<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): December 16, 1996
Walbro Corporation
-------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-6955 38-1358966
------------------ ---------------- -------------------
(State or Other Jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6242 Garfield Street, Cass City, Michigan 48726
----------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (517) 872-2131
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Marwal Systems S.N.C.
The following Financial Statements of Marwal Systems S.N.C. as of December 31,
1995, 1994 and 1993 and for the years ended December 31, 1995, 1994 and
1993 are included on Pages F-1 through F-39:
Letter of Confirmation . . . . . . . . . . . . . . . . . . . . . . F-1
Report of Independent Public Accountants for 1995 . . . . . . . . F-2
Balance Sheet as of December 31, 1995 . . . . . . . . . . . . . . F-3
Income Statement for the year ended December 31, 1995 . . . . . . F-5
Notes to the Financial Statements for 1995 . . . . . . . . . . . . F-7
Report of Independent Public Accountants for 1994 . . . . . . . . F-14
Balance Sheet as of December 31, 1994 . . . . . . . . . . . . . . F-15
Income Statement for the year ended December 31, 1994 . . . . . . F-17
Notes to the Financial Statements for 1994 . . . . . . . . . . . . F-19
Report of Independent Public Accountants for 1993 . . . . . . . . F-27
Balance Sheet as of December 31, 1993 . . . . . . . . . . . . . . F-28
Income Statement for the year ended December 31, 1993 . . . . . . F-30
Notes to the Financial Statements for 1993 . . . . . . . . . . . . F-32
(b) Exhibits.
23.1 Consent of Ernst & Young.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Walbro Corporation
By: /s/ L. E. Althaver
-------------------------------------
Dated: January 7, 1997 L. E. Althaver
Chairman and Chief Executive Officer
3
<PAGE> 4
[ERNST & YOUNG LETTERHEAD]
Mr. Mike Shope
Walbro Corporation
6242 Garfield Street
Cass City, Michigan 48726-1325
U.S.A.
December 26, 1996
Dear Sirs,
With respect to the contemplated filing of a registration statement by Walbro
Corporation and the inclusion in this filing of the audited financial
statements under French GAAP of Marwal Systems for fiscal years ended December
31, 1993, 1994 and 1995, we confirm that our audits of these Marwal Systems
financial statements were conducted substantially in accordance with US
generally accepted auditing standards.
Yours faithfully,
ERNST & YOUNG Audit
/s/ Gilles Meyer
---------------------
Gilles Meyer
Partner
F-1
<PAGE> 5
MARWAL SYSTEMS, S.N.C.
(MARWAL SYSTEMS, S.A. UNTIL
SEPTEMBER 30, 1995)
STATUTORY AUDITOR'S GENERAL REPORT
YEAR ENDED DECEMBER 31, 1995
In our capacity as statutory auditor, we present below our report on:
* the accompanying annual accounts of Marwal Systems,
* the specific procedures and disclosures prescribed by law,
for the year ended December 31, 1995.
These annual accounts are the responsibility of the Company's management. Our
responsibility is to express an opinion on these annual accounts based on our
audit.
I. OPINION ON THE ANNUAL ACCOUNTS
We conducted our audit in accordance with French auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the annual accounts are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the annual accounts. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall annual account presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the annual accounts present fairly, in all material respects,
the financial position of the Company at December 31, 1995 and the results of
its operations for the year then ended.
II. SPECIFIC PROCEDURES AND DISCLOSURES PRESCRIBED BY LAW
We have also carried out, in accordance with professional standards, the
specific procedures prescribed by law.
We have nothing to report with respect to the fairness of information contained
in the Directors' Report and its consistency with the annual accounts and other
information presented to shareholders concerning the financial position and
annual accounts.
The Statutory Auditor
ERNST & YOUNG Audit
Gilles Meyer
February 26, 1996
F-2
<PAGE> 6
MARWAL SYSTEMS, S.N.C.
Balance Sheet as of
December 31, 1995
(in French Francs)
<TABLE>
<CAPTION>
ASSETS December 31, 1995
------------------------------------------------------------------
Accumulated
depreciation
amortization and
Gross allowances Net book value
------------------------------------------------------------------
<S> <C> <C> <C>
Fixed assets
Intangible fixed assets 18.226.005,10 16.433.332,65 1.792.672,45
Tangible fixed assets 128.951.636,21 70.814.996,81 58.136.639,40
Financial investments:
- - Associates 36.369,00 36.369,00
- - Others 1.011.340,15 1.011.340,15
-------------- -------------- --------------
Sub-total 148.223.350,46 87.248.329,46 60.977.021,00
-------------- -------------- --------------
Inventories
- - Raw materials 24.844.475,00 2.489.620,00 22.354.855,00
- - Work-in-progress 2.910.543,00 258.005,00 2.652.538,00
- - Finished goods 11.693.971,00 1.057.171,00 10.636.800,00
-------------- -------------- --------------
Sub-total 39.448.989,00 3.804.796.00 35.644.193,00
-------------- -------------- --------------
Current assets
Advances and payments on accounts 823.782,34 823.782,34
Trade accounts and notes receivable:
- - Customers and related accounts 109.941.372,93 3.971.285,50 105.970.087,43
- - Other 13.189.440,94 13.189.440,94
Other receivables 2.327.218,02 2.327.218,02
Cash and cash equivalent 67.163.748,22 67.163.748,22
Payments in advance 2.113,74 2.113,74
Deferred Charges 2.004.784,97 2.004.784,97
Foreign exchange translation differences 432.784,33 432.784,33
-------------- -------------- --------------
Sub-total 195.885.245,49 3.971.285,50 191.913.959,99
-------------- -------------- --------------
TOTAL ASSETS 383.559.584,95 95.024.410,96 288.535.173,99
-------------- -------------- --------------
</TABLE>
F-3
<PAGE> 7
MARWAL SYSTEMS, S.N.C.
Balance Sheet as of
December 31, 1995
(in French Francs)
<TABLE>
<CAPTION>
LIABILITIES AND
SHAREHOLDERS' EQUITY DECEMBER 31, 1995
<S> <C>
Shareholders' equity
Share capital 90.660.000,00
Reserves 196.550,23
Revaluation reserve 0
Retained earnings at January 1st 108.054,10
Result for the year 25.472.561,45
--------------
Sub-total 116.437.165,78
--------------
Provisions for contingencies and charges 5.513.067,65
Liabilities
Financial debts:
- - Amounts owned to financial institutions 0
- - Other financial debts 2.695.629,49
Accounts payable and related accounts 130.472.854,90
Social charges payable 19.810.842,99
Taxes 2.808.171,90
Other 2.115.551,85
Other creditors:
- - Accounts payable on fixed assets 6.502.143,36
- - Group 0
- - Other 128.985,44
Deferred income 1.112.983,10
Foreign exchange translation differences 937.777,53
--------------
Sub-total 166.584.940,56
--------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 288.535.173,99
--------------
</TABLE>
F-4
<PAGE> 8
MARWAL SYSTEMS, S.N.C.
Income Statement for the
year ended December 31, 1995
(in French Francs)
<TABLE>
<CAPTION>
December 31, 1995
----------------------------------
<S> <C> <C>
Operating revenues: 565.719.064,53
Sale of goods 540.478.654,89
Sale of services 19.107.848,98
--------------
Net sales 559.586.503,87
Movement in finished goods and
work-in-progress (957.292,00)
In-house production 958.322,00
Grants 1.004.628,42
Reversal of provisions and transfer
of charges 4.277.496,90
Other income 849.405,34
--------------
565.719.064,53
Operating expenses 515.796.687,06
Purchases of raw materials and
other supplies 267.809.549,46
Movements in raw materials stock 4.985.449,00
Other purchases and external
charges 81.354.762,36
Taxes and similar charges 9.142.104,58
Wages & salaries 85.212.941,72
Social charges 37.218.880,73
Depreciation and amortisation
expenses and provisions:
* Fixed assets 23.363.492,27
* Current assets 1.571.179,46
* Contingencies and charges 4.826.888,73
Other charges 311.438,75
--------------
515.796.687,06
Operating profit 49.922.377,47
Financial income: 14.072.141,78
From other investments 521,35
Other interest and similar income 2.887.113,46
Reversal of provisions and transfer
of charges 3.136.636,82
Foreign exchange gains 8.047.870,15
--------------
14.072.141,78
22.428.209,50
Financial expenses:
Depreciation and provisions 924.032,56
Interest and similar charges 6.080.465,40
Foreign exchange losses 15.423.711,54
--------------
22.428.209,50
Net financial income/(expenses) (8.356.067,72)
</TABLE>
F-5
<PAGE> 9
MARWAL SYSTEMS, S.N.C.
Income Statement for the
year ended December 31, 1995
(in French Francs)
<TABLE>
<CAPTION>
December 31, 1995
-----------------
<S> <C> <C>
Profit before taxation 41.566.309,75
Exceptional income: 8.712.352,95
From operating activities 2.897.314,03
From capital transactions 1.072.032,92
Reversal of provisions and
transfer of charges 4.743.006,00
------------
8.712.352,95
Exceptional charges: 9.209.111,25
From operating activities 7.178.141,85
From capital transactions 1.217.422,40
Depreciation and provisions 813.547,00
------------
9.209.111,25
Exceptional profit (loss) (496.758,30)
Profit before taxation 41.069.551,45
Profit-Sharing 4.750.000,00
Income tax 10.846.990,00
Profit after taxation 25.472.561,45
Total income 588.503.559,26
Total expenditure 563.030.997,81
Profit 25.472.561,45
</TABLE>
F-6
<PAGE> 10
MARWAL SYSTEMS, S.N.C.
Notes to the financial statements
(in thousands of French Francs)
EVENTS DURING THE YEAR
The Marwal branch based in Italy was closed on December 31, 1995.
An extraordinary shareholders' meeting held on September 29, 1995 decided the
transformation of the Company into a "Societe en Nom Collectif", a partnership,
with effect from October 1 , 1995.
NOTE 1: ACCOUNTING POLICIES
The accounts of the Company have been prepared based upon generally accepted
accounting principles in France which conform with the Chart of Accounts as set
out in the French law dated April 30, 1983 and the decree of November 29, 1983.
1.1 Intangible fixed assets
The intangible fixed assets consist mainly of goodwill which is amortised on a
straight line basis over 5 years.
The amortisation methods and the useful lives for other categories are as
follows:
- - Set-up costs 3 years straight line
- - Computer software 1-3 years straight line
1.2 Tangible fixed assets
Tangible fixed assets are valued at historical purchase price or cost of
production when they have been produced in house. The cost of production is
made up of the following elements: purchase price of raw materials, consumables
and direct production costs.
Assets are depreciated on a straight line basis or declining balance, when
applicable, for items purchased during or after 1992.
The depreciation methods and the useful lives applied are as follows;
<TABLE>
<S> <C>
Installations 10 years straight line
Machinery 5-6 2/3 straight line / declining balance
Toolings 1-5 years straight line / declining balance
Leasehold improvements - Mac./Toolings 5-6 2/3 straight line / declining balance
Vehicles 4-5 years straight line
Fixtures and fittings 10 years straight line
Computer hardware 4-5 years straight line / declining balance
</TABLE>
F-7
<PAGE> 11
MARWAL SYSTEMS, S.N.C.
Notes to the financial statements
(in thousands of French Francs)
1.3 Financial investments
- - The investments in associates are valued at their acquisition cost in the
assets of the Company.
- - A reserve is recorded when their fair value is less than their book value.
1.4 Inventory and work-in-progress
The policies used are as follows:
* Inventory is valued at the total cost of production.
* Raw materials and consumables are valued at the average weighted cost for
goods received in the last month. This method is similar to FIFO.
* The Cost of production includes direct and indirect production expenses and
an allocation of the costs of running the Head Office, to the extent that
they are related to the production.
* The provision for obsolescence is determined based upon the sales.
1.5 Allowance for doubtful accounts
The receivables are valued at their face value, a provision is recorded when
the value recoverable is less than the book value.
1.6 Foreign exchange transactions
The receivables and payables denominated in foreign currency are translated
into French Francs at the December 31st exchange rate. The resulting differences
with amounts translated at historical exchange rates are shown in the balance
sheet as "foreign exchange translation differences".
A provision for exchange losses is recorded separately for unrealised losses.
1.7 Retirement indemnity liabilities
The "Projected Benefit Obligation" has been applied to calculate the
retirement obligation.
The total obligation is covered by:
- - a fund run by La Mondiale, with a value of KFRF.8,343,
- - a provision of KFRF.357 included in the Marwal accounts at December 31, 1995.
NOTE 2: FIXED ASSETS
The movements in gross value are as follows:
<TABLE>
<CAPTION>
12/31/94 Increase Decrease 12/31/95
<S> <C> <C> <C> <C>
Intangible fixed assets 18519 307 600 18226
Tangible fixed assets 107067 24751 2866 128952
Financial investments 1122 852 927 1047
</TABLE>
F-8
<PAGE> 12
MARWAL SYSTEMS, S.N.C.
Notes to the financial statements
(in thousands of French Francs)
The movements in amortisation and depreciation are analysed as follows:
<TABLE>
<CAPTION>
12/31/94 Increase Decrease 12/31/95
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Intangible fixed assets 13658 3375 600 16433
Tangible fixed assets 52431 19988 1604 70815
</TABLE>
NOTE 3: INVENTORIES AND WORK IN PROGRESS
The reserve for obsolescence for raw materials, consumables and finished goods
at 31/12/95 amounts to KFRF. 3,805.
NOTE 4: ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES
At December 31, 1995, accounts receivable can be split by maturity date as
follows:
<TABLE>
<CAPTION>
Greater
Total Less than 1 year than 1 year
----- ---------------- -----------
<S> <C> <C> <C>
Long term receivables 1011 1008 3
Current assets 126284 126284 -
</TABLE>
NOTE 5: SHORT TERM INVESTMENTS
N/A.
NOTE 6: PREPAYMENTS AND DEFERRED INCOME
<TABLE>
<CAPTION>
12/31/95
--------
<S> <C>
Prepayments
Other 2
<CAPTION>
12/31/95
--------
<S> <C>
Deferred income
Long term contracts (tooling) 1089
Other 24
----
1113
====
</TABLE>
NOTE 7: DEFERRED CHARGES
<TABLE>
<CAPTION>
Charged to
income statement
Total 1995 12/31/95
---- ---------------- --------
<S> <C> <C> <C>
Deferred charges
Amortised over 3 years 3921 1916 2005
</TABLE>
F-9
<PAGE> 13
MARWAL SYSTEMS, S.N.C.
Notes to the financial statements
(in thousands of French Francs)
NOTE 8: SHAREHOLDERS' EQUITY
The capital stock is made up of 906,600 shares with a nominal value of FRF.100,
completely paid up.
The accounts of the Company are consolidated in the group accounts of the
Magneti Marelli Spa Group.
NOTE 9: TAX PROVISIONS AND PROVISIONS FOR CONTINGENCIES AND CHARGES
The movements in the year are analysed as follows:
<TABLE>
<CAPTION>
12/31/94 Additionals Reversals 12/31/95
-------- ----------- --------- --------
<S> <C> <C> <C> <C>
Provisions for contingencies
and charges of which: 10058 5104 9649 5513
* Provision for payments 357 357
on retirement
* Provision for guarantee 1000 2523 1000 2523
* Provision for loss on 3136 433 3136 433
foreign exchange
</TABLE>
NOTE 10: CREDITORS
At December 31, 1995, debts, excluding advances and deposits received, deferred
income and foreign exchange differences, can be analysed by maturity date as
follows:
<TABLE>
<CAPTION>
Less than Between
Total 1 year 1 and 5 years > 5 years
----- --------- ------------- ---------
<S> <C> <C> <C> <C>
Other financial debts 2696 2696
Trade payables and other
liabilities* 161839 157089* 4750
* of which trade bills payable: 27225
</TABLE>
NOTE 11: RELATED PARTIES
The related parties transactions are included in the different accounts in the
balance sheet as follows:
<TABLE>
<CAPTION>
Assets Liabilities
------ -----------
<S> <C> <S> <C>
Trade receivables 16856 Trade payables 14716
Other receivables 198 Other payables 8
Cash and
cash equivalent 73017 Financial debt 432
</TABLE>
Interest expenses and financial income with related parties are as follows:
Operating income 47440 Operating expenses 54317
Financial income 2373 Interest expenses 5991
F-10
<PAGE> 14
MARWAL SYSTEMS, S.N.C.
Notes to the financial statements
(in thousands of French Francs)
NOTE 12: ACCRUALS AND INCOME RECEIVABLE RELATING TO DIFFERENT BALANCE SHEET
ACCOUNTS
<TABLE>
<CAPTION>
Assets Liabilities
------ -----------
<S> <C> <C> <C>
Trade receivables Trade payables
* Customers 6558 * Suppliers 14246
* Suppliers 2354 * Tax and social charges 14641
* State 2490 * Other 1283
Other receivables 534 Other liabilities 390
</TABLE>
NOTE 13: EXCHANGE DIFFERENCES RELATED TO BALANCE SHEET ACCOUNTS
<TABLE>
<CAPTION>
Exchange difference
-----------------------
Asset Liability
----- ---------
<S> <C> <C>
Asset
Trade receivables 431 3
Liabilities
Trade payables 1 935
</TABLE>
NOTE 14: SALES TURNOVER ANALYSIS
<TABLE>
<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Sales 565671 559587
Sales of goods 535259 540479
Sales of services 30412 19108
Split between export/domestic
Domestic 353114 318495
Export 212557 241092
Sales 565671 559587
</TABLE>
NOTE 15: DEFERRED TAX POSITION
<TABLE>
<CAPTION>
12/31/94 Movements 12/31/95
---------------- ---------------- ----------------
Nature Asset Liability Asset Liability Asset Liability
- ------ ----- --------- ----- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Timing differences
Organic 559 559 730 730
</TABLE>
F-11
<PAGE> 15
MARWAL SYSTEMS, S.N.C.
Notes to the Financial Statements
(in thousands of French Francs)
NOTE 16: EMPLOYEE INFORMATION
<TABLE>
<CAPTION>
Permanent staff Temporary staff
--------------- ---------------
<S> <C> <C>
Executives & Management 55
Employees 135 4
Labor and production 476 10
--------------- --------------
Total 666 14
NOTE 17: LEASE COMMITMENTS
None.
NOTE 18: COMMITMENTS UNDERTAKEN AND RECEIVED
Discounted trade bills receivable but not matured 89827
NOTE 19: INFORMATION RELATING TO MANAGEMENT
N/A.
NOTE 20: EXCEPTIONAL INCOME
Exceptional income from operating activities 2897
Redundancy payments reinvoiced to Jaeger S.A. 251
Grant relating to training 2565
Other 81
Exceptional income from capital transactions 1072
Income from the sale of fixed assets 1066
Other 6
Reversal of provisions and transfer of charges 4743
Provision for delocalisation 1700
Provision for the starting of pumps 1304
Other 1739
NOTE 21: EXCEPTIONAL CHARGES
Exceptional charges on operating activities 7178
Redundancy payments 3378
Training costs 3056
Other 744
Exceptional charges from capital transactions 1217
Net book value of fixed assets sold 1217
Depreciation and provisions 813
Provision for delocalisation and other 813
</TABLE>
F-12
<PAGE> 16
MARWAL SYSTEMS, S.N.C.
Notes to the financial statements
(in thousands of French Francs)
NOTE 22: CHANGE IN ACCOUNTING POLICIES
N/A.
NOTE 23: ANALYSIS OF INCOME TAX
The income tax accounted for is that which is calculated for the accounts to
9/30/1995, Marwal Systems becoming a partnership as from 10/01/95.
BASE BASE TAX
12/31/95 9/30/95 9/30/95
Operating profit 41566 28083 10977
Exceptional items (497) (156) (61)
----- ----- -----
Profit before tax 41069 27927 10916
Income tax credit 1994 69
-----
TOTAL INCOME TAX FOR THE
COMPANY (10847)
F-13
<PAGE> 17
MARWAL SYSTEMS, S.A.
STATUTORY AUDITOR'S GENERAL REPORT
YEAR ENDED DECEMBER 31, 1994
In our capacity as statutory auditor, we present below our report on:
- - the accompanying annual accounts of Marwal Systems, S.A.;
- - the specific procedures and disclosures prescribed by law,
for the year ended December 31, 1994.
I. OPINION ON THE ANNUAL ACCOUNTS
We have audited the annual accounts in accordance with professional standards
and, accordingly, performed such auditing procedures as we considered necessary
in the circumstances.
In our opinion, the annual accounts present fairly, in conformity with generally
accepted accounting principles in France, the financial position of the Company
at December 31, 1994, and the results of its operations for the year then
ended.
II. SPECIFIC PROCEDURES AND DISCLOSURES PRESCRIBED BY LAW
We have also carried out, in accordance with professional standards, the
specific procedures prescribed by law.
We have nothing to report with respect to the fairness of information contained
in the Directors' Report and its consistency with the annual accounts and other
information presented to shareholders concerning the financial position and
annual accounts.
The Statutory Auditor
ERNST & YOUNG Audit
Gilles Meyer
March 17, 1995
F-14
<PAGE> 18
MARWAL SYSTEMS, S.A.
Balance Sheet as of
December 31, 1994
(in French Francs)
<TABLE>
<CAPTION>
ASSETS
December 31, 1994
------------------------------------------------
Gross Accumulated Net book
Depreciation value
amortization
and allowances
------------------------------------------------
<S> <C> <C> <C>
Fixed assets
Intangible fixed assets 18.519.155,10 13.658.164,14 4.860.990,96
Tangible fixed assets 107.067.527,50 52.430.885,19 54.636.642.31
Financial investments 1.122.471,53 1.122.471,53
--------------- -------------- --------------
Sub-total 126.709.154,13 66.089.049,33 60.620.104,80
--------------- -------------- --------------
Inventories
* Raw materials 29.829,924,00 1.591.848,00 28.238.076,00
* Work-in-progress 3.101.279,00 182.005,00 2.919.274,00
* Finished goods 12.460.527,00 1.062.465,00 11.398.062,00
--------------- -------------- --------------
Sub-total 45.391.730,00 2.836.318,00 42.555.412,00
--------------- -------------- --------------
Current assets
Advances and payments on account 1.186.853,59 1.186.853,59
Trade accounts & notes receivable
* Customers and related accounts 108.200.292,33 4.815.370,90 103.384.921,43
* Other 10.379.297,27 0,00 10.379.297,27
Other receivables 4.465.165,81 0,00 4.465.165,81
Cash and cash equivalent 69.076.737,77 69.076.737,77
Payments in advance 216.943,59 216.943,59
Deferred Charges 2.430.152,50 2.430.152,50
Foreign exchange translation
differences 3.136.636,82 3.136.636,82
--------------- -------------- --------------
Sub-total 199.092.079,68 4.815.370,90 194.276.708,78
--------------- -------------- --------------
TOTAL ASSETS 371.192.963,81 73.740.738,23 297.452.225,58
--------------- -------------- --------------
</TABLE>
F-15
<PAGE> 19
MARWAL SYSTEMS, S.A.
Balance Sheet as of
December 31, 1994
(in French Francs)
LIABILITIES AND
SHAREHOLDERS' EQUITY DECEMBER 31, 1994
-----------------
Shareholders' equity
Share Capital 90.660.000,00
Revaluation reserve 172.508,46
Retained earnings at January 1st (11.603.376,40)
Result for the year 15.534.381,07
---------------
Sub-total 94.763.513,13
Provisions for contingencies and charges 10.058.014,45
Liabilities
Financial debts:
- - Amounts owed to financial institutions 6.344.656,90
Accounts payable and related accounts 136.837.422,79
Social charges payable 20.444.348,88
Taxes 10.435.846,93
Other 13.034.865,71
Other creditors:
* Accounts payable on fixed assets 1.878.106,81
* Group 689.291,53
* Other 40.995,22
Deferred income 2.185.908,10
Foreign exchange translation differences 739.255,13
---------------
Sub-total 192.630.698,00
---------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY 297.452.225,58
===============
F-16
<PAGE> 20
MARWAL SYSTEMS, S.A.
Income Statement for the
year ended December 31, 1994
(in French Francs)
<TABLE>
<CAPTION>
December 31, 1994
------------------
<S> <C> <C>
Operating Revenues: 579.451.349,75
Sale of goods 535.259.461,85
Sale of services 30.412.022,43
--------------
Net sales 565.671.484,28
Movement in finished goods and
work-in-progress (1.383.971,17)
In-house production 728.865,00
Grants 1.351.306,20
Reversal of provisions and transfer
of charges 12.830.704,98
Other income 252.960,46
--------------
579.451.349,75
Operating expenses: 544.962.616,72
Purchases of raw materials and
other supplies 296.647.374,00
Movements in raw materials stock (11.922.463,00)
Other purchases and external
charges 89.956.155,98
Taxes and similar expenses 8.664.895,48
Wages & salaries 81.428.350,72
Social charges 45.200.262,16
Depreciation and amortization
expenses and provisions
* Fixed assets 24.834.071,13
* Current assets 4.221.947,14
* Contingencies and charges 5.257.039,66
Other charges 674.983,45
--------------
544.962.616,72
Operating profit 34.488.733,03
-------------
</TABLE>
F-17
<PAGE> 21
MARWAL SYSTEMS, S.A.
Income Statement for the
year ended December 31, 1994
(in French Francs)
<TABLE>
<CAPTION>
December 31, 1994
--------------------------------
<S> <C> <C>
Financial income: 10.022.168,72
From other investments 942,13
Other interest and similar income 1.624.516,23
Reversal of provisions and transfer
of charges 1.884.372,97
Foreign exchange gains 6.512.337,39
-------------
10.022.168,72
Financial expenses: 14.971.569,16
Depreciation and provisions 3.136.636,82
Interest and similar charges 4.373.906,83
Foreign exchange losses 7.461.025,51
-------------
14.971.569,16
Net financial income / (expenses) (4.949.400,44)
Profit (loss) before tax 29.539.332,59
Exceptional income: 7.540.565,06
From operating activities 4.284.190,06
From capital transactions
Reversal of provision and transfer
of charges 3.256.375,00
-------------
7.540.565,06
Exceptional charges: 12.626.722,58
From operating activities 8.776.657,58
From capital transactions
Depreciation and provisions 3.850.065,00
-------------
12.626.722,58
Exceptional profit (5.086.157,52)
Profit before taxation 24.453.175,07
Profit-Sharing 2.745.109,00
Income tax 6.173.685,00
Profit after taxation 15.534.381,07
Total income 597.014.083,53
Total expenditure 581.479.702,46
PROFIT (LOSS) 15.534.381,07
</TABLE>
F-18
<PAGE> 22
MARWAL SYSTEMS, S.A.
Notes to the Financial Statements
(in thousands of French Francs)
The accounts of the branch based in Italy have been translated using the year
end rate of exchange. The entire business will be transferred to France with
effect starting in 1995 which will result in the closure of Marwal Italy during
the year.
NOTE 1: ACCOUNTING POLICIES
The accounts of the Company have been prepared based upon generally accepted
accounting principles in France which conform with the Chart of Accounts as set
out in the French law dated April 30, 1983 and the decree of November 29, 1983.
1.1 INTANGIBLE FIXED ASSETS
The intangible fixed assets consist mainly of goodwill which is amortised on a
straight line basis over 5 years.
The amortisation methods and the useful lives for other categories are as
follows:
- - Set-up costs 3 years straight line
- - Computer software 1-3 years straight line
1.2 TANGIBLE FIXED ASSETS
Tangible fixed assets are valued at historical purchase price or cost of
production when they have been produced in house. The cost of production is
made up of the following elements: purchase price of raw materials, consumables
and direct production costs.
Assets are depreciated on a straight line basis or declining balance, when
applicable for items purchased during or after 1992.
F-19
<PAGE> 23
MARWAL SYSTEMS, S.A.
Notes to the Financial Statements
(in thousands of French Francs)
The depreciation methods and the useful lives applied are as follows:
Installations 10 years straight line
Machinery 5-6 2/3 straight line/declining balance
Toolings 1-5 years straight line/declining balance
Leasehold improvements
Mach./Toolings 5-6 2/3 straight line/declining balance
Vehicles 4-5 years straight line
Fixtures and fittings 10 years straight line
Computer hardware 4-5 years straight line/declining balance
1.3 FINANCIAL INVESTMENTS
N/A
1.4 INVENTORY AND WORK-IN-PROGRESS
The policies used are as follows:
- - Inventory is valued at the total cost of production.
- - Raw materials and consumables are valued at the average weighted cost for
goods received in the last month. This method is similar to FIFO.
- - The Cost of production includes direct and indirect production expenses and
an allocation of the costs of running the Head Office, to the extent that
they are related to the production.
- - The provision for obsolescence is determined based upon the sales forecasts.
1.5 ALLOWANCE FOR DOUBTFUL ACCOUNTS
The receivables are valued at their face value, a provision is recorded when
the value recoverable is less than the book value.
1.6 FOREIGN EXCHANGE TRANSACTIONS
The receivables and payables denominated in foreign currency are translated
into French francs at the December 31st, exchange rate. The resulting
differences with amounts translated at historical exchange rates are shown in
the balance sheet as "foreign exchange translation differences."
A provision for exchange losses is recorded separately for unrealised losses.
F-20
<PAGE> 24
MARWAL SYSTEMS, S.A.
Notes to the financial statements
(in thousands of French Francs)
1.7 RETIREMENT INDEMNITY LIABILITIES
The "Projected Benefit Obligation" has been applied to calculate the retirement
obligation.
The fund was placed during 1994 with a specialized organisation and therefore
the provision has reversed at 12/31/94.
NOTE 2: FIXED ASSETS
The movements in gross value are as follows:
<TABLE>
<CAPTION>
12/31/93 Increase Decrease 12/31/94
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Intangible fixed assets 18159 360 - 18519
Tangible fixed assets 89813 17254 - 107067
Financial investments 4 1118 - 1122
</TABLE>
The movements in amortisation and depreciation are analysed as follows:
<TABLE>
<CAPTION>
12/31/93 Increase Decrease 12/31/94
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Intangible fixed assets 9875 3783 - 13658
Tangible fixed assets 31380 21051 - 52431
Financial investments 0 0 - 0
</TABLE>
NOTE 3: INVENTORY AND WORK IN PROGRESS
The reserve for obsolescence for raw materials, consumables and finished goods
at 12/31/94 amounts to KFRF. 2,836.
NOTE 4: ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES
At December 31, 1994, accounts receivable can be split by maturity date as
follows:
<TABLE>
<CAPTION>
Greater than
Total Less than 1 year 1 year
----- ---------------- ------------
<S> <C> <C> <C>
Long term receivables 1122 1118 4
Current assets 124449 124449
</TABLE>
F-21
<PAGE> 25
MARWAL SYSTEMS, S.A.
Notes to the financial statements
(in thousands of French Francs)
NOTE 5: SHORT TERM INVESTMENTS
N/A.
NOTE 6: PREPAYMENTS AND DEFERRED INCOME
<TABLE>
<CAPTION>
31/12/94
--------
<S> <C>
Prepayments
Interest 217
</TABLE>
<TABLE>
<CAPTION>
31/12/94
--------
<S> <C>
Deferred income
Long term contracts (tooling) 2185
</TABLE>
NOTE 7: DEFERRED CHARGES
<TABLE>
<CAPTION>
Charged to
income statement
Total 1994 12/31/94
----- ---------------- --------
<S> <C> <C> <C>
Deferred charges 3849 1419 2430
</TABLE>
NOTE 8: SHAREHOLDERS' EQUITY
The capital stock is made up of 906,600 shares with a nominal value of FRF.100,
completely paid up.
The accounts of the Company are consolidated in the group accounts of the
Magneti Marelli Spa Group.
F-22
<PAGE> 26
MARWAL SYSTEMS, S.A.
Notes to the financial statements
(in thousands of French Francs)
NOTE 9: TAX PROVISIONS AND PROVISIONS FOR CONTINGENCIES AND CHARGES
The movements in the year are analysed as follows:
<TABLE>
<CAPTION>
12/31/93 Additions Reversals 12/31/94
-------- --------- --------- --------
<S> <C> <C> <C> <C>
Provisions for
contingencies and charges
of which: 12.813 11.353 14.108 10.058
Provision for payments
on retirement 4.845 3.370 8.215 0
Provision for guarantee 1.020 242 262 1.000
Provision for loss on
foreign exchange 1.884 3.136 1.884 3.136
</TABLE>
NOTE 10: CREDITORS
At December 31, 1994, debts, excluding advances and deposits received, deferred
income and foreign exchange differences, can be analysed by maturity date as
follows:
<TABLE>
<CAPTION>
Less than Between 1
Total 1 year and 5 years > 5 years
----- --------- ----------- ---------
<S> <C> <C> <C> <C>
Bank overdrafts 6345 6345
Trade payables and other
liabilities* 183361 180616 2745
* of which trade bills payable: 30585
</TABLE>
NOTE 11: RELATED PARTIES
The related parties transactions are included in the different accounts in the
balance sheet as follows:
<TABLE>
<CAPTION>
Assets Liabilities
------ -----------
<S> <C> <C> <C>
Fixed assets 1747
Trade receivables 22014 Trade payables 20388
Other receivables 268 Other payables 1656
Cash and cash
equivalent 67689 Financial debt 6497
</TABLE>
F-23
<PAGE> 27
MARWAL SYSTEMS, S.A.
Notes to the financial statements
(in thousands of French Francs)
Interest expenses and financial income with related parties are as follows:
<TABLE>
<S> <C> <C> <C>
Operating income 62784 Operating expenses 52309
Financial income 51 Interest expenses 4331
</TABLE>
NOTE 12: Accruals and income receivable relating to different balance sheet
accounts
<TABLE>
<CAPTION>
Assets Liabilities
------ -----------
<S> <C> <C> <C>
Trade receivables 10768 Trade payables
Other receivables 132 * Suppliers 22135
* Tax and social charges 23730
* Other 5106
</TABLE>
NOTE 13: Exchange differences related to balance sheet accounts
<TABLE>
<CAPTION>
Exchange difference
-------------------
Asset Liability
----- ---------
<S> <C> <C>
Assets
Trade receivables 2210 64
Liabilities
Trade payables 927 675
The exchange difference resulting from the
translation of the accounts of Marwal Italy
has been included in the revaluation
reserve within shareholders' equity 173
</TABLE>
NOTE 14: Sales turnover analysis
<TABLE>
<CAPTION>
1993 1994
---- ----
<S> <C> <C>
Sales 424023 565671
Sales of goods 378099 535259
Sales of services 45924 30412
Split between export/domestic
Domestic 295213 353114
Export 128810 212557
Sales 424023 565671
</TABLE>
F-24
<PAGE> 28
MARWAL SYSTEMS, S.A.
Notes to the financial statements
(in thousands of French Francs)
NOTE 15: DEFERRED TAX POSITION
<TABLE>
<CAPTION>
12/31/93 Movements 12/31/94
---------------- ---------------- ----------------
Nature Asset Liability Asset Liability Asset Liability
- ------ ----- --------- ----- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Timing differences
Organic 425 425 559 0 559
</TABLE>
NOTE 16: EMPLOYEE INFORMATION
<TABLE>
<CAPTION>
Permanent staff Temporary staff
--------------- ---------------
<S> <C> <C>
Executive and Management 46
Employees 135 2
Labor and production 518 36
Total 699 38
</TABLE>
NOTE 17: LEASE COMMITMENTS
None.
NOTE 18: COMMITMENTS UNDERTAKEN AND RECEIVED
Discounted trade bills receivable but not matured 90177
NOTE 19: INFORMATION RELATING TO MANAGEMENT
N/A.
F-25
<PAGE> 29
MARWAL SYSTEMS, S.A.
Notes to the financial statements
(in thousands of French Francs)
NOTE 20: EXCEPTIONAL INCOME
Exceptional income from operating activities 4284
Redundancy payments reinvoiced to Jaeger S.A. 2214
Grant relating to training 1811
Other 259
Exceptional income from capital transactions Not significant
Reversal of provisions 3256
Provision for delocalization 2027
Provision for the starting of pumps 1229
NOTE 21: EXCEPTIONAL CHARGES
Exceptional charges on operating activities 8777
Redundancy payments 4024
Training costs 3439
Other 1314
Depreciation and provisions 3850
Provision for delocalization 2111
Other 1739
NOTE 22: CHANGE IN ACCOUNTING POLICIES
N/A.
NOTE 23: ANALYSIS OF INCOME TAX
<TABLE>
<CAPTION>
Base Tax
------ -----
<S> <C> <C>
Operating profit 29539 10087
Exceptional items -5086 -1695
------ -----
Profit before tax 24453 8392
Income tax credit 1993 -2218
-----
TOTAL INCOME TAX FOR THE COMPANY 6174
</TABLE>
F-26
<PAGE> 30
MARWAL SYSTEMS, S.A.
STATUTORY AUDITOR'S GENERAL REPORT
YEAR ENDED DECEMBER 31, 1993
In our capacity as statutory auditor, we present below our report on:
* the accompanying annual accounts of Marwal Systems, S.A.
* the specific procedures and disclosures prescribed by law,
for the year ended December 31, 1993.
I. OPINION ON THE ANNUAL ACCOUNTS
We have audited the annual accounts in accordance with professional standards
and, accordingly, performed such auditing procedures as we considered necessary
in the circumstances.
In our opinion, the annual accounts present fairly, in conformity with
generally accepted accounting principles in France, the financial position of
the Company at December 31, 1993, and the results of its operations for the
year then ended.
II. SPECIFIC PROCEDURES AND DISCLOSURES PRESCRIBED BY LAW
We have also carried out, in accordance with professional standards, the
specific procedures prescribed by law.
We have nothing to report with respect to the fairness of information contained
in the Directors' Report and its consistency with the annual accounts and other
information presented to shareholders concerning the financial position and
annual accounts.
The Statutory Auditor
ERNST & YOUNG Audit
Gilles Meyer
March 29, 1994
F-27
<PAGE> 31
MARWAL SYSTEMS, S.A.
Balance Sheet as of
December 31, 1993
(in French Francs)
<TABLE>
<CAPTION>
ASSETS December 31, 1993
----------------------------------------------
Gross Accumulated Net book
depreciation, value
amortization
and allowances
------ --------------- ----------
<S> <C> <C> <C>
Fixed assets
Intangible fixed assets 18.159.104,10 9.874.923,94 8.284.180,16
Tangible fixed assets 89.813.033,71 31.380.054,31 58.432.979,40
Financial investments: 4.415,58 4.415,58
-------------- ------------- -------------
Sub-total 107.976.553,39 41.254.978,25 66.721.575,14
--------------- ------------- --------------
Inventories
- - Raw materials 17.907.461,00 815.996,00 17.091.465,00
- - Work-in-progress 4.231.239,00 315.006,00 3.916.233,00
- - Finished goods 12.714.538,17 870.061,00 11.844.477,17
--------------- ------------- -------------
Sub-total 34.853.238,17 2.001.063,00 32.852.175,17
--------------- ------------- --------------
Current assets
Advances and payments on accounts 1.772.204,90 1.772.204,90
Trade accounts and notes receivable:
- - Customers and related accounts 77.233.770,95 2.788.350,90 74.445.420,05
- - Other 6.289.607,34 6.289.607,34
Other receivables 4.269.761,36 4.269.761,36
Cash and cash equivalent 42.965.036,62 42.965.036,62
Payments in advance 218.723,24 218.723,24
Deferred charges 817.197,20 817.197,20
Foreign exchange translation
differences 1.884.372,97 1.884.372,97
--------------- ------------- --------------
Sub-total 135.450.674,58 2.788.350,90 132.662.323,68
--------------- ------------- --------------
TOTAL ASSETS 278.280.466,14 46.044.392,15 232.236.073,99
=============== ============= ==============
</TABLE>
F-28
<PAGE> 32
MARWAL SYSTEMS, S.A.
Balance Sheet as of
December 31, 1993
(in French Francs)
LIABILITIES AND
SHAREHOLDERS' EQUITY DECEMBER 31, 1993
-----------------
Shareholders' equity
Share Capital 90.660.000,00
Revaluation reserve 167.367,14
Retained earnings at January 1st (11.386.850,99)
Result for the year (216.525,41)
---------------
Sub-total 79.223.990,74
Provisions for contingencies and charges 12.813.098,60
Liabilities
Financial debts:
- - Amounts owed to financial institutions 8.307.621,90
Accounts payable and related accounts 102.715.810,23
Social charges payable 15.155.093,16
Taxes 6.892.389,61
Other 1.190.863,26
Other creditors:
- - Accounts payable on fixed assets 371.917,55
- - Group 318.930,27
- - Other 14.015,30
Deferred income 4.426.476,10
Foreign exchange translation differences 805.867,27
---------------
Sub-total 140.198.984,65
---------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY 232.236.073,99
===============
F-29
<PAGE> 33
MARWAL SYSTEMS, S.A.
Income Statement for the
year ended December 31, 1993
(in French Francs)
<TABLE>
<CAPTION>
December 31, 1993
------------------
<S> <C> <C>
Operating Revenues: 429.968.360,99
Sale of goods 378.099.332,97
Sale of services 45.923.734,73
--------------
Net sales 424.023.067,70
Movement in finished goods and
work-in-progress (1.321.910,81)
In-house production 1.111.370,00
Grants 174.420,00
Reversal of provisions and transfer
of charges 5.724.630,10
Other income 256.784,00
--------------
429.968.360,99
Operating Expenses: 422.950.222,69
Purchase of raw materials and
other supplies 224.828.928,90
Movements in raw materials stock (2.881.815,00)
Other purchases and external
charges 59.626.939,04
Taxes and similar expenses 7.158.884,44
Wages and salaries 77.069.073,03
Social charges 32.865.711,99
Depreciation and amortisation
expenses and provisions:
- - Fixed assets 20.398.056,16
- - Current assets 1.295.998,45
- - Contingencies and charges 2.257.534,00
Other charges 330.911,68
--------------
422.950.222,69
Operating profit 7.018.138,30
-------------
</TABLE>
F-30
<PAGE> 34
MARWAL SYSTEMS, S.A
Income Statement for the
year ended December 31, 1993
(in French Francs)
<TABLE>
<CAPTION>
December 31, 1993
--------------------------------
<S> <C> <C>
Financial income: 4.773.755,52
Other interest and similar income 1.525.392,40
Reversal of provisions and transfer
of charges 151.336,64
Foreign exchange gains 3.097.026,48
-------------
4.773.755,52
12.717.074,11
Financial expenses:
Depreciation and provisions
Interest and similar charges 3.419.369,57
Foreign exchange losses 9.297.704,54
-------------
12.717.074,11
Net financial income/(expenses) (7.943.318,59)
Profit (loss) before taxation (925.180,29)
Exceptional income: 5.595.519,86
From operating activities 2.238.703,28
From capital transactions 22,58
Reversal of provisions and transfer
of charges 3.356.794,00
-------------
5.595.519,86
Exceptional charges: 5.083.958,98
From operating activities 2.995.596,58
From capital transactions 61.472,40
Depreciation and provisions 2.026.890,00
-------------
5.083.958,98
Exceptional profit (loss) 511.560,88
Loss before taxation (413.619,41)
Income tax (197.094,00)
Loss after taxation (216.525,41)
Total income 440.337.636,37
Total expenditures 440.554.161,78
Loss (216.525,41)
</TABLE>
F- 31
<PAGE> 35
MARWAL SYSTEMS, S.A
Notes to the financial statements
(in thousands of French Francs)
The Company Marwal Systems, S.A. created a branch on January 1st, 1993. This
branch, based in Italy, sells gauges. Since it is run autonomously, the closing
exchange rate was used to translate the accounts at 12/31/93.
NOTE 1: ACCOUNTING POLICIES
The accounts of the Company have been prepared based upon generally accepted
accounting principles in France in compliance with the French law dated April
30, 1983 and the decree of November 29, 1983.
1.1 Intangible fixed assets
The intangible fixed assets consist mainly of goodwill which is amortised on a
straight line basis over a 5 year period.
The amortisation methods and the useful lives for other categories are as
follows:
- - Set-up costs 3 years straight line
- - Computer software 1-3 years straight line
1.2 Tangible fixed assets
Tangible fixed assets are valued at historical purchase price or cost of
production when they have been produced in house. The cost of production is
made up of the following elements: purchase price of raw materials, consumables
and direct production costs.
Assets are depreciated on a straight line basis or declining balance, when
applicable, for items purchased during or after 1992.
F-32
<PAGE> 36
MARWAL SYSTEMS, S.A.
Notes to the financial statements
(in thousands of French Francs)
The depreciation methods and the useful lives applied are as follows:
<TABLE>
<S> <C>
Installations 10 years straight line
Machinery 5-6 2/3 straight line / declining balance
Toolings 1-5 years straight line / declining balance
Leasehold improvements - Mach./Toolings 5-6 2/3 straight line / declining balance
Vehicles 4-5 years straight line
Fixtures and fittings 10 years straight line
Computer hardware 4-5 years straight line / declining balance
</TABLE>
1.3 Financial Investments
N/A.
1.4 Inventory and work-in-progress
The policies used are as follows:
* Inventory is valued at the total cost of production.
* Raw materials and consumables are valued at weighted average cost for goods
received in the last three months. This method is considered as similar to
FIFO.
* The Cost of production includes direct and indirect production expenses and an
allocation of the costs of running the Head Office, to the extent that they
are related to the production.
* The provision for obsolescence is determined based upon the sales forecasts.
1.5 Allowance for doubtful accounts
The receivables are valued at their face value, a provision is recorded when the
value recoverable is less than the book value.
1.6 Foreign exchange operations
Debtors and creditors denominated in foreign currency are translated into French
Francs at the 31st December exchange rate. The resulting differences with
amounts translated at historical exchange rate are shown in the balance sheet as
"foreign exchange translation differences" either as an asset or liability.
Unrealised currency losses are provided for separately as contingencies.
F-33
<PAGE> 37
MARWAL SYSTEMS, S.A.
Notes to the financial statements
(in thousands of French Francs)
1.7 Retirement indemnity liabilities
The "Projected Benefit Obligation" method has been applied to calculate the
retirement obligation.
NOTE 2: FIXED ASSETS
The movements in gross value are as follows:
<TABLE>
<CAPTION>
12/31/92 Increase Decrease 12/31/93
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Intangible fixed assets 17797 362 - 18159
Tangible fixed assets 64383 25499 69 89813
Financial investments 6 0 2 4
</TABLE>
The movements in amortisation and depreciation are analysed as follows:
<TABLE>
<CAPTION>
12/31/92 Increase Decrease 12/31/93
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Intangible fixed assets 6262 3613 0 9875
Tangible fixed assets 14631 16789 40 31380
Financial investments 0 - - 0
</TABLE>
NOTE 3: INVENTORIES AND WORK IN PROGRESS
The reserve for raw materials, consumables and finished goods at 12/31/93
amounts to KFRF 2,001.
NOTE 4: ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES
At December 31, 1993, accounts receivable can be split by maturity date as
follows:
<TABLE>
<CAPTION>
Greater than
Total Less than 1 year 1 year
----- ---------------- ------------
<S> <C> <C> <C>
Long term receivables 0 4
Current assets 89784
</TABLE>
NOTE 5: SHORT TERM INVESTMENTS
N/A.
F-34
<PAGE> 38
MARWAL SYSTEMS, S.A.
Notes to the financial statements
(in thousands of French Francs)
NOTE 6: PREPAYMENTS AND DEFERRED INCOME
<TABLE>
<CAPTION>
12/31/93
--------
<S> <C>
Prepayments
Interest 219
<CAPTION>
12/31/93
--------
<S> <C>
Deferred income
Long term contracts (tooling) 4426
</TABLE>
NOTE 7: DEFERRED CHARGES
<TABLE>
<CAPTION>
Charged to
income statement
Total 1993 12/31/93
----- ---------------- --------
<S> <C> <C> <C>
Deferred charges 1225 408 817
Amortised over 3 years
</TABLE>
NOTE 8: SHAREHOLDERS' EQUITY
The capital stock is made up of 906,600 shares with a nominal value of FRF.100,
completely paid up.
The accounts of the Company are consolidated in the group accounts of the
Magneti Marelli Spa Group.
NOTE 9: TAX PROVISIONS AND PROVISIONS FOR CONTINGENCIES AND CHARGES
The movements in the year are analysed as follows:
<TABLE>
<CAPTION>
12/31/92 Additions Reversals 12/31/93
<S> <C> <C> <C> <C>
Tax provisions -- -- -- --
Provisions for
contingencies and
charges of which: 14987 3966 6140 12813
Provision for
retirement indemnities 4009 836 4845
Provision for
guarantee 2058 580 1618 1020
</TABLE>
F-35
<PAGE> 39
MARWAL SYSTEMS, S.A.
Notes to the financial statements
(in thousands of French Francs)
NOTE 10: CREDITORS
At December 31, 1993, creditors, excluding advances and deposits received,
deferred income and foreign exchange differences, can be analysed by maturity
date as follows:
<TABLE>
<CAPTION>
Less than Between 1 and >
Total 1 year 5 years 5 years
------- --------- ------------- ---------
<S> <C> <C> <C> <C>
Bank overdrafts 8307 8307
Trade payables and other liabilities* 126660 126660
* of which trade bills payable: 15937
</TABLE>
NOTE 11: RELATED PARTIES
The related parties transactions are included in the different accounts in the
balance sheet as follows:
<TABLE>
<CAPTION>
Assets Liabilities
------ -----------
<S> <C> <C> <C>
Fixed assets 1154
Trade receivables 26574 Trade payables 14259
Other receivables Other payables 8495
</TABLE>
Interest expenses and financial income with related parties are as follows:
<TABLE>
<S> <C> <C> <C>
Financial income 1525 Interest expenses 3352
</TABLE>
NOTE 12: ACCRUALS AND INCOME RECEIVABLE RELATING TO DIFFERENT BALANCE SHEET
ACCOUNTS
<TABLE>
<CAPTION>
Assets Liabilities
------ -----------
<S> <C> <C> <C>
Trade receivables 10517
Other receivables 2056 Trade payables
* Suppliers 18837
* Tax and social charges 11636
* Other 750
</TABLE>
F-36
<PAGE> 40
MARWAL SYSTEMS, S.A.
Notes to the financial statements
(in thousands of French Francs)
NOTE 13: EXCHANGE DIFFERENCES RELATED TO BALANCE SHEET ACCOUNTS
<TABLE>
<CAPTION>
Exchange difference
-----------------------
Asset Liability
----- ---------
<S> <C> <C>
Assets
Trade receivables 1546 3
Liabilities
Trade payables 338 803
</TABLE>
The exchange difference resulting from the translation of the accounts of
Marwal Italy has been recorded in the revaluation reserve within
shareholders' equity.
NOTE 14: SALES TURNOVER ANALYSIS
<TABLE>
<CAPTION>
1992 1993
---- ----
<S> <C> <C>
Sales 328819 424023
Sales of goods 263575 378099
Sales of services 65244 45924
Split between export/domestic
Domestic 245352 295213
Export 83467 128810
Sales 328819 424023
</TABLE>
NOTE 15: DEFERRED TAX POSITION
<TABLE>
<CAPTION>
12/31/92 Movements 12/31/93
---------------- ---------------- ----------------
Nature Asset Liability Asset Liability Asset Liability
- ------ ----- --------- ----- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Timing differences
Organic 331 331 425 0 425
</TABLE>
F-37
<PAGE> 41
MARWAL SYSTEMS, S.A.
Notes to the financial statements
(in thousands of French Francs)
NOTE 16: EMPLOYEE INFORMATION
<TABLE>
<CAPTION>
Permanent staff Temporary staff
--------------- ---------------
<S> <C> <C>
Executives and Management 39
Employees 130
Labor and production 498 2
Total 667 2
</TABLE>
NOTE 17: LEASE COMMITMENTS
None.
NOTE 18: COMMITMENTS UNDERTAKEN AND RECEIVED
There are no commitments either given or received by Marwal Systems.
NOTE 19: INFORMATION RELATING TO MANAGEMENT
N/A.
NOTE 20: EXCEPTIONAL INCOME
<TABLE>
<CAPTION>
<S> <C>
Exceptional income from operating activities 2239
Redundancy payments reinvoiced to Jaeger S.A. 1275
Grant relating to training 875
Other 89
Exceptional income from capital transactions Not significant
Reversal of provisions 3357
Provision for delocalisation 2890
Other 467
</TABLE>
F-38
<PAGE> 42
NOTE 21 : EXCEPTIONAL CHARGES
Exceptional charges on operating activities 2996
Redundancy payments made on behalf of Jaeger S.A. 1275
Redundancy payments 333
Part time costs 139
Training costs 950
Other 299
Exceptional charges from capital transactions
Net book value of fixed assets sold 40
Other 21
Depreciation and provisions
Provision for delocalisation 2027
NOTE 22 : CHANGE IN ACCOUNTING POLICIES
N/A.
NOTE 23 : ANALYSIS OF INCOME TAX
Base Tax
----------------------------------
Operating profit (925) 1462
Exceptional items 512 (729)
--- ----
Profit before tax (413) 733
Income tax credit 1993 927
----
TOTAL INCOME TAX FOR THE COMPANY 194
F-39
<PAGE> 43
EXHIBIT INDEX
Sequential
Page
Number
Exhibit # Item
23.1 Consent of Ernst & Young 44
<PAGE> 1
EXHIBIT 23.1
[LETTERHEAD OF ERNST & YOUNG]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation of our reports dated March 29, 1994, March 17,
1995 and February 26, 1996 with respect to the balance sheets of Marwal Systems
as of December 31, 1993, December 31, 1994 and December 31, 1995, and the
related statements of income for the years then ended, which reports are
included or incorporated by reference in the Form 8-K and the S-3 registration
statement of Walbro Corporation to be filed on January 7, 1997.
ERNST & YOUNG Audit
/s/ Gilles Meyer
------------------
Gilles Meyer
January 6, 1997
