1.1MB - Pirelli

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In Europe, truck tyres recorded a positive commercial trend. Activities for loss prevention have continued and include, among other things, the completion of some important installations of automatic fire-fighting systems and an overall reduction in risk which is measured by the HPR Rating, a parameter recognized by insurers internationally used to quantify risk in relation to the level of protection available. As part of the due diligence review carried out for the acquisition of the Siemens business segment, the risks and insurance coverage were analyzed, laying the groundwork for the integration of the new acquisition into the Group’s insurance plan. i 37
The Pirelli Corporate Web, the Intranet network for the distribution of information within the Group, has been further developed. Information Systems 1998 saw the completion of the first cycle of the innovation process for the Pirelli Group information technology which was based on the framework of the diffusion of SAP, the shift to a client/server-type architecture and the expansion of the network. The state-of-the-art reached in information systems constitutes a solid base on which to build to create a competitive advantage (development of electronic marketing, advanced systems of reporting and decision support). This level of excellence was also confirmed by the International Innovation Award awarded to Pirelli by Gartner Group for 1998; this was the first time in 13 years that the award has been bestowed on a non-American company. In 1998, the use of the SAP platform, as the main vehicle for a gradual standardization and functional integration was expanded to the following Operating Units: – Tyres : Pirelli Reifenwerke GmbH & Co. K.G. (Germany); Pirelli Neumaticos S.A.I.C. (Argentina); Turk Pirelli Lastikleri A.S. (Turkey); Pirelli UK Tyres Ltd (Great Britain); – Cables and Systems : Pirelli Cables and Systems LLc (North America); Cables Pirelli S.A. (France); Pirelli Cavi e Sistemi S.p.A. - Photonics Business. In addition, in the areas that are also involved in the program, new applications modules were developed: – Tyres : Logistics/Commercial in Brazil and Production in Spain; – Cables and Systems : Logistics/Commercial in Brazil and Australia. In 1998, the basic prototypes were completed relating to the SAP PP model for Production systems and the SAP PM model for Maintenance systems for both Sectors. A boost was given to the spread of the standard infrastructure based on Client/Server framework and open systems (APIS Project - Advanced Pirelli Information System) which has the goal of simplifying the information flow and reducing the paper support. At December 31, 1998 the total number of APIS users is equal to 7,000 units, compared to 4,700 at December 31, 1997. During the year, a new kind of international link (frame-relay solutions) was created which enabled higher speed in the communications network (at the same cost) and a further increase in the number of connected localities (163 compared to the 125 of the previous year). During the last quarter, intensive support was given to the completion of the due diligence review associated with the acquisition of the Power Cables Division from Siemens A.G. in 10 different countries. The Group made a great effort to improve the efficiency of its activities, which led to a reduction in costs over and beyond those that had been estimated. Particular emphasis was given to two very topical themes in 1998: the introduction of the euro and the prevention of risks associated with the change of the century. These are described in the following paragraphs. 38 i
Page 1 and 2: Pirelli S.p.A. Milan Annual Report
Page 3 and 4: Contents Board of Directors; Board
Page 5 and 6: Structure of Pirelli Group at Decem
Page 7 and 8: Five-year Summary of Selected Conso
Page 9 and 10: Gross Domestic Product of the main
Page 11 and 12: 1997-1998 trend in raw materials pr
Page 13 and 14: Distribution of Pirelli Group 1998
Page 15 and 16: The added value of submarine system
Page 17 and 18: Cables and Systems Sector Overall p
Page 19 and 20: Distribution of 1998 Cables and Sys
Page 21 and 22: Advanced studies within the laborat
Page 23 and 24: The first submarine optical amplifi
Page 25 and 26: In Iceland, Pirelli installed 150 k
Page 27 and 28: The rotating platform of the Pirell
Page 29 and 30: The new Audi TT is fitted with ultr
Page 31 and 32: The Lamborghini Diablo is among the
Page 33 and 34: The trend of truck tyres in Brazil
Page 35 and 36: New types and sizes of the “Scorp
Page 37: Pirelli supplied the Berlin electri
Page 41 and 42: Certification activities in line wi
Page 43 and 44: Distribution of Group personnel by
Page 45 and 46: • revenues for goods and services
Page 47 and 48: Corporate Governance As represented
Page 49 and 50: Results of operations The 1998 resu
Page 51 and 52: Appointment of the audit firm Upon
Page 53 and 54: Consolidated balance sheets Assets
Page 55 and 56: Liabilities and shareholders’ equ
Page 57 and 58: Consolidated statements of income (
Page 59 and 60: - positive differences, where not a
Page 61 and 62: • Provision for income taxes The
Page 63 and 64: "Investments in associated companie
Page 65 and 66: - Other receivables Other receivabl
Page 67 and 68: Provisions for income taxes The pro
Page 69 and 70: An analysis of payables by due date
Page 71 and 72: MEMORANDUM ACCOUNTS Memorandum acco
Page 73 and 74: Personnel costs Personnel costs con
Page 75 and 76: for liabilities and expenses accrue
Page 77 and 78: R&D expenditures In 1998 the Group
Page 79 and 80: Consolidated statements of cash flo
Page 81 and 82: Reconciliation of net results and s
Page 83 and 84: Assets (continued) (in thousands of
Page 85 and 86: Memorandum accounts (in thousands o
Page 87 and 88: List of investments Companies conso
Page 89 and 90:
Percentage Company Activity Headqua
Page 91 and 92:
Percentage Company Activity Headqua
Page 93 and 94:
Other investments in subsidiaries a
Page 95 and 96:
improvements and loan acquisition c
Page 97 and 98:
Extraordinary part of the sharehold
Page 99 and 100:
the two companies, given that that
Page 101 and 102:
the formation of the value in this
Page 103 and 104:
The weighted average cost of capita
Page 105 and 106:
Result of the valuation and the sha
Page 107 and 108:
Entering into the merits of the mer
Page 109 and 110:
Group structure at December 31, 199
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Notice pursuant to art. 10, paragra
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1.i - Evaluations by the Board of D
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December 31, 1998, with the cancell
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Amendment of the by-laws Present wo
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6. Effects of the merger The transa
Page 121 and 122:
and abroad, pursuant to the terms o
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or Managing Directors, the chair sh
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e enclosed with the lists together
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Attachment 2 Pirelli S.p.A. - Milan
Page 129 and 130:
Article 10 In view of the nature of
Page 131 and 132:
Article 19 The Board is authorized
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Failing any lists, the Board of Sta
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