Consolidated
Financial
Statements
  december , 
api holding S.p.A.
Registered office : Via Salaria 1322 - 00138 Rome
Share Capital Euro 361,200.00 fully paid
Rome Chamber of Commerce and Economic Administrative Roster (R.E.A.) No. 660678
Tax Code and Companies’ Register of Rome No. 08505000581
VAT Code 02073821007
Contents
1
2
api holding S.p.A. - Group organization chart
4
Board of Directors
7
Report of the Board of Directors as of 31 December 2011
9
Report as of 31 December 2011
11
The Macroeconomic scenario
11
The Reference Market
12
The Electricity Sector
12
The Oil Industry
15
Performance of the main subsidiaries
16
Results from Operations
25
Financial Management
31
Relations with Subsidiary and Associated Companies
33
Main events occurring after year end
34
Consolidated Financial Statements as of 31 December 2011
37
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
39
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
40
CONSOLIDATED CASH FLOW STATEMENT
41
CHANGES IN SHAREHOLDERS’ EQUITY ITEMS
42
Accounting standards and explanatory notes
44
Explanatory notes to Consolidated Statement of Comprehensive Income
67
Explanatory notes to Consolidated Statement of Financial Position
76
3
Report of the Board of Statutory Auditors
109
4
Independent Auditors’ Report
113
5
Summary of key financial data as of 31 December 2011
117
Balance Sheet IAS/IFRS
118
Income Statement IAS/IFRS
119
api holding S.p.A.
Rome
Fin. Bra. S.A.
Luxembourg
99.98%
api anonima petroli italiana S.p.A.
Rome
api real estate S.r.l.
Rome
51.31% api holding S.p.A.
48.51% Fin. Bra. S.A.
51.31% api holding S.p.A.
48.51% Fin. Bra. S.A.
api energia S.p.A.
Falconara Marittima (AN)
api raffineria di Ancona S.p.A.
Falconara Marittima (AN)
98.84% api anonima italiana S.p.A.
1.16% api holding S.p.A.
100.00% anonima petroli italiana S.p.A.
apisoi service S.p.A. in liquidation
Ancona
ISI 2003 S.r.l. in liquidazione
Rome
100.00%
Finbra Real Estate S.r.l.
Rome
50.00%
100.00%
Courmayer Montblanc Funivie S.p.A.
Aosta
1.65%
api services Ltd
London
apioil Ltd
Bermuda
99.99%
99.99%
Festival S.p.A.
Rome
Dialco S.r.l.
Bari
100.00%
100.00%
apifin S.r.l. in liquidation
Rome
G.R.C. S.r.l.
Rome
100.00%
100.00%
Saccne rete S.r.l.
Messina
Ip Services S.r.l.
Rome
50.00%
100.00%
Abruzzo Costiero S.r.l.
Pescara
Apisem S.r.l.
Lecce
30.00%
50.00%
SGR S.p.A.
Rome
Petroven S.r.l.
Marghera
0.78%
10.00%
Marina Fiera di Genova GE S.p.A.
Genoa
Immobiloil S.r.l.
Rome
4.70%
3.12%
Apimak Sh.pk.
Macedonia
apibenzin d.o.o.
Croatia
52.00%
50.00%
Civita servizi S.r.l.
Rome
2.33%
api nòva energia S.r.l.
Rome
cer S.p.A.
Rome
100.00%
100.00%
nòvawind Sud S.r.l.
Rome
nòvasol Calabria S.r.l.
Belvedere Marittimo (CS)
Ambienta SGR S.p.A.
Milan
100.00%
100.00%
0.60%
nòvawind Sicilia S.r.l.
Palermo
nòvasol Puglia S.r.l.
Foggia
100.00%
100.00%
Opera sca
Luxembourg
1.10%
s.e.r S.p.A.
Palermo
nòvasol Centro S.r.l.
Rome
50.10%
100.00%
s.e.r. 1 S.p.A.
Rome
nòvasol Sicilia S.r.l.
Palermo
F.I.T. S.p.A.
London
2.91%
2.00% apinòva energia S.r.l.
96.00% s.e.r. S.p.A.
100.00%
Sator S.p.A.
Rome
1.09%
italsilicon S.p.A.
Rome
WAS S.r.l.
Bologna
41.50%
50.00%
sunshire S.r.l.
Tolentino (MC)
100.00%
sòlergys S.p.A.
Rome
SAB Sr.l.
Rome
50.00%
SAB Mozambiqque S.A.
Mozambico
100.00% SAB S.r.l.
51.00%
nòvabra ES S.A.
Espirito Santo (BRA)
100.00%
nòvaagri soc. agr. a.r.l.
Rome
100.00%
Biotrade S.p.A.
Strongoli
50.00%
Ecoenergia S.r.l.
Foggia
51.00%
Biomasse Italia S.p.A.
Crotone
50.00%
Board
of
directors
Cav. Lav. Dott. Aldo Maria Brachetti Peretti
Dott. Ferdinando Maria Brachetti Peretti
Dott. Ugo Brachetti Peretti
Sig.ra Mila Peretti
Dott. Umberto Scarimboli
Sig.ra Benedetta Brachetti Peretti
Sig.ra Chiara Brachetti Peretti
Avv. Ferdinando Carabba Tettamanti
Board
of
(Chairman)
(Vice Chairman/ Managing Director)
(Vice Chairman)
(Director)
(Vice Chairman)
(Director)
(Director)
(Director)
statutory auditors
Dott. Pier Andrea Frè Torelli Massini
Dott. Mario Casini
Dott. Fabrizio Scanu
Avv. Stefano Crisci
Dott. Mirko Pezzulich
registered
office
Via Salaria, 1322
00138 Rome
independent auditors
Reconta Ernst & Young S.p.A.
(Chairman)
(Statutory Auditor)
(Statutory Auditor)
(Alternate Auditor)
(Alternate Auditor)
1
Report of the Board of Directors
as of 31 December 2011
Report as of 31 December 2011
Dear Shareholders,
The financial statements for the year 2011, which we submit for your approval, show a profit equal
to Euro 40,279,964.
Before providing you with an in-depth analysis of the financial statements and the explanatory notes
with the aim of illustrating the accounting principles used and the significant figures recognised, we
deem it worthwhile to outline the trend in the company’s market and the most important data
concerning our main subsidiaries.
The macroeconomic scenario
Last year featured an overall growing world economy, with a 4% rise in global GDP, though
considerably slowing down compared to the 5.1% increase of 2010. As in the past, the great
divergence between emerging and industrialised countries persists; for the former, supported by the
internal demand, growth reached 6.4%, while industrialised countries experienced limited growth,
totalling 1.6%.
In the Euro zone, 2011 was characterised by the intensifying sovereign debt crisis which, after
hitting Greece, Ireland and Portugal, started to expand in an ever worrying manner also to Spain and
Italy, putting the entire Euro zone at risk and generating serious volatility and uncertainty in the financial
markets. This difficult context led investors to prefer “safer” financial assets (flight to quality) thus
resulting in a very high differential between the Treasury bonds deemed reliable (American and German
in particular) and riskier securities. The spread of Italian treasury bonds compared to German bonds
reached the record figure of 548 basis points in November.
The Euro Group intervened in this difficult situation through the State Rescue Fund (EFSF), providing,
together with the IMF, capital for Euro 78 billion to Portugal and more support to Greece for Euro 130
billion, on condition that the latter approves profound austerity measures.
Furthermore, during the year the EFSF was reformed and bolstered from Euro 250 to 440 billion
during the summit of 21 July in order to give it more flexibility; these changes mainly concern the
possibility for the fund to recapitalise banks and operate in the secondary market by purchasing
debentures issued of any country in the Monetary Union that finds itself in exceptional circumstances.
In this extremely uncertain scenario, the ECB in any case decided, in the first part of the year, to
increase the official discount rate from 1% to 1.50% in the meetings of 7 April and 7 July; this measure,
after almost two years of rates fixed at 1%, was implemented due to the concerns about inflation as
a consequence of the sharp increase in the price of raw materials. Instead, in the last few months of
the year, the increasingly uncertain and worrying situation in the Euro zone forced the ECB to bring the
discount rate back to 1%, through two subsequent measures on 3 November and 8 December.
Furthermore, beginning in the summer the ECB restarted to purchase treasury bonds, especially
Italian and Spanish ones, as part of the Security Market Programme (SMP) in order to reduce the
widening differential between the return of German treasury bonds and that of countries in great
difficulty.
Finally, the Central Bank scheduled two long-term refinancing operations (LTRO) for banks at 36
months at 1% and widened the range of securities to be provided as collateral. The first LTRO started
on 21 December and ended with the granting of Euro 489 billion, with Italian banks requesting Euro
116 billion. The second was scheduled for 29 February.
11
Report of the Board of Directors
Consolidated Financial Statements 2011 api holding S.p.A.
12
api holding S.p.A. Consolidated Financial Statements 2011
The monetary policy adopted by the FED continued to be very expansive, leaving the level of FED
FUNDS unchanged between 0% – 0.25% for all of 2011; indeed, also at the last meeting of 13
December, the FED underlined how this level of rates will be kept unaltered at least until halfway
through 2013.
In September the FED also reduced the so-called “operation twist”, i.e. the purchase, until June
2012, of treasury bonds with a term between 6 and 30 years and the sale of securities with a term of
less than 3 years. The aim of this transaction is to flatten the yield curve.
As regards the foreign currency market, after weakening in the first few days of the year, reaching
1.2903, the Euro/Dollar exchange rate started a rising trend from the middle of June, reaching the
maximum level of 1.4822 on 4 May; the reason for this Euro appreciation is mainly associated with the
performance of the Euro/USA rate differential, particularly since the ECB suggested possible additional
rate increases, as demonstrated in April; this trend is also affected by the increased petrol price after
the political tension in North African countries.
In the summer months, with the issues regarding the sovereign debt worsening and due to the
uncertainty regarding the plans to manage the crisis, the Euro/Dollar exchange rate experienced a very
volatile trend, weakening considerably in September when it passed from 1.4285 Euro/Dollar (on 1
September) to 1.3181 Euro/Dollar (on 4 October), with a more than 8% depreciation in just one month.
After a slight recovery in October, the Euro returned to lose value as the Euro Group failed to make
decisions on the Greek problem, until reaching a minimum low of 1.2889 on 29 December.
In the commodities markets, the serious geopolitical crisis breaking out in North African countries
led to a sharp increase in the price of the Brent Bwave which, from 93.33 USD/barrel on 7 January, hit
125.41 USD/barrel on 11 April. The price subsequently slimmed down following the catastrophic events
occurring in Japan up to 104.51 USD/barrel on 27 June. From the summer onwards, the oil price
featured a very volatile trend (ranging between a maximum of 119.90 USD/barrel on 14 June to a
minimum of 100.44 USD/barrel on 4 October).
Throughout the year, the extraordinary increase in risk aversion led to a continuous growth of the
price of gold, which on 5 September reached the maximum value of 1900 USD/ounce.
THE REFERENCE MARKET
THE ELECTRICITY SECTOR
Electricity demand was up for the second year in a row. Provisional data on electricity requirement
in 2011 shows an increase of 0.6% compared to 2010, which in turn had ended with +3.2% compared
to 2009. The energy required in Italy in 2011 totalled 332.3 billion kWh (kilowatt-hour).
2011 – Estimated values GWh
2011
Hydroelectric production
Thermoelectric production
Geothermal electric production
Wind production
Photovoltaic production
Total net production
Energy for pumps
Net production for consumption
Imported
Exported
Foreign balance
Requirement
47,672
217,369
5,307
9,560
9,258
289,166
2,518
286,648
47,349
1,723
45,626
332,274
2010
53,795
220,984
5,047
9,048
1,874
290,748
4,453
286,295
45,987
1,827
44,160
330,455
Change %
-11.4%
-1.6%
5.2%
5.7%
394.0%
-0.5%
-43.5%
0.1%
3.0%
-5.7%
3.3%
0.6%
In 2011 national production met 86.3% of the electricity demand (of which 64.7% thermoelectric,
14.3% hydroelectric, 2.9% wind, 2.8% photovoltaic and 1.6% geothermal); the remainder (13.7%)
was met by the energy exchanged with foreign countries. In more detail, the net national production
(289.2 billion kWh) decreased by 0.5% compared to 2010; a drop is recorded in hydroelectric (-11.4%)
and thermoelectric (-1.6%) sources, while geothermal electric (+5.2%), wind (+5.7%) and photovoltaic
(+394%) production sources showed an increase.
Photovoltaic installations in particular grew exponentially. Official data shows an installed power as
at 31 December 2011 slightly lower than 13,000 MW (megawatts), given the objective, according to
the National Action Plan as at 2020, of 8,000 MW, with about 9,400 MW new installations in 2011
only, i.e. +367% compared to the power installed in 2010. It is worth specifying that, of the 9,400 MW,
about 3,740 MW refer to plants in operation in 2011 but for which construction was completed by 31
December 2010 and which, therefore, benefit from the incentives of the II Energy Account according
to the provisions of Law 129/10 (so-called Salva Alcoa).
On the wind front, the power accumulated at the end of 2011 reached 6,878 MW, up by 18.3%
compared to 2010, corresponding to 1,064 MW installed in the year. At the end of 2011 a total of
about 41,352 MW were installed in Italy, referring to renewable source plants. Initial estimates would
suggest that this power, when added to the new installations forecast for the first half of 2012, will be
sufficient to cover the 20-20-20 objective regarding the total consumption to be satisfied through
renewable sources, equalling about 100 TWh (terawatt hour).
Regulatory aspects
For the sector of renewable sources, 2011 was an extremely important year, with several regulatory
interventions that will have a considerable impact in the future.
The main change concerns the legislative decree implementing directive 2009/28/EC (Leg. Decree
28/2011) on promoting the use of energy from renewable sources. As is well known, the directive
introduces a binding objective of contribution from renewable sources to primary energy consumption
in the European Union equal to 20%, to be reached gradually but strictly by 2020. This objective is
arranged at Member State level, so that Italy is assigned a national target of 17% of production from
renewable sources over primary energy consumption by 2020. This is subordinated to the obligation to
reach a 10% use of biofuels over the total consumption in the transport sector.
Legislative decree 28/2011 implementing directive 2009/28/ec
Based on the proxy granted to the government by Parliament with law 96/2010, the Government
issued a legislative decree regarding the implementation of directive 2009/28/EC, published definitively
on 28 March 2011 (Leg. Decree 28/2011). With the aim of defining instruments, mechanisms,
incentives and an institutional, financial and legal framework to reach the objectives of 2020 in terms
of overall portion of energy from renewable sources on the total energy consumption and in transport,
the decree entirely overhauls the sector.
More precisely, for the plants powered by renewable sources that will start operation after 31
December 2012, also following total or partial remaking or upgrade, the decree replaces the
“incentivising instrument” of the green certificate with a new mechanism based on incentives assigned
via long term private law contracts with the GSE (“feed-in” contract), whose value is defined through
a unique bid auction. The starting auction value (i.e. the maximum value that can be obtained) varies
by technology, size and date of commissioning the plant and will be adjusted on the basis of
technological evolution (update set every three years). Once the individual feed-in contracts are
13
Report of the Board of Directors
Consolidated Financial Statements 2011 api holding S.p.A.
14
api holding S.p.A. Consolidated Financial Statements 2011
awarded and the characteristic incentive is defined, the tariff will be constant and will remain valid for
a duration that is proportional to the conventional average useful life of the specific type of plant. The
auction procedures carried out periodically refer to the power quotas to be installed for each source or
type of plant.
The plants in operation by 31 December 2012 will continue to benefit from the green certificates
until 2015. The compulsory green certificate quota will continue to increase until 2012, when it will
reach 7.55%. This portion will be decreased gradually from 2013, until reaching zero in 2015.
For sustainable biomasses and bioliquids, the incentive considers the traceability and origin of the
raw material as well as the need to apply woody biomass primarily for thermal use and sustainable
bioliquids for transport.
The already complex reference framework for bioenergy is compounded by the transposition of
sustainability criteria into the national law. These criteria derive from the will to encourage the use only
of those bioliquids that are deemed sustainable, meaning those bioliquids that are not produced from
raw materials cultivated in particularly “valuable” lands (such as primary forests and other woodland,
areas devoted to nature protection purposes or that feature a high carbon stock) and are able to ensure
a reduction in the emission of greenhouse gases by at least 35% compared to using fossil sources,
throughout their entire life cycle, from sowing the seed to the production of energy. The bioliquids that
do not meet these requirements will not be included among the renewable sources to reach the target
for 2020 and can not benefit from the incentives.
Early termination of CIP 6/92 Conventions
At the end of May 2011 the Government approved the Legislative Decree implementing directives
2009/72/EC, 2009/73/EC and 2008/92/EC concerning the opening of the electric energy and gas
markets. The measure rearranges the above mentioned markets with the introduction of regulations
aiming to better protect consumers, increase the security of supplies and promote competition and the
full opening of markets.
Worth remembering is that, in implementing art. 30, paragraph 20 of Law no. 99 of 23 July 2009,
the Ministry for Economic Development issued, upon the proposal of the Authority for Electricity and
Gas, the decree of 2 December 2009 that establishes the mechanisms for the early and voluntary
termination of the so-called Cip 6 conventions, concerning the plants powered by process fuels, residues
or energy recovered and similar plants powered by fossil fuel. With the subsequent decree of 2 August
2010, the minister defined the early termination and settlement methods, just for the plants powered by
fossil fuels. For the plants powered by process fuels, the decrees will be arranged during 2012.
Regarding the api group it is recorded that the company api energia S.p.A., after obtaining the
authorisation from the financing banks, signed a binding participation in the advanced resolution on 6
February 2012.
Green Certificates
Trading on the Green Certificates Market in 2011 recorded a volume of certificates exchanged
during the 47 sessions organised by the GME (Gestore Mercato Elettrico) of 4,126,473, up compared
to the 2,578,638 green certificates exchanged in 2010, equalling a total of about Euro 340 million (Euro
217 million in 2010). The weighted average price of green certificates exchanged in the market sessions
equalled Euro 82.25/MWh (euro/megawatt hour) (Euro 84.41/MWh last year).
In consideration of the provisions of resolution AEEG/11/2012/R/efr of 26 January 2012, the sale
price for electricity recorded in 2011 is set at Euro 74.72/MWh; consequently the withdrawal price for
the green certificates pertaining to 2011 equals Euro 82.12/green certificate.
THE OIL INDUSTRY
Also during 2011 growth in the international price of crude oil was witnessed. From 1998 to date,
there was an increase by 773%, particularly strong in the last few years: the average between 19982004 was 24.3 USD/barrel, compared to 77.3 USD/barrel in 2005-2011 period. The Brent average in
the twelve years of this century rose to 57.2 USD/barrel against 18.00 USD/barrel in the 1990s (more
than +218%).
On average at the end of 2011 the CIF cost of crude oil imported in OECD countries stood at 108.8
USD/barrel, against 78.1 USD/barrel in 2010 and 60.4 USD/barrel in 2009, up by 37%.
In the second part of 2011 the increase in quotations was a consequence of demand growing faster
than the supply. Starting from March, also the suspended production in Libya had an impact, pushing
the price to over 120 USD/barrel. In the second part of 2011 the quotation ranged between 100 and
120 USD/barrel.
The economic slowdown, particularly evident in the second half of 2011, led the total demand for
oil to grow moderately by 0.8% compared to 2010, reaching 89.0 million barrels/day, (+0.7 million
barrels/day), against an average growth of 1.1 million barrel/day in the ten-year period 2001 – 2010. In
Europe there was a 1.9% drop, equal to about 0.4 million barrels/day.
The requirements of OECD countries were 45.6 million barrels/day, down once again by 1.2%,
compared with the exceptional 1.1.% increase of 2010, with a weight on the total of about 51%
(versus 62% in 2000). The requirements of non-OECD countries, which are less influenced by the
financial turbulence experienced by western countries, amounted to 43.4 million barrels/day, increased
by 3.0% with a weight on the total of 48% (versus 38% in 2000). The difference in consumption of
the two areas is currently 2 million barrels/day, against 19 million barrels/day of ten years ago.
The former Soviet Union (+5.4%), China (+4.7%) and Latin America (+2.5%) continued to lead the
demand from non-OECD countries (+2.9%).
The total supply of 2011 stood at 88.5 million barrels/day, +1.1% compared to 2010, again lower
than the demand: the “Arab spring” and the lack of production in Libya in most of the year resulted
in tensions concerning supplies. Supporting the increase were mainly OPEC countries (+2.7% compared
to 2010, equal to +0.9 million barrels/days), and Saudi Arabia in particular which, by increasing its
production by about 1 million barrels/day (more than +11%), tried to make up for the missing
production from Libya.
The international prices of products were not immune to the tension experienced in 2011. Yearly
average Platts quotations for gasoline reached around 990 dollars/tonne, 34% more than 2010. Diesel,
again on average, was priced at 971 dollars/tonne (+40% compared to 2010).
The rise of both products was practically continuous, with tension peaking in spring and especially
at the end of 2011.
2011 was an extremely negative year in terms of refinery margins, which worsened considerably,
reaching the lowest levels of the last 20 years and on average equalled not even 1 USD/barrel for the
most complex processes.
Following the generalised reduction in petroleum product consumption (2.5% compared to 2010),
gasoline continued the drop started in 2004, losing another 601 thousand tons. The sum of gasoline
and diesel shows a decrease of 1.2% compared to 2010 value (gasoline -6%; diesel +0.8%). Fuel oil
for thermoelectric use further lost ground with -23.2% (-0.3 million tons). Heating diesel amounts to
slightly less than 1.6 million tons, posting a decrease by -15.7%.
15
Report of the Board of Directors
Consolidated Financial Statements 2011 api holding S.p.A.
16
api holding S.p.A. Consolidated Financial Statements 2011
In 2011 the refining system was seriously affected by the structural crisis of excessive supply
compared to the domestic demand and the decreased exports of its products, leading to the suspension
of activities and the transformation of the Cremona refinery into an integrated logistic pole, thus
reducing the Italian total effective capacity to 103 million tons. In the aggregate, 84% of the plant’s
capacity was used (as far as crude oil and semi-finished products imported are concerned). Refining
amounted to a total of 86.0 million tons (-5.6%). In terms of raw materials processed, both crude oil
and semi-finished products declined (-5.9% and -6.3%, respectively). Exports of products recorded a
decrease of 1.9 million tons (-6.3%).
The energy bill from petroleum products in 2011 was Euro 34.9 billion, approximately Euro 6.5
billion more than in the previous year, despite the drop in consumption estimated at 2.5%. The sharp
increase in the quotations of the imported crude oil (+39%) was only partially mitigated by the
improved €/USD, euro/dollar exchange rate (+5.2%); consequently, in 2011, the record outlay of the
last decade, reached in 2008 (32.5 billion in nominal values, 34.3 in real terms), was exceeded.
The energy bill is estimated to rise by more than Euro 9.1 billion compared to 2010, close to Euro
62.1 billion (+17%). This corresponds to 3.9% of GDP (3.4% in 2010). Oil makes up 56% of the total
outlay, while gas represents 33%.
PERFORMANCE OF THE MAIN SUBSIDIARIES
Oil industry
api anonima petroli italiana S.p.A.
The year 2011 ended with a profit after tax of Euro 22 million, compared to a profit of Euro 49
million of the previous year.
The effect of changes in inventory was significant also in 2011.
Net of the extraordinary effects, the result decreased compared to the previous year and was
affected by the particularly unfavourable refining margins, which moved from -0.4 to -1,5 USD/barrel.
The operational performance in 2011, compared with 2010, witnessed a decrease in the retail
network market of 9.86% (10.3% in 2010), with volumes decreasing by 7.83% in a market dropping
by 3.71%.
Unit margins in 2011 were higher than in 2010 despite the greater competitive pressure on the price
front.
On the extra network market, experiencing a considerable downturn in the main segments, total
sales decreased by 14.4%. Diesel fuel decreased by 16.1% (with the market growing by 3%) to defend
margins and contain the financial exposure on customers potentially at risk. Bitumen decreased by
11.2% (in a market rising by 4.7%), paying maximum attention to margins also in this channel.
Lubricants, on the other hand, given a slightly decreasing market (-0.6%), increased by 2.6% over 2010
thus slightly improving the market share.
The EBITDA saw a profit of 76 million.
Amortisation was in line with 2010, equalling Euro 27 million.
EBIT reached Euro 49 million (Euro 0 million in 2010).
The negative net financial position rose from Euro 685 million to Euro 717 million due to the greater
requirements of the subsidiary api raffineria.
api raffineria di ancona S.p.A.
The financial year 2011 ended with a loss of Euro 35.2 million, versus a loss of Euro 20.6 million in
2010 (which had benefited from Euro 3.7 million of pre-tax extraordinary recoveries, compared to Euro
1 million this year).
Also this year, refining margins were particularly unfavourable, consequently reducing the
processing programs from 3,401,442 tons in 2010 to 3,339,730 in 2011.
The decreased processing caused a reduction in the revenues from the processing fee with the
controlling company api anonima petroli italiana S.p.A., and the application of a minimum contractually
guaranteed amount of 3.5 €/barrel.
The result was heavily affected by the rise in the purchase price of energy sources, partially offset by
the contained operating costs directly associated with the operation of the plants. As a result of this
reduction, it was possible to release (Euro 1 million) the provision specifically set up in 2006 given the
onerous nature of the O&M contract for the IGCC plant, the use of which was required in the year.
The result before amortisation, fiscal charges and taxes (EBITDA) went from Euro 5.1 million in 2010
to Euro -4.7 million in 2011.
Amortisation amounted to Euro 34 million, up by Euro 1.4 million compared to the previous year.
The operating profit decreased from Euro -27.5 million to Euro -38.8 million.
Financial charges equalled Euro 7.4 million, worsening by Euro 3 million due to the growing interest
rates and the higher debt compared to the previous year.
The electricity sector
api nòva energia S.r.l.
During 2011, api nòva energia focussed its efforts on supporting the investments already underway
of the main subsidiaries (SER, sunshire, nòva agri and Biomasse Italia), with the aim of pursuing growth
in the green energy sector, boosting internal development activities such as the regasifier (LNG), the
new power plants in the industrial site of Falconara (CCGT) and several wind energy and photovoltaic
projects.
The positive result of 2011 totalled Euro 6.5 million (IAS result equal to Euro 6.2 million), against a
loss of Euro 3.8 million in 2010. This was mainly due to the dividends recognised by the subsidiary
Biomasse Italia.
In quantitative terms, the gross total power of the companies operating in the renewable sectors,
including both authorised and operational power, went from 415.2 MW in 2010 to 425.4 MW in 2011
(326 MW wind, 27.4 MW photovoltaic, 72 MW biomasses), thus ensuring a leading position on the
national landscape.
17
Report of the Board of Directors
Consolidated Financial Statements 2011 api holding S.p.A.
18
api holding S.p.A. Consolidated Financial Statements 2011
Wind sector
ser S.p.A. (not subsidised wind sector) 50.1% api nòva energia Srl
ser 1 S.p.A. (subsidised wind sector pursuant to law 488 of 1992) 100% ser SpA
The result for the year of SER shows profits for Euro 4.4 million (IAS result Euro 4.6 million)
compared to the profit for 2010 equal to Euro 2.9 million. The result for the year of the direct subsidiary
SER 1 shows a profit of Euro 1,3 million (IAS result Euro 1.2 million), against the profit for 2010 equal
to Euro 2.8 million.
In terms of production, the commissioning of the 3 Nebrodi parks (2 of which of the subsidiary SER
1) occurred in October led the gross total installed power for both companies to rise from 132.45 MW
to 197.05 MW. 47.6 MW regarding the Alcantara projects remain to be installed, which are scheduled
to come into operation in April 2012.
In 2011, as in the previous year, the production of the Sant’Agata di Puglia parks (Serra del Vento
and Taverna la Storta) was affected by the modulation measures taken by Terna. In any case the
reduction in limitation hours was lower than in 2010 by about 48%.
As regards the seizure of the wind turbines of the Sant’Agata parks, on 22 September 2011 the
Court of review of Foggia ruled the cancellation of the seizure of the wind farm and ordered for the
assets to be immediately returned to the company. On 9 December 2011 the same Court ruled the
return to the company and the subsidiary SER1 of all the income from the sale of the electricity
produced by the wind turbines originally seized and restricted to the term account of the courtappointed administrator. In December, the accumulated income was credited to the account of both
companies for a total of about Euro 5.5 million.
Until 30 September 2011 the companies continued to allocate the exact value of the income from
the seized turbines to a specific fund that has now been released, having an overall positive impact on
the income statement of Euro 2.2 million.
Financially speaking, disbursements from the pool of banks are still suspended, following the
criminal proceedings started by the State Attorney General of Foggia. Therefore, the two shareholders,
api nòva energia and Iberdrola Renovables Italia, continued to disburse the funds needed to complete
the construction pursuant to the Additional Advanced Shareholders Loan (AASL), a contract entered
into between the shareholders and SER on 9 December 2010, with an overall disbursement at the
closing date of the accounts for 2011 of Euro 80 million.
Furthermore, it is specified that on 28 November 2011, with the disbursements still being suspended
and the revolving loan expiring at the same time, SER submitted to the banks a second request to
extend the loan period as well as a request to extend the expiry of the revolving bridge loan until 30
June 2012. The extension requests were accepted but the conditions of actual resumption of the fund
disbursements are still being negotiated nevertheless.
Concerning the 488 financing of SER1, in light of the release of the wind turbines of the S. Agata
park, on 22 December 2011 the Ministry issued two separate decrees revoking, under the appeal
process, the suspension of the facilitated procedure. Having regard to the latest ministerial provisions
mentioned, the company urged Centrobanca, an entity serving as an agent for the financing pursuant
to law 488, to resume the suspended disbursements as soon as possible. The amounts already
requested currently total about Euro 5.9 million for the S. Agata projects (Taverna la Storta Nord and
Taverna la Storta Sud).
Furthermore, SER1 is waiting to receive from Centrobanca the amount of Euro 64 million, required
during the fourth quarter of 2009 and in January 2010, with reference to the four second-phase Sicilian
projects regarding the Nebrodi and Alcantara parks.
Finally, it is specified that, with deed of notary Fanfani of 30 May 2011 (Rep. no. 60369 – Folder no.
17678), the company conferred the company branch engaged in designing, development and creating
the wind farm called Monti Sicani Nord to the company Novawind Sicilia S.r.l.
cer - campana energie rinnovabili S.p.A.
2011 ended with a loss of Euro 0.58 million (IAS profit Euro 0.35 million), net of taxes, against a
loss of Euro 0.89 million in 2010. Revenues reached Euro 3.3 million (IAS Euro 4.6 million) with an
EBITDA of Euro 1.8 million (IAS Euro 3.1 million).
It is worth mentioning that the company owns a wind farm with a nominal capacity of 30 MW, fully
in operation, located in the Municipality of Castelfranco in Miscano (province of Benevento). The entire
production is sold to GSE in accordance with three agreements stipulated between 1998 and 2000,
each for the three phases of the plant construction.
Energy production in 2011 was equal to approximately 30.3 GWh (gigawatt hour), below
expectations due to the lack of wind, the obsolescence of the plant and the ongoing power limits
imposed by TERNA, once again due to the transmission grid’s inability to receive the electricity produced.
PROJECTS UNDER DEVELOPMENT
In 2011, api nòva energia, also through its subsidiaries in the wind energy sector, continued its
development activities on the internal and the foreign market.
In the first few months of 2011, the wind projects initially developed directly by api nòva energia
S.r.l., were allocated to the purposely-set up special purpose companies: nòvawind Sud S.r.l., nòvawind
Sicilia S.r.l. and nòva Centro S.r.l.
Italy
The strategies adopted by the sub-holding had the objective of consolidating the existing projects
in those regions where the development of production of wind power was already well underway
(Puglia and Sicilia), while the activities were extended in those areas where it was possible to build wind
farms following the approval of the new energy plans (Lazio, Abruzzo, Molise, Basilicata, Calabria and
Sardinia).
In detail:
– the company nòvawind Sud S.r.l. manages projects being developed in Puglia for 301 MW, in
Basilicata for 130 MW, in Sardinia for 252 MW, in Molise for 30 MW and in Calabria for 17 MW;
– the company nòva Centro S.r.l. manages a developing portfolio in the region of Lazio for 20 MW
and in Abruzzo for 24 MW;
– the company nòvawind Sicilia S.r.l manages a portfolio of projects for 188.5 MW.
Abroad
A boost was given to the research and development activities of the projects and to initiatives to be
acquired by third parties abroad.
The countries of interest include Argentina, where the objective is being pursued of setting up a
joint-venture to develop and create wind farms.
Development activities of the green-field type are being implemented in the Espirito Santo State in
Brazil (Jatropha projects) through the subsidiary nòvabra ES S.A.
Finally, a portfolio of wind farms of 203.8. MW have been developed in Greece and Bulgaria
through the subsidiary WAS S.r.l. owned at 50% with the Maccaferri group.
19
Report of the Board of Directors
Consolidated Financial Statements 2011 api holding S.p.A.
20
api holding S.p.A. Consolidated Financial Statements 2011
Photovoltaic sector
Sunshire S.r.l.
The year ended with a profit of Euro 0.940 million (IAS result Euro 0.609 million) against a profit of
Euro 1.94 million in 2010. The change reflects the increase in the lease instalments to create the
photovoltaic plants of Pollenza and Tolentino for 8 MW in total and the new solar park C for 2.2 MW,
which was completed in April 2011.
Sòlergys S.p.A.
The company closed the year with a profit of Euro 0.371 million (IAS result Euro 0.375 million euro)
against a loss of the previous year of Euro 0.235 million.
The total revenues were obtained from the operations of the pilot shelters completed in previous
years, which are linked to the disbursements of the Energy Account by GSE, and from the quantity of
electricity produced by the photovoltaic plant and introduced into the network (SSP) and the quantity
of energy sold to the managers of the shelters.
The following projects started production in 2011:
– photovoltaic plant at the company STM in Catania (power 1,352 KW):
the plant was fully built, is in production and benefits from the 2010 incentive tariff;
– plant at the ThyssenKrupp Factory (hereinafter TK) in Terni (power 1,894 KW).
This plant is partially integrated and located on the roof of two sheds of the Finishing Station at
Thyssen Krupp in Terni.
nòva agri soc. agr. a r.l.
In September 2010 the company nòva agri started the creation of two photovoltaic plants that are
totally integrated on greenhouse structures of the Calabria Region in the Municipality of Cassano allo
Ionio (CS), called “Prainetta” and “Santa Venere”, for an overall power of 3.88 MWp (1.24 and 2.64
MWp, respectively).
The photovoltaic plant “Prainetta” started operation on 20 April 2011 and produced 1,204 MWh
until 31 December 2011.
The photovoltaic plant “S. Venere” started operation on 31 May 2011 and produced 2,396 MWh
until 31 December 2011.
A bridge loan for Euro 15.7 million was arranged with Banca Popolare di Milano to cover the costs;
the refinancing transaction with project financing is being discussed.
The company closed the year with a profit of Euro 0.78 million euro.
PROJECTS UNDER DEVELOPMENT
In 2011, we focussed our attention on completing the planning activities and the required fulfilment
to start the authorisation phase of all the green-field projects originated in 2009.
In the photovoltaic sector, as in the wind energy one, the development drive undertaken in the
previous years was able to guarantee a considerable portfolio in various Italian regions, which is always
managed by specifically established purpose companies.
More in detail, the company nòvasol puglia s.r.l. manages a portfolio equal to 246 MW developed
in the region of Puglia, nòvasol calabria S.r.l. is developing 85 photovoltaic MW in the region of Calabria
and nòvasol Sicilia s.r.l. is developing 96 photovoltaic MW in the region of Sicily.
Biomass sector
Biomasse Italia S.p.A. / Biomasse Crotone S.p.A
On 4 October 2011, a notary deed provided for the spin-off of Biomasse Italia S.p.A. with the
objective of assigning part of the assets to a newly established joint-stock company pursuant to art.
2506 of the Italian Civil Code called Biomasse Crotone S.p.A.
This spin off is aimed at optimising, in both technical and operating terms, the two production
plants of Crotone and Strongoli, which differ one from the other in combustion technology, power and
mix of biomass used.
The demerged company (Biomasse Italia) will continue to ensure the necessary strategic support and
the relevant services that are common to the development of the two plants.
An important event was the extension of the portion of the business scope devoted to photovoltaic
energy: a project was completed regarding the photovoltaic shelters of a power of about 1.24 MW, for
the creation of which a total of Euro 4.6 million were invested. The plant is operating: commissioning
started on 16 march 2011. Downstream of an integration request on the authorising security, the GSE
confirmed the incentivising tariff of the Energy Account 2010 equal to Euro 422/MWh. The plant is up
to code while the remote control system is to be completed.
The investments made last year totalled Euro 32.2 million, of which Euro 30.9 million for
reconstruction projects (Euro 20.1 million in Crotone and Euro 10.8 million in Strongoli), Euro 0.6
million for the photovoltaic project and Euro 0.6 million for investments of varying nature (Euro 0.34
million in Strongoli and Euro 0.26 million in Crotone).
Biomasse Italia S.p.A. closed 2011 with a net profit of Euro 25.0 million (IAS result Euro 34.7
million). Instead Biomasse Crotone S.p.A. recorded a loss of Euro 0.523 million as of 31 December 2011
(IAS result Euro 0.529 million).
Biotrade S.p.A.
The year ended at 31 December 2011 recorded a negative result of Euro 34 thousand.
During 2011 the company discontinued the procurement and supply of fuels/biomasses for the
power plants of Biomasse Italia S.p.A., a sister company with which contractual relations existed for
years, mainly regarding the purchase and sale of local biomass.
Starting from 1 January 2011, Biotrade transferred to Biomasse Italia the contracts for the supply of
biomass from the local market, receiving from Biomasse Italia in return a “lump-sum” payment of Euro
1 million as consideration for this transaction.
Ecoenergia S.r.l.
The company shows a loss of Euro 45 thousand, a slight worsening on the previous year (Euro 23 thousand).
The purpose of Ecoenergia S.r.l., a subsidiary of api nòva energia by 51%, is the construction and
running of a 20 MW station powered by vegetable in the Municipality of Foggia. On 12 September
2011 the Services Conference was called at the Puglia Regional Board during which the Body recorded
26 positive opinions on the project and just one negative opinion, by ARPA Puglia. The company is
preparing the necessary argument against the negative opinion.
The search for the multiannual supply of vegetable oil at satisfactory economic conditions for the
project continued: prices are currently very high and demotivating, and the leading suppliers
(Caterpillar, Wartsila and Termoindustriale/MAN) were requested offers for the supply of the engines.
Finally, the offers for the supply of the tanks were received.
21
Report of the Board of Directors
Consolidated Financial Statements 2011 api holding S.p.A.
22
api holding S.p.A. Consolidated Financial Statements 2011
nòvabra energia ES S.A. (Brazil - Espirito Santo)
The project envisages the cultivation of 25,000 ha of Jatropha in outgrowing by 2015. The first
farming campaign was created in 2010, allowing for the contracting of about 1,100 ha of plantations,
of which 700 ha were cultivated.
The strategic objective for 2011 was to reach 3,000 ha of plantations contracted through family
outgrowing (small farming business).
In light of the new technologies that allow for the mechanised collection of Jatropha, the project
strategy was reviewed in 2011 with the integration of large mechanisation companies for an intensive
agronomic management and more sustainable development rhythms.
2,870 contracted ha were reached after two months from the end of the year, thanks to the new
strategy adopted.
It should be noted that the project obtained a loan from SIMEST pursuant to law 394 to finance the
first two years of start-up (all management expenses, including wages, are funded at a subsidised rate).
The funded amount equals Euro 1.9 million, with a 7-year repayment plan at a rate of about 1%. The
SIMEST loan totalled Euro 608,000 of the 2011 budget.
SAB S.r.l. – SAB Mozambique S.A. (Mozambique)
The activities of SAB S.r.l. are still aimed at developing the Inveragro farming business in Inhassune
(Mozambique) via the subsidiary SAB Mozambique SA; the experimental program continues in Ghana
(on 10 hectares) in the province of Yeji, where an option for concession can be obtained on large plots
of land (about 100,000 ha).
All the activities of SAB were analysed in close cooperation with SECI Energia S.p.A. (a 50% partner
with api nòva energia of SAB S.r.l.).
Other development activities
LNG
On 12 July 2011 the deciding Services Conference met at the Ministry for Economic Development
(MSE) reached a positive outcome and, on 28 December, a decree was issued that authorises the
construction and operation of the terminal and related works. This completes the activities that in 2010
led to the achievement of important intermediate objectives as part of the procedure to authorise the
off-shore regasification terminal of GNL in Falconara Marittima.
A total of about Euro 4.0 million was spent for this initiative in the period 2008 – 2011; the grant
obtained by the European Community as part of the TEN-E tender (equal to about Euro 0.7 million)
must be subtracted.
520MW and 60MW CCGT GAS POWER STATIONS
The new 580 MWe combined cycle project, comprising a 520 MWe section and a 60 MWe section,
obtained the clearance (NOF) from the Technical Committee for the Marche Region on 11 November
2008, a positive environmental compatibility opinion (VIA) on 14 October 2009 and the Integrated
Environmental Authorisation (AIA) on 31 January 2011 with the issue of the relevant Decrees.
Considering the change of some project hypotheses compared to the preliminary project of the new
combined cycle presented in 2006, activities are in progress to review the project in terms of VIA and
AIA, in agreement with the local administrations and consistently with the changes occurred to the site
in the meanwhile.
api energia S.p.A.
The year 2011 ends with net profits of Euro 39 million compared to Euro 36 million of 2010.
The year was characterised by a good performance of the plant with a very high reliability level of
98.2% (reliability percentage of the plant net of the scheduled shutdowns for maintenance), now
established over time, one of the highest in comparison with similar plants.
During the year 2011 the plant produced 2,146,203 MWh of electricity and 428,195 tons of steam,
decreasing slightly compared to 2010, mainly due to the higher number of days when the plant was
out of service (28 vs. 24 in 2010).
The following main managerial events characterised 2011:
Avoided Fuel Costs (CEC)
In the year 2011 the Ministry implemented the AEEG proposal made with resolutions 8/9 and 9/10
which, together with resolution 249, introduced additional elements to calculate the CEC, except for
the parameter to calculate the overall performance of the plant, which remains set at the value
established by CIP 6/92.
On this point, the Ministry for Economic Development has submitted a query to the State Council
to verify the applicability of this performance reduction coefficient also to the selected initiatives, such
as ours. A definitive response from the State Council has not yet being received.
Green Certificates
The Inspectorate for the Compensation Fund for the Electricity Sector recognised the cogenerative
quality of our plant according to the indexes calculated pursuant to 42/02 and 136/06, until 2009. A
response from the GSE is being awaited for 2010, while for the years 2011 and 2012, based on the
new legal provisions (L.D. Ministry for Economic Development of 5 September 2011) concerning
incentives to renewable sources and in particular the new parameters that restrictively govern the
cogeneration criteria (high-efficiency cogeneration), there is now the possibility of the authority not
recognising the cogenerative quality of IGCC, with consequent charges to be incurred to purchase
green certificates.
api energia S.p.A. is considering lodging an appeal against the ruling.
White Certificates
As regards the White Certificates, after the approval by the AEEG of the energy saving project for
the consumption of electricity through the use of the Syngas Expander, api energia obtained from the
beginning of the project the recognition of 8971 Energy saving bonds, which were resold through the
trader in the market sessions for a total value of Euro 635,000.
Tax Audit
During 2010, the company was subject to a tax audit, conducted by the Italian Inland Revenue –
Lazio Regional Management Office concerning IRES, IRAP and VAT for 2007.
Upon the outcome of the audit, on 16 December 2010, the Inland Revenue notified an Official Tax
Audit Report that contested, concerning IRES and IRAP, the omitted attribution of revenues for the CIP/6
incentive component and the incorrect application of the depreciation rate of the item "Miscellaneous”
of Tangible Fixed Assets. Both cases concern accrual issues, since the taxable amounts being recovered
to determine the income for 2007, were / will be subject to taxation in the subsequent years.
23
Report of the Board of Directors
Consolidated Financial Statements 2011 api holding S.p.A.
24
api holding S.p.A. Consolidated Financial Statements 2011
Concerning the first issue, the company, with the assistance of the entrusted professionals and
backed up by suitable appraisal drawn up by influential professionals, in consideration of the absolute
unfounded nature of the two contested findings, deemed it appropriate not to carry out any provision
for a potential liability, as this is not considered probable.
Regarding the second issue, based on the afore-mentioned Tax Audit, the Inland Revenue –Marche
Regional Management Office notified the company in December 2010, of an assessment notice for IRES
and IRAP for 2005, in which the amortisation of the fiscally deductible item “Miscellaneous” was
recalculated. Through this act the company proposed to refer, under legal terms, to the Ancona
Provincial Tax Commission.
In 2011 the Marche Regional Management Office - Auditing Office, in charge of the assessment,
examined the issue regarding the depreciation of the item "Miscellaneous" for the tax year 2006 and
re-determined the annual rate of fiscally deductible depreciation in consideration of the "mixed" nature
of the costs posted under the item "Miscellaneous", having regard to the proportional weight of each
micro class, except for the "Buildings" class, with respect to the overall costs of the plant. In
consideration of the considerable re-dimensioning of the assessment, the company decided to redefine
years 2006 and 2005; it did not make any allocation for the year 2007 and subsequent years, given the
negligible amount that may be due.
Research & Development
A technical study was conducted as part of research and development activities to verify the plant
changes needed to feed the combined IGCC cycle directly with natural gas.
The necessary technical requirements, in addition to the connection between the general natural gas
distribution collector and the new section supplying the turbine, comprise a fuel pre-treatment unit and
the replacement of some mechanical parts of the turbine.
Despite the positive outcome of the technical feasibility analysis, possible issues emerged in
connection with the long delivery terms for the changed parts.
Real estate sector
api real estate S.r.l.
The company closed 2011 with a loss of Euro 0.9 million (IAS profit of Euro 0.03 million) and an
EBITDA of Euro 3.2 million (IAS Euro 3.4 million).
During the year the company continued its ordinary and extraordinary management activities
concerning the property assets.
On 8 September 2011 a lease agreement was signed with the company Gamenet S.p.A. for the
offices in Rome, C.so d’Italia, 6, for a total of 3,043 m. sq.
Other shareholdings
FIN.BRA S.A.
With the operation of cross-border spin-off of Fin.bra. S.A. approved by the shareholders on 27 July
2011 and formalised with deed drawn up by notary Nicola Atlante of 1 December 2011 – Rep. 39849,
the company transferred to the beneficiary api holding S.p.A. the stake held by Fin.bra. s.a. in api real
estate S.r.l., with a book value of Euro 9,895,372, equal to 48.51% of the share capital.
api holding S.p.A.
The operation allowed almost all of the stake in api real estate S.r.l. to be held by holding spa, of
which the same held 51.31%. The value of Fin.bra S.A. at the end of the year was Euro 57,967,734.
Other
In the field of developing renewable energies the api holding invested in a manner that was
complementary to the consistent commitments assumed in api nòva energia in the AMBIENTA mutual
investment fund, by purchasing, in 2007, a symbolic share of Euro 9,000 (0.6%) of the related asset
management company, and underwriting a commitment to contribute up to Euro 3,000,000. As at 31
December 2011, Euro 1,470,000 were already paid.
In addition, we would remind you that in 2008 a shareholding in SATOR S.p.A. for an amount of
Euro 2,800,000 was purchased with the aim of diversifying the financial investments within the group.
The value of the stake in Opera Participation S.C.A. as at 31 December 2011 equalled Euro
1,180,436. The difference compared to the value of 31 December 2010 (Euro 1,760,066) is due to the
repayment of the shareholding regarding the Opera Participation Fund for Euro 579,630.
Instead no main events are recorded concerning the investments in Enel S.p.A. of Euro 98,896 and
in ARTILIUM PLC of Euro 5,242.
RESULTS OF OPERATIONS1
Key economic and operating data
Euro/thousand
Revenues from core operations (1)
Intersectorial revenues
31.12.11
31.12.10
4,140,132
3,559,896
-223,204
-217,598
3,916,928
3,342,298
Adjusted EBITDA
128,319
132,040
LPG capital gain
26,100
0
Inventory profits
82,879
46,585
Rebranding
-6,225
-18,000
Revenues from third parties
EBITDA
Amortisation and depreciation and write-downs
Adjusted EBIT
Operating profit (loss)
231,073
160,624
-120,055
-111,511
8,264
20,529
111,018
49,113
31.12.11
31.12.10
213,525
139,262
Investments
Euro/thousand
Employees at period end
No.
939
988
Supply & Trading
tons
4,910,900
5,534,100
Refinery processing
tons
3,553,000
3,597,000
Retail sales
tons
2,598,000
2,810,000
Wholesale Sales
tons
1,424,000
1,663,000
Other Sales (2)
tons
385,000
220,000
2,146,204
2,204,439
672,686
672,492
IGCC Production
MWh
Stocks of raw materials and products
tons
(1) net of excise tax and trading
(2) includes sales to oil companies and export sales
1
It is pointed out that as a result of the rounding up to the nearest thousand or million, the data provided may not match between
the various tables, and the total may not correspond to the sum of the various components by some units (of thousands or millions).
25
Report of the Board of Directors
Consolidated Financial Statements 2011
26
api holding S.p.A. Consolidated Financial Statements 2011
Results by business sector
Euro/thousand
31.12.11
31.12.10
Total revenues from core operations:
Refining
133,818
135,981
3,626,185
3,098,999
298,845
277,824
64,243
34,091
Real Estate
6,282
5,332
Corporate
10,760
7,669
Marketing
IGCC
Renewables
Intersectorial revenues
Total
-223,204
-217,598
3,916,928
3,342,298
As of 31 December the company reported revenues of Euro 3,917 million, more than in the same
period of the previous year (Euro 3,342 million at 31 December 2010). The movement is due mainly to
the increased sale prices after the rise in the international prices of petroleum products.
Euro/thousand
31.12.11
31.12.10
9,438
15,540
Marketing
85,485
102,548
IGCC
50,469
51,164
Renewables
42,350
16,026
Real Estate
3,576
3,128
Adjusted EBITDA
Refining
Corporate
Total
-62,999
-56,366
128,319
132,040
EBITDA
Refining
9,438
15,540
188,239
131,132
IGCC
50,469
51,164
Renewables
42,350
16,026
Marketing
Real Estate
Corporate
Total
3,576
3,128
-62,999
-56,366
231,073
160,624
Adjusted EBITDA
At 31 December the company reported an adjusted EBITDA of Euro 128 million, Euro 4 million less
than in the same period of the previous year (Euro 132 million at 31 December 2010).
The change compared to EBITDA in 2010 is mainly due to the combined effect of the following
extraordinary factors:
– lower refining margins due to a less favourable oil situation;
– volumes decreasing compared to the previous year;
– improved consistency of the plant producing energy from renewable sources that refer to the
subsidiary api nòva energia.
EBITDA
At 31 December, the company reported an EBITDA of Euro 231 million, Euro 70 million more than in
the same period of the previous year (Euro 161 million at 31 December 2010).
The improvement is due to the reasons described above and to the following extraordinary effects:
– higher inventory profits. The variations in international prices for petroleum products led to an increase
in the price of crude oil and products in the warehouse resulting from the application of the average
weighted cost. This increase, calculated as the difference between the valuation at the end of the
financial year and the valuation at the beginning of the financial year of the quantities still held in stock
at the end of the financial year, combined with the allocation to the inventory write-down provision,
resulted in inventory profits of Euro 83 million (compared to profits of Euro 47 million at 31 December
2010);
– the costs of rebranding the points of sale for Euro 6 million in 2011, lower than those in the same
period of the previous year (Euro 18 million at 31 December 2010).
Euro/thousand
31.12.11
31.12.10
Adjusted EBIT
Refining
-24,599
-17,056
Marketing
58,793
76,083
IGCC
16,208
15,645
Renewables
20,046
2,012
Real Estate
2,332
1,718
-64,516
-57,874
8,264
20,529
Refining
-24,599
-17,056
Marketing
Corporate
Total
EBIT:
161,547
104,668
IGCC
16,208
15,645
Renewables
20,046
2,012
Real Estate
2,332
1,718
Corporate
Total
-64,516
-57,874
111,018
49,113
Adjusted EBIT
At 31 December, the company reported an EBIT of Euro 8 million, Euro 12 million less than in the same
period of the previous year (Euro 20 million at 31 December 2010).
The difference is mainly due to the reasons described above and the reduction of amortisation/depreciation
(Euro 120 million at 31 December 2011 vs. Euro 112 million at 31 December 2010).
Euro/thousand
31.12.11
31.12.10
-35,817
-22,871
Net result
Refining
Marketing
22,661
-6,117
IGCC
39,127
36,365
Renewables
18,346
-1,411
165
-420
Real Estate
Corporate
Total
-4,201
-2,367
40,281
3,180
27
Report of the Board of Directors
Consolidated Financial Statements 2011 api holding S.p.A.
28
api holding S.p.A. Consolidated Financial Statements 2011
Net result
At 31 December, the company reported an EBIT of Euro 40 million, Euro 37 million less than in the
same period of the previous year (Euro 3 million at 31 December 2010).
In the period under examination, the company showed taxation of Euro 38 million, consisting of costs
for current taxes of Euro 39 million, deferred tax provisions of Euro 5 million and prepaid taxes of Euro 6
million.
IRES was calculated by applying, in addition to the ordinary rate (27.5%), an additional 10.5% for oil
and energy sector business (for the latter, excluding those operating in the renewable sector: wind,
photovoltaic and biomasses) with revenues greater than Euro 25 million, pursuant to art. 81 of Law Decree
no. 112 of 25 June 2008, amended by art. 56, paragraph 3 of Law no. 99 of 23 July 2009.
Key data by business sector
REFINING
The api Group carries out refining activity through the Falconara Refinery and, for certain special
processing, through a processing account with the Alma Refinery, owned by third parties.
The overall refining capacity of the api Group totals around 4 million tons of crude oil per year.
Euro/thousand
31.12.11
Revenues from core operations
Intersectorial revenues
31.12.10
133,818
135,981
-131,119
-133,174
Revenues from third parties
2,698
2,808
Adjusted EBITDA
9,438
15,540
LPG capital gain
0
0
Inventory profit/loss
0
0
Rebranding
0
0
9,438
15,540
Amortisation and depreciation and write-downs
-34,036
-32,597
Adjusted EBIT
-24,599
-17,056
-24,599
-17,056
31.12.11
31.12.10
EBITDA
Operating profit (loss)
Processing at api Refinery in Falconara
tons
3,340,000
3,401,000
Processing at Alma Refinery in Ravenna
tons
213,000
196,000
Refinery processing
tons
3,553,000
3,597,000
api Refinery Processing margin
USD/barrel
-1.5
-0.4
At 31 December 2011 processing totalled 3,553 thousand tons, decreased compared to the
processing of same period of the previous year (3,597 thousand tons at 31 December 2010).
Processing at the subsidiary api Raffineria di Ancona was lower than 2010 mainly due to the
particularly negative oil scenario.
At 31 December 2011 the refining margin was -1.5 USD/barrel, lower than the margin for the
previous year (-0.4 USD/ barrel at 31 December 2010).
MARKETING
The api Group markets petroleum products, both in the so-called Retail channel, through points of
sale that are either owned or contracted and located on ordinary road and motorway networks, and
through the so-called Wholesale Channel, with sales to wholesalers and resellers, and marginally,
through export sales by ship (so-called cargo market) and to other oil companies.
Euro/thousand
Revenues from core operations
Intersectorial revenues
31.12.11
31.12.10
3,626,185
3,098,999
-75,287
-68,638
3,550,897
3,030,361
Adjusted EBITDA
85,485
102,548
LPG capital gain
26,100
0
Inventory profits
82,879
46,585
Rebranding
-6,225
-18,000
EBITDA
188,239
131,132
Amortisation and depreciation and write-downs
-26,692
-26,465
Revenues from third parties
Adjusted EBIT
Operating profit (loss)
58,793
76,083
161,547
104,668
31.12.11
31.12.10
Retail sales
tons
2,598,000
2,810,000
Wholesale Sales
tons
1,424,000
1,663,000
Other Sales (1)
tons
385,000
220,000
Total Sales
tons
4,407,000
4,693,000
(1) include sales to oil companies and export sales
As of 31 December 2011 sales totalled 4,407 thousand tons, decreased as compared to the same
period of the previous year (4.693 thousand tons at 31 December 2010).
Retail sector
At 31 December 2011, retail sales totalled 2,598 thousand tons, down from the same period in the
previous year (2,810 thousand tons at 31 December 2010), with unit margins higher than the same
period of 2010.
Wholesale
At 31 December 2011, wholesale sales totalled 1,424 thousand tons, down from the same period
in the previous year (1,663 thousand tons at 31 December 2010), with unit margins higher than the
same period of 2010 for diesel; instead, these were significantly lower for bitumens.
Other sales
As of 31 December 2011 Other sales totalled 385 thousand tons, increased as compared to the
same period of the previous year (220 thousand tons at 31 December 2010).
Crude oil and product inventory
Increase in value of crude oil and oil products in stock at the beginning of the year and still existing
at the end of the quarter resulted in profits from inventory of 83 million Euro (profits for 47 million Euro
at 31 December 2010).
29
Report of the Board of Directors
Consolidated Financial Statements 2011 api holding S.p.A.
30
api holding S.p.A. Consolidated Financial Statements 2011
IGCC
The 280 MW IGCC power station, located inside the perimeter of the Refinery in Falconara, uses
the residual portions of the refining cycle through a combined syngas cycle that is sent to the
cogeneration section for the combined production of electricity and steam.
Euro/thousand
31.12.11
31.12.10
Revenues from core operations
298,845
277,824
-6,800
-6,035
Intersectorial revenues
Revenues from third parties
292,045
271,789
Adjusted EBITDA
50,469
51,164
LPG capital gain
0
0
Inventory profit/loss
0
0
Rebranding
EBITDA
Amortisation and depreciation and write-downs
Adjusted EBIT
Operating profit (loss)
0
0
50,469
51,164
-34,261
-35,519
16,208
15,645
16,208
15,645
The percentage of operating hours of api energia spa for 2011 was 92.2% of total hours, while in
the same period of 2010 this was 93.2%, with a slight decrease in the production of electricity, which
during 2011 equalled 2,146,204 MWh against 2,204,439 MWh in 2010.
Below, the production of electricity is reported:
Production
MWh
31.12.11
31.12.10
2,146,204
2,204,439
RENEWABLES
The api Group carries out management and development activities in the sector of electricity
production from renewable sources such as biomasses, wind and photovoltaic.
Euro/thousand
Revenues from core operations
Intersectorial revenues
31.12.11
31.12.10
64,243
34,091
-195
-114
Revenues from third parties
64,048
33,977
Adjusted EBITDA
42,350
16,026
LPG capital gain
0
0
Inventory profit/loss
0
0
Rebranding
0
0
EBITDA
Amortisation and depreciation and write-downs
Adjusted EBIT
Operating profit (loss)
42,350
16,026
-22,304
-14,013
20,046
2,012
20,046
2,012
Through the associated companies and subsidiaries operating in this segment, the gross total power
(including both authorised and operational power) was increased from 415 MW in 2010 to 425 MW
in 2011 (326 MW wind, 27.50 MW photovoltaic, 72 MW biomasses), 286.5 MW of which are
operating (223 MW in 2010).
In economic terms, the positive results reflect the greater production of the main associated
companies and subsidiaries (SER SER1, sunshire, solergys, nòva agri and biomasse).
REAL ESTATE
The api Group carries out activities aimed at ensuring the ordinary and extraordinary management
of its real estate.
Euro/thousand
Revenues from core operations
Intersectorial revenues
31.12.11
31.12.10
6,282
5,332
-4,539
-4,426
Revenues from third parties
1,743
905
Adjusted EBITDA
3,576
3,128
LPG capital gain
0
0
Inventory profit/loss
0
0
Rebranding
0
0
EBITDA
Amortisation and depreciation and write-downs
Adjusted EBIT
Operating profit (loss)
3,576
3,128
-1,245
-1,410
2,332
1,718
2,332
1,718
FINANCIAL MANAGEMENT
2011 was characterised by two separate phases. In the first few months of the year (until before the
summer), the trend of 2010 continued, despite the national banking system being forced to reduce
costs and risks by the supervisory authorities though still managing to finance itself without problems
but at a growing costs through the interbanking market and the public. Market conditions started to
deteriorate rapidly in the summer due to the issues linked to the sovereign debt crisis. In just a few
weeks the growing speculative pressure concerning the Italian sovereign debt was reflected heavily on
domestic banks, whose risk profile increased on International markets, as these hold most of the debt
securities. The situation worsened on a daily basis due to both the downgraded rating attributed by the
main agencies to several Italian institutes, and the Italian and European political stance, unable to solve
the problem. The combined effect of these two events further limited the traditional credit channels of
banks, making it impossible to refinance the maturing debentures and requiring considerable capital
increases to face the write-downs deriving from the application of the market price (mark to market)
to the treasury bonds in the portfolio. A certain number of banks made some capital increases while
accepting the deleveraging process already in progress and thus completely discontinuing
disbursements to companies, indistinctively and without any regard to the quality of the borrowers,
their rating, solvency, industrial plans or investments in progress. Access to long-term credit ceased and
the start of new project finance/leasing activities was made difficult and expensive; short-term loans,
when not revoked, were subject to sudden rises in spread to reflect the increased cost of bank credit
and the need for banks to reduce their exposure rapidly before the end of the year. It was only the
combined effect of two reductions in the official rates, one in November at the time of the change in
the ECB management, and an LTRO by the ECB, that made liquidity levels acceptable once again on the
market: thanks to this last measure about Euro 500 billion were “injected” into the system at
favourable rates allowing banks to deposit, as collateral, bonds issued by them.
These affairs have undoubtedly played a major role in the financial management of the group that
heads api holding spa, which during the year was engaged on the one hand in the repayment or
renegotiation of the maturities of the part of the group headed by api S.p.A. (oil sector) and on the
other in supporting the commitments and investments planned in the sector of renewable energies.
31
Report of the Board of Directors
Consolidated Financial Statements 2011 api holding S.p.A.
32
api holding S.p.A. Consolidated Financial Statements 2011
Regarding the debt of api S.p.A., of the 127 million maturing in the year, the company was able to
renegotiate 90 million and repaid 37 million. In addition, thanks to the favourable first few months of
the year, api S.p.A. negotiated and obtained “new” loans for 30 million, of which 15 million in “bullet”
mode (i.e. with total final repayment of the capital) expiring in July 2014 and another 15 million “in
amortisation” (i.e. with gradual repayment of the borrowed capital in set periods) with final instalment
in March 2016.
api energia, a subsidiary of api S.p.A., continued to regularly repay the project finance started in
2000 and refinanced in 2005 by repaying more than Euro 17 million in the period, highlighting once
again an excellent financial performance by improving the net financial position thanks to the rapidly
increasing restricted cash at bank and in hand. At 31 December 2011 the residual debt equalled Euro
182.6 million. The residual debt was recalculated under the amortised cost at a rate of 3.15% for a
total of Euro 180.4 million.
In the period the company api holding reduced its exposure to banks by repaying two loans for a
total of Euro 20 million and repaying another loan for Euro 12 million in advance with a view to
reallocating the debt within the group. Despite a lower debt exposure to banks, in the year the
company intensified its role as “intersection” for the financial flows of the group, coordinating the
collection of resources, mainly through api S.p.A. or by using revolving lines that had been rarely
adopted in the past, and distributing them to the companies in the renewable energy sector, the subholding api nòva energia and its subsidiaries in particular.
The company api nòva energia increased the amounts owed to banks in the short term and its
payables to the controlling company consequently to the objective difficulties experienced in 2011 in
obtaining medium to long term loans at a reasonable price. This forced the company to directly finance
the new projects and the initiatives already in progress at the subsidiaries operating in the photovoltaic,
biomass and wind sector: by way of example, in this last sector, due to the blocked disbursements from
the pool of banks involved in the SER project, the two shareholders, api nòva energia and Iberdrola
Renovables Italia, continued to provide the necessary funds, with a total disbursement, at the end of
2011, of Euro 80 million.
The company api real estate showed a substantially stable bank debt, which was lowered from Euro
28.4 to 27.9 million also thanks to the repayment of the principal amounts of a loan expiring in 2020.
The exchange rate risk is managed by stipulating forward purchase agreements with an average
term of about 15 days. These purchases, the amount of which was approximately 7.4 million dollars/day
in 2011, are made by benchmarking with the daily closures of the European Central Bank (ECB).
During the year, this management resulted in average accumulated savings of Euro 1.8 million,
calculated as the difference between the Euro/USD weighted average exchange rate from the ECB
(1.3209) and the weighted average purchase exchange rate obtained by api (1.3226) from bank
counterparties.
Net financial indebtedness of the api holding Group
Euro/thousand
Cash at bank and in hand
31.12.2011
53,904
31.12.2010
24,696
Liquidity tied up in project finance
89,372
63,986
Medium to long term financial debt
839,593
942,793
Short term financial debt
Net financial position at 31 December 2011
Payables to/Receivables from shareholders
Total net financial position at 31.12.2011
784,497
529,063
1,480,814
1,383,174
1,677
3,389
1,482,491
1,386,563
The net financial position of the api holding group at the end of 2011 was in debt for Euro
1,482,491 thousand with a 7% increase compared to the previous year (Euro 1,386,563 thousand).
The increased debt associated with the already mentioned higher requirements in the renewable energy
sector was only partly offset by the increase in liquidity regarding both the tied-up part and the available
part. The liquid items were increased as a consequence of the combined effect of api energia not
distributing dividends in 2011 as opposed to 2010 and the increased cash obtained mainly for the
companies api S.p.A., api holding and SER1. An indebtedness analysis shows a substantial stability
between short-term liabilities (48% of the total) and medium/long-term liabilities (52%) compared to
the prevailing medium to long term liabilities (64%) of the previous year. The tighter banking conditions
for the granting of loans introduced throughout 2011 affected the increase in short-term debt, forcing
the main group companies to use less expensive instruments such as short-term credit lines and bank
overdrafts.
The percentage of medium long term debt covered by risk deriving from interest rate oscillations
was around 47% in 2011, unchanged compared to the previous year.
At group level, the only company continuously engaged in the exchange rate market and, as such,
exposed to the exchange rate fluctuation risk is the sub holding, api – anonima petroli italiana spa. To
meet the foreign currency needs arising from crude oil imports, in 2011 the company traded the
significant amount of USD 2.885 billion through Italian and foreign bank counterparties operating in
the exchange rate market.
Net of exports totalling USD 217 million, the balance of dollars at risk was USD 2.668 billion in 2011,
compared to USD 1.932 billion in 2010.
The increase in the value of foreign currency transactions was a direct consequence of the increase
in the prices of imported raw materials as compared to the previous year.
The exchange rate risk is managed by stipulating forward purchase agreements with an average
term of about 15 days. These purchases, the amount of which is approximately 10.5 million dollars/day,
are made by benchmarking with the daily closures of the European Central Bank (ECB). During the year,
this management resulted in average accumulated savings of Euro 2.8 million, calculated as the
difference between the Euro/USD weighted average exchange rate from the ECB (1.3922) and the
weighted average purchase exchange rate obtained by api (1.3943) from bank counterparties.
RELATIONS WITH SUBSIDIARY AND ASSOCIATED COMPANIES
2011 Euro/thousand
REVENUES
COSTS
30
3,135
OIL CONSUMPTION
Apisem S.P.A.
Abruzzo costiero S.R.L.
3,859
Within the context of centralised cash management, we also provide details of financing flows with
respect to other Group companies, also indicating the relative financial charges.
2011 Euro/thousand
FINANCIAL RECEIVABLES
BIOMASSE ITALIA S.P.A.
5,029
BIOMASSE CROTONE S.P.A
2,500
ABRUZZO COSTIERO S.R.L.
70
33
Report of the Board of Directors
Consolidated Financial Statements 2011 api holding S.p.A.
34
api holding S.p.A. Consolidated Financial Statements 2011
MAIN EVENTS OCCURRING AFTER YEAR END
AND BUSINESS OUTLOOK
The macroeconomic scenario which is likely to occur for this year would seem to reflect a worsening
economic cycle; at the start of the year the IMF lowered, compared to the previous estimates of
September, the growth prospects for the global economy from 4% to 3.3% for 2012. The most serious
review mainly concerned Europe, for which a slowdown of 0.5% is foreseen (against the previous
estimate of +1.1%). Prospects for Italy also fell, with an expected 2.2% drop (against +0.3% estimated
a few months ago).
For Europe, 2012 began once again with a focus on the sovereign debt of the countries of the Euro
Group and Greece in particular, for which a new assistance plan was finally approved on 20 February
for 130 billion through the EFSF and the International Monetary Fund. For the private debtors, a loss
of 53.5% of the par value is expected, while the residual part will be exchanged with bonds maturing
in 11 to 30 years. This assistance plan should contribute to reducing the Debt/GDP ratio to 120.5% in
2020.
In the other countries of the Euro area, a drop in the returns of Treasury bonds started to be seen,
Italian bonds in particular, for which the spread with the German bunds dropped to 315 basis points
(on 5 March); this followed the measures adopted by national governments and the various
amendments made to the Rescue Fund, which will soon be effective.
However, in recent weeks financial markets have been rocked again by a wave of risk aversion due
to the worsening of the sovereign debt crisis with a consequent rise in the Btp – German Bund spreads;
for Italy in particular a new maximum level was recorded on 23 April with a spread with respect to the
Bund equalling 405.86 basis points. Spain is also in difficulty after the rating agency S&P downgraded
the Spanish debt from A to BBB+.
Among the additional measures adopted to face the European crisis, an increase of USD 430 billion
is recorded in the resources available to the IMF and provided by the countries of the G20 in the
meeting in April.
On the monetary front, the FED kept official rates unvaried in the FOMC of 25 April, repeating that
this level will remain unvaried until the end of 2014 at least. No mention was made of a third
Quantitative Easing, even if the chairman Bernanke repeated that the FED is ready to intervene at any
time, if necessary.
Concerning Europe, on 29 February the ECB carried out the second important operation of
unlimited loan to banks for 3 years at 1% (LTRO) for a total of 529.5 billion, of which more than 100
billion were requested by Italian banks.
No new operation on the official rates was implemented as per the last meeting of 4 April, despite
the macroeconomic data giving signs of recession for the entire Euro area. Instead, the interventions of
the ECB continue to support liquidity through the purchase of Securities in the secondary market.
In the currency market, the Euro initially strengthened against the Dollar, from a minimum of 1.2624
on 13 January to 1.3454 at the end of February, to then sharply readjust in the first few days of March.
Pulling the Euro downwards were the persisting problems linked to the Greek bailout plan.
Starting from the second half of March, the Euro/Dollar was characterised by a swinging trend that
saw the single currency strengthen to the level of 1.3356 on 30 March, to then drop to 1.3024 on 16
April and then rise again for the entire month of April; from the end of April the dollar began to slowly
and gradually strengthen well over the threshold of 1.30, consequently to a host of factors of political
and economic uncertainty at European level. From a political point of view, the result of the Greek
elections in May asserted the inability of local politicians to form a government, while the outcome of
the presidential elections in France, where the president in office was ousted, could lead to scenarios
of lower financial strictness and rigidity. From an economic stand point, the European Union continues
to show worsening macroeconomic data, lower growth in some areas and a real recession in others.
According to many observers, the “breakage” of the support at 1.30 for the Euro/Dollar exchange rate
marks a decline to levels of 1.25 and beyond.
Also the price of oil rose at the beginning of the year, passing from about 110 USD/barrel in January
to almost 125 USD/barrel in the first few days of March. However, a drop was witnessed in April,
continuing also in May, which took the price to the level of the beginning of the year (111 USD/barrel),
thus re-establishing the “historical” inverse correlation with the USD.
Prices were affected by various factors, including the decision of the European parliament, pressured
by North America, to boycott Iranian oil in response to the growing nuclear ambitions of the current
regime.
This situation will be reflected on the Group’s supply policies and the company api S.p.A. in
particular which, to face the restrictions, has already made arrangements with a certain number of
suppliers of crude oil, who happily agreed to increase sales volumes in the coming months.
The refining scenario is in any case characterised by unprofitable margins such to recommend
reducing the use of the plants.
On the fuel distribution front, the first few months of the year saw a gradual and continuous drop
in consumption, partly explained by the adverse weather conditions that hit all of Italy, particularly in
February, and the depressive effect of the pump price increase as a consequence of the recent excise
hikes and the rising cost of the raw material.
Regarding energy (api energia), worth remembering is that, following the issue of Ministerial Decree
of the Ministry for Economic Development of 23 June 2011 and the letter of the GSE on 19 November
2011, containing the procedure related to the presentation of the binding claim for the early
termination of the CIP 6/92 conventions, on 6 February 2012 api energia presented, after having
obtained the authorisation from the banks, the binding participation to the early termination of the
existing CIP 6/92 convention, effective starting from 1 January 2013. A complex legal and financial
operation was finalised in March and April through which the banks in the pool of financers of api
energia agreed to be repaid directly by the controlling company api S.p.A. for their residual receivable
from api energia spa. Worth highlighting is that, now that the operation is over and the obligations
deriving from the project finance regime have been cancelled, this latter company has significant
liquidity, which may be used to face the requirements of the group. Therefore api Energia Spa will
continue production according to the Agreement with the GSE until 31 December 2012; in addition,
hypotheses will be assessed to change the production plant, dismantle it or sell it partially or totally.
While waiting for the developments described above, the subsidiary has prepared its financial
statements according to the principles of an on going concern, considering the complete recoverability
of the values entered, through the indemnity connected to early termination.
The uncertainty experienced in the renewable energy sector partly derives from the expectations
related to the remodulation of the incentives and the new tariffs of the V Energy Account and partly
from the growing difficulties encountered in obtaining medium to long term bank loans, encouraging
the adoption of a reflective policy to identify and choose new and old projects to be developed and to
value those earmarked to be transferred at a suitable value.
In the first few months of the year, the latest two wind farms of SER, Nebrodi and Alcantara, started
production definitively for a total of 127 MW. The plants of Biomasse Italia in Crotone and Strongoli
are being repowered and the banks that will finance this operation are being identified. A definitive
loan was signed in April, structured as project finance and with a fifteen-year duration, related to the
photovoltaic project headed by the company Nòva agri.
35
Report of the Board of Directors
Consolidated Financial Statements 2011 api holding S.p.A.
36
api holding S.p.A. Consolidated Financial Statements 2011
Regarding the real estate sector, the first few months of 2012 do not seem to show any signs of
recovery: the group continued the process of further valuation of the equity.
Concerning the loans expiring in the first part of the year, which involve the companies api S.p.A.,
api holding and api nòva energia, the banking counterparts, with which communication is active,
showed their willingness to renew most of the loans for periods exceeding 12 months. This attitude
also derives from the changing conditions on the interbanking market, whose liquidity has increased
after the ECB carried out the second Long Term Refinancing Operation at the end of February.
Rome, 18 May 2012
The Board of Directors
The Chairman
Cav. Lav. Dott. Aldo Maria Brachetti Peretti
2
Consolidated Financial Statements
as of 31 December 2011
Consolidated Financial Statements 2011 api holding S.p.A.
39
Consolidated income statement
api holding S.p.A. group
Notes
Revenues
Other revenues
31/12/2011
31/12/2010
3,825,429,180
3,279,691,834
91,499,085
62,605,766
Total
4
3,916,928,265
3,342,297,600
Costs for Raw Materials and Consumables
5
-3,125,549,666
-2,619,310,193
Costs for Services
6
-297,365,115
-324,875,164
-33,663,101
-29,042,944
Costs for Use of third party assets
Staff cost
7
-71,244,231
-71,476,644
Amortisation and depreciation and write-downs
8
-120,055,349
-111,510,900
Provisions for Risks
9
-26,894,081
-10,269,286
Other operating costs
10
-131,138,826
-126,699,466
-3,805,910,369
-3,293,184,597
111,017,896
49,113,003
Total
OPERATING RESULT
Financial Income
18,938,059
19,608,178
Borrowing costs
-69,392,887
-60,875,380
17,424,098
10,339,550
-33,030,730
-30,927,652
77,987,166
18,185,351
-37,707,202
-15,005,635
40,279,964
3,179,716
38,174,053
6,848,444
2,105,911
-3,668,728
Income (and charges) from valuation using the NE method
Total
11
RESULT BEFORE TAXATION
Taxation for the period
12
RESULT FOR THE PERIOD NET OF TAXATION
Result for the Period - Group
Result for the Period - Minority Interests
Basic earnings per share
13
575.22
45.202
Diluted earnings per share
13
575.22
45.20
Dividend
14
-
-
Consolidated statement of comprehensive income
31 December 2011
api holding S.p.A. group
31/12/2011
31/12/2010
Profit for the year
40,279,964
3,179,716
-3,771,587
1,388,428
Other components of comprehensive income statement
– Profits (losses) from CFH hedging components
– Profits (losses) for reserve for exchange rate
154,357
281,890
Total overall profit for the year
36,662,734
4,850,034
Result for the Period - Group
35,818,350
8,656,322
844,384
-3,806,288
Result for the Period - Minority Interests
Consolidated Financial Statements as of 31 December 2011
31 December 2011
40
api holding S.p.A. Consolidated Financial Statements 2011
Consolidated statement of financial position
31 December 2011
api holding S.p.A. group
Notes
IFRS
IFRS
31/12/2011
31/12/2010
Property, Plant and Equipment
15
1,425,746,880
1,353,527,226
Goodwill
16
120,232,045
121,088,669
Intangible Fixed Assets
17
163,463,673
166,545,411
Equity Investments
18
36,316,234
28,718,215
Other non-current assets
19
31,853,893
33,345,258
Derivative instrument assets
20
1,174,099
10,057
Prepaid taxation
21
94,217,011
94,536,80
Non-Current Assets
1,873,003,835
1,797,771,639
Inventories
22
441,287,301
352,864,478
Trade and other debtors
23
772,244,981
625,789,785
Other current assets
24
50,716,291
27,472,415
Tax receivables
25
17,454,749
29,655,930
Liquidity tied up in Project Finance
26
89,372,457
63,985,985
Cash at Bank and in hand and Cash Equivalents
27
53,903,870
24,696,156
Current Assets
1,424,979,649
1,124,464,7498
TOTAL ASSETS
3,297,983,484
2,922,236,388
Share Capital
361,200
361,200
Legal Reserve
72,240
72,240
Other reserves
372,598,255
368,917,198
Profit (loss) for the period
Total Group shareholders’ equity
28
Minority Interests
Shareholders’ equity
38,174,053
6,848,444
411,205,748
376,199,082
-1,965,790
-2,357,145
409,239,958
373,841,937
Medium to long term debt
29
839,593,217
942,792,656
Employee benefits
30
12,703,550
13,855,497
Deferred tax liabilities
31
134,672,231
130,564,076
Provisions for risks and charges
32
Non-Current Liabilities
59,937,030
48,510,424
1,046,906,028
1,135,722,653
Trade and other payables
33
720,491,894
500,512,334
Derivative instrument liabilities
34
39,645,554
33,897,806
Short-term loans
35
784,497,384
529,062,803
Payables due to shareholders
36
1,676,482
3,389,393
Other liabilities
37
163,657,188
209,242,265
Payables due to taxation authorities
38
131,868,996
136,567,197
Current liabilities
1,841,837,498
1,412,671,798
TOTAL LIABILITIES
3,297,983,484
2,922,236,388
Consolidated Financial Statements 2011 api holding S.p.A.
41
Consolidated cash flow statement
api holding S.p.A. group
(amounts in Euro/thousand)
Net result for the financial year
IFRS
IFRS
2011
2010
40,280
3,180
117,800
110,153
Adjustments for:
Depreciation of Tangible Fixed Assets
Amortisation of Intangible Fixed Assets and Impairment
Effects of Equity Evaluation of Equity Investments
Changes in Provisions (including Employee Severance Indemnity)
Neutralisation of non-monetary effects of Hedge Accounting
Other non-monetary items
Variation to Provision (Asset) for Deferred (Prepaid) Taxation
Cash-flow from Operating Activities (prior to change in Working Capital)
Change in trade receivables
2,255
1,358
-17,424
-10,340
10,275
-5,210
6,074
5,152
-37,487
-41,183
4,428
4,435
126,201
67,545
-146,455
-100,177
Change in inventory
-88,423
7,023
Change in trade payables
219,980
69,235
Change in other operating activities – net
-55,987
60,310
152
282
55,468
104,218
1,683
-10,097
Effects of change in the exchange rates on consolidated foreign subsidiaries
CASH-FLOW FROM OPERATIONS [a]
Investments in intangible fixed assets
Investments in tangible fixed assets
-142,823
-139,205
Equity investments
9,826
3,867
Change in long term financial assets
1,491
10,727
CASH-FLOW FROM INVESTMENTS [b]
-129,823
-134,708
Repayment/opening of medium/long term debt
-144,067
-92,629
Change in short term financial debts/receivables
248,381
33,551
-751
-751
103,563
-59,829
29,208
-90,319
OPENING BALANCE OF CASH AND CASH EQUIVALENTS
24,696
115,015
CLOSING BALANCE OF CASH AND CASH EQUIVALENTS
53,904
24,696
Distribution of dividends
CASH-FLOW FROM FINANCING ACTIVITY [c]
Increase /(decrease) in cash and cash equivalents [a+b+c]
Consolidated Financial Statements as of 31 December 2011
31 December 2011
-71,181
441,642
2,863
Change in the consolidation area
Balance at 31 December 2011
-2,923
Other changes in shareholders’ equity
Companies valued at equity
-14,738
-54,305
38,174
411,206
2,863
-2,923
0
0
10,626
Reclassifications from other reserves
-751
0
35,818
153
-2,509
38,174
376,199
-4,072
-454
-3,669
-1,261
1
-1,262
1,312
Shareholders’
Capital and
equity
Reserves
Group Min. Interests
0
-751
Distribution of dividends
-6,848
38,174
38,174
6,848
Profit (loss)
for the period
Payment from shareholders
6,848
Allocation of profit for year 2010
-2,509
-2,509
-12,229
C.F. Hedge
Profits
Reserve carried forward
153
-10,626
452,328
Other
Reserves
Total overall profit for the year
72
72
Legal
Reserve
153
361
361
Share
Capital
Foreign Shareholdings Translation Reserve
Effect of hedge accounting operations
Profit (loss) for the period
Balance at 1 January 2011
api holding S.p.A.
31 December 2011
Change in shareholders’ equity items
2,106
3,669
2,106
2,106
-3,669
Profit (loss)
for the period
Min. Interests
-1,966
0
-454
0
0
0
0
0
845
1
-1,262
2,106
-2,357
Shareholders’
equity
Min. Interests
409,240
2,863
-3,377
0
0
0
-751
0
36,663
154
-3,771
40,280
373,842
Shareholders’
equity
Total
42
api holding S.p.A. Consolidated Financial Statements 2011
-80,195
Balance at 31 December 2010
Change in the consolidation area
452,328
-12,229
-71,181
-752
386
Other changes in shareholders’ equity
-286
205
22
-745
10,311
Companies valued at equity
Reclassifications from other reserves
Payment from shareholders
Distribution of dividends
Allocation of profit for year 2009
1,527
1,527
-13,778
C.F. Hedge
Profits
Reserve carried forward
281
264
451,678
Other
Reserves
Total overall profit for the year
72
72
Legal
Reserve
281
361
361
Share
Capital
Foreign Shareholdings Translation Reserve
Effect of hedge accounting operations
Profit (loss) for the period
Balance at 1 January 2010
api holding S.p.A.
31 December 2009
Change in shareholders’ equity items
376,199
-366
205
-745
8,656
281
1,527
6,848
368,449
1,312
240
-6
2,369
-137
1
-138
-1,154
Shareholders’
Capital and
equity
Reserves
Group Min. Interests
-3,669
-2,369
-3,669
-3,669
2,369
Profit (loss)
for the period
Min. Interests
-2,357
240
-6
-3,806
1
-138
-3,669
1,215
Shareholders’
equity
Min. Interests
Consolidated Financial Statements as of 31 December 2011
6,848
-10,311
6,848
6,848
10,311
Profit (loss)
for the period
373,842
-126
205
-751
4,850
282
1,389
3,179
369,664
Shareholders’
equity
Total
Consolidated Financial Statements 2011 api holding S.p.A.
43
44
api holding S.p.A. Consolidated Financial Statements 2011
Accounting standards and explanatory notes
1.1 Company Information
API HOLDING S.p.A., a company established in Italy with offices in Rome, Via Salaria, 1322, is a
holding company with investments in industrial companies engaged in importing, processing and
generally trading crude mineral oils and all of their petroleum-derived products, as well as in the
production and transfer of electricity via renewable energy sources.
The publication of these consolidated financial statements of API HOLDING S.p.A. and its subsidiary
companies for the financial year ended 31 December 2011 was authorised by Directors’ resolution of
18 May 2012.
Consolidation area
The consolidated financial statements include the financial statements for the period to 31 December
2011 of api holding S.p.A. (hereinafter referred to as “api holding”) and of the following subsidiary
companies held either directly or indirectly:
Company name
Registered office
Shareholders
% held
Share Capital
(Euro/thousand if not
indicated otherwise)
Fin.Bra S.A.
Luxembourg
“Api holding S.p.A”
99.98
Euro 5 million
api - anonima petroli italiana S.p.A.
Rome
“api holding S.p.A. “
51.31
115,425
“Fin.Bra S.A.”
48.51
“third parties”
0.18
“api”
100
13,125
(hereinafter referred to as “api”)
“api Raffineria” di Ancona S.p.A.
Ancona
(hereinafter referred to as "api Raffineria”)
api nòva energia S.r.l.
Rome
“api holding S.p.A”
100.00
8,500
Api Real Estate S.r.l. (former api immobiliare spa)
Rome
“api holding S.p.A”
99.82
750
“third parties”
0.18
isi 2003 S.r.l. in liquidation
Rome
“api real Estate S.r.l.”
100.00
10
Finbra Real Estate S.r.l.
Rome
“api real Estate S.r.l.”
100.00
218
Cer S.r.l. (former Filippo Sanseverino S.r.l.)
Caserta
“api holding S.p.A”
100.00
460
“s.e.r. S.p.A.”
Palermo
“apinòva energia S.r.l.”
50.10
120
“third parties”
49.90
“apinòva energia S.r.l.”
2.00
“s.e.r. S.p.A.”
96.00
“third parties”
2.00
“apinòva energia S.r.l.”
51.00
“third parties”
49.00
s.e.r. 1 S.p.A.
Sòlergys S.p.A.
Rome
Rome
120
120
Sunshire S.r.l.
Tolentino (MC) “apinòva energia S.r.l.”
100.00
100
Nòvawind Sud S.r.l.
Rome
100.00
10
“apinòva energia S.r.l.”
Company name
Registered office
Shareholders
% held
Share Capital
(Euro/thousand if not
indicated otherwise)
Nòvasol Puglia S.r.l.
Foggia
“apinòva energia S.r.l.”
100.00
10
Nòvawind Sicilia S.r.l.
Palermo
“apinòva energia S.r.l.”
100.00
100
Ecoenergia S.r.l.
Foggia
“apinòva energia S.r.l.”
51.00
50
“third parties”
49.00
Nòvasol Calabria S.r.l.
Belvedere M. “apinòva energia S.r.l.”
100.00
10
Nòva Centro S.r.l.
Rome
“apinòva energia S.r.l.”
100.00
10
Nòvasol Sicilia S.r.l.
Palermo
“apinòva energia S.r.l.”
100.00
10
Nòvabra es S.A.
Espirito
Santo (Bra)
“apinòva energia S.r.l.”
100.00
50,000 Reais (Brl)
Nòva agri soc.agr. a.r.l.
Rome
“apinòva energia S.r.l.”
100.00
60
api Energia S.p.A.
Rome
“api”
98.84
13,831
“api holding SpA”
1.16
“api”
99.99
api services limited (United Kingdom)
London
Apioil limited (Bermuda)
Hamilton
“third parties”
0.01
“api”
99.99
“third parties”
0.01
GBP 10,000
USD 2 million
Festival S.p.A.
Rome
“api”
100
560
Dialco S.r.l.
Bari
“api”
100
10
Ip services S.r.l. (former Alpenoil S.r.l.)
Rome
“api”
100
100
G.R.C. S.r.l.
Rome
“api”
100
50
Apifin S.r.l. in liquidation
Rome
“api”
100
60
The equity investments in associated companies detailed below were valued under the equity
method:
Company name
Registered office
Shareholders
% held
Share Capital
(Euro/thousand if not
indicated otherwise)
Apisoi Service S.p.A. in liquidation
Falconara (An)
“api Raffineria”
“third parties”
50.00
50.00
260
Apisem S.p.A..
Lecce
“api”
“third parties”
50.00
50.00
423
Abruzzo Costiero S.r.l.
Pescara
“api”
“third parties”
30.00
70.00
2,995
Saccne rete S.r.l.
Messina
“api”
“third parties”
50.00
50.00
2,200
Biomasse Italia S.p.A.
Crotone
“apinòva energia S.r.l.”
“third parties”
50.00
50.00
1,848
Biomasse Crotone S.p.A.
Crotone
“api nòva energia S.r.l.”
“third parties”
50.00
50.00
1,182
Biotrade S.r.l.
Crotone
Rome
WAS S.r.l.
Bologna
50.00
50.00
41.50
58.50
50.00
50.00
103
Italsilicon S.p.A.
“apinòva energia S.r.l.”
“third parties”
“apinòva energia S.r.l.”
“third parties”
“apinòva energia S.r.l.”
“third parties”
SAB S.r.l.
Rome
“apinòva energia S.r.l.”
“third parties”
50.00
50.00
10
Associated companies:
120
10
45
Consolidated Financial Statements as of 31 December 2011
Consolidated Financial Statements 2011 api holding S.p.A.
46
api holding S.p.A. Consolidated Financial Statements 2011
Other equity investments and equity investments in associated companies regarding which, in the
company’s opinion, the company has no significant influence, are valued under the cost method.
The principal consolidated companies engage in the following business activities:
■ “api”: crude oils supply and distribution of petroleum products;
■ “api Energia”: management of a power generation plant based on integrated gasification and
combined cogeneration cycle;
■ “api Raffineria”: oil refining on account of the parent company;
■ “apioil limited and api services Ltd”: respectively procurement brokerage and sale of
petroleum products and monitoring international petroleum product markets;
■ Festival S.r.L. : restaurant services management;
■ Apifin S.r.l. in liquidation: Fuel card management;
■ api nòva energia S.r.L.: production of electricity using renewable sources and sources
similar to
renewable ones;
■ Fin.bra S.A.: management of equity investments;
■ CER S.p.A.: production of electricity through wind energy;
■ SER S.p.A.: production of electricity through wind energy;
■ SER1 S.p.A.: production of electricity through wind energy.
The other consolidated companies, of lesser significance, engage in marketing in the oil industry and
services predominantly on behalf of Group companies, as well as start up activities for the production
of electricity through wind and photovoltaic energy.
As part of the Group’s expansion strategies, the following corporate operations were completed
during 2011:
■ On 10 January 2011, with deed of notary Marina Fanfani, Repertory no. 59957, Folder no. 17451,
a company branch was transferred by the company api nòva energia s.r.l., consisting of 28 wind
farms, to the subsidiary of nòvawind sud S.r.l.. In addition, with the minutes of the extraordinary
meeting, as per notary deed drawn up by notary M. Fanfani on 19 October 2011, Repertory no.
60711, Folder no. 17867, api nòva signed a capital increase by transferring the company branch
with the aim of developing, designing and creating 2 wind farms in Puglia. Please note that the
value conferred had been previously conferred by api holding spa to api nòva with notary deed
drawn up by notary M. Fanfani on 12 October 2011 (rep. no. 60681 folder no. 17846);
■ On 27 January 2011, with deed of notary Marina Fanfani, Repertory no. 60008, Folder no. 17481,
a company branch was transferred by api nòva energia s.r.l., consisting of 18 photovoltaic farms
located in Sicily, in favour of the subsidiary nòvasol sicilia s.r.l;
■ On 21 February 2011, with deed of notary Marina Fanfani, Repertory no. 60071, Folder no. 17515,
a company branch was transferred by api nòva energia s.r.l., consisting of 40 photovoltaic farms
located in Puglia, in favour of the subsidiary nòvasol Puglia s.r.l;
■ On 2 May 2011, with deed of notary Marina Fanfani, Repertory no. 60292, Folder no. 17638, a
company branch was transferred by api nòva energia s.r.l., consisting of wind and photovoltaic
farms located in central Italy, in favour of the subsidiary nòva centro s.r.l;
■ On 25 May 2011, a share equal to 0.002% of the share capital of Fin.bra. S.A. was acquired by an
individual; consequently api holding spa holds 100% of the share capital;
■ On 30 May 2011, with deed of Notary Marina Fanfani, Repertory no. 60369, Folder no. 17678, a
company branch was transferred regarding the creation of a wind farm called Monti Sicani Nord by
SER S.p.A. in favour of nòvawind sicilia s.r.l., as a result of which SER S.p.A. is included in the
company structure, though with a minority share of 13.34%.
The stake was subsequently (28 June 2011) transferred to api nòva energia s.r.l., which regains total
control of the company; nòvawind sicilia: furthermore, with the minutes of the extraordinary
meeting, as per notary deed drawn up by notary M. Fanfani on 28 July 2011 (rep. no. 60533 folder
no. 17773), api nòva transferred a company branch with the purpose of developing, designing and
creating 4 wind farms in Sicily; with minutes of the meeting, as per notary deed drawn up by notary
Notaio M. Fanfani on 19 October 2011 (rep. no. 60710 folder no. 17866), api nòva conferred an
additional company branch with the purpose of developing, designing and creating 1 wind farm in
Sicily. Please note that the project had been conferred by api holding spa to api nòva with notary
deed drawn up by notary M. Fanfani on 12 October 2011 (rep. no. 60681 folder no. 17846);
■ On 4 October 2011, with deed of “partial proportional spin-off and establishment of company” of
the notary Marina Fanfani, Repertory no. 60651, Folder no. 17829, the associated company
Biomasse Italia spa was demerged to create a new company “Biomasse Crotone spa”; the company
structure of the company Biomasse Italia spa and of the newly established company remains
unchanged;
■ On 12 October 2011, with deed of the notary Marina Fanfani, Repertory no. 60681, the parent
company transferred to api nova energia S.r.l. the projects developed in Puglia Castelluccio dei Sauri
and Troia, and in Monreale, Sicily;
■ On 1 December 2011, the operation of cross-border spin-off of Fin.bra. S.A. took place as approved
by the shareholders on 27 July 2011, and formalised with deed drawn up by notary Nicola Atlante
Repertory no. 39849, through which the stake held in Fin.bra. s.a. in api real estate S.r.l., equal to
48.51% of the share capital, was transferred to the beneficiary api holding spa. The operation
allows almost all of the stake in api real estate S.r.l. to be held by the beneficiary, of which api
holding already held 51.31%.
Concerning the corporate operations carried out during the year on minority equity investments,
Civita Servizi, Aerdorica and SGR, refer to the paragraph concerning “Equity Investments” of these
Explanatory Notes.
2.1 PREPARATION CRITERIA
The consolidated financial statements have been prepared on the basis of the historical cost
principle, with the exception of derivative financial instruments which have been recorded at the fair
value. The book value of assets and liabilities recorded, which are subject to hedging transactions, and
which would otherwise be recorded at cost, are adjusted to take into account the changes in the fair
value attributable to the risks being hedged. The consolidated financial statements are presented in
Euro and all values are expressed in thousand Euro unless otherwise indicated.
The Consolidated Financial Statements consist of the consolidated income statement, the
consolidated comprehensive income statement, the consolidated statement of financial position and
the statement of changes in equity. The Financial Statements are likewise provided along with the
management report and the Statement of cash flows.
47
Consolidated Financial Statements as of 31 December 2011
Consolidated Financial Statements 2011 api holding S.p.A.
48
api holding S.p.A. Consolidated Financial Statements 2011
Statement of compliance with IFRSs
The consolidated financial statements at 31 December 2011 for api holding Spa have been prepared
in compliance with the International Financial Reporting Standards (IFRS) adopted by the European Union.
In relation to the accounting standards adopted for the preparation of the consolidated financial
statements it is pointed out that the company falls under the scope laid down by letter f) of Art. 2 of
Legislative Decree no. 38 of 28 February 2005, which regulates the exercising of the options provided
for by Art. 5 of Community Regulation no. 1606/2002 in relation to the International Financial
Reporting Standards (hereinafter also “IFRS”) and therefore in accordance with Article 3, Paragraph 2
of the same decree, the Company has voluntarily exercised the right to apply the IFRSs adopted by the
European Union for the preparation of its consolidated financial statements, commencing from the
2005 financial year.
International Financial Reporting Standards (IFRS)
IFRS 1
IFRS 2
IFRS 3
IFRS 4
IFRS 5
IFRS 6
IFRS 7
IFRS 8
IFRS 10
IFRS 11
IFRS 12
IFRS 13
First-time adoption of the International Financial Reporting Standards
Share-based payment
Business combinations (Revised 2008)
Insurance Contracts
Non-current assets held for sale and discontinued operations
Exploration for and evaluation of mineral resources
Financial instruments: Disclosures
Operating segments
Consolidated Financial Statements
Joint arrangements
Disclosure of interests in other entities
Fair value measurement
√
√
√
√
√
√
√
International Accounting Standards (IAS)
IAS 1
IAS 2
IAS 7
IAS 8
IAS 10
IAS 11
IAS 12
IAS 16
IAS 17
IAS 18
IAS 19
IAS 20
IAS 21
IAS 23
IAS 24
IAS 26
IAS 27
IAS 28
IAS 29
IAS 31
IAS 32
IAS 33
IAS 34
IAS 36
IAS 37
IAS 38
IAS 39
IAS 40
IAS 41
Presentation of financial statements
Inventories
Statement of cash flows
Accounting principles, changes in accounting estimates and errors
Events after the balance sheet date
Construction contracts
Income taxes
Property, plant and equipment
Leases
Revenue
Employee benefits
Accounting for government grants and disclosure of government assistance
The effects of changes in foreign exchange rates
Borrowing costs
Related party disclosures
Accounting and reporting by retirement benefit plans
Consolidated and separate financial statements
Investments in associates (revised in 2008)
Financial reporting hyperinflationary economies
Interests in joint ventures
Financial instruments: presentation
Earnings per share
Interim financial reporting
Impairment of assets
Provisions, contingent liabilities and contingent assets
Intangible assets
Financial instruments: recognition and measurement
Property investments
Agriculture
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
Consolidated Financial Statements 2011 api holding S.p.A.
49
IAS 1 Presentation of Financial Statements – Presentation of other components in the
comprehensive income statement
The amendment to IAS 1 changes the grouping of the other components in the comprehensive
income statement. Items that could be reclassified to profit or loss at a future point in time should be
presented separately from items which will never be reclassified. The amendment will only concern the
presentation method and will have no impact on the Group’s results. The amendment will be effective
from 1 July 2012 or subsequently.
IAS 19 Employee benefits (amended)
The IASB issued a host of amendments to IAS 19. These range from radical changes such as the
elimination of the corridor mechanism and the concept of the returns expected from the plan activities,
to simple explanations and terminology. During the year, the Group voluntarily changed the accounting
policies to recognise the actuarial profits and losses among the other components of the comprehensive
income statement. The Group is currently assessing the impact of the other amendments. The
amendments are effective for the years which start on or after 1 January 2013 or subsequently.
IAS 27 Separate financial statements (revised in 2011)
Following the new IFRS 10 and IFRS 12, the remaining part of IAS 27 is limited to the accounting of
subsidiaries, joint ventures and associates, in the separate financial statements. The Group does not
prepare separate financial statements. The amendments become effective for the years which start on
or after 1 January 2013 or subsequently.
IFRS 7 Financial instruments: Disclosures Transfer of financial assets
The amendments require additional information on the financial instruments, transferred but not yet
recorded in the financial statements, to allow financial statement users to understand the relation
between the assets that have not yet been recorded in the financial statements and the related
liabilities. In addition, the amendments require information on the residual involvement in the
transferred assets not yet recorded, to allow financial statement users to assess the nature and the risk
connected to the residual involvement of the company in these assets cancelled from the financial
statements. The amendments apply to the years that start on 1 July 2011. The amendments only
concern the financial statement disclosure and do not affect the Group’s financial position or its result.
IFRS 10 – Consolidated financial statements
IFRS 10 replaces the part of IAS 27 consolidated and separate financial statements which governs
the accounting of the consolidated financial statements. It also includes the problems raised in SIC-12
Consolidation – Special purpose entities. IFRS 10 establishes a single control model that applies to all
entities, including the special purpose entities. The changes introduced by IFRS 10 will require
management to exercise significant judgement to determine which entities are controlled and,
therefore, must be consolidated by the parent company, compared with the requirements that were in
IAS 27. This principle is applied from the years starting from 1 January 2013 or subsequently.
Consolidated Financial Statements as of 31 December 2011
Accounting principles and interpretations issued by the IASB/IFRIC
and not yet endorsed by the EU
50
api holding S.p.A. Consolidated Financial Statements 2011
IFRS 11 Joint Arrangements
IFRS 11 replaces IAS 31 Interests in Joint ventures and SIC - 13 Jointly controlled entities – Nonmonetary contribution by venturers. IFRS 11 eliminates proportional consolidation as a method to
account for joint arrangements. The jointly controlled entities that respect the definition of a joint
venture must be accounted for using the equity method. The application of this standard will have an
impact on the Group’s financial position. This is due to the termination of the proportional consolidation
of the joint venture Showers Limited (see note 6) which must be accounted for with the equity method.
This principle is applied from the years starting from 1 January 2013. or subsequently.
IFRS 12 Disclosure of interests in other entities
IFRS 12 includes all the disclosure requirements previously included in IAS 27 and related to the
consolidated financial statements, as well as all the disclosure requirements of IAS 31 and IAS 28. This
information relates to the interest of a company in subsidiaries, jointly arrangements, associates and
structured vehicles. New disclosure cases are also foreseen. This principle is applied from the years
starting from 1 January 2013.
IFRS 13 – Fair value measurement
IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13
does not change the cases when an entity is required to use fair value, but rather, provides guidance
on how to measure fail value under IFRS when fair value is requested or permitted by IFRS. The Group
is currently assessing the impact this principle will have on the financial position and the results. This
principle is effective for the years starting from 1 January 2013.
Consolidation principles
The consolidated financial statements include the financial statements for api holding Spa and
subsidiary companies prepared at 31 December 2011, adopting the same accounting standards as the
parent company at each year end.
All intercompany balances and transactions, including any profits and losses not realised resulting
from relations maintained between Group companies which are recognised under assets, are completely
written off.
Subsidiary companies are fully consolidated from the date of acquisition, or from the date on which
the Group acquired control, and cease to be consolidated on the date on which control is transferred
outside of the Group.
2.2 DISCRETIONARY VALUATIONS AND CONSIDERATIONS IN
RELATION TO THE SEASONAL OR CYCLICAL NATURE OF INTERIM
TRANSACTIONS
Uncertainty of estimates
Key assumptions made in relation to the future and other important sources of uncertainty of
estimates are presented below at the date of closure of the company accounts, which could give rise
to significant book value adjustments to assets and liabilities within the next financial year.
Goodwill impairment
Goodwill is tested for impairment on at least an annual basis; said test requires an estimate of the
value in use of the cash-generating unit to which the goodwill is attributed, in turn based on the cash
flows expected from the unit and discounting back on the basis of a suitable discount rate.
Please refer to Paragraph 16 of these Explanatory Notes for details of the book value for goodwill.
Impairment of investments
Impairment occurs when the book value of an asset or a cash generating unit exceeds its recoverable
value, which is the higher between the fair value minus the selling costs and its value in use. The
calculation of the fair value less the selling costs is based on the data available from binding selling
transactions between free and autonomous parties, concerning similar assets or observable market
prices, minus the higher costs regarding the disposal of the asset. The calculation of the value in use is
based on a discounted cash flow model. The cash flows are obtained from the plan for the next five
years and do not include the restructuring activities for which the Group does not have an obligation
in place, nor significant future investments that increase the return of the assets comprised in the cash
flow generating unit being measured. The recoverable amount significantly depends on the discount
rate used in the discounted cash flow model as well as the incoming cash flows expected in the future
and the growth rate used for the extrapolation.
Taxation
The interpretation of complex tax regulations and the amount and terms regarding the future
taxable income are somewhat uncertain. Given the large array of international business relations, the
long-term nature and the complexity of the contractual agreements in place, the differences between
the actual results and the hypotheses made, or the future changes in these hypotheses, may require
future adjustments to income taxes and the costs already recorded. The Group makes allocations based
on reasonable estimates for possible consequences on audits by the tax authorities from the various
countries it works in. The amount of these allocations is based on various factors such as the experience
of previous tax assessments or the different interpretations of tax regulations by the company subject
to taxation and by the competent tax authority. Interpretation differences may arise for several issues,
depending on the conditions prevailing in the relevant domicile of the Group companies. Deferred tax
assets are recorded for all unused tax losses, to the extent that a taxed profit is likely in the future, which
is such to allow the use of the losses. Management is required to make estimates to determine the
amount of the tax assets that may be measured based on the level of future taxable profits, the timing
of their occurrence and the tax planning strategies.
Fair value of financial instruments
When the fair value of a financial asset or liability recorded in the statement of financial position can
not be derived from an active market, it is determined by using different measurement techniques,
including the discounted cash flow model. The input entered in this model comes from observable
markets; however, if this is not possible, estimates are required to define the fair value. The estimates
include considerations on variables such as the liquidity risk, the credit risk and volatility. Changes in the
assumptions on these elements may have an impact on the fair value of the financial instrument
concerned.
51
Consolidated Financial Statements as of 31 December 2011
Consolidated Financial Statements 2011 api holding S.p.A.
52
api holding S.p.A. Consolidated Financial Statements 2011
Disputes and appropriations to the provisions for doubtful debtors
The parent company is a suitor in several legal disputes. Given their nature, it is not objectively possible
to predict the final outcome of these lawsuits, some of which may end with an unfavourable ruling.
Funds were set aside to cover all the significant liabilities for the cases for which the lawyers have
suggested a possible negative outcome and a reasonable estimate of the loss.
Other items
Estimates have been necessarily applied to calculate the following:
■ prepaid tax assets, with regard to the probability of their future reversing;
■ appropriations to the provision for doubtful debtors and provisions for risks and charges;
■ main assumptions applied to the actuarial recalculation of the provision for severance indemnity
(employee benefits), such as future turnover rate, inflation rate and discount rate.
2.3 SUMMARY OF THE MAIN ACCOUNTING STANDARDS
a) Translation of entries in foreign currency
The consolidated financial statements at 31 December 2011 are presented in Euro, which is the
functional and presentation currency adopted by the Company. Each Group entity defines its own
functional currency, which is used to evaluate items included in the individual financial statements at
31 December. Transactions in foreign currency are initially recorded at the exchange rate (relative to the
functional currency) current at the date of the transaction. Monetary assets and liabilities, denominated
in foreign currency, are translated into the functional currency at the exchange rate currently in force
on the closing date of the consolidated financial statements. All exchange rate differences are recorded
in the income statement, with the exception of differences deriving from financing in foreign currency
initiated to cover a net investment in a foreign company, which are recorded directly in shareholders’
equity until such time as the investment is disposed of, when it is recognised in the income statement.
Taxation and tax credits attributable to exchange rate differences on such financing are also charged
directly to the balance sheet. Non-monetary items in foreign currency valued at historical cost are
translated by using the exchange rate in force on the date of initial recognition of the transaction. Nonmonetary items recorded at the fair value in foreign currency are converted by using the exchange rate
at the date of determination of this value.
The operating currency used by the subsidiary apioil Limited Bermuda is the US Dollar, while for the
company apiservices Ltd London U.K. it is the British Pound; finally the operating currency used by the
subsidiary nòvabra ES S.A. Espirito Santo, Brazil, is the Real. At the consolidated balance sheet date,
the assets and liabilities of these subsidiaries are converted into the presentation currency of api holding
S.p.A. (Euro) at the exchange rate in force at that date, and the income statement is converted using
the average exchange rate for the period. The exchange rate differences resulting from the translation
are recorded directly in the balance sheet and are expressed separately in a special reserve for the same.
At the time of disposal of a foreign company, the cumulative exchange rate differences recorded in
shareholders’ equity in consideration of that particular foreign company are recorded in the income
statement.
Consolidated Financial Statements 2011 api holding S.p.A.
53
Property, plant and equipment are recorded at the historical cost, net of the relative depreciation
provision and accumulated impairment losses. This cost includes the costs for the replacement of part
of the plant and machinery at the time that these were incurred if compliant with recognition criteria,
and the financial charges directly attributable to the purchase of the asset. When significant parts of
property, plant and equipment have to be replaced periodically, these are recorded by the Group as
autonomous assets with a specific useful life and related depreciation.
Depreciation is calculated using the straight line method on the basis of the estimated useful life of
the asset, as follows:
Rate %
Useful life
2011
2010
2011
2010
4%
4%
25
25
Land
Industrial buildings
Pipeline tanks
5.55%
5.55%
18
18
10.00%
10.00%
10
10
Generic plants
5.55%
5.55%
18
18
Scantly corrosive plants
6.25%
6.25%
16
16
Highly corrosive plants
8.33%
8.33%
12
12
Point of sale sheltered buildings
5.00%
5.00%
20
20
Point of sale fittings
8.33%
8.33%
12
12
Formation expenses
6.66%
6.66%
15
15
Other fixtures, tools and equipment
25.00%
25.00%
4
4
Furniture
12.50%
12.50%
8
8
Electronic machines
20.00%
20.00%
5
5
Motor vehicles
25.00%
25.00%
4
4
UOP catalysers
33.33%
33.33%
3
3
AKZO catalysers
50.00%
50.00%
2
2
Phase I wind turbines and anemometers
8.30%
8.30%
12
12
Phase II wind turbines
4.95%
4.95%
20
20
Phase III wind turbines
5.39%
5.39%
19
19
Light constructions
An asset is written off from the financial statements at the time of sale or when there are no future
economic benefits expected from its use or disposal. Any losses or profits (calculated as the difference
between the net income of the sale and the book value) are included in the income statement at the
time of the abovementioned elimination.
The book value of plant and machinery is subject to impairment tests when events or changes
indicate that the book value may not be recoverable.
Calculation of the recoverable value, in accordance with IAS 36, has been carried out using the higher
of the assets’ value in use and their fair value, net of any charges resulting from the sale transaction.
c) Borrowing costs
In application of IAS 23, financial charges that cannot be directly attributed to the acquisition and
construction of plants identifiable as qualifying assets are capitalised, as they are part of the cost of the asset
itself. All the other financial charges must be entered as a cost for the year in which they were incurred.
Consolidated Financial Statements as of 31 December 2011
b) Property, plant and equipment
54
api holding S.p.A. Consolidated Financial Statements 2011
d) Leases
The company analyses the contractual agreements to ascertain whether they include lease
transactions or not, based on the substance of the agreement, and ascertains if compliance with the
agreement depends on the use of one or more specific assets or if the agreement transfers the right to
use that asset.
For contracts signed before 1 January 2005, the commencement date was considered to be 1
January 2005, in accordance with the transitional provisions of IFRIC 4.
The Group as lessee
According to financial lease contracts, which essentially transfer to the Group all the risks and
benefits deriving from the ownership of the leased asset, at the lease start date the leased asset is
capitalised at its fair value or, if lower, the current value of the leasing instalments. Leasing instalments
are proportionally allocated between the capital and the interest, so as to apply a constant interest rate
on the remaining balance of the debt. The financial charges are posted to the income statement.
Leased assets are depreciated on the basis of the useful life of the asset. If, at the end of the
contract, it is not reasonably certain that the Group will obtain the ownership of the asset, the asset is
depreciated over its estimated useful life or the duration of the lease agreement, whichever is shorter.
Operating lease instalments are recorded in the income statement as costs on a straight-line basis
over the duration of the contract.
e) Property investments
Property investments are initially recognised at the historical cost, inclusive of ancillary negotiation
fees. The book value includes the cost contributing to the replacement of part of a property investment
at the time at which the cost is incurred, on the condition that recognition criteria are satisfied, and
excludes ordinary maintenance costs. Property investments are written off from the financial statements
when they are sold or when the investment is unusable over the long-term and there are no future
economic benefits to be gained from its sale. Any profits or losses resulting from the withdrawal or
disposal of property investment are recorded in the income statement in the financial year in which the
withdrawal or disposal occurs.
The reclassifications to property investments occur when, and only when, there is a change in use,
evidenced by events such as: termination of direct use, commencement of an operating lease contract
with third parties or the completion of construction or property development works. The
reclassifications from property investments occur when, and only when, there is a change in use,
evidenced by events such as: commencement of direct use or the start of a development programme
with the prospect of a future sale.
When the assets used directly by the Group become a property investment, the Group records these
assets in compliance with the criteria indicated in the Property, plant and equipment item up until the
date of change of use.
Consolidated Financial Statements 2011 api holding S.p.A.
55
Business combinations are entered in the accounts by using the acquisition method. The acquisition
cost is recognised as the sum of the transferred consideration, measured at the fair value on the
acquisition date and inclusive of the amount of the minority interest owned by the acquired entity.
For each business combination, the Group defines whether to measure the minority interest in the
acquired entity at fair value or proportionally to the portion of the minority interest in the net assets
identifiable in the acquired company. Acquisition costs are recorded and classified under administration
expenses. When the Group acquires a business, it classifies or designates the financial assets acquired
or the liabilities assumed in agreement with the contractual terms, the economic conditions and the
other related conditions existing on the acquisition date. This includes a check to establish whether an
incorporated derivative must be separated from the primary contract.
If the business combination is arranged into more than one phase, the purchaser must recalculate
the fair value of the interest previously held and measured with the equity method and record any
resulting profit or loss in the income statement. Any potential consideration is recorded by the
purchaser at the fair value on the acquisition date. The change in the fair value of the potential
consideration classified as asset or liability will be recorded according to the provisions of IAS 39, in the
income statement or in the other components in the comprehensive income statement. If the potential
consideration is classified in the shareholders’ equity, its value must not be recalculated until its
redemption is accounted for against the shareholders’ equity. The subsequent transaction will be
recorded in the shareholders’ equity. If the potential consideration is not within the scope of IAS 39,
this is measured in accordance with the appropriate IFRS. The goodwill is initially measured at the cost
being the excess of the sum of the consideration paid and the amount recognised for the minority
interest with respect to the identifiable net assets acquired and the liabilities assumed by the Group. If
the consideration is lower than the fair value of the net assets of the acquired subsidiary, the difference
is recognised in the income statement. After initial recording, the goodwill is valued at the net cost of
the accumulated impairment. For the purpose of verifying the impairment, the goodwill acquired in a
business combination must, on the acquisition date, be allocated to any cash flow generating unit of
the Group that is expected to benefit from the synergies of the aggregation, regardless of other assets
or liabilities of the acquired entity being assigned to these units. If the goodwill is allocated a cash flow
generating unit and the entity disposes of part of the assets of this unit, the goodwill associated with
the disposed asset must be included in the book value of the assets when the profit or loss from the
disposal is calculated. The goodwill associated with the disposed asset must be calculated on the basis
of the values related to the dismissed asset and the part of the cash flow generating unit maintained.
Each unit or group of units to which the goodwill is allocated:
■ represents the lowest level within the Group at which the goodwill is monitored for the purposes of
internal management;
■ is not larger than a segment as defined in the Group primary or secondary reporting schedule in
accordance with IFRS 8 Segment Reporting.
The impairment loss is determined by defining the recoverable value of the cash-generating unit (or
group of units) to which the goodwill is allocated. When the recoverable value of the cash-generating unit
(or group of units) is less than the book value, an impairment loss is recorded. In cases where the goodwill
is attributed to a cash-generating unit (or group of units) whose asset is partially disposed of, the goodwill
associated with the asset sold is considered for the purpose of calculation of any capital gain (loss) resulting
from the transaction. In such circumstances, the goodwill transferred is measured on the basis of the values
relative to the asset disposed of with respect to the asset still held with reference to the same unit.
Consolidated Financial Statements as of 31 December 2011
f) Business combinations and goodwill
56
api holding S.p.A. Consolidated Financial Statements 2011
g) Intangible fixed assets
The following categories of intangible fixed assets exist within the Group, the useful life of which is
defined as follows:
–
trademark
indefinite useful life
–
owned network
indefinite useful life
–
third party network
indefinite useful life
–
licences
indefinite useful life
–
software
finite useful life (contract duration)
Intangible fixed assets acquired separately are initially capitalised at cost, while those acquired by
way of business combination are capitalised at fair value at the date of acquisition. Following initial
recognition, the intangible fixed assets are recorded at cost, net of depreciation provisions and any
accumulated impairment losses. Intangible fixed assets generated internally are not capitalised and are
recorded in the income statement in the financial year in which they were incurred. The useful life of
intangible fixed assets is evaluated as defined or indefinite. Intangible fixed assets with finite life are
amortised over the period of their useful life and subjected to consistency tests each time that there are
indications of a possible impairment loss. The period and the method of amortisation applied to these
are reviewed at the end of each financial year or more frequently if necessary. Changes in expected
useful life or the methods with which the future economic benefits associated with the intangible fixed
assets are achieved by the Group are recorded by modifying the period or the method of amortisation,
as appropriate, and treated as modifications to the accounting estimates. The amortisation portions for
intangible fixed assets with finite life are recorded in the income statement in the cost category
consistent with the function of the intangible fixed asset.
Intangible fixed assets with an indefinite useful life are subjected to annual impairment tests at
individual level or at cash generating unit level. No amortisation is recorded for such assets. The useful
life of an intangible fixed asset with indefinite life is reviewed on an annual basis in order to ascertain
whether the conditions at the basis of such classification still exist. If not, the change in the useful life
from indefinite to finite is made on the basis of future use.
The profits or losses deriving from disposal of an intangible asset are measured as the difference
between the net sales revenue and the book value of the asset and are recorded in the income
statement at the time of disposal.
CO2 emission rights were assigned free-of-cost for the three year period 2008-2012, with specific
indication of the quotas provided for each period, by the Ministry for the Environment and Land
Protection on the basis of the PNA.
For the purpose of their recognition in the financial statements, the purchase cost of the quotas
used to cover the requirement of the year was recorded among the “other operating costs”. The
surplus of quotas accounted for at year-end are recorded in inventories.
h) Equity investments in associated companies
Group equity investments in associated companies are valued using the equity method. An associate
is a company on which the Group exerts significant influence which cannot be classified as a subsidiary
or joint venture.
In accordance with the equity method, an equity investment in an associated company is recorded
in the balance sheet at cost, increased by the changes subsequent to acquisition for the share
pertaining to the group of the net assets of the associate. Goodwill pertaining to the associate is
included at the book value of the equity investment and is not subject to amortisation. After applying
the equity method, the Group determines whether it is necessary to record any additional impairment
losses with reference to the shareholders’ equity investment of the Group in the associate. The income
statement reflects the share pertaining to the Group of the financial year result for the associated
company. In the event that the associated company records adjustments which are directly attributed
to the shareholders’ equity, the Group records the share pertaining to it and presents this, where
applicable, in the statement of changes in shareholders’ equity.
The accounting year-end for the associates coincides with the last accounts approved; the
accounting standards used comply with those used by the Group for transactions and events of the
same nature in similar circumstances.
i) Impairment losses
At each closing date of the financial statements, tangible and intangible fixed assets are analysed in
order to assess the existence of impairment indicators. In this case, or in cases where annual impairment
test is required, the recoverable value is estimated. The recoverable value of an asset is the greater of
the fair value of an asset or cash-generating unit net of the costs of sale and its value in use. The
recoverable value is calculated for each individual asset, except where this asset does not generate cash
flows, which are fully independent of those generated by other activities or groups of assets. If the book
value of an asset is greater than its recoverable value, this asset has suffered an impairment loss and is
consequently written down to bring it back to the recoverable value. In determining the value in use,
the expected future cash flows are discounted using a discount rate gross of taxes that reflects the
current market valuations of the cost of money, related to the investment period and the specific risks
of the asset. For assets that do not generate cash flows which are fully independent, the recoverable
value is determined in relation to the cash generating unit this asset belongs to. Impairment is
recognised in the income statement if the recognition value of the asset, or the relevant cash generating
unit it is allocated to, is higher than its recoverable value. Impairment of cash generating units is firstly
attributed to the reduction in the book value of any goodwill attributed to it and thus a reduction in
the other assets, proportionally to their book value. If the requirements for a previously applied writedown cease to be met, the book value of the asset is restored in the income statement, within the limits
of the net book value the asset in question would have had if the write-down had not been applied
and the relevant amortisation had been calculated. The Group bases its impairment test on detailed
budgets and calculation forecasts prepared separately for each Group cash flow generating unit
individual assets are allocated to. These budgets and calculation forecasts generally cover a five-year
period. In case of longer periods, a long-term growth rate is calculated and used to project future cash
flows beyond the fifth year.
Impairment losses suffered by assets, including losses on stocks, during the financial year are
recorded in the income statement in the cost categories consistent with the function of the asset which
demonstrated the impairment loss. An exception lies in the previously revalued fixed assets, when the
revaluation was accounted for under other comprehensive profits and classified as revaluation reserve.
57
Consolidated Financial Statements as of 31 December 2011
Consolidated Financial Statements 2011 api holding S.p.A.
58
api holding S.p.A. Consolidated Financial Statements 2011
In these cases the impairment is in turn recorded under the other comprehensive profits until
reaching the previous revaluation. At each year end, the Group evaluates, with reference to the assets
other than goodwill, any existence of indications of failure to occur (or the reduction) of impairment
losses previously recorded and, and if these indications exist, estimates the recoverable value. The value
of an asset previously written down can be restored only if there have been changes in the assumptions
the calculation of the recoverable value was based on, determined after the recognition of the last
impairment. The write-back can not exceed the book value that would have been determined, net of
amortisation, in the hypothesis of no impairment recorded in previous years. This write-back is recorded
in the income statement, except in case the fixed asset is not recorded at the written back value; in this
case the write-back is treated as an increase from revaluation.
The following criteria are adopted to record impairment regarding specific types of assets:
Goodwill
Goodwill is tested for impairment on at least an annual basis (31 December) and, more frequently,
when circumstances suggest that the recognition value may be subject to impairment. The goodwill
impairment is determined by assessing the recoverable value of the cash flow generating unit (or group
of cash flow generating units) the goodwill relates to. If the recoverable value of the cash flow
generating unit is lower than the book value of the cash flow generating unit the goodwill was
allocated to, impairment is reported. The decrease in the value of goodwill can not be restored in future
years.
j) Investments
Initially all investments are recorded at fair value. For assets other than those at fair value with
change in the income statement, the fair value is increased by the transaction costs directly attributable
to the acquisition.
The api holding Group determines the classification of its own investments after initial recognition
and, where appropriate and permitted, reviews this classification at the end of each financial year.
Financial assets at fair value with an offsetting item recorded in the income statement
This category includes the assets held for trading and the assets designated at the time of their first
recording such as financial assets at fair value with changes attributed to the income statement. Assets
held for trading are all those assets purchased for the purpose of sale in the short term. Profits or losses
on assets held for trading are recorded in the profit and loss account.
Investments held until maturity
Investments which are not derivative instruments and which are characterised by payments or fixed
or determinable maturity dates are classified as “investments held until maturity” when the Group has
the intention and the capacity to keep them in the portfolio until maturity. After initial recognition these
assets are valued under the amortised cost criterion using the actual interest rate method, which
represents the rate that discounts the future payments or collections estimated throughout the
expected life of the financial instrument. The profits and losses are recorded in the income statement
at the time at which the investment is written off from the accounts or on the occurrence of an
impairment loss, as well as through the depreciation process.
The Group does not currently hold financial instruments with the intention of holding them until
their maturity.
Financing and loans
Financing and loans are non-derivative investments with fixed or determinable payments which are
not listed on an active market. After initial recognition these assets are valued under the amortised cost
criterion using the method of the actual interest rate, net of any provision for impairment.
The profits and losses are recorded in the accounts when the financing and loans are written off from
the accounts or on the occurrence of impairment losses, as well as through the depreciation process.
Impairment of investments
At each accounting year-end the Group verifies whether an investment or group of investments
have suffered a value loss.
An investment or group of investments is deemed as subject to lasting impairment if, and only if,
there is objective evidence of impairment as the result of one or more events occurred after initial
recognition (in case of “loss”) and this loss event has an impact, for as much as it can be estimated
reliably, on the estimated future cash flows of the investment or group of investments.
Investments valued in accordance with the amortised cost criterion
If there is an objective indication that the financing or loan recorded at the amortised cost has
suffered an impairment loss, the amount of the loss is measured as the difference between the book
value of the asset and the actual value of the estimated future cash flows (excluding future credit losses
not yet incurred) discounted at the original effective interest rate for the investment (or the actual
interest rate calculated at the date of initial recognition). The accounting value of the investment will
be reduced through the use of a provision. The amount of the loss will be recorded in the income
statement.
If, in a subsequent financial year, the amount of the impairment loss reduces and this reduction can
be objectively traced back to an event which occurred after recording of the impairment loss, the
previously reduced value can be restored. Any subsequent value restorations are recorded in the income
statement, to the extent to which the book value of the asset does not exceed the amortised cost at
the date of restoring the value.
Regarding trade receivables, a provision for impairment is made when there is an objective
indication (such as, for example, the probability of insolvency or significant financial difficulty of the
borrower) that the group will not be able to recover the amounts due based on the original conditions
of the invoice. The book value of the receivable is reduced by using a specific fund. The receivables
subject to impairment are reversed when these turn out to be irrecoverable.
k) Inventories
Inventories are valued at the cost or the net estimated realisable value, whichever is lower.
Costs incurred for transporting to the actual location and warehousing are recorded as follows:
Raw materials
–
purchase cost based on the Weighted Average Cost method;
Products for resale
and semi-finished products
–
direct cost of materials and manufacturing plus a portion of
the general production expenses defined on the basis of
normal production capacity but not considering financial
charges.
The net estimated realisable value comprises the normal estimated sales price after deduction of the
estimated completion costs and estimated costs for realising the sale.
59
Consolidated Financial Statements as of 31 December 2011
Consolidated Financial Statements 2011 api holding S.p.A.
60
api holding S.p.A. Consolidated Financial Statements 2011
l) Trade and other debtors
Trade receivables are recorded at the nominal amount given in the invoice, net of the provision for
doubtful debtors. This provision is made in the presence of objective proof that the Group will not be
able to collect the receivables. Receivables which cannot be collected are written off at the time at
which they are identified.
m) Cash at bank and in hand and cash equivalents
Cash at bank and in hand and short term deposits in the balance sheet and include petty cash and
on demand and short term deposits, in the latter case with the original forecast due date of no more
than three months.
For the purpose of the consolidated cash flow statement, cash at bank and in hand and cash
equivalents are represented by the cash deposits as defined above, net of bank overdrafts.
n) Financial liabilities
Initial recording and subsequent valuation
The financial liabilities that fall within the area of application of IAS 39 are classified as financial
liabilities at fair value, recorded in the income statement as loans or derivatives as hedging instruments,
depending on the case. The Group establishes the classification of its financial liabilities upon the initial
recording. All the financial liabilities are initially recorded at fair value, which, in the case of loans, is
increased by the directly attributable transaction costs. The financial liabilities of the api Group include
trade debts and other debts, current account overdrafts, loans, guarantees granted and derivative
financial instruments.
After initial recording, the financing is valued under the amortised cost criterion using the actual
interest rate method.
Each profit or loss item is entered in the income statement when the liability is written off, as well
as through the amortisation process.
Medium and long term debt
Long-term debt is initially recorded at fair value, increased by the transaction costs; this is
subsequently valued by using the amortised cost, represented by the initial value, net of the capital
repayments already made, increased or decreased on the basis of possible differences between the
initial value and the value at maturity, using the actual interest rate method. Each profit or loss item is
entered in the income statement when the liability is written off, as well as through the amortisation
process.
Derivative financial instruments and hedge accounting
The Group uses derivative financial instruments including foreign currency forward contracts and
interest rate swap contracts to hedge the risks resulting from interest and exchange rate fluctuation.
These derivative financial instruments are initially recognised at fair value at the date when the
derivative contract is signed, after which these are once again valued at fair value. Derivatives are
recognised as financial assets when the fair value is positive and as financial liabilities when the fair
value is negative.
Any profits or losses resulting from the changes in the fair value of derivatives are recorded directly
in the income statement, except for the effective cash flow hedge, which is recorded in the
shareholders’ equity.
For the purposes of hedge accounting, hedges are classified as:
■ fair value hedge if they cover the risk of a change in the fair value of the underlying asset or liability
or an irrevocable commitment not recorded (except for the currency risk);
■ cash flow hedge if they cover the exposure to the variability of cash flows attributable to a particular
risk associated with a recorded asset or liability, a highly probable scheduled transaction or a
currency risk associated with an irrevocable commitment not recorded;
■ net investment hedge in a foreign entity.
On initiating a hedge transaction, the Group designates and formally documents the hedge
relationship to which it intends to apply hedge accounting, its own objectives in the management of
the risk and the strategy followed. The documentation includes identification of the hedge instrument,
the item or transaction that is the object of the hedge, the nature of the risk and the method by which
the company intends to evaluate the hedge effectiveness in compensating for exposure to fair value
changes in the item or cash flows which can be traced back to the hedged risk. It is expected that this
hedging will be highly effective in compensating for the exposure of the hedged element to changes
in the fair value or cash flows attributable to the hedged risk; the evaluation of the fact that these
hedges are demonstrated to be highly effective is carried out on an ongoing basis during the financial
years to which they are designated.
Transactions which satisfy the criteria for hedge accounting are recorded in the accounts as follows:
Fair value hedge
The change in the fair value of hedging derivatives on interest rates is recorded under financial
charges in the income statement. The change in the fair value of hedging instruments attributable to
the hedged element is recorded as part of the book value of the hedged element and is also recognised
under financial charges in the income statement.
With regard to fair value hedges relative to items entered in the accounts in accordance with the
amortised cost criterion, adjustment of the book value is depreciated in the income statement over the
remaining period until expiry. The amortisation can commence as soon as there is an adjustment, but
not after the date on which the item subject to hedging ceases to be adjusted, due to changes in the
fair value attributable to the risk which is the object of the hedging.
If the hedged element is written off, the fair value not amortised is immediately recorded in the
income statement.
When an irrevocable unrecorded commitment is designated as an item subject to hedging, the
subsequent accumulated changes in its fair value attributable to the hedged risk covered are entered
in the accounts as assets and liabilities and the corresponding profits or losses are recorded in the
income statement.
Cash flow hedge
The portion of profit or loss on the hedged instrument related to the effective hedging part is
recorded under the other overall profits of the “cash flow hedge” reserve, while the non effective part
is recorded directly under financial charges in the income statement.
The amounts posted under the comprehensive profits are transferred to the income statement
during the period in which the transaction subject to the hedging influences the income statement (for
example when a financial charge or income is recorded or when an anticipated sale occurs).
61
Consolidated Financial Statements as of 31 December 2011
Consolidated Financial Statements 2011 api holding S.p.A.
62
api holding S.p.A. Consolidated Financial Statements 2011
When the item subject to hedging is the cost of a non-financial asset or liability, the amounts
entered under the other comprehensive profits are transferred at the initial book value of the asset or
liability.
If it is considered that the anticipated transaction or the irrevocable commitment will no longer
occur, the cumulative profits or losses recorded in the cash flow hedge reserve are transferred to the
income statement. If the hedge instrument expires or is sold, cancelled or exercised without being
replaced, or if its designation as hedging is withdrawn, the amounts previously entered in the cash flow
hedge reserve remain recorded therein until such time as the anticipated transaction or irrevocable
commitment have an impact on the income statement.
o) Medium to long term provisions
Allocations to provisions for risks and charges are made when the Group has to meet a current
obligation (legal or implied) resulting from a past event, it is probable that resources will need to be
allocated to meet such an obligation and it is possible to make a reliable estimate of the amount. When
the Group considers that an allocation to the provision for risks and charges will be either wholly or
partially repaid, such as for example in the case of risks covered by insurance policies, the indemnity is
recorded in a distinct and separate manner in assets if, and only if, it is practically certain. In this case,
the costs of any relative allocation are presented in the income statement net of the amount recorded
for the indemnity. If the effect of discounting the monetary value is significant, the allocations are
discounted using a discount rate before tax which reflects, where appropriate, the specific risks of the
liability. When the discounting has been implemented, the increase in the allocation due to the passage
of time is recorded as a financial charge.
p) IAS 19 Employee benefits
Employee benefits granted subsequently to termination of the employment relationship (defined
benefit post-employment benefits) and other long term benefits are subject to actuarial assessment.
Liabilities recorded in the accounts are represented by the current value of the company obligation, net
of any plan assets.
We would like to point out that the company has decided not to use the “corridor approach” and
to record profits and losses resulting from changes to the actuarial calculations directly in the income
statement.
Supplementary severance indemnities are recorded as a liability and cost when the company is
committed to interrupting the employment relationship of an employee or group of employees prior to
normal retirement, or it has undertaken to make severance payments following a voluntary redundancy
proposal due to redundant staff.
Following the 2007 reform of the national regulation that governs – for those Companies with more
than 50 employees – the severance indemnity accruing as from 1 January 2007 can be defined as a
defined contribution plan, whose payments are directly booked to the income statement as costs, if
any. The severance indemnity accrued until 31 December 2006 is still considered as a defined benefit
plan, with no future contributions. For this reason, it is valued by independent actuaries, only based on
the expected residual average working life of employees, without taking into account the remuneration
received during a preset service period.
Therefore, the severance indemnity accrued before 1 January 2007 is calculated on a different basis,
due to the non-occurrence of the previous actuarial assumptions linked to salary increases. More
specifically, the liability linked to the “severance indemnity accrued” is currently valued at 1 January
2007, without pro-rata application (years of service rendered/total years of service), since employee
benefits at 31 December 2006 may be considered as almost entirely accrued (with the sole exception
of revaluation), pursuant to paragraph 67 (b) of IAS 19. As a consequence, with regard to this
calculation, the “current service costs” related to future working service of employees shall be
considered null, since they are represented by contribution payments to supplementary pension funds
or to the Treasury fund at the Italian National Social Security Institution (INPS).
q) Recognition of revenues
RRevenues are recorded to the extent to which it is probable that the economic benefits will be
achieved by the Group and the relative amount can be determined in a reliable manner. Revenues are
measured at the fair value of the amount received or to be received, taking into account the terms of
payment set out in the agreement and excluding taxes and duties.
The following specific criteria for recognition of revenues must be met prior to their recording:
Sale of goods
The revenue is recognised when the company has transferred all significant risks and benefits
associated with ownership of the asset to the purchaser. Part of group sales revenues is based on a sales
contract with Gestore dei Servizi Elettrici spa (GSE), regulated at the predetermined tariff by provision
No. 6 of 29 April 1992 of the Inter-Ministerial Prices Commission (CIP 6/92), which applies for 20 years
and has already been authorised by the European Community for the first 15 years. According to the
provision, an incentive was granted in the first eight years of the agreement and, for the remaining
years, a tariff was calculated by AEEG on the basis of the criteria set forth in resolution 249/06.
When the economic effects were accounted for, the amount deriving from the sale of electricity was
divided into two components, whereby the avoided cost component was entered under “Revenues”
on the basis of the electricity supplied on an annual basis, and the incentive component was allocated
by applying the deferred liability method over a time period of 15 years (the length of the authorisation
by the European Community) rather than being recorded on the basis of the eight-year period during
which the incentive was granted, pursuant to the provisions of IAS 18, paragraphs 13 and 19.
Dividends
Revenues are recorded when shareholders obtain the right to receive payment.
Rent receivable
Rents resulting from property investments are entered in the accounts on a straight-line basis over
the duration of the leasing contracts in existence at the date of financial statements, and are classified
among revenues considering their operating nature.
63
Consolidated Financial Statements as of 31 December 2011
Consolidated Financial Statements 2011 api holding S.p.A.
64
api holding S.p.A. Consolidated Financial Statements 2011
r) Financial Income and Charges
Financial income and charges are recorded on an accrual basis based on the interest accrued on the
net value of the relevant financial assets and liabilities, using the effective interest rate, and include the
changes in the fair value of the financial instruments recorded at fair value in the income statement and
the changes in the fair value of the derivatives connected with financial transactions.
Financial income includes the changes in fair value of the financial assets recorded in the income
statement, the profits from the exchange rates and the profits from hedging instruments recorded in
the income statement.
Financial charges include the interest expenses on loans, exchange rate losses, changes in fair value
for financial assets at fair value recorded in the income statement, losses on hedging instruments
recorded in the income statement.
s) Income taxes
Current taxes
Current tax assets and liabilities for the current year are valued at the amount which it is expected
will be recovered or paid to the tax authorities.
The rates and tax regulations applied to calculate the amount are those current on the closing date
of accounts or essentially in effect at the closing date of the financial statements in the countries or
where the Group operates and generates its taxable income.
Deferred taxes
Deferred taxation is calculated by applying the liability method to the temporary differences
between the tax values for assets and liabilities taken as a reference and the values given in the financial
statements.
Deferred tax liabilities are recorded against all taxable temporary differences, except:
■ when the deferred tax liabilities result from initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination merger and which, at the time of the same
transaction, does not have an effect either on the financial year profit calculated for accounting
purposes or for tax purposes;
■ with reference to temporary taxable differences associated with shareholdings in subsidiary and
associated companies and in joint-ventures, in the event that the reversal of the temporary
differences can be controlled and that it is probable that they will not occur in the foreseeable
future.
Deferred tax assets are recorded against all temporary deductible differences and for unused tax
assets and liabilities carried forward, to the extent to which their recovery is probable.
The value of deferred tax assets to be reported in the financial statements is reviewed at the end of
each financial year and reduced to the extent in which it is no longer likely that enough tax profit will
be available in the future so that this credit can be partially or totally used.
Deferred tax assets and liabilities are measured on the basis of the tax rates which it is expected will
be applied to the financial year in which the asset is realised or the liability written off, considering the
rates in force and those being issued or already issued at the balance sheet date.
Taxation on income relative to items recorded directly in the shareholders’ equity is attributed directly
to the shareholders’ equity and not the income statement.
Deferred tax assets and liabilities are offset, if there is a legal right to offset current tax assets against
current tax liabilities and the deferred taxes make reference to the same taxation entity and the same
tax authority.
t) Value Added Tax
Revenues, costs and assets are recorded net of Value Added Tax with the exception of cases where:
■ the tax applied on the purchase of goods or services is non-deductible, in which case it is recorded
as part of the purchase cost of the asset or part of the cost item recorded in the income statement;
■ it relates to trade receivables and creditors presented including the value of the tax.
The net amount of indirect taxes on sales which can be recovered from or paid to the Inland
Revenue is included in the financial statements under trade receivables and payables depending on
whether it is a positive or negative balance.
65
Consolidated Financial Statements as of 31 December 2011
Consolidated Financial Statements 2011 api holding S.p.A.
66
api holding S.p.A. Consolidated Financial Statements 2011
3. Reporting by business sector
The statement is presented according to IFRS 8 – Operating segments and the reporting statement
comprises the business sectors.
31.12.2011
Euro/thousand
Net revenues from core operations
Refining
Marketing
IGCC
Renewable Real Estate
Total
Corporate
Companies
133,818
3,626,185
298,845
64,243
6,282
4,129,372
10,760
4,140,132
-131,119
-75,287
-6,800
-195
-4,539
-217,941
-5,263
-223,204
2,698
3,550,897
292,045
64,048
1,743
3,911,431
9,220
82,452
50,395
42,350
3,576
187,995
-60,075
127,919
Adjusted EBITDA
9,438
85,485
50,469
42,350
3,576
191,318
-62,999
128,319
Inventory profit/loss
0
82,879
0
0
0
82,879
0
82,879
LPG capital gain
0
26,100
0
0
0
26,100
0
26,100
Rebranding
0
-6,225
0
0
0
-6,225
0
-6,225
9,438
188,239
50,469
42,350
3,576
294,072
-62,999
231,073
-120,055
Intersectorial revenues
Revenues from third parties
EBITDA
5,497 3,916,928
Amortisation/depreciation
-34,036
-26,692
-34,261
-22,304
-1,245
-118,538
-1,517
Operating profit (loss) ex inventory and extraordinary expenses
-24,599
58,793
16,208
20,046
2,332
72,780
-64,516
8,264
Operating profit (loss)
-24,599
161,547
16,208
20,046
2,332
175,534
-64,516
111,018
Investments in fixed assets
48,277
28,252
3,444
133,543
9
213,525
0
213,525
Net result
-35,817
22,661
39,127
18,346
165
44,481
-4,201
40,280
31.12.2010
Euro/thousand
Refining
Net revenues from core operations
Intersectorial revenues
135,981
Marketing
3,098,999
IGCC
277,824
Renewable Real Estate
34,091
5,332
Total
3,552,227
Corporate
Companies
7,669
3,559,896
-5,211
-217,598
-133,174
-68,638
-6,035
-114
-4,426
-212,387
2,808
3,030,361
271,789
33,977
905
3,339,840
Adjusted EBITDA
15,540
102,548
51,164
16,026
3,128
188,406
-56,366
132,040
Inventory profit/loss
0
46,585
0
0
0
46,585
0
46,585
Revenues from third parties
Rebranding
2,458 3,342,298
0
-18,000
0
0
0
-18,000
0
-18,000
15,540
131,132
51,164
16,026
3,128
216,990
-56,366
160,624
Amortisation/depreciation
-32,597
-26,465
-35,519
-14,013
-1,410
-110,004
-1,507
-111,511
Operating profit (loss) ex inventory and extraordinary expenses
-17,056
76,083
15,645
2,012
1,718
78,402
-57,874
20,529
Operating profit (loss)
-17,056
104,668
15,645
2,012
1,718
106,987
-57,874
49,113
Investments in fixed assets
38,277
27,134
2,453
71,341
57
139,262
0
139,262
Net result
-22,871
-6,117
36,365
-1,411
-420
5,546
-2,367
3,180
31.12.2011
Euro/thousand
Refining
EBITDA
Fixed assets
Current Assets
Marketing
IGCC
Renewable Real Estate
Total
Total Liabilities
31.12.2010
Euro/thousand
Fixed assets
Current Assets
477,954
386,102
538,830
93,753
1,840,146
32,858
1,873,004
26,021
698,254
95,700
49,290
1,615
870,880
147,680
1,018,559
406,420
406,420
369,527
1,176,208
481,802
588,120
95,368
2,711,026
586,958 3,297,983
82,089
874,565
197,427
64,322
4,566
1,222,969
2,075,014 3,297,983
Refining
Marketing
IGCC
Renewable Real Estate
Total
Total Liabilities
Financial &
Corporate
Companies
330,378
490,315
422,594
428,547
92,329
1,764,162
33,610
1,797,772
26,636
563,830
87,192
26,216
2,674
706,548
102,125
808,673
315,791
315,791
357,014
1,054,145
509,786
454,763
95,002
2,470,710
451,526 2,922,236
68,694
688,292
216,478
50,461
4,744
1,028,669
1,893,567 2,922,236
Inventory
Total assets
Companies
343,506
Inventory
Total assets
Financial &
Corporate
Consolidated Financial Statements 2011 api holding S.p.A.
67
4. REVENUES AND OTHER REVENUES
Euro/thousand
Revenue
Other revenues
Total
2011
2010
3,825,429
3,279,692
91,499
62,606
3,916,928
3,342,298
Revenues from sales and services show an increase, as compared to the same period in 2010, of
Euro 574,630 thousand.
This increase is mainly due to a price rise consequently to the increased international quotations of
petroleum products for the subsidiary api S.p.A., the revenues from the sale of electricity of SER spa
and SER1 spa; the positive increase over last year is particularly due to the parks of Lago Arancio and
Rocca Ficuzza (which started production in July of 2010), which in 2011 contributed for the entire year,
and the commissioning in October of the Nebrodi Ovest park for SER spa as well as the full-operation
production of the Apulian parks, and the start of the Nebrodi park of SER1 spa in October.
The item “Other revenues”, equal to Euro 91,499 thousand, increased by Euro 28,893 thousand
compared to 2010, essentially due to the capital gain obtained by api S.p.A. for about Euro 26,100
thousand regarding the sale of the LPG company branch to the company Goldengas S.p.A. in April 2011.
The breakdown is summarised below:
Euro/thousand
2011
2010
Royalties
1,281
1,060
Net capital gain from the sale of property,
plant and machinery
26,547
731
Income from plant and industrial fixtures and fittings
3,739
3,490
Other revenues /Repayments
59,932
57,325
Total
91,499
62,606
The amount of the item “Royalties” equal to Euro 1,281 thousand refers to fees for non-oil
activities, and shows an increase compared to the previous year equalling Euro 221 thousand.
“Income from plant and industrial fixtures and fittings”, totalling Euro 3,739 thousand, relates to
fees derived from company rental payments, hires, automatic car-washes and various equipment, up by
Euro 249 thousand compared to the previous year.
“Other revenue/Repayments”, totalling Euro 59,932 thousand, shows an increase of Euro 2,607
thousand and mainly includes:
■ Euro 17,424 thousand as reimbursement of the CO2 quotas purchased to cover the emissions of
the IGCC plant;
■ Euro 3,421 thousand relating to the repayment by the GSE of part of the charges incurred for the
obligation to purchase green certificates for 2011 by api energia (., MISE of 5 September 2012);
■ Euro 2,246 thousand relating to the release of revenues for the amounts allocated to specific
provisions for risks as of 31 December 2010, regarding the turbines seized until the date of the order
of the Court of Review of Foggia of 22 September 2011 which led to the release of the Sant’Agata
parks of SER for Euro 656 thousand, and Euro 1,590 thousand for SER1;
Consolidated Financial Statements as of 31 December 2011
Accounting standards and explanatory notes
68
api holding S.p.A. Consolidated Financial Statements 2011
■ Euro 146 thousand related to revenues for the sale of 1,696 type I TEE (Energy Efficiency Certificates)
recognised following the approval of the saving project due to the use of the Syngas Expander;
■ Euro 5,125 thousand substantially represent the remuneration of the gross operating income sold,
■
■
■
■
■
■
to the National consolidation (art. 117 of the Consolidation Act on Income Taxes), by api Energia
S.p.A. pursuant to the regulation of the consolidation of the api Holding S.p.A. group, by api
Energia S.p.A. for Euro 4,191 thousand, and Euro 934 thousand of the parent company;
Euro 3,091 thousand relative to revenues of api raffineria for mooring of tankers using the offshore
platform for the offloading of crude oil;
Euro 847 thousand for the acquisition of the Energy Efficiency Certificates, recognised as a
consequence of the thermal integration interventions carried out at the Topping plant, with
communication of the Authority for Electricity and Gas (AEEG) of 28 November 2011, based on the
agreement in place with Eni S.p.A., the securities were valued based on the quotations as at 31
December 2011, of the TEE market managed by the GME (Gestore Mercati Energetici);
Euro 7,030 thousand relating to charge-back of the parent company to operators of part of the
costs incurred for the 2011 promotional campaign, and to cash contribution of customers for the
purchase of presents;
Euro 8,416 thousand for charge-back to our customers of logistics and product transport services
(Euro 2,437 thousand), maintenance services (Euro 1,428 thousand) and royalties on volumes sold
(Euro 4,551 thousand);
Euro 2,502 thousand for charge-back to the customers of the parent company to join the fuel cards
circuit;
Euro 466 thousand to repay accidents by the insurance companies referring to the parent company
for Euro 447 thousand, and the subsidiary api raffineria for Euro 19 thousand.
5. COSTS FOR RAW MATERIALS AND CONSUMABLES
Euro/thousand
2011
2010
Costs for raw materials and consumables
3,125,550
2,619,310
of which changes in stocks
(90,629)
(28,371)
The item “Costs for raw materials and consumables” as of 31 December 2011 amounts to Euro
3,125,550 thousand, with an increase of Euro 506,240 thousand compared to 31 December 2010,
equalling Euro 2,619,310 thousand. This increase is affected by a price rise due to the increase in the
international quotations of petroleum products.
The total of the item “Costs for raw materials and consumables” includes the change in the stocks
of raw materials, semi-finished products and goods for resale valued both at 31 December 2011 and
at 31 December 2010 under the “Weighted Average Cost Method”. This change was equal to Euro 90,629 thousand at 31 December 2011 and Euro -28,371 thousand at 31 December 2010.
The change of Euro 62,000 thousand (Euro 18,071 thousand at 31 December 2010) benefits from
a positive income component equal to Euro 82,879 thousand (Euro 46,584 thousand as at 31
December 2010), calculated as a change of the valuation of the quantities still held in stock at the end
of the financial year, connected with the decreasing price trend in 2011 compared to the previous year.
Consolidated Financial Statements 2011 api holding S.p.A.
69
Costs for services totalling Euro 297,365 thousand, show a decrease of Euro 27,510 thousand
versus the previous year.
The following table provides the breakdown:
Euro/thousand
2011
2010
Transport
46,610
49,207
Maintenance
68,384
68,859
Service station fees
98,883
97,500
Advertising and communication costs
6,401
4,889
Commissions
3,716
4,875
Technical and administrative services
31,809
40,667
Other services
41,562
58,878
297,365
324,875
Total
Item “Transport”, which covers costs incurred for road and sea transport, totals Euro 46,610
thousand, down by Euro 2,597 thousand compared to last year.
The item “Maintenance” of Euro 68,384 thousand, substantially covers the costs incurred for nonincremental ordinary and extraordinary maintenance services, carried out at the Retail sales points, on
refinery plant and the IGCC plant, in line with last year.
The “Contract service station fees” equal to Euro 98,883 thousand, refer to the fees paid to contract
operators. The rise compared to last year, equalling Euro 1,383 thousand, is to be attributed to the
increase in the platts price of products for which fees are paid to contract operators.
The item “Advertising and promotion costs”, equal to Euro 6,401 thousand, represents both the
costs incurred by api S.p.A. for Euro 6,042 thousand for radio and television advertisements, with an
increase of Euro 1,153 thousand compared to 2010, due to greater radio and television spaces,
advertisements regarding the Nectar card and sponsorships, and the cost of promotional activities of
the subsidiary nòvabrà in Brazil for Euro 308 thousand.
Commissions of Euro 3,716 thousand, are relating to fees paid to third parties for sales of petroleum
products in the name and on behalf of api; the balance at 31 December 2011 includes discounting
back, in compliance with the provisions of IAS 37. The effects of discounting back were appraised by
applying the “projected unit credit method” as defined in IAS 19.
The item “Technical and administrative services” for Euro 31,809 thousand is down by Euro 8,858
thousand compared to the previous year, mainly attributed to the company policy of containing costs
related to external collaborations in particular.
Under the “Other services” item, totalling Euro 41,562 thousand, which was down Euro 17,316
thousand compared to the previous year, the following should be noted:
■ “Mandatory oil stocks and on consignment” totalling Euro 14,350 thousand (Euro 24,602 thousand
as at 31 December 2010), relating to both the charge for the parent company (Euro 5,518
thousand) recognised to other oil companies for stocks of product as “mandatory stocks”, as
required under the current rules and regulations, and to charges for storage at third parties of own
product (Euro 8,832 thousand);
Consolidated Financial Statements as of 31 December 2011
6. COSTS FOR SERVICES
70
api holding S.p.A. Consolidated Financial Statements 2011
■ Euro 3,363 thousand concerning expenses for painting the points of sales related to the
■
■
■
■
■
“rebranding”, down compared to the same period of the previous year (Euro 8,108 thousand) due
to the lower charges incurred for painting at points of sales for fuel distribution, after the
completion of the rebranding project (Euro 11,471 thousand as at 31 December 2010);
Euro 2,937 thousand for miscellaneous utility bills, down by Euro 1,154 thousand (Euro 4,091
thousand as at 31 December 2010);
Euro 5,286 thousand relating to costs incurred for insurance policies (Euro 5,296 thousand in 2010);
Euro 830 thousand for surveillance and guardianship (Euro 849 thousand at 31 December 2010);
Euro 815 thousand for warranty bond expenses (Euro 543 thousand at 31 December 2010);
Euro 2,249 thousand for software updating and implementation (Euro 2,905 thousand at 31
December 2010).
7. STAFF COST
Euro/thousand
2011
2010
Wages and salaries
47,885
47,803
Social security costs
15,240
14,724
Staff pension costs and similar charges
8,119
8,950
71,244
71,477
Total
Staff costs, equal to Euro 71,244 thousand, reflect the combined effect of a decrease by api S.p.A.
attributable to both the sale of the LPG canister company branch and the decrease in the costs incurred
by the subsidiary api raffineria S.p.A. consequently to the reviewed pension regulations and an increase
in staff costs of some subsidiaries in the renewables segment.
The item “Wages and salaries” totalled Euro 47,885 thousand, recording an increase by Euro 83
thousand.
“Social security costs” for the period stood at Euro 15,240 thousand.
“Staff pension costs and similar charges”, equal to Euro 8,119 thousand, mainly include:
■ the costs for rehearsal courses for Euro 292 thousand;
■ company canteen costs for Euro 778 thousand;
■ mileage allowances for employees for Euro 2,315 thousand;
■ charges for interim work and for the collaborators from group companies for a total of Euro 699
thousand.
It should be noted that “staff costs” cover, for an amount totalling Euro 489 thousand, the positive
effect of discounting the Employee Severance Indemnity at 31 December 2011. For details of this,
please refer to the liability item - non-current liabilities – Employee Severance Indemnity Provision.
8. AMORTISATION AND DEPRECIATION AND WRITE-DOWNS
Euro/thousand
2011
2010
Amortisation of Intangible Fixed Assets
2,255
1,358
Depreciation of Tangible Fixed Assets
117,800
110,153
Total
120,055
111,511
The item “Depreciation of tangible fixed assets” shows an increase compared to the previous year
by Euro 8,544 thousand. This effect refers to the activation of the parks of Lago Arancio and Rocca
Ficuzza (for Euro 4,652 thousand), which in 2011 contributed for the entire year, and the
commissioning in October 2011 of the Nebrodi photovoltaic plant of SER spa, together with the
commissioning in October 2011 of the Nebrodi Nord and Nebrodi Est parks for Euro 1,077 thousand
of SER1. Finally, worth mentioning is the increase in Sunshire S.r.l. for about Euro 1,200 thousand.
During the year no effects were transferred to the income statement due to depreciation resulting
from the application of the Impairment Test on the tangible and intangible fixed assets of the group
according to IAS 36.
9. RISK PROVISIONS
The “Risk Provisions” item totals Euro 26,894 thousand (Euro 10,269 thousand at 31 December
2010) and can be attributed mainly to:
■ Euro 7,455 thousand for appropriation by the parent company in relation to reclamation,
environmental restoration and securing of polluted sites. For more details see the item relative to
“Medium and long term provisions” in these Explanatory Notes;
■ Euro 6,369 thousand for appropriation due to risk of depreciation of the trade receivables, deemed
as bad or partly payable, particularly for Euro 6,324 thousand referred to the parent company, Euro
20 thousand regarding the subsidiary Festival spa and Euro 25 thousand the subsidiary Dialco S.r.l.;
■ Euro 11,123 thousand for appropriation due to future charges and expenses, Euro 9,409 thousand
of which refer to the valuation of the “green certificates” purchased for 2011 by the subsidiary api
energia S.p.A. in connection with the enforcement, from 1 January 2011, of the new legal provision
of high-efficiency cogeneration that governs cogeneration criteria in a restrictive manner; Euro
1,658 thousand of which refer to the parent company for the allocation due to a dispute with a
third party for transport expenses; Euro 56 thousand for the completion of actions to reclaim and
dismantle the area concerned by the accident of the bitumen plant in 2004;
■ Euro 737 thousand referring to the effect of the discounting of the Operator relationship
termination bonus, in compliance with the provisions of IAS 37. This effect has been valued by
applying the “projected unit credit method” as defined in IAS 19;
■ Euro 950 thousand for appropriation to the provision for disposal of obsolete stock materials, Euro
600 thousand of api anonima, and Euro 350 thousand of the subsidiary api raffineria S.p.A.
10. OTHER OPERATING COSTS
Euro/thousand
2011
2010
Consumables
1,225
1,473
Operator relationship termination bonus
7,701
8,033
Various indemnities
13,540
11,091
Duties and taxes
13,713
11,194
Other general costs
Total
94,960
94,908
131,139
126,699
71
Consolidated Financial Statements as of 31 December 2011
Consolidated Financial Statements 2011 api holding S.p.A.
72
api holding S.p.A. Consolidated Financial Statements 2011
The item “Consumables” equal to Euro 1,225 thousand has decreased compared to the same
period of the previous year, by Euro 248 thousand, and mainly includes charges incurred for printing
and stationery (Euro 320 thousand), for various materials (Euro 405 thousand) and for clothing (Euro
180 thousand).
The item “Operator relationship termination bonus”, equal to Euro 7,701 thousand, substantially is
in line with the value of the previous year.
“Various indemnities”, totalling Euro 13,540 thousand, decreased by Euro 2,449 thousand
compared to the same period of the previous year and mainly comprise:
■ indemnities for goods spreading and loss of the parent company, equal to Euro 11,235 thousand
(Euro 8,625 thousand as at 31 December 2010);
■ indemnities and expenses to public entities for Euro 1,152 thousand (Euro 1,395 thousand as at 31
December 2010);
■ indemnities for settlements and disputes for Euro 1,132 thousand (Euro 439 thousand as at 31
December 2010).
The item “Duties and taxes” totalled Euro 13,713 thousand, recording an increase of Euro 2,519
thousand. It mainly refers to:
■ charges incurred by api S.p.A. for the municipal tax on advertising -ICP- for Euro 5,509 thousand,
TOSAP and COSAP ground occupation tax for Euro 1,953 thousand, and charges for rents and
accesses for Euro 74 thousand;
■ the charge related to the municipal tax on property equal to Euro 727 thousand.
“Other general costs” for Euro 94,960 thousand are substantially in line with the previous year. The
item mainly refers to the following items:
■ Euro 50,151 thousand related to “Mixing charges”, which represent the cost incurred to fulfil the
input obligation for biofuel consumption in the gasoline and diesel market in 2011 (Euro 48,033
thousand as at 31 December 2010);
■ Euro 17,729 thousand as the cost incurred for the purchase of the CO2 quotas by api energia for
the plant emissions, decreasing to Euro 2,162 thousand as a consequence of the combined effect
of the decrease in the value of the cost incurred during the year to purchase CO2 quotas and the
lower emission of CO2 into the atmosphere by the plant;
■ Euro 7,522 thousand for special “lump-sum” payments for management of service stations to
contract operators, with a decrease over last year equalling Euro 1,466 thousand (Euro 8,988
thousand as at 31 December 2010);
■ Euro 5,657 thousand for the cost incurred by the company for the circuit of the oil maps, with an
increase compared to last year equal to Euro 544 thousand (Euro 5,113 thousand as at 31 December
2010);
■ Euro 2,646 thousand for capital losses from disposal of assets. The amount is broken down as
follows: Euro 2,325 thousand mainly relating to the failure of the parent company to renew
agreements for 122 service stations, and the transfer of obsolete equipment; and Euro 321
thousand for capital losses from disposal of assets by the controlling company (Euro 252 thousand),
and the subsidiary api raffineria (Euro 69 thousand);
■ Euro 1,067 thousand for entertainment expenses;
■ Euro 1,080 thousand for subscription fees;
■ Euro 714 thousand for guarantor charge contribution on loans.
Consolidated Financial Statements 2011 api holding S.p.A.
73
The negative balance in financial management, of Euro 33,031 thousand, comprises income of Euro
18,937 thousand, offset against charges of Euro 66,938 thousand, as well as value adjustments in
respect of investments of Euro 17,424 thousand and the effects of the change in the CFH reserve for
Euro 2,454 thousand.
The breakdown can be found in the following table:
Euro/thousand
2011
2010
Financial Income
Bank interest receivable
1,206
313
Income from equity investments
1,349
3,651
16,382
15,644
18,937
19,608
Bank financing and account overdrafts
- 46,833
- 40,500
Other charges
- 20,105
- 17,411
Other income
Total financial income
Financial Charges
Total financial charges
- 66,938
- 57,911
Financial Income and Charges balance
- 48,001
- 38,303
Income (and charges) from valuation using the NE method
17,424
10,339
Changes in the CFH reserve
- 2,454
- 2,964
- 33,031
- 30,928
Total Financial management
Bank interest receivable of Euro 1,206 thousand referred essentially to the amounts accrued on the
bank current account of the project in the name of the Facility Agent of the subsidiary api energia S.p.A.
for Euro 973 thousand; and Euro 65 thousand regarding api S.p.A.
The Income from equity investments, equalling Euro 1,349 thousand, includes the value of the
capital gain for Euro 822 thousand of api S.p.A. for the sale of the company TRE C S.r.l., the dividend
of Euro 100 thousand distributed by Petroven S.p.A. and the distribution of reserves and profits by the
subsidiary S.G.R S.p.A. in liquidation for Euro 394 thousand plus Euro 28 thousand regarding the
dividend distributed by Sator S.p.A. and Euro 5 thousand regarding the dividend distributed by Enel spa
to the controlling company api holding S.p.A..
“Other income”, of Euro 16,382 thousand, mainly includes:
■ Euro 1,883 thousand for positive exchange differences (Euro 2,552 at 31 December 2010);
■ Euro 5,220 thousand of income from fair value appraisal of derivatives owned by api energia (equal
to Euro 3,775 thousand) and the parent company (equal to Euro 1,445 thousand);
■ Euro 8,572 thousand represent for Euro 5,028 thousand the residual benefit of the interest
receivable on the loan granted by SER to SER1, at the rate of 8%, obtaining a margin of Euro 3,544
thousand; the subsidiary SER1 capitalises the entire amount of this interest; at consolidated level,
the portion measured as margin for SER1 spa is reversed from the assets with financial charges as
an offsetting item against the entry under interest receivable of SER equal to Euro 3,544 thousand;
Consolidated Financial Statements as of 31 December 2011
11. FINANCIAL INCOME AND CHARGES AND ADJUSTMENTS
OF INVESTMENTS
74
api holding S.p.A. Consolidated Financial Statements 2011
■ Euro 204 thousand for interest accrued on receivables from customers;
■ Euro 400 thousand for interest on loans to the associated companies of api nòva.
Financial charges, equal to Euro 66,938 thousand, increased by Euro 9,027 thousand as a
consequence mainly of the item “Interest on loans and current account overdrafts”; the increased
charges are due to the joint effect of a greater debt stock, the rising spreads required by banks and the
increased interest rated in most of the year. For more details concerning the trends for debt, rates and
the conditions of the credit market during 2011, reference is made to the chapter on “Financial
Management” in the Management Report.
The amount related to the item “Financing and bank account overdrafts”, equal to Euro 46,833
thousand, mainly includes the financial charges related to the company api S.p.A. for Euro 18,091
thousand, api energia for Euro 8,829 thousand and SER for Euro 11,081 thousand, the controlling
company for Euro 3,974 thousand, the company api real estate S.r.l. for Euro 884 thousand, the
company api nòva for Euro 1,274 thousand, sòlergys for Euro 180 thousand, the company api raffineria
for Euro 169 thousand.
For more details on the average debt and the interest rates applied for the various maturities,
reference should be made to the information contained in the Financial Management Report.
Other charges, equal to Euro 20,105 thousand, include a series of financial costs, as detailed below:
the costs for the fair value appraisal of the derivative instruments held by api energia and api S.p.A. for
Euro 1,556 thousand respectively, the recalculation of the debt based on the amortised cost criterion
of api energia for Euro 981 thousand, and for Euro 374 thousand for SER; for Euro 3,066 thousand for
interest toward the shareholder Iberdrola by SER, negative exchange rate differences for Euro 2,040
thousand, commission and bank charges for Euro 2,695 thousand, the interests on swap for Euro 1,939
thousand, the financial charges deriving from the transfer of receivables from customers for Euro 2,108
thousand, incurred following the factoring transaction concluded with api S.p.A., discounts on forward
currency purchases in Euro and various interest expense for lower amounts.
In addition, the items “Other income” and “Other charges” include the portion for the year arising
from application of the criterion set by IAS 20 in relation to financing obtained through the Law No.
488. See paragraph 29 on medium/long term debt of the company SER (Euro 556 thousand).
Finally, it is highlighted that the item includes the reclassification due to the application of IAS 1,
which requires the separate indication (for the year examined and for the previous year) of the release
of both the positive Cash Flow Hedge (CFH) components from “Other income” and the negative CFH
components from “other charges”. The net amount can be essentially referred to api S.p.A. for Euro 1,159 thousand and to api energia S.p.A. for -1,295 thousand.
12. TAXATION
The main components of income taxation for the year 2011 are given in the following table:
Euro/thousand
2011
2010
Current taxes
-38,972
-23,393
Deferred taxes
-4,591
10,834
Prepaid taxation
5,856
-2,447
-37,707
-15,006
Total
Consolidated Financial Statements 2011 api holding S.p.A.
75
The basic earnings per share are calculated by dividing the net profit for the period attributable to
the parent company’s ordinary shareholders by the weighted average number of ordinary shares
outstanding in the period.
According to IAS 33.14, the basic earnings per share concerned do not include the profit
attributable to shareholders with preference shares. Indeed, the share capital of api holding S.p.A. is
subdivided into 49,000 ordinary shares worth Euro 5.16 each and 21,000 preference shares worth Euro
5.16 each, to which more value is assigned compared to ordinary shares equal to Euro 0.75 each.
The diluted earnings per share distributed do not show any difference with respect to the base
earnings per share as there are no convertible debentures or other financial instruments with dilution
effects. The income and information is given below on shares used for the purposes of calculation of
the earning profit per share:
Euro/thousand
2011
2010
Net profit from assets attributable
to ordinary and preference shareholders
40,280
3,180
Net profit from assets attributable
to ordinary shareholders
28,186
2,215
2011
2010
Weighted average number of shares (excluding own shares)
for the purpose of basic earnings per share
70,000
70,000
Weighted average number of ordinary shares (excluding own shares)
for the purpose of basic earnings per share
49,000
49,000
2011
2010
575.22
45.20
Number
Euro
Net profit (loss) attributable to the ordinary shareholders
of the Parent Company for the purpose of calculating
the basic and diluted earnings per share
from assets intended for disposal
14. DIVIDENDS
The meeting of 24 May 2011 resolved to distribute dividends for a total of Euro 750,750, assigning
to each of the 49,000 ordinary shares a dividend equal to Euro 10.5 and to each of the 21,000
preference shares a dividend equal to Euro 11.25.
Consolidated Financial Statements as of 31 December 2011
13. EARNINGS PER SHARE
76
api holding S.p.A. Consolidated Financial Statements 2011
Explanatory notes to Balance Sheet Items
15. PROPERTY, PLANT AND EQUIPMENT
At 31 December 2011, this item totalled Euro 1,425,747 thousand.
The breakdown for the item in question is provided in the following table:
Euro/thousand
Land and
Buildings
Plant and
machinery
Industrial and
commercial fixtures
fittings Other assets
Assets under
construction
and advances
At 1 January 2011 net of depreciation and impairment losses
221,420
742,715
194,503
194,890
1,353,528
40,262
203,846
34,221
134,334
412,663
-440
-2,924
-4,981
-209,110
-217,455
Capitalisations for the period /works in progress
Decreases
Change in the consolidation area
0
Decreases due to the sale of the LPG branch
Depreciation portions for the period
-13,343
-75,302
-21,667
-21,667
-29,155
-117,800
12,122
12,122
4,355
4,355
Impairment losses
0
Movements in the dep. prov. due to the sale of the LPG branch
Movements in the dep. prov. due to disposals or changes in the consolidation area
At 31 December 2011 net of depreciation and impairment losses
Total
247,899
868,335
189,398
120,114
1,425,746
295,494
1,227,152
474,517
194,890
2,192,053
At 1 January 2011
Cost
Accumulated depreciation and impairment losses
-74,074
-484,437
-280,014
221,420
742,715
194,503
194,890
1,353,528
Cost at 31 December 2011
334,618
1,421,237
474,865
120,114
2,350,834
Accumulated depreciation and impairment losses at 31 December 2011
-86,719
-552,902
-285,467
247,899
868,335
189,398
Net book value
Net book value at 31 December 2011
-838,525
-925,089
120,114
The item “Property, plant and machinery” covers:
“Land and Buildings” recorded for a value equal to Euro 334,618 thousand, Depreciation Provision
of Euro 86,719 thousand, for a residual value of Euro 247,899 thousand.
The item in question mainly relates to:
■ Land, Equipment Buildings and Buildings of Euro 301,275 thousand, Depreciation provision of Euro
73,898 thousand;
■ Land and buildings covered by service stations of Euro 33,343 thousand, Building Depreciation
Provision of Euro 12,821 thousand.
The increases, net of the decreases of the year, equal to Euro 39,822 thousand, refer to both the
capitalisation by api of works in progress for Euro 2,535 thousand, mainly relating to the land and
buildings covered by service stations, and the capitalisation of works in progress by SER regarding a
building valued at Euro 138 thousand and the acquisition of land for Euro 14 thousand for SER1,
together with the works carried out by the subsidiary raffineria for Euro 36,598 thousand, of which:
■ Euro 12,167 thousand for the modernisation of jetties and the consequent expansion of the
operating limits at the “Isola” marine terminal;
1,425,747
Consolidated Financial Statements 2011 api holding S.p.A.
77
■ Euro 10,436 thousand for the structural consolidation of the “Pontile” marine terminal;
Increases include Euro 203 thousand for api nòva regarding the purchase of two plots of land, the
first with deed drawn up by notary L. Colavita on 23 February 2011 (rep. no. 35203, folder 10349)
located in Santa Croce di Magliano, Contrada Terra Vecchia, with a surface of 42 ares and 50 centiares;
the second with deed drawn up by notary L. Colavita of 8 March 2011 (rep. no. 35243, folder 10377)
located in Santa Croce di Magliano, Contrada Terra Vecchia, for a surface of 42 ares and 50 centiares.
The decreases include the sale made by api nòva on 16 November 2011 with deed drawn up by notary
L. Colavita (rep. no. 35999, folder 10961) of 2 plots of land for a total of 6.685 hectares.
“Plant and Machinery” equal to Euro 1,421,237 thousand, Depreciation Provision of Euro 552,902
thousand, leaving a residual value of Euro 868,335 thousand.
The item in question essentially includes refinery plant and machinery, the api energia S.p.A. IGCC
plant, the general plants installed in the deposits of Rome and Barletta, the plants and machinery
relative to the networks belonging to api S.p.A., the wind turbines of the subsidiaries CER, SER, SER1
and the photovoltaic plants of sòlergys and Sunshire.
The item includes also leased assets owned by sunshire and api nòva, in accordance with the
provisions set out in the Preparation criteria - Leases.
In this regard, we consider it appropriate to point out that the item “Plant and machinery” includes:
■ the financial charges capitalised by the subsidiary api energia during the course of previous financial
years relative to interest due and instalments on the debt owing to the financing banks, sponsors
and hedging banks;
■ the financial charges capitalised by SER spa and SER1 spa and related to the charges incurred during
the application for the debt owing to the financing banks and the sponsors, which will be amortised
over the duration of the Project Financing, for the Sant’Agata and Taverna La Storta parks.
Purchases and capitalisations for the financial year, equal to Euro 200,922 thousand, relate mainly to:
■ Euro 4,098 thousand for the thermal implementation of the fourth line of the bitumen products of
api raffineria;
■ Euro 3,415 thousand regarding the thermal integration of the Topping plant for energy recovery of
api raffineria;
■ Euro 2,926 thousand for the replacement of the catalysers of the Desulphurisation HDS3A and
Sulphur recovery of api raffineria;
■ Euro 2,775 thousand for changes to the residue cooling circuit of the Visbreaker plant of api
raffineria;
■ Euro 1,102 thousand to adjust the fire fighting motor pumps at the “Isola” terminal of api raffineria;
■ Euro 637 thousand relating to the upgrade of the plants for “implementation in the conditioning
system of tanks 38 and 39” and “implementation on the system to control the temperature on
muffles of api energia;
■ Euro 9,972 thousand concern for Euro 6,172 thousand the capitalisation from the works in progress
following the coming into operation of the photovoltaic plants at API service stations in the
Municipalities of Chieti (Chieti plant), Lecce (Lecce plant), Bitetto (Bitetto plant), Nola (Nola plant),
Roseto degli Abruzzi (Roseto degli Abruzzi plant); at the property of STMicroelectronics located in
Catania (Stm plant). For Euro 3,800 thousand to the increase in the item surface rights regarding
the surface right sold by STMicroelectronics to Sòlergys as per deed drawn up by notary Fanfani no.
59924 recorded on 11 January 2011 to create the photovoltaic plant of the company Sòlergys;
■ Euro 5,513 thousand regarding the lease of the photovoltaic plants of sòlergys;
Consolidated Financial Statements as of 31 December 2011
■ Euro 10,252 thousand for the rationalisation and extraction of the pipes of the crude circuit.
78
api holding S.p.A. Consolidated Financial Statements 2011
■ Euro 7,837 thousand for the change in the assets of Sant’Agata, Rocca Ficuzza and Lago Arancio,
■
■
■
■
■
■
■
due to the signing of the Final Acceptance Certificates for the contracts related to the public works
and the Turbines of SER;
Euro 42,007 thousand regarding the value of the total investment of the Nebrodi park (with
pertaining substation) of SER;
Euro 29,666 thousand for higher investments made during the year and related to the capitalisation
of the costs for progress in the public works on the Nebrodi EST parks of SER1;
Euro 4,418 thousand for the change in the assets of Taverna La Storta due to the signing of the Final
Acceptance Certificates for the contracts related to the public works and the Turbines of SER1;
Euro 34,938 thousand regarding the value of the total investment of the Nebrodi Nord parks of
SER1;
Euro 9,038 thousand regarding the photovoltaic plant park C of sunshire S.r.l., increase capitalised
starting from 1 September 2011;
Euro 26,249 thousand regarding the lease of the Park A+B1 plants of sunshire;
Euro 16,318 thousand regarding the capitalisation of the works in progress at the two integrated
photovoltaic greenhouses built in the Calabria region and called Santa Venere for a power of 1.24
MWp, the works for which ended on 6 October 2011, and Prainetta for a power of 2.64 MWp, the
works for which ended on 3 August 2011, of nòva agri.
“Industrial Fixtures and Fittings and Other Assets” equal to Euro 474,865 thousand, Depreciation
Provision of Euro 285,467 thousand, leaving a residual value of Euro 189,398 thousand. The item
mainly relates to:
■ Service station equipment for a value of Euro 287,589 thousand, Service Station equipment
depreciation provision of Euro 160,676 thousand;
■ Sales point start-up costs of Euro 121,343 thousand, Sales point start-up costs Depreciation
Provision of Euro 92,765 thousand; these are relating to formation, start up and restructuring of
points of sale;
■ Other fixtures, tools and equipment, electronic machines and furniture of Euro 60,597 thousand,
with respective depreciation provision of Euro 27,189 thousand, mainly relating to refinery
equipment and the IGCC plant of api energia, as well as to electronic equipment and group
company furniture and furnishings.
The increase for the financial year, totalling Euro 34,221 thousand, can essentially be attributed:
■ for Euro 30,173 thousand to capitalisation of works in progress relating to tanks, pumps, shelters,
booths and self-service equipment installed at the network’s points of sale of the parent company;
■ for Euro 2,543 thousand to the acquisition of the spare parts called capital spare. It is specified that
the item capital spare mainly refers to material for the refractory of the gasifiers, the exchangers of
the BLAC and BNLC compressor, and the tube band of the E 8105 exchanger of the subsidiary api
energia.
The item decreased by a total of Euro 26,648 thousand in terms of balance sheet items and Euro
16,477 thousand in terms of amortisation provision, mainly due to the transactions below:
■ Euro 21,667 thousand regarding LPG tanks, canisters and burners, depreciation provision for Euro
12,122 thousand after the sale of the LPG company branch by the parent company;
■ Euro 513 thousand for equipment regarding the points of sale, the depreciation provisions for Euro
417 thousand after the contribution by the parent company for the establishment of Tre C s.r.l., sold
during the year;
■ Euro 4,409 thousand mainly due to the removal and loss of the points of sale of the group’s
network, depreciation provision for Euro 3,938 thousand.
“Fixed assets under construction and advances” at the end of the financial year totalled Euro
120,114 thousand and essentially relate to:
■ Euro 51,003 thousand for new constructions, restructuring, revamps, and extensions of points of
sale and non-oil plants by api S.p.A.; the replacement of the underwater pipelines that connect the
refinery to the “Isola” marine terminal, the activities to rationalise connections between the facilities
at sea and the tank farms on land, the rationalisation of the “Pontile” lines and other activities of
api raffineria spa;
■ Euro 19,611 thousand, mainly to the costs capitalised in 2011 for works carried out at the parks of
Nebrodi and Alcantara Interconnetting. To be added are the investments made to supply turbines,
the costs incurred towards Terna for the connections to the Ucria substation of SER;
■ Euro 32,553 thousand include the costs capitalised in 2011 for the works carried out on the
photovoltaic plants and the supply of turbines of SER1.
16. GOODWILL
A breakdown of the goodwill item is provided below:
Euro/thousand
api anonima petroli italiana S.p.A.
C.E.R. S.p.A.
Amount at
31/12/10
Increases
Decreases
12,247
Amount at
31/12/11
12,247
Cash
Genarate Unit
Marketing
1,406
1,406
Energy
IP Italiana Petroli S.p.A.
50,510
50,510
Marketing
Dicar S.p.A.
14,298
14,298
Marketing
Step S.p.A.
7,665
7,665
Marketing
Gamma petroli S.r.l.
1,079
1,079
Marketing
Petrolgas S.a.s.
1,412
1,412
Marketing
Elbagas S.r.l.
854
854
Marketing
Bielpe S.p.A.
13,812
13,812
Marketing
Petronoil S.r.l.
2,059
2,059
Marketing
0
Marketing
14,717
14,717
Marketing
107
107
Marketing
F Gas S.r.l.
680
Calgas S.r.l.
Ecoenergia S.r.l.
Third parties
Total
-680
53
53
121,089
120,232
Goodwill in the financial statements as at 31 December 2011, equalling Euro 120,232 thousand,
mainly refers to the acquisition of the company IP in 2005 (Euro 50,510 thousand), the merger of the
company Calgas in 2009 (Euro 14,717 thousand), the merger of the company Bielpe (Euro 13,812
thousand) and the acquisition of the company Step in 2002 (Euro 7,665 thousand) and due to its nature
is completely allocated to the Marketing CGU. This CGU is tested for impairment at least once a year.
As at 31 December 2011 this item recorded a decrease of Euro 680 thousand referred to the
goodwill of the company F Gas S.r.l. consequently to the sale of the LPG company branch by api S.p.A.
After optimising its IT system during 2011, the Company currently has detailed information that
allows the processing of systematic reports regarding the various businesses of the Group. Therefore,
starting from 2011, two different CGUs were set up for the refining business and the marketing
business, which until 2010 were part of one single CGU. The CGU represented by the energy business
remains the same as in previous years.
79
Consolidated Financial Statements as of 31 December 2011
Consolidated Financial Statements 2011 api holding S.p.A.
80
api holding S.p.A. Consolidated Financial Statements 2011
The company tested the CGUs described above for impairment as at 31 December. In particular, the
impairment indicators of the Refining CGU and the Energy CGU were analysed and indicators were
identified relating to the negative performance of the refining scenario and the early termination of the
CIP convention for the energy sector, respectively. The Marketing CGU undergoes an impairment test
at least once a year. The goodwill recorded in the financial statements is allocated to it.
The impairment test carried out on 31 December 2011 for the Marketing, Refining and Energy
CGUs revealed a stable book value, including the goodwill allocated to the Marketing CGU. In
particular, the cash flow values associated with the activity of the above mentioned CGUs of oil and
energy products estimated on the basis of the forward prices that can be inferred from the market and
discounted at the discount rate of 9% (WACC), are positive. Therefore, the case pursuant to IAS 36 for
a possible write-down does not occur.
The most important assumptions for the projection of the future cash flows of the CGU concern
the sales margin, the sold quantities, the increase in the international price of crude oil, the discount
rates and the final growth rate. These assumptions derive from the industrial plan adopted by
management and approved on 6 March 2012 by the Board of Directors of api anonima.
We feel that it is appropriate to remind you that the Group has made accounting entries for
impairment write-downs in those cases in which the recoverable value of the assets subject to analysis
is lower than their book value, and the relative impairment loss is considered to be lasting by the
directors.
Calculation of the recoverable value, in accordance with IAS 36, has been carried out using the
higher of the assets’ value in use and their fair value, net of any charges resulting from the sale
transaction.
To calculate the value in use of the assets, the directors have considered, on the basis of the
accepted current practice, to adopt the UDCF (Unlevered Discounted Cash Flow) method, which
involves the discounting of operating cash flows, i.e. the flows available prior to the repayment of the
financial debts and remuneration of shareholders. On the basis of this criteria, the operating flows are
discounted at a rate equal to the weighted average of the cost of the debt and own capital (WACC or
Weighted Average Cost of Capital), for the purpose of obtaining the operating capital value which may
be able to be generated by the assets subject to analysis. The operating cash flows subject to
discounting are those produced by the Marketing CGU and used for the preparation of the 2012-2016
Group Business Plan. The year 2011 is based on budget data. With regard to the following years, EMC
forecasts for the first refining margins and internal forecasts for the sales margin were used. Other
costs/revenues were obtained by applying 75% of the planned inflation rate (1.5%) to 2011 figures.
The discount rate used was equal to 8.1% over a five-year period. With regard to the calculation of the
recoverable amount, a terminal value was also included, revalued at a 1.5% growth rate.
For calculation of the fair value net of the charges resulting from the sales transactions, on the other
hand, reference is made to the most current criteria used by the market, which is that of estimating the
sales price using a multiple based on EBITDA as a reference.
The directors pointed out that the value in use of the goodwill is sensitive to deviations from the
basic assumptions used to prepare the 2012-2016 economic plan, such as the achievement of the
expected revenues and the implementation of the planned strategies.
Consolidated Financial Statements 2011 api holding S.p.A.
81
17. INTANGIBLE FIXED ASSETS
Euro/thousand
At 1 January 2011 net of amortisation
provisions and impairment losses
Owned
networks
Third party
networks
21,134
43,623
-341
-1,984
Increases
Decreases
Patent rights and Licences concessions
rights to use
and brands
patent of others
and sim. rights
Assets under
construction
and advances
Other
intangible
fixed assets
26,490
16,712
Total
3,879
54,707
166,545
91
1,116
20,510
1,500
19,351
-152
-21,072
-493
-20,178
-734
-2,255
16,983
163,463
Changes to consolidation area
Accounting reclassifications
Other changes
Extraordinary transactions
Amortisation
At 31 December, net of amortisation
and impairment losses
20,793
41,639
-558
-963
3,412
54,708
25,928
The item “Intangible fixed assets” totals 163,463 thousand and includes:
“Owned networks” and “Third party networks”, respectively equal to Euro 20,793 thousand and
41,639 thousand, representing the fair value of the intangible assets recorded at the time of allocation
of the price paid for the acquisition of IP. The decrease of Euro 341 thousand and of Euro 1,984
thousand, in owned and third parties’ networks respectively, is resulting from failure to renew the
agreements in place, and sale and closure of owned plants;
“Patent rights and rights to use the patents of others”, for a value of Euro 3,412 thousand,
essentially represented by the software usage rights of the parent company and api raffineria, as well
as the General Electric Energy patent right (formerly Texaco Development Corporation) relative to the
gasification process for the production of electricity by the subsidiary api energia.
“Concessions, licences, trademarks and similar rights”, of Euro 54,708 thousand, essentially
comprise the following:
■ Euro 51,894 thousand, as the fair value of the IP brand acquired in 2005 at the time of allocation
of the price paid for acquisition of the company in point;
■ Euro 2,643 thousand, referring to concessions and licences concerning points of sale and bars of
the parent company.
“Fixed assets under construction and advances”, equal to Euro 25,928 thousand, almost entirely
attributable to development costs incurred by the subsidiaries api nòva, Ser and Ser 1, necessary for the
implementation of the wind farms located in Puglia and Sicily and capitalised pursuant to IAS 38.57.
More specifically:
■ Euro 4,269 thousand refer to the design, development and creation of the wind farms of nòvawind sud;
■ Euro 2,223 thousand refer to the design, development and creation of the wind farms of nòvawind
sicilia;
Consolidated Financial Statements as of 31 December 2011
A breakdown of the Intangible fixed assets item is provided below:
82
api holding S.p.A. Consolidated Financial Statements 2011
■ Euro 851 thousand refer to the acquisition of property rights on land and increases in assets for
internal works at SER1;
■ Euro 1,136 thousand regard the acquisition of the property rights on land and increases in assets
for internal works as well as the capitalisation of the ancillary costs regarding the RBS loan of the
company SER;
■ Euro 2,118 thousand refer to the costs of projects being developed and capitalised during the year
by api nòva energia.
The decreases essentially concern the value of the projects conferred or sold to the vehicle
companies for Euro 6,553 thousand by api nòva energia S.r.l. and for Euro 940 thousand following the
reclassification of the multiannual ancillary costs regarding the photovoltaic plants of sunshire S.r.l. that
started operation during the year.
“Other intangible fixed assets”, equal to Euro 16,983 thousand, consisting of:
■ the api energia contribution for connecting to the ENEL national network for Euro 1,938 thousand,
amortised at an annual rate of 5% relating to the duration of the agreement stipulated with ENEL
(now GSE);
■ a total of Euro 13,407 thousand referring to SER and SER1 regarding ancillary costs related to RBS
financing;
18. EQUITY INVESTMENTS
The item “Equity investments” of Euro 36,316 thousand, a breakdown of which is provided in the
table below, comprises an amount of Euro 31,020 thousand of equity investments in associated
companies, and Euro 5,124 thousand of equity investments in other companies.
Euro/thousand
Book Value
31/12/10
Associated companies
Apisem S.p.A.
4,604
Abruzzo costiero S.r.l.
1,658
apisoi service S.r.l. in liquidation
928
Saccne rete S.r.l.
3,229
Apibenzin
13
Biomasse Italia S.p.A.
11,955
Biomasse Crotone S.p.A.
Biotrade S.p.A.
1,140
Italsilicon S.p.A..
28
WAS S.r.l.
5
SAB S.r.l.
16
Associates write-down provision
-13
Total
23,563
Other companies
Petroven S.r.l.
16
Immobiloil S.r.l.
50
Consorzio grandi reti
4
Opera participations S.C.A.
1,760
Ambienta SGR S.p.A.
1,239
Sator S.p.A.
2,800
Other equity investments
770
Other group companies write-down provision -1,483
Total
5,156
Increases
Decreases
-336
163
356
8,503
3,540
-46
12,515
-3540
-265
-835
-23
-34
-25
-5,058
-580
-32
-32
580
0
Book Value
31/12/11
% held
31/12/11
% held
31/12/10
4,268
1,821
928
3,585
13
16,918
3,275
305
5
-29
-9
-59
31,021
50.00%
30.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
41.50%
50.00%
50.00%
50.00%
30.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
41.50%
50.00%
50.00%
16
50
4
1,180
1,239
2,800
770
-935
5,124
10.00%
10.00%
20.00%
20.00%
Consolidated Financial Statements 2011 api holding S.p.A.
83
at 31.12.2011
Euro/thousand
Non current
assets
Current
assets
Non current
liabilities
Current
Liabilities
Revenue
Profits/
(Losses)
Biomasse Italia S.p.A.
64,061
44,886
(4,063)
(73,967)
99,223
34,754
Biomasse Crotone S.p.A.
39,901
946
(663)
(30,713)
16
(529)
1,468
185
–
(1,247)
76
(68)
684
1,757
(58)
(2,292)
85
(34)
WAS S.r.l.
Biotrade S.p.A.
Italsilicon S.p.A..
717
294
(836)
(99)
–
(57)
SAB S.r.l.
4,346
1,316
(5,324)
(358)
486
(51)
Apisem S.p.A.
9,642
1,388
(38)
(2,458)
4,021
827
Abruzzo costiero S.r.l.
7,276
1,291
(194)
(2,302)
3,853
545
–
2,077
(85)
(41)
–
–
66,129
33,981
(29,214)
(46,985)
79,368
15,785
–
–
–
–
–
–
37
657
(625)
(59)
–
65
Biotrade S.p.A.
565
5,106
(2,317)
(3,296)
18,627
2,186
Italsilicon S.p.A..
715
661
–
(1,308)
–
(31)
SAB S.r.l.
127
3,414
–
(3,509)
349
(70)
Apisem S.p.A.
–
9,176
–
–
1,586
1,586
Abruzzo costiero S.r.l.
–
9,238
–
(3,711)
561
561
apisoi service S.r.l. in liquidation
–
2,054
(167)
(31)
14
(96)
apisoi service S.r.l. in liquidation
at 31.12.2010
Biomasse Italia S.p.A.
Biomasse Crotone S.p.A.
WAS S.r.l.
As far as equity investments in other companies are concerned, a decrease of Euro 580 thousand is
reported in the equity investment of the Opera company as partial distribution of company reserves.
19. OTHER NON-CURRENT ASSETS
The “Other non-current assets” comprise:
Euro/thousand
31/12/2011
31/12/2010
Receivables from Associated Companies
7,605
10,597
Tax receivables
4,154
2,236
Other Debtors
20,091
20,508
4
4
31,854
33,345
Investments
Total
The item at 31 December 2011 totals Euro 31,854 thousand, with a decrease of Euro 1,491 thousand
as compared to the balance for the previous year.
The balance for the item includes:
■ “Receivables from associated companies” totalling Euro 7,605 thousand, essentially related to the
financial receivables and the relevant interest accrued of api from Abruzzo Costiero s.r.l. for Euro 76
thousand; from api nòva energia to: Biomasse Italia for Euro 5,029 thousand, and Biomasse Crotone
for Euro 2,500 thousand;
Consolidated Financial Statements as of 31 December 2011
Other increases and decreases in value of equity investments in associated companies can be
attributed to the results in the companies valued using the net equity method.
For the main equity investments in associated companies, also the economic and balance sheet data
is provided:
84
api holding S.p.A. Consolidated Financial Statements 2011
■ “Receivables from taxation authorities”, of Euro 4,154 thousand, relative mainly to tax
withholdings, advances, and interest on tax credits dating back to previous financial years, for which
the request has been made to pay this off by means of the grant of treasury bonds in accordance
with Legislative Decree no. 307 of 23 May 1994 converted into Law 457/94, as well as the advance
tax of Employee Severance Indemnity paid in accordance with Law no. 140 of 1997;
■ “other debtors”, equal to Euro 20,091 thousand, involving both prepayments of Euro 16,579
thousand with a duration of more than one year deriving from the payment by api of a contract
renewal lump sum for exclusive supplies (operator agreements), and for Euro 2,185 thousand,
prepayments mainly relating to leasing instalment costs paid in advance with respect to the period
which they cover, and fees paid to service providers.
20. DERIVATIVE INSTRUMENT ASSETS
The item “Derivative instrument assets” of Euro 1,174 thousand corresponds to the fair value appraisal
of derivative contracts in place at the balance sheet date, relating to hedging transactions for the hedging
of the risk linked to interest rate fluctuation of api S.p.A.
The fair value has been determined using generally accepted valuation models and techniques, based
on the discounting of expected cash flows. Certain derivatives have been valued using the pricing models
for options. For this purpose, in addition to the contractual parameters for each derivative market,
parameters for the underlying risk factors have been used (Euribor and volatility yield curves) which can
be obtained from external info-providers (e.g. Bloomberg).
The Group verified on a quarterly basis the effectiveness of the hedging relationships in place.
At 31 December 2011, the application of hedge accounting produced the following effects on the
financial statements:
1) The improved fair value of the exchange rate derivatives compared to the previous year, mainly linked
to the appreciation of the dollar, occurred between the date of stipulation of the forward agreements
and the year end;
2) The amount of the cash flow hedge reserve went from Euro -7,640 thousand to Euro -5,801 thousand.
The change is mainly due to the reduction in the negative value of the fair values on interest rates of
the parent company api S.p.A. compared to the previous year and, to a lower extent, the recovery plan
for the cash flow reserve by api energia.
Consequently to the above, the net amount between the financial income and charges of Euro -2,455
thousand was recorded in the Income statement.
21. PREPAID TAXATION
Prepaid taxation as of 31 December 2011 totals Euro 94,217 thousand, compared with an amount
at 31 December 2010 of Euro 94,537 thousand.
The balance in question mainly includes credits generated from temporary differences on:
■ The balance of Euro 72,336 mainly includes credits generated from temporary differences on
allocations to taxed provisions and other costs whose deductibility is postponed to the future, net
of the profits substantially referable to the release of the taxed provisions. Likewise, the item
includes prepaid taxes related to the temporarily non-deductibility of the interest expense pursuant
to art. 96 TUIR as well as the valuation of the fiscal loss of the past year of the parent company to
the effects of ordinary IRES and additional IRES; finally, it is worth remembering that for the
subsidiary api energia S.p.A. an increase was recorded due to the recalculation of the taxes
considering the 0.09% increase in the IRAP rate applicable in the Lazio Region; the IRAP rate of this
Region in particular was increased to 4.97%. The value mainly refers to: api S.p.A. for Euro 18,617
thousand, the subsidiary api energia S.p.A. for Euro 34,115 thousand and the subsidiary api
raffineria S.p.A. for Euro 19.301 thousand;
■ the remaining fiscal losses of the subsidiaries SER and SER1 after the application of the “Tremonti
ter” regulation for a total of Euro 5,859 thousand;
■ temporary differences from hedging transactions carried out by SER for a total of Euro 7,872
thousand.
22. INVENTORIES
This item amounts to Euro 441,287 thousand at 31 December 2011 and shows an increase of Euro
88,423 thousand with respect to the corresponding balance at 31 December 2010.
The breakdown of the item is as follows:
Euro/thousand
31/12/2011
31/12/2010
Raw materials
170,173
115,393
Products being processed
34,930
29,309
Finished products
201,318
171,089
Stocks and spare parts
Total
34,866
37,073
441,287
352,864
The increase of Euro 88,423 thousand is due to the dual effect of:
■ an increase in the weighted cost compared to the market value in January 2011;
■ lower inventories compared to the previous year.
It is important to point out that the amounts given in the table are net of the relative write-down
provisions.
“Stocks and spare parts” of Euro 34,866 thousand are mainly relating to spare parts and maintenance
materials of the refinery and the IGCC plant, and to consumables and maintenance materials for the
petroleum product distribution network of api S.p.A.
23. TRADE RECEIVABLES AND OTHER DEBTORS
Trade receivables and other debtors are made up as follows:
Euro/thousand
31/12/2011
31/12/2010
Trade receivables
666,961
532,791
Receivables from other oil companies
80,599
81,886
Bills of exchange receivable
1,865
2,284
Receivables from associated companies
22,820
8,829
772,245
625,790
Total
85
Consolidated Financial Statements as of 31 December 2011
Consolidated Financial Statements 2011 api holding S.p.A.
86
api holding S.p.A. Consolidated Financial Statements 2011
Trade receivables equal Euro 666,961 thousand, the provision for doubtful debtors of Euro 9,735
thousand reflects the negative effects of the profound credit and economic crisis under way in Italy.
The item “Receivables from other oil companies” of Euro 80,599 thousand, shows a decrease of
Euro 1,287 thousand. These receivables represent, in relation to the counter-entry item in the liabilities
section, the amount of receivables confirmed at the end of the period with respect to the other oil
companies in relation to sale and purchase contracts for goods entered into with the same.
“Bills of exchange receivable”, of Euro 1,865 thousand, has decreased by Euro 419 thousand. The
variation is relating to the value of bills on hand and also of bills already presented subject to collection,
at the closing date of accounts.
The item “Receivables from associated companies” amounts to Euro 22,820 thousand and
essentially relates to:
■ mainly the credit granted by the api S.p.A. to the associated company Saccne rete S.r.l. amounting
to Euro 7,517 thousand; in particular, Euro 2,629 thousand represent the residue to be collected due
to the transfer by the parent company of the share capital of Royal oil S.r.l. fully controlled; while
Euro 4,861 thousand represent the value of the trade receivables from the parent company.
■ Euro 10,302 thousand refer mainly to receivables of the company api nòva from Biomasse Italia
S.p.A. (about Euro 9,000 thousand) and BioTrade S.p.A. (about Euro 1,100 thousand).
24. OTHER CURRENT ASSETS
“Other assets” amount to Euro 50,716 thousand, increasing by Euro 23,244 thousand with respect
to the previous year. Among the most significant items we would point out:
■ Regione Friuli-Venezia-Giulia, of Euro 3,963 thousand - in accordance with Art. 3 Paragraphs 16 and
17 of Law no. 549 of 28 December 1995 – for the recovery of discounts applied by api S.p.A. by
way of reduction of the pump price of gasoline to regional territory residents only;
■ other relations with various parties for a total value of Euro 1,930 thousand, relating essentially to
amounts owed for advances on leasing instalments and other minor advances paid by api S.p.A.;
■ Mediofactoring, equal to Euro 13,638 thousand, relating to the credit – at 31 December 2011 – to
“Carta Maxima” fuel card customers, covered by the factoring company Mediofactoring SpA, to
which the credits of api S.p.A. were transferred with a guarantee without recourse;
■ the amount of green certificates not yet sold as of the balance sheet date for Euro 9,474 thousand
of the company SER S.p.A.;
■ the amount of green certificates not yet sold as of the balance sheet date for Euro 6,162 thousand
of the company SER1 S.p.A.;
■ the energy account contributions to be collected for Euro 1,342 thousand by the subsidiary
Sunshire.
25. TAX RECEIVABLES
The item “tax receivables” totals Euro 17,455 thousand, showing a decrease of Euro 12,201
thousand, and includes the IRES and IRAP credit for group companies.
Consolidated Financial Statements 2011 api holding S.p.A.
87
The value as of 31 December 2011 totalled Euro 89,372 thousand recording an increase of Euro
25,386 thousand.
The item comprises the restricted cash at bank and in hand of:
■ api energia S.p.A. for an overall value of Euro 83,985 thousand, up by Euro 24,579 thousand. The
heading is entirely made up of api energia’s restricted cash at bank and in hand, associated with
current accounts opened with the Banca Nazionale del Lavoro in the name of the Facility Agent, The
Royal Bank of Scotland, respectively called “Revenues” for Euro 79,690 thousand, (Euro 58,419
thousand at 31 December 2010), “Debt Service Reserve Account” of Euro 3,872 thousand (Euro
567 thousand at 31 December 2010), “Compensation” of Euro 307 thousand (Euro 305 thousand
at 31 December 2010) and “Extra-maintenance” of Euro 116 thousand (Euro 115 thousand at 31
December 2010);
■ C.E.R. S.p.A. referring to the amounts held by Mediocredito Centrale, of Euro 2,834 thousand, to
guarantee the payment of the mortgage instalments due to the same credit institute;
■ Sunshire S.r.l., referring to the amounts in the term current account open at Banca di Credito
Cooperativo, for Euro 1,131 thousand, as part of the guarantee issued in favour of Banca
Agrileasing S.p.A. for the payment of the financial lease instalments and the other commitments
undertaken by the Company but available to the Company in compliance with the credit transfer
agreement;
■ SER S.p.A., regarding the balance of the term current account for Euro 4 thousand.
27. CASH AT BANK AND IN HAND AND CASH EQUIVALENTS
Cash at bank and in hand and cash equivalents comprise:
Euro/thousand
31/12/2011
31/12/2010
Bank and post office deposit accounts
51,386
23,333
Ready cash and cheques
2,518
1,363
53,904
24,696
Total
Short term bank deposits earn variable rate interest based on daily rates.
For the purposes of the consolidated cash flow statement, the item cash at bank and in hand and
cash equivalents at 31 December 2011 is made up as indicated above.
28. GROUP SHAREHOLDERS’ EQUITY
Share Capital
The share capital totalled Euro 361 thousand.
Legal Reserve
The “Legal reserve” amounts to Euro 72 thousand and is in line with the previous year.
Consolidated Financial Statements as of 31 December 2011
26. LIQUIDITY TIED UP IN PROJECT FINANCE
88
api holding S.p.A. Consolidated Financial Statements 2011
Other Reserves
The item “Other Reserves”, net of the Cash flow hedge reserve, totals Euro 441,642 thousand, with
a decrease with respect to the previous year of Euro 10,686 thousand.
Cash flow hedge reserve
This heading totals Euro -14,739 thousand and relates to the effective portion of the fair value of
contracts in derivative instruments in existence at 31 December 2011 to hedge the risk of exchange
rate and interest rate fluctuation.
Distribution of dividends
The meeting of 24 May 2011 resolved to distribute dividends for a total of Euro 750,750, assigning
to each of the 49,000 ordinary shares a dividend equal to Euro 10.5 and to each of the 21,000
preference shares a dividend equal to Euro 11.25.
Profits carried forward
The item totals Euro -54,305 thousand with a change of Euro 16,876 mainly attributable to the
allocation of the group results.
Minority Interests
The item totals Euro -1,966 thousand, with a change of Euro 1,715 thousand, including the result
for the year of Euro 2,106 thousand.
The changes in shareholders’ equity including the share of third party shareholders are analysed in
the following table (in thousands of Euro):
Balance at 1 January 2011
Share
Capital
Legal
Reserve
361
72
Other C.F. Hedge
Reserves
Reserve
Profits Profit (loss) Shareholders’
Capital and
Profit (loss) Shareholders’ Shareholders’
carried
for the
equity
Reserves for the period
equity
equity
forward
period
Group Min. Interests Min. Interests Min. Interests
Total
452,328 -12,229 -71,181
Profit (loss) for the period
Effect of hedge accounting operations
6,848
376,199
38,174
38,174
-2,509
Foreign Shareholdings Translation Reserve
153
Total overall profit for the year
-2,509
Allocation of profit for year 2010
Distribution of dividends
Change in the consolidation area
Balance at 31 December 2011
361
72
373,842
2,106
40,280
-2,509
-1,262
-1,262
-3,771
153
1
1
154
38,174
35,818
-1,261
2,106
845
36,663
-6,848
0
-3,669
3,669
0
0
-751
0
-751
0
0
0
0
0
0
0
0
0
-454
-3,377
0
2,863
-1,966
409,240
10,626
Companies valued at equity
Other changes in shareholders’ equity
-2,357
2,106
153
Payment from shareholders
-10,626
-3,669
6,848
-751
Reclassifications from other reserves
1,312
-2,923
-2,923
2,863
2,863
441,642 -14,738 -54,305
38,174
411,206
-454
-4,072
2,106
Consolidated Financial Statements 2011 api holding S.p.A.
89
29. MEDIUM TO LONG TERM DEBT
Euro/thousand
31/12/2011
31/12/2010
Bank borrowings
716,482
871,532
Payables due to Other Financiers
123,111
71,261
Total
839,593
942,793
The item “Medium to long term debt” decreased by Euro 103,200 thousand, due to a reduction
in the exposure to the banking system, equal to Euro 155,050 thousand. This was only partially offset
by an increase in payables towards non-banking counterparties, amounting to Euro 51,850
thousand. The reduction in bank borrowing derives from an increase in long-term financial
indebtedness for the parent company and the companies operating in the renewable energies sector,
chiefly the sub-holding api nòva energia and its subsidiaries SER, SER1, sòlergys and sunshire, and
from a considerable decrease in medium/long-term debts for api S.p.A. and api energia. Despite
these changes, it is worth highlighting the stability of the long term indebtedness for the subsidiary
api real estate.
Medium to long term debt of the parent company api holding dropped by Euro 12,000 thousand
compared to the previous year consequently to the early repayment of the loan granted by UBI Banco
di Brescia. The debt value at the end of December equalled Euro 54,500 thousand.
With regard to loans issued in favour of api nòva energia, holding company of a set of companies
operating in the renewable energies sector, it is worth pointing out that the payables due to banks
total Euro 7,500 thousand, down on the previous year by Euro 2,000 thousand. More specifically, the
payables refer to a 60-month unsecured loan for Euro 5,000 thousand granted on 30 July 2009 by
Banca Popolare di Sondrio and a loan granted by Banca Popolare Emilia Romagna for Euro 2,500
thousand in March 2010 for the duration of 36 months.
With regard to the debt of the subsidiaries of api nòva energia, it is worth highlighting that:
■ the company SER S.p.A., a joint-venture with Iberdrola, at 31 December had long term
indebtedness equalling Euro 230,955 thousand, which represents the debt owed to RBS to
finance the first and second phase projects. At the balance sheet date disbursements by banks
are still blocked. The change in debt compared to 2010 equalled Euro 4,734 thousand and can
be attributed to the repayment of part of facility C to The Royal Bank of Scotland for Euro 206
thousands, linked to the transfer of the Monti Sicani Nord project to the company Novawind
Sicilia, and the repayment of the first instalment of the debt (Fac A-C) paid to The Royal Bank of
Scotland pursuant to the loan contract for Euro 4,527 thousand. The interest accrued on the
financing from RBS is calculated at the average Euribor rate of 1.26%. The first-phase projects are
Lago Arancio, Rocca Ficuzza, Serra del Vento Nord and Sud, Taverna La Storta Nord and Sud
(projects for which SER1 is responsible), while the second phase includes the projects of Alcantara
and Nebrodi (for which SER1 is responsible, except for the Nebrodi Ovest park).
■ with regard to the subsidiary SER1 S.p.A., the Euro 16,226 thousand loan represents the debt
owed to RBS for the first tranche of the 488 financing of the Taverna La Storta Nord projects for
Euro 7,373 thousand and the Taverna La Storta Sud project for Euro 9,209 thousand, on which
interest accrues at the Euribor rate of 2.10%;
Consolidated Financial Statements as of 31 December 2011
Medium to long term debt comprises:
90
api holding S.p.A. Consolidated Financial Statements 2011
■ CER S.p.A., the company owning a wind farm already working in Campania, reduced its long
term exposure by approximately Euro 2.4 million. As at 31 December 2011, its debt exposure
within the project financing amounted to Euro 2,066 thousand;
■ for the subsidiary Sunshire, the remaining balance of the payable to Banca delle Marche regarding
the unsecured loan to create park B2, to build the photovoltaic plant in Tolentino equalled Euro
5,793 thousand, up by Euro 379 thousand. The lending conditions are as follows: duration 240
months, applied rate 3-month Euribor increased by 1.85 percentage points;
■ for sòlergys S.p.A., the residual balance of the bank debt equalled Euro 4,125 thousand and
refers to the disbursed portions of the MCI loan for Euro 4,743 thousand, entered into on 30
December 2010, with instalments to be repaid in five years amounting to Euro 885 thousand, and
Euro 2,574 thousand for the repayment of the instalments beyond five years; and the portions of
the Cariparma loan for Euro 692 thousand, for which the instalments to be repaid within five
years are Euro 113 and Euro 553 thousand for repayment of the instalments beyond five years.
The bank exposure of the api S.p.A. group as at 31 December amounted to Euro 367,444
thousand and is attributable to the parent company for Euro 211,912 thousand and to the residual
debt of the project financed by api energia for Euro 155,532 thousand. The decrease in the item
represents the portion of medium/long term debt maturing during the next year, which was
reclassified under short-term loans.
The reduction in the portion of medium – long term debt is also affected, as already mentioned,
by the risk reduction process undertaken by the banking system, which has made the granting of
new medium and long loans very difficult and expensive in terms of the applied spreads. This
behaviour led the group, and specifically api S.p.A., to refinance the loans payable in the year by
rescheduling the expiry dates and the spreads applied rather obtain new ones. For more details
please refer to chapter “Financial Management” in the Management Report.
With regard to api real estate srl, which is in charge of all ordinary and extraordinary management
activities concerning the property assets of the api group, the financial indebtedness, totally
represented by long term loans, remained essentially unchanged during the year and stood at Euro
27,873 thousand, with a slight decrease by approximately Euro 475 thousand following the
repayment of the first portion of amortisation for a loan with final expiry in June 2020.
The item “Payables due to other financiers” is equal to Euro 123,111 thousand and mainly
comprises:
■ the Euro 68,373 thousand debt owed by SER to the minority shareholder Iberdrola Renovables
Italia; this item shows an increase on the previous year by Euro 27,370 thousand;
-the debt value of SER1 S.p.A., for a par value of 12,285 thousand. The amount refers to the debt
to the lead bank for the first tranche of the 488 loan funding the projects of the wind farms located
in Puglia;
■ the overall value of Euro 32,724 thousand of the company Sunshire, referring to both the lease
contract for Euro 12,237 thousand regarding the photovoltaic plant called “park a+b1”, and the
new lease contract entered into with Iccrea BancaImpresa (former Banca Agrileasing) regarding
the photovoltaic plants of parks B2 and C for Euro 20,487 thousand;
■ the amount of Euro 3,526 thousand owed by the company api nòva energia of which Euro 2,775
thousand relate to a lease contract and Euro 751 thousand are linked to a loan granted by Simest;
Consolidated Financial Statements 2011 api holding S.p.A.
91
■ the amount of Euro 2,205 thousand related to a loan granted to Sòlergys by the shareholder
Green Network;
■ he amount of Euro 3,998 thousand related to a lease contract entered into to create the
The table below gives the composition of short and medium-long term financial debts in relation
to the rates applied:
Euro/thousand
31/12/2011
31/12/2010
20,000
20.000
Funding at 1% < actual rate* < 2%
377,198
672,084
Funding at 2% < actual rate* < 3%
391,469
350,710
Funding at 3% < actual rate* < 4%
329,496
69,513
Funding at 4% < actual rate* < 5%
420,707
318,877
Funding at 5% < actual rate* < 6%
49,325
20,443
Euro Financing
– fixed rate
Subtotal Euro fixed rate financing
– variable rate
Financing > 6%
35,895
20,228
Subtotal Euro variable rate financing
1,604,090
1,451,855
Total medium / long term debts
1,624,090
1,471,855
784,497
529,063
Of which current portion
Of which long term portion
839,593
942,792
1,624,090
1,471,855
* the actual rate includes costs relative to the spread applied and to any hedge transactions (IRS, collar etc.)
For more details on short term debt from banks, see note 35 Short term debt.
30. EMPLOYEE BENEFITS (EMPLOYEE SEVERANCE INDEMNITY)
Valuation of Employee Severance indemnity at 31 December 2011 has been carried out in
accordance with the calculation methodology indicated in IAS 19.
The tables below summarise the components of the net costs recorded in the consolidated income
statement:
Post-employment benefits
Opening liability
2011
2010
13,855
15,442
Service costs
164
87
Interest costs
590
572
Actual Gain/Loss
-487
-487
Transfers
-3
Services provided
-1,415
-1,759
Net cost of the benefit
12,704
13,855
Consolidated Financial Statements as of 31 December 2011
Thyssenkrupp plant of Sòlergys in Terni.
92
api holding S.p.A. Consolidated Financial Statements 2011
It should be underlined that, following application of the reform on the election on appropriation
of employee severance indemnity introduced by Law 296/2006 (Finance Act 2007), as from 1 January
2007 employees can elect to appropriate their accruing severance indemnity to industry complementary
pension schemes (Fondoenergia) or to INPS (National Social Security Institute). For this reason,
recalculation of the present value of provision for severance indemnity resulted in a positive effect for
the company on actuarial profits.
The following table includes the employee reconciliation as of 31 December 2011, with respect to
those of 31 December 2010, not considering resignations as of 31 December:
Employees at 31/12/2010
988
New employees
24
Employees acquired
0
Resignations
73
Employees at 31/12/2011
939
The assumptions adopted for the purposes of valuation of the severance indemnity can be
subdivided into two categories:
–
financial assumptions;
–
demographic assumptions.
More specifically the assumptions adopted are the following:
Financial assumptions
Executives
Other employees
■ Increase in the cost of living
2.0% per year
2.0% per year
■ Discount rate
4.0% per year
4.0% per year
■ Salary increase:
• less than or equal to 40 years of age
• over 40 years of age but less than or equal to 55 years of age
• over 55 years of age
2.75% per year
2.5% per year
2.25% per year
2.5% per year
2.25% per year
2.0% per year
Executives
Other employees
Mortality table RG 48
published by State
General Accountancy
Mortality table RG 48
published by State
General Accountancy
INPS table
according to
age and sex
INPS table
according to
age and sex
4.0%
in each year
Nil
2.0%
in each year
Nil
35%
(100% for women)
60%
(100% for women)
20%
in each year
10%
in each year
100%
100%
3.0%
in each year
3.0%
in each year
Demographic assumptions
■ Probability of:
• Death
• Invalidity
• resignations:
– up to 50 years of age
subsequently
• retirements:
– on reaching 60 years of age
– subsequently but up to less than 65 years of age
– on turning 65 years of age
• receive an advance from the appropriated
severance indemnity reserve set aside at 70%
Consolidated Financial Statements 2011 api holding S.p.A.
93
Deferred tax liabilities at 31 December 2011 stands at Euro 134,672 thousand, compared with a
value at 31 December 2010 of Euro 130,564 thousand.
The entry reflects the greater costs deducted in comparison to the amounts recorded in the income
statement in the current year and in the previous ones by virtue of specific taxation standards. The
increase in the item in question is mainly due to the deferred taxation of the capital gains from the sale
of the LPG company branch of api S.p.A., only partially offset by the return on the amortisation of
tangible and intangible fixed assets fiscally deductible from the taxable income of the previous years.
Thus the value is essentially referred to api S.p.A. for Euro 67,374 thousand, the subsidiary api
raffineria S.p.A. for Euro 18,063 thousand, and the subsidiary api energia S.p.A. for Euro 45,316
thousand. In addition, the provision includes also higher tax amortisation carried out by CER S.p.A. for
Euro 1,880 thousand and the temporary differences between the value attributed to the property
according to statutory criteria and the corresponding value adopted for tax purposes, for Euro 1,684
thousand and pertaining to api real estate S.r.l.
32. PROVISIONS FOR RISKS AND CHARGES
The breakdown and movement in medium and long term provisions from 1 January 2011 to 31
December 2011 is as follows:
Euro/ thousand
Opening balance
Opening balance
Increases
Uses
Discounting
Retirement payments
and similar
obligations
Taxation
provision
Land
Reclamation
Provision
Provision for risks
charges and
other expenses
22,852
584
18,281
10,417
52,134
23,981
584
17,096
6,849
48,510
8,767
7,457
11,285
27,509
-6,416
-4,805
-4,039
-15,260
-822
Total
-822
Reclassifications
Other changes
Closing balance
25,510
584
19,748
14,095
59,937
Retirement payments
This item totals Euro 25,510 thousand, and relates to:
■ Euro 25,147 thousand for relations with service station operators by way of an operating
termination bonus, following the framework agreement of 18 November 1992; appropriation for
the period equals Euro 8,670 thousand and utilisation equals Euro 6,108 thousand;
■ Euro 363 thousand for goodwill compensation with respect to agents for the termination of
relations; appropriation for the period equals Euro 97 thousand and utilisation equals Euro 308
thousand;
■ finally, the value of Euro 823 thousand relates to the impact of discounting of the Operating
termination Bonus during the year, which has shown a positive effect of Euro 737 thousand, and a
positive effect due to goodwill compensation with respect to agents of Euro 86 thousand, in
compliance with the provisions of IAS 37. These effects were appraised by applying the “projected
unit credit method” as defined under IAS 19.
Consolidated Financial Statements as of 31 December 2011
31. DEFERRED TAXATION LIABILITIES
94
api holding S.p.A. Consolidated Financial Statements 2011
Provision for taxation
This item amounts to Euro 584 thousand and represents the potential risk relating to any minor
amounts which might be confirmed within the context of pending lawsuits which, to date, have not
yet been favourably concluded.
We would also mention that in 1998, api anonima was subjected to an inspection by the Italian Tax
Police, referring to the period between 1992 to 1997, the outcome of which resulted in an assessment
report, which gave rise to the following assessment and amendment notices:
■ in December 1998 an assessment notice was served for the 1992 financial year (Corporate Income
Tax – IRPEG, Local Income Tax - ILOR), almost totally reversed in 2002 by the Rome Regional Tax
Commission; the Finance administration presented an appeal for Annulment of this judgement. The
hearing was held in January 2008. The Supreme Court – by means of judgment no. 9497/08 filed on
11 April 2008 - accepted both the main appeal of the Italian Inland Revenue and the interlocutory
appeal of the Company and referred the case back to another section of the Lazio Regional Tax
Commission. On 21 December 2009, the Lazio Regional Tax Commission filed the judgement no.
713/01/09, with which it accepted the appeal of the Company and rejected the appeal of the Office.
Also against this ruling, the Finance Administration presented an appeal for annulment;
■ during 1999, assessment notices were served for the 1993 year (Corporate Income Tax – IRPEG, Local
Income Tax - ILOR and VAT), which were appealed against in accordance with the Law. The VAT
appeal was judged in favour of the company, with a final judgement passed, while the IRPEG-ILOR
appeal was fully upheld by the Rome Provincial Tax Commission. The Lazio Regional Tax Commission,
having passed a judgement during 2004, almost entirely accepted the Company’s reasoning, making
use of an Official Technical Consultant who verified the unfounded nature of the claims; the Finance
Administration presented an appeal for Annulment of this judgement. The hearing was held in
January 2008. The Supreme Court – by means of judgment no. 8773/08 filed on 4 April 2008 accepted both the primary appeal of the Italian Inland Revenue and the interlocutory appeal of the
Company and referred the case back to another section of the Lazio Regional Tax Commission. On
14 January 2010, the Lazio Regional Tax Commission filed the judgement no. 7/01/10, with which it
accepted the appeal of the Company and rejected the appeal of the Office. Also against this ruling,
the Finance Administration presented an appeal for annulment;
■ during 2001 assessment notices were served for 1994 (Corporate Income Tax – IRPEG, Local Income
Tax - ILOR, VAT), 1995 (Corporate Income Tax – IRPEG, Local Income Tax - ILOR, VAT), and 1996
(VAT) which, also in this case, were appealed against in accordance with the Law. The judgements
passed to date, issued by the Lazio Tax Commission accept the Company’s reasoning without
exceptions, while the judgments related to 1994 and 1995 VAT notices have already had a final
judgement passed. The Finance Administration presented an appeal for annulment of the
judgements related to the disputes for 1994 (Corporate Income Tax – IRPEG, Local Income Tax –
ILOR), 1996 (VAT) and 1995 (Corporate Income Tax – IRPEG, Local Income Tax – ILOR); the
conciliation hearing has not year been set;
■ during 2002, assessment notices were served for 1996 (Corporate Income Tax – IRPEG, Local Income
Tax – ILOR) and 1997 (VAT); also in this case appeals were presented in accordance with the Law.
CTP in Rome accepted the appeal and annulled the notification concerning the Corporate Income
Tax - IRPEG and Local Income Tax - ILOR for 1996. The Office has not lodged an appeal and the
judgement has already had a final judgement passed.
With regard to the VAT notice for 1997, the Company appeal was fully upheld by the judgement
issued by the Rome Provincial Tax Commission. The Italian Inland Revenue presented an appeal for the
annulment of this judgement; on 19 January 2010 the negotiating hearing took place and, on 6
October 2010, the Rome Regional Tax Commission filed judgement no. 154/35/10 with which it
accepted the appeal of the Finance Administration. The company proposed an appeal to revoke the
ruling and requested the suspension with the Rome Regional Tax Commission as well as appealing to
the supreme court; on 15 December 2011 the Rome Regional Tax Commission, sect. II, filed order no.
43/2/11 with which it suspended the enforcement of the abovementioned ruling no. 154/35/10;
■ during 2003, an assessment notice was served for the 1997 year (Corporate Income Tax - IRPEG,
Local Income Tax - ILOR); the appeal submitted by the company was fully upheld by the Rome
Provincial Tax Commission. The Italian Inland Revenue appealed against this decision, against which
the Company appeared in accordance with the Law. The Lazio Regional Tax Commission rejected
the appeal submitted by the Italian Inland Revenue, thus confirming the provisions contained in the
judgement issued by the Rome Provincial Tax Commission. The Italian Inland Revenue appealed
against this decision, against which the Company appeared in accordance with the Law; the date
for the conciliation hearing has not yet been set.
Decontamination provision for land and service station disposal
The amount of this provision at 31 December 2011 was equal to Euro 19,748 thousand. During the
year, an amount equal to Euro 7,457 thousand was set aside, while Euro 4,805 thousand were used.
This provision refers to the appropriation of costs made by api S.p.A. for the environmental damage
concerning the network and the provincial deposits on the network plants.
Provision for risks, charges and other costs
This item has a value of Euro 14,094 thousand as of 31 December.
The provision has increased during the period by Euro 11,285 thousand, for which we would
highlight the following main movements:
■ Euro 9,409 thousand for provisions allocated by the subsidiary api energia, regarding the obligation
to purchase green certificates to cover 6.8% of the production of electricity for 2011, with valuation
at the unit price of Euro 82.51. The charge to be incurred to purchase green certificates will be offset
by the repayment by GSE of an amount equal to Euro 3,421 thousand, i.e. Euro 30 per certificate;
■ Euro 1,659 thousand for provisions of the parent company against the forecast increase in the cost
for the secondary transport of oil products, to guarantee respect of security regulations as required
by the representatives of carriers, although on this point Confindustria contested both the method
and the data; while awaiting more details on the issue in question, the abovementioned amount
was allocated for precautionary purposes;
■ Euro 55 thousand for increases linked to the completion of the actions to reclaim and dismantle the
bitumen storage plant of the subsidiary api raffineria.
A total of Euro 4,039 thousand of the provision has been utilised during the period, regarding:
■ Euro 155 thousand used to cover the charges associated with the continuation of the actions to
reclaim and secure the bitumen area of the subsidiary api raffineria;
■ Euro 1,556 thousand for the purchase on the market of the CO2 emission rights to cover the deficit
recorded in the three year period 2008-2010 equal to 129,669 securities of the subsidiary api
raffineria;
■ Euro 83 thousand regarding the partial recovery of the allocation made in the previous year against
the losses incurred in the management of two stations (Sicilia Ovest and Adige Ovest) of api S.p.A.
■ Euro 656 thousand relating to the release of the Provision following the Order of the Court of Foggia
dated 22 September 2011, which ruled the cancellation of the seizure of the Sant’Agata farm of SER;
■ Euro 1,589 thousand relating to the release of the Provision following the Order of the Court of Foggia
dated 22 September 2011, which ruled the cancellation of the seizure of the Sant’Agata farm of SER1.
95
Consolidated Financial Statements as of 31 December 2011
Consolidated Financial Statements 2011 api holding S.p.A.
96
api holding S.p.A. Consolidated Financial Statements 2011
33. TRADE AND OTHER PAYABLES
Trade and other payables comprise:
Euro/thousand
31/12/2011
31/12/2010
Trade payables
527,445
360,916
Payables due to other oil companies
192,482
138,365
565
1,231
720,492
500,512
Payables to associated companies
Total
Trade payables, equalling Euro 527,445 thousand, increased in comparison with the previous year
by Euro 166,529 thousand, and are the results of the ordinary management of working capital.
“Payables due to other oil companies”, totalling Euro 192,482 thousand include, in relation to the
respective counter-item under assets, the amount of the actual amounts payable at year end to other
oil companies under goods purchase and sale agreements entered into with same.
Payables due to associated companies totalled Euro 565 thousand and mainly comprise payables to
the associated company apisem S.r.l. for Euro 358 thousand.
34. DERIVATIVE INSTRUMENTS LIABILITIES
The item “Derivative instrument liabilities” of Euro 39,646 thousand (Euro 33,898 thousand at 31
December 2010) corresponds to the fair value appraisal of derivative contracts in place at the balance
sheet date, relating to hedging transactions of api anonima, api energia, api holding and SER for the
hedging of the risk of exchange rate and interest rate fluctuation.
In api anonima the negative balance of these hedges, equal to Euro 873 thousand (Euro 3,544
thousand as at 31 December 2010), corresponds to the fair value appraisal of the derivative contracts
in place at the balance sheet date, relating to hedging transactions for the hedging of the risk linked
to interest rate fluctuations. The reduction in the negative value compared to the previous year is mainly
due to an increase in the forward curve on rates, particularly in the short term part. The reduction in
the negative fair value on rates is also attributable to the expiry and early repayment during the year of
6 derivative contracts that generated a negative fair value.
As regards the subsidiary api energia S.p.A., there are 3 positions relating to derivative hedging
instruments, corresponding to interest rate collars for which the Company collects from the
counterparty any difference between the 6-month Euribor and 6% on a half-yearly basis, and pays to
the counterparty any difference included between 1.97% and the 6-month Euribor, again on a halfyearly basis.
These derivative contracts were entered into to contain the risk linked to the fluctuations of the
variable interest rate at which the Project finance was disbursed. To this end, through a “zero cost”
structure, the company is protected against a possible increase in market rates above 6% (cap), though
accepting to pay a minimum level in any case equal to 1.97% (floor) in the hypothesis of market rates
lower than this level. This event occurred for the second year in a row throughout the entire year 2011
when, given the stably low level of market rates, with the 6-month Euribor equal to an average of
1.638%, the company paid the fixed rate of 1.97% in any case.
Hedging was defined for a value equal to about 75% of the global risk exposure and for a duration
equal to the residual life of the loan. Only the intrinsic value component of the interest rate collar
instruments was designated as hedging (and the time value component is therefore excluded).
The balance of this item includes also the fair value related to six derivative contracts of interest rate
collars which were entered into by SER S.p.A. in October 2008 in order to hedge the fluctuations of the
variable interest rate to which the project finance is exposed, which equalled 20,111 thousand as at 31
December 2011.
Finally, the item includes the fair value of the three interest rate collar derivative contracts entered
into by Sunshire thus year; the debt as at 31 December 2011 equals Euro 3,184 thousand.
35. SHORT TERM LOANS
Short term debt comprises:
Euro/thousand
Bank borrowings
Payables due to Other Financiers
Total
31/12/2011
31/12/2010
784,375
527,443
122
1,620
784,497
529,063
The increase in short term debt, totalling Euro 255,434 thousand, was due to the aforementioned reclassifications to short term of loans originally taken out by api S.p.A. as medium/long
term and expiring in 2012 and, to a lower extent, to the higher needs by api nòva, which
considerably increased its short term debt with the banks. Short term debt accounts for
approximately 48% of the total debt, in comparison to 36% of the previous year. This increase is
mainly due to the tighter banking conditions for the granting of loans experienced in 2011, as
described in detail in the chapter “Financial Management” in the Management Report.
36. PAYABLES DUE TO SHAREHOLDERS
The item “Payables due to shareholders” at 31 December 2011 was Euro 1,676 thousand and
shows a decrease by Euro 1,713 thousand referring to a partial return of the debt in question,
performed by api holding S.p.A.
37. OTHER LIABILITIES
“Other Liabilities” of Euro 163,657 thousand, recorded a decrease of Euro 45,586 thousand and are
made up as follows:
Euro/thousand
Payables due to Welfare Institutions
31/12/2011
31/12/2010
4,205
4,170
Other creditors
159,452
205,073
Total
163,657
209,243
The item “Payables due to welfare institutions” of Euro 4,205 thousand, is substantially in line with
the previous year and relates mainly to contributions due to the INPS, Inpdai and other Bodies and are
proportionate to salary payments for the month of December.
97
Consolidated Financial Statements as of 31 December 2011
Consolidated Financial Statements 2011 api holding S.p.A.
98
api holding S.p.A. Consolidated Financial Statements 2011
The item “Other creditors” mainly includes:
■ Euro 130,327 thousand as deferred income of the incentive component of the CIP6 tariff related to
the sales contract of api energia with the Electricity Service Operator (GSE), which applies for 20
years and provides for recognition of an incentive for the first eight years;
■ Euro 8,307 thousand for the sale of the outstanding fuel vouchers of api S.p.A.;
■ Euro 4,286 thousand as deferred income of the incentive component of the CIP6 tariff related to
the sales contract of CER with the Electric Service Operator (GSE), which applies for 20 years and
provides for recognition of an incentive for the first eight years;
■ Euro 3,610 thousand regarding the sale of electricity pursuant to art. 4 of the deed amending the
contract for the constitution of the surface right on the plant called “Stm” of the company sòlergys;
■ Euro 3,625 thousand in relation to the portion of the subsidised loan in accordance with Law No.
488 granted by Centro Banca to SER1 spa;
■ Euro 2,450 thousand, for amounts due to employees at 31 December 2011 for deferred indemnities
and bonuses;
■ Euro 647 thousand relating to the debt to operators for application of the concessional rate on LPG
of api S.p.A.
38. TAX PAYABLES
Euro/thousand
31/12/2011
31/12/2010
Tax payables
131,869
136,567
Total
131,869
136,567
The balance of Euro 131,869 thousand at 31 December 2011 mainly comprises:
■ Euro 2,911 thousand regarding mainly the 13th instalment of the Robin Tax for Euro 1,214
thousand, the IRAP balance of 2011 for Euro 1,557 thousand of api S.p.A. and Euro 140 thousand
of sunshire;
■ Euro 113,220 thousand to customs relative to the excise applied to the origin of products carried
out in the month of December, net of the advance paid in December 2011 for current payments
becoming due in the first few months of 2012;
■ Euro 2,894 thousand regarding the balance of current taxes of SER S.p.A. for Euro 1,281 thousand,
SER1 for Euro 392 thousand, the parent company for Euro 607 thousand;
■ Euro 1,000 thousand regarding current debt for payments made to the agent in January 2011 for
withholding taxes.
39. GUARANTEES AND COMMITMENTS
The total balance of the item at 31 December 2010 totalled Euro 184,956 thousand and mainly
comprises the following guarantees and commitments:
■ guarantees provided by the company in favour of Public Entities in relation to the obligations
connected with the issue of licenses and/or concessions essentially totalling Euro 90,820 thousand
of api S.p.A.;
Consolidated Financial Statements 2011 api holding S.p.A.
99
December 2001, subject to specific authorisation by the Facility Agent, issued as a guarantee for the
permit to use the stretch of water of 66,663 m2 at the Port of Ancona for a total amount of Euro
320 thousand of api S.p.A.;
■ special privilege pursuant to art. 46 of the Consolidated Act of Laws on Banking and credit of Euro
82,189 thousand issued by C.E.R. to Mediocredito Centrale on all the capital goods purchased using
the loan granted by the mentioned credit institute. Subsequently to the constitution of the privilege,
C.E.R. irrevocably transferred to Mediocredito Centrale all of its rights of a pecuniary nature and all
the amounts to be received in relation to these rights, as well as all the insurance indemnities
payable in relation to insurance linked to the loan contract;
■ bank guarantees for Euro 11,627 thousand given by SER to public entities for the issue of the
permits to build the plants.
40. LEGAL PROCEEDINGS AND ARBITRATION
During the period there were legal, administrative and arbitration proceedings pending of various
types involving the Issuer or api Group companies.
Among the most significant disputes the following are highlighted:
(i) during the Services Conference of 11 January 2005, the Minister for the Environment prescribed a
series of environmental mitigation measures relative to the site on which the Falconara Refinery is
located. Among these works, we would particularly highlight the request to create a physical
containment barrier for the area in order to isolate it and impede any diffusion of pollutants. With
appeal of 13 April 2005, api Raffineria contested the decisions of the Services Conference before
the Marche Administrative Law Court in that they were excessively onerous and difficult to realise
in practice, and the relative dispute is pending. To this is added the appeal against the Conference
decisions of the following March (2006). The appeals were set for discussion before the Marche
Region Administrative Law Court at the hearing of 4 April 2007; the hearing – that was initially put
back to 5 March 2008 – was put back again to 2 December 2009 and then again in view of a
settlement of the administrative procedure with the Minister for the Environment that overcomes
the issues raised with the appeal; the next hearing is set for 24 January 2013.
(ii) On 25 August 1999 an incident occurred at the Falconara Refinery resulting in the death of two api Raffineria
employees. Following this incident, criminal proceedings were opened, which were settled with the acquittal
of all the plaintiffs except a field operator. The criminal proceedings are now in the pending appeal phase
initiated by the State Attorney General, by the convicted defendant and by api Raffineria as the party with
third party liability; the first hearing for the appeal was scheduled on 23 March 2012. Among the plaintiffs
claiming damage, the Municipality of Falconara did not lodge an appeal and the claim for damages;
(iii) During 2006 and 2007, four VAT audit notices were served to the company api Raffineria S.p.A. for
2000, 2001, 2002 and 2003, all resulting from an assessment report issued by the Italian Tax Police
– Marche Regional Division, following a tax audit conducted on the associated company apisoi
service S.r.l. These deeds contested the delayed invoicing by api raffineria S.p.A. to the associate
apisoi service S.r.l. of materials withdrawn by the same apisoi service S.r.l. from the api raffineria
warehouse – based on a supply relationship pursuant to art. 1559 of the Italian Civil Code – to carry
out maintenance work at the refinery.
Consolidated Financial Statements as of 31 December 2011
■ api energia insurance bonds, which have replaced bank bonds for an equal amount expired on 31
100
api holding S.p.A. Consolidated Financial Statements 2011
The auditing office has confirmed the material transfers within the context of the VAT regulation of
asset transfer, refusing to recognise the existence of a supply relationship. At the balance sheet date,
with final judgement issued by the Rome Regional Tax Commission, the dispute relating to 2000
was settled in favour of the company; in addition, the disputes for the years 2001, 2002 and 2003
were ruled with fully favourable judgements filed by the Ancona Provincial Tax Commission and, for
the years 2001 and 2003, also by the Ancona Regional Tax Commission. For the year 2002, the
Inland Revenue notified an appeal against the decision and a date for the hearing has not been set
yet. In consideration of the manifest unfounded nature of the claim by the Taxation office and of
the favourable judgements, the company has decided not to make any provision for such potential
liabilities as they are not considered probable;
(iv) During 2010 the company api energia S.p.A. was subject to a tax audit, conducted by the Italian
Inland Revenue – Lazio Regional Management Office concerning IRES, IRAP and VAT for 2007. Upon
the outcome of the audit, on 16 December 2010, the Inland Revenue notified an Official Tax Audit
Report that contested, concerning IRES and IRAP, the omitted attribution of revenues for the CIP/6
incentive component and the incorrect application of the depreciation rate of the item
"Miscellaneous” of Tangible Fixed Assets. Both cases concern accrual issues, since the taxable
amounts being recovered to determine the income for 2007, were / will be subject to taxation in
the subsequent years. Concerning the first finding, the auditors considered incorrect the accounting
system adopted by api energia (in compliance with the IAS/IFRS accounting standards) in dividing
across several years (due to the relationship between the effective annual production and the total
amount of the expected production, referring to 15 years) the incentive component of CIP/6 tariff,
claiming that the incentive should be entirely attributed as a revenue to the first 8 years of the
contract. Concerning this issue, the company, with the assistance of the entrusted professionals and
backed up by suitable appraisal drawn up by influential professionals, in consideration of the
absolute unfounded nature of the two contested findings, deemed it appropriate not to carry out
any provision for a potential liability, as this is not considered probable.
Concerning the second finding, the auditors recalculated the depreciation of the item
“Miscellaneous” subject to division of the related amount on the total of the IGCC plant, using a
weighted average rate in place of the one used by the company (10%), that is typical of the
“Production and filtration” category. Based on the afore–mentioned Tax Audit, the Inland Revenue
– Marche Regional Management Office notified the Company in December 2010, of an assessment
notice for IRES and IRAP for 2005, in which the amortisation of the fiscally deductible item
“Miscellaneous” was recalculated. Through this act the company proposed to refer, under legal
terms, to the Ancona Provincial Tax Commission. In 2011 the Marche Regional Management Office
- Auditing Office, in charge of the assessment, examined the issue regarding the depreciation of the
item "Miscellaneous" for the tax year 2006 and re-determined the annual rate of fiscally deductible
depreciation in consideration of the "mixed" nature of the costs posted under the item
"Miscellaneous", having regard to the proportional weight of each micro class, except for the
"Buildings" class, with respect to the overall costs of the plant. In consideration of the considerable
re-dimensioning of the assessment, the company decided to redefine years 2006 and 2005; it did
not make any allocation for the year 2007 and subsequent years, given the negligible amount that
may be due.
Consolidated Financial Statements 2011 api holding S.p.A.
101
The Group’s operating activities are financed predominantly by applying to the banking system,
through the use of current account overdrafts and financing, both short term - in Euro and to a limited
extent in foreign currency – and medium and long term. Within the context of ordinary management
of activities, api also uses other financial instruments such as trade debts and credits and operating hire
contracts.
As part of its ordinary operating activity, the Group is simultaneously exposed to interest rate risk,
exchange rate risk, commodity risk, liquidity risk and credit risk. To-date, the Group policy provides
solely for hedging the risks connected to fluctuations in interest and exchange rates, substantially
implemented by entering into IRSs, collars and forwards; no trading of derivative instruments for
speculative purposes is provided.
At 31 December 2011, there were 13 positions relating to derivative instruments hedging the
interest rate risk, 7 of which are interest rate swap and 6 interest rate cap and collar instruments.
Regarding interest rate swap hedging positions, the aim pursued by the Company is about
neutralising the potential variations in future financial charges associated to existing medium/long term
debt regarding variations in the euribor rate. Regarding interest rate cap and collar instruments
positions, the aim pursued by the Company is about limiting the potential variation in future financial
charges associated to existing medium/long term debt with respect to euribor rate variations within a
preset corridor. For such transactions, solely the intrinsic value component of interest rate collar
instruments was designated for hedging purposes (and the time value component is therefore
excluded).
Also, there are 3 positions relating to interest rate derivative instruments (collars) traded for hedging
medium/long term financial liabilities prior to adoption of the international financial accounting
standard. These hedging contracts, although not speculative in nature, do not meet the criteria
indicated by the IFRS standards for cash flow hedge accounting.
At 31 December 2011, there were 6 positions, stipulated during the year 2008 by the subsidiary
company SER, relating to derivative instruments hedging the interest rate risk, corresponding to six
interest rate collar contracts. The aim pursued by the Company through the negotiation of these
contracts is to limit, only for the share of the residual debt covered, the potential variations in future
financial charges associated to existing medium/long term debt regarding variations in the Euribor rate
within a preset corridor.
Three new Interest Rate Swap contracts were entered into during 2011 to hedge two lease contracts
and one unsecured loan of the company sunshire. Hedging was defined for a value equal to 80% of
the underlying debt and for a duration equal to the residual life of the loans.
At the balance sheet date, the fair value of the derivatives is negative for Euro 39.6 million.
INTEREST RATE DERIVATIVES
2011
2010
Change
NOTIONAL
VALUE
(€/000)
ASSETS
FAIR VALUE
(€/000)
d
LIABILITIES
FAIR VALUE
(€/000)
e
NET
FAIR VALUE
(€/000)
f=d+e
NOTIONAL
VALUE
(€/000)
ASSETS
FAIR VALUE
(€/000)
a
LIABILITIES
FAIR VALUE
(€/000)
b
NET
FAIR VALUE
(€/000)
c=a+b
CHANGE IN
NET FAIR VALUE
(€/000)
g=f-c
Derivative instruments
hedging cash flows
425,702
0.044
(28,390)
(28,390)
522,093
9
(18,135)
(18,126)
(10,264)
Other derivative instruments
198,875
0.030
(11,240)
(11,240)
224,132
1
(14,388)
(14,387)
3,147
624,577
0.074
(39,631)
(39,631)
746,225
205
(32,523)
(32,513)
(7,118)
Total
Consolidated Financial Statements as of 31 December 2011
41. FINANCIAL RISK MANAGEMENT: OBJECTIVES AND CRITERIA
102
api holding S.p.A. Consolidated Financial Statements 2011
EXCHANGE RATE DERIVATIVES
2011
Derivative instruments
hedging assets and
liabilities stated
in foreign currencies
Derivative instruments
hedging highly probable
future transactions
in foreign currencies
TOTAL EXCHANGE
RATE DERIVATIVES
2010
Change
NOTIONAL
VALUE
(€/000)
ASSETS
FAIR VALUE
(€/000)
d
LIABILITIES
FAIR VALUE
(€/000)
e
NET
FAIR VALUE
(€/000)
f=d+e
NOTIONAL
VALUE
(€/000)
ASSETS
FAIR VALUE
(€/000)
a
LIABILITIES
FAIR VALUE
(€/000)
b
NET
FAIR VALUE
(€/000)
c=a+b
CHANGE IN
NET FAIR VALUE
(€/000)
g=f-c
116.100
1.195
(21)
1.174
114.400
496
(1.792)
(1.296)
2.470
–
–
–
–
41.500
3
(218)
(215)
215
116.100
1.195
(21)
1.174
155.900
499
(2.010)
(1.511)
2.685
Also, at 31 December 2011, there existed 36 positions relating to forward purchase agreements of
dollars. These positions were traded to hedge against the exchange rate risk connected with 2 goods
purchase transactions, with settlement expected for January 2012. For these transactions, solely the
component connected to variations in the spot exchange rate was designated for hedging purposes;
therefore, the interest component is excluded (connected to the variation in spot-forward differential).
The fair value of existing interest and exchange rate derivative instruments is determined on the basis of
internal valuation models. These models are based on generally accepted principles, in particular, regarding
the calculation of the present value of future cash flows implicit in such derivative instruments. These are
estimated on the basis of market parameters on the forward structure of the Euro and Dollar rates, their
volatility and the Euro/Dollar exchange rate. Valuations made with internal models are validated also by
examining evidence from the counterparties to such derivative instruments.
The derivative financial instruments for which an active market can not be identified are recorded in the
accounts at fair value, calculated by applying some quantitative techniques based on market data and using
specific pricing models recognised by market and fed by parameters such as interest rates and exchange
rates. This methodology reflects the significance of the input data used to calculate the fair value
consistently with the level 2 of the fair value hierarchy defined in IFRS 7: although quotations from the active
market are not available for the instruments (level 1), it was possible to obtain data directly or indirectly
found on the market on which the valuations can be based. Instead, a valuation not based on market data
would have corresponded to level 3.
Interest rate risk
In relation to the market risk due to interest rate variations, it is Group policy to hedge the relative
exposure relating to medium and long term indebtedness. In managing this risk, zero-cost hedging
structures are used such as Swap “cap” and “collar”. Slightly more structured transactions were carried
out in the past consisting of the combination of two simple derivatives.
It is the group policy that the depreciation plan for the hedging specularly follows, as far as due date
and notional amount are concerned, the depreciation plan for the underlying debt.
The main sources of exposure of the Company to interest rate risks relate to existing medium/long
term loans and derivative instruments. In particular, the potential impact on the income statement for
2012 (2011 for comparison purposes) connected to the interest rate risk is as follows:
■ potential variation in financial charges and interest pertaining to 2012;
Consolidated Financial Statements 2011 api holding S.p.A.
103
■ potential variation in the fair value of existing derivative instruments (other derivatives and inefficient
SENSITIVITY INTEREST
31 December 2011
Residual
debt
Estimated
present value
financial charges
year 2012
(€/000)
a
b
Financial assets
Borrowings
Total Financing
Impact
on P&L
2012
+100 bps
(€/000)
c
31 December 2010
Impact
on P&L
2012
-50 bps
(€/000)
d
Residual
debt
Estimated
present value
financial charges
year 2011
(€/000)
a
b
Impact
on Account
2011
+100 bps
(€/000)
c
Impact
Account
2011
-100 bps
(€/000)
d
8,033
114
–
–
8.033
250
38
(19)
(1,637,661)
(45,702)
(10,736)
5,368
(1,484,365)
(30,784)
(9,091)
4,545
(1,629,628)
(45,588)
(10,736)
5,368
(1,476,332)
(30,533)
(9,053)
4,526
Notional
(€/000)
Impact
on P&L
Account
2012
+100 bps
(€/000)
k
Impact
on P&L
Account
2012
-50 bps
(€/000)
l
Notional
(€/000)
i
Differential
present value
estimated
year
2012
(€/000)
j
m
Differential
present value
estimated
year
2011
(€/000)
n
Impact
on Income
Statement
2011
+100 bps
(€/000)
o
Impact
on Income
Statement
2011
-50 bps
(€/000)
p
425,702
198,875
624,577
(5,555)
(3,112)
(8,667)
1,237
45
1,282
(954)
(23)
(976)
522,093
224,132
746,225
(7,810)
(3,874)
(11,684)
1,660
1,082
2,742
(2,742)
(553)
(3,295)
Derivative instruments
hedging cash flows
Other derivatives instruments
Total derivatives
Derivative instruments (shift in rates)
SENSITIVITY OF DERIVATIVE FAIR VALUE
31 December 2011
Notional
Net
Amount Fair Value
Derivative instruments
hedging cash flows
Net
Fair Value
(€/000)
(€/000)
+100 bps
(€/000)
Change
in Net
Fair Value
+100 bps
(€/000)
a
b
c
d=c-b
Impact
Impact on
on P&L Shareholders
Account
Equity
+100 bps
+100 bps
2010
2010
(€/000)
e=d-f
f
425,702
(28,390)
(14,573)
13,818
299
Other derivatives instruments 198,875
Total
624,577
(11,240)
(39,631)
(10,943)
(25,516)
297
14,115
297
596
Net
Fair Value
-100 bps
(€/000)
Change
in Net
Fair Value
-100 bps
(€/000)
Impact Impact on
on P&L Shareholders
Account
Equity
-100 bps
-100 bps
2010
2010
(€/000)
(€/000)
i=h-j
j
g
h=g-b
13,519
(35,955)
(7,565)
480
(8,045)
13,519
(11,394)
(47,349)
(154)
(7,718)
(154)
326
(8,045)
Net
Fair Value
-100 bps
(€/000)
Change
in Net
Fair Value
-100 bps
(€/000)
g
h=g-b
8,130
(25,721)
(7,595)
(1,164)
(6,431)
8,130
(14,637)
(40,358)
(250)
(7,845)
(250)
(1,414)
(6,431)
31 December 2010
Notional
Net
Amount Fair Value
Derivative instruments
hedging cash flows
Net
Fair Value
(€/000)
(€/000)
+100 bps
(€/000)
Change
in Net
Fair Value
+100 bps
(€/000)
a
b
c
d=c-b
Impact
Impact on
on P&L Shareholders
Account
Equity
+100 bps
+100 bps
2010
2010
(€/000)
e=d-f
f
522,093
(18,126)
(4,523)
13,603
5,473
Other derivatives instruments 224,132
Total
746,225
(14,387)
(32,513)
(13,909)
(18,432)
478
14,081
478
5,951
Impact Impact on
on P&L Shareholders
Account
Equity
-100 bps
-100 bps
2010
2010
(€/000)
(€/000)
i=h-j
j
Consolidated Financial Statements as of 31 December 2011
component of hedging derivatives).
Potential variations in the fair value of the effective component of existing hedging derivative
instruments produce an impact on the Shareholders’ equity.
104
api holding S.p.A. Consolidated Financial Statements 2011
Derivative instruments (shift in volatility)
SENSITIVITY OF DERIVATIVE FAIR VALUE
31 December 2011
Derivative instruments
cash flows
Other derivative
Total
Notional
Amount
Net
Fair Value
Net
Fair Value
(€/000)
(€/000)
+5%
volatility
(€/000)
Change
in Net
Fair Value
+5%
volatility
(€/000)
Net
Fair Value
d=c-b
Impact
on P&L
Account
+5%
volatility
2011
(€/000)
e
a
b
c
425,702
(28,390)
198,875
624,577
(11,240)
(39,631)
-5%
volatility
(€/000)
Change
in Net
Fair Value
-5%
volatility
(€/000)
f
g=f-b
Impact
on P&L
Account
-5%
volatility
2011
(€/000)
h
(24,598)
3,792
3,792
(23,850)
4,541
4,541
(11,240)
(35,838)
0
3,792
0
3,792
(11,240)
(35,090)
0
4,541
0
4,541
Net
Fair Value
-5%
volatility
(€/000)
Change
in Net
Fair Value
-5%
volatility
(€/000)
f
g=f-b
Impact
on P&L
Account
-5%
volatility
2010
(€/000)
h
31 December 2010
Derivative instruments
cash flows
Other derivative
Total
Notional
Amount
Net
Fair Value
Net
Fair Value
(€/000)
(€/000)
+5%
volatility
(€/000)
Change
in Net
Fair Value
+5%
volatility
(€/000)
a
b
c
d=c-b
Impact
on P&L
Account
+5%
volatility
2010
(€/000)
e
522,093
(18,126)
(17,488)
638
638
(17,509)
617
617
224,132
746,225
(14,387)
(32,513)
(14,386)
(31,874)
0
638
0
638
(14,404)
(31,913)
(18)
599
(18)
599
The interest rate risk sensitivity was appraised using internal appraisal models, based on generally
accepted principles:
■ regarding financing, by estimating a parallel variation of +100 basis points (+1%) and -50 basis
points (-0.5%) of the term structure of rates, applied solely to cash flows to be settled in 2012 (2011
for comparison purposes);
■ regarding derivative instruments, by estimating a parallel variation of +100 basis points (+1%) and
-50 basis points (-0.5%) of the interest rate forward contract and an average variation in volatility
of Euro rates of +/-5%.
The assumptions relating to the range of variations in market parameters used for shock simulation
purposes have been formulated on the basis of the analysis of the historical evolution in such
parameters with reference to a temporal horizon of 12 months.
Consolidated Financial Statements 2011 api holding S.p.A.
105
Exchange rate risk
Consolidated Financial Statements as of 31 December 2011
Both the main activity for supply of raw materials and marginal export activity, both expressed in
foreign currency, expose the Group to the risk of exchange rate changes in the Euro/dollar rate. The
policy applied provides for total hedging of the net risk - given by the value of the import and
subtracting the export component – through the systematic use of forwards. These forward contracts,
usually characterised by very short expiry dates (10 – 30 days), show a settlement currency which tends
to coincide with the currency used to pay the foreign supplier. Group policy provides for stipulation of
the forward contract solely in the presence of an irrevocable commitment. The translation exchange
rate risk is not currently managed because individual purchase agreements of currency are preceding
the date of payment of invoices stated in US$.
The potential impact on the Income Statement for 2011 (2010 for comparison purposes) connected
to the exchange rate risk is as follows:
■ revaluation/devaluation of assets and liabilities items stated in foreign currencies;
■ variation in fair value of existing derivative instruments hedging assets and liabilities items stated in
foreign currencies;
■ variations in the fair value of the ineffective component of existing derivative instruments hedging
highly probable transactions in foreign currencies.
Potential variations in the fair value of the effective component of existing hedging derivative
instruments produce an impact on the Shareholders’ equity.
Foreign currency exposure 2011
FOREIGN CURRENCY EXPOSURE (USD)
Exposure relating to
balance sheet items
Assets
(USD/000)
SENSITIVITY
Liabilities
(USD/000)
Net
(USD/000)
Δ P&L
Account
EUR/USD
Exchange
rate +5%
(€/000)
Δ P&L
Account
EUR/USD
Exchange
rate -5%
(€/000)
Cash
-
-
-
-
-
Trade receivables
-
-
-
-
(5,162)
Trade payable
-
(133,579)
(133,579)
5,162
Financial debt
-
-
-
-
-
Total gross exposure of balance sheet items
-
(133,579)
(133,579)
5,162
(5,162)
Forward purchase (notional amount)
-
116,100
116,100
(4,486)
4,486
Forward sales (notional amount)
-
-
-
-
-
Total net exposure of balance sheet items
-
(17,479)
(17,479)
675
(675)
FOREIGN CURRENCY EXPOSURE (USD)
Exposure from
highly probable
future transactions
Future
forecast
SENSITIVITY
Δ P&L
Account
EUR/USD
Exchange
rate +5%
(€/000)
Δ P&L Δ Shareholders’ Δ Shareholders’
Account
Equity
Equity
EUR/USD
EUR/USD
EUR/USD
Exchange
Exchange
Exchange
rate -5%
rate +5%
rate -5%
(€/000)
(€/000)
(€/000)
Net
(USD/000)
(USD/000)
Future
payment
forecast
(USD/000)
Amount of future cash flows
(component not recorded in the balance sheet)
-
-
-
Forward purchase (notional amount)
-
-
-
-
-
-
-
Forward sales (notional amount)
-
-
-
-
-
-
-
Total net exposure
future transaction
-
-
-
-
-
-
-
Total net exposure
-
(17,479)
(17,479)
675
(675)
-
-
106
api holding S.p.A. Consolidated Financial Statements 2011
Foreign currency exposure 2010
FOREIGN CURRENCY EXPOSURE (USD)
Exposure relating to
balance sheet items
Cash
SENSITIVITY
Assets
(USD/000)
Liabilities
(USD/000)
Net
(USD/000)
Δ P&L
Account
EUR/USD
Exchange
rate +5%
(€/000)
Δ P&L
Account
EUR/USD
Exchange
rate -5%
(€/000)
228
6,095
-
6,095
(228)
Trade receivables
-
-
-
-
-
Trade payable
-
(184,704)
(184,704)
6,912
(6,912)
Financial debt
Total gross exposure of balance sheet items
-
-
-
-
-
6,095
(184,704)
(178,609)
6,683
(6,683)
Forward purchase (notional amount)
-
216,333
216,333
(8,095)
8,095
Forward sales (notional amount)
-
(101,933)
(101,933)
3,814
(3,814)
6,095
(70,304)
(64,209)
2,403
(2,403)
Total net exposure of balance sheet items
FOREIGN CURRENCY EXPOSURE (USD)
Exposure from
highly probable
future transactions
Amount of future cash flows
(component not recorded in the balance sheet)
Future
forecast
SENSITIVITY
Net
(USD/000)
(USD/000)
Future
payment
forecast
(USD/000)
-
(41,500)
(41,500)
Δ P&L
Account
EUR/USD
Exchange
rate +5%
(€/000)
Δ P&L Δ Shareholders’ Δ Shareholders’
Account
Equity
Equity
EUR/USD
EUR/USD
EUR/USD
Exchange
Exchange
Exchange
rate -5%
rate +5%
rate -5%
(€/000)
(€/000)
(€/000)
Forward purchase (notional amount )
-
41,500
41,500
-
-
(1,553)
1,553
Forward sales (notional amount)
-
-
-
-
-
-
-
Total net exposure
future transaction
-
-
-
-
-
(1,553)
1,553
6,095
(70,304)
(64,209)
2,403
(2,403)
(1,553)
1,553
Total net exposure
The assumptions on the magnitude of variations in market parameters used for simulating the
shocks were formulated on the basis of the historical evolution of these parameters with respect to a
time horizon of 30-45 days, consistent with the expected duration of exposures.
Warehouse commodity risk
The risk associated with the variation in the prices of raw materials is managed by the company solely when
accompanied by events of an extraordinary nature, predominantly associated with refinery requirements.
During the financial year no hedging transaction has been carried associated with this type of risk.
Credit risk
The Group only deals with reliable clients. The balance of credits is monitored during the year as far
as outstanding and overdue amounts are concerned. It is Group policy to subject clients who require
delayed payment conditions to verification procedures on the relevant credit/solvency category.
The aggregate exposure of the Group to the credit risk, regarding 2011, is mainly associated with
trade receivables and amounts receivable from other Oil companies, mainly resulting from the core
business of the Company.
Since 2008, the subsidiary company api S.p.A. has carried out a factoring transaction with IFITALIA
(company of the BNL Group). With this transaction, api anonima transferred to IFITALIA a portion (for
a maximum amount of Euro 170 million a month) of its own trade receivables with wholesale
customers. Due to the guarantees provided by api holding to IFITALIA, in order to draw up these
consolidated financial statements, it was not possible to carry out the derecognition of the positions
granted, which thus remain among the assets of the Company.
No significant concentrations of credit risk exposure should be underlined towards single debtors.
All positions relating to trade receivables – both at the end of 2011 and 2010, have an expiry date
of less than 12 months.
Liquidity risk
The financial flexibility of the group is essentially guaranteed by the effect of continual and dynamic
recourse to very short term forms of financing (current account overdrafts, “hot money” etc.).
Illustrated below is a breakdown of the existing liabilities, with reference to the years 2011 and
2010, referring to financial instruments for the residual duration.
31 December 2011
FINANCIAL DEBT
Due date
Within 1 month
Principal amount
(€/000)
Interest amount
(€/000)
a
b
(185)
(2,574)
Trade
payables
(€/000)
c
Derivatives
Instruments
Total
(€/000)
d
e=a+b+c+d
1,523
(1,236)
(49,998)
1 to 3 months
(42,901)
(6,893)
(204)
3 to 6 months
(71,439)
(15,834)
(1,412)
(88,685)
6 to 12 months
(760,052)
(23,249)
(2,779)
(786,080)
1 to 2 years
(167,565)
(18,383)
(7,016)
(192,965)
2 to 3 years
(148,593)
(16,927)
(3,923)
(169,442)
3 to 5 years
(126,800)
(28,669)
(4,198)
(159,667)
5 to 10 years
(156,448)
(50,470)
(775)
(207,693)
After 10 years
(163,678)
(14,403)
620
(177,461)
(1,637,661)
(177,402)
-
(18,164)
(1,833,226)
Derivatives
Instruments
Total
(€/000)
d
e=a+b+c+d
Total
31 December 2010
FINANCIAL DEBT
Due date
Within 1 month
Principal amount
(€/000)
Interest amount
(€/000)
a
b
Trade
payables
(€/000)
c
(82)
(1,408)
(139,596)
(1,575)
(142,661)
1 to 3 months
(49,206)
(5,420)
(360,916)
(830)
(416,372)
3 to 6 months
(114,314)
(9,814)
(3,041)
(127,170)
6 to 12 months
(488,308)
(18,066)
(3,055)
(509,428)
1 to 2 years
(265,779)
(19,782)
(4,986)
(290,546)
2 to 3 years
(120,537)
(18,008)
(3,087)
(141,633)
3 to 5 years
(168,301)
(31,699)
(4,338)
(204,339)
5 to 10 years
(184,287)
(41,078)
(1,996)
(227,360)
After 10 years
(93,551)
(10,654)
-
(104,206)
(1,484,365)
(155,930)
(22,907)
(2,163,714)
Total
(500,512)
107
Consolidated Financial Statements as of 31 December 2011
Consolidated Financial Statements 2011 api holding S.p.A.
108
api holding S.p.A. Consolidated Financial Statements 2011
Estimated future charges implicit in financing and expected future differentials implicit in derivative
instruments were determined on the basis of the forward structure of the Euro interest rate and of the
Euro/Dollar exchange rate current on the reference dates (31 December 2011 and 31 December 2010).
42. RELATED PARTIES TRANSACTIONS
Transactions entered into by the api holding Group with related parties involve the exchange of
goods and the provision of services. All the transactions form part of ordinary management and are
generally regulated on market conditions, that is on the conditions that would have been applied
between two independent parties. All transactions put in place are concluded in the interest of the
company.
Details are given below of transactions of a commercial, miscellaneous and financial nature put in
place with related parties in compliance with the provisions of IAS 24 in relation to financial statement
information on transactions with related parties.
We also present, broken down by type of activity, the economic entity of contractual relations
entered into with the controlling company and other group companies for 2011:
2011 Euro/thousand
OIL CONSUMPTION
APISEM S.P.A.
ABRUZZO COSTIERO S.R.L.
REVENUES
COSTS
30
3,859
3,135
Within the context of centralised cash management, we also provide details of financing flows with
respect to other Group companies.
2011 Euro/thousand
FINANCIAL RECEIVABLES
BIOMASSE ITALIA S.P.A
5,029
BIOMASSE CROTONE S.P.A
2,500
ABRUZZO COSTIERO S.R.L.
70
Rome, 18 May 2012
api holding S.p.A.
The Chairman
Cav. del Lav. Dott. Aldo Maria Brachetti Peretti
3
Report of the Board of Statutory Auditors
Consolidated Financial Statements 2011 api holding S.p.A.
111
api holding S.p.A.
Registered office : Via Salaria 1322 - 00138 Rome
Share Capital Euro 361,200.00 fully paid
Rome Chamber of Commerce and Economic Administrative Roster (R.E.A.) No. 660678
Tax Code and Companies’ Register of Rome No. 08505000581
VAT Code 02073821007
***
Board of statutory auditors’ report
to the consolidated financial statements
at 31 decemBer 2011
We regularly exchanged information with the group auditing and internal control functions, the independent auditors and the supervisory body.
No events worthy of mention emerged during the meetings.
To the extent of our responsibility we can confirm that the statements in question comply with the provisions set out by the International accounting standards (IFRS) for the consolidation.
The separate financial statements closed with a profit of Euro 3.0 million, the allocation of which is proposed for your decision by the Board of Directors. The shareholders’ equity stands at Euro 243.1 million.
In our opinion and to the extent of our responsibility we consider that the aforementioned financial statements can be approved.
We, within the scope of our competencies, share our considerations to Consolidated Financial
Statements, which are submitted to you for approval.
You are kindly reminded that our mandate ceases with the Financial Statements for the financial year
ended 31 December 2011. We thank you for the trust placed in us and invite you to appoint the new
control body.
Rome, 1 June 2012
The Board of Statutory Auditors
Dr. Piér Andrea Frè Torelli Massini (Chairman)
Dr. Mario Casini (Statutory Auditor)
Dr. Frabrizio Scanu (Statutory Auditor)
Report of the Board of Statutory Auditors
Dear Shareholders,
during 2011 we continued to carry out administrative supervision duties, given that the task of auditing the corporate accounts is entrusted to Reconta Ernst & Young SpA.
Our work involved participation in all the Board of Directors’ meetings and regular contact and reports
on the course of operations with the top management.
4
Independent Auditors’ Report
115
Independent Auditors’ Report
Consolidated Financial Statements 2011 api holding S.p.A.
116
api holding S.p.A. Consolidated Financial Statements 2011
5
Summary of key financial data
as of 31 December 2011
118
api holding S.p.A. Consolidated Financial Statements 2011
BALANCE SHEET IAS/IFRS
31 December 2011
Property, plant and machinery
Goodwill
Intangible fixed assets
api
holding S.p.A.
Rome
(euro)
fin.bra
S.A.
Luxembourg
(euro)
api nòva
energia S.r.l.
Rome
(euro)
api real
estate S.r.l.
Rome
(euro)
2,118,590
0
4,411,526
50,835,276
0
0
0
0
9,977
0
6,242,293
600
Equity Investments
261,537,766
145,793,472
22,715,937
36,605,194
Other assets
172,929,897
0
76,230,228
3,317,061
0
0
0
0
Derivative instrument assets
Prepaid taxation
Non-Current assets
Inventories
Trade and other debtors
Financial current assets
973,294
0
1,197,887
0
437,569,524
145,793,472
110,797,871
90,758,131
0
0
0
0
34,385,332
0
21,202,469
193,095
0
0
40,936,280
0
31,593
0
796,343
114,167
Tax receivables
2,564,975
1,714
0
0
Cash at bank and in hand and cash equivalents
8,480,005
782
2,029
342,893
Other assets
Discontinued assets
Current Assets
TOTAL ASSETS
Shareholders’ equity
Medium to long term debt
0
0
0
0
45,461,905
2,496
62,937,121
650,155
483,031,429
145,795,968
173,734,992
91,408,286
238,150,114
80,075,573
22,521,759
34,413,984
54,500,000
0
107,258,420
52,772,630
Employee benefits
13,499
0
243,696
61,256
Deferred taxation provision
33,000
0
137,121
1,682,526
750,000
1,699
0
390,000
Medium to long term provisions
Other liabilities
0
0
0
0
Total non-current liabilities
55,296,499
1,699
107,639,237
54,906,412
Trade and other payables
29,854,628
13,018,033
5,936,143
1,763,823
0
0
0
0,
157,296,838
52,697,386
35,228,933
0
0
0
0
0
Other liabilities
1,158,902
3,277
2,269,267
289,269
Tax payables
1,274,448
0
139,653
34,798
Short-term portion of m/l-term debt
0
0
0
0
Liabilities relating to discontinued assets
0
0
0
0
189,584,816
65,718,696
43,573,996
2,087,890
483,031,429
145,795,968
173,734,992
91,408,286
Derivative instrument liabilities
Short term debt
Short-term portion of m/l-term debt
Total current liabilities
TOTAL LIABILITIES
Consolidated Financial Statements 2011 api holding S.p.A.
119
PROFIT AND LOSS ACCOUNT IAS/IFRS
31 December 2011
api
holding S.p.A.
Rome
(euro)
fin,bra
S.A.
Luxembourg
(euro)
5,374,402
0
api nòva
energia S.r.l.
Rome
(euro)
api real
estate S.r.l.
Rome
(euro)
ASSETS - CONTINUING OPERATIONS
Ricavi
Revenues from barters
441,406
4,693,606
0
0
0
0
427,644
0
1,176,488
1,326,892
Increase in assets for internal work
0
0
0
0
Change in inventories
0
0
0
0
Other revenues
Extraordinary income
0
0
0
0
5,802,046
0
1,617,894
6,020,498
Costs for raw materials and consumables
0
0
0
0
Costs for barters
0
0
0
0
(1,474,869)
(15,302)
(2,458,872)
(1,736,420)
(132,833)
0
(547,950)
(154,418)
(3,151,207)
0
(3,392,011)
(289,948)
Amortisation and depreciation and write-downs
(692,195)
(959)
(152,259)
(1,180,611)
Provisions for Risks
(250,000)
0
0
(10,000)
Other operating costs
(562,436)
(62)
(786,310)
(438,100)
0
0
0
0
TOTAL
(6,263,540)
(16,323)
(7,337,402)
(3,809,497)
PROFIT
(461,494)
(16,323)
(5,719,508)
2,211,001
(1,116,130)
(1,475,158)
11,035,367
(1,608,577)
0
0
(112,706)
0
TOTAL
Costs for Services
Costs for Use of third party assets
Staff cost
Extraordinary expenses
FINANCIAL MANAGEMENT
Financial income (charges)
Adjustments to financial assets
Income (and charges) from valuation using the NE method
0
0
0
0
TOTAL
(1,116,130)
(1,475,158)
10,922,661
(1,608,577)
RESULT BEFORE TAXATION
(1,577,624)
(1,491,481)
5,203,153
602,424
Current taxes
(436,515)
(1,575)
1,048,390
(608,112)
Deferred Taxes - Income Statement
0
0
0
15,236
Prepaid Taxes - Income Statement
44,353
0
(126)
23,887
(392,162)
(1,575)
1,048,264
(568,989)
TOTAL
Change in Cash Flow Hedge Reserve (CFH)
RESULT FOR THE PERIOD NET OF TAXATION
0
0
0
0
(1,969,786)
(1,493,056)
6,251,417
33,435
Summary of key financial data as of 31 December 2011
TAXATION
120
api holding S.p.A. Consolidated Financial Statements 2011
BALANCE SHEET IAS/IFRS
31 December 2011
api
anonima petroli
italiana S.p.A.
Rome
(euro)
api raffineria
di ancona S.p.A.
api Energia
S.p.A.
Ancona
(euro)
Rome
(euro)
Property, plant and machinery
204,622,541
323,246,223
349,749,364
Goodwill
108,855,428
0
0
Intangible fixed assets
115,868,372
96,416
4,934,402
Equity Investments
107,755,555
130,000
0
Other assets
4,724,496
64,711
15,223
Derivative instrument assets
1,174,069
0
0
20,046,197
21,859,886
34,023,320
Non-Current assets
563,046,657
345,397,237
388,722,309
Inventories
409,012,912
19,148,762
12,275,692
Trade and other debtors
558,574,159
28,600,309
84,930,641
Financial current assets
361,800,210
0
0
Prepaid taxation
Other assets
Tax receivables
Cash at bank and in hand and cash equivalents
Discontinued assets
Current Assets
42,103,491
510,614
843,580
5,725,850
5,372,287
3,994,040
41,497,111
21,310
99,588,437
0
0
0
1,418,713,732
53,653,282
201,582,390
1,981,760,389
399,050,519
590,304,699
Shareholders’ equity
330,050,280
20,840,696
152,046,104
Medium to long term debt
211,911,727
0
155,532,814
TOTAL ASSETS
Employee benefits
5,770,206
6,110,714
147,425
Deferred taxation provision
67,373,530
18,063,190
45,315,988
Medium to long term provisions
48,138,358
7,796,544
9,409,195
0
0
0
Total non-current liabilities
333,193,821
31,970,448
210,405,421
Trade and other payables
536,218,092
56,744,588
46,455,630
872,919
0
14,593,224
641,902,100
283,067,939
24,846,830
Other liabilities
Derivative instrument liabilities
Short term debt
Short-term portion of m/l-term debt
Other liabilities
Tax payables
Short-term portion of m/l-term debt
Liabilities relating to discontinued assets
Total current liabilities
TOTAL LIABILITIES
0
0
0
14,792,588
4,240,369
138,739,280
124,730,590
2,186,479
3,218,210
0
0
0
0
0
0
1,318,516,289
346,239,375
227,853,173
1,981,760,389
399,050,519
590,304,699
Consolidated Financial Statements 2011 api holding S.p.A.
121
PROFIT AND LOSS ACCOUNT IAS/IFRS
31 December 2011
api
anonima petroli
italiana S.p.A.
Rome
(euro)
api raffineria
di ancona S.p.A.
api Energia
S.p.A.
Ancona
(euro)
Rome
(euro)
ASSETS - CONTINUING OPERATIONS
Revenues
3,453,199,176
65,842,052
276,995,849
Revenues from barters
(735,820,677)
0
0
Other revenues
101,422,448
23,755,395
26,040,193
Increase in assets for internal work
0
0
0
Change in inventories
0
0
0
Extraordinary income
0
0
0
2,818,800,947
89,597,447
303,036,042
(2,196,335,941)
(8,102,779)
(119,728,927)
0
0
0
(359,439,234)
(53,337,463)
(40,771,707)
TOTAL
Costs for raw materials and consumables
Costs for barters
Costs for Services
Costs for Use of third party assets
(31,724,078)
(1,109,792)
(940,099)
Staff cost
(32,895,155)
(27,932,562)
(1,190,556)
Amortisation and depreciation and write-downs
(27,358,871)
(34,051,147)
(34,541,659)
Provisions for Risks
(16,774,786)
(405,000)
(9,409,195)
Other operating costs
(105,038,276)
(3,429,948)
(19,594,167)
0
0
0
(2,769,566,341)
(128,368,690)
(226,176,312)
49,234,605
(38,771,243)
76,859,730
(11,278,914)
(7,431,618)
(6,993,262)
Adjustments to financial assets
0
0
0
Income (and charges) from valuation using the NE method
0
0
0
(11,278,914)
(7,431,618)
(6,993,262)
37,955,692
(46,202,861)
69,866,468
(13,652,851)
0
(22,198,061)
Deferred Taxes - Income Statement
(2,174,629)
3,188,213
(2,910,114)
Prepaid Taxes - Income Statement
1,233,736
7,765,088
(4,726,101)
(14,593,744)
10,953,301
(29,834,276)
(1,159,432)
0
(1,295,295)
22,202,516
(35,249,561)
38,736,897
Extraordinary expenses
TOTAL
PROFIT
FINANCIAL MANAGEMENT
Financial income (charges)
TOTAL
RESULT BEFORE TAXATION
Current taxes
TOTAL
Change in Cash Flow Hedge Reserve (CFH)
RESULT FOR THE PERIOD NET OF TAXATION
Summary of key financial data as of 31 December 2011
ITAXATION
122
api holding S.p.A. Consolidated Financial Statements 2011
BALANCE SHEET IAS/IFRS
31 December 2011
apioil
limited
api services
limited
IP services
S.r.l.
Bermuda
(USD)
London
(Lst)
Rome
(Euro)
Property, plant and machinery
0
1,514
3,125
Goodwill
0
0
0
Intangible fixed assets
0
0
0
Equity Investments
0
0
0
Other assets
0
0
955
Derivative instrument assets
0
0
0
Prepaid taxation
0
0
0
Non-Current assets
0
1,514
4,080
Inventories
0
0
727,897
Trade and other debtors
177,977,555
74,316
851,065
Financial current assets
0
0
0
179,720
0
239,138
0
0
1,868
5,916,760
483,939
1,157,068
0
0
0
Other assets
Tax receivables
Cash at bank and in hand and cash equivalents
Discontinued assets
Current Assets
184,074,035
558,255
2,977,036
184,074,035
559,769
2,981,116
6,797,612
467,014
360,596
Medium to long term debt
0
0
0
Employee benefits
0
0
0
Deferred taxation provision
0
0
0
Medium to long term provisions
0
0
0
Total non-current liabilities
0
0
0
TOTAL ASSETS
Shareholders’ equity
Trade and other payables
176,791,176
92,755
2,599,517
Derivative instrument liabilities
0
0
0
Short term debt
0
0
0
Short-term portion of m/l-term debt
0
0
0
Other liabilities
485,247
0
222
Tax payables
0
0
20,782
Short-term portion of m/l-term debt
0
0
0
Liabilities relating to discontinued assets
0
0
0
Total current liabilities
TOTAL LIABILITIES
177,276,423
92,755
2,620,520
184,074,035
559,769
2,981,116
Consolidated Financial Statements 2011 api holding S.p.A.
123
PROFIT AND LOSS ACCOUNT IAS/IFRS
31 December 2011
apioil
limited
api services
limited
IP services
S.r.l.
Bermuda
(USD)
London
(Lst)
Rome
(Euro)
ASSETS - CONTINUING OPERATIONS
Revenues
452,736,422
297,309
25,345,429
Revenues from barters
0
0
0
Other revenues
0
164,577
116,959
Increase in assets for internal work
0
0
0
Change in inventories
0
0
0
Extraordinary income
0
0
0
TOTAL
452,736,422
461,886
25,462,388
Costs for raw materials and consumables
(450,236,536)
0
(24,609,423)
0
0
0
(526,186)
(150,697)
(390,179))
Costs for barters
Costs for Services
Costs for Use of third party assets
0
0
(3,484)
Staff cost
0
(133,993)
0
Amortisation and depreciation and write-downs
0
0
(750)
Provisions for Risks
0
0
0
Other operating costs
0
0
(76,252)
Extraordinary expenses
0
0
0
(450,762,722)
(284,690)
(25,080,088)
1,973,700
177,196
382,300
(124,510)
1,151
(59,992)
Adjustments to financial assets
0
0
0
Income (and charges) from valuation using the NE method
0
0
0
TOTAL
PROFIT
FINANCIAL MANAGEMENT
Financial income (charges)
TOTAL
(124,510)
1,151
(59,992)
RESULT BEFORE TAXATION
1,849,190
178,347
322,308
(434,297)
(50,844)
(115,349)
Deferred Taxes - Income Statement
0
0
0
Prepaid Taxes - Income Statement
0
0
0
(434,297)
(50,844)
(115,349)
0
0
0
1,414,893
127,503
206,959
Current taxes
TOTAL
Change in Cash Flow Hedge Reserve (CFH)
RESULT FOR THE PERIOD NET OF TAXATION
Summary of key financial data as of 31 December 2011
ITAXATION
124
api holding S.p.A. Consolidated Financial Statements 2011
BALANCE SHEET IAS/IFRS
31 December 2011
Apifin S.r.l.
in liquidazione
Dialco S.r.l.
Festival S.r.l.
GRC S.r.l
Rome
(Euro)
Bari
(Euro)
Rome
(Euro)
Rome
(Euro)
Property, plant and machinery
0
1,428
3,096
5,802
Goodwill
0
0
0
0
Intangible fixed assets
0
1,824
1,007
0
Equity Investments
0
0
0
0
600,000
0
0
0
Derivative instrument assets
0
0
0
0
Prepaid taxation
0
0
300,161
2,190
Other assets
Non-Current assets
600,000
3,252
304,264
7,992
Inventories
0
134,381
0
0
Trade and other debtors
0
5,023,502
611,388
840,597
Financial current assets
0
0
0
0
3,230
1,111
52,716
0
0
184,249
34,932
25,507
1,848
2,171,655
18,131
62,280
0
0
0
0
Other assets
Tax receivables
Cash at bank and in hand and cash equivalents
Discontinued assets
Current Assets
5,078
7,514,898
717,167
928,384
605,078
7,518,150
1,021,431
936,376
571,161
860,507
745,437
731,975
Medium to long term debt
0
0
0
0
Employee benefits
0
49,403
36,560
120,198
Deferred taxation provision
0
0
0
0
Medium to long term provisions
0
1,490
0
0
Total non-current liabilities
0
50,893
36,560
120,198
TOTAL ASSETS
Shareholders’ equity
Trade and other payables
33,917
6,534,160
145,193
45,979
Derivative instrument liabilities
0
0
0
0
Short term debt
0
56,173
0
0
Short-term portion of m/l-term debt
0
0
0
0
Other liabilities
0
10,011
18,501
38,224
Tax payables
0
6,406
75,740
0
Short-term portion of m/l-term debt
0
0
0
0
Liabilities relating to discontinued assets
0
0
0
0
Total current liabilities
TOTAL LIABILITIES
33,917
6,606,750
239,434
84,203
605,078
7,518,150
1,021,431
936,376
Consolidated Financial Statements 2011 api holding S.p.A.
125
PROFIT AND LOSS ACCOUNT IAS/IFRS
31 December 2011
Apifin S.r.l.
in liquidazione
Dialco S.r.l.
Festival S.r.l.
GRC S.r.l
Rome
(Euro)
Bari
(Euro)
Rome
(Euro)
Rome
(Euro)
ASSETS - CONTINUING OPERATIONS
Revenues
0
23,692,708
0
650,278
Revenues from barters
0
0
0
0
Other revenues
0
5,150
987,022
5,360
Increase in assets for internal work
0
0
0
0
Change in inventories
0
0
0
0
Extraordinary income
0
0
0
0
TOTAL
0
23,697,858
987,022
655,638
Costs for raw materials and consumables
0
(22,905,003)
(5,933)
0
Costs for barters
0
0
0
0
(8,685)
(629,709)
(254,494)
(175,469)
Costs for Services
Costs for Use of third party assets
0
(67)
(250)
(31,894)
Staff cost
0
(76,082)
(177,521)
(371,718)
Amortisation and depreciation and write-downs
0
(899)
(266,498)
(2,221)
Provisions for Risks
0
(25,100)
(20,000)
0
(881)
(24,076)
(45,047)
(3,377)
0
0
0
0
TOTAL
(9,566)
(23,660,936)
(769,743)
(584,679)
PROFIT
(9,566)
36,922
217,279
70,959
(158)
2,664
(2,114)
3,209
Adjustments to financial assets
0
0
0
0
Income (and charges) from valuation using the NE method
0
0
0
0
Other operating costs
Extraordinary expenses
FINANCIAL MANAGEMENT
Financial income (charges)
TOTAL
RESULT BEFORE TAXATION
(158)
2,664
(2,114)
3,209
(9,724)
39,586
215,165
74,168
0
(19,015)
(111,116)
(38,028)
Current taxes
Deferred Taxes - Income Statement
0
0
0
0
Prepaid Taxes - Income Statement
0
0
36,937
1,355
TOTAL
0
(19,015)
(74,179)
(36,673)
Change in Cash Flow Hedge Reserve (CFH)
0
0
0
0
(9,724)
20,571
140,986
37,495
RESULT FOR THE PERIOD NET OF TAXATION
Summary of key financial data as of 31 December 2011
ITAXATION
126
api holding S.p.A. Consolidated Financial Statements 2011
BALANCE SHEET IAS/IFRS
31 December 2011
Property, plant and machinery
Goodwill
Intangible fixed assets
Equity Investments
Ser S.r.l.
Ser1 S.p.A.
Palermo
(Euro)
Rome
(Euro)
180,415,027
185,935,443
0
0
9,773,673
10,839,258
4,582,609
0
173,289,218
12,777,573
0
0
14,292,417
0
382,352,944
209,552,274
21,363
0
Trade and other debtors
12,892,837
2,646,357
Financial current assets
0
0
10,215,858
7,279,468
0
96,853
19,534,319
14,967,912
0
0
Other assets
Derivative instrument assets
Prepaid taxation
Non-Current assets
Inventories
Other assets
Tax receivables
Cash at bank and in hand and cash equivalents
Discontinued assets
Current Assets
TOTAL ASSETS
Shareholders’ equity
Medium to long term debt
Employee benefits
42,664,377
24,990,590
425,017,321
234,542,864
(2,475,486)
6,932,788
367,701,390
201,800,627
176,569
12,788
Deferred taxation provision
0
0
Medium to long term provisions
0
0
Other liabilities
0
0
Total non-current liabilities
367,877,959
201,813,415
Trade and other payables
25,265,421
21,750,467
Derivative instrument liabilities
20,110,739
0
Short term debt
12,777,572
0
Short-term portion of m/l-term debt
Other liabilities
Tax payables
Short-term portion of m/l-term debt
Liabilities relating to discontinued assets
Total current liabilities
TOTAL LIABILITIES
0
0
232,618
3,654,524
1,228,498
391,671
0
0
0
0
59,614,848
25,796,662
425,017,321
234,542,864
Consolidated Financial Statements 2011 api holding S.p.A.
127
PROFIT AND LOSS ACCOUNT IAS/IFRS
31 December 2011
Ser S.r.l.
Ser1 S.p.A.
Palermo
(Euro)
Rome
(Euro)
30,996,963
12,010,312
0
0
ASSETS - CONTINUING OPERATIONS
Revenues
Revenues from barters
Other revenues
1,590,305
2,572,531
Increase in assets for internal work
0
0
Change in inventories
0
0
Extraordinary income
0
0
32,587,268
14,582,843
(35,068)
(1,544)
0
0
Costs for Services
(2,874,562)
(1,823,409)
Costs for Use of third party assets
(2,199,375)
(449,122)
Staff cost
(1,502,653)
(71,403)
(10,937,117)
(5,089,184)
0
0
(1,371,906)
(189,605)
0
0
TOTAL
(18,920,681)
(7,624,267)
PROFIT
13,666,587
6,958,576
(6,297,116)
(4,658,982)
(258)
0
0
0
(6,297,374)
(4,658,982)
7,369,213
2,299,594
Current taxes
(1,281,769)
0
Deferred Taxes - Income Statement
(1,495,956)
(1,055,784)
Prepaid Taxes - Income Statement
0
0
(2,777,725)
(1,055,784)
0
0
4,591,488
1,243,810
TOTAL
Costs for raw materials and consumables
Costs for barters
Amortisation and depreciation and write-downs
Provisions for Risks
Other operating costs
Extraordinary expenses
FINANCIAL MANAGEMENT
Financial income (charges)
Adjustments to financial assets
Income (and charges) from valuation using the NE method
TOTAL
RESULT BEFORE TAXATION
TOTAL
Change in Cash Flow Hedge Reserve (CFH)
RESULT FOR THE PERIOD NET OF TAXATION
Summary of key financial data as of 31 December 2011
ITAXATION
ARTWORK, DESIGN AND PRINT BY
Marchesi Grafiche Editoriali S.p.A.
Via Flaminia, 995/997 - 00189 Rome
T +39 06 33216 1 - F +39 06 33216 420
www.marchesigrafiche.it
[email protected]