9.17 Borrowings
31.12.2008 31.12.2007
(EUR 000) Current Non-current Total Current Non-current Total
Bank payables 8,713 3,315 12,028 11,491 3,697 15,188
Finance lease payables 27 - 27 8 32 40
Other borrowings 536 2,432 2,968 1,102 3,239 4,341
Total 9,276 5,747 15,023 12,601 6,968 19,569
Changes during the period were as follows:
(EUR 000) 31.12.2007 New position Repayments
Change in scope of
consolidation changesOther 31.12.2008
Bank payables 15,188 - (1,764) (228) (1,168) 12,028
Finance lease payables 40 - (31) 18 27
Other borrowings 4,341 1,036 (362) - (2,047) 2,968
Total 19,569 1,036 (2,157) (228) (3,197) 15,023
Bank payables
Bank payables, equal to EUR 12,028 thousand, refer for EUR 8,315 thousand to the Signalling Business Unit, for EUR 3,698 thousand to the Transport Systems Business Unit and for EUR 15 thousand to the Group Parent Ansaldo STS SpA.
With regard to the Signalling Business Unit, these mainly refer to the short-term exposure for EUR 6,052 thousand of the Indian subsidiary of the Asia Pacifi c area, for EUR 735 thousand of the Australian subsidiary Ansaldo STS Australia, for EUR 1,446 thousand of the Italian subsidiary ASF for facilitated fi nancing obtained in relation to research programmes.
With regard to the Transport Systems Business Unit, these refer to facilitated fi nancing acquired under Law 346/88 for research activities.
Finance lease payables
The payables regard the tangible assets held by the Group under fi nance lease contracts. The amount at 31 December 2008 was EUR 27 thousand compared with EUR 40 thousand at 31 December 2007 and refers to the fi nance lease of automobiles by the Signalling Business Unit’s Australian subsidiary, Ansaldo STS Australia.
Due to other lenders
This item showed a negative variation of EUR 1,373 thousand mainly due to the redemption of instalments falling due in 2008 by Ansaldo Segnalamento Ferroviario.
9.18 Provisions for risks and charges and contingent current liabilities
(EUR 000) Penalties warrantiesProduct disputesLabour Provision for taxes
Contractual risks and charges
Disputes with third
parties restructuringProvision for Other Total Balance at 31 December 2007 87 13,284 394 1,517 7,893 893 - 2,147 26,215 Reclassifi cations - - - - (596) - - 1,800 1,204 Allocations 3 2,525 65 43 1,298 - 1,635 2,722 8,291 Reversals - (820) - (6) (3,549) - - - (4,375) Uses - (14) (100) (520) (99) - (1,007) (756) (2,496) Other changes - (90) - - (88) - 36 (156) (298) Balance at 31 December 2008 90 14,885 359 1,034 4,859 893 664 5,757 28,541 Current 87 13,284 394 1,517 7,893 893 - 2,147 26,215 Non-current - - - - - - Balance at 31 December 2007 87 13,284 394 1,517 7,893 893 - 2,147 26,215 Current 90 14,885 359 1,034 4,859 893 664 5,757 28,541 Non-current - - - - Balance at 31 December 2008 90 14,885 359 1,034 4,859 893 664 5,757 28,541
The risk provisions at 31 December 2008 amounted to EUR 28,541 thousand increasing by EUR 2,326 thousand compared with 31 December 2007.
In relation to the risk provisions, it should be noted that the companies of the Ansaldo STS Group work in sectors and markets where many disputes - both those initiated by the Group or those initiated by third parties against the Group - are resolved only after a considerable time-lag, especially where the party being dealt with is a government body.
To the best of our current knowledge, the various disputes that could give rise to a liability on the part of the Group that are not covered by a specifi c provision can be resolved in a satisfactory manner without a signifi cant impact on results.
Obviously, in accordance with the applicable accounting standards, provisions have been made for any quantifi able liability that is likely to arise.
As to litigation, the following is noted:
• Ansaldo STS SpA is not directly involved in any litigation;
• none of the subsidiaries is involved in litigation that is so signifi cant or risky as to require specifi c further disclosure other than that provided in the notes;
• for litigation in which a subsidiary is involved as a defendant and in which, on the basis of a prudent evaluation, an adverse outcome is likely, the relevant companies have established provisions to cover such eventuality.
Iricav Due Consortium/Treno Alta Velocità (TAV) SpA
The Concessions released to T.A.V. by the Ente Ferrovie dello Stato for the Milan-Verona, Verona-Padua and Milan-Genoa lines and to the General Contractors were revoked at the beginning of 2007 by the Italian Government.
The decree also establishes that, with respect to the termination of contract, the General Contractors will be entitled to compensation to the extent of the actual loss. The Iricav Due Consortium, which had already initiated arbitration proceedings to assess TAV’s failure to perform its obligations - complaining specifi cally about the failure to perform acts of co-operation, including the development of the preliminary design and the raising of fi nancial resources - following the revocation of the concession, has served notice of an appeal fi led to the Lazio Regional Administrative Court (TAR).
The aim was to obtain the cancellation of the orders of the Ministry of Transportation and RFI SpA and the submission of the demand for a preliminary ruling to the Court of Justice of the European Communities.
In fact, in April 2007 TAV SpA had already formally presented to the Consortium a claim for the repayment of the advance and the related interest accrued to the date of payment and for the delivery of all project documents presented during the concession period.
The Lazio TAR suspended the effectiveness of the orders, subsequent to the law, with which RFI SpA revoked the concession and with which TAV SpA terminated contracts with the three General Contractors. The Lazio TAR also transferred the case to the European Court of Justice to verify, as requested by the appellant fi rms, the alleged incompatibility with European regulations.
TAV SpA appealed against this ruling to the Council of State to obtain the revocation of the suspension of the ruling of the court of fi rst instance, without prejudice to the ruling on the main issue expected following the ruling of the European Court of Justice.
In 2007 the Ministry of Infrastructures proposed to the plaintiffs the formation of ad-hoc technical workshops to come to an agreement. In the meanwhile, the Council of State with Order dated 10 October 2007 upheld the appeals made by the Offi ce of the Prime Minister and the Ministry of Transportation, by TAV SpA and by R.F.I. SpA amending the Lazio TAR order, confi rming the legitimacy of the submission to the European Court of Justice in relation to the evaluation of the compatibility of the revocation order with the EC regulations.
In September 2008 the Advocate General of the European Court of Justice deposited its opinions and acknowledged the legitimacy of the issued orders of revocation of the Convention. As a consequence, the Iricav Due Consortium notifi ed the discontinuance of the administrative case, in abeyance, while awaiting the pronunciation of the European Court of Justice.
Following the discontinuance of the administrative case submitted by the Iricav Due Consortium, the Lazio TAR delivered a judgement which takes note of the discontinuance of the administrative action presented by the Consortium.
This sentence was notifi ed to the European Court of Justice, which should also extinguish the preliminary ruling pending before the same, without thus pronouncing a judgement in relation to the compatibility with the EC regulations.
On 21 August 2008, Law no. 133 of 6 August 2008 was published being converted from Legislative Decree no.112 of 25 June 2008, which repealed Art. 13 of Legislative Decree no.7 of 31 January 2007 converted into Law no. 40 of 2 April 2007, which since 1 January 2009 has cancelled concessions (conventions) stipulated in 1991-94 between TAV and their respective General Contractor, reinstating them in the name of R.F.I.
In the meanwhile the IRICAV DUE Consortium continues the arbitration proceedings initiated to assess TAV’s failure to perform its obligations, also because in the event of abandonment, it could no longer be initiated for the same reasons already produced.