Annual Report 2014

Transcrição

Annual Report 2014

RIVA FORNI ELETTRICI
Bilancio Consolidato
Annual Report
2014
Carica cesta rottame in forno - Stabilimento
Riva Acciaio
di Siviglia
Verona/ -Steel
Tondo
scrap
in rotoli
basket
/ Hot
charged
rolled into
stretched
the furnace
coils --Verona
Sevilla Plant
plant
Indice
Contents
3
Business Report
Profilo del Gruppo
5
Group Profile
I dati significativi
7
Highlights
Bilancio consolidato
35
Consolidated financial statements
Nota illustrativa
43
Notes to Consolidated financial statements
Relazione della Società di Revisione
e del Collegio Sindacale
79
Auditors’report
Relazione sulla gestione
I principali prodotti
Main products
Semiprodotti
(da colata continua)
Semiproducts
(continuous casting)
Blumi
Billette
Blooms
Billets
Laminati a caldo
Hot rolled products
Vergella
Tondo cemento armato
Barre
Wire rod
Concrete reinforcing bars
Bars
Laminati a freddo
Cold rolled products
Rete elettrosaldata
Filo trafilato
Trafilati
Pelati
Rettificati
Welded mesh
Drawn wire
Drawn products
Peeled bars
Ground bars
Ricordo di Emilio Riva
RIVA FORNI ELETTRICI
100%
100%
Holding
Riva Acciaio
68,18%
9,09%
Muzzana
Trasporti
22,73%
12,44%
Immobiliare
Siderurgica
87,56%
Mentre si stava chiudendo il primo bilancio
consolidato del Gruppo Riva Forni Elettrici, il 29 aprile 2014 è scomparso
Emilio Riva, fondatore, nel 1954, della prima società da cui ha preso vita
l’attuale Gruppo.
Pur senza voler cedere alla retorica, non si può dunque non ricordare
qui la figura dell’Ingegner Riva, il cui impegno professionale e la cui
lungimiranza imprenditoriale hanno svolto un ruolo determinante nella
crescita e nello sviluppo di uno dei principali gruppi siderurgici italiani,
europei e mondiali.
Emilio Riva è nato il 21 giugno del 1926 a Milano, e ha iniziato la sua
carriera imprenditoriale costituendo, insieme al fratello Adriano, nel 1954,
a 28 anni, la Riva&C, una società che commercializzava rottami ferrosi
destinati alle acciaierie del bresciano.
100%
Siderurgica
Sevillana
100%
A.S.I.
100%
Thy Marcinelle
100%
Trefileries de Fontaine
L’Eveque
Tre anni dopo aveva realizzato la prima acciaieria, con forno elettrico, a
Caronno Pertusella in provincia di Varese dove, nel 1964, installò – per
primo al mondo - la macchina a colata continua “Danieli”, che ancora
oggi costituisce una tecnologia imprescindibile per tutti i siti produttivi del
mondo, e che, nel 2001, valse a Emilio Riva la Laurea Honoris Causa in
ingegneria meccanica del Politecnico di Milano.
100%
Parsider
100%
Riva Aciér
75%
Riva Stahl
25%
100%
Acor
94%
H.E.S.
6%
Da quella “colata continua”, e da quel forno elettrico, iniziano l’inarrestabile
avventura di successo di Emilio Riva e di crescita del Gruppo che diventerà,
in pochi decenni, uno dei primi dieci produttori mondiali del settore, e le
cui tappe di espansione si possono così sintetizzare; acquisizione delle
Acciaierie del Tanaro, nel cuneese (1966); acquisizione della S.E.E.I, nel
bresciano (1970); ingresso nella Siderurgica Sevillana in Spagna (1971);
nella Iton Seine in Francia (1976).
90%
Holding
98,13%
SAM
100%
Iton Seine
100%
SAM Montereau
100%
Alpa
1,87%
94%
B.E.S.
100%
Betonstahl
Lampertheim
Gruppo RIVA FORNI ELETTRICI - al 31.12.2014
RIVA FORNI ELETTRICI Group - as at 31.12.2014
6%
10%
Fino alla metà degli anni ’70, il Gruppo gestisce anche un’acciaieria ad
Addis Abeba e altri impianti di verticalizzazione di prodotti siderurgici
in Etiopia, attività che favoriscono lo sviluppo economico della nazione
africana e che varranno per questo a Emilio Riva gli encomi dell’allora
imperatore Hailé Selassié. Nel 1981 viene quindi acquistata la Officine e
Fonderie Galtarossa di Verona.
Emilio Riva è stato poi pioniere e grande protagonista (nonché apripista)
della stagione delle privatizzazioni della siderurgia europea degli anni
‘80, processo fortemente caldeggiato, all’epoca, dal visconte Étienne
Davignon che, in qualità di Commissario europeo agli affari industriali,
promosse una drastica ristrutturazione del sistema siderurgico del
Vecchio Continente, sistema attanagliato da una crisi che sembrava
allora irreversibile.
Investita da una pesantissima crisi congiunturale, oltreché soggetta a
distorsioni competitive del mercato, indotte dal dominante controllo
pubblico, la siderurgia europea trovò, proprio grazie alla “cura
Davignon”, la via della ripresa. Le privatizzazioni ne rappresentarono,
-3-
Riva Acciaio Verona
Parco
- Laminatoio
billette - Stabilimento
vergella n. 3 /diNo.
Siviglia
3 wire
/ Billets
rod hot
storage
rolling yard
mill --Verona
Sevilla Plant
plant
Relazione sulla gestione
Business report
Group Profile
The Riva Forni Elettrici Group (hereinafter also “RFE
Group”) operates in the steel industry and other related activities, and
specifically in the field of “long products”.
The Group started operating, with legal effect on 1st January 2013, following
the partial demerger carried out by Riva Fire S.p.A.
The corporate organization chart of the Group as of
31 December 2014 is presented in the flyer above. The production and
processing facilities and sales branches of the Group, on the same date,
are located as follows:
Countries
Production
and processing facilities
Italy
7
France
7
Germany
3
Belgium
2
Spain
1
Canada
1
———
21
=====
In 2014 the RFE Group reached a consolidated
turnover of Euro 3,609 million, with a steel production of 7.8 million tons
and with the use of 5,061 employees.
-5-
Riva Acciaio Verona Treno
- Carica
sbozzatore
del rottame
laminazione
nel forno n.
1 -1Stabilimento
/ Scrap charging
di Siviglia
process
/ Roughing
into no.1rolling
EAF fournace
mill no.1--Verona
Sevilla Plant
plant
Highlights
I siti produttivi e di trasformazione
Production and transformation plants
Italia • Italy
Riva Acciaio - Annone Brianza (LC)
Riva Acciaio - Caronno Pertusella (VA)
Riva Acciaio - Cerveno (BS)
Riva Acciaio - Lesegno (CN)
Riva Acciaio - Malegno (BS)
Riva Acciaio - Sellero (BS)
Riva Acciaio - Verona
(In milioni di euro)
2013
Estero • Foreign
Acor - Creil (F)
Acor - Vauvert (F)
Acor - St. Just St. Rambert (F)
Alpa - Gargenville (F)
ASI - Montreal (CAN)
BES - Brandenburg (D)
Betonstahl Lampertheim - Lampertheim (D)
HES - Hennigsdorf (D)
Iton Seine - Bonnieres Sur Seine (F)
SAM - Neuves Maisons (F)
SAM - Montereau (F)
Siderurgica Sevillana - Siviglia (E)
Trefileries de Fontaine l’Eveque - Fontaine l’Eveque (B)
Thy Marcinelle - Charleroi (B)
USA e
Canada
Società Commerciali
Trading Companies
Dati gestionali
Fatturato netto
Margine operativo
Risultato dell’esercizio di Gruppo
3.694,5
(45,5)
(60,3)
Struttura patrimoniale
Patrimonio netto di Gruppo
Debiti finanziari a lungo termine
Posizione finanziaria netta
Immobili, impianti e macchinari
1.104,9
(254,3)
734,3
Altri dati
Cash flow operativo
Ammortamenti
Proventi / (Oneri) finanziari netti
Investimenti in immobili, impianti e macchinari
Estero • Foreign
Riva Acciaio - Milano (I)
Riva Aciér - Creil (F)
Riva Stahl - Hennigsdorf (D)
Siderurgica Sevillana - Siviglia (E)
Thy Marcinelle - Charleroi (B)
134,1
134,8
(13,6)
84,4
Dati statistici
RIVA FORNI ELETTRICI S.p.A. Milano
Dipendenti a fine anno
n.
5.076
Tonnellate prodotte (in migliaia):
- acciaio
- vergella
- tondo per cemento armato
- barre - billette laminate
t.
t.
t.
t.
7.591
4.204
2.101
913
Fatturato per dipendente (in migliaia di Euro)
729
- 17 -
Highlights
(In million euros)
2014
2013
Operating results
Net sales
EBITDA
Operating margin
Net income (loss)
3,608.7
145.3
(430.9)
(439.4)
3,694.5
121.6
(45.5)
(60.3)
Capital Structure
Group equity
Long-term debt
Net Financial Position
Property, plant and equipment
665.8
388.7
(428.3)
660.8
1,104.9
(254.3)
734.3
Other key figures
Cash flow from operations
Depreciation and amortization
Net financial income/ (loss)
Capital expenditures
159.2
131.9
(20.0)
69.0
134.1
134.8
(13.6)
84.4
Key Statistics
Employees at year end
n.
5,043
5,076
Tons produced (in thousands):
- Crude steel
- Wire rod
- Concrete reinforcing bars
- Bars, hot-rolled billets
T.
T.
T.
T.
7,762
4,215
2,190
956
7,591
4,204
2,101
913
713
729
Sales per employee (in thousands of Euros)
-9-
The international
steel industry
Over 2014 the world economy expanded by 3.3%
(IMF source), a rate equal to that of 2013. The largest contribution to the
growth came this year once again from the emerging economies that
grew in total at a rate of 4.4%.
The growth in the demand of advanced economies and China was
substantially the factor that led to support the economies of emerging
countries. However, the economic activity remained weak within emerging
countries, with the risk of a further slowdown of the Chinese economy and
a deterioration in the economic and financial conditions in Russia.
China’s economy expanded at a rate of 7.4%, thus lower than the declared
annual growth objective (7.5%), with a significant drop in the final part of
the year.
The acceleration of the economy in India remained strong, while stagnation
continued in Brazil, where the gross domestic product was slowed by weak
investments.
The economic situation in Russia is undergoing a major halt. This rapid
deterioration is due to the sanctions imposed by the Western countries at the
end of July, the collapse of the rouble and the fall of the oil price. In developed
countries the overall cyclical conditions remain very heterogeneous.
Overall, they underwent a 1.8% growth, supported by the United States
(+2.4%) and the United Kingdom (+2.6%). However the uncertainty on time
and on the strength of the recovery in Japan and the Euro area have a
remarkable weight on the economic performance of these countries.
Like last year, a multiplicity of factors adversely affected the economic
performance of the Euro Area (which closed the year with a +0.8%) such as
the consolidation of public accounts and the persistent difficulties faced by
the building sector and the high levels of unemployment.
Among the major economies, the gross domestic product increased once
again in Germany (+1.5%) and very slightly in France (+0.4%), but decreased
in Italy (-0.4%). The French economy benefited from the expansion of public
consumption, while in Germany a modest support to the activity was due to
the acceleration of household expenditure and public administrations.
In Italy consumptions started growing to a limited extent. Their contribution
to the growth of the economy was partially offset by lower investments
curbed by uncertainty about the prospects of the demand and the difficulties
of the building industry.
A strengthening in the growth in the Euro area by 1.2% in 2015 and 1.4%
in 2016 is forecast.
In the United States the economic activity sharply accelerated with a growth
- 11 -
of the gross domestic product by 2.8%. The economic growth is expected to
be equal to 3.6% in 2015, benefiting of the strengthening in consumptions.
The Japanese economy grew over 2014 to a disappointing rate of 0.1%.
This is due to a new fall in investments, only partially offset by a modest
recovery in consumptions.
Steel market
The year 2014 closed with a new record for the world
production that with 1,637 million tons exceeded by 1.1% the record of
2013 (worldsteel data).
The Asian annual production, with 1,111 million tonnes of steel, improved
by 1.4% compared to the previous year’s results. The continent’s share
increased slightly, from 67.7% in 2013 to 67.9% in 2014.
Steel production in China marked a new record in 2014 with 823 million
tonnes and an increase of 0.9% compared to 2013. China in 2014
produced little more than half of the world steel, with a production share
of 50.3%. Japan produced 110.7 million tonnes in 2014, with an increase
of 0.1% from 2013, while India is expanding to 83 million tonnes (2.3%).
A contraction affected the CIS countries (-2.8%), with a substantial
decrease of Ukraine (-17.1%), while Russia closed the year with a slight
increase (2.6%).
Brazil produced 33.9 Mt in 2014, a decrease of -0.7% compared to
2013, while the United States produced 88.3 million tonnes, with an
improvement of +1.7% compared to 2013.
The Middle East improved by 7.9% to reach 28.1 million tonnes, with Iran
first (16.3 million tonnes, +5.9%) and Qatar (3.0 million tonnes, +36.3%),
while Turkey slowed even further (34.0 million tonnes, -1.8%).
The EU registered a growth of +1.8% compared to 2013 with a production
of 169.2 million tonnes. Germany produced 42.9 million tonnes of steel
in 2014, with a production level close to that of 2013 (+0.7%). Italy and
Spain showed a drop of -1.4% and -0.6% respectively, while the French
production improved by 2.9%.
Consumption of finished products
The latest data available at the moment (worldsteel source) show a world
consumption of finished products set on 1,538 million tonnes, with an
overall increase of +0.6% compared to 2013, after +6.2% in the previous year.
Apparent steel consumption in the EU28 registered an increase of +3.3%
over the previous year. An expansion in the demand for steel by +1.9%
and +2.6% respectively in 2015 and 2016 is foreseen.
- 12 -
According to worldsteel an increase of the steel market in the EU28 equal
to 2.1% in 2015 and to 2.8% in 2016 is expected.
Very positive was the trend of the North African market that grew by 9.4%
for 2014 (Algeria: +9.4%; Egypt: +10.6%; Morocco: +2.7%), while the
steel consumption in Turkey decreased by 1.8%.
The Italian steel
industry
Economic framework
The Italian economy contracted by 0.4% in 2014, due
mainly to the weakness of investments, slowed by wide margins of unused
capacity. In spite of the oscillations of the world demand, exports continue
to support the product dynamic, while the slow recovery of consumption by
households continued.
The industrial activity, which has been decreasing almost without interruption
since summer 2011, decreased by about 1% in 2014. The climate of trust
in the manufacturing fields marked a marginal recovery. Businesses that
operate in the industrial sector indicate a worsening of the general economic
situation, but to a much lesser extent than in the past.
The decline in investment concerned both the building ones and those of
capital goods. This would be due to the weakness in demand, while the
slowing down resulting from financial constraints significantly attenuated
compared to previous years.
A growth was seen in the amount of worked hours in the overall economy
thanks to the increase in labour supply, however, the unemployment rate was
not reduced, which rose to 12.8% in 2014 (data as of November 2014).
As a result, household consumptions continued to increase to a limited extent,
confirming a trend dating back to summer 2013. The difficult conditions of
the labour market and the uncertainty surrounding the economic situation of
families still affect consumption.
Gross fixed investment decreased by 4% (compared to 5.4% of 2013);
the decline in investment in the construction field was approximately 4.1%
(estimate, data as of October 2014) while the investments in machinery and
equipment moved back to 3.6% (estimate, data as of October 2014).
Positive was the contribution to the growth of the gross domestic product
supplied by net foreign demand. The balance of payments on current account
returned positive in 2013 and continued to grow reaching 24.7 billion euro in
the first eleven months of 2014. However, in the third quarter of 2014 exports
of goods and services decelerated due to the stagnation of the demand from
other countries of the Euro Area. A picture of great uncertainty emerges on
the perspective demand of Italian products abroad.
- 13 -
Italian steel market
In 2014 the production of steel in Italy was equal to
23.7 million tonnes, a decrease of 1.5% over 2013, mainly due to the last
quarter (-12.6%). The national output dropped by 25% compared with
the pre-crisis peak of 2006.
Long products, which continue to be penalized by the decline of the
construction sector, undergo a new recession. In 2014 the production of
long rolled sections, 11.3 million tonnes, decreased by 1.2% compared
to 2013.
Beams and rigging products are the more penalized products (declining
on average by 12.2%); wire rods and concrete reinforcing bars lost
respectively 0.3% and 1.4%, while the production of merchant bars
concluded the year with an increase (+1.4%).
The apparent consumption of primary steel products in 2014 was equal
to 25.4 million tonnes, an increase of about +0.8% compared to 2013.
As of 2014, the apparent consumption of long products marked a
new historic low since 1999, in harmony with the trend in the national
construction sector (2.9%decline). In particular, the rod, beams and
rigging material marked a historic low in demand, while the concrete
reinforcing bars concluded the year with a 6.2% growth.
The activities of the national companies slowed down considerably in
2014 (26.1 million tonnes delivered, -2.6%), while imports increased by
5.8% to reach 15.3 million tonnes, with an emphasis on European ones
(8.2 million tonnes, +3.4%) compared to those outside Europe (7.1 million
tonnes, +8.7%).
As regards long products, statistics confirm the improvement of exports
(+3.6%), particularly in favour of markets outside Europe (+5.2%). Imports
confirmed to be undergoing a rise (+6.6%).
The Riva Forni
Elettrici Group
The total number of legal entities that are part of the
Group is 25.
For a complete detail of the consolidation area, see Appendix 1.
Secondary places
of business
None of the companies of the RFE Group has
established branches.
- 14 -
The Sales
The turnover of the RFE Group was Euro 3,609
million, with a 2% decrease compared to the previous year. In detail, the
turnover by Country of origin is the following (in millions of Euro):
Countries
2014
2013
+ ( -)
747
742
5
1,202
1,185
17
France
972
1,077
(105)
Belgium
358
361
(3)
Spain
320
327
(7)
10
3
7
----------
----------
----------
3,609
3,695
(86)
=======
=======
=======
Italy
Germany
Canada
Sales of steel products made by the Italian companies represent about
21% of the entire turnover, while the remaining 79% of the total has been
achieved by the European subsidiaries. Marginal is the turnover achieved
by non-EU companies.
The Production
In 2014 the Group produced 7.8 million tons of steel
with a prevalence (82%) of the production in the EU countries. The total
production of the Group was maintained over the last year, as it can also
be seen from the data reported in the following table (in thousands of tons):
Countries
2014
2013
+ (-)
Italy
1,405
1,346
59
France
2,554
2,563
(9)
Germany
2,266
2,156
110
Belgium
808
808
-
Spain
729
718
11
----------
----------
----------
7,762
7,591
171
=======
=======
=======
- 15 -
In terms of production quotas on the total of the EU,
in 2014 the Riva Forni Elettrici Group essentially confirms its presence
both in the production of crude steel and in the field of long rolled
which operates in. A summary of the shares at European level, drawn
up on the basis of data estimates available at present, is shown in the
following table:
Market share of the RFE Group in Europe (EU 28)
2014
2013
2012
Raw steel
4.6%
4.6%
4.6%
12.6%
12.4%
11.9%
Long-rolled products
The result of
operations
The consolidated income statement can be
summarized as follows (in millions of Euro):
2014
%
2013
%
3,609
100.0%
3,695
100.0%
145
4.0%
122
3.3%
Operating margin
(431)
(11.9%)
(45)
(1.2%)
Net financial loss
(20)
(0.6%)
(14)
(0.4%)
Net income (loss)
before minority interest
(439)
(12.2%)
(60)
(1.6%)
Net income (loss)
(439)
(12.2%)
(60)
(1.6%)
Net sales
Ebitda
The economic results of the financial year 2014 have been affected in
particular:
- by the difficult economic situation in the global economy, which also
reflected on the steel sector;
- 16 -
-
by the achievement of positive operating margins in certain geographical
areas and negative in others;
-
by the depreciation / provisions made by the parent company Riva Forni
Elettrici in the light of the grounds set out in the following paragraphs
and to which reference should be made;
-
by the consolidation of production quotas in the sector the Group
operates in.
The balance of the financial management is analyzed below (in thousands
of Euro):
Interest expense and financial charges
Discounting charges
Foreign exchange losses
Total financial expenses
2014
2013
18,188
14,055
2,116
894
529
349
------------
------------
20,833
15,298
------------
------------
Interest income and other financial income
367
120
Income from investments in associates, net
(70)
276
Foreign exchange gains
585
1,299
------------
------------
882
1,695
------------
------------
(19.951)
(13,603)
========
========
Total financial income
Net financial loss
The result of the financial management suffers from the one hand of
the stricter conditions on funding applied by credit institutions, given
the continuing difficult economic situation and, on the other hand, of
the different financial structure related to the MLT financing by some
companies operating primarily in Germany, France, Spain and Belgium.
Cash flow
The cash flow generated from operations was Euro
159 million, thus represented (in millions of Euro):
Income (loss) before minority interests
Changes in provisions
Operating Cash flow
2014
2013
(439)
(60)
474
124
-----------159
135
59
-----------134
========
========
- 17 -
The net financial position can be summarized below (in millions of Euro)
Cash and cash equivalents
Bank overdrafts
Short-term financing
Bank overdrafts, net
Financial assets
Current portion of long-term debt
Long-term debt
Net financial indebtedness
Net financial position
2014
2013
134,658
122,596
(136,626)
(298,240)
(5,428)
(78,655)
------------
------------
(7,396)
(254,299)
------------
------------
1,583
-
(33,776)
-
(388,683)
-
------------
------------
(420,876)
(254,299)
------------
------------
(428,272)
(254,299)
========
========
The improvement of the financial position in the short term is mainly due
to the cash generated by long-term financing.
The variation of the total net financial position, on the other hand, suffers
from the acquisition by the parent company Riva Forni Elettrici of a debt
towards a credit institution previously due to the demerged Riva Fire
S.p.A., in the light of the grounds set out in the following paragraphs and
which reference is made to.
- 18 -
Main Indicators
The main changes occurred over the year are highlighted in the
consolidated financial statements (Note 1) of which the following is a
summary (in millions of Euro):
2014
Cash and cash equivalents (bank overdrafts)
2013
(254)
(275)
------------
------------
(103)
127
Cash flows used in investing activities
(73)
(105)
Cash flows used in financing activities
423
(1)
------------
------------
247
21
------------
------------
(7)
(254)
========
========
at the beginning of the year, net
Cash flows provided by operating activities
Increase in cash and cash equivalents, net
Bank overdrafts at the end of the year, net
Profitability indicators
2014
2013
ROI (operating margin/ (operating invested capital - operating liabilities))
(39.71)%
(5.19)%
Net ROE (net result/ shareholders’ equity)
(65.98)%
(5.46)%
ROS (operating margin/ sales)
(13.51)%
(2.08)%
2014
2013
Working capital (Current assets – Current Liabilities)
385
368
Current Ratio (Current Assets/ Current Liabilities)
1.39
1.33
(238)
(288)
0.76
0.74
Solvency Indicators
Operating working capital (Trade and other receivables +
Cash and cash equivalents) – (Current Liabilities)
Cash Ratio (Trade and other receivables + Cash and cash
equivalents)/ (Current Liabilities)
- 19 -
Loan structure indicators
Debt-to-Equity Ratio
(Long-term Liabilities + Current Liabilities)/ Group Equity
Leverage Ratio
(Financial Liabilities/ Group Equity)
2014
2013
2.11
1.05
0.85
0.34
It should be noted that some of the indicators described above, are significantly
influenced by the entries attributable to the parent company Riva Forni Elettrici
S.p.A. taking into account the depreciation and provisions made with reference
to the situation of the demerged Riva FIRE S.p.A. better illustrated below.
Personnel
The number of employees as of December 31, 2014
was 5,043 units, against 5,076 of the previous year.
Employees working at foreign units were 3,649, those working within
Italian companies 1,394. Comparative data (excluding the employees of
non-consolidated minority shareholdings) are as follows:
Average headcount
December 31 headcount
Countries
2014
2013
+ (-)
2014
2013
+ (-)
Italy
1,424
1,426
(2)
1,394
1,442
(48)
France
1,363
1,380
(17)
1,380
1,378
2
Germany
1,540
1,521
19
1,535
1,531
4
Belgium
337
350
(13)
342
350
(8)
Spain
355
357
(2)
350
344
6
Luxembourg
12
-
12
12
-
12
Canada
30
32
(2)
30
31
(1)
------------
------------
------------
------------
------------
------------
5,061
5,066
(5)
5,043
5,076
(33)
========
========
========
========
========
========
There have been no cases of employees registered in the company’s
register subject to death or any serious work accidents that may have
resulted, in the year under review, in the assessment of definitive corporate
responsibility or any claim for work-related illnesses for which the
companies of the Group may have been declared definitively responsible
under criminal law.
- 20 -
Production and
commercial
structure
As already mentioned, the Riva Forni Elettrici Group
works in the field of long rolled products in the major European countries:
Italy, Germany, France, Spain and Belgium.
In Italy, Riva Acciaio S.p.A. carries out its production
and business activities at the plants in Caronno Pertusella (VA), Lesegno
(CN), Verona (VR), Cerveno (BS), Sellero (BS), Malegno (BS) and Annone
Brianza (LC).
In France, the main production companies are Iton Seine S.A.S., Acieries
et Laminoirs de Paris S.A.S., Société des Aciers d’Armature pour le
Beton - SAM S.A.S., SAM Montereau S.A.S. and Aciers de Construction
Rationalisés - Acor S.A.S., while the purchase of the raw material and
supply of semi-finished and finished products is carried out from the
shore Riva Acier S.a. At the level of general coordination is Parsider S. a.
In Germany, with an organization similar to that present in France, the
productive activity is carried out by the companies HES – Hennigsdorfer
Elektrostahlwerke GmbH, BES – Brandenburger Elektrostahlwerke
GmbH and the newly established Betonstahl Lampertheim Gmbh, while
the marketing activities are carried out by Riva Stahl GmbH.
In Belgium operate Thy Marcinelle and Tréfileries de Fontaine L’Eveque:
the first manufactures and sell their products directly, entrusting to the
second with the transformation services; there is also the Belgian Branch
of the Luxembourg law company Stahlbeteiligungen Holding that deals
with the financial functions for the non-Italian companies of the Group.
In Spain Siderurgica Sevillana is present while in Canada the ASI activity
consists in the selection of iron scrap.
The relationship between the companies within the scope of the present
consolidated financial statements reflect both commercial and financial
operations and transactions and are regulated under normal market conditions.
As regards specifically to the Parent Company, it has carried out for some
subsidiaries, primarily administrative and financial services.
Investments in property, plant and equipment made
in 2014 amounted to Euro 69 million, with a contraction in relation to the
expenditure carried out in the previous financial year, which amounted to
Euro 84 million.
As in previous years, the activity of plant investment was focused in the
attainment of the improvement of qualitative aspects of the products,
in the containment of production costs, in the improvement of safety
conditions and in the consolidation of the production asset in the context
of preserving and improving environmental factors.
- 21 -
Research and
development
Research and Development activities primarily
relate to the activities, at the Lesegno (CN) plant of Riva Acciaio, of
the experimental laboratory and the system for the simulation of steel
processes, which enables to implement the R&D activities at the service
of all the Group plants.
These processes are simulated through a number of tools including:
- Gleeble 3800, which is able to recreate, on specially formed specimens,
the manufacturing cycle of the steel, starting from the continuous
casting, passing through the rolling to get to all the types of subsequent
treatments (hot moldings, annealings, welding etc.) performed on the
product. Simulations can be either on long products and on the flat
products.
- Experimental melting furnace, that allows to provide experimental
casting tests to test new products and/or optimize existing ones without
having to use industrial castings.
- Laboratory cold rolling mill, which allows to prepare raw rolling pieces
intended to the continuous annealing tests in the Gleeble simulator.
The experimental laboratory of Lesegno is therefore not only a resource
within the plant but covers the role of a further resource for the whole
Gruppo Riva Forni Elettrici, available to all production linked to it.
In this sense process and product metallurgists, technologists, quality
control managers can take advantage of the opportunities offered by
the laboratory itself, within the various types of application (simulation of
continuous casting, dilatometry and determination of the “ttt” and “cct”
curves, simulation of the thermal treatments, simulation of hot rolling,
study of hot deformation, workability of the steel, welds).
All charges resulting from this R&D activity were fully entered in the
consolidated income statement, with the exception of the assets subject
to the amortization process.
Environmental and
ecological matters
Over 2014 the activities of implementation and
completion of the systems for the containment of air pollution continued,
thus implementing the current regulations and authorisation requirements.
There have been no cases where the companies of the Group have been
declared definitively guilty on matters such as environmental damage,
nor penalties were imposed or final judgments under the criminal law for
environmental offenses.
- 22 -
During 2014, the national plants have operated under the following
permissions:
- Caronno Pertusella plant: Autorizzazione Integrata Ambientale
(Integrated Environmental Authorization) (AIA) N. 7379 of 05.07.2007
and following update N. 3662, Issued by the Province of Varese, and
currently in the process of renewal/review;
- Lesegno plant: Autorizzazione Integrata Ambientale (AIA) N. 687 of
26.11.2013, issued by the province of Cuneo.
- Verona plant: Autorizzazione Integrata Ambientale (AIA) N. 1364/13 of
20.03.2013, issued by the Province of Verona.
- Sellero plant: Autorizzazione Integrata Ambientale (AIA) N. 3012 of
20.03.2006 issued by the Province of Brescia and currently undergoing
a renewal/review;
- Cerveno plant: Autorizzazione Integrata Ambientale (AIA) N. 641 of
30.01.2007 issued by the Province of Brescia and currently under
renewal/review;
- Malegno plant: Autorizzazione Unica Ambientale (Unique Environmental
Authorisation) (AUA) N. 3561 of 16.05.2014 issued by the Province of
Brescia, concerning a specific authorization to discharge water;
- Annone Brianza plant: specific authorization for emissions to the
atmosphere, issued by the Province of Lecco. The plant required the
Province of Lecco the Autorizzazione Unica Ambientale (AUA) that is
being examined.
The plant of Caronno Pertusella, over 2014, submitted a request for a
non-substantial modification relating to the reorganization of storage
areas and waste treatment.
The plant of Lesegno, over 2014, submitted a request for a non-substantial
modification related to the implementation of internal yards through the
use of steelworks waste.
The plant of Verona, over 2014, submitted a request for a non-substantial
modification related to the variation of the monitoring plan for the CO
parameter.
All plants, managed under the Autorizzazione Integrata Ambientale (AIA),
have complied with the deadlines required by the Piano di Monitoraggio
e Controllo (Monitoring and Control Plan) (PMC) of the Authorizing Act.
The results obtained always complied with the limits.
During 2014 the plants continued to maintain the appropriate certifications
relating to the aspects of quality, environment and safety UNI EN ISO 9001,
ISO 14001 and OHSAS 18001, issued by the appropriate certification
bodies (IGQ, TUV, LLOYD).
As regards the water requirement of the plants, it is satisfied by special
wells and/or drainage from superficial watercourses, and its use is
expressly authorized by the park authorities.
- 23 -
As regards the scrap/waste originated from the production process, it
should be noted that these were always disposed of and/or recovered in
authorized facilities.
Regarding the foreign plants, the situation is as follows:
- France: all of the plants are managed following specific Prefectural
authority authorizations, the permissions are for an indefinite period of
time.
- Belgium: the plants are managed with specific permissions with
deadline 02.03.2030 for Thy Marcinelle and 03.11.2014 for Tref. de
Fontaine l’Eveque.
- Spain: the plant is managed with proper authorization which expires in
2018.
- Germany: the plants of Brandenburg and Hennigsdorf hold the specific
permissions for an indefinite period of time, the plant of Lampertheim
for the specific machining tasks and in relation to the German legislation
does not require particular permissions.
REACH Regulation
Compliance with the EU legislation on chemicals,
Regulation 1907/2006 REACH and of related European regulations (first of
all the CLP regulation n. 1272/2008, that reached the third adaptation to
scientific and technical progress), is ensured by a transverse structure which
sees the integrated involvement of professionals with specific expertise in the
administrative, technical-scientific and legal field, operating both at central
level and in production units of the Group.
The safety of chemicals produced and used in production processes is the
subject of careful monitoring, together with the prevention of any criticality in
the vital processes of supply, manufacture and marketing of steel products.
During 2013, activities were carried out to consolidate within the corporate
practice the application of new regulations, especially in the case of the
obligations deriving from the role of “downstream user” of substances and
mixes thereof. The project - started in 2011 - to monitor the entry of dangerous
substances and those showing particular problems - “SVHCS”- provides for
the construction of a central unified archive with shared management and
the widespread dissemination of the information contained in the Safety Data
Sheets. These procedures improve in this way, the control of the safety profile
of substances used in the processes and in working locations already from
the first supply stages.
Riva Acciaio adheres to the Reach Consortium using the related technicalscientific facility, in particular as regards the evaluation of the registration
dossier by the ECHA Agency and the need to update the records.
- 24 -
Over 2014, the gradual application of the CLP regulation - which enter into
force on 01.06.2015 - on classification, labelling and packaging of substances
and preparations was closely followed.
Emission Trading
With reference to the CO2 market and the Emission
Trading System (ETS), please note the following subjects of interest:
- ETS Auctions for 2013 – 2020: as of 2013 emission titles for the III stage
of EU ETS for the thermo-electric sector will no longer be allocated by
National Allocation Plans but through auctions.
The auctions and market will be organised in compliance with
harmonised EU level criteria established in the application Regulations
of the new ETS Directive.
The Commission has announced an early auction of EUA permits for 120
million tons of CO2 in 2012. It has also announced that 1.4 billion tons
equivalent in emission permits will be reduced from the total auction
quotas to mitigate the effect of the economic crisis (drop in emissions)
and market length of stage II.
This should contribute to the effectiveness of the plan in transferring
price signals to the market for investments in decarbonisation measures.
- ETS Registers: on June 17, 2011 EU Government representatives ratified
the EU Regulations introducing further security measures to protect ETS
register operations following hacker attacks and their forced closure in
January 2011.
Even with the possibility to use trusted accounts and measures to protect
operators against theft of access credentials, the Regulation still has
provisions for keeping the serial number of titles purchased anonymous.
Said measure exposes credits to be returned in compliance with the
measure in which the list of fraudulent EUAs can be updated at any time to
risk; possibly making credits bought on the market “in good faith” unusable.
- Clean Development Mechanism (CDM) Market: EU Governments
have adopted, at the Commission’s proposal, the European Decision,
which bans credits (CER) generated by CDM projects on industrial
gases (HFC-23 and N2O) as of May 1, 2013. Furthermore, during the
Environmental Council of June 21, 16 EU governments (Germany, UK,
France, Austria, Belgium, Estonia, Greece, Sweden, Slovenia, Czech
Republic, Malta, Bulgaria, Latvia, Luxembourg and Slovakia but not
Italy) signed the Danish Government declaration; so, also within the
”Effort Sharing” framework, they will not use HFC credits in the third
ETS period.
- CO2 Expenses: the companies of the Group were assigned emission
permits in line with respect to the actual requirements of the lines
- 25 -
themselves. Therefore, in the statement of accounts being commented,
it was not necessary to allocate charges for these purposes. However, it
should be noted that it is pending before the TAR (Regional Administrative
Court) of Lazio the appeal of act no. 29/2013 of the National Committee for
the management of directive 2003/87/EC and to support the management
of project activities of the Kyoto Protocol, bearing the list of existing
plants and the total annual quantity of emissions allocated free of charge
to each manager, for the period 2013/2020 the appeal of the European
Commission’s decision n. 2013 /448/CE is pending and also regarding
any other act or preordered measure, consequent and/or still connected.
By order filed on 4th July 2014 the TAR (Regional Administrative Court) of
Lazio decided an adjournment the discussion of the merits, following the
decision by the EU Court of Justice of which the preliminary ruling.
This ordinance did not suspend the issuance of allowances for the entire
reference period: as a result, the measures for the issuing of allowances
for 2013 and 2014 remain perfectly valid.
By order filed 30th July 2014 the TAR of Lazio postponed the issue
concerning the legality of the criterion for the allocation of free CO2
allowances to the Court of Justice of the EU.
The deliberations on the assignments to some operators of emission
allowances for 2015 have recently been published.
During the year, the companies of the Group have not carried out operations
for the purchase or sale of shares.
Company risk
management
With regard to the management of risk exposures,
with particular reference to financial risks, also within the meaning of
art. 2428, paragraph 2, number 6 bis, of Italian civil code, the main risk
categories the Group is exposed to, are listed below:
Risks related to the sectors the Group operates in - The results of the
Group are influenced by the evolution of the prices of the steel market
and the effects that this trend has on the achieved margins; in addition,
for a proper management of the production cycle and of the trade flows,
the Group presents stocks of raw materials and end products; the level
of these stocks is subject to fluctuations in the steel market. These risk
factors are closely linked to the very nature of the business and are
constantly monitored.
Credit Risk - The maximum theoretical exposure to credit risk is
represented by the book value of the financial activities described in the
budget. Outstanding loans at the end of the year are essentially towards
diversified customers and the Exchequer. There are no significant amount
expired balances.
- 26 -
Liquidity Risk - The liquidity risk can manifest itself with the inability to
find the financial resources necessary for the operation. The companies
of the Group are included in the system of centralised management of the
Group’s treasury department, therefore the liquidity risks to which they
are subject are closely related to those affecting the Group as a whole.
The two main factors that determine the liquidity situation of the Group
are, on the one hand, the resources generated or absorbed by operational
and investment activities, on the other hand, the characteristics of expiry
and renewal of debt or liquidity of financial assets and market conditions.
The Group has adopted a series of processes designed to optimize the
management of financial resources, reducing the liquidity risk:
- centralized management of flows of cash receipts and payments (cash
pooling) in the various Countries in which it operates;
- maintaining an adequate level of liquidity available;
- diversification of the tools for the retrieval of financial resources and
continuing and active presence on the capital market;
- obtaining appropriate credit lines;
- monitoring of the liquidity conditions in relation to the process of
business planning.
Currently there are ongoing contacts with the various banks to obtain
further funding lines, in addition to those already available. These lines, in
addition to the funds generated from operating and funding activities, will
allow the satisfaction of needs arising from investment, working capital
management activities and repayment of debts as they naturally expire.
Foreign exchange risk - No credit or debt positions, or financial
derivatives particularly exposed to the exchange risk are outstanding.
Interest rate risk - Interest rate risk - The Group covered its financial
needs through both the system of centralized management of the treasury,
and with autonomous funding operations on the markets. The function
of centralised treasury is now restricted to the foreign companies while
those in Italy, mainly Riva Acciaio S.p.A. have installed or are installing
autonomous lines. It should be noted that the Group policy provides only
for the use of financial derivatives for hedging purposes, being the trading
and/or speculative activities precluded.
Other risks on financial derivatives - On the closing date of the financial year,
the Group does not carry out any other transaction in financial derivatives.
Risks associated with the demerger of Riva Fire - RFE started operating
as a result of the demerger of Riva Fire S.p.A., carried out with legal effect
from 1st January 2013, within the context of a broader plan of the group
of companies that the latter was heading. As result of the demerger, RFE
and Riva Fire S.p.A. have been operating in full autonomy and separately,
each within its own sphere of expertise. Although the two companies are
entirely distinct entities both in functional and technical terms and under
- 27 -
the legal profile, starting from mid-2013, the same have been in part
together in legal events regarding ILVA S.p.A.. In particular, RFE has been
involved in various civil, criminal and administrative procedures, pending
or threatened, that derive from events which occurred prior to 1st January
2013 (effective date of the demerger of Riva Fire in favour of RFE).
RFE, moreover, within the limits of the assets assigned to it, is responsible,
without prejudice, for the debts of the demerged company, prior to the
demerger itself, which should remain unsettled.
The situation of the demerged company Riva Fire
In the light of the foregoing, it should be noted that Riva Fire was placed
into voluntary winding up through the Extraordinary Shareholders’ Meeting
resolution of 4th February 2015 filed with the registry of companies on 13th
February 2015.
The budget for the financial year closed on 31st December 2014 indicates a
loss of 1,156 million euros. The balance sheet date however is prior to of the
decision to voluntary wind up the company due to a decrease of the corporate
capital below the legal minimum amount and the facts and the events inherent
to the year 2014 relatehave no relation with the activities carried out by the
liquidator appointed by the Extraordinary Shareholders’ Meeting.
The previous bodyboard of directors, as a result of the events that affected
Riva Fire and its main subsidiary (ILVA S.p.A.) had carried out an evaluation
on the prospects for the company focused on the following aspects:
- the inability to manage its main “asset”, consisting of the majority
stake in the share capital of ILVA S.p.A., following the commissioner
administration defined under Law Decree 61/2013;
- the losses suffered by the same ILVA S.p.A. over the years 2012, 2013 and
in the first eight months of 2014, on the basis of the financial statements
submitted by the commissioners of the same;
- the judicial and legislative provisions adopted in relation to RIVA FIRE
that made it impossible to pursue and/or achieve its corporate purpose.
Although the Company filed an appeal on the receivership and against the
insolvency declaration, also concerning its genesis, the company was in
no position but to record, as things stand, the economic and accounting
consequences of the foregoing. The directors have therefore called the
shareholders’ meeting in order for the latter to deliberate on the winding up
of the company, in light of two major reasons:
• inability to freely manage its main “asset” represented by the participation
in the share capital of ILVA S.p.A.;
• crisis of ILVA undercommissioner administration, which took to a
devaluation of the participation, generating losses of such magnitude as
to reduce the capital below the legal minimum.
Subsequently, the liquidator, drawing up the financial statements as of 31st
December 2014, has shown the prospects, including time frames, of the
liquidation, as well as the principles and criteria to be followed to achieve
it, in accordance with the rules of art. 2490 of the Civil Code. The liquidator,
- 28 -
however expressed the effects of Law Decree 1/2015, concerning the
admission of ILVA S.p.A. to the extraordinary administration procedure
following the declaration of insolvency.
As a matter fact, on 5th January 2015 Law Decree 1/2015 was published,
having the purpose of extending the discipline of Law Decree 347/2003
(the so called “Marzano law”) for businesses that manage industrial plants
of strategic national interest, with reference to the particular situation of the
ILVA S.p.A. plant of Taranto.
This legislation provides that, for the case of companies subject to
commissioner administration under Law Decree 61/2013, the commissioner
may file with the competent Ministry the request for admission to the
extraordinary administration procedure of the company, also giving the
commissioner the possibility to be appointed as Commissioner also under
“Marzano law”.
The law decree also modifies art. 4 of the “Marzano law”, giving the
extraordinary commissioner the power to identify the lessee or the purchaser
of the company, under a private negotiation, amongst entities that shall
ensure, depending on the situation, the productive continuity of the industrial
plant of strategic national interest, also maintaining appropriate levels of
employment, as well as the promptness of the intervention under the law.
The mentioned decree also provides that the rent of the business or the
purchase price cannot be lower than the market price, as resulting from
expert report drafted by a primary indipendent financial advisor.
Under the new legislation, on 21st January 2015, the extraordinary
commissioner of ILVA, Mr. Piero Gnudi, filed a request with the Minister
for Economic Development for the immediate admission of ILVA to the
extraordinary administration procedure. The Minister, on the same date,
admitted the company to the abovementioned procedure with immediate
effect. By the same decree, Mr. Piero Gnudi, Mr. Corrado Carrubba and
Prof. Enrico Laghi were appointed commissioners.
On the same day, Riva Fire S.p.A. filed an appeal against the declaration
of the state of insolvency of ILVA with the Registry of the Court of Milan
- Bankruptcy section by which, being the majority shareholder of ILVA
S.p.A. and therefore being “interested party” under Art. 9 Law Decree No.
270/1999, submitted opposition before the Court of Milan, claiming:
• in the first place, the annulment of the declaration of the state of
insolvency of the entity ILVA S.p.A., and the declaration of the insolvency
of the company ILVA S.p.A., subject to extraordinary receivership under
Law Decree 61/2013;
• alternatively, for the case to be referred to the Constitutional Court, , in
order for the latter to declare the constitutional illegitimacy of articles 1
and 2 of Law Decree 61/2013 and of article 1 paragraph 2 of Law Decree
1/2015, being the same in contrast with articles 3, 23, 41, 42, 43, 97 and
117 paragraph 1 of the Italian Constitution.
- 29 -
Riva Fire challenged, with an application filed on 27th March 2015 with the
competent administrative court, the ministerial decree by wich ILVA was
admitted to the extraordinary administration. Subsequently, with Law 20
dated 4th March 2015, the Law Decree 1/2015, was amended and finally
approved. The main amendments concern :
- the possibility for small and medium-size enterprises, having receivables
towards Ilva, prior to its admission to the administrative receivership
procedure to receive preferential payment of their credits concerning,
activities performed for the rehabilitation and environmental safety or for
the continuity of the activity of essential manufacturing plants;
- the provision according to which the Commissioner shall require the
potential lessee or purchaser of the company, to provide together with
its offer the offer, the presentation of an industrial and financial plan
where the investments, the coverage methods, as well as the strategic
objectives of the industrial production in the group plants.
On 20th February 2015, the Ministry of Economic Development issued
further decrees by which other companies of the ILVA Group were admitted
to the extraordinary administration procedure, through a motion formalised
by the liquidators of the latter, pursuant to article 3 Paragraph 3 Law
decree 347/2003. Such companies are Ilvaform S.p.A.; Taranto Energia
S.r.l.; Innse Cilindri S.r.l.; Sanac S.p.A.; Ilva Servizi Marittimi S.p.A. and
Lyonnaise De Deroulage Sa. According to the arrangement of article 85
of Law Decree No. 270/1999, were appointed as special commissioners
the same individuals that cover this role in the “parent” procedure. Finally,
with ministerial decree of 17th March 2015, were admitted to the special
administration procedure also Tillet sas and Socova sas, controlled
indirectly by ILVA S.p.A..
Since Riva Fire owns (directly and indirectly) the majority shareholding of
ILVA S.p.A. equal to 87% of the share capital, the participation is classified
accounts-wise in the statements of accounts as financial asset.
As a result of the admission of ILVA to the extraordinary administration
procedure, with consequent declaration of a state of insolvency, as from
the Court of Milan decision, the liquidator prudently proceeded to set to
zero the value of the participation in the statement of accounts as of 31st
December 2014, given the permanent impairment of value in fact actually
generated.
Of course, the faculty of the company to seek compensation for damages
suffered as a result of the receivership of ILVA remains, an expectation that
still cannot be included in the statement of accounts.
- 30 -
Guidelines on the liquidation of Riva Fire
In accordance with the rules of art. 2490 of the civil code, the liquidator,
in the financial statement of Riva Fire ended 31-12-2014, outlined the
prospects of liquidation, and the principles and criteria that might be taken
to achieve it.
The vicissitudes of ILVA S.p.A.
The above documents do not, however, lack of detailed illustrations of the
events concerning:
• the lawsuits in 2012, consisting of real and personal precautionary
measures, exceeded in fact by Law 231/2012.
• the confiscation in May 2013 on the Company’s property and institutions
derived from its demerger, up to the amount of 8,100,000,000 which
was then cancelled without referral from the Court of Cassation on 20th
December 2013.
This measure, however, seems to have been the reason that prompted the
Government to arrange the receivership of ILVA on 4th June 2013. In fact, it
does not seems that ILVA contravened specific obligations in relation to
environmental requirements, but it seems rather that the receivership may arise
from the consideration of ILVA’s inability to operate, as under the confiscation
order dated 22nd May 2013, although cancelled by the Court of Cassation.
ILVA’s history in receivership has more specific characteristics:
- the company at the time of the receivership was in bonis and presented
a significant financial soundness, albeit after a difficult 2012, at least for
the lawsuits that imposed a substantial block in production for certain
periods.
- the Commissary function, in the person first of Mr. Enrico Bondi and, with
effect from 4th June 2014, of Mr. Piero Gnudi, never delivered formally
approved financial statements, although this compliance is attributed by
law to his powers. The draft financial statements for 2012, 2013 and
the first eight months of 2014, filed by the commissioner, pointed to the
accumulation of relevant operating losses.
- these documents show a progressive deterioration of the situation,
consisting of an enormous permanent imbalance in the income statement.
This situation of operating losses, which the real reasons are not known,
continued, consuming the also large reserves the company still had at
the time of the receivership. The continuing wealth erosion described
brought ILVA and the group it belongs to a situation of illiquidity.
At this point, there is a new intervention of the executive power, by Law
Decree 1/2015, which attributed to the extraordinary commissioner
pro tempore the power to require the admission of the extraordinary
administration, a procedure which was specifically modified to ease the
path that at that time the Government prefigured for ILVA.
- 31 -
Currently, the extraordinary administration of the company seems to
proceed relatively slow and with considerable difficulty and, therefore, it is
not possible to predict its evolution.
In light of the above, the following considerations can be expressed:
- RIVA FIRE lost the control of ILVA as the joint result of doubtful judicial,
governmental and legislative measures. The judicial measures are all
interim measures and, therefore, do not hold the merit; inter alia, the
major seizure adopted by the Court of Taranto has been overruled by the
Supreme Court, as already mentioned;
- the Government emergency measures, adopted by means of specific law
decrees, seem to have significant conflict profiles with the constitutional
and European rules together with the general principles of the European
Convention on Human Rights.
In short, the following occurred:
(a) the compulsory eviction of RIVA FIRE, as shareholder, from the
management of its own participation in ILVA is due to the effect of a
urgency decrees and in based on circumstances occurred prior to their
entry into force, which are at present sub iudice;
(b) the management of the company by the commissioner produced
extremely important losses leading to the decision to admit ILVA to the
extraordinary administration procedure, also as a consequence of the
entry into force of decree 1/2015.
Moreover, it should be noted that the company has always abided by the
environmental rules.
The history of RIVA FIRE shows paradoxical elements, for instance:
• RIVA FIRE purchased ILVA from the public shareholder in 1995. Its
main industrial plant, or the steel plant of Taranto, was built by ILVA and
in the ‘60 was owned by the state. Then from 1995 to 2012 a private
management conducted the business in a profitable manner, strongly
increasing the solidity of the company.
• In 2012 several lawsuits started claiming the alleged pollution of the area
surrounding the plant and, as of today, there is no judicial decision to
such regard. The claims seem to be based on a sort of environmental
incompatibility of the industrial plant with respect to the surrounding
territory which has a predominance of houses, rather than on actual
violations in its management.
• The commissary management, moreover, does not seem to have done
significant work regarding the environment, except for the reduction of
production, so it is not clear the urgency to proceed to the procedure,
having stated that the company would have worked to implement the
A.I.A. requirements.
- 32 -
• In this situation, Riva FIRE is evaluating the existence of the conditions for
a compensation action that, prima facie, appears feasible and, to this end,
leading law firms have been appointed to advise on the issue.
The subordination agreement between Riva Forni Elettrici and Riva Fire
In the financial statements drawn up by the demerged Riva Fire, there were
remaining debts amounting to approximately Euro 298 million toward the
banks. Such debts were entirely referred to the period prior to the demerger
and equal to the overall bank exposure of Riva Fire. In light of the particular
situation of the company resulting from the management of the commissioner
Riva Forni Elettrici, on 15th September 2014, paid the bank exposure following
a request by the lender bank to extinguish any loan. As a result, Riva Fire has
debts towards Riva Forni Elettrici and no longer towards the banking system.
Moreover, Riva Forni Elettrici has granted a postponement by accepting that
the reimbursement by Riva FIRE will be performed by means of the future
cash flows of the same and that the credit is subordinated and subject to the
claim of the other creditors, thus renouncing to the share which does not find
enough capacity in the Company’s assets.
The mentioned agreement also applies to the additional liabilities that might
arise towards Riva Fire as a result of a further value adjustment to the
remaining stake in ILVA S.p.A. (now under extraordinary administration) for
an initial amount of Euro 87 million, then integrated up to the amount of Euro
93 million.
Given the economic balance of the merged company Riva Fire, also in
light of the financial statement as of 31-12-2014 and the admission to the
procedure of voluntary liquidation, Riva Forni Elettrici integrally depreciated
the receivables towards Riva Fire (about 316 million) with the provision for
risks for an amount of Euro 99 million (as to Euro 93 million to the above
mentioned risk and, in addition, as to Euro 6 million for other risks).
The impact of the above-mentioned subordination agreement on the
consolidated financial statements of Riva Forni Elettrici
In light of the above, it should be noted that the item “Amortization and
depreciation” of the consolidated income statement for the financial
year taken into consideration reflects, therefore, extraordinary and not
reoccurring reserves for Euro 415 million related to the above-mentioned
measures, mainly as a result of the subordination agreements, in addition
to about Euro 10 million as a result of the impairment test carried out
by Riva Acciaio with reference to the activities of the Sellero plant that
manufactures steel for Innse Cilindri S.r.l. (controlled by ILVA S.p.A., also
admitted to the procedure of extraordinary administration).
- 33 -
Business outlook
In the light of the above considerations, and the data
gathered in the early months of the current financial year, it is reasonable
to assume that 2015 can achieve operating results in line with respect to
those of 2014. Evident are still some criticalities in some of the Countries
the RFE Group operates in and these aspects could adversely affect the
margins of the Group.
In the first quarter the following results were achieved:
2015
Turnover (in million Euros)
Tonnes of steel produced (in thousands)
852
2,060
Milan, 27th May 2015
Board of Directors
The President
- 34 -
2014
976
2,162
Bilancio consolidato
Consolidated financial statements
Consolidated income statement for the financial years
ended on December 31, 2014 and 2013 - (Note 1)
(In thousands of Euros)
2014
2013
3,674,576
3,722,455
3,608,668
3,694,569
(18,948)
(31,736)
84,856
59,622
4,105,505
3,767,953
2,910,091
3,004,538
Service costs
306,335
292,706
Payroll costs
284,422
275,318
Depreciation, amortization and other provisions
576,258
167,120
28,399
28,271
---------------
---------------
(430,929)
(45,498)
---------------
---------------
(19,882)
(13,879)
(69)
276
---------------
---------------
(450,880)
(59,101)
---------------
---------------
11,491
(1,198)
---------------
---------------
(439,389)
(60,299)
---------------
---------------
(1)
6
---------------
---------------
(439,390)
(60,293)
==========
==========
(20.86)
(2.86)
Value of production
(Note 20)
Net sales
Change in inventories of work-in-progress, semi-finished goods and finished products
Other revenues
Production costs
(Note 21)
Raw, ancillary and consumable materials
Other operating expenses
Operating margin
Financial charges, net
(Note 22)
Income from investments, net
Income (loss) before taxes
Income taxes
(Note 23)
Minority interests
Result of the year
Earnings per share (Note 12 - expressed in Euro)
The accompanying notes are an integral part of these consolidated financial statements.
- 37 -
Consolidated income statement for the financial years
ended on December 31, 2014 and 2013 - (Note 1)
Assets
Non-current Assets
2014
2013
708,721
778,477
(Note 4)
(Note 5)
1,026
816
660,804
734,256
and other investments
(Note 6)
66
19
Long-term financial assets
and other non-current assets
(Note 7)
46,825
43,386
1,363,159
1,486,728
622,941
656,173
603,760
706,412
12
13
134,646
122,582
1,800
1,548
---------------
---------------
2,071,880
2,265,205
==========
==========
Intangible assets
Investments in affiliates
Current assets
Inventories
Trade and other receivables
Short-term financial assets
Other current assets
Total assets
(Note 8)
(Note 9)
(Note 10)
(Note 11)
- 38 -
Consolidated Balance Sheets
as of December 31, 2014 and 2013 - (Note 1)
Liabilities and Group Equity
Group Equity
(Note 12)
Share capital
Translation reserve
2014
2013
665,755
1,104,947
210,600
210,600
(842)
(1,491)
455,997
895,838
Non-current liabilities
644,556
201,090
Passività non correnti
644.556
201.090
(Note 14)
(Note 15)
388,683
-
150,156
69,611
(Note 16)
(Note 17)
36,672
39,453
69,045
92,026
761,342
958,942
175,830
376,895
582,954
581,911
2,558
136
2,071,880
2,265,205
==========
==========
Other reserves and retained earnings
Long-term loans
Provisions for risks and charges
Provision for severance
indemnities and pensions
Deferred taxes
Current Liabilities
Short-term loans
Trade and other payables
Other current liabilities
Total liabilities and equity
(Note 18)
(Note 19)
- 39 -
Consolidated statements of cash flows - (Note 1)
2014
2013
(103,024)
126,95
(439,389)
(60,299)
474,072
134,781
Changes in provisions
124,566
59,610
---------------
---------------
159,249
134,092
(69,783)
(32,687)
(192,490)
25,547
(72,730)
(105,154)
(68,939)
(83,947)
(305)
(97)
(3,486)
(21,110)
422,657
(1,177)
422,604
-
(146)
(35)
199
(1,266)
-
124
---------------
---------------
Increase/ (decrease) in cash and cash equivalents, net
246,903
20,621
Cash and cash equivalents at the beginning of the year
(bank overdrafts), net
(254,299)
(274,920)
---------------
---------------
(7,396)
(254,299)
==========
==========
134,658
122,596
(142,054)
(376,895)
Cash flows provided (used) by operating activities
Adjustments for items not affecting cash flows
Payments of severance indemnities and utilization of provisions
Net change in working capital
Cash flows provided/ (used) in investing activities
Net investments in intangible assets
Net decrease in long-term receivables
Cash flows provided/ (used) by financing activities
Proceeds from long-term loans
Payment of long-term loans
Net change in other reserves and retained earnings
Net change in minority interests
Cash and cash equivalents at the end of the year
(bank overdrafts), net
Bank overdrafts
- 40 -
Consolidated statement of changes in Group Equity - (Note 1)
Capital
Balance as of January 1, 2013
Translation Other reserves and
Reserve
retained earnings
Total
210,600
-
955,866
1,166,466
=========
=========
=========
=========
Translation adjustments
-
(1,491)
-
(1,491)
Actuarial gains on benefits to employees
-
-
364
364
Other adjustments (note 12)
-
-
(99)
(99)
Net income
-
-
(60,293)
(60,293)
-------------
-------------
-------------
-------------
210,600
(1,491)
895,838
1,104,947
=========
=========
=========
=========
-
649
-
649
Actuarial gains on benefits to employees
-
-
(450)
(450)
Net income
-
-
(439,391)
(439,391)
-------------
-------------
-------------
-------------
210,600
(842)
455,997
665,755
=========
=========
=========
=========
Balance as of December 31, 2013
Balance as of December 31, 2013
The consolidated statement of changes in Group equity has been prepared on the basis of the net result of the year. The changes which have
not been directly recorded in the consolidated income statement were highlighted in the individual net equity entries. In order to present the
information thoroughly, it should be noted that the cumulative translation reserve change and the other changes in retained earnings are included
in the configuration of the consolidated comprehensive income statement provided for by IAS 1.
- 41 -
Consolidated comprehensive income statement
as of December 31, 2014 and 2013 - (Note 1)
Net income (loss)
2014
2013
(439,391)
(60,299)
649
(1,491)
(450)
364
199
(1,127)
---------------
---------------
(439,192)
(61,426)
---------------
---------------
(1)
6
---------------
---------------
(439,193)
(61,420)
==========
==========
Other items:
Translation adjustment
Actuarial gains
Other profit and loss account items
Comprehensive income statement
Minority net income (loss)
Total Group net income (loss)
- 42 -
Nota illustrativa
Notes to Consolidated financial statements
Notes to the consolidated financial statements for
the years ended December 31, 2014 and 2013
Introduction
The Riva Forni Elettrici Group is engaged in the field of
production and processing of steel. The Parent Company Riva Forni Elettrici
S.p.A. is located in Milan, in Viale Certosa 249.
About the reasons and aspects related to the birth of
the RFE Group, please refer to what has been illustrated in detail earlier
in the Business Report.
These consolidated financial statements have been prepared in
accordance with the International Financial Reporting Standards
(hereinafter “I.F.R.S.” or “International Accounting Standards”) issued by
the International Accounting Standard Board (I.A.S.B.).
These standards were adopted by the European Commission according
to the procedure outlined in art. 6/1606 of the European Parliament and
Council of July 19, 2002 and pursuant to Italian Legislative Decree n. 38
of February 28, 2005.
The International Accounting Standards adopted by the European
Commission may differ in certain aspects from those issued by the
International Accounting Standard Board (I.A.S.B.).
It should be noted that the I.F.R.S. adjustments regarding the preceding
years were accounted for with direct Equity consideration.
1.
Consolidated
financial
statements
structure and
content
The consolidated financial statements of the Riva Forni
Elettrici Group have been prepared through the consolidation of operating
companies and the holding companies, both Italian and foreign, where Riva
Forni Elettrici S.p.A. owns directly or indirectly the majority of the voting rights.
The financial statements used for the consolidation are generally those
prepared by the Boards of Directors of the individual companies for
approval by the respective board meetings, i.e. those which are approved
by the meetings themselves. These financial statements were adjusted
and reclassified to conform them to I.F.R.S. and uniform Group accounting
principles and valuation method.
The area of consolidation for the financial years ended December 31, 2014
and 2013 is shown in Appendix 1.
Corporate transactions that affected the Group during 2013 and 2014 are
the following:
2013
Amongst the corporate transactions that took place in 2013 we must
- 45 -
remember the transfer made by the German company Riva Stahl Gmbh for
the benefit of the newly-formed company Betonstahl Lampertheim Gmbh
and the purchase by third parties of 25% of the share capital of the Spanish
society Valorizacion de Aridos S.l by the Siderurgica Sevillana S.a.
2014
The merger by incorporation occurred of the company Riva Energia S.r.l.
in the company Muzzana Trasporti S.r.l. and the merger by incorporation
of the Belgian company Centre de Coordination Siderurgique S.A. in the
Luxembourg parent company Stahlbeteiligungen Holding S.A.
2.
Consolidation
principles
The most important consolidation criteria adopted
for the drawing up of the consolidated financial statements were the
following:
A. The carrying value of investments in consolidated subsidiaries is
eliminated against the related share of their shareholders’ equity;
assets, liabilities, income and expenses, are consolidated on a lineby-line basis.
B. The elimination of the book value of investments in subsidiaries as
indicated above is carried out on the basis of the current values at
the date of the purchasing of the subsidiary. Any positive difference
arising from elimination is accounted for as goodwill. Goodwill is not
depreciated but impaired at each reporting date in order to verify that
its book value does not exceed its recoverable amount. Any negative
difference arising from elimination is recognized in the consolidated
income statements.
C. Intercompany receivables, payables, costs and revenues, as well
as profit and appreciations which have not yet been realized are
eliminated.
D. Dividends distributed among the Group companies are written off
in the consolidated income statements. Any related tax credits are
shown as a deduction from income taxes of the financial year, up to
the amount payable.
E. Minority interests in consolidated subsidiaries are stated in a separate
line in the consolidated balance sheets and income statements.
F. The consolidated companies’ financial statements were prepared in
their respective local currencies. The financial statements denominated
in foreign currencies are translated into Euros as follows: income
statement items are translated at the yearly average exchange rates
which approximate the exchange rates in force on the date of the
- 46 -
respective operations; balance sheet items are translated at the
year-end exchange rates, except for the net income (loss) which is
translated at the yearly average exchange rates. Differences arising
upon translation are recorded as a component of Group equity under
“Translation reserve”.
The exchange rates applied for the translation of the foreign companies financial
statements prepared in currencies different from the Euro, are as follows:
Currency
Dollaro Canadese
3.
Accounting
principles and
valuation criteria
Average 2014
12.31.2014
Average 2013
12.31.2013
1.467
1.406
1.368
1.467
These consolidated financial statements were drawn
up on the basis of the historical cost convention. Currently there are no
transactions in financial derivatives.
Euro is the functional currency used. Values in the financial statements
and in the illustrative notes are expressed in thousands of Euros, unless
differently indicated.
Use of estimates
in preparing
the financial
statements
The drawing up of the consolidated financial statements and related notes requires the Directors to make estimates which
affect the stated values of the assets, liabilities, revenues and expenses,
and also of the contingent assets and liabilities on the date of Financial
Statement (such as depreciation and provisions). These estimates are based
on the going-concern assumption, and on the best information available
on the date they were made: the possibility cannot, therefore, be excluded
that events may occur which will cause the assumptions to change. The
effect of any changes in estimates will be recorded in the consolidated
financial statements as soon as they can be objectively determined.
Impairment of
assets
Assets’ values are verified for each financial statement
as of its closing date whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. In
this case, the asset is recorded at its recovery value, defined as the higher
of net price of sale and useful value, the latter estimated by discounting
the future cash inflows and outflows deriving from the continued use
of the asset and its final decommissioning. Where the reasons for any
impairment of assets recognized in earlier years no longer exist, the value
of the asset is restored, subject to a maximum of the original book value,
net of depreciation and write-downs.
Foreign currency
items
Revenues and expenses expressed in foreign currency
are translated into the functional currency at the exchange rate ruling
at the time of the underlying transaction; monetary assets and liabilities
expressed in foreign currency are translated into the functional currency
at the year-end exchange rate. Any resulting differences are charged to
- 47 -
the Income Statement. Non monetary assets and liabilities valued at cost
measured in foreign currency are translated into the functional currency
at the exchange rate ruling at the time of the transaction, while those
valued at fair value are converted at the exchange rate prevailing at the
time when the value is being determined.
Derivative
instruments
To hedge future cash flows related to the payment
of interest and commercial transactions in foreign currency derivative
contracts are stipulated. Changes in the fair value of hedging instruments
are recorded directly to equity reserves. The carrying amounts of the
hedged assets and liabilities are adjusted for changes in their fair value in
view of the risks covered.
The most significant valuation criteria used in preparing the consolidated
financial statements are as follows:
Intangible assets
Intangible assets are recorded at their purchase or
production cost and are amortized on a straight-line basis over their
estimated useful lives.
Business
combinations
Business combinations are recorded by posting the
difference between the cost of acquisition of the enterprise and the fair
value of its assets and liabilities to its assets and liabilities. If the business
combination involves the control of the acquired company, the above
non-attributed difference is posted to goodwill if positive or to the income
statement if negative. Subsequent share purchases after the Group has
acquired control, are posted to minority purchases and the differences
are offset to “Other reserves and retained earnings”. After the initial
posting, goodwill is not amortized and is posted net of any losses in value
determined according to the method described above.
Property, plant
and equipment
Property, plant and equipment are entered at their
purchase or production cost, net of accumulated depreciation on each item
and written down when necessary as a result of permanent impairments in
value, and also net of any capital grants received.
- 48 -
Where a tangible fixed asset includes significant components with different
useful lives, these components are entered as separate assets. The costs
sustained for the replacement and renewal of significant components are
entered separately. Parts replaced are written-off in full. The subsequent
costs on tangible fixed assets in use are recorded as an increase in the
value of the asset only when it is probable that future economic benefits
will arise that exceed the normal services obtained from the original assets.
All other expenses incurred subsequently are charged in full to the income
statement in the year in which they are sustained. Depreciation of tangible
assets in use is calculated on a straight-line basis at economic-technical
rates, which reflect the estimated useful life of the assets.
Fixed assets in the course of production and advance payments on fixed
assets are entered at cost; depreciation begins on the date when they
enter in use.
The main depreciation rates used are as follows:
Buildings
3-5%
Specific equipment and industrial plants
5-20%
Furnaces
6-18%
Fixtures
20-40%
Furniture and office equipment
10-20%
Means of transport
20-25%
Vessels
5-15%
Lands are not subject to depreciation.
Investments
Investments in entities where a significant influence
is exercised by the Group (generally investments between 20% and 50%
in a company’s equity) are accounted for under the equity method.
Inventories
Inventories are stated at the lower of purchase or
production cost (determined as average cost) and market or net realizable
value. Production cost includes raw materials, labour and all other direct
and indirect production overheads.
Receivables and
payables
Receivables and payables are shown at their face
value. Receivables are then adjusted to their net realizable value through
an allowance for doubtful accounts.
Financial assets
Financial assets are initially entered at cost and
thereafter stated at fair value. Any gains or losses arising from such
valuations are charged to the income statement.
Provisions for risks
and charges
Provisions for risks and charges cover liabilities whose
amount or effective date is uncertain, when a present obligation (legal or
constructive) exists as a result of a past event and it is probable that
an outflow of resources embodying economic benefits will be required
to discharge the obligation. Provisions are made according to the best
probable estimate of the total amount of the obligation. Provisions for risks
and charges are reviewed and adjusted at the end of each financial period.
- 49 -
Provisions
for severance
indemnities and
pensions
Consolidated companies have different pension
plans, based upon laws, regulations and labour contracts prevailing
in the countries where they operate. The most significant provisions for
severance indemnities and pensions relate to Italian companies. The
provision for severance indemnities and pensions reflects the present
value of the liabilities for benefits owed to employees, at the termination
date, considering demographic and financial actuarial assumptions. Such
provision is computed in the amount of benefits earned by each employee
in return to their service at each balance sheet date.
The profits and losses arising from changes in the actuarial assumptions
underlying the determination of the fair value of the liability are charged in
full to equity.
Revenues and
expenses
Revenues and expenses are accounted for on the
accrual basis. Revenues from sales of goods are recognized when the
transfer of risk and rewards of ownership has occurred.
Financial revenues
and expenses
Financial revenues and expenses are charged to the
income statement on the basis of the accrual principle.
Income taxes
Provision is made for current income taxes on the
basis of the best possible estimate of taxable income, taking into account
the tax regime and any tax allowances available in the individual countries.
They are stated in the Financial Statement net of any tax credits that may
be due. Deferred taxes are stated on the basis of the temporary timing
differences between the value of an asset or liability for tax purposes and
its balance sheet value. These are calculated using the fiscal depreciation
quotas applying in the various countries.
Due to the peculiar economic conditions of the steel industry, whose
profitability is strongly affected by cyclical trends, tax assets are
recognized only to the extent that the timing of their redemption is
reasonably foreseeable.
Segment
information
For management purposes, the Group’s activities are
organized in a single operating segment.
Commitments and
contingencies
Contingencies which are probable but for which the
amount cannot reasonably be estimated, or which are only possible, are
described in the notes to the financial statements, but no provision is set
aside for them. Remote contingencies are not taken into account.
- 50 -
Assets and
liabilities intended
for disposal
Assets or groups of assets and liabilities which meet
the criteria for classification as held for sale are stated separately on their
own lines in the balance sheet, at the lower of their carrying amount and
their presumed realizable value taking selling costs into account; any losses
are charged to the income statement. The net income of each individual
asset, group of assets or liability to be disposed of is stated separately on
its own line in the income statement.
Changes to
the accounting
standards issued
by the EU and
in force since
January 1,2014
As required by paragraph 28 of IAS 8 are listed
below and briefly explained the IFRS in force since January 1, 2013 with
potential effects on the Group.
The IASB and IFRIC have approved some changes to and interpretations
of IFRS, which were published in part in the Official Journal of the
European Union and applied for the first time to annual periods beginning
on or after 1st January 2014.
They have also approved some changes in interpretations already issued
but applicable to financial statements relating to periods beginning on or
after 1st January 2014.
The following accounting standards, amendments and interpretations have
been applied by the Group for the first time starting from January 1, 2014:
IFRS 10 - Consolidated Financial Statements
This standard replaces SIC-12 Consolidation – Special Purpose Entities
(SPVs) and some parts of IAS 27 - Consolidated and Separate Financial
Statements, whose title was changed to IAS 27 - Separate Financial
Statements and governs the accounting treatment of equity investments in
the separate financial statements.
The new IFRS 10 identifies the concept of control as the factor that
determines whether or not a company should be consolidated into the
Parent Company’s consolidated financial statements, and provides
guidance on determining the existence of control in difficult cases. This
standard has not had a significant impact on the information included in
these financial statements.
Transition guidance (IFRS 10, IFRS 11, IFRS 12)
On 28th June 2012, the IASB issued “Consolidated Financial Statements,
Joint Arrangements and Disclosure of Interests in Other Entities”, which
clarifies and simplifies the transition requirements for IFRS 10, IFRS 11 and
IFRS 12. This standard has not had a significant impact on the information
included in these financial statements.
- 51 -
IFRS 11 - Joint Arrangements
This standard replaces IAS 31 - Interests in Joint Ventures and SIC-13 –
Jointly Controlled Entities - Non-Monetary Contributions by Venturers. The
new standard sets out the criteria for identifying joint arrangements based
on the rights and obligations arising from the agreement rather than on the
legal form of the agreement itself, and establishes that equity investments
in jointly controlled entities may only be accounted for in the consolidated
financial statements using the equity method. This standard has not had a
significant impact on the information included in these financial statements.
IFRS 12 - Disclosure of Interests in Other Entities
This standard describes the additional information to be disclosed about
equity investments (subsidiaries, joint arrangements, associates, special
purpose entities and other unconsolidated structured entities). This
standard has not had a significant impact on the information included in
these financial statements.
IAS 27 - Consolidated and Separate Financial Statements
The amendment to IAS 27 sets out the standards to be applied when
accounting for investments in subsidiaries, joint ventures and associates
when preparing separate financial statements after the introduction of IFRS
10. This amendment has not had a significant impact on the information
included in these financial statements.
IAS 28 - Investments in Associates and Joint Ventures
The amendment to IAS 28 (as amended in 2011) sets out the criteria for
applying the equity method when accounting for investments in associates
and joint ventures. The standard has not had an impact on these financial
statements.
IFRIC 21 – “Levies”
The interpretation published on 20th May 2013 by the IASB applies to
financial statements beginning on or after 1st January 2014. IFRIC 21 is an
interpretation of IAS 37 - Provisions, Contingent Liabilities and Contingent
Assets, which stipulates one of the criteria for detecting a liability as the
entity having a current liability due to a past event (i.e. an obligating event).
The interpretation clarifies that the obligating event that gives rise to the
recognition of a liability to pay a levy is the activity that triggers the payment
of the levy, as identified by the legislation. This interpretation has not had a
significant impact on these financial statements.
Amendments to IAS 32 - Financial Instruments: Presentation
The amendments clarify certain requirements for offsetting financial assets
- 52 -
and financial liabilities. The amendments, published by the IASB in December
2011, were adopted by the European Commission in December 2012 and
apply to periods beginning on or after 1st January 2014. The amendments
have not had a significant impact on these financial statements.
Amendments to IAS 36 - Impairment of Assets
The amendments introduce slight changes to the disclosures required
under IAS 36, when the recoverable amount is determined using fair value
less costs of disposal.
When issuing IFRS 13 - Fair Value, the IASB also introduced some
amendments to IAS 36. One of the amendments has had a greater impact
than the IASB originally intended. Therefore, in addition to correcting this
issue, this amendment requires additional disclosures regarding fair value
when there has been value impairment or reversal.
The amendment specifically:
• removed the obligation to indicate the book value of goodwill and
intangible assets with an indefinite useful life when a CGU contains
goodwill or an intangible asset with an indefinite useful life when there
has not been impairment;
• requires disclosure of the recoverable value of an asset or a CGU when
an impairment or a reversal has been reported;
• requires detailed disclosure of how the fair value net of costs of disposal
has been measured when an impairment has or a reversal has been
reported.
Amendments to IAS 39 - Novation of Derivatives and Continuation of
Hedge Accounting
The amendments have introduced an exception to the requirements for
hedge accounting to be terminated in the event of novation of OTC
derivatives with a central counterparty. The amendment specifically
establishes that it is not necessary to discontinue hedge accounting in
the case of a “novated or changed” derivative that has been designated
as a hedging instrument if the following conditions are met:
• if, as a consequence of laws and regulations, the parties to a hedging
instrument agree that a central counterparty is the new counterparty of
the OTC;
• if, as a consequence of laws and regulations, one or more counterparties
replace the original counterparty to become their new counterparty;
• if any other changes in the hedging instrument are limited to those
necessary to effect such a replacement of the counterparty.
The changes introduced by the amendment therefore clarify that is
possible to continue to recognise “novated” hedging derivatives when the
replacement or rollover of the derivative into another hedging instrument is
not an expiration or temination of the previous instrument. The clarification
defines the stringent criteria for establishing whether such a replacement
- 53 -
or rollover is a termination, interruption or continuation of the contractual
effects of the original derivative.
This amendment has not had a significant impact on these financial
statements.
Accounting standards, amendments and interpretations not yet
applicable and not adopted in advance by the Group
IFRS 9 - Financial Instruments
The IASB issued this standard on 12th November 2009. At the reporting date,
the IASB had not set the effective date for the standard and the competent
bodies of the European Union had not yet completed the endorsement
process necessary for the application of the amendment. The amendments
concern the reporting and measurement criteria for financial assets and the
related classification in the financial statements.
Among other things, the new provisions establish a model for classifying
and measuring financial assets based solely on the following categories:
(i) assets measured at amortised cost;
(ii) assets measured at fair value. The new provisions also require equity
investments other than those in subsidiaries, joint ventures or affiliates
to be carried at fair value through profit or loss. Where such investments
are not held for trading, fair value changes may be recognised in the
statement of comprehensive income, with only the effects of the
distribution of dividends being recognised in the income statement.
When the investment is sold, the amounts carried in the statement of
comprehensive income do not need to be recognised in the income
statement.
Furthermore, on 28th October 2010, the IASB incorporated new requirements
into IFRS 9, including the criteria for recognising and measuring financial
liabilities. Among other things, the new provisions specifically require that,
when a financial liability is measured at fair value through profit or loss,
changes in fair value due to changes in the issuer’s credit risk (known as
“own credit risk”) must be recognised in the statement of comprehensive
income. This component is recognised in the income statement in order to
ensure a matching presentation of the other items relating to the liability,
and that there is no accounting mismatch.
The Group is currently evaluating the impact that the new standard may
have on future financial statements.
Annual Improvements to IFRSs 2010-2012 Cycle
The following amendments have been made in the 2010-2012 annual
improvements:
• IFRS 2: The definition of “vesting conditions” has been clarified, and
definitions of “service conditions” and “performance conditions” have
been introduced.
- 54 -
• IFRS 3: The standard has been amended in order to clarify that the
obligation to pay a contingent consideration comes under the definition
of a financial instrument and must be classified as a financial liability or
as an equity item based on the indications provided in IAS 32. It has
also been clarified that, unlike equity instruments, obligations to pay a
contingent consideration are measured at fair value at the reporting date,
and any changes recognised in the income statement.
• IFRS 8: The amendment requires information to be given about the
measurements carried out by management when aggregating operating
segments, specifying the segments that have been aggregated and the
economic indicators that have been assessed in order to determine that
the aggregated segments have similar economic characteristics. The
standard has also been amended to require that the notes to the financial
statements include a reconciliation between the assets of operating
segments and the total assets in the statement of financial position (the
information must be provided only if information is provided about the
assets of the operating segments).
• IAS 16 and IAS 38: both standards have been amended to clarify the
accounting treatment of historical cost and the accumulated depreciation
or amortisation of a fixed asset when an entity applies the revalued cost
model. It has been clarified that the alignment of the account carrying
amount to the revalued amount can be carried out in two ways; a) the
gross value of the asset is revalued and the value of the accumulated
depreciation or amortisation is revalued, if necessary proportionately; b)
the accumulated depreciation or amortisation is offset against the gross
value of the asset.
• IAS 24: The amendment introduced sets out the information to be provided
when a third party provides key management personnel services to the
reporting entity.
At the moment, it is expected that adopting these amendments will not
have a significant impact on the Group’s financial statements.
Annual Improvements to IFRSs 2011-2013 Cycle
The following amendments have been made in the 2011-2013 annual
improvements:
• IFRS 3: The amendment clarifies that IFRS 3 is not applicable when
recognizing accounting impact of setting up a joint venture or joint operation
(as defined by IFRS 11) in the financial statements of the joint venture or
joint operation.
• IFRS 13: It has been clarified that the provision of IFRS 13 according to
which it is possible to measure the fair value of a group of financial assets
and liabilities on a net basis applies to all the contracts (including nonfinancial contracts) covered by IAS 39 or IFRS 9.
• IAS 40: The amendment introduced clarifies that the provisions of IFRS 3
must be referred to when determining when the purchase of an investment
property constitutes a business combination.
It is currently believed that adopting these amendments will not have a
significant impact on the Group’s financial statements.
- 55 -
The IASB also issued the following amendments, for which the European
Union had not completed the endorsement process by the date of these
financial statements.
Lo IASB ha emesso inoltre i seguenti emendamenti, il cui processo di
omologazione da parte dell’Unione Europea non risulta ancora concluso
alla data del presente Bilancio.
Investment entities (IFRS 10; IFRS 12 and IAS 27)
On 31st October 2012, the IASB issued the document “Investment Entities”,
which regulates the activities carried out by specific types of companies
classified as investment entities. The IASB considers investment entities to
be companies that invest with the sole capital appreciation or investment
income or both. The provisions will be effective from financial years
beginning on or after 1st January 2014.
The amendment to IAS 19 - Employee Benefits concerns the accounting
purpose for defined benefit plans involving contributions from third parties
or employees.
The plan to revise the accounting standard on financial instruments was
completed with the issue of the full version of IFRS 9 - Financial Instruments.
The new provisions amend the way financial assets are classified and
measured. They introduce the concept of expected loss among the variables
to take into consideration in the measurement and writing down of financial
assets, and amend the provisions on hedge accounting. The provisions will
be effective from financial years beginning on or after 1st January 2018.
IFRS 15 - Revenue from Contracts with Customers: the standard
requires companies to recognise revenue when control of the goods or
services, the customer obtains control at an amount that reflects the
consideration which is expected to be received in exchange for such
goods or services. The standard replaces IAS 18, IAS 11 and the following
interpretations: IFRIC 13, IFRIC 15, IFRIC 18 and SIC 31. It applies to all
contracts with customers except for agreements that come within the
scope of IAS 17, IFRS 4 or IAS 39/IFRS 9.
IFRS 14 - Regulatory Deferral Accounts concerns rate regulated
activities, i.e. sectors subject to rate regulation. It only allows first-time
adopters of IFRS to continue to recognise regulatory deferral account
balances according to the previous accounting standards used. In order
to improve comparability with entities applying IFRS that do not recognise
these amounts, the standard requires the effect of rate regulation to be
presented separately from other items.
IAS 16 - Property, Plant and Equipment and IAS 38: the IASB has clarified
that a depreciation process based on revenue cannot be applied to property,
plant and equipment, as this method is based on factors that do not represent
the effective consumption of the economic benefits of the underlying asset.
- 56 -
Amendments to IAS 27 - Separate Financial Statements: the
amendment allows the entity to use the equity method in its separate
financial statements to value investments in subsidiaries, joint ventures
and associates.
Amendments to IFRS 11, Accounting for Acquisitions of Interests in
Joint Operations: this amendment requires an entity to adopt IFRS to
measure the accounting effects of acquiring an interest in a joint operation
that constitutes a business.
The document Disclosure Initiative - IAS 1 Amendments clarifies some
aspects regarding the presentation of financial statements by highlighting
the importance of financial statement disclosures and specifying that
there is no longer a specific order for the presentation of the notes to the
financial statements, as well as introducing the possibility of aggregating
or separating financial statement items, so that items considered to be
minimum content under IAS 1 can be aggregated if considered not material.
IFRS 9 - Financial Instruments:this standard replaces IAS 39 and contains
a model for measuring financial instruments based on three categories:
amortised cost, fair value and fair value through OCI. The standard includes
a new impairment model that is different from the one currently used in IAS
39 and is mainly based on expected loss.
Finally, the Annual Improvements to IFRSs 2012-2014 Cycle should be
mentioned. This mainly amends some accounting standards by clarifying
some areas that were unclear. They mainly refer to IFRS 5 - Non-current
Assets Held for Sale and Discontinued Operations, IFRS 7 - Financial
Instruments: Disclosures, IAS 19 - Employee Benefits and IAS 34 - Interim
Financial Reporting.
The Group is currently evaluating the impact, if any, of the above standards
and amendments on future financial statements.
- 57 -
4.
Intangible
assets
The handling of this item is the following (in thousands
of Euro):
Other intangible
fixed assets
Net value at January 1, 2013
863
========
Net increases
Amortization and impairment
97
(144)
------------
Net value at December 31, 2013
816
========
Net increases
305
Amortization and impairment
(95)
------------
Net value at December 31, 2014
1,026
========
- 58 -
5.
Property, plant
and equipment
The handling of this item is the following (in thousands
of Euro):
Land and
buildings
Net value at
January 1, 2013
Industrial & Construction Other
Commercial in progress and fixed
equipment
Advances
assets
Plant and
Machinery
211,064
511,873
30,239
=======
========
=======
929
18,029
812
(19,847)
77
-
-
-
-
-
-
-
4,801
(148)
46,033
(3,754)
8,254
(1,810)
18,615
(26)
6,699
(1,257)
84,402
(6,995)
Accumulated Depreciation
Increases
(15,461)
Decreases
63
(104,896)
3,727
(8,429)
1,617
-
(5,851)
1,250
(134,637)
6,657
(42)
(72)
-
-
(4)
(118)
-----------
------------
-----------
----------- -----------
------------
201,206
470,940
30,683
=======
1,110
-
========
17,354
-
=======
1,518
-
4,895
(344)
-
28,570
(2,876)
(10,499)
10,618
(2,575)
(27)
18,813
(101)
-
6,108
(2,281)
(15)
69,004
(8,177)
(10,541)
Accumulated Depreciation
Increases
(13,815)
Decreases
233
(103,089)
2,823
(9,501)
2,498
-
(5,437)
2,274
(131,842)
7,828
15
20
-
-
1
36
-----------
------------
-----------
----------- -----------
------------
193,300
403,243
33,214
=======
========
=======
Reclassifications
Change in consolid. area
Gross value of assets
Increases
Decreases
Net value at
December 31, 2013
Reclassifications
Change in consolid. area
Gross value of assets
Increases
Decreases
Impairment
Net value at
December 31, 2014
16,359
15,412
Total
784,947
======= ======= ========
15,101
16,326
734,256
======= ======= ========
(19,990)
248
240
-
13,823
17,224
660,804
======= ======= ========
- 59 -
The main changes in property, plant and equipment
which occurred during 2013 and 2014 are summarized as follows:
2013
Main additions relate to the investments made at Brandenburg (EUR 13
million), Neuves Maison (EUR 11 million), Montereau (EUR 11 million),
Lesegno (CN) (EUR 7 million), Gargenville (EUR 7 million), Seville (EUR 6
million), Bonnieres sur Seine (EUR 6 million), Verona (EUR 5 million) and
Hennigsdorf (EUR 3 million).
2014
Main additions relate to the investments made at Neuves Maison (EUR 14
million), Montereau (EUR 8 million), Seville (EUR 8 million), Bonnieres sur Seine
(EUR 6 million), Hennigsdorf (EUR 6 million), Brandenburg (EUR 5 million),
Gargenville (EUR 5 million), Charleroi (EUR 4 million) and Verona (EUR 3 million).
As indicated below (note 24), mortgages are present on some buildings in
favour of financial institutions.
Riva Acciaio carried out the impairment test for each of the Cash Generating
Units (CGUS), as defined within the activities. The results of these tests have
led to a full devaluation of installations relating to work performed on behalf of
third parties at the Sellero plant, for a total amount of Euro 10.5 million.
6.
Investments
in affiliates
and other
investments
The balance at December 31 includes (in thousands
of Euro):
% held
2014
2013
Metal Interconnector S.c.p.a.
Immobiliare Siderurgica S.r.l.
Other investments
Total
- 60 -
6.660
12.443
12.443
Value at December 31
2014
2013
52
11
11
3
6
----------
----------
66
19
=======
=======
7.
Long-term
financial assets
The balance at December 31 includes (in thousands
of Euro):
Guarantee deposits
Other long-term financial assets
Deferred tax assets
Total
2014
2013
2,390
1,729
621
17
43,814
41,640
----------
----------
46,825
43,386
=======
=======
Deferred tax assets are entered on past tax losses which have become
usable without any time limit and are related to foreign companies for
Euro 10.4 million (Euro 20.9 million in 2013) and Euro 33.4 million to Italian
companies (Euro 20.7 million in 2013); as regards the tax losses of Riva
Acciaio, accrued in the years until 2012 and arising from the procedure
of the so-called “tax consolidation” of which Riva Fire S.p.A. (now in
liquidation) was the parent company, regarding which a fund on risks
of an equal amount was constituted, the eligibility was confirmed by the
Agenzia delle Entrate as a result of a tax clearance application.
- 61 -
8.
Inventories
This caption, at year-end, can be detailed as follows
(in thousands of Euros):
Scrap
Refractory products and alloys
Spare parts and sundry materials
Provision for obsolete and slow-moving inventories
Total raw materials and spare parts
Work-in-progress and semi-finished goods
Long-rolled products
Provision for obsolete and slow-moving inventories
Total finished products
Advances
Totale
- 62 -
2014
2013
243,960
19,773
170,942
(40,230)
-----------394,445
-----------52,783
------------
249,937
19,486
165,552
(30,284)
-----------404,691
-----------53,465
------------
175,557
(321)
-----------175,236
------------
196,757
(56)
-----------196,701
------------
477
1,316
------------
------------
622,941
========
656,173
========
9.
Trade and other
receivables
The breakdown of trade and other receivables is as
follows (in thousands of Euros):
2014
2013
566,497
675,828
2
1
34
-
--------------
--------------
566,533
675,829
--------------
--------------
(23,328)
(11,748)
--------------
--------------
543,205
664,081
--------------
--------------
53,157
31,488
892
1,703
323,935
9,151
--------------
--------------
377,983
42,342
--------------
--------------
(317,429)
(11)
--------------
--------------
60,554
42,331
--------------
--------------
603,730
706,412
=========
=========
Trade receivables.
Due from clients
Due from affiliates
Advances to suppliers
Total trade receivables
Allowance for doubtful accounts
Total trade receivables, net
Other receivables:
Tax credit
Due from social security agencies
Others
Total other receivables
Allowance for doubtful accounts
Total other receivables (net)
Total trade and other receivables
Tax credits mainly include income taxes for Euro
1.5 million (Euro 2.5 million in 2013) and VAT credits for Euro 35.7 million
(Euro 11 million in 2013).
The Other debtors entry includes receivables towards Riva Fire Spa in
liquidation related to the debt taking over towards credit institutions
for Euro 309.2 million, payments made on behalf of Riva Fire Spa in
liquidation in favour of third parties for Euro 5.8 million and receivables
related to the spin-off equalization towards Riva Fire Spa in liquidation for
Euro 2 million.
Such receivables toward Riva Fire Spa in liquidation have been the
subject of value adjustments for a total of €/000 317,418.
- 63 -
10. Short-term
financial assets
The balance of short-term financial assets includes
(in thousands of Euro):
2014
Other financial assets
Total
2013
12
13
------------
------------
12
13
=======
========
The heading Other financial assets relates to receivables for interest
on the financing granted by the subsidiary Riva Acciaio to the owned
company Immobiliare Siderurgica.
11. Cash and cash
equivalents
The balance of cash and cash equivalents includes
(in thousands of Euros):
Petty cash
Bank and postal deposits
Total
2014
2013
41
41
134,605
122,541
------------
------------
134,646
122,582
=======
========
In the 2013 Bank and postal deposits entry were included also balances
of the sums directed to the FUG, as a result of the seizures described in
the introductory part, amounting to approximately Euro 61 million. Sums
that were released only in the first quarter of 2014.
12. Group Equity
Riva Forni Elettrici S.p.A. share capital, issued and
fully paid in, consists of 21,060,000 ordinary shares with a nominal value
of Euro 10 each, with equal rights and no restrictions.
The other reserves and retained earnings of some
consolidated companies include suspended tax reserves arising from
the application of laws of the individual countries, as well as reserves of
undistributed profits that would be subject to taxation in the event of a
distribution. No burden for deferred taxes has been allocated for such
reserves as the tax systems and the losses of companies potentially
involved in their distribution do not account their taxation (note 17).
- 64 -
The other reserves and retained earnings, as of 31st
December 2014, show an increase of 0.2 million euro (a decrease of 1.2
million Euro in 2013) on the effect of the conversion of financial statements
in a foreign currency for an increase of Euro 0.6 million (decrease for Euro
1.5 million in 2013) and to the actuarial gains according to IAS 19 for a
decrease of Euro 0.4 million (an increase of 0.4 million euro in 2013).
The earning per share is negative for Euro 20.86
(negative for Euro 2.86 in 2013) and it was calculated by dividing the
result of the year for the number of shares of Riva Forni Elettrici S.p.A.
The Board of Directors of May 27th 2015, which
approved the financial statements 2014 of the Parent Company Riva
Forni Elettrici S.p.A., has not proposed any dividend distribution.
13. Minority interests
For the year 2014 the variation in minority interests
reflects only the minority interest in the operating result of consolidated
companies. For the year 2013, the variation was related to the minority
interest in the operating result (negative for Euro 6 thousands) of the
consolidated companies and a variation of the reserves determined by
subscription failure of increases in equity of some German subsidiaries
by minority shareholders (positive for Euro 124 thousands).
14. Long-term loans
Long-term financial debts can be analysed as
follows (in thousands of Euro):
2014
Interest Rates
(indexed on the Euribor
at 6 months)
Interest Rates
-
-
Long-term loans
422,459
Less - current quota
(33,776)
-
-
------------
------------
------------
388,683
-
-
========
========
========
Total
2.80% - 3.19%
2013
- 65 -
The deadlines for the long-term financial debts are the following (in
thousands of Euro):
2014
2013
From 1 to 2 years
33,897
-
From 2 to 3 years
34,023
-
From 3 to 4 years
53,928
-
From 4 to 5 years
54,116
-
Over 5 years
Total
212,719
-
------------
------------
388,683
-
========
========
Long-term loans are backed by warranties set forth in Note 24, and, in
some cases, are subject to compliance with “covenants”.
15. Provisions for
risks, charges
and contingent
liabilities
The operations for the financial year 2013 and 2014
are the following (in thousands of Euro):
Provisions for
risks and
charges
Balance at January 1, 2013
42,009
========
Increases
30,872
Decreases
(3,270)
------------
Balance at December 31, 2013
69,611
========
Increases
105,099
Decreases
(24,554)
------------
150,156
========
- 66 -
The entry provisions for risks and charges
formed as follows (in thousands of Euro)
is
2014
2013
Environmental liabilities
33,772
33,201
Legal disputes and contractual, fiscal and other contingencies
11,469
10,728
104,915
25,682
------------
------------
150,156
69,611
========
========
Others
Total
The provision for environmental liabilities reflects
primarily the estimate of future remediation and waste disposal costs of
sites in Germany for Euro 25.8 million (Euro 24.5 million in 2013), Italy for
Euro 7.5 million (Euro 8.3 million in 2013) and France for Euro 0.4 million
(Euro 0.4 million in 2013).
The provision for legal disputes and contractual,
fiscal and other contingencies is mainly due to work-related disputes.
Other provisions relate mainly to the parent company
Riva Forni Elettrici S.p.A. (Euro 99.3 million) and correspond to the overall
balance of the spending commitment that the company has taken in regard
to Riva Fire Spa in liquidation.
Contingent liabilities are composed of the risks arising
from the demerger operation, following the subsidiary responsibility of the
parent company, within the limits of the equity assigned to it, for liabilities
existing prior to the demerger. No specific provisions were made for contingent
liabilities, as an outgoing of resources cannot be predicted or quantified.
- 67 -
16. Provision for
severance
indemnities and
pensions
Changes in the provision for severance indemnities
and pensions for the financial years 2013 and 2014 are the following (in
thousands of Euro):
Provision for severance
indemnities and
pensions
43,214
========
Increases
8,424
Decreses
(12,185)
------------
39,453
========
Increases
13,423
Decreses
(16,204)
------------
36,672
========
The provision for severance indemnities and
pensions reflects the current value of liabilities for benefits due to employees,
at the date of the termination of the work contract, considering demographic
and financial actuarial assumptions and is summarized below:
Recruitment
2014
2013
Mortality rates
ISTAT SIMF91 Table
ISTAT SIMF91 Table
Inflation rates
The cost of living index for the year
2014, linear variation from 2014
at predictive value 2015
(source: DEF 2014);
From 2016 constant rate
The cost of living index for the year
2013, linear variation from 2013
at predictive value 2015
(source: DEF 2013);
From 2016 constant rate
Salary increases
No salary increase
No salary increase
Turnover,
Rates inferred from observation of the Rates inferred from observation of the
Retirement, employment historical data of the Group’s companies historical data of the Group’s companies
contract expiration
and advances
Interest Rates
- 68 -
risk free rate Curve +
spread 0.15%
risk free rate Curve +
spread 0.15%
Actuarial gains and losses deriving from the change in the assumptions
underlying the determination of the current value of liabilities are
recognized to equity.
The economic components for the adjustments of the liabilities in relation
to the provision for severance indemnities and pensions were classified
among personnel costs (Euro 17.4 million in 2014 and 16.3 million in
2013) and amongst financial charges (Euro 38 thousands in 2014 and
Euro 69 thousands in 2013).
17. Deferred taxes
The variation of deferred taxes is the following (in
thousands of Euros):
Deferred
tax liabilities
88,943
========
Increases
14,205
Decreases
(11,122)
------------
92,026
========
Increases
Decreases
4,705
(27,686)
------------
69,045
========
The provision for deferred taxes includes the net tax
liability related to the temporary differences between individual company’s
carrying amounts of asset and liabilities and their corresponding tax base.
As indicated in Note 3 (“Accounting principles and valuation criteria”),
the consolidated financial statements as of December 31, 2014 do not
include deferred tax assets relating to non-deductible provision and other
temporary deductible differences for Euro 17 million (Euro 50 million in
2013).
The consolidated financial statements as of 31st December 2014 do not
reflect the allocations of deferred taxes for Euro 9 million (Euro 16 million
in 2013) on the undistributed earnings belonging to foreign consolidated
companies, which would undergo taxation in the event of a distribution,
since the tax systems and the losses of companies potentially interested
- 69 -
in their distribution do not account for their taxation.
As far as the Italian companies’ undistributed reserves are concerned, the
Group is subject to the tax consolidation regime on a national basis and
thus taxation is almost completely excluded in the case of distribution.
The provision for deferred taxes is formed as such (in
2014
2013
37,256
42,103
Inventories
28,780
49,012
3,009
911
------------
------------
69.045
92.026
========
========
Tax effects related to temporary
differences for:
Other differences
Totale
This entry is as follows (in thousands of Euro):
18. Short-term loans
Short-term debts and bank loans
Current quota of long-term
loans (note 14)
Total
2014
2013
142,054
376,895
33,776
-
------------
------------
175,830
376,895
========
========
Loans from banks and other lenders are regulated by interest rates
varying between 2.9% and 8.8% (between 2% and 7% in 2013).
- 70 -
19. Trade and other
payables
The balance of trade and other payables may be
analyzed as follows (in thousands of Euro):
2014
2013
504,687
493,024
964
8,268
------------
------------
Trade payables:
Due to suppliers
Advances from customers
Total trade payables
505,651
501,292
------------
------------
Due to tax authorities
24,201
24,996
Due to social security institutions
16,697
21,395
Due to personnel
27,728
30,441
8,677
3,787
------------
------------
77,303
80,589
------------
------------
582,954
581,911
========
========
Other payables:
Others
Total other payables
Total trade and other payables
Due to tax authorities mainly includes liabilities for
income taxes for the fiscal year for Euro 7.7 million (Euro 3.6 million in
2013), withholding taxes on the wages of the employees for Euro 2.4
million (Euro 2.2 million in 2013) and VAT payables for Euro 7.1 million
(Euro 13.3 million in 2013).
- 71 -
20. Value of
production
Net sales per country of origin, net of the infra-group
sales, can be summarized as follows (in thousands of Euros):
2014
2013
746,550
741,669
1,201,565
1,185,334
France
971,948
1,076,969
Spain
320,325
327,014
Belgium
358,150
360,558
Canada
10,130
3,025
------------
------------
3,608,668
3,694,569
========
========
Italy
Germany
Total
Other revenues amounted to Euro 84.9 million in 2014
(Euro 59.6 million in 2013) and mainly include fees related to the consumption
of electricity for Euro 30.7 million (Euro 27.2 million in 2013), recovery of various
charges for Euro 35.1 million (Euro 14.7 million in 2013), capital gains for Euro
0.8 million (Euro 0.4 million in 2013).
21. Production
costs
Raw, ancillary and consumable materials are
identifiable as follows (in thousands of Euros):
Raw Materials
Energy
Semi-finished and finished goods
Metals, iron alloys, fluxes and refractory
Spare Parts
Others
2014
2013
2,161,755
2,249,005
378,017
385,336
12
1,079
112,677
111,287
68,390
65,273
178,265
183,192
Change in raw, ancillary
and consumable materials
- 72 -
10,275
9,366
------------
------------
2,910,091
3,004,538
========
========
Service costs include (in thousands of Euros):
2014
2013
186,116
181,834
Maintenance
56,357
47,912
Sundry services
37,047
37,248
General and administrative costs
12,903
11,737
Others
13,912
13,975
------------
------------
306,335
292,706
========
========
Transport and sales commissions
Total
The service costs includes the amounts due to the members of the
Parent Group’s Board of Auditors which were stated by the Shareholders’
meeting amounting to Euro 78 thousands (Euro 75 thousands in 2013).
There are also fees relevant to the years 2014 and 2013 for the auditing
services rendered by Mazars S.p.A. for Euro 16 thousands.
The payroll costs are formed as such (in thousands
of Euros):
2014
2013
199,131
192,487
Social Security
64,320
62,391
Provision for severance indemnities and pensions
17,383
16,238
3,587
4,202
------------
------------
284,422
275,318
========
========
Salaries and wages
Others
Total
- 73 -
22. Financial
charges, net
Financial charges, net are reported below (in
Interest expense and financial charges
Discounting losses
Foreign exchange losses
Total financial charges
2014
2013
(18,188)
(14,056)
(2,116)
(894)
(529)
(349)
------------
------------
(20,833)
(15,299)
------------
------------
Interest income and financial income
366
120
Foreign exchange gains
585
1,300
------------
------------
951
1,420
------------
------------
(19,882)
(13,879)
========
========
Total financial income
Total
During the year Euro 16.1 million were paid on interest
expense (Euro 11.1 million in 2013) and Euro 282 thousands were received as
interest income (Euro 58 thousands in 2013).
23. Income taxes for
the year
This item includes the allocation of current taxes
for the year for Euro 15.2 million (Euro 8 million in 2013) and a release
of deferred taxes for Euro 22.5 million (provision for Euro 3.1 million in
2013). In 2014 for Euro 4.2 million were accounted for deferred tax on tax
losses (Euro 9.9 million in 2013).
During the 2014 financial year Euro 9.6 million of income taxes were paid.
Deferred taxes derived mainly from temporary differences concerning the
values of consolidated financial assets and liabilities and their respective
taxable values.
Below is the reconciliation between the theoretical tax charge obtained
by applying the Italian tax rate to the economic result before tax and the
overall tax charge accounted in the consolidated financial statements (in
thousands of Euro):
- 74 -
Income (loss) before taxes
Theoretical tax charge:
IRES (National income tax) - 27.5%
IRAP (Local income tax) - 3.9% *
Effects resulting from the differential between the theoretical tax rate
and those in force, as a function of the rules
apply in individual countries in which the Group operates
Effect of non-taxable earnings deriving from the valuation
of investment with the equity method
Effect of non-deductible charges, net
Tax effects of temporary deductible differences
and tax losses to be carried forward
Total income tax for the year
2014
2013
(450,880)
------------
(59,101)
------------
(123,992)
345
-----------(123,647)
(16,253)
998
-----------(15,255)
(49,187)
6,351
-
-
45,831
6,249
115,512
-----------(11,491)
3,853
-----------(1,198)
========
========
* The tax base IRAP is different from the IRES one.
24. Commitments
and guarantees
Commitments and guarantees as at December 31,
2014 are represented by:
- guarantees for Euro 32.9 million (Euro 35.5 million in 2013), mainly
relating to guarantees and letters of patronage;
- collaterals, supplied for payables entered in the balance sheet, for Euro
467.0 million, for mortgages on land, buildings and industrial plants and
share pledges;
25. Derivatives
On December 31, 2014 and 2013 the Group has no
existing derivative contract.
26. Segment
information
The Riva Forni Elettrici Group operates in a single
production sector, therefore no information is provided as segment
information, nor information per geographic area as more than 90% of
the Group’s activities are carried out within the EU, which is viewed by
management as a common market.
- 75 -
List of companies included
in the 2014 and 2013 consolidation
Appendix 1
Companies fully consolidated on a line-by-line basis (Note 1)
Name
Production and
processing
companies
Headquarters
Business
Consolidation
%
2014
2013
Italy:
Riva Acciaio S.p.A.
Milano, Italia
Steel production
100.00
100.00
Trading
Abroad:
Service centres and
trading Companies
- 76 -
Aciérs de Construction Rationalisés – Acor S.A.S.
Creil, France
Processing
100.00
100.00
Aciéries et Laminoirs de Paris S.A.S.
Gargenville, France
Steel production
100.00
100.00
Associated Steel Industries Ltd.
Ville St Catherine, Canada
Crushing
100.00
100.00
Betonstahl Lampertheim GmbH
Hennigsdorf, Germany
Steel production
100.00
100.00
Brandenburger Elektrostahlwerke GmbH
Brandenburg, Germany
Steel production
99.886
99.886
Iton Seine S.A.S.
Bonnieres sur Seine, France Steel production
100.00
100.00
Hennigsdorfer Elektrostahlwerke GmbH
Steel production
99.886
99.886
Sam Montereau S.A.S.
Montereau, France
Steel production
100.00
100.00
Siderurgica Sevillana S.A.
Siviglia, Spain
Steel production
100.00
100.00
Société des Aciérs d’Armature pour le Beton S.A.S.
Neuves Maisons, France
Steel production
100.00
100.00
Thy Marcinelle S.A.
Charleroi, Belgium
Steel production
100.00
100.00
Trefileries de Fontaine L’Eveque S.A.
Fontaine L’Eveque, Belgium Processing
100.00
100.00
Parsider S.A.
Gargenville, France
Trading
100.00
100.00
Riva Aciér S.A.
Gargenville, France
Trading
100.00
100.00
Riva Stahl GmbH
Trading
100.00
100.00
Abroad:
Headquarters
Business
Consolidation
%
2014
2013
Muzzana Trasporti S.r.l.
Caronno Pertusella, Italy
Transport
100,00
100,00
Riva Energia S.r.l.
Milano, Italy
Energy
0,00
100,00
Name
Service Companies
Italy:
Abroad:
Holdings
Brand. Suedstreifen Vermoegensverw. GmbH
Brandenburg, Germany
Real Estate
99,886
99,886
Centre de Coordination Siderurgique S.A.
Mont sur Marchienne, Belgium
Services
0,00
100,00
Hierros del Sur S.A.
Siviglia, Spain
Services
100,00
100,00
Valorizacion de Aridos S.l.
Siviglia, Spain
Services
100,00
100,00
Milano, Italy
Holding
100,00
100,00
Stahlbeteiligungen Holding S.A.
Luxembourg
Holding
100,00
100,00
B.E.S/H.E.S. Stahlbeteiligungen GmbH
Real Estate
90,00
90,00
Henn. Real Estate & CO KG
Real Estate
98,10
98,10
Brand. Real Estate & CO KG
Real Estate
98,10
98,10
Italy:
Riva Forni Elettrici S.p.A.
Abroad:
- 77 -
Relazione della Società di Revisione
e del Collegio Sindacale
Auditor’s report
Auditor’s Report on the consolidated financial statements pursuant
to Art. 14 of Lgs. Decree n. 39, of 27 January 2010
To the Shareholders of
RIVA FORNI ELETTRICI S.p.A.
1. We have audited the consolidated financial statements of RIVA FORNI ELETTRICI S.p.a.,
and its subsidiaries (RIVA FORNI ELETTRICI Group) as of and for the year ended
December 31st , 2014, which comprise the statement of financial position, the income
statement, the statement of changes in equity, the statement of cash flows and the related
explanatory notes. These consolidated financial statements prepared in accordance with
International Financial Reporting Standards (“IFRS”) as adopted by the European Union are
the responsibility of the RIVA FORNI ELETTRICI S.p.A’s Directors. Our responsibility is to
express an opinion on these consolidated financial statements based on our audit.
2. We conducted our audit in accordance with the Auditing Standards issued by the Italian
Accounting Profession (CNDCEC) and recommended by Consob. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by the Directors, as well as evaluating the
overall financial statements presentation. We believe that our audit provides a reasonable
basis for our opinion.
For the opinion on the prior year’s consolidated financial statements, the data of which are
presented for comparative purposes, reference should be made to our auditor’s report
issued on June,10th, 2014.
3. In our opinion, the consolidated financial statements of RIVA FORNI ELETTRICI Group as
of December,31st, 2014 comply with the International Financial Reporting Standards as
adopted by the European Union; accordingly, they give a true and fair view of the financial
position, of the results of operations and of the cash flows of the RIVA FORNI ELETTRICI
Group for the year then ended.
4. Attention is drawn to the following circumstances:
a) In the Report on Operations the Directors recall that also in 2014 RIVA FORNI
ELETTRICI was involved in some judicial events inherent the demerge of the company
Riva Fire S.p.A. and its subsidiary Ilva S.p.A.. Furthermore, the Directors recall that
Riva Fire S.p.A. is also part in various civil, criminal and administrative procedures,
pending or threatened, that derive from events which occurred prior to 1st January 2013
(effective date of the demerger of Riva Fire in favour of Riva Forni Elettrici S.p.A.).
Some of those proceedings towards Riva Fire S.p.A. are potential (and actually latent)
sources of asset responsibility also for Riva Forni Elettrici.
M AZARS S PA
S EDE L EGALE : V IALE A BRUZZI , 94 - 20131 M ILANO
T EL : +39 02 58 20 10 - F AX : +39 02 58 20 14 03 - www.mazars.it
SPA - CAPITALE SOCIALE € 1.000.000,00 I.V.
REG. IMP. MILANO E COD. FISC. / P. IVA N. 03099110177 - REA DI MILANO 2027292
ISCRITTA AL REGISTRO DEI REVISORI LEGALI AL N. 41306 CON D.M. DEL 12/04/1995 G.U. N.31BIS DEL 21/04/1995
U FFICI I N I TALIA : B ARI - B OLOGNA – B RESCIA - F IRENZE - G ENOVA – M ILANO - N APOLI - P ADOVA - P ALERMO - R OMA – T ORINO
RIVA FORNI ELETTRICI, moreover, within the limits of the assets assigned to it, is
responsible, without prejudice, for the debts of the demerged company, prior to the
demerger itself, which should remain unsettled.
5. The Directors of RIVA FORNI ELETTRICI S.p.A are responsible for the preparation of the
Report on Operations in accordance with the applicable laws and regulations. Our
responsibility is to express an opinion on the consistency of the Report on operations with
the consolidated financial statements, as required by law. For this purpose, we have
performed the procedures required under Auditing Standard n. 001 issued by the Italian
Accounting Profession (CNDCEC) and recommended by Consob. In our opinion, the
Report on operations is consistent with the consolidated financial statements of RIVA
FORNI ELETTRICI Group as of and for the year ended December 31st, 2014.
Milan, June 11th, 2015
Signed by Simone Del Bianco
Partner
This report has been translated into the English language solely for the convenience of
international readers
Riva Forni Elettrici S.p.A.
Share Capital 210.600.000 Euro fully paid up
Registered Office in Viale Certosa n. 249 – Milan
Registration Number and Tax Code: 07969220966
REPORT OF THE BOARD OF STATUTORY AUDITORS TO THE SHAREHOLDERS’ MEETING
FOR THE FINANCIAL STATEMENT AND FOR THE CONSOLIDATED FINANCIAL STATEMENT
PURSUANT TO ARTICLE 2429 N. 2 OF THE ITALIAN CIVIL CODE
Dear Shareholders of the company Riva Forni Elettrici S.p.A. (following “RFE”),
we point out that a) following the effect of the proportional partial demerger of Riva Fire S.p.A.
occurred on the 1 January 2013, the financial year closed at 31 December 2014 represents the second
operating financial year of RFE; b) pursuant to article 2364 n. 2 of the Italian Civil Code the Company,
having to draft the consolidated financial statement, availed itself of the right to use the longer time
limit of 180 days for convening the shareholders’ meeting to approve the financial statement.
In the financial year closed at 31 December 2014, we discharged the supervisory activities in
accordance with the rules of conduct for the Board of Statutory Auditors as provided for by the Italian
Board of Professional Accountants and Auditors.
• Supervisory activities
We have supervised and checked the compliance with the law and the Company’s by-laws and we
watched over that the principles of correct administration have been observed.
We have attended the Shareholders’ Meetings and the Board’s meetings and, based on the
information provided, we didn’t notice violations of Law and of the Company’s by-laws and we did
not notice operations manifestly imprudent or risky, in potential conflict of interest or susceptible of
compromising the integrity of the Company’s assets and equity.
During meetings and on the base of the management report on the 2014 financial statement, the
Directors provided us information on the activities undertaken by them, and on the most significant
economic, financial and capital transactions carried out by the Company and its subsidiaries.
Based on the information provided we report the following:
• during the financial year 2014, the economical trend of RFE continued to be influenced by issues
related to the demerged company Riva Fire S.p.A., the controlling entity of Ilva S.p.A; in particular,
after the Court of Cassation judgment of the 20 December 2013, further judicial and legislative
measures addressed to Riva Fire and Ilva, led Riva Fire S.p.A to the voluntary liquidation.
• Riva Fire is part of various pending or threatened civil, penal and administrative disputes, related to events
occurred before the 1 January 2013 (date of effect of the proportional partial demerger of Riva Fire S.p.A. in
favour of RFE). Even for RFE some of these disputes represent potential (at present latent) economic losses.
In fact, according to the Italian Law on demerger, payments of compensation due by Riva Fire and related
to events occurred before the effect of the demerger could have negative effects on RFE, even though it is a
mere hypothesis. Moreover, RFE is liable in the alternative for the reimbursement of any unpaid debt of the
demerged Company incurred before the demerger, with the limit of the assigned assets.
• Considering that Riva Fire is managed by a commissioner and following the request of its main
financing bank, on the 15 September 2014 RFE paid the primary bank debt incurred by Riva Fire.
Therefore, from the aforesaid day, Riva Fire is indebted to RFE and, substantially, does not have any
financial debts to banks. Moreover, RFE awarded a contractual payment extension, agreeing that
its credits are subordinated to the rights of other creditors of Riva Fire. Such agreement has been
extended to further potential liabilities, not covered by Riva Fire assets, that could occur to Riva Fire
as a consequence of additional loss of value of the remaining participation in Ilva S.p.A. (now in special
administration). In view of the financial situation of Riva Fire, RFE recognized a complete write-down
of the receivables on Riva Fire (about Euro 316 millions) and a provision for risks of about Euro 99
millions.
No significant aspects or issues worthy of mention arose during the meeting held with the Independent
Auditors.
We have exchanged information with the Statutory Auditors of the controlled companies and no relevant
issues are worthy of mention in this report.
We have acquired knowledge and watched over, insofar as this falls within our competencies, the
adequacy of the organizational structure also by collecting information from the heads of the different
business functions and no relevant issues have to be reported.
We have acquired knowledge and watched over, insofar this falls within our competencies, regarding
the adequacy of the administration/accounting system, as well as on the dependability of this latter to
correctly reflect operational events by collecting information from heads of different functions and from
the independent auditor and by examining company’s documentation and no relevant objection have to
be reported.
No complaints, pursuant to article 2408 of the Italian Civil Code, were received during the course of the
financial year.
No other relevant issues emerged during the performed supervisory activities described above.
• Financial Statement and Consolidated Financial Statement
We have examined the Draft Financial Statement at 31 December 2014, made available to us within
the terms pursuant to article 2429 of the Italian Civil Code, and we report as follows.
As the Independent Audit of the Financial Statement is not our responsibility, we oversaw compliance
with statutory provisions pertaining to the preparation and layout of the Financial Statements and the
related Reports on Operations and no relevant objection have to be reported.
We oversaw the compliance with the law related to the preparation of the Reports on Operations and
no relevant objection have to be reported.
As far as the Board of Statutory Auditors knows, the Directors have made no derogation from the
Law pursuant to article 2423, paragraph 4, of the Italian Civil Code in the preparation of the Financial
Statement.
The Directors in the Financial Statements have illustrated that the business operations carried out
during the financial year with related parties or with companies belonging to the Group have been
performed within the normal business activities, at market conditions and in the Company’s interest.
Pursuant to Legislative Decree no. 127/1991 the Company have prepared the Consolidated Financial
Statement and the related Reports on Operations.
The Board of Statutory Auditors oversaw the compliance with statutory provisions pertaining to the
preparation and layout of the Consolidate Financial Statements and the related Consolidated Reports
on Operations and no relevant objections have to be reported.
The Independent Auditors on the 11 June 2015 issued the reports which show respectively that the
Financial Statement and the Consolidated Financial Statement as at 31 December 2014 have been
clearly prepared and are a true and fair view of the Company’s and Group’s balance sheets, financial
situations and operating results for the Financial Year. The Independent Auditors report also show the
consistency of the Company’s Reports on Operations and of the Consolidated Reports on Operations
with the Financial Statement and the Consolidated Financial Statement as of 31 December 2014.
We point out that the Independent Auditors, as well as the Board of Statutory Auditors, highlight the
events that led to the voluntary liquidation of Riva Fire and the existence of various legal disputes
towards Riva Fire that could represent potential (at present latent) economic losses even for RFE.
• Conclusions
Given the conclusion of the Independent Auditors reports and as referred in this report, the Board of
Statutory Auditors proposes to the shareholders’ meeting the approval of the Financial Statement as
of 31 December 2014 as prepared by the Directors.
Milan, 12 June 2015
The Board of Statutory Auditors
Enrico Maria Colombo
- Chairman
Oliviero Eric Cimaz
- Statutory Auditor
Francesco Nobili
- Statutory Auditor
This report has been translated into the English language
solely for the convenience of the international readers.

Annual Report 2014

Transcrição

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