980
Options granted by the
issuer and all companies
in the scope of the option
plans, to the
10 employees holding the
highest number of options
38.03
67,200
6,720
31,360
6,720
4,480
11,200
26,880
26,880
13,440
22,600
68,500
Options held on the issuer
and all companies
included in the scope of
the option plans and
exercised by the
10 employees having
purchased the highest
number of options
28.70
14,594
-
239
-
-
126
-
360
4,720
-
-
20,039
163
j OTHER
INFORMATION
164
14.
15.
Certificate of persons responsible
for the annual report
166
167
16. Organisation chart
168
165
j
OTHER INFORMATION
14. 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 scope, and that the
management report provides a fair presentation of the business trend, the results and the financial position of Faiveley Transport and all the companies
included in the consolidation scope, as well as a description of the principal risks and uncertainties they face.”
166
Thierry Barel
Guillaume Bouhours
Chief Executive Officer
Chief Financial Officer
OTHER INFORMATION
15. Statutory Auditors’ fees
15. 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 2013 and 31 March 2012 were as follows:
ECA
PWC
2012/2013
2011/2012
2012/2013
2011/2012
• Parent company
161
150
210
200
• Subsidiaries
109
113
692
553
2
2
2
-
272
265
904
753
-
-
16
-
Audit:
Statutory Auditors, certification, review of individual
and consolidated financial statements:
Other services directly related to the audit assignment
SUB-TOTAL AUDIT FEES
Other services:
Legal, tax, corporate
Other
-
-
29
-
SUB-TOTAL OTHER SERVICES
-
-
45
-
272
265
949
753
TOTAL
167
j
OTHER INFORMATION
16. ORGANISATION CHART
E
FAIVELEY TRANSPORT GROUP SIMPLIFIED LEGAL STRUCTURE AT 1 APRIL 2013
FAIVELEY TRANSPORT
FAIVELEY TRANSPORT
AMIENS
100%
FAIVELEY TRANSPORT
GENNEVILLIERS
100%
FAIVELEY TRANSPORT
NSF
100%
FAIVELEY TRANSPORT
TOURS
100%
FAIVELEY TRANSPORT
ACQUISITION AB
100%
100%
FAIVELEY TRANSPORT
HOLDING GmbH & Co KG
100%
FAIVELEY TRANSPORT
WITTEN GmbH
SAB WABCO UK Ltd
100%
FAIVELEY TRANSPORT
BIRKENHEAD Ltd
100%
FAIVELEY TRANSPORT
LEIPZIG GmbH & Co KG
100%
100%
FAIVELEY TRANSPORT
MALMÖ AB
FAIVELEY TRANSPORT
AUSTRALIA
100% 100%
FAIVELEY TRANSPORT
KOREA Ltd
FAIVELEY TRANSPORT
POLSKA z.o.o
100%
51%
FAIVELEY TRANSPORT
VERWALTUNGS GmbH
SHANGHAI FAIVELEY RAILWAY
TECHNOLOGY Co Ltd
FAIVELEY TRANSPORT RAIL
TECHNOLOGIES INDIA Ltd
75%
100% 100%
FAIVELEY TRANSPORT
NORDIC AB
98.7%
FAIVELEY TRANSPORT
ITALIA Spa
100% 100%
FAIVELEY TRANSPORT
TRESMONICE s.r.o
100%
FAIVELEY TRANSPORT
SCHWEIZ AG
49%
SAB WABCO SHARAVAN
100%
NOWE GmbH
FAIVELEY TRANSPORT PLZEN
2%
100%
48%
F.M.R.P
FAIVELEY TRANSPORT
TAMWORTH Ltd
100%
FAIVELEY TRANSPORT
SERVICE MAROC
100%
FAIVELEY TRANSPORT SYSTEMS
TECHNOLOGY (Beijing) Co Ltd
100%
DATONG FAIVELEY COUPLER
SYSTEMS Co Ltd
50%
QINGDAO FAIVELEY
SRI RAIL BRAKE Co Ltd
50%
SHIJIAZHUANG JIAXIANG
PRECISION MACHINERY Co Ltd
50%
FAIVELEY TRANSPORT
FAR EAST Ltd
100%
98%
o.o.o FAIVELEY TRANSPORT
100%
F.T.M.T TAIWAN Ltd
100%
49%
42.73%
57.27%
99.56%
FAIVELEY TRANSPORT
BELGIUM
FAIVELEY TRANSPORT
DO BRASIL
100%
FAIVELEY TRANSPORT CHILE
100%
100% 100%
FAIVELEY TRANSPORT
IBERICA SA
0.44%
100%
F.T.M.T
SHANGHAI Co Ltd
FAIVELEY TRANSPORT LEKOV
FAIVELEY TRANSPORT
CANADA Inc
FAIVELEY TRANSPORT USA
F.T.M.T SINGAPORE Pte Ltd
ELLCON NATIONAL Inc
100% 100%
F.T.M.T THAILAND Co Ltd
67.5%
Parent Company
168
FT Group - Majority shareholder
Jointly-held subsidiary
GRAHAM WHITE
MANUFACTURING COMPANY
AMSTED RAIL-FAIVELEY LLC
FT Group - Minority shareholder
General Partner
2012 / 2013 FINANCIAL REPORT

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