ANNUAL REPORT ARCELOR 2003 - paperJam

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAmounts in EUR million, unless indicated otherwise.Note 1 :Note 2 :Note 3 :Note 4 :Note 5 :Note 6 :Note 7 :Note 8 :Note 9 :GeneralAccounting policiesChanges in consolidation scopeIntangible assetsProperty, plant and equipmentInvestments in companies accountedfor using the equity methodOther investmentsReceivables and other financial assetsInventoriesNote 17 : Employee benefitsNote 18 : Provisions for contract terminationindemnitiesNote 19 : Other provisionsNote 20 : Other amounts payableNote 21 : Staff costsNote 22 : Net financial resultNote 23 : TaxationNote 24 : Related party disclosuresNote 25 : Derivative financial instrumentsNote 10 : Trade receivablesNote 11 : Other amounts receivableNote 12 : Cash and cash equivalentsNote 13 : EquityNote 14 : Earnings per shareNote 15 : Minority interestsNote 16 : Interest-bearing liabilitiesNote 26 : Commitments given and receivedNote 27 : Segment reportingNote 28 : Events after the balance sheet dateNote 29 : Reconciliation of the Arcelor groupfinancial statements prepared in accordwith Luxembourg GAAP with the financialstatements prepared in accord with IFRSNote 30 : Simplified Group organisation chartNote 31 : Listing of Group companies136ANNUAL REPORT ARCELOR 2003
INTRODUCTIONThe consolidated financial statements of the Arcelorgroup for the year ended December 31, 2003 areprepared in accordance with International FinancialReporting Standards (“IFRS”) applicable at that date.These standards were partially adopted by theInternational Accounting Standards Board (“IASB”)in December 2003 (thirteen modified standards werepublished with effect after the balance sheet date)and will continue as such, in the context of the deadlineof 2005 set by the European Union.Arcelor has adopted a proactive approach in order toanticipate, and, where required, adapt its accountingpolicies depending on developments.NOTE 1 – GENERALArcelor S.A. was incorporated under Luxembourg Lawon June 8, 2001 in the context of the project of thebusiness combination of Aceralia, Arbed and Usinor.This business combination was completed onFebruary 28, 2002.In accord with the requirements of International FinancialReporting Standards (formerly known as InternationalAccounting Standards), and specifically under IAS 22,the business combination between Aceralia, Arbed andUsinor (the acquiring entity) was accounted for using thepurchase method of accounting.The consolidated financial statements as at December 31,2003 present the financial position of the Company andits subsidiaries (hereafter “the Group”), as well as theinterests of the Group in its associated companies andits interests in jointly controlled entities.The Board of Directors authorised the publication of theDecember 31, 2003 financial statements on February 18,2004. These financial statements will not be final untilapproved at the annual general meeting of shareholders.The consolidated financial statements have beenprepared in accordance with IFRS. This implies that theGroup makes certain estimates and assumptions whichhave an impact on the assets and liabilities, the incomestatement for the period and the notes to the financialstatements. Changes in facts and circumstances maylead the Group to change these estimates.NOTE 2 – ACCOUNTING POLICIES1) Statement of complianceThe consolidated financial statements have beenprepared in accordance with International FinancialReporting Standards as adopted by the IASB and theinterpretations of those standards published by theInternational Financial Reporting InterpretationsCommittee (“IFRIC”).The Group applied IFRS for the first time for the yearended December 31, 2002. Adjustments resulting bothfrom the move from French GAAP, as applied by Usinor,to IFRS and the application of the new accountingpolicies of the Arcelor group, are shown in shareholders’equity in the opening balance sheet as at December 31,2000. This has been done in order to show theretroactive application of IFRS in accordance with theinterpretation of the Standing Interpretation Committee(“SIC”), specifically SIC 8.The consolidated financial statements have beenprepared in accordance with the requirements of sectionXVI of the Luxembourg Law of August 10, 1915 oncommercial companies, with the specific exception ofthe accounting and valuation of financial instrumentsfollowing the adoption, in 2001, of IAS 39. Moreover, thepresentation of the consolidated balance sheet andincome statement is different from that required byLuxembourg Law. In the opinion of the Directors, thepresentation chosen more appropriately reflects theGroup’s financial situation.Note 29 sets out a reconciliation between the net profitand shareholders’ equity of the Group for the yearended December 31, 2003 as detailed in these IFRSfinancial statements and the amounts which would havebeen published had Luxembourg legal and regulatoryrequirements been followed.2) Presentation of consolidated financialstatementsThe consolidated financial statements are prepared ineuro (“EUR”), rounded to the nearest million.The consolidated financial statements of the Groupare prepared on the basis of the historical costconvention with the exception of the following assetsand liabilities which are stated at their fair values:derivative financial instruments, investments held fortrading and investments available for sale. Hedgedassets and liabilities are stated at their fair value inrespect of the risks hedged.financial information > consolidated financial statementsANNUAL REPORT ARCELOR 2003 137
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ANNUAL REPORT ARCELOR 2003ANNUAL RE
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Message from the Chairman ofthe Boa
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Message from the Chairman ofthe Man
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Does this mean that the Group is en
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8ANNUAL REPORT ARCELOR 2003
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Portrait of the GroupArcelor was bo
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The Arcelor/Nippon Steel Corporatio
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Key Figures for 2003Revenues (1) Re
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2003 highlightsOn January 24, 2003,
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Corporate GovernanceBoard of Direct
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Report of the Chairman of the Board
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Role and authority of the Board of
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4.2. The Audit Committee andthe App
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AuthorityThe powers of the Manageme
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B. Internal Control Procedures1. GO
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3.3. Internal control procedures go
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Information regarding capital, mark
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Market informationListingArcelor sh
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Information policyArcelor intends t
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table of contents >Flat Carbon Stee
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Within this context, and in order t
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3.3. Packaging steelsThe packaging
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table of contents >Long Carbon Stee
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3. THE SECTOR’S PRODUCTS ANDMARKE
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table of contents >Stainless Steels
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The distribution of the UGINE & ALZ
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The adaptation plan - industrial re
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table of contents >Distribution-Pro
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2. ORGANISATION OF THE SECTORThe ye
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Other ActivitiesThe “Other Activi
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Group Consolidated Management Repor
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Trends in global crude steel produc
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Financial highlights for the GroupI
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Return on capital employed (ROCE) b
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BUSINESS BY SECTORFlat Carbon Steel
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Even though shipments in 2003 in th
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From a financial standpoint, and ex
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The Trading and Distribution busine
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- in September 2003, the sale of th
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The market tightness provoked by th
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Risk ManagementGeneral legal risks
Page 88 and 89: Group purchasing performanceIn addi
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Page 92 and 93: Implementation of the Sustainable D
Page 94 and 95: Arcelor’s principles Principal ac
Page 96 and 97: Organisation of Sustainable Develop
Page 98 and 99: indicators 2002 2003Principle 4 - O
Page 100 and 101: Group profitabilityObjectives• Av
Page 102 and 103: Arcelor Health and Safety policyArc
Page 104 and 105: Safety certificationsSeveral Arcelo
Page 106 and 107: Arcelor Environmental PolicyArcelor
Page 108 and 109: Implementation of a monitoring plan
Page 110 and 111: Dialogue with all stakeholdersObjec
Page 112 and 113: Dialogue with societyArcelor partic
Page 114 and 115: Development of individual interview
Page 116 and 117: Scientific CouncilChairman:• Marc
Page 118 and 119: Corporate governanceObjectives• E
Page 120 and 121: SponsorshipEvery year, the various
Page 122 and 123: Durability: Manufacturers are now a
Page 126 and 127: GENERAL INFORMATION ABOUTARCELORCor
Page 128 and 129: Cold-rolled flat products: In 2001,
Page 130 and 131: Safeguard clause• United States:
Page 134 and 135: Consolidated financial statementsof
Page 136 and 137: CONSOLIDATED CASH FLOW STATEMENTIn
Page 140 and 141: Assets intended to be disposed of o
Page 142 and 143: AmortisationAmortisation is recogni
Page 144 and 145: 13) EquityRepurchase of share capit
Page 146 and 147: 18) Other provisionsA provision is
Page 148 and 149: The major changes in the consolidat
Page 150 and 151: NOTE 4 - INTANGIBLE ASSETSGoodwill
Page 152 and 153: NOTE 5 - PROPERTY, PLANT AND EQUIPM
Page 154 and 155: NOTE 7 - OTHER INVESTMENTSThe main
Page 156 and 157: NOTE 13 - EQUITY13.1 Issued capital
Page 158 and 159: NOTE 15 - MINORITY INTERESTSIn the
Page 160 and 161: 16.6 Detail of main individual long
Page 162 and 163: 17.2.2 Additional pension plansFran
Page 164 and 165: 17.2.3 Leaving indemnities (continu
Page 166 and 167: 18.2 Early retirement plansAn actua
Page 168 and 169: NOTE 22 - NET FINANCING RESULTIn EU
Page 170 and 171: NOTE 24 - RELATED PARTY DISCLOSURES
Page 172 and 173: The portfolio of financial instrume
Page 174 and 175: NOTE 26 - COMMITMENTS GIVEN AND REC
Page 176 and 177: 27.1 Breakdown by activity (continu
Page 178 and 179: 27.2 Geographical breakdown(Figures
Page 180 and 181: NOTE 29 - RECONCILIATION OF THE ARC
Page 182 and 183: Company name Consolidation Country
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Company name Consolidation Country
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Company name Consolidation Country
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Audit31, Allée Scheffer Telephone
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Annual accounts Arcelor S.A.ANNUAL
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INCOME STATEMENT FROM JANUARY 1 TO
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NOTE 3 - STATEMENT OF TANGIBLE FIXE
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NOTE 8 - PROVISIONS FOR LIABILITIES
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NOTE 14 - DIRECTORS’ REMUNERATION
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Arcelor Ordinary General Meeting on
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GlossaryAnnealing:The heat treatmen
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How steel is made?a 3-stage process
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Arcelor’s main steel-manufacturin
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NOTES210ANNUAL REPORT ARCELOR 2003
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Concept and realization133, avenue
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