2005 Annual Report - Touax

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Risk factors annual report <strong>2005</strong> Group has never been held liable to any significant extent in such cases. ■ River barges The fuel oil market may affect the competitiveness of river transport, either as a result of a shortage or as a result of an increase in the price of oil. The Group does not use any hedging instruments to cover changes in the oil price, but limits the risk by including indexation clauses in the majority of its transport contracts to follow changes in the price of refined products. Climate risk ■ River barges River navigation depends on climatic conditions: precipitation, drought and ice. When heavy rainfall affects certain rivers, water levels rise and reduce the clearance under bridges, limiting or preventing the passage of river barges. Drought leads to a fall in water levels, requiring loads to be reduced or even preventing the passage of river barges. Very harsh winters may mean that all of the fleet is immobilized until the ice melts. Poor climatic conditions can also have an impact on the grain harvests in a country or region. The impact can be qualitative or quantitative, or even both. Poor quality grain or a fall in production volume will weaken export sales, leading to a fall in freight levels. This risk is limited as a result of the Group’s diversified geographical presence. In addition, on the Danube the Group’s activity focuses on waterways (such as canals) which are less susceptible to climate risk. ■ Railcars The main climate risk for the Group is the flooding of a railcar. This would cause additional repair and maintenance costs up to the limit of the insurance cover. Positioning risk and risk of loss of containers Lessees sometimes return containers in regions where demand for containers is low (notably the United States). To cover such risks, the Group applies “penalties” (drop-off charges) when the containers are returned to regions of low demand. It is also developing a secondhand container sales department in order to reduce stocks in regions of low demand. Stocks of containers in depots are monitored on a daily basis and analyzed monthly. Containers can also be lost or damaged. The Group then bills its customers for the replacement value previously agreed in each leasing contract. This is always higher than the net book value. The risk of total loss is not covered if a customer becomes insolvent. On the other hand, all of the damage or losses associated with a natural disaster are covered, either by the customer’s insurance or by the depot insurance. Technical and quality risk applying to modular buildings Modular buildings may be subject to technical obsolescence resulting from qualitative developments in competitors’ equipment or changes in customer preferences (changes of taste). Additional costs are generated by research into quality materials. The Group invests in high-quality equipment which is ahead of existing standards and competing products, enabling it to minimize the additional costs of new materials. Railcar subcontracting risk The subcontracting risks mainly relate to problems caused by derailments and strikes affecting rail operators. In the event of a derailment, the Group’s risk is limited to its share of the liability and to the insurance cover. In the event of a strike, only railcars in the process of being delivered are affected, and the customers continue to be billed as normal for the leased railcars. Insurance – coverage of risks The Group has a policy of systematically insuring its tangible assets and general risks. The Group has three kinds of insurance policy: insurance for equipment, operating public liability and the public liability of company officers. The risk of loss or deterioration of the tangible assets of the modular buildings and river barges businesses is covered by equipment insurance. The insurance for the tangible assets of the shipping containers business and the railcars business is delegated to the Group’s customers and suppliers (depots), in accordance with standard practice in the industry. The operating losses consequent to the loss or deterioration of tangible assets are covered by the tangible asset insurance. There is no captive insurance company. The public liability insurance of the parent company, TOUAX SCA, covers material damage arising from its operations. The Group subsidiaries each have their own public liability insurance. The public liability insurance for company officers covers the Group’s managers (whether they are company officers or not) incurring liability for a professional fault committed within their directorial, managerial or supervisory activity, carried on with or without a mandate or power of attorney. The Shipping Containers business has public liability insurance cover. The equipment is insured directly by the customers and depots in accordance with industry practice. The modular buildings insurance guarantees the value of equipment generally, and in particular when 22
the equipment is stored or on lease and where the customer has omitted to effect insurance for the term of the lease. This insurance covers in particular the risks of explosion, fire, hurricane, storm, collision, water damage, falls, theft, etc. The river barges insurance covers damage, loss, third-party recourse and expenses resulting from any accident of navigation, explosion, fire or any instance of force majeure, specifically damage resulting from malfunctions of the propulsion or steering systems, mechanical breakdown, electrical damage, waterways, damage arising from poor stowage or loading, mooring risks, damage to structures, pollution risks, investigation costs, surveys, proceedings and legal fees. The insurance includes contractual public liability in respect of leased barges owned by third parties, cover for carrier’s liability as defined by laws and regulations and cover for goods carried. The nature of the cover and sums insured depend on the vessel and areas of operation. It should also be noted that war risks are covered in the case of vessels operating on the Danube. The railcars business has public liability insurance cover. The equipment is insured directly by the customers and depots in accordance with industry practice. annual report <strong>2005</strong> 23
Page 1 and 2: 2005 annual report your operational
Page 3 and 4: The message of the general partners
Page 5 and 6: contents Shipping containers 4 Modu
Page 7 and 8: Modular buildings A flexible servic
Page 9 and 10: Freight railcars Services for indus
Page 11 and 12: tion chart River barges FRANCE Sein
Page 13: Stock market Distribution of capita
Page 16 and 17: Responsible persons Persons respons
Page 18 and 19: Selected financial information Sele
Page 20 and 21: Risk factors annual report 2005 Aga
Page 22 and 23: Risk factors annual report 2005 the
Page 26 and 27: Information concerning the issuer H
Page 28 and 29: Information concerning the issuer M
Page 30 and 31: Brief survey of activities annual r
Page 32 and 33: Organigram Parent-subsidiary relati
Page 34 and 35: Organigram The guarantees and other
Page 36 and 37: Owned real estate, plant and equipm
Page 38 and 39: Information on trends Main trends u
Page 40 and 41: Profit forecasts or estimates Repor
Page 42 and 43: Remuneration and benefit En 2004 (
Page 44 and 45: Main shareholders Breakdown of shar
Page 46 and 47: Main shareholders annual report 200
Page 48 and 49: annual report 2005 Financial inform
Page 54 and 55: Financial information concerning th
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Financial information concerning th
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Additional information Subscribed c
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Additional information annual repor
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Significant contracts There are no
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Reports of the Managers Analysis by
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Reports of the Managers annual repo
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Reports of the Managers Results of
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Reports of the Managers Regulated a
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Reports of the Managers annual repo
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Report of the Supervisory Board and
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Recent press releases annual report
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Draft resolutions Combined General
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Draft resolutions annual report 200
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Draft resolutions 2 A variable port
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Table of contents annual report 200
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The present document was filed with
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Tour Arago. 5 rue Bellini 92806 Put
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2005 Annual Report - Touax

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