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FINAVAL HOLDING SPA –
Consolidated Financial Statements at December 31, 2011
Finaval News : headline registered by the law court of Rome n. 7/2011 - 20/01/2011
www.finavalholding.com
Finaval Holding owns interests in companies
operating in areas on which we have decided
to focus through investing financial and, above all,
managerial resources.
We believe that the real drivers of the sustainable
growth of our business and finances are the corporate
values we share with our business associates.
Finaval Holding around the world:
Italy;
France
Switzerland;
Croatia;
Poland;
Greece;
Canada;
Saudi Arabia;
Kazakhstan;
Malta;
India;
Manning agency:
India;
Philippines;
Bulgaria.
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 3
LETTER FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS(*)
Dear Shareholders,
2011 was a very demanding year for Finaval Holding SpA, which was faced with a difficult and complicated
market environment in which, more than in previous years, excess supply resulted in a general decline in
prices, creating operational problems for all companies in the sector.
The Company reports a loss for the year of approximately 23.6 million euros, including non-recurring items of
25 million euros, which at the same time generated cash of approximately 22 million euros.
“The already worrying outlook for shipping was exacerbated by the problems at financial institutions which,
too preoccupied with their own problems, were unable to provide adequate support for industry.
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 4
The economy was, and continues to be, simultaneously affected by three factors: the general loss of industrial
competitiveness, the lack of infrastructure and, above all, the credit squeeze, considered by many
international observers to be the prime reason for the Italian recession, which was initially treated as a bad
loan problem.
It is widely believed that Italian banks are not sufficiently innovative to finance high-potential projects, unless
fully guaranteed.
The banks' conservatism continues to penalize companies which, short of funds, cannot invest and,
consequently, lack the equipment to effectively take on their competitors.
It was often impossible to establish a dialogue with banks to provide with them with the full quantitative and
qualitative understanding of our operations necessary to obtain financing on affordable terms, provide
sufficient liquidity and recapitalize the company in order to provide a base for future growth.
Analysis of the financial statements for 2011 in this light provides a better understanding of the logic of certain
of the Company's decisions, which were taken for the benefit of all stakeholders.
In 2011 Finaval made use of the only leverage available, taking steps to boost profit margins and selling three
ships, giving a substantial boost to liquidity. Whilst resulting in losses reported in the financial statements for
2011, the sales have enabled the Company to restructure its finances and strengthen its balance sheet.
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 5
The Group’s financial highlights show:
a 33 million euro loss, 26 million euros of which was made up of non-recurring items (losses on disposals and
fair value losses on non-current assets) which, however, generated cash of approximately 22 million euros;
adjusting the 2011 loss for non-recurring items results in a loss of approximately 7 million euros, with positive
EBIT at approximately 500 thousand euros;
cash flow generated by operating activities was 24 million US dollars compared with 26 million US dollars in
2010;
cash of 15 million US dollars was generated during the period, which was a 50 million US dollar
improvement on the 35 million US dollars used in 2010.
85% of the vessels directly operated by Finaval were employed on long-term time charter + profit sharing
contracts.
Finaval has, over the past five years, concentrated on bolstering its strength and the outlook for long-term
growth by allying itself with a top ranking international partner, Vitol SA (25% shareholder) and avoiding
speculative business. This approach was the reason that ships were operated throughout the period under
long-term charter parties, which, despite the deep crisis affecting the sector, generated results that were
ahead of the market and Finaval's strongest competitors.
Vitol is a leading global oil product trader with revenues of 297 billion US dollars in 2011, up 45% on 2010. It is
also the world's largest charterer of product tankers in the world with over 200 vessels at sea every day. 5,460
voyages were completed in 2011 compared with 5,300 in 2010.
In addition to its careful management of business, Finaval introduced a cost reduction plan in 2011. Profits
were protected by renegotiating supply contracts and taking advantage of legislation enabling us to benefit
from temporary reductions in staff costs.
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 6
During the year two significant agreements have been signed for the temporary reduction in personnel costs
of the corporate offices through the use of different types of social safety nets. These agreements are
fundamental because cost reduction has been obtained without having to resort to personnel reduction.
With the two separate agreements, one signed by the company, trade unions and the Lazio Regional
Authority, the other by the company and trade unions, two agreements have respectively been activated:
the “exceptional” wages guarantee fund and the “defensive” job-security agreement for Finaval’s
administrative employees.
In that regard, a special thank you goes to those who still believe in the company and who manage to fulfill
their commitments through hard work and dedication despite the difficulties arising from the reduction in
working hours.
Net financial costs for 2011 reflect the year-end translation of debt into euros, which resulted in a deterioration
in the item of 3.5 million US dollars from the 2010 result.
I would also like to emphasize the importance of Finaval's decision to sell a number of ships in these very
difficult market conditions, which meant that the improvement in the company's finances was accompanied
by a loss caused by the very high fluctuations of ship prices.
The vessels were sold to two companies owned by Kazmortransflot, Kazakhstan's state company.
The Director General of Kazmortransflot also attended the concluding meeting, whose presence sealed the
nascent collaboration agreements in which the companies will participate. The involvement of Vitol, one of
the most active oil companies in the region and Finaval’s long-standing partner, was very important for the
finalization of the agreements.
The sale enabled the Company to strengthen its position compared with its peers operating in this weak
market, where an improvement appears to be underway as overcapacity has reached its peak and started
to narrow leading to a slight recovery in charter rates. The recovery is expected to gain momentum in the
second half of 2012, above all with respect to the medium range vessels that make up the great part of
Finaval's fleet.
That notwithstanding, the outlook for the market remains difficult, with a relentless need for change and
flexibility. This will require us to be tireless in our strategy, quickly adjusting to changing market conditions.
Market gyrations are becoming less predictable and can only be successfully confronted by Finaval through
its ability to adopt to change as demonstrated in recent years.
Finaval's strategy and the commitment of management, employees and external stakeholders are key to
strengthening our competitive position and enabling us to excel in our core business”.
The Chairman
Giovanni Fagioli
(*)Letter from the Chairman of the Board of Directors written on the occasion of the presentation of Finaval
SpA’s Consolidated Financial Statements for the year ended December 31, 2011.
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 7
FINAVAL HOLDING SPA
CONSOLIDATED FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 8
CONSOLIDATED BALANCE SHEET
In Euro thousands
ASSETS Dec 31, 11 Dec 31, 10 NOTES
NON-CURRENT ASSETS
PROPERTY, PLANT & EQUIPMENT
Fleet 328,486 390,444 A
Fleet under construction 0 12,765 B
Other assets 9,979 12,932 C
INTANGIBLE ASSETS 13,249 13,052 D
FINANCIAL ASSETS
Other receivables and deposits 1,746 2,312 E
Equity investments 7,613 7,481 F
Deferred tax assets 253 656 G
TOTAL NON-CURRENT ASSETS 361,326 439,642
CURRENT ASSETS
Inventories of oils, lubricants and services in course 2,594 4,420 H
Trade receivables 8,725 13,248 I
Other receivables 1,642 3,293 L
Cash and cash equivalents 20,028 11,964 M
Derivative financial instruments 354 340 N
Tax assets 1,228 1,351 O
TOTAL CURRENT ASSETS 34,571 34,616
NON-CURRENT ASSETS HELD FOR SALE 0 7,287 P
TOTAL ASSETS 395,897 481,546
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 9
CONSOLIDATED BALANCE SHEET
In Euro thousands
SHAREHOLDERS' EQUITY AND LIABILITIES Dec 31, 11 Dec 31, 10 NOTES
SHAREHOLDERS’ EQUITY
Share Capital 30,000 30,000 I1
Legal Reserve 1,565 889 L1
Translation Reserve 18,038 13,801 M1
Consolidation Reserve 18,033 17,463 N1
Other reserves 29,257 20,015 O1
Cash Flow hedge Reserve -5,974 -2,274 P1
Fair value reserve of financial assets available-for-sale -3,406 -1,363 Q1
Retained earnings 26,705 32,956 R1
Net profit for the year -23,613 5,656 S1
TOTAL GROUP SHAREHOLDERS’ EQUITY 90,605 117,142
Minority interest in capital and reserves 30,353 30,708
Minority share of profit/(loss) for the period -8,394 -406
TOTAL SHAREHOLDERS’ EQUITY 112,564 147,444
NON-CURRENT LIABILITIES
Bank payables 204,462 241,500 A1
Employees benefits 630 864 B1
Deferred tax liabilities 510 333 C1
Provision for future charges 57 91 D1
CURRENT LIABILITIES
Bank payables 53,166 66,556 E1
Derivative financial instruments 8,049 4,774 N
Trade payables 11,084 13,222 F1
Other payables 4,657 6,112 G1
Tax liabilities 718 650 H1
TOTAL LIABILITIES 283,333 334,102
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 395,897 481,546
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 10
CONSOLIDATED INCOME STATEMENT
In Euro thousands
Dec 31, 11 Dec 31, 10 NOTES
Net revenues 74,833 84,270 1
Operating costs -49,720 -51,541 2
CONTRIBUTION MARGIN 25,113 32,729 3
Overhead costs -7,642 -9,249 4
Other costs and revenues 1,034 808 5
Result on disposal of vessel -24,983 6,451 6
EBITDA -6,478 30,739 7
Amortisation & depreciation -17,600 -19,196 8
Fair value measurement of non-current assets 0 -3,959 9
Provisions for potential losses on current receivables 0 -91 10
EBIT -24,078 7,493 11
Net Financial income (charges) -7,181 -1,215 12
PRE-TAX RESULT -31,259 6,278
Income taxes -409 -424
Deferred tax charges -339 26
NET PROFIT FROM CONTINUING OPERATIONS -32,007 5,879 13
Net result from discontinued operations 0 -630 14
NET PROFIT -32,007 5,249
Minority share of profit/(loss) for the period -8,394 -406
GROUP RESULT -23,613 5,656
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 11
STATEMENT OF COMPREHENSIVE INCOME
In Euro thousands Dec 31, 11 Dec 31,109
Net profit -23,613 5,656
Gains/(losses) on exchange differences on translating foreign
operations 2,819 9,267
Gains/(losses) on cash flow hedge -3,700 -3,976
Gains/(losses) on fair value of available-for-sale financial assets -2,043 -375
Total comprehensive income -26,537 10,572
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY (WITH COMPREHENSIVE INCOME)
In Euro thousands Dec 31, 11 Dec 31, 10
Initial Equity 117,142 106,770
Comprehensive income -26,537 10,572
- Net profit -23,613
- Gains/(losses) on exchange differences on translating foreign
operations 2,819
- Gains/(losses) on cash flow hedge -3,700
- Gains/(losses) on fair value of available-for-sale financial assets -2,043
Dividends distribution 0 -200
Final Equity 90,605 117,142
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 12
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY
In Euro thousands Share
capital
Legal
reserve
Traslation
Reserve
Consolidati
on Reserve
Other
reserves
Cash
flow
hedge
reserve
Fair
value
reserve
Retained
earnings Result for
the year Group
shareholder
s' equity
Minority
equity
Totale
Equity
Balance at December 31, 2009 30,000 858 1,440 16,193 20,215 1,702 -988 34,170 3,181 106,770 28,210 134,980
Allocation of the 2009 result 31 3,150 -3,181 0 0
Change in fair value deriving
from hedging and of financial
assets available-for-sale net of
the tax effect -3,976 -375 -4,351 -4,351
Transationa Reserve 12,361 1,270 -4,364 9,267 2,498 11,766
Dividends distribution -200 -200 -200
Result for the year 5,656 5,656 -406 5,249
Balance at December 31, 2010 30,000 889 13,801 17,463 20,015 -2,274 -1,363 32,956 5,656 117,142 30,302 147,444
Allocation of the 2010 result 677 9,242 -4,264 -5,656 0 0
Change in fair value deriving
from hedging and of financial
assets available-for-sale net of
the tax effect -3,700 -2,043 -5,743 -5,743
Transationa Reserve 4,236 571 -1,987 2,819 51 2,871
Result for the year -23,613 -23,613 -8,394 -32,007
Balance at December 31, 2011 30,000 1,566 18,037 18,034 29,257 -5,974 -3,406 26,705 -23,613 90,605 21,959 112,564
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 13
FINAVAL HOLDING SPA
CONSOLIDATED FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2011
IN FUNCTIONAL CURRENCY (USD)
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 14
CONSOLIDATED BALANCE SHEET
In Usd thousands
ASSETS Dec 31, 11 Dec 31, 10 NOTES
NON-CURRENT ASSETS
PROPERTY, PLANT & EQUIPMENT
Fleet 425,028 521,711 A
Fleet under construction 0 17,056 B
Other assets 12,912 17,280 C
INTANGIBLE ASSETS 17,143 17,440 D
FINANCIAL ASSETS
Other receivables and deposits 2,259 3,090 E
Equity investments 9,851 9,996 F
Deferred tax assets 327 877 G
TOTAL NON-CURRENT ASSETS 467,520 587,450
CURRENT ASSETS
Inventories of oils, lubricants and services in course 3,356 5,906 H
Trade receivables 11,289 17,702 I
Other receivables 2,125 4,400 L
Cash and cash equivalents 25,914 15,986 M
Derivative financial instruments 458 455 N
Tax assets 1,589 1,806 O
TOTAL CURRENT ASSETS 44,731 46,255
NON-CURRENT ASSETS HELD FOR SALE 0 9,737 P
TOTAL ASSETS 512,251 643,442
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 15
CONSOLIDATED BALANCE SHEET
In Usd thousands
SHAREHOLDERS' EQUITY AND LIABILITIES Dec 31, 11 Dec 31, 10 NOTES
SHAREHOLDERS’ EQUITY
Share Capital 38,817 40,086 I1
Legal Reserve 2,026 1,187 L1
Translation Reserve 25,052 18,637 M1
Consolidation Reserve 23,334 23,334 N1
Other reserves 37,856 26,743 O1
Cash Flow hedge Reserve -7,730 -3,039 P1
Fair value reserve of financial assets available-for-sale -4,408 -1,821 Q1
Retained earnings 34,553 44,036 R1
Net profit for the year -32,265 7,362 S1
TOTAL GROUP SHAREHOLDERS’ EQUITY 117,235 156,525
Minority interest in capital and reserves 39,822 41,073
Minority share of profit/(loss) for the period -11,410 -584
TOTAL SHAREHOLDERS’ EQUITY 145,647 197,014
NON-CURRENT LIABILITIES
Bank payables 264,554 322,693 A1
Employees benefits 815 1,154 B1
Deferred tax liabilities 660 445 C1
Provision for future charges 73 121 D1
CURRENT LIABILITIES
Bank payables 68,791 88,933 E1
Derivative financial instruments 10,415 6,380 N
Trade payables 14,342 17,667 F1
Other payables 6,026 8,167 G1
Tax liabilities 928 868 H1
TOTAL LIABILITIES 366,604 446,428
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 512,251 643,442
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 16
CONSOLIDATED INCOME STATEMENT
In Usd thousands
Dec 31, 11 Dec 31, 10 NOTES
Revenues 104,219 112,014 1
Operating costs -69,214 -68,475 2
CONTRIBUTION MARGIN 35,005 43,539 3
Overhead costs -10,640 -12,250 4
Other costs and revenues 1,397 1,049 5
Result on disposal of vessel -33,834 8,440 6
EBITDA -8,072 40,778 7
Amortisation & depreciation -24,544 -25,462 8
Fair value measurement of non-current assets 0 -5,290 9
Provisions for potential losses on current receivables 0 -120 10
EBIT -32,616 9,906 11
Net Financial income (charges) -10,022 -1,756 12
PRE-TAX RESULT -42,638 8,150
Income taxes -563 -563
Deferred tax charges -472 41
NET PROFIT FROM CONTINUING OPERATIONS -43,673 7,628 13
Net result from discontinued operations 0 -850 14
NET PROFIT -43,673 6,778
Minority share of profit/(loss) for the period -11,408 -584
GROUP RESULT -32,265 7,362
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 17
STATEMENT OF COMPREHENSIVE INCOME
In Usd thousands Dec 31, 11 Dec 31, 10
Net profit -32,265 7,362
Gains/(losses) on exchange differences on translating foreign
operations 253 1,529
Gains/(losses) on cash flow hedge -4,691 -5,492
Gains/(losses) on fair value of available-for-sale financial assets -2,587 -398
Total comprehensive income -39,290 3,001
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY (WITH COMPREHENSIVE INCOME)
In Usd thousands Dec 31, 11 Dec 31, 10
Initial Equity 156,525 153,812
Comprehensive income -39,290 3,001
- Net profit -32,265
- Gains/(losses) on exchange differences on translating foreign
operations 253
- Gains/(losses) on cash flow hedge -4,691
- Gains/(losses) on fair value of available-for-sale financial assets -2,587
Dividends ditribution 0 -288
Final Equity 117,235 156,525
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
FINAVAL HOLDING SPA Pag. 18
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY
In usd thousands Share
capital
Legal
reserve
Traslation
Reserve
Consolid
ation
Reserve
Other
reserves
Cash flow
hedge
reserve
Fair
value
reserve
Retained
earnings Result for
the year Group
sharehold
ers'
equity
Minority
equity
Totale
Equity
Balance at December 31, 2009 43,218 1,236 2,724 23,327 29,120 2,453 -1,423 49,223 3,934 153,812 40,640 194,452
Allocation of the 2009 result 45 3,889 -3,934 0 0
Change in fair value deriving from
hedging and of financial assets
available-for-sale net of the tax
effect -5,492 -398 -5,890 -5,890
Transationa Reserve -3,132 -93 15,913 7 -2,089 -9,076 1,529 433 1,962
Dividends distribution -288 -288 -288
Result for the year 7,362 7,362 -584 6,778
Balance at December 31, 2010 40,086 1,187 18,637 23,334 26,743 -3,039 -1,821 44,036 7,362 156,525 40,489 197,014
Allocation of the 2010 result 905 12,350 -5,893 -7,362 0 0
Change in fair value deriving from
hedging and of financial assets
available-for-sale net of the tax
effect -4,691 -2,587 -7,277 -7,277
Transationa Reserve -1,269 -66 6,415 0 -1,238 -3,590 253 -667 -414
Result for the year -32,265 -32,265 -11,410 -43,676
Balance at December 31, 2011 38,817 2,025 25,052 23,334 37,856 -7,730 -4,408 34,553 -32,265 117,235 28,412 145,647
FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2011
CONSOLIDATED CASH FLOW STATEMENT
In USd thousands
Operating activities Dec 31,11 Dec 31,10
Profit from operating activities -43,673 7,628
Adjustments for:
- Adjustment to financial assets 71 37
Fair value measurement of non-current assets 0 5,290
- Income taxes 1,035 522
- Financial (income)/Charges 10,021 1,756
- Depreciation of non-current tangible assets 24,539 25,396
- Amortisation of intangible assets 5 66
- Employee leaving indemnity provision 538 331
- Provisions for risks and future charges 84 79
- Purchase/sale of fixed assets 33,834 -8,440
- Result of discontinued operations net of purchase/sale of fixed assets 0 -850
- Financial (income)/charges of discontinued operations 0 0
Cash flow generated from operating activities before working capital changes 26,456 31,816
Financial income/(charges) net of exchange gains(losses) and the IAS 32 and 39
effects -12,577 -8,333
(Increase) / Decrease in trade receivables 6,412 -5,836
Increase/ (Decrease) in trade payables -3,325 -442
(Increase) / Decrease in inventories 2,549 -3,652
(Increase) / Decrease of other current assets/liabilities 134 -1,390
(Increase) / Decrease in tax receivables and payables -758 -710
Increase (Decrease) in risks and employee leaving indemnity provision -1,009 183
Increase / (Decrease) of deferred tax assets and liabilities 765 -271
Cash flow generated from working capital 4,769 -12,117
Cash flow generated/(absorbed) from Operating Activities (A) 18,647 11,366
Investing activities
(Investments) / Divestments in intangible assets 292 -2,123
(Investments) / Divestments in property, plant and equipment 59,733 -76,552
(Investments) / Divestments in financial assets 5,595 23,675
(Investments) / Divestments in non-current assets held-for-sale 9,737 -9,738
Divestment of discontinued operations 0 0
Cash flow generated/(absorbed) from Investing Activities (B) 75,357 -64,738
Financing activities
Change in bank payables -78,280 29,821
Change in Shareholders' Equity -7,695 -4,217
Cash flow generated/(absorbed) from Financing Activities (C) -85,975 25,604
Cash flow generated (absorbed) in the year (A+B+C) 8,030 -27,768
Effect of the changes in foreign exchange rates (D) 1,897 6,593
Cash and cash equivalents at the beginning of the year (E) 15,986 37,160
Cash and cash equivalents at the end of the year (A+B+C+D+E) 25,914 15,986
FINAVAL HOLDING SpA
Sole Shareholder
Roma: Via M. Bufalini, 8
ISSUED CAPITAL €30,000,000.00 fully paid-up
TAX CODE AND COMPANIES’ REGISTER NUMBER
AT THE COURT OF ROME: 01922160351 - ROME BUSINESS REGISTER NO. 1070911
A company that exercises control, management and coordination
Report of the Board of Statutory Auditors
on the consolidated financial statements
of FINAVAL HOLDING SpA for the year ended December 31, 2011
Dear Shareholders,
The consolidated financial statements of FINAVAL HOLDING SpA and its subsidiaries for the
year ended December 31, 2011, as made available to you, have been prepared pursuant to article 25
of Legislative Decree 127 of April 9, 1991. The consolidated financial statements report loss for the
year of 23,613,000 euros. They have been published within the legally required deadline, together
with the management report on operations.
As in the prior year, the Group's consolidated financial statements for the year ended December 31,
2010 have been prepared in compliance with the IAS/IFRS issued by the International Accounting
Standards Board and endorsed by the European Union.
The reason for this decision was that the subsidiary, Finaval SpA, which is by far the largest of the
Finaval Holding Group's consolidated companies, has exercised the option of adopting IAS/IFRS
for its own financial statements. The Board of Directors has explained its decision in the notes to
the financial statements, referring to the provisions of paragraph 9.3 of Italian Accounting Standard
17 regarding the necessity to apply uniform accounting standards in the preparation of consolidated
financial statements. The Board of Statutory Auditors concurs with this explanation.
The functional currency for the Group's consolidated financial statements is the United States
dollar, due to the adoption, in 2008, of the dollar as its functional currency by the subsidiary,
Finaval SpA, which is by far the largest company consolidated in the Finaval Holding Group's
financial statements. This decision was taken in consideration of the effects of the investment and
disinvestment plan implemented during that year, and decisions made regarding the use of new
ships, taking into account the substantial employment of the fleet via contracts denominated in US
dollars, as well as the fact that the Group's operating costs and financial expenses are primarily
incurred in US dollars. These circumstances thus led to the Parent Company to change its functional
currency from the euro to the US dollar, by applying the relative currency translation procedure
regarding accounting data as of January 1, 2008, in accordance with the provisions of IAS 21.
The Group exercises the right to present financial statements in a currency different from the
functional currency. In particular, the Parent Company presents its statutory and consolidated
financial statements in euros. Consequently, the accounts presented in the consolidated financial
statements as of and for the year ended December 31, 2011 were translated into euros, the
presentation currency.
Whilst the Board of Statutory Auditors is not responsible for expressing an audit opinion on the
consolidated financial statements, we confirm that the information provided by the Directors’ with
regard to identification of the principal economic environment is in line with the principal “primary
and secondary indicators” identified by the IASB (International Accounting Standards Board) for
the purposes of adopting a functional currency different from the presentation currency.
The audit carried out by the independent auditors, Deloitte & Touche SpA, confirmed that the
amounts reported in the financial statements are consistent with the underlying accounting records
of the Parent Company, with the separate and consolidated financial statements of the Parent
Company, and with the disclosures therein.
The financial statements provided to the Parent Company by its subsidiaries for the purposes of
preparing the consolidated financial statements, as prepared by the respective board of directors,
have been audited by the entities with responsibility for auditing each individual company, when
appointed, and by Deloitte & Touche SpA as part of its audit of the consolidated financial
statements. The Board of Statutory Auditors has not, therefore, audited these financial statements.
The management report on operations adequately describes the results of operations and financial
position of the Group, and its operating performance in 2011. It also contains adequate information
on related party transactions, on events after December 31, 2011 and on the outlook for 2012.
The independent auditors, Deloitte & Touche SpA, have submitted to us there report on the
consolidated financial statements, prepared pursuant to art. 41 of Legislative Decree 127/91. The
report states that the consolidated financial statements comply with International Financial
Reporting Standards and expresses a clean opinion on the consolidated financial statements,
attesting that they are in conformity with the related legislation and that the management report on
operations is consistent with the financial statements.
Based on the above, we attest that the basis of presentation for the consolidated financial statements
and the management report on operations complies with the related legislation.
June 13, 2012
The Board of Statutory Auditors
Maria Altamura
Gigliola Di Chiara
Fabio Senese
INDEPENDENT AUDITORS’ REPORT ISSUED PURSUANT TO
ART. 14 OF LEGISLATIVE DECREE 39 OF JANUARY 27, 2010
To the Shareholders of
Finaval Holding S.p.A.
1. We have audited the consolidated financial statements of Finaval Holding S.p.A. and its subsidiaries
(the Finaval Holding Group), which comprise the balance sheet, the income statement, the statement
of comprehensive income and changes in equity, and the cash flow statement for the year ended
December 31, 2011, and the related explanatory notes. Preparation of the financial statements in
accordance with the International Financial Reporting Standards adopted by the European Union is
the responsibility of the Directors of Finaval Holding S.p.A.. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.
2. We conducted our audit in accordance with generally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain the necessary assurance about whether the
consolidated financial statements are free of material misstatement and, taken as a whole, are
presented fairly. 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. We believe that our audit provides a
reasonable basis for our opinion.
For our opinion on the consolidated financial statements of the prior year, presented for comparative
purposes, reference should be made to our report issued on June 13, 2011.
3. In our opinion, the consolidated financial statements of the Finaval Holding Group for the year ended
December 31, 2011 comply with the International Financial Reporting Standards adopted by the
European Union and give a true and fair view of the balance sheet, financial position and results of
operation and cash flows of the Finaval Holding Group as at that date.
4. Preparation of the Directors’ report on operations in compliance with applicable legislation is the
responsibility of the Directors of Finaval Holding S.p.A.. Our responsibility is to express an opinion
on the consistency of the Directors’ report on operations with the financial statements, as required by
law. We have, therefore, carried out the procedures indicated in auditing principle no. 001 issued by
the Italian accounting profession. It is our opinion that the Directors’ report on operations is
consistent with the consolidated financial statements of the Finaval Holding Group for the year
ended December 31, 2011.
DELOITTE & TOUCHE S.p.A.
Giovanni Cherubini
Partner
Rome, Italy
June 13, 2012