Management Reports • Feb 21, 2014
Management Reports
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Sonae Capital, SGPS, SA Lugar do Espido, Via Norte T (+351) 22 010 79 03 Capital Social 250.000.000 euros Sociedade Aberta Apartado 3053 – 4471-937 Maia F (+351) 22 010 79 35 CRC Maia (matrícula nº 508 276 756) Portugal www.sonaecapital.pt Pessoa colectiva nº 508 276 756
| | REPORT OF THE BOARD OF DIRECTORS | 3 |
|---|---|---|
| 1. HIGHLIGHTS |
4 | |
| 2. THE SONAE CAPITAL GROUP |
5 | |
| 3. MACROECONOMIC ENVIRONMENT |
7 | |
| 4. OVERALL PERFORMANCE |
10 | |
| 5. SEGMENT PERFORMANCE |
13 | |
| 6. OUTLOOK |
17 | |
| 7. SHARE PRICE PERFORMANCE |
18 | |
| 8. OTHER INFORMATION |
20 | |
| GLOSSARY | 22 | |
| | APPENDIX TO THE REPORT OF THE BOARD OF DIRECTORS | 23 |
| | CORPORATE GOVERNANCE REPORT | 28 |
| | CONSOLIDATED FINANCIAL STATEMENTS | 97 |
| | INDIVIDUAL FINANCIAL STATEMENTS | 177 |
| | REPORT AND OPINION OF THE FISCAL BOARD | 207 |
| | STATUTORY AUDIT AND AUDITORS' REPORT | 210 |
31 DECEMBER 2013
THE YEAR'S RESULTS SHOW A SIGNIFICANT SHIFT TOWARDS THE OPERATIONAL PATH OF PREVIOUS YEARS. ON A LIKE FOR LIKE1 BASIS…
… Consolidated TURNOVER GREW 25%, driven by:
… Consolidated RECURRENT EBITDA2 rose to positive 6.6 M.€ (-2.1 M.€ in 2012):
… Consolidated NET PROFIT2 with an expressive improvement, to negative 10.9 M.€ (comparable negative 21.5 M. in 2012).
SUSTAINED DECREASE IN NET DEBT, to 246 M.€ (down 10 M.€), consistent with the Group's commitment to undertake a reduction of its financial leverage.
1Including comparable perimeter in 2013 and 2012
2Excluding restructuring costs arising from cost optimisation plans (already implemented and ongoing), and the 2012 adjustment arising from the value update of Imosede Fund's participation
Since its incorporation, in 14 December 2007, Sonae Capital has adopted a review policy of its business portfolio aimed at implementing a focus strategy on businesses identified as priority, trying to optimize its corporate and business structures so as to ensure profitability levels which are consistent with the Group's sustainability and with the continued going concern management assumptions.
Based on this premises, the Group has promoted, during 2013, a deep strategic review assignment, in order to define and validate its future options. Now that the process is concluded, the vision and mission of the Sonae Capital Group are clearly defined, as well as the key variables of its strategic plan.
Recurrently identify new business opportunities and provide resources to enable their growth, aiming to create international companies in strategic sectors, delivering economic and social value.
Using a Venture Capital approach, incubate new high growth business segments with high potential for international exposure, allocating resources to enable growth and develop long-term presence in strategic sectors until they achieve sufficient scale to become autonomous, enabling a self-sustained financial cycle to re-invest in new opportunities, with a solid financial structure and a balanced risk profile portfolio.
The Group's guidelines are thus clear, and set in 4 strategic pillars:
The chosen strategic matrix assumes that the current business portfolio releases cash flow, in order to support new investment opportunities and enhance the Group's portfolio growth, which is being attained with significant success.
In face of the growing importance of the business and of resources engaged in the Energy business, the Group reorganized its structure, with Spred lacking its past reporting status, which historically comprised the Refrigeration, HVAC and Maintenance and the Energy business areas.
Sonae Capital's portfolio, as at the date of this report, is as follows:
Future management efforts should translate this new strategic framework, fostering growth and profitability of current business areas and sale of non-strategic assets, which are of critical importance to the business rotation cycle and self-sustained financing implicit in the model.
The year of 2013 may represent the turning point in the slowdown track which has been characterizing the global economy since 2009. The last half of the year already shows some improvement signs, driven by demand recovery in advanced economies and exports growth in emerging economies.
The growth level in World Economy should be globally in line with the previous year, although evidencing diverse trends at each of the different economic blocks. Growth has been slowing down in the United States, BRICs have been recovering (on the back of Brazil and India, with Russia underperforming) as well as Japan, and recession is still haunting the Euro Area although to a lesser extent compared to the previous year. In this context, World GDP is expected to growth 3.0% in 2013 (3.1% in 2012), frustrating expectations of a more expressive recovery (mostly supported by BRICs performance, particularly China) which were anticipated in the beginning of 2013. Last IMF projections assume a 3.7% growth in 2014, with a stabilization scenario in 2015.
In the United States, economic growth slowdown in 2013 (+1.9%, compared to +2.8% in 2012) still reflected some instability in financial markets, particularly in the debt market, and increased tax burden and cuts on government spending. In the last half of the year, industrial production and transformation industry levels showed significant growth, together with increasing exports and private consumption, which should turn out as main growth driver for 2014 expected United States performance (+2.8%).
With the exception of Russia, remaining BRIC countries continued to evidence growth rates above the developed economies country block, although with an obvious slowdown trend in the year. Investment continues to drive growth in China (+7.7%, in line with 2012), with expectation being of a slight drawback in 2014 due to political pressure on deleveraging and increase in the cost of capital. India evidenced a +4.4% increase in 2013 (+3.2% in 2012), led by exports growth, and should benefit from structural policies aimed at supporting investment in 2014 (+5.4% estimated growth in 2014). The +2.3% growth projected for 2013 in the Brazilian economy should remain below average estimated growth for Latin America, as a result of the exposure of the country to the United States and European economies. Investment shall continue to be a crucial development driver, with stabilization foreseen in 2014 with a +2.3% growth. Russian evidenced clear slowdown signs compared to 2012 (+3.4%), growing 1.5% in 2013, as a result of major drops in private consumption and investment. Additionally, the high dependence of that economy to oil and natural gas exports, is an additional factor leading to lower economic activity in the dropping prices scenario affecting those commodities in 2013. Forecasts regarding the Russian economy have been systematically revised on the downside (+2.0% in 2014), as a result of the potential failure of the economic growth model adopted (mostly based on internal demand performance).
According to most recent estimates from major reference institutions, real GDP growth in the Euro Area shall remain at -0.4% in 2013 (-0.7% in 2012), reflecting a slowdown from the recessive scenario which turned out real in the recent past. Projections for 2014 already signal a reversion scenario, with a +1% projected growth, assuming more modest contributions from South European countries, which have a longer recovery path. The weight of the debt crisis, both public and private, will continue to mark political and financial (towards austerity) options, necessarily impact internal demand levels. Under this scenario, exports shall play a determinant role in the recovery efforts of the Euro Area economies. Uncertainties regarding the Euro Area performance, namely in what respects the sustainability of ongoing reforms and of the governance model, are still implicit and extremely critical in any projection exercise. In the Euro Area, inflation shall remain at low levels throughout 2014 (around 1.5% according to IMF's Autumn World Economic Outlook from FMI) and average unemployment shall be of circa 12% (according to the same source), reflecting a set of very diverse realities by country and rates that range from 5% to 27%.
The banking sector deleveraging process should spread over the coming years, entailing continued restrictions in credit access. The scenario of historically interbank low interest rates shall persist, with no foreseen trend inversion in the short term. A gradual recovery can lead to a slight decrease in the gap of bank lending rates towards the reference rate (currently at 0.25%).
The evolution of oil prices during the year showed its already know volatility, continuing far from 2008 maximum levels. Brent finished the year at 110.8 dollars per barrel, with the last forecasts envisaging a short term downward trend, pointing to an average price per barrel of 102,9 dollars per barrel in 2014, as a result of the demand decrease in China and improved stability in MENA countries (Middle East and North Africa), which will lead to a recovery to historical offer figures.
The performance of the Portuguese Economy in 2013 was undoubtedly impacted by the implementation of measures included in the economic adjustment project (PAEF). According to the most recent economic forecasts included in the Winter Bulletin of Banco de Portugal, GDP shall fall by 1.4% in 2013, compared to a 3.2% decrease in 2012. As in the Euro Area, the projected performance for the portuguese economy lies in a decrease of internal demand (-2.7% in 2013 versus -6,9% in 2012), partially offset by an increase in net exports (1.1% in 2013 and 3.7% in 2012). In the last quarter of 2013, change towards the comparable GDP figure shall represent around 1.6% growth, with a positive contribution from internal demand, signaling a growth that was not achieved since the last quarter of 2010. On a cumulated basis, internal demand reduction in the 2009-2013 period shall have reached around 17%. Inflation should have remained at 0.5% in 2013 (2.8% in 2012), and unemployment rate shall have remained high, closing the year at 15.3% (16.5% in 2012).
Estimates for 2014 point out to a recovery in economic growth – although still shy at about 0.8% from GDP – keeping up with the trend evidenced in the last quarters of 2013 (deviation of +0.3% in the third quarter and +0.5% in the fourth quarter, compared to the previous ones).
Within the ongoing Portuguese Economic and Financial Assistance Program, the 10th regular examination performed at the end of 2013, made a positive evaluation of the fulfillment of budget consolidation measures endorsed by the program and confirmed the alignment of the 2014 Portuguese Government Budget, approved on 26 November 2013 with votes against from all the opposition parties, with the budgetary consolidation efforts foreseen in the program.
At the end of 2013, the political, social and economic challenges facing Portugal are unquestionable. In this scenario, and in spite of the most recent signs towards the inversion into a recovery cycle, there is still high uncertainty regarding the extent of change of the main economic aggregates, for which macroeconomic and prospective scenarios should be analyzed with significant caution.
| Consolidated Profit and Loss | |||
|---|---|---|---|
| Million euro | |||
| FY13 | FY12 | D 13/12 | |
| Total Operational Income | 145.5 | 123.8 | +17.5% |
| Turnover | 135.9 | 112.3 | +21.0% |
| Other Operational Income | 9.6 | 11.5 | -16.9% |
| Total Operational Costs | -137.8 | -124.5 | -10.7% |
| Cost of Goods Sold | -40.8 | -36.6 | -11.6% |
| Change in Stocks of Finished Goods | -7.6 | -2.3 | <-100% |
| External Supplies and Services | -50.6 | -44.8 | -13.1% |
| Staff Costs | -35.9 | -37.2 | +3.4% |
| Other Operational Expenses | -2.8 | -3.6 | +22.6% |
| Recurrent EBITDA | 6.6 | -2.1 | - |
| EBITDA | 4.7 | -2.9 | - |
| EBIT | -8.5 | -19.2 | +55.6% |
| Net Financial Expenses | -11.5 | -11.0 | -4.8% |
| Investment Income and Results from Assoc. Undertakings |
9.2 | 20.1 | -54.3% |
| EBT | -10.9 | -10.1 | -7.5% |
| Taxation | -2.4 | -1.6 | -47.3% |
| Net Profit | -13.2 | -11.7 | -13.0% |
| Attributable to Equity Holders of Sonae | |||
| Capital | -13.2 | -11.1 | -19.0% |
| Attributable to Non-Controlling Interests | 0.0 | -0.6 | +92.2% |
| Consolidated Balance Sheet | |||
|---|---|---|---|
| Million euro | |||
| 2013 | 2012 | D 13/12 | |
| Total Assets | 633.4 | 657.4 | -3.6% |
| Tangible and Intangible Assets | 246.3 | 253.9 | -3.0% |
| Goodwill | 61.0 | 61.0 | -0.0% |
| Non-Current Investments | 52.0 | 55.0 | -5.4% |
| Other Non-Current Assets | 45.8 | 48.3 | -5.3% |
| Stocks | 178.9 | 187.8 | |
| Trade Debtors and Other Current Assets | 46.5 | 48.1 | -3.4% |
| Cash and Cash Equivalents | 3.0 | 3.2 | -7.6% |
| Total Equity | 313.2 | 324.0 | -3.3% |
| Total Equity attributable to Equity Holders of Sonae Capital |
304.3 | 315.2 | -3.5% |
| Total Equity attributable to Non Controlling Interests |
8.9 | 8.7 | +1.6% |
| Total Liabilities | 320.3 | 333.5 | -4.0% |
| Non-Current Liabilities | 171.9 | 180.1 | -4.6% |
| Non-Current Borrowings | 153.0 | 158.7 | -3.6% |
| Deferred Tax Liabilities | 12.6 | 14.3 | -12.3% |
| Other Non-Current Liabilities | 6.3 | 7.1 | -10.5% |
| Current Liabilities | 148.4 | 153.4 | -3.2% |
| Current Borrowings Trade Creditors and Other Current |
96.1 | 100.6 | -4.6% |
| Liabilities | 52.3 | 52.7 | -0.7% |
| Total Equity and Liabilities | 633.4 | 657.4 | -3.6% |
Consolidated turnover reached 135.9 M.€, evidencing a 25% increase (on a like for like basis) towards the previous year,
with significant contributions from Sonae Turismo (mostly through sales of troiaresort real estate) and from the Refrigeration, HVAC and Maintenance business (significantly driven by international markets).
Recurrent EBITDA performance, at the consolidated level, conveys a totally different reality from that of the last three years, reaching positive 6.6 million euro (-2.1 million euro in 2012, on a like for like basis),
comprising an overall improvement across all business units, and positive contributions from the Energy business (3.3 million euro), Refrigeration, HVAC and Maintenance (3.1 million euro), Resorts (2.5 million euro) and Fitness (0.5 million euro).
Net profit for the year was negative 13.2 million euro, with change towards the previous year being mostly explained by the non-recurrent one off impact from the change in the accounting method of Imosede Fund participation units which was accounted for in the third quarter of 2012 (totaling positive 17.1 million euro.
*Recurrent
On a recurrent basis (excluding restructuring costs and the above mentioned impact), the year's net profit improved 10.6 million euro, to negative 10.9 million euro.
The 5.9 million euro increase in the share of results from associated undertakings / investment income stands out amongst the recurrent contributions to net profit, and is mostly explained by Norscut's contribution and by Imosede Fund income distribution.
| Net Capital Employed Million euro |
|||
|---|---|---|---|
| 2013 | 2012 | 2011 | |
| Net Capital Employed | 559.2 | 580.0 | 598.0 |
| Capex in the Period | 6.8 | 12.1 | 11.0 |
| Working Capital | 173.1 | 183.2 | 208.8 |
| Equity | 313.2 | 324.0 | 336.9 |
| Net Debt | 246.0 | 256.1 | 261.1 |
| Net Debt / Capital Employed44.0% | 44.1% | 43.7% | |
| Gearing | 78.6% | 79.0% | 77.5% |
Capex amounted to 6.8 million euro in the year, remaining significantly below historical figures, and mostly focused in the Energy business expansion plan,
including a 4.2 million euro investment in the photovoltaic park which should be operating at full output by the end of the first quarter of 2014.
As at 31 December 2013, Net Debt amounted to 246.0 million euro (235.4 million euro excluding debt from the Energy business),
representing a 10 million euro decrease (4%) compared to the end of the previous year.
The evolution of historical levels, validates the Group's effort towards the reduction of the structural debt level and the commitment with the deleveraging strategic guideline.
Sonae Capital, SGPS, SA Report and Accounts 11
The forecasted repayment schedule of borrowings (in million euro) as at 31 December 2013, taking into consideration commitment periods in relation to each financing operation, was as follows:
Value presented in N+1 (43.1 million euro) includes commercial paper taken under short term lines of credit with automatic renewals.
Following the policies and measures implemented to manage liquidity and bank relationship risks, the Group does not foresee any risks which may affect businesses as a going concern.
On a like or like basis, Sonae Turismo's turnover amounted to 48.5 million euro in the year, representing a significant 45% growth compared to 2012,
with an expressive contribution from troiaresort's real estate deeds, and improvement in the remaining Sonae Turismo's business areas.
Recurrent EBITDA, of negative 2.1 million euro, grew 6.4 million euro compared to the previous year, comprising evident improvements throughout the year in all operational segments.
As at 31 December 2013, real estate contracts signed regarding residential units in troiaresort include 39 sales deeds (one of which regarding a promissory purchase agreement signed in 2012),
17 promissory purchase agreements, and 12 reservation agreements (the latter including the payment of a reservation fee).
In 2014, and up to the date of this report, sales efforts translated into an additional 11 units sold, comprising one deed, 3 promissory purchase agreements and 7 reservation agreements.
Set within the strategic objectives of increasing the scale of operation, following a capital light strategy, and growing average profitability, the business has been managing a third party owned fitness center since August 2013 (still with marginal contribution to the year's results).
Turnover grew 8% (0.9 million euro) on a like for like basis, due to the increase in the active membership basis, leading, together with increased operational efficiency, to a positive recurrent EBITDA of 0.5 million euro (negative 1.2 million euro in the previous year).
*Excluding the contribution from the discontinued fitness operation in Spain.
Turnover from the Hotels segment delivered two digit growth in 2013 (+14% compared to the previous year), reaching 13.6 million euro, largely driven by Summer season's good performance (mainly visible in Troia's units) and by occupancy growth in occupation from MICE and corporate segments in Porto Palácio Hotel.
The year's turnover has also profited from higher tourism occupancy from foreign visitors in Tróia (golf and group segment). The total number of room nights sold grew 11% in the Group's hotel units.
In spite of the 17% improvement (1.1 million euro) in the recurrent EBITDA, the Hotel business has not yet reached operational breakeven in the year.
The results of the Energy business show the steady turnover an EBITDA profile of the corresponding portfolio.
The 2013 performance of the Energy business indicators, compared to the previous year, is solely explained by the contribution of the new cogeneration facility in Vale de Cambra, which started operating in the course of the second half of 2012.
Comparing the set of assets under management with the significant weight in the Group's consolidated EBITDA (delivering the highest contribution in the year), signals the significant impact of any growth effort in this business segment.
Once the new photovoltaic park starts its full operation, the power under management will rise to 19.3 MW,
with a potential accrual of 37 MW in the short term, within the transaction for the acquisition
of shareholdings and interest in cogeneration plants, already announced to the market (transaction still pending approval).
Internationally, the operation in Brazil was the sole contributor to EBITDA growth, mostly via increased volumes.
International turnover from Refrigeration, HVAC and Maintenance (consolidating exports from and direct sales abroad) grew steadily in the course of the year, reaching 16.6 million euro in the twelve months (+64%).
In Portugal, turnover increased 11%, to 50.9 million euro, driven by new commercial refrigeration projects.
Recurrent EBITDA from the Portuguese operation reflects growth in the activity level and improved efficiency through the adjustment of business structures to the new market referential.
*Arising from rentals and sale of non-strategic real estate assets.
Non-strategic assets held by the Sonae Capital Group, which are available for sale, include:
During 2013, and consistent with the sale guideline agreed for this set of assets, sales deeds amounted to 2.1 million euro, comprising multiple assets with diverse individual values.
Addressing current market trends and the demand profile for such type of assets, 74 rental contracts regarding City Flats were signed up to the end of the year (with 33 apartments remaining available for sale/rental).
As at 31 December, capital employed in this group of assets amounted to 128.9 million euro:
(note: external valuation reported at 31 December 2011- Cushman & Wakefield)
Major assets as at 31 December 2013:
| Asset | % Shareholding |
|---|---|
| Norscut | 36.00% |
| Imosede Fund | 25.85% |
| Lidergraf | 24.50% |
In the reporting period, main change in this segment regards the sale of a 6.51% stake in Imosede Real Estate Investment Fund, which occurred in March 2013, generating a 10 million euro cash inflow.
At the end of 2013, the Sonae Capital Group strategic pillars and guidelines, which support its venture capital like profile, are clearly defined.
In Sonae Turismo, and now that the restructuring and business structure optimization processes are concluded, 2014 will be filled with actions aimed at maximizing topline, enhancing volume growth through capital light strategies, recover/ensure positive profitability levels, and clarify management models and positioning models.
In the Refrigeration, HVAC and Maintenance business, there is still potential for additional efficiency gains. A deep restructuring plan is underway, aiming to speed up margin recovery. In this context, the business is exiting the local operation in Spain. Growth in this business area, based on the existing market perspectives for Portugal, will have to be driven by international markets (maximizing volumes and margins), widening the scope of markets besides those in which the business is already operating (Brazil, Angola and Mozambique) and assessing growth scenarios through partnerships.
The Group will continue with systematic market screening efforts, regarding assets which fit its ambition regarding the Energy business expansion plan (focused, in the short term, in cogeneration and photovoltaic projects located in Portugal).
During the year of 2014, and within the current Sonae Capital's business portfolio refocus plan, finding an option to business areas identified as non-strategic will remain as an important management objective.
Additionally, the financial discipline and Group's deleveraging, inevitable under a going concern premise and liquidity risk management, will continue to bias the assumptions and objectives to be defined by each business area.
Name: Sonae Capital, SGPS, SA ISIN Code:
Security's issuer: Sonae Capital, SGPS, SA NYSE Euronext:
Listing date: 28 January 2008 Reuters:
Share capital: 250,000,000 € Bloomberg:
Listed amount: 250,000,000 shares
Treasury stock: As at 31 December 2013, the company owns 5,119,562 own shares.
During 2013, Sonae Capital's share price rose by an expressive 136%, closing the year at 0.33 euro. This rise significantly outperformed the comparable 16% increase in the Portuguese Stock Market reference index (PSI20).
PTSNP0AE0008
SONC
SONAC LS
SONC.PL
The following table and chart summarizes the most relevant information on the Sonae Capital shares traded in Euronext Lisbon.
| Euronext Lisbon | 2013 | 2012 |
|---|---|---|
| Closing price N-1 | 0.14 € | 0.27 € |
| Maximum price | 0.37 € (28 Nov.13) | 0.26 € (2 Jan.12) |
| Minimum price | 0.14 € (3 Jan. 13) | 0.12 € (27 Nov. 12) |
| 31 December N | 0.33 € | 0.14 € |
| Transactions | ||
| Average daily quantity | 373,837 | 150,053 |
| Total shares traded | 95,328,426 | 38,413,635 |
| Total volume (million euro) | 22.7 | 6.1 |
| Average daily volume (million euro) | 0.08 | 0.03 |
| Market capitalization 31.12.N (a) | 82,500,000€ | 35,000,000 € |
(a) Market capitalization calculated using the total number of shares.
Relevant events announced to the market in 2013 include:
Sonae Capital, SGPS, SA, the Group's holding company, posted a positive 6,081,764 euro net profit, including a material 12.4 million euro impact from dividends paid by subsidiaries. Last year's result, a 995,091 euro net loss, was negatively impacted by around 1.0 million euro regarding an impairment loss over Sonae Capital, SGPS, SA shareholding in WTC Fund.
The year's result already includes 310,045 euro euro, intended for the executive directors' variable remuneration, through the year's net profit appropriation, under the terms of number 2 of article 31 of the Articles of Association and following a proposal by the Remuneration Committee, which is responsible for the enforcement of the remuneration policy approved in the Shareholders' General Meeting held on 18 March 2013.
As a result of Sonae Capital's share performance during the year, and in accordance with the approval given at the last Shareholders' General Meeting, Sonae Capital acquired, during 2013, 3,519,252 own shares, on NYSE Euronext Lisbon Stock Exchange, at an average transaction price of 0.243 euro per share.
As a result of the abovementioned transactions, as at 31 December 2013 Sonae Capital held 5,119,562 own shares, representing 2.048% of its share capital.
During the year of 2013, and in the course of the strategic review assignment performed within the Group, Non-Executive Board Members provided significant insights in the discussion of the several options, keeping, as in previous years, close contact with the corporate directors and management teams (namely in the Energy business, given its development stage and the challenges it presents). During the year, Non-Executive Board Members have effectively played their role as Board of Directors members and members of the Board Audit and Finance Committee and of the Nomination and Remuneration Committee (with only one of the Non-Executive Directors being a member of the latter).
Additional information on the activities of the above mentioned bodies is available in paragraph 29 of the Company's Corporate Governance Report, complementing the information on activities performed by Non-Executive Board Members described in this section of the report.
Sonae Capital, SGPS, SA, as the holding company of the Group, posted a net profit of 6,081,764.35 euro in 2013. The Board of Directors proposes to the Shareholders' General Meeting that this amount should be transferred to Legal Reserve (304,088.22 euro) and to Free Reserves (5,777,676.13 euro).
The Board of Directors would like to thank all Sonae Capital's stakeholders for their support and trust during the year, emphasizing the Fiscal Board and Statutory Auditor's cooperation and work.
We would also like to express our thanks to our employees for their commitment and valuable contribution to the significant improvement in operational results, and to shared effort in the pursuit of goals outlined.
More than ever, we believe that the basis for the Group's growth is stronger, trusting in the success and sustainability of the chosen strategy.
Maia, 19 February 2014
31 DECEMBER 2013
BOARD OF DIRECTORS
(Translation of a Statement originally issued in Portuguese)
The signatories individually declare that, to their knowledge, the Report of the Board of Directors, the Consolidated and Individual Financial Statements and other accounting documents required by law or regulation were prepared in accordance with applicable International Financial Reporting Standards, and give a true and fair view, in all material respects, of the assets and liabilities, financial position and the consolidated and individual results of Sonae Capital, SGPS, SA, and of the companies included in the consolidation perimeter, where appropriate, and that the Report of the Board of Directors faithfully describes major events that occurred during the year 2013 and their impacts, if any, in the business performance and financial position of Sonae Capital, SGPS, SA and of the companies included in the consolidation perimeter, and contains an appropriate description of the major risks and uncertainties that they face.
Maia, 19 February 2014
Belmiro Mendes de Azevedo Ivone Pinho Teixeira Chairman of the Board of Directors Member of the Board of Directors
Maria Cláudia Teixeira de Azevedo Francisco de La Fuente Sánchez Member of the Board of Directors Member of the Board of Directors
Álvaro Carmona e Costa Portela Paulo José Jubilado Soares de Pinho Member of the Board of Directors Member of the Board of Directors
(Article 447 of the Portuguese Companies Act and nr. 7 of Article 14 of CMVM's 5/2008 Regulation)
Disclosure of shares and other securities held by Members of the Board of Directors and Fiscal Board and of transactions during 2013 involving shares and other securities:
| Balance as at | ||||||
|---|---|---|---|---|---|---|
| Purchases | Sales | 31.12.2013 | ||||
| Date | Quantity | Av. Price € | Quantity | Av. Price € | Quantity | |
| Belmiro Mendes de Azevedo | ||||||
| Efanor Investimentos, SGPS, SA (1) | 49,999,997 | |||||
| (includes 1 share owned by the spouse) | ||||||
| Sonae Capital, SGPS, SA (a) | 838,862 | |||||
| Maria Cláudia Teixeira de Azevedo | ||||||
| Efanor Investimentos, SGPS, SA (1) | 1 | |||||
| Linhacom, SGPS, SA (2) | 99,996 | |||||
| Álvaro Carmona e Costa Portela | ||||||
| Sonae Capital, SGPS, SA | 3,242 | |||||
| Paulo José Jubilado Soares de Pinho | ||||||
| Sonae Capital, SGPS, SA (b) | 20,775 | |||||
| Balance as at | ||||||
|---|---|---|---|---|---|---|
| Purchases | Sales | 31.12.2013 | ||||
| Date | Quantity | Av. Price € | Quantity | Av. Price € | Quantity | |
| (1) Efanor Investimentos, SGPS, SA | ||||||
| Sonae Capital, SGPS, SA | 88,859,200 | |||||
| Pareuro, BV (3) | 5,583,100 | |||||
| (2) Linhacom, SGPS, SA | ||||||
| Sonae Capital, SGPS, SA | 43,912 | |||||
| Imparfin, SGPS, SA (4) | 150,000 | |||||
| (3) Pareuro, BV | ||||||
| Sonae Capital, SGPS, SA | 66,600,000 | |||||
| (4) Imparfin, SGPS, SA | ||||||
| Sonae Capital, SGPS, SA | 513,160 |
(a) Includes 1,862 shares owned by the spouse.
(b) Includes 8,125 shares owned by Change Partners, SCR, SA, company where Paulo José Jubilado Soares de Pinho is member of the Board of Directors.
Number of shares held by shareholders owning more than 10%, 33% or 50% of the company's share capital:
Number of shares as at 31.12.2013
| Efanor Investimentos, SGPS, SA (1) | |
|---|---|
| Sonae Capital, SGPS, SA | 88,859,200 |
| Pareuro, BV | 5,583,100 |
Pareuro, BV Sonae Capital, SGPS, SA 66,600,000
(1) Belmiro Mendes de Azevedo is, under the terms of paragraph b number 1 of Article 20 and number 1 of Article 21 of the Portuguese Securities Code, the ultimate beneficial owner, as he holds around 99% of the share capital and voting rights of Efanor Investimentos SGPS, SA, which entirely controls Pareuro BV.
As required by number 1, c) of Article 9 of CMVM Regulation Nr. 5/2008, the following shareholders held more than 2% of the company's share capital as at 31 December 2013:
| Shareholder | Nr. of Shares | % of Share Capital |
% of Voting Rights |
|---|---|---|---|
| Efanor Investimentos, SGPS, S.A. (1) | |||
| Directly Owned | 88,859,200 | 35.544% | 35.544% |
| Through Pareuro, BV (controlled by Efanor) | 66,600,000 | 26.640% | 26.640% |
| Through Belmiro Mendes de Azevedo (Chairman of the Board of Directors of Efanor) | 837,000 | 0.335% | 0.335% |
| Through Maria Margarida Carvalhais Teixeira de Azevedo (Member of the Board of Directors of Efanor) |
1,862 | 0.001% | 0.001% |
| Through Linhacom, SGPS, S.A. (controlled by the Member of the Board of Directors of Efanor Maria Cláudia Teixeira de Azevedo) |
43,912 | 0.018% | 0.018% |
| Through Migracom, SGPS, S.A. (controlled by the Member of the Board of Directors of Efanor Duarte Paulo Teixeira de Azevedo) |
161,250 | 0.065% | 0.065% |
| Through descendents of Duarte Paulo Teixeira de Azevedo (Member of the Board of Directors of Efanor) |
411 | 0.000% | 0.000% |
| Through descendents of Nuno Miguel Teixeira de Azevedo (Member of the Board of Directors of Efanor) |
1,312 | 0.001% | 0.001% |
| Total attributable | 156,504,947 | 62.602% | 62.602% |
| Santander Asset Management - Sociedade Gestora de Fundos de Investimento Mobiliários, S A |
|||
| Through Santander Acções Portugal Fund (managed by Santander Asset Management) | 5,214,974 | 2.086% | 2.086% |
| Through Santander PPA Fund (managed by Santander Asset Management) | 484,869 | 0.194% | 0.194% |
| Total attributable | 5,699,843 | 2.280% | 2.280% |
| Blueshore Global Equity Fund | 5,000,000 | 2.000% | 2.000% |
| Total attributable | 5,000,000 | 2.000% | 2.000% |
(1) Belmiro Mendes de Azevedo is, under the terms of paragraph b number 1 of Article 20 and number 1 of Article 21 of the Portuguese Securities Code, the ultimate beneficial owner, as he holds around 99% of the share capital and voting rights of Efanor Investimentos SGPS, SA, which entirely controls Pareuro BV.
31 DECEMBER 2013
Sonae Capital, SGPS, SA Lugar do Espido, Via Norte T (+351) 22 010 79 03 Capital Social 250.000.000 euros Sociedade Aberta Apartado 3053 – 4471-937 Maia F (+351) 22 010 79 35 CRC Maia (matrícula nº 508 276 756) Portugal www.sonaecapital.pt Pessoa colectiva nº 508 276 756
(Translation from the Portuguese Original)
I. Share Capital structure
Sonae Capital share capital of 250,000,000 euro, made up of 250,000,000 ordinary shares, bearer and nontitled, each with a nominal value of 1 euro.
All shares of Sonae Capital were admitted to trading on Euronext Lisbon regulated market on 28 January 2008.
There are no limitation to transmission and ownership of Sonae Capital shares.
As at 31 December 2013, the company held 5,119,562 own shares, representing 2.048% of share capital and respective voting rights.
There are no agreements incorporating clauses with the aim of setting up defensive measures to a change in shareholder control or that cease in case of a change company's control following a takeover bid. The majority of the share capital of the Company is owned by one shareholder.
No defensive measures were adopted.
The existence of any shareholders' agreements concerning the society is unknown.
| II. Qualifying shareholdings and Bonds held |
|---|
| --------------------------------------------- |
As at 31 December 2013, those shareholders, who in accordance with article 20 of the Securities Code, held qualifying shareholdings representing at least 2% of the share capital of Sonae Capital, were the following:
| Shareholder | Nr Shares Held | % Share Capital |
% Voting Rights |
|---|---|---|---|
| Efanor Investimentos, SGPS, S.A.1 | 156,504,947 | 62.602% | 62.602% |
| Santander Asset Management | 5,699,843 | 2.280% | 2.280% |
| BlueShore Equity Fund | 5,000,000 | 2.000% | 2.000% |
1 Belmiro Mendes de Azevedo is, under the terms of paragraph b number 1 of Article 20 and number 1 of Article 21 of the Portuguese Securities Code, the ultimate beneficial owner, as he holds around 99% of the share capital and voting rights of Efanor Investimento SGPS, SA, which in entirely controls Pareuro BV.
Shares, of the Company or of any group company, held by members of governing bodies of the Company, directly or through related parties, are disclosed in the appendix to the report of the Board of Directors in accordance with and for the purposes of article 447 of the Portuguese Company Law and in accordance with number 6, article 14 of CMVM's Regulation 5/2008.
The Articles of Association confers this competence uniquely to the General Meeting of Shareholders since December 2012.
Business dealings or transactions with members of the Board of Directors or holders of qualified shareholdings, are part of the day to day activity of Sonae Capital affiliated companies and made on an arm's length basis. The amounts involved, essentially from rents charged, are not material.
As at 31 December 2013, the Board of the Shareholders' General Meeting had the following members, mandated for the 2013-2014 period:
The Company's Articles of Association do not establish any percentage or maximum limit to the exercise of voting rights for any shareholder, corresponding to each share one vote.
The Company has not issued non-voting preference shares.
For the presence in the General Meeting there is no need for blocking period, but should be accomplished the legal rules that define the "Record Date" as the relevant moment to be registered as a valid shareholder and to exercise the corresponding presence and voting rights for the Shareholders' General Meeting, as well as the arrangements for participation and voting of shareholders who professionally hold shares in their own name but on behalf of clients.
Shareholders may be represented at the Meeting by means of a written representation letter addressed to the Chairman of the Board of the Shareholders' General Meeting and delivered up to the beginning of the meeting, indicating the name and address of the representative nominated, as well as the date of the meeting. That written communication can be made using e-mail in accordance with instructions of the meeting's notice.
A shareholder may appoint several representatives related to owned shares held through different share accounts, without undermining the principle of vote unity and the ability of professional shareholders to vote differently according with representation of different shareholders.
The Company makes available, within timings comprised in the law, adequate information, so that shareholders take seat in the Shareholders' General Meeting directly or through representatives, as well as a minute of representation letter in its website (www.sonaecapital.pt).
Shareholders may vote using written voting papers in all matters subject to the approval of the Shareholders' General Meeting. Votes may be cast using electronic means, if these are made available to shareholders and mentioned in the meetings' notice.
The Company makes available to shareholders minutes of written voting papers on the Company's website (www.sonaecapital.pt) at the same time with the notice given to the Shareholders' General Meeting.
There is no limitation on the number of votes that may be held or exercised by a single shareholder or group of shareholders.
Under the terms of the Company's Articles of Association, resolutions at the Shareholders' General Meeting shall be taken by simple majority, unless otherwise determined by law.
Sonae Capital adopts the monist model of governance (composed by Board of Directors, a Fiscal Board and a Statutory Auditor).
The Board of Directors has the responsibility of management, strategic guidance and appointment and general supervision of the Executive Committee activities and the specialized committees.
The remaining two bodies have supervisory responsibility.
Details of the structure adopted, the bodies that compose and corresponding roles and responsibilities are presented in the following sections.
In accordance with Law and the Company's Articles of Association, members of Board of Directors are elected under the terms of proposal approved at the Shareholders' General Meeting.
The election of one member of the Board of Directors takes place independently from the remaining elections, under the terms of the law, among persons listed in proposals subscribed by groups of shareholders, provided that such groups of shareholders hold shares that represent more than ten and less than twenty percent of the share capital. The same shareholder cannot subscribe to more than one proposal. Each proposal must contain the identification of at least two persons eligible for each of the positions to be filled. If proposals are presented by more than one group of shareholders, voting will be based on all of these proposals.
The Board of Directors appoints a substitute in case of death, resignation or temporary or permanent incapacity or unavailability of any member, except the administrator elected under rule of minorities. This appointment shall be subjected to ratification by shareholders at the first Annual General Meeting to be held following the cooptation.
A substitute is elected to the Board of Directors in the case of permanent unavailability of the member of the Board elected under the provisions set in the previous paragraph.
Under the Company's Articles of Association, the Board of Directors can be made up of an odd or even number of members, with a minimum of three members and a maximum of seven members, elected at the Shareholders' General Meeting.
The Board's term of office is of two years, and members can be reelected for one or more times. The current term of the Board of Directors corresponds to the 2013-2014 period. The Board of Directors elects, under the Articles of Association, its Chairman.
As at 31 December 2013, the Board of Directors was made up of six members, three executive and three non executive. Two of non executive members are independent:
| Name | First Appointment on | Term of Office |
|---|---|---|
| Belmiro Mendes de Azevedo | December 2007 | 31 December 2014 |
| Álvaro Carmona e Costa Portela | March 2011 | 31 December 2014 |
| Maria Cláudia Teixeira de Azevedo | March 2011 | 31 December 2014 |
| Ivone Pinho Teixeira | March 2013 | 31 December 2014 |
| Francisco de La Fuente Sánchez | April 2008 | 31 December 2014 |
| Paulo José Jubilado Soares de Pinho | April 2008 | 31 December 2014 |
| Belmiro Mendes de Azevedo | Chairman – Non executive |
|---|---|
| Álvaro Carmona e Costa Portela | Executive |
| Maria Cláudia Teixeira de Azevedo | Executive |
| Ivone Pinho Teixeira | Executive |
| Francisco de La Fuente Sánchez | Non Executive (Independent) |
| Paulo José Jubilado Soares de Pinho | Non Executive (Independent) |
Non executive members were appointed based on their reputation in business, finance, academia and consultancy areas, to strengthen the skills of the Board of Directors, namely in relation to the approval of the portfolio configuration strategy and of the annual business plan and any significant changes to it.
Non executive members of the Board of Directors, Francisco de La Fuente Sánchez and Paulo José Jubilado Soares de Pinho, are considered independent under the terms of independence criteria established at 18.1 of the appendix I of the Regulation 4/2013 of CMVM and the recommendation II.1.7 of CMVM (2013).
Independent Non Executive Directors have to disclose immediately to the Company any event that, in the course of their mandate, might lead to conflicts of interest or loss of independence under the terms of legal requirements.
The current composition of the Board of Directors, especially the number of Non Executive and independent members (2 from a total of 5 members), ensure the necessary supervision of the activities performed by Executive Directors. The Report of the Board of Directors contains a section with a description of the activities carried out by Non Executive board members.
Professional qualifications and other relevant curricula elements of the members of the Board of Directors are detailed in the appendix of this document.
The Chairman of the Board of Directors, Belmiro Mendes de Azevedo, holds the majority of the share capital and voting rights of the shareholder Efanor Investimentos, SGPS, SA, to which is attributed the domain of the capital and voting rights of the Company. The Chief Executive Officer, Maria Cláudia Teixeira de Azevedo, daughter of Belmiro de Azevedo, is a shareholder and member of the Board of Directors of Efanor Investimentos, SA.
21. Division of powers between the different boards, committees and / or departments within the company, including information on delegating responsibilities, particularly with regard to the delegation of powers, in particular with regard to the delegation of daily management of the Company
Under the current governance structure, the Board of Directors is responsible for business portfolio strategic decisions and respective implementation.
The Board of Directors delegates to the Executive Committee the powers to manage the dayto-day operations of the Company and, regulates how the Executive Committee operates and how the delegated powers can be exercised. The Board of Directors does not delegate the following powers:
The Corporate Centre is instrumental in supporting the Executive Committee and the Board of Directors in defining and executing major strategies, policies and objectives and is composed of seven sovereign functions and three shared services functions which provide services to all Group companies.
Those functions are the following:
| Sovereign functions | Shared services functions |
|---|---|
| Corporate Finance | Financial Services |
| Legal | Accounting, Tax and Reporting |
| Corporate Planning and Control | Administrative Human Resources |
| Corporate Human Resources | |
| Internal Audit & Risk Management | |
| Corporate Development | |
| Information Systems |
The Corporate Finance function has the responsibility to define and implement financial strategies and policies to ensure an integrated and across the board view of the Group's needs as well as ensuring the liaison with capital, debt and banking markets. This department is also responsible for financial risk management at Group level and for the preparation and follow-up of the Group's financial plan.
The Legal function provides legal support in all domains, ensuring the safeguard of the Groups' interests and promoting the strategy defined by the Board of Directors.
The Planning and Control function plays a role in supporting the strategic planning of the Group, in defining management information policies and in ensuring consolidated management reporting. This function includes the Investor Relations Office which has as main responsibilities external reporting and ensuring a permanent contact with institutional investors, shareholders and analysts.
Corporate Human Resources have the responsibility of defining and implementing the strategy and policy of Human Resources of the Group as well as the planning and management of talent and careers of senior managers.
Corporate Development has the main role of assisting the Board of Directors of Sonae Capital in projects of organic growth and in the management of Group's businesses, as well as in projects of portfolio optimization including the analysis and negotiation of investment or divestment opportunities.
The Internal Audit & Risks Management function defines and executes internal audit activities and evaluates systematically and independently Group's activities, with the objective of ensuring the efficacy of management systems and processes and internal control. Simultaneously, it supports the Board of Directors in identifying, modelling and accompanying Group's risks with the objective of controlling and mitigating those risks and also to include risk assessment in strategic and operational decision making.
Information Systems function has the role of ensuring the alignment of information systems with Group's strategy, creating value by providing solutions that promote efficacy, efficiency and innovation in processes.
Sovereign functions report to the Executive Committee of Sonae Capital.
Financial Services have the mission of optimizing Group's financial flows by efficiently coordinating external partners, namely clients, suppliers and banks. The function is coordinated by a manager at the Corporate Centre level.
Accounting & Consolidation has the purpose of maintaining the accounting organization to guarantees the availability and integrity of financial and accounting information and assets of the whole organization through an integrated information system. The function is coordinated by a manager at the Corporate Centre level.
Administrative Human Resources ensure the coordination of administrative management activities of human resources and alignment with businesses. The function is coordinated by the sovereign function of Corporate Human Resources.
Regulations are available at the site of the Company (www.sonaecapital.pt).
According to the Company's Articles of Association, the Board of Directors meets at least once every quarter and, in addition, whenever the Chairman or two Board Directors convene a meeting. During 2013, the Board of Directors held eight meetings and the respective attendance, personally or by representation, was as follows:
| Belmiro Mendes de Azevedo | 100% |
|---|---|
| Maria Cláudia Teixeira de Azevedo | 100% |
| Álvaro Carmona e Costa Portela | 100% |
| Ivone Pinho Teixeira | 100% |
| Francisco de La Fuente Sánchez | 100% |
| Paulo José Jubilado Soares de Pinho | 100% |
The functioning and other logistic issues are dealt with by the Board's Secretary, which also ensures that records of decisions taken are kept in minutes of meetings and provides Board members with support information for the proposed agenda at least five days in advance and always leaving a weekend between distribution and the respective meeting.
Sonae Capital's Remunerations Committee is responsible for the performance appraisal, approval of remuneration, and other compensations of the Board of Directors, Fiscal Board and members of the Board of the Shareholders' General Meeting.
The Board Nomination and Remuneration Committee (BNRC), is fully composed by non executive members and support the Shareholders' Remuneration Committee in its duties.
The performance evaluation of executive directors is based on predetermined criteria, consisting of objective performance indicators established for each period and aligned with the Group strategy of growth and the business performance.
The named consist in business, economic and financial KPI´s (Key Performance Indicators) and are divided into company, department and individual KPI's.
The company's business KPIs include economic and financial indicators based on the budget, on the performance of each business unit, as well as on the consolidated performance of the Company. Meanwhile, the department business KPIs are similar in nature to the previous ones, being directly influenced by the performance of the Executive Director. The personal KPIs, which may include subjective and objective indicators, are determined by the compliance of individual obligations and commitments.
26. Availability of each member of the Board of Directors indicating the positions held simultaneously in other companies inside and outside the group, and other relevant activities by members of these bodies during the financial year
Information on other offices held by members of the Board of Directors can be found in the curricula vitae included in an appendix to this report. Members of the Board of Directors consistently demonstrated availability for the proper exercise of their duties.
In addition to the Executive Committee, the Board has also appointed especialised advisory committees, namely the Board Audit and Finance Committee and the Board Nomination and Remuneration Committee.
The Regulations on the functioning of these committees can be found at the website of the Company (www.sonaecapital.pt).
| Name | Position |
|---|---|
| Maria Cláudia Teixeira de Azevedo | Chief Executive Officer |
| Álvaro Carmona e Costa Portela | Vice-President |
| Ivone Pinho Teixeira | Chief Financial Officer |
The Executive Committee has the ability to manage the day-to-day operations of the Company.
In accordance with the adopted policy, all Executive Committee members, including the CEO, share responsibilities in more than one area, with responsibilities being attributed according to the profile and experience of each member.
The Board of Directors may only deliberate if a majority of their members is present or represented, and decisions will be taken by a majority of votes cast by members present, represented or voting in writing.
The Executive Committee meetings may also be attended by members of the corporate team, at a Director's request, for assistance and advice on specific issues
The functioning and other logistic issues are dealt with by the Board's Secretary, which also ensures that records of decisions taken are kept in minutes of meetings and provides Board members with support information for the proposed agenda at least five days in advance and always leaving a weekend between distribution and the respective meeting.
The existence of a common Secretary to both governing bodies, ensuring information flows between them, contributes to the timely supply of information and reduces misinterpretation of information requests, thus leading to more efficiency and effectiveness in the process.
During the year 2013, the approved minutes of the Executive Committee meetings were made available to Non Executive Board members and Fiscal Board members. Members of the Executive Committee provide timely and adequate information whenever requested by members of other statutory bodies.
The Board Audit and Finance Committee (BAFC) operate based on the terms approved by the Board of Directors.
As at 31 de December 2013, the BAFC is composed by Non Executive independent members, Francisco de La Fuente Sánchez (President) and Paulo José Jubilado Soares de Pinho.
The BAFC reviews Company's reports, financial information and financial statements, before they are approved by the Board, advises the Board on reports to shareholders and financial markets, on the adequacy and appropriateness of internal information provided by the Executive Committee, including internal business controls, and on compliance with best practices in corporate governance, and reviews, on behalf of the Board, the internal audit and risk management activities and assesses processes and procedures in order to ensure monitoring of internal control and the efficient management of risks. The BAFC meets directly the Statutory External Auditors and the Internal Audit team.
Regarding risk issues and the respective control please see numbers 50 and following on this report.
The BAFC shall meet at least six times a year before the disclosure of the annual and interim results, once before the approval of the annual consolidated budget, once to evaluate the effectiveness of corporate governance policies and practices of the Company and whenever it is convened by its Chairman, or the Board's Chairman or the Chief Executive Officer.
The Secretary of the BAFC circulates required agendas and support documents to the members of the BAFC at least five days in advance and always leaving a weekend between distribution and the respective meeting, also ensuring records of decisions taken are kept in minutes of the meetings.
The Board Nomination and Remunerations Committee (BNRC) is composed by the Chairman Belmiro Mendes de Azevedo (President) and the Independent Non Executive Member Francisco de La Fuente Sánchez.
BNRC operates under terms of reference approved by the Board of Directors and is responsible for identifying potential candidates for the position of Director or Senior Management positions within the Sonae Capital Group. It is also responsible for overseeing the preparation of proposals on remuneration and other compensation on behalf of the Board of Directors, for the succession planning, monitoring of talent management processes and the contingency plans. The BNRC reports to the Board of Directors, in writing, whenever necessary, and operates in coordination with the Remuneration Committee in obtaining approval for remuneration and other compensations of members of the Board of Directors and other corporate bodies. The BNRC may receive assistance from external entities, which should guarantee absolute confidentiality.
The BNRC meets at least once a year, before the annual meeting of the Shareholders' Remuneration Committee.
The Fiscal Board and the Statutory Auditor are the Supervision bodies of the Company.
In accordance with the Company's Articles of Association, the Fiscal Board shall be made of an odd or even number of members, with a minimum number of three members and a maximum number of five members, being the number of members decided upon by the Shareholders' General Meeting of the Company. One or two substitutes shall be appointed if the Fiscal Board is made up of three or more members, respectively.
The Fiscal Board appoints it's Chairman if the Shareholders' General Meeting has not made such an appointment. If the Chairman ceases his/her functions before the end of his/her mandate, the remaining members shall choose amongst themselves who will perform those duties until the end of the mandate. Substitute member(s) shall replace effective member(s) who are unable or have ceased to exercise their functions, and shall remain member(s) until the next Shareholders' General Meeting which will appoint new members to fill any vacancy(ies). If there are no substitute members available, the Shareholders' General Meeting shall appoint new members.
The members appointed for the current mandate (2013-2014) are:
| Name | Position | First Appointment on |
|---|---|---|
| Manuel Heleno Sismeiro | Chairman | April 2009 |
| Armando Luís Vieira de Magalhães | Member | December 2007 |
| Jorge Manuel Felizes Morgado | Member | December 2007 |
| Carlos Manuel Pereira da Silva | Substitute | December 2007 |
For further information about the Statutory Auditor please see below point 39 to 41.
The members of the Fiscal Board are of the opinion that they can all be considered independent under the terms of number five article 414 of the Portuguese Company Law and that they comply with all incompatibility rules mentioned in number 1 article 414-A of the Portuguese Company Law.
In accordance by Law, the members of the Fiscal board have the obligation to immediately inform to the Company any change that can harm their independence.
Professional qualifications and other relevant curricula elements of the members of the Fiscal Board are detailed in the appendix of this document.
Regulations are available at the site of the Company (www.sonaecapital.pt).
Fiscal Board has at least one meeting in every three months. During 2013, the Fiscal Board held four meetings and the respective attendance, personally or by representation, was as follows:
| Manuel Heleno Sismeiro | 100% |
|---|---|
| Armando Magalhães | 100% |
| Jorge Morgado | 100% |
The resolutions of the Fiscal Board shall be taken by a simple majority.
The members of the Fiscal Board performed their functions effectively and expressed total availability for the holding such position.
Professional qualifications and other relevant curricula elements of the members of the Fiscal Board are detailed in the appendix of this document.
The Fiscal Board is the responsible to approve the provision of additional audit services to the external auditor.
The Fiscal Board establishes, in the first meeting of each year, a work plan and timetable for the year, comprising among other subjects, the coordination of tasks with the Statutory Auditor including:
In the assessment of criteria that support the hiring of additional works to the External Auditor, the Audit Committee verifies the presence of the following:
The duties of the Fiscal Board are those determined by law, which include amongst others:
(iv) Prepare, annually, a report on its enforcement activity to the shareholders, including therein the description on the supervisory activity, detected any constraints and give an opinion on the financial statements and proposals made by the administration;
(v) Monitoring the effectiveness of the risk management system, internal control system and internal audit system;
To carry out its duties, the Fiscal Board:
To support the Fiscal Board's activity, the Company provides human and technical resources needed for scheduling meetings, preparing agendas, minutes and support documents and ensuring their timely distribution. Additionally, internal staff deemed relevant for matters in the agenda, is also present in the meetings, to present and explain the main questions raised by the Fiscal Board. Items in the agenda regarding External Audit issues are discussed, at the request of the Fiscal Board, without the presence of other department's staff.
The Fiscal Board issues an annual report on the supervisory work performed including the annual assessment of the Statutory External Auditor, as well as an opinion on the report of the Board of Directors, consolidated and individual financial statements and corporate governance report presented by the Board of Directors, in order to meet the legal deadlines for presentation of those documents to the annual Shareholders' General Meeting. The Fiscal Board's report on annual activity is included in the annual reports made available on the Company's website (www.sonaecapital.pt).
The Statutory Auditor is the supervisory body responsible for legal certification of financial information of the Company, with the competence of:
The Statutory Auditor of the Company for 2013-2014 is PricewaterhouseCoopers & Associados, SROC, represented by Hermínio António Paulos Afonso or by António Joaquim Brochado Correia.
The Statutory Auditor is in its second term of two years, having been re-elected for another term, under proposal of the Fiscal Board, at the General Meeting of March 18, 2013. The Company's auditor is the same auditor since 2011 in almost all participating companies.
The Statutory Auditors additionally provides to the Company audit services as described below.
The Company's Statutory External Auditor for the term ended in 2013 was PricewaterhouseCoopers & Associados, SROC, registered with nr.9077 in Commission for Securities Market, represented by Hermínio António Paulos Afonso or by António Joaquim Brochado Correia.
The Statutory External Auditor was elected by the Shareholders' General Meeting, by proposal of the Fiscal Board for the first time in 2011, to the 2011-2012 term of office and is in its second one. The representing partner prosecutes his functions since then.
The Company has not defined and implemented a rotation policy for the Statutory External Auditor once it only been working with the Company since 2011.
According to the Corporate Governance model, the election or removal of the Statutory External Auditor is decided at the General Meeting upon the proposal of the Fiscal Board. Additionally, the Fiscal Board oversees the performance of the External Auditor and the work during each exercise, considers and approves the additional work to provide and, annually, preprare an assessment of the External Auditor, which includes an assessment of their independence.
In order to ensure External Auditor independence, tax consultancy services and other services (mostly related with management consulting) were provided by different teams than those involved in audit services. The Board Audit and Finance Committee and the Fiscal Board reviewed the scope of other services and concluded they did not affect the independence of Auditors.
The services provided by the external auditor, other than audit services, were approved by the Fiscal Board within the recommended principles. The percentage of those services in total services provided by PricewaterhouseCoopers & Associados, SROC (PwC) to the Company amounts to 48%. From this, 25.1% correspond to a due diligence process, exceptional and nonrecurring, which was carried out for the purpose of acquisition to subsidiaries of Enel Green Power SpA (Enel), a set of holdings and interests in cogeneration plants located in Portugal. This operation was disclosed to the market by the Company on 23 December 2013. The proposal submitted by PwC was selected because it was considered that this entity had better knowledge of the sector and best price. Given the amount involved and the fact that the services are provided by a completely different team from the entity that provides audit services, was preserved the auditor independence and impartiality.
As part of its work plan, the external auditor confirmed the application of policies and remuneration systems, as well as the effectiveness and performance of internal control mechanisms, and has not identified any material issues that should be reported to the Company's Fiscal Board.
During 2013, the total remuneration paid to the Company's external auditors was 170,866 euro, corresponding to the following services provided:
| Values in Euro | ||||||
|---|---|---|---|---|---|---|
| 2013 | % | 2012 | % | 2011 | % | |
| Statutory Audit 1 | 88,286 | 51.7 | 98,796 | 90.8 | 90,436 | 100.0 |
| Other Assurance2 | 42,970 | 25.1 | 0 | 0.0 | 0 | 0.0 |
| Tax Consultancy2 | 38,772 | 22.7 | 10,000 | 9.2 | 0 | 0.0 |
| 2 Other Services |
838 | 0.5 | 0 | 0.0 | 0 | 0.0 |
| Total | 170,866 | 100.0 | 108,796 | 100.0 | 90,436 | 100.0 |
1 Fees agreed for the year.
2 Amounts invoiced.
Amendments to the Articles of Association follow the terms of the Commercial Companies Code, requiring a two-thirds majority of votes cast for approval of such resolution. To initialize the General Meeting on first call, the Articles of Association requires that a minimum of 50% of the issued capital is present or represented at the General Meeting.
The main features of the whistle blowing policy currently in place are:
review process of any individual who, even indirectly, may have a conflict of interest with the disclosure of the review process.
The Company's Policy and Procedures, the main features of which are summarized above, are available for consultation on the Company's website (www.sonaecapital.pt).
During 2012, the Fiscal Board has not received, through the available means, any communication that falls under the ruling of this policy.
Sonae Capital assigns prime importance to the implementation of appropriate internal control and risk management principles. Market visibility, exposure and diversification of the businesses' risks and the increasing speed of information transmission, makes the implementation of these principles crucial to value creation and compliance with ethical and social responsibility values.
Risk management materializes with coordinated plans and systems aimed at managing and controlling opportunities and threats which may affect business objectives and Group companies, preventing errors and irregularities from occurring, minimizing their consequences and maximizing the organisation's performance and the reliability of its information on a going concern basis.
Risk management, as a support to Sonae Capital's corporate culture and objectives, is inherent in all management processes and is a continued concern for all Group managers and employees. Risk management aims to create value and is one of the main components of the sustainable development of companies through the identification, understanding,
management and mitigation of uncertainties and threats that may affect their different businesses, in order to increase the probability of their success and reduce the likelihood of failure.
The Board of Directors is the responsible for the Risk Management Policy definition for the Company and its subsidiaries.
The Executive Committee is the resposible for the ongoing assessment of risks that affect the organization and the approval of measures, models and mechanisms for the asessment, control and mitigation of those risks.
The Board Audit and Finance Committee informs the Board of Directors about the suitability of internal information provided by the Executive Committee and of the systems and internal control principles and for compliance with the best practices in corporate governance. In addition, The Board Audit and Finance Committee advises the Fiscal Board on the appointment of the Statutory Auditor and to define the scope and remuneration for their work.
External Audit evaluates and reports the risks of reliability and integrity of accounting and financial information, thereby validating the internal control system set up for that purpose at Sonae Capital.
The Internal Audit function, acting as an independent entity of internal counselling, identifies and evaluates the efficacy and efficiency of management and control of risks of business processes and information systems, as well as risks of non conformity with legislation, contracts, policies and procedures of companies. The Risk Management and Internal Audit functions are coordinated by a single manager at Sonae Capital's Corporate Centre level, and its activities are reported and followed up by the Board Audit and Finance Committee of the Board of Directors.
The Board Audit and Finance Committee advises the Board of Directors about the quality and independence of the Internal Auditor and must be consulted by management regarding the appointment of the internal audit team.
Regarding the relationship between the two Audit committees, the Board Audit and Finance Committee reviews the scope of work of Internal Audit and its relation to the scope of work of the External Auditor and analyses with the external auditor and with the head of Internal Audit their reports on the review of the annual and interim financial information and the review of internal control, reporting the conclusions to the Board of Directors. These reports are issued to the Fiscal Board and to the Audit and Finance Committee simultaneously.
The Corporate Center, reporting to Executive Committee, promotes, supports, ease and supports the procedure development of Risk Management, promoting the inclusion of risk level in strategic and operational decisions, and this function as well as the Internal Audit function are coordinated by a single manager at Sonae Capital's Corporate Centre level, and its activities are reported and followed up by the Board Audit and Finance Committee of the Board of Directors.
Like the Internal Audit and Risk Management functions, the management of financial and legal risks is also coordinated by two managers, at the Corporate Centre level of Sonae Capital and its activities are reported and followed up by the Audit and Finance Committee and by the Fiscal Board.
Financial Risks: Sonae Capital is exposed to a variety of financial risks namely interest rates, transaction and translation foreign currency exchange, liquidity and debt and equity financial market fluctuations, counterpart and credit risk (especially relevant in scenarios of economic downturn), commodity and raw material prices.
Sonae Capital's financial risk management policy seeks to minimize potential adverse effects of the volatility of financial markets, and with that end in mind, a coherent set of systems and processes are implemented at Sonae Capital allowing the identification, monitoring and management by the Corporate Finance function, on a timely basis.
The current situation of financial markets places liquidity risk, credit risk and fluctuations in capital and debt markets assume a forefront position in companies concerns due to potential impact in the continuity and development of businesses. In fact, the development of businesses of some companies held by Sonae Capital may require additional investment from Sonae Capital in its affiliates or Sonae Capital may intend to expand its businesses through organic growth or acquisitions and also business continuity demands the maintenance of appropriate liquidity reserves to face company's activities. The additional investment and the maintenance of liquidity reserves may be raised through shareholders' equity or external debt.
Sonae Capital cannot guarantee whether these funds, if necessary, will be obtained or that they will be obtained under the desired conditions in which case plans for business expansion may have to be altered or postponed.
In this context, the abovementioned systems and processes of financial risks management, which are centralized in the Company's Corporate Centre, are set out in order to mitigate those risks and to ensure liquidity management through:
(vi) maintenance of an adequate level of liquidity through contractual arrangements relationship banks for short term credit facilities.
Additionally, Sonae Capital's attitude towards financial market risk management is conservative and cautious, sometimes using derivative instruments to hedge certain exposures related to its operating businesses or the arrangement of insurance credit whenever adequate. The Company does not therefore enter into derivatives or other financial instruments that are unrelated to its operating businesses.
Legal Risks: Sonae Capital and its businesses have a legal and tax function permanently dedicated to its activities, which are closely carried out with the remaining sovereign functions and businesses, in order to ensure, preventively, the protection of Sonae Capital's interests while complying with legal obligations and applying best practices. Legal and tax function is also guaranteed, on a national and international level, by external professionals, selected from reputed firms and based on criteria of competence, ethics and experience.
Information Systems risks: Information systems of Sonae Capital are characterized by being comprehensive, wide-ranging and spread. From an information security stand point, several actions to mitigate risks of compromising confidentiality, availability and integrity of business data have been carried out. Among those actions are off site backups, implementation of high availability systems, network redundancies, control and quality check of flows between software, management of accesses and profiles and implementation of antivirus. On a recurrent basis, the Internal Audit function carries out audit assignments in several domains: software, servers and networks with the purpose to identify and correct potential vulnerabilities that may have a negative impact in the business as well as to ensure the protection of confidentiality, availability and integrity of information.
People Risks: Sonae Capital's ability to successfully implement its strategy depends on the ability to recruit and retain the most qualified and competent employees for each function. Despite Sonae Capital's human resources policy being oriented towards attaining those goals, it is not possible to guarantee that there will be no limitations in this area in the future.
Insurable Risks: In relation to the transfer of insurable risks (technical and operational), Group companies negotiate insurance coverage with the objective of rationalizing these types of risk
by searching to establish a sound insurance capital structure for the capital values at risk, based on the constant changes in the businesses involved. On another level, insurance coverage and retention levels have also been optimized in accordance with the needs of each business, ensuring internally effective insurance management.
Sonae Capital's main assets, as an investment holding company, are shareholdings. Sonae Capital is therefore dependent upon the possible distribution of dividends by its affiliated companies, the payment of interest, the repayment of loans granted and other cash flows distributed by those companies. The ability of affiliated companies to make funds available to Sonae Capital will depend in part on their capacity to generate positive cash flows. The ability of those companies to, on the one hand, distribute dividends, and on the other, pay interest and repay loans granted by Sonae Capital, is subject to, in particular, statutory and tax restrictions, their financial results, available reserves, financial structure and compliance with any contractual obligations duly undertaken.
Sonae Capital has a diversified portfolio, hence major risks to which its affiliates are exposed may be sector specific. Most relevant risks are identified below.
a. Sonae Turismo's businesses are subject to economic cycles and dependent on the growth of tourism activity and real estate in Portugal. Its tourism operations are dependent on tourist demand which, in turn, is linked to economic trends, both nationally and internationally. Any negative developments in the Portuguese economy or in the main countries feeding tourist visitors to the Portuguese market can have an adverse impact on its business performance. Similarly, leisure activity (health clubs) can be affected by the economy's behavior, notably, through a drop in consumer confidence and the consequent impact on household disposable income.
b. The successful marketing of high-quality tourism and residential property developments depends on the state of the real estate sector in Portugal and in major European countries (in view of the fact that a significant part of the tourism property developments is targeted at foreign investors) at the time that properties are put on the market. A less favorable economic environment than expected can put at risk current business expectations, namely in relation to selling prices and marketing periods, with a potentially negative impact on the Company's financial position.
c. The business carried on by Sonae Turismo as tourism and hotel operator is subject to supervision by the Directorate-General for Tourism and compliance with specific legislation for this activity. Any breach, or any alteration to the broad ranging legal framework applicable to the sector, could entail major risks for the business and for its operating performance.
d. The activity carried out by Atlantic Ferries and by the Tróia Marina is subject to the terms and periods referred to in the concessionary contracts signed, as follows: (i) Atlantic Ferries entered into, with APSS (Associação dos Portos de Setúbal e Sesimbra), in 2005, a concessionary contract for the river crossing public transport service of passenger, light and heavy vehicles between Setúbal and the Tróia Peninsula. The concession was granted for a period of 15 years extendable for successive periods of 5 years, if both parties agree; (ii) the Tróia Marina entered into, with the APSS, in 2001, a concessionary contract for the operation of the Tróia Marina for a period of 50 years. Any breach of the contractual obligations could entail major risks for the activity and have an impact on the companies' earnings.
e. The level of Sonae Turismo's business can depend on the intensity of competition – both regional and global – from the tourism destinations in which they operate. As a consequence of growth in demand, massive use of air transport and the emergence of new destinations, competition between tourism destinations is becoming increasingly more aggressive. However, over and above the convenience of the location, the brand's widespread awareness and the quality of the property development, in particular the offer of complementary facilities (restaurants, golf, SPA and other leisure activities), are important competitive advantages in this sector. As far as the Tróia Peninsula is concerned, tourism real estate developments may also be affected by competition from other developments, in particular, on the Alentejo coast, the Algarve and southern Spain. However, it is important to point out that the troiaresort project is being developed in an area where the existing biodiversity and cultural heritage are considered to be the factors which differentiate the project, and can be capitalized on with new tourism services and products with a positive impact on the project.
f. In the leisure sector, namely in the Fitness segment where Sonae Turismo operates through Solinca Health & Fitness (health clubs), competition is based on the price and quality of the services provided. The response to increased competition both as a result of the entry of new operators into the market, from their increased size due to mergers and acquisitions, and the decision to try to increase the number of customers/members, could force a reduction in prices charged or the application of promotional discounts.
g. Some of the businesses carried out by Sonae Turismo are seasonal, with the result that abnormally adverse conditions during these periods could negatively affect the level of activity and operating results. These activities are subject to fluctuations in demand associated with natural disasters, as well as to factors of a social or political nature which could have an impact on the inflow of tourists and consequently on occupancy rates.
h. The possibility of the occurrence of risks to public health in the restaurant and health club activities and of accidents that may put at risk the safety and health of customers at the respective premises, may result in Sonae Turismo being held liable for damages, which could have an adverse effect on the Company's earnings and financial position. However, any possible risks for the restaurant and other businesses, arising from situations that could lead to public health risks are minimized by the implementation of a rigorous quality control and food safety system for processes and products, which is regularly audited by external companies with a view to continuous improvement. In this respect, Sonae Turismo uses tools such as HACCP (Hazard Analysis and Critical Control Points) defined in the "Codex Alimentarius" – Appendix to CAC/RCP 1-1969, Rev. 4 (2003), undertaking to comply with the requirements specified therein, as well as with prevailing legislation, namely with Regulation (EC) nr. 852/2004 of the European Parliament and Council of 29 April 2004, relating to food hygiene.
Activities related to refrigeration, air conditioning and related maintenance services have specific risks, the majority of which are related to competition from other companies operating in the same markets and to the economic situation. The following major risks have been identified:
a. Retail of equipment growth may be limited by pressure from Spanish rivals which are beginning to start up business in Portugal;
b. Engineering services in the refrigeration area may suffer a slowdown in their growth and profitability rates due to cuts in capital expenditure by the large food retailers and in the property sector, although new opportunities exist in alternative energies which could compensate for this reduction;
c. Maintenance, technical assistance and planning services in the electricity, electromechanical and air conditioning and ventilation areas are dependent on a limited number of customers, as a result of which cancellation of a contract may lead to excess capacity which must be managed, not only by increasing the customer base, but also by diversifying the range of services provided, allowing staff to be relocated if one of these contracts is lost.
The area of Energy and Environment carries out its activity mainly in the development and management of cogeneration projects. Although this form of electric power production is a more efficient alternative and "environmental friendly", it nonetheless entails certain risks that could have an impact on the earnings of the companies concerned:
a. Cogeneration is a form of rationalizing the consumption of energy, given that the production of electric energy based on the energy released at the moment of combustion, is synonymous with the most efficient use of fuel (natural gas in the case of projects of Sonae Capital). A cogeneration power plant uses less fuel compared to that used in separate production of the same quantities of thermal and electric power. Related risks concern the award of CO2 emission licenses. Up to 2012, licences for the emission of CO2 were issued free of charge, but after that date nothing has yet been defined regarding new licenses to be attributed. However, it is important that the limits on greenhouse gas emissions that Portugal has committed to under the Kyoto Protocol are not exceeded;
b. Cogeneration has predefined tariffs defined by the State, hereby encouraging the production of this alternative form of electric power generation, more efficient and less polluting. The risks relating to the selling price of energy are minimized. In cogeneration projects, thermal energy is sold for industrial use, with the relevant price indexed to the price of fuel. Electric power is sold at the price defined by the State for a protracted period of time. The introduction of austerity measures within the carry out of the economic austerity programme signed with European Union, European Central Bank and the International Monetary fund may bring additional barriers to the development of new projects;
c. The production of energy in cogeneration facilities, is subject to supervision by the Directorate-General for Geology and Energy (DGGE) and by the Energy Services Regulator (ERSE) - the entities responsible for regulating the electricity sector in Portugal, and to the compliance with specific legislation dealing with this sector. Any non-compliance, as well as any alteration to this wide ranging legal regime applicable to the sector could imply major risks for the activity and for its operating performance.
Norscut holds the concession for the operation and maintenance under the shadow toll regime (portagem sem cobrança aos utilizadores - SCUT) of the A24 motorway and associated roads (motorway which links Viseu to the Chaves border). The concession is operated under a contract signed with the State on 30 December 2000 for a period of 30 years. Any breach of the contract's conditions could entail major risks for Norscut's activity and its operating performance. This contract may be changed as a result of ongoing negotiations endorsed by the Portuguese government, which intends to change the operating model, paying the concessionary for the availability of the infrastructure and not for its use. These contractual changes have not yet been agreed and may have a significant impact in the Company's activity.
As a structured and disciplined approach that aligns strategy, processes, people, technology and knowledge, Risk Management is integrated throughout the planning process of Sonae Capital, aiming to identify, assess and manage the opportunities and threats that the business of Sonae Capital face in pursuing their goals of creating value.
The management and monitoring by Sonae Capital of its main risks is completed through several approaches and agents, among which are:
Policies and procedures of internal control set at both corporate and business levels, with the goal of ensuring:
The Internal Audit team regularly carries out audit assignments with the objective of complying at all times with implemented policies and procedures.
Risk management process relying on an uniform and systematic methodology based on the international model of Enterprise Risk Management – Integrated Framework of COSO (The Committee of Sponsoring Organizations of the Treadway Commission), which includes, amongst others, the following:
This process consists of the following steps:
(i) Within the Strategic planning, are identified and assessed risks to the portfolio of existing business and the development of new business and relevant projects, and defined strategies to manage those risks;
(ii) At the operational level, are identified and assessed risks of management of the business objectives and planned actions to manage those risks, which are monitored and included within the plans of the business units and functional units;
(iii) For general risks, such as large scale organizational change, structured risk management programs are developed with the participation of heads of units and functions involved;
(iv) Regarding safety risks of physical assets and human resources (risks "technicaloperational"), audits and corrective measures are implemented. Regularly is reassessed the financial coverage of insurable risks;
(v) Financial risk management is carried out and monitored within the financial functions of the Company and business centralized in the Corporate Center whose work is reported, coordinated and followed up by the Finance Committee of Sonae and the Board Audit and Finance Committee;
(vi) The management of legal, tax and regulatory risks is carried out and monitored within the legal and tax function in the Corporate Centre;
(vii) The Internal Audit develops annual work plans which comprise audits on critical business processes, compliance audits, financial audits and audits of information systems.
Sonae Capital encourages continuous education and the adoption of best international methodologies and practices in Risk Management and Internal Audit. To that end, the Group supports attendance to training and knowledge update programmes, which include the international professional certification in Internal Audit promoted by the IIA – The Institute of Internal Auditors – the Certified Internal Auditor (CIA). The Internal Audit team members are Certified Internal Auditors.
External Audit evaluates and reports the risks of reliability and integrity of accounting and financial information, thereby validating the internal control system set up for that purpose at Sonae Capital and that materialize in the clear distinction between producers and users of such information and by performing several validation procedures throughout the process of its production and disclosure.
The Board of Audit and Finance Committee analyzes the risks of the Company, the models and the mechanisms adopted by the Executive Committee, assessing the suitability of these and propose to the Board possible needs for amendment of the company's risk management policy.
The existence of an effective internal control environment, particularly in the financial reporting process, is a commitment of the Board of Directors of the Company, seeking to identify and improve the most important processes for the preparation and disclosure of financial information, with the objectives of transparency, consistency, simplicity, reliability and relevance. The purpose of the internal control system is to ensure a reasonable assurance regarding the preparation of financial statements in accordance with accounting principles, and the quality of financial reporting.
The reliability and integrity of accounting and financial information is guaranteed either by the clear distinction between producers and users, and the performing of several validation procedures throughout the process of its production and disclosure.
The internal control system with regard to accounting and preparation and dissemination of financial information includes the following key controls:
The financial statements are prepared under the supervision of the Executive Committee. The group of documents that constitute the semester and annually report shall be submitted for review and approval of the Board of Directors of Sonae Capital. After approval, the documents are sent its Statutory External Auditor, which discloses the Legal Certification of Accounts and the Report of the External Audit;
The Statutory Auditor performs an annual audit and half year limited review of individual and consolidated financial statements. In performing their examination, in accordance with the Auditing Standards issued by the Portuguese Institute of Statutory Auditors, they are required to obtain a reasonable assurance, in the annual audit, and a moderate assurance, in the half year limited review, that financial statements are free from material misstatement. Such examination includes verifying, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. Significant estimates and judgments made by management in their preparation are also assessed. Verification is also made of whether the accounting policies are appropriate, are consistently applied and adequately disclosed;
Among the causes of risk that may materially affect the accounting and financial reporting, we noted the following:
More specific information about how these and other risks were mitigated is available in the appendix to the financial statements.
Sonae Capital, SGPS, SA, via its Investor Relations Office maintains constant contact with investors and analysts by providing up to date information. In addition, on request, it provides clarification of relevant facts about the Company's activities, as already disclosed under the terms of law.
The objective of the Investor Relations Office of Sonae Capital, SGPS, SA is to ensure adequate relations with shareholders, investors, analysts, as well as with financial markets, particularly, with Euronext Lisbon and with the Portuguese Securities Market Commission (CMVM).
The Investor Relations Office of Sonae Capital, SGPS, SA, supplies, whenever necessary, all relevant information related to material events and answers queries from shareholders, investors, analysts and general public about financial indicators and different business areas' information available to the public.
In strict compliance with law and regulations, the Company informs expeditiously its shareholders and the capital markets in general of all relevant facts concerning its activities, avoiding delays between their occurrence and disclosure.
Information is made publicly available through the Information Disclosure System of the Portuguese Securities Market Commission (www.cmvm.pt) and on the Company's own website (www.sonaecapital.pt).
The Investor Relations Office can be contacted at: Telephone: +351 22 010 79 03; Fax: +351 22 010 79 35; e-mail: [email protected]; Address: Lugar do Espido, Via Norte, Apartado 3053, 4471-909 Maia. The Investor Relations Manager is Bárbara Almeida, who can be contacted using the above numbers and address.
The Legal Representative for Capital Market Relations is Anabela Nogueira Matos (Telephone: +351 22 010 79 25; Fax: +351 22 010 79 35; e-mail: [email protected]).
Sonae Capital, SGPS, SA, via its Investor Relations Office maintains constant contact with investors and analysts by providing up to date information. In addition, on request, it provides clarification of relevant facts about the Company's activities, as already disclosed under the terms of law. All information requests are analyzed and answered within five working days.
V. Website
The Company has a website for disclosure of information. Its address is: http://www.sonaecapital.pt.
Specific information can be found at the following website: http://www.sonaecapital.pt/PresentationLayer/conteudo.aspx?menuid=682&exmenuid=698
Specific information can be found at the following website: http://www.sonaecapital.pt/PresentationLayer/conteudo.aspx?menuid=683&exmenuid=682
Specific information can be found at the following website: http://www.sonaecapital.pt/PresentationLayer/conteudo.aspx?menuid=685&exmenuid=683
Specific information can be found at the following website: http://www.sonaecapital.pt/PresentationLayer/conteudo.aspx?menuid=688&exmenuid=685
Specific information can be found at the following website: http://www.sonaecapital.pt/PresentationLayer/conteudo.aspx?menuid=794&exmenuid=689
Specific information can be found at the following website: http://www.sonaecapital.pt/PresentationLayer/conteudostextoslistagem.aspx?menuid=689&e xmenuid=794
Based on the remuneration and compensation policy approved by the shareholders in the General Meeting, Sonae Capital's Remunerations Committee is responsible for the approval of remuneration and other compensations of the Board of Directors, Fiscal Board and members of the Board of the Shareholders' General Meeting.
Regarding the remuneration of Executive directors, the Nomination and Remunerations Committee liaises with the Shareholders' Remuneration Committee, contributing with proposals before a decision is taken.
The Board of Directors appointed the members of the Board Nomination and Remuneration Committee (BNRC). The BNRC is composed of Belmiro Mendes de Azevedo (Chairman of the Board of Directors) and Francisco de La Fuente Sánchez (Non Executive Independent Director).
The Board Nomination and Remuneration Committee is composed by Non Executive Members and support the Remuneration Committee on its duties.
The members of the Remuneration Committee are independent of the board of directors, with the explanation contained in the following paragraph.
Belmiro Mendes de Azevedo, Chairman and Non executive member of the Board of Directors, is member of the Shareholders' Remuneration Committee, by representation the company Efanor Investimentos, SGPS, SA (majority shareholder of Sonae Capital), acting as a the shareholder's representative in the Remuneration Committee. To ensure the independence in the exercise of such functions, this member does not take part in the discussion nor votes on any decision from which a conflict of interest may arise.
The experience and professional qualifications of the members of the Shareholders' Remuneration Committee allows them to carry out their duties in a rigorous and competent manner in safeguard of the interests of the Company.
The remuneration of members of the statutory bodies of the Company is fixed by the Shareholders' General Meeting. The Shareholders' General Meeting fulfilled in 18 March 2013 has appointed the current Shareholders' Remuneration Committee to set and propose the compensation and performance assessment policies and respective guidelines.
The proposals for the remuneration of members of statutory bodies are formulated, taking into account:
The remuneration policy for board members and executives of Sonae Capital, SGPS, SA in the current reporting period is available at www.sonaecapital.pt (General Meeting section).
The proposals regarding remuneration and other compensations of the Executive Directors are prepared considering market benchmarks, other internal comparisons and individual assessment of each executive director, based on the performance against defined objectives. Under the approved policy, the compensation package should promote the alignment between the management team and the interests of shareholders, with the variable component being dependent on both individual and Company's performance and, preventing behaviors which may lead to excessive risk assumption. This objective is also ensured by setting a maximum limit to each Key Performance Indicator (KPI).
The structure of remuneration with as set out, and the deferral of at least half the value corresponding to the variable remuneration dependent on fluctuations in the share price, guarantees, in the opinion of the Company, the alignment of the interests of Executive Directors with those of all shareholders. This approach promotes management orientation towards long term interests of the company and the adoption of risk weighting approaches.
As described before in 69., remuneration and compensation policy for Executive Directors (ED) may include (i) a fixed remuneration, including a Base Salary and an annual responsibility allowance (ii) a variable remuneration, paid in the first half of the following year to which it relates and conditional to the fulfilment of the objectives set in the previous year, divided in two components, (a) a Short Term Variable Bonus, payable immediately after the granting date, and b) a Medium Term Variable Bonus, which will be payable on the third anniversary of the granting date.
(i) Fixed remuneration of the Executive Director is defined according to individual skills and the responsibility level of each Executive Director, and will be reviewed annually.
(ii) The variable remuneration aims at rewarding Directors for the achievement of predefined objectives, based on key performance indicators of business activity, of teams under his/her responsibility and on his/her individual performance and is attributed after the Company's earnings are known and performance appraisal has been done. Variable remuneration is set annually, and the value of the pre-defined objective varies between 30% and 60% of total annual remuneration (fixed remuneration and target for variable remuneration), depending on circa 70% from business KPI's which comprise a significant share of economic and financial indicators. These are objective indicators which are divided into Company and department KPIs. The company's business KPIs include economic and financial indicators based on the budget, on the performance of each business unit, as well as on the consolidated performance of the Company. These KPIs take into consideration not only the real growth of the Company and value effectively delivered to shareholders, as well as its long-term sustainability and the limits on risk assumptions. Meanwhile, the department business KPIs are similar in nature to the previous ones, being directly influenced by the performance of the Executive Director. The remaining 30% are determined by the compliance of personal KPIs, which may include
subjective and objective indicators.
As described before, at least 50% of variable remuneration is deffered for a three year period. The payment is carried out according to the following paragraph.
According to the plan approved by the Shareholders' General Meeting, eligible members are granted the right to acquire, at nil cost, a number of shares corresponding to the division between the amount of the medium term variable bonus granted and the lower of the following closing share prices, in the Portuguese stock market: i) closing share price of the first business day after the Shareholders' General Meeting, or ii) the average closing share price of the thirty-day period of trading prior to the Shareholders' General Meeting.
If dividends are distributed, changes in the nominal value of shares or in the share capital if the Company occur or any other change in equity with impact in the economic value of attributed rights, after the granting date and before its exercise, the amount converted in shares will be adjusted to an equivalent figure considering the effect of the mentioned changes.
To ensure effectiveness and transparency of objectives of the Remuneration and Compensation Policy was established that the executive directors:
have not signed contracts with the company or third parties aimed at mitigating the risk inherent to changes in the remuneration that was set by the company;
shall not sell during the new mandate, shares of the company that were attributed as variable remuneration, up to the limit of two times the value of the total annual remuneration, except those which need to be sold to cover tax payments which may arise following the attribution of those same shares
In 2013 the variable component of total remuneration was of 10%.
74. Criteria that underlie the allocation of variable remuneration in options and indication of the deferral period and the exercise price and the members of the Company
The Company did not establish any variable remuneration in options.
Main parameters and reasoning about variable remuneration are detailed at the remuneration policy approved in March 2013 General Meeting and is available at: http://www.sonaecapital.pt/.
The Company does not have any complementary pension or early retirement schemes for Directors.
IV. Disclosure of remuneration
77. Statement of the annual amount of remuneration received by the board members including fixed and variable remuneration, and for this, mentioning the different components that gave rise
The remuneration policy includes a relationship between the fixed and variable components to the appropriated profile of the company as well as the ceilings are consistent with practices of comparable companies, and as such was approval of the Shareholders' General Meeting.
During 2013, members of the Board of Directors of Sonae Capital, SGPS, SA were paid the following remuneration and other compensation:
| Values in Euro | ||||
|---|---|---|---|---|
| Name | Fixed Remuneration |
Performance Bonus Paid |
Deffered Performance Bonus Paid |
Total |
| Board of Directors in office | ||||
| Belmiro Mendes de Azevedo | 211,800 | 49,900 | 31,609 | 293,309 |
| Álvaro Carmona e Costa Portela | 72,300 | 0 | 0 | 72,300 |
| Maria Cláudia Teixeira de Azevedo | 103,979 | 17,958 | 0 | 121,937 |
| Ivone Pinho Teixeira | 106,332 | 0 | 0 | 106,332 |
| Sub-total Executive Directors | 494,411 | 67,858 | 31,609 | 593,878 |
| Francisco de La Fuente Sánchez | 34,600 | 0 | 0 | 34,600 |
| Paulo José Jubilado Soares de Pinho |
24,800 | 0 | 0 | 24,800 |
| Sub-total Non executive Directors | 59,400 | 0 | 0 | 59,400 |
| Full Total | 553,811 | 67,858 | 31,609 | 653,278 |
The values described above, 82,127 euros were paid by a company in a control because Ivone Pinho Teixeira have assumed executive functions during the year 2013.
Amounts were paid as described above and were granted based on the degree of achievement of objectives.
80. Compensation paid or owed to former executive directors following the termination of their duties during the year
The Company neither paid nor has due compensations to any former executive director.
During 2013, members of the Fiscal Board of Sonae Capital, SGPS, SA were paid the following fixed remuneration (no other remuneration was paid):
| Values in Euro | |
|---|---|
| Fixed Remuneration | |
| Manuel Heleno Sismeiro | 7,560 |
| Armando Luís Vieira de Magalhães | 6,100 |
| Jorge Manuel Felizes Morgado | 6,200 |
| Total | 19,860 |
Remuneration paid to Statutory Auditor was previously described in item 47.
The remuneration of the Chairman of the Shareholders' General Meeting was the fixed remuneration of 3,000 euro.
The appropriate legal instruments shall be established so that in the event of a Director's dismissal without due cause, the envisaged compensation shall not be paid out if the dismissal or termination by agreement is due to the Director's inadequate performance.
Members of the Board of Directors receive no additional compensation, applying the same criteria as all employees. There are not yet any individual contracts with administrators to define the methodology of calculation of any compensation. Moreover, Sonae Capital never assigned or assign any compensation plans in the event of dismissal or termination of service by inadequate performance.
84. Reference to the existence and description, stating the sums involved, of the agreements between the company and members of the Board of Directors, providing for compensation in case of dismissal without due cause or termination of the employment relationship, following a change of control of the company
There are no agreements due to this specific matter.
The plan for allocations of shares includes the medium-term variable remuneration (MTVR) and their recipients executive directors in terms detailed above in paragraph 69. to 76. as well even as employees of group companies, in terms to define by the respective Board.
The current plan was approved by the Shareholders' General Meeting as at 18 March 2013, under proposal of the Remuneration Committee in establishment of article 2 of the Law 29/2009 of 19 June and the Recommendation II.1.5.4 CMVM (2010), currently Recomendation II.3.4 CMVM (2013), and can be found at www.sonaecapital.pt (General Meeting section).
The MTVR is one of the components of remuneration policy, integrating the share of the variable remuneration of executive directors whose payment is deferred in time. This remuneration component allows the recipient to share with shareholders the value generated by their involvement in the strategy and management of Sonae Capital Business.
Under the approved plan, are eligible for the allocation of the MTVR executive directors of Sonae Capital Group. The Board of Directors may also extend the MTVR to employees whom, by this policy, the Plan is applicable.
| Elegible members | Value of reference of the variable medium term remuneration component (% of total variable remuneration objective) |
|---|---|
| Executive Directors Sonae Capital | At least 50% |
| Executive Directors businesses | At least 50% |
| Employees | Terms to be set up by the Board of each Company |
The MTVR is set annually for three years periods. From the beginning of the third consecutive plan overlapping three-year plans will occur at every moment.
The MTVR is valued at the date of attributing to representative prices in the share price considering the effect corresponding to the closing of the first business day following the General Meeting or the average price more favorable value (considering for the purpose of determining the average price, the closing price in the 30 trading days prior to the date of the General Meeting).
Is assigned to members covered the right to purchase a number of shares determined by dividing the value of the variable remuneration awarded and medium-term share price at the grant date calculated in accordance with the preceding paragraph, such right may be exercised after three years of the grant.
The executive directors covered by the plan, acquire the shares without payment of compensation. Other employees who have been assigned that right can acquire shares under the conditions established by the Board of each Company.
If dividends are distributed, changes in the nominal value of shares or in the share capital if the Company occur or any other change in equity with impact in the economic value of attributed rights, after the granting date and before its exercise, the amount converted in shares will be adjusted to an equivalent figure considering the effect of the mentioned changes.
On the vesting date, the Company reserves the right to settle in cash, equivalent to the market value of shares. The right to exercise is dependent on the maintenance of a contractual link between the Director and the Company three years after the grant date.
The right to purchase the shares allocated by MTVB matures expired three years after being granted.
The exercise of the right to acquire the shares granted at the end of the Plan expires if occurs the termination of the bond between the member and the company without prejudice in the following paragraphs.
The right will remain in force if permanent disability or death of the member, in which case, the payment to own or the inheritors at the date of the respective maturity.
In case of retirement of the member which was granted the right, it may be exercised on its expiration date.
The plans of the MTVR of the executive members of the Board of Directors and Executive Directors of the Company ongoing in 2013 can be summarized as follows:
| Year of Grant | Number of Vesting Year |
Fair value | |||
|---|---|---|---|---|---|
| participants1 | 31. Dec.13 | 31. Dec.12 | 31 Dec.11 | ||
| 2009 | 2012 | - | - | - | 75,054 |
| 2010 | 2013 | - | - | 24,585 | 77,011 |
| 2011 | 2014 | 2 | 106,579 | 42,203 | 132,017 |
| 2012 | 2015 | 8 | 467,581 | 195,897 | - |
| 2013 | 2016 | 8 | 535,181 | - | - |
| Total | 1,109,342 | 262,685 | 284,082 |
1 As at 31 December 2013
During 2013, the Company did not approve any plan to acquire share by employees.
There are any control mechanisms to control employee participation in the capital.
The Company defines the execution of transactions with related parties by principles of stringency, transparency and strict compliance with the competitive market rules. Such transactions are subjected to specific administrative procedures arising from regulatory constraints, including those relating to transfer pricing rules, or voluntary adoption of internal systems of checks and balances, in particular reporting processes or formal validation, depending on the value of transaction at issue. Transactions with holders of qualifying holdings or entities in any relation under Article 20 of the Portuguese Securities Code are formally submitted to the prior opinion of the Board of Finance and Audit Committee if the amount is materially significant.
Business dealings or transactions with members of the Board of Directors or holders of qualified shareholdings, are part of the day to day activity of Sonae Capital affiliated companies and made on an arm's length basis. The amounts involved, essentially from rents charged, are not material.
There were no business dealings with Fiscal Board members.
Transactions with the Statutory Auditor were solely those related to his official duties, and the fees paid are described in section 47. of the current report.
Transactions with holding companies, affiliates or group companies were not material and were made on an arm's length basis as part of the normal business activity of the Company and, as such, do not require further disclosure.
91. Description of the procedures and criteria for intervention by the Authority for the purpose of preliminary assessment of the business carried out between the company and holders of qualifying holdings or entities that are in a relationship with them, under Article 20. of the CVM
Criteria and procedures defined in paragraph 89. above.
92. Location where the financial statements and the information about transactions with subsidiaries can be found (in accordance of IAS 24)
Specific information can be found at the Company's website.
The Corporate Governance Report provides a description of the Corporate Governance structure and practices followed by the Company under the terms of article 245-A of the Portuguese Securities Code and information duties required by CMVM Relation no. 4/2013, of 1 August. The Report additionally discloses, in light with the principle of comply or explain, the terms of compliance by the Company with the CMVM Recommendations contained in the CMVM Corporate Governance Code (2013).
This section should be read together with and as a complement to the 2013 Management Report and Individual and Consolidated Accounts.
The information requirements of article 3 of Law no. 28/2009, of 19 June, articles 447 and 448 of the Portuguese Companies Act, article 245-A of the Portuguese Securities Code and CMVM Regulation no. 5/2008 has been fulfilled.
The Company has adopted the Corporate Governance Code issued by the CMVM in July 2013. All of the rules and regulations mentioned in this Report are publicly available at www.cmvm.pt.
I.1 Companies should encourage their shareholders to participate and vote in general meetings, in particular by not setting an excessively high number of shares required to be entitled to one vote and implementing essential means to the exercise of voting rights by electronic means.
RECOMMENDATION FULLY ADOPTED - CHAPTER 12 OF THIS REPORT
The company encourages its shareholders to participate in general meetings, in particular by assigning to each share one vote, not limiting the number of votes that may be held or exercised by each shareholder and making available to shareholders the means necessary to exercise voting by correspondence (postal vote) or electronically.
Additionally, the company publishes on its website, from the date of notice of each General Meeting, standard documents to facilitate access to information necessary for issuing the notifications required by shareholders to ensure their presence at the meeting, and also provides an e-mail address to clarify all doubts and for the reception of all communications to participate in the General Meeting.
I.2 Companies should not adopt mechanisms that hinder the passing of resolutions by shareholders, including setting a deliberative quorum greater than foreseen in the law. RECOMMENDATION FULLY ADOPTED - CHAPTERS 12, 13 AND 14 OF THIS REPORT
The Company's Articles of Association do not establish deliberative quorum greater than the legally prescribed.
I.3 Companies shall not establish mechanisms which therefore cause the mismatch between the right to receive dividends or subscription of new securities and the voting rights of each ordinary share, unless duly justified according to the long-term interests of shareholders.
RECOMMENDATION FULLY ADOPTED - CHAPTERS 12 AND 13 OF THIS REPORT
Any mechanism of this nature is established.
I.4 Corporate articles of association that provide a limitation to the number of votes that may be held or exercised by a single shareholder, individually or in agreement with other shareholders, shall also establish that, at least every five years, the maintenance of such articles shall be subject to a resolution at the Shareholders' General Meeting – with no requirements for an aggravated quorum as compared to the legal one – and that upon such resolution all votes cast shall be counted without the operation of such limitation.
RECOMMENDATION NOT APPLICABLE
The Company's Articles of Association do not establish any limitation on the number of votes that may be issued by a shareholder.
I.5 Measures that have the effect of requiring payments or assumption of charge by the Company in the case of change of control or composition of the Board of Directors, thus hindering the shares' free transferability and shareholders' free evaluation of the performance of members of the Board of Directors, shall not be adopted.
RECOMMENDATION FULLY ADOPTED - CHAPTERS 4 AND 84 OF THIS REPORT
The Company does not adopt, unilaterally, policies that have the effect of any restrictions listed in this recommendation. The contracts concluded by the Company reflect the defense of their social interest in order to achieve business sustainability in the long term within market conditions framework.
II.1.1 Within the limits established by law, and unless the company is of a reduced size, the Board of Directors shall delegate the daily management of the company and the delegated duties should be identified in the Annual Corporate Governance Report.
RECOMMENDATION FULLY ADOPTED - CHAPTERS 28 AND 29 OF THIS REPORT
The Board of Directors has delegated the daily management of the company to the Executive Committee.
II.1.2 The Board of Directors shall ensure that the activity of the Company is in accordance with its ends, and should not delegate its duties, namely in what concerns: i) definition of the Company's strategy and general policies; ii) definition of the corporate structure of the group; iii) decisions taken that are considered to be strategic due to the amounts, risk and particular characteristics involved.
RECOMMENDATION FULLY ADOPTED - CHAPTERS 21 OF THIS REPORT
The powers not delegated by the Board comply with the rules contained in this recommendation.
II.1.3 The General and Supervisory Board, in addition to the exercise of supervisory powers that are entrusted to them, must assume full responsibility at corporate governance level. So by the statutory provision or by equivalent means, should be given the obligation to this body to decide on the strategy and major policies of society, the definition of the corporate structure of the group and the decisions that must be considered strategic due to the amounts or risk. This body should also assess compliance with the strategic plan and the implementation of major policies of the company.
RECOMMENDATION NOT APPLICABLE
The adopted Corporate Governance model doesn´t include the General and Fiscal Board.
II.1.4 Unless the Company is of a reduced size and depending on the adopted model, the Board of Directors and the General and Supervisory Committees, shall set up the necessary Committees in order to: i) ensure that a competent and independent assessment of the Executive Directors' performance is carried out, as well as its own overall performance and further yet, the performance of all existing committees; ii) study the adopted governance system and verify its efficiency and propose to the competent bodies, measures to be carried out with a view to its improvement.
RECOMMENDATION FULLY ADOPTED - CHAPTERS 27 AND 29 OF THIS REPORT
The Board of Directors has appointed two specialized committees composed of non-executive members, for the purpose of assisting and enhancing the quality of its work. The Board of Audit and Finance Committee and the Board of Nomination and Remuneration Committee are in place.
II.1.5 The Board of Directors or the General and Supervisory Board, depending on the model adopted, should set goals in terms of risk-taking and create systems for their control in order to ensure that the risks actually incurred are consistent with those goals.
RECOMMENDATION FULLY ADOPTED - CHAPTERS 29 AND 51 OF THIS REPORT
The Board of Directors has established internal risk control systems with appropriate components.
II.1.6 The board of directors shall include a sufficient number of non-executive directors whose role is to ensure an actual ability to audit, supervise and assess the activity of its executive members.
RECOMMENDATION FULLY ADOPTED - CHAPTERS 18 AND 29 OF THIS REPORT
The Board of Directors consists of a total of six members, three of whom are non-executive.
II.1.7 The Non-Executive Members shall include a number of independent members as appropriate, taking into account the adopted governance model, the size of the company and its shareholder structure and the respective free float.
The independence of the members of the General and Supervisory Board and members of the Audit Committee is assessed in accordance with applicable law, and as to the other members of the Board are considered independent the person who is not associated with any group of specific interests on the company, nor under any circumstance likely to affect their impartiality of analysis or decision, particularly in relation to:
a. Have been an employee of the company or with which it is found in a control or group situation in the past three years;
b. Have provided services or established significant business relationship with the company or with which it is in a control or group, either directly or as a partner, director, manager or agent, in the past three years;
c. Being in favor of compensation paid by company or by a company with which it is found in a control or group than the remuneration resulting from the exercise of the duties of a director;
d. Living in consensual union, or be a spouse, relative or other kind of relation directly to the 3rd degree, even in the collateral line, of administrators or individuals directly or indirectly qualifying shareholders;
e. Be qualified shareholder or a representative of a qualified shareholder.
RECOMMENDATION FULLY ADOPTED - CHAPTER 18 OF THIS REPORT
The Board of Directors is composed of two independent non-executive directors who meet the independence criteria set out in this recommendation.
II.1.8 When Directors that perform executive functions are requested by other Board Members to provide information, the former shall do so in a timely manner and the information provided must adequately suffice the request made.
RECOMMENDATION FULLY ADOPTED - CHAPTER 29 OF THIS REPORT
The Executive Committee provides in a timely manner to the Board of Directors the contents of all the resolutions it has adopted during the year. The executive members provide to nonexecutive members, as well as to the other board members, all explanations necessary for the exercise of their powers, either at members´ request or on their own initiative.
II.1.9 The Chairman of the Board of executive directors or Executive Committee shall send, as applicable, to the Chairman of the Board of Directors, the Chairman of the Supervisory Board, the Chairman of the Audit Committee, the Chairman of the General and Supervisory Board and the Chairman of the Commission for Financial Affairs, the convening notices and minutes of its meetings.
RECOMMENDATION FULLY ADOPTED - CHAPTER 29 OF THIS REPORT
The Chief Executive Officer provided to the Chairman of the Board of Directors and Chairman of the Audit Committee all the information regarding the meetings held.
II.1.10 If the Chairman of the Board of Directors has an executive role, this body shall appoint, amongst its members, an independent trustee to ensure the coordination of the work of other non-executive members and they take decisions in an independent and informed manner or find an equivalent mechanism to ensure such coordination.
RECOMMENDATION NOT APPLICABLE
The Chairman of the Board of Directors does not perform executive functions.
II.2.1 The Chairman of the Supervisory Board, the Audit Committee or the Committee for Financial Affairs (as the applicable model may be) shall be independent, according to the applicable legal standard, and have adequate skills to carry out his duties.
RECOMMENDATION FULLY ADOPTED - CHAPTER 32 AND APPENDIX OF THIS REPORT
The Chairman of the Fiscal Board, as all the others board members, are independent according to the criteria set out in nr. 5 of article 447 of the Portuguese Companies Act and have the skills and experience needed to carry out their functions.
II.2.2 The Supervisory Board should be the main interlocutor of the external auditor and the first recipient of their respective reports, and also responsible for propose the respective remuneration and to ensure that are provided the appropriate conditions for the provision of services within the company.
RECOMMENDATION FULLY ADOPTED - CHAPTER 38 OF THIS REPORT
The Fiscal Board is responsible for the supervision of the Statutory External Auditor activity and independence, interacting directly with him the terms of their competencies and performance standards contained in Regulation of the Fiscal Board, and receive and approve their reports. The company believes that the fact that the Statutory External Auditor simultaneously sends reports to the Board of Directors does not threaten compliance with this recommendation.
II.2.3 The Supervisory Board shall assess the Statutory External Auditor on an annual basis and propose the removal of the same or the termination of the contract for the provision of their services whenever justifiable grounds are present.
RECOMMENDATION FULLY ADOPTED – CHAPTER 28 OF THIS REPORT, ANNUAL REPORT AND FISCAL BOARD REPORT
The Fiscal Committee annually assesses the External Auditor, stating that evaluation on its annual report and opinions, available along with other documents of accountability at www.sonaecapital.pt (Investors tab, General Meetings section).
II.2.4 The Fiscal Board shall evaluate the internal control and risk management systems and propose adjustments that may be required.
RECOMMENDATION FULLY ADOPTED – CHAPTER 38 OF THIS REPORT
The Board of Directors proactively ensures internal control and risk management systems. The Fiscal Board assesses the effectiveness of those systems, proposing necessary measures to optimize it and stating his opinion on its annual report and opinions.
II.2.5 The Audit Committee, the General and Supervisory Board and the Fiscal Board shall decide on the work plans and resources allocated to internal audit services and to the services that ensure compliance with the rules applicable to the Company (compliance services), and should be addressed to the reports from these services at least when they are concerned matters related to accountability, identification or resolution of conflicts of interest and the detention of potential illegalities.
RECOMMENDATION FULLY ADOPTED – CHAPTER 38 AND 51 OF THIS REPORT
The Fiscal Board establishes the action plan with the internal audit, supervises their activities, receives regular reporting on activities undertaken, assesses the results achieved, assesses the existence of irregularities and issues guidelines as are deemed convenient.
II.3.1 Members of the Remuneration Committee or similar, shall be independent from the executive members of the Board of Directors and include at least one member with knowledge and experience in matters of remuneration policy.
RECOMMENDATION FULLY ADOPTED – CHAPTER 67 OF THIS REPORT
Belmiro de Azevedo, Chairman of the Board of Directors and non-executive member of this board, integrates the Remuneration Committee, having been elected to such committee by the General Meeting on the proposal of the majority shareholder, Efanor Investimentos, SGPS, SA. Belmiro de Azevedo represents shareholder interest and intervenes in this quality and not as Chairman of the Board of Directors.
To ensure the independence in the exercise of such functions, this member does not take part in the discussion nor votes on any decision from which a conflict of interest may arise, ensuring with this procedure the conditions of independence in its member's actions and decisions taken by this body.
II.3.2 Any individual or legal person which provides or has provided, over the past three years, services to any structure subject to the Board of Directors, or the Board it self or that has current relationship as consultant with the company shall not be recruited to assist the Remuneration Committee. This recommendation also applies to any individual or legal person who has an employment contract or provides services.
RECOMMENDATION FULLY ADOPTED - CHAPTER 67 OF THIS REPORT
The Board Nomination and Remuneration Committee is entirely composed by non-executive directors and supports the Remuneration Committee in carrying out its responsibilities.
II.3.3 The statement on the remuneration policy of the Board of Directors and Supervisory Board referred to in Article 2 of Law No. 28/2009 of 19 June, shall contain in addition:
a) Identification and clarification of the criteria for determining the remuneration to be paid to members of governing bodies;
b) Information on the maximum potential amount, individually, and the maximum potential amount, aggregated, to be paid to members of governing bodies, and identification of the circumstances under which these maximum amounts may be payable;
c) Information regarding the liability or not of payments for the dismissal or termination of appointment of administrators.
RECOMMENDATION FULLY ADOPTED – CHAPTER 69 AND 80 OF THIS REPORT AS WELL AS REMUNERATION POLICY APPROVED IN 18 MARCH 2013.
A statement on the remuneration policy was presented to the Shareholders' General Meeting on 18 March 2013 which includes the information referred to in this recommendation. Payments for the dismissal or termination of appointment of directors are not required, subject to the applicable legal provisions.
A statement on the remuneration policy is available at www.sonaecapital.pt.
II.3.4 Proposals relative to approval of share attribution plans and/or share acquisition options, or based on share price variations, to board members should be submitted to the General Meeting of Shareholders. Proposals should include all necessary elements for correct plan evaluation.
RECOMMENDATION FULLY ADOPTED - CHAPTERS 85 AND 86 OF THIS REPORT
The variable compensation plan for the medium term and its implementation was approved at the Annual General Meeting held on 18 March 2013 and is available at www.sonaecapital.pt.
II.3.5 Proposals relative to approval of any system of retirement benefits established for members of governing bodies must be submitted to the Shareholders' General Meeting. Proposals should include all necessary elements for correct system evaluation.
RECOMMENDATION NOT APPLICABLE
The approved remuneration policy does not establish any system of retirement benefits.
III.1 Remuneration of executive members of the Board of Directors shall be based on actual performance and discourage excessive risk-taking.
RECOMMENDATION FULLY ADOPTED - CHAPTER 70 OF THIS REPORT AND REMUNERATION POLICY APPROVED IN 18 MARCH 2013.
The remuneration of the members of the Board of Directors who perform executive functions is based on the performance of those managers, measured according to predetermined criteria and is built to align their activities with the company's sustainability and shareholder interests. Excessive risk taking is discouraged.
III.2 The remuneration of non-executive members of the Board of Directors and the remuneration of the members of the supervisory board shall not include any component whose value depends on the performance of the company or of its value.
RECOMMENDATION FULLY ADOPTED - CHAPTER 69 OF THIS REPORT AND REMUNERATION POLICY APPROVED ON 18 MARCH 2013
The remuneration of non-executive members of the Board of Directors consists solely of a fixed amount, without any connection with the company performance or of its value.
III.3 The variable component of remuneration should be reasonable in relation to the fixed component of remuneration and maximum limits should be set for all components.
RECOMMENDATION FULLY ADOPTED - CHAPTERS 77 AND 78 OF THIS REPORT AND REMUNERATION POLICY APPROVED ON 18 MARCH 2013
The remuneration policy provides a solid relationship between the fixed and variable component of the remuneration which is suitable to the company and group profile. It also sets maximum limits in accordance with the practices of comparable companies. Such measures were considered by shareholders and annually approved on the Shareholder´s General Meeting.
III.4 A significant portion of variable remuneration should be deferred for a period not less than three years, and the right to receive should depend on the positive performance of the company during that period.
RECOMMENDATION FULLY ADOPTED - CHAPTERS 71, 72 AND 86 OF THIS REPORT
In accordance with the remuneration policy approved at the Annual General Meeting held on 18 March 2013, a portion of not less than fifty per cent of variable remuneration is deferred for a period of three years and its value depends on the performance of the company over that period.
III.5 The members of the Board of Directors shall not enter into contracts with the Company or with third parties, which have the effect of mitigating the risk inherent variability of the remuneration established by the company.
RECOMMENDATION FULLY ADOPTED - CHAPTER 73 OF THIS REPORT AND REMUNERATION POLICY APPROVED ON 18 MARCH 2013
The remuneration policy approved at the Shareholders' General Meeting held on 18 March 2013 addresses the principle definedin this recommendation.
III.6 Until the end of his mandate, executive directors shall hold their Company shares which were allotted by benefit of variable remuneration schemes, up to twice the value of total annual remuneration, except those which need to be sold for to pay taxes on the gains of the same actions.
RECOMMENDATION FULLY ADOPTED - CHAPTER 73 OF THIS REPORT AND REMUNERATION POLICY APPROVED ON 18 MARCH 2013
The remuneration policy approved at the Shareholders' General Meeting held on 18 March 2013 addresses the principle laid down in this recommendation.
III.7 When the variable remuneration includes stock options, the early exercise period shall be deferred for a period not less than three years
RECOMMENDATION NOT APPLICABLE
The approved remuneration policy doesn´t include stock options.
III.8 When the removal of an administrator is not due to serious breach of its duties or their unfitness for the normal exercise of their functions, but still is due a poor performance, the Company should have the appropriate and necessary legal instruments to deal with any damages or compensation, beyond the legally owed, not required.
RECOMMENDATION FULLY ADOPTED - CHAPTER 83 OF THIS REPORT AND REMUNERATION POLICY APPROVED ON 18 MARCH 2013
The company fully complies with this recommendation in its policy.
IV.1 The external auditor must, within its responsibilities, verify the implementation of remuneration policies and systems of governing bodies, the efficiency and effectiveness of the internal control mechanisms and report any shortcomings to the company´s supervisory board.
RECOMMENDATION FULLY ADOPTED - CHAPTER 46 OF THIS REPORT
The Statutory Auditor pronounced on the activity carried out in its annual audit report, which is subject to approval at the Annual Shareholders´ General Meeting, and is available in www.sonaecapital.pt.
IV.2 The Company or any entities with which it has a controlling relationship with shall not recruit the external auditor for services other than audit services, nor any entities with which takes part or incorporates the same network. If there are reasons for hiring such services which must be approved by the Supervisory Board and explained in its Annual Corporate Governance Report - they should not exceed 30% of the total value of services rendered to the Company.
RECOMMENDATION ADOPTED WITH CLARIFICATIONS - CHAPTER 46 AND 47 OF THIS REPORT
The services provided by the external auditor, other than audit services, were approved by the Fiscal Board within the recommended principles. The percentage of those services in total services provided by PricewaterhouseCoopers & Associados, SROC (PwC) to the Company amounts to 48%. From this, 25.1% correspond to a due diligence process, exceptional and non-recurring, which was carried out for the purpose of acquisition to subsidiaries of Enel Green Power SpA (Enel), a set of holdings and interests in cogeneration plants located in Portugal. This operation was disclosed to the market by the Company on 23 December 2013. The proposal submitted by PwC was selected because it was considered that this entity had better knowledge of the sector and best price. Given the amount involved and the fact that the services are provided by a completely different team from the entity that provides audit services, was preserved the auditor independence and impartiality.
IV.3 Companies shall advocate the rotation of auditors after two or three terms of office in accordance with four or three years respectively. Their extension beyond this period must be based on a specific opinion for the Fiscal Board to formally consider the conditions of auditor independence and the benefits and costs of replacement.
RECOMMENDATION FULLY ADOPTED - CHAPTER 44 OF THIS REPORT
The Statutory Auditor began his second biannual mandate in 2013. The competent board hasn´t yet defined any policy about this matter. The periodicity of rotation of the External Auditor shall be assessed in relation to the best practices in corporate governance at the expiry of that term of office.
V.1 Where deals are concluded between the Company and shareholders with qualifying holdings, or entities with which same are linked in accordance with Article 20 of the Securities Code, such deals shall be carried out in normal market conditions.
RECOMMENDATION FULLY ADOPTED - CHAPTERS 10, 89 AND 90 OF THIS REPORT
Transactions with holding companies, affiliates or group companies are conducted by principles of rigor, transparency and strict compliance with the competitive market rules. Such transactions are subject to specific administrative procedures arising from normative regulation, including those related with transfer pricing rules, or the voluntary adoption of internal checks and balances systems, in particular reporting processes or formal validation, depending on the value of transaction in question.
V.2 The supervisory board shall establish the required procedures and criteria to define the relevant significance level of business with holders of qualifying holdings or entities in any relationship situation referred to in no. 1 of article 20 of the Portuguese Securities Code. Conducting business of significant importance is dependent on prior opinion of this board.
RECOMMENDATION FULLY ADOPTED - CHAPTER 38 OF THIS REPORT
The Company has adopted and implemented a formal internal procedure in order to obtain the opinion of the Fiscal Board and the Board of Audit and Finance Commission prior to the conducting of business by Executive Committee with holders of qualifying holdings or entities and related parties (according the definition of no. 1 of article 20 of the Portuguese Securities Code), when such transactions involve an interest higher than five million euro. All transactions in excess of one million euro are still subject to semiannual reporting to those two Boards.
VI.1 Companies shall provide, through its website, in Portuguese and English, access to information to enable the knowledge about its evolution and its current reality in economic, financial and governance terms.
RECOMMENDATION FULLY ADOPTED
All the recommended information is available in Portuguese and English versions on the Company's website – www.sonaecapital.pt.
VI.2 Companies should ensure the existence of an Investor Relations Office and the permanent contact with the market to timely respond to investor requests and a register of applications submitted and the treatment that was given should be maintained.
RECOMMENDATION FULLY ADOPTED - CHAPTER 56 OF THIS REPORT
The Company has an Investor Relations Office that provides to investors and financial community, regular and relevant information, making registration of relevant dialogues in order to optimize the quality of its performance.
There are no further informations.
Maia, 19 February 2014
The Board of Directors
Belmiro Mendes de Azevedo
Maria Cláudia Teixeira de Azevedo
Álvaro Carmona e Costa Portela
Ivone Pinho Teixeira
Francisco de La Fuente Sánchez
Paulo José Jubilado Soares de Pinho
Curricula Vitae of the Members of the Governing Bodies
Belmiro Mendes de Azevedo
Chairman of the Board of Directors of Sonae Capital, SGPS, SA
Age: 76
| Education: | Graduation in Chemical Engineering - Porto University (1964) |
|---|---|
| PMD (Programme for Management Development) - Harvard Business School (1973) |
|
| Financial Management Programme - Stanford University (1985) |
|
| Strategic Management - Wharton University (1987) |
|
| Global Strategy – University of California (1995) |
|
| Positions held in Group | Chairman of the Board of Directors of the following companies: |
| Companies: | SC, SGPS, SA |
| Positions held in Other | Chairman of APGEI - Associação Portuguesa de Gestão e Engenharia Industrial |
| Companies: | Member of Consulting Council of Faculdade de Economia da Universidade Nova de Lisboa – Business School |
| Founding Member of Instituto Superior de Estudos Empresariais (ISEE), current EGP-UPBS (University of Porto Business School) (1989) |
|
| Member of Consulting Council of IPATIMUP – Instituto de Patologia e Imunologia Molecular da Universidade do Porto (1990) |
|
| Member of WBCSD – Order of Outstanding Contributors to Sustainable Development |
|
| Member of European Union Hong-Kong Business Cooperation Committee |
|
| Member of INSEAD Portuguese Council (1998 – 2009) |
|
| Member of International Advisory Board da Allianz AG (2000-2012) |
|
| Member of Regional Advisory Board da London Business School (2001 – 2005 |
|
| Member of the Board of COTEC Portugal (2002 – 2009) |
|
| Member of European Round Table of Industrialists (2004 – 2008) |
|
| Founding member of Founding Council of Forum Manufuture Portugal (2005) |
|
| Member of European Advisory Board da Harvard Business School (Since 2005) |
|
| Chairman of the General Board of EGP-UPBS (2008-2011) |
|
| Main Professional | Since 2012 - Chairman of the Executive Committee of Sonae Indústria, SGPS, SA |
| activities in the last five | Since July 2011 - Chairman of the Board of Directors of EGP-UPBS |
| years: | Since 2005 – Chairman of the Board of Directors of Sonae Indústria, SGPS, SA |
| Since 2007 - Chairman of the Board of Directors of Sonae, SGPS, SA |
|
| Chairman of the Board of Directors of Sonae Capital SGPS, SA | |
| Chairman of the Board of Directors of SC, SGPS, SA | |
| Chairman of the Board of Directors of Alpessego – Sociedade Agrícola, SA |
|
| Chairman of the Board of Directors of Águas Furtadas – Sociedade Agrícola, SA |
|
| Chairman of the Board of Directors of Casa Agrícola de Ambrães, SA |
|
| Chairman of the Board of Directors of Efanor Investimentos, SGPS, SA |
|
| Chairman of the Board of Directors of Imoassets – Sociedade Imobiliária, SA |
|
| Chairman of the Board of Directors of Prosa - Produtos e Serviços Agrícolas, SA |
|
| Single Director of BA - Business Angels, SGPS, SA |
|
| Sonae Capital shares: | 837,000 shares held directly or by relatives |
| 155,667,947 shares held through Efanor Investimentos, SGPS, |
Álvaro Carmona e Costa Portela Executive Director of Sonae Capital, SGPS, SA
Age: 62
| Education: | Graduation in Mechanical Engineering – FEUP (1974) |
|---|---|
| Master in Business Administration – MBA (Universidade Nova de Lisboa – 1983) |
|
| AMP / ISMP – Harvard Business School - 1997 |
|
| Positions held in Group | Member of the Board of Directors of the following companies: |
| Companies: | SC, SGPS, SA |
| Sonae Turismo, SGPS, SA |
|
| Sonae Capital, SGPS, SA |
|
| Non Executive Chairman of the Board of Directors of the following companies: | |
| Contacto Concessões, SGPS, SA |
|
| Ecociclo II - Energias, SA |
|
| Integrum Energia, SA |
|
| Integrum Colombo - Energia, SA |
|
| Integrum Martim Longo - Energia, SA |
|
| Integrum Vale do Caima - Energia, SA |
|
| Integrum Vale do Tejo - Energia, SA |
|
| SC - Eng. Promoção Imobiliária, SA |
|
| Sistavac SGPS, SA |
|
| Sistavac, SA |
|
| Spred SGPS, SA |
|
| Positions held in Other | Non-Executive Director of the following companies: |
| Companies: | COPAM – Companhia Portuguesa de Amidos, SA |
| Casa Agrícola HMR, SA |
|
| Sonae, SGPS, SA |
|
| Foundation Victor e Graça Carmona e Costa |
|
| Foundation Belmiro de Azevedo |
|
| SPDI-Secure Property Development & Investment plc |
|
| Non Executive Chairman of MAF Properties (EAU) | |
| Member of Investment Committee do European Prime Shopping Centre Fund (Germany) | |
| Member of Representative Council of da Faculdade de Economia da UP | |
| Manager of Portela & Portela, Lda | |
| Main Professional | 1990-2010 – Chairman of Sonae Sierra SGPS |
| activities in the last five | 2006-2010 – Non executive Chairman of Sonae Investimentos, SGPS, SA |
| years: | 2004-2009 – Trustee of ESCT – European Shopping Centre Trust (UK) |
| 2004-2009 – Member of International Advisory Board of Eurohypo (Germany) |
|
| 2005-2008 – Trustee of International Advisory Board of ICSC – International Council of |
|
| Shopping Centres | |
| Since 2008 - Fellow do Royal Institute of Chartered Surveyors |
|
| 2010-2013 – Trustee of Urban Land Institute |
|
| Since 2011 – Director of Sonae Capital, SGPS, SA |
|
| 2011-2013 - Member of Investment Advisory Committee do PanEuropean Property |
|
| Limited Partnership |
Maria Cláudia Teixeira de Azevedo
Chief Executive Officer of Sonae Capital, SGPS, SA
Age: 44
| Education: | Graduation in Business Administration - Universidade Católica Portuguesa |
|---|---|
| MBA by INSEAD (Fointainebleau) |
|
| Positions held in Group | CEO of Sonae Capital, SGPS, SA |
| Companies: | Chairman of the Board of Directors and CEO of Sonae Turismo, SGPS, SA |
| Chairman of the Board of Directors of Imoareia - Investimentos Turísticos, SGPS, SA | |
| Member of the Board of Directors of SC, SGPS, SA |
|
| Positions held in Other | Chairman of the Board of Directors of the following companies: |
| Companies: | Efanor – Serviços de Apoio à Gestão, SA |
| Digitmarket – Sistemas de Informação, SA |
|
| Imparfin, SGPS, SA |
|
| Linhacom, SGPS, SA |
|
| Lugares Virtuais, SA |
|
| Mairoad – Serviços de Tecnologias de Informação, SA |
|
| Miauger – Organização e Gestão de Leilões Electrónicos, SA |
|
| Saphety Level – Trusted Services, SA |
|
| WeDo Technologies Americas, INC |
|
| WeDo Technologies Panamá, SA |
|
| Member of the Board of Directors of the following companies: | |
| Efanor Investimentos, SGPS, SA |
|
| Fundation Belmiro de Azevedo |
|
| PCJ – Público, Comunicação e Jornalismo, S.A. |
|
| Público Comunicação Social, SA |
|
| Praesidium Services Limited |
|
| Sonaecom, SGPS, SA |
|
| Sonaecom Sistemas de Informação, SGPS, SA |
|
| Sonaecom - Serviços Partilhados, SA |
|
| Cape Tehnologies Limited (Ireland) |
|
| WeDo Consulting, Sistemas de Informação, SA |
|
| WeDo Technologies Australia PTY Limited |
|
| WeDo Technologies (UK) Limited |
|
| Zon Optimus, SGPS, SA |
|
| ZOPT, SGPS, S.A. |
|
| Director of the following company: | |
| Sonaecom – Sistemas de Información España, SL |
|
| Manager of the following companies: | |
| WeDo Poland SP. Z.o.o. |
| WeDo Technologies Egypt |
|
|---|---|
| WeDo Technologies Mexico, S. De R.L. de C.V |
|
| Main Professional | Executive Director of Sonaecom, SGPS, SA |
| activities in the last five years: |
Executive Director of Zon Optimus, SGPS, SA |
| Member of the Board of Directors of the following companies: | |
| Sonaecom Sistemas de Informação, SGPS, SA |
|
| Sonae Matrix Multimédia |
|
| WeDo Consulting, Sistemas de Informação, SA |
|
| Profimetrics |
|
| Efanor Investimentos, SGPS, SA |
|
Ivone Pinho Teixeira Age: 41 Nacionality: Portuguese
| Education: | Graduation in Economics – Faculdade de Economia do Porto (1995) |
|---|---|
| Pos-Graduation in Credit Analisys – Instituto Superior de Gestão Bancária (1996) |
|
| Pos-Graduation in International Tax – Universidade Católica (2004) |
|
| Positions held in Group | Member of the Board / Manager of the following companies: |
| Companies: | Aqualuz – Turismo e Lazer, SA |
| Atlantic Ferries – Tráfego Local, Fluvial e Marítimo, SA |
|
| Bloco Q – Sociedade Imobiliária, SA |
|
| Bloco W – Sociedade Imobiliária, SA |
|
| Casa da Ribeira – Hotelaria e Turismo, SA |
|
| Centro Residencial da Maia – Urbanismo, SA |
|
| Cinclus Imobiliária, SA |
|
| Contacto Concessões, SGPS, SA |
|
| Country Club da Maia – Imobiliária, SA |
|
| Ecociclo II – Energias, SA |
|
| Empreendimentos Imobiliários Quinta da Azenha, SA |
|
| Golfe Time – Golfe e Investimentos Turísticos, SA |
|
| Imoareia – Investimentos Turísticos, SA |
|
| Imobiliária da Cacela, SA |
|
| Imoclub – Serviços Imobiliários, SA |
|
| Imodivor – Sociedade Imobiliária, SA |
|
| Imobeauty, SA |
|
| Imohotel – Empreendimentos Turísticos, SA |
|
| Imopenínsula – Imobiliária, SA |
|
| Imoponte – Sociedade Imobiliária, SA |
|
| Imoresort – Sociedade Imobiliária, SA |
|
| Imosedas – Imobiliária e Serviços, SA |
|
| Implantação – Imobiliária, SA |
|
| Marina de Tróia, SA |
|
| Marmagno – Exploração Hoteleira e Imobiliária, SA |
|
| Martimope - Empreendimentos Turísticos, SA |
|
| Marvero – Exploração Hoteleira e Imobiliária, SA |
|
| Norscut – Concessionária de Auto-Estradas, SA |
|
| Paulo Jorge Pacheco – Equipamentos de Refrigeração, Unipessoal, Lda |
|
| Porturbe – Edifícios e Urbanizações, SA |
|
| | |
| Praedium – Serviços, SA | |
| Praedium – SGPS, SA |
|
| Praedium II – Imobiliária, SA |
|
| Prédios Privados – Imobiliária, SA |
|
| Predisedas – Predial das Sedas, SA |
|
| Promessa – Sociedade Imobiliária, SA |
|
| S.I.I. – Soberana – Investimentos Imobiliários, SA |
|
| SC – Engenharia e Promoção Imobiliária, SGPS, SA |
|
| SC – Sociedade de Consultadoria, SA |
| SC Assets, SGPS, SA |
|
|---|---|
| -------------------------- | -- |
| activities in the last five Head of Corporate Finance, Sonae Capital Group – 2007-2012 years: |
Main Professional | | Chief Financial Officer, Grupo Sonae Capital – SInce 2012 |
|---|---|---|---|
| ---------------------------------------------------------------------------------------------------------- | ------------------- | --- | ----------------------------------------------------------- |
Francisco de La Fuente Sánchez Non Executive Director of Sonae Capital, SGPS, SA
Age: 72
| Education: | Graduation in Electro technical Engineering - Instituto Superior Técnico (1965) |
|---|---|
| Positions held in Group Companies: |
- |
| Positions held in Other Companies: |
Chairman of the Board of the Shareholders' General Meeting of Iberwind – Desenvolvimento e Projectos, SA Chairman of the Board of the Shareholders' General Meeting of APEDS – Associação Portuguesa de Engenheiros para o Desenvolvimento Social Member of the Remuneration Committee of Sonae SGPS and Sonaecom Co-option Member of the School Council of Instituto Superior Técnico Non Executive Vice-President of the Board of Directors of EFACEC Capital Chairman of AAAIST – Associação de Antigos Alunos do Instituto Superior Técnico Member of the Patronage of Fundação Hidroeléctrica del Cantábrico Member of the Consulting Council of Fórum para a Competitividade Honorary Chairman of Hidroeléctrica del Cantábrico, SA Member of the Curators Council of Fundação Luso-Brasileira Member of Fórum Ibero América Member of the Curators Council of Fundação Luso-Espanhola |
| Main Professional activities in the last five years: |
2005 - 2009 - President of EDP Foundation Since 2010 - Chairman of the Board of the Shareholders' General Meeting of Iberwind – Desenvolvimento e Projectos, SA Since 2009 - Co-option member of Instituto Superior Técnico School Council Since 2005 – Member of Patronage of Fundação Hidroeléctrica del Cantábrico Since 2005 – Member of Consulting Council of Fórum para a Competitividade Since 2004 - Member of the Curators Council of the Luso-Brazilian Foundation Since 2003 - Member of the Ibero American Forum Since 2002 - Member of the Curators Council of the Luso-Spanish Foundation 2007-2013 - Chairman of the General Council of PROFORUM and Chairman of the National Council of the Electro technical Engineering Board of the Engineers Institute 2007-2012 – Invited member of Conselho Nacional da Água 2007-2012 – Chairman and Non-Executive Vice President of the Board of Directors of EFACEC Capital 2007-2009 – Chairman of the General Board for Corporate Governance of Millennium BCP – Banco Comercial Português 2006-2009 - Member of the Supervisory Board of Millennium BCP – Banco Comercial Português 2004-2010 – Member of Consulting Council of Instituto Português de Corporate Governance 2000-2010 – Non Executive Director of Portugal-Africa Foundation |
Paulo José Jubilado Soares de Pinho Non Executive Director of Sonae Capital, SGPS, SA Age: 51 Nationality: Portuguese
| Education: | Graduation in Economics - Faculdade de Economia da Universidade Nova de Lisboa) MBA - Master in Business Administration - Faculdade de Economia da Universidade Nova de Lisboa (1989) PhD in Banking and Finance - City University Business School, London (1994) Negotiation Analysis - Amsterdam Institute of Finance (2005) Advanced Course - European Venture Capital and Private Equity Association (2006) Valuation Guidelines Masterclass - European Venture Capital and Private Equity Association (2007) Private Equity and Venture Capital Programme - Harvard Business School (2007) |
|---|---|
| Positions held in Group Companies: |
- |
| Positions held in Other Companies: |
Member of the Board of Directors of Change Partners, SCR, SA Member of the Board of Directors of Biotecnol, SA |
| Main Professional activities in the last five years: |
2004-2007 - Executive Director and Member of the Board of Directors of REN - Redes Eléctricas Nacionais, SA Since 2003 – Chairman of the General Council of Venture Capital Syndication Fund PME IAPMEI Since 2005 - Member of the Advisory and Strategic Board of Fundo Fast Change Venture Capital 2007-2008 – Chairman of the Board of Directors of Xis Vending - Serviços de Vending, SA 2007 – 2010 –Senior Advisor for Iberia of Profit Technologies, EUA Since 2007 - Senior Advisor of New Next Moves Consultants, Portugal Since 2007 - Director of Venture Valuation, Switzerland (Representative for Portugal Since 2008 - Visiting Professor at Cass Business School, London 2007-2012 - Associate Dean of Universidade Nova de Lisboa Associate Professor of Faculty of Economics of Universidade Nova of Lisboa |
Manuel Heleno Sismeiro Chairman of the Fiscal Board of Sonae Capital, SGPS, SA
| Education: | Bachelor degree in Accounting - ICL, Lisbon (1964) Graduation in Finance - ISCEF, Lisbon (1971) |
|---|---|
| Positions held in Group Companies: |
- |
| Positions held in Other Companies: |
Member of the Fiscal Board of the following companies: OCP Portugal Produtos Farmacêuticos, SA Sonae Indústria, SGPS, SA |
| Chairman of the Board of the Shareholders' General Meeting of Segafredo Zanetti (Portugal), SA |
|
| Main Professional activities in the last five years: |
1980 - 2008 - Partner of Coopers & Lybrand and of Bernardes, Sismeiro & Associados Since 2008 - Advisor, namely on matters of internal audit and internal control |
Member of the Fiscal Board of Sonae Capital, SGPS, SA
| Education: | Bachelor degree in Accounting, ISCAP (1972) Graduation in Economics - Faculdade de Economia, Porto University (1978) Executive MBA - European Management, IESF/IFG (1996) |
|---|---|
| Positions held in Group Companies: |
- |
| Positions held in Other | Member of the Fiscal Board of the following companies: |
| Companies: | Sonaecom, SGPS, SA Sonae Indústria, SGPS, SA Futebol Clube do Porto - Futebol SAD Real Vida Seguros Fundação Eça de Queiroz Associação Sénior de Golfe do Norte de Portugal |
| Main Professional activities in the last five years: |
1989 - 2010 - Statutory Auditor and Managing Partner of Santos Carvalho & Associados, SROC, SA Since 2010 – Statutory Auditor and Partner of Armando Magalhães, Carlos Silva & Associados, SROC, Lda |
Jorge Manuel Felizes Morgado Member of the Fiscal Board of Sonae Capital, SGPS, SA
| Education: | Graduation in Management - ISEG, Universidade Técnica de Lisboa MBA in Finance - IEDE, Madrid MBA in Management and Information Systems - Faculdade de Economia e Gestão, Universidade Católica |
|---|---|
| Positions held in Group Companies: |
- |
| Positions held in Other Companies: |
Member of the Fiscal Board of rhe following Companies: Sonae, SGPS, SA Sonae Indústria, SGPS, SA Sonae Sierra, SGPS, SA Manager of Horwath Parsus – Soluções de Gestão, Lda |
| Main Professional activities in the last five years: |
Since 2004 - Statutory Auditor Since 2006 -Partner of Econotopia - Consultoria e Gestão, SA |
31 DECEMBER 2013
(Amounts expressed in euro)
| ASSETS | Notes | 31.12.2013 | 31.12.2012 |
|---|---|---|---|
| NON-CURRENT ASSETS: Tangible assets Intangible assets Goodwill Investments in associated companies Other investments Deferred tax assets Other non-current assets Total non-current assets |
10 11 12 6 7, 9 and 13 20 9 and 14 |
238,552,228 7,745,826 60,982,213 12,458,452 39,540,098 26,186,529 19,570,690 405,036,036 |
246,117,450 7,831,062 60,988,643 4,666,035 50,325,207 27,849,077 20,481,928 418,259,402 |
| CURRENT ASSETS: Inventories Trade account receivables Other Debtors Taxes recoverable Other current assets Cash and cash equivalents Total Current Assets |
15 9 and 16 9 and 17 18 19 9 and 21 |
178,930,013 20,872,540 8,951,082 12,841,371 3,807,413 2,997,963 228,400,382 |
187,800,644 23,475,283 7,703,322 12,380,617 4,550,336 3,244,695 239,154,897 |
| TOTAL ASSETS | 633,436,418 | 657,414,299 | |
| EQUITY AND LIABILITIES | |||
| EQUITY: Share capital Own Shares Reserves and retained earnings Profit/(Loss) for the year attributable to the equity holders of Sonae |
22 22 |
250,000,000 (1,124,125) 68,634,546 |
250,000,000 (264,705) 76,606,169 |
| Capital Equity attributable to the equity holders of Sonae Capital Equity attributable to non-controlling interests TOTAL EQUITY |
23 | (13,200,373) 304,310,048 8,850,291 313,160,339 |
(11,092,003) 315,249,461 8,707,639 323,957,100 |
| LIABILITIES: NON-CURRENT LIABILITIES: Bank Loans Bonds Obligation under finance leases Other loans Other non-current liabilities Deferred tax liabilities Provisions Total Non-Current Liabilities |
9 and 24 9 and 24 9, 24 and 25 9 and 24 9 and 27 20 32 |
68,961,416 59,773,468 21,683,572 2,550,245 3,256,871 12,581,859 3,079,824 171,887,255 |
70,140,254 59,655,971 24,543,588 4,335,860 3,997,310 14,344,526 3,079,824 180,097,333 |
| CURRENT LIABILITIES: Bank Loans Obligation under finance leases Other loans Trade creditors Other creditors Taxes and contribution payables Other current liabilities Provisions Total Current Liabilities |
9 and 24 9, 24 and 25 9 and 24 9 and 29 9 and 30 18 31 32 |
92,405,686 2,856,743 788,511 15,756,800 7,003,528 7,007,231 19,612,612 2,957,713 148,388,824 |
96,937,328 2,813,237 888,683 17,589,482 4,449,870 6,727,194 22,798,965 1,155,107 153,359,866 |
| TOTAL LIABILITIES | 320,276,079 | 333,457,199 | |
| TOTAL EQUITY AND LIABILITIES | 633,436,418 | 657,414,299 |
The accompanying notes are part of these financial statements.
(Amounts expressed in euro)
| Notes | 31.12.2013 | 31.12.2012 | |
|---|---|---|---|
| Sales | 35 | 68,664,509 | 51,916,061 |
| Services rendered | 35 | 67,203,120 | 60,372,417 |
| Other operating income | 36 | 9,590,083 | 11,542,232 |
| Cost of sales | 15 | (40,829,087) | (36,584,661) |
| Changes in Inventories of finished goods and work in progress | 37 | (7,580,828) | (2,258,161) |
| External supplies and services | 38 | (50,634,526) | (44,753,524) |
| Staff costs | 39 | (35,942,980) | (37,216,180) |
| Depreciation and amortisation | 10 and 11 | (12,798,510) | (13,478,980) |
| Provisions and impairment losses | 32 | (3,396,083) | (5,128,480) |
| Other operating expenses | 40 | (2,820,258) | (3,644,018) |
| Operational profit/(loss) | (8,544,560) | (19,233,294) | |
| Financial Expenses | 41 | (12,607,566) | (12,682,142) |
| Financial Income | 41 | 1,120,397 | 1,716,396 |
| Profit/(Loss) in associated undertakings | 6 | 5,060,825 | 3,501,150 |
| Investment income | 42 | 4,116,081 | 16,597,379 |
| Profit/(Loss) before taxation | (10,854,823) | (10,100,511) | |
| Taxation | 43 | (2,394,830) | (1,626,308) |
| Profit/(Loss) for the year | 44 | (13,249,653) | (11,726,819) |
| Attributable to: | |||
| Equity holders of Sonae Capital | (13,200,373) | (11,092,003) | |
| Non-controlling interests | 23 | (49,280) | (634,816) |
| Profit/(Loss) per share | |||
| Basic | 46 | (0.053403) | (0.044494) |
| Diluted | 46 | (0.053403) | (0.044494) |
The accompanying notes are part of these financial statements.
(Amounts expressed in euro)
| Sales 25,046,258 15,118,246 Services rendered 13,094,163 13,447,330 Other operating income 3,838,686 2,634,400 Cost of sales (10,191,170) (10,651,939) Changes in Inventories of finished goods and work in (5,996,440) (1,340,849) progress External supplies and services (13,636,818) (12,011,198) |
th Quarter 12 1 |
|---|---|
| Staff costs (9,296,618) (9,247,269) |
|
| Depreciation and amortisation (2,796,481) (3,325,742) |
|
| Provisions and impairment losses (1,818,598) (4,623,665) |
|
| Other operating expenses (1,260,520) (1,017,247) |
|
| Operational profit/(loss) (3,017,538) (11,017,933) |
|
| Financial Expenses (3,365,410) (2,848,492) |
|
| Financial Income 300,128 |
460,650 |
| Profit/(Loss) in associated undertakings 1,388,964 (1,395,660) |
|
| Investment income 3,540,423 |
837,161 |
| Profit/(Loss) before taxation (1,153,433) (13,964,274) |
|
| Taxation 2,059,974 |
169,571 |
| Profit/(Loss) for the period 906,541 (13,794,703) |
|
| Attributable to: | |
| Equity holders of Sonae Capital 1,254,886 (13,329,701) |
|
| Non-controlling interests (348,345) |
(465,002) |
| Profit/(Loss) per share | |
| Basic 0.004966 (0.053460) |
|
| Diluted 0.004966 (0.053460) |
The accompanying notes are part of these financial statements.
1Prepared in accordance with IAS 34 - Interim Financial Reporting and unaudited.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Amounts expressed in euro)
| 31.12.2013 | 12.12.2012 | |
|---|---|---|
| Consolidated net profit/(loss) for the period | (13,249,653) | (11,726,819) |
| Items that may be reclassified subsequently to net profit / (loss): | ||
| Changes in the currency translation differences | (246,683) | (99,523) |
| Share of other comprehensive income of associates and joint ventures accounted for by the equity method (Note 5) |
2,694,592 | (128,605) |
| Change in the fair value of assets available for sale | (743,938) | 153,082 |
| Change in the fair value of cash flow hedging derivatives | 1,186,537 | (589,966) |
| Tax related to other comprehensive income captions | 178,282 | - |
| Others | - | (365,685) |
| Other comprehensive income for the period | 3,068,790 | (1,030,697) |
| Total comprehensive income for the period | (10,180,863) | (12,757,516) |
| Attributable to: | ||
| Equity holders of Sonae Capital | (10,079,251) | (12,108,253) |
| Non-controlling interests | (101,612) | (649,263) |
The accompanying notes are part of these financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Amounts expressed in euro)
| th Quarter 13 1 4 |
th Quarter 12 1 4 |
|
|---|---|---|
| Consolidated net profit/(loss) for the period | 906,541 | (13,794,704) |
| Items that may be reclassified subsequently to net profit / (loss): | ||
| Changes in the currency translation differences | (96,570) | (1,265,906) |
| Share of other comprehensive income of associates and joint ventures accounted for by the equity method (Note 5) |
501,185 | 196,247 |
| Change in the fair value of assets available for sale | (1,996,712) | 153,082 |
| Change in the fair value of cash flow hedging derivatives | 280,036 | 183,988 |
| Tax related to other comprehensive income captions | 499,178 | - |
| Others | - | (365,685) |
| Other comprehensive income for the period | (812,883) | (1,098,274) |
| Total comprehensive income for the period | 93,658 | (14,892,978) |
| Attributable to: | ||
| Equity holders of Sonae Capital | 464,349 | (14,445,124) |
| Non-controlling interests | (370,691) | (447,854) |
The accompanying notes are part of these financial statements.
1 Prepared in accordance with IAS 34 - Interim Financial Reporting and unaudited.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE TWELVE MONTHS ENDED 31 DECEMBER 2013 AND 2012
(Amounts expressed in Euro)
| Attributable to Equity Holders of Sonae Capital | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Share Capital |
Own Shares |
Demerger Reserve (Note 16) |
Translation Reserves |
Fair Value Reserves |
Hedging Reserves |
Other Reserves and Retained Earnings |
Sub total | Net Profit/(Loss) |
Total | Non Controlling Interests |
Total Equity | |
| Balance as at 1 January 2012 | 250,000,000 | (36,143) | 132,638,253 (1,179,502) | - (1,737,980) | (55,049,957) | 74,670,814 | 2,994,272 | 327,628,943 | 9,241,777 | 336,870,720 | ||
| Total consolidated comprehensive income for the period | - | - | - | 1,168,016 | 153,082 | (599,196) | (1,738,152) | (1,016,250) | (11,092,003) | (12,108,253) | (649,263) | (12,757,516) |
| Appropriation of profit of 2011: | ||||||||||||
| Transfer to legal reserves and retained earnings | - | - | - | - | - | - | 2,994,272 | 2,994,272 | (2,994,272) | - | - | - |
| Acquisition of own shares | - | (228,562) | - | - | - | - | - | - | - | (228,562) | - | (228,562) |
| Changes in the percentage of capital held in affiliated | - | - | - | - | - | - | - | - | - | - | 119,556 | 119,556 |
| companies Other changes |
- | - | - | - | - | - | (42,667) | (42,667) | - | (42,667) | (4,431) | (47,098) |
| Balance as at 31 December 2012 | 250,000,000 | (264,705) | 132,638,253 | (11,486) | 153,082 (2,337,176) | (53,836,504) | 76,606,169 | (11,092,003) | 315,249,461 | 8,707,639 | 323,957,100 | |
| Balance as at 1 January 2013 | 250,000,000 | (264,705) | 132,638,253 | (11,486) | 153,082 (2,337,176) | (53,836,504) | 76,606,169 | (11,092,003) | 315,249,461 | 8,707,639 | 323,957,100 | |
| Total consolidated comprehensive income for the period | - | - | - | (178,136) (743,938) | 1,170,322 | 2,872,874 | 3,121,122 | (13,200,373) | (10,079,251) | (101,612) | (10,180,863) | |
| Appropriation of profit of 2012: | ||||||||||||
| Transfer to legal reserves and retained earnings | - | - | - | - | - | - | (11,092,003) (11,092,003) | 11,092,003 | - | - | - | |
| Dividends paid | - | - | - | - | - | - | - | - | - | - | (304,254) | (304,254) |
| Acquisition of own shares | - | (859,420) | - | - | - | - | - | - | - | (859,420) | - | (859,420) |
| Changes in the percentage of capital held in affiliated | - | - | - | - | - | - | (742) | (742) | - | (742) | 548,518 | 547,776 |
| companies Other changes |
- | - | - | - | - | - | - | - | - | - | - | - |
| Balance as at 31 December 2013 | 250,000,000 | (1,124,125) | 132,638,253 | (189,622) (590,856) (1,166,854) | (62,056,375) | 68,634,546 | (13,200,373) | 304,310,048 | 8,850,291 | 313,160,339 | ||
The accompanying notes are part of these financial statements.
| OPERATING ACTIVITIES: Cash receipts from trade debtors 134,476,350 112,795,703 35,246,969 29,537,878 Cash receipts from trade creditors (86,603,132) (73,538,547) (22,795,751) (20,274,362) Cash paid to employees (35,239,523) (38,581,231) (9,551,637) (10,378,990) Cash flow generated by operations 12,633,695 675,925 2,899,581 (1,115,474) Income taxes (paid) / received (2,492,777) (1,359,996) (1,009,550) (1,298,533) Other cash receipts and (payments) relating to operating activities (1,005,464) 2,202,975 1,156,165 (110,012) Net cash flow from operating activities (1) 9,135,454 1,518,904 3,046,196 (2,524,019) INVESTMENT ACTIVITIES: Cash receipts arising from: Investments 47 16,079,307 29,223,861 3,218,903 20,018,958 |
|---|
| Tangible assets 3,088,787 312,100 1,996,431 106,019 |
| Intangible assets 9,417 - - - |
| Interest and similar income 224,683 649,850 17,601 163,142 |
| Dividends 220,681 214,698 - - |
| 19,622,875 30,400,509 5,232,935 20,288,119 |
| Cash Payments arising from: |
| Investments 47 (69,448) (292,060) (123) 32,658 |
| Tangible assets (5,207,162) (12,047,596) (656,564) (4,216,597) |
| Intangible assets (128,877) (838,845) (6,027) (421,405) |
| Loans granted (476,203) (10,387) - (10,387) |
| (5,881,690) (13,188,888) (662,714) (4,615,731) |
| Net cash used in investment activities (2) 13,741,185 17,211,621 4,570,221 15,672,388 |
| FINANCING ACTIVITIES: |
| Cash receipts arising from: |
| Loans obtained 24,373,209 38,418,299 666,930 (12,905,235) |
| Capital increases, additional paid in capital and share premiums - 75,985 - 75,985 |
| 24,373,209 38,494,284 666,930 (12,829,250) |
| Cash Payments arising from: |
| Loans obtained (33,152,716) (44,895,257) (6,267,616) 762,834 |
| Interest and similar charges (12,566,639) (12,456,940) (1,913,692) (1,581,467) |
| Dividends (305,254) - (4,254) - |
| Purchase of own shares (859,420) (228,562) (358,072) (163,705) |
| (46,883,029) (57,580,759) (8,543,634) (982,338) |
| Net cash used in financing activities (3) (22,509,820) (19,086,475) (7,876,704) (13,811,588) |
| Net increase in cash and cash equivalents (4) = (1) + (2) + (3) 366,819 (355,950) (260,287) (663,219) |
| Effect of foreign exchange rate 53,664 20,968 5,202 8,855 |
| Cash and cash equivalents at the beginning of the period 21 2,609,152 2,986,070 3,187,796 3,281,226 |
| Cash and cash equivalents at the end of the period 21 2,922,307 2,609,152 2,922,307 2,609,152 |
The accompanying notes are part of these financial statements.
1 Prepared in accordance with IAS 34 - Interim Financial Reporting and unaudited.
(Amounts expressed in Euro)
________________________________________________
SONAE CAPITAL, SGPS, SA ("Company", "Group" or "Sonae Capital") whose head-office is at Lugar do Espido, Via Norte, Apartado 3053, 4471-907 Maia, Portugal, is the parent company of a group of companies, as detailed in Notes 5 to 7 ("Sonae Capital Group") and was set up on 14 December 2007 as a result of the demerger of the shareholding in SC, SGPS, SA (previously named Sonae Capital, SGPS, SA) from Sonae, SGPS, SA, which was approved by the Board of Directors on 8 November 2007 and by the Shareholder's General Meeting held on 14 December 2007.
Reflecting the current management structure, the reporting segments were revised, addressing the three strategic business areas identified in the Group:
The non-strategic assets (including non-tourism real estate assets and financial shareholdings) are included in the segment "Other assets".
The main accounting policies adopted in preparing the accompanying consolidated financial statements are as follows:
________________________________________________
The accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS" – previously named International Accounting Standards – "IAS"), issued by the International Accounting Standards Board ("IASB") and Interpretations issued by the "International Financial Reporting Interpretations Committee" ("IFRIC"), previously named "Standing Interpretations Committee" ("SIC"), beginning on 1 January 2013.
Interim financial statements were presented quarterly, in accordance with IAS 34 – "Interim Financial Reporting".
The accompanying consolidated financial statements have been prepared from the books and accounting records of the Company and of its affiliated undertakings, on a going concern basis and under the historical cost convention, except for derivative financial instruments which are stated at fair value.
As at the date of the approval of these consolidated financial statements, the following standards have been endorsed by the European Union
a) In force for fiscal year 2013 and with no material impact on the consolidated financial statements at 31 December 2013:
| Date of endorsement by the EU |
Effective Date (Started on or after) |
|
|---|---|---|
| Amendments to IAS 1 - Presentation of Items of Other Comprehensive Income |
05-06-2012 | 01-07-2012 |
| Amendments to IAS 19 - Employee Benefits | 05-06-2012 | 01-01-2013 |
| IFRS 1 - First-time Adoption of International Financial Reporting Standards - Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters |
11-12-2012 | 01-01-2013 |
| IAS 12 - Income Taxes - Deferred Tax: Recovery of Underlying Assets |
11-12-2012 | 01-01-2013 |
| IFRS 13 - Fair Value Measurement | 11-12-2012 | 01-01-2013 |
| IFRIC 20 - Stripping Costs in the Production Phase of a Surface Mine |
11-12-2012 | 01-01-2013 |
| Amendments to IFRS 7 Financial Instruments - Disclosure - Offsetting Financial Assets and Financial Liabilities |
13-12-2012 | 01-01-2013 |
| IFRS 1 - First-time Adoption of International Financial Reporting Standards – Government loans |
04-03-2013 | 01-01-2013 |
| Annual Amendments – IFRS 1, IAS 1, IAS 16, IAS 32 and IAS 34 | 27-03-2013 | 01-01-2013 |
b) In force for periods subsequent to 31 December 2013:
| Date of endorsement by the EU |
Effective Date (Started on or after) |
|
|---|---|---|
| IFRS 10 - Consolidated Financial Statements | 11-12-2012 | 01-01-2014 |
| IFRS 11 - Joint Arrangements | 11-12-2012 | 01-01-2014 |
| IFRS 12 - Disclosure of Interests in Other Entities | 11-12-2012 | 01-01-2014 |
| IAS 27 - Separate Financial Statements | 11-12-2012 | 01-01-2014 |
| IAS 28 - Investments in Associates and Joint Ventures | 11-12-2012 | 01-01-2014 |
| Amendments to IAS 32 Financial Instruments - Presentation - Offsetting Financial Assets and Financial Liabilities |
13-12-2012 | 01-01-2014 |
| Amendments to IFRS 10, IFRS 11 and IFRS 12 | 04-04-2013 | 01-01-2014 |
| Amendments to IFRS 10, IFRS 12 and IAS 27 | 20-11-2013 | 01-01-2014 |
| Amendments to IAS 39 – Financial Instruments: Recognition and Measurement |
19-12-2013 | 01-01-2014 |
| Amendments to IAS 36 – Impairment of Assets | 19-12-2013 | 01-01-2014 |
The adoption of the above mentioned standards has not led to material impacts on the consolidated financial statements of Sonae Capital at 31 December 2013.
The consolidation methods adopted by the Group are as follows:
Investments in companies in which the Group owns, directly or indirectly, more than 50% of the voting rights at Shareholders' General Meetings or is able to establish financial and operational policies so as to benefit from its activities (definition of control normally used by the Group), are included in the consolidated financial statements using the full consolidation method. Equity and net profit attributable to minority shareholders are shown separately, under the caption Non-controlling interests, in the consolidated balance sheet and in the consolidated income statement, respectively. Companies included in the consolidated financial statements are listed in Note 5.
Comprehensive income and other components of equity are attributable to non-controlling interests, even if these captions show negative values.
Assets and liabilities of each Group company are measured at their fair value at the date of acquisition and this measurement may be adjusted within 12 months from the date of acquisition. Any excess of the cost of acquisition over the Group's interest in the fair value of the identifiable net assets acquired is recognised as goodwill (Note 2.2.c)). Any excess of the Group's share in the fair value of the identifiable net assets acquired over cost is recognized as income in profit or loss for the period of acquisition, after reassessment of the estimated fair value of net assets acquired. Non-controlling interests include their proportion of the fair value of net identifiable assets and liabilities recognised on acquisition of Group companies.
The results of affiliated companies acquired/sold during the period are included in the income statement since the date of acquisition or until the date of sale.
Adjustments to the financial statements of Group companies are performed, whenever necessary, in order to adapt accounting policies to those used by the Group. All intragroup transactions, balances, income and expenses and distributed dividends are eliminated on consolidation.
Financial investments in companies excluded from consolidation are recorded at acquisition cost net of impairment losses (Note 7).
Whenever the Group has, in substance, control over other entities created for a specific purpose, even if no share capital interest is directly held in those entities, these are consolidated by the full consolidation method. Such entities, when applicable, are disclosed in Note 5.
Investments in associated companies (companies where the Group exercises significant influence but does not establish financial and operational policies – usually corresponding to holdings between 20% and 50% in a company's share capital) and in jointly controlled companies are accounted for in accordance with the equity method.
Under the equity method, investments are recorded at cost, adjusted by the amount corresponding to the Group's share of changes in equity (including net profit) of associated and jointly controlled companies and by dividends received.
Any excess of the cost of acquisition over the Group's share in the fair value of the identifiable net assets acquired is recognised as goodwill (Note 2.2.c)), which is included in the caption Investment in associated and jointly controlled companies. Any excess of the Group's share in the fair value of the identifiable net assets acquired over cost is recognised as income in the profit or loss for the period of acquisition, after reassessment of the estimated fair value of the net assets acquired.
An assessment of investments in associated and jointly controlled companies is performed when there is an indication that the asset might be impaired. Any impairment loss is disclosed in the income statement. Impairment losses recorded in prior years that are no longer justifiable are reversed.
When the Group's share of losses exceeds the carrying amount of the investment, this is reported at nil value and recognition of losses is discontinued, unless the Group is committed beyond the value of its investment.
The Group's share in unrealized gains arising from transactions with associated and jointly controlled companies is eliminated. Unrealized losses are eliminated, but only to the extent that there is no evidence of impairment of the asset transferred.
Investments in associated and jointly controlled companies are disclosed in Note 6.
The excess of the cost of acquisition of investments in group, jointly controlled and associated companies over the Group's share in the fair value of the assets and liabilities of those companies at the date of acquisition is shown as Goodwill (Note 12) or as Investments in associated and jointly controlled companies (Note 6).
The excess of the cost of acquisition of investments in foreign companies over the fair value of their identifiable assets and liabilities at the date of acquisition is calculated using the functional currency of each of those companies. Translation to the Group's currency (Euro) is made using the closing exchange rate. Exchange rate differences arising from this translation are disclosed in Currency Translation Reserves.
Goodwill is not amortised, but is subject to impairment tests on an annual basis. The recoverable amount is determined based on the business plans used in the management of the Group or on valuation reports prepared by independent entities.
Impairment losses identified in the period are disclosed in the income statement under Provisions and impairment losses, and may not be reversed.
Any excess of the Group's share in the fair value of identifiable assets and liabilities in Group, jointly controlled and associated companies over costs, is recognised as income in the profit and loss for the period, at the date of acquisition, after reassessment of the fair value of the identifiable assets and liabilities acquired.
Assets and liabilities denominated in foreign currencies in the individual financial statements of foreign companies are translated to euro using exchange rates at the balance sheet date. Profit and loss and cash flows are converted to euro using the average exchange rate for the period. Exchange rate differences originated after 1 January 2004 are recorded as equity under Currency Translation Reserves. Exchange rate differences that originated prior to 1 January 2004 (date of transition to IFRS) were written-off through Retained earnings.
Goodwill and fair value adjustments arising from the acquisition of foreign companies are recorded as assets and liabilities of those companies and translated to euro using exchange rates at the balance sheet date.
Whenever a foreign company is sold (in whole or in part), the share of the corresponding accumulated exchange rate differences is recorded in the income statement as a gain or loss on the disposal, in the caption Investment income.
Exchange rates used on translation of foreign group, jointly controlled and associated companies are listed below:
| 31.12.2013 | 31.12.2012 | |||
|---|---|---|---|---|
| End of the Period | Average of Period | End of the Period | Average of Period | |
| Mozambican Metical | 0.02418 | 0.02498 | - | - |
| Brazilian Real | 0.30697 | 0.35076 | 0.36988 | 0.39996 |
| Angolan kwanza | 0.00743 | 0.00780 | 0.00791 | 0.00817 |
Source: Bloomberg
Tangible assets acquired up to 1 January 2004 (transition date to IFRS) are recorded at acquisition cost, or revaluated acquisition cost, in accordance with generally accepted accounting principles in Portugal until that date, net of depreciation and accumulated impairment losses.
Tangible assets acquired after that date is recorded at acquisition cost, net of depreciation and accumulated impairment losses.
Depreciation is calculated on a straight line basis, once the asset is available for use, over the expected useful life for each class of assets and disclosed in Amortisation and depreciation in the consolidated profit and loss account.
Impairment losses in tangible assets are accounted for in the year when they are estimated, and are disclosed in Impairment losses in the consolidated profit and loss account, except for those relating to Inventories whose impairment is recorded in Cost of goods sold and materials consumed.
Depreciation rates used correspond to the following estimated useful lives:
| Years | |
|---|---|
| Buildings | 10 to 50 |
| Plant and machinery | 10 to 20 |
| Vehicles | 4 to 5 |
| Tools | 4 to 8 |
| Fixture and fittings | 3 to 10 |
| Other tangible assets | 4 to 8 |
Maintenance and repair costs related to tangible assets are recorded directly as expenses in the year they are incurred.
Tangible assets in progress represent fixed assets still under construction/development and are stated at acquisition cost net of impairment losses. These assets are depreciated from the date they are completed or start being used.
Gains or losses on sale or disposal of tangible assets are calculated as the difference between the selling price and the carrying amount of the asset at the date of its sale/disposal. These are recorded in the income statement under either other operational income or other operational expenses.
Intangible assets are stated at acquisition cost, net of depreciation and accumulated impairment losses. Intangible assets are only recognised if it is probable that future economic benefits will flow from them, if they are controlled by the Group and if their cost can be reliably measured.
Expenditure on research associated with new technical know-how is recognised as an expense recorded in the income statement when it is incurred.
Expenditure on development is recognised as an intangible asset if the Group demonstrates the technical feasibility and its intention to complete the asset, its ability to sell or use it and the probability that the asset will generate future economic benefits. Expenditure on development which does not fulfil these conditions is recorded as an expense in the period in which it is incurred.
Internal costs associated with maintenance and development of software is recorded as an expense in the period in which they are incurred. Only costs directly attributable to projects for which the generation of future economic benefits is probable are capitalized as intangible assets.
The Group adopted IFRIC 12 – Service Concession Arrangements from 2009 onwards whenever an affiliated undertaking enters into a service concession arrangement with a public sector entity to provide services to the public. The Troia Marina is the sole service concession arrangement to which this interpretation is applicable. In this case, costs incurred with building the infrastructure for the marina were recorded as an intangible asset which is amortised, on a straight line, over the period of the arrangement, because the affiliated undertaking was given rights to charge users of the public service but has no unconditional contractual right to receive cash from the grantor.
Amortisation is calculated on a straight line basis, once the asset is available for use, over the expected useful life which normally is between 3 and 6 years, and are disclosed in Amortisation and Depreciation in the consolidated profit and loss account, except for Troia Marina assets, recorded as Intangible assets under IFRIC 12 - Service Concession Arrangements, which are amortised over the period of the arrangement (50 years).
Lease contracts are classified as (i) a finance lease if the risks and rewards incidental to ownership lie with the lessee and (ii) as an operating lease if the risks and rewards incidental to ownership do not lie with the lessee.
Whether a lease is classified as finance or an operating lease depends on the substance of the transaction rather than the form of the contract.
Tangible assets acquired through finance lease contracts are recorded as assets and corresponding obligations as liabilities in the balance sheet. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability, at the lower of fair value and present value of minimum lease payments up to the end of the lease. Both the finance charge and the depreciation expense for depreciable assets are taken to the income statement in the period in which they are incurred.
Lease payments under operating lease contracts are recognised as an expense on a straight line basis over the lease term.
Where the Group acts as a lessor in operating leases, the value of assets leased is maintained in the Group's balance sheet and related rents are taken to the profit and loss account on a straight line basis over the period of the lease.
Government grants are recognised at fair value when there is reasonable assurance that they will be received and that the Group will comply with the conditions attaching to them.
Investment subsidies related to the acquisition of fixed assets are recognised as deferred income under other current liabilities that are taken to the income statement, under other operating profit, on a systematic basis over the estimated useful life of the asset.
Assets are assessed for impairment at each balance sheet date whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognised in the income statement under Provisions and impairment losses.
The recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm's length transaction less the costs of disposal. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if this is not possible, for the cash-generating unit to which the asset belongs.
Reversal of impairment losses recognised in prior years is only recorded when it is concluded that the impairment losses recognised for the asset no longer exist or have decreased. This analysis is performed whenever there is an indication that the impairment loss previously recognised has been reversed. The reversal is recorded in the income statement as Operational income. However, the increased carrying amount of an asset due to a reversal of an impairment loss is recognised to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised for that asset in prior years.
Borrowing costs are normally recognised as an expense in the period in which they are incurred.
Borrowing costs directly attributable to the acquisition, construction or production of tangible and real estate projects included under Inventories are capitalised as part of the cost of the qualifying asset. Borrowing costs are capitalised from the time of preparation of the activities to construct or develop the asset up to the time the production or construction is complete or when asset development is interrupted. Any income earned on funds temporarily invested pending their expenditure on the qualifying asset, is deducted from the borrowing costs that qualify for capitalisation.
Non-current assets (or disposal groups) are classified as held for sale if the carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case the sale must be highly probable and the asset or disposal group is available for immediate sale in its present condition. In addition, the sale should be expected to occur within 12 months from the date of classification.
Non-current assets (or disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. These assets are not depreciated since the date they were classified as available for sale.
Goods for sale and raw materials are stated at the lower of cost, net of discounts obtained or estimated, and net realisable value. Cost is determined on a weighted average basis. Goods for sale include mostly land for real estate developments.
Finished goods and work in progress are stated at the lower of the weighted average production cost or net realisable value. Production cost includes cost of raw materials, labour costs and overheads (including depreciation of production equipment based on normal levels of activity). Work in progress includes mostly resorts and real estate developments for sale in the normal course of business.
Net realisable value is the estimated selling price less estimated costs of completion and estimated costs necessary to make the sale.
Differences between cost and net realisable value, if negative, are shown as operating expenses under Cost of sales or Changes in Inventories of finished goods and work in progress, depending on whether they refer to goods for sale and raw materials or finished goods and work in progress.
Provisions are recognised when, and only when, the Group has an obligation (legal or constructive) resulting from a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of that obligation. Provisions are reviewed and adjusted at the balance sheet date to reflect the best estimate as of that date.
Restructuring provisions are recorded by the Group whenever a formal and detailed restructuring plan exists and that plan has been communicated to the parties involved.
Financial instruments were classified in the categories presented in the consolidated balance sheet as detailed in Note 9.
Investments are classified into the following categories:
Held to maturity investments are classified as non-current assets unless they mature within 12 months of the balance sheet date. Investments classified as held to maturity have defined maturities and the Group has the intention and ability to hold them until the maturity date.
Investments measured at fair value through profit or loss includes investments held for negotiation, which the Group acquires with a view to their disposal within a short time period. They are shown in the consolidated balance sheet as Current Investments.
The Group classifies as investments available for sale, those which are not considered as investments measured at fair value through profit or loss nor as investments held to maturity. These assets are classified as noncurrent assets, unless there is an intention to dispose of them in a period of less than 12 months from the balance sheet date.
All purchases and sales of investments are recognised on the trade date, independently of the settlement date.
Investments are initially measured at cost, which is the fair value of the consideration paid for them, including transaction costs.
Available-for-sale investments and investments measured at fair value through profit or loss are subsequently carried at fair value, without any deduction for transaction costs which may be incurred on sale, by reference to their quoted market price at the balance sheet date. Investments in equity instruments that do not have a quoted market price and whose fair value cannot be reliably measured are stated at cost, less impairment losses.
Gains or losses arising from a change in fair value of available-for-sale investments are recognised directly in equity, under Fair value reserve, included in Reserves and retained earnings until the investment is sold or otherwise disposed of, or until it is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is transferred to net profit or loss for the period.
Changes in the fair value of investments measured at fair value through profit or loss are included in the consolidated income statement for the period.
Held to maturity investments are carried at amortised cost using the effective interest rate, net of capital reimbursements and interest income received.
Loans and accounts receivable are booked at amortised cost using the effective interest method less any impairment losses.
Financial income is calculated using the effective interest rate, except for amounts receivable within a very short time period, for which the income receivable is immaterial.
These financial investments arise when the Group supplies money, goods or services directly to a debtor without the intention to negotiate the debt involved.
Loans and accounts receivable are classified as current assets, expect in cases where the maturity date is more than 12 months from the date of the balance sheet, when they are classified as non-current assets. These financial investments are included in the classes identified in Note 9.
Amounts owing from Customers and other third party debts are booked at their nominal value and shown in the consolidated balance sheet less any impairment losses, recognised in the caption Losses due to impairment in receivables in order to reflect their net realisable value. These captions, when current, do not include interest, since the discount impact is considered immaterial.
Impairment losses are booked following the events that have taken place, which indicate objectively and in a quantifiable manner that the whole or a part of the debt will not be received. For this, each Group company takes into consideration market information which demonstrates that:
Recognised impairment losses equal the difference between the amount receivable in the accounts and the related present value of future estimated cash flows, discounted at the initial effective interest rate, which is considered to be zero, since the discount impact is considered immaterial, in those cases where a receipt is expected within less than a year.
Financial liabilities and equity instruments are classified and accounted for based on their contractual substance, independently from the legal form they assume.
Loans are recorded as liabilities at their nominal value, net of up-front fees and commissions related to the issuance of those instruments. Financial expenses are calculated based on the effective interest rate and are recorded in the income statement on an accruals basis, in accordance with the accounting policy defined in Note 2.16. The portion of the effective interest charge relating to up-front fees and commissions, if not paid in the period, is added to the book value of the loan.
Accounts payable are stated at their nominal value, since they do not bear interest and the discount impact is considered immaterial.
The Group uses derivatives in the management of its financial risks, only to hedge such risks and/or to optimise funding costs.
Derivatives classified as cash flow hedge instruments are used by the Group mainly to hedge interest rate risks on loans obtained. Conditions established for these cash flow hedge instruments are identical to those of the corresponding loans in terms of base rates, calculation rules, rate setting dates and repayment schedules of the loans and for these reasons they qualify as perfect hedges. Inefficiencies that may exist are shown in the caption Net Financial Income/Expenses in the consolidated income statement.
The Group's criteria for classifying a derivative instrument as a cash-flow hedge instrument include:
Cash-flow hedge instruments used by the Group to hedge the exposure to changes in interest rate of its loans are initially accounted for at cost and subsequently adjusted to their corresponding fair value. Changes in fair value of these cash flow hedge instruments are recorded in equity under the caption Hedging reserves, and then recognised in net financial income/expenses in the income statement over the same period in which the hedged instrument affects income statement.
Hedge accounting of derivative instruments is discontinued when the instrument matures or is sold. Whenever a derivative instrument can no longer be qualified as a hedging instrument, the fair value differences recorded in equity under the caption Hedging reserve are transferred to profit or loss of the period or to the carrying amount of the asset that resulted from the hedged forecast transaction. Subsequent changes in fair value are recorded in the income statement.
In those cases in which derivative instruments, in spite of having been negotiated with the abovementioned objectives (essentially derivatives in the form of interest rate options), in relation to which the company did not apply hedge accounting, are initially recorded at cost, if any, and subsequently measured at fair value. The changes in value resulting from the measurement at fair value, calculated using especially designed software tools are included in Net financial charges in the consolidated income statement.
When embedded derivatives exist, they are accounted for as separate derivatives when the risks and the characteristics are not closely related to economic risks and characteristics of the host contract, and this is not stated at fair value, and unrealised gains or losses recorded in the consolidated income statement.
In specific situations, the Group may use interest rate derivatives with the goal of obtaining fair value cover. In these situations, derivatives are booked at their fair value in the consolidated financial statements. In situations in which the derivative involved is not measured at fair value (in particular borrowings that are measured at amortised cost), the effective share of cover will be adjusted to the accounting value of the derivative covered through the profit and loss account.
Equity instruments are those that represent a residual interest on the Group's net assets and are recorded at the amount received, net of costs incurred with their issuance.
Cash and cash equivalents include cash on hand, cash at banks, term deposits and other treasury applications which mature in less than three months and are subject to insignificant risk of change in value.
In the consolidated statement of cash flows, cash and cash equivalents also include bank overdrafts, which are included in the balance sheet caption current bank loans.
Share-based payments result from Deferred Performance Bonus Plans that are referenced to the Sonae Capital, SGPS, SA share price and vest within a period of 3 years after being granted.
Share-based payment liabilities are measured at fair value on the date they are granted (normally in March of each year) and are subsequently remeasured at the end of each reporting period, based on the number of shares or share options granted and the corresponding fair value at the closing date. These obligations are stated as Staff costs and other liabilities, and are recorded on a straight-line basis, between the date the shares are granted and their vesting date, taking into consideration the time elapsed between these dates, when the Group has the choice to settle the transaction in cash.
Contingent liabilities are not recorded in the consolidated financial statements. Instead they are disclosed in the notes to the financial statements, unless the probability of a cash outflow is remote, in which case, no disclosure is made.
Contingent assets are not recorded in the consolidated financial statements but disclosed when future economic benefits are probable.
The tax charge for the year is determined based on the taxable income of companies included on consolidation and considers deferred taxation.
Current income tax is determined based on the taxable income of companies included on consolidation or of groups of companies included in tax consolidations, in accordance with the tax rules in force in the respective country of incorporation.
Deferred taxes are calculated using the balance sheet liability method, reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are calculated and annually remeasured using the tax rates that have been enacted or substantively enacted and therefore are expected to apply in the periods when the temporary differences are expected to reverse.
Deferred tax assets are recognised only when it is probable that sufficient taxable profits will be available against which the deferred tax assets can be used, or when taxable temporary differences are recognised and expected to reverse in the same period. At each balance sheet date a review is made of the deferred tax assets recognised, which are reduced whenever their future use is no longer probable.
Deferred taxes are recorded in the income statement, except if they relate to items directly recorded in equity. In these cases the corresponding deferred tax is recorded in equity.
Revenue from the sale of goods is recognised in the income statement when the risks and benefits have been transferred to the buyer and the amount of the revenue can be measured reasonably. Sales are recognised net of sales taxes and discounts and other expenses arising from the sale, and are measured as the fair value of the amount received or receivable.
Revenue from services rendered is recognised in the income statement taking into consideration the stage of completion of the transaction at the balance sheet date.
Revenue associated with work in progress is recognized at the end of each year as follows: when total amounts invoiced are higher than corresponding costs, the excess is recorded in other current liabilities; and when costs are higher than corresponding amounts invoiced the excess is recorded in Work in progress.
Revenue arising from contract variations, claims and completion premiums is recorded when these are agreed with the customer, or when negotiations are at an advanced stage and it is probable that these will be favourable to the Group.
Dividends are recognised as income in the year they are attributed to the shareholders.
Income and expenses are recorded in the year to which they relate, independently of the date of the corresponding payment or receipt. Income and expenses for which their real amount is not known are estimated.
Other current assets and other current liabilities include income and expenses of the reporting year which will only be invoiced in the future. Those captions also include receipts and payments that have already occurred but will only correspond to income or expenses of future years, when they will be recognised in the income statement.
Transactions in currencies other than the Euro, are translated to Euro using the exchange rate as at the transaction date.
At each balance sheet date, all monetary assets and liabilities expressed in foreign currencies are translated to the functional currency of each foreign company at the exchange rates as at that date. All non-monetary assets and liabilities recorded at fair value and stated in foreign currencies are converted to the functional currency of each company, using the exchange rate at the date the fair value was determined.
Exchange gains and losses arising from differences between historical exchange rates and those prevailing at the date of collection, payment or the date of the balance sheet, are recorded as income or expenses of the period, except for those related to non-monetary assets or liabilities, for which adjustments to fair value are directly recorded under equity.
Events after the balance sheet date that provide additional information about conditions that existed at the balance sheet date (adjusting events), are reflected in the consolidated financial statements. Events after the balance sheet date that are non-adjusting events are disclosed in the notes when material.
The most significant accounting estimates reflected in the financial statements are as follows:
Estimates were based on the best information available at the date of the preparation of the financial statements and on the best knowledge and experience of past and/or current events. These estimates may, however, be affected by subsequent events which are not foreseeable at the present date. Changes to these estimates, which take place after the date of the financial statements, will be recognised prospectively in the income statement, in accordance with IAS 8.
The main estimates and assumptions used relating to future events included in the consolidated financial statements are described in the corresponding notes attached.
Financial information regarding business segments is included in Note 48.
As a result of maintaining its debt in the consolidated balance sheet at variable rates, and the resulting cash flows from interest payments, the Group is exposed to a Euro interest rate risk.
________________________________________________
In view of the fact that:
(converted to fixed rate through use of derivatives), but rather has opted for a dynamic approach to monitoring exposure, which aligns market conditions to the real exposure of the Group, in order to avoid the possibility of exposure that could have a real impact on the consolidated results of the Group.
In view of the above, the Group policy concerning this issue defines a case by case review of each potential transaction, such that any contract for derivatives must follow the following principles:
Interest rate sensitivity is based on the following assumptions:
Changes in market interest rates affect income and expenses related to fixed interest rate financial instruments, in cases in which these are recognised at fair value. As such, all financial instruments with fixed interest rates booked at amortised cost, are not subject to interest rate risk, as defined in IFRS 7;
In the case of instruments designated as fair value hedges of interest rate risk, when changes to the fair value of the hedging instrument, which are attributable to movements in interest rates, are almost completely compensated in the financial results in the same period, these financial instruments are also considered not to be exposed to interest rate risks;
Given the above mentioned assumptions, if interest rates of financial instruments denominated in euro had been 0.75 percentage points higher/lower, the consolidated net profit before tax of the Group as at 31 December 2013 would have been higher/lower by 1,073,964 euro (as at 31 December 2012 they would have been lower by 1,141,051 euro and higher by 1,147,308 euro). The impact in equity (excluding the impact on net profit) of the interest rate sensitivity analysis as at 31 December 2013 would have been lower/higher by around 0 euro (as at 31 December 2012 the impact would have been lower/higher by around 0 euro).
The Sonae Capital Group, as a Group mainly operating in the Iberian Peninsula, has an immaterial exposure to exchange rate risk.
In relation to translation risks, given that almost all of shareholders' funds and loans to affiliates are denominated in euro, there is no significant exposure to this risk.
In relation to transaction a risk, whenever exposure arises in this area, the risk is mainly managed through forward exchange rate contracts, in order to eliminate the volatility of forward exchange rate fluctuations, and thus increase cash flow certainty. From time to time, and if the amounts involved and degree of uncertainty are relevant, the Company, with approval from the Board of Directors, may use options.
In view of the low volume of balances in foreign currency, no exchange rate sensitivity analysis was carried out.
The Group is exposed to risks arising from the value of investments made in financial shareholdings. However, these investments are in general made with strategic objectives in mind and not for current trading.
Credit risks at Sonae Capital arise mainly from (i) debts from customers relating to operational activity, (ii) its relationships with financial institutions in the course of its day to day business activity, and (iii) the risk of noncompliance by business counterparts in portfolio transactions.
Customer Credit: The management of credit risk at Sonae Capital is structured to the specific needs of the businesses of the Group, always taking into consideration:
Financial Institutions: The credit risk is linked to possible noncompliance by financial institutions, to which the Group is contractually bound, in its normal operational activity, term deposits, cash balances and derivatives.
To mitigate this risk, the Group:
Shareholding Buy/Sale transactions: In the course of its business, the Group is exposed to the credit risk of counterparts with whom it agrees transactions concerning investments in shareholdings. In these cases, the means used to mitigate risks are determined on a one on one basis, in order to take into account the specifics of the transaction, with the constant supervision of the Board of Directors. Despite the variability of the means used, there exists always the possibility of using normal market methods, namely carrying out due diligences, obtaining financial information concerning the counterpart in question, or the pledging of an asset which is released when the financial transaction has been completed, requesting bank guarantees, setting up escrow accounts, obtaining collateral, among others.
The objective of liquidity risk management is to ensure at any given moment that the Group has the financial capability under favourable market conditions to: (i) comply with its payment obligations when these fall due and (ii) ensure in a timely manner the appropriate financing for the development of its businesses and strategy.
To that end, the Group aims at maintaining a flexible financial structure, so that the process of managing liquidity within the Group includes the following key aspects:
Changes to international accounting standards that came into force on or after 1 January 2013, did not have material impacts in the financial statements as at 31 December 2013.
________________________________________________
Group companies included in the consolidated financial statements, their head offices and percentage of the share capital held by the Group as at 31 December 2013 and 31 December 2012, are as follows:
| Percentage of capital held | ||||||||
|---|---|---|---|---|---|---|---|---|
| 31 December 2013 | 31 December 2012 | |||||||
| Company | Head Office | Direct | Total | Direct | Total | |||
| Sonae Capital SGPS, SA | Maia | Holding | Holding | Holding | Holding | |||
| Sonae Turismo | ||||||||
| Aqualuz - Turismo e Lazer, Lda | a) | Lagos | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Atlantic Ferries - Traf.Loc.Flu.e Marit., SA | a) | Grândola | 83.41% | 83.41% | 83.41% | 83.41% | ||
| Casa da Ribeira - Hotelaria e Turismo, SA | a) | Marco de Canaveses |
100.00% | 100.00% | 100.00% | 100.00% | ||
| Golf Time - Golfe e Inv.Turisticos, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Imoareia Investimentos Turísticos,SGPS, SA | a) | Matosinhos | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Imopenínsula - Sociedade Imobiliária, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Imoresort - Sociedade Imobiliária, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Marina de Tróia, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Marmagno-Expl.Hoteleira Imob., SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Marvero-Expl.Hoteleira Imob., SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | ||
| 4) | Sete e Meio-Investimentos e Consultadoria,SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | |
| SII - Soberana Investimentos Imobiliários, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Solinca - Health & Fitness, SA | a) | Lisbon | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Solinca-Investimentos Turísticos, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Solinfitness - Club Málaga, SL | a) | Malaga (Spain) | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Solswim – Gestão e Expl.de Equip. Aquáticos, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Soltroia-Imob.de Urb.Turismo de Tróia, SA | a) | Lisbon | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Sonae Turismo - SGPS, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Sontur, BV | a) | Amsterdam (The Netherlands) |
100.00% | 100.00% | 100.00% | 100.00% | ||
| Tróia Market, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Tróia Natura, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Troiaresort - Investimentos Turísticos, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Troiaverde-Expl.Hoteleira Imob., SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Tulipamar-Expl.Hoteleira Imob., SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% |
| Ecociclo II – Energias, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
|---|---|---|---|---|---|---|---|
| Integrum Colombo – Energia, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Integrum-Energia, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Integrum Martim Longo - Energia, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Integrum Vale do Caima- Energia, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| 3) | Integrum Vale do Tejo – Energia, SA | a) | Maia | 100.00% | 100.00% | - | - |
| Refrigeration and HVAC | |||||||
| 7) | Sistavac Sistemas HVAC-R do Brasil, Lda | a) | São Paulo (Brazil) | 100.00% | 70.00% | 100.00% | 70.00% |
| PJP - Equipamento de Refrigeração, Lda | a) | Matosinhos | 100.00% | 70.00% | 100.00% | 70.00% | |
| Sistavac, SGPS, SA | a) | Matosinhos | 70.00% | 70.00% | 70.00% | 70.00% | |
| Sistavac, SA | a) | Matosinhos | 100.00% | 70.00% | 100.00% | 70.00% | |
| SKK-Central de Distr., SA | a) | Porto | 100.00% | 70.00% | 100.00% | 70.00% | |
| Sopair, SA | a) | Madrid (Spain) | 100.00% | 70.00% | 100.00% | 70.00% | |
| Other Assets | |||||||
| Bloco Q-Sociedade Imobiliária, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% | |
| Bloco W-Sociedade Imobiliária, SA | a) | Matosinhos | 100.00% | 100.00% | 100.00% | 100.00% | |
| Centro Residencial da Maia,Urban., SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Cinclus Imobiliária, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Contacto Concessões, SGPS, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Country Club da Maia-Imobiliaria, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| 5) | Cronosaúde – Gestão Hospitalar, SA | a) | Porto | 100.00% | 50.00% | 100.00% | 50.00% |
| Empreend.Imob.Quinta da Azenha, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| 1) | Fundo Especial de Investimento Imobiliário Fechado WTC |
a) | Maia | 99.82% | 99.82% | 99.82% | 99.82% |
| Imobiliária da Cacela, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Imoclub-Serviços Imobiliários, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Imodivor - Sociedade Imobiliária, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| 1) 6) |
Imobeauty, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% |
| Imohotel-Emp.Turist.Imobiliários, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Imoponte-Soc.Imobiliária, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Imosedas-Imobiliária e Serviços, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Implantação – Imobiliária, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Inparvi SGPS, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| 5) | Invesaude – Gestão Hospitalar, SA | a) | Maia | 100.00% | 50.00% | 100.00% | 50.00% |
| Martimope – Empreendimentos Turisticos, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Porturbe-Edificios e Urbanizações, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Praedium – Serviços, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Praedium II-Imobiliária, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Praedium-SGPS, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Prédios Privados Imobiliária, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Predisedas-Predial das Sedas, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% |
| Promessa Sociedade Imobiliária, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
|---|---|---|---|---|---|---|---|
| 5) | Saúde Atlântica - Gestão Hospitalar, SA | a) | Maia | 50.00% | 50.00% | 50.00% | 50.00% |
| SC Assets, SGPS, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| SC – Eng. e Promo Imobiliária,SGPS,SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% | |
| Sete e Meio Herdades - Investimentos Agrícolas e Turismo, SA |
a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | |
| Société de Tranchage Isoroy SAS | a) | Honfleur (France) |
100.00% | 100.00% | 100.00% | 100.00% | |
| Soconstrução, BV | a) | Amsterdam (The Netherlands) |
100.00% | 100.00% | 100.00% | 100.00% | |
| Soira-Soc.Imobiliária de Ramalde, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Sótaqua - Soc. de Empreendimentos Turísticos, SA |
a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Spinarq–Engenharia, Energia e Ambiente,SA | a) | Luanda (Angola) | 99.90% | 99.90% | 99.90% | 99.90% | |
| 3) | Spinarq-Moçambique, Lda | a) | Maputo (Mozambique) |
100.00% | 100.00% | - | - |
| Spinveste - Promoção Imobiliária, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Spinveste-Gestão Imobiliária SGII, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Spred SGPS, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Torre São Gabriel-Imobiliária, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Urbisedas-Imobiliária das Sedas, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |
| Vistas do Freixo-Emp.Tur.imobiliários,SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% | |
| 1) | World Trade Center Porto, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% |
| Others | |||||||
| Interlog-SGPS, SA | a) | Lisbon | 98.98% | 98.98% | 98.98% | 98.98% | |
| SC – Sociedade de Consultadoria, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% | |
| SC-SGPS, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% | |
| SC Finance, BV | a) | Amsterdam (The Netherlands) |
100.00% | 100.00% | 100.00% | 100.00% | |
| 2) | SKKFOR - Ser.For.e Desen. de Recursos, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 70.00% |
a) Majority of voting rights.
These group companies are consolidated using the full consolidation method as described in Note 2.2.a).
________________________________________________
Associated and jointly controlled companies included in the consolidated financial statements, their head offices and the percentage of share capital held by the Group as at 31 December 2013 and 31 December 2012 are as follows:
| Percentage of capital held | ||||||||
|---|---|---|---|---|---|---|---|---|
| 31 December 2013 | 31 December 2012 | Book Value | ||||||
| Company | Head Office |
Direct | Total | Direct | Total | 30 December 2013 |
31 December 2012 |
|
| Other Assets | ||||||||
| Andar - Sociedade Imobiliária, SA | Maia | 50.00% | 50.00% | 50.00% | 50.00% | 357,859 | 637,735 | |
| 1) | Sociedade de Construções do Chile, SA | Maia | 100.00% | 50.00% | 100.00% | 50.00% | - | - |
| 1) | Vastgoed One - Sociedade Imobiliária, SA | Maia | 100.00% | 50.00% | 100.00% | 50.00% | - | - |
| 1) | Vastgoed Sun - Sociedade Imobiliária, SA | Maia | 100.00% | 50.00% | 100.00% | 50.00% | - | - |
| Lidergraf - Artes Gráficas, Lda | Vila do Conde |
24.50% | 24.50% | 24.50% | 24.50% | 690,582 | 510,194 | |
| Norscut - Concessionária de Scut Interior Norte, SA |
Lisbon | 36.00% | 36.00% | 36.00% | 36.00% | 11,386,011 | 3,494,106 | |
| Operscut - Operação e Manutenção de Auto estradas, SA |
Lisbon | 15.00% | 15.00% | 15.00% | 15.00% | 24,000 | 24,000 | |
| Total | 12,458,452 | 4,666,035 |
1) Null investment values result from the adoption of the equity method in Andar – Sociedade Imobiliária, SA, holder of all of these investments.
Associated and jointly controlled companies are consolidated using the equity method.
Nil balances shown result from the reduction to acquisition cost of amounts determined by the equity method, discontinuing the recognition of its part of additional losses under the terms of IAS 28.
As at 31 December 2013 and 31 December 2012, aggregate values of main financial indicators of associated and jointly controlled companies can be analysed as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Total Assets | 668,902,549 | 684,639,926 |
| Total Liabilities | 590,182,432 | 628,141,343 |
| Income | 128,281,701 | 123,046,279 |
| Expenses | 112,365,691 | 114,807,275 |
During the periods ended 31 December 2013 and 2012, movements in investments of associated and jointly controlled companies may be summarized as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Opening balance as at 1 January | 4,697,978 | 60,092,179 |
| Acquisitions in the period | 37,000 | 195,600 |
| Disposals in the period | - | - |
| Equity method | 7,755,417 | 3,372,545 |
| Change in the consolidation method | - | (58,962,346) |
| Closing balance as at 31 December | 12,490,395 | 4,697,978 |
| Accumulated impairment losses (Note 22) | (31,943) | (31,943) |
| 12,458,452 | 4,666,035 |
The use of the equity method had the following impacts: 5,060,825 euro recorded on share of results of associated undertakings (3,501,150 euro at 31 December 2012), and 2,694,592 euro in changes in reserves (-128,605 euro at 31 December 2012).
Group companies, jointly controlled companies and associated companies excluded from consolidation, their head offices, percentage of share capital held and book value as at 31 December 2013 and 31 December 2012 are made up as follows:
| Percentage of capital held | ||||||||
|---|---|---|---|---|---|---|---|---|
| 31 December 2013 | 31 December 2012 | |||||||
| Company | Head Office |
Direct | Total | Direct | Total | 31 December 2013 |
31 December 2012 |
|
| Tourism | ||||||||
| Infratroia – Emp. de Infraest. de Troia, E.N. |
Grândola | 25,90% | 25,90% | 25,90% | 25,90% | 64,747 | 64,747 | |
| Other Assets | ||||||||
| Fundo de Investimento Imobiliário Fechado Imosede |
Maia | 25,85% | 25,85% | 32,36% | 32,36% | 38,654,123 | 49,286,915 | |
| Fundo de Investimento Imobiliário Imosonae Dois |
Maia | 0,06% | 0,06% | 0,06% | 0,06% | 124,892 | 124,934 | |
| Net, SA | Lisbon | 2,80% | 2,80% | 2,80% | 2,80% | 11,132 | 11,132 | |
| 1) | Sear - Sociedade Europeia de Arroz, SA |
Santiago do Cacém |
- | - | 15,00% | 15,00% | - | 150,031 |
| Fundo de Capital de Risco F-HITEC | Lisbon | 7,14% | 7,14% | 7,14% | 7,14% | 250,000 | 250,000 | |
| Other investments | 435,204 | 437,448 | ||||||
| Total (Note 9) | 39,540,098 | 50,325,207 | ||||||
| 1) Company disposed in the period. |
Null balances shown above result from deduction of impairment losses from related investments.
________________________________________________
During the year, Saúde Atlântica - Gestão Hospitalar, SA and its affiliates were sold:
| Percentage of capital held | ||||
|---|---|---|---|---|
| At the date of disposal | ||||
| Company | Head Office | Direct | Total | |
| Saúde Atlântica – Gestão Hospitalar, SA | Maia | 50,00% | 50,00% | |
| Cronosaúde – Gestão Hospitalar, SA | Porto | 100,00% | 50,00% | |
| Invesaúde – Gestão Hospitalar, SA | Porto | 100,00% | 50,00% |
Impacts in the consolidated financial statements at the exclusion date were as follows:
| Net assets excluded Tangible and intangible assets (Notes 10 and 11) 1,215,490 1,215,490 Inventories - - Other assets 4,312,803 3,322 Cash and cash equivalents 63,185 64,274 Other liabilities (5,022,214) (2,431,476) 569,264 (1,148,390) Goodwill (Note 12) 6,430 - 575,694 (1,148,390) Gain/(Loss) on exclusion 521,621 - 1,097,315 (1,148,390) Date of disposal of 31 December 2012 shareholding Sales and services rendered 2,340,616 3,109,033 Other operational income 99,581 187,470 Other operational expenses (2,227,531) (3,139,230) Net financial expenses (121,067) (212,273) Investment income 62,788 - Profit/(Loss) before taxation 154,387 (55,000) Taxation (41,747) (68,171) Profit/(Loss) for the period 112,640 (123,171) |
Date of disposal of shareholding |
31 December 2012 |
|---|---|---|
Financial Instruments, in accordance with the policies described in Note 2.1, were classified as follows:
| Financial Instruments | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Financial Assets | Note | Borrowings and accounts receivable |
Available for sale |
Investments held to maturity |
Sub-total | Assets not covered by IFRS 7 |
Total | ||
| As at 31 de December 2013 | |||||||||
| Non-Current Assets | |||||||||
| Other Investments | 13 | - | 39,540,098 | - | 39,540,098 | - | 39,540,098 | ||
| Other non-current assets | 14 | 19,570,690 | - | - | 19,570,690 | - | 19,570,690 | ||
| 19,570,690 | 39,540,098 | - | 59,110,788 | - | 59,110,788 | ||||
| Current Assets | |||||||||
| Trade account receivables | 16 | 20,872,540 | - | - | 20,872,540 | - | 20,872,540 | ||
| Other debtors | 17 | 8,951,082 | - | - | 8,951,082 | - | 8,951,082 | ||
| Cash and cash equivalents | 21 | 2,997,963 | - | - | 2,997,963 | - | 2,997,963 | ||
| 32,821,585 | - | - | 32,821,585 | - | 32,821,585 | ||||
| 52,392,275 | 39,540,098 | - | 91,932,373 | - | 91,932,373 | ||||
| As at 31 de December 2012 | |||||||||
| Non-Current Assets | |||||||||
| Other Investments | 13 | - | 50,325,207 | - | 50,325,207 | - | 50,325,207 | ||
| Other non-current assets | 14 | 20,481,928 | - | - | 20,481,928 | - | 20,481,928 | ||
| 20,481,928 | 50,325,207 | - | 70,807,135 | - | 70,807,135 | ||||
| Current Assets | |||||||||
| Trade account receivables | 16 | 23,475,283 | - | - | 23,475,283 | - | 23,475,283 | ||
| Other debtors | 17 | 7,703,322 | - | - | 7,703,322 | - | 7,703,322 | ||
| Cash and cash equivalents | 21 | 3,244,695 | - | - | 3,244,695 | - | 3,244,695 | ||
| 34,423,300 | - | - | 34,423,300 | - | 34,423,300 | ||||
| 54,905,228 | 50,325,207 | - | 105,230,435 | - | 105,230,435 |
| Financial Liabilities | Note | Financial liabilities recorded at amortised cost |
Liabilities not covered by IFRS 7 |
Total |
|---|---|---|---|---|
| As at 31 de December 2013 | ||||
| Non-Current Liabilities | ||||
| Bank Loans | 24 | 68,961,416 | - | 68,961,416 |
| Bonds | 24 | 59,773,468 | - | 59,773,468 |
| Other loans | 24 and 25 | 24,233,817 | - | 24,233,817 |
| Other non-current liabilities | 27 | 2,764,815 | 492,056 | 3,256,871 |
| 155,733,516 | 492,056 | 156,225,572 | ||
| Current Liabilities | ||||
| Bank Loans | 21 and 24 | 92,405,686 | - | 92,405,686 |
| Bonds | 24 and 25 | 3,645,254 | - | 3,645,254 |
| Trade Creditors | 29 | 15,756,800 | - | 15,756,800 |
| Other current liabilities | 30 | 3,691,809 | 3,311,719 | 7,003,528 |
| 115,499,549 | 3,311,719 | 118,811,268 | ||
| 271,233,065 | 3,803,775 | 275,036,840 | ||
| Financial Liabilities | Note | Financial liabilities recorded at amortised cost |
Liabilities not covered by IFRS 7 |
Total |
| As at 31 de December 2012 | ||||
| Non-Current Liabilities | ||||
| Bank Loans | 24 | 70,140,254 | - | 70,140,254 |
| Bonds | 24 | 59,655,971 | - | 59,655,971 |
| Other loans | 24 and 25 | 28,879,450 | - | 28,879,450 |
| Other non-current liabilities | 27 | 3,879,350 | 117,960 | 3,997,310 |
| 162,555,024 | 117,960 | 162,672,984 | ||
| Current Liabilities | ||||
| Bank Loans | 21 and 24 | 96,937,328 | - | 96,937,328 |
| Other loans | 24 and 25 | 3,701,920 | - | 3,701,920 |
| Trade Creditors | 29 | 17,589,482 | - | 17,589,482 |
| Other current liabilities | 30 | 2,363,836 | 2,086,034 | 4,449,870 |
| 120,592,567 | 2,086,034 | 122,678,601 | ||
| 283,147,591 | 2,203,994 | 285,351,585 |
During the periods ended 31 December 2013 and 2012, movements in tangible assets as well as in amortisation and accumulated impairment losses, are made up as follows:
________________________________________________
| Tangible Assets | |||||||
|---|---|---|---|---|---|---|---|
| Land and Buildings |
Plant and Machinery |
Vehicles | Fixtures and Fittings |
Others | Tangible Assets in progress |
Total Tangible Assets |
|
| Gross Cost: | |||||||
| Opening balance as at 1 January 2012 | 215,045,171 | 131,774,808 | 1,608,033 | 5,674,826 | 2,407,224 | 9,358,098 | 365,868,160 |
| Changes in consolidation perimeter (companies out) | - | (133,284) | - | (31,868) | (54,335) | - | (219,487) |
| Capital expenditure | 90,973 | 91,274 | 181,565 | 26,407 | 29,641 | 10,822,810 | 11,242,670 |
| Disposals | (617,236) | (1,979,838) | (100,136) | (395,263) | (26,479) | (2,325) | (3,121,277) |
| Exchange rate effect | - | (5,039) | (7,615) | (5,985) | (6,692) | - | (25,331) |
| Transfers | 9,748,793 | 13,642,690 | (106,145) | 10,935 | 66,748 | (8,072,751) | 15,290,270 |
| Opening balance as at 1 January 2013 | 224,267,701 143,390,611 | 1,575,702 | 5,279,052 | 2,416,107 | 12,105,832 | 389,035,005 | |
| Changes in consolidation perimeter (companies out) | - | (2,734,013) | - | (160,156) | (8,259) | (75) | (2,902,503) |
| Capital expenditure | 346,148 | 31,992 | 105,907 | 7,028 | 22,897 | 5,889,511 | 6,403,483 |
| Disposals | (686,162) | (1,975,372) | (71,012) | (315,868) | (41,255) | - | (3,089,669) |
| Exchange rate effect | - | (8,506) | (19,543) | (9,629) | (11,926) | - | (49,604) |
| Transfers | 753,792 | 1,587,128 | (3,416) | 34,703 | (460,862) | (1,952,906) | (41,561) |
| Closing balance as at 31 December 2013 | 224,681,479 140,291,840 | 1,587,638 | 4,835,130 | 1,916,702 | 16,042,362 | 389,355,151 | |
| Accumulated depreciation and impairment losses | |||||||
| Opening balance as at 1 January 2012 | 78,891,380 | 43,361,489 | 1,179,817 | 4,376,803 | 1,970,452 | - | 129,779,941 |
| Changes in consolidation perimeter (companies out) | - | (103,218) | - | (29,796) | (51,634) | - | (184,648) |
| Charges for the period 1) | 5,272,414 | 10,203,351 | 208,641 | 360,136 | 81,350 | - | 16,125,892 |
| Disposals 2) | (662,479) | (1,947,009) | (97,074) | (254,151) | (9,470) | - | (2,970,183) |
| Exchange rate effect | - | (1,702) | (3,301) | (4,237) | (3,994) | - | (13,234) |
| Transfers | 209,697 | 95,199 | (115,215) | (39,927) | 30,033 | - | 179,787 |
| Opening balance as at 1 January 2013 | 83,711,012 | 51,608,110 | 1,172,868 | 4,408,828 | 2,016,737 | - | 142,917,555 |
| Changes in consolidation perimeter (companies out) | - | (1,554,946) | - | (125,065) | (8,255) | - | (1,688,266) |
| Charges for the period 1) | 2,710,298 | 9,225,383 | 219,520 | 279,858 | 68,930 | - | 12,503,989 |
| Disposals 2) | (44,056) | (1,634,102) | (70,494) | (299,818) | (41,283) | - | (2,089,753) |
| Exchange rate effect | - | (3,001) | (10,554) | (6,915) | (6,850) | - | (27,320) |
| Transfers | (139) | (253,821) | (20,686) | (51,950) | (486,687) | - | (813,282) |
| Closing balance as at 31 December 2013 | 86,377,115 | 57,387,623 | 1,290,654 | 4,204,938 | 1,542,592 | - | 150,802,923 |
| Carrying amount | |||||||
| As at 31 December 2012 | 140,556,689 | 91,782,501 | 402,834 | 870,224 | 399,370 | 12,105,832 | 246,117,450 |
| As at 31 December 2013 | 138,304,364 | 82,904,217 | 296,984 | 630,192 | 374,110 | 16,042,362 | 238,552,228 |
1) Includes impairment losses amounting to 229,832 euro (2,992,249 euro at December 2012)
2) Includes reversal of impairment losses amounting to 136,248 (336,242 euro at December 2012).
31 December 2013
The acquisition cost of Tangible assets held by the Group under finance lease contracts amounted as at December 2013 to 37,383,648 euro (37,426,837 euro at December 2012) and their net book value as of those dates amounted to 26,818,349 euro and 28,859,002 euro, respectively (Note 25).
Major amounts included in the caption Tangible assets in progress, refer to the following projects:
| 31 December 2013 | 31 December 2012 | |||
|---|---|---|---|---|
| Troiaresort | 7,322,147 | 7,316,889 | ||
| Photovoltaic Project | 7,412,790 | 3,260,000 | ||
| Others | 1,307,425 | 1,528,943 | ||
| 16,042,362 | 12,105,832 |
During the periods ended 31 December 2013 and 2012, movements in intangible assets as well as in amortisation and accumulated impairment losses, are made up as follows:
| Intangible Assets | |||||||
|---|---|---|---|---|---|---|---|
| Patents and other similar rights |
Software | Others | Intangible Assets in progress |
Total Intangible Assets |
|||
| Gross Cost: | |||||||
| Opening balance as at 1 January 2012 | 7,805,800 | 2,586,420 | 174,822 | 66,927 | 10,633,969 | ||
| Changes in consolidation perimeter (companies out) | - | (22,464) | - | - | (22,464) | ||
| Capital expenditure | 184,500 | 17,884 | - | 695,744 | 898,128 | ||
| Disposals | (13,072) | (1,106,588) | (167,300) | - | (1,286,960) | ||
| Exchange rate effect | - | (2,360) | - | - | (2,360) | ||
| Transfers | 11,029 | 134,386 | 1,900 | (117,231) | 30,084 | ||
| Opening balance as at 1 January 2013 | 7,988,257 | 1,607,278 | 9,422 | 645,440 | 10,250,397 | ||
| Changes in consolidation perimeter (companies out) | (153,528) | (31,007) | - | - | (184,535) | ||
| Capital expenditure | - | 2,266 | - | 434,583 | 436,849 | ||
| Disposals | (15,868) | (11,639) | - | - | (27,507) | ||
| Exchange rate effect | - | (3,761) | - | - | (3,761) | ||
| Transfers | 15,176 | 648,660 | - | (644,367) | 19,469 | ||
| Closing balance as at 31 December 2013 | 7,834,037 | 2,211,797 | 9,422 | 435,656 | 10,490,912 | ||
| Accumulated depreciation and impairment losses | |||||||
| Opening balance as at 1 January 2012 | 1,013,594 | 2,107,323 | 34,274 | - | 3,155,191 | ||
| Changes in consolidation perimeter (companies out) | - | (21,988) | - | - | (21,988) | ||
| Charges for the period | 180,656 | 164,048 | 633 | - | 345,337 | ||
| Disposals | (13,072) | (1,018,006) | (26,752) | - | (1,057,830) | ||
| Exchange rate effect | - | (1,374) | - | - | (1,374) | ||
| Transfers | (8,917) | 8,917 | - | - | - | ||
| Opening balance as at 1 January 2013 | 1,172,261 | 1,238,919 | 8,155 | - | 2,419,335 | ||
| Changes in consolidation perimeter (companies out) | (153,528) | (29,755) | - | - | (183,283) | ||
| Charges for the period | 195,388 | 328,333 | 633 | - | 524,354 | ||
| Disposals | (6,669) | (6,390) | - | - | (13,060) | ||
| Exchange rate effect | - | (2,261) | - | - | (2,261) | ||
| Transfers | - | - | - | - | - | ||
| Closing balance as at 31 December 2013 | 1,207,452 | 1,528,846 | 8,788 | - | 2,745,086 | ||
| Carrying amount | |||||||
| As at 31 December 2012 | 6,815,996 | 368,359 | 1,267 | 645,440 | 7,831,062 | ||
| As at 31 December 2013 | 6,626,585 | 682,951 | 634 | 435,656 | 7,745,826 | ||
As at December 2013 net assets of Marina de Troia amount to 6,141,720 euro (6,290,007 euro at 31 December 2012).
APSS – Administração dos Portos de Setúbal e Sesimbra, SA (APSS) signed in 2007 with an affiliated company a service concession arrangement to build and operate, in the public interest, a marina and support services in Troia, during a period of 50 years from the date of entry into operation. This period may be extended a maximum of 10 years if agreed between the parties. At the end of the service concession arrangement the concession will revert to APSS at no consideration, with some exceptions in the arrangement.
The Group has the right to charge fees for services to be provided under the concession. Maximum fee limits must be approved by the grantor based on a proposal submitted by the Group.
During the concession period the Group has a contractual obligation to maintain the infrastructure in a specific level of serviceability and pays the grantor a fixed fee and a variable fee, the latter based on revenues charged for the service provided.
The grantor may cancel the service concession arrangement whenever public interest is affected, provided that at least the contractual period is over and with at least 1 year notice, in which case the Group is entitled to compensation equal to the net book value of the infrastructure plus lost revenue calculated in accordance with the terms of the contract.
During the periods ended 31 December 2013 and 31 December 2012, movements in goodwill, as well as in corresponding impairment losses, are as follows:
________________________________________________
| 31 December 2013 | 31 December 2012 | ||
|---|---|---|---|
| Gross amount: | |||
| Opening balance | 62,290,239 | 62,330,108 | |
| Decreases - disposals of affiliated companies | (6,430) | (39,869) | |
| Closing balance | 62,283,809 | 62,290,239 | |
| Accumulated impairment losses: | |||
| Opening balance | 1,301,596 | 1,301,596 | |
| Closing balance | 1,301,596 | 1,301,596 | |
| Total | 60,982,213 | - 60,988,643 |
Impairment tests on Goodwill, as at 31 December 2013, consisted in calculating the fair value minus costs to sell each cash generating unit.
Regarding Goodwill of the Tourism business segment, projections of the sales value of units were used (discounted to present value).
As for the remaining Goodwill, which mostly regards Spred, discounted cash flows, for a five year period, were used, calculating a perpetuity and discounting cash flows up to the date of the present consolidated financial statements. Discount rates used correspond to the weighted average cost of capital (WACC). WACC's used range from 10,4% and 12.2% and the growth rate in perpetuity was zero.
As at 31 December 2013 and 2012, Goodwill may be split as follows:
| 31 December 2013 | 31 December 2012 | |||
|---|---|---|---|---|
| Tourism | 24,393,763 | 24,393,763 | ||
| Energy | 614,798 | 614,798 | ||
| Refrigeration and HVAC | 9,622,339 | 9,622,339 | ||
| Other Assets | 12,299,160 | 12,305,590 | ||
| Holding and Others | 14,052,153 | 14,052,153 | ||
| 60,982,213 | 60,988,643 |
As at 31 December 2013, movements in investments were as follows:
| 31 December 2013 | 31 December 2012 | |||
|---|---|---|---|---|
| Non current | Current | Non current | Current | |
| Investments at acquisition cost | ||||
| Opening balance as at 1 January | 8,223,418 | - | 8,200,508 | - |
| Acquisitions in the period | 122 | - | 22,910 | - |
| Disposals in the period | (152,525) | - | - | - |
| Transfers | 86 | - | - | - |
| Changes in consolidation perimeter | - | - | - | - |
| Closing balance as at 31 December | 8,071,101 | - | 8,223,418 | - |
| Accumulated impairment losses (Note 32) | (7,707,935) | - | (7,707,935) | - |
| 363,166 | - | 515,483 | - | |
| Investments held for sale | ||||
| Fair value as at 1 January | 49,938,723 | - | 651,807 | - |
| Disposals in the period | (9,919,661) | - | (19,874,257) | - |
| Increase/(Decrease) in fair value | (713,131) | - | 16,605,709 | - |
| Transfers | - | - | 52,555,464 | - |
| Fair value as at 31 December | 39,305,931 | - | 49,938,723 | - |
| Accumulated impairment losses (Note 32) | (128,999) | - | (128,999) | - |
| Fair value (net of impairment losses) as at 31 December | 39,176,932 | - | 49,809,724 | - |
| Other Investments (Note 13) | 39,540,098 | - | 50,325,207 | - |
________________________________________________
The amounts shown under fair value related to the Imosede Fund.
The Imosede Fund is accounted as an available for sale asset, measured at fair value. For the remaining investment under this heading, the Group considers that it is not reasonable to estimate a fair value, as there is no observable market data.
These investments are recorded at acquisition cost less impairment losses.
As at 31 December 2013 and 31 December 2012, other non-current assets are detailed as follows:
________________________________________________
| 31 December 2013 | 31 December 2012 |
|---|---|
| 17,740,756 | 16,646,298 |
| 691,505 | 215,303 |
| 18,432,261 | 16,861,601 |
| (34,916) | (34,916) |
| 18,397,345 | 16,826,685 |
| - | 2,457,493 |
| 1,173,345 | 1,197,750 |
| - | - |
| 1,173,345 | 3,655,243 |
| 19,570,690 | 20,481,928 |
Generally, values included in other non-current assets bear interest at market rates, and it is estimated that their fair value does not significantly differ from amounts in the balance sheet.
As at 31 December 2013 and 2012, the ageing of Trade accounts receivable and other debtors can be detailed as follows:
| Trade accounts receivable and other debtors | |||||
|---|---|---|---|---|---|
| 31 December 2013 | 31 December 2012 | ||||
| Not due | 28,015 | 2,484,521 | |||
| Due but not impaired | |||||
| < 6 months | - | 26,019 | |||
| 6 - 12 months | - | - | |||
| > 1 year | 1,145,330 | 1,144,703 | |||
| 1,145,330 | 1,170,722 | ||||
| Due and impaired | |||||
| > 1 year | - | - | |||
| 1,173,345 | 3,655,243 |
Loans granted to related parties do not have a defined maturity, and therefore are not due. These loans bear interests.
Inventories as at 31 December 2013 and 31 December 2012 can be detailed as follows, highlighting the value attributable to real estate developments:
________________________________________________
| 31 December 2013 | 31 December 2012 | ||||
|---|---|---|---|---|---|
| Total | of which Real Estate Developments |
Total | of which Real Estate Developments |
||
| Raw materials, by-products and consumables | 1,162,725 | - | 1,268,569 | - | |
| Goods for sale | 32,155,488 | 30,045,640 | 33,039,474 | 30,781,226 | |
| Finished goods | 68,373,552 | 68,373,552 | 76,347,355 | 76,347,355 | |
| Work in progress | 80,964,110 | 77,147,748 | 80,592,327 | 78,222,630 | |
| Payments on account | - | - | 68,459 | - | |
| 182,655,875 | 175,566,940 | 191,316,184 | 185,351,211 | ||
| Accumulated impairment losses on Inventories (Note 32) | (3,725,862) | (3,434,621) | (3,515,540) | (3,434,621) | |
| 178,930,013 | 172,132,319 | 187,800,644 | 181,916,590 |
Cost of goods sold as at 31 December 2013 and 2012 amounted to 40,829,087 euro and 36,584,661 euro, respectively, and may be detailed as follows:
| 31 December 2012 | 31 December 2012 | |
|---|---|---|
| Opening Inventories | 34,308,043 | 35,797,138 |
| Exchange rate effect | (67,939) | (44,021) |
| Purchases | 39,877,917 | 36,102,963 |
| Adjustments | (250,061) | (976,139) |
| Closing Inventories | 33,318,213 | 34,308,043 |
| 40,549,747 | 36,571,898 | |
| Impairment losses (Note 32) | 280,072 | 12,762 |
| Reversion of impairment losses | (732) | - |
| Total Operations | 40,829,087 | 36,584,661 |
As at 31 December 2013 and 31 December 2012, trade accounts receivable and other current assets are detailed as follows:
________________________________________________
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Trade accounts receivable | ||
| Tourism | 2,792,872 | 2,923,324 |
| Energy | 2,654,448 | 522,915 |
| Refrigeration and HVAC | 15,844,788 | 19,863,945 |
| Other Assets | 1,819,194 | 1,872,830 |
| Holding and Others | 79,601 | 71,065 |
| 23,190,903 | 25,254,079 | |
| Trade Debtors, bills receivable | 191,545 | 131,485 |
| Doubtful debtors | 3,529,097 | 3,530,814 |
| 26,911,545 | 28,916,378 | |
| Accumulated impairment losses on Trade Debtors (Note 32) | (6,039,005) | (5,441,095) |
| Total Operations | 20,872,540 | 23,475,283 |
In the normal course of activity collection risk may arise in Trade debtors. The amounts presented on the face of the balance sheet are net of impairment losses, which were estimated based on the Group's experience and on the assessment of present economic conditions. As a result, amounts disclosed in Trade debtors reflect their fair value.
As at 31 December 2013 we do not have any reason to believe that normal collection times regarding trade accounts receivable not due for which there are no impairment losses will not be met.
| As at 31 December 2013 and 2012, the ageing of Trade Accounts Receivables can be detailed | |||||||
|---|---|---|---|---|---|---|---|
| as follows: |
| Trade Accounts Receivable | ||||||
|---|---|---|---|---|---|---|
| 31 December 2013 | Tourism | Energy | Refrigeration and HVAC |
Other Assets |
Holding and Others |
Total |
| Not Due | 644,249 | 1,480,506 | 10,850,256 | 678,307 | 49,644 | 13,702,962 |
| Due but not impaired | ||||||
| 0 - 30 days | 363,748 | 1,142,080 | 1,698,538 | 537,995 | - | 3,742,360 |
| 30 - 90 days | 197,535 | 9,290 | 915,038 | 276,968 | 23,740 | 1,422,571 |
| + 90 days | 273,143 | 22,573 | 997,957 | 303,850 | 6,217 | 1,603,741 |
| Total | 834,426 | 1,173,943 | 3,611,533 | 1,118,813 | 29,957 | 6,768,672 |
| Due and impaired | ||||||
| 0 - 90 days | 88,515 | - | 169,731 | 20,574 | - | 278,820 |
| 90 - 180 days | 53,503 | - | 13,084 | - | - | 66,587 |
| 180 - 360 days | 178,960 | - | 16,329 | - | - | 195,289 |
| + 360 days | 2,600,325 | - | 2,822,109 | 383,274 | 93,508 | 5,899,216 |
| Total | 2,921,303 | - | 3,021,253 | 403,848 | 93,508 | 6,439,912 |
| Total Operations before impairments |
4,399,978 | 2,654,449 | 17,483,042 | 2,200,968 | 173,109 | 26,911,545 |
| 31 December 2012 | Tourism | Energy | Refrigeration and HVAC |
Other Assets |
Holding and Others |
Total |
| Not Due | 569,226 | 226,938 | 14,996,724 | 749,319 | - | 16,542,207 |
| Due but not impaired | ||||||
| 0 - 30 days | 325,152 | 125,443 | 1,190,320 | 742,360 | 24,600 | 2,407,875 |
| 30 - 90 days | 322,933 | 74,272 | 1,565,965 | 89,969 | 367 | 2,053,506 |
| + 90 days | 447,843 | 96,262 | 1,469,187 | 268,994 | 46,099 | 2,328,385 |
| Total | 1,095,928 | 295,977 | 4,225,472 | 1,101,323 | 71,066 | 6,789,766 |
| Due and impaired | ||||||
| 0 - 90 days | 27,204 | - | - | 22,298 | - | 49,502 |
| 90 - 180 days | 134,333 | - | - | 3,464 | - | 137,797 |
| 180 - 360 days | 95,124 | - | - | 8,352 | - | 103,476 |
| + 360 days | 2,229,749 | 356,030 | 93,508 | 5,293,631 | ||
| 2,614,344 | - | |||||
| Total | 2,871,005 | - | 2,229,749 | 390,144 | 93,508 | 5,584,406 |
To determine the recoverability of Trade accounts receivable, the Group reviews all changes to the credit quality of its counterparties since the date of the credit to the date of reporting consolidated financial statements. Credit risk is not concentrated because of the significant number of trade debtors. The Group thus believes that credit risk does not exceed recorded impairment losses for trade accounts receivable doubtful accounts.
In addition, the Group considers that maximum exposure to credit risk corresponds to the total of trade accounts receivable disclosed in the consolidated balance sheet.
________________________________________________
As at 31 December 2013 and 2012, other debtors are made up as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Loans granted to and other amounts to be received from related parties |
||
| Others | 70,058 | 68,102 |
| 70,058 | 68,102 | |
| Other Debtors | ||
| Suppliers with a debtor balance | 850,602 | 1,240,239 |
| Sale of assets | 9,678 | 14,720 |
| Sale of financial investments | 4,804,214 | 24,203,831 |
| Others | 10,923,538 | 10,042,786 |
| 16,588,032 | 35,501,576 | |
| Other Debtors | 16,658,090 | 35,569,678 |
| Accumulated impairment losses on Other Debtors (Note 32) | (7,707,008) | (27,866,356) |
| Total financial instruments (Note 9) | 8,951,082 | 7,703,322 |
| Total Operations | 8,951,082 | 7,703,322 |
Loans granted to related parties bear interest at market rates.
As at 31 December 2013 and 2012, ageing of other debtors can be summarised as follows:
| Other Debtors | ||
|---|---|---|
| 31 December 2013 | 31 December 2012 | |
| 3,118,973 | ||
| 460,772 | 302,391 | |
| 2,055,552 | 282,396 | |
| 2,551,783 | 3,967,334 | |
| 5,068,107 | 4,552,121 | |
| - | 1,451 | |
| 9,723 | 197 | |
| - | 1,451 | |
| 7,599,581 | 27,827,383 | |
| 7,609,304 | 27,830,482 | |
| 16,588,032 | 35,501,576 | |
| 3,910,621 |
As at 31 December 2013 we do not have any reason to believe that normal collection times regarding other debtors not due, and for which there are no impairment losses, will not be met.
Values included in other debtors are close to their fair value.
________________________________________________
As at 31 December 2013 and 2012, taxes recoverable and taxes and contributions payable are made up as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Tax recoverable | ||
| Income taxation - payments on account and amounts withheld | 5,462,166 | 5,860,952 |
| VAT | 6,610,330 | 6,166,066 |
| Other taxes | 768,875 | 353,599 |
| Total Operations | 12,841,371 | 12,380,617 |
| Taxes and contributions payable | ||
|---|---|---|
| Income taxation | 3,684,314 | 3,946,103 |
| VAT | 1,340,955 | 891,767 |
| Income taxation - amounts withheld | 1,189,808 | 1,202,554 |
| Social security contributions | 625,393 | 564,911 |
| Other taxes | 166,761 | 121,859 |
| Total Operations | 7,007,231 | 6,727,194 |
As at 31 December 2013 and 2012, other current assets are made up as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Interest receivable | 965,460 | 1,195,981 |
| Deferred costs - External supplies and services | 895,653 | 756,891 |
| Deferred costs - Rents | 264,345 | 292,513 |
| Other current assets | 1,681,955 | 2,304,951 |
| Total Operations | 3,807,413 | 4,550,336 |
Deferred tax assets and liabilities as at 31 December 2013 and 31 December 2012 can be detailed as follows, split between the different types of temporary differences:
| Deferred tax assets | Deferred tax liabilities | |||
|---|---|---|---|---|
| 31 December 2013 |
31 December 2012 |
31 December 2013 |
31 December 2012 |
|
| Amortisation and Depreciation harmonisation adjustments | 884,314 | 1,019,814 | 2,783,003 | 2,440,744 |
| Provisions and impairment losses of non-tax deductible | 8,934,857 | 9,907,502 | - | 40,234 |
| Write off of tangible and intangible assets | 325,774 | 620,196 | - | - |
| Write off of accruals | 126,853 | 273,593 | - | - |
| Revaluation of tangible assets | - | - | 103,166 | 113,359 |
| Tax losses carried forward | 15,843,605 | 15,800,521 | - | - |
| Financial instruments | - | - | 1,276,624 | 2,590,303 |
| Write off of Inventories | - | - | 931,724 | 1,020,906 |
| Taxable temporary differences arising from the fair value of non-current liabilities |
- | - | 7,150,724 | 7,746,432 |
| Others | 71,126 | 227,451 | 336,618 | 392,548 |
| 26,186,529 | 27,849,077 | 12,581,859 | 14,344,526 |
During the periods ended 31 December 2013 and 2012, movements in deferred tax are as follows:
| Deferred tax assets | Deferred tax liabilities | |||
|---|---|---|---|---|
| 31 December 2013 |
31 December 2012 |
31 December 2013 |
31 December 2012 |
|
| Opening balance | 27,849,077 | 23,563,437 | 14,344,526 | 11,535,355 |
| Effect in results (Note 43): | - | - | - | - |
| Amortisation and Depreciation harmonisation adjustments |
(69,340) | 55,972 | 568,272 | 363,397 |
| Provisions and impairment losses of non-tax deductible |
(243,412) | (229,744) | (40,234) | 40,234 |
| Write off of tangible and intangible assets | (267,100) | (268,237) | - | - |
| Write off of accruals | (136,385) | (136,797) | - | - |
| Tax losses carried forward | 1,495,475 | 4,878,055 | - | - |
| Financial Instruments | - | - | (1,024,386) | 2,590,303 |
| Changes in tax rates | (2,033,518) | - | (1,035,190) | - |
| Others | (150,185) | (13,609) | (51,787) | (124,717) |
| (1,404,464) | 4,285,640 | (1,583,325) | 2,869,217 | |
| Effect in reserves: | ||||
| Financial Instruments | - | - | (178,282) | - |
| Others | - | - | (1,060) | (60,046) |
| - | - | (179,342) | (60,046) | |
| Changes in consolidation perimeter | (258,084) | - | - | - |
| Closing balance | 26,186,529 | 27,849,077 | 12,581,859 | 14,344,526 |
In accordance with the tax statements presented by companies that recorded deferred tax assets arising from tax losses carried forward, as at 31 December 2013 and 31 December 2012, and using exchange rates effective at that time, tax losses carried forward can be summarized as follows:
| 31 December 2013 | 31 December 2012 | |||||
|---|---|---|---|---|---|---|
| Tax losses carried forward |
Deferred tax assets |
Time limit |
Tax losses carried forward |
Deferred tax assets |
Time limit |
|
| With limited time use | ||||||
| Generated in 2007 | - | - | 2013 | 1,416,550 | 354,137 | 2013 |
| Generated in 2008 | 1,105,341 | 254,228 | 2014 | 1,426,557 | 356,639 | 2014 |
| Generated in 2009 | 6,379,907 | 1,467,379 | 2015 | 6,448,363 | 1,612,091 | 2015 |
| Generated in 2010 | 18,328,751 | 4,215,613 | 2014 | 18,343,706 | 4,585,927 | 2014 |
| Generated in 2011 | 17,938,869 | 4,125,940 | 2015 | 18,076,637 | 4,519,159 | 2015 |
| Generated in 2012 | 16,006,259 | 3,681,440 | 2017 | 16,718,251 | 4,179,563 | 2017 |
| Generated in 2013 | 9,126,112 | 2,099,006 | 2018 | - | - | |
| 68,885,239 | 15,843,605 | 62,430,063 | 15,607,516 | |||
| With a time limit different from the above mentioned |
- | - | 569,640 | 193,005 | ||
| 68,885,239 | 15,843,605 | 62,999,704 | 15,800,521 |
As at 31 December 2013 and 31 December 2012, deferred tax assets resulting from tax losses carried forward were re-assessed. Deferred tax assets have only been recorded to the extent that future profits will arise which may be offset against available tax losses or against deductible temporary differences.
As at 31 December 2013, tax losses carried forward amounting to 175,288,767 euro (177,450,385 euro as at 31 December 2012), have not originated deferred tax assets for prudential reasons and are detailed as follows:
| 31 December 2013 | 31 December 2012 | |||||
|---|---|---|---|---|---|---|
| Tax losses carried forward |
Tax Credit | Time limit |
Tax losses carried forward |
Tax Credit | Time limit |
|
| With limited time use | ||||||
| Generated in 2007 | - | - | 2013 | 17,895,099 | 4,473,774 | 2013 |
| Generated in 2008 | 33,053,902 | 7,602,397 | 2014 | 37,294,794 | 9,323,699 | 2014 |
| Generated in 2009 | 35,694,882 | 8,209,823 | 2015 | 42,270,653 | 10,567,664 | 2015 |
| Generated in 2010 | 16,443,812 | 3,782,077 | 2014 | 17,922,419 | 4,480,605 | 2014 |
| Generated in 2011 | 18,024,594 | 4,145,657 | 2015 | 19,698,860 | 4,924,715 | 2015 |
| Generated in 2012 | 19,508,597 | 4,486,977 | 2017 | 22,854,282 | 5,713,579 | 2017 |
| Generated in 2013 | 36,378,392 | 8,367,030 | 2018 | - | - | |
| 159,104,179 | 36,593,961 | 157,936,107 | 39,484,036 | |||
| Without limited time use | 1,186,715 | 395,532 | 1,186,715 | 395,532 | ||
| With a time limit different from the above mentioned |
14,997,872 | 4,318,664 | 18,327,563 | 5,427,546 | ||
| 16,184,587 | 4,714,196 | 19,514,278 | 5,823,079 | |||
| 175,288,767 | 41,308,157 | 177,450,385 | 45,307,115 | |||
As at 31 December 2013 and 31 December 2012, cash and cash equivalents can be detailed as follows:
________________________________________________
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Cash at hand | 84,252 | 161,516 |
| Bank deposits | 2,901,739 | 3,083,179 |
| Treasury applications | 11,972 | - |
| Cash and cash equivalents on the balance sheet | 2,997,963 | 3,244,695 |
| Bank overdrafts - (Note 24) | (75,657) | (135,542) |
| Guarantee deposit | - | (500,000) |
| Cash and cash equivalents in the statement of cash-flows | 2,922,307 | 2,609,152 |
Bank overdrafts include creditor balances of current accounts in financial institutions, and are disclosed in the balance sheet under current bank loans (Note 24).
The share capital of Sonae Capital SGPS, SA is represented by 250,000,000 ordinary shares, which do not have the right to a fixed remuneration, with a nominal value of 1 euro each.
________________________________________________
The demerger originated a reserve in the amount of 132,638,253 euro, which has a treatment similar to that of a Legal Reserve. According to Company Law, it cannot be distributed to shareholders, unless the company is liquidated, but can be used to make good prior year losses, once other reserves have been used fully, or for capital increases.
As at 31 December 2013, Sonae Capital SGPS, S.A. owns 5,119,562 own shares (1,600,310 own shares at 31 December 2012) booked for 1,124,125 euro (264,705 euro at 31 December 2012).
Movements in non-controlling interests in the periods ended 31 December 2013 and 31 December 2012 are as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Opening balance as at 1 January | 8,707,639 | 9,241,777 |
| Changes in hedging reserves | 16,215 | 9,230 |
| Changes in the percentage of capital held in affiliated companies | 548,518 | 119,556 |
| Changes resulting from currency translation | (68,547) | (23,677) |
| Dividends paid | (304,254) | - |
| Others | - | (4,431) |
| Profit for the period attributable to minority interests | (49,280) | (634,816) |
| Closing balance | 8,850,291 | 8,707,639 |
As at 31 December 2013 and 31 December 2012, Borrowings are made up as follows:
________________________________________________
| 31 December 2013 | 31 December 2012 | |||||
|---|---|---|---|---|---|---|
| Outstanding amount | Outstanding amount | Repayable on | ||||
| Current | Non Current | Current | Non Current | |||
| Bank loans | ||||||
| Sonae Capital SGPS - commercial paper a) | - | - | 10,000,000 | - | Mar/2013 | |
| Sonae Capital SGPS - commercial paper b) | 75,000,000 | - | 58,450,000 | - | Mar/2018 | |
| Sonae Capital SGPS - commercial paper e) | 8,250,000 | - | - | 8,250,000 | Jan/2014 | |
| Sonae Capital SGPS - commercial paper c) | - | 12,650,000 | 23,950,000 | - | Aug/2016 | |
| Sonae Capital SGPS - commercial paper f) | - | - | 2,000,000 | - | Feb/2016 | |
| Sonae Capital SGPS - commercial paper d) | - | 30,000,000 | - | 30,000,000 | Dec/2017 | |
| Sonae Capital SGPS g) | 7,000,000 | 24,000,000 | 2,000,000 | 31,000,000 | Jun/2017 | |
| Up-front fees | - | (552,029) | - | (317,336) | ||
| Others | 2,080,029 | 2,863,444 | 401,786 | 1,207,589 | ||
| 92,330,029 | 68,961,416 | 96,801,786 | 70,140,254 | |||
| Bank overdrafts (Note 21) | 75,657 | - | 135,542 | - | ||
| Bank loans | 92,405,686 | 68,961,416 | 96,937,328 | 70,140,254 | ||
| Bond Loans | ||||||
| Sonae Capital 2011/2016 Bonds | - | 10,000,000 | - | 10,000,000 | Jan/2016 | |
| SC, SGPS, S.A. 2008/2018 Bonds | - | 50,000,000 | - | 50,000,000 | Mar/2018 | |
| Up-front fees | - | (226,532) | - | (344,029) | ||
| Bond Loans | - | 59,773,468 | - | 59,655,971 | ||
| Other loans | 686,968 | 1,116,336 | 689,568 | 1,803,305 | ||
| Derivatives (Note 26) | 101,543 | 1,433,909 | 199,115 | 2,532,557 | ||
| Obligations under finance leases (Note 25) | 2,856,743 | 21,785,159 | 2,813,237 | 24,657,747 | ||
| Up-front fees on finance leases (Note25) | - | (101,587) | - | (114,159) | ||
| 96,050,940 | 152,968,701 | 100,639,248 | 158,675,674 |
a) Commercial paper programme, with subscription guarantee, issued on 14 March 2008 and valid for a 5 year period.
b) Short term commercial paper programme, issued on 28 March 2008 and valid for a 10 year period, which may be extended at the option of Sonae Capital. Placed in investors or financial institutions and guaranteed by credit lines, with commitment of at least six months to a year, placed in relationship banks.
c) Commercial paper programme, with subscription guarantee, issued on 31 March 2011 and valid up to August 2018, except if the reimbursement is anticipated under the contracted terms of the call/put option, in August 2016. This loan is guaranteed by a mortgage on real estate assets
d) Commercial paper programme, with subscription guarantee, issued on 27 December 2012 and valid up to December 2017. e) Commercial paper programme, with subscription guarantee, issued on 31 December 2013, with annual renewals up to 3
years. f) Short term commercial paper programme, with subscription guarantee, issued on 17 February 2011, with annual renewals
up to a maximum of 5 years. g) Bank loan guarantee by a mortgage on real estate, started on 2 June 2011 and valid for a 6 year period, with annual payments.
As at 31 December 2013, borrowings of the Group were as follows:
SC, SGPS, SA, 2008/2018 bond loan in the amount of 50,000,000 euro, with a 10 year maturity, and a sole reimbursement on 3 March 2018, except if the reimbursement is anticipated, fully or partially, which can happen on 3 March 2016. This bond loan bears interest every six months.
Sonae Capital SGPS - 2011/2016 bond loan in the amount of 10,000,000 euro, with a 5 year maturity, and a sole reimbursement on 17 January 2016, except if the reimbursement is anticipated, fully or partially, which can happen on 17 January 2014. This bond loan bears interest every six months.
The interest rate on bonds in force on 31 December 2013 was on average 3.46%.
Bank loans pay interest rates that are indexed to the Euribor market rates of the period, and its fair value is considered close to its book value.
Other non-current loans include reimbursable grants to affiliated undertakings, which do not bear interest.
Other current loans include letters of credit not yet due.
The repayment schedule of the nominal value of borrowings may be summarised as follows:
| 31 December 2013 | 31 December 2012 | |||||
|---|---|---|---|---|---|---|
| Nominal value | Interest | Nominal value | Interest | |||
| N+1 a) | 95,949,397 | 8,582,090 | 100,440,133 | 8,393,490 | ||
| N+2 | 11,417,824 | 6,548,639 | 19,279,012 | 7,208,617 | ||
| N+3 | 25,082,672 | 4,290,860 | 11,002,099 | 5,941,516 | ||
| N+4 | 47,689,566 | 2,861,554 | 20,447,129 | 3,713,646 | ||
| N+5 | 57,636,739 | 2,140,898 | 43,053,564 | 2,875,583 | ||
| After N+5 | 10,588,138 | 415,871 | 63,136,837 | 1,010,080 | ||
| 248,364,336 | 24,839,912 | 257,358,774 | 29,142,932 |
a) Includes amounts drawn under commercial paper programmes. Of the total amount maturing in N+1, 55% concerns to commercial paper taken under lines of credit with commitment exceeding one year. Taking into account the policies and measures to manage liquidity risk, no risks that could jeopardize the continuity of operations are anticipated.
| 31 December 2013 | 31 December 2012 | ||||
|---|---|---|---|---|---|
| Commitments < 1 year |
Commitments > 1 year |
Commitments < 1 year |
Commitments > 1 year |
||
| Value of available lines | |||||
| Tourism | - | - | - | - | |
| Energy | - | - | - | - | |
| Refrigeration and HVAC | 2,709,583 | - | 8,186,317 | - | |
| Other Assets | - | - | - | - | |
| Holding and Others | 39,599,398 | 23,950,000 | 48,899,398 | 15,650,000 | |
| 42,308,981 | 23,950,000 | 57,085,715 | 15,650,000 | ||
| Value of contracted lines | |||||
| Tourism | - | - | - | - | |
| Energy | - | - | - | - | |
| Refrigeration and HVAC | 3,165,417 | - | 8,236,978 | - | |
| Other Assets | - | - | - | - | |
| Holding and Others | 47,849,398 | 66,600,000 | 61,599,398 | 79,850,000 | |
| 51,014,815 | 66,600,000 | 69,836,376 | 79,850,000 |
As at 31 December 2013 and 2012, Obligations under finance leases are made up as follows:
| Obligations under finance leases | Minimum finance lease payments | Present value of minimum finance lease payments |
|||
|---|---|---|---|---|---|
| Amounts under finances leases: | 31 December 2013 |
31 December 2012 |
31 December 2013 |
31 December 2012 |
|
| N+1 | 3,332,892 | 3,352,546 | 2,856,743 | 2,813,237 | |
| N+2 | 3,255,296 | 3,340,653 | 2,838,808 | 2,865,496 | |
| N+3 | 3,228,553 | 3,257,165 | 2,874,044 | 2,842,437 | |
| N+4 | 3,228,553 | 3,228,744 | 2,936,666 | 2,874,544 | |
| N+5 | 3,228,553 | 3,228,742 | 3,001,239 | 2,936,733 | |
| After N+5 | 10,532,705 | 13,771,082 | 10,134,402 | 13,138,537 | |
| 26,806,552 | 30,178,933 | 24,641,902 | 27,470,984 | ||
| Future Interest | (2,164,650) | (2,707,949) | |||
| 24,641,902 | 27,470,984 | ||||
| Up-front fees | (101,587) | (114,159) | |||
| Current obligations under finance leases | 2,856,743 | 2,813,237 | |||
| Obligations under finance leases - net of current obligations | 21,683,572 | 24,543,588 |
Finance leases are contracted at market interest rates, have defined useful lives and include an option for the acquisition of the related assets at the end of the period of the contract.
As at 31 December 2013 and 2012, the fair value of finance leases is close to their book value.
Obligations under finance leases are guaranteed by related assets.
As at 31 December 2013 and 2012, the book value of assets acquired under finance leases can be detailed as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Assets acquired under finance leases | ||
| Land and Buildings | - | - |
| Plant and machinery | 26,813,876 | 28,851,465 |
| Vehicles | 58 | 230 |
| Tools | 18 | 594 |
| Fixtures and Fittings | 4,398 | 6,713 |
| Total tangible assets | 26,818,350 | 28,859,002 |
Hedging instruments used by the Group as at 31 December 2013 were mainly interest rate options (cash-flow hedges) contracted with the goal of hedging interest rate risks on loans in the amount of 55,000,000 euro, whose fair value of 1,535,452 euro (2,731,672 euro at 31 December 2012) is recorded as liabilities. As at 31 December 2013 and 31 December 2012, all derivatives are hedging derivatives.
________________________________________________
These interest rate hedging instruments are valued at fair value as at the balance sheet date, determined by valuations made by the Group using derivative valuation calculation schedules and external valuations when these schedules do not permit the valuation of certain instruments. For options, fair value is determined using the Black-Scholes model and its variants.
The fair value of derivatives is calculated using valuation models based on assumptions which are confirmed by market benchmarks, thus complying with level 2 requirements set on the IFRS 7.
Risk coverage guidelines generally used by the Group in contractually arranged hedging instruments are as follows:
Perfect matching between indices: the reference index for the hedging instrument and that for the financing to which the underlying derivative relates are the same;
In the case of extreme rises in interest rates, the maximum cost of financing is limited.
Counterparts for derivatives are selected based on their financial strength and credit risk profile, with this profile being generally measured by a rating note attributed by rating agencies of recognized merit. Counterparts for derivatives are top level, highly prestigious financial institutions which are recognized nationally and internationally.
The fair value of derivatives is as follows:
| Liabilities | ||||
|---|---|---|---|---|
| 31 December | 31 December | 31 December | 31 December 2012 |
|
| - | - | - | - | |
| - | - | 1,535,452 | 2,731,672 | |
| - | - | - | - | |
| - | - | 1,535,452 | 2,731,672 | |
| 2013 | Assets 2012 |
2013 |
As at 31 December 2013 and 31 December 2012 other current liabilities can be detailed as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Loans and other amounts payable to related parties | ||
| Plaza Mayor Parque de Ocio, SA | 2,092,131 | 2,153,861 |
| Others | 216,645 | 1,314,645 |
| 2,308,680 | 3,468,506 | |
| Other creditors | ||
| Creditors in the restructuring process of Torralta | 456,039 | 410,844 |
| 456,039 | 410,844 | |
| Deferred income | ||
| Obligations by share-based payments (Note 28) | 492,056 | 117,960 |
| 492,056 | 117,960 | |
| Other non-current liabilities | 3,256,871 | 3,997,310 |
As at 31 December 2013 and 2012, other creditor's balances maturity can be detailed as follows:
| 31 December 2013 | N+1 | N+2 | N+3 | N+4 | N+5 | Total |
|---|---|---|---|---|---|---|
| Fixed assets suppliers | - | - | - | - | - | - |
| Other non-current creditors | - | - | - | - | 456,039 | 456,039 |
| Total Operations | - | - | - | - | 456,039 | 456,039 |
| 31 December 2012 | N+1 | N+2 | N+3 | N+4 | N+5 | Total |
| Fixed assets suppliers | - | - | - | - | - | - |
| Other non-current creditors | - | - | - | - | 410,844 | 410,844 |
| Total Operations | - | - | - | - | 410,844 | 410,844 |
In 2012 and in previous years, the Sonae Capital Group granted deferred performance bonuses to employees, based on shares of Sonae Capital SGPS, SA to be acquired at nil cost, three years after they were attributed to the employee. In any case, the acquisition can be exercised during the period commencing on the third anniversary of the grant date and the end of that year. The company has the choice to settle in cash instead of shares. The option can only be exercised if the employee still works for the Sonae Capital Group on the vesting date.
________________________________________________
As at 31 December 2013 and 31 December 2012, the market value of total liabilities arising from share-based payments, which have not yet vested, may be summarised as follows:
| Year of | Vesting year | Number of | Fair Value | |||
|---|---|---|---|---|---|---|
| grant | participants | 31 December 2013 | 31 December 2012 | |||
| Shares | ||||||
| 2010 | 2013 | - | - | 24,585 | ||
| 2011 | 2014 | 2 | 106,579 | 42,203 | ||
| 2012 | 2015 | 8 | 467,581 | 195,897 | ||
| 2013 | 2016 | 8 | 535,181 | - | ||
| Total | 1,109,341 | 262,685 |
As at 31 December 2013 and 31 December 2012, the financial statements include the following amounts corresponding to the period elapsed between the date of granting and those dates for each deferred bonus plan, which have not yet vested:
| 31 December 2013 | 31 December 2012 | ||
|---|---|---|---|
| Other non-current liabilities (Note 27) | 492,056 | 117,960 | |
| Other current liabilities | 106,579 | 30,794 | |
| Reserves | 110,935 | 129,184 | |
| Staff Costs | 487,700 | 19,570 |
As at 31 December 2013 and 31 December 2012 trade accounts payable can be detailed as follows:
________________________________________________
| Payable | ||||
|---|---|---|---|---|
| 31 December 2013 | Less than 90 days | 90 to 180 days | More than 180 days | |
| Trade creditors current account | ||||
| Tourism | 3,125,599 | 2,778,075 | 164,545 | 182,979 |
| Energy | 2,564,585 | 2,560,507 | 426 | 3,652 |
| Refrigeration and HVAC | 8,261,782 | 8,036,932 | 87,195 | 137,655 |
| Other Assets | 248,393 | 242,881 | 5,512 | - |
| Holding and Others | 638,883 | 622,503 | 9,296 | 7,084 |
| 14,839,242 | 14,240,898 | 266,974 | 331,370 | |
| Trade creditors - Invoices Accruals | 917,558 | 879,603 | 21,849 | 16,106 |
| Total Operations | 15,756,800 | 15,120,501 | 288,823 | 347,476 |
| Payable | |||||
|---|---|---|---|---|---|
| 31 December 2012 | Less than 90 days | 90 to 180 days | More than 180 days | ||
| Trade creditors current account | |||||
| Tourism | 2,891,073 | 2,226,361 | 196,922 | 467,790 | |
| Energy | 2,535,172 | 2,531,997 | 1,243 | 1,932 | |
| Refrigeration and HVAC | 10,133,565 | 9,946,854 | 128,521 | 58,190 | |
| Other Assets | 1,035,350 | 545,017 | 236,315 | 254,018 | |
| Holding and Others | 361,804 | 350,674 | 4,357 | 6,774 | |
| 16,956,963 | 15,600,903 | 567,357 | 788,704 | ||
| Trade creditors - Invoices Accruals | 632,519 | 603,694 | 10,219 | 18,606 | |
| Total Operations | 17,589,482 | 16,204,597 | 577,576 | 807,310 |
As at 31 December 2013 and 2012, this caption relates only to trade payables due in the normal course of Group companies activities. The Board of Directors believes that the fair market value of these payables is approximately their book value, and that the effect of discounting these balances is immaterial.
________________________________________________
As at 31 December 2013 and 2012 other creditors can be detailed as follows:
| Payable | ||||
|---|---|---|---|---|
| 31 December 2013 |
Less than 90 days |
90 to 180 days |
More than 180 days |
|
| Other creditors | ||||
| Fixed assets suppliers | 2,494,318 | 2,376,025 | 31,951 | 86,342 |
| Others | 1,197,491 | 793,301 | 82,235 | 321,955 |
| 3,691,809 | 3,169,326 | 114,186 | 408,297 | |
| Advances from customers and down payments |
3,203,979 | |||
| 6,895,788 | ||||
| Related parties | 107,740 | |||
| Total Operations | 7,003,528 |
| Payable | ||||
|---|---|---|---|---|
| 31 December 2012 |
Less than 90 days |
90 to 180 days |
More than 180 days |
|
| Other creditors | ||||
| Fixed assets suppliers | 1,096,072 | 979,266 | 33,149 | 83,657 |
| Others | 1,267,764 | 643,189 | 14,840 | 609,735 |
| 2,363,836 | 1,622,455 | 47,989 | 693,392 | |
| Advances from customers and down payments |
1,968,241 | |||
| 4,332,077 | ||||
| Related parties | 117,793 | |||
| Total Operations | 4,449,870 |
As at 31 December 2013 and 2012, this caption includes balances payable to other creditors and fixed assets suppliers that do not include interest. The caption includes also advances from customers on promissory sales of Inventories and tangible assets and down payments from financial institutions regarding the discount of letters of credit over customers. The Board of Directors believes that the fair market value of these payables is approximately their book value, and that effects of discounting these balances are immaterial.
________________________________________________
As at 31 December 2013 and 2012 other current liabilities can be detailed as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Staff Costs | 5,610,334 | 5,256,361 |
| Amounts invoiced for works not yet completed | 2,777,135 | 5,632,274 |
| Other external supplies and services | - | - |
| Interest payable | 1,339,963 | 1,009,851 |
| Expenses with construction contracts | 429,108 | 401,198 |
| Investment aid | 1,604,523 | 1,664,142 |
| Others | 7,851,549 | 8,835,139 |
| Total Operations | 19,612,612 | 22,798,965 |
Movements in provisions and accumulated impairment losses over the period ended 31 December 2013 were as follows:
________________________________________________
| Captions | Balance as at 1 January 2013 |
Increases | Decreases | Utilisations | Balance as at 31 December 2013 |
|---|---|---|---|---|---|
| Accumulated impairment losses on: | |||||
| Other Investments (Notes 6 and 13) | 7,868,877 | - | - | - | 7,868,877 |
| Other non-current assets (Note 14) | 34,916 | - | - | - | 34,916 |
| Trade accounts receivable (Note 16) | 5,441,095 | 1,383,903 | (752,246) | (33,747) | 6,039,005 |
| Other current debtors (Note 17) | 27,866,356 | 68,459 | (433,327) | (19,794,479) | 7,707,008 |
| Inventories (Note 15) | 3,515,540 | 211,612 | (1,290) | - | 3,725,862 |
| Non-current provisions | 3,079,824 | - | - | - | 3,079,824 |
| Current provisions | 1,155,107 | 2,007,347 | (11,785) | (192,956) | 2,957,713 |
| 48,961,714 | 3,671,321 | (1,198,648) | (20,021,182) | 31,413,205 |
| Captions | Balance as at 1 January 2012 |
Increases | Decreases | Utilisations | Balance as at 31 December 2012 |
|---|---|---|---|---|---|
| Accumulated impairment losses on: | |||||
| Other Investments (Notes 6 and 13) | 7,868,877 | - | - | - | 7,868,877 |
| Other non-current assets (Note 14) | 34,916 | - | - | - | 34,916 |
| Trade accounts receivable (Note 16) | 4,435,511 | 1,706,324 | (438,815) | (261,926) | 5,441,095 |
| Other current debtors (Note 17) | 27,732,750 | 152,775 | (14,100) | (5,070) | 27,866,356 |
| Inventories (Note 15) | 3,505,580 | 12,460 | (2,500) | - | 3,515,540 |
| Non-current provisions | 3,185,974 | - | (106,150) | - | 3,079,824 |
| Current provisions | 1,055,216 | 276,423 | (162,532) | (14,000) | 1,155,107 |
| 47,818,824 | 2,147,982 | (724,097) | (280,996) | 48,961,714 |
As at 31 December 2013 and 2012 increases in provisions and impairment losses can be detailed as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Provisions and impairment losses | 3,396,083 | 5,128,480 |
| Impairment losses not included in this note | ||
| Tangible assets | (229,832) | (2,992,249) |
| Provisions and impairment losses recorded in cost of goods sold (Note 15) |
280,072 | 12,762 |
| Impairment losses on financial Investments | - | - |
| Others | 224,998 | (1,011) |
| 3,671,321 | 2,147,982 |
As at 31 December 2013 and 31 December 2012 detail of other provisions was as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Judicial claims | 1,824,313 | 1,792,273 |
| Others | 4,213,223 | 2,442,657 |
| 6,037,537 | 4,234,930 |
Impairment losses are deducted from the book value of the corresponding asset.
As at 31 December 2013 and 31 December 2012 the most important contingent liabilities referred to guarantees given and were made up as follows:
________________________________________________
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Guarantees given: | ||
| on VAT reimbursements | 5,065,159 | 4,988,723 |
| on tax claims | 4,015,535 | 4,126,605 |
| on municipal claims | 2,884,505 | 3,100,248 |
| Others | 14,905,311 | 16,964,193 |
Others include the following guarantees:
7,862,436 euro as at 31 December 2013 (5,658,660 euro as at 31 December 2012) of guarantees on construction works given to clients;
5,581,280 euro as at 31 December 2013 and as at 31 December 2012 of guarantees given concerning building permits in the Tourism business.
The Group has not registered provisions for the events/disagreements for which these guarantees were given since the Group believes that the above mentioned events will not result in a loss for the Group.
Minimum lease payments (fixed income) arising from operational leases, in which the Group acts as a lessor, recognized as income during the period ended 31 December 2013 and 2012 amounted to 2,915,295 euro and 3,016,190 euro, respectively.
________________________________________________
Additionally, as at 31 December 2013 and 2012, the Group had operational lease contracts, as a lessor, whose minimum lease payments (fixed income) had the following payment schedule:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Due in: | ||
| N+1 automatically renewed | 2,373,081 | 2,376,046 |
| N+1 | 260,476 | 668,634 |
| N+2 | 181,556 | 307,543 |
| N+3 | 139,642 | 277,945 |
| N+4 | 48,214 | 145,044 |
| N+5 | 25,891 | 112,006 |
| After N+5 | 67,506 | 51,546 |
| 3,096,366 | 3,938,763 | |
Lease payments arising from operational leases, in which the Group acts as a lessee, recognized as an expense during the period ended 31 December 2013 and 2012 amounted to 3,001,109 euro and 3,578,504 euro, respectively.
Additionally, as at 31 December 2013 and 2012, the Group had operational lease contracts, as a lessee, whose minimum lease payments (fixed income) had the following payment schedule:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Due in: | ||
| N+1 automatically renewed | 1,779,864 | 2,033,542 |
| N+1 | 1,028,475 | 1,097,824 |
| N+2 | 656,311 | 591,733 |
| N+3 | 438,898 | 434,442 |
| N+4 | 375,648 | 340,345 |
| N+5 | 347,797 | 290,710 |
| After N+5 | 1,445,132 | 1,287,494 |
| 6,072,125 | 6,076,091 | |
Turnover for the year ended 31 December 2013 and 2012 was as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Sale of goods | 54,373,523 | 27,459,675 |
| Sale of products | 14,290,986 | 24,456,386 |
| 68,664,509 | 51,916,061 | |
| Services Rendered | 67,203,120 | 60,372,417 |
| Total Operations | 135,867,629 | 112,288,478 |
________________________________________________
Other operational income for the year ended 31 December 2013 and 2012 was as follows:
________________________________________________
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Own work capitalised | 2,931,101 | 3,303,515 |
| Gains on sales of assets | 2,132,932 | 3,238,047 |
| Reversal of impairment losses | 1,328,176 | 720,061 |
| Supplementary income | 1,416,982 | 1,581,314 |
| Others | 1,780,892 | 2,699,296 |
| Total Operations | 9,590,083 | 11,542,233 |
Changes in Inventories for the years ended 31 December 2013 and 2012 was as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Finished goods | (8,136,473) | (1,824,808) |
| Work in progress | 555,644 | (435,853) |
| Impairment Gains / (Losses) on goods and work in progress |
- | 2,500 |
| Total Operations | (7,580,828) | (2,258,161) |
Changes in Inventories were calculated as follows:
| 31 December 2013 | 31 December 2012 |
|---|---|
| 156,939,682 | 176,853,327 |
| (21,191) | (17,652,984) |
| 149,337,662 | 156,939,682 |
| (7,580,828) | (2,260,661) |
| - | - |
| - | 2,500 |
| (7,580,828) | (2,258,161) |
As at 31 December 2013 and 2012, external supplies and services were made up as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Subcontracts | 15,661,525 | 9,940,356 |
| Services | 6,277,633 | 5,116,197 |
| Rents | 6,018,738 | 6,815,016 |
| Fees | 1,178,176 | 2,307,648 |
| Maintenance | 2,953,120 | 2,783,117 |
| Cleaning, health and safety | 2,509,273 | 2,779,690 |
| Electricity | 2,286,840 | 2,797,031 |
| Travelling expenses | 1,025,151 | 906,485 |
| Publicity | 3,157,567 | 1,010,799 |
| Fuel | 905,108 | 1,055,778 |
| Security | 583,859 | 749,726 |
| Communication | 759,914 | 1,048,528 |
| Commissions | 1,527,139 | 928,759 |
| Other fluids | 1,514,557 | 1,936,918 |
| Insurance | 864,074 | 916,189 |
| Others | 3,411,852 | 3,661,287 |
| Total Operations | 50,634,526 | 44,753,524 |
________________________________________________
As at 31 December 2013 and 2012, staff costs were made up as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Salaries | 27,140,840 | 29,205,134 |
| Social security contributions | 5,172,559 | 5,499,232 |
| Insurance | 596,170 | 619,919 |
| Welfare | 166,069 | 63,973 |
| Other staff costs | 2,867,342 | 1,827,922 |
| Total Operations | 35,942,980 | 37,216,180 |
As at 31 December 2013 and 2012, other operational expenses were made up as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Losses on sales of assets | 81,870 | 584,818 |
| Other taxes | 413,969 | 725,486 |
| Property tax | 713,211 | 767,906 |
| Doubtful debts written-off | 165 | 205,344 |
| Others | 1,611,043 | 1,360,465 |
| Total Operations | 2,820,258 | 3,644,019 |
As at 31 December 2013 and 2012, net financial expenses were made up as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Expenses: | ||
| Interest payable | ||
| Related with bank loans and overdrafts | 7,516,990 | 6,153,061 |
| Related with bank non-convertible bonds | 1,090,878 | 2,243,344 |
| Related with finance leases | 528,106 | 817,232 |
| Related with hedge accounting derivatives | 976,836 | 689,551 |
| Others | 334,970 | 356,496 |
| 10,447,780 | 10,259,684 | |
| Exchange Losses | 103 | - |
| Payment discounts given | 2,967 | 36,189 |
| Up-front fees | 1,777,010 | 2,226,029 |
| Other financial expenses | 379,706 | 160,240 |
| 12,607,566 | 12,682,142 | |
| Income: | ||
| Interest receivable | 1,030,763 | 1,424,726 |
| Other financial income | 89,634 | 291,670 |
| 1,120,397 | 1,716,396 | |
| Net financial expenses | (11,487,169) | (10,965,746) |
| 31 December 2013 | 31 December 2012 | |||
|---|---|---|---|---|
| Dividends | 220,681 | 214,698 | ||
| Sale of Saúde Atlantica - Gestão Hospitalar, SA and its affiliates | 521,621 | |||
| Sale of Edifícios Saudáveis Consultores - Ambiente e Energia em Edifícios, SA | - | (14,134) | ||
| Dissolution of Rochester Real Estate Ltd | - | 13,365 | ||
| Dissolution of Marina Magic - Exploração de Centros Lúd., SA | - | 2,609 | ||
| Dissolution of SKK Distribuction de Refrigeración, S.R.L. | - | 2,608 | ||
| Gains on disposal of investments in group companies | 521,621 | 4,448 | ||
| Sale of Sear - Sociedade Europeia de Arroz, SA | 234,969 | - | ||
| Price adjustment of Sodesa, SA | 8,431 | - | ||
| Dissolution of Sodesa , SA | - | 2,347 | ||
| Gains on disposal in associated and in jointly controlled companies | 243,400 | 2,347 | ||
| Change in accounting method of Fundo de Investimento Imosede to assets held for sale |
- | 16,773,670 | ||
| Sale of investment units from Fundo de Investimento Imosede | 111,688 | 125,746 | ||
| Income from Fundo de Investimento Imosede | 3,010,570 | - | ||
| Income from Fundo de Investimento Imobiliário Imosonae Dois Investment Units | 8,224 | 12,490 | ||
| Sale of Solinca Eventos e Catering | - | (536,000) | ||
| Gains/(Losses) on sale of investments in assets available for sale | 3,130,482 | 16,375,906 | ||
| Others | (103) | (20) | ||
| Investment Income | 4,116,081 | 16,597,379 |
As at 31 December 2013 and 2012, Taxation was made up as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Current tax | 2,679,436 | 3,042,730 |
| Deferred tax | (284,606) | (1,416,422) |
| Taxation | 2,394,830 | 1,626,308 |
________________________________________________
The reconciliation between the profit before taxation and the tax charge for the periods ended 31 December 2013 and 2012 may be summarised as follows:
| 31 December 2013 |
31 December 2012 |
|
|---|---|---|
| Profit before income tax | (10,854,823) | (10,100,511) |
| Difference between accounting and tax treatment of capital gains/(losses) | (6,533,793) | (1,432,759) |
| Share of gains/(losses) of associated undertakings (Note 6) | (5,060,825) | (3,501,150) |
| Provisions and impairment losses not accepted for tax purposes | (17,798,712) | 559,535 |
| Other permanent differences | 2,159,940 | (1,817,562) |
| Taxable Profit | (38,088,213) | (16,292,447) |
| Use of tax losses carried forward | 315,321 | (9,396,285) |
| Recognition of tax losses that have not originated deferred tax assets | 37,363,215 | 29,585,123 |
| (409,677) | 3,896,391 | |
| Income tax rate in Portugal | 25.00% | 25.00% |
| (102,419) | 974,098 | |
| Effect of different income tax rates in other countries | (6,701) | (193,266) |
| Effect of increases or decreases in deferred taxes | 1,982,547 | 278,172 |
| Municipality tax | 238,253 | 412,839 |
| Under / (over) taxation estimates | 129,020 | (76,362) |
| Autonomous taxes and tax benefits | 154,130 | 230,828 |
| Taxation | 2,394,830 | 1,626,308 |
As at 31 December 2013 and 2012, the reconciliation of consolidated net profit can be analysed as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Aggregate net profit | (11,233,149) | (18,947,339) |
| Harmonisation adjustments | (1,655,042) | 490,119 |
| Elimination of intragroup dividends | (18,814,395) | (7,683,714) |
| Share of gains/(losses) of associated undertakings | 5,060,825 | 3,501,150 |
| Elimination of intragroup capital gains/(losses) | (4,257) | - |
| Elimination of intragroup impairment | 8,690,306 | 356,506 |
| Adjustments of gains/(losses) on assets disposals | - | 3,003,042 |
| Adjustments of gains/(losses) of financial shareholdings sale | 4,706,059 | 7,554,033 |
| Others | - | (616) |
| Consolidated net profit for the year | (13,249,653) | (11,726,819) |
Balances and transactions during the periods ended 31 December 2013 and 2012 with related parties are detailed as follows:
________________________________________________
| Sales and services rendered | Purchases and services obtained | ||||
|---|---|---|---|---|---|
| Transactions | 31 December 2013 | 31 December 2012 | 31 December 2013 | 31 December 2012 | |
| Parent company (a) | - | - | - | - | |
| Associated companies | - | - | 24,367 | 21,452 | |
| Other partners and Group companies (b) | 33,689,532 | 31,869,881 | 6,724,575 | 7,626,230 | |
| 33,689,532 | 31,869,881 | 6,748,942 | 7,647,682 | ||
| Interest income | Interest expenses | ||||
| Transactions | 31 December 2013 | 31 December 2012 | 31 December 2013 | 31 December 2012 | |
| Parent company (a) | - | - | - | - | |
| Associated companies | 947,243 | 1,111,565 | - | - | |
| Other partners and Group companies (b) | - | - | 139,610 | 142,163 | |
| 947,243 | 1,111,565 | 139,610 | 142,163 | ||
| Accounts receivable | Accounts payable | ||||
| Balances | 31 December 2013 | 31 December 2012 | 31 December 2013 | 31 December 2012 | |
| Parent company (a) | - | - | - | - | |
| Associated companies | 937,076 | 1,101,343 | 1,812 | 4,932 | |
| Other partners and Group companies (b) | 8,463,343 | 13,671,174 | 2,415,720 | 2,673,449 | |
| 9,400,419 | 14,772,517 | 2,417,532 | 2,678,381 | ||
| Loans obtained | Loans granted | ||||
| Balances | 31 December 2013 | 31 December 2012 | 31 December 2013 | 31 December 2012 | |
| Parent company (a) | - | - | - | - | |
| Associated companies | - | 2,153,861 | 18,397,346 | 16,826,685 | |
| Other partners and Group companies (b) | 2,092,131 | - | - | - | |
| 2,092,131 | 2,153,861 | 18,397,346 | 16,826,685 |
a) The parent company is Efanor Investimentos, SGPS, SA;
b) Balances and transactions with Sonae, SGPS, SA and Sonae Indústria, SGPS, SA are included under Other partners in Group companies.
Remunerations attributed in 2013 to key management staff of main companies of the Sonae Capital Group (excluding members of the Board of Directors of Sonae Capital, SGPS, SA) amounted to 653,278 euro (497,980 euro in 2012), of which 553,811 euro (383,520 euro in 2012) are fixed remunerations and 99,467 euro (114,460 euro in 2012) are performance bonuses.
Earnings per share for the periods ended 31 December 2013 and 2012 were calculated taking into consideration the following amounts:
________________________________________________
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Net profit | ||
| Net profit taken into consideration to calculate basic earnings per share (Net profit for the period ) |
(13,200,373) | (11,092,003) |
| Net profit taken into consideration to calculate diluted earnings per share |
(13,200,373) | (11,092,003) |
| Number of shares | ||
| Weighted average number of shares used to calculated basic earnings per share |
247,182,143 | 249,290,870 |
| Weighted average number of shares used to calculated diluted earnings per share |
247,182,143 | 249,290,870 |
| Earnings per share (basic and diluted) | (0.053403) | (0.044494) |
There are no convertible instruments included in Sonae Capital, SGPS, SA's shares, hence there is no dilutive effect.
As at 31 December 2013 and 2012, cash receipts and cash payments related to investments can be analysed as follows:
| 31 December 2013 | 31 December 2012 | |||
|---|---|---|---|---|
| Amount received |
Amount paid |
Amount received |
Amount paid |
|
| Sale of investment units from Fundo de Investimento Imobiliário Fechado Imosede | 10,000,541 | - | 20,000,000 | - |
| Income from Fundo de Investimento Imobiliário Fechado Imosede Investment Units | 3,010,570 | - | 6,727,926 | - |
| Sale of Sociedade Imobiliária Tróia B3, SA | 2,457,492 | - | 2,457,492 | - |
| Sale of Sear - Sociedade Europeia de Arroz, SA | 385,000 | - | - | - |
| Sale of Saúde Atlantica - Gestão Hospitalar, SA and its affiliates | 200,000 | - | - | - |
| Other | 25,704 | 69,448 | 38,443 | 292,060 |
| Total Operations | 16,079,307 | 69,448 | 29,223,861 | 292,060 |
In 31 December 2013 and 31 December 2012, the following were identified as segments:
The contribution of the business segments to the income statement of the periods ended 31 December 2013 and 2012 can be detailed as follows:
| 31 December 2013 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Profit & Loss Account | Sales | Services rendered | Other operational income |
Total operational income |
Operational cash flow (EBITDA) |
||||
| Resorts | 16,764,476 | 8,777,473 | 3,820,736 | 29,362,685 | 2,407,176 | ||||
| Hotels | 55,863 | 13,833,018 | 746,416 | 14,635,297 | (5,384,116) | ||||
| Fitness | 162,626 | 11,354,290 | 813,573 | 12,330,489 | 477,849 | ||||
| Other | - | 1,173,733 | 303,766 | 1,477,499 | 221,661 | ||||
| Intersegment Adjustments | (941) | (3,586,859) | (989,249) | (4,577,049) | (4,090) | ||||
| Sonae Turismo | 16,982,024 | 31,551,655 | 4,695,242 | 53,228,921 | (2,281,520) | ||||
| Energy | 13,339,683 | 184,943 | 361,743 | 13,886,369 | 3,338,763 | ||||
| Refrigeration and HVAC | 39,495,314 | 26,916,137 | 1,069,763 | 67,481,214 | 1,580,633 | ||||
| Real Estate Assets | 1,300,690 | 7,341,827 | 1,150,123 | 9,792,640 | 4,008,374 | ||||
| Financial Assets | 744 | 8,140,798 | 927,524 | 9,069,066 | 367,287 | ||||
| Intersegment Adjustments | - | - | - | - | - | ||||
| Total Other Assets | 1,301,434 | 15,482,625 | 2,077,647 | 18,861,706 | 4,375,661 | ||||
| Holding & Others | - | 5,556,097 | 257,753 | 5,813,850 | (2,337,725) | ||||
| Intersegment Adjustments | (2,453,946) | (12,488,337) | 1,127,935 | (13,814,348) | (16,793) | ||||
| Consolidated | 68,664,509 | 67,203,120 | 9,590,083 | 145,457,712 | 4,659,019 |
| 31 December 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Profit & Loss Account | Sales | Services rendered | Other operational income |
Total operational income |
Operational cash flow (EBITDA) |
|||
| Resorts | 4,024,285 | 8,590,603 | 2,517,413 | 15,132,301 | (1,742,320) | |||
| Hotels | 63,429 | 12,037,664 | 1,253,573 | 13,354,666 | (6,644,691) | |||
| Fitness | 47,917 | 11,752,848 | 568,454 | 12,369,219 | (2,283,977) | |||
| Other | - | 1,670,794 | 880,281 | 2,551,075 | 330,370 | |||
| Intersegment Adjustments | (769) | (3,525,257) | (1,271,566) | (4,797,592) | 1,442 | |||
| Sonae Turismo | 4,134,862 | 30,526,652 | 3,948,155 | 38,609,669 | (10,339,176) | |||
| Energy | 12,674,154 | 494,299 | 551,391 | 13,719,844 | 3,307,555 | |||
| Refrigeration and HVAC | 38,792,852 | 18,839,558 | 371,226 | 58,003,636 | (1,269,530) | |||
| Real Estate Assets | 331,820 | 8,290,445 | 3,640,022 | 12,262,287 | 6,712,588 | |||
| Financial Assets | 65,955 | 8,068,474 | 554,359 | 8,688,788 | 83,011 | |||
| Intersegment Adjustments | - | - | - | - | - | |||
| Total Other Assets | 397,775 | 16,358,919 | 4,194,381 | 20,951,075 | 6,795,599 | |||
| Holding & Others | - | 4,679,245 | 539,688 | 5,218,933 | (1,435,230) | |||
| Intersegment Adjustments | (4,083,582) | (10,526,256) | 1,937,392 | (12,672,446) | (4,111) | |||
| Consolidated | 51,916,061 | 60,372,417 | 11,542,232 | 123,830,710 | (2,944,893) |
The contribution of the business segments to the Balance sheets as at 31 December 2013 and 31 December 2012 can be detailed as follows:
| 31 December 2013 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Balance Sheet | Fixed Assets Tangible and Intangible |
Investments | Other Assets | Total Assets | Total Liabilities |
Technical investment |
Gross Debt | Net Debt | |
| Resorts | 105,481,311 | 162,441 | 154,102,824 | 259,746,575 | 156,927,406 | 617,795 | 18,335,737 | 18,238,655 | |
| Hotels | 1,075,954 | 7,647 | 11,789,571 | 12,873,172 | 24,015,098 | 173,498 | 277 | (56,961) | |
| Fitness | 9,404,573 | 20,098 | 1,768,000 | 11,192,671 | 18,637,298 | 502,800 | 1,240,792 | 1,164,515 | |
| Other | 4,489 | 341,450 | 123,672,141 | 124,018,080 | 243,598,480 | - | 24,296 | (6,689) | |
| Intersegment Adjustments | - | - | (138,863,336) | (138,863,336) | (145,227,101) | - | - | - | |
| Sonae Turismo | 115,966,327 | 531,637 | 152,469,199 | 268,967,163 | 297,951,181 | 1,294,093 | 19,601,101 | 19,339,520 | |
| Energy | 21,611,730 | 2,546 | 7,349,632 | 28,963,908 | 25,241,374 | 4,541,284 | 10,539,415 | 10,535,939 | |
| Refrigeration and HVAC | 374,001 | 13 | 51,577,202 | 51,951,216 | 17,781,413 | 40,013 | 768,024 | 116,194 | |
| Real Estate Assets | 107,375,160 | 20,084,089 | 103,648,103 | 231,107,352 | 159,783,318 | 371,489 | 50,035 | (1,066,022) | |
| Financial Assets | 234,843 | 12,366,945 | 50,785,700 | 63,387,488 | 22,995,450 | 159,677 | 455,459 | 283,541 | |
| Intersegment Adjustments | - | - | 4,164,013 | 4,164,013 | - | - | - | - | |
| Total Other Assets | 107,610,004 32,451,034 | 158,597,815 | 298,658,853 | 182,778,768 | 531,166 | 505,494 | (782,481) | ||
| Holding & Others | 735,993 19,013,320 | 416,120,995 | 435,870,308 | 243,563,946 | 433,778 | 217,605,606 | 216,812,506 | ||
| Intersegment Adjustments | - | - | (450,975,029) | (450,975,029) | (447,040,605) | - | - | - | |
| Consolidated | 246,298,054 | 51,998,550 335,139,814 | 633,436,418 | 320,276,079 | 6,840,333 | 249,019,641 | 246,021,678 |
| 31 December 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Balance Sheet | Fixed Assets Tangible and Intangible |
Investments | Other Assets | Total Assets | Total Liabilities |
Technical investment |
Gross Debt | Net Debt |
| Resorts | 110,809,406 | 162,390 | 168,873,899 | 279,845,695 | 165,814,832 | 535,657 | 20,814,543 | 20,697,005 |
| Hotels | 2,131,901 | 7,638 | 21,182,410 | 23,321,949 | 31,558,815 | 159,574 | - | (118,405) |
| Fitness | 10,434,643 | 20,066 | 2,339,189 | 12,793,898 | 22,393,451 | 1,162,601 | 1,686,456 | 1,596,722 |
| Other | 5,946 | 341,450 | 137,595,825 | 137,943,221 | 245,193,579 | - | 17,575 | 3,508 |
| Intersegment Adjustments | - | - | (154,981,577) | (154,981,577) | (160,763,217) | - | - | - |
| Sonae Turismo | 123,381,897 | 531,544 | 175,009,745 | 298,923,187 | 304,197,460 | 1,857,832 | 22,518,574 | 22,178,831 |
| Energy | 18,363,784 | 2,546 | 6,189,031 | 24,555,361 | 21,811,393 | 8,632,381 | 9,154,806 | 9,137,748 |
| Refrigeration and HVAC | 566,282 | - | 54,027,362 | 54,593,644 | 20,256,144 | 397,830 | 5,651 | (501,072) |
| Real Estate Assets | 109,518,113 | 20,726,524 | 107,734,693 | 237,979,330 | 157,143,663 | 664,626 | 58,946 | (1,539,993) |
| Financial Assets | 1,662,998 | 4,447,050 | 51,084,792 | 57,194,840 | 26,694,523 | 156,437 | 54,771 | (345,778) |
| Intersegment Adjustments | - | - | - | - | - | - | - | - |
| Total Other Assets | 111,181,111 25,173,574 | 158,819,485 | 295,174,170 | 183,838,186 | 821,063 | 113,717 | (1,885,771) | |
| Holding & Others | 455,437 29,283,577 | 403,934,943 | 433,673,957 | 256,268,090 | 431,691 | 227,522,174 | 227,140,491 | |
| Intersegment Adjustments | - | - | (449,506,019) | (449,506,019) | (452,914,074) | - | - | - |
| Consolidated | 253,948,512 54,991,242 | 348,474,545 | 657,414,299 | 333,457,199 | 12,140,798 | 259,314,922 | 256,070,226 |
Contribution of the main business segments to the cash-flow statement for the periods ended 31 December 2013 and 2012 can be detailed as follows:
| 31 December 2013 | |||||||
|---|---|---|---|---|---|---|---|
| Tourism | Energy | Refrigeration and HVAC |
Other Assets |
Holding & Others |
Consolidated | ||
| Operating activities | 16,413,796 | 1,798,476 | (779,582) | 456,083 | (8,753,319) | 9,135,454 | |
| Investment activities | 3,998,144 | (3,326,692) | (24,147) | 1,601,012 | 11,492,868 | 13,741,185 | |
| Financing activities | (3,522,815) | 1,029,241 | 527,443 | 200,748 | (20,744,437) | (22,509,820) | |
| Change in cash and cash equivalents | 16,889,125 | (498,975) | (276,286) | 2,257,843 | (18,004,888) | 366,819 |
| 31 December 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Tourism | Energy | Refrigeration and HVAC |
Other Assets |
Holding & Others |
Consolidated | |||
| Operating activities | 773,243 | 5,133,982 | 1,345,860 | 1,328,211 | (7,062,392) | 1,518,904 | ||
| Investment activities | 539,334 | (8,566,822) | (282,656) | 1,111,057 | 24,410,708 | 17,211,621 | ||
| Financing activities | (2,049,450) | (1,352,818) | (758,943) | 26,502 | (14,951,766) | (19,086,475) | ||
| Change in cash and cash equivalents | (736,873) | (4,785,658) | 304,261 | 2,465,770 | 2,396,550 | (355,950) |
Net debt of the Holding can be analysed as follows:
| 31 December 2013 | |
|---|---|
| Inflows | |
| Gross bank debt | 217,605,606 |
| Cash and cash equivalents | 787,426 |
| Net bank debt | 216,818,180 |
| Other Assets | 40,737,150 |
| Intercompany ST Loans Obtained | 40,737,150 |
| Total Inflows | 257,555,330 |
| Outflows | |
| Other Assets | 23,672,122 |
| Intercompany Loans Granted | 23,672,122 |
Sonae Capital's average headcount can be detailed as follows:
| 31 December 2013 | 31 December 2012 | ||
|---|---|---|---|
| Tourism | 520 | 464 | |
| Energy | 19 | 19 | |
| Refrigeration and HVAC | 578 | 661 | |
| Other Assets | 94 | 128 | |
| Holding and Others | 95 | 94 | |
| 1,306 | 1,366 |
Decree Law Nr. 185/09 article 11
During the years ended 31 December 2013 and 31 December 2012, the following amounts have been paid to the company's external auditor:
________________________________________________
| 31 December 2013 | 31 December 2012 | ||
|---|---|---|---|
| Audit and Statutory Audit 1 | 88,286 | 98,023 | |
| Other Assurance 2 | 42,970 | - | |
| Tax Consultancy 2 | 38,772 | 5,000 | |
| Other Services 2 | 838 | 5,000 | |
| Total | 170,866 | 108,023 | |
| 1 Fees agreed for the year. |
2Amounts already paid.
No significant events, requiring further disclosure, have occurred after 31 December 2013.
These consolidated financial statements were approved by the Board of Directors and authorized for issue on 19 February 2014.
________________________________________________
31 DECEMBER 2013
Sonae Capital, SGPS, SA Lugar do Espido, Via Norte T (+351) 22 010 79 03 Capital Social 250.000.000 euros Sociedade Aberta Apartado 3053 – 4471-937 Maia F (+351) 22 010 79 35 CRC Maia (matrícula nº 508 276 756) Portugal www.sonaecapital.pt Pessoa colectiva nº 508 276 756
(Translation of the individual financial statements originally issued in Portuguese)
| ASSETS | Notes | 31 December 2013 | 31 December 2012 | |
|---|---|---|---|---|
| NON CURRENT ASSETS: | ||||
| Tangible assets | 4,668 | |||
| Investments | 4 | 576,779,243 | 582,772,362 | |
| Deferred tax assets | 7 | 407,059 | 429,213 | |
| Other non current assets | 5 | 153,051,695 | 133,517,946 | |
| Total Non Current Assets | 730,242,665 | 716,719,521 | ||
| CURRENT ASSETS: | ||||
| Other current assets | 6 | 6,970,428 | 26,036,184 | |
| Cash and cash equivalents | 8 | 786,250 | 374,001 | |
| Total Current Assets | 7,756,678 | 26,410,185 | ||
| TOTAL ASSETS | 737,999,343 | 743,129,706 | ||
| EQUITY AND LIABILITIES | ||||
| EQUITY: | ||||
| Share Capital | 9 | 250,000,000 | 250,000,000 | |
| Own shares | 9 | (1,124,125) | (264,705) | |
| Legal reserve | 10 | 8,307,376 | 8,307,376 | |
| Other reserves | 10 | 287,715,325 | 288,710,416 | |
| Profit / (Loss) for the period | 6,081,764 | (995,091) | ||
| TOTAL EQUITY | 550,980,341 | 545,757,996 | ||
| LIABILITIES: | ||||
| NON CURRENT LIABILITIES: | ||||
| Bank loans | 11 | 66,148,229 | 68,932,664 | |
| Bonds | 11 | 9,999,265 | 9,985,411 | |
| Other non current liabilities | 167,556 | 52,605 | ||
| Deferred tax liabilities | 7 | - | 778 | |
| Total Non Current Liabilities | 76,315,050 | 78,971,458 | ||
| CURRENT LIABILITIES | ||||
| Suppliers | 229,793 | 68,784 | ||
| Bank loans | 11 | 90,250,000 | 96,400,981 | |
| 11 | - | - | ||
| Other creditors | 12 | 18,798,082 | 20,748,477 | |
| Other current liabilities | 13 | 1,426,077 | 1,182,010 | |
| Total Current Liabilities | 110,703,952 | 118,400,252 | ||
| TOTAL EQUITY AND LIABILITIES | 737,999,343 | 743,129,706 |
The accompanying notes are an integral part of these financial statements
(Translation of the individual financial statements originally issued in Portuguese)
(Amounts expressed in euro)
| Notes | 31 December 2013 | 31 December 2012 | |
|---|---|---|---|
| Operational income | |||
| Other operational income | 84,890 | 30,892 | |
| Total operational income | 14,246 | 9,132 | |
| Operational expenses | |||
| External supplies and services | 14 | (1,438,340) | (1,060,454) |
| Staff costs | 16 | (826,656) | (461,579) |
| Depreciation and amortisation | (2,333) | - | |
| Other operational expenses | (38,057) | (7,519) | |
| Total operational expenses | (2,305,386) | (1,529,552) | |
| Operational profit/(loss) | (2,220,497) | (1,498,660) | |
| Financial income | 17 | 9,849,467 | 11,418,111 |
| Financial expenses | 17 | (9,903,016) | (9,846,148) |
| Net financial income/(expenses) | (53,549) | 1,571,963 | |
| Investment income | 17 | 8,385,687 | (1,043,989) |
| Profit/(loss) before taxation | 6,111,641 | (970,686) | |
| Taxation | 18 | (29,877) | (24,405) |
| Profit/(loss) for the period | 6,081,764 | (995,091) | |
| Profit/(loss) per share | |||
| Basic and diluted | 18 | 0.024604 | (0.003992) |
The accompanying notes are an integral part of these financial statements
(Translation of the individual financial statements originally issued in Portuguese)
(Amounts expressed in euro)
| t h Quarter 2013 4 (Unaudited) |
t h Quarter 2012 4 (Unaudited) |
||
|---|---|---|---|
| Operational income: | |||
| Other operational income | 70,644 | 21,760 | |
| Total operational income | 70,644 | 21,760 | |
| Operational expenses: | |||
| External supplies and services | (278,650) | (343,297) | |
| Staff costs | (210,725) | (72,918) | |
| Depreciation and amortisation | (875) | - | |
| Other operational expenses | 23,618 | (7,445) | |
| Total operational expenses | (466,632) | (423,660) | |
| Operational profit/(loss) | (395,989) | (401,900) | |
| Financial income | 2,780,405 | 2,647,544 | |
| Financial expenses Net financial income/(expenses) |
(2,643,826) 136,579 |
(2,133,874) 513,670 |
|
| Investment income | (5,096,619) | (1,426,910) | |
| Profit/(loss) before taxation | (5,356,029) | (1,315,140) | |
| Taxation | (527,369) | (26,824) | |
| Profit/(loss) for the period | (5,883,398) | (1,341,964) | |
| Profit/(loss) per share Basic and diluted |
(0.023802) | (0.005383) | |
| The Board of Directors | |||
| Sonae Capital, SGPS, SA | Report and Accounts | 180 |
(Translation of the individual financial statements originally issued in Portuguese)
(Amounts expressed in euro)
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Net profit for the period | 6,081,764 | (995,091) |
| Items that may subsequently be reclassified to net income: | ||
| Change in currency translation reserve | - | - |
| Share of other comprehensive income of associated undertakings and joint ventures accounted for by the equity method |
- | - |
| Change in the fair value of assets available for sale | - | - |
| Change in the fair value of cash flow hedging derivatives | - | - |
| Income tax relating to components of other comprehensive income Other comprehensive income for the period |
- - |
- - |
| Total comprehensive income for the period | 6,081,764 | (995,091) |
The accompanying notes are an integral part of these financial statements
| (Amounts expressed in euro) | |||
|---|---|---|---|
| t h Quarter 2013 4 (Unaudited) |
t h Quarter 2012 4 (Unaudited) |
||
| Net profit for the period | (5,883,398) | (1,341,964) | |
| Exchange differences on translating foreign operations | - | - | |
| Share of other comprehensive income of associates and joint ventures accounted by the equity method Change in the fair value of assets available for sale Change in the fair value of cash flow hedging derivatives Gains on property revaluation Income tax relating to components of other comprehensive income Other comprehensive income for the period |
- - - - - - |
- - - - - - |
|
| Total comprehensive income for the period | (5,883,398) | (1,341,964) | |
| Sonae Capital, SGPS, SA | Report and Accounts | 182 |
(Translation of the individual financial statements originally issued in Portuguese)
(Amounts expressed in euro)
| Share Capital |
Own Shares |
Legal Reserve |
Fair Value Reserve |
Hedging Reserve |
Other Reserves |
Retained Earnings |
Sub total | Net profit / (loss) |
Total Equity | |
|---|---|---|---|---|---|---|---|---|---|---|
| Balance as at 1 January 2012 | 250,000,000 | (36,144) | 8,307,376 | - | - 289,628,622 | - | 297,935,998 | (918,206) | 546,981,648 | |
| Total comprehensive income for the period | - | - | - | - | - | - | - | - | (995,091) | (995,091) |
| Appropriation of profits: Transfer to legal reserve and retained earnings Dividends distributed Acquisition/(disposal) of own shares |
- - - |
- - (228,562) |
- - - |
- - - |
- - - |
(918,206) - - |
- - - |
(918,206) - - |
918,206 - - |
- - (228,562) |
| Others | - | - | - | - | - | - | - | - | - | - |
| Balance as at 31 December 2012 | 250,000,000 | (264,706) | 8,307,376 | - | - 288,710,416 | - | 297,017,792 | (995,091) | 545,757,996 | |
| Balance as at 1 January 2013 | 250,000,000 | (264,706) | 8,307,376 | - | - 288,710,416 | - | 297,017,792 | (995,091) | 545,757,995 | |
| Total comprehensive income for the period | - | - | - | - | - | - | - | - | 6,081,764 | 6,081,764 |
| Appropriation of profits: Transfer to legal reserve and retained earnings Dividends distributed Acquisition/(disposal) of own shares |
- - - |
- - (859,420) |
- - - |
- - - |
- - - |
(995,091) - - |
- - - |
(995,091) - - |
995,091 - - |
- - (859,420) |
| Others | - | - | - | - | - | - | - | - | - | - |
| Balance as at 31 December 2013 | 250,000,000 | (1,124,125) | 8,307,376 | - | - 287,715,325 | - | 296,022,701 | 6,081,764 | 550,980,341 |
The accompanying notes are an integral part of these financial statements
(Translation of the individual financial statements originally issued in Portuguese)
(Amounts expressed in euro)
| 31 December 2013 | 31 December 2012 | ||
|---|---|---|---|
| OPERATING ACTIVITIES | |||
| Cash paid to trade creditors | 1,441,952 | 2,512,421 | |
| Cash paid to employees | 819,131 | 593,928 | |
| Cash flow generated by operations | (2,261,083) | (3,106,349) | |
| Income taxes (paid)/received | 671,543 | (95,646) | |
| Other cash receipts/(payments) relating to operating activities | (377,713) | (15,133) | |
| Net c as h flow from operat ing ac t ivit ies [ 1] |
(3,310,339) | (3,025,836) | |
| INVESTMENT ACTIVITIES | |||
| Cash receipts arising from: | |||
| Investments | 188 | 0 | |
| Interest and similar income | 9,972,687 | 11,439,257 | |
| Dividends | 12,355,245 | 382,921 | |
| Others | 2,023,374 | - | |
| Loans obtained | 48,207,348 | 95,998,597 | |
| 72,558,842 | 107,820,775 | ||
| Cash payments arising from: | |||
| Investments | - | 42,057,274 | |
| Tangible assets | 7,000 | - | |
| Loans granted | 47,595,400 | 69,831,543 | |
| 47,602,400 | 111,888,817 | ||
| Net c as h flow from inves t ment ac t ivit ies [ 2] |
24,956,442 | (4,068,042) | |
| FINANCING ACTIVITIES | |||
| Cash receipts arising from: | |||
| Loans obtained | 20,300,000 | 86,946,600 | |
| 20,300,000 | 86,946,600 | ||
| Cash Payments arising from: | |||
| Interest and similar costs | 9,673,022 | 10,001,774 | |
| Acquisition of own shares | 859,420 | 228,562 | |
| Loans obtained | 31,000,430 | 69,600,000 | |
| 41,532,872 | 79,830,336 | ||
| Net c as h flow from financ ing ac t ivit ies [ 3] |
(21,232,872) | 7,116,264 | |
| Net increase/(decrease) in cash and cash equivalents [4] = [1]+[2]+[3] | 413,231 | 22,386 | |
| Cash and cash equivalents at the beginning of the period | 8 | 373,019 | 350,634 |
| Cash and cash equivalents at the end of the period | 8 | 786,250 | 373,019 |
The accompanying notes are an integral part of these financial statements
(Translation of the individual financial statements originally issued in Portuguese)
| OPERATING ACTIVITIES Cash paid to trade creditors |
(Unaudited) | (Unaudited) |
|---|---|---|
| 222,654 | 661,465 | |
| Cash paid to employees | 266,667 | 147,422 |
| Cash flow generated by operations | (489,321) | (808,887) |
| Income taxes (paid)/received | 846,945 | 169,319 |
| Other cash receipts/(payments) relating to operating activities Net c as h flow from operat ing ac t ivit ies [ 1] |
282,782 (1,053,484) |
10,510 (967,696) |
| INVESTMENT ACTIVITIES | ||
| Cash receipts arising from: | ||
| Investments | 188 | - |
| Interest and similar income | 1,009,777 | 675,340 |
| Dividends Others |
- 2,023,374 |
- - |
| Loans granted | 35,663,561 | 95,998,597 |
| 38,696,900 | 96,673,937 | |
| Cash payments arising from: | ||
| Investments Tangible assets |
- - |
42,057,274 - |
| Loans granted | 27,995,900 | 40,354,097 |
| 27,995,900 | 82,411,371 | |
| Net c as h flow from inves t ment ac t ivit ies [ 2] |
10,701,000 | 14,262,566 |
| FINANCING ACTIVITIES | ||
| Cash receipts arising from: | ||
| Loans obtained | 700,000 | 38,864,600 |
| Cash Payments arising from: | 700,000 | 38,864,600 |
| Interest and similar costs | 2,356,539 | 2,447,111 |
| Acquisition of own shares | 358,072 | 163,705 |
| Loans obtained | 7,195,630 | 49,300,000 |
| 9,910,241 | 51,910,816 | |
| Net c as h from financ ing ac t ivit ies [ 3] |
(9,210,241) | (13,046,216) |
| Net increase/(decrease) in cash and cash equivalents [4] = [1]+[2]+[3] | 437,275 | 248,654 |
| Cash and cash equivalents at the beginning of the period | 348,975 | 124,366 |
| Cash and cash equivalents at the end of the period | 786,250 | 373,019 |
| The Board of Directors | ||
(Translation of the individual financial statements originally issued in Portuguese)
(Amounts expressed in euro)
Sonae Capital, SGPS, SA ("the Company" or "Sonae Capital") whose registered office is at Lugar do Espido, Via Norte, Apartado 3053, 4471-907 Maia, Portugal, was set up on 14 December 2007 by public deed, following the demerger from Sonae, SGPS, SA of the whole of the shareholding in the company formerly named Sonae Capital, SGPS, SA, now named SC, SGPS, SA, in compliance with paragraph a) of article 118 of the Commercial Companies Code.
The Company's financial statements are presented as required by the Commercial Companies Code. According to Decree-Law 158/2009 of 13 July of 2009, the Company's financial statements have been prepared in accordance with International Financial Reporting Standards.
The principal accounting policies adopted in preparing the accompanying individual financial statements are as follows:
The accompanying financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), issued by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") or by the previous Standing Interpretations Committee ("SIC"), applicable to financial years beginning on 1 January 2012.
As at the date of the approval of these financial statements, the following standards have been endorsed by the European Union.
a) In force for fiscal year 2013 and with no material impact on the Company financial statements at 31 December 2013:
| Date of endorsement by the EU |
Effective Date (Started on or after) |
||
|---|---|---|---|
| Amendments to IAS 1 - Presentation of Items of Other Comprehensive | 05/06/2012 | 01/07/2012 | |
| Income Amendments to IAS 19 - Employee Benefits |
05/06/2012 | 01/01/2013 | |
| IFRS 1 - First-time Adoption of International Financial Reporting Standards - Severe Hyperinflation and Removal of Fixed Dates for First time Adopters |
11/12/2012 | 01/01/2013 | |
| IAS 12 - Income Taxes - Deferred Tax: Recovery of Underlying Assets IFRS 13 - Fair Value Measurement |
11/12/2012 11/12/2012 |
01/01/2013 01/01/2013 |
|
| IFRIC 20 - Stripping Costs in the Production Phase of a Surface Mine | 11/12/2012 | 01/01/2013 | |
| Amendments to IFRS 7 Financial Instruments - Disclosure - Offsetting Financial Assets and Financial Liabilities |
13/12/2012 | 01/01/2013 | |
| IFRS 1 - First-time Adoption of International Financial Reporting Standards – Government loans |
04/03/2013 | 01/01/2013 | |
| Annual Amendments – IFRS 1, IAS 1, IAS 16, IAS 32 and IAS 34 | 27/03/2013 | 01/01/2013 |
b) In force for periods subsequent to 31 December 2013:
| Date of endorsement by the EU |
Effective Date (Started on or after) |
||
|---|---|---|---|
| IFRS 10 - Consolidated Financial Statements | 11/12/2012 | 01/01/2014 | |
| IFRS 11 - Joint Arrangements | 11/12/2012 | 01/01/2014 | |
| IFRS 12 - Disclosure of Interests in Other Entities | 11/12/2012 | 01/01/2014 | |
| IAS 27 - Separate Financial Statements | 11/12/2012 | 01/01/2014 | |
| IAS 28 - Investments in Associates and Joint Ventures | 11/12/2012 | 01/01/2014 | |
| Amendments to IAS 32 Financial Instruments - Presentation - Offsetting Financial Assets and Financial Liabilities |
13/12/2012 | 01/01/2014 | |
| Amendments to IFRS 10, IFRS 11 and IFRS 12 | 04/04/2013 | 01/01/2014 | |
| Amendments to IFRS 10, IFRS 12 and IAS 27 | 20/11/2013 | 01/01/2014 | |
| Amendments to IAS 39 – Financial Instruments: Recognition and Measurement |
19/12/2013 | 01/01/2014 | |
| Amendments to IAS 36 – Impairment of Assets | 19/12/2013 | 01/01/2014 |
No significant impacts are expected to arise from the application of these standards.
The accompanying financial statements have been prepared from the books and accounting records on a going concern basis and under the historical cost convention, except for financial instruments which are stated at fair value (Note 2.3).
Financial charges connected with loans contracted are generally recognised as a cost in accordance with the accruals principle, using for this purpose the effective interest rate method.
Investments are classified into the following categories:
Held to maturity investments are classified as non-current assets unless they mature within 12 months of the balance sheet date. Investments classified as held to maturity have defined maturities and the Company has the intention and ability to hold them until the maturity date. Investments measured at fair value through profit or loss are classified as current investments. Available-for-sale investments are classified as non-current assets.
Investments measured at fair value through profit and loss include investments held for negotiation which the company acquires with a view to disposal within a reasonable period of time and are classified in the balance sheet as current investments.
The Company classifies as available for sale investments those which are not classified as investments measured at fair value through profit and loss nor as investments held to maturity. These investments are classified as non current assets, unless there is an intention to dispose of them within 12 months of the balance sheet date.
All purchases and sales of investments are recognised on the trade date, independently of the settlement date.
Investments are initially measured at cost, which is the fair value of the consideration paid for them, including transaction costs, in the case of available for sale investments.
Available-for-sale investments and investments measured at fair value through profit or loss are subsequently carried at fair value, without any deduction for transaction costs which may be incurred on sale, by reference to their quoted market price at the balance sheet date. Investments in equity instruments that do not have a quoted market price and whose fair value cannot be reliably measured are stated at cost, less impairment losses.
Gains and losses arising from a change in fair value of available-for-sale investments are recognised directly in equity, under Fair value reserve, until the investment is sold or otherwise disposed of, or until its fair value is lower than its carrying amount and that corresponds to an impairment loss, at which time the cumulative gain or loss previously recognised in equity is transferred to net profit or loss for the period.
Gains and losses resulting from changes to the fair value of derivatives valued at fair value are shown in the financial statements in the caption net financial charges/income.
Held to maturity investments are carried at amortised cost using the effective interest rate, net of capital reimbursements and interest income received.
In accordance with IAS 27, investments in affiliated and associated undertakings are stated at acquisition cost, less impairment losses.
Financial liabilities and equity instruments are classified and accounted for based on their contractual substance, independently from the legal form they assume.
Loans are recorded as liabilities at their nominal value, net of up-front fees and commissions related to the issuance of those instruments. Financial expenses are calculated based on the effective interest rate and are recorded in the income statement on an accruals basis, in accordance with the accounting policy defined in Note 2.4. The portion of the effective interest charge relating to up-front fees and commissions, if not paid in the period, is added to the book value of the loan.
Trade accounts payable are stated at their nominal value.
The Company uses derivatives in the management of its financial risks only to hedge such risks, and/or to optimize funding costs, in accordance with the interest rate risk policy stated in Note 3.1.
The derivatives used by the Company defined as cash-flow hedge instruments relate mainly to interest rate hedge instruments on loans contracted. The indices, calculation methods, dates for re-fixing interest rates and the reimbursement plans for the interest rate hedge instruments are all identical to the conditions established for the underlying contracted loans, and thus qualify as perfect hedges. Inefficiencies that may exist are shown in the caption Net financial income/expenses in the income statement.
The Company's criteria for classifying a derivative instrument as a cash-flow hedge instrument include:
Cash-flow hedge instruments used by the Company to hedge the exposure to changes in interest rates of its loans are initially accounted for at cost, if any, and subsequently adjusted to their corresponding fair value. Changes in fair value of these cash flow hedge instruments are recorded in equity, under the caption Hedging reserves, and then recognised in the income statement over the same period in which the hedged instrument affects profit or loss.
Hedge accounting of derivative instruments is discontinued when the instrument matures or is sold. Whenever a derivative instrument can no longer be qualified as a hedging instrument, the fair value differences recorded in equity, under the caption Hedging reserves, are transferred to profit or loss of the period or to the carrying amount of the asset that resulted from the hedged forecast transaction. Subsequent changes in fair value are recorded in the income statement.
In cases in which derivative instruments, in spite of having been negotiated in accordance with the interest rate risk policy stated in Note 3.1, in relation to which the Company did not apply hedge accounting, are initially recorded at cost, if any, and subsequently measured at fair value. Changes in value resulting from the measurement at fair value, calculated using especially designed software tools, are included in Net financial charges in the income statement.
When embedded derivatives exist, they are accounted for as separate derivatives when the risks and characteristics are not closely related to economic risks and characteristics of the host contract, and this is not stated at fair value, and unrealized gains or losses arising from these derivatives recorded in the income statement.
In specific situations, the Company may use interest rate derivatives with the goal of obtaining fair value hedging. In these situations, derivatives are booked at their fair value in the profit and loss account. In situations in which the derivative involved is not measured at fair value (in particular borrowings measured at amortised cost), the effective share of hedging will be adjusted to the accounting value of the derivative hedged through the profit and loss account.
Cash and cash equivalents include cash on hand, cash at banks, term deposits and other treasury applications which mature in less than three months and are subject to insignificant risk of change in value.
In the cash-flow statement, cash and cash equivalents also include bank overdrafts, which are included in the balance sheet caption current bank loans.
Income and expenses are recorded in the year to which they relate, independently of the date of the corresponding payment or receipt. Income and expenses for which their real amount is not known are estimated.
Other current assets and Other current liabilities include income and expenses of the reporting year which will only be invoiced in the future. Those captions also include receipts and payments that have already occurred but will only correspond to income or expenses of future years, when they will be recognised in the income statement.
Events after the balance sheet date that provide additional information about conditions that existed at the balance sheet date (adjusting events) are reflected in the financial statements. Events after the balance sheet date that are non-adjusting events are disclosed in the notes, when material.
The most significant accounting estimates reflected in the financial statements are as follows:
Estimates were based on the best information available at the date of the preparation of the financial statements and on the best knowledge and experience of past and/or current events. These estimates may, however, be affected by subsequent events which are not foreseeable at the present day. Changes to these estimates, which take place after the date of the financial statements, will be recognized prospectively in the income statement, in accordance with IAS 8.
The main estimates and assumptions concerning future events included in the financial statements are described in the corresponding notes to the accounts, when applicable.
Current income tax is determined in accordance with tax rules in force in Portugal, considering the profit for the period.
Deferred taxes are calculated using the balance sheet liability method. Deferred tax assets are recognised only when their use is probable.
a) Interest Rate risk - POLICY
As a result of maintaining its variable rate debt in the balance sheet, and the resulting cash flows from interest payments, the Company is exposed to the Euro interest rate risk.
In view of the fact that:
some extent be compensated by movements in the remaining lines of the profit and loss account, in particular by operational profits or losses;
the Company policy concerning the mitigation of this risk does not establish the maintenance of any minimum proportion of fixed interest rate debt (converted to fixed rate through use of derivatives), but rather has opted for a dynamic approach to monitoring exposure, which aligns market conditions to the real exposure of the Company, in order to avoid the possibility of exposure that could have a real impact on the Company's results.
In view of the above, the Company policy concerning this issue defines a case by case review of each potential transaction, such that any contract for derivatives must follow the following principles:
b) Interest Rate Risk - SENSITIVITY ANALYSIS
Interest rate sensitivity is based on the following assumptions:
changes in interest rates affect interest receivable and payable of financial instruments indexed to variable rates (interest payments, related to financial instruments not defined as hedging instruments for interest rate cash-flow hedges). As a result, these instruments are included in the calculation of financial results sensitivity analysis;
changes in market interest rates affect income and expenses related to fixed interest rate financial instruments, in cases in which these are recognised at fair value. As such, all financial instruments with fixed interest rates booked at amortised cost, are not subject to interest rate risk, as defined in IFRS 7;
Given the above assumptions, if interest rates of financial instruments denominated in euro had been 0.75 percentage points higher/lower, the net profit before tax of the Company as at 31 December 2013 would have been lower or higher by 141,658.31 euro, respectively. As at 31 December 2012 they would have been lower or higher by 289,539.84 euro.
c) Exchange Rate Risk
The Company has no exposure to exchange rate risk.
d) Other Price Risks
The Company is exposed to risks arising from the value of investments made in financial shareholdings. However, these investments are in general made with strategic objectives in mind and not for current trading.
Credit risks at Sonae Capital arises mainly from (i) its relationships with financial institutions in the course of its day to day business activity, and (ii) the risk of non compliance by business counterparts in portfolio transactions.
To mitigate this risk, the Company:
d) Regularly monitors total exposures with each counterpart, in order to guarantee compliance with the policy established.
Shareholding Buy/Sale transactions: In the course of its business, the Company is exposed to the credit risk of counterparts with whom it agrees transactions concerning investments in shareholdings. In these cases, the means used to mitigate risks are determined on a one on one basis, in order to take into account the specifics of the transaction, with the constant supervision of the Board of Directors. Despite the wide range of means used, there exists always the possibility of using normal market methods, namely carrying out due diligence, obtaining financial information concerning the counterpart in question, or the pledging of an asset which is released when the financial transaction has been completed.
The objective of liquidity risk management is to ensure at any given moment that the Company has the financial capability under favourable market conditions to: (i) comply with its payment obligations when these fall due and (ii) ensure in a timely manner the appropriate financing for the development of its businesses and strategy.
To that end, the Company aims at maintaining a flexible financial structure, so that the process of managing liquidity within the Company includes the following key aspects:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Investments in affiliated and associated undertakings | 584,195,526 | 584,195,526 |
| Investments in other companies | ||
| Sonae RE - (0,04%) | 1,200 | 1,200 |
| Fundo Invest. Imob. Imosonae Dois - (0,001%) | 2,546 | 2,546 |
| 584,199,272 | 584,199,272 | |
| Impairment | (7,420,029) | (1,426,910) |
| 576,779,243 | 582,772,362 |
As at 31 December 2013 and 31 December 2012, the detail of Investments in Affiliated and Associated Companies is as shown in the table below.
| 31 December 2013 | 31 December 2012 | |||||||
|---|---|---|---|---|---|---|---|---|
| Company | % Held | Fair | Book Value | Fair Value | % Held | Fair | Book Value | Fair Value |
| Value | Reserve | Value | Reserve | |||||
| SC, SGPS, SA | 100.00% | - | 382,638,253 | - | 100.00% | - | 382,638,253 | - |
| Spred, SGPS, SA | 54,05 | - | 40,000,000 | - | 54,05 | - | 40,000,000 | - |
| SC Assets, SGPS, SA | 76,64 | - | 82,000,000 | - | 76,64 | - | 82,000,000 | - |
| Sonae Turismo, SGPS, SA | 23,08 | - | 37,500,000 | - | 23,08 | - | 37,500,000 | - |
| Fundo Esp.Inv.Imo.Fec. WTC | 59,57 | - | 42,057,273 | - | 59,57 | - | 42,057,273 | - |
| Total | - | 584,195,526 | - | - | 584,195,526 | - |
Investments carried at cost correspond to those in unlisted companies and for which a fair value cannot be reliably estimated.
Impairment tests on financial investments were performed, based on external valuations of the real estate of group companies, to assess the fair value of such investments
As at 31 December 2013 and 31 December 2012, the detail of Impairments on Investments in Affiliated and Associated Companies is as shown in the table below.
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Fundo Esp.Inv.Imo.Fec. WTC | (920,029) | (1,426,910) |
| Sonae Turismo, SGPS, SA | (6,500,000) | - |
| (7,420,029) | (1,426,910) |
As at 31 December 2013 and 31 December 2012 Other Non Current Assets are detailed as follows:
| 31 December 2013 | 31 December 2012 | ||
|---|---|---|---|
| Loans granted to group companies: | |||
| SC, SGPS, SA | 121,338,653 | 111,341,743 | |
| SC Assets, SGPS, SA | 31,713,043 | 22,176,203 | |
| 153,051,695 | 133,517,946 |
These assets were not due or impaired as at 31 December 2013. The fair value of loans granted to Group companies is basically the same as their book value.
Loans to group companies interest at market rates and are repayable within a period exceeding one year.
As at 31 December 2013 and 31 December 2012 Other Current Assets can be detailed as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Group companies - Short term loans: | ||
| SC, SGPS, SA | 232,300 | 20,450,367 |
| SC Assets SGPS, SA | 327,500.00 | 255,130 |
| Suppliers | - | 5,213 |
| Income tax withheld | 847,476 | 189,194 |
| Other Debtors | 81,727 | 5,500 |
| Accrued income | 4,984,735 | 5,107,967 |
| Deferred costs | 496,690 | 22,812 |
| 6,970,428 | 26,036,184 |
Loans granted to group companies bear interest at market rates and are repayable within one year.
The amount recorded as accrued income includes EUR 4,980,391.79 for interest on loans granted to group companies.
Under the heading deferred costs include EUR 468,036.67 relating to bank charges.
Deferred tax assets and liabilities as at 31 December 2013 and 2012 can be detailed as follows, split between the different types of temporary differences:
| Deferred tax assets | Deferred tax liabilities | |||
|---|---|---|---|---|
| 31 December 2013 31 December 2012 | 31 December 2013 31 December 2012 | |||
| Tax losses carried forward | 407,059 | 429,213 | - | - |
| Others | - | - | - | 778 |
During the periods ended 31 December 2013 and 2012, movements in Deferred tax are as follows:
| Activos por impostos diferidos | Passivo por impostos diferidos | |||
|---|---|---|---|---|
| 31 December 2013 31 December 2012 | 31 December 2013 | 31 December 2012 | ||
| Opening balance | 429,213 | 451,247 | 778 | 11,699 |
| Effect in results ( Nota 17): | ||||
| Tax losses carried forward | 12,108 | (22,034) | - | - |
| Others | (34,262) | - | (778) | (10,921) |
| 407,059 | 429,213 | - | 778 | |
| Effect in reserves: | - | - | - | - |
| Closing balance | 407,059 | 429,213 | - | 778 |
In accordance with the tax statements presented by companies that recorded deferred tax assets arising from tax losses carried forward, as at 31 December 2013 and 2012, and using exchange rates effective at that time, tax losses carried forward can be summarised as follows:
| 31 December 2013 | 31 December 2012 | |||||
|---|---|---|---|---|---|---|
| Prejuízo | Deferred tax | To be | Prejuízo fiscal | Deferred | To be | |
| fiscal | assets | used until | tax assets | used until | ||
| Generated in 2010 | 552,093 | 126,981 | 2014 | 551,761 | 137,940 | 2014 |
| Generated in 2011 | 1,165,089 | 267,970 | 2015 | 1,165,089 | 291,272 | 2015 |
| Generated in 2013 | 52,641 | 12,107 | 2018 | - | - | |
| 1,769,823 | 407,059 | 1,716,850 | 429,213 |
As at 31 December 2013 and 31 December 2012 Cash and Cash Equivalents can be detailed as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Cash | 1,004 | 1,004 |
| Bank deposits | 785,247 | 372,997 |
| Cash and cash equivalents in the balance sheet | 786,250 | 374,001 |
| Bank overdrafts | - | 981 |
| Cash and cash equivalents in the cash flow statement | 786,250 | 373,019 |
As at 31 December 2013 Share Capital consisted of 250,000,000 ordinary shares of 1 euro each.
In 2013, Sonae Capital SGPS, S.A. bought 3,519,252 own shares on the stock market, representing 1.4077% of its share capital, for a total consideration of 859,419.53 euro. As at 31 December 2013, the total of own shares bought by the company is 5,119,962, representing 0,640% of its share capital.
As at 31 December 2013, and 31 December 2012 the caption Other Reserves can be detailed as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Free reserves | 153,952,948 | 155,807,458 |
| Demerger reserve | 132,638,252 | 132,638,252 |
| Own shares reserve | 1,124,125 | 264,705 |
| 287,715,325 | 288,710,416 |
The demerger reserve (Note 1), corresponds to the difference between the book value of the shareholding in SC, SGPS, SA (382,638,252 euro) which was spun off from Sonae, SGPS, SA to the Company, and the value of the share capital of the Company (250,000,000 euro). This reserve, which has a treatment similar to that of a Legal Reserve, according to Company Law, it cannot be distributed to shareholders, unless the company is liquidated, but can be used to make good prior year losses, once other reserves have been used fully, or for capital increases.
Legal Reserve: According to the Company Law, at least 5% of the annual net profit must be transferred to the legal reserve until it represents 20% of share capital. This reserve cannot be distributed to shareholders, unless the company is liquidated, but can be used to cover prior year losses, once other reserves have been used fully, or for capital increases. As at 31 December 2013 the value of this caption is 8,307,376 euro.
As at 31 December 2013 and 31 December 2012 this caption included the following loans:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Bank loans - Commercial paper | 42,650,000 | 38,250,000 |
| Bank loans - Term loan | 24,000,000 | 31,000,000 |
| Up-front fees not yet charged to income statement | (501,771) | (317,336) |
| Bank loans - non current | 66,148,229 | 68,932,664 |
| Nominal value of bonds | 10,000,000 | 10,000,000 |
| Up-front fees not yet charged to income statement | (735) | (14,589) |
| Bond Loans | 9,999,265 | 9,985,411 |
| Non-current loans | 76,147,494 | 78,918,075 |
| Bank loans - Commercial paper | 83,250,000 | 94,400,000 |
| Bank loans - Term loan | 7,000,000 | 2,000,000 |
| Bond Loans | - | - |
| Up-front fees not yet charged to income statement | - | - |
| Bank overdrafts | - | 981 |
| Current bank loans | 90,250,000 | 96,400,981 |
The caption Non Current Bank Loans relates to amounts issued detailed as follows:
The bank loans mentioned above bear interest at market rates, indexed to the Euribor of each issue period.
The average interest rate of these bond loans as at 31 December 2013 was 4.559%.
The caption Current Bank Loans relates to amounts issued, detailed as follows:
The above loans are not guaranteed, and their fair value is considered to be close to their book value, in view of the fact that interest payable on them is at variable market rates.
There are no Derivatives.
The nominal value of loans and the estimated nominal values of interest to be paid on them have the following maturity dates:
| 31 December 2013 | 31 December 2012 | ||||
|---|---|---|---|---|---|
| Capital | Interest | Capital | Interest | ||
| N+1 | 90,250,000 | (6,032,370) | 96,400,981 | (7,025,683) | |
| N+2 | 7,000,000 | (4,115,231) | 15,250,000 | (5,929,592) | |
| N+3 | 21,216,667 | (3,171,801) | 7,000,000 | (4,743,816) | |
| N+4 | 44,216,667 | (1,845,410) | 17,000,000 | (2,589,950) | |
| N+5 | 4,216,667 | (1,542,885) | 40,000,000 | (1,828,362) | |
| After N+5 | - | - | - | - | |
| 166,900,000 | (16,707,697) | 175,650,981 | (22,117,403) | ||
As at 31 December 2013 and 31 December 2012, available credit lines may be summarised as follows:
| 31 December 2013 Commitments |
31 December 2012 Commitments |
|||
|---|---|---|---|---|
| less than 1Y | over 1 Y | less than 1Y | over 1 Y | |
| Amounts of credit lines available | 39,599,398 | 23,950,000 | 48,899,398 | 15,650,000 |
| Amounts of credit lines contracted | 47,849,398 | 66,600,000 | 61,599,398 | 79,850,000 |
As at 31 December 2013 and 31 December 2012, these captions were made up as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Other creditors | ||
| Group companies - Short term loans: | ||
| Spred, SGPS, SA | 18,796,170 | 20,746,600 |
| Other creditors | 1,912 | 1,877 |
| 18,798,082 | 20,748,477 |
Loans obtained from group companies bear interest at market rates and are repayable within one year.
As at 31 December 2013 and 31 December 2012, these captions were made up as follows:
| 31 December 2013 | 31 December 2012 | ||
|---|---|---|---|
| Other current liabilities | |||
| Taxes payable | 80,830 | 140,913 | |
| Accruals: | |||
| Staff costs | 235,119 | 235,216 | |
| Interest payable | 1,101,139 | 637,782 | |
| Other accruals | 4,410 | 164,029 | |
| Deferred income | 4,578 | 4,070 | |
| 1,426,077 | 1,182,010 |
As at 31 December 2013 and 31 December 2012, External Supplies and Services can be detailed as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Operational rents | 35,463 | 33,999 |
| Insurance costs | 45,319 | 49,615 |
| Travelling expenses | 30,177 | 20,064 |
| Services obtained | 1,313,257 | 944,024 |
| Other services | 14,123 | 12,751 |
| 1,438,340 | 1,060,454 |
As at 31 December 2013 and 31 December 2012, the Company had Operational Lease contracts, as a lessee, whose minimum lease payments (fixed income) had the following payment schedule:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| N+1 | 25,870 | 25,870 |
| N+2 | 15,091 | 25,870 |
| N+3 | - | 25,870 |
| N+4 | - | - |
| N+5 | - | - |
| 40,961 | 77,610 |
As at 31 December 2013 and 31 December 2012, Staff Costs are made up as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Governing bodies' remunerations | 737,243 | 388,574 |
| Social security contributions | 49,939 | 49,925 |
| Other staff costs | 39,475 | 23,080 |
| 826,656 | 461,579 |
As at 31 December 2013 and 31 December 2012, Net Financial Expenses and Investment Income can be detailed as follows:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Interest payable and similar expenses | ||
| Interest arising from: | ||
| Bank loans | (7,281,771) | (6,083,044) |
| Bonds | (479,623) | (1,134,868) |
| Other | (103,892) | (358,524) |
| Other financial expenses | (2,037,730) | (2,269,712) |
| (9,903,016) | (9,846,148) | |
| Interest receivable and similar income | ||
| Interest income | 9,849,467 | 11,418,111 |
| 9,849,467 | 11,418,111 | |
| Net financial expenses | (53,549) | 1,571,963 |
| Reversal of Impairment losses (Note 4.1) | (5,993,119) | (1,426,910) |
| Dividends received | 12,355,245 | 382,921 |
| Other income | 2,023,561 | - |
| Investment income | 8,385,687 | (1,043,989) |
As at 31 December 2013, the amount of dividends received from affiliated companies was as follows:
| SC ASSETS, SGPS, SA | 2,221,944 |
|---|---|
| SC, SGPS, SA | 9,500,000 |
| SPRED, SGPS, SA | 633,300 |
| 12,355,245 |
As at 31 December 2013 and 31 December 2012, Taxation is made up as follows:
| 31 December 2013 | 31 December 2012 | ||
|---|---|---|---|
| Current tax | (8,502) | (13,292) | |
| Deferred tax | (21,375) | (11,113) | |
| (29,877) | (24,405) |
The reconciliation between profit before income tax and taxation for the periods ended 31 December 2013 and 31 December 2012 is made up as follows:
| 31 December 2013 | 31 December 2012 | ||
|---|---|---|---|
| Total | Total | ||
| Profit before income tax | 6,111,641 | (970,686) | |
| Difference between accounting and tax of capital gains/(losses) | (6,164,282) | 1,088,420 | |
| Taxable Profit | (52,641) | 117,734 | |
| Recognition of tax losses originating deferred taxes | 52,641 | (88,301) | |
| Taxable Income | - | 29,433 | |
| Tax Charge (25%) | - | (7,358) | |
| Under/Over taxation estimates | 32 | 2 | |
| Municipal surcharge | - | (1,177) | |
| Autonomous taxes | (8,534) | (4,758) | |
| Effect of increases or decreases in deferred taxes | (21,375) | (11,113) | |
| Taxation | (29,877) | (24,405) |
Earnings per share for the three months periods ended 31 December 2013 and 2012 were calculated taking into consideration the following amounts:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Net profit | ||
| Net profit taken into consideration to calculate basic | ||
| earnings per share (Net profit for the period ) | 6,081,764 | (995,091) |
| Effect of dilutive potential shares | - | - |
| Net profit taken into consideration to calculate | ||
| diluted earnings per share | 6,081,764 | (995,091) |
| Number of shares | ||
| Weighted average number of shares used to calculate | ||
| basic earnings per share | 247,182,143 | 249,290,870 |
| Weighted average number of shares used to calculate | ||
| diluted earnings per share | 247,182,143 | 249,290,870 |
| Earnings per share (basic and diluted) | 0.024604 | (0.003992) |
Balances and transactions during the periods ended 31 December 2013 and 2012 with related parties are detailed as follows:
| Expenses | Income | |||
|---|---|---|---|---|
| Transactions | 31 December 2013 31 December 2012 | 31 December 2013 31 December 2012 | ||
| Parent company | - | - | - | - |
| Group and associated companies | 650,112 | 1,077,260 | 9,853,678 | 11,787,105 |
| 650,112 | 1,077,260 | 9,853,678 | 11,787,105 | |
| Accounts payable | Accounts receivable | |||
| Balances | 31 December 2013 31 December 2012 | 31 December 2013 31 December 2012 | ||
| Parent company | - | - | - | - |
| Group and associated companies | 171,441 | 178,646 | 4,984,735 | 5,103,612 |
| 171,441 | 178,646 | 4,984,735 | 5,103,612 | |
| Loans obtained | Loans granted | |||
| Balances | 31 December 2013 31 December 2012 | 31 December 2013 31 December 2012 | ||
| Parent company | - | - | - | - |
| Group and associated companies | 18,796,170 | 20,748,477 | 153,611,495 | 154,223,443 |
| 18,796,170 | 20,748,477 | 153,611,495 | 154,223,443 |
Art 5 nr 4 of Decree-Law nr 495/88 of 30 December changed by art 1 of Decree-Law nr 318/94 of 24 December
In the period ended 31 December 2013 shareholders' loan contracts were entered into with the companies SC, SGPS, SA and SC Assets, SGPS, SA.
In the period ended 31 December 2013 short-term loan contracts were entered with the companies Spred, SGPS, SA.
As at 31 December 2013 amounts due by affiliated companies can be summarized as follows:
Loans and Short term loans granted
| Companies | Closing Balance |
|---|---|
| SC, SGPS, SA | 121,570,953 |
| SC Assets, SGPS, SA | 32,040,543 |
| 153,611,495 |
As at 31 December 2013 amounts due to affiliated companies can be summarized as follows:
Short term loans obtained
| Companies | Closing Balance |
|---|---|
| Spred, SGPS, SA | 18,796,170 |
| 18,796,170 |
In the 12 months ended 31 December 2013 and 31 December 2012, the following remunerations were paid to the external auditor of the company:
| 31 December 2013 | 31 December 2012 | |
|---|---|---|
| Audit and Statutory Audit1 | 12,928 | 13,361 |
| Tax Consultancy | - | - |
| 12,928 | 13,361 | |
1Annual fees agreed.
The accompanying financial statements were approved by the Board of Directors and authorized for issue on 19 February 2014.
31 DECEMBER 2013
Sonae Capital, SGPS, SA Lugar do Espido, Via Norte T (+351) 22 010 79 03 Capital Social 250.000.000 euros Sociedade Aberta Apartado 3053 – 4471-937 Maia F (+351) 22 010 79 35 CRC Maia (matrícula nº 508 276 756) Portugal www.sonaecapital.pt Pessoa colectiva nº 508 276 756
(Translation of a report originally issued in Portuguese)
To the Shareholders of Sonae Capital, S.G.P.S., S.A.
In accordance with applicable legislation and the mandate given to the Fiscal Board, we hereby submit our Report and Opinion which covers the report of the Board of Directors and the consolidated and individual financial statements of Sonae Capital, S.G.P.S., SA for the year ended 31 December 2013, which are the responsibility of the Company's Board of Directors.
During the year, we have monitored the management of the Company, reviewed the development of the operations of the Company and of its main affiliates, and held meetings whenever considered necessary and with the appropriate scope. In face of the subject under review, these meetings were attended by key staff of the finance department, namely the Chief Financial Officer, of the planning and control department and of internal audit and risk management. We have also followed up closely the work of the statutory auditor and external auditor of the Company who kept us informed of the scope and conclusions of the audit work performed. In performing these tasks, the Fiscal Board has obtained from the Board of Directors, Company staff and affiliated companies' staff and from the statutory auditor all the necessary information and explanations, for a proper understanding and assessment of business developments, financial performance and position, as well as of risk management and internal control systems.
We have also reviewed the preparation and disclosure of financial information, as well as the statutory audit performed on the individual and consolidated accounts of the Company, having obtained from the statutory auditor all information and explanations requested. Additionally, within the scope of the mandate given to the Fiscal Board, we examined the individual and consolidated balance sheets as at 31 December 2013, the individual and consolidated statements of profit and loss by nature, statements of cash flows, statements of comprehensive income and statements of changes in equity for the year ended on that date and related notes.
We have also reviewed the report of the Board of Directors and the Corporate Governance Report for the year 2013, issued by the Board of Directors, and the Statutory Auditor's Report issued by the External Auditor of the Company, whose content we agree with.
Considering the above, we are of the opinion that the consolidated and individual financial statements referred to above were prepared in accordance with applicable accounting, legal and statutory standards and give a true and fair view of the assets and liabilities, financial position and results of Sonae Capital, S.G.P.S., SA and of its main affiliates, and that the report of the Board of Directors faithfully describes business developments, performance and financial position of the Company and of its affiliates and the main risks and uncertainties they face. We hereby inform that the Corporate Governance report issued complies with article 245-A of the Portuguese Securities Code.
The Fiscal Board would like to express its gratitude to the Company's Board of Directors and staff for their cooperation.
In face of the above mentioned, we are of the opinion that the Shareholders' General Meeting can approve:
a) The report of the Board of Directors, the individual and consolidated balance sheets as at 31 December 2013, the individual and consolidated financial statements of profit and loss by nature, of cash flows, of comprehensive income and of changes in equity for the year ended on that date and related notes;
b) The profit appropriation proposal of the Board of Directors.
Under the terms of Article 245, paragraph 1, c) of the Portuguese Securities Code, the members of the Fiscal Board hereby declare that, to their knowledge, the information disclosed in the Report of the Board of Directors and other accounting documents, was prepared in accordance with applicable accounting standards, and give a true and fair view of the assets, liabilities, financial position and results of the Company and of its affiliates.
Moreover, members of the Fiscal Board consider that the Report of the Board of Directors faithfully describes business developments, the performance and the position of the Company and of its affiliates and the main risks and uncertainties they face.
Maia, 19 February 2014
The Fiscal Board,
Manuel Heleno Sismeiro
Armando Luís Vieira de Magalhães
Jorge Manuel Felizes Morgado
31 DECEMBER 2013
Sonae Capital, SGPS, SA Lugar do Espido, Via Norte T (+351) 22 010 79 03 Capital Social 250.000.000 euros Sociedade Aberta Apartado 3053 – 4471-937 Maia F (+351) 22 010 79 35 CRC Maia (matrícula nº 508 276 756) Portugal www.sonaecapital.pt Pessoa colectiva nº 508 276 756
1 As required by the Portuguese Securities Market Code, we present the Audit Report for Statutory and Stock Exchange Regulatory Purposes on the financial information included in the Directors' Report and in the attached Consolidated and Individual Financial Statements of Sonae Capital, S.G.P.S., S.A., comprising the consolidated and individual statement of financial position as at 31 December 2013, (which shows total assets of 633.436.418 Euros and 737.999.343 Euros, respectively, a total consolidated equity of 313.160.339 Euros, which includes non-controlling interests of 8.850.291 Euros and individual of 550.980.341 Euros, a net consolidated loss of 13.249.653 Euros and a net individual profit of 6.081.764 Euros) the consolidated and individual statement of income by nature, the consolidated and individual Comprehensive Income, the consolidated and individual statements of changes in equity and the consolidated and individual cash flow statements for the year then ended and the corresponding notes to the accounts.
2 It is the responsibility of the Company's Board of Directors (i) to prepare the Directors' Report and Consolidated and Individual Financial Statements that present fairly, in all material respects, the financial position of the company and its subsidiaries, the consolidated and individual changes in equity, the consolidated and individual result of their operations, the consolidated and individual comprehensive income and their consolidated and individual cash flows; (ii) to prepare historical financial information in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU that is complete, true, timeliness, clear, objective and licit, as required by the Portuguese Securities Market Code; (iii) to adopt adequate accounting policies and criteria; (iv) to maintain appropriate systems of internal control; and (v) to disclose any significant matters which have influenced the activity, the financial position or results of the company and its subsidiaries.
3 Our responsibility is to verify the financial information included in the financial statements referred to above, namely as to whether it is complete, true, up-to-date, clear, objective and lawful, as required by the Portuguese Securities Market Code, for the purpose of issuing an independent and professional report based on our audit.
PricewaterhouseCoopers & Associados - Sociedade de Revisores Oficiais de Contas, Lda. o′Porto Bessa Leite Complex, Rua António Bessa Leite, 1430 - 5º, 4150-074 Porto, Portugal Tel +351 225 433 000 Fax +351 225 433 499, www.pwc.com/pt Matriculada na Conservatória do Registo Comercial sob o NUPC 506 628 752, Capital Social Euros 314.000
PricewaterhouseCoopers & Associados - Sociedade de Revisores Oficiais de Contas, Lda. pertence à rede de entidades que são membros da PricewaterhouseCoopers International Limited, cada uma das quais é uma entidade legal autónoma e independente. Sede: Palácio Sottomayor, Rua Sousa Martins, 1 - 3º, 1069 - 316 Lisboa, Portugal Inscrita na lista das Sociedades de Revisores Oficiais de Contas sob o nº 183 e na Comissão do Mercado de Valores Mobiliários sob o nº 9077
4 We conducted our audit in accordance with the Standards and Technical Recommendations approved by the Institute of Statutory Auditors which require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated and individual financial statements are free from material misstatement. Accordingly, our audit included: (i) verification that the company and its subsidiaries' financial statements have been properly examined and for the cases where such an audit was not carried out, verification, on a sample basis, of the evidence supporting the amounts and disclosures in the consolidated financial statements, and assessing the reasonableness of the estimates, based on the judgements and criteria of Management used in the preparation of the consolidated financial statements; (ii) verification of the consolidation operations and the utilization of the equity method; (iii) assessing the appropriateness and consistency of the accounting principles used and their disclosure, as applicable; (iv) assessing the applicability of the going concern basis of accounting; (v) assessing the overall presentation of the consolidated and individual financial statements; and (vi) assessing the completeness, truthfulness, accuracy, clarity, objectivity and lawfulness of the consolidated and individual financial information.
5 Our audit also covered the verification that the financial information included in the Board of Director's report is consistent with the financial statements as well as the verification set forth in paragraphs 4 and 5 of Article 451º of the Companies Code.
6 We believe that our audit provides a reasonable basis for our opinion.
7 In our opinion, the consolidated and individual financial statements referred to above, present fairly in all material respects, the consolidated and individual financial position of Sonae Capital, S.G.P.S, S.A. as at 31 December 2013, the consolidated and individual results of their operations, the consolidated and individual comprehensive income, the consolidated and individual statements of changes in equity and their consolidated and individual cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU and the information included is complete, true, timely, clear, objective and licit.
8 Based on our work, nothing has come to our attention that leads us to conclude that the information included in the management report is not consistent with the consolidated and individual financial information for the period and the corporate governance report includes all the elements required by article nº 245-A of the Securities Market Commission Code.
19 February 2014
PricewaterhouseCoopers & Associados – Sociedade de Revisores Oficiais de Contas, Lda. represented by:
Hermínio António Paulos Afonso, R.O.C.
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