veolia environmental services - Veolia SE

Transcription

COUV_RF_VE_PROP_EXE/GB.qxd
8/08/06
16:01
Page 1
Board of directors
Honorary Chairman
Bernard Rouer
Chairman of the board
Henri Proglio
Chief Executive
Denis Gasquet
Directors
Olivier Barbaroux
Joachim Bitterlich
Armand Burfin
Jérôme Contamine
Antoine Frérot
Denis Gasquet
Paul-Louis Girardot
Gustave Kuch
Bernard Rouer
Daniel Schmidt
Jean-Claude Turion
Statuory auditors
Statuory auditors principal
Salustro Reydel, member of KPMG International
Barbier Frinault - Ernst & Young
Alternates
Hubert Luneau
Maxime Petiet
Person responsible for providing
financial communication
Pierre Bellon-Serre
Content
Index
Legal structure
.....................................
2
...............................
3
2005 Consolidated financial statements . . . . . . .
11
Management report
Financial Report 2005 • Veolia Environmental Services
1
Legal structure
Legal structure
As of December 31, 2005
International
VEOLIA ENVIRONMENTAL
SERVICES
France
ILE-DE-FRANCE
100% OTUS / Onyx (Propreté Urbaine)
100% Taïs / Sarm (Déchets Indust.)
100% Généris (Traitement)
100% REP
UNITED KINGDOM
100% OEG
NORTHERN EUROPE
NORWAY (100% Onyx Norway)
DENMARK (65% Marius Pedersen AS)
CONTINENTAL EUROPE
72% SWITZERLAND
(Rev/Stesa/Muldenzentrale/ Matthey Transp.)
47,5% SWITZERLAND (GES, Valorec, RSMVA)
100% GERMANY
NORTH AMERICA
100% MIC
100% OES
100% Onyx WASTE SERVICES
100% OIS
ASIA
SINGAPORE (100% Onyx Asia hldg, 90% FME)
HONG KONG (100% Onyx Hong-Kong)
SOUTH KOREA (50% Eco Services Korea Ltd)
PHILIPPINES (51% Greenline)
INDIA (100% Chennaï)
PACIFIQUE
AUSTRALIA (100% Collex)
NEW-ZEALAND (100% Onyx Group)
AFRICA ET MIDDLE EAST
100% CGEA Israël
46% AMNIR
AMÉRIQUE DU SUD
MEXICO (90% Rimsa, 100% Sarpi Mexico,
100% Confinamina)
BRAZIL (100% Sarpi Brésil, 92% Resicontrol,
100% SASA)
EST
95% Onyx EST
95% VALEST (Traitement)
47,5% Nancy Energie (Traitement)
NORD NORMANDIE
100% AUBINE
100% VALNOR (Traitement)
45% ESTERRA
100% IPODEC Normandie / Onyx Normandie
SUD-OUEST
100% Onyx AQUITAINE / Onyx MIDI PYR.
100% SOVAL (Traitement)
38% SETMI (Traitement)
CENTRE-OUEST
100% SOCCOIM / SVE
100% SETRAD (Traitement)
100% SACO (Netra)
100% GEVAL (Traitement) / 50% SOBREC
AUVERGNE RHONE-ALPES
100% Onyx ARA
100% RONAVAL (Traitement)
SUD-EST
100% Onyx MED / SEA
100% VALSUD (Traitement)
48% SONITHERM (Traitement)
100% SMA / SOMEDIS
POLE NETTOYAGE INDUSTRIEL
100% RENOSOL
DECHETS LIQUIDES
100% SARP
DECHETS SPECIAUX
100% SARP INDUSTRIE
ACTIVITE PAPIER
100% SOULIER
OTHERS
100% SEDIBEX
100% ANGIBAUD
DOM-TOM
100% CSP / 66% ENVIROPOL / 66% TSP
70% MARTINIVAL
2
Management report
Management report
Management report
...............................
4
Veolia Environmental Services key
consolidated figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
French subsidiaries
5
.................................
International subsidiaries
Litigation
.........................
6
............................................
7
Business outlook
...................................
Parent company accounts
Funds statement
7
........................
8
...................................
9
Directors’ fees and compensation
Proposed resolutions
................
9
................................
10
3
Management report
Management report
On November 3, 2005, at the Veolia Environment conference
that gathered 4,000 managers from all over the world,
Henri Proglio, Chief Executive Officer of Veolia Environment,
presented the new Group Branding system.
Group divisions – water, environmental services, energy services
and transport – are gathered under a common name:Veolia.
Accompanied by a new logo, this deployment illustrates willingness of the whole group to build a global coherence between
its divisions and to increase visibility of company already put
in synergy, particularly for research and training means.
Onyx becomes though Veolia Environmental Services. In
2005, as in 2004, the Veolia Environmental Services group
represented a substantial share (more than 25%) of Veolia
Environment’s annual turnover.
With a turnover of more than €6.5 billion,Veolia Environmental
Services strengthens its position as the second largest waste
management company in the world and a European leader,
providing a comprehensive range of hazardous and nonhazardous, solid and liquid waste services, with an increasing
focus on industrial customers and new municipal waste
treatment contracts.
In accordance with regulation (CE) n°1606/2002 from
European parliament and board of July 19, 2002 and to
regulation (CE) n°1725/2003 for European commission
of September 29, 2003, Veolia Environmental Services
establishes its consolidated accounts from fiscal year 2005
in International Financial Reporting Standards (IFRS)
as published by International Accounting Standards
Board (IASB) and adopted by European Union. Impact on
financial statements linked to IFRS adoption is the subject
of an explanatory note in Veolia Environmental Services
consolidated accounts.
Veolia Environmental Services key
consolidated figures
€Million except percentages
Turnover
Operating Income
Operating income/Turnover
Net financial expense
Net income (including minority interest)
Cash flow from operations
Industrial investments
Aquisition of financial assets
Cash flow generated by operating activities (*)
Operational capital employed (**)
Profitability before tax
Net financial debt (***)
2003 VE GAAP
2004 VE GAAP
2004 Pro forma IFRS
December 2005 IFRS
5,896
385
6.5%
(133)
13
622
(691)
(32)
78
4,357
8.4%
2,554
6,176
454
7.4%
(128)
145
775
(720)
(52)
163
4,219
10.6%
2,406
6,176
466
7.5%
(131)
222
992
(717)
(53)
189
4,660
9.9%
2,832
6,579
523
7.9%
(139)
246
1,050
(740)
(62)
56
5,118
10.9%
3,457
*
Cash flow generated (used) by operating activities correspond to the cash flow resulting from operating activities, after deduction of industrial
investments, and acquisition or sale of financial assets.
( )
** Operational capital employed corresponds to shareholder’s equity (group and minorities) and net financial debt.
(
***) Net financial debt corresponds to financial debts after deduction of cash, marketable securities and short term loans (< 3 months).
( )
Veolia Environmental Services spurred business activity
through internal growth. At a constant exchange rate and
consolidation scope, the turnover has increased by 5.7%
from 2004 to 2005, after a 6.9% increase from 2003 to 2004.
4
The current operating income (operating income without
depreciation of goodwill), excluding exchange rate and
consolidation scope impacts, has increased by 14.0%,
more rapidly than turnover, boosted in particular by high
Management report
performance in France, United States, and United Kingdom
and by a significant decrease of overhead expenses.
requirements enabled the group to generate €56 million
from operating activities in 2005.
On the whole, ratio between operating income and turnover
increased from 7.5% in 2004 to 7.9% in 2005.
After recording the equity reduction of €354 million,
having paid dividends to Veolia Environment (€100 million)
and taken into account exchange rate (negative of about
€140 million because of dollar changes), net financial debt
is €3,457 million.
Profitability before tax (the ratio between recurrent
operating income and average capital employed) increased
from 9.9% in 2004 to 10.9% in 2005.
A sharp control of investments and working capital
Interest rates increase generated net financial expense
deterioration; net income has increased from 2004 to 2005.
French subsidiaries
Fiscal year 2005 is marked by a significant growth of the
activity and the profitability of Veolia Environmental
Services France, as well as by a reorganization having
ended in the grouping of certain regions.
The Ile-de-France region includes collection activities of
Ile-de-France region organized around the company of
Veolia Environmental Services SA its subsidiary OTUS,
industrial waste activity managed by Taïs, incineration
activity was grouped in Generis and landfill with the
company REP. This new group realized a turnover of
€528 million (against €466 million in 2004). This sharp
increase notably results from the contribution by Aubine
of its activities of Seine-et-Marne in the region Ile-de-France.
In the South West region, the Onyx Aquitaine and its subsidiaries reported a turnover of €216 million, in a very strong
increase with regard to the previous financial year considering the previously mentioned merger and the acquisition
of Actisol Company.
In the Rhône-Alpes area, Onyx ARA, realised a €151 million
turnover, higher than the previous year.
The new Southeast region includes Onyx Méditerranée
and its subsidiaries and the subgroup SEA. This unit realized
in 2005 a turnover of €189 million, higher than previous
year (€173 million), notably resulting from first consolidation
of companies SOTAME and SOMEREC.
In Eastern France, Onyx Est and its subsidiaries reported
turnover of €184 million, higher than the previous year,
and with better earnings across all segments of business.
The industrial cleaning business led by Renosol reported
a €212 million turnover. Operational results are steady
compared to last year.
Normandy, which includes former Northeast Paris area
(Aubine and Valnor) and ex Normandy (Onyx Normandie,
Ipodec Normandie, Onyx Branch in Caen and 10 subsidiaries),
has a turnover of €238 million in 2005 compared to
€279 million in 2004. The decrease comes from the
transfer of few activities of Aubine in Seine-et-Marne to
Ile-de-France region.
The SARP subgroup in France reported an increase of 5% in
its turnover mainly due to its activities (sewage, industrial
cleaning and collection of hazardous waste).
Former Loire-Brittany and Central France (Soccoim) areas
have been grouped to centre-west region which realized
a €341 million turnover in 2005 compared to €362 million
in 2004. The decrease comes from the transfer of certain
branches to Southwest region.
The hazardous waste collection and processing business
operated by SARP Industries has been affected by a drop
in demand from difficult situations with the industrial
customers but SARP Industries is still able to improve its
operational result from previous year thanks to reduction
of overhead expenses.
5
Management report
International subsidiaries
In the United Kingdom, Veolia Environmental Services
Environmental (VES) is present in all segments of the waste
management market. In 2005, the hazardous waste
segment has been widened by assets acquisition of the
former hazardous waste division of Shanks plc. All British
activities had a turnover of €730 million in 2005, a
significant rise from 2004. Operating income improved to
satisfactory levels, due to the collection contracts
(Camden, Westminster) and the integrated service
contracts (Sheffield, East Sussex, Hampshire) and others
activities.
In Germany, group revenues amounted to €142 million in
2005, so a steady level to 2004. It should be noted that the
group sold Onyx Umweltservice GmbH in May 2003, as part
of the restructuring plan launched in 2002 due to poor
earnings and the highly competitive German marketplace.
In addition, a goodwill loss of €21.5 million was reported
for the SARP sub-group in the 2003 consolidated financial
statements, due to its relatively poor performance.
In Scandinavia, Veolia Environmental Services has a strong
position through Onyx Norway, in the Norwegian marketplace, and Marius Pedersen in Denmark. Onyx Norway
earnings are still improving in 2005, especially thanks to
recycling activity performances.
In 2005, the group sold his activities in Portugal and
Sweden. Veolia Environmental Services has consolidated
for the first time the Swiss group REV-BATREC, specialized
in collection and treatment of hazardous waste, acquired
in 2004.
Elsewhere in Europe, growth was satisfactory, with good
performance in the Czech Republic.
6
The Group’s North American operations are combined
around Onyx North America, which owns Onyx Waste
Services in solid waste, Veolia Environmental Services in special waste, Veolia Environmental Services Industrial Services
in industrial services and Montenay Inc. in incineration.
Their combined turnover reached €1,310 million in 2005,
an increase of 8,6% with constant exchange rate compared
to 2004. This result is due to effort of productivity in a
very competitive sector with climate catastrophes in 2005.
The Mexican operation acquired by the Group in 2000, which
handles special waste and more specifically operates a
landfill site, continued to experience major operational
problems that had surfaced in 2001. The Group has begun
international arbitration proceedings against the former
shareholders.
In Australia, the Collex group continued to expand at a
steady rate mostly through organic growth, and turnover
reaching €384 million. Moreover, the group started to
transfer some of its branch of activity to New-Zealand.
Onyx Asia Holdings and its subsidiaries are the spearhead
of the Group’s strategic growth in Asia, where there is
major potential for expansion. Turnover amounted to
€147 million in 2005, i.e. €7 million more than 2004.
The Group’s subsidiaries in Israel reported a turnover of
€52 million in 2005, slightly increasing from 2004. The
current operating income has come back to breakeven.
Finally, the Egyptian subsidiary Onyx Alexandrie continued
its growth. Revenue amounted to €19 million, and earning
were significantly higher than 2004, in line with expectations
at the time of our contract bid.
Management report
Litigation
Septèmes dispute
Concerning the judgement dating from May 6, 2003 at
the court of summary jurisdiction of Aix-en-Provence,
A fire broke out on July 25, 1997 at a landfill operated by
Onyx Méditerranée in Septèmes-les-Vallons in the South of
France. On 6 May 2003, the court of Aix en Provence
ordered a valuation of the claims filed by the plaintiffs for
losses or damages, concerning mainly woodland and plantations. Veolia Environmental Services estimates that the
dispute should not materially affect the company’s financial
statements, considering the subscribed insurance level.
Business outlook
Veolia Environmental Services continued to examine all
opportunities which arise in a constantly changing sector,
where waste management, treatment and recycling business continue to be more complex and technology-based.
Veolia Environmental Services will seek better returns on
investments, focusing on its high value-added waste
treatment and recycling business and by increasing its
presence in areas where it can find growth and profitability.
Veolia Environmental Services is in a strong position
considering its comprehensive range of waste management
services, its international network, and synergies with
other divisions of Veolia Environment.
7
Management report
Parent company accounts
(in € million)
2003
2004
2005
122
125
126
Other operating profits
121
110
121
Operating income
(13)
(8)
(9)
Turnover
Share of profits from GP
18
21
41
Financial income
(37)
99
74
Exceptional income
(10)
1
(3)
Net income
(42)
108
104
Capital expenditure
Acquisition of financial assets
Self-financing capacity
Shareholders’ funds
Change of accounting method:
The methods of definition, accounting and valuation of
assets were modified according to arrangements of the
new regulation on assets (CRC N° 2004-06). This change of
method has no significant impact on the accounts in 2005.
Result
The company’s turnover stabilized between 2004 and
2005, with regional variations. Turnover of regions of
Ile-de-la-Réunion and Ile-de-France increased by 5%, the
one of Caen registered a 5% decrease (put under state
control and decrease of activity). Furthermore, activity was
discontinued in Morocco in 2005 (contract of Fes).
The drop noticed in other operating profits is linked to a
net increase of the invoicing of technical support by the
headoffice for subsidiaries in 2005 compared to 2004. 2004
also supported the cost of credit note in favour of Onyx
Alexandrie.
The slight deterioration of operating income noticed in
2005, a loss of €9 million compared to a €8 million in 2004,
8
11
10
10
106
17
61
27
83
98
4
30
17
is mainly due to stabilization of the margin realized
on exploitations and a controlled increase of head
office expenses.
The improvement of share of profits from General
Partnership is mainly due to high level of profits from
REP and OTUS.
The net balance of financial operations represents a net
profit of €74 million compared to €99 million in 2004, a
decrease of €25 million. This is due to:
- smaller collected dividends (-€14 million),
- a net negative impact of - €71 million on financial
provision (in 2004 the reversal of provision on securities
Onyx UK of +€56 million compensated by depreciation
on securities of -€12 million; impact of net depreciation
on securities and financial loans realized in 2005 is of
-€24 million),
- a favourable currency effect (€63 million),
- impact of financial subvention in 2005 granted to
Ouest Propreté company of -€4 million;
The exceptional result of - €3 million in 2005 is due to
an appreciation of +€1 million, exceptional depreciation
of -€4.1 million.
Management report
Funds statement
• The improvement of self financing capacity of
+€16 million mainly results from the increase of profits
of joint-venture companies (+€20 million) and exchange
results ( + €8 million) over 2005 compared to 2004
compensated with a decrease of collected dividends
in 2005 (-€14 million).
• Deterioration of working capital is notably explained by
discontinued use of Dailly receivables ( + €16 million)
and by a decrease of delaying payments to suppliers
(+€ 15 million).
• The financial assets acquisitions performed in 2005
concern acquisition of securities from Comgen and Onyx
group (reclassifying within the Group) for €54 million,
purchase of Autovila for €4 million and repurchase of
minorities from REV for €2 million. In 2004, investments
corresponded to acquisition of minorities of Ipodec
Ireland for €13 million and Onyx Méditerranée's increase
in capital for €3,6 million.
• Industrial investments remained stable in 2005, allowing
for the renovation of car park facilities.
• The asset transfer in 2005 refers to the sale of securities
from Ipodec Portugal and Autovila.
• Self financing capacity enabled the payment of dividends
to Veolia Environnement.
• The capital reduction of the Company and the deterioration
of working capital had a negative impact on the financial
debts of Veolia Environmental Services.
Directors’ fees and compensation
Pursuant to Article L. 225-102-1 of the Commercial Code,
we report below the total remuneration and benefits paid
to directors during the period, either by the Company or
by companies it controls as defined by Article L. 233-16
of the Commercial Code.
Directors’ remuneration during the period was as follows:
Henri Proglio, Chairman of the Board of Directors:
- Global remuneration paid by VE
1,797,612 euros
- Attendance fees paid by VE
34,000 euros
- Attendance fees paid by subsidiaries
70,912 euros
Jérôme CONTAMINE, Director:
- Global remuneration paid by VE
774,978.50 euros
36,684 euros
Paul-Louis GIRARDOT, Director:
- Attendance fees paid by VE
45,250 euros
49,059 euros
A list of all directorships and other outside appointments
can be found in the appendix.
9
Management report
Proposed resolutions
We suggest categorizing the profit of the exercise in the following way:
Income
103,665,330.33 €
Retained earnings voted
during June 16, 2005 board meeting
DISTRIBUTABLE TOTAL
7,867,560.86 €
111,532,891.19 €
Dividends
110,039,368.75 €
Retained earnings
1,493,522.44 €
A net dividend of €12,85 per share will be paid out.
As required by law, the table below sets out dividends paid over the last three years:
2002
2003
2004
9,310,588
9,310,588
9,310,588
6.56 €
6.56 €
10.75 €
3.28 €
61,077,457.28 €
3.28 €
61,077,457.28 €
100,088,821.00 €
Total payment allowing a reduction of 50%
-
-
4,289.25 €
Total payment not allowing a reduction of 50%
-
-
100,084,531.75 €
Number of shares
Net dividend per share
Tax credit
Total payment
The Board proposes paying the dividend on July 4, 2006.
After hearing the Auditors’ reports, shareholders will be
asked to approve the Company’s financial statements and
the proposed distribution of net income and dividends;
and to approve agreements governed by Articles L 225-38
of the Commercial Code.
10
Shareholders will also be asked to approve the consolidated
financial statements of the Company, as of December 31,
2005, to renew the directorship of Henri Proglio.
Consolidated financial statements
2005 Consolidated financial statements
Consolidated balance sheet
Note 1
Note 2
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
Note
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
......................
12
Consolidated income statement
.................
13
Consolidated cash flow statement
.................
14
Consolidated statement of changes
in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
Notes
16
Accounting principles and methods . . . . . . . . . . . . . . . . .16
Use of management estimates
in the application of Group accounting standards . . . . . . . .25
Significant events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . .28
Publicly-owned utility domain . . . . . . . . . . . . . . . . . . . . .29
Investments in associates . . . . . . . . . . . . . . . . . . . . . . . . .29
Non-consolidated investments . . . . . . . . . . . . . . . . . . . . .31
Long-term IFRIC 4 loans . . . . . . . . . . . . . . . . . . . . . . . . . .31
Other long-term loans and investments . . . . . . . . . . . . . .32
Deferred tax, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
Other short-term financial assets . . . . . . . . . . . . . . . . . . .35
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . .36
Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Non-current and current provisions . . . . . . . . . . . . . . . . .38
Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Other long-term borrowings . . . . . . . . . . . . . . . . . . . . . . .42
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Bank overdrafts and other cash position item . . . . . . . . . .42
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
....................................................
Note 23
Note 24
Note 25
Note 26
Note 27
Note 28
Note 29
Note 30
Note 31
Note 32
Note 33
Note 34
Note 35
Note 36
Note 37
Note 38
Note 39
Note 40
Note 41
Note 42
Note 43
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Finance costs, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
Other financial income (expenses) . . . . . . . . . . . . . . . . . . .44
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Share of net income of associates . . . . . . . . . . . . . . . . . . .46
Net income for the year
attributable to equity holders of the parent . . . . . . . . . . . .46
Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
Employee commitments . . . . . . . . . . . . . . . . . . . . . . . . . .48
Main acquisitions in 2005 . . . . . . . . . . . . . . . . . . . . . . . . .51
Concession contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
Finance leases and operating leases . . . . . . . . . . . . . . . . .52
Proportionately consolidated companies . . . . . . . . . . . . . .53
Tax reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
Commitments and contingencies . . . . . . . . . . . . . . . . . . .54
Collateral guarantees supporting borrowings . . . . . . . . . .55
Related party transactions . . . . . . . . . . . . . . . . . . . . . . . . .56
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
Segment information . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
Auditor fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
Main companies included
in the 2005 consolidated financial statements . . . . . . . . . .58
Passage of French accounting principles
in the standards IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
Auditor’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71
11
Assets
(€ million)
Goodwill
Other intangible assets
Property, plant and equipment
Publicly owned utility domain
Investments in associates
Non-consolidated investments
Long-term IFRIC 4 loans
Derivative financial instruments
Other long term loans and investments
Deferred tax assets
Non-current assets
Inventories and work-in-progress
Operating receivables
Short-term IFRIC 4 loans
Other short-term loans
Marketable securities
Cash and cash equivalents
Assets of discontinued operations
Current assets
Total assets
Notes
As of December
31, 2005
As of December
31, 2004
4
5
6
7
8
9
10
29
11
12
1,609.5
82.8
2,762.4
774.4
53.8
25.1
261.3
1.3
41.5
226.6
5,838.7
109.9
2,043.4
1.6
4.5
5.1
213.8
1.6
2,380.0
8,218.7
1,441.5
78.9
2,490.8
617.6
59.9
34.0
251.6
1.7
75.2
205.6
5,256.8
98.5
1,922.6
0.2
20.6
3.8
149.6
4.0
2,199.3
7,456.1
As of December
31, 2005
As of December
31, 2004
137.0
1,294.6
149.0
1,635.5
149.5
84.1
1,665.2
392.5
3,402.6
7.4
79.9
249.3
4,131.7
1,973.2
180.7
166.3
101.6
2,421.8
8,218.7
(96.1)
139.0
1,827.4
326.1
2,256.9
6.5
74.7
232.1
2,896.3
1,814.8
191.9
643.8
82.2
2,732.7
7,456.1
13
13
10
14
14
15
Equity and Liabilities
(€ million)
Notes
Share capital
Additional paid-in capital
Reserves and retained earnings
attributable to equity holders of the parent
Minority interests
Total equity
Non-current provisions
Long-term borrowings
Derivative financial instruments
Other non-current liabilities
Deferred tax liabilities
Non-current liabilities
Operating payables
Current provisions
Short-term borrowings
Bank overdrafts and other cash position items
Liabilities of discontinued operations
Current liabilities
Total equity and liabilities
16
17
18
29
19
12
13
17
20
21
-
The accompanying notes are an integral part of these consolidated financial statements.
12
Consolidated income statement
(€ million)
Notes
Revenue
Cost of sales
Selling costs
General and administrative expenses
Other operating revenue and expenses (net)
Operating income
Finance costs, net
Other financial income and expenses (net)
Income tax expense
Share of net income of associates
Net income from continuing operations
Net income from discontinued operations
Net income
Attributable to:
Minority interests
Equity holders of the parent
22
23
24
25
26
8
27
28
As of December 31,
2005
6,579.2
(5,146.2)
(134.1)
(790.7)
14.8
523.0
(139.2)
0.0
(139.2)
1.6
246.2
246.2
(27.2)
219.0
%
8.0%
3.7%
As of December 31,
2004
%
6,176.1
( 4,824.8)
(121.0)
(764.6)
0.4
466.1
(124.2)
(6.6)
(123.6)
9.9
221.6
221.6
7.6%
3.6%
(22.9)
198.7
13
Consolidated cash flow statement
(€ million)
Notes
As of December 31,
2005
Net income for the year attributable to equity holders of the parent
28
Minority interests
Operating depreciation, amortization, provisions and impairment losses
Financial amortization and impairment losses
Other calculated revenue and expenses net
Gains (losses) on disposal and dilution
8
Dividends received
Finance costs, net
24
Income tax
26
Operating cash flow before changes in working capital
Changes in working capital
13
Income taxes paid
Net cash flow provided by operating activities
Purchases of property, plant and equipment
Proceeds on disposal of property, plant and equipment
Purchases of investments
Proceeds on disposal of investments
IFRIC 4 investment contracts:
10
New IFRIC 4 loans
Principal payments on IFRIC 4 loans
New long-term loans granted
Principal payments on long term loans
Changes in scope
Dividends received
Net decrease in short-term loans
Investment subsidies received
Net cash flow provided by investing activities
Net variation in short-term borrowings
New long-term borrowings and other debt
Principal payments on long-term borrowings and other debt
Capital increase
Purchase of treasury shares
Dividends paid
Interest paid
Net cash flow provided by financing activities
Cash and cash equivalents at the beginning of the year
Effect of foreign exchange rate changes
Cash and cash equivalents at the end of the year
15
Bank overdrafts and other cash position items
21
14
As of December 31,
2004
219.0
27.2
525.3
(3.7)
16.2
(6.2)
(1.6)
(1.0)
139.2
139.2
1,053.6
(22.7)
(97.1)
933.8
(713.3)
59.5
(61.8)
31.3
198.7
22.9
553.9
4.5
(4.0)
(20.9)
(9.9)
(1.4)
124.2
123.6
991.7
91.9
(113.7)
969.9
(606.6)
45.1
(52.7)
11.6
(1.7)
18.7
(2.6)
26.2
(30.1)
3.8
(13.8)
0.0
(683.9)
(115.1)
789.4
(131.8)
(353.8)
0.0
(117.8)
(138.8)
(67.9)
67.4
(137.3)
112.1
213.8
101.6
112.1
18.6
(17.7)
36.2
1.6
6.6
15.7
5.0
(535.9)
(155.0)
582.6
(651.7)
10.8
0.0
(82.8)
(120.5)
(416.5)
37.2
12.6
67.4
149.6
82.2
67.4
Consolidated statement of changes in
equity
(€ million)
Share Additional Treasury Consolidated
capital
paid-in
shares reserves and
capital
retained
earnings
As of January 1, 2004
149.0
Dividend distribution
Foreign exchange translation adjustments
Fair value adjustments
Other changes
Net income as of December 31, 2004
As of January 1, 2005
149.0
Equity reduction
(12.0)
Share options
Dividend distribution
Foreign exchange translation adjustments
Actuarial gains (losses) on pension obligations Other changes
Net income as of December 31, 2005
137.0
1,635.5
1,635.5
(340.9)
1,294.6
-
(154.6)
(61.1)
(11.6)
198.7
(28.6)
(4.2)
(100.0)
(22.4)
(0.8)
219.0
61.9
Foreign
exchange
translation
reserves
Fair
value
reserves
Equity
attributable to
equity holders
of the parent
0.0
(67.7)
(67.7)
157.3
89.6
0.0
(0.4)
0.6
0.2
2.4
(4.6)
(2.0)
1,629.9
( 61.1)
(67.7)
(0.4)
0.6
198.7
1,688.4
(354.0)
(4.2)
(100.0)
157.3
2.4
(22.4)
(5.4)
219.0
1,581.1
15
Note 1
Accounting principles and methods
1 • 1 Basis of preparation
as of December 31,2005
In accordance with European Parliament and Council
Regulation (EC) No. 1606/2002 of July 19, 2002 and European
Commission Regulation (EC) No. 1725/2003 of September
29, 2003, the Veolia Environnement consolidated financial
statements for the year ended December 31, 2005 are the
first financial statements prepared in accordance with
International Financial Reporting Standards (IFRS), as
published by the International Accounting Standards Board
(IASB) and adopted by the European Union.
The financial statements are presented in million of Euro.
The accounting methods presented below have been applied
consistently for all periods presented in the consolidated
financial statements and for the IFRS opening balance sheet
as of January 1, 2004 for the purposes of IFRS transition.
The consolidated financial statements are presented using
the historical cost convention, with the exception of the
following assets and liabilities recognized at fair value: derivative instruments, financial instruments held for trading
and available-for-sale financial instruments.
The consolidated financial statements have been drawn
up in accordance with IFRS adopted by the European Union
as of December 31, 2005 and do not differ from the
application of IFRS published by the IASB at this date.
The Veolia Environmental Services consolidated financial
statements for the year ended December 31, 2005 were
approved by the Board of Directors on March 27, 2006.
1• 2 Preparation of 2004
comparative figures
in accordance with IFRS
The impact of IFRS transition on the Group’s financial
position, results and cash flow of the group is presented
in note 42.
16
This 2004 financial information on the expected quantified
impact of IFRS adoption was prepared by adjusting 2004
figures in line with those IFRS standards and interpretations
that Veolia Environmental Services considered applicable for
the preparation of the comparative consolidated statements
as of December 31, 2005. The 2004 financial information
detailed below is based on the following:
• IFRS standards and interpretations subject to mandatory
application as of December 31, 2005, as known to date,
• IFRS standards and interpretations subject to mandatory
application post 2005, which the Group has decided to
adopt early where this is encouraged,
• elected options and exemptions which the Group will
apply for the preparation of its first IFRS consolidated
financial statements in 2005.
The consolidated financial statements for the year ended
December 31, 2005 are the first financial statements presented in accordance with IFRS, as adopted by the European
Union. They are presented with 2004 comparative figures
prepared in accordance with the same standards base,
pursuant to IFRS 1 (adopted by European Commission
Regulation (EC) No. 707/2004 of April 6, 2004) on first-time
adoption of IFRS.
IFRS 1 offers a number of options for first-time adoption of
IFRS. Veolia Environmental Services has elected to apply
the following options:
• business combinations performed prior to the transition
date are not retrospectively restated,
• accumulated actuarial differences as of January 1, 2004
in respect of pension obligations are recorded in equity,
• accumulated foreign exchange translation adjustments
as of January 1, 2004 are reclassified definitively in
consolidated reserves,
• retention of the historical cost method for intangible
assets and property, plant and equipment, without
remeasurement at fair value,
• add-back of discounted receivables («Dailly » sales) as of
January 1, 2004.
For all other IFRS, the restatement of asset and liability
values as of January 1, 2004 has been performed retrospectively as if these standards were always applied.
Furthermore, Veolia Environmental Services has opted
for early adoption, as of January 1, 2004, of the following
standards:
• IAS 32 and IAS 39 on financial instruments (European
Commission Regulation (EC) No. 2086/2004 of November
19, 2004 and European Commission Regulation (EC)
No. 2237/2004 of December 29, 2004,
• IFRS 5 on discontinued operations (European Commission
Regulation (EC) No. 2236/2004 of December 23, 2004), and
• IFRIC 4, determining whether an arrangement contains a
lease.
1 • 3 Principles of consolidation
Veolia Environmental Services fully consolidates all entities
over which it exercises control. Control is defined as the
ability to govern, directly or indirectly, the financial and
operating policies of an entity in order to obtain the benefit
of its activities.
Companies over which Veolia Environmental Services
exercises joint control as a result of a contractual agreement
between partners are consolidated using the proportionate
method.
Pursuant to SIC 12, Special Purpose Entities (SPEs) are
consolidated when the substance of the relationship
between the SPE and Veolia Environmental Services or its
subsidiaries indicates that the SPE are controlled by Veolia
Environmental Services. Control may arise through the
predetermination of the activities of the SPE or through
the fact that, in substance, the financial and operating
policies are defined by Veolia Environmental Services or
Veolia Environmental Services benefits from most of the
economic advantages and/or assumes most of the economic
risks related to the activity of the SPE.
Pursuant to IAS 27, potential voting rights attached to
financial instruments which, if exercised, would confer voting
rights on Veolia Environmental Services and its subsidiaries, are taken into account where necessary in assessing the
level of percentage control or significant influence exercised.
Finally, the Group continues to apply the proportionate
method of consolidation in accordance with IAS 31.
1 • 4 Translation of foreign
subsidiaries’ financial statements
(IAS 21)
Companies in which Veolia Environmental Services exercises
significant influence over financial and operating policies
are accounted for using the equity method. Significant
influence is presumed to exist where the Group holds at
least 20% of share capital or voting rights.
Balance sheets, income statements and cash flow statements
of subsidiaries whose functional currency is different from
that of the Group are translated into the reporting currency at
the applicable rate of exchange (i.e., the year-end rate for
balance sheet items and the average annual rate for income
statement and cash flow items). Translation gains and losses
are recorded in equity. The exchange rates of the major
currencies of non-euro countries used in the preparation
of the consolidated financial statements were as follows:
Year-end exchange rate
(one foreign currency unit
= €xx)
Average annual exchange
rate (one foreign
currency unit = €xx)
The financial statements of subsidiaries are included in
the consolidated financial statements from the effective
date of control up to the date control ceases.
U.S. Dollar
Pound Sterling
Czech Crown
December
31,
2005
December
31,
2004
0.8477
1.4592
0.0345
0.7342
1.4183
0.0328
U.S. Dollar
Pound Sterling
Czech Crown
2005
2004
0.8078
1.4640
0.0336
0.8025
1.4721
0.0314
1 • 5 Foreign currency transactions
(IAS 21 – IAS 39)
and liabilities are remeasured in Euro at year-end exchange
rates. The resulting foreign exchange gains and losses are
recorded in net income for the period.
Foreign currency transactions are translated into Euro at the
exchange rate prevailing at the transaction date. At the
year-end, foreign currency denominated monetary assets
Loans to a subsidiary the settlement of which is neither
planned nor probable in the foreseeable future represent,
17
in substance, a portion of the Group’s net investment in
this foreign operation. Foreign exchange gains and losses
on monetary items forming part of a net investment are
recognized directly in equity as foreign exchange translation adjustments and are released to income on the disposal of the net investment.
Exchange gains and losses on foreign currency denominated
borrowings or on foreign currency derivatives that qualify
as hedges of net investments in foreign subsidiaries, are
recognized directly in equity as foreign exchange translation
adjustments. Amounts recognized in equity are released
to income on the sale of the relevant investment.
Foreign currency denominated non-monetary assets and
liabilities recognized at historical cost are translated using
the exchange rate prevailing as of the transaction date.
Foreign currency denominated non-monetary assets and
liabilities recognized at fair value are translated using the
exchange rate prevailing as of the date the fair value is
determined.
1 • 6 Property, plant and equipment
(IAS 16 and IAS 17)
Property, plant and equipment are recorded at historical
acquisition cost, less accumulated depreciation and any
accumulated impairment losses.
Property, plant and equipment are recorded by component,
with each component depreciated over its useful life.
Borrowing costs attributable to the acquisition or construction of identified installations, incurred during the
construction period, are included in the cost of those
assets in accordance with IAS 23.
Investment grants are deducted from the gross carrying
amount of property, plant and equipment to which they
relate.
Pursuant to IAS 17, assets financed by finance lease are
recorded in property, plant and equipment at the present
value of minimum lease payments less accumulated
depreciation and any accumulated impairment losses or,
if lower, fair value and depreciated over the shorter of the
lease term and the expected useful life of the assets,
unless it is reasonably certain that the asset will become
the property of the lessee at the end of the contract. A
finance lease contract is a contract which transfers to the
Group substantially all the risks and rewards related to the
ownership of an asset.
18
Given the nature of the Group's businesses, the Divisions
do not own investment property.
1 • 7 Government grants (IAS 20)
Government grants finance all or part of publicly-owned
utility networks. In principle, these grants are definitively
earned and not repayable.
In accordance with the option offered by IAS 20, these
grants are presented in debt and equity.
Such grants are therefore recorded in Revenue in the year
the publicly-owned utility domain is sold.
1 • 8 Intangible assets excluding
goodwill (IAS 38)
Intangible assets are identifiable non-monetary assets
without physical substance. They are recorded at acquisition
cost less accumulated amortization and any accumulated
impairment losses.
Intangible assets mainly consist of fees paid to local
authorities for public service contracts and amortized over
the contract term, the value of contracts acquired through
business combinations, the patents, licenses, software and
operating rights.
1 • 9 Goodwill and business
combinations (IFRS 3)
All business combinations are recorded in accordance with
the purchase accounting method. Goodwill arises on the
acquisition of subsidiaries, associates and joint ventures.
Under this method, assets acquired and liabilities assumed
are recorded at fair value. The excess of the purchase price
over the fair value of assets acquired and liabilities and
contingent liabilities assumed, if any, is capitalized as
goodwill.
Goodwill is not amortized under IFRS, but subject to impairment tests performed at the level of the cash generating
unit (« CGU »), at least once annually. Under IAS 36, the
cash generating unit is defined as a country per business
segment . This is generally the level at which Veolia
Environmental Services management assesses operating performance.
1 • 10 Asset impairment (IAS 36)
1 • 13 Provisions (IAS 37)
The Group performs impairment tests on intangible assets
and property, plant and equipment if there is internal or
external indication of impairment loss.
Pursuant to IAS 37, a provision is recorded when, at the
year end, the Group has a current legal or implicit obligation to a third party as a result of a past event, and it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and the
amount of the obligation can be reliably estimated.
Veolia Environmental Services performs systematic annual
impairment tests in respect of goodwill and other intangible
assets with an indefinite useful life following the preparation
of a strategic plan, or more frequently where there is evidence of impairment losses. In such case, the long-term prospects
of an activity are downgraded, a valuation is performed and
an impairment is recorded in priority against goodwill and
intangible assets in interim financial reporting if necessary.
The net carrying amount of an asset or group of assets is
reduced to its recoverable amount (higher of the fair value
less costs to sell and the value in use), where this is less.
In the event of a restructuring, an obligation exists if, prior
to the period end, the restructuring has been announced
and a detailed plan produced or implementation has commenced. Future operating costs are not recorded.
Provisions giving rise to a cash outflow after more than 1
year are discounted if the impact is material. The unwinding of discount is recorded in the Income statement in
« Other financial income and expenses ».
The value in use is determined by discounting the future
cash flows expected to be derived from the asset, cash
generating unit (CGU) or group of CGUs considered, taking
into account, where appropriate, the residual value, discounted using the discount rate determined for each
asset, CGU or group of CGUs and corresponding to the riskfree rate plus a risk premium weighted for business-specific risks. Given the activities of the Group, cash generating
units correspond to a geographic zone or an activity segment of a geographic zone.
In the case of provisions for site restoration, Veolia
Environmental Services accounts for the obligation to restore a site as waste is buried, recording a non-current asset
component and taking into account inflation and the date
on which expenses will be incurred (discounting). The
asset is amortized based on its depletion.
On disposal, fair value less costs to sell is estimated using
the multiples method (broker surveys) or based on similar
recent transactions.
Financial assets and liabilities
Impairment losses can be reversed, with the exception of
goodwill.
1 • 14 Financial instruments
(IAS 32 and IAS 39)
Financial assets include assets classified as available-forsale, held-to-maturity and held-for-trading, asset derivative instruments, loans and receivables and cash and cash
equivalents.
1 • 11 Inventories (IAS 2)
Financial liabilities include borrowings, other financing
and bank overdrafts, liability derivative instruments and
operating liabilities.
In accordance with IAS 2, inventories are stated at the
lower of cost and net realizable value. Net realizable value
is the estimated selling price in the ordinary course of
business less the estimated costs of completion and the
estimated costs necessary to make the sale.
The recognition and measurement of financial assets and
liabilities is governed by IAS 39-Financial instruments:
recognition and measurement.
Financial instruments: recognition and measurement
1 • 12 Assets and liabilities
of discontinued operations
Assets and liabilities of discontinued operations are stated
at the lower of their net carrying amount and fair value
less costs to sell.
Financial assets are recognized at the settlement date.
Financial assets are initially recognized at fair value, net of
transaction costs.
The Group classifies financial assets in one of the four
categories identified by IAS 39 on the acquisition date:
19
Held-to-maturity assets
Held-to-maturity assets are financial assets with fixed or
determinable payments and fixed maturity, other than
loans and receivables that the Group acquires with the
positive intention and ability to hold to maturity. After
initial recognition at fair value, held-to-maturity assets are
recognized and measured at amortized cost using the
effective interest method.
Held-to-maturity assets are reviewed for objective evidence
of impairment. An impairment loss is recognized if the
carrying amount of the financial asset exceeds its recoverable amount, as estimated during impairment tests. The
impairment loss is recognized in the Income statement.
Available-for-sale assets
Available-for-sale assets mainly consist of non-consolidated
investments and marketable securities that do not qualify
for inclusion in other financial asset categories. They are
measured at fair value, with fair value movements recognized
directly in equity, unless an impairment test leads to the
recognition of an unrealized capital loss compared with the
historical acquisition cost and this is equated to a material
and long-term loss. Where this is the case, the impairment
loss is recognized in the Income statement. Reverse of
impairments of debt securities only are recognized in the
Income statement (receivables and interest rate bonds).
Amounts recognized in equity are released to income on the
sale of the relevant investment. Fair value is equal to market
value in the case of listed securities and an estimate of the
value in use in the case of unlisted securities, determined
based on financial criteria most appropriate to the specific
situation of each security. Non-consolidated investments
which are not listed on an active market and for which the
fair value cannot be measured reliably, are recorded as a last
resort by the Group at historical cost less any accumulated
impairment losses.
Loans and receivables
This category includes loans to non-consolidated investments, other loans and receivables and trade receivables.
After initial recognition at fair value, these instruments
are recognized and measured at amortized cost using the
effective interest method.
An impairment loss is recognized if the carrying amount of
these assets exceeds the recoverable amount, as estimated
during impairment tests. The impairment loss is recognized
in the Income statement.
Assets at fair value through the Income statement
This category includes trading assets acquired by the
20
Company for the purpose of selling them in the near term in
order to realize a capital gain, which form part of a portfolio
of identified financial instruments that are managed
together and for which there is evidence of a recent actual
pattern of short-term profit-taking. Assets at fair value
through the Income statement also include the portfolio
of cash UCITS whose performance and management are
based on fair values. Changes in the value of these assets
are recognized in the Income statement.
Cash equivalents are held to meet short-term cash commitments rather than for investment or other purposes. Cash
and cash equivalents include all cash balances, deposits with
a maturity of less than 3 months, cash and monetary UCITS
and negotiable debt instruments. These investments can be
converted into cash or sold in the very short term and do
not present any material risk of loss in value. Cash and
cash equivalents are valued in accordance with the rules
applicable to assets at fair value through the Income statement.
Bank overdrafts repayable on demand which form an integral
part of the Group’s cash management policy represent a
component of cash and cash equivalents for the purposes
of the Cash flow statement.
Recognition and measurement of financial liabilities
With the exception of trading liabilities and liability
derivative instruments which are measured at fair value,
borrowings and other financial liabilities are recognized
initially at fair value less transaction costs and subsequently measured at amortized cost using the effective
interest method.
The effective interest rate is the rate that exactly discounts
estimated future cash payments through to maturity or the
next market-price fixing date, to the net carrying amount
of the financial liability.
When the financial liability issued includes an embedded
derivative which must be recognized separately, the amortized cost is calculated on the debt component only. The
amortized cost at the acquisition date is equal to the proceeds from the issue less the fair value of the embedded
derivative.
Minority interest put options
Pursuant to IAS 27, minority interests in fully consolidated
subsidiaries are considered a component of equity.
Furthermore, in accordance with IAS 32, minority interest
put options are considered a liability and measured in
accordance with IAS 39.
forecast transaction (such as a planned purchase or sale)
and could affect net income for the period,
Pending an IFRIC interpretation or a specific IFRS, the Group
has provisionally adopted the following treatment which
may be modified at a later date:
• the net investment hedge in a foreign operation hedges
the exposure to foreign exchange risk of the net assets
of a foreign operation including loans considered part
of the investment (IAS 21).
• The fair value of purchases promises is recorded in borrowings in the balance sheet, through minority interests and
where necessary goodwill for the residual balance.
An asset, liability, firm commitment, future cash-flow or
net investment in a foreign operation qualifies for hedge
accounting if:
• Gains or losses resulting from the unwinding of discount
of the liability are recorded in other financial income and
expenses, and when the put exercise price is variable,
changes in the value of the instrument resulting from
changes in valuation assumptions concerning the promise
are recorded in borrowings through goodwill.
• the hedging relationship is precisely defined and documented at the inception date,
If the minority interests are not purchased on expiry of the
promise, the journals previously recorded are reversed.
• the effectiveness of the hedge is demonstrated at inception
and by regular verification of the offsetting nature of movements in the market value of the hedging instrument and
the hedged item. The ineffective portion of the hedge is
systematically recognized in financial items.
The use of hedge accounting has the following consequences:
Recognition and measurement of derivative financial
instruments
The Group uses various derivative instruments to manage
its exposure to interest rate and foreign exchange risks
resulting from its operating, financial and investment
activities. Certain transactions performed in accordance
with the group management policy do not satisfy hedge
accounting criteria and are recorded as trading instruments.
Derivative instruments are recognized in the balance
sheet at fair value. Other than the exceptions detailed
below, changes in the fair value of derivative instruments
are recorded through the Income statement. The fair value
of derivatives is estimated using standard valuation
models which take into account active market data.
Derivative instruments may be classified as one of three
types of hedging relationship: fair value hedge, cash flow
hedge or net investment hedge in a foreign operation:
• a fair value hedge is a hedge of exposure to changes in
fair value of a recognized asset or liability, or an identified
portion of such an asset or liability, that is attributable
to a particular risk (notably interest rate or foreign
exchange risk), and could affect net income for the
period,
• in the case of fair value hedges of existing assets and liabilities, the hedged portion of these items is measured at
fair value in the balance sheet. The gain or loss on remeasurement is recognized in the Income statement, where
it is offset against matching gains or losses arising on
the fair value remeasurement of the hedging financial
instrument, to the extent it is effective,
• in the case of future cash flow hedges, the portion of
the gain or loss on the fair value remeasurement of the
hedging instrument that is determined to be an effective
hedge is recognized directly in equity, while the gain or
loss on the fair value remeasurement of the underlying
item is not recognized in the balance sheet. The ineffective
portion of the gain or loss on the hedging instrument is
recognized in the Income statement. Gains or losses
recognized in equity are released to the Income statement
in line with the recording of the items hedged,
• in the case of net investment hedges, the effective portion
of the gain or loss on the hedging instrument is recognized
in translation reserves in equity, while the ineffective
portion is recognized in the Income statement. Gains and
losses recognized in translation reserves are released to the
Income statement when the foreign operation is sold.
Embedded derivatives
• a cash flow hedge is a hedge of exposure to variability in
cash flows that is attributable to a particular risk associated
with a recognized asset or liability or a highly probable
An embedded derivative is a component of a host contract
that satisfies the definition of a derivative and whose
21
economic characteristics are not closely related to that of
the host contract. An embedded derivative must be separated from its host contract and accounted for as a derivative
if, and only if, the following three conditions are satisfied:
• the economic characteristics and risks of the embedded
derivative are not closely related to the economic characteristics and risks of the host contract,
• the embedded derivative satisfies the definition of a derivative laid down in IAS 39; and
• the hybrid instrument is not measured at fair value with
changes in fair value recognized in the Income statement.
1 • 15 Pension plans (IAS 19) and
other employee-related obligations
The Group has several pension plans. Pension obligations
are calculated using the projected unit credit method. This
method is based on the probability of personnel remaining
with companies in the Group until retirement, the foreseeable changes in future compensation, and the appropriate
discount rate. Specific discount rates are adopted for each
monetary zone. This results in the recognition of pensionrelated assets or liabilities, and the recognition of the related
net expenses.
Veolia Environmental Services has elected to offset actuarial
gains and losses against equity as of January 1, 2004 and
for early adoption as of January 1, 2005 of IAS 19 (revised).
Actuarial gains and losses generated at this date are,
therefore, offset against equity and no amortization charge
in respect of these actuarial gains and losses is recorded in
the Income statement.
1 • 16 Share-based payments
(IFRS 2)
Pursuant to IFRS 2 Share-based Payment an expense is
recorded in respect of share purchase or subscription plans
and other share-based compensation granted by the
Group to its employees. The fair value of these plans on
the grant date is expensed in the Income statement and
recognized directly in equity in the period in which the
benefit vests and the service is rendered. In accordance
with IFRS 2, in order to ensure the comparability of the
2005 and 2004 financial statements, only those plans
granted after November 7, 2002 and for which rights have
not vested at January 1, 2005 are measured and recognized
in personnel costs.
22
The fair value of purchase and subscription options is
calculated using the binomial model, taking into account
the expected life of the options, the risk-free interest rate,
observed volatility in the past and dividends expected on
the shares.
The compensation expense in respect of employee savings
plans is equal to the difference between the subscription
price and the average share price at each subscription date.
1 • 17 Revenue (IAS 18)
In accordance with IAS 18, the definition of revenue has been
modified.
Revenue is equal to the fair value of goods and services for
which the risks and rewards of ownership and the control
thereof have been effectively transferred to the buyer.
Income from contracts comprising a lease pursuant to
IFRIC 4 includes:
• principal finance repayments by the local authority,
• loan remuneration.
Principal finance repayments are excluded from revenue.
However, financial income related to the loans is included
therein.
1 • 18 Financial items in the income
statement
In the Group’s opinion, the non-accounting balance, « net
financial debt », is a relevant indicator of the Group’s debt.
Net financial debt is defined by the Group as the total of
long- and short-term borrowings less net cash and cash
equivalents.
Net finance costs consist of interest payable on borrowings
calculated using the effective interest rate, gains and losses
on interest rate derivatives both qualifying and not qualifying
as hedges and income from cash investments and equivalents. Interest income is recognized in the Income statement
when it is earned using the effective interest method.
Interest costs included in payments under lease finance
contracts are recorded using the effective interest method.
Other financial income and expenses notably include
loan income calculated using the amortized cost method,
dividends, foreign exchange gains and losses, impairment
losses on financial assets and the unwinding of discount
of provisions.
1 • 19 Income taxes (IAS 12)
The income tax expense (income) includes the current tax
charge (income) and the deferred tax charge (income).
Deferred tax assets are recognized on deductible temporary
differences, tax loss carry forwards and/or tax credit carry
forwards. Deferred tax liabilities are recognized on taxable
temporary differences.
Deferred tax assets and liabilities are adjusted for the effects
of changes in tax laws and rates at the enactment date.
Deferred tax balances are not discounted.
A deferred tax asset is recognized to the extent that the
Group is likely to generate sufficient future taxable profits
against which the asset can be offset. Deferred tax assets
are impaired to the extent that it is no longer probable
that sufficient taxable profits will be available.
1 • 20 Accounting policies specific
to environmental services activities
Veolia Environmental Services provides environmental
management services to local authorities and industrial
c u s t o m e r s . T h ro u g h n u m e ro u s co nt ra c t s, Ve o l i a
E n v i r o n m e n t a l S e r v i c e s operates assets that it
returns when the contracts terminate. In certain
cases, Veolia Environmental Services finances the
assets on behalf of public or private partners. As
part of the review accompanying IFRS adoption, Veolia
Environmental Services examined the nature of assets
held by considering the « substance » of these contracts,
grouping them into three categories.
therefore becomes the lessor vis-à-vis its customers. Where
the lease transfers the risks and rewards of ownership of
the asset in accordance with IAS 17 criteria, the operator
recognizes a loan (« IFRIC 4 loan ») to reflect the corresponding financing.
Contracts satisfying the criteria laid down in IFRIC 4 are
either outsourcing contracts with industrial customers, or
incineration contracts, under which, notably, risks associated
with the level of demand or volume are in substance
transferred to the customer.
Veolia Environmental Services does not therefore recognize
an item of property, plant and equipment but a financial
receivable. During the construction phase, a financial
receivable is recognized in the balance sheet and operating
income in the Income statement, in accordance with the
percentage completion method laid down in IAS 11 for
construction contracts. The financial receivables resulting
from this analysis are measured at amortized cost using
the effective interest method. After a review of the contract
and its financing, the implied interest rate on the financial
receivable is based on either the Group financing ra t e
and/or the borrowing rate associated with the contract.
Concession contracts
A substantial portion of Group’s assets are the result of
concession contracts granted. The characteristics of these
contracts vary significantly depending on the country and
activity concerned. Nonetheless, they generally provide,
directly or indirectly, for customer involvement in the
determination of the service and its remuneration, and
the return of the assets necessary to the performance of
the service at the end of the contract. In 2005, the Group
recorded these assets on a separate line of the balance sheet,
« Publicly-owned utility networks ». These assets are
amortized or depreciated over their useful life in accordance
with IAS 38 on intangible assets and IAS 16 on property,
plant and equipment.
Assets relating to contracts covered by IFRIC 4
Certain assets qualify for treatment as lease contracts
pursuant to IAS 17 and its interpretation IFRIC 4 published
in December 2004. IFRIC 4 Determining whether an
arrangement contains a lease calls for a review of the
contractual terms and conditions of agreements that do not
take the legal form of a lease but convey a right to use an
asset in return for a payment or series of payments. Under
this interpretation such agreements qualify as leases, based
on the allocation of the risks and rewards of ownership,
and must be analyzed and accounted for in accordance
with the criteria laid down in IAS 17. The contract operator
In addition, the Group generally assumes a contractual
obligation to maintain and repair facilities managed through
public service contracts. In the case of publicly-owned utility
networks accounted for in accordance with IAS 38, resulting
maintenance and repair costs are analyzed in accordance
with IAS 37 on provisions and, where appropriate, a provision
for maintenance and repair costs is recorded.
Other contracts
Property, plant and equipment under contracts which do
not fall into either of the above two categories continue to be
23
recorded as property, plant and equipment. The components
approach is applied in accordance with IAS 16.
Outlook for 2006
In March 2005, IFRIC published draft interpretations D12,
D13 and D14 on service concession arrangements where
the grantor determines the terms and conditions under
which the assets are operated and sets directly or indirectly
the price of services rendered, and which provide for the
return of assets with a material residual value to the grantor
at the end of the contract term.
These drafts do not permit the recording of such infrastructures in property, plant and equipment by the concession
operator. If the operator finances the infrastructure, it must
recognize either a financial asset (D13), when payments are
made by the grantor, or an intangible asset (D14), when
payments are collected from users.
Despite several delays in the publication date of these
interpretations and the fact that their adoption remains
uncertain, the Group has nonetheless decided to proceed
with their implementation in 2006. In the Group’s opinion,
these draft interpretations could represent a significant
progress in the application of the standards and offer an
adequate basis for amending the accounting presentation
of the assets concerned. The Group will therefore undertake
a detailed review of its extensive contract portfolio in 2006,
with a view to initial application in the first-half of 2006,
subject to further amendments to the drafts.
1 • 21 Construction contacts (IAS 11)
Pursuant to IAS 11, and when the net income from a contract
can be measured reliably, Group companies recognize a
margin in accordance with the completion method.
The percentage of completion is determined by comparing
costs incurred as of the balance sheet date with total
estimated costs under the contract.
When total contract costs exceed total contract income,
the expected loss is expensed immediately through the
recognition of a provision for losses to completion.
1 • 22 Segment reporting (IAS 14)
For confidential reasons, Veolia Environmental Services does
not wish to develop this segment.
24
1 • 23 Standards and interpretations
for 2006 and 2007 (other than those
mentioned in note 1.20)
• IFRIC 7-Applying the restatement approach under IAS 29
financial reporting in Hyperinflationary Economies:
European Union approval is expected in April/May 2006.
This draft interpretation is applicable to the Group from
January 1, 2007. Veolia Environnement does not expect
implementation of this interpretation to have a material
impact.
• IFRIC 8-Scope of IFRS 2: European Union approval is
expected in the summer of 2006. Application of this interpretation is mandatory for financial periods beginning on
or after May 1, 2006. Application by Veolia Environmental
Services is mandatory from January 1, 2007. Veolia
Environmental Services does not expect implementation of this interpretation to have a material impact.
• IAS 21 revised (December 15, 2005): European Union
approval is expected in April/May 2006 and application
is mandatory from January 1, 2006. The revised text states
that in the case of net investments in foreign operations,
foreign exchange gains and losses on loans denominated
in a currency different from the functional currency of
the lending company or of the borrowing company, must
be recognized in foreign exchange translation reserves.
• Amendment to IAS 39 on the fair value option. This
amendment is applicable from January 1, 2006. Companies
may designate a financial asset or liability as being
at fair value through the Income statement on initial
recognition. In so far as it produces more relevant information, this designation is possible where it eliminates
or significantly reduces an inconsistency in recognition or
measurement which, otherwise, would result from the
measurement of assets or liabilities or the recognition of
resulting gains or losses on another basis. This designation
may also be adopted when a group of financial assets
or financial liabilities or both are managed and their
performance is measured on a fair value basis in accordance with a documented risk management or investment
policy and that information on a group is presented on this
basis, internally, to group management. The Group does
not expect any material impact.
• Amendment to IAS 39 on cash flow hedges of future intercompany transactions. The foreign exchange risk of
a highly probable inter-company forecast transaction
may qualify as a hedged item in a cash flow hedge in
consolidated financial statements, provided that the
transaction is denominated in a currency other than the
functional currency of the entity entering into the transaction and the foreign exchange risk will affect consolidated
net income. This option offered to companies would not,
in theory, appear to concern Veolia Environmental Services.
• IFRS 7 on financial instrument disclosures is applicable
from January 1, 2007 and early adoption is possible from
financial year 2006.
Note 2
Use of management estimates in the application
of Group accounting standards
The preparation of financial statements requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenues and expenses,
and the disclosures of contingent assets and liabilities.
Future results could differ significantly from these estimates.
Notes 1.10 and 4 concern goodwill and intangible asset
impairment tests. Group management performed tests
based on best forecasts of the future value of the activities
of the cash generating units concerned and taking into
account discount rates.
Underlying estimates and assumptions are determined
based on past experience and other factors considered as
reasonable given the circumstances. They act as a basis for
making judgments necessary to the determination of the
carrying amount of assets and liabilities, which cannot be
obtained directly from other sources. Future values could
differ from these estimates.
Note 29 on derivative instruments describes the treatment
of such instruments. Veolia Environmental Services valued
these derivative instruments, allocated them and tested
their effectiveness where necessary.
Underlying estimates and assumptions are reviewed on
an ongoing basis. The impact of changes in accounting
estimates is recognized in the period the change is made if
it affects this period only and in the period the change is
made and subsequent periods if they are also affected by
the change.
Notes 1.9 and 4 on goodwill and business combinations
present the method adopted for the allocation of the
acquisition price on business combinations. This allocation
is based on future cash flow assumptions and discount
rates.
Notes 17 and 30 on provisions and employee commitments
detail the provisions recognized by Veolia Environmental
Services. Veolia Environmental Services determined these
provisions based on best estimates of these obligations.
Note 26 on the income tax expense presents the tax position
of the Group and is notably based in France and in the
United States on best estimates available to the Group of
trends in future tax results.
All these estimates are based on organized procedures for
the collection of forecast information on future flows,
validated by line management, and on expected market
data based on external indicators and used in accordance
with consistent and documented methodologies.
25
Note 3
Significant events
• In November 2005, Onyx SA became Veolia Environmental
Services Ltd. This change of name follows upon adoption
by various divisions of Veolia Environnement of a common
name.
Financière de l’Ouest for €354 million. These securities
were cancelled by means of a capital reduc tion
(747,213 shares). The repurchase of these shares was
financed by an advance of Veolia Environnement, wich
owns to 100% of Veolia Environmental Services.
• On December 9, 2005, Veolia Environmental Services
acquired its own shares with Veolia Environnement
Note 4
Goodwill
Goodwill breaks down as follows:
(€ million)
As of December
31, 2005
As of December
31, 2004
1,620.9
(11.4)
1,609.5
1,443.6
( 2.8)
1,441.6
Gross
Impairment losses
Net
Movements in the net carrying amount of goodwill by segment during 2005:
(€ million)
France
International
Total
(1)
As of December
31, 2004
Change in
consolidation scope (1)
Foreign exchange
translation
Impairment
losses
Other
movements
As of December
31, 2005
335.9
1,105.7
1,441.6
53.0
12.6
65.6
117.1
117.1
(10.0)
(10.0)
(1.0)
(3.7)
(4.7)
387.9
1,221.7
1,609.6
In 2005, changes in consolidation scope were due to the acquisition by Veolia Environmental Services (especially Shanks dangerous waste division
and the company Vasko in United States) and the recognition of the put on minorities in the balance sheet.
Impairment tests as of December 31, 2005
Veolia Environmental Services performs systematic annual
impairment tests in respect of goodwill and other intangible
assets with an indefinite useful life. More frequent tests
are performed where there is evidence of impairment losses.
Discount rates are estimated by management for each cashgenerating unit and reflect current market assessments
of the time value of money and the specific risks to which
the cash-generating unit is exposed. The growth rate and
trends in volume, prices and direct costs are based on past
trends and the future market outlook.
The recoverable value of a cash-generating unit is estimated
by discounting future cash flows. The main assumptions
on which the value in use of a cash-generating unit is
based are the discount rate, the growth rate and trends in
prices and direct costs over the period.
Systematic impairment tests are based on future cash flows
taken, for the first five years, from the strategic planning
process in June 2005. Cash flows for years 6 to 15 are based
on year 6 cash flows (taken from the strategic planning
document) adjusted by an appropriate growth rate (3% on
26
average in 2005). The terminal value is then calculated by
discounting year 16 data at the perpetual growth rate,
including only an organic growth rate such as inflation
(2% on average in 2005).
Discount rates used in 2005 reflect both the business and
the country or geographical area of the business, based
on the criteria disclosed in Note 1.9. The main average
discount rates by geographical area in 2005 were as follows,
depending on the nature of the risk:
France:
Great Britain:
United States:
Czech Republic:
Germany:
Australia:
4,23% à 8,23%
5,76% à 10,80%
5,55% à 7,83%
4,62% à 6,35%
4,23% à 7,39%
7,60% à 7,92%
At December 31, 2005, an impairment loss of €10 million
was recognised for Israel CGU. The discounting rate used
is 10.8%.
Note 5
Movements in the net carrying amount of other intangible assets during 2005:
(€ million)
As of
Acquisitions
Disposals
December 31,
Impairment
Amortization/
Change in
Foreign
Other
As of
losses
reversals
consolidation
exchange
movements
December 31,
scope
translation
-
(7.1)
(22.6)
(29.7)
0.0
7.4
7.4
0.1
6.2
6.3
4.1
6.2
10.3
20.7
62.1
82.8
2004
Software
Others
Total
16.7
62.2
78.9
7.2
5.7
12.9
(0.3)
(3.1)
(3.4)
2005
The item « others » includes intangible rights acquired (customers lists, etc..)
Other intangible assets break down as follows:
(€ million)
Intangible assets with an indefinite useful life, gross
Impairment losses
Intangible assets with an indefinite useful life, net
Intangible assets with a definite useful life, gross
Amortization
Impairment losses
Intangible assets with a definite useful life, net
Total
As of December 31,
2004
As of December 31,
2005
0.0
180.8
(101.9)
78.9
78.9
0.0
238.5
(155.5)
(0.2)
82.8
82.8
27
Note 6
Movements in the net carrying amount of property, plant and equipment during 2005:
(€ million)
As of
Acquisitions Disposals Impairment
December 31,
losses
Amortization/
Change in
reversals consolidation
2004
Property, plant and
equipment, gross
Other
As of
exchange movements
Foreign
December 31,
scope translation
2005
5,702.4
555.9
(287.3)
-
-
60.9
299.2
3.7
6,334.9
(3,211.6)
-
230.4
-
(481.9)
11.4
(129.7)
8.9
(3,512.5)
Property, plant and
equipment, net
2,490.8
555.9
(56.9)
-
(481.9)
72.4
169.4
12.7
2,762.4
Depreciation
Foreign exchange translation adjustments are essentially due to appreciation of U.S. dollar at December 31, 2004.
Property, plant and equipment by segment break down as follows:
(€ million)
Gross
France
International
Total
907.9
1,582.9
2,490.8
2,721.4
3,613.4
6,334.9
Depreciation and
impairment losses
(1,760.0)
(1,812.5)
(3,572.5)
Net
961.4
1,801.0
2,762.4
The breakdown of property, plant and equipment by class of assets is as follows:
(€ million)
Gross
Land
Buildings
Technical systems
Assets under construction
Other
Total
28
592.0
457.7
887.7
187.3
366.2
2,490.8
1,029.9
928.8
2,690.0
137.2
1,548.9
6,334.9
Depreciation and
impairment losses
(426.2)
(389.6)
(1,636.3)
(6.8)
(1,113.7)
(3,572.5)
Net
603.8
539.2
1,053.7
130.5
435.3
2,762.4
Note 7
Publicly-owned utility domain
Movements in the net carrying amount of publicly-owned utility networks during 2005:
(€ million)
As of Acquisitions Disposals Depreciation/
December
reversals
31, 2004
Publicly-owned utility
domain, gross
Depreciation
Publicly-owned utility
networks, net
Changes in
consolidation
scope
Foreign
exchange
translation
Other
movements
As of
December
31, 2005
814.0
(197.4)
182.7
-
(1.5)
1.0
(44.6)
-
12.3
(2.5)
6.5
2.8
1,015.1
(240.7)
617.6
182.7
(0.5)
(44.6)
-
9.8
9.3
774.4
Les actifs du domaine concédé se détaillent comme suit :
(€ million)
Gross
France
International
Total
293.7
323.9
617.6
Depreciation and
impairment losses
Net
(165.0)
(75.6)
(240.7)
369.5
404.9
774.4
534.6
480.6
1,015.1
Note 8
The principal investments in associates are as follows:
(€ million)
% holding
Tiru
Ta-Ho Onyx Taitung Environment (1)
Grand Bahamas
EPFD
GEREP
TWZ
ATIC
Tecnoborgo (2)
Tianjin Heija Onyx Environment
Shangaï Laogang landfill
Effeh
Total Waste Management (3)
Others (unit < €1 million)
Total
As of December 31,
Share in equity
Share of net
income
2005
2004
2005
2004
2005
2004
24.00%
20.00%
50.00%
50.00%
50.00%
42.88%
50.00%
31.08%
30.00%
25.00%
-
24.00%
50.00%
50.00%
50.00%
42.88%
50.00%
49.00%
31.08%
30.00%
25.00%
50.0%
10.7
3.3
13.9
3.7
1.9
1.3
1.6
3.6
5.2
3.6
5.0
53.8
11.5
12.1
3.6
2.1
1.2
1.6
6.5
3.1
4.5
3.4
2.2
8.1
59.9
(0.8)
(0.4)
1.3
0.3
(0.1)
0.1
0.0
0.1
(0.1)
0.0
1.3
1.6
5.1
1.6
0.2
0.2
0.2
0.0
1.5
(0.3)
0.0
0.0
0 .3
1.1
9.9
29
Movements in investments in associates in 2005
(€ million)
Tiru
Ta-Ho Onyx Taitung
Environment (1)
Grand Bahamas
EPFD
GEREP
TWZ
ATIC
Tecnoborgo (2)
Tianjin Heija Onyx
Environment
Shangaï Laogang landfill
Effeh
Total Waste Management (3)
Others (unit < €1 million)
Total
(1)
(2)
(3)
% holding
2004
Net
income
Changes in
consolidation scope
Other
2005
24.00%
11.5
(0.8)
-
-
-
-
10.7
20.00%
50.00%
50.00%
50.00%
42.88%
50.00%
-
12.1
3.6
2.1
1.2
1.6
6.5
(0.4)
1.3
0.3
(0.1)
0.1
(1.5)
(0.2)
(0.1)
-
(0.6)
1.9
-
4.0
-
0.3
-
-
-
-
(6.5)
-
3.3
13.9
3.7
1.9
1.3
1.6
-
31.08%
30.00%
25.00%
50.00%
3.1
4.5
3.4
2.2
8.1
59.9
0.1
(0.1)
0.0
-
0.3
0.8
0.2
0.1
-
1.3
1.6
(1.0)
(2.8)
2.6
(2.2)
(2.9)
(8.1)
Dividend Foreign exchange
distribution
translation
0.2
0.6
3.6
5.2
3.6
5.0
53.8
First consolidation in 2005
Consolidated by proportionate method since January 1, 2005
Consolidated by proportionate method since April 1, 2005
Summarized financial information for the principal equity associates is as follows:
(€ million)
30
As of December
31, 2005
As of December
31, 2004
Long term assets
Current assets
Total assets
Equity attributable to equity holders of the parent
Minority interests
Financial debts
Other liabilities and depreciation
289.7
187.0
476.7
111.3
1.4
198.9
165.1
476.7
231.0
170.0
401.0
81.6
1.7
145.7
172.0
401.0
Income statement
Revenue
Operating income
Net income
178.0
24.0
11.1
173.7
16.7
8.3
Note 9
Non-consolidated investments
Pursuant to IAS 39, non-consolidated investments are classified as available-for-sale and, as such, recognized at fair value.
Unrealized gains and losses are taken directly to equity, except for unrealized losses considered long-term which are expensed in the Income Statement.
Movements in the fair value of non-consolidated investments during 2005:
(€ million)
As of Acquisitions Disposals
Change in
ReDecember
consolidation valuation
31, 2004
scope
Non-consolidated
investments
34.0
9.5
(2.7)
(16.9)
Impairment
losses
-
Foreign
Other
exchange mouvements
translation
2.2
(0.1)
(0.8)
As of
December
31, 2005
25.1
Non-consolidated investments break down as follows:
(€ million)
Non-consolidated
investments
(1)
(2)
As of
December
31, 2004
% interest as
of December
31, 2005
Gross carrying
amount as of
December 31,
2005
Impairment
losses
Revaluation
Net carrying
amount as of
December 31,
2005
Ta-Ho Yunlin Onyx
RSEA Environment
9.8
Solurban
0.3
EAR
Soborec
4.0
Ta-Ho Onyx Taitung Environment (1)
13.2
Rev Suisse recyclage holding (2)
1.2
Sotame (2)
Accounting unit < € 1 million for 2005 5.5
Total
34.0
33.30%
50.00%
89.60%
100%
-
10.4
3.0
2.6
2.4
14.6
32.9
(0.4)
(2.7)
(4.7)
(7.8)
-
10.0
0.3
2.6
2.4
9.8
25.1
Consolidated by equity method since January 1, 2005.
Fully consolidated since January 1, 2005.
No unrealized gains and losses have been recognized in fiscal years 2004 and 2005.
Note 10
Long-term IFRIC 4 loans
Movements in the net carrying amount of long-term IFRIC 4 loans during 2005:
(€ million)
Long-term loans
Short-term loans
As of
December
31, 2004
Acquisitions
Repayments
Impairment
losses
Changes in
consolidation
scope
Foreign
exchange
translation
Other
As of
December
31, 2005
251.6
0.2
1.7
-
(18.7)
-
-
-
14.6
-
12.1
1.4
261.3
1.6
31
Note 11
Other long-term loans and investments
Movements in the value of other non-current financial assets during 2005:
(€ million)
As of
December
31, 2004
Acquisitions
Sales/
Repayments
Change in
consolidation
scope
Impairment
Fair value
losses adjustments
Other long term
loans, gross
49.5
0.9
(7.5)
1.3
-
-
Impairment losses
on other
long-term loans
(0.5)
-
-
-
-
-
Other long term
loans, net
49.0
0.9
(7.5)
1.3
-
Other investments,
gross
29.4
5.9
(3.2)
(1.4)
Impairment losses
on other
investments
(3.2)
(0.3)
-
Other investments,
net
26.2
5.5
Other non-current
financial assets, net
75.2
6.4
Foreign
exchange
translation
Other
As of
December
31, 2005
3.1 (33.7)
13.6
-
0.5
-
-
3.1 (33.2)
13.6
-
-
2.0
(2.6)
30.0
-
-
-
-
1.2
(2.2)
(3.2)
(1.4)
-
-
2.0
(1.4)
27.8
(10.7)
(0.1)
-
-
5.2 (34.6)
41.5
The classification of these financial assets in accordance with IAS 39 is as follows:
(€ million)
Held-to-maturity
Other long term loans, net
Other investments, net
Other non-current financial assets, net
32
As of December
31, 2004
As of December
31, 2005
15.5
15.5
16.5
16.5
originated by the company
As of December
As of December
31, 2004
31, 2005
49.0
10.7
59.7
13.7
11.3
25.0
Note 12
Deferred tax, net
The timing differences which give rise to significant deferred tax assets and liabilities are as follows:
(€ million)
Deferred tax assets
Employee benefits
Loss allowance
Tax losses
Finance leases/Assets
Other deductible temporary
differences
Gross deferred tax assets
Deferred tax assets
recognized
Recognized deferred
tax assets
Deferred tax liabilities:
Asset remeasurement
Deferred tax on amortization
differential
Finance leases/Liabilities
Other taxable temporary
differences
Deferred tax liabilities
Deferred tax. net
As of
December
31, 2004
Change in
business
Change in
consolidation
scope
Revaluation
Foreign
exchange
translation
Other
As of
December
31, 2005
17.5
44.5
80.1
16.6
0.6
1.3
0.4
(1.0)
(0.2)
-
9.3
-
0.4
2.3
6.9
-
0.3
(4.4)
7.4
0.1
28.1
43.6
94.8
15.6
94.2
253.0
(1.4)
(0.1)
0.4
0.2
0.3
9.6
36.6
46.2
(7.4)
(4.0)
122.7
304.9
(47.4)
(23.5)
-
-
(7.0)
(0.4)
(78.3)
205.6
(23.6)
0.2
9.6
39.2
(4.0)
226.6
35.9
5.1
(0.2)
-
4.7
(0.2)
45.3
85.9
7.2
2.5
0.2
-
-
11.8
-
36.3
(0.5)
136.5
6.9
103.1
232.1
(26.5)
(34.5)
(26.7)
3.1
0.7
0.5
(0.3)
9.6
31.0
47.5
(8.3)
(39.7)
(4.1)
(0.2)
60.6
249.3
(22.7)
Note 13
Working capital
Movements in net working capital during 2005:
(€ million)
Inventories and work in progress, net
As of
December
31, 2004
Change in
business
Change in
consolidation
scope
Foreign
exchange
translation
Other
As of
December
31, 2005
98.5
8.3
0.9
4.7
(2.4)
109.3
Net operating receivables
1,922.6
60.0
(3.7)
64.3
0.3
2,043.4
Net operating payables
1,814.8
90.6
2.1
72.7
(6.9)
1,973.2
Net working capital
206.3
(22.3)
(0.7)
(3.7)
4.8
179.5
Neutralization in tax working capital
-
45.0
-
-
-
-
Changes in net working capital
-
22.7
-
-
-
-
33
(€ million)
Inventories and work
in progress
As of Change
December
in
31, 2004 business
Impairment
losses
Reversal of
impairment
losses
Change in
consolidation
scope
Foreign
exchange
translation
Other
As of
December
31, 2004
Raw materials and supplies
72.7
0.6
-
-
0.5
3.6
(0.4)
76.9
Work in progress
12.0
6.2
-
-
-
0.5
(2.0)
16.7
Finished products inventories
11.3
0.4
-
-
0.5
-
0.2
12.3
Contracts in progress
3.7
1.1
-
-
-
0.6
-
5.5
in progress
99.7
8.3
-
-
0.9
4.7
(2.2)
111.3
Impairment losses on raw
materials and supplies
(0.9)
-
(1.3)
1.3
-
-
-
(1.0)
-
-
-
-
-
-
-
-
(0.4)
-
-
-
-
-
-
(0.4)
-
-
-
-
-
-
-
-
Impairment losses on inventories
and work-in-progress
(1.3)
-
(1.3)
1.3
-
-
-
(1.4)
8.3
(1.3)
1.3
0.9
4.7
(2.2)
109.9
As of
December
31, 2004
Change in
business
Charge to
provisions
Provision
reversals
Change in
consolidation
scope
Foreign
exchange
translation
Other
As of
December
31, 2005
1,558.8
54.5
84.4
0.8
-
-
(5.5)
(0.3)
56.3
2.8
(2.8)
-
1,691.1
57.9
195.8
180.1
(36.7)
11.4
-
-
1.7
0.2
4.8
1.8
15.7
(14.1)
181.3
179.4
1,989.1
60.0
-
-
(3.9)
65.7
(1.3)
2,109.6
(62.3)
-
(20.6)
21.2
0.5
(1.3)
5.0
(57.5)
(4.3)
-
(1.6)
1.7
(0.3)
(0.1)
(4.1)
(8.7)
(66.5)
-
(22.2)
22.9
0.2
(1.4)
0.9
(66.2)
1,922.6
60.0
(22.2)
22.9
(3.7)
64.3
(0.4)
2,043.4
Impairment losses
on work in progress
Impairment losses on finished
products inventories
Impairment losses
on contracts in progress
in progress, net
98.5
(€ million)
Operating receivables
Trade accounts receivable
Prepaid expenses
Other operating
account receivables
Other tax receivables
Operating receivables,
gross
Provisions on trade accounts
receivables
Provisions on other
operating receivables
Provisions on
operating receivables
Operating receivables,
net
34
Trade accounts receivable having been the subject of a Dailly loan sale program or of securitization represented a total of
€39 million at December 31, 2005 and €334 million at December 31, 2004.
(€ million)
Operating payables
Trade accounts payable
Other liabilities
Income tax liabilities
Other tax liabilities,
excluding income tax
Prepaid income
Operating payables
As of
December
31, 2004
Change
in
business
Change in
consolidation
scope
Foreign
exchange
translation
Other
As of
December
31, 2005
872.1
508.6
51.8
51.5
62.1
(24.6)
(1.0)
0.8
0.1
25.7
23.5
7.0
16.8
(32.3)
124.0
965.1
562.6
158.3
320.4
61.9
1,814.8
(0.5)
2.0
91.0
2.1
2.1
11.2
5.4
72.7
(115.6)
0.2
(6.9)
215.6
71.6
1,973.2
Note 14
Other short-term financial assets
Movements in other current financial assets during 2005:
(€ million)
As of
December
31, 2004
Other short-term loans, gross
Impairment losses
on short-term loans
Other short-term loans, net
Marketable securities, gross
Impairment losses
on marketable securities
Marketable securities, net
Other short-term
financial assets
Change
Change in
in consolidation
business
scope
Fair
Foreign
value exchange
adjustments translation
Other
As of
December
31, 2005
24.2
(4.3)
2.5
-
0.4
(18.5)
4.3
(3.7)
20.6
4.0
0.8
(3.4)
0.6
2.5
-
-
(0.2)
0.2
-
3.3
(15.3)
0.9
0.2
4.5
5.5
(0.1)
3.8
0.6
-
-
-
(0.2)
0.6
(0.4)
5.1
24.4
(2.8)
2.5
-
0.2
(14.6)
9.6
The classification of these financial assets in accordance with IAS 39 is as follows:
(€ million)
Financial assets
at fair value
through the
Income Statement
As of
As of
December
December
31, 2004
31, 2005
Other short-term loans
Marketable securities
-
-
originated by
the company
Available-for-sale
financial
assets
As of
December
31, 2004
As of
December
31, 2005
As of
December
31, 2004
As of
December
31, 2005
20.6
-
4.5
-
3.8
5.1
35
Note 15
Movements in cash and cash equivalents during 2005:
(€ million)
As of
December
31, 2004
Cash
Cash equivalents
122.8
26.8
149.6
Change
Change in
in consolidation
business
scope
(13.3)
4.2
(9.6)
12.5
6.3
18.8
Fair
Foreign
value exchange
Other
As of
December
31, 2005
-
36.4
8.6
45.0
167.6
46.2
213.8
9.7
0.3
10.0
Note 16
Equity
1. Share capital
Number of shares outstanding:
9,310,588 shares were outstanding as of January 1, 2004; 9,310,588 as of December 31, 2004 and 8,563,375 as of December 31, 2005.
Share capital decrease:
On December 9, 2005, Veolia Environmental Services acquired its own shares with Veolia Environnement Financière de l’Ouest
for €354 million. These securities were cancelled by means of a capital reduction (747,213 shares).
2. Appropriation of net income and dividend distribution
A dividend distribution of €100.0 million was paid in 2005 out of 2004 net income attributable to equity holders of
the parent of €198.7 million. The residual balance of €98.7 million was transferred to Veolia Environmental Services
consolidated reserves.
3. Foreign exchange translation reserves
Accumulated foreign exchange translation reserves were transferred on January 1, 2004 to consolidated reserves, in accordance
with the option adopted by the Group on first-time adoption of IFRS.
In 2005, positive translation differences of €89.6 million concerned the US dollar in the amount of €65.3 million.
In 2004, negative translation differences of €-67.7 million concerned the US dollar in the amount of €-50.3 million.
36
Movements in translation reserves attributable to equity holders of the parent:
(€ million)
Exchange differences on translation of the financial statements of subsidiaries
prepared in a foreign currency
Exchange differences on the net financing of foreign investments of holding companies (NIH)
Total
Movement during the year
Total
Total
Gross
Deferred
tax
Net
(56.5)
8.9
(47.6)
(20.1)
(20.1)
(56.5)
(11.2)
(67.7)
141.2
(1.1)
140.1
17.2
17.2
141.2
16.1
157.3
84.7
7.8
92.5
(2.9)
(2.9)
84.7
4.9
89.6
Breakdown by currency of translation reserves attributable to equity holders of the parent:
(€ million)
U.S. Dollar
Pound Sterling
Australian Dollar
Canadian Dollar
Chinese Yuan
Other currencies
Total
As of
December 31, 2004
Movement
As of
December 31, 2005
(50.3)
(0.7)
(2.6)
(0.5)
(0.6)
(13.0)
(67.7)
115.6
4.2
4.7
8.6
1.6
22.6
157.3
65.3
3.5
2.1
8.1
1.0
9.6
89.6
4. Value adjustments
These adjustments correspond to the change in fair value of the derivative hedging instruments qualified as cash-flow hedges.
5. Other adjustments
Other adjustments essentially reflect the actuarial gains and losses on employee commitments and the recognition in reserves
of the amount to cover expenses related to employee stock options.
Minority interests
(€ million)
Minority interests as of January 1,
Changes in consolidation scope
Net income of consolidated subsidiaries attributable to minority interests
Dividends paid by consolidated subsidiaries
Impact of foreign exchange fluctuations on minority interests
Other changes
Minority interests as of December 31,
2005
2004
139.0
(66.3)
27.2
(17.8)
7.8
(5.8)
84.1
120.6
12.8
22.9
(21.6)
(0.1)
4.4
139.0
The decrease in minority interests in 2005 was mainly due to accounting for the puts attributed to the share of minority interests.
37
Comprehensive income
(€ million)
As of
December 31, 2005
As of
December 31, 2004
149.0
(56.6)
16.1
165.1
(11.2)
(67.8)
2.4
2.4
(0.4)
(0.4)
(22.4)
(22.4)
145.1
246.2
391.3
(68.2)
221.6
153.4
356.3
35.0
130.6
22.8
Foreign exchange translation reserves
- exchange differences on translation of the financial statements
of subsidiaries prepared in a foreign currency
- exchange differences on the net financing of foreign investments
of holding companies (NIH)
Total
- fair value adjustments on available for sale assets
- derivative instruments – cash flow hedges
Total
Other value adjustments recognized in equity
- actuarial gains or losses on pension obligations
Total
Total value adjustments recognized directly in equity
Total income and expenses recognized in net income or equity
- attributable to equity holders of the parent
- attributable to minority interests
Note 17
Non-current and current provisions
Pursuant to IAS 37, provisions maturing after more than one year are discounted. Discount rates as of December 31, 2004
and 2005 were as follows:
Discount rates
Euro
2 to 5 years
6 to 10 years
After ten years
U.S. Dollar
2 to 5 years
6 to 10 years
After ten years
Pound Sterling
2 to 5 years
6 to 10 years
After ten years
As of December 31,
2005
As of December 31,
2004
3.25%
3.88%
4.32%
3.23%
4.79%
5.16%
5.16%
5.55%
5.79%
2.84%
4.79%
5.16%
4.88%
5.11%
5.10%
5.42%
5.67%
5.67%
Discount rates mainly increased between December 31, 2004 and December 31, 2005. The increase of the discount rate of
provisions entails lesser endowments.
38
Movements in non-current provisions in 2005:
(€ million)
As of Charges
December
to
31, 2004 expenses
Litigation including employee
related and Tax
Provision for work in progress
and losses to completion
on LT contracts
Closure and post closure costs
Pension commitments
and assimilated
Other
Total
Utilization Reversal
Unwinding
of
discount
Change in
Foreign
consolidation
exchange
scope translation
Other
As of
December
31, 2005
2.3
2.6
(0.4)
-
0.1
-
-
0.1
4.7
2.9
243.8
4.8
(3.7)
(4.1)
(0.3)
(0.1)
0.2
13.6
2.0
0.6
11.7
(0.6)
24.8
7.7
288.0
46.5
30.6
326.1
1.4
2.3
7.4
(14.9)
(2.2)
(21.6)
(0.1)
(5.1)
(5.6)
0.3
14.3
0.1
2.4
4.5
1.1
0.5
13.9
33.0
(3.9)
53.4
67.2
24.9
392.5
Litigation provisions
This provision covers all losses that are considered probable
and that relate to litigation arising in the normal course of
Veolia Environmental Services business operations.
The increase in provisions for site restoration resulting
from new commitments, the provisions unwinding discount
and effect of change in the discount rate, affect the noncurrent provisions respectively at the level of €25.5 million,
€13.6 million and €(5.7) million.
Provisions for impairment of work in progress and losses
on long-term contracts
The main provisions concern loss-making contracts.
On December 31, 2005, the estimated undiscontinued future
cost amounted to more than €500 million.
Closure and post-closure costs
The Group has financial obligations relating to closure and
post-closure costs and the remediation of the disposal
facilities it operates or for which it is otherwise responsible.
The Group provides for these estimated future costs in
proportion to the tons of waste buried over the authorized
term of the installations.
Pensions:
see Note 30
Other provisions
Other provisions include those obligations recorded as part
of the normal operation of the Group’s subsidiaries.
Changes in current provisions in 2005 were as follows:
(€ million)
As of
December
31, 2004
Current provisions
Litigation including
employee-related and Tax
Provision for work in
progress and losses to
completion on LT contracts
Closure and post closure costs
Restructuring expense
Subsidiary risk
Pension commitments
and assimilated
Provision for own insurer
Other
Total
Additional
provision in the
year charged
to expenses
Utilization
Change in
consolidation
scope
Foreign
exchange
translation
Other
renewal
As of
December
31, 2005
23.5
10.3
(6.3)
(6.2)
-
0.1
0.3
21.7
12.8
67.2
(1.9)
2.1
0.8
3.5
1.0
-
(1.1)
(25.8)
(2.3)
-
(3.8)
(0.7)
(2.3)
(2.0)
-
1.4
4.0
0.2
0.2
(10.3)
4.2
7.3
-
3.5
47.4
3.5
-
27.8
18.7
40.0
191.9
5.5
14.2
25.0
58.6
(0.6)
(8.6)
(16.3)
(60.9)
(0.1)
(7.1)
(20.0)
0.1
1.0
(0.9)
0.4
2.9
0.7
9.8
(1.7)
0.7
3.2
2.3
31.3
26.5
46.5
180.7
Released
39
Note 18
(€ million)
Bonds
Other long-term
borrowings
Sales agreement granted
by a party
As of
December
31, 2004
Acquisitions
Maturities/
Disposals
Change in
consolidation
scope
Value
adjustments
Foreign
exchange
translation
Other
As of
December
31, 2005
180.3
1.2
(8.8)
-
(0.4)
13.6
(6.6)
179.4
2,076.6
802.9
(114.9)
25.2
-
140.0
194.1
3,113.8
2,256.9
8.2
812.3
(123.7)
25.2
(0.4)
143.6
101.2
288.7
109.4
3,402.6
Long-term borrowings break down by maturity as follows:
(€ million)
As of
December
31, 2004
Montgomery bond issue
Selch’p bond issue
Tyseley bond issue
Other < €10 million
Total
71.9
33.8
66.0
8.7
180.3
1 to 2 years
Maturity
2 to 5 years
After five years
8.5
1.1
5.0
7.6
22.1
28.2
6.6
17.0
0.7
52.5
38.2
26.1
40.5
104.8
As of
December
31, 2005
74.8
33.8
62.5
8.3
179.4
Breakdown of bond issues by main component:
(€ million)
Operation
Final
maturity
Montgomery bond issue 11/01/2014
Tyseley bond issue
30/07/2018
Selch’p bond issue (49%) 31/12/2021
Principal totals
of bond issues
Currency Nominal Interest Amortized
ReNet Effective
in
rate
cost valuation carrying interest
€ million
restatement
amountrate before
hedging
USD
GBP
GBP
73.8
71.5
34.4
179.7
5.00%
6.67%
7.14%
Effective
interest
rate after
hedging
1.0
(9.0)
(0.6)
-
74.8
62.5
33.8
3.60%
9.50%
7.39%
3.60%
9.50%
7.39%
(8.6)
-
171.1
n/a
n/a
Limited recourse financing
The debenture loan taken out to finance the waste to energy household refuse plant of Selch'p, located in the suburbs of
London is a non-recourse loan, which means it only guarantees the assets financed. This loan is offset by an entry under
property plant and equipement in the balance sheet.
40
(€ million)
As of
December
31, 2004
Veolia Environment loans
Finance leases
Autres
Others
1,462.2
367.1
247.3
2,076.6
1 to 2 years
70.2
27.5
97.7
Maturity
2 to 5 years
After five years
1,610.2
116.9
201.8
2,778.9
850.0
160.6
76.7
237.3
As of
December
31, 2005
2,460.2
347.7
305.9
3,113.8
The debt of the Group is partly signed with Veolia Environnement, who provides the financing and hedges the risks.
The loan agreements concluded between Veolia Environmental Services and Veolia Environnement include:
• a long-term loan of €550 million at IBOR +1,5% redeemable on December 31, 2018, a long-term loan of €300 million at IBOR +1%
redeemable on December 1, 2015 and a medium-term loan for €500 million at IBOR +0,5% redeemable on December 1, 2008,
• a cash agreement of €350 million at the rate Eonia +0,15%.
The long-term debt of the group is mainly based on variable rate (about 75%).
Long term debt includes the financing concerning waste to energy plants: in France, 10 waste to energy plants are leased from
the local authorities and are returned to the local authorities at the end of the lease term. They represented €210.1 million
in 2005 against €223.6 million in 2004.
The fixed part of the debt is essentially linked to our waste to energy plants, wich are financed either by fixed rate leases,
or by bond issues.
The breakdown of long-term borrowings into the currencies of issue (before SWAP transactions) is as follows (amortized cost
or fair value):
(€ million)
Euro
U.S. Dollar
Pound Sterling
Australian Dollar
Norwegian Crown
Czech Crowns
Other
Total
As of
December
31, 2004
As of
December
31, 2005
1,274.0
98.0
725.9
97.3
23.6
0.3
37.5
2,256.9
2,106.8
153.1
842.5
137,7
13.4
7.2
142.0
3,402.6
The increase in long-term debt in euros in 2005 results essentially from the financing of the capital reduction in December 2005
for €354 million.
41
Note 19
Other long-term borrowings
Movements in other long-term borrowings during 2005:
(€ million)
As of
December
31, 2004
Change
in
business
Change in
consolidation
scope
Foreign
exchange
translation
Other
As of
December
31, 2005
74.7
4.5
0.3
2.5
(2.1)
79.9
Other long-term borrowings
Note 20
Short-term borrowings
Movements in short-term borrowings during 2005:
(€ million)
As of
December
Acquisitions Repayments/
Change in
transfers consolidation
Fair
value
scope adjustment
31, 2004
Current financial liabilities
643.8
-
(115.1)
(4.9)
Foreign
exchange
Other
translation
0.6
As of
December
31, 2005
9.1 (367.2)
166.3
Note 21
Bank overdrafts and other cash position item
Movements in other non-current liabilities during 2005:
(€ million)
As of
December
31, 2004
Changes
in
business
Change in
consolidation
scope
translation
82.2
(221.3)
8.9
(0.3)
Trésorerie passive
Foreign
exchange
Other
As of
December
31, 2005
232.1
101.6
Note 22
Revenue
Breakdown of revenue:
(€ million)
Sales of goods
Services rendered
IFRIC 4 loan income
Total revenue
42
As of
December 31, 2005
As of
December 31, 2004
472.8
6,091.4
15.0
6,579.2
483.9
5,675.8
16.4
6,176.1
Note 23
Operating income
(€ million)
As of December 31,
2005
2004
Revenue from ordinary activities
Net operating depreciation, amortization and provisions (a)
Personnel costs (including employee benefits) (b)
Restructuring costs (c)
Impairment losses on intangible assets with an indefinite useful life (d)
Capital gains and losses on asset sale
Other operating expenses
Research and development costs
(excluding personnel operating depreciations) (e)
Operating income
6,579.2
(517.3)
(2,268.0)
(1.5)
(10.0)
5.9
(3,263.0)
6,176.1
(554.2)
(2,112.0)
(2.7)
(2.0)
22.1
(3,055.1)
(2.3)
523.0
(6.1)
466.1
Operating depreciation, amortization, provisions and impairment losses in the Cash flow statement breaks down as follows:
(€ million)
As of December 31,
2005
2004
Net operating depreciation, amortization and provisions (a)
Net operating depreciation, amortization and provisions of discontinued operations
Replacement costs (e)
Other
Total operating depreciation, amortization, provisions and impairment losses
(517.3)
(517.3)
(554.2)
(554.2)
(a) Net operating depreciation, amortization and provisions
(€ million)
Charge
Depreciation and amortization
Intangible assets
Other impairment losses
Inventories and work in progress
Trade account receivable
Other operating accounts receivable
Other non-current and current provisions
Total
Reversal
Net
(526.0)
(29.8)
-
(526.0)
(29.8)
(4.4)
(1.4)
(22.2)
(1.6)
(66.0)
(651.4)
3.9
1.3
22.9
1.7
104.4
134.1
(0.5)
(0.1)
0.6
0.1
38.4
(517.3)
(b) Personnel costs
(€ million)
As of December 31,
2005
Employee costs
Profit sharing
Share-based compensation (IFRS 2)
Total personnel costs
(2,248.9)
(14.9)
(4.2)
(2,268.0)
2004
(2,098.1)
(13.8)
(2,111.9)
43
(c) Restructuring costs
(€ million)
Restructuring charges
Net charge to restructuring provisions
Restructuring costs
As of December 31,
2005
2004
(3.6)
2.1
(1.5)
(4.9)
2.2
(2.7)
(d) Impairment losses on goodwill and intangible assets with an indefinite useful life
This section corresponds to impairment of goodwill, see note 4.
(e) Research and development costs
Research and development costs amounted to €2.3 million and €6.1 million in 2005 and 2004 respectively. After inclusion of personnel costs and charges net of reversals, research and development costs
amounted to €12.2 million and €9.4 million in 2005 and 2004 respectively.
Note 24
Finance costs, net
Net finance costs consist of gross finance costs, including the result of cover of exchange rate, less net cash result.
(€ million)
As of December 31,
2005
2004
Income
Expense
Total
11.5
(150.7)
(139.2)
9.4
(133.5)
(124.2)
The financing rate (expressed as a percentage of the finance cost net compared to average net financial debt) of 4.7% in 2005
increased slightly compared to 2004.
Note 25
Other financial income (expenses)
(€ million)
As of December 31,
2005
2004
Loan income
Dividends
Exchange income
Financial provisions
Losses/Profits linked to provisions unwinding of discount
Other income (expenses)
Total
2.6
1.0
6.5
5.3
(12.0)
(3.3)
0.0
7.3
1.4
2.7
(5.9)
(8.1)
(4.0)
(6.6)
The foreign exchange gain is mainly due to gains on the US dollar current accounts in the South American subsidiaries.
44
Note 26
Income tax expense
Analysis of the Income Tax Expense
The income tax expense breaks down as follows:
(€ million)
As of December 31,
2005
2004
Current income tax expense
France
Other countries
Deferred income tax expense (credit)
France
Other countries
Total income tax expense
(142.1)
(62.7)
(79.3)
2.9
(10.1)
13.0
(139.2)
(128.5)
(60.8)
(67.6)
4.9
0.1
4.8
(123.6)
A number of French subsidiaries elected to form a consolidated tax group with Veolia Environment as the head company,
with effect from January 1, 2001. Veolia Environment is liable to the French treasury department for the full income tax charge,
calculated based on the group tax return. Any tax savings are recognized at Veolia Environment SA level.
Pursuant to Article 39 of the amended 2004 Finance Act, Veolia Environmental Services recorded a charge of €0.5 million in respect
of the 2.5% additional tax payable on long-term capital gains reserves (exemption of €500,000 and ceiling of €200 million).
Tax rate reconciliation
(€ million)
As of December 31,
2005
2004
Effective tax rate
Goodwill amortization not deductible for tax purposes
Permanent differences
Lower tax rate on long-term capital gains
Change of deferred tax assets provisions
Differences in rates
Recognition/utilization of tax losses
Other, net
Effective tax rate (a)
(a)
34.93%
2.92%
2.24%
(3.36%)
(0.62%)
36.11%
35.43%
1.70%
1.47%
(0.47%)
(2.33%)
35.81%
The effective tax rate is computed by dividing the current and deferred tax expense by pretax net income plus the share of net income of associates.
45
Note 27
The share of minorities in net income essentially comprises those of Onyx Hong-Kong (€8.4 million in 2005 against €8.6 million
in 2004) and Marius Pedersen (€11.7 million in 2005 against €5.1 million in 2004)
Note 28
2005 Net income for the year attributable to equity holders of the parent breaks down as follows:
(€ million)
Operating income
Finance costs, net
Other financial income (expense)
Income tax expense
Minority interests
2005 Net income for the year
Recurring
Non-recurring
Total
Comments
533.0
(139.2)
0.0
(139.2)
1.6
(27.2)
(10.0)
-
523.0
(139.2)
0.0
(139.2)
1.6
(27.2)
Cf. note 4
229.0
(10.0)
219.0
2004 Net income for the year attributable to equity holders of the parent breaks down as follows:
(€ million)
Operating income
Finance costs, net
Income tax expense
Minority interests
2004 Net income for the year attributable to equity holders of the parent
46
Recurring
Non-recurring
Total
468.1
(124.2)
(6.6)
(123.6)
9.9
(22.9)
200.7
(2.0)
(2.0)
466.1
(124.2)
(6.6)
(123.6)
9.9
(22.9)
198.7
Note 29
Financial instruments
The Group uses various financial derivative instruments to manage its exposure to fluctuations in interest rates and foreign
exchange rates. The Group does not anticipate any counterpart which could have a significant impact on its financial positions
and the results of its transactions.
(€ million)
As of Acquisitions
Sales/
Change in
December
Re- consolidation
31, 2004
payments
scope
Derivative financial
instrument in assets
Derivative financial
instrument in liabilities
Impairment
losses
Fair
Foreign Other
value exchange
As of
December
31, 2005
1.7
0.2
(0.1)
-
-
(0.5)
-
-
1.3
6.5
-
-
2.5
-
(0.7)
0.1
(1.0)
7.4
Hedging instruments as of December 31, 2005
(€ million)
Interest rate risk management hedges
Fixed rate payer – floating rate receiver swaps
- Nominal amount
- Fair value (at December, 31)
Floating rate payer – fixed rate receiver swaps
- Nominal amount
- Fair value (at December 31)
Foreign currency hedges
Swaps and forwards
- Nominal amount
Total
Less than 1 year
1 to 5 years
More than 5 years
97.2
(3.2)
7.6
0.7
-
27.8
0.2
75.5
(0.5)
7.6
0.7
-
21.7
(2.7)
-
The foreign exchange transaction portfolio as of December 31, 2005 was as follows:
(€ million)
USD
GBP
Currency swaps
and forward purchases
Currency swaps
and forward sales
0.2
15.9
0.1
2.9
47
Hedging instruments as of December 31, 2004
(€ million)
Total
Interest rate hedges
Fixed rate payer - floating rate receiver swaps
- Nominal amount
Floating rate payer – fixed rate receiver swaps
- Nominal amount
Foreign currency hedges
Forward exchange contracts (swaps and forward contracts)
- Nominal amount
Less than 1 year
89.0
(3.8)
-
1 to 5 years
-
49.2
(0.7)
More than 5 years
65.7
(1.0)
7.6
1.2
-
23.3
(2.8)
-
Note 30
Employee commitments
Employee savings plan
Veolia Environnement has introduced savings plans which enable a large number of employees of Veolia Environnement and
its subsidiaries to subscribe to Veolia Environnement shares. Employees benefit from a 20% discount compared with the average
Veolia Environnement share price during the 20 business days preceding the date of authorization of these plans by the
Board of Directors. Shares subscribed by employees under these plans are subject to certain restrictions regarding their sale
or transfer by employees.
Shares subscribed by Veolia Environnement employees:
Number of shares
Subscribed amounts (€ million)
2005
2004
127,620
3.6
127,775
2.4
In 2004, a compensation expense of €0.6 million was recorded in respect of the Group's contribution to the 2004 savings plan.
In 2005, a compensation expense of €0.9 million was recorded in accordance with IFRS 2 on share-based payments.
48
Pension plans and other employee benefits
(€ million)
Pension Plans
2005
2004
Change in the benefit obligation
Benefit obligation at beginning of year
Current service cost
Interest cost
Plan participants’ contributions
Obligations acquired on acquisition of subsidiaries
Obligations transferred on disposal of subsidiaries
Curtailments/liquidations
Actuarial loss (gain)
Benefits paid
Plan amendments
Other (incl. changes in consolidation scope
and foreign exchange translation)
Benefit obligation at end of year
Change in plan assets
Fair value of plan assets at beginning of year
Actual return on plan assets
Actuarial gains (losses)
Group contributions
Plan participants’ contributions
Plan assets acquired on acquisition of subsidiaries
Plan assets transferred on disposal of subsidiaries
Benefits paid
Other (incl. changes in consolidation scope
and foreign exchange translation)
Fair value of plan assets at end of year
Funded status of plan
Unrecognized past service costs
Other
Net liability recognized in the balance sheet
Provisions
Prepaid benefits
Other employee benefits
2005
2004
241.3
10.0
12.1
2.1
0.3
0.0
0.1
55.3
(10.0)
0.0
203.7
16.2
10.9
0.3
0.1
0.0
0.0
3.7
(6.5)
10.3
6.0
1.8
(0.6)
-
0.1
5.6
(0.2)
-
7.2
318.3
2.5
241.3
0.2
7.4
0.5
6.0
163.7
9.8
19.0
25.2
2.1
0.1
0.0
0.0
(8.3)
148.0
5.2
4.9
10.7
0.3
0.0
0.0
0.0
(5.7)
-
-
2.5
214.1
(104.2)
10.8
1.9
(91.5)
91.5
0.0
0.2
163.7
(77.5)
12.0
(1.2)
(66.7)
66.7
0.0
(7.4)
(7.4)
7.4
0.0
(6.0)
(6.0)
6.0
0.0
The Group plans to make contributions of €7.4 million to defined benefit plans in 2006.
The Projected Benefit Obligation (PBO) is €318.3 million for unfunded defined benefit plans and €214.1 million for partially and
fully funded plans as of December 31, 2005, compared with €241.3 million and €163.7 million respectively at the end of 2004.
49
Amounts recognized in the Income statement for the period are as follows:
(€ million)
Pension Plans
2005
2004
Current service cost
Interest cost
Expected return on plan assets
Past service costs recognized in the year
Other
Net expense recognized in the Income statement
10.0
12.1
(9.8)
0.6
0.1
0.6
13.6
Other employee benefits
2005
2004
16.2
10.9
(5.2)
0.2
0.1
(0.4)
21.9
1.8
1.8
5.6
-5.6
Actuarial assumptions used for calculation purposes vary depending on the country in which the plan is implemented. Group
assets in France are primarily invested with insurance companies and the long-term return on these assets is directly linked to
past rates of return. Assets in the United Kingdom are primarily invested in shares and bonds via a trust and long-term rates
of return are based on long-term market performance statistics.
Employee obligations as of December 31, 2005, 2004 and 2003 are based on the following average assumptions:
Pension Obligations
As of December
31, 2005
As of December
31, 2004
4.45%
3.32%
4.92%
3.24%
Discount rate
Expected rate of salary increase
Periodic benefit obligations for 2005 and 2004 are based on the following average assumptions:
Pension Obligations
As of December
2005
As of December
2004
4.92%
6.12%
3.24%
15.2
5.40%
5.82%
3.20%
15.2
Discount rate
Expected return on plan assets
Expected rate of salary increase
Average residual life expectancy (in years)
The actual return on plan assets in 2005 and 2004 was €9.8 million and €5.2 million respectively.
Group pension plan assets were invested as follows as of December 31, 2005 and 2004:
Shares
Bonds and debt instruments
Insurance risk free funds
Cash
Other
50
As of December
2005
As of December
2004
54%
28%
14%
2%
2%
50%
28%
17%
2%
3%
Note 31
Main acquisitions in 2005
The main acquisition in 2005 was the ex-division of
dangerous waste of Shanks plc for €43 million. This acquisition gives exclusively tangible assets. A temporary review
of assets values was realized and noted a goodwill of
€10 million in December 31, 2005 accounts.
Other minor acquisitions were realized in Europe and
United States.
Note 32
Concession contracts
In the course of its business, Veolia Environmental Services
provides services to customers under contract with the
public authorities. These public services are often the
responsibility of public authorities, which are directly
involved in their management:
In addition, the Group generally assumes a contractual
obligation to maintain and repair facilities managed under
public service contracts. Resulting maintenance and repair
costs are analyzed in accordance with IAS 37 on provisions
and expensed as incurred, and where appropriate, a provision for future maintenance and repair costs is recorded.
• either by managing the services with their own resources,
• or by transferring full responsibility for performance of
the services to a company, by conferring or delegating, in
accordance with contractual terms and conditions, overall
responsibility for the organizational structure (human,
physical and financial resources) to be implemented
and, where applicable, the construction and financing
of installations.
The nature and extent of the Group’s rights and obligations
under these different contracts differs according to the
public services rendered by the different Group segments.
Both in France and abroad, Veolia Environmental Services
generally operates under PSD Concession contracts for the
treatment and recovery of waste by incineration. The main
characteristics of these contracts are as follows:
These public services are rendered in accordance with
contractual agreements which can take a variety of forms.
However, an analysis of the substance of these different
contracts identifies three main categories:
• average term: 20 to 30 years,
• PSD (« Public Service Delegation ») Concession contracts,
• acquisition/Creation of a tangible asset: contracts generally
include financing and building by Veolia Environmental
Services (which addresses subcontractors) of processing
infrastructures,
• BOT (Build, Operate, Transfer) and DBO (Define, Build,
Operate) contracts,
• other contracts.
These contracts generally include price review clauses.
These clauses are mainly based on cost trends, inflation,
changes in tax and/or other legislation and occasionally
on changes in volumes and/or the occurrence of specific
events changing the profitability of the contract.
• services rendered: waste management (incineration,
sorting, composting, etc..),
• restoration of the specific asset in the term of the contract:
the financed proper ties are returned to the local
authority at the conclusion of the contract (these assets
are classified in fixed assets of the granted domain).
51
Note 33
Finance leases and operating leases
Assets financed by finance lease and operating lease
Assets financed by finance and operating leases as of December 31, 2005 are as follows:
(€ million)
Gross carrying
amount
Finance lease
Accumulated
depreciation
Net carrying
amount
Operating lease
Land
Buildings
Technical systems
Other property, plant and equipment
Assets under construction
Publicly-owned utility domain
2.2
77.5
121.9
225.0
1.0
427.5
194.8
(0.4)
(65.6)
(58.0)
(68.1)
(1.0)
(193.2)
(66.0)
1.8
11.8
63.9
156.9
0.0
234.3
128.8
30.1
147.2
13.4
91.6
0.0
282.3
0.0
Total 2005
622.3
259.2
363.1
282.3
Total 2004
599.0
246.9
352.1
255.2
Minimum lease payments
The Veolia Environmental Services Group acquires certain operating assets and investment properties under finance lease.
Future minimum lease payments total €485.8 million as of December 31, 2005 compared with €407.1 million as of December 31,
2004. The present value of minimum lease payments of €347.7 million as of December 31, 2005 is recorded in long term borrowing
and €25.1 million is short term borrowings.
In addition, the Group enters into operating leases (mainly for transportation equipment).
As of December 31, 2005, future minimum lease payments under these contracts are as follows:
(€ million)
2006
2007
2008
2009
2010
2011 and thereafter
Total future minimum lease payments
Interest
Present value of minimum lease payments (finance leases)
52
Operating
lease
Finance lease
[in the BS]
64.2
52.7
38.3
32.8
29.4
64.9
282.3
68.3
64.6
59.1
49.8
41.2
202.8
485.8
(113.0)
372.8
Note 34
Proportionately consolidated companies
Summarized financial information in respect of proportionately consolidated companies is set out below:
(€ million)
Non-current assets
Current assets
Total assets
Minority interests
Financial debt
Provisions and other liabilities
As of December
31, 2005
As of December
31, 2004
257,1
113,1
370,2
49,7
1,5
164,6
154,4
370,2
216,7
91,8
308,5
40,9
1,5
135,0
131,1
308,5
(€ million)
As of December 31,
2005
2004
Income statement data
Revenue
Operating income
Net income for the period
Financing data
Operating cash flow
Investing cash flow
Financing cash flow
324,7
24,7
12,9
281,9
15,6
3,0
41,9
(22,8)
(23,0)
30,6
(21,7)
(15,9)
Contribution of the companies to Net income for the year attributable to equity holders of the parent.
Note 35
Tax reviews
In the normal course of their business, the group’s subsidiaries are subjected to regular tax reviews in France and
abroad.
In 2005, a restricted number of French companies of Veolia
Environmental Services group were subject to fiscal controls.
Those for whom an additional tax remained chargeable to
the Group had provisionned in a suitable way.
The Group being present in thirty five countries abroad,
it permanently undergoes fiscal controls outside France. In
entities where these controls gave place to notification of
adjustment in 2005, the control is followed with a local
fiscal council. If necessary, these adjustments or the
identified fiscal non-settlements but not being subject of
an adjustment are subject of provisions suited with best
knowledge of the Group.
53
Note 36
Commitments and contingencies
Specific commitments given
on behalf of the American entities to guarantee the environmental obligations relating to their business activities.
Specific commitments linked to our activities were granted
in the United States.
In addition, in the Dade contract, it is important to note
that Montenay Dade Ltd is a special purpose entity with a
loan from the County of Dade (linked to the financing of a
waste to energy plant) of €73.2 million, guaranteed by the
tonnage provided by the County (« put or pay ») to generate
enough income to service the debt (approximately
€62.8 million). Further to a legal interpretation of the
contract, the rights and obligations of the County of Dade
can be offset.
In the Unted States, closure bonds and post closure bonds
were granted at OWS, MIC and OES to cover site rehabilitation
commitments and post-operating surveillance of the landfills. The guarantees were contracted with insurance
companies (mainly AIG) and were guaranteed by Veolia
Environment. According to the same principle, « letters of
credit » are issued by financial institutions to third parties
Breakdown by maturity of specific commitments given
(€ million)
Operational guarantees
As of
December
31, 2004
As of
December
31, 2005
Less than
1 year
Maturity
1 to 5
years
More than
5 years
159.3
118.8
60.0
53.9
3.9
Financial guarantees
71.3
73.2
9.1
36.6
27.5
Letters of credit
93.8
201.9
155.8
35.6
10.5
324.4
392.9
224.9
126.1
41.9
Total
Other commitments given
Other commitments and contingencies given do not include the collateral guarantees supporting borrowings, nor the specific
commitments and contingencies described above.
In accordance with AMF recommendations, other commitments and contingencies are as follows:
(€ million)
Operational guarantees
Financial guarantees
Debt guarantees
Warranty obligations given
Commitments given
Annual loan installments
Obligations to buy
Obligations to sell
Letters of credit
Total
54
As of
December
31, 2004
As of
December
31, 2005
209.6
98.0
95.9
2.1
39.7
1.9
37.8
61.8
5.4
56.4
409.0
244.7
88.0
75.3
12.7
52.8
0.4
43.8
8.6
33.4
33.4
418.9
Less than
1 year
83.3
9.8
5.5
5.3
10.2
0.4
1.2
8.6
1.2
1.2
104.5
Maturity
1 to 5
years
133.7
37.8
29.4
8.4
42.4
42.4
16.6
16.6
230.5
More than
5 years
27.7
40.4
40.4
0.2
0.2
15.6
15.6
84.0
Operational guarantees: operational guarantees are
commitment not linked to financing transactions required
for contracts. They generally concern the operations of the
Group companies. These guarantees include commitments
on competitive bidding, guarantees to repay deposits and
performance bonds.
Obligations to buy or sell: firm orders or sale agreements.
Letters of credit: letters of credit delivered by financial
institutions to Group creditors, customers and suppliers
guaranteeing operating activities.
Litigation (not accounted for)
Debt guarantees: these relate to guarantees given to
financial institutions in connection with the loans and
borrowings of non-consolidated companies, equity
associates, or proportionately consolidated companies.
Warranty obligations given: commitments given by a
company selling to a third party as to the accuracy of the
balance sheet from which sale price was determined.
The Group is subject to litigation in the normal course
of its business. Although it is not possible to predict the
outcome of such litigation with certainty, based on the
facts known by the Group and after consultation with
counsel, management believes that such litigation will
not have a material adverse effect on the Group’s financial
position or results of operations.
Commitments received
(€ million)
Guarantees received
Debt guarantee
Warranty obligation received
Other guarantees
Credit lines
As of December
31, 2005
As of December
31, 2004
18.9
0.3
9.2
6.9
2.5
145.1
84.0
4.8
18.6
37.7
Note 37
Collateral guarantees supporting borrowings
As of December 31, 2005, €142.4 million in borrowings was supported by collateral guarantees. The breakdown by type of asset
is as follows (in million of Euro):
(€ million)
Type of pledge/mortgage
On intangible assets
On property, plant and equipment
On financial assets (*)
Total non-current assets
On current assets
Total assets
Amount pledged
(a)
Total balance
sheet amount (b)
%
(a) / (b)
118.2
8.6
126.8
15.6
142.4
82.8
3 536.8
382.9
5 589.4
2 378.3
7 969.4
0.0
3.3
2.2
2.3
0.7
1.8
* As financial assets pledged as collateral are essentially shares of consolidated subsidiaries, the ratio is not significant.
( )
55
The breakdown by maturity is as follows:
(€ million)
As of
December
31, 2004
As of
December
31, 2005
Less than
1 year
120.6
8.2
3.1
5.1
36.7
23.8
12.9
165.4
118.2
8.6
3.5
5.1
15.6
14.4
1.2
142.4
6.5
6.5
Intangible assets
Financial assets
Taitung
Tecnoborgo
Current assets
Pledges on trade receivables
Pledges on inventories
Total
Maturity
1 to 5
years
More than
5 years
12.1
12.1
99.6
8.6
3.5
5.1
15.6
14.4
1.2
123.8
Finally, in the scope of the obtained banking financing, pledges were granted:
- pledge on the Tecnoborgo securities for an amount of €5,086 thousand for financing the factory,
- pledges on Onyx Norway's fixed assets for an amount of €34,193 thousand for local financing,
- pledges on fixed assets at MIC for an amount of €91,881 thousand for financing of Montgomery's factory,
- pledges on the Taitung securities for an amount of €3,475 thousand for local financing.
Note 38
Related party transactions
Chairman and Chief Executive Officer
The following table presents the total gross compensation (fixed and variable compensation, directors’ fees and employee
benefits) paid to Henri Proglio during 2004 and 2005.
(in €)
Fixed
Compensation paid in 2004
Compensation paid in 2005
(a)
(b)
(c)
900,000
944,996
Compensation
Variable
473,620(b)
850,000(c)
VE
directors’
fees
24,517
34,000
Directors
fees’ paid
by controlled
companies
Employee
benefits (a)
Total
gross
compensation
3,898
2,616
1,472,430
1,902,524
70,395
70,912
Company car.
Variable compensation paid in 2004 in respect of 2003.
Variable compensation paid in 2005 in respect of 2004.
Henri Proglio is a member of the collective pension plan granted to Group Executive management.
Global Remuneration of directors in common with Veolia Environment (except CEO)
The attendance fees paid to directors in common with Veolia Environment in 2005 and 2004 was €24,000 per year.
Remuneration of executive committee members (except CEO)
The remuneration of members of the executive committee of Veolia Environmental Services was €3,232,530 in 2005 and
€2,888,348 in 2004 (fixed and variable parts and benefits).
56
Share purchase and subscription options
Share purchase or subscription options granted to the Chairman and Chief Executive Officer in 2005 and options exercised
during the year: Nil.
Share purchase or subscription options granted to Executive Committee members in 2005 and options exercised during the
year: Nil.
Note 39
Employees
Average number of employees (*) breaks down as follows:
By category
Executives
Employees
Total
5,043
63,968
69,011
5,043
61,880
66,923
( )
* Employees of proportionately consolidated companies are included in the percentage of consolidation. Employees of equity associates are not included.
By segment
France
International
Fully consolidated companies
By method of consolidation
Fully consolidated companies
Proportionately consolidated companies
Total
31,613
37,398
69,011
31,763
35,160
66,923
67,033
1,978
69,011
65,185
1,738
66,923
Note 40
Segment information
For confidential reasons, Veolia Environmental Services does not present segment information.
57
Note 41
Auditor fees
The amount of the signatory statutory auditors of the consolidated financial statements of Veolia Environmental Services as
regards the fiscal year 2005 for the totality of consolidated companies is the following one:
(in € million)
KPMG
As of December
As of December
31, 2004
31, 2005
Legal audit, accounts examination (1)
Audit-mission (2)
Other services
Total
(1)
(2)
2.8
0.2
0.6
3.6
Ernst & Young
As of December
As of December
31, 2004
31, 2005
2.9
0.2
0.2
3.3
2.5
0.4
0.2
3.1
2.7
0.3
0.1
3.2
The fees include fees concerning companies proportionately consolidated.
Includes fees relative to establishment of letters of comfort, issued certificates, acquisition audits and IFRS review.
Note 42
Main companies included
in the 2005 consolidated financial statements
In 2005, the Group consolidated or accounted for a total of 610 companies, of which the principal companies are:
F : Fully consolidated company
P : Proportionate consolidation
E : Equity method
Consolidation Name of
method
the company
%
holding
%
control
ACTISOL
99.87
AFOUARDS SCI
99.49
ALPES ASSAINISSEMENT
64.85
ALPHA
47.49
ANGIBAUD SPECIALITES
99.95
ATEP
47.50
ATICS
50.00
AUBINE
99.98
AUQUEMESNIL SNC
100.00
AUREADE
95.45
AUTOMATION
ENVIRONNEMENT SERVICE
99.94
BATI EXPRES
99.17
BRAMETOT SNC
100.00
BRUNET SCI
99.98
CERCHIMIE
98.74
CIE DU GUANO DE POISSON
ANGIBAUD (SA)
99.95
CIE EUROPEENNE DE
PROPRETE & HYGIENE
100.00
CIE GENERALE
D'ENVIRONNEMENT DE CERGY 99.95
CSP
99.99
CTSP CENTRE
100.00
DAUPHINOISE DE TRI
100.00
DEROME
93.57
ENERGY DECHET
100.00
ENVIROPOL
66.19
EPR
100.00
ESTERRA
44.68
EVOLIA
100.00
FRANCAISE
D'ASSAINISSEMENT
ET DE SERVICE
100.00
GENERALE DE REHABILITATION
DES SITES
99.94
GENERALE NUTRITION VEGETAL 49.97
GENERIS
99.95
100.00
100.00
65.00
49.99
100.00
50.00
50.00
100.00
100.00
99.95
method
the company
FRANCE
F
F
F
F
F
F
P
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
P
F
F
F
P
F
58
100.00
99.47
100.00
100.00
98.74
99.95
100.00
100.00
99.99
100.00
100.00
93.61
100.00
99.91
100.00
44.68
100.00
100.00
100.00
50.00
100.00
NEW
NEW
NEW
%
holding
%
control
F
GIE CREED
100.00
100.00
F
F
F
F
IPODEC NORMANDIE
LA MEDITERRANEENNE
LOCABENNE
MARTINIQUAISE
DE VALORISATION
MCI SNC
MCS ENVIRONNEMENT
MONTVALOR
NANCY ENERGIE
NETURBA
ONYX
ONYX (SCI)
ONYX AQUITAINE
ONYX AUVERGNE
RHONE ALPES
ONYX EST
ONYX INDUSTRIES SERVICES
ONYX
LANGUEDOC ROUSSILLON
ONYX MEDITERRANEE
ONYX MIDI PYRENEES
ONYX NORD NORMANDIE
ONYX NORMANDIE
ONYX PACTOM
ONYX POITOU-CHARENTES
OREDUI
ORVADE
ORVAL
OTUS
OUEST NETTOIEMENT
OUEST PROPRETE
PREFERNORD
REMOISE DE VALORISATIONS
DECHETS
REP ENERGIE
REP ENVIRONNEMENT
RIMMA NANCY
RONAVAL
100.00
99.95
80.00
100.00
100.00
80.00
69.96
49.97
100.00
95.08
47.49
99.68
100.00
100.00
99.99
69.96
50.00
100.00
100.00
49.95
99.98
100.00
100.00
99.99
100.00
95.00
99.78
100.00
95.00
100.00
99.87
100.00
100.00
99.98
100.00
100.00
99.71
99.76
99.94
100.00
100.00
100.00
99.96
50.93
99.88
100.00
100.00
99.98
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.96
50.93
95.08
99.90
99.88
94.04
100.00
100.00
99.90
99.88
98.97
100.00
P
F
F
P
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
P
F
F
F
F
F
NEW
NEW
method
the company
%
holding
%
control
F
ROUTIERE DE L'EST PARISIEN
100.00
100.00
F
P
F
F
P
F
F
F
F
F
F
P
F
P
F
F
F
F
F
F
F
RUDOFERT
89.60
S.T.M. C.
44.68
SA LAYERE
99.99
SAFISE
99.76
SAREN
49.98
SARM
99.70
SAVED
100.00
SEAS
99.76
SEAV
99.76
SEC
98.94
SECODE
59.92
SEDE
49.99
SEDIBEX
99.77
SENSE
42.76
SETOM
100.00
SETRAD
99.94
SEUS SNC
100.00
SMTVD
59.92
SNC CET DE NOUMÉA
99.99
SOCCOIM
100.00
SOCIETE NIVERNAISE
DE VALORISATION
95.05
SOCODES
99.95
SOMEDIS
100.00
SOMEREC
89.79
SONITHERM
47.87
SOTAME
99.76
SOULIER
100.00
SOVAL
99.91
S'PRINT PACIFIQUE
99.84
STE DE VALORISATION
DE MATERIAUX D'IDF.
49.52
STE D'EXPLOITATION
THERMIQUE DU MIRAIL
38.35
STE HAUT-MARNAISE
VALORIS DECHETS
95.05
STE MONTHYONNAISE
DE VALORISATION
99.95
STE NORMANDE DE
VALORISATION ENERGETIQUE 99.56
STE VOSGIENNE DE
VALORISATION DE DECHETS 47.54
STVDL
99.94
SUD AGRI
99.95
SUD MARSEILLE
ASSAINISSEMENT
100.00
SVE
99.59
TAÏS
100.00
TECHNIVAL
66.16
TRAITEMENT IND.
DES RESIDUS URB. - TIRU
24.00
TRIADE
99.70
TSP
66.24
VAL SUD
100.00
VALENE
99.95
VALEST
95.08
VALNOR
99.99
VALNORMANDIE
100.00
VALREP
99.88
VARRAY PARISI
99.70
VE EST
44.91
89.60
45.00
100.00
100.00
50.00
99.70
100.00
100.00
100.00
100.00
59.93
49.99
99.77
45.01
100.00
100.00
100.00
59.92
100.00
100.00
F
F
F
P
F
F
F
F
P
P
F
F
F
P
F
F
F
F
F
F
E
F
F
F
F
F
F
F
F
F
P
99.97
100.00
100.00
90.00
47.87
100.00
100.00
99.99
99.87
49.67
38.38
99.97
100.00
99.56
50.00
100.00
100.00
100.00
99.59
100.00
99.88
24.00
100.00
66.24
100.00
100.00
99.96
99.99
100.00
99.88
100.00
45.01
method
the company
F
F
F
F
F
F
F
F
F
F
F
E
F
E
NEW
NEW
NEW
F
F
F
F
F
F
F
F
F
F
F
P
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
E
F
F
F
F
F
F
F
F
%
holding
%
control
ATO
99.51
BACHELET SA
49.64
BONNEFOND
49.69
CIG
99.52
COLIDEC
99.67
DIDERON SA
99.49
EAV
49.67
ECOGRAS
99.52
ECOPUR
84.57
EDIB
89.58
ENT DE TRAVAUX SANS TRANCHEE 99.53
EPFD
49.76
FENESTRA
99.53
FRANCHE COMTE
ASSAINISSEMENT
49.70
GLOBALIS SERVICE ONYX
99.53
GUS
99.53
HUHN
99.53
IFA
57.35
KST
99.53
ODD SA
49.67
OIR
99.53
ONYX CCS
99.53
ORKS
99.53
RENOV'CUVES
79.59
ROLLAND TE
99.53
RST
49.77
SANI CENTRE
49.71
SARP BFC
99.51
SARP CANADA
100.00
SARP CENTRE EST
99.44
SARP CLAUBERT
100.00
SARP DRAINAMAR
100.00
SARP ILE DE FRANCE
99.52
SARP MYSTO
100.00
SARP ONYX HOLDING GMBH
99.53
SARP OUEST
99.53
SARP SA
99.53
SARP SEWER MATIC
100.00
SARP SUD OUEST
99.53
SARP TORONTO
100.00
SERVICE ENTRETIEN
MEDITERRANEE
99.53
SMAB
99.45
SMF
99.53
SNAB
99.48
SNAVEB
49.72
SOA
97.36
SODI
99.52
SODI NORMANDIE
49.76
SODI RHONE ALPES
99.53
SODI SUD
98.70
SOGESSAE
49.76
SOLIS
99.53
SOMES ASSAINISSEMENT
99.51
SRRHU
79.35
SVR
95.28
TECHNISUD
99.53
TELEREP FRANCE
79.39
TMS
99.53
WITHOFS
99.53
100.00
49.88
49.94
99.99
100.00
99.96
49.90
100.00
100.00
90.00
100.00
50.00
100.00
49.94
100.00
100.00
100.00
75.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
50.00
49.94
99.98
100.00
99.91
100.00
100.00
99.99
100.00
100.00
99.99
100.00
100.00
100.00
100.00
100.00
99.93
100.00
100.00
49.97
97.82
99.99
50.00
100.00
99.17
49.99
100.00
99.97
79.61
95.75
100.00
99.99
100.00
100.00
NEW
RENOSOL (% HOLDING OF RENOSOL (MOTHER)= 100%)
F
F
F
F
F
F
F
F
F
F
F
CENTRE ASSISTANCE
COMATEC SA
EPPSI
RENOSOL
RENOSOL APPROS
ET TECHNIQUES
RENOSOL ATLANTIQUE
RENOSOL IDF
RENOSOL NORD ET EST
RENOSOL SUD-EST
TEST
USP NETTOYAGE
99.96
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.96
100.00
100.00
100.00
100.00
100.00
100.00
99.96
100.00
100.00
GRANDJOUAN (% HOLDING OF SACO (MOTHER)= 99.99%)
F
P
F
P
F
F
P
F
F
F
F
P
F
F
ARC EN CIEL
BOUYER LEROUX
ENVIRONNEMENT
CENTRE DE TRI ET RECYCLAGE
CET BOUYER LEROUX
GEVAL
GEVAL COTES D'ARMOR
INCINERATION BOUYER LEROUX
LA BARRE THOMAS
NETRA
PAUL GRANJOUAN SACO
SENETD
STE BRETONNE EXPLOITAT
CHAUFFAGE
VAL D'ARMOR
VALDEF
99.99
100.00
50.00
65.99
50.00
99.99
99.99
50.00
59.83
99.99
99.99
99.99
50.00
66.00
50.00
100.00
100.00
50.00
59.84
100.00
100.00
100.00
49.99
99.99
99.99
50.00
100.00
100.00
SARP (% HOLDING OF SARP(MOTHER)= 99.53%)
E
ATIC
49.76
49.99
SARPI (% HOLDING OF SARPI (MOTHER)= 99.82%)
F
P
F
F
P
F
F
F
F
F
F
F
F
E
F
F
P
F
F
F
F
F
F
F
F
F
F
CENTRE DEPOLL. INDUS.
LORRAIN - CEDILOR
CLE BRASIL LTDA USD
DATA ENVIRONNEMENT
DOROG (ECU)
ECOLOGICAL SOLUTIONS - ECOSOL
ECOVALOR
ECR
ELIOD SERVIS SRO
EMTA
EURO DIEUZE INDUSTRIE
FINANCIERE DIVAUR
FLORAS
GMA
GRPE ELIM. RESIDUS POLLUANTS GEREP
INMOBILIARIA CONFINAMINA
SA DE CV
LOBBE DABROWA GORNICZA
OCCITANIS
PROECOLOGIA
RECUPERATION TRAITEMENT
DECHETS HYDROCAR
RECYMET SA
RESICONTROL SA
RESIDUOS INDUSTRIALES
MULTIQUIM SA DE CV
SARP CARAIBES
SARP INDUSTRIAL WASTE LTD
SARP INDUSTRIES
SARP INDUSTRIES AQUITAINE
PYR. - SIAP
SARP INDUSTRIES BRASIL LTDA
83.51
24.93
99.82
99.82
49.89
99.67
99.70
79.86
99.70
99.82
99.82
99.82
99.82
83.66
25.00
100.00
100.00
50.00
100.00
100.00
80.00
99.89
100.00
100.00
100.00
100.00
49.89
49.98
99.70
99.82
49.81
50.91
100.00
100.00
49.96
51.00
99.82
99.76
99.70
100.00
99.94
100.00
89.73
99.61
99.77
99.82
90.00
100.00
100.00
100.00
99.82
99.70
100.00
100.00
NEW
59
method
the company
F
F
F
P
F
F
F
F
F
F
F
F
F
F
F
F
F
F
E
%
holding
SARP INDUSTRIES MEXICO
DA DE CV
SARP INDUSTRIES SUISSE
SARPI ITALIA
SEDA SA
SERAF SA
SICO
SIRAM
SISTEMAS AMBIENTAIS
COMERICIO LTDA
SITREM
SOLICENDRE
SOLITOP
SONOLUB
SPUR 13
STE NOUVELLE FRADIN - SNF
STE OUEST RECOND. DECH. IND. SOREDI
STE PICARDIE REGENERATION SPR
STE TRAITEMENT EFFLUENTS
NORD - SOTRENOR
STE TRAITEMENT & EMULS.
OUEST - SOTREMO
TWZ
%
control
99.70
99.82
99.82
48.84
57.63
99.70
99.82
100.00
100.00
100.00
48.99
57.80
99.88
100.00
99.70
99.73
99.98
99.69
99.61
99.82
99.82
100.00
99.91
100.00
100.00
99.94
100.00
100.00
99.80
99.98
method
the company
F
F
F
F
F
F
F
F
F
F
F
F
P
F
F
F
F
F
F
F
F
F
P
F
P
P
F
F
F
F
F
P
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
P
F
60
F
F
F
F
F
P
99.82
100.00
93.20
100.00
98.55
42.80
100.00
42.88
ACTION WASTE LTD
100.00
AR-PACK LTD
100.00
BLACKLEIGH LTD
100.00
BRIDE (CHURCH LAWFORD) LTD 100.00
CARTAWAYS LTD
100.00
CH PINCHES SONS LTD
100.00
COMATEC UK
100.00
ECONOTEK LIMITED
100.00
ECONOTEK WASTECARE LIMITED 100.00
ELLIS DAVIES SONS LTD
100.00
GERRARDS CROSS WASTE
DISPOSAL LTD
100.00
GIBSON WASTE COMPANY LTD 100.00
GJT HOLDINGS LIMITED
100.00
GLACIER ARM
40.00
HAMPSHIRE WASTE SERVICES 100.00
HT HUGHES PLC
100.00
IC WOODWARD SON LIMITED 100.00
L G INSURANCE LTD
100.00
LEIGH CHURCH LAWFORD LTD 100.00
LEIGH ENVIRONMENTAL
SOUTHERN LTD
100.00
LEIGH FLEXIBLE STRUCTURES INC 100.00
LEIGH INDUSTRIAL SERVICES LTD 100.00
LEIGH INTERESTS PLC
100.00
LIDSEY LANDFILL LTD
50.00
MAYBROOK TRANSPORT LTD
100.00
MIDLAND CONSTRUCTION
MATERIALS LIMITED
50.00
MINOSUS LIMITED
50.00
MODERN DISPOSALS LTD
100.00
ONYX AURORA
100.00
ONYX CLINICAL LTD
100.00
ONYX ENVIRONMENTAL GROUP
PLC
100.00
ONYX HAMPSHIRE LTD
100.00
ONYX HANSON LTD
50.00
ONYX HIGHMOOR LTD
100.00
ONYX KINGSBURY LTD
100.00
ONYX L.A.S. LTD
100.00
ONYX LAND TECHNOLOGIES LTD 100.00
ONYX LANDFILL LTD
100.00
ONYX LEIGH ENVIRONMENTAL
LTD
100.00
ONYX NORTHERN EUROPE
LIMITED
100.00
ONYX SELCHP INVESTMENT
LIMITED
100.00
ONYX SELCHP LTD
100.00
ONYX SHEFFIELD LTD
100.00
ONYX SOUTH DOWNS LTD
100.00
ONYX SPRINGFIELD LTD
100.00
ONYX UK
100.00
ONYX UK HOLDINGS PLC
100.00
ORGANIC TECHNOLOGIES
LIMITED
100.00
PGR WASTE MANAGEMENT
LIMITED
100.00
PLYMOUTH ENERGY PARK LTD 100.00
PROCESS CHEMICALS LTD
100.00
PROPERPAK LTD
100.00
SARP UK
100.00
SARP UK HOLDINGS LTD
100.00
SARP UK LIMITED (NEW)
100.00
SHEFFIELD ENVIRONNMENTAL
SERVICES LTD
100.00
SOUTH DOWNS WASTE
SERVICES LTD
100.00
SOUTH EAST LONDON COMB
HEAR POW
49.00
SUMMERDOWN LTD
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
N
N
N
N
N
N
N
N
N
N
100.00
100.00
100.00
40.00
100.00
100.00
100.00
100.00
100.00
N
N
N
N
N
N
N
N
N
100.00
100.00
100.00
100.00
50.00
100.00
N
N
N
N
N
N
50.00
50.00
100.00
100.00
100.00
N
N
N
N
N
100.00
100.00
50.00
100.00
100.00
100.00
100.00
100.00
N
N
N
N
N
N
N
N
100.00
N
100.00
N
100.00
100.00
100.00
100.00
100.00
100.00
100.00
N
N
N
N
N
N
N
100.00
N
100.00
100.00
100.00
100.00
100.00
100.00
100.00
N
N
N
N
N
N
N
%
control
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
N
N
N
N
N
100.00
100.00
N
100.00
100.00
N
100.00
100.00
95.55
100.00
100.00
95.55
N
N
N
ACCUREC
44.78
AV BV
100.00
BATREC INDUSTRIES
67.45
FRANCEY SERVICES SA
72.13
FRITZ ERISMAN
72.13
GLOBAL ENVIRONNEMENT
SUISSE SA
47.50
IBKA
100.00
IBKA AB. SWEDEN
100.00
IBKA UK LTD.. UNITED KINGDOM 100.00
JAWORZNO
75.58
KIELCE
100.00
MATTHEY TRANSPORT SA
72.13
MULDENZENTRALE AG BASEL
72.13
ONYX ITALIA HOLDING
100.00
ONYX POLSKA SOCIETE
ANONYME
100.00
PENINSOUL S.L.
66.00
RECYBAT
43.95
REV ONYX SUISSE
72.13
REV SUISSE RECYCLAGE HOLDING 74.64
RSMVA ASSETS
47.50
SEDE BENELUX
49.98
SM RECYCLING
43.95
SOULIER DEUTSCHLAND
100.00
SOULIER ITALIA
100.00
SOVAG
43.95
STESA
72.13
TECNOBORGO (IP)
49.00
VALLOTTON VOIRIE SERVICES SA 72.13
VALOREC SERVICES AG
47.50
ZEW
75.58
ZGOK CHZARNOW
52.17
60.00
100.00
91.38
100.00
100.00
NEW
OTHER EUROPE
OEG (% HOLDING OF OEG (MOTHER)= 100%)
F
F
F
F
F
F
F
F
F
F
F
THE DERBY WASTE DISPOSAL
COMPANY LTD
TRINCO
TYSELEY FINANCE PLC
TYSELEY WASTE DISPOSAL
UESL
WHELAN ENVIRONMENTAL
CONSULTANTS LTD
SERVICES (STOCKE) D
SERVICES
WISTECH HOLDING
YORK TRUST EQUITIES
%
holding
100.00
N
100.00
N
49.00
100.00
N
N
F
F
F
F
F
F
F
F
F
F
F
F
F
P
P
F
F
F
F
F
P
F
P
F
P
NEW
47.50
100.00
100.00
100.00
75.58
100.00
100.00
100.00
100.00
100.00
66.00
100.00
72.14
100.00
50.00
49.98
100.00
100.00
100.00
58.89
100.00
49.00
100.00
50.00
100.00
52.17
NEW
NEW
NEW
NEW
ONYX NORWAY (EX NORSK GJENVINNING) (% HOLDING (MOTHER)= 100%)
E
F
E
E
F
F
F
F
E
F
F
E
F
F
F
E
F
F
F
F
E
E
E
E
F
F
F
F
F
F
BIL1 DIN AS
30.00
BRUKTBO AS
50.00
E. KOCH RORINSPEKSJON AS
30.00
ELEKTRONIKKGJENVINNING
VEST AS
30.00
FREDRIKSTAD MILJØPARK AS
100.00
KAMAS AS
75.00
LARVIK ENERGISENTRAL AS
100.00
METALL OG GJENVINNING AS
50.60
MILJO OG VEISERVICE AS
37.50
MILJOSORTERING AS
65.00
NAMDAL BILOPPHUGGERI AS
52.00
NAMSOS MILJØINDUSTRI AS
25.00
NG MILJOEIENDOMMER AS
100.00
NORMET GROUP AS
100.00
NORSK GJENVINNING AS
100.00
NORSK MILJO OG RESIRKULERING
AS
33.30
ONYX INDUSTRISERVICE AS
75.00
ONYX NORWAY AS
100.00
ONYX OFFSHORE AS
100.00
ONYX PLAST GJENVINNING
100.00
OPPLAND MILJOTEKNIKK AS
37.50
OSTFOLD GJENVINNING AS
33.00
OSTFOLD OG FOLLO MILJOFOR AS 22.00
RETURBIL AS
50.00
RIVAS AS
50.00
RIVHOLD AS
50.00
RIVNINGSSPESIALISTEN AS
50.00
SANDE ENERGISENTRAL AS
100.00
SARP NORWAY AS
100.00
TERRANOVA AS
51.00
30.00
50.00
30.00
30.00
100.00
75.00
100.00
50.60
37.50
65.00
52.00
25.00
100.00
100.00
100.00
33.30
75.00
100.00
100.00
100.00
37.50
33.00
22.00
50.00
50.00
50.00
50.00
100.00
100.00
51.00
MARIUS PEDERSEN (% HOLDING (MOTHER)= 65%)
F
F
E
F
F
F
F
F
F
BOHEMIAN
WASTE MANAGEMENT A.S.
BORINA EKOS S.R.O.
DANSK SPECIAL AFFALD A/S
EKO - CHLEBICOV A.S.
EKO SERVIS VARNSDORF A.S.
EKOLA CESKE LIBCHAVY S.R.O.
EKOLOGICKA SKLADKA S.R.O.
EKOPRES HLOHOVEC S.R.O.
ELIO SLEZSKO A.S.
39.00
59.80
32.50
51.06
35.75
48.18
65.00
65.00
35.75
60.00
92.00
50.00
78.55
55.00
74.12
100.00
100.00
55.00
NEW
NEW
method
the company
F
E
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
E
F
F
F
F
F
F
F
F
F
F
E
F
F
F
F
F
F
F
F
F
F
F
F
F
F
IG
%
holding
FARUM INDUSTRIRENOVATION
A/S
GEN-TEK I/S
HANS P. OLSEN A/S
HAVEX - EKO S.R.O.
HRADECKE SLUZBY A.S.
ICEKO ONYX S.R.O.
IPODEC - CISTE MESTO A.S.
IPODEC-ONYX KROH
BANSKA BYSTRICA S.R.O.
JAN KASTRUP A/S
KOMPLEX-ODPADOVÁ
SPOLOCNOST S.R.O.
KOPANICIARSKA ODPADOVA
SPOLOCNOST S.R.O.
MARIUS PEDERSEN DANEMARK
A/S
MARIUS PEDERSEN SLOVAQUIE
A.S.
MARIUS PEDERSEN TCHÉQUIE A.S.
MARIUS PEDERSEN/ONYX
HOLDING A/S
MESTSKA SKLADKA S.R.O.
MORAVSKA SKLADKOVA
SPOLECNOST A.S.
MP A/S-4S JORDRENS
MP NR. 2 A/S
MP/ONYX MILJØSERVICE A/S
NITRIANSKE KOMUNALNE
SLUZBY S.R.O.
NYKOS A.S.
OBALY CZ A.S.
ODENSE AFFALDSSORTERING A/S
ODPADY-TRIDENI-RECYKLACE A.S.
PAPKOV S.R.O.
PETMAS ONYX S.R.O.
POVAZSKA ODPADOVA
SPOLOCNOST A.S.
RECODAN PAPIRSORTERING A/S
REMIT S.R.O.
RUZOV A.S.
SEVEROCESKE KOMUNALNI
SLUZBY A.S.
SOMA MARKVARTOVICE A.S.
SOP A.S.
SPOLECNOST HORNI LABE A.S.
SPOLOCNOST POHRONIE A.S.
SPOLOCNOST SARIS A.S.
SPOLOCNOST STREDNE
POVAZIE A.S.
TATRANSKA ODPADOVA
SPOLOCNOST S.R.O.
TEKOVSKÁ EKOLOGICKÁ S.R.O.
TRANSPORT TRUTNOV S.R.O.
TS VALASSKE MEZIRICI S.R.O.
ZAPADOCESKE KOMUNALNI
SLUZBY A.S.
ZAPADOCESKE
KOMUNALNI SLUZBY A.S.
%
control
65.00
16.25
65.00
64.35
39.00
32.50
37.05
100.00
25.00
100.00
99.00
60.00
50.00
57.00
63.92
65.00
98.34
100.00
method
the company
F
F
F
F
F
54.07
60.00
F
E
F
F
F
F
83.19
65.00
100.00
65.00
65.00
100.00
100.00
65.00
48.75
100.00
75.00
39.00
32.50
65.00
65.00
60.00
50.00
100.00
100.00
33.23
55.71
65.00
32.63
39.00
52.00
65.00
51.13
85.71
100.00
50.20
60.00
80.00
100.00
F
F
F
F
F
F
45.50
21.66
42.79
33.80
70.00
33.33
65.83
52.00
F
42.25
37.70
39.00
39.00
39.00
56.96
65.00
58.00
60.00
60.00
60.00
87.63
39.00
60.00
41.63
55.90
39.00
48.69
64.05
86.00
60.00
74.90
63.70
98.00
63.70
98.00
F
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
F
F
F
NEW
F
F
F
F
F
F
F
F
FROGMORE
ONYX ENVIRONMENTAL
SERVICES LTD
ONYX IRELAND
SCL ONYX LTD
SLUDGE CLEARANCE
MONTENAY INTERNATIONAL CORP (% of holding (mother)= 100%)
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
M O'CONNOR LLC
100.00
MONTENAY BAY LLC
100.00
MONTENAY CHARLESTON
RESOURCE RECOVERY INC
100.00
MONTENAY DADE LTD
100.00
MONTENAY DELAWARE INC
100.00
MONTENAY DUTCHESS LLC
100.00
MONTENAY ENERGY RESOURCES
OF MONTGOMERY COUNTY INC 100.00
MONTENAY GLEN COVE CORP 100.00
MONTENAY INC
100.00
MONTENAY INTERNATIONAL
CORP.
100.00
MONTENAY INVESTMENTS INC 100.00
MONTENAY ISLIP INC
100.00
MONTENAY LB CORP
100.00
MONTENAY MONTGOMERY
CORP
100.00
MONTENAY MONTGOMERY
GP CORP
100.00
MONTENAY MONTGOMERY
INVESTMENT CORP
100.00
MONTENAY MONTGOMERY
LTD PARTNERSHIP
60.00
MONTENAY PACIFIC POWER
CORPORATION
100.00
MONTENAY POWER CORP DADE 100.00
MONTENAY POWER
CORPORATION
100.00
MONTENAY PROJECTS INC
100.00
100.00
100.00
100.00
100.00
100.00
100.00
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
100.00
100.00
100.00
F
100.00
100.00
100.00
100.00
F
F
F
100.00
100.00
F
100.00
60.00
100.00
100.00
1.00
1.00
100.00
100.00
100.00
100.00
100.00
100.00
ADVANCED ENVIRONMENTAL
TECHNICAL SERVICES INC.
ALARON CORPORATION
METROPLEX INDUSTRIES INC.
OES ALARON. LLC
OES ILLINOIS LLC
ONYX CHEMICAL CLEANING INC.
ONYX ENVIRONMENTAL
SERVICES LLC « OES »
ONYX INDUSTRIAL SERVICES INC.
ONYX INDUSTRIAL SERVICES LTD.
ONYX NORTH AMERICA CORP
ONYX PORT ARTHUR
MANUFACTURING L.P.
ONYX SPECIAL SERVICES. INC.
100.00
100.00
49.00
100.00
100.00
100.00
100.00
100.00
49.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
NEW
ONYX WASTE SERVICES (% of holding (mother)= 100%)
IPODEC IRELAND (% of holding (mother)= 100%)
F
F
MONTENAY SAVANNAH GP INC
MONTENAY SAVANNAH
LIMITED PARTNERSHIP
MONTENAY SAVANNAH
OPERATIONS INC
MONTENAY YORK RESOURCE
ENERGY SYSTEMS LLC
ONYX PENNSYLVANIA
WASTE SERVICES LLC
%
control
ONYX NORTH AMERICA CORP (% of holding (mother)= 100%)
F
39.00
%
holding
F
100.00
100.00
F
100.00
100.00
F
COMO AVENUE PROPERTIES LLC 100.00
G&R REAL ESTATE LLC
100.00
LAND AND GAS RECLAMATION INC 100.00
ONYX ARBOR HILLS LANDFILL INC 100.00
ONYX BLACKFOOT LANDFILL INC 100.00
ONYX CEDAR HILL LANDFILL INC
(EX SUPERIOR CEDAR HILL
LANDFILL INC)
100.00
ONYX CHESTNUT VALLEY LANDFILL
INC (EX CBF INC) ONYX
100.00
CRANBERRY CREEK LANDFILL LLC
(EX SUPERIOR CRANBERRY CREEK
LANDFILL LLC)
100.00
ONYX CYPRESS ACRES LANDFILL
INC (SUPERIOR CYPRESS ACRES
LANDFILL INC)
100.00
ONYX EAGLE BLUFF LANDFILL INC
(SUPERIOR EAGLE BLUFF
LANDFILL INC)
100.00
ONYX EMERALD PARK LANDFILL
LLC (EX SUPERIOR EMERALD PARK
LANDFILL INC)
100.00
ONYX EVERGREEN LANDFILL INC 100.00
ONYX FCR LANDFILL INC. (EX
SUPERIOR FCR LANDFILL INC)
100.00
ONYX GLACIER RIDGE LANDFILL LLC
(EX SUPERIOR GLACIER RIDGE INC) 100.00
ONYX GRAND BAHAMAS LTD
100.00
ONYX GREENTREE LANDFILL LLC
(EX SUPERIOR GREENTREE
LANDFILL INC)
100.00
ONYX HICKORY MEADOWS LANDFILL
LLC (EX SUPERIOR HICKORY
MEADOWS LANDFILL INC)
100.00
ONYX LANDCASTER LLC
100.00
ONYX LEASING CORP
100.00
ONYX MAPLE HILL LANDFILL INC
(EX SUPERIOR MAPLE HILL
LANDFILL INC)
100.00
ONYX OAK RIDGE LANDFILL INC
(EX SUPERIOR OAK RIDGE
LANDFILL INC)
100.00
ONYX ORCHARDS HILLS
LANDFILL INC
100.00
ONYX PECAN ROW LANDFILL LLC
(EX GEOWASTE OF GA)
100.00
ONYX PONTIAC LANDFILL. INC. 100.00
ONYX SEVEN MILE CREEK
LANDFILL LLC (EX SUPERIOR SEVEN
MILE CREEK LANDFILL LLC)
100.00
ONYX STAR RIDGE LANDFILL INC
(EX SUPERIOR STAR RIDGE
LANDFILL INC)
100.00
ONYX VALLEY MEADOWS
LANDFILL LLC(EX SUPERIOR VALLEY
MEADOWSLANDFILL LLC
EX VALLEY SANITATION)
100.00
ONYX VALLEY VIEW LANDFILL INC 100.00
ONYX WASTE SERVICES INC (NJ)
(EX ACS SERVICES)
100.00
ONYX WASTE SERVICES INC
(PENNSYLVANIA) (EX SUPERIOR
WASTE SERVICES OF DELAWARE
VALLEY)
100.00
ONYX WASTE SERVICES INC
(WISCONSIN ) (EX SUPERIOR
SERVICES INC)
100.00
ONYX WASTE SERVICES MIDWEST
INC (EX SUPERIOR
OF WISCONSIN INC)
100.00
ONYX WASTE SERVICES OF
MICHIGAN INC (EX SUPERIOR
SERVICES OF MICHIGAN)
100.00
ONYX WASTE SERVICES
OF NORTH AMERICA LLC
100.00
100.00
100.00
100.00
100.00
100.00
NEW
NEW
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
61
method
the company
F
F
F
F
F
F
F
E
F
F
%
holding
ONYX WASTE SERVICES
OF TEXAS INC
100.00
ONYX WASTE SERVICES
SOUTHEAST INC (EX OWS OF
FLORIDA INC EX SUPERIOR WASTE
SERVICES OF FLORIDA)
100.00
ONYX ZION LANDFILL INC
100.00
SUMMIT INC
100.00
SUPERIOR HUDSON VALLEY
INC
100.00
SUPERIOR SERVICES
OF WESTCHESTER INC
100.00
SUPERIOR WASTE SERVICES
OF NEW YORK CITY INC
100.00
URBAN SANITATION LTD
50.00
VASKO RUBBISH REMOVAL. INC 100.00
VASKO SOLID WASTE. INC
100.00
%
control
method
the company
F
F
F
F
F
100.00
100.00
100.00
100.00
F
F
F
F
100.00
100.00
100.00
50.00
100.00
100.00
%
holding
%
control
RAMNIR
46.36
SARP ISRAËL
100.00
SARP ONYX ISRAËL
100.00
SHERUTEI NOY- AHOSEF
46.36
TAMAM INTEGRATED
RECYCLING INDUSTRIES LTD
46.36
TAMAM MMM TRANSFER
STATION AND LANDFILLS LTD
46.36
Y.A.R.A.V (RISHON LEZION) 1998 LTD46.36
Y.A.R.A.V (SHRUTEI NOY) 1985 LTD 46.36
ZACH-OR SANITATION SERVICE LTD 31.06
100.00
100.00
100.00
100.00
100.00
100.00
100.00
67.00
COMGEN AUSTRALIA PTY LTD
100.00
70.15
PACIFIC
NEW
NEW
F
100.00
ONYX GROUP (New Zealand - % of holding (mother)= 100%)
ONYX CANADA (% of holding (mother)= 99.81%)
F
F
F
F
GROUPE SANI GESTION INC
ONYX CANADA INC
ONYX INDUSTRIES INC
SANI GESTION - ONYX INC
99.81
99.81
99.81
99.81
F
E
100.00
100.00
100.00
100.00
F
F
F
P
F
P
F
F
F
F
P
P
F
F
F
F
F
F
P
F
P
F
P
F
ADVANCED PLASTIC RECYCLING
JOINT VENTURE
50.00
AMOW LIMITED
100.00
AUSTRALIAN GREEN ENERGY
PTY LTD
100.00
COLLEX ALEXANDRIA PTY LTD
(EX SRC PTY LTD)
100.00
COLLEX AND LEE FACILITIES
MANAGEMENT
50.00
COLLEX PTY
100.00
COLLEX UNANDERRA SOIL
REMEDIATION
50.00
EDSTAR ENTERPRISES PTY LTD 100.00
EMS GROUP PTY LTD
100.00
HORSLEY PARK WASTE
MANAGEMENT JOINT VENTURE 92.50
INTEGRATED WASTE
MANAGEMENT
50.01
NATURAL RECOVERY SYSTEMS
JOINT VENTURE
50.00
NSW LIQUID TREATMENT PTY LTD 50.00
NSW LIQUID WASTE TREATMENT
JOINT VENTURE
75.00
ONYX AIMS PTY LTD
100.00
ONYX COATINGS SDN BHD
100.00
ONYX INDUSTRIAL SERVICES
PTY LTD
100.00
ONYX Z SDN BHD
100.00
PORT BOTANY TRANSFER
STATION PTY LTD
50.10
SYDNEY RECYCLING CENTRES
JOINT VENTURE
50.00
TI TREE BIOENERGY JOINT
VENTURE
50.00
TOTAL WASTE MANAGEMENT
PTY LTD
50.00
WASTE MANAGEMENT
SERVICES PTY LTD£
100.00
WESTERN RESOURCE RECOVERY
PTY LTD
50.00
WOODLAWN BIOREACTOR
PTY LTD
100.00
E
F
50.00
100.00
P
F
F
100.00
F
100.00
50.00
100.00
F
NEW
F
F
E
F
E
F
F
P
F
P
F
F
F
62
AMNIR AND ENVIRONMENTAL
SERVICES LTD
46.36
BARTHELEMI HOLDINGS LTD
66.09
CGSP
99.98
EFFEH
11.59
EVRON TAMAM MANAGEMENT
LTD
23.64
GO AWASTE MANAGEMENT
SERVICES (PTY) LTD
21.00
GRS VALTECH ISRAEL
100.00
LIPODAN
100.00
M.M.M COMPANY UNITED
LANDFILL INDUSTRIES (1998) LTD 15.30
ONYX ALEXANDRIE
99.97
ONYX GULF COMPANY LTD
49.00
ONYX ISRAEL
100.00
ONYX SOUTH AFRICA WASTE
MANAGEMENT SERVICES (PTY)
LIMITED
100.00
ONYX TUNISIE
99.60
F
F
F
F
F
F
F
50.00
100.00
100.00
92.50
50.01
P
50.00
50.00
P
F
75.00
100.00
100.00
100.00
100.00
F
E
E
P
50.10
E
50.00
E
F
50.00
F
F
E
F
100.00
50.00
100.00
F
P
100.00
66.09
99.98
25.00
F
F
51.00
21.00
99.97
100.00
33.00
99.97
49.00
100.00
100.00
99.60
100.00
50.00
CGS MACAU TRATAMENTO
RESIDUOS
30.00
CHENNAI ENVIRONMENTAL
CORPORATION
100.00
ECO SERVICES KOREA LTD
50.00
FME ONYX PTE LTD
90.00
FOSHAN LANDFILL COMPANY
LIMITED
100.00
GREENLINE ENVIROTECH
PHILIPPINES INC
51.00
GUANZHOU LIKENG
INCINERATION
100.00
ONYX (CHINA) WASTE-TO-ENERGY
COMPANY LTD
100.00
ONYX (FOSHAN) CO LTD
100.00
ONYX (SHANGHAI) COMPANY LTD 100.00
ONYX ASIA PTE LTD
100.00
ONYX ASIA SER. PTE LTD
100.00
ONYX CHINA LTD
100.00
ONYX SHANGHAI ENV PROTEC
TECH CONSULT CO
100.00
ONYX TA-HO ENERGY RECOVERY
CO. LTD
42.00
ONYX TA-HO WASTE CLEARANCE
CO. LTD
50.00
PURE CHEMICAL INDUSTRIES
PTE LTD
70.00
PUXI OM
51.00
SHANGHAI LAOGANG LANDFIL 30.00
TA HO ONYX TAITUNG ENVT
20.00
TA-HO ENVIRONMENTAL TECH
SERVICE
50.00
TIANJIN HEIJA-ONYX
ENVIRONMENT
31.08
30.00
NEW
100.00
50.00
90.00
100.00
NEW
51.00
100.00
NEW
100.00
100.00
100.00
100.00
100.00
100.00
NEW
NEW
NEW
100.00
NEW
42.00
50.00
70.00
51.00
30.00
20.00
NEW
50.00
31.08
ONYX HONG-KONG (% of holding (mother)= 100%)
50.00
AFRICA AND MIDDLE EAST
F
100.00
50.00
ASIA
COLLEX (% of holding (mother)= 100%)
P
ONYX GROUP LTD
WESTREEF SERVICES LTD
NEW
F
F
F
F
ECOSERVE LTD
50.00
ENVIRONMENTAL TECHNOLOGIES
CHINA LTD
100.00
ENVIROPACE LTD
70.00
GREEN VALLEY LANDFILL LTD
50.00
GREENFIELD TRANSFER LTD
50.00
GUANGZHOU GUANG JIA
ENVIRONMENTAL PROTECTION
CO LTD
100.00
HANGZHOU ZHONG JIA
ENVIRONMENTAL TECHNOLOGY
CO LTD
100.00
HUIZHOU DONGJIANG ONYX
SOLID WASTE TREATMENT CO LTD 49.00
ONYX (GUANGZHOU)
COMPANY LIMITED
100.00
ONYX (GUANGZHOU)
COMPANY LIMITED
(HONG KONG HOLDING CO)
100.00
ONYX (HONG KONG) CO LTD
100.00
PWM RECYCLING AND SERVICES
LTD
100.00
SOUTH CHINA TRANSFER LTD
50.00
ZAPPAWAY LIMITED
100.00
50.00
100.00
70.00
50.00
50.00
100.00
100.00
49.00
NEW
100.00
100.00
100.00
100.00
50.00
100.00
NEW
F
P
E
527.00
51.00
32.00
610.00
Note 43
Transition from French accounting principles
to International Financial Reporting Standards (IFRS)
Summary of the impact of IFRS transition on the main income statement and balance sheet headings
(€ million)
French GAAP
IFRS
Revenue
Net income
Total equity
Gross financial debt
Cash and cash equivalent
Net financial debt
6,176.9
125.1
1,664.0
1,813.2
2,655.6
180.8
2,405.7
Difference
6,176.1
198.7
1,688.4
1,827.4
2,982.0
149.6
2,832.4
(0.8)
73.6
24.4
14.2
326.4
(31.2)
426.7
Reconciliation of French GAAP and IFRS equity as of January 1, 2004 and December 31, 2004
and reconciliation of 2004 net income
(€ million)
As of
January 1,
2004
Equity under French GAAP
Goodwill
Actuarial gains (losses)
Analysis of contracts
Discounting of provisions
Componant approach
on tangible assets
Intangibles assets
Others
Equity under IFRS
Minority interest
under French GAAP
Goodwill and others
Minority interests under IFRS
(a)
Net
Share Dividends
Foreign
Changes in
income for capital
exchange consolidation
the year
translation
scope
Other
As of
December
31, 2004
(3.2)
-
1,664.0
79.3
(24.8)
2.4
32.3
(a)
(10.3)
0.0 (13.5)
(23.1)
(16.8)
(28.3)
3.4
1,688.
1,666.7
6.4
(24.3)
34.6
125.1
75.0
(0.5)
1.1
(2.3)
0.0
-
(61.1)
-
(63.5)
(2.1)
-
0.0
-
(18.6)
(16.8)
(25.5)
6.1
1,629.9
(4.5)
0.0
(2.8)
7.6
198.7
0.0
(61.1)
(65.6)
-
135.7
(15.7)
0.6
120.6
19.4
(0.8)
4.3
22.9
0.0
0.0
(21.7)
(21.7)
(1.8)
1.2
0.5
(0.1)
17.6
(0.3)
17.3
0.0
0.0
149.2
(15.3)
5.1
139.0
FTA corrections, mainly on renewal provisions
63
(€ million)
As of December
31, 2004
French GAAP
with IFRS presentation
Goodwill
Non current financial assets
Deferred tax, net
Non-current assets
Current operating assets
Current financial assets
Cash and cash equivalent
Current assets
Assets of discontinued operations
Total assets
Minority interests
Equity
Grants
Other long-term deferred income
Other non-current liabilities
Non current liabilities
Operating payables
Current provisions
Current financial liabilities
Bank overdrafts
Current liabilities
64
1,112.4
347.5
3,379.4
62.5
(45.3)
4,856.5
1,728.1
34.6
146.2
1,908.9
6,765.4
1,664.0
149.2
1,813.2
46.1
11.6
10.5
2,258.3
27.2
2,353.7
1,794.7
535.0
335.8
61.4
2,726.9
6,893.8
Ref
IAS/IFRS
adjustments
As of December
31, 2004
IFRS
I
II
III
IV
V
VI
VII
VII
VIII
IX
XI
X
XI
329.1
(268.6)
(270.9)
(2.6)
362.5
18.8
168.3
293.0
(10.0)
3.4
286.4
4.0
458.7
24.4
(10.2)
14.2
0.0
(10.7)
315.6
(2.3)
7.9
310.5
20.1
(343.1)
308.0
20.8
5.8
330.5
1,441.5
78.9
3,108.5
59.9
362.5
(26.5)
5,024.8
2,021.1
24.6
149.6
2,195.3
4.0
7,224.1
1,688.4
139.0
1,827.4
46.1
0.9
326.1
2,256.0
35.1
2,664.2
1,814.8
191.9
643.8
82.2
2,732.7
7,224.3
IFRS consolidated income statement as of December 31, 2004
(€ million)
French GAAP
Revenue
Cost of sales
Selling, general
and administrative costs
= EBIT
IFRS
6,176.9
(4,826.9)
Other income (expense)
= Net income before taxes,
minority and equity interests
Income taxes
= Net income before minority
and equity interests
Equity in net income of affiliates
= Minority interests
Discontinued operations income
= Net income
of the year
6,176.1
(4,824.8)
Selling costs
(121.0)
General and administrative costs
(764.6)
XII
(895.8)
454.2
Restructuring costs
(2.7)
Goodwill amortization and impairment
of intangible assets with an indefinite life (70.3)
= Operating income
(73.0)
Financial income (expenses)
= Income from ordinary activities
Ref
Revenue
Cost of sales
(119.8)
(8.0)
(200.8)
7.7
Other operating revenue and expenses
= Operating income
0.4
466.1
XIII
Finance costs, net
(124.2)
(6.6)
XIV
XV
Income tax expenses
(123.6)
XVI
(193.1)
(125.7)
(318.8)
9.1
(19.4)
(329.1)
= Net income from
continuing operations
9.9
221.6
Net income from discontinued operations 0.0
= Net income of the year
221.6
attributable to minority interests
(22.9)
= Net income for the year attributable
to equity holders of the parent
198.7
XVII
65
Cash-flow statement as of December 31, 2004
(€ million)
Net income for the year attributable to equity holders of the parent
Minority interests
Net charge to depreciation, amortization and provisions
Net charge to financial amortization and provisions
Other calculated revenues and expenses
Gains (losses) on disposal and dilution
Dividends received
Finance costs, net
Income tax expense
Deferred charges
Other
Operating cash-flow before changes in working capital
Income taxes paid
Changes in working capital
Net cash from operating activities
Purchases of property, plant and equipment
Proceeds on disposal of property, plant and equipment
Purchases of investments
Proceeds on disposal of investments
IFRIC 4 investment contracts
- New IFRIC 4 loans
- Principal payments on IFRIC 4 loans
Interest-bearing long-term loans granted
Principal payments on interest-bearing long-term loans
Scope of consolidation effect
Dividends received
Net decrease in short-term loans
Grants received
Other
Net cash from investing activites
Net increase in short-term borrowings
New long-term borrowings and other debt
Principal payment borrowings and other debt
Proceeds on issue of shares
Purchase of treasury
Dividends
Interest paid
Net cash used in financing activities
Cash and cash equivalents at the beginning of the year
Effect of foreign exchange rate changes
Bank overdraft and other cash position item
66
French GAAP
125.1
19.5
654.4
6.2
(22.0)
(9.1)
5.2
(4.3)
0.4
107.0
882.4
(718.8)
41.3
(52.5)
12.1
IFRS
198.7
22.9
553.9
4.5
(4.0)
(20.9)
(9.9)
(1.4)
124.2
123.6
Difference
991.7
(113.7)
91.9
969.9
(606.6)
45.1
(52.7)
11.6
-
(18.6)
20.1
(0.3)
22.6
0.5
(693.6)
(164.3)
688.2
(606.9)
10.8
0.0
(82.8)
(155.0)
38.4
12.6
84.8
146.2
61.4
84.8
18.6
(17.1)
36.2
1.6
6.6
15.7
5.0
(535.9)
(155.0)
582.6
(651.7)
10.8
0.0
(82.8)
(120.5)
(416.5)
37.2
12.6
67.4
149.6
82.2
67.4
Ref
87.5
XVIII
157.7
XIX
(261.5)
(1.2)
0.0
(17.4)
3.4
20.8
(17.4)
XX
Analysis of adjustments
I. Goodwill
(€ million)
Total
French
GAAP
Purchased goodwill
and market share (1)
Cancellation GW amortization/
negative GW reversal (2)
Other
IFRS
1,112.4
249.0
81.0
(0.9)
1,441.5
Purchased goodwill and market shares acquired as a result of business combinations and recognized under intangible assets under French GAAP are
transferred to goodwill in IFRS (IAS 38).
(2)
Cancellation of amortization.
(1)
II. Intangibles assets
(€ million)
Total
French
GAAP
Purchased goodwill
not recognized (1)
Intangible assets
non reconnus (2)
Other (3)
IFRS
347.5
(249.0)
(10.0)
(9.6)
78.9
Purchased goodwill and market shares acquired as a result of business combinations and recognized under intangible assets under French GAAP are
transferred to goodwill in IFRS (IAS 38).
(2)
Start-up costs cancelled in IFRS.
(3)
Deferred charges cancelled in IFRSI
(1)
III. Property, plant and equipment
(€ million)
Total
French
GAAP
Componants approach
on tangible assets (1)
Analysis
of contracts (2)
Other (3)
IFRS
3,379.4
(32.0)
(228.0)
(10.9)
3,108.5
Componant approach on tangibles assets.
IFRIC 4 application to certain contracts.
(3)
Transfer to property, plant and equipment of depreciation charge of fixed assets recorded in provisions for contingencies and losses under French GAAP.
(1)
(2)
IV. Non-current financial assets
(€ million)
Long-term loans
Other financial assets
Non consolidated investments
Actifs financiers non courants
French GAAP
IFRS
69.1
26.3
33.1
300.6
27.9
34.0
362.5
The increase in Other financial assets (231.5 € million) is mainly attributable to the reclassification of PPE pursuant to the
application of IFRC 4 (248 € million). In addition, bonds issuance costs were reclassified in net financial debt.
V. Deferred taxes, net
Corresponds to the tax impact of IFRS adjustments.
VI. Current operating assets
The 293 million increase in operating receivable is mainly due to the add-back of « Dailly law » discounted receivable
(+334 million) and the discounting effect of long-term receivable (-28 million).
VII. Current financial assets, cash and cash equivalents
Reclassifications.
67
VIII. Other long-term deferred income
Other long-term deferred income includes under French GAAP payments made in respect of income from the securitization
of future receivables. Under IFRS, this transaction is equated to additional financing and reclassified in borrowings.
IX. Non-current provisions
(€ million)
Provisions for contingencies
and losses
Provisions for pensions
and other employee benefits
French
GAAP
Reclassification
ST-LT
Reclassification
in PPE (1)
Discounting
Actuarial
gains (losses) (3)
Other
IFRS
10.5
330.0
(10.0)
(52.0)
-
1.1
279.6
0.0
8.0
-
-
38.5
0.0
46.5
(2)
Reclassifications of non-current provisions concern the depreciation charge of fixed assets under concession deducted from PPE under French GAAP.
Discounting of provisions.
(3)
VES elected to offset actuarial gains and losses against equity as of January 1, 2004.
(1)
(2)
X. Current provisions
(€ million)
Provisions for contingencies
and losses
Provisions for pensions
and other employee benefits
French
GAAP
Reclassification
ST-LT
Reclassification
in PPE (1)
Discounting
Actuarial
gains (losses) (3)
Other
IFRS
495.8
(330.0)
-
-
-
(1.6)
164.2
39.2
(8.0)
-
-
(3.4)
0.0
27.8
(2)
XI. Borrowings
(€ million)
French GAAP
Securitization/« Dailly law » (1)
Amortized cost restatement (2)
Other
IFRS adjustments
Borrowings under IFRS
(1)
(2)
Short term
Long term
335.8
334.0
(26.0)
0.0
308.0
643.8
2,258.3
0.0
(2.3)
(0.0)
(2.3)
2,256.0
Add-back of securitized operating receivables.
Reclassification of bonds issuance costs in borrowings
XII. Revenue
(€ million)
VES
Revenues under French GAAP
Loan amortization in accordance with IFRIC 4
Scope of consolidation (potential voting rights)
Revenues under IFRS
68
6,176.9
(14.2)
13.4
6,176.1
XIII. Reconciliation of EBIT and Operating income
(€ million)
VES
EBIT under French GAAP
Other non-recurring items
Restructuring costs, net
Amortization and impairment of goodwill and intangible assets with an indefinite useful life
Operating income IFRS presentation
Cancellation of amortization and impairment of goodwill and intangible assets with an indefinite useful life
Impact of IFRIC 4
Components approach
Intangibles assets
Provisions
Other
Total IFRS adjustments
Operating income under IFRS
454.2
7.7
(2.7)
(70.3)
388.9
68.3
0.7
(5.9)
10.6
4.6
(1.1)
77.2
466.1
XIV. Reconciliation of finance costs
(€ million)
Finance costs under French GAAP
+ Finance costs in inventories and capitalized
- Loan income and income from marketable securities (1)
Finance cost IFRS presentation
Calculation of the debt at amortized cost (2)
Fair value adjustment of derivative instruments (3)
Finance costs under IFRS
(119.8)
9.2
(7.5)
(118.1)
(2.4)
(3.7)
(124.2)
XV. Reconciliation of other financial income (expenses)
(€ million)
Other financial income (expenses) under French GAAP
+ Loan income and income from marketable securities
- Finance costs in inventories and capitalized
Other financial income (expenses) IFRS presentation
Income on foreign exchange rates transactions
Unwinding of discoutn of provisions
Other financial income (expenses) under IFRS
(8.0)
7.5
(9.2)
(9.7)
11.2
(8.1)
(6.6)
Net financial debt under IFRS consist of gross financial debt less cash and cash equivalents. As such, loan income and income from marketable securities
is transferred to « other financial income and expenses ».
(2)
Under French GAAP, the amortization of redemption premiums and loan issue costs is treated as other financial expenses. Under IFRS, these expenses
are treated as components of amortized cost.
(3)
These adjustments concern the revaluation of interest rate derivatives.
(1)
69
XV. Reconciliation of other financial income (expenses)
(€ million)
Other financial income (expenses) under French GAAP
+ Loan income and income from marketable securities
- Finance costs in inventories and capitalized
Other financial income (expenses) IFRS presentation
Income on foreign exchange rates transactions
Unwinding of discoutn of provisions
Other financial income (expenses) under IFRS
(8.0)
7.5
(9.2)
(9.7)
11.2
(8.1)
(6.6)
Net financial debt under IFRS consist of gross financial debt less cash and cash equivalents. As such, loan income and income from marketable securities
is transferred to « other financial income and expenses ».
Under French GAAP, the amortization of redemption premiums and loan issue costs is treated as other financial expenses. Under IFRS, these expenses
are treated as components of amortized cost.
(3)
These adjustments concern the revaluation of interest rate derivatives.
(1)
(2)
XVI. Tax reconciliation
The difference stems from tax impact of IFRS adjustments
XVII. Reconciliation of net income for the year attributable to equity holders of the parent company
(€ million)
Net income for the year under French GAAP
Goodwill amortization
Actuarial gains and losses
Discounting of provisions
Components approach on PPE
Intangible assets
Other
Net income for the year under IFRS
125.1
75.0
(0.5)
1.1
(2.3)
(4.5)
0.0
(2.8)
7.6
198.7
XVIII. Net cash from operating activities
Under IFRS, net cash from operating activities excludes interest paid (classified in financing activities). Besides, the application of
IFRIC 4 leads to a reclassification between operating activities and investing activities since a component of French GAAP revenues
are a repayment flow of financial receivable under IFRS.
XIX. Net cash from investing activities
Application of IFRIC 4 : cf. note XVIII.
Under IFRS, purchases of property, plant and equipment financed by finance lease are excluded from the cash-flow statement.
XX. Net cash from financing activities
Under IFRS, financing activities include interest paid. Finance leases impact is excluded (see note XIX).
70
Auditor’s report
Statutory auditor’s report on the
consolidated financial statements
Year ended December 31, 2005
SALUSTRO REYDEL
Membre of KPMG International
1, cours Valmy
92923 Paris-La Défense Cedex
S.A. au capital de € 3.824.000
BARBIER FRINAULT & AUTRES
ERNST & YOUNG
41, rue Ybry
92576 Neuilly-sur-Seine Cedex
S.A.S. au capital variable de € 37.000
Statutory Auditors
Member of the compagnie régionale de Paris
Statutory Auditors
Member of the compagnie régionale de Versailles
This is a free translation into English of the statutory auditors’ report issued in French and is provided solely for the convenience
of English speaking users. The statutory auditors’ report includes information specifically required by French law in such reports,
whether modified or not. This information is presented below the opinion on the consolidated financial statements and includes
an explanatory paragraph discussing the auditors’ assessments of certain significant accounting and auditing matters. These
assessments were considered for the purpose of issuing an audit opinion on the consolidated financial statements taken as a
whole and not to provide separate assurance on individual account captions or on information taken outside of the consolidated
financial statements. This report should be read in conjunction with, and construed in accordance with, French law and professional
auditing standards applicable in France.
To the shareholders,
Following our appointment as Statutory Auditors by your Annual General Shareholders’ Meetings, we have audited the accompanying consolidated financial statements of Veolia Propreté for the year ended December 31, 2005.
The consolidated financial statements have been approved by the Company’s Board of Directors. Our role is to express an opinion
on these financial statements based on our audit. These financial statements have been prepared for the first time in accordance
with IFRSs as adopted by the European Union. They include comparative information restated in accordance with the same standards in respect of financial year 2004.
I. Opinion on the consolidated financial statements
We conducted our audit in accordance with professional standards applicable in France. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the
management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for the opinion expressed in this report.
In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial
position of the Group and of the results of its operations for the year then ended in accordance with IFRSs as adopted by the EU.
71
Auditor’s report
II. Basis of our assessments
In accordance with the requirements of article L.823-9 of the French Commercial Law (Code de Commerce) relating to the justification of our assessments, we bring to your attention the following matters:
• Note 1.14 to the consolidated financial statements describes the accounting policy for minority interest put options in the
absence of a specific IFRS adopted by the EU. We verified the appropriateness of the information presented in Note 1.14
regarding the method used by Veolia Propreté.
• We reviewed the accounting policies adopted by Veolia Propreté regarding service concession arrangements, for which there
is not any specific position under IFRS as adopted by the EU. We also verified the appropriateness of the information presented
in the note 1.20 to the consolidated financial statements regarding this matter.
• Note 2 to the consolidated financial statements refers to the significant estimates and judgments made by the management. In
connection with our audit, we concluded that those judgments and estimates related primarily to goodwill and intangible
assets (notes 1.9, 1.10, 4 and 5), property, plant and equipment (notes 1.6, 1.10, 6 and 7), deferred tax assets and tax
result (notes 1.19, 12 and 26), provisions and pension benefits (notes 1-13, 1-15, 17 and 30) and financial instruments
(notes 1-14 and 29). Our work includes the evaluation of the data and assumptions on which those judgments and estimates
were based, the review of the calculation, on a test basis, made by the company, and the review of the appropriateness
of the information presented in the notes to the consolidated financial statements. Based on our assessments, we checked
that these estimates are reasonable.
These assessments were made in the context of our audit of the consolidated financial statements taken as a whole, and therefore contributed to the opinion we formed which is expressed in the first part of this report.
III. Specific verifications
In accordance with professional standards applicable in France, we have also verified the information given in the group's
management report. We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.
Paris La Défense and Neuilly-sur-Seine, on May 22, 2006
The Statutory Auditors
72
SALUSTRO REYDEL
Membre of KPMG International
BARBIER FRINAULT & AUTRES
ERNST & YOUNG
Bernard Cattenoz
Jean Bouquot
Cover design:
Design and production:
IKONEO (Phone: +33 (0) 1 49 73 30 54)
73
COUV_RF_VE_PROP_EXE/GB.qxd
8/08/06
16:01
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veolia environmental services - Veolia SE

Transcription

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