Consolidated Financial Statements of the F.I.L.A. Group
Separate Financial Statements of F.I.L.A. S.p.A.
122
Risks
Provisions for Tax Disputes
This provision represents the best estimate by management of liabilities concerning a tax assessment
of F.I.L.A. S.p.A. by the public tax departments, concerning financial year 2004 and relating to direct
and indirect taxes (Euro 39 thousand).
Legal Dispute
Provisions
The provision concerns accruals made in relation to:
legal proceedings arising from ordinary operating activities;
legal proceedings concerning disputes with employees or former employees and agents.
The movement in the risks provision in 2016 concerned particularly Daler Rowney Ltd (United
Kingdom). At the acquisition date of February 3, 2016, the English company reported a risks
provision for a dispute in progress with a client. During the year, the dispute was concluded with
utilisation of the provision for Euro 244 thousand and release of the excess of Euro 341 thousand.
Provisions for Pensions and Similar Obligations
The account includes the agents’ supplementary indemnity provision at December 31, 2016 of the
parent F.I.L.A. S.p.A. and of the subsidiaries Industria Maimeri S.p.A. and Canson Italia S.r.l.. The
2016 actuarial loss was Euro 95 thousand. The actuarial changes in the year, net of the tax effect, are
recognised directly to equity.
Restructuring Provisions
For the integration and alteration of the Group structure following the acquisitions in 2016, a number
of F.I.L.A. Group companies established provisions for risks and charges concerning personnel
mobility plans for a total of Euro 1,845 thousand. The plans will involve in particular the US
subsidiaries and Canson SAS (France), as per the structural reorganisation projects drawn up by the
parent.
Other Provisions
The provision of Euro 1,126 thousand principally relates to the subsidiary Dixon Ticonderoga
Company (U.S.A.) and F.I.L.A. S.p.A.. The US company established a provision for risks concerning
environmental reclamation (Euro 441 thousand) relating to actions undertaken in the US in the period
prior to acquisition by F.I.L.A. S.p.A.. Reclamation times and estimates will be revised by
management until completion. No further disposal and environmental reclamation costs are expected
following the reorganisation process involving the F.I.L.A. Group sites.
Consolidated Financial Statements of the F.I.L.A. Group
Separate Financial Statements of F.I.L.A. S.p.A.
123
The parent F.I.L.A. S.p.A. provisioned, taking account of the information available and the best
estimate made by management, Euro 586 thousand against liabilities deriving from the medium/long-
term variable remuneration plan for a number of strategic executives of the company. The plan,
approved by the Remuneration Committee and ratified by the Board of Directors, is indexed to
quantitative and qualitative parameters. As concerning a medium/long-term provision, the expected
future cash flows are discounted at a rate of 7.6%.
In order to establish the best estimate of the potential liability, each F.I.L.A. Group company assesses
legal proceedings individually to estimate the probable losses which generally derive from similar
events. The best estimate considers, where possible and necessary, the opinion of legal consultants
and other experts, the prior experience of the company, in addition to the intention of the company
itself to undertake further actions in each case. The present provision in the F.I.L.A. Group
consolidated financial statements concerns the sum of individual allocations made by each Group
company.
Note 16 - Deferred tax liabilities
Deferred Tax Liabilities amount to Euro 47,034 thousand (Euro 19,485 thousand at December 31,
2015).
Euro thousands
December 31, 2015
19,485
Provisions
730
of which Change in Consolidation Scope
121
Utilisations
(2,094)
of which Change in Consolidation Scope
(1,212)
Change in consolidation scope
30,244
Translation differences
(1,281)
Change in Equity
(50)
December 31, 2016
47,034
Change
27,549
Note 16.A CHANGES IN DEFERRED TAX LIABILITIES
Consolidated Financial Statements of the F.I.L.A. Group
Separate Financial Statements of F.I.L.A. S.p.A.
124
Deferred tax liabilities principally concern differences between fiscal and statutory amounts and the
tax effect calculated on tangible and intangible assets valued through the “purchase price allocation”
in completion of the corporate operations executed by the F.I.L.A. Group.
The table below shows the deferred tax liability provision by nature of the provision:
Euro thousands
2016
Contribution from
Change in Consol.
Scope
(1)
2015
2016
2015
2016
2015
Inventories
-
33
-
(33)
-
-
-
Intangible Assets
38,744
24,454
14,346
(56)
(630)
-
-
Property, Plant and Equipment
8,402
5,003
3,837
(439)
375
-
-
Personnel - IAS 19
70
-
154
(34)
27
(50)
19
Dividends planned F.I.L.A. Group - IAS 12
285
-
125
160
-
-
-
Translation reserve difference
(1,281)
-
99
(99)
(209)
(1,281)
94
Other
815
753
924
(863)
61
-
-
Total deferred tax liabilities
47,034
30,244
19,485
(1,364)
(376)
(1,331)
113
(1)
The amount in question relates to the contribution calculated at the acquisition date of the companies involved in change to consolidation scope
NOTE 16.B - BREAKDOWN OF DEFERRED TAX LIABILITIES
Statement of Financial Position
Income Statement
Equity
The balance at December 31, 2016 is mainly due to the change in the consolidation scope. The
acquisition of the Canson Group, the Daler-Rowney Lukas Group and St. Cuthberts holding in fact
resulted in the contribution to the consolidated financial statements of deferred tax liabilities
principally from the fiscal effects calculated on the revaluations of the Fair Values of the Brands and
other intangible assets. The M&A effect estimated at the acquisition date of the company amounts to
Euro 30,244 thousand.
Excluding the changes to
the consolidation scope, the other companies of the F.I.L.A.
Group reporting
significant deferred tax liabilities are Writefine Products Private Limited (Euro 13,664 thousand), also
relating to the tax effect calculated on
Brands and the “Customer List” valued on acquisition in 2015.
The change in the Equity represents the tax effect of the “Actuarial Gains/Losses” calculated on the
“Post-Employment Benefits and Employee Benefits” and recognised, in accordance with IAS 19, as
an Equity reserve.
Note 17 - Financial Instruments
“Financial Instruments” amount to Euro 0 thousand at December 31, 2016 (Euro 21,504 thousand at
December 31, 2015).