Notes to the Financial Statements - Efacec

17. Provisions for risks and charges
Pensions Shareholdings
31
Other risks and
charges
As at 1 January 2006
Carried to profi t and loss:
1.857.698 563.171 5.035.914 7.456.783
- additional provisions 0 97.847 1.594.728 1.692.575
- reversal of provisions -1.323.695 0 -711.069 -2.034.764
Changes in the consolidation perimeter 0 0 -81.226 -81.226
Exchange rate differences 0 0 0 0
As at 31 December 2006 534.003 661.018 5.838.348 7.033.369
Carried to profi t and loss:
- additional provisions 123.581 0 3.045.028 3.168.608
- reversal of provisions -59.324 0 -2.469.668 -2.528.991
Changes in the consolidation perimeter 0 -661.018 0 -661.018
Exchange rate differences 0 0 -7.871 -7.871
As at 31 December 2007 598.260 0 6.405.837 7.004.097
No environmental contingent liability exists.
Other shareholdings
This provision existing at the beginning of the period concerns the use of the Equity Method for the shareholding in Efacec
– Mozambique and corresponds to the share of the Group in the accumulated losses of this associate. The provision ceased to
be applicable as from 2007 when the Group acquired the entire share capital, at which time it was thus fully consolidated in the
accounts (Note 6).
Other risks and charges
This line includes mainly provisions for amounts to receive from insurance companies (1,683,335 Euro), penalties, repairs and
and negative variances on works in progress. The additional provisions of the period mainly relate to variances on work projects
in the subsidiary Efacec Energia.
These amounts relate to situations which are being constantly analysed by the management of the various companies as to
EFACEC’s responsibility to customers, and where an unfavourable outcome seems likely during the accounting period.
Over the last few fi nancial years, the Group has incurred costs of after sales service and maintenance. These costs have been
analysed, and if they are signifi cant, have been subject to provisions being set up for future losses. In this way the future potential
commitments of the Group are appropriately presented.
The amount shown as a reduction in provisions corresponds to the amount reversed out of the provision account as the related
costs are recognised, or when the situation for which the provisions was set up, no longer exists.
Total
2007 Consolidated and
Individual Financial Statments