bilan - genoyer · provisions and deferred taxes 7,555 9,777 provisions for other liabilities and...

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BALANCE SHEET

ASSETS December 31, 2012

(in thousands of Euros) NoteGross amount Accumulated

depreciation

Net

amount

Net amount

Unpaid capital 11 - 11 12

Non-current assets 125,297 81,809 43,488 45,060

Goodwill 2.1 9,806 6,008 3,797 3,974

Intangible assets 2.2 5,138 4,308 829 674

Tangible assets 2.3 106,020 71,455 34,565 36,680

Financial assets 2.4 4,334 37 4,297 3,732

Inventories 68,460 2,078 66,382 74,383

Raw materials and supplies 21,977 532 21,445 22,327

Work in progress 8,112 - 8,112 12,482

Finished goods 19,170 762 18,408 18,921

Goods purchased for resale 19,201 785 18,417 20,653

Accounts receivable 103,238 869 102,369 94,977

Prepayments 1,066 - 1,066 690

Trade receivables 2.5 92,948 221 92,727 87,295

Other receivables 2.6 9,224 648 8,576 6,992

Other receivables and suspense accounts 5,254 - 5,254 4,307

Prepaid expenses 2,000 - 2,000 894

Deferred income tax assets 2.10 3,254 - 3,254 3,413

Cash and cash equivalents 2.7 43,347 - 43,347 33,838

TOTAL ASSETS 345,607 84,757 260,850 252,577

December 31, 2013

5

LIABILITIES AND SHAREHOLDERS' EQUITYNote December 31, 2013 December 31, 2012

(in thousands of Euros)

Shareholders' equity - Group 2.8 158,713 143,725

Share capital 61,179 61,179

Merger reserve 18 18

Legal reserve 6,118 6,118

Consolidated reserves 76,463 64,998

Investment grants 139 162

Cumulative currency translation difference (774) (232)

Profit / (loss) for the period - Group share 15,570 11,481

Minority interests 2.8 (10) 25

Provisions and deferred taxes 7,555 9,777

Provisions for other liabilities and charges 2.9 5,616 8,267

Deferred income tax liabilities 2.10 1,939 1,510

Borrowings and financial debts 2.11 6,195 10,959

Current Liabilities 88,397 88,090

Advance payments received 8,340 9,537

Trade payables 2.12 62,984 63,029

Salaries, wages, related social items and other tax liabilities 7,568 7,686

Payables related to capital expenditure 1,085 552

Deferred revenue 25 5

Other payables and accruals 2.13 8,396 7,281

TOTAL LIABILITIES 260,850 252,577

6

INCOME STATEMENT

(in thousands of Euros) Note December 31, 2013 December 31, 2012

Net Sales 3.1 321,195 304,255

Operating expenses

Purchases and changes in inventory of goods for resale (135,413) (118,328)

Raw materials used (58,643) (71,716)

Work in progress (4,614) 6,621

Personnel costs (40,634) (38,804)

Other purchases and external expenses (53,166) (54,260)

Taxes (other than on income) (2,680) (2,536)

Depreciation and amortization (5,431) (5,576)

Net change in provisions 3.2 2,711 (1,270)

Other profit / (loss) 3.3 (2,050) (1,844)

Operating profit 21,274 16,541

Net financial income / (loss) 3.4 54 (229)

Profit before income tax and exceptional items 21,328 16,313

Exceptional profit 3.5 939 602

Net current income tax profit / (expense) (5,767) (5,255)

Net deferred income tax profit / (expense) (559) 73

Net income tax profit / (expense) 2.10 (6,325) (5,181)

Profit before goodwill amortization 15,942 11,734

Goodwill amortization (273) (270)

Profit for the period 15,668 11,464

Minority interests 98 (17)

Profit for the period - Group share 15,570 11,481

EBITDA before restructuring, environment, health and safety costs 3.6 28,591 23,308

(In €)

Basic earnings per share 4.3 9,70 7,15

Diluted earnings per share 9,70 7,15

7

STATEMENT OF CASH FLOWS

(in thousands of Euros) December 31, 2013 December 31, 2012

Profit / (loss) for the period 15,668 11,464

Non cash items for operating activities

Depreciation and changes in provisions 2,802 6,368

Goodwill amortization 273 270

Deferred income taxes 558 (73)

Net loss / (profit) on sale and disposal of fixed assets (960) (11)

Changes of interests on borrowings (110) (432)

Changes in working capital (986) (5,222)

Cash flows from operating activities 17,245 12,364

Investing activities

Purchase of intangible and tangible assets (7,248) (6,064)

Purchase of financial assets (99) (182)

Proceeds from the sale of intangible and tangible assets 4,530 247

Proceeds from the sale of financial assets 70 154

Acquisition of subsidiaries, net of cash acquired (241) (12)

Loans variation (354) -

Interest received (34) -

Investment grants received - 59

Changes in payables and receivables related to fixed assets 533 (381)

Cash flows from investing activities (2,843) (6,179)

Financing activities

New borrowings 1,055 750

Deposit received (8) -

Variation of shareholder's current account (4,324) (23,846)

Variation of other current accounts - 8,253

Repayments of borrowings (1,237) (367)

Increase in other short term debt (108) 10

Dividends paid - -

Cash flows from financing activities (4,621) (15,200)

Net cash flows 9,781 (9,015)

Effect on cash of changes in exchange rate (273) 45

Cash and cash equivalents at the beginning of the period 33,838 42,808

Cash and cash equivalents at the end of the period 43,347 33,838

Operating activities

8

MAIN EVENTS

1. Changes in the scope of consolidation

o Liquidation and exit from consolidation of the Italian subsidiary Phoceenne SRL

o Acquisition of all minority interests of Nantong Colves fluid Control, a Chinese

company, allowing us to hold 100 % of the company. This subsidiary is not controlled

directly by Genoyer SA (subsidiary owned and controlled by Colves Fluid Control)

o In 2013 the Group extended its presence in Africa by creating a subsidiary in

Mozambique (99 % held).

2. Main events of the reporting period

2.a – Disposal of assets

Due to their distance from its center of activity and their remote strategic value, on

January 31, 2013. the Group authorized its Scottish subsidiary Munro & Miller Fittings

Limited to sell its main operating assets, including its business and all employees. On

February 14, 2013, Munro & Miller Fittings Ltd changed its name to Genoyer (Scotland)

Limited.

Following this disposal, and after the agreement received from the authorities, the

liabilities related to the company’s pension scheme have been transferred to another

of the group’s English subsidiaries (Fithandel)

2.b – Tax audit

On February 6, 2012 Genoyer SA received notice of a tax inspection relating to the

period January 1, 2009 to December 31, 2010, as well as to the amount of income tax

paid for the year ended December 31, 2008.

The inspection was completed during fiscal year 2013 on the reception of rectification

proposals by the French Authorities on October 24, 2013. In December, 2013 the

Company sent their comments, and on February 21, 2014 the Company received an

answer from the authorities. Disagreements are still ongoing; the company follows

procedure under the options when the case cannot be finalized at this stage.

9

3. Events after the reporting period

Except for the points specified above (cf note”Tax audit”), no significant events took

place after the reporting period which call for recognition in the Financial Statements or

notes.

Heat treatment of forged products VILMAR (Vilcea – Romania)

10

1. SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES

Genoyer SA and its consolidated subsidiaries (hereafter referred to as the “Company”

or the “Group”) prepare consolidated financial statements in accordance with the

provisions of “Comité de la Règlementation Comptable” (CRC) regulation 99-02 and

generally accepted accounting principles in France.

The preparation of financial statements requires the Group to make estimates and

assumptions that affect the reported amounts of assets and liabilities, the disclosure of

contingent assets and liabilities at the date of the financial statements and the

reported amount of revenues and expenses during the period. Actual results may differ

from these estimates.

These financial statements are established in Euros.

The financial year beginning January 1, 2013 and ending December 31, 2013 is a period

of 12 months.

1.1 PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Genoyer SA and all of its

material subsidiaries. Subsidiaries are all entities over which the Company has the power

to govern the financial operating policies generally accompanying a shareholding of

more than one half of the voting rights. The financial year-end for all the companies

included within the scope of consolidation is December 31.

Subsidiaries are consolidated from the date on which control is transferred to the

Company. They cease to be consolidated from the end of the control date.

All intercompany balances and transactions between group companies are

eliminated. The exchange differences arising on foreign currency intercompany

transactions are included in the profit and loss account for the year.

The financial statements of the companies included in the consolidated financial

statements are prepared in accordance with the accounting principles generally

accepted in their respective countries. Some consolidation adjustments are recorded

so as to ensure that these financial statements comply with Group accounting

principles.

11

1.2 GOODWILL

At the date of the acquisition of a subsidiary, identifiable assets acquired and liabilities

assumed are measured at their fair value. The excess of the cost of acquisition over the

fair value of net assets acquired is recorded as goodwill, recognized as an asset and

amortized over a maximum duration of twenty years.

At year-end, goodwill is tested for impairment whenever events or changes in

circumstances indicate the carrying value may not be recoverable. If the net carrying

value is higher than the recoverable value, which is the higher amount of the value in

use and the net market value, an impairment charge is recorded.

1.3 START UP COSTS

Start-up costs are expensed as incurred.

1.4 NON CURRENT ASSETS

1.4.1 INTANGIBLE ASSETS

Intangible assets are mainly composed of:

Software which is amortized over 3 or 5 years

Acquired goodwill which is amortized over 5 years

Right to use land which is amortized over 10 years

1.4.2 TANGIBLE ASSETS

In 1998, the Group carried out a revaluation of tangible assets on all subsidiaries. This

revaluation took place in relation to the change of ownership structure of Financière

Genoyer SA, shareholder of Genoyer SA. Technical and economic experts revalued the

tangible assets of the Group to their fair market value.

12

Tangible assets revalued in the context of the acquisition of the Group Genoyer were

depreciated over their estimated remaining useful lives, or generally according to the

following durations:

Buildings 10 years

Fixtures and fittings 10 years

Technical installations 10 years

Tools and machinery 5 to 10 years

Vehicles 3 years

Furniture and office equipement 3 years

The revalued tangible assets mainly relate to operations. Whenever events or changes

in circumstances indicate their carrying value may not be recoverable, an additional

impairment charge is recorded.

Other tangible assets are recognized at their historical cost. Components of tangible

assets except for land are depreciated on a straight-line basis over their estimated

useful lives, which, for the main categories, are as follows:

Buildings 20 years

Fixtures and fittings 10 years

Technical installations 5 to 15 years

Tools and machinery 5 to 15 years

Vehicles 4 to 5 years

Furniture and office equipement 3 to 10 years

Material capital expenditures purchased under a finance lease are recognized as an

asset and capitalized on the basis of the present value of the minimum lease payments.

They are depreciated over their estimated useful lives.

The Company incurs no significant inspection costs that may require a provision or a

component to be recognized.

1.4.3 INVESTMENTS

Entities over which the Group has no significant influence or control are recognized at

cost and not consolidated. A provision is recorded when the recoverable amount at

the balance sheet date is lower than the net carrying amount. The recoverable

amount is determined considering the share of net equity of the investment and its

anticipated future cash flows.

Entities for which consolidation is not significant or which are dormant or over which the

Group has no significant influence or control are not consolidated.

13

1.5 INVENTORIES AND RECEIVABLES

Inventories of goods purchased for resale and raw materials are valuated item by item

at average weighted cost. Given the specific nature of the products sold by the

Company, aging has no effect on their net realizable value.

Inventories of work in progress and finished goods are carried at their cost price

including direct and indirect costs. This is to ensure that the manufacturing costs as

reflected as closely as possible.

The determination of the allowance against inventories is based on a classification of

inventories by category in compliance with the product and market expertise /

knowledge of the Group. If any risk is identified on the recoverability of an item, it is

classified within the relevant category, which will be impaired based on the analysis of

the product and market. The net book value equals the minimum scrap value.

Receivables are recognized at their nominal value and allowances are calculated on a

case by case analysis, excluding value added tax, depending on local regulation.

1.6 FOREIGN CURRENCY TRANSLATION

1.6.1 FOREIGN SUBSIDIARIES FINANCIAL STATEMENTS TRANSLATION

For the Company’s foreign subsidiaries and affiliates using a functional currency other

than Euros, assets and liabilities are translated into Euros using the year-end exchange

rate and revenues and expenses are translated into Euros at exchange rates which

approximate the average exchange rates during the period.

The resulting translation adjustments are recorded in a separate account of

shareholders’ equity as “Cumulative Currency Translation Difference”.

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1.6.2 TRANSACTIONS IN FOREIGN CURRENCIES

Transactions made by consolidated entities which are denominated in foreign

currencies are translated into the functional currency of the consolidated entities at the

exchange rate at the transaction date.

Payables and receivables in a currency other than the functional currency of an entity

of the Group are translated at the year-end exchange rate or at the hedging

exchange rate. Unrealized exchange gains and losses resulting from this translation are

recorded in profit and loss of the period:

- As operating profit for trading operations,

- As financial profit and loss for financing operations.

Payables or receivables of a consolidated entity, for which repayment is neither

planned nor likely to take place in the foreseeable future, are considered as a long-

term investment. The exchange difference relating to these payables or receivables is

accounted for directly in shareholders' equity.

1.6.3 FINANCIAL INSTRUMENTS

The Group uses financial instruments exclusively to hedge foreign exchange positions

on international operations. The Group hedges its foreign exchange positions by using

non-speculative forward exchange contracts. Hedged transactions are recorded at

their forward hedging exchange rate. Instruments qualifying under hedge accounting

criteria are recognized as off-balance sheet commitments until the hedged

transactions are completed.

Gas heater 25,000 Nm3 / hr. Genoyer SA division Piping Technologies (VITROLLES - FRANCE)

15

1.7 DEFERRED TAXES

Deferred income tax results from temporary differences between the carrying amounts

of assets and liabilities in the consolidated financial statements and their tax bases. The

deferred income tax is provided using the liability method, whereby deferred tax

balances are determined using tax rates (and laws) that have been enacted or

substantially enacted by the year-end closing date and are expected to apply when

the related deferred income tax asset is realized or the deferred income tax liability is

settled. Deferred income tax assets on tax losses and on temporary differences are

recognized to the extent that it is probable that future taxable profit will be available

against which these assets can be utilized.

1.8 RETIREMENT BENEFITS

As recommended by the “Conseil National de la Comptabilité” (CNC) regulation 2003

R-01, post retirement obligations are recognized in the balance sheet. A provision has

been estimated based on actuarial assumptions and analysis, and Group estimates

relating to employee turnover. Actuarial gains and losses are recognized directly in the

result of the period.

1.9 PROVISIONS FOR OTHER LIABILITIES AND CHARGES

Provisions for other liabilities and charges are recorded in accordance with CRC

regulation 2000-06 concerning liabilities.

Provisions are recorded to cover the liabilities and charges linked to known claims

which relate to past events. These provisions are calculated based on the Group’s best

estimate of the probable outflow of resources that will be required to settle the

obligation.

1.10 FINANCIAL BORROWING

Financial borrowings are stated at historical cost.

1.11 EARNING PER SHARE

“Basic earnings per share” are calculated by dividing “Profit for the period - Group

share” by the weighted average number of ordinary shares in issue during the year.

“Diluted earnings per share” are computed after taking into account equity instruments

issued by the Group.

16

2. NOTES TO THE BALANCE SHEET

2.1 GOODWILL

Opening Changes Changes in Closing

31-déc.-12 consolidation scope 31-déc.-13


Gross value 9,723 - 103 (20) 9,806

Amortization (5,749) (273) - 14 (6,008)

Net value 3,974 (273) 103 (6) 3,797

Other changes

(including

changes in

exchange rate)

2.2 INTANGIBLE ASSETS

Opening Additions Closing

31-déc.-12 31-déc.-13


Gross value

Software 3,510 257 (3) - (3) 3,761

Acquired intangibles 68 - - - - 68

Other 1,340 2 (33) - - 1,309

Total 4,917 259 (36) - (3) 5,138

Amortization

Software 3,293 101 (3) - (3) 3,389

Acquired intangibles 68 - - - - 68

Other 883 2 (33) - - 852

Total 4,244 103 (36) - (3) 4,308

Net value 674 156 - - - 829

Other changes

(incl. changes in

exchange rate)

Disposals and

retirements

Changes in

consolidation

scope

17

2.3 TANGIBLE ASSETS


31-déc.-12 31-déc.-13


Gross value

Land 4,516 - (1,023) - (41) 3,452

Buildings 30,413 686 (2,051) - 9 29,057

Plant and Equipment 68,182 3,587 (5,231) - 1,173 67,711

Other (including assets in progress) 4,997 2,716 (254) - (1,659) 5,801

Total 108,108 6,989 (8,559) - (518) 106,020

Amortization

Buildings 23,464 598 (191) - (4) 23,866

Plant and Equipment 45,622 4,564 (4,651) - (239) 45,296

Other 2,343 167 (181) - (35) 2,294

Total 71,429 5,328 (5,024) - (278) 71,455

Net value 36,680 1,661 (3,536) - (240) 34,565

including : Assets under capital

leases877 (162) - - - 715

Other changes

(incl. changes in

exchange rate)

Disposals

and

retirements

Changes in

consolidation

scope

The increase in buildings is mainly related to reorganizations of workshop or logistic

warehouses (at SBS and Vilmar).

The increase of material and tools for the year includes 339 thousand Euros of

acquisitions by BSL Pipes & Fittings, 1,736 thousand Euros of acquisitions by Vilmar and

875 thousand Euros of acquisitions by SBS.

The increases in tangible asset in progress is mainly relate to Vilmar and BSL.

The disposal of asset are mainly impacted by the sale of asset of Genoyer Scotland Ltd,

this represents a net book value of 3,498 thousand Euros.

18

2.4 FINANCIAL ASSETS


31-déc.-12 31-déc.-13(in thousands of Euros)

Investments 3,381 - - - - 3,382

Loans - 374 (21) - 154 508

Deposits 388 99 (70) - (8) 410

Interest on loans - 34 - - - 34

Gross value 3,769 508 (90) - 147 4,334

Provisions 37 - (34) 34 - 37

Net value 3,732 508 (56) (34) 147 4,297

Other changes

(incl. changes in

exchange rate)

Disposals and

retirements

Changes in

consolidation

scope

The increase of financial asset is mainly related to loan contract with subsidiary

Phoceenne Nigeria, company integrated in equity method (i.e. information related to

consolidation scope).

Carrying amount of non-consolidated investments

Gross value Provision Net value % ownership


Genoyer International 3,344 - 3,344 2%

Phoceenne Cameroun 2 (2) - 100%

Sitindustrie Tubes & Pipes 15 (15) - n.s.

Phoceenne Chili 11 (11) - 100%

Phoceenne Caracas 9 (9) - 100%

Lab Systems LLP - - - 50%

Phoceenne Mozambique - - - 49%

Vitjoint - - - n.c

TOTAL 3,382 (37) 3,344

Entities for which consolidation is not significant or which are dormant or over which the

Group has no significant influence or control are not consolidated.

19

2.5 BREAKDOWN OF TRADE RECEIVABLES

(in thousands of Euros) 31-déc.-13 31-déc.-12

Trade receivables 92,667 86,969

Accrued income 4 367

Promissory notes 278 219

Gross value 92,948 87,555

Provision for doubtful accounts (221) (259)

Net value 92,727 87,295

Trade receivables are due within one year.

2.6 BREAKDOWN OF OTHER RECEIVABLES


Suppliers - Credit notes 1,046 701

Receivables from sale of assets - -

Taxes to be recovered - Income Tax 589 260

Taxes to be recovered - VAT and other 3,893 4,395

Group tax consolidation receivables 608 24

Financial receivables - 1

Other receivables 3,088 1,757

Gross value 9,224 7,138

Provision on other receivables (648) (146)

Net Value 8,576 6,992

Other receivables are due within one year.

2.7 CASH AND CASH EQUIVALENTS

As at December 31, 2013 the cash and cash equivalents of the Group were mainly

composed of bank accounts. The Group does not hold any listed shares or any

financial investments.

In 2013, cash pooling has been put in place for Genoyer SA with the French subsidiaries

20

2.8 STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

Total


Balance at December 31, 2011 61,179 - 6,118 52,471 12,532 127 (288) 132,139

Allocation of prior year earnings 12,532 (12,532) -


Dividends distribution -

Change in grants received 35 35

Change in translation differences 69 69

Changes in the consolidation scope 13 (13) -

Merged profit 18 (18) -

Balance at December 31, 2012 61,179 18 6,118 64,998 11,481 162 (232) 143,725

Allocation of prior year earnings 11,481 (11,481) -


Dividends distribution -

Change in grants received (23) (23)

Change in translation differences (555) (555)

Changes in the consolidation scope (15) 14 (1)

Merged profit -

Balance at December 31, 2013 61,179 18 6,118 76,463 15,570 139 (774) 158,713

Share

capital

Profit/(loss) for

the period

Consolidated

reserve

Investment

grants

Cumulative currency

translation

adjustment

Merger

reserve

Legal

Reserve

Changes in minority interests are as follows:

(in thousands of Euros) 2013 2012

Minority interests at January 1st 25 39

Profit/(Loss) for the period 98 (17)Change in translation differences (13) 2 Changes in the consolidation scope (120) 1

Minority interests at December 31 (10) 25

21

2.9 PROVISIONS FOR OTHER LIABILITIES AND CHARGES


(in thousands of Euros)31-déc.-12 31-déc.-13

TOTAL 8,267 1,848 (3,819) (602) - (78) 5,616

Provisions for liabilities 4,587 1,560 (2,412) (598) - (25) 3,112

Provisions for claims and customer risk 4,246 1,445 (2,243) (598) - (25) 2,825

Provisions for restructuring 341 115 (169) - - - 287

Provisions for other risks - - - - - - -

Provisions for charges 3,680 288 (1,407) (4) - (53) 2,505

Provisions for pension liabilities and

jubilees 3,332 288 (1,366) (4)-

(50) 2,201

Other provisions for charges 348 - (41) - - (4) 303

Operating profit (2,572)

Financial income -

Extraordinary items -

Impact on net income (2,572)

Other changes

(incl. changes in

exchange rate)

Change in

consolidation

scope

Unused

amounts

reversed

Used during

the period

The amount booked regarding Fithandel (Munro & Miller in 2012) pension obligation,

equals the difference between the fair value of the plan assets and the actual value of

the obligations as displayed below:

(in thousands of Euros) 31.12.2013 31.12.2012

Fair value of the assets 7 126 5 683

Actual value of the pension plan 6 711 6 964

Benefit (Deficit) of the plan 414 (1 281)

Regarding 2013 the plans have seen a profit, so we have not booked any provision for

this year.

These elements do not have to be settled in the short or medium term and their

valuations are likely to change before they are settled.

The main actuarial assumptions used to calculate the pension obligations are as

follows : UK France (a) Germany Romania

Inflation rate 3,30% 1,10% 2,00% 3,20%

Discount rate 4,40% 3,40% 3,50% 4,20%

Turnover rate n.a. 5% to 17% 4,50% 5,00%

Return on plan assets 0,5% to 7% n.a. n.a. n.a.

Age of retirement (years) 65 65 to 67 65 63 to 67

(a) Social charges rate of 42% assuming voluntary retirements.

22

2.10 BREAKDOWN OF DEFERRED INCOME TAXES


Acquired assets at fair value (225) (226)

Carry forward tax losses 3,180 2,833

Pension obligations 264 535

Temporary differences (129) (146)

Regulatory provisions (568) (505)

Intercompany provisions (913) (665)

Intercompany margin on inventories 300 697

Internal operations (520) (516)

Deferred expenses - -

Fixed assets amortization harmonization (159) (141)

Other 85 39

Deferred income tax - net 1,315 1,903

Deferred income tax - assets 3,254 3,413

Deferred income tax - liabilities (1,939) (1,510)

Deferred income tax - net 1,315 1,903

The reconciliation between the reported income tax expense and the theoretical

amount that would arise using the tax rate in France is as follows:

31-déc.-13 31-déc.-12


Profit before income tax 21,994 16,645

Income tax calculated at the tax rate in France (33.33%) (7,330) (5,548)

Effect of different tax rates in foreign countries 1,236 1,794

Differences on goodwill amortization (91) (90)

Variation of non recognised deferred tax 238 (871)

Permanent differences 41 (345)

Other (418) (122)

NET INCOME TAX (PROFIT) / EXPENSE (6,325) (5,181)

23

2.11 ANALYSIS OF BORROWINGS AND FINANCIAL DEBTS


Shareholder's current account 5,048 9,482

Bank borrowings 690 872

Bank overdrafts 2 113

Financial leases 453 492

Total Borrowings 6,195 10,959

Cash and cash equivalents 43,347 33,838

Financial receivables 1 1

Net debt (37,154) (22,880)

Short Medium Long Total

Term Term Term 31-déc.-13

(in thousands of Euros) < 1 yr 1 yr < > 5 yrs > 5 yrs

Shareholder's current account 5,048 - - 5,048

Bank borrowings 690 - - 690

Bank overdrafts 2 - - 2

Financial leases 39 414 - 453

Total borrowings 5,781 414 - 6,195

On July 19, 2013, the company entered into a revolving credit facility agreement and a

master agreement of debts disposal for insurance and a master agreement for the

insurance of bonds, valid until December 31, 2014. This agreement requires adherence

to a ratio. This ratio is calculated every six months on the basis of a twelve month rolling

period. Calculations show that the Company is in compliance with this ratio.

Forged rings for nuclear valves – SBS (BOEN – FRANCE)

24

2.12 BREAKDOWN OF TRADE PAYABLES


Suppliers 42,062 33,653

Promissory notes 61 86

Accrued expenses 20,860 29,290

Trade payables 62,984 63,029

2.13 BREAKDOWN OF OTHER PAYABLES AND ACCRUALS

(in thousands of Euros) 31-déc.-13 31.12.2012

Credit notes 3,644 3,603

Contractual duties 2,396 2,082

Sundry creditors 123 132

Group tax consolidation payables 1,301 918

Other 932 546

Other payables and accruals 8,396 7,281

Staimless Steel pipes - BSL PIPES AND FITTINGS (SOISSONS– FRANCE)

25

3. NOTES TO INCOME STATEMENT

3.1 BREAKDOWN BY MAJOR ACTIVITY


Trading / Services 204,109 192,779

Manufacturing 117,086 111,476

Net sales 321,195 304,255

The classification of the subsidiaries by major activity is displayed in the note

“Subsidiaries included in the consolidated financial statements”.

3.2 NET CHANGE IN PROVISION


Reversal of / (Additions to) net on provisions

On working capital 138 (455)

On other liabilities and charges 2,572 (815)

Total 2,711 (1,270)

3.3 OTHER OPERATING PROFIT / (LOSS)


Penalties accrued net of penalties received (2,512) (2,179)

Other operating income 736 544

Other operating expenses (243) (144)

Losses on receivables (31) (65)

OTHER OPERATING PROFIT / (LOSS) (2,050) (1,844)

Other operating income mainly includes capitalized production for an amount of 307

thousand Euros.

26

3.4 NET FINANCIAL INCOME / (LOSS)


Interest income 208 410

Net exchange gain / (loss) 705 (296)

Net change in financial provisions (610) (2)

Interest expense (248) (341)

Other financial items - -

NET FINANCIAL INCOME / (LOSS) 54 (229)

3.5 EXCEPTIONAL PROFIT / (LOSS)


Exceptional provisions for other liabilities,

charges and exceptional depreciation 48 -

Capital gain / (loss) on sale of assets 960 11

Other items (69) 591

EXCEPTIONAL PROFIT / (LOSS) 939 602

Capital gains are mainly due to Genoyer Scotland fixed assets sales.

3.6 EBITDA BEFORE RESTRUCTURING, ENVIRONMENT, HEALTH AND SAFETY COSTS

EBITDA is calculated from net income or loss by reinstating interest income and interest

expense, changes in financial provisions, income taxes, gain or loss from disposal of

discontinued operations, amortization/depreciation of intangible and tangible assets,

amortization of goodwill, restructuring expenses including changes in provisions, and

environment, health and safety related expenses including changes in provisions. The

minority interest is excluded from the calculation.

27

4. OTHER INFORMATIONS

4.1 PERSONNEL

As at December 31, 2013, the Group employed 1,066 people of whom 422 work for

Vilmar in Romania. At year-end the headcount breakdown is as follows :

31-déc.-13 31-déc.-12

Executives 161 148

Employees, technicians, controllers 336 346

Manual workers 569 610

TOTAL 1,066 1,104

4.2 COMMITMENTS AND CONTINGENT LIABILITIES


Guarantess given

Forward exchange hedging contracts 23,910 27,291

Comfort letters and letters intention 4,936 7,012

Guarantees given related to operations 26,289 31,258

Guarantees received

Comfort letters - 1,721

Guarantees received related to operations 3,618 15,195

The Group hedges its foreign exchange positions on import and export transactions

mainly by entering into foreign currency forward exchange contracts. Such

transactions are recorded at the forward hedging rate. These forward exchange

contracts enable the hedging of a part of the commitments related to the backlog.

Guarantees given or received related to operations are mainly contracted through

banks in order to ensure the satisfactory completion of contracts.

28

4.3 SHARE CAPITAL

The share capital of Genoyer SA is made up of 1,605,233 ordinary shares and amounts

to € 61,179,048.

4.4 MANAGEMENT WAGE AND BENEFITS

The aggregate amount of the wages and benefits granted to management for their

functions as directors or as members of the Board is not disclosed as it would involve

providing information regarding individuals.

4.5 GROUP TAX CONSOLIDATION

The French companies Genoyer SA, SBS, RTI, BSL Pipes & Fittings, and TTB are included in

the Genoyer International SAS group tax consolidation.

The Group benefits from the following tax group:

Countries Companies menbers of tax group

United Kingdom Fithandel

Genoyer Scotland Ltd

Bon Accord Engineering

Phoceenne UK

SFS

29

4.6 OTHER RELATED PARTY TRANSACTIONS

As at December 31, 2013, the consolidated income statement includes transactions

with related parties:

Management fees and other expenses charges by Genoyer International SAS

amounting to € 3,506 thousand, other expenses charged by Genoyer SA to

Genoyer International SAS for € 501 thousand.

A financial interest expense amounting to € 5 thousand related to current

account with the shareholder Financière Genoyer and Genoyer International

(i.e. 2.11).

SADARA Project (SAUDI ARABIA)

The largest petrochemical facility ever built in a single phase.

30

SUBSIDIARIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS

Method of

consolidation

% of

interest

Business

Division

FRENCH SUBSIDIARIES

GENOYER SA9/11 rue de Lisbonne - 13742 Vitrolles (France) - SIREN : 063 803

704Parent company 100 T/S

SPECIAL BRIDES SERVICE 42130 Boën sur Lignon (France) - SIREN : 330 927 377 Full 100 M

RTI INDUSTRIES22 route de Crêton Les Culs Menaux - 18110 Vasselay - (France)

SIREN : 329 691 000Full 100 M

BSL PIPES & FITTINGS108, route de Reims - 02200 Billy sur Aisne (France)

SIREN : 432 329 639Full 100 M

TTB, TECHNOLOGICAL TUBES & BELLOWSQuai de l'Oise - Zone Industrielle - 60 870 RIEUX

SIREN : 407 713 775 Full 100 M

FOREIGN SUBSIDIARIES

PHOCEENNE UK LIMITED 27 New Bond street, London WIY 9HD (UK) Full 100 T/S

FITHANDEL (Scotland) LIMITED Unit 1 Woodside Road-Aberdeen AB28EF- Scotland - (UK) Full 100 T/S

SPECIAL FLANGE SERVICES LIMITED 27 New Bond Street, London W1S 2RH (UK) Full 100 M

MUNRO & MILLER FITTINGS LIMITEDEast Mains Industrial estate - Broxburn EH52 5AU West Lothian

Scotland (UK)Full 100 M

BON ACCORD ENGINEERING SUPPLIES

(CASPIAN) LIMITEDUnit 1 Woodside Road-Aberdeen B 23 8 EF Scotland - (UK) Full 100 T/S

PIPELINE TECHNOLOGY LLPEnterprise House - Beeson's Yard - Bury Lane- Rickmansworth -

Hertfordshire W3D 1DS (UK)Equity method 50 T/S

PHOCEENNE BV Beechavenue 54-80, 1119 PW Schipol Rijk (Netherlands) Full 100 T/S

VILMAR SA Platforma Industriala n°1- Ramnicu Vilcea (Romania) Full 100 M

WILHELM GELDBACH INDUSTRIE GmbH Ziegelstraβe 17, D-45886 Gelsenkirchen (Germany) Full 100 M

UTM 40 Bd Joseph II - 1840 Luxembourg Full 100 NA

PHOCEENNE SRL Piazza Manin 4/3 - Genova 16122 - (Italy) Full 100 T/S

COLVES FLUID CONTROL SRL Via F.Serpero 20060 Masate - Milan (Italy) Full 100 M

PHOCEENNE SA Plazza de Castilla 3, Planta 8°A, 28046 Madrid (Spain) Full 100 T/S

PHOCEENNE MEXICO, SA de CVSanta Margarita 108 302 Col Del Valle - Mexico Distrito Federal

CP 03100 (Mexico)Full 100 T/S

GENOYER GROUP, INC 16360 Park Ten Place - #300 Houston - 77084 - Texas (USA) Full 100 T/S

DL FLANGE CORPORATION 77-85 Little York Houston Texas 77018 (USA) Full 100 M

DL FLANGE CANADA INC 6346 Roper Rd - Admonton, Alberta, T6B 3P9 - CANADA Full 100 M

Nipon International Trading CorporationNishishimbashi Yasuda Union Building 3F 4-2, Nishishimbashi2

chome,Minato-ku, Tokyo 103-0005 (Japan)Full 100 T/S

PHOCEENNE ASIA PTE LTD 80 Robinson Rd - # 02 00 - 06 8898 SINGAPORE Full 100 T/S

GENOYER PHOCEENNE TRADING

(SHANGHAI), Co. LTD

Suite 1606, Hai Bo Plaza- N°101 Nanmantou Rd -200125 Pudong

New District, Shanghai (P. R. China)Full 100 T/S

PT PHOCEENNE INDONESIAPlaza Permata JI Jalan MH Thamrin n°57 - 10350 Jakarta –

(Indonesia)Full 99 T/S

PHOCEENNE AUSTRALIA PTY LTD 1060 Hay Street, West Perth 6005, WA (Australia) Full 100 T/S

NANTONG COLVES FLUID CONTROL, Co.

LTD

West Side Guoquiang Road, North Side N°190, North Outer Ring

Road, Nantong, Jiangsu Province 226011 (P.R.China)Full 100 M

GENOYER ALGERIE Vila 134 - Bois des Cars - Dely Ibrahim - 1320 ALGER Full 70 T/S

GENOYER ANGOLATerraços do Atlântico Edifício J 1º Andar Bairro Talatona,

Município de Belas (Angola)Equity method 49 T/S

PHOCEENNE CONGO Pointe Noire BP 1226 (République du Congo) Full 99 T/S

PHOCEENNE NIGERIA11a Grace Anjous Drive Off Adebayo Doherty Way Lekki Phase

1, LagosEquity method 24 T/S

VFTC Nantong, Jiangsu Province 226011 (P.R.China) Full 100 T/S

GENOYER DO BRASILAvenida Beira Mar, 262, 6° Andar Rio de Janeiro, CEP 20021-060

Brasil Full 100 T/S

Business Division : T/S: Trading / Services activity; M: Manufacturing activity; NA: Not allocated

31

PricewaterhouseCoopers Audit KPMG,

Les Docks – Atrium 10.1 1, Cours Valmy Paris

10, Place de la Joliette F -92923 la Défense Cedex

B.P. 81525

13567 Marseille Cedex 2

RAPPORT DES COMMISSAIRES AUX COMPTES

SUR LES COMPTES CONSOLIDES

(Exercice clos le 31 décembre 2013)

Aux actionnaires Genoyer S.A. ZI - 9/11, Rue de Lisbonne BP 60061 13742 Vitrolles Cedex

En exécution de la mission qui nous a été confiée par votre assemblée générale, nous vous présentons notre rapport relatif à l’exercice clos le 31 décembre 2013, sur :

- le contrôle des comptes consolidés de la société Genoyer S.A, tels qu’ils sont joints au présent rapport;

- la justification de nos appréciations ;

- la vérification spécifique prévue par la loi. Les comptes consolidés ont été arrêtés par votre directoire. Il nous appartient, sur la base de notre audit, d’exprimer une opinion sur ces comptes.

I - Opinion sur les comptes consolidés

Nous avons effectué notre audit selon les normes d’exercice professionnel applicables en France ; ces normes requièrent la mise en œuvre de diligences permettant d'obtenir l'assurance raisonnable que les comptes consolidés ne comportent pas d'anomalies significatives. Un audit consiste à vérifier, par sondages ou au moyen d’autres méthodes de sélection, les éléments justifiant des montants et informations figurant dans les comptes consolidés. Il consiste également à apprécier les principes comptables suivis, les estimations significatives retenues et la présentation d’ensemble des comptes. Nous estimons que les éléments que nous avons collectés sont suffisants et appropriés pour fonder notre opinion.

Nous certifions que les comptes consolidés sont, au regard des règles et principes comptables français, réguliers et sincères et donnent une image fidèle du patrimoine, de la situation financière, ainsi que du résultat de l'ensemble constitué par les personnes et entités comprises dans la consolidation.

32

II- Justification de nos appréciations

En application des dispositions de l’article L.823-9 du Code de commerce relatives à la justification de nos appréciations, nous vous informons que les appréciations auxquelles nous avons procédé ont porté sur le caractère approprié des principes comptables appliqués.

Estimations comptables :

Provision pour dépréciation des valeurs d’exploitation :

Votre Groupe constitue des provisions pour couvrir les risques sur la valeur nette de réalisation des stocks et des créances clients, tel que décrit en note de 1.5 de l’annexe.

Comptabilisation des impôts différés :

Les actifs sur pertes fiscales reportables et différences temporaires ne sont inscrits à l’actif de votre Groupe que lorsque leur utilisation future est probable, tel que décrit en note 1.7 de l’annexe.

Nous avons procédé à l’appréciation des approches retenues par le Groupe sur la base des éléments disponibles à ce jour, et mis en œuvre des tests pour vérifier par sondage l’application de ces méthodes. Nous avons procédé à l’appréciation du caractère raisonnable de ces estimations.

Les appréciations ainsi portées s’inscrivent dans le cadre de notre démarche d’audit des comptes consolidés, pris dans leur ensemble, et ont donc contribué à la formation de notre opinion, exprimée dans la première partie de ce rapport.

III - Vérification spécifique

Nous avons également procédé, conformément aux normes d’exercice professionnel applicables en France, à la vérification spécifique prévue par la loi des informations relatives au groupe données dans le rapport de gestion.

Nous n'avons pas d'observation à formuler sur leur sincérité et leur concordance avec les comptes consolidés.

Marseille et Paris La Défense, le 12 Juin 2014

Les commissaires aux comptes

33

Statutory auditors’ report on the consolidated financial statements

For the year ended 31 December 2013

This is a free translation into English of the statutory auditors’ report issued in French and is provided solely for the

convenience of English speaking users. The statutory auditors’ report includes information specifically required by

French law in such reports, whether modified or not. This information is presented below the opinion on the

consolidated financial statements and includes an explanatory paragraph discussing the auditors’ assessments of

certain significant accounting and auditing matters. These assessments were considered for the purpose of issuing an

audit opinion on the consolidated financial statements taken as a whole and not to provide separate assurance on

individual account captions or on information taken outside of the consolidated financial statements.

This report should be read in conjunction with, and construed in accordance with, French law and professional

auditing standards applicable in France.

To the Shareholders

Genoyer S.A. ZI - 9/11, Rue de Lisbonne BP 60061 13742 Vitrolles Cedex

In compliance with the assignment entrusted to us by your general meeting, we hereby report to you, for the year ended 31 December 2013, on: - the audit of the accompanying consolidated financial statements of Genoyer S.A ; - the justification of our assessments; - the specific verification required by law. These consolidated financial statements have been approved by the board of directors. Our role is to express an opinion on these consolidated financial statements based on our audit.

I - Opinion on the consolidated financial statements

We conducted our audit in accordance with professional standards applicable in France; those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit involves performing procedures, using sample techniques or other methods of selection, to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made, as well as the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the Group as at 31 December 2013 and of the results of its operations for the year then ended in accordance with the accounting rules and principles applicable in France.

34

II - Justification of our assessments

In accordance with the requirements of article L.823-9 of the French Commercial Code (code de commerce) relating to the justification of our assessments, we bring to your attention the following matters: Provision for impairment of current assets:

Your group records provisions for impairment to cover risks on the net realizable value of inventories and accounts receivable as described in note 1.5 to the consolidated financial statements.

Accounting for deferred taxes:

Deferred income tax assets relating to tax losses and other temporary differences are recognized by your Group only to the extent that it is probable that they will be recoverable in the future, as set out in note 1.7 to the consolidated financial statements.

We carried out our assessment of the approach used by the Group based on the information available at the time and we performed tests to verify the proper application of these methods. In our opinion these estimates are reasonable. These assessments were made as part of our audit of the consolidated financial statements taken as a whole, and therefore contributed to the opinion we formed which is expressed in the first part of this report. III - Specific verification

As required by law, we have also verified the information presented in the Group’s management report in accordance with professional standards applicable in France.

We have no matters to report regarding its fair presentation and its consistency with the consolidated financial statements.

35

NOTES

36

GROUPE GENOYER

9 – 11 Rue de Lisbonne - Z.I Les Estroublans

BP 60061 - 13742 VITROLLES

[email protected]

www.genoyer.com

mailto:[email protected]

bilan - genoyer · provisions and deferred taxes 7,555 9,777 provisions for other liabilities and...

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