IV. L AS « PECULIARES DIOECESES » EN EL DECRETO P RESBYTERORUM O RDINIS
4. El Schema de ministerio et vita presbyterorum Textus emendatus
5.3.4 Change in shareholders’ equity
French GAAP(in thousand euros)
Net incom e (51,449) (11,719)
Elimination of amortization, depreciation and prov isions 30,050 16,654 Elimination of change in tax es 267 753 Elimination of capital gains / losses from disposals 110 12 Other income and ex penses (including div idends receiv ed) 15,414 (12,097)
Gross cash flow (A) (5,608) (6,398)
Effect of change in WCR related to operations (B) 5,287 5,275
Cash flow from operating activities (a) = (A+B) (321) (1,123)
Acquisitions of fix ed assets (62) (69)
Disposals of fix ed assets - -
Div idends receiv ed 1,116 6,865
Change in loans 522 (21,157)
Cash flow from investing activities (b) 1,576 (14,361)
Increase in share capital (0) (77)
Increase in loans - -
Repay ments of loans - -
Interests paid (4,237) (4,352)
Cash flow from financing activities (c) (4,237) (4,429)
Change in cash and cash equivalents (d) = (a) + (b) + (c) (2,982) (19,913)
Net cash and cash equiv alents as at beginning of period 16,185 36,098 Net cash and cash equiv alents as at end of period 13,203 16,185
CHANGE IN CASH AND CASH EQUIVALENTS (2,982) (19,913)
2013/12/31 2012/12/31
French GAAP (in thousand euros)
As at 2011/12/31 127,591 342,405 (45,665) (219,304) 2,011 207,040
Change in share capital, of w hich: (36,751) 2,276 - 38,412 - 3,937
Free shares 442 (442) -
Conversion of OCEANE bonds 1,303 2,711 4,014
Share cancellations (84) 7 (77)
Due to losses (38,412) 38,412 -
Accelerated tax depreciation 478 478
Allocation of earnings 45,665 (45,665) -
Profit / loss for the period (11,719) (11,719)
As at 2012/12/31 90,840 344,681 (11,719) (226,556) 2,489 199,736
Change in share capital, of w hich: 13 27 40
Free shares - -
Conversion of OCEANE bonds 13 27 40
Share cancellations -
Due to losses -
Accelerated tax depreciation 24 24
Allocation of earnings 11,719 (11,719) -
Total shareholders' equity Capital Prem ium s Profit/loss
Retained
5.
FINANCIAL STATEMENTS
5.3.5 Notes to the parent company financial statements
Notes to the balance sheet, before allocation of the income for the fiscal year closed as at December 31, 2013, the total of which amounts to 312,754 thousand euros, and to the income statement for the year, presented in list form and showing a loss of (51,449) thousand euros.
The fiscal year closed had a 12-month duration, starting January 1, 2013 and ending December 31, 2013. The notes below are an integral part of the annual financial statements.
These financial statements were approved on April 22, 2014 by the Company’s Board of Directors. Going concern
THEOLIA is facing the risk of a request for early repayment of its convertible bonds as at January 1, 2015 at the unit price of 15.29 euros. The Company considers that it is highly likely that bondholders will choose to ask for the early repayment. In the event all outstanding bonds are subject to early repayment requests, the maximum amount to repay as at January 1, 2015 would reach 125.8 million euros. The Company considers that, in its current situation, it would not be capable of paying this entire amount. As a consequence, THEOLIA is currently working on several scenarios, of which:
implementing a capital increase;
issuing a new debt with an extended maturity date;
renegotiating the terms of its convertible bond;
disposing of assets; and
being subject to another takeover offer.
Performing one or a combination of several of these options before December 31, 2014, until when the Group continues as a going concern, is crucial for the Group’s durability and future development. In this respect, the Company is notably discussing with its main bondholders to implement a solution to enable it to continue as a going concern after January 1, 2015.
However, the Company cannot guarantee that it will be able to implement one or a combination of several of these options in a timely manner. In particular, due to the uncertainty related to market conditions and the approval of shareholders and/or bondholders, it is very difficult to predict if such an operation would succeed. The inability of the Company to implement one or a combination of several of these options could force the Company to consider all legal remedies available, notably those provided for in Book VI of the French Commercial Code, including safeguard procedures, judicial reorganization or judicial liquidation, which, as the case may be, could force it to stop operating. Any liquidation of assets that would result from it would cause a significant destruction of value. None of the adjustments which would be necessary in this case were recognized in the consolidated financial statements as at December 31, 2013.
The risk for the bondholders to request early repayment of their securities as at January 1, 2015 has or is likely to have the following significant consequences:
limiting the Group’s capacity to obtain new financing to finance its working capital requirements, its investments in wind projects under development or its acquisitions;
limiting the Group’s ability to obtain satisfactory financing conditions;
limiting the Group’s ability to obtain or renew the insurance required to cover the main risks related to its wind activities which may be insured;
significantly diluting the existing shareholders of the Company in the event of a significant capital increase operation; and destroying the value of some assets should they be disposed of under unfavorable price conditions.
These and other factors may adversely affect the business, financial position and income of the Group. The Group makes its best efforts so as to be able to meet its commitments.
FINANCIAL STATEMENTS
5.
NOTE 1 ACCOUNTING RULES AND METHODS
The annual financial statements were prepared in accordance with French accounting principles (CRC Rule 99-03, as well as all the following CRC rules). General accounting conventions were applied with regard to the principle of prudence, in accordance with the following basic principles:
consistency of accounting methods from one fiscal year to the next; independence of fiscal years;
historical cost; and going concern.
The main accounting principles used were the following:
1.1 Intangible assets
Intangible assets are valued at acquisition cost (purchase price and ancillary expenses). Software is depreciated over 12 months. Trademarks are not subject to depreciation.
The Company engages in no research and development activity.
1.2 Tangible assets
Tangible assets are valued at acquisition cost (purchase price and ancillary expenses) or production cost. Depreciation is calculated using the straight-line method according to the expected use life:
building furnishings and fixtures 10 years
general facilities 5 years
office equipment and computer hardware 3 and 4 years
1.3 Financial assets
Gross value of financial assets corresponds to the purchase price plus acquisition expenses. These expenses are subject to accelerated tax depreciation over 5 years.
The current value of equity investments is determined as follows:
listed securities: net asset value based on stock price as at December 31; and
non-listed securities: valuation according to various approaches, including specifically discounted cash flow (DCF). If current value is less than net book value, depreciation is applied for the amount of the difference.
Equity investments, treasury shares and investment securities are valued according to the “first in, first out” (FIFO) method.
1.4 Inventories
Equipment inventories are valued at their purchase cost, increased by the acquisition cost. Depreciation is applied if the estimated sale value is lower than the book value.
5.
FINANCIAL STATEMENTS
1.6 Marketable securities
Marketable securities, recognized at cost of purchase, are valued at year-end at probable trading value (stock price). If year-end book value is greater than market value, depreciation is recognized.
1.7 Stock warrants
Stock warrants giving access to the share capital are recognized upon subscription, at subscription price.
1.8 Regulated provisions
Acquisition expenses of equity investments included in the cost price of these equities are depreciated for tax purposes over five years, starting from the date of acquisition.
Accelerated tax depreciation is posted each year in the amount of 1/5th of total expenses. This method is applied to all off-book withdrawals.
The regulated provision will only be reversed upon disposal of the shares.
1.9 Recognition of revenue
Total revenue earned by the Company corresponds largely to services related to management of the Group for which it is the parent company.
NOTE 2 KEY HIGHLIGHTS OF THE YEAR
Global transfer of assets and liabilities of Ecoval Technology SAS
On July 22, 2013, the Ecoval Technology subsidiary was dissolved via global transfer of assets and liabilities under the common law tax regime. Its assets, as well as receivables held against that same subsidiary, were transferred to THEOLIA.
The merger loss recognized in financial expenses from this operation was 4,484 thousand euros.
Ongoing liquidation of the NeoAnemos subsidiary
The NeoAnemos subsidiary being under liquidation as at the date of closing of fiscal year 2013, the wind turbines previously bought from THEOLIA in 2010 were re-transferred to THEOLIA.
Transactions on securities
During fiscal year 2013, THEOLIA received several requests for bond conversions. 2,090 OCEANEs were thus converted, resulting in the creation of 9,028 new shares.