Consolidated Financial Statements >
CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES
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| 2012 annual report prysmian group
The most significant accounting policies and standards used in preparing the consolidated financial statements
and Group financial information are set out below.
B. ACCOUNTING POLICIES AND STANDARDS
B.1
BASIS OF PREPARATION
The present financial statements have been prepared on a
going concern basis, with the directors having assessed that
there are no financial, operating or other kind of indicators
that might provide evidence of the Group’s inability to meet
its obligations in the foreseeable future and particularly in the
next 12 months.
In particular, the Group’s estimates and projections have taken
into account the increase in net debt resulting from the Draka
acquisition, possible developments in the investigations by
the European Commission and other jurisdictions into alleged
anti-competitive practices in the high voltage underground
and submarine cables market, as well as the risk factors
described in the Directors’ Report, and confirm Prysmian
Group’s ability to operate as a going concern and to comply
with its financial covenants.
Section C. Financial risk management and Section C.1 Capital
risk management of these Explanatory Notes contain a
description of how the Group manages financial risks,
including liquidity and capital risks.
In application of Legislative Decree 38 of 28 February 2005
“Exercise of the options envisaged by article 5 of European
Regulation 1606/2002 on international accounting standards”,
the Company has prepared its consolidated financial
statements in accordance with the international accounting
and financial reporting standards (hereafter also “IFRS”)
adopted by the European Union.
The term “IFRS” refers to all the International Financial
Reporting Standards, all the International Accounting
Standards (“IAS”), and all the interpretations of the
International Financial Reporting Interpretations Committee
(“IFRIC”), previously known as the Standing Interpretations
Committee (“SIC”).
IFRS have been applied consistently to all the periods
presented in this document. The consolidated financial
statements have been prepared in accordance with IFRS
and related best practice; any future guidance and new
interpretations will be reflected in subsequent years, in
the manner established from time to time by the relevant
accounting standards.
The Group has elected to present its income statement
according to the nature of expenses, whereas assets and
liabilities in the statement of financial position are classified
as current or non-current. The statement of cash flows is
prepared using the indirect method. The Group has also
applied the provisions of Consob Resolution 15519 dated 27
July 2006 concerning financial statement formats and the
requirements of Consob Communication 6064293 dated 28
July 2006 regarding disclosures.
During 2009 and 2010, Consob (the Italian Securities and
Exchange Commission), together with the Bank of Italy and
ISVAP (the Italian insurance industry regulator), issued two
documents (numbers 2 and 4): “Disclosures in financial
reports about business continuity, financial risks, asset
impairment tests and uncertainties in the use of estimates”
and “Disclosures in financial reports about asset impairment
tests, about contractual clauses in debt financing, about debt
restructuring and about the fair value hierarchy”.
The financial statements have been prepared on the historical
cost basis, except for the valuation of certain financial assets
and liabilities, including derivatives, which must be reported
using the fair value method.
For the sake of consistency with the current presentation,
the consolidated income statement at 31 December 2011,
presented in the annual financial statements for comparative
purposes, contains some reclassifications compared with the
previously published figures. In particular, the cost of goods for
resale and related change in inventories have been reclassified
from “Other expenses” to “Raw materials, consumables used
and goods for resale”. The amount of the reclassification at 31
December 2011 is Euro 41 million.
