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Consolidated Financial Report |
EXPLANATORY NOTES
2014 Annual Report
Prysmian Group
132
duly placed under detailed technical investigation.
Following tests on the quality of the cable produced and
analysis of the materials and the manufacturing process, the
Directors felt able to make a reliable estimate of the impact
of the above problems on the project’s revenues and costs.
The total impact on the 2014 results has been Euro 53 million,
resulting from the full elimination of the margins previously
recognised on the contract and the recognition of a provision
to cover the expected contract loss.
Including non-recognition of the margin originally expected
on this project in the period, the overall negative impact of
theWestern HVDC Link (UK) project on the 2014 results would
have been Euro 94 million.
Plant closures
On 6 July 2014, the Management Board of Prysmian Nether-
lands informed trade union representatives of the intention
to close the plant in Amsterdam - 78 employees - and transfer
production to the plants in Delft and Emmen.
Agreements for the plant’s closure have been reached, with
the process of shutdown currently in progress and due to last
for part of 2015.
On 16 July 2014, Draka Paricable (France) initiated a con-
sultation process with the trade unions for the closure of
the Aubevoye plant - 92 employees - and the transfer of
production to the plants in Amfreville and Gron. The process
of discussions with the unions and the related agreements
completed by the end of 2014, as well as the plant’s closure.
These plant closures are in response to the need to optimise
manufacturing footprint at individual country level, with the
aim of realigning industrial presence with the potential of
the relevant business/market and of improving production
capacity utilisation, as well as overall economic performance,
through economies of scale.
Consequent impairment testing of the assets of the plants
involved in this restructuring has not resulted in the recogni-
tion of any impairment losses.
Other restructuring costs have been estimated based on
the outcome of negotiations with the trade unions; at 31
December 2014, these costs were recognised as far as could
be reasonably estimated. Further details can be found in Note
14. Provisions for risks and charges.
AMT Explorer cable barge
On 3 July 2014, the AMT Explorer cable barge, chartered to
transport power cables for the Deutsche Bucht and Butendiek
offshore wind farms in Germany, capsized while under tow in
transit from Arco Felice (Naples) to Bremerhaven (Germany).
The rotating platform owned by the Prysmian Group and its
load sank as a result. The value of the cables transported,
unrecoverable given the depth of the water in the area of
the sinking, amounted to approximately Euro 28 million. The
lost cables were fully insured and as at 31 December 2014
Prysmian PowerLink S.r.l. had collected the full amount of the
loss claimed from the insurers. At 31 December 2014 the value
of the rotating platform was fully impaired (Euro 5 million)
and an insurance reimbursement for the same amount has
been recognised.
Prysmian and TenneT, the partner in the wind farm projects,
are working to avoid any consequences that could affect the
project execution timetable.
Second cycle of Group employee share purchase
plan (YES Plan)
During the month of December 2014, employees were
informed of the opening of the plan’s second cycle in 2015.
Employees had until the third week of February 2015 to sign
up for the second cycle and to communicate the amount they
intended to invest. The total amount collected will be used to
make purchases of the Company’s shares on the Milan Stock
Exchange (MTA) during the month of July 2015.
The consolidated financial statements contained herein were
approved by the Board of Directors on 25 February 2015.
In application of art. 264b HGB of the German Commercial
Code (“Hundelsgesetzbuch”), the present financial state-
ments exempt Draka Comteq Berlin GMBH & Co.KG and Draka
Comteq Germany GMBH & Co.KG. from the requirement to
present statutory financial statements.
Note: all amounts shown in the tables in the following Notes
are expressed in millions of Euro, unless otherwise stated.