14MB - Pirelli

FINANCIAL STATEMENT FORMATS
The company has applied the provisions of Consob Resolution 15519 dated July 27, 2006 with
regard to the formats of the financial statements and Consob Communication 6064293 of July
28, 2006 in respect of corporate disclosure.
The consolidated financial statements consist of the balance sheet, the income statement, the
statement of recognized income and expense, the statement of cash flows and the notes, together
with the report on operations by the directors on the operating performance.
The format adopted for the balance sheet classifies assets and liabilities between current and
non-current.
The income statement applies the classification of costs by nature.
The format for the changes in equity is entitled “Statement of recognized income and expense”
and includes the result for the year and, by homogeneous categories, the income and expenses
which, under IFRS, are recognized directly in equity. The amounts of transactions with equity
holders and movements during the year in the earnings reserves are presented in the notes.
In the statement of cash flows, cash flows from operating activities are presented using the
indirect method where the income or loss for the year is adjusted by the effect of non-monetary
transactions, by any deferral or accrual of previous or future operating collections or payments
and by revenues or costs connected with cash flows from investing or financing activities.
Compared to the published consolidated financial statements at December 31, 2007, the caption of
the line item in the income statement “Raw materials and consumables used” has been changed
to “Raw materials and consumables used (net of change in inventories)” and the caption of the
line item “Financial instruments” has been changed to “Derivative financial instruments”.
The consolidated financial statements show the comparative figures of the previous year.
Compared to the published balance sheet at December 31, 2007, the amount of Euros 117,098
thousand has been reclassified from “Current borrowings from banks and other financial institutions”
to “Non current borrowings from banks and other financial institutions”. This reclassification
has no effect on the result for the year or equity.
In the income statement for the year ended December 31, 2008 and in the comparative figures
for the year ended December 31, 2007, the income or loss from discontinued operations, in reference
to the sale of the INTEGRA FM B.V. Group (formerly Pirelli RE Integrated Facility Management
B.V.) and PGT Photonics S.p.A., is shown separately from the results from continuing
operations. Accordingly, the income statement data presented in the consolidated financial
statements for the year ended December 31, 2007 have been reclassified.
Lastly, the cash flows from discontinued operations (and the corresponding amounts for the
prior year) are disclosed in the notes, whereas in the consolidated financial statements at December
31, 2007, such cash flows were reported in the statement of cash flows.
SCOPE OF CONSOLIDATION
The scope of consolidation includes the subsidiaries, the associates and the investments in
joint ventures.
Subsidiaries are considered all the companies and entities in which the Group has the power
to determine the financial and operating policies; this circumstance is generally considered to
occur when more than half of the voting rights is held. The financial statements of subsidiaries
are included in the consolidated financial statements from when control over such subsidiaries
commences until the date that control ceases. The equity and income (loss) attributable to the
ANNUAL FINANCIAL REPORT 2008
323