Annual Report • Jun 14, 2011
Annual Report
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Manuel de Oliveira Marques – President José Lourenço Abreu Teixeira – Vice President Manuel Fernando Monteiro da Silva – 1st Secretary Maria Olívia Almeida Madureira – 2nd Secretary
José Reis da Silva Ramos – President Hiroyuki Ochiai – Member Miguel Silva Ramalho da Fonseca – Member Maria Angelina Martins Caetano Ramos - Member Salvador Acácio Martins Caetano – Member Miguel Pedro Caetano Ramos – Member Rui Manuel Machado de Noronha Mendes - Member Shigeki Enami – Alternate Member
José Jorge Abreu Fernandes Soares – President António Pimpão & Maximino Mota, SROC represented by António Maia Pimpão – Member Kenichiro Makino – Member Fernando Sousa Matos Pires – Alternate Member
José Pereira Alves, or by Hermínio António Paulos Afonso representing PricewaterhouseCoopers & Associados - Sociedade de Revisores Oficiais de Contas, Lda. António Joaquim Brochado Correia – Alternate Member
Company's sustainability has now become the arbiter of success in the world of business. Toyota Caetano Portugal has supported our action next to the Community, Employees, Clients and Business Partners, in our deep commitment to the environment and based on our values of trust, innovation and quality.
We have always been concerned to provide our Clients with the utmost satisfaction, and we remain committed to offering reliable, innovative and safe products, with a special focus on environmentally friendly solutions. So I therefore wish to emphasize the pioneering nature of Toyota hybrid vehicles, the environmental leadership of our brand within the car sector and the launch, in the middle of last year, of a hybrid version in the Auris range, which represents our highest volume model.
In 2010, we experienced a period of great upheaval in the media, the result of news about Service Campaigns, influenced above all by events in the United States of America. However, the results achieved in sales and profitability, as well as independent studies evaluating the credibility of our brands (among which I highlight winning the Reader's Digest 'Trusted Brand' Trophy) and, more relevantly, the commitment of our Clients in defending our reputation, demonstrate the quality of our products and Toyota as a safe value. In this respect, I also wish to mention a survey conducted by TUV, world leader in technical inspections, which placed Toyota as an undisputed leader for its quality, positioning 17 models of the Brand in the TOP 10 of each segment, with the Prius highlighted as the most reliable vehicle in the overall table. Among our Employees, the Company's most valuable asset, we seek mutual trust and respect. With our Business Partners, which include the Toyota Dealer Network, our suppliers and shareholders, among others, we seek the continuous cooperation based on stable and mutual growth, corporate values and long-term relationships.
In 2010, as the result of a containment strategy and the global effort to reduce waste and rationalise costs, we closed the year with high profit levels. These profits mirror good performance in sales of new and used vehicles, in after-sales service excellence, but also the provision of Toyota Forklifts unit (another benchmark in the sector).
We continued to invest in the industry as part of the strategy of the Company and of Salvador Caetano Group, so here I underline the quality of the products manufactured in Ovar, including the commercial Toyota Dyna which continued to lead the chassis cab segment in 2010.
Within this integrated vision of business sustainability, Toyota Caetano Portugal, reflecting its close compliance with standards of citizenship, continues to promote a better society in the community through the development of environmental, road safety and philanthropy awareness activities. Among a variety of facts which support our socially and environmentally sustainable business performance, I wish to mention the Reforestation Project '1 Toyota, 1 Árvore' ('A Tree for every Toyota') and also the fact that Toyota Caetano Portugal is a signer to the European Road Safety Charter and the Anti-corruption Charter and a partner of several national NGOs. And in an action very closely co-ordinated with the local community, I evaluate positively a year of cooperation with the Centro de Dia de Gervide (Gervide Day Centre) (in Oliveira do Douro) and with the Conferência de S. Vicente de Paulo de S. Martinho de Arada (Conference of S.Vicente de Paulo of S. Martinho de Arada (in Ovar), where we guarantee the daily provision of meals for the elderly.
Although complex, 2010 ultimately became a year of challenges which we overcame successfully, in the full assumption, for a complete period, of the Company's management under my responsibility as President.
I have a feeling of accomplishment, but I am assured that this was merely one step in what is already the long history of this Company.
2011 will bring even greater tests – indeed difficult conditions began to appear early in the year both for the Portuguese economy and for the sector. The expected economic context, as well as changes to car taxation, together with the increase in VAT, ISV (car tax) and the closure of the End of Life Vehicle Discount Scheme all led to purchases being brought forward to 2010, therefore worsening the outlook for the new year. But I assure you that we will work hard to continue to perform strongly, with advantages for everyone: Employees, Clients, Business Partners, Shareholders and the Community.
We will continue to be a benchmark in company sustainability, because we care about business solidity, we manage efficiently and we act for results.
José Reis da Silva Ramos President
In accordance with the provisions laid down in Article 245 (1-a) of Código dos Valores Mobiliários (Portuguese Securities Code) the management report and the proposal for the allocation of the profits below were prepared, as well as the respective Annexes in accordance with the provisions laid down in articles 447th and 448th of the Código das Sociedades Comerciais (Commercial Companies Code). For each of the Companies included in the consolidation perimeter of Toyota Caetano Portugal an indication of the main events that occurred throughout the period and the respective impact on the financial statements will be shown.
In 2010, 2,553 units were produced in the Toyota business, corresponding to an increase of 30% over 2009. Production of Dyna model for the export market grew by 98% compared with 2009, with 1,055 vehicles being produced.
In 2010, 91 units were produced in the Mini Buses business, an increase of 6% compared to the same period in 2009. The domestic market is the main destination of the production with 59 vehicles.
Conversion and PDI business prepared 6,316 vehicles, representing a growth of 11% over the same period last year.
It should be highlighted that the values shown result from the comparison made with abnormally low production values pertaining to 2009.
| PRODUCTION | 2010 | 2009 | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|
| Toyota Physical Units | 2,553 | 1,967 | 5,947 | 4,924 | 3,831 |
| Minibuses Physical Units | 91 | 86 | 154 | 160 | 132 |
| Converted Physical Units | 6,316 | 5,677 | 10,046 | 11,682 | 6,865 |
| Total Employees | 297 | 340 | 360 | 343 | 325 |
In another aspect it is noted that compliance with the Car Sector Support Program (PASA - Programa de Apoio Sector Automóvel), allowed 22.2% of the employees of the Ovar Factory Unit to be certified for minimum education (Year 9) and a further 20% to be certified for Year 12.
As was the case last year, this Factory Unit signed with all its employees a new agreement on working hours' bank, to run until 2013.
Most noteworthy is the renewal of ISO 14001:2004 Environmental Certification and monitoring of ISO 9001:2008 Quality Standard.
We also highlight that Ovar Factory Unit was rewarded by Toyota Motor Corporation for the quality of its production through the 'Overseas Plant Quality' which rates this Unit among the best in Europe. The Unit was also recognised, for the second consecutive time, with the 'Toyota Global Eco Award' for its environmental efficiency.
The Toyota Optimo Seven minibus was awarded one of the most renowned international design awards in the transport category, the 'Good Design Award' awarded by Chicago Athenaum.
In celebration of its 39th anniversary, the Ovar Factory arranged a different day for its employees and families with an open door day with guided tours and various recreational activities.
Also noteworthy is the first participation of the Ovar Factory Unit in the 5th European Quality Control Circles Convention (QCC) at TMMT (Turkey).
2010 showed clearly positive results against 2009, with a 33.9% growth and a total of 272,763 marketed units.
Light passenger vehicles registered a higher performance than commercial vehicles, with a growth of approximately 39% vs. 15% respectively.
| 2010 | 2009 | Var% | |
|---|---|---|---|
| Scrapping | 35.754 | 40.194 | -11,0% |
| RAC | 17.730 | 10.560 | 67,9% |
| Other | 169.980 | 110.259 | 54,2% |
| TTL | 223.464 | 161.013 | 38,8% |
The good market performance is based on the following factors:
1) 2009 was the worst year for 22 years, with performance damaged by the sharp drop in economic activity.
2010 was more positive, with a significant recovery in economic terms, which was felt in the several distribution channels.
This chapter highlights the development of the rent-a-car market that closes the year with a growth of approximately 68%.
2) Due to the phenomenon of advance purchasing, a result of containment measures adopted under the State Budget for 2011.
The 2 p.p. increase in VAT and the aggravation in vehicle tax, with an impact on prices between 2% and 4%; and the end of the discount incentive explain the strong demand experienced in late 2010.
This reality is clear in the sales distribution reported, where it can be seen that, contrary to what has traditionally happened, December was the strongest month in the whole year, with a 12.6% share in total sales.
In 2010, in line with market trends, Toyota sales grew by 22.3% overall, reaching 15,081 units, which translated into a total market share of 5.5%.
Toyota's performance was different depending on whether we are talking about Light Passenger or Commercial vehicles:
The strong growth was due mainly to:
Even so, the good results obtained were not sufficient to offset the strong Market growth, resulting in an overall loss of share. This loss of market share is mainly a result of a lower rate of market coverage due to the growing trend for offering vehicle types that we do not supply (SWs and SUVs/CUVs in the C segment).
This difference in performance compared to the Market is essentially explained by the following:
(1) A reduced level of market coverage, with Toyota not present in the Combos segment, which has the highest growth in Commercial vehicles (about 27%);
(2) Less competitiveness in the CDVs segment, the segment with the second highest growth rate (25.5%);
(3) Our strongest segments were those where there was least growth and, in the case of Chassis-cabs (Dyna), it was the only segment to lose sales.
Two positive points are, however, of note:
Keeping leadership in the Chassis cab segment, with Dyna model, produced locally at the Ovar assembly plant.
The successful end-of-year Dyna and Hiace campaign.
2010 was essentially marked by the sales growth in the IS and RX Ranges. In the case of the IS Range, the sales increase was due to the introduction of the IS200d, with very competitive price positioning, and to the marketing effort developed throughout all of 2010. In the case of the RX450h, the increase in sales was due to the positive impact of launching actions at the end of 2009, and the introduction of front-wheel drive versions with excellent price positioning.
This strategy allowed us to increase sales in the 2nd year of sales of the 2nd Generation of the RX450h. Sales of the GS range dropped by 50% as a result of the lower competitiveness of the model compared to the new products launched by our direct competitors. The same happened with the LS Range that saw its sales drop to only 2 units. This reduction is due to the end of the novelty effect of the model and the introduction of new models by our most direct competitors.
| 2009 | 2010 | |
|---|---|---|
| IS | 198 | 219 |
| GS | 22 | 11 |
| RX | 41 | 54 |
| LS | 5 | 2 |
| Total | 266 | 286 |
| MARKET | TOYOTA + BT SALES | |||||||
|---|---|---|---|---|---|---|---|---|
| '09 '10 |
Variation | '09 | '10 | Variation | ||||
| % | QT | Share | QT | Share | % | |||
| Counterbalanced Forklifts |
1172 | 1001 | -14,6 | 276 | 23,5 | 233 | 23,3 | -15,6 |
| Warehouse equipment |
1053 | 1041 | -1,1 | 278 | 26,4 | 199 | 19,1 | -28,4 |
| TOTAL MMC | 2225 | 2042 | -8,2 | 554 | 24,9 | 432 | 21,2 | -22,0 |
Source: ACAP
In 2010 the market for Load Handling Machines, continued to fall, even more than the previous year, due to the effects of the crisis in the Portuguese economy which led to the closure of countless companies within the industrial area. There was, thus, a market loss of around 8.2%, totalling 2,042 units compared to 2,225 units in 2009.
An analysis by equipment type showed that the loss of market in Counterbalanced Forklifts was more pronounced (-14.6%) compared to that registered for Warehouse Equipment (-1.1%), the latter having benefitted from renewed confidence in the Portuguese Food Retail and Distribution sector.
Regarding the sales of Toyota Counterbalanced Forklifts, we can say that they have followed the market drop, having decreased by 15.6%. As for the sales of Warehouse Equipment, the drop of sales registered was sharper
(28.4%).
This performance is explained by the fact that in 2009, two large fleet deals were achieved which positively affected Toyota and BT sales. The year was closed in counter-cycle against the market and this did not happen in 2010.
Nonetheless and in terms of sales ranking, Toyota + BT kept its market leadership, achieving a share of 21.2%.
| Product | Sales 2010 |
Sales 2009 |
Growth % 2010/2009 |
Management Budget |
% Budget Execution |
|---|---|---|---|---|---|
| Parts/ Accessories/Merchandising | 42,879 | 40,075 | 7.0% | 40,949 | 104.7% |
| Extracare/Eurocare Services | 1,943 | 1,473 | 31.9% | 1,356 | 143.3% |
| Total | 44,822 | 41,548 | 7.9% | 42,305 | 105.9% |
During 2010, Toyota's After Sales Division invoiced approximately 42.9 million Euros in parts, accessories and merchandising. This figure represents an increase of 7.0% compared to the turnover achieved in 2009, thus reflecting a recovery in business as opposed to the difficulties encountered in the previous year.
Similarly, the sale of services (namely 'Eurocare', 'Extracare' and 'Euroassistance') also registered a growth. These services' turnover totalised 1.9 million Euros, more 31.9% than in the previous year. This figure includes the sale of 'Eurocare' for offer in the Accelerator Pedal Inspection campaign, which totalled 156,000 Euros. On the other hand, 'mandatory' services are dependent on the sales of new vehicles, to which they are directly associated.
| Weight (%) in Sales Total | |||
|---|---|---|---|
| 2009 | 2010 | ||
| Genuine Toyota Parts | 85.7% | 84.7% | |
| Nationally Incorporated Parts | 4.5% | 4.3% | |
| Accessories | 9.1% | 10.2% | |
| Merchandising | 0.8% | 0.9% |
Note: the table above refers only to sales of parts, accessories and merchandising (therefore not including the sale of services).
The sale of Genuine Toyota parts stands for the largest share of overall sales, and amounted to 84.7% (slightly lower than the 85.7% in 2009).
The Official Toyota Assistance network is the main client of the After Sales Division. This client got 90.5% of global turnover, corresponding to 38.8 million Euros. This is a growth of 7.7% (+2.7 million Euros) when compared with the total for the previous year. The amount in budget for this client was exceeded in 0.6 percentage points.
2010 reflected an upturn in After-Sales business given the economic difficulties encountered in 2009. This growth is in large part the result of efforts by Toyota Caetano Portugal, through various actions, among which we would like to highlight the following:
The financial year that ended on 31 December 2010 was marked by the crisis that is still affecting Europe and the rest of the world.
So, and within this context, to which Portugal naturally is no stranger, we were pleased to note that Caetano Auto achieved a turnover, and at the same time cost retention, above expectations within this economic climate.
In fact the core business of the Company – car sales – in 2010 was responsible for 7,310 new license plates compared to 7,176 for the same period of the previous year, thus registering a growth of about 1.8 percentage points. Also in the used vehicles business Caetano Auto was responsible for more than five thousand invoiced vehicles.
These indicators are not directly reflected in the turnover of the Company which includes other sales and services and also by virtue of the reduction in gross margin to cope specifically with the crisis and market competition.
In parallel with this and again during this financial year there was another strong reduction in indirect costs, including External Supplies and Services (ESF) – another key focus of management attention – which, as a result of several actions and tools implemented, achieved a higher and better rationalisation of resources that, along with the involvement and motivation of all those involved, contributed to a reduction of about 50% of these expenses from 2009 to 2010.
However, as a result of the first implementation of the Financial Reporting Accounting Standards (NCRF – Normas Contabilísticas de Relato Financeiro) governing the new Accounting Standardisation System (SNC – Sistema de Normalização Contabilístico), the Company saw its profits drop by more than two million Euros, due to the registration of impairments (the difference between the book value and the market value) relating to adjustments of Assets, particularly in facilities classified as Investment Properties.
However and despite the current and already mentioned economic situation, in 2010 the Company registered investments close to 12 million Euros, consolidated mainly on transport equipment due to the replacement/upgrade of the service vehicle fleet and in buildings, particularly with the completion of Montijo facilities, where from 2011, Caetano Auto will start to provide to the public a new and pleasant site for all its sales or after-sales activities.
It should also be added that it is one of Caetano Auto's beliefs that the profits achieved in 2010 will be surpassed in 2011 by about 12%, despite the global economic scenario still showing no prospects for short-term improvement.
Auto Partner - Comércio de Automóveis, S.A. was delighted to achieve a turnover and cost retention above expectations and, consequently, profits that were markedly higher to those achieved in previous years. (Positive profits before taxes of 108 thousand Euros in 2010, against a loss of 453 thousand Euros in 2009).
In fact the core business of the Company – new and used car sales - in 2010 was responsible for 649 invoiced units against 629 for the same period of the previous year.
It is also important to note that the change in the management of this entity, due to operational restructuring, has now, since early 2010, the attention and direct intervention of Caetano Auto Board of Directors – an entity that holds 50% of the share capital of the parent company 'Caetano Retail (Norte) II, SGPS, SA.'
The Company also registered, in 2010, some investments in adaptation works and workshop equipment.
Finally it should also be added that Auto Partner – Comércio de Automóveis, S.A. is assured that the profits before taxes for 2011 will remain at 2010 levels, despite the global economic scenario still being very unstable.
Caetano Colisão (Norte) S.A. reached a turnover higher of that of the previous year giving again privilege to the cost control which contributed to a significant improvement of the profits achieved against the previous financial year.
Indeed, the core business of the Company – repair of car accidents – already shows in 2010 the improvement resulting from the operational restructuring registered, particularly with the closure of Bragança facilities.
Effectively, to the negative profits before taxes registered in 2009 corresponds now in 2010 a truly positive profit around one hundred thousand Euros.
In 2010 the Company registered no significant investments.
Also noteworthy is Caetano Colisão (Norte), S.A. conviction that profits before taxes for 2011 will continue to follow the improvement line initiated in 2010.
The pace of economic growth in Cape Verde is dependent on the tourism sectors and the real estate sector. According to the INE – Instituto Nacional de Estatística (Cape Verde Statistics Institute), these sectors registered a slight improvement during the last quarter of 2010.
The external environment, which has been more favourable in recent months, has had a positive impact on the development of international transactions in Cape Verde, as shown in the data for the last quarter of 2010, collected from official bodies. Indeed the recovery in international economic activity has had a positive impact on the recovery of tourism revenues and flows geared towards the tourist real estate sector.
The level of investment, despite showing signs of some recovery, continues to evolve in a negative direction, as confirmed by Cape Verde INE.
Although benefiting from this slight improvement in the economy, Cape Verde Motors failed to increase its turnover levels, which fell short of last year.
In the table below we can see the comparison of the development of commercial activity in 2010 over the same period of 2009.
| Euros | |||||
|---|---|---|---|---|---|
| Period | No. of | Total | |||
| Vehicles Sold | Vehicles | Parts | Manpower | ||
| Year 2009 | 521 | 11,921,517 | 2,231,002 | 335,033 | 14,487,552 |
| Year 2010 | 411 | 9,505,561 | 1,915,484 | 355,557 | 11,776,602 |
| Value | |||||
| Comparison | -110 | -2,415,956 | -315,518 | 20,524 | -2,710,950 |
| % | -21.11 | -20.27 | -14.14 | 6.13 | -18.71 |
In terms of the outlook for 2011, we believe that even though the economic situation tends to improve, the levels of activity and profits will be broadly similar to those obtained in 2010.
The turnover reached a value of around 5 million Euros which, compared with the previous financial year, represents a decrease of around 1.8%.
The average fleet of the Company during the year stood at 1,535 units, and at year end the total number of units was 1,736.
The significant increase in the fleet was due mainly to the increase in the 'RACs' segment, where the number of units purchased was 1,229 of the 1,600 purchases made during 2010.
This significant increase in vehicles in the above-mentioned segment results in an increase in operating costs, which will only be recovered in 2011, when the lease agreements will expire.
The above-mentioned increase in operating costs refers to the differences between Rents charged and supported Write-backs, which contributed significantly to the negative Net Profit obtained in the financial year.
It is our belief that with the stabilisation of the fleet the 2011 financial year will see recovery of at least some of the losses that are being registered now.
2010 is marked by a reduction in orders from the main clients, CaetanoBus and Toyota Caetano, at the level of bodywork and commercial vehicles.
As a positive aspect we should highlight the bank order for 61 Levante units for National Express which enabled improved results.
For the other clients with a turnover of some significance for Caetano Components, EFACEC also reduced its volume of orders and Manitowoc saw a slight increase in orders, with the introduction of some new components.
The study and manufacture of the first structural components for C5 chassis began, with the validation of the cutting and welding process. The start-up of this project took place with the provision of sets of structures for prototype chassis assembly in Switzerland.
The layout for this project was implemented, with definition of the storage areas of the materials, for component pre-assembly and assembly line for the integrated production of the front and rear chassis modules. The training of the personnel working on this new product was launched.
Activities relating to the cutting of frames and the welding of bodywork structures were transferred to CaetanoBus. The assembly of aluminium side covers was also shifted. This action resulted in a significant reduction in Caetano Components staff, due to the transfer to Caetano Bus and other companies of Salvador Caetano Group.
The Ibus project solutions were in the meantime completed with the planned construction of a Mokup in 2011, aimed at creating new designs for the interior of buses for the final CaetanoBus integrator. The Iseat project was launched with the aim of creating new seat finishing for the railway industry.
In addition, contacts were also established with Fainsa for the study of a partnership for the supply of covers for the German railway industry. This project is aimed to be consolidated during 2011.
With regard to profits for the year 2010, the budget-predicted values were fully satisfied, emphasizing that for 2011 – although in a clearly unfavourable domestic situation – we have reason to believe that as a result of the orders already secured the Company will continue to ensure an appropriate profitability, keeping the levels achieved in 2010.
Saltano, in developing its activity of managing company shareholdings and in the year under review, increased its stake in Caetano Auto through the purchase of 1,355,447 shares, amounting to 2.3 million Euros, and thus holds 52.10% of the company's share capital. In this context, the company has also disposed the shares held in BCP and BPI.
The existing loans from the parent company remained active, and in the current financial year increased by 2.3 million Euros.
Dividends received amounted to 710 thousand Euros, deriving from the distribution of the profits of the subsidiaries Caetano Renting, Caetano Auto and also from the shareholding in BCP and BPI. The contribution of these companies to the profits was 324 thousand Euros.
As a result of the above the net profit for the financial year surpassed 622 thousand Euros.
Companies without activity in the period under review.
The most important and current challenge for the Companies is first of all one of survival, with a significant commitment to sustainability. This major objective is supported by the establishment of strong principles and values that promote and underpin all our strategic and operational activities.
This is why in 2010 we continue to seek to understand the expectations of our Employees, through the Satisfaction Surveys, to establish commitments based on procedures for Performance Evaluation and Management as a means of ensuring that the Human Capital of the Companies is a key asset for meeting their Goals and Missions.
Through this commitment we are seeking to resolve our ongoing concern about recruitment and the integration of new Employees, even those who are with us on a temporary basis, as is the case of Trainees, but always with very demanding standards in the challenges that we set each other.
Training and development remains a fundamental cornerstone for the success of the various projects, and is, for our Companies, a growing requirement in the indices of quality, in the programs that it defines, but even more so in the expected results.
At the same time, we continue to encourage Employees who do not have Year 12 schooling, to join the New Opportunities Program, and during 2010 there were 319 new members, with 55 people certified with the basic level and 46 with the secondary level.
In the Qualification of Young people, which continues to be strategic for us, we wish to emphasize the opening of another Training Centre in Sintra – Rio de Mouro, thus increasing to four the sites where this education is developed.
| TYPE OF ACTIONS | 2008 | 2009 | 2010 | |||
|---|---|---|---|---|---|---|
| COURSES TRAINEES COURSES |
TRAINEES | COURSES | TRAINEES | |||
| YOUNG PEOPLE TRAINING |
10 | 158 | 13 | 293 | 18 | 342 |
| MANPOWER TRAINING | 348 | 6589 | 300 | 6591 | 626 | 7365 |
| TOTAL | 358 | 6.747 | 313 | 6.884 | 644 | 7.707 |
The table below shows the activity developed within the Training Area in 2010:
In the area of incentives and maintenance of the high levels of motivation of our Employees, we would like to highlight two situations:
We conducted a salary review addressed only at employees with the lowest rates of pay as a sign of solidarity for the increased difficulties caused by adverse economic conditions for this group, increasing internal cohesion and a sense of responsibility and social fairness for all Employees.
Proposal for allocation to all Employees of an extra bonus as profit sharing for the period under review, amounting to 682,500 Euros.
With the OECD's leading indicator pointing to a gradual improvement in the Portuguese economy, in line with the Euro Zone, since last September, the year 2010 ends with a positive trend in GDP of 1.4%, compared to the 2.5% contraction registered in 2009. This economic growth in Portugal was due also to the strong contribution of increased domestic demand, with particularly significant end-consumer expenditure by households and also a smaller slowdown in investment than that registered in 2009.
In this scenario, the automotive sector, where Toyota Caetano Portugal Group mainly operates, was particularly important, having shown an increase in vehicle license plates of 33.9% over 2009, with Toyota, the brand represented by the Group, registering a growth of 22.3%.
Thus, in the period under review, and with the consolidation perimeter remaining unchanged, Toyota Caetano Portugal Group's performance reflects the market behaviour of its area of influence.
| mEuros | |||
|---|---|---|---|
| Variation | |||
| 2009 | 2010 | % | |
| Total Operating Profits | 438,074 | 463,265 | 5.8% |
| Operating Income | 14,485 | 13,134 | - 9.3% |
| Profit Before Taxes | 14,234 | 14,545 | 2.2% |
The increase in activity was accompanied by some sacrifice of the marketing margin, although it was possible to achieve profits before taxes of 14.5 million Euros, very similar to that obtained in the same period of 2009, which featured the contribution of around 4 million Euros related to a reversal of estimated costs for the pension fund. Achieving these profits was also the result of a continued policy of expenditure containment, as well as favourable development of financial income, either through cost reductions through lower levels of interest bearing debt, and respective price, based on the Group's rating, or also through the neutralisation of costs associated with an operation to fix the interest rate at approximately 1 million Euros, these being costs that were already recognised in prior periods by the application of fair value to this financial instrument.
As a negative contribution to the income, we can underline that, notwithstanding the valuation criteria adopted for real estate being the cost model, an impairment of 1.8 million Euros was registered on assets allocated to operations, compared to values determined in recent valuations.
Consolidated net profit for the financial year, amounting to 11.9 million Euros, reflects an increase of 16.6% compared with 2009.
It is noteworthy that in this period, and due to the entry into force of the new accounting standards in Portugal, companies on the Group perimeter with their headquarters in Portugal have adopted those standards, and show in their individual accounts all the transitional adjustments.
We can therefore see in the following table the reconciliation of equity and consolidated net income now disclosed and calculated in accordance with the 'IFRS' regulations, with equity and individual results also now published and obtained by applying the rules in force in our country (SNC).
| Standard | INCOME | EQUITY | |
|---|---|---|---|
| Consolidated - IFRS | 11,740 | 139,746 | |
| Exclusions | |||
| Disposal of the Company Shares Listed in Lisbon Euronext - BPI | a) IAS 39 |
817 | - |
| Fair Value of Cimóvel Shareholding Units | b) IAS 39 |
86 | - |
| Fair Value of the Company Shares Listed in Lisbon Euronext - BCP | b) IAS 39 |
186 | - |
| Inclusions | |||
| Government Subventions in Tangible Fixed Assets | NCRF 22 | - | 160 |
| Government Captive Subvention in Reserves | NCRF 22 | - | 289 |
| Individual - NCRF | 10,652 | 140,195 | |
m€uros
Gross Cash Flow generated by the Group, amounting to 32 million Euros, lower than in 2009 by 7%, enabled bank debt to be reduced by 18.8%, assuming overall liability of 60 million Euros, and making a further net investment of 23 million Euros. At the same time, there was an increase in Customer and Supplier accounts and a reduction in Inventories, an effect of the extraordinary turnover registered by the end of the year. The combination of the previous contributions made it possible to strengthen the Degree of Financial Autonomy, which rose from 47.3% in 2009 to 48.4% this financial year.
It should be mentioned that in terms of the companies comprising Toyota Caetano Portugal Group's perimeter, none of them registered any Social Security debt or late payment of taxes, contributions or fees to the State Public Sector.
The outlook for 2011 is particularly challenging given the macroeconomic assumptions, with a strong contraction of GDP according to the predictions of Banco de Portugal in its latest Winter Bulletin:
| Projections from Banco de Portugal 2010 - 2012 Variation Rate, in percentage |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| Current projections | Autumn EB | ||||||||
| 2010 | 2011 | 2012 | 2010 | 2011 | |||||
| GDP | 1.3 | -1.3 | 0.6 | 1.2 | 0,0 | ||||
| Private consumption | 1.8 | -2.7 | -0.5 | 1.8 | -0.8 | ||||
| Public Consumption | 3.2 | -4.6 | -1,0 | 1.5 | -1,0 | ||||
| FBCF | -5,0 | -6.8 | -0.4 | -4.2 | -3.2 | ||||
| Domestic demand | 0.5 | -3.6 | -0.5 | 0.4 | -1.2 | ||||
| Exports | 9,0 | 5.9 | 6.1 | 7.9 | 4.5 | ||||
| Imports | 5,0 | -1.9 | 2.4 | 4.2 | 0.4 | ||||
| IHPC | 1.4 | 2.7 | 1.4 | 1.4 | 1,0 |
The expected downturn in the level of consumption will be felt more acutely in the consumption of durable goods which are typically more sensitive to the economic cycle, with an expected drop of around 21.7% for 2011.
The Car Market will be affected by this environment, with two specific factors notably conditioning demand in 2011:
The advance purchases phenomenon, which was felt at the end of 2010 and is expected to result in lower demand in early 2011;
And the generalised rise in prices of new vehicles, due to the simultaneous increase in vehicle tax (ISV) and VAT.
In face of this background, the Motor Trade Association of Portugal (ACAP - Associação de Comércio Automóvel de Portugal) provides a Market forecast for 2011 of around 211,000 units, entailing a loss of 25% over the previous year:
This forecast has a tacit level of retail sales in line with that registered in 2009, the difference being supported by a more active Rent-a-Car market than in that year.
Given the conditions described, Toyota's target for 2011 is 11,800 units, representing a slightly lower decrease than that estimated for the market as a whole, resulting in a market share of 5.6% - an increase of 0.1 p.p. on the previous year.
For Lexus and for 2011, even given the strong likelihood of a worsening economic environment, our focus is on increasing the volume of sales to 492 units (a 72% growth). To achieve this target we are relying on the introduction of a new entry-level Lexus model, the CT200h. Aimed at the 2nd largest segment of the premium market, this model has a competitive price positioning, a power unit suitable for the segment and is a leading model in the segment with respect to greenhouse gas emissions and fuel consumption. This model is expected to stand for 61% of Lexus total sales in the domestic market. In the other ranges we expect slightly lower annual sales in line with the forecasts for the segments to which they belong and taking into account the absence of innovations regarding the products.
Credit risk at Toyota Caetano, is primarily the result of credit on its Clients, related to the operational activity.
The main objective of credit risk management at Toyota Caetano is to ensure effective collection of operational receipts from Clients as per the terms and conditions negotiated.
In order to mitigate credit risk arising from potential payment default by Clients, the Group companies exposed to this risk have:
Set up a dedicated department for Credit Risk analysis and follow-up;
Implemented pro-active credit management processes and procedures which are always supported by information systems;
Hedging instruments (credit insurance, credit letters, etc.).
Due to the significant proportion of variable rate debt in its Consolidated Balance Sheet and the resulting interest payment cash flows, Toyota Caetano is exposed to interest rate risk.
Toyota Caetano has therefore made use of derived financial instruments to cover, at least partially, its exposure to interest rate changes.
As a geographically diversified Group, with subsidiaries in the UK and Cape Verde (although the subsidiary operating in the UK is currently inactive and in 2008 changed its functional currency to the Euro), the exchange rate risk results essentially from commercial transactions, resulting from the purchase and sale of products and services in currencies other than the functional currency of each business.
Exchange rate risk management policy seeks to minimize the volatility of investments and operations denominated in foreign currency, making the Group's income less sensitive to exchange rate fluctuations. The Group's exchange rate risk management policy is geared towards a case-by-case assessment of the opportunity to cover this risk, particularly in view of the specific circumstances of the countries and currencies concerned.
Management of liquidity risk at Toyota Caetano aims to ensure that the company is able to obtain the necessary funding in a timely manner in order to carry out its business activities, implement its strategy and meet its payment duties when due, while avoiding the need to obtain funding on unfavourable terms.
To this end, management of liquidity in the Group comprises the following aspects:
a) Consistent financial planning based on cash flow forecasts in terms of operations according to different timelines (weekly, monthly, yearly and multi-annual);
b) Diversification of funding sources;
c) Diversification of the maturities of debt issued to avoid excessive concentration in short periods of debt amortization;
d) Agreement of contracts with partner Banks, short-term credit lines, commercial paper programs, and other types of financial operations, ensuring a balance between adequate levels of liquidity and commitment fees incurred.
A detailed description of this point can be found in the Corporate Governance Report
The company did not acquire or sell shares during the year. As at 31 December 2010, the company held none of its own shares.
We declare, under the terms and for the purposes provided for in article 245(1-c) of the Código dos Valores Mobiliários (Portuguese Securities Code), that to the best of our knowledge, the individual and consolidated financial statements of Toyota Caetano Portugal regarding 2010 were prepared in accordance with applicable accounting standards, giving a true and fair view of the assets and liabilities, the financial condition and the income of this company and of the companies included in its consolidation perimeter, and that the management report faithfully shows the business development, the performance development and the position of this company and subsidiaries included in the consolidation perimeter, as well as the description of the more significant risks and uncertainties faced.
In accordance with the provisions laid down in nr 1 of article 376 (b) of the Código das Sociedades Comerciais (Commercial Companies Code), we propose the following allocation of the profits obtained in the fiscal year, amounting to 10.652.178,78 Euros, stated in the individual financial statements of Toyota Caetano Portugal:
a) To cover the losses obtained and registered Equity reduction, when changing to the new Accounting Standards
€ 1,291,340.73
b) To non-distributable reserves by Profits recognised and not realised in interests in subsidiaries resulting from the application of the equity method.
€ 3.010.129,21
c) To dividends to be allocated to share capital, €0.18 per share, which considering its 35,000,000 shares totals
€ 6,300,000.00
d) The remainder for the reinforcement of Free Reserves € 50,708,84
Since the end of 2010 and up to the present date, no relevant facts worthy of being mentioned have been observed.
Other Issues / Acknowledgements
This report would be incomplete if we did not express our acknowledgement of the people or bodies who, in some manner, have contributed to the development of the Company's activity or for the profits achieved in 2010, namely:
Vila Nova de Gaia, 31 March 2011
The Board of Directors
José Reis da Silva Ramos – President Hiroyuki Ochiai Miguel Silva Ramalho da Fonseca Maria Angelina Martins Caetano Ramos Salvador Acácio Martins Caetano Miguel Pedro Caetano Ramos Rui Manuel Machado de Noronha Mendes
(UNDER ARTICLE 9 (a) OF CMVM REGULATION 5/2008)
JOSÉ REIS DA SILVA RAMOS: As at 27 January 2010 he purchased 39,590 shares at €4.10 each, and as such as at 31 December 2010 he held 125,590 shares with the nominal value of one euro each.
HIROYUKI OCHIAI – Holds no shares or bonds.
MIGUEL SILVA RAMALHO DA FONSECA – Holds no shares or bonds.
MARIA ANGELINA MARTINS CAETANO RAMOS – Holds no shares or bonds. As at 27 January 2010 the spouse purchased 39,590 shares at €4.10 each, and as such as at 31 December 2010 he held 125,590 shares with the nominal value of one euro each.
SALVADOR ACÁCIO MARTINS CAETANO – Holds no shares or bonds.
MIGUEL PEDRO CAETANO RAMOS – Has no changes and as such as at 31 December 2010 he held 1,130 shares, with the nominal value of one euro each.
RUI MANUEL MACHADO DE NORONHA MENDES – Holds no shares or bonds.
SHIGEKI ENAMI – Holds no shares or bonds.
Maria Angelina Martins Caetano Ramos - President of the Board of Directors, Salvador Acácio Martins Caetano – Vice President of the Board of Directors, José Reis da Silva Ramos and Miguel Pedro Caetano Ramos - Members of the Board of Directors of GRUPO SALVADOR CAETANO, SGPS, S.A., this Company registered no changes and as such as at 31 December 2010 held 21,000,000 shares, with the nominal value of one euro each.
José Reis da Silva Ramos – spouse of Maria Angelina Martins Caetano Ramos – President of the Board of Directors, Salvador Acácio Martins Caetano and Rui Manuel Machado de Noronha Mendes – Members of the Board of Directors, of FUNDAÇÃO SALVADOR CAETANO, this Company disposed 670,006 shares as at 25 January 2010 at € 4.10 each, and purchased: as at 30 June 2010, 3,962 shares at € 3.20 each; as at 21 July 2010, 200 shares at € 3.20 each; as at 23 July 2010, 15 shares at € 3.60 each; as at 16 August 2010, 22 shares at € 3.60 each; as at 24 August 2010, 10 shares at € 3.70 each; as at 25 August 2010, 140 shares at € 3.70 each; as at 26 August 2010, 150 shares at € 3.70 each; as at 27 August 2010, 45 shares at €3.40 each; as at 1 September 2010, 45 shares at € 3.70 each; as at 7 September 2010, 50 shares at € 3.70 each, and as such, as at 31 December 2010 it held 4,639 shares, with the nominal value of one euro each.
Maria Angelina Martins Caetano Ramos - spouse of José Reis da Silva Ramos, President of the Board of Directors and Salvador Acácio Martins Caetano - Member of the Board of Directors of COCIGA – Construções Civis de Gaia, S.A., this Company registered no changes and as such as at 31 December 2010 held 290 shares, with the nominal value of one euro each.
José Jorge Abreu Fernandes Soares – Holds no shares or bonds.
António Pimpão & Maximino Mota, SROC represented by António Maia Pimpão – Holds no shares or bonds.
Kenichiro Makino – holds no shares or bonds
Dr. Fernando Sousa Matos Pires – holds no shares or bonds.
PricewaterhouseCoopers & Associados - Sociedade de Revisores Oficiais de Contas, Lda., represented by José Pereira Alves, or by Hermínio António Paulos Afonso - Holds no shares or bonds.
| Shares Held As at 31.12.09 |
Shares Acquired As at 2010 |
Shares Sold As at 2010 |
Shares Held As at 31.12.10 |
|
|---|---|---|---|---|
| JOSÉ REIS DA SILVA RAMOS (President) | 86,000 | 39,590 | -- | 125,590 |
| HIROYUKI OCHIAI (Member) | -- | -- | -- | -- |
| MIGUEL SILVA RAMALHO DA FONSECA (Member) | -- | -- | -- | -- |
| MARIA ANGELINA M. CAETANO RAMOS (Member) | -- | -- | -- | -- |
| SALVADOR ACACIO MARTINS CAETANO (Member) | -- | -- | -- | -- |
| MIGUEL PEDRO CAETANO RAMOS (Member) | 1,130 | -- | -- | 1,130 |
| RUI MANUEL MACHADO DE NORONHA MENDES (Member) | -- | -- | -- | -- |
| JOSÉ JORGE ABREU FERNANDES SOARES (President Audit Board) |
-- | -- | -- | -- |
| KENICHIRO MAKINO ( Alternate Member) | -- | -- | -- | -- |
| ANTÓNIO PIMPÃO & MAXIMINO MOTA, SROC, REPRESENTED BY ANTÓNIO MAIA PIMPÃO (Member of the AuditBoard) |
-- | -- | -- | -- |
| PRICEWATERHAUSECOOPERS & Associados, SROC, S.A., REPRESENTED BY JOSÉ PEREIRA ALVES OR BY HERMÍNIO ANTÓNIO PAULOS AFONSO (Statutory Auditor - Permanent) |
-- | -- | -- | -- |
| SHAREHOLDERS | Shares | Shares | Shares | Shares |
|---|---|---|---|---|
| Held | Acquired | Sold | Held | |
| As at 31.12.09 | As at 2010 | As at 2010 | As at 31.12.10 | |
| TOYOTA MOTOR EUROPE NV/SA | 9,450,000 | -- | -- | 9,450,000 |
| SHAREHOLDERS | Shares | Shares | Shares | Shares |
|---|---|---|---|---|
| Held | Acquired | Sold | Held | |
| As at 31.12.09 | As at 2010 | As at 2010 | As at 31.12.10 | |
| GRUPO SALVADOR CAETANO, SGPS, SA | 21,000,000 | -- | -- | 21,000,000 |
| SHAREHOLDER | Shares | % of voting rights |
|---|---|---|
| GRUPO SALVADOR CAETANO - SGPS, SA | 21,000,000 | 60.00 |
| TOYOTA MOTOR EUROPE NV/SA | 9,450,000 | 27.000 |
| SALVADOR FERNANDES CAETANO | 1,399,255 | 3.998 |
| Millenium BCP – Gestão de Fundos de Investimentos, S.A. representing the securities' funds it manages, as follows: |
||
| Millennium Acções Portugal |
701,163 | 2.00 |
| Millennium PPA |
541,020 | 1.55 |
| Millennium Poupança PPR |
85,296 | 0.24 |
| Millennium Investimento PPR |
48,823 | 0.14 |
| Millennium Aforro PPR |
11,752 | 0.03 |
| (Euros) | ||
|---|---|---|
| DEC '10 | DEC '09 | |
| SALES | 328.425.815 | 294.821.380 |
| CASHFLOW | 18.980.831 | 18.272.002 |
| NET INCOME | 10.652.179 | 11.033.809 |
| INTEREST AND OTHERS | 2.669.057 | 2.786.295 |
| PERSONNEL EXPENSES | 19.850.120 | 18.782.724 |
| NET INVESTMENT | 5.827.094 | 12.070.239 |
| GROSS WORKING CAPITAL | 84.340.688 | 77.511.482 |
| GVA | 47.216.057 | 43.421.334 |
| SALES UNITS | 18.839 | 16.564 |
| NUMBER OF EMPLOYEES | 618 | 675 |
| (Euros) | |||
|---|---|---|---|
| ASSETS | Notes | 31/Dec/2010 | 31/Dec/ 2009 |
| NON CURRENT ASSETS | |||
| TANGIBLE FIXED ASSETS | 5 | 32.414.642 | 39.157.605 |
| INVESTMENT PROPERTIES | 6 | 14.470.383 | 11.587.818 |
| GOODWILL | 7 | 611.997 | 611.997 |
| INTANGIBLE ASSETS | 8 | 12.300 | 167.815 |
| FINANCIAL INVESTMENTS - Equity method | 9 | 53.016.791 | 51.076.225 |
| OTHER FINANCIAL INVESTMENTS | 10 & 14 | 39.904 | 9.869.904 |
| DEFERRED TAX ASSETS | 11 | 902.886 | 1.236.916 |
| CURRENT ASSETS | |||
| INVENTORIES | 12 & 19 | 48.317.270 | 51.303.072 |
| ACCOUNTS RECEIVABLE | 13 &19 | 88.303.488 | 73.199.949 |
| DOWN PAYMENTS | 12.162 | 39.035 | |
| SHAREHOLDERS | 14 | 1.866.882 | 1.074.749 |
| OTHER ACCOUNTS RECEIVABLE | 15 | 30.688 | 2.200 |
| OTHER FINANCIAL INVESTMENTS | 10 | 12.133.199 | 0 |
| DEFERRALS | 16 | 485.926 | 408.355 |
| CASH AND CASH EQUIVALENTS | 4 | 1.996.607 | 1.984.710 |
| TOTAL ASSETS | 254.615.123 | 241.720.350 |
| EQUITY AND LIABILITIES | Notes | 31/Dec/2010 | 31/Dec/ 2009 |
|---|---|---|---|
| EQUITY | |||
| SHARE CAPITAL | 35.000.000 | 35.000.000 | |
| LEGAL RESERVE | 7.498.903 | 7.498.903 | |
| OTHER RESERVE | 74.944.552 | 74.544.546 | |
| RETAINED EARNINGS | 548.253 | ||
| ADJUSTMENTS TO FINANCIAL INVESTMENTS - Equity method | 6.486.824 | 1.362.587 | |
| REVALUATION RESERVE | 6.195.184 | 6.195.184 | |
| OTHER EQUITY MOVEMENTS - Gap transition | -1.131.341 | -1.089.959 | |
| NET INCOME | 10.652.179 | 11.033.809 | |
| TOTAL EQUITY | 17 | 140.194.554 | 134.545.070 |
| LIABILITIES | |||
| NON CURRENT LIABILITIES | |||
| PROVISIONS | 19 | 0 | 60.090 |
| LOANS | 20 & 21 | 4.124.771 | 5.626.328 |
| SHAREHOLDERS | 14 | 3.536.244 | 0 |
| DEFERRED TAX LIABILITIES | 11 | 898.073 | 885.655 |
| CURRENT LIABILITIES | |||
| ACCOUNTS PAYABLE | 22 | 30.318.608 | 24.374.663 |
| DOWN PAYMENTS | 321.801 | 69.513 | |
| ACCRUED TAXES | 11 | 15.425.296 | 11.679.262 |
| SHAREHOLDERS | 14 | 47.426 | 3.592.232 |
| LOANS | 20 & 21 | 47.202.702 | 46.401.341 |
| OTHER ACCOUNTS PAYABLE | 15 | 8.076.672 | 8.391.853 |
| DEFERRALS | 16 | 4.294.196 | 4.981.080 |
| DERIVATIVE FINANCIAL INSTRUMENTS - SWAP | 23 | 174.782 | 1.113.264 |
| TOTAL LIABILITIES | 114.420.570 | 107.175.280 | |
| TOTAL EQUITY + LIABILITIES | 254.615.123 | 241.720.350 |
CHARTERED ACCOUNTANT BOARD OF DIRECTORS
ALBERTO LUÍS LEMA MANDIM JOSE REIS DA SILVA RAMOS –President HIROYUKI OCHIAI MIGUEL SILVA RAMALHO DA FONSECA SILVA RAMALHO DA MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS RUI MANUEL MACHADO DE NORONHA MENDES
| Notes | 31/Dec/2010 | 31/Dec/2009 | |
|---|---|---|---|
| SALES AND SERVICE RENDERED | 26 | 328.425.815 | 294.821.380 |
| SUBSIDIES | 18 | 1.110.939 | 1.616.398 |
| GAINS IN FINANCIAL INVESTMETS - Equity method | 9 | 3.010.129 | 5.666.012 |
| VARIATION OF PRODUCTS | 12 | -1.049.454 | -3.167.473 |
| COST OF GOODS AND RAW MATERIAL AND | 12 | -267.072.664 | -235.895.529 |
| SUPPLIES | 28 | -39.396.823 | -38.490.294 |
| PERSONNEL EXPENSES | 29 | -19.850.120 | -18.782.724 |
| IMPAIRMENT IN INVENTORIES | 19 | 212.028 | |
| IMPAIRMENT IN ACCOUNTS RECEIVABLE | 19 | -212.672 | |
| INCREASES / REDUCTIONS OF FAIR VALUE | 23 | 938.483 | -331.110 |
| OTHER GAINS | 31 | 29.599.346 | 30.061.080 |
| OTHER EXPENSES | 31 | -10.117.151 | -9.106.255 |
| INCOME BEFORE DEPRECIATIONS, FINANCIAL COSTS AND INCOME TAX | 25.597.855 | 26.391.485 | |
| DEPRECIATIONS | 5, 6 & 8 | -9.843.007 | -10.582.111 |
| OPERATIONAL INCOME | 15.754.848 | 15.809.374 | |
| FINANCIAL INCOME | 32 | 134.356 | 240.784 |
| FINANCIAL EXPENSES | 20 & 32 | -2.803.413 | -3.027.079 |
| INCOME BEFORE TAXES | 13.085.791 | 13.023.079 | |
| INCOME TAX FOR THE YEAR | 11 | -2.433.612 | -1.989.270 |
| NET INCOME | 10.652.179 | 11.033.809 | |
| BASIC EARNINGS PER SHARE DILUTED EARNINGS PER SHARE |
0,30 0,30 |
0,32 0,32 |
CHARTERED ACCOUNTANT BOARD OF DIRECTORS
ALBERTO LUÍS LEMA MANDIM JOSE REIS DA SILVA RAMOS –President HIROYUKI OCHIAI MIGUEL SILVA RAMALHO DA FONSECA MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS RUI MANUEL MACHADO DE NORONHA MENDES
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ALBERTO LUÍS LEMA MANDIM
CHARTERED ACCOUNT BOARD OF DIRECTORS
JOSE REIS DA SILVA RAMOS –President
HIROYUKI OCHIAI
MIGUEL SILVA RAMALHO DA FONSECA
MARIA ANGELINA MARTINS CAETANO RAMOS
SALVADOR ACÁCIO MARTINS CAETANO
MIGUEL PEDRO CAETANO RAMOS
RUI MANUEL MACHADO DE NORONHA MENDES
| 2010 | 2009 | ||||
|---|---|---|---|---|---|
| STATEMENT OF CASH FLOWS ON OPERATING ACTIVITIES | |||||
| Collections from Customers Payments to Suppliers |
412.682.113 -355.098.030 |
393.117.449 -310.846.204 |
|||
| Payments to Personnel Payments to |
-13.310.482 | -13.595.713 | |||
| Operating Flow | 44.273.601 | 68.675.532 | |||
| Payments of Income Tax | -1.659.352 | -802.520 | |||
| Other Collections/Payments Related to Operating Activities | -35.840.314 | -28.414.425 | |||
| Flow in Operating Activities | 6.773.935 | ||||
| STATEMENT OF CASH FLOWS ON STATEMENT OF CASH FLOWS |
INVESTING ACTIVITIES INVESTING |
||||
| Collections from: | |||||
| Tangible Fixed Assets | 4.261.546 | 3.137.163 | |||
| Investment Subsidy | 392.773 | 2.042.729 | |||
| Interest and Others | 711 | 2.277 | |||
| Dividends | 541.775 | 5.196.805 | |||
| Payments to: | |||||
| Investments | -2.303.199 | ||||
| Tangible Fixed Assets Intangible Intangible Fixed Assets Fixed Assets |
-1.338.597 -11.463 11.463 |
-3.653.259 3.653.259 |
-1.809.230 -198.551 198.551 |
39.458.587 5.182.169 -2.007.781 2.007.781 |
| Collections from: Collections |
||||
|---|---|---|---|---|
| Loan | 710.596 | 710.596 | 2.459.358 | 2.459.358 |
| Payments to: | ||||
| Loan | -40.029.229 | |||
| Lease Down Payments | -1.430.195 | -1.461.871 | ||
| Interest and Others | -2.346.829 | -2.481.804 | ||
| Dividends | -5.239.157 | -9.016.181 | -2.445.849 -46.418.753 |
| Cash and Cash Equivalents at Beginning of Period Cash and Cash Equivalents at End of Period |
3.311.130 1.984.710 |
|
|---|---|---|
| Net Flow in Cash Equivalents | 11.897 | -1.326.420 |
CHARTERED ACCOUNT BOARD OF DIRECTORS
ALBERTO LUÍS LEMA MANDIM JOSE REIS DA SILVA RAMOS –President
HIROYUKI OCHIAI
MIGUEL SILVA RAMALHO DA FONSECA
MARIA ANGELINA MARTINS CAETANO RAMOS
SALVADOR ACÁCIO MARTINS CAETANO
MIGUEL PEDRO CAETANO RAMOS
RUI MANUEL MACHADO DE NORONHA MENDES
(Amounts in Euros)
Toyota Caetano Portugal, S.A. ("Toyota Caetano" or "the Company") was incorporated in 1946, with its headquarters in Vila Nova de Gaia, which mainly carries economic activities included in the automotive sector, namely the import, assembly and commercialization of light and heavy vehicles, import and sale of industrial equipment, as well as the corresponding technical assistance.
Its shares are listed in the Lisbon Stock Exchange Market since October 1987.
Toyota Caetano is the distributor of the brands Toyota, Lexus and BT in Portugal and is the head of a group of companies ("Toyota Caetano Group") with the following composition as at 31 December 2010 :
Companies Headquarters With headquarters in Portugal: Toyota Caetano Portugal, S.A. ("Parent company") Vila Nova de Gaia Saltano – Investimentos e Gestão, S.G.P.S., S.A. ("Saltano") Vila Nova de Gaia Caetano Components, S.A. ("Caetano Components") Vila Nova de Gaia Caetano Renting, S.A. ("Caetano Renting") Vila Nova de Gaia Caetano – Auto, S.A. ("Caetano Auto") Vila Nova de Gaia Caetano Retail (Norte) II, SGPS, S.A. ("Caetano Retail SGPS") Vila Nova de Gaia Auto Partner - Comércio de Automóveis, S.A. ("Auto Partner") Vila Nova de Gaia Caetano Colisão (Norte) II, S.A. ("Caetano Colisão") Vila Nova de Gaia Movicargo – Movimentação Industrial, Lda. ("Movicargo") Vila Nova de Gaia With headquarters in foreign countries: Salvador Caetano (UK), Ltd. ("Salvador Caetano UK") (1) Leicestershire (England) Cabo Verde Motors, S.A.R.L. ("Cabo Verde Motors") Praia (Cape Verde) (1) Company inactive in the period
According to the applicable legislation, Toyota Caetano will present separately, financial consolidated statements as at 31 December 2010 prepared in accordance with International Financial Reporting Standards (IAS/IFRS) as adopted in the European Union.
The following notes are organized in accordance with the structure understood more appropriate to a correct reading and apprehension of the principal politics of accountancy adopted as well as of the most relevant facts occurred in the period in analysis in accordance with Sistema de Normalização Contabilística, SNC (Portuguese GAAP) in force since 1 January 2010. Therefore, the financial statements were prepared in accordance with the accounting standards Normas Contabilísticas e de Relato Financeiro, NCRF ( Accounting Standards and financial Reporting) approved by the Decree Law nº 158/2009. Being 2010 the first period of application of the referred accounting standards, the GAAP transition adjustments are presented in Note 2.
(Amounts in Euros)
The facts that are not mentioned in these notes are considered to be not relevant to an appropriate understanding of financial statements.
The amounts mentioned are expressed in Euros ( rounded to the unit), because this is the group's functional currency.
The accompanying financial statements have been prepared on a going concern basis from books and accounting records of Toyota Caetano, maintained in accordance with generally accepted accounting principles in Portugal and defined in "SNC" (Portuguese GAAP) adopted from the beginning of the exercise of 2010.
In order to be possible the comparison of all the pieces of the financial statements, the presented ones in previous periods were object of adjustments resulting from the transition for the new accounting principles, duly indicated in Note 2.2.
The Company adopted the Accounting Standards and financial Reporting (NCRF) in 2010
All the pieces of the financial statements now presented were object of adjustments resulting from the transition for the new accounting principles
The company has decided to adopt the cost model (deemed cost) for tangible fixed assets, intangible fixed assets and investments properties recognition, as permitted by NCRF 3.
The company has derecognized intangible assets that don't meet the recognition criteria set in NCRF 6.
(Amounts in Euros)
The NCRF 3 allows the revaluation of tangible fixed assets and investment properties at the moment of transition. According with NCRF 3 and a decision from the Board of Directors of Toyota Caetano Portugal, S.A., the tangible fixed assets and investment properties are recorded at deemed cost, which corresponds to its acquisition cost or its revalued acquisition cost as referred in Note3 b).
Additionally, the company has derecognized tangible assets that don't meet the recognition.
As required by NCRF 13 and NCRF 15, investments in companies in which Toyota Caetano Portugal, S.A. has a significant influence or control are measured in accordance with the Equity Method.
Government Grants to investment were recognized directly in Equity, as required by NCRF 22.
The company has recognized deferred tax assets and liabilities in result of differences between the underlying carrying amounts and tax bases generated by the transition adjustments, as set by the article nº 5 of the Decree Law 159/2009.
The interest rate swap has been classified as a financial liability held for trading in accordance with NCRF 27, being measured at fair value through profit or loss of the period.
As required by NCRF 28, the company has accrued employees' bonuses.
Prepaid expenses that don't meet the asset recognition criteria have been derecognized.
The impacts of the GAAP transition on Equity are summarized in the following table:
(Amounts in Euros)
| 01/Jan/2009 | Note | 31/Dec/2009 | Note | |
|---|---|---|---|---|
| Equity in POC (old GAAP ) | 103.235.325 | 100.385.325 | ||
| Adjustments to financial investments - equity method | 24.273.168 | 2.2.3. | 24.215.894 | 2.2.3. |
| Other equity movements | ||||
| - Derecognition of Intangible Assets | -2.607 | 2.2.1. | -2.607 | 2.2.1. |
| - Derecognition of Tangible Fixed Assets | -580.731 | 2.2.2. | -580.731 | 2.2.2. |
| - Government Grants | 0 | 273.989 | 2.2.4. | |
| - Deferred taxes | 465.854 | 2.2.5. | 393.207 | 2.2.5. |
| - Fair Value of Financial Instruments | -782.154 | 2.2.6. | -782.154 | 2.2.6. |
| - Bonus | -400.000 | 2.2.7. | 0 | |
| - Derecogntion of Deferred Costs | -391.662 | 2.2.8. | -391.662 | 2.2.8. |
| Equity in NCRF (new GAAP) (without net profit) | 125.817.192 | 123.511.260 |
Note that the adjustments resumed above don't include 2009 Net Income effects.
| ASSETS | 01-Jan-09 | 01-Jan-09 | |
|---|---|---|---|
| POC | Adjust. | NCRF | |
| NON CURRENT ASSETS | |||
| Tangible Fixed Assets | 49.675.711 | -13.261.842 | 36.413.868 |
| Investments Properties | 0 | 12.652.728 | 12.652.728 |
| Goodwill | 611.997 | 0 | 611.997 |
| Intangible Assets | 332.737 | 25.776 | 358.514 |
| Financial Investments - Equity Method | 17.486.106 | 28.882.534 | 46.368.641 |
| Shareholders | 0 | 0 | 0 |
| Other Financial Investments | 9.869.904 | 0 | 9.869.904 |
| Deferred Tax Assets | 773.667 | 465.646 | 1.239.312 |
| CURRENT ASSETS | |||
| Inventories | 80.280.652 | 0 | 80.280.652 |
| Accounts Receivable | 93.610.481 | -2.331.050 | 91.279.431 |
| Down Payments | 22.447 | 0 | 22.447 |
| Accrued Taxes | 806.022 | 0 | 806.022 |
| Shareholders | 268.822 | 0 | 268.822 |
| Other Accounts Receivable | 243.822 | 0 | 243.822 |
| Deferrals | 875.677 | -391.662 | 484.015 |
| Other Financial Assets | 0 | 0 | 0 |
| Cash and Cash Equivalents | 3.311.130 | 0 | 3.311.130 |
| TOTAL ASSETS | 258.169.176 | 26.042.130 284.211.306 |
(Amounts in Euros)
The 13,3 million Euros of adjustments occurred in Tangible Fixed Assets at 01/01/2009 are essentially due to:
Reclassifications to Investment Properties (Tangible Fixed Assets held to obtain periodic rents): 12,7 million Euros;
Remaining is related with expenses which don't meet the recognition criteria according NCRF 7.
There have been 3 thousand Euros of expenses that were derecognized from intangible assets as required by NCRF 6. Additionally there were reclassified 28 thousand Euros from Tangible Fixed Assets to Intangible Assets related to software programs.
The 29 million Euros adjustment refers to the adoption of the Equity Method in the measurement of interests in subsidiaries and associates in accordance with NCRF 13 and NCRF 15.
There were recognized 466 thousands Euros of Deferred Tax Assets in result of differences between the underlying assets carrying amounts and tax bases generated by the transition adjustments, namely:
The 2.3 million Euros adjustment refers to the presentation of Accounts Receivable's Accumulated Impairment Losses as an Allowance to the underlying asset, net of deferred taxes effect, instead of a liability.
The Plurianual costs previously deferred were expensed as they don't meet asset's recognition criteria according to the new Portuguese GAAP.
(Amounts in Euros)
| LIABILITIES | 01-Jan-09 | 01-Jan-09 | |
|---|---|---|---|
| POC | Adjust. | NCRF | |
| NON CURRENT LIABILITIES | |||
| Provisions | 2.596.546 | -2.516.726 | 79.820 |
| Loans | 0 | 1.919.861 | 1.919.861 |
| Deferred Tax Liabilities | 729.537 | 185.468 | 915.005 |
| Other Accounts Payable | 1.919.861 | -1.919.861 | 0 |
| CURRENT LIABILITIES | |||
| Accounts Payable | 35.343.391 | 0 | 35.343.391 |
| Down Payments | 128.828 | 0 | 128.828 |
| Accrued Taxes | 12.488.801 | 0 | 12.488.801 |
| Shareholders | 3.297.677 | 0 | 3.297.677 |
| Loans | 84.949.633 | 355.064 | 85.304.697 |
| Other Accounts Payable | 12.421.829 | 44.936 | 12.466.765 |
| Deferrals | 1.057.747 | 4.609.367 | 5.667.114 |
| Derivative Financial Instruments – SWAP | 0 | 782.154 | 782.154 |
| TOTAL LIABILITIES | 154.933.850 | 3.460.264 158.394.114 |
Adjustment related with the presentation of Accounts Receivable Accumulated Impairment Losses as an Allowance to the underlying asset, net of deferred taxes effect, instead of a liability.
The observed increase results from the Reclassification of Finance Leases to financial debt.
Recognition of 185 thousand Euros related with the transition adjustments.
The adjustment of 355 thousands Euros is a result from the Reclassification of Finance Leases to financial debt according to the new GAAP.
The increase of 45 thousand Euros results from the net effect of the reclassification of Financial Leases to financial debt of 355 thousand Euros and recognition of a provision related with employee's bonus of 400 thousands Euros according to NCRF 28.
(Amounts in Euros)
Adjustment related with the recognition of the Interest Rate Swap's Fair Value at 31/12/2008.
The value mentioned in the current liabilities refers to the intercompany margins' deferral as a result of the adoption of the Equity Method in the measurement of interests in subsidiaries and associates.
| EQUITY | 01-Jan-09 | 01-Jan-09 | |
|---|---|---|---|
| POC | Adjust. | NCRF | |
| Share Capital | 35.000.000 | 0 | 35.000.000 |
| Legal Reserve | 7.498.903 | 0 | 7.498.903 |
| Other Reserve | 74.217.795 | 0 | 74.217.795 |
| Retained Earnings | 3.176.750 | 0 | 3.176.750 |
| Adjustments to Financial Investments - equity Method | -22.853.307 | 24.273.168 | 1.419.861 |
| Revaluation Reserve | 6.195.184 | 0 | 6.195.184 |
| Other Equity Movements - Gaap transition | 0 | -1.691.301 | -1.691.301 |
| Net Income | 0 | 0 | 0 |
| TOTAL EQUITY | 103.235.325 | 22.581.866 125.817.192 |
The Equity adjustments' details are presented in the Note 2.3.
(Amounts in Euros)
| ASSETS | 31/Dec/2009 | 31/Dec/2009 | |
|---|---|---|---|
| POC | Adjust. | NCRF | |
| NON CURRENT ASSETS | |||
| Tangible Fixed Assets | 51.267.148 -12.109.543 39.157.605 | ||
| Investments Properties | 0 11.587.818 11.587.818 | ||
| Goodwill | 611.997 | 0 | 611.997 |
| Intangible Assets | 142.307 | 25.508 | 167.815 |
| Financial Investments - Equity Method | 17.486.106 33.590.119 51.076.225 | ||
| Shareholders | 0 | 0 | 0 |
| Other Financial Investments | 9.869.904 | 0 | 9.869.904 |
| Deferred Tax Assets | 773.667 | 463.250 | 1.236.916 |
| CURRENT ASSETS | |||
| Inventories | 51.303.072 | 0 51.303.072 | |
| Accounts Receivable | 75.530.998 | -2.331.050 73.199.948 | |
| Down Payments | 39.035 | 0 | 39.035 |
| Accrued Taxes | 0 | 0 | 0 |
| Shareholders | 1.074.749 | 0 | 1.074.749 |
| Other Accounts Receivable | 2.200 | 0 | 2.200 |
| Deferrals | 546.986 | -138.632 | 408.355 |
| Derivative Financial Instruments - SWAP | 0 | 0 | 0 |
| Cash and Cash Equivalents | 1.984.709 | 0 | 1.984.709 |
| TOTAL ASSETS | 210.632.879 31.087.471 241.720.350 |
The 12,1 million Euros of adjustments occurred at 31/12/2009 in Tangible Fixed Assets are essentially due to:
Reclassifications to Investment Properties (Tangible Fixed Assets held to obtain periodic rents): 11,6 million Euros;
Remaining is related with expenses which don't meet the recognition criteria according to NCRF 7.
Adjustment related with the reclassification of software programs from Tangible Fixed Assets to Intangible Assets.
(Amounts in Euros)
The 33,6 million Euros adjustment refers to the adoption of the Equity Method in the measurement of interests in subsidiaries and associates in accordance with NCRF 13 and NCRF 15.
There were recognized 463 thousand Euros of Deferred Tax Assets in result of differences between the underlying assets carrying amounts and tax bases generated by the transition adjustments, namely:
Adjustment related with the presentation of Accounts Receivable Accumulated Impairment Losses as an Allowance to the underlying asset, net of deferred taxes effect, instead of a liability.
The Plurianual costs previously deferred were expensed. In fact, according to the new Portuguese GAAP they don't meet recognition criteria.
| LIABILITIES | 31/Dec/2009 | 31/Dec/2009 | |
|---|---|---|---|
| POC | Adjust. | NCRF | |
| NON CURRENT LIABILITIES | |||
| Provisions | 2.576.816 | -2.516.726 | 60.090 |
| Loans | 2.119.358 | 3.506.970 | 5.626.328 |
| Deferred Tax Liabilities | 627.371 | 258.283 | 885.655 |
| Other Accounts Payable | 3.506.970 | -3.506.970 | 0 |
| CURRENT LIABILITIES | |||
| Accounts Payable | 24.374.663 | 0 | 24.374.663 |
| Down Payments | 69.514 | 0 | 69.514 |
| Accrued Taxes | 11.679.262 | 0 | 11.679.262 |
| Shareholders | 3.592.232 | 0 | 3.592.232 |
| Loans | 44.970.000 | 1.431.342 | 46.401.342 |
| Other Accounts Payable | 9.472.951 | -1.081.099 | 8.391.852 |
| Deferrals | 1.814.598 | 3.166.482 | 4.981.080 |
| Derivative Financial Instruments - SWAP | 0 | 1.113.265 | 1.113.265 |
| TOTAL LIABILITIES | 104.803.735 | 2.371.546 | 107.175.281 |
(Amounts in Euros)
The 2,5 millions adjustment is related with the presentation of Accounts Receivable Accumulated Impairment Losses as an Allowance to the underlying asset, net of deferred taxes effect, instead of a liability.
The 3,5 millions Euros adjustment in Non Current Liabilities results from the reclassification of Finance Leases to financial debt according to the new GAAP.
The 1.4 millions Euros adjustment in Current Liabilities results of the same reclassification.
Recognition of 285 thousand Euros related with the transition adjustments:
The Adjustment shown in Non Current Liabilities is a result from the reclassification of Finance Leases to financial debt.
The adjustments shown in Current Liabilities results from the following effects:
The adjustments refers to:
Adjustment related with the recognition of the Interest Rate Swap's Fair Value at 31/12/2009.
(Amounts in Euros)
| EQUITY | 31/Dec/2009 | 31/Dec/2009 | |
|---|---|---|---|
| POC | Adjust. | NCRF | |
| Share Capital | 35.000.000 | 0 | 35.000.000 |
| Legal Reserve | 7.498.903 | 0 | 7.498.903 |
| Other Reserve | 74.544.545 | 0 | 74.544.545 |
| Retained Earnings | 0 | 0 | 0 |
| Adjustments to Financial Investments - equity Method | -22.853.307 | 24.215.894 | 1.362.587 |
| Revaluation Reserve | 6.195.184 | 0 | 6.195.184 |
| Other Equity Movements - GAAP transition | 0 | -1.089.959 | -1.089.959 |
| Net Income | 5.443.819 | 5.589.990 | 11.033.809 |
| TOTAL EQUITY | 105.829.144 | 28.715.925 | 134.545.069 |
The Equity adjustments' details are presented in the Note 2.3.
| GAINS & EXPENSES | 31/Dec/2009 | 31/Dec/2009 | |
|---|---|---|---|
| POC | Ajust. | NCRF | |
| Sales and Service Rendered | 294.821.380 | 0 | 294.821.380 |
| Government Grants | 1.616.398 | 0 | 1.616.398 |
| Gains in Financial Investments - equity method | 0 | 5.666.012 | 5.666.012 |
| Variation Products | -3.167.473 | 0 | -3.167.473 |
| Cost of Goods and Raw Material | -235.895.529 | 0 | -235.895.529 |
| Supplies | -38.739.911 | 249.617 | -38.490.294 |
| Personnel Expenses | -18.700.224 | -82.500 | -18.782.724 |
| Increases / Reductions of fair value | 0 | -331.110 | -331.110 |
| Other Gains | 30.061.080 | 0 | 30.061.080 |
| Other Expenses | -9.106.255 | 0 | -9.106.255 |
| Income Before Depreciations, Financial Costs and Income | |||
| Tax | 20.889.466 | 5.502.019 | 26.391.485 |
| Depreciations | -10.672.647 | 90.536 | -10.582.111 |
| Operational Income | 10.216.819 | 5.592.555 | 15.809.374 |
| Financial Income | 240.784 | 0 | 240.784 |
| Financial Expenses | -3.027.079 | 0 | -3.027.079 |
| Income Before Taxes | 7.430.524 | 5.592.555 | 13.023.079 |
| Income Tax for the Year | -1.986.706 | -2.564 | -1.989.270 |
| Net Income | 5.443.819 | 5.589.990 | 11.033.809 |
| Net Income per Share | 0,16 | 0,32 |
(Amounts in Euros)
The principal accounting policies used in the preparation of the accompanying financial statements are as follows:
The intangible assets are stated at cost and comprise to 31 December 2010 exclusively Software Programs (Note 8).
The corresponding depreciation is computed on straight line basis on an annual basis in accordance with a period of useful life appreciated of three years.
Tangible fixed assets and as well as the meantime re-classified for investment properties acquired up to 31 December 1997 are stated at cost and can be restated in accordance with Portuguese legislation. Tangible fixed assets acquired after that date are stated at cost.
Depreciation is computed on straight line basis on an annual basis, accordingly with the following useful lives:
| Years | |
|---|---|
| - Buildings and Other Constructions | 20 - 50 |
| - Machinery and Equipment | 7 - 16 |
| - Transport Equipment | 4 - 5 |
| - Administrative Equipment | 3 - 14 |
| - Other Fixed Assets | 4 - 8 |
Toyota Caetano restated its tangible fixed assets in accordance with Portuguese legislation as follows:
Decree-Law 430/78, of 27 December Decree-Law 219/82, of 2 June Decree-Law 399-G/84, of 28 December Decree-Law 118-B/86, of 27 May Decree-Law 111/88, of 2 April Decree-Law 49/91, of 25 January Decree-Law 264/92, of 24 November Decree-Law 31/98, of 11 February
The depreciations of the period ended at 31 December 2010 were increased as a result of the referred restatement done. A part (40%) of this amount it is not accepted as a cost for corporate income tax purposes (IRC). Additionally, 40% of the depreciations of future exercises related to the effect of the restatement on fixed assets not yet depreciated will not be accepted as fiscal cost either, and the company recorded the correspondent liability for deferred tax (Note 11).
(Amounts in Euros)
Tangible fixed assets acquired under financial lease contracts and the corresponding liabilities are recorded by the financial method. Under this method the cost of the fixed assets is recorded and reflected in the balance sheet in caption of tangible fixed assets and the corresponding liability determined in accordance with the contractual financial plan are recorded like obtained financing and reflected in the balance sheet. Installments are composed of interest and capital refunding. Interest included in the lease installments and depreciation of the fixed assets is recognized in the income statement of the period to which they apply (Notes 5 and 21).
From the beginning of the year of 2010, the "MEP" (Equity Method) started to be applied to the participations in subsidiaries for which Toyota detains a dominant influence and according to the SNC rules.
The Equity Method was adopted in the financial investments in Group Companies and Affiliates measurement.
Dividends from interests in subsidiaries and associates are recorded in the period in which they are received as a straight reduction to the value of the financial participation, once his equivalent had been already considered by the appropriation in MEP of the results of the subsidiaries.
The company classifies financial instruments into the following categories:
This category includes financial instruments that satisfy at least one of the following conditions:
(Amounts in Euros)
Toyota Caetano Portugal's financial instruments that belong to this class are as follows:
A financial instrument is classified in this category if it doesn't meet conditions to be classified as a financial instrument at cost or amortized cost less impairment losses.
Toyota Caetano Portugal's financial instruments that belong to this class are as follows:
Merchandise, raw, subsidiary and consumable materials are stated at average cost, which is lower than market value.
A provision for depreciation of used cars was created to face the strong fluctuation of these product's market prices (Note 12).
Finished and intermediate goods and work in process are stated at production cost, which is lower than market value. Production costs include incorporated raw materials, direct labor, production overheads and external services.
Non refundable subsidies received to finance tangible fixed assets are recorded in "Other Reserve" when granted and recognized in the Statement of profit and loss proportionally to the depreciation of the subsidized assets (Note 18).
Operating subsidies are recorded as "Operating income" in the period in which they are received (Note 18).
Toyota Caetano Portugal incorporated by public deed dated December 29, 1988 the Salvador Caetano Pension Fund, with subsequent updates in January 2, 1994, December 29, 1995 and December 23, 2002.
(Amounts in Euros)
In order to estimate its liabilities for the payment of the mentioned responsibilities, the company obtains annually an actuarial calculation of the liabilities for past services in accordance with the "Projected Unit Credit Method".
Recorded liabilities as of the statement of financial position date relate to the present value of future benefits adjusted for actuarial profits or losses and/or for liabilities for past services not recognised, net of the fair value of net assets within the pension fund (Note 25).
Income tax payable is determined based on the taxable results of the companies included in the fiscal consolidation of Toyota Caetano Portugal, according to the fiscal regime applicable in the country of each Group company's head office (Portugal) (Note 11).
The current income tax is calculated based on Toyota Caetano's taxable results.
Deferred income taxes are computed using the statement of financial position liability method and reflect the timing differences between the amount of assets and liabilities for accounting purposes and the corresponding amounts for tax purposes. The deferred tax assets and liabilities are computed on an annual basis using the tax rates that are expected to be in force at the time these temporary differences are reversed.
Deferred tax assets are only recorded when there is reasonable expectation that sufficient taxable profits will arise in the future to allow their use or when there are temporary taxed differences that overcome temporary deductible differences at the time of its reversal. At the end of each year the Company reviews its recorded and unrecorded deferred tax assets which are reduced whenever their realization ceases to be likely, or recorded if it is likely that taxable profits will be generated in the future to enable them to be recovered.
Deferred tax assets and liabilities are recorded in the income statement, except if they relate to items directly recorded in equity, situations in which the corresponding deferred tax is also recorded in equity captions.
The Company records income and expenses on an accrual basis. Under this basis, income and expenses are recorded in the period to which they are related independently of when the amounts are received or paid. The differences between the amounts received and paid and the corresponding income and expenses are recorded in "Accruals" and "Deferrals" captions (Notes 15 and 16).
The Company has the policy of recording employee termination indemnities as an operational expense in the year in which they are agreed.
(Amounts in Euros)
During the period ended in 31 December 2010 there were paid indemnities in the amount of approximately Euros 1.406.000 (approximately Euros 913.000 in 31 December 2009).
Provisions are recognized when, and only when, the company has a present obligation (legal or constructive) arising from a past event; it is probable that an outflow of resources will be required and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each statement of financial position date and adjusted as to reflect the best estimate of its fair value as of that date (Note 19).
Restructuring provisions are recorded by the company whenever there is a formal and detailed restructuring plan and it has been communicated to parties involved.
Contingent liabilities are defined by the company as (i) possible obligations from past events and which existence will only be confirmed by the occurrence or not of one or more uncertain future events not totally under Toyota Caetano's control or (ii) present obligations from past events not recognized because it is not expected that an output of resources that incorporate economic benefits will be necessary to settle the obligation or its amount cannot be reliably measured.
Contingent liabilities are not recorded in the financial statements, being disclosed in the respective Notes, unless the probability of a cash outflow is remote. In these situations no disclosure is made.
Contingent assets are possible assets that arise from past events and whose existence will only be confirmed by the occurrence or not of one or more uncertain future events not totally under the company's control.
Contingent assets are not recorded in the financial statements but only disclosed when it is likely the existence of future economic benefits.
The financial expenses related with loans obtained (interest, bonus, accessory costs and lease contract's interests) are recorded as cost in the income statement of the year to which they relate, on an accrual basis.
(Amounts in Euros)
Assets and liabilities expressed in foreign currencies are translated to Euros at the prevailing exchange rates published by "Banco de Portugal". Favorable and unfavorable exchange differences, arising from changes between the exchange rates prevailing on the dates of the transactions and those in effect on the dates of payment, collection or as of the period, are recorded in the Income Statement.
The revenue is recognized net of taxes and commercial discounts, by the fair value of the amount received or to be received.
Sales' revenue is recognized in the income statement when the inherent assets risks and significant advantages are already under the buyer's jurisdiction, when it is probable that economic benefits will flow to Toyota Caetano Portugal and when it is reasonably possible to measure the corresponding income.
Revenue related with services rendered is recognized in accordance with the percentage of completion method or based on the contract period when the service is not associated with the implementation of specific activities, but the continuing provision of the service
In each year the company identifies the most adequate business and geographic segments.
Information related to revenue of the identified business segments is included in Note 27.
During the preparation of the financial statements, the Board of Directors of the company based itself in the best knowledge and in the experience of past and/or present events considering some assumptions relating to future events.
Most significant accounting estimates included in attached financial statements as of December 31, 2010 and 2009 include:
(Amounts in Euros)
The underlying estimations and assumptions were determined based in the best knowledge existing at the date of approval of the financial statements of the events and transactions being carry out as well as in the experience of past and/or present events. Nevertheless, some situations may occur in subsequent periods which, not being predicted at the date of approval of the financial statements, were not consider in these estimations. The changes in the estimations that occur after the date of the financial statements shall be corrected in a foresight way. Due to this fact and to the uncertainty degree associated, the real results of the transactions may differ from the corresponding estimations. Changes to these estimates, which occur after publication of these financial statements, will be corrected in a prospective way, in accordance with NCRF 4.
Main estimates and judgments related to future events included in the financial statements preparation are described in the attached Notes.
Events occurring after the statement of financial position date which provide additional information about conditions prevailing at the time of the statement of financial position ('adjusting events') are reflected in the financial statements. Events occurring after the statement of financial position date that provide information on post-statement of financial position conditions ('non adjusting events'), when material, are disclosed in the Notes to the financial statements.
The financial statements include estimates that do not present a significant risk of originating a material adjustment to the carrying values of assets and liabilities in the following period.
The amounts included in "Cash and cash equivalents" correspond to cash, bank deposits, time deposits and other cash investments which mature in less than three months, and that can be immediately mobilized with a negligible risk of changes in value.
As of 31 December 2010 and 31 December 2009 cash and cash equivalents detail was the following:
| Itens | 31/Dec/2010 | 31/Dec/2009 |
|---|---|---|
| Money | 101.250 | 101.250 |
| Bank Deposits at Immediate Disposal | 1.894.907 | 1.846.812 |
| Cash Equivalents | 450 | 36.648 |
| Cash and Cash Equivalents | 1.996.607 | 1.984.710 |
(Amounts in Euros)
During 2010 and 2009, the movement in tangible fixed assets as well as in the accumulated depreciation were as follows:
| Buildings and | Machirnery | Other | Construction | |||||
|---|---|---|---|---|---|---|---|---|
| 2010 | Other | and | Administrative | Fixed | in | |||
| Land | Constructions | Equipments | Vehicles | Equipment | Assets | Progress | Total | |
| Gross | ||||||||
| Opening Balance 31/12/2009 | 6.512.319 | 29.455.359 | 48.873.545 | 32.198.282 | 5.847.361 | 2.771.712 | 903.473 | 126.562.051 |
| Increases | 368.642 | 8.477.344 | 82.467 | 37.326 | 8.965.779 | |||
| Disposals | -41.141 | -6.685.760 | -6.726.901 | |||||
| Transfers and Write offs | -3.146.965 | 1.842.379 | -2.500 | 2.500 | -1.304.586 | |||
| Final Balance 31/12/2010 | 3.365.354 | 31.297.738 | 49.198.546 | 33.992.366 | 5.929.828 | 2.809.038 | 903.473 | 127.496.343 |
| Depreciations | ||||||||
| Opening Balance 31/12/2009 | 23.568.903 | 42.427.369 | 13.297.440 | 5.616.114 | 2.494.620 | 87.404.446 | ||
| Increases | 1.158.403 | 1.583.790 | 6.082.013 | 112.342 | 85.280 | 9.021.828 | ||
| Disposals | -41.012 | -3.274.160 | -3.315.172 | |||||
| Transfers and Write offs | 1.970.599 | -500 | 500 | 1.970.599 | ||||
| Final Balance 31/12/2010 | 26.697.905 | 43.969.647 | 16.105.793 | 5.728.456 | 2.579.900 | 95.081.701 | ||
| Net Value | 3.365.354 | 4.599.833 | 5.228.899 | 17.886.573 | 201.372 | 229.138 | 903.473 | 32.414.642 |
| Buildings and | Machirnery | Other | Construction | |||||
|---|---|---|---|---|---|---|---|---|
| 2009 | Other | and | Administrative | Fixed | in | |||
| Land | Constructions | Equipments | Vehicles | Equipment | Assets | Progress | Total | |
| Gross | ||||||||
| Opening Balance 01/01/2009 | 6.512.319 | 29.745.939 | 48.337.862 | 23.397.163 | 5.818.244 | 2.739.615 | 980.990 | 117.532.132 |
| Increases | 589.446 | 13.904.510 | 36.658 | 32.097 | 14.562.711 | |||
| Disposals | -53.763 | -5.089.564 | -7.386 | -5.150.713 | ||||
| Transfers and Write offs | -290.580 | -13.827 | -155 | -77.517 | -382.079 | |||
| Final Balance 31/12/2009 | 6.512.319 | 29.455.359 | 48.873.545 | 32.198.282 | 5.847.361 | 2.771.712 | 903.473 | 126.562.051 |
| Depreciations | ||||||||
| Transition Adjustments | 22.655.717 | 40.762.992 | 9.796.414 | 5.494.925 | 2.406.432 | 81.116.480 | ||
| Increases | 1.203.766 | 1.718.140 | 6.109.013 | 128.730 | 88.188 | 9.247.837 | ||
| Disposals | -53.763 | -2.601.074 | -7.386 | -2.662.223 | ||||
| Transfers and Write offs | -290.580 | -6.913 | -155 | -297.648 | ||||
| Final Balance 31/12/2009 | 23.568.903 | 42.427.369 | 13.297.440 | 5.616.114 | 2.494.620 | 87.404.446 | ||
| Net Value | 6.512.319 | 5.886.456 | 6.446.176 | 18.900.842 | 231.247 | 277.092 | 903.473 | 39.157.605 |
The acquisition cost considered at the transition moment has a net effect of legal revaluations of 1.731.329 Euros.
As at 31 December 2010 and 31 of December of 2009, the caption "Investment properties" correspond to real estate assets detained by Toyota Caetano in order to obtain income through its lease or increase in value. These assets are measured at acquisition cost.
Gains associated to Investment properties are registered in the caption "Other Gains" and they ascended to 2.980.157 Euros in the period ended in 31 December 2010 (3.174.990 Euros in 31 December 2009).
During 2010 and 2009, the movements occurred in the investment properties as well as in the accumulated depreciation were as follows:
| 2010 | Buildings and Other |
||
|---|---|---|---|
| Land | Constructions | Total | |
| Gross | |||
| Opening Balance 31/12/2009 | 5.722.165 | 32.457.181 | 38.179.346 |
| Increases | 406.850 | 406.850 | |
| Disposals | 0 | ||
| Transfers and Write offs | 3.146.965 | -1.842.378 | 1.304.587 |
| Final Balance 31/12/2010 | 8.869.130 | 31.021.653 | 39.890.783 |
| Depreciations | |||
| Opening Balance 31/12/2009 | 26.591.528 | 26.591.528 | |
| Increases | 799.471 | 799.471 | |
| Disposals | 0 | ||
| Transfers and Write offs | -1.970.599 | -1.970.599 | |
| Final Balance 31/12/2010 | 25.420.400 | 25.420.400 | |
| Net Value | 8.869.130 | 5.601.253 | 14.470.383 |
(Amounts in Euros)
| 2009 | Land | Buildings and Other Constructions |
Total |
|---|---|---|---|
| Gross | |||
| Opening Balance 01/01/2009 | 5.722.165 | 32.457.181 | 38.179.346 |
| Increases | |||
| Disposals | |||
| Transfers and Write offs | |||
| Final Balance 31/12/2009 | 5.722.165 | 32.457.181 | 38.179.346 |
| Depreciations | |||
| Opening Balance 01/01/2008 | 25.526.618 | 25.526.618 | |
| Increases | 1.064.910 | 1.064.910 | |
| Disposals | |||
| Transfers and Write offs | |||
| Final Balance 31/12/2009 | 26.591.528 | 26.591.528 | |
| Net Value | 5.722.165 | 5.865.653 | 11.587.818 |
The acquisition cost considered at the transition moment has a net effect of legal revaluations of 4.674.306 Euros.
Additionally, in accordance with external appraisals made by independent experts, with reference to 2010, and in accordance with evaluation criteria usually accepted for real estate markets, the fair value of those investment properties amounts to, approximately, 60 million Euros.
The fixed assets recorded in "Investment Properties " as at December 31, 2010 and December 31, 2009 can be detailed as follows:
| Dez-10 | Dez-09 | |||||
|---|---|---|---|---|---|---|
| Imóvel | Local | Carrying | Fair Value | Carrying | Valuation | |
| Amount | at | Amount | at | |||
| 31/12/2010 | 31/12/2008 | |||||
| Industrial | V.N. Gaia | 1.107.830 | 10.750.000 | 1.363.508 | 11.000.000 | |
| Facilities | ||||||
| Industrial | Carregado | 6.382.543 | 24.100.000 | 3.028.215 | 23.100.000 | |
| Facilities | ||||||
| Industrial | V.N. Gaia | 1.559.960 | 4.800.000 | 1.337.773 | 5.440.000 | |
| Warehouse | ||||||
| Commercial | Lisboa | 1.346.926 | 1.310.000 | 1.376.315 | 1.600.000 | |
| Facilities | ||||||
| Commercial | Various | 4.073.124 | 19.270.000 | 4.482.007 | 31.158.000 | |
| Facilities | locals | |||||
| 14.470.383 | 60.230.000 | 11.587.818 | 72.298.000 | |||
(Amounts in Euros)
The investment properties' fair value disclosed in December 31, 2010 was determined on an annual basis by an independent appraiser – American Appraisal (Market Method, Cost Method and Return Method), with reference to 2010.
During 2010, there have not occurred any changes to the Goodwill.
The Goodwill is due entirely to the amount recorded on the of Movicargo's acquisition in 2008 whose operations were meanwhile transferred to Toyota Caetano Portugal, SA.
Goodwill is not amortized, being tested annually for impairment.
For impairment test's purposes, the recoverable amount was determined in accordance with the Value in Use, through the discounted cash flows model and based on business plans carried out by people in charge, being approved by the Board of Directors. The discount rate used is considered to represent the risks inherent to the business.
As at 31 December 2010 the main assumptions of the test were as follows:
(Amounts in Euros)
| Movicargo – BT Industrial | |
|---|---|
| Equipment Division | |
| Goodwill | 611.997 |
| Cash Flows Projection Period | 5 years |
| Growth Rate (g) (1) | 0% |
| Discount Rate (2) | 9,93% |
(1) Growth rate used to extrapolate cash flows beyond the period considered in the business plan (2) Discount rate applied to projected cash flows
The Board of Directors, supported by the estimated discounted cash flows, concluded that on December 31, 2010, the net book value of assets, including goodwill, does not exceed its recoverable amount.
The projections of cash flows were based on historical performance and on expectations of improved efficiency. The management believe that a possible change (within a normal scenario) in key assumptions used in calculating the recoverable amount will not result in impairment losses.
During 2010 and 2009, the movements in intangible assets were as follows:
| 2010 | Research & Development Expenses |
Software | Total |
|---|---|---|---|
| Gross | |||
| Opening Balance 31/12/2009 | 2.978.595 | 983.622 | 3.962.217 |
| Increases | 8.500 | 8.500 | |
| Disposals | 0 | ||
| Transfers and Write offs | -2.978.595 | -2.978.595 | |
| Final Balance 31/12/2010 | 0 | 992.122 | 992.122 |
| Depreciations | 0 | ||
| Opening Balance 31/12/2009 | 2.836.288 | 958.114 | 3.794.402 |
| Increases | 21.708 | 21.708 | |
| Disposals | 0 | ||
| Transfers and Write offs | -2.836.288 | -2.836.288 | |
| Final Balance 31/12/2010 | 0 | 979.822 | 979.822 |
| Net Value | 0 | 12.300 | 12.300 |
(Amounts in Euros)
| 2009 | Research & Development Expenses |
Software | Total |
|---|---|---|---|
| Gross | |||
| Opening Balance 01/01/2009 | 2.923.147 | 958.622 | 3.881.769 |
| Increases | 55.448 | 25.000 | 80.448 |
| Disposals | 0 | ||
| Transfers and Write offs | 0 | ||
| Final Balance 31/12/2009 | 2.978.595 | 983.622 | 3.962.217 |
| Depreciations | 0 | ||
| Opening Balance 01/01/2009 | 2.593.017 | 930.239 | 3.523.256 |
| Increases | 243.271 | 27.875 | 271.146 |
| Disposals | 0 | ||
| Transfers and Write offs | 0 | ||
| Final Balance 31/12/2009 | 2.836.288 | 958.114 | 3.794.402 |
| Net Value | 142.307 | 25.508 | 167.815 |
In 31 December 2010 and 31 December 2009, the financial investments were as follows:
| SCUK | Movicargo | Caetano Auto | CVM | Saltano | MEP Adjustments |
Total | |
|---|---|---|---|---|---|---|---|
| 1 January 2009 | 3.369.958 | 817.687 | 19.202.025 | 4.220.747 | 21.931.426 | -3.173.202 46.368.641 | |
| Acquisitions | 0 | ||||||
| Gains/Losses | 153.229 | -420.106 | 892.294 | 342.689 | 1.577.763 | 3.120.143 | 5.666.012 |
| Other Capital Movements | -57.274 | -57.274 | |||||
| Disposal | 0 | ||||||
| Others | -901.154 | -901.154 | |||||
| Dividends received | 0 | ||||||
| 31 December 2009 | 3.523.187 | 397.581 | 20.094.319 | 4.563.436 | 23.509.189 | -1.011.486 51.076.225 | |
| Acquisitions | 0 | ||||||
| Gains/Losses | 22.679 | -1.344 | 492.688 | 207.614 | 1.299.689 | 988.804 | 3.010.130 |
| Other Capital Movements | 0 | ||||||
| Disposal | 0 | ||||||
| Others | -527.789 | -527.789 | |||||
| Dividends received | -541.775 | -541.775 | |||||
| 31 December 2010 | 3.545.866 | 396.237 | 20.045.232 | 4.771.050 | 24.808.878 | -550.472 53.016.791 |
During the period, the only change in percentages of interest refers to the acquisition of 5,21% of Caetano Auto by Saltano, SGPS, SA to a minority shareholder. In the following chat, the evolution on the participation rates in Group companies can be appreciated:
(Amounts in Euros)
| SCUK | Movicargo | Caetano Auto | CVM | Saltano | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 31-Dez-09 31-Dez-10 31-Dez-09 31-Dez-10 31-Dez-09 31-Dez-10 31-Dez-09 31-Dez-10 31-Dez-09 31-Dez-10 | ||||||||||
| Equity | 3.530.179 | 3.552.898 | 405.434 | 404.090 43.712.397 42.990.284 | 5.950.278 | 6.158.069 23.865.372 24.547.666 | ||||
| Net Income | 41.813 | 22.719 | -67.079 | -1.344 | 966.863 | 488.589 | 607.277 | 289.868 | 1.900.321 | 621.855 |
| % Direct Interest | 99,82% | 99,82% | 100% | 100% | 46,30% | 46,30% | 81,24% | 81,24% | 99,98% | 99,98% |
| % Indirect Interest | 99,82% | 99,82% | 100% | 100% | 93,18% | 98,39% | 81,24% | 81,24% | 99,98% | 99,98% |
Subsidiaries' financial position and net income can be summarized as follows:
| 31-12-2010 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Caetano | ||||||||
| SCUK | Movicargo | Auto | CVM | Saltano | ||||
| Assets | 3.571.692 | 405.326 | 119.476.580 | 6.700.761 | 36.760.446 | |||
| Current | 27.612 | 65.326 | 64.028.038 | 5.561.737 | 7.699.842 | |||
| Non Current 3.544.080 | 340.000 | 55.448.542 | 1.139.024 | 29.060.605 | ||||
| Liabilities | 18.794 | 1.235 | 76.486.296 | 542.690 | 12.212.780 | |||
| Current | 18.794 | 1.235 | 69.677.103 | 542.690 | 79.581 | |||
| Non Current | 0 | 0 | 6.809.193 | 0 | 12.133.199 | |||
| Equity | 3.552.898 | 404.091 | 42.990.284 | 6.158.071 | 24.547.666 | |||
| Income | 42.129 | 4.894 | 243.951.063 | 11.875.358 | 867.241 | |||
| - | ||||||||
| Expenses | -19.410 | -6.238 | -243.462.474 | 11.585.490 | -245.386 | |||
| Net Income | 22.719 | -1.344 | 488.589 | 289.868 | 621.855 |
| 31-12-2009 | |||||||
|---|---|---|---|---|---|---|---|
| SCUK | Movicargo | Caetano Auto |
CVM | Saltano | |||
| Assets | 3.548.940 | 407.290 | 113.295.838 | 6.367.043 | 33.585.523 | ||
| Current 3.548.940 | 67.290 | 61.612.791 | 5.122.586 | 1.307.794 | |||
| Non Current | 0 | 340.000 | 51.683.047 | 1.244.458 | 32.277.729 | ||
| Liabilities | 18.761 | 1.856 | 69.583.441 | 416.765 | 9.834.269 | ||
| Current | 18.761 | 1.856 | 59.266.240 | 416.765 | 4.269 | ||
| Non Current | 0 | 0 | 10.317.201 | 0 | 9.830.000 | ||
| Equity | 3.530.179 | 405.434 | 43.712.397 | 5.950.278 | 23.751.254 | ||
| Income | 62.854 | 55.537 | 249.528.383 | 14.572.283 | 1.811.045 | ||
| Expenses | -21.041 | -122.616 | -248.561.520 | 13.965.007 | -24.842 | ||
| Net Income | 41.813 | -67.079 | 966.863 | 607.277 | 1.786.203 |
(Amounts in Euros)
| Non Current Assets | |
|---|---|
| Investments in small private companies | 39.904 |
| Current Assets | |
| Loan to Saltano, SGPS, SA (Note 14) | 12.133.199 |
Both financial assets are measured at amortized cost less impairment losses.
The Board of Directors believes that the carrying amount of investments in small private companies is roughly near its fair value.
In March 2007 the Company took the decision to apply to the Corporate Income Tax for the Group (RETGS) according to the articles 69th and 70th of Income Tax Code (CIRC) and beginning in 1st January 2007. In consequence, the parent company (Toyota Caetano Portugal, S.A.) shall book the income tax calculated in the Group Companies (Toyota Caetano Portugal, Caetano Auto, Saltano, Caetano Components and Caetano Renting) in order to determine the group income tax.
Amounts and nature of the assets and liabilities for deferred taxes recorded in 2010 comprise (Debits/ (Credits)):
| Balance | ||||
|---|---|---|---|---|
| 31 December 2010 | ||||
| Deferred tax assets |
Deferred tax liability |
Reflected in Income Statement |
Reflected in Equity |
|
| Provisions not accepted as fiscal costs 40% of depreciation as a result of legal revaluation of fixed assets |
717.083 | (89.209) | 56.584 (17.342) |
|
| Effect of the reinvestments of the gains in fixed assets sales |
(426.003) | (58.146) | ||
| Gains in fixed assets according nº7 Art. 7º Law 30/G 2000 Reserve captive |
(30.559) (104.085) |
(6.112) | ||
| Transition adjustments | (190.530) | 4.854 | ||
| Provisions not accepted as fiscal costs | ||||
| Investments Subsidies | (57.687) | (14.920) | ||
| Valuation of financial instruments | 46.317 | 248.698 | ||
| Assets not capitalized | 105.198 | 26.299 | ||
| Cancellation of deferred costs | 29.390 | 7.347 | ||
| Intangible assets | 4.898 ---------------- |
----------------- | (4.898) ----------------- |
----------------- |
| 902.886 | (898.073) | 257.284 | (14.920) |
The Group Companies' operating profits forecasted to the next year show that the carrying amount of deferred tax assets recognized at 31 December 2010 will be totally recovered.
Additionally, the Income Statement caption "Income taxes" was determined as follows:
| Income taxes in year ended 31 December 2010 | 2.176.328 |
|---|---|
| Deferred income taxes of the period | 257.284 |
| 2.433.612 |
The liability caption "Accrued Taxes", as of 31 December 2010, does not include outstanding overdue debts, and comprise:
| Items | Amount |
|---|---|
| Corporate Income Tax for the Year 2010 (income tax estimate) | 2.176.328 |
| Corporate Income Tax(payments in advance) for the Year 2010 | -2.154.577 |
| Sub-Total | 21.751 |
| Corporate Income Tax for the Year (RETGS) | 950.014 |
| Vehicles Tax | 3.836.667 |
| Custom Duties | 727.142 |
| Value Added Tax | 9.302.926 |
| Other Tax | 586.796 |
| Total | 15.425.296 |
The reconciliation of the earnings before taxes of the years ended at 31 December, 2010 and 2009 can be analyzed as follows:
| Dez-10 | Dez-09 | |
|---|---|---|
| Income Before Taxes | 13.085.791 | 13.023.079 |
| Tax at rate aplicable in Portugal (26,5 % ) | 3.465.985 | 3.449.366 |
| Equity Method | -3.010.129 | -5.666.012 |
| Restitution of non deductible taxes and excess on income tax provision | -1.548.720 | 0 |
| Derivative Financial Instruments | -938.483 | 0 |
| Accounting Capital Gains | -844.690 | -1.013.729 |
| Elimination of the Economical Double Taxation on Distributed Income | -541.775 | 0 |
| Others | -506.867 | -398.915 |
| Income not subject to tax | -7.390.665 | -7.078.656 |
| Equity Method | 541.775 | 0 |
| Non deductible depreciation and amortization | 414.617 | 619.773 |
| Others | 246.117 | 538.497 |
| Expenses not deductable | 1.202.509 | 1.158.270 |
| Equity variations - Transition condition | 71.258 | 0 |
| Deferred tax | 257.284 | -102.166 |
| Additional tax on profit | 124.409 | 0 |
| Additional income tax | 206.912 | 210.972 |
| Tax Expenses | 2.433.612 | 1.989.270 |
(Amounts in Euros)
As of 31 December 2010 and 31 December 2009, inventories detail was the following:
| Items | Dec/2010 | Dec/2009 |
|---|---|---|
| Goods | 31.525.802 | 33.933.811 |
| Raw materials | 8.041.704 | 7.782.071 |
| Finished and Intermediate goods | 3.817.227 | 3.820.977 |
| Work in Progress | 6.020.509 | 7.066.213 |
| Impairment Loss - Goods (Note 19) | -1.087.972 | -1.300.000 |
| 48.317.270 | 51.303.072 |
The cost of goods sold and consumed for 2010 was as follows:
| Opening Balances 33.933.811 7.782.071 41.715.882 Purchases 226.415.999 38.508.289 264.924.288 Closing Balances 31.525.802 8.041.704 39.567.506 |
Items | Goods | Raw Materials | Total |
|---|---|---|---|---|
| 228.824.008 38.248.656 267.072.664 |
The variation of production for 2010 was as follows:
| Finished and | |||
|---|---|---|---|
| Items | Intermediate | Work in | Total |
| Goods | Progress | ||
| Closing Balances | 3.817.227 | 6.020.509 | 9.837.736 |
| Opening Balances | 3.820.977 | 7.066.213 | 10.887.190 |
| -3.750 | -1.045.704 | -1.049.454 |
As of 31 December 2010 and 31 December 2009 Accounts Receivable detail was the following:
| Items | 31/Dec/2010 | 31/Dec/2009 |
|---|---|---|
| Accounts Receivable Doubtful Accounts Receivable |
90.010.149 5.502.982 |
74.653.578 5.502.982 |
| Impairment Losses (Note 19) | 7.209.643 | 6.956.612 |
| 88.303.488 | 73.199.949 |
(Amounts in Euros)
Due and payable balances with Group and Associated companies, which, as of 31 December 2010, were recorded in the captions "Accounts receivable", "Accounts payable", "Other financial investments" and " shareholders", as follows:
| Accounts Receivable | 54.973.551 |
|---|---|
| Accounts Payable | -1.710.831 |
| Shareholders (Note 11) | |
| - RETGS's Companies | |
| . Saltano, S.A. | 76.536 |
| . Caetano Components, S.A. | -275.102 |
| . Caetano Renting, S.A. | -385.848 |
| . Caetano Auto, S.A. | 2.451.296 |
| --------------- 1.866.882 |
|
| - Others | |
| . Salvador Caetano UK, Ltd | -3.196.244 |
| . Movicargo, Lda | -340.000 |
| --------------- -3.536.244 |
|
| Other Financial Investments (Note 10) | |
| . Saltano, SA. | 12.133.199 |
Accounts Receivable and Accounts Payable (Notes 13 and 22)
Intercompany balances and transactions related with accounts receivable and payable were as follows:
| Comercial Debt | Products | Fixed Assets | Services | Others | |||||
|---|---|---|---|---|---|---|---|---|---|
| Group Companies | Receivable | Payable | Sales | Purchases | Acquisitions | Rendered | Obtained | Costs | Income |
| SALVADOR CAETANO (UK), LTD | 347.836 | 77.371 | |||||||
| CAETANO COMPONENTS, S.A. | 102.291 | 72.488 | 2.157 | 675.317 | 108.430 | 1.521 | 76.156 | ||
| CABO VERDE MOTORS, SARL | 266.533 | 207 | 8.397.043 | 621 | 71.278 | ||||
| CAETANO RENTING, S.A. | 5.887.950 | 63.301 | 16.019.763 | 5.806.258 | 189.623 | 155.023 | 36.322 | 447.769 | |
| CAETANO AUTO, S.A. | 46.235.310 | 1.175.500 | 154.499.790 | 446.723 | 7.194.109 | 10.307.647 | 5.977.022 | ||
| AUTO PARTNER - COMÉRCIO DE AUTOMÓVEIS, S.A. | 2.457.544 | 32.367 | 8.242.628 | 2.217 | 274.532 | 447.128 | 290.500 | ||
| CAETANO COLISÃO (NORTE), SA | 23.920 | 14.245 | 6.106 | 19.553 | 625 | 51.822 | |||
| MOVICARGO - MOVIMENTAÇÃO INDUSTRIAL, S.A. | 3 | 4.887 | 4.887 | 2 |
(Amounts in Euros)
Other Accounts Payable's detail at 31 December 2010 is as follows:
| Other Accounts Payable | 31/Dec/2010 |
|---|---|
| Interest | 121.619 |
| Sales Campaigns | 1.342.925 |
| Vacations pay and Bonus | 2.155.866 |
| Anticipaded costs related with sold vehicles | 1.773.970 |
| Supplies | 344.937 |
| Warranty claims | 266.577 |
| Car tax related with disposed vehicles not registered | 710.473 |
| Personnel | 688.753 |
| Publicity | 346.435 |
| Royalties | 135.723 |
| Insurance | 189.394 |
| Total | 8.076.672 |
The amount of 31 thousand Euros of Other Accounts Receivable refers to accrued income.
As of 31 December 2010, these items were as follows:
| 204.984 |
|---|
| 146.186 |
| 134.756 |
| -------------- 485.926 |
| 80.148 |
| 980.256 |
| 3.180.424 |
| 53.368 |
| -------------- 4.294.196 |
(Amounts in Euros)
As of 31 December 2010 Toyota Caetano share capital was represented by 35.000.000 bearer shares, totally subscribed and realized, with a nominal value of 1 Euro.
The identification of corporate entities with more than 20% of issued capital was as follows:
| - Grupo Salvador Caetano (S.G.P.S.), S.A | 60% |
|---|---|
| - Toyota Motor Europe NV/SA | 27% |
The parent company Grupo Salvador Caetano (SGPS), SA has its headquarters at Avenida Vasco da Gama, 1410, Oliveira do Douro, Gaia.
According to the General shareholders meeting deliberation, as of 23 April 2010, a dividend of 0,15 Euros per share was paid (total dividend of 5.250.000 Euros). As of 30 April 2009, the dividend paid was of 0,07 Euros per share (total dividend of 2.450.000 Euros).
In relation to 2010, the Board of Directors proposes that it should be paid a dividend of 0,18 Euros per share. This proposal must to be approved in the General Shareholders Meeting and was not included as a liability in the financial statements. The proposed dividend amounts to a total of 6.300.000 Euros.
Commercial legislation establishes that at least 5% of the net profit of each year must be appropriated to a legal reserve until this reserve equals the statutory minimum requirement of 20% of the share capital. This reserve is not available for distribution, except in case of dissolution of the Company, but may be used in share capital increases or used to absorb accumulated losses once other reserves have been exhausted.
It reserves includes reserves created by the company (74.655.864 Euros) accrued with a reserve referent to the recognition of a FEDER premium net of deferred tax effect (288.688 Euros).
The revaluation reserves cannot be distributed to the shareholders, except if they are completely depreciated and if the respective assets that were revaluated have been alienated.
(Amounts in Euros)
Adjustments to Financial Investments – Equity Method
Adjustments related with the Equity Method adoption.
Other Equity Movements
Amounts related with transition adjustments (Note 2).
The distributable amount in Equity, excluding Net Income, includes:
In accordance with the provisions laid down in the Portuguese Commercial Companies' Code (article 376th, number 1 – b), it was proposed by the Board of Directors the following allocation for 2010's profit (10.652.178,78 Euros):
The detail of the movements in captions subsidies and support received during 2010 is as follows (Note 3 g)
| PROGRAM | Subsidies Received in previous years |
Subsidies Received |
Transfer to surface treatment activity |
Recognized in period |
Deferred to future |
|---|---|---|---|---|---|
| POE1.2 – SIME A application 00/07099 | 513.708 | 267.742 | 49.296 | 196.670 | |
| SIME IDT - OPTIMO SEVEN | 28.023 | 7.006 | 21.017 | ||
| FEDER | 392.773 | 392.773 | |||
| sub-total for subsidies to fixed and intangible assets | 541.731 | 392.773 | 267.742 | 56.302 | 610.460 |
| Program of Qualification and Employment for the Automotive Industry (PASA) |
59.935 | 47.355 | 107.291 | ||
| Operational Program for the Human Potencial (POPH) | 1.003.649 | 1.003.649 | |||
| sub-total for operating subsidies | 59.935 | 1.051.004 | 0 | 1.110.940 | 0 |
(Amounts in Euros)
During 2010 and 2009, the following movements occurred in provisions and impairments:
| Items | Opening | Increases | Transfers | Reversals | Ending |
|---|---|---|---|---|---|
| 31/Dec/2010 Balances | Balances | ||||
| Doubtful Accounts Receivable Inventories Other Risks and Charges |
6.956.612 1.300.000 60.090 |
212.672 | 60.090 -60.090 |
-19.731 7.209.643 -212.028 1.087.972 |
|
| 8.316.702 | 212.672 | 0 | -231.759 8.297.615 |
| Items | Opening | Increases | Transfers | Reversals | Ending |
|---|---|---|---|---|---|
| Balances | |||||
| 31/Dec/2009 | Resteted | Balances | |||
| Doubtful Accounts | |||||
| Receivable | 6.956.612 | 6.956.612 | |||
| Inventories | 1.300.000 | 1.300.000 | |||
| Other Risks and Charges | 60.090 | 60.090 | |||
| 8.316.702 | 0 | 0 | 0 8.316.702 |
The increases and reversals of provisions have resulted from an internal evaluation made to accounts receivable and inventories' recoverable amounts.
As of 31 December 2010, loans can be detailed as follows
| Commercial Paper Programs | 45.700.000 |
|---|---|
| Leases | 1.292.090 |
| Others | 210.612 |
| Current Liability | --------------- 47.202.702 |
| Leases | 2.216.025 |
| Other Loans | 1.908.746 |
| Non Current Liability | --------------- 4.124.771 |
Loans are measured at amortized cost, being the effective interest rate coincident with the nominal interest rate.
Interests relating to the Commercial Paper Programs and bank Loans mentioned above are indexed to Euribor, plus a spread which varies between 90 and 350 bps.
Other Loans refer to the investment refundable grant received in 2009, with the following reimbursement plan:
| 2011 | 210.612 |
|---|---|
| 2012 | 545.356 |
| 2013 and after | 1.363.390 |
| 2.119.358 |
During 2010 the detail of the costs supported with Loans and other financial instruments was as follows:
| Amount | |
|---|---|
| Commercial Paper Programs | 863.964 |
| Bank Loans | 44.099 |
| Leases | 49.903 |
| Financial Instruments | 968.814 |
| 1.926.780 |
The detail of derivative financial instruments' contract conditions are explained on Note 23.
As of 31 December 2010, the company was maintaining responsibilities like tenant relative to future installments of financial lease contracts of industrial equipment in the amount of 3.508.115 Euros, which are included in the caption "Loans" (Note 20).
The detail of this caption, as well as the reimbursement plan can be summarized as follows:
| Medium and Long-Term | ||||||||
|---|---|---|---|---|---|---|---|---|
| Contract | Leasings | Short-Term | 2011 | 2012 | 2013 | > 2013 | TOTAL | TOTAL |
| Industrial Equipment |
||||||||
| Capital | 1.292.091 | 981.029 | 798.736 | 431.825 | 4.435 | 2.216.024 | 3.508.115 | |
| Juros | 42.508 | 25.612 | 12.689 | 3.235 | 9 | 41.545 | 84.053 |
The fair value of the liabilities for leasing contracts is similar to the fair value of the leased assets.
Operating leases' minimum payments are essencially related with informatic equipment's rental and can be summarized as follows:
| Operating Leases' minimum payments | Dez-10 | Dez-09 |
|---|---|---|
| Less than one year Between one and five years |
247.067 248.235 |
247.667 346.867 |
| 495.302 | 594.534 |
As of 31 December 2010 and 2009 this caption was composed of current accounts with suppliers, which end at short term.
The derivative financial instruments used by Toyota Caetano Portugal, existing at 31 December, 2010, refer to interest rate swaps. Although not fulfilling the requirements to be considered for hedge accounting purposes (cash flow hedging), their acquisition was made with the objective of interest rate risk coverage of loans. In fact, they contribute for the reduction of exposure to the interest rate variation or for the optimization of funding costs.
The fair value at 31 December, 2010 was negative by 174.782 Euros ( as at 31 December 2009 was negative by 1.113.265 Euros), and includes a total exposition of 20 Million Euros, for a 3 years term, counting from December 21, 2010.
These derivative instruments were valued considering the future cash flows that are expected from those instruments. Toyota Caetano intends to hold these instruments until their maturity, so this kind of evaluation translates the best estimation of future cash flows resulting from these instruments.
Swaps are measured at fair value with reference to 31 December 2010, which is determined through valuation techniques used by financial institutions that are counterparties on the derivatives contract. The fair value of these financial instruments is based, for the swaps, on the update to the date of the financial position of the future cash-flows resulting from the difference between the fixed interest rate "leg" and the variable interest rate applied to the "leg " of the derivative .
(Amounts in Euros)
As of 31 December, 2010 and 2009, Toyota Caetano had assumed the following financial commitments:
| Responsabilities | Dec'10 | Dec'09 |
|---|---|---|
| Commitments assumed by guaranties | 12.078.088 | 13.401.248 |
| Others Guaranties | 2.013.588 | 1.959.823 |
| Total | 14.091.676 | 15.361.071 |
At 31 December 2010 and 2009, the financial commitments classified as "Commitments assumed by guaranties" include essentially the amount of 8.080.910 Euros (8.500.000 Euros in 2009), which related with guarantees on imports provided to Customs Agency.
Toyota Caetano (together with other associated and related companies) incorporated, by public deed dated December 29, 1988, the Salvador Caetano Pension Fund, which was subsequently updated in January 2, 1994, in December 29, 1995 and in December 23, 2002.
The Pension Fund was set up to, while Toyota Caetano maintains the decision to make contributions to the referred fund, provide employees (beneficiaries), at their retirement date, the right to a pension complement, which is not subject to update and is based on a percentage of the salary, among other conditions.
A request was made as of 19 December 2006 to the fund manager of the Salvador Caetano Pension Fund (ESAF – Espirito Santo Activos Financeiros, S.A.), to act near the "ISP - Instituto de Seguros de Portugal" and take the necessary measures to change the defined benefit plan into a defined contribution plan, among other changes.
Following the above mentioned, a dossier was sent on December 18, 2007 to Instituto de Seguros de Portugal containing the proposals to change the "Constitutive Contract" of Salvador Caetano Pension Fund, as well as the minute of approval of these changes by the Pensions Fund Advisory Committee, and requesting, with effects as from January 1, 2008, the approval of these changes.
The proposal for changing the pension complement, dully approved by the Pension Funds Advisory Committee ("Comissão de Acompanhamento do Fundo de Pensões"), includes the maintenance of a defined benefit plan for the current retired workers and ex-employees with acquired rights, as well as for all the current employees with more than 50 years and more than 15 years of service completed until January 1, 2008. A new group will be created to which all current employees with less than 50 years and/or less than 15 years of service will be transferred.
(Amounts in Euros)
At December 29, 2008 Toyota Caetano Portugal, S.A. received a letter from ISP - Instituto de Seguros de Portugal (Portuguese Insurance Institute) with the approval of the pretended alterations and entering into force starting from January 1, 2008. ISP determined in the referred approval that the employees associated to the Salvador Caetano Pension Fund who at January 1, 2008 had achieved 15 years of service and had ages inferior to 50 years (and that shall integrate a Defined Contribution Plan) have the right to an individual "initial capital" according to the new Plan, determined according to the actuarial responsibilities as at December 31, 2007 and based on the presumptions and criteria used on that year.
According to the actuarial study made by the fund manager, Toyota Caetano has been contributing to this Fund (contributions registered in the financial statements in item "Personnel costs"), having this contribution in 2010 amounted to 994 thousand Euros (15 thousand de Euros as of 31 December 2009), allowing the patrimonial situation of the Fund to achieve, at December 31, 2010, approximately, 16,8 million Euros. The global responsibilities parcel estimated actuarially for the defined benefit plan relating to Toyota Caetano at December 31, 2010, approximately, 17,1 million Euros. Thus, the responsibilities of the Fund on December 31, 2010 are not fully covered by the Fund patrimonial situation being expected by the administration that this situation reverses during 2011 through the appreciation of the assets comprising the Fund.
The actuarial presumptions used by the fund manager include the "Projected Unit Credit" calculation method, the Mortality Table and disability TV 73/77 and SuisseRe 2001, respectively, as well as well as salary increase rate, pensions increase rate and average rate of return of 2%, 0% and 5%, respectively.
The movement of the Fund responsibilities of the Company with the Defined benefit plan in 2010 can be summarized as follows:
| Responsibilities at January 1, 2010 | 17.083.469 |
|---|---|
| Cost of the current services | ---------------- 121.508 |
| Cost of interest (Gains) and actuarial losses |
824.860 308.373 |
| Pension payment | (1.172.532) |
| Responsibilities at December 31, 2010 | ---------------- 17.165.678 |
| ========= |
The allocation of this amount during 2010 to both plans (Defined benefit plan and Defined contribution plan) can be summarized as follows:
| Item | Defined benefit plan |
Defined contribution plan |
Total |
|---|---|---|---|
| Fund amount at December 31, 2009 Contributions |
16.874.482 994.039 |
2.673.657 193.079 |
19.548.139 1.187.118 |
| Real recovery of the plan assets Pension payment Transfers between Members |
75.920 -1.172.532 14.903 |
-33.663 0 -23.927 |
42.257 -1.172.532 -9.024 |
| Fund amount at December 31, 2010 |
16.786.811 | 2.809.147 | 19.595.958 |
At 31 December 2010, the Pension Fund's portfolio that covers the defined benefit plan was as follows:
| Portfolio | % | Value at 31-12-2010 |
|---|---|---|
| Stocks | 11% | 1.846.549 |
| Bonds | 43% | 7.218.329 |
| Real Estate | 36% | 6.043.252 |
| Cash | 7% | 1.175.077 |
| Other Assets | 3% | 503.604 |
| Total | 100% | 16.786.811 |
To be noted that in December 31, the pension fund held approximately 182,329 shares of Toyota Caetano Portugal, S.A., whose importance in the Pension Fund's portfolio amounted to 454,000 Euros.
The evolution of the pension fund's value and Toyota Caetano Portugal's responsabilities related with the defined benefit plan are as follows:
| 2010 | 2009 | |
|---|---|---|
| Responsibility's Values | 17.165.678 | 17.083.470 |
| Fund's Value | 16.786.811 | 16.874.482 |
(Amounts in Euros)
Sales and services rendered by geographic markets, in 2009 and 2010, was as follows:
| 2010 | 2009 | Var | 2010 | 2009 | Var | 2010 | 2009 | Var | |
|---|---|---|---|---|---|---|---|---|---|
| National Market | (%) | External Market | (%) | Total | (%) | ||||
| Light Vehicles | 242.353.133 | 211.131.072 | 15% | 21.681.428 | 17.597.656 | 23% | 264.034.561 | 228.728.728 | 15% |
| Heavy Vehicles | 5.955.715 | 7.797.838 | -24% | 484784 | 327.702 | 48% | 6.440.499 | 8.125.540 | -21% |
| Industrial Vehicles Spare Parts and |
8.160.550 | 10.709.892 | -24% | 414.188 | 375.775 | 10% | 8.574.738 | 11.085.667 | -23% |
| Accessories | 43.158.961 | 40.305.111 | 7% | 802.839 | 1.026.687 | -22% | 43.961.800 | 41.331.798 | 6% |
| Others | 5.406.379 | 5.543.158 | -2% | 7.838 | 6.489 | 21% | 5.414.217 | 5.549.647 | -2% |
| 305.034.738 | 275.487.071 | 11% | 23.391.077 | 19.334.309 | 21% | 328.425.815 | 294.821.380 | 11% |
The main information relating to the business segments existing on December, 2010 and 2009, prepared according to the same accounting policies and criteria adopted in the preparation of the financial statements, is as follows:
| 31/Dec/2010 | NATIONAL | EXTERNAL | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Vehicles | Inadustrial Equipment | Others | Vehicles | Inadustrial Equipment | |||||||
| Industry | Commercial | Commercial | Services | Rental | Industry CommercialCommercial | Services | Rental | ||||
| PROFITS | |||||||||||
| External sales | 33.055.390 | 260.432.174 | 8.823.641 | 2.826.598 | 15.277.006 7.692.045 | 311.125 | 7.838 | ||||
| Suplementary income | 9.358.522 | 103.064 | |||||||||
| INCOME | |||||||||||
| Operational income | -1.603.513 | 13.502.017 | -88.120 | 1.457.517 | 869.379 | -1.925.320 | 543.447 | 6.213 | 5.381 -22.283 | ||
| Financial income | -205.426 | -1.828.056 | -33.319 | -17.001 | -444.353 | -90.939 | -47.218 | -2.063 | -54 | -627 | |
| Gains in subsidiaries | 300.861 | 2.036.236 | -1.344 | 444.085 | 230.291 | ||||||
| Net income | -1.508.078 | 11.690.851 | -122.784 | 1.187.246 | 351.506 | 444.085 -2.016.259 | 640.683 | 3.433 | 4.406 -22.910 | ||
| OTHER INFORMATION | |||||||||||
| Total assets | 76.646.274 | 121.639.323 | 8.215.550 | 571.967 | 45.059.669 | ||||||
| Total liabilities | 34.943.347 | 55.455.861 | 3.745.503 | 260.762 | 20.542.886 | ||||||
| Investments in subsidiaries (1) | 1.919.435 | 24.043.563 | -215.761 | 19.009.559 | 8.259.994 | ||||||
| Capital Expenditur (2) | 1.076.524 | 1.594.430 | 189.494 | 32.601 | 2.934.044 | ||||||
| Depreciation (3) | 1.818.442 | 2.693.279 | 320.089 | 55.069 | 4.956.128 | ||||||
| 31/Dec/2009 | NATIONAL | EXTERNAL | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Vehicles | Inadustrial Equipment | Others | Vehicles | Inadustrial Equipment | |||||||
| Industry | Commercial | Commercial | Services | Rental | Industry CommercialCommercial | Services | Rental | ||||
| PROFIT | |||||||||||
| External sales | 36.110.828 | 224.233.147 | 12.012.423 | 3.236.092 | 8.771.156 10.180.889 | 270.356 | 6.489 | ||||
| Suplementary income | 8.262.109 | 105.419 | |||||||||
| INCOME | |||||||||||
| Operational income | -3.754.377 | 9.321.954 | 261.288 | 1.742.736 | 356.541 | -1.150.373 | 412.095 | 17.400 | 5.378 -15.046 | ||
| Financial income | -208.812 | -1.639.515 | -53.620 | -20.628 | -466.697 | -52.424 | -66.717 | -1.493 | -38 | -659 | |
| Gains in subsidiaries | 579.194 | 4.309.360 | -420.107 | 783.432 | 414.133 | ||||||
| Net income | -3.238.383 | 12.512.626 | 167.758 | 1.387.383 | -105.417 | 783.432 -1.151.041 | 675.316 | 12.850 | 4.313 -15.028 | ||
| OTHER INFORMATION | |||||||||||
| Total assets | 48.040.795 | 78.393.741 | 16.315.860 | 10.630.416 | 45.947.120 | ||||||
| Total liabilities | 23.810.751 | 38.854.766 | 8.086.728 | 5.268.818 | 22.773.050 | ||||||
| Investments in subsidiaries (1) | 1.618.574 | 23.076.890 | -214.417 | 18.565.474 | 8.029.703 | ||||||
| Capital Expenditur (2) | 2.911.357 | 4.750.800 | 352.976 | 8.428 | 4.049.627 | ||||||
| Depreciation (3) | 3.515.482 | 5.736.621 | 426.220 | 10.177 | 983.586 |
(1) By equity method
(2) Capital Expenditur: (Net tangible,intagible and investments properties variation)+(year depretiation)
(3) From the year
(Amounts in Euros)
At 31 December 2010 and 2009, supply expenses were as follows:
| Description | 31-12-2010 31-12-2009 | |
|---|---|---|
| Subcontracts | 46.801 | 129.985 |
| Professional Services | 5.081.822 | 4.438.576 |
| Advertising | 14.082.266 | 14.564.873 |
| Vigilance and Security | 424.879 | 447.846 |
| Professional Fees | 714.256 | 635.462 |
| Comissions | 261.757 | 296.591 |
| Repairs and Maintenance | 1.211.744 | 1.056.510 |
| Others | 3.172.538 | 3.242.434 |
| Specialized Services | 24.949.261 | 24.682.293 |
| Tools and Utensils | 49.704 | 44.264 |
| Books and Technical Documentation | 302.638 | 273.494 |
| Office Supplies | 124.101 | 118.597 |
| Gifts | 51.722 | 52.465 |
| Others | 8.208.765 | 7.596.081 |
| Materials | 8.736.929 | 8.084.902 |
| Electricity | 371.399 | 360.445 |
| Fuel | 502.798 | 493.418 |
| Water | 37.364 | 36.573 |
| Utilities | 911.561 | 890.436 |
| Traveling Expenses | 780.945 | 769.838 |
| Personnel Transportation | 103.825 | 125.050 |
| Transportation of Materials | 1.074.786 | 1.278.932 |
| Travel and Transportation | 1.959.556 | 2.173.820 |
| Rent | 590.371 | 610.481 |
| Communications | 398.587 | 325.195 |
| Insurance | 746.051 | 679.125 |
| Royalties | 487.075 | 382.379 |
| Notaries | 8.279 | 20.121 |
| Cleaning and Comfort | 562.352 | 511.558 |
| Other Supplies | 2.792.715 | 2.528.859 |
| TOTAL SUPPLIES | 39.396.823 | 38.490.294 |
(Amounts in Euros)
At 31 December 2010 and 2009, payroll expenses were as follows:
| Description | 31-12-2010 31-12-2009 | |
|---|---|---|
| Payroll - Management | 574.214 | 603.379 |
| Payroll - Other Personnel | 11.375.200 | 11.668.933 |
| Benefit Plans | 1.178.649 | 218.511 |
| Termination Indemnities | 1.406.454 | 913.424 |
| Social Security Contributions | 3.072.350 | 2.978.617 |
| Workmen's Insurance | 245.953 | 242.731 |
| Social Costs | 1.290.569 | 1.323.630 |
| Others | 706.730 | 833.499 |
| PAYROLL EXPENSES | 19.850.120 | 18.782.724 |
During the years ended as of December 31, 2010 and 2009, the average number of personnel was as follows:
| Items | Dec´10 | Dec´09 |
|---|---|---|
| Employees | 428 | 447 |
| Production Personnel | 221 649 |
254 701 |
The remuneration of the board members in Toyota Caetano Portugal, S.A. during the years 2010 and 2009, was as follows:
| Board Members | Dec'2010 | Dec'2009 |
|---|---|---|
| Board of Directors | 419.265 | 580.239 |
| Shareholder's Assembly | 758 | 758 |
| Board of Auditors | 25.165 | 22.381 |
(Amounts in Euros)
As of 31 December, 2010 and 2009, the captions "Other Expenses" and "Other Gains" were as follows:
| OTHER EXPENSES | Dec'10 | Dec'09 |
|---|---|---|
| Tax | 573.635 | 466.890 |
| Cash Discount Granted | 31.494 | 11.896 |
| Bad Depts | 28.695 | |
| Losses on Inventories | 169.375 | 75.338 |
| Losses on Fixed Assets | 127.325 | 40.993 |
| Other Cost | 9.186.627 | 8.511.138 |
| 10.117.151 | 9.106.255 |
The caption "Other Expenses" includes trade incentives and subsidies granted to dealers
| OTHER GAINS | Dec'10 | Dec'09 |
|---|---|---|
| Supplementary Income | 26.433.094 | 26.720.182 |
| Obtained Cash Discounts | 10.489 | 14.613 |
| Recovery of Bad Debts | 17 | 261 |
| Gains on Inventories | 180.183 | 304.713 |
| Gains on Fixed Assets | 1.216.217 | 1.171.901 |
| Other Gains | 1.759.346 | 1.849.411 |
| 29.599.346 | 30.061.081 |
The supplementary income refers to equipment and real estate renting fees, as well as provided services( Print services) and recovery of other expenditures( warranties)
The caption "Other Gains" include tax recovery gains as a result of favourable decisions on judicial impugnation processes.
Gains on fixed assets are related with capital gains resulting from disposals.
(Amounts in Euros)
As of 31 December, 2010 and 2009, the captions "Financial Income" and "Financial Expenses" were as follows:
| COSTS | Dec'10 | Dec'09 |
|---|---|---|
| Interest | 1.926.780 | 2.663.694 |
| Other Costs | 876.633 | 363.385 |
| 2.803.413 | 3.027.079 |
| GAINS | Dec'10 | Dec'09 |
|---|---|---|
| Interest | 134.356 | 240.784 |
The earnings per share for the year ended as of December 31, 2010 and 2009 were computed based on the following amounts:
| Dec-10 | Dec-09 | |
|---|---|---|
| Net Income | ||
| Basic | 10.652.179 | 11.033.809 |
| Diluted | 10.652.179 | 11.033.809 |
| Number of shares | 35.000.000 | 35.000.000 |
| Earnings per share (basic and | ||
| diluted) | 0,30 | 0,32 |
During the period ended in 31 December 2010 and 2009 there were no changes in the number of shares.
Balances and transactions details between Toyota Caetano Portugal and Related Parties other than those referred on Note 14 can be summarized as follows:
| Related Companies | Comercial Debt | Products | Fixed Assets | Services | Others | ||||
|---|---|---|---|---|---|---|---|---|---|
| Receivable Payable | Sales | Purchases Purchases | Rendered Obtained Costs | Income | |||||
| AMORIM BRITO & SARDINHA LDA | 435 | 2.253 | |||||||
| BAVIERA - COMÉRCIO DE AUTOMÓVEIS, SA | 1.123.023 | 24.784 4.990.835 | 7.507 | 152.243 239.795 | 572.685 | ||||
| CAETANO AUTOBODY,COMERCIO DE AUTOCARROS,SA | 3.979.608 | 7.500 41.799.917 | 2.494 | 193.003 | 335 | 108.096 | |||
| CAETANO CITY E ACTIVE (NORTE) SA | 2.393 | 444 | 5.234 | ||||||
| CAETANO COLISÃO (SUL) SA | 366 | ||||||||
| CAETANO DRIVE SPORT URBAN (NORTE)SA | 1.641 | 5.522 | 6.453 | ||||||
| CAETANO DRIVE SPORT URBAN(CENTRO)SA | 2.467 | 5.852 | |||||||
| CAETANO DRIVE SPORT URBAN(SUL)SA | 1.126 | 931 | |||||||
| CAETANO FORMULA (NORTE),SA | 3.768 | 3.354 | 10.438 | ||||||
| CAETANO MOTORS (NORTE), SA | 955 | 94 | 2.352 | ||||||
| CAETANO MOTORS (SUL), SA | 1.126 | 931 | |||||||
| CAETANO PARTS (NORTE) LDA | 20.242 | 730 | 1.927 | 158 | 213 | 50.822 | |||
| CAETANO POWER (PORTO), SA | 327 | 179 | 176 | 948 | |||||
| CAETANO POWER (SUL) SA | 3.579 | 7.934 | |||||||
| CAETANO RETAIL SERVIÇOS SA | 14.275 | 3.800 | 32.117 | ||||||
| CAETANO SPAIN, SA | 202.371 | 211 | 201.373 | 562 | |||||
| CAETANO STAR (SUL) SA | 3.853 | 3.402 | |||||||
| CAETANO TECHNIK (SUL), SA | 1.126 | 931 | |||||||
| CAETANO TECHNIK E SQUADRA LDA | 8.586 | 913 | 22.315 | ||||||
| CAETANO UK LIMITED | 8.330 | 32.263 | 33.845 | 10.545 | |||||
| CAETANOBUS-FABRICAÇÃO DE CARROÇARIAS SA | 1.731.169 | 112.589 | 344.157 | 713.383 | 899.627 | 7.165 2.834.531 | |||
| CAETANOLYRSA, S.A | 112 | 1.110 | |||||||
| CAETSU PUBLICIDADE,SA | 12.057 | 465.442 | 1.216 | 4.761.462 | 3.000 | 87.500 | |||
| CARPLUS-COMERCIO AUTOMOVEIS SA | 2.708 | 1.686 | |||||||
| CARPLUS (CENTRO) SA | 896 | 60 | 1.841 | ||||||
| CARPLUS (NORTE) LDA | 2.392 | 1.332 | 168.863 | 92.420 | |||||
| CHOICE CAR-COMERCIO AUTOMOVEIS SA | 13.516 | ||||||||
| CONTRAC GMBH MASCHINEN UND ANLAGEN | -25.769 | 88.181 | 786 | 1.420 | 46.636 | ||||
| ENP-ENERGIAS RENOVÁVEIS PORTUGAL, S.A. | 7.860 | 25.047 | 11.700 | 84.000 | 22.220 | ||||
| EUFER-CAETANO-ENERGIAS RENOVÁVEIS,LDA | 6.438 | 16.052 | |||||||
| FINLOG - ALUGUER E COMÉRCIO AUTO, SA | 1.280.472 | 595.900 4.488.777 | 3.228.383 | 375.218 47.110 | 237.228 | ||||
| GLOBALIA AUTOMOVILES SL | 48.172 | 48.172 | |||||||
| GRUPO SALVADOR CAETANO,SGPS, SA | 2.385 | 1.570 | 1.542 | 922 | |||||
| GUÉRIN-RENT-A-CAR(DOIS),LDA | 130.436 | 23.824 | 293.703 | 24.104 | 151.492 | ||||
| LUSILECTRA - VEÍCULOS E EQUIPAMENTOS, SA | 32.891 | 31.074 | 190.631 | 157.029 | 13.790 | 73.048 | 81.131 | ||
| MDS AUTO - MEDIAÇÃO SEGUROS SA | 19.702 | 78.202 | 948.197 14.472 | 74.519 | |||||
| PORTIANGA - COMÉRCIO INTERNACIONAL E PARTICIPAÇÕES, SA | 2.127 | 28.367 | 4.208 | 54.943 | 5.991 | ||||
| RIGOR - CONSULTORIA E GESTÃO, SA | 264.164 1.396.064 | 1.324 | 12.400 | 3.997.040 26.594 | 380.886 | ||||
| SALVADOR CAETANO (MOÇAMBIQUE), SARL | 356.468 | ||||||||
| TOYOTA MOTOR EUROPE NV/SA (TME) | 2.394.115 18.404.870 13.903.940 224.215.858 | 5.000 | 522.805 126.451 6.882.273 | ||||||
| TOYOTA MOTOR CORPORATION | 1.584 | 105.217 | 3.394.948 | 20.642 381.466 | 9.446 | ||||
| ATLANTICA | 5.111 | ||||||||
| GILLCAR NORTE - COM. IND. MAQUINAS E TINTAS,SA | 1.643 | 8.035 | 709 | 1.590 | |||||
| GRUPO SOARES DA COSTA | 30.451 | ||||||||
| COCIGA - CONSTRUÇÕES CIVIS DE GAIA, SA | 19.256 | 234.914 | 6.034 | 11.179 | 487.435 | ||||
| SIMOGA - SOC. IMOBILIÁRIA DE GAIA, SA | 1.643 | ||||||||
| POAL | 17.806 | ||||||||
| SOL PORTUGAL - VIAGENS TURISMO Lda. | 290 | 26.268 | |||||||
| DICUORE-DECORACAO SA | 180 | 16.048 | |||||||
| ALBITIN- CIMFT, LDA | 713 | 2.912 | 8 | 267 | |||||
| SPRAMO - PUBLICIDADE & IMAGEM, S.A. | 681 | ||||||||
| RARCON - ARQUITECTURA E CONSULTADORIA, SA | 12.633 | 13.847 | 12.126 | 105.885 | |||||
| NOVEF-SGPS | 19.500 | ||||||||
| CIBERGUIA | 9.954 | ||||||||
| TURISPAIVA - SOCIEDADE TURÍSTICA PAIVENSE, LDA. | 431 | 612 | |||||||
| TOTAL | 11.763.687 21.675.435 66.453.857 231.733.343 | 42.890 | 24.634 12.840.315 854.618 11.725.487 |
In accordance with current legislation the Company tax returns are subject to review and correction by the tax authorities during a period of four years. Consequently, the tax returns for the years 2007 to 2010 are still subject to review. The Board of Directors of Toyota Caetano believes that any corrections resulting from reviews/inspections by the tax authorities to the tax returns open to inspection, will not have a significant effect on the financial statements of this Company.
As a result of favourable decisions on the judicial impugnation processes, referring to the additional payments of the Corporate Income Tax and relating to the fiscal years of 1995 it is
expected that the reimbursement of the remaining tax paid, and recognized as expenses in previous years, added by the corresponding compensatory interest, may occur soon.
During the year has been recovered approximately 1.331.000 Euros recorded under "Other operating income" connected with the judicial impugnation process related to the fiscal years of 1997, 1998 and 1999 (Note 31), remaining to receive the corresponding compensatory interest.
Regarding the tax inspection to the years 2003 and 2004, the additional assessments related with Corporate Income Tax already paid and recognizes as expenses in previous years were claimed, amounting to 725.542 Euros, as the Company understands that there are legal reasons for this procedure. During the year has been recovered approximately 218.000 Euros recorded under "other operating income" related with this judicial process.
The Board of Directors and its legal advisors believe that the arguments presented by a former agent, who claims compensation for the termination of the agency contract, is not in accordance with applicable law and thereby no losses will result to the company, so it was not recorded any provision in the financial statements.
Toyota Caetano Portugal is being subjected to a counter-ordination process by Market Authority (Autoridade de Concorrência), arising from the complaint of monopolistic practices. The process is currently under investigation and the companies have responded to all information requests. The Board of Directors and its legal advisors believe that the complaint on the basis of this process is unfounded and will not result in losses to the company, so it was not recorded any provision in the financial statements to address this situation.
The company adopts the necessary measures relating to the environment, aiming to fulfil current applicable legislation.
The Toyota Caetano Board of Directors does not estimate that there are risks related to the environmental protection and improvement, not having received any infraction related to this matter during 2010.
In September 2000 the European Commission voted on a directive regarding end-of-life vehicles and the responsibility of Producers/Distributors for dismantling and recycling them.
Producers/Distributors will have to bear at least a significant part of the cost of the take back of vehicles put on the market as of July 1, 2002 and from January 1, 2007 for vehicles put on the market.
This legislation will impact Toyota vehicles sold in Portugal. Toyota Caetano and Toyota are closely monitoring the development of Portuguese National Legislation in order to access the impact on their financial statements.
(Amounts in Euros)
Is our conviction in face of the studies already done into the Portuguese market, and taking notice on the possible valorization of the residues from the end-of-life vehicles dismantling, that the effective impact of this legislation in the Company accounts will be reduced or null.
Meanwhile and according to the legislation introduced (Dec./Law 196/2003), the Company contract with "ValorCar – Sociedade de Gestão de Veículos em Fim de Vida, Lda" - a licensed entity for the management of an integrated system of ELV- the transfer of the responsibilities in this process.
The remuneration of the Statutory Auditor, PricewatherhouseCoopers & Associados – S.R.O.C., Lda. for 2010, was as follows:
| 31.12.2010 | |
|---|---|
| Total fees related statutory audit | 31.000 |
The financial statements were approved by the Board of Directors on March 31, 2011.
Since the end of the year and up to date no significant events occurred.
ADMINISTRATIVE MANAGER BOARD OF DIRECTORS ALBERTO LUÍS LEMA MANDIM JOSÉ REIS DA SILVA RAMOS - President HIROYUKI OCHIAI MIGUEL SILVA RAMALHO DA FONSECA MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS RUI MANUEL MACHADO DE NORONHA MENDES
Dear Shareholders,
Thus,
a) Approves the Annual Management's Report and the Statement of Single Accounts for the Fiscal Year ending at 31 st December 2010;
b) Approves the proposal for the application of net profits as mentioned in the Management's Report.
c) Approves the proposal of Application of Retained Earnings mentioned in item c) of the Convening Notice to the Annual General Shareholder's Meeting to be held on 28 April 2011.
Vila Nova de Gaia, 31st March 2011
The Board of Auditors José Jorge Abreu Fernandes Soares - President António Pimpão & Maximino Mota, SROC, represented by António Maia Pimpão
"All members of the Board of Auditors of the TOYOTA CAETANO PORTUGAL, SA under the terms of item c) of number1 of Article 245.º of the Securities of Exchange Code (Código de Valores Mobiliários), hereby confirm, as far as it is our knowledge, that the information provided in item a) of the above referred article was elaborated according to accounting rules applicable, evidencing a correct and clear image of the assets and liabilities, of the financial highlights and results of TOYOTA CAETANO PORTUGAL, SA and that the report of the management clearly shows the business evolution the performance and the position of the Company, evidencing as well a description of the mains risks and incertitude's to be faced."
José Jorge Abreu Fernandes Soares - President António Maia Pimpão on behalf of: António Pimpão & Maximino Mota, SROC
| Dec-10 | Dec-09 | Dec-08 | ||
|---|---|---|---|---|
| TURNOVER | 426.258.266 | 399.124.912 | 535.378.134 | |
| CASH-FLOW | 31.880.061 | 34.278.941 | 25.704.051 | |
| INTEREST AND OTHERS | -1.411.105 | 251.383 | 4.146.802 | |
| PERSONNEL EXPENSES EXPENSES |
48 509 077 48.509.077 |
47 897 001 47.897.001 |
50 003 086 50.003.086 |
|
| NET INVESTMENT | 22.717.629 | 6.653.760 | 7.575.069 | |
| NUMBER OF EMPLOYEES | 1.898 | 1.943 | 2.110 | |
| NET INCOME WITH NON-CONTROLLING INTERESTS | 11.936.710 | 10.241.559 | 1.565.706 | |
| NET INCOME WITHOUT NON-CONTROLLING INTERES | 11.740.117 | 10.379.409 | 1.797.793 | |
| DEGREE OF AUTONOMY | 48,37% | 47,26% | 37,74% |
| ASSETS | Notes | 31-12-2010 | 31-12-2009 |
|---|---|---|---|
| NON-CURRENT ASSETS | |||
| Intangible Assets | 6 | 313.801 | 334.149 |
| Property, plant and equipment | 7 | 98.443.328 | 93.487.822 |
| Goodwill | 9 | 611.997 | 611.997 |
| Investment properties | 8 | 16.910.528 | 16.076.792 |
| Available for sale Investments | 10 | 3.395.705 | 62.136 |
| Deferred tax | 15 | 2.506.497 | 1.798.198 |
| Accounts Receivable | 12 | 1.556.626 | 2.093.425 |
| OOther Non Current Assets | |||
| Total non-current assets | 123.738.482 | 114.464.519 | |
| CURRENT ASSETS | |||
| Inventories | 11 | 66.797.892 | 69.173.277 |
| Accounts Receivable | 12 | 68.808.514 | 62.017.688 |
| Other Credits | 13 | 7.970.625 | 13.173.423 |
| Public Entities | 23 | 1.636.769 | 127.892 |
| Other Current Assets | 14 | 2.115.892 | 1.713.612 |
| Available for sale Investments | 10 | - | 5.305.021 |
| Cash and cash equivalents | 16 | 20.102.375 | 25.214.005 |
| Total current assets | 167.432.067 | 176.724.918 | |
| Total assets | 291.170.549 | 291.189.437 | |
| EQUITY & LIABILITIES | |||
| EQUITY | |||
| Share capital | 17 | 35.000.000 | 35.000.000 |
| Legal Reserve | 7.498.903 | 7.498.903 | |
| Revaluation reserves | 6.195.184 | 6.195.184 | |
| Translation reserves | (1.695.238) | (1.695.238) | |
| Fair value reserves | (271.329) | 885.936 | |
| Other Reserves | 81.278.229 | 76.079.493 | |
| Net Income | 11.740.117 | 10.379.409 | |
| 139.745.866 | 134.343.687 | ||
| Non-controlling interests | 19 | 1.081.820 | 3.284.681 |
| Total equity | 140.827.686 | 137.628.368 | |
| LIABILITIES: NON-CURRENT LIABILITIES |
|||
| Borrowings | 20 | 250.000 | 250.000 |
| Other Loan | 20 | 1.908.747 | 2.119.358 |
| Other Creditors | 22 | 6.621.087 | 8.880.233 |
| Deferred tax | 15 | 1.771.535 | 1.578.930 |
| Total non-current liabilities | 10.551.369 | 12.828.521 | |
| CURRENT LIABILITIES | |||
| Borrowings | 20 | 59.565.402 | 73.387.506 |
| Accounts Payable | 21 | 37.913.647 | 30.611.514 |
| Other Creditors | 22 | 5.011.963 | 5.728.156 |
| Public Entities | 23 | 18.818.974 | 14.046.886 |
| Other current liabilities | 24 | 17.205.024 | 14.961.426 |
| Provisions | 26 | 1.101.702 | 828.133 |
| Derivative financial instruments | 27 | 174.782 | 1.168.927 |
| Total current liabilities | 139.791.494 | 140.732.548 | |
| Total liabilities and shareholder' equity | 291.170.549 | 291.189.437 |
The annex integrates the Balance sheet at 31 December 2010.
CHARTERED ACCOUNTANT BOARD OF DIRECTORS ALBERTO LUÍS LEMA MANDIM JOSÉ REIS DA SILVA RAMOS – President HIROYUKI OCHIAI MIGUEL SILVA RAMALHO DA FONSECA MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS RUI MANUEL MACHADO DE NORONHA MENDES
| Notes | 31-12-2010 | 31-12-2009 | |
|---|---|---|---|
| Operational Income: | |||
| Sales | 33 | 400.197.180 | 372.200.557 |
| Service Rendered | 33 | 26.061.086 | 26.924.355 |
| Other Operating Income | 34 | 37.007.063 | 38.949.037 |
| 463.265.329 | 438.073.949 | ||
| Operational Costs: | |||
| Cost of sales | 11 | (328.775.232) | (303.155.837) |
| Variation of Products | 11 | (1.036.729) | (3.295.243) |
| External Supplies and Services | (47.500.001) | (45.320.386) | |
| Payroll Expenses | 32 | (48.509.077) | (47.897.001) |
| Depreciations and Amortizations | 6 e 7 | (18.003.463) | (18.510.791) |
| Investment property Amortization | 8 | (916.724) | (1.138.524) |
| Provisions and Impairment loss | 26 | (2.658.157) | (1.030.447) |
| Other Operating expenses | (2.732.061) | (3.240.310) | |
| (450.131.444) | (423.588.539) | ||
| Operational Profit | 13.133.885 | 14.485.410 | |
| Finance costs | 36 | (2.959.989) | (3.620.389) |
| Finance Income | 36 | 4.371.094 | 3.369.006 |
| Profit before taxation from continuing operations | 14.544.990 | 14.234.027 | |
| Income tax expense | 29 | (2.608.280) | (3.992.468) |
| Net profit for the period | 11.936.710 | 10.241.559 | |
| Net profit for the period attributable to: | |||
| Owners of the parent | 11.740.117 | 10.379.409 | |
| Non-Controlling interests | 196.593 | (137.850) | |
| 11.936.710 | 10.241.559 | ||
| Earnings per share: | |||
| Basic | 30 | 0,341 | 0,293 |
The annex integrates the Income Statement at 31 December 2010.
Diluted 0,341 0,293
CHARTERED ACCOUNTANT BOARD OF DIRECTORS ALBERTO LUÍS LEMA MANDIM JOSÉ REIS DA SILVA RAMOS – President HIROYUKI OCHIAI MIGUEL SILVA RAMALHO DA FONSECA MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS RUI MANUEL MACHADO DE NORONHA MENDES
| Re ser ves |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Sh are ital cap |
Leg al Re ser ves |
Re lua tion ava Re ser ves |
Tra nsl atio n res erv es |
Fa ir v alu e res erv es |
Oth er Re ser ves |
To tal res erv es |
No n-C roll ing ont Inte ts res |
Ne t fit pro |
To tal |
|
| Ba lan of D mb at 31 er 2 008 ces ece |
35 .00 0.0 00 |
7.4 98 .90 3 |
6.1 95 .18 4 |
( 8) 1.6 95 .23 |
23 1.5 36 |
76 .78 9.0 14 |
89 .01 9.3 99 |
3.4 90 .45 9 |
1.7 97 .79 3 |
12 9.3 07 .65 1 |
| Ap lica tion of the Co lida ted Ne t In e 2 008 p nso com Leg al r s tr fer ese rve ans |
- | |||||||||
| Dis trib d d ivid end ute s |
- | - | - | - | - | - | - | - | ( 2.4 50 .00 0) |
( 2.4 50 .00 0) |
| Oth nsf tra er res erv es er |
- | - | - | - | - | ( 7) 652 .20 |
( 7) 652 .20 |
- | 65 2.2 07 |
- |
| Tot al c hen siv e in e fo r th om pre com e y ear |
- | - | - | - | 65 4.4 00 |
( .31 4) 57 |
59 7.0 86 |
( 205 8) .77 |
10 .37 9.4 09 |
10 0.7 17 .77 |
| Ba lan 31 of D mb er 2 009 at ces ece |
35 .00 0.0 00 |
7.4 98 .90 3 |
6.1 95 .18 4 |
( 1.6 95 .23 8) |
88 5.9 36 |
76 .07 9.4 93 |
88 .96 4.2 78 |
3.2 84 .68 1 |
10 .37 9.4 09 |
13 7.6 28 .36 8 |
| Ba lan of D mb at 31 er 2 009 ces ece |
35 .00 0.0 00 |
7.4 98 .90 3 |
6.1 95 .18 4 |
( 8) 1.6 95 .23 |
88 5.9 36 |
76 .07 9.4 93 |
88 .96 4.2 78 |
3.2 84 .68 1 |
10 .37 9.4 09 |
13 7.6 28 .36 8 |
| Ap lica tion of the Co lida ted Ne t In e 2 009 p nso com |
- - |
|||||||||
| Leg al r s tr fer ese rve ans |
- | - | - | - | - | - | - | - | - | - |
| Dis trib d d ivid end ute s |
- | - | - | - | - | - | - | - | ( 5.2 50 .00 0) |
( 5.2 50 .00 0) |
| Oth nsf tra er res erv es er |
- | - | - | - | - | 5.1 29 .40 9 |
5.1 29 .40 9 |
- | ( 9) 5.1 29 .40 |
- |
| Tot al c hen siv e in e fo r th om pre com e y ear Oth ers |
- | - | - | - | ( 1.1 57 .26 5) |
69 .32 7 |
( 1.0 87 .93 8) |
19 6.5 93 ( 4) 2.3 99 .45 |
11 .74 0.1 17 |
10 .84 8.7 72 ( 4) 2.3 99 .45 |
| Ba lan 31 of D mb er 2 010 at ces ece |
35 .00 0.0 00 |
7.4 98 .90 3 |
6.1 95 .18 4 |
( 1.6 95 .23 8) |
( 27 1.3 29) |
81 .27 8.2 29 |
93 .00 5.7 49 |
1.0 81 .82 0 |
11 .74 0.1 17 |
14 0.8 27 .68 6 |
The annex integrates this Statement at 31 December 2010.
CHARTERED ACCOUNTANTALBERTO LUÍS LEMA MANDIM
BOARD OF DIRECTORS JOSÉ REIS DA SILVA RAMOS – President HIROYUKI OCHIAIMIGUEL SILVA RAMALHO DA FONSECAMARIA ANGELINA MARTINS CAETANO RAMOSSALVADOR ACÁCIO MARTINS CAETANOMIGUEL PEDRO CAETANO RAMOSRUI MANUEL MACHADO DE NORONHA MENDES
IAS/IFRS IAS/IFRS 31-12-2010 31-12-2009 Consolidated net profit for the year, including non-controlling interest 11.936.710 10.241.559 Components of other consolidated comprehensive income, net of tax: Available for sale Investments fair value changes (Note 10) (1.157.265) 654.400 Others 69.327 (125.242) Consolidated comprehensive income 10.848.772 10.770.717 Atributable to: Owners of the parent 10.652.179 10.976.495 Non-controlling interests 196.593 (205.778)
The annex integrates this Statement at 31 December 2010.
CHARTERED ACCONTANT BOARD OF DIRECTORS ALBERTO LUÍS LEMA MANDIM JOSÉ REIS DA SILVA RAMOS – President HIROYUKI OCHIAI MIGUEL SILVA RAMALHO DA FONSECA MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS RUI MANUEL MACHADO DE NORONHA MENDES
| (Euros) | |||||
|---|---|---|---|---|---|
| OPERATING ACTIVITIES | 2010 | 2009 | |||
| Collections from Customers | 446.426.493 | 433.737.918 | |||
| Payments to Suppliers | (362.561.678) | (321.211.227) | |||
| Payments to Personnel | (40.894.340) | (39.358.985) | |||
| Cash generated from operations | 42.970.475 | 73.167.706 | |||
| Payments of Income Tax | (1.839.614) | (1.322.638) | |||
| Other Collections/Payments Related to Operating Activities | (15.550.847) | (10.522.648) | |||
| Flow in Operating Activities | 25.580.014 | 61.322.420 | |||
| INVESTING ACTIVITIES | |||||
| Collections from: | |||||
| Investments | 5.589.458 | ||||
| Property, plant and equipment | 19.767.478 | 11.598.704 | |||
| Intangible Assets | 56.133 | 99.468 | |||
| Subsidies | 476.841 | 2.120.963 | |||
| Interest and Others | 130.487 | 356.807 | |||
| Dividends | 268.398 | 26.288.795 | 144.915 | 14.320.857 | |
| Payments to: | |||||
| Investments | (3.604.898) | ||||
| Property, plant and equipment | (27.206.926) | (15.259.779) | |||
| Intangible Assets | (212.258) | (31.024.082) | (88.963) | (15.348.742) | |
| Flow in Investing Activities | (4.735.287) | (1.027.885) | |||
| FINANCING ACTIVITIES | |||||
| Collections from: | |||||
| Loan | 730.000 | 730.000 | 2.369.358 | 2.369.358 | |
| Payments to: | |||||
| Loan | (14.762.716) | (45.020.256) | |||
| Lease Down Payments | (3.644.156) | (1.743.540) | |||
| Interest and Others | (3.040.660) | (3.872.670) | |||
| Dividends | (5.238.825) | (26.686.357) | (2.447.894) | (53.084.360) | |
| Flow in Financing Activities | (25.956.357) | (50.715.002) | |||
| CASH | |||||
| Cash and Cash Equivalents at Beginning of Period (Note 16) Changes in perimeter (Note 5) |
25.214.005 | 15.634.472 | |||
| Cash and Cash Equivalents at End of Period (Note 16) | 20.102.375 | 25.214.005 | |||
Net Flow in Cash Equivalents (5.111.630) 9.579.533
ADMINISTRATIVE MANAGER BOARD OF DIRECTORS ALBERTO LUÍS LEMA MANDIM JOSÉ REIS DA SILVA RAMOS – President HIROYUKI OCHIAI MIGUEL SILVA RAMALHO DA FONSECA MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS RUI MANUEL MACHADO DE NORONHA MENDES
Detail of cash and cash equivalents:
| (Euros) | ||
|---|---|---|
| ITEMS | 2010 | 2009 |
| Money Bank Deposits at Immediate Disposal Cash Equivalents |
156.425 19.945.500 450 |
270.497 24.906.861 36.647 |
| Cash and Cash Equivalents | 20.102.375 | 25.214.005 |
| AVAILABILITIES AS IN BALANCE SHEET | 20.102.375 | 25.214.005 |
| ADMINISTRATIVE MANAGER ALBERTO LUÍS LEMA MANDIM |
BOARD OF DIRECTORS JOSÉ REIS DA SILVA RAMOS – President HIROYUKI OCHIAI MIGUEL SILVA RAMALHO DA FONSECA |
MIGUEL SILVA RAMALHO DA FONSECA MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS RUI MANUEL MACHADO DE NORONHA MENDES
Toyota Caetano Portugal, S.A. ("Toyota Caetano" or "Company") was incorporated in 1946, has its headquarters in Vila Nova de Gaia, and is the Parent Company of a Group of companies ("Toyota Caetano Group"), which mainly develop economic activities included in the automotive sector, namely the import, assembly and commercialization of vehicles, bus and coach industry, sale and rental of industrial equipment forklifts, sale of vehicles parts, as well as the corresponding technical assistance.
Toyota Caetano Group develops its activity mainly in Portugal and Cape Verde.
Toyota Caetano shares are listed in Euronext Lisbon since October 1987.
As of 31 December, 2010, the companies of Toyota Caetano Group, their headquarters and abbreviations used, are as follows:
| Companies | Headquarters |
|---|---|
| With headquarters in Portugal: | |
| Toyota Caetano Portugal, S.A. ("Empresa-mãe") | Vila Nova de Gaia |
| Saltano – Investimentos e Gestão, S.G.P.S., S.A. ("Saltano") | Vila Nova de Gaia |
| Caetano Components, S.A. ("Caetano Components") | Vila Nova de Gaia |
| Caetano Renting, S.A. ("Caetano Renting") | Vila Nova de Gaia |
| Caetano – Auto, S.A. ("Caetano Auto") | Vila Nova de Gaia |
| Caetano Retail (Norte) II, S.G.P.S., S.A. ("Caetano Retail (Norte) II SGPS") | Vila Nova de Gaia |
| Auto Partner - Comércio de Automóveis, S.A. ("Auto Partner") | Vila Nova de Gaia |
| Caetano Colisão (Norte), S.A. ("Caetano Colisão") | Vila Nova de Gaia |
| Movicargo – Movimentação Industrial, Lda. ("Movicargo") | Vila Nova de Gaia |
| With headquarters in foreign countries: | |
| Salvador Caetano (UK), Ltd. ("Salvador Caetano UK") (1) | Leicestershire (England) |
| Cabo Verde Motors, S.A.R.L. ("Cabo Verde Motors") | Praia (Cape Verde) |
(1) Company inactive during 2010 and 2009
The attached financial statements are stated in Euros (round to unit), as this is the functional currency used in the economic environment where the Group operates. Foreign operations and transactions are included in the consolidated financial statements in accordance with the policy described in Note 2.2 d).
The main accounting policies adopted in the preparation of the consolidated financial statements are as follows:
These financial statements relate to the consolidated financial statements of Toyota Caetano Group and were prepared according to the IFRS – International Financial Reporting Standards emitted by the International Accounting Standards Board ("IASB"), the International Accounting Standards (IAS), emitted by the International Accounting Standards Committee ("IASC") and its respective interpretations - IFRIC and SIC, emitted, respectively, by the International Financial Reporting Interpretation Committee ("IFRIC") and by the Standing Interpretation Committee ("SIC"), that have been endorsed by the European Union, being effective for the annual periods beginning on or after 1 January 2010.
The accompanying consolidated financial statements have been prepared on a going concern basis and having as basis the principle of the historical cost and, in the case of some financial instruments, at fair value, based on the accounting records of the companies included in consolidation (Note 4).
The following standards, interpretations, amendments and revisions endorsed by the European Union and mandatory in the fiscal years beginning in or after 1 January 2010, were adopted by the first time in the fiscal year ended at 31 December 2010:
IFRS 3 – Business Combinations (amended 2008), IAS 27 – Consolidated and Separate Financial Statements (amended 2008), IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations (improved 2008), IFRS 1 – First Time Adoption of International Financial Reporting Standards (amended 2008), IFRS 2 – Sharebased Payments (amended 2009), IAS 39 – Financial Instruments: Recognition and Measurement (amended 2008), IFRIC 12 – Service Concession Arrangements, IFRIC 15 – Agreements for the Construction of Real Estate, IFRIC 16 – Hedges of a Net Investment in a Foreign Operation, IFRIC 17 – Distribution of Non-Cash Asset to Owners, IFRIC 18 – Transfers of Assets from Customers.
The impact on the Group financial statements ended at 31 December 2010, resulting from the adoption of the standards, interpretations, amendments and revisions above mentioned was not significant.
The following standards, interpretations, amendments and revisions, mandatory in future fiscal years, were, until the date of approval of these financial statements, endorsed by the European Union:
IAS 32 – Financial Instruments: Presentation (amendment), IAS 24 – Related Party Disclosures (revised), IFRS 7 – Financial Instruments: Disclosures (amendment), IAS 12 – Income Taxes (amendment); IFRS 9 – Financial Instruments (issued 2009); IFRIC 14 - IAS 19 – The Limit of a Defined Benefit Asset, Minimum Funding Requirements and their Interaction and IFRIC 19 – Extinguishing Financial Instruments with Equity Instruments.
These standards although endorsed by the European Union were not adopted by the Group in the annual period ended on 31 December 2010, once its application is not yet mandatory. No significant impacts are expected in the financial statements resulting from their adoption.
In the preparation of the accompanying financial statements several estimations were used, which influence the value of the assets and liabilities stated, as well as the losses and profits of the period reported. However, all estimates and assumptions made by the Board of Directors were based on the best knowledge of events and transactions in progress, existing at the date of financial statements approval.
Consolidation principles used by the Group were as follows:
Investments in companies in which the Group has, directly or indirectly, more than 50% of the voting rights in General Meeting or Partners or in which it has the power to control financial and operating policies (definition of control used by the Group), were fully consolidated in the accompanying consolidated financial statements. Equity and net results corresponding to third parties participations in those companies are recorded separately in the consolidated statement of financial position and in the consolidated income statement under the caption "Non-Controlling Interests". Fully consolidated companies are listed in Note 4.
When losses attributable to minority shareholders exceed Non-Controlling Interests in shareholders equity, the Group absorbs the excess together with any additional losses, except when the minority shareholders have the obligation and are capable of covering those losses. If the subsidiaries subsequently report profits, the Group appropriates all the profits until the amount of Non-Controlling Interests in these losses absorbed by the Group is recovered.
In the purchase of companies it is followed the purchase method. Identifiable assets and liabilities of each associate company are stated at their fair value at the date of acquisition. Any excess in the acquisition cost over its fair value of net assets and liabilities acquired is recorded as a consolidation difference (Notes 2.2 c)). In case of a negative difference between the acquisition cost and the fair value of the identifiable net assets and liabilities acquired, it is recognised as income in the consolidated statement of profit and loss of the period of the acquisition after a reassessment of the estimated fair value. Non-Controlling Interests are presented according to their share in the fair value of the identifiable assets and liabilities of the acquired subsidiaries.
The results of the subsidiaries acquired or disposed during the period are included in the consolidated income statement from the effective date of their acquisition or up to the date of disposal.
Whenever necessary, adjustments to the financial statements of Group companies are made, in order to adapt their accounting policies to those used by the Group. All transactions, margins generated among the Group companies, balances and distributed dividends among Group companies are eliminated in the consolidation process.
Whenever the Group substantially holds control over other entities created for a specific purpose, even if no share capital is directly held in those entities, these are consolidated by the full consolidation method.
Investments in associated companies (companies where the Group has significant influence, but has no control over financial and operational decisions – usually corresponding to holdings between 20% and 50% in a company's share capital) are accounted for in accordance with the equity method.
According to the equity method, investments are initially recorded at their acquisition cost and annually adjusted by the amount corresponding to the Group's share on the changes of equity (including the net profit) of the associated companies, against profit and losses of the year and by any dividends received and other variations occurred in the associated companies.
Any excess of the acquisition cost over the Group's share in the fair value of the identifiable net assets and liabilities acquired is recorded as goodwill which is included in the caption "Investments in associated companies" (note 2.2 c)). If those differences are negative they are recorded as a gain of the year in the caption "Gains and losses in associated companies" after reconfirmation of the fair value assigned.
An assessment of investments in associated companies is performed, whenever there are signs of impairment, and recorded as a cost, when confirmed. When the losses by impairment recognised in previous years no longer exist, they are submitted to reversion.
When the Group's share of losses of the associated company exceeds the investment's book value, the investment is recorded at nil value while the net equity is not positive, except to the extent of the Group's commitments to the associated company being in such cases recorded a provision to cover those commitments.
Unrealised gains arising from transactions with associated companies are eliminated proportionally to the Group's interest in the associated company, against investment held. Unrealised losses are also eliminated, but only to the extent that there is no evidence of impairment of the asset transferred.
As of 31 December, 2010 and 2009, there were no investments in associated companies.
Differences between the acquisition cost of Group companies and the fair value of identifiable assets and liabilities (including contingent liabilities) of those companies as of the acquisition date if positive are recorded under the caption "Goodwill" (Note 9) and if negative, as an income in the consolidated income statement, after reconfirmation of the fair value assigned.
Differences between the acquisition cost of associated companies and the fair value of identifiable assets and liabilities of those companies at the acquisition date, if positive, are recorded in caption "Investments in associated companies" and if negative, as an income in the consolidated income statement, after reconfirmation of the fair value assigned.
The amount of Goodwill is not depreciated and the Group annually makes formal impairment tests. The recoverable amount is the present value of the future cash flows expected, to be derived from the continuous use of the asset. Goodwill's impairment losses are recognized in the annual income statements in the item "Provisions and impairment losses".
The impairment loss recognised for Goodwill shall not be reversed.
Assets and liabilities in the financial statements of foreign entities are translated to Euros using the exchange rates in force at the statement of financial position date, and gains and losses as well as cash flows are translated to Euros using the average exchange rates for the year.
Exchange rate differences originated after 1 January, 2004 are recorded in equity under the caption "Translation reserves". The accumulated exchange differences generated before 1 January, 2004 (IFRS transition date) were written-off against the caption "Other reserves".
Whenever a foreign entity is disposed, the accumulated exchange rate differences are recorded in the financial statements as a profit or loss in the disposal.
Exchange rates used in 2010 and 2009 in the translation into Euros of foreign subsidiaries were as follows:
| 2010 | |||||
|---|---|---|---|---|---|
| Final Exchange | Average Historic | Exchange at | Final Exchange | ||
| Items | Currency | 2010 | Exchange 2010 | the Date of Incorporation | 2009 |
| Cabo Verde Motors, SARL | CVE | 0,009069 | 0,009069 | 0,009069 | 0,009069 |
| Application | Statement of financial position Accounts except Equity |
Income Statement | Share Capital | Retained Earnings |
| 2009 | |||||
|---|---|---|---|---|---|
| Final Exchange | Average Historic | Exchange at | Final Exchange | ||
| Items | Currency | 2009 | Exchange 2009 | the Date of Incorporation | 2008 |
| Cabo Verde Motors, SARL | CVE | 0,009069 | 0,009069 | 0,009069 | 0,009069 |
| Application | Statement of financial position Accounts except Equity |
Income Statement | Share Capital | Retained Earnings |
The main accounting policies used by Toyota Caetano Group in the preparation of the consolidated financial statements were as follows:
Property, plant and equipment acquired until 1 January, 2004 (IFRS transition date) are recorded at deemed cost, which corresponds to its acquisition cost or its revalued acquisition cost in accordance with generally accepted accounting principles in Portugal (and in the subsidiaries countries) until that date, net of accumulated depreciation and accumulated impairment losses.
Property, plant and equipment acquired after that date are recorded at acquisition cost, net of accumulated depreciation and accumulated impairment losses.
The impairment losses detected in the Property, plant and equipment realization value are registered in the year in which they are estimated by counterpart of the item "Provisions and Impairment loss" of the financial statements.
Depreciation is computed on straight-line basis as from the date the asset is first used according to the following expected useful lives:
| Years | |
|---|---|
| - Buildings and other constructions | 20 - 50 |
| - Machinery and equipment | 7 - 16 |
| - Vehicles | 4 - 5 |
| - Tools and utensils | 4 - 14 |
| - Administrative equipment | 3 - 14 |
| - Other tangible assets | 4 - 8 |
Expenses with maintenance and repair costs of Property, plant and equipment are recorded as a cost in the year in which they occur. The repairs of significant amount that increase the estimated usage period of the assets are capitalised and depreciated according to the assets remaining useful life.
Property, plant and equipment in progress relate to tangible assets under construction/development, and are recorded at acquisition cost. These assets are transferred to Property, plant and equipment and depreciated as from the date in which they are prepared for use and in the necessary conditions to operate according with the management.
Gains or losses arising from the disposal or write-off of Property, plant and equipment are computed as the difference between the selling price and the net book value at the date of disposal/write-off, and are recorded in the statement of profit and loss as "Other operating income" or "Other operating expenses".
b) Intangible assets
Intangible assets are recorded at acquisition cost, net of accumulated depreciation and accumulated impairment losses. Intangible assets are only recognized if it is likely that future economic benefits will flow to the Group, are controlled by the Group and if their cost can be reliably measured.
Research costs and expenses with new technical knowledge are recorded as costs in the statement of profit and loss when incurred.
Development costs are capitalized as an intangible asset if the Group has proven technical feasibility and ability to finish the development and to sell/use such assets and it is likely that those assets will generate future economic benefits. Development expenses which do not fulfil these requirements are recorded as an expense in the period in which they are incurred.
Internal expenses related to Software maintenance and development are recorded as costs in the statement of profit and loss, except in situations in which these expenses are directly related to projects from which it is likely that future economic benefits will flow to the Group. In such circumstances, these expenses are capitalized as intangible assets.
Intangible assets are depreciated on a straight-line basis over a period of three to five years.
The depreciation charge for each period of intangible assets shall be recognized in profit or loss in item "Depreciations and amortizations".
c) Investment properties
Investment properties are related to real estate assets held to obtain income through its lease or for capital gain purposes, and not for use in production, external supplies and services or for administrative purposes, are recorded at its acquisition cost, being the respective fair value disclosed in the Notes to the financial statements (Note 8).
Whenever these assets fair value is lower than the respective acquisition cost, an impairment loss is recorded against the caption "Investment properties amortization" in the statement of profit and loss. As of the moment in which the recorded accumulated impairment losses no longer exist, they are immediately reversed against the caption "Other operating profits" in the statement of profit and loss until the limit of the amount that would have been determined, net of amortizations or depreciations, if no impairment losses would have ever been recognized in previous years.
Investment properties' disclosed fair value is determined on an annual basis by an independent appraiser – American Appraisal (Market, Cost and Return Method), being the last reported to 2010.
Lease contracts are classified as (i) financial lease contracts, if all or a substantial part of the risks and benefits related to possession are transferred and as (ii) operating lease contracts if all or a substantial part of the risks and benefits related to possession are not transferred.
Classification as financial lease contracts or as operating lease contracts depends on the substance of the transaction and not on the form of the contract.
Property, plant and equipment acquired under financial lease contracts, as well as the corresponding liabilities are recorded according to the financial method and, consequently, the cost of the fixed asset is recorded in Property, plant and equipment captions and the corresponding responsibility as suppliers of fixed assets captions. Lease down payments are constituted by interest expenses and by the amortization of capital in accordance with the contractual financial plan, with interests recognised as expenses in the statement of profit or loss for the year to which they relate and with the depreciation of the Property, plant and equipment according to their estimated useful lives, according to Note 2.3. a).
For lease contracts considered as operating, the rents paid are recognized as an expense in the statement of profit or loss over the rental period (Note 35).
Goods, raw, subsidiary and consumable materials are stated at acquisition average cost, which is lower than market value.
Finished and intermediate goods as well as work in progress are stated at production cost, which is lower than market value. Production costs include the cost with raw materials, direct labour, production overheads and external services.
Accumulated impairment losses to reduce inventories value reflect the difference between their acquisition cost and net realizable or market value.
Government grants are recognized at the respective fair value when there is a solid guarantee that they will be received and that the Company will be able to accomplish the conditions required to its concession.
Non repayable subsidies obtained to finance investment in Property, plant and equipment are recorded, only when there is a reasonable guaranty of receiving, as "Other non current liabilities" and "Other current liabilities", and recognized in the income statement as an income in accordance with the depreciation of the related Property, plant and equipment.
The subsidies related to incurred costs are registered as a gain if there is a reasonable guaranty that they will be received, if the company has already incurred in the subsidiary costs and if they fulfill the conditions for their concession.
Assets are assessed for impairment at each statement of financial position date and 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 (defined as the highest of the net sale price and the use value, or as the net sale price for assets held for sale), an impairment loss is recognized in the statement of profit and loss under the caption "Provisions and impairment losses". The net selling price is the amount that would be obtained from the sale of an asset in a transaction between independent entities, less the cost of the disposal. The value in use is the present value of estimated future cash flows expected to arise from the continued use of an asset and its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if not possible, for the cash-generating unit to which the asset belongs.
The reversal of impairment losses recognized in previous years is recorded when it is concluded that the impairment losses recognized for the asset no longer exist or have decreased. This analysis is performed whenever there is an indication that the impairment losses previously recognized have been reversed. The reversal is recorded in the statement of profit or loss in the caption "Other operating income". However, the increased carrying amount of an asset due to a reversal of an impairment loss is recognized to the extent it does not exceed the carrying amount that would have been determined (net of depreciation and amortization) if no impairment losses had been recognized for that asset in prior years.
The evidence of existence of impairment in the accounts receivable appears when:
For the receivable debts, the Group uses historic information and information from their credit and law control departments, which allow making an estimation of the impairment amounts.
In the case of the "Inventories", the impairment losses are calculated based on market indicators and on several indicators of inventories rotation.
h) Finance Costs
The Finance Costs related with Borrowings obtained (interest, bonus, accessory costs and lease contract's interests) are recorded as cost in the income statement of the year to which they relate, on an accrual basis.
i) Provisions
Provisions are recognized when, and only when, the Group has a present obligation (legal or constructive) arising from a past event; it is probable that an outflow of resources will be required and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each statement of financial position date and adjusted as to reflect the best estimate of its fair value as of that date (Note 26).
Restructuring provisions are recorded by the Group whenever there is a formal and detailed restructuring plan and it has been communicated to parties involved.
Investments held by the Group are classified as follows: 'Investments measured at fair value through profit and loss', 'Borrowings and receivables', 'Investments held to maturity' and 'Investments available for sale'. The classification depends on the subjacent intention of the investment acquisition.
This category is divided into two subcategories: "investments held for trading" and "investments at fair value through profit and loss". An investment is classified in this category if it is acquired with the objective of being sold at short term or if the adoption of the valorisation through this method significantly eliminates or reduces an accounting difference. The derivatives instruments are also classified as held for trading, except if they are related to hedging operations. The assets within this category are classified as current assets in case they are held for trading or if it is expected that they will be realized within a period inferior to 12 months starting from the Statement of financial position date.
(Amounts in Euros)
At 31 December, 2010 and 2009, Toyota Caetano Group did not have financial instruments registered in the items "investments held for trading" and "investments at fair values through profit and loss".
These are financial non-derivative assets with defined or determinable payment dates, defined maturity or determined payment dates and there is an intention and capacity to maintain them until the maturity date. These investments are classified as non-current Assets, unless they mature within 12 months as of the statement of financial position date.
These are all the remaining investments that are not classified as held to maturity or measured at fair value through profit and loss, being classified as non current assets. This category is included in non current assets, except if the Board of Directors has the intention of alienate the investment within a period inferior to 12 months starting from the Statement of financial position date.
At 31 December, 2010, Toyota Caetano Group held investments classified in this category that correspond to shares of entities registered in Lisbon Stock Exchange (Euronext Lisbon) and shares of Cimóvel - Real Estate Investment Fund (Note 10).
Investments are initially stated at acquisition cost, which is the fair value of the price paid; in investments held to maturity and investments available for sale transaction costs are included.
After their initial recognition, investments at fair value through profit and loss and investments available for sale are subsequently measured at their fair value by reference to their market value at the statement of financial position date, without any deduction relating to transaction costs which may be incurred until its sale.
Gains and losses arising from a change in the fair value of investments available for sale are recorded under equity caption "Fair value reserves" until the investment is sold or disposed, or until it is determined to be impaired. At that moment, the accumulated gains or losses previously recognized in equity are transferred to profit and loss statement for the period.
Investments available for sale in equity instruments not listed on a stock exchange market are stated at acquisition cost, net of impairment losses. The Group's Board of Directors believes that the fair value of these investments does not significantly differ from their acquisition cost.
All purchases and sales of investments are recorded on their trade date, which is on the date the Group assumes all risks and obligations related to the purchase or sale of the asset. Investments are all initially recognized at fair value plus transaction costs, being the only exception the "investments at fair value through profit and loss". In this last case, the investments are initially recognized at fair value and the transaction costs are recognized in the income statement.
The investments are derecognized if the right to receive financial flows has expired or was transferred, and consequently, all associated risks and benefits have been transferred.
The "investments available for sale" and the "investments at fair value through profit and loss" are subsequently maintained in the fair value by reference to its market value at the statement of financial position date, without any deduction related to transaction costs that might occur until its sale.
The "investments held to maturity" are registered by the amortized cost through the effective interest rate method.
Gains and losses, realized or not, coming from a fair value change in the "investments at fair values through profit and loss" are registered in the income statement. Gains and losses, realized or not, coming from a fair value change of the non monetary investments available for sale are recognized in Equity, in item "Fair value reserves" until the investment is sold, received or any way alienated, or until the investment fair value is lower than its acquisition cost and it represents an impairment loss, moment in which the accumulated loss is registered in the income statement.
The fair value of the financial investments available for sale is based on the current market prices. If the market is not net (non listed investments), the Group records the acquisition cost, having in consideration the existence or not of impairment losses. The Board believes that the fair value of these investments is not very different from the acquisition cost. The fair value of the listed investments is calculated based on the stock market closed value at statement of financial position date.
The Group makes evaluations if it considers that at the statement of financial position date exists clear evidence that the financial asset might be in impairment. In case of stock instruments classified as available for sale, have a significant drop or extended of its fair value inferior to its cost, it indicates that an impairment situation is occurring. If there is any evidence of impairment in "investments available for sale", the accumulated losses – calculated by the difference between the acquisition cost and the fair value deducted from any impairment loss previously recognized in the statement of profit and loss – are retrieved from the equity and recognized in the statement of profit and loss.
All purchases and sales of these investments are recognized at the date of the purchase and sale contracts, regardless the financial settlement date.
Accounts receivable not bearing interests are stated at their nominal value less impairment losses so that they reflect the respective net realizable value. These amounts are not discounted because its effect in the financial actualization is not considered relevant.
Accounts receivable which bear interests (namely those related to partial payments of vehicles sales) are recorded by their total amount, and the part related to interests is recorded in liabilities as a deferred income and recognized in the income statement in accordance with its maturity.
iii) Borrowings
Borrowings are recorded as liabilities at their nominal value net of up-front expenses which are directly related to the issuance of those instruments. Finance Costs are calculated based on the effective interest rate and are recorded in the consolidated income statement of profit and loss on an accrual basis.
iv) Accounts payable
Non interest bearing accounts payable are stated at their nominal value.
The Group uses derivative financial instruments to cover risks of financial investments. Derivative financial instruments (cash-flow hedges) used by the Group (mainly interest rate swaps), have the specific aim of interest rate risk coverage.
These derivative instruments, though engaged with the purposes above mentioned, were not designated for hedge accounting. Therefore, they are measured at fair value with changes in fair value being recognized directly in the income statement (financial results). The referred fair value is determined through valuations made by financial institutions which are counterparties on derivatives' contracts.
Cash and its equivalents include cash on hand, bank deposits, term deposits and other treasury applications which reach their maturity within less than three months and are subject to insignificant risks of change in value.
Toyota Caetano Group incorporated by public deed dated December 29, 1988 the Salvador Caetano Pension Fund, with subsequent updates in 2 January, 1994, 29 December, 1995 and 23 December, 2002.
This Pension Fund establishes that, as long as Toyota Caetano Group maintains the decision of making contributions to this fund, workers will benefit as from their retirement date, from a non updatable retirement pension complement determined based on a wage percentage, among other conditions. These retirement complements consist of a defined benefit plan. The Group has created an autonomous pension Fund for this effect (which is managed by ESAF – Espírito Santo Activos Financeiros, S.A.).
Meanwhile, as a consequence of the request for the change in the way those compensations function, done to the Portuguese Insurance Institute (ISP - Instituto de Seguros de Portugal), this Defined Benefit Plan started covering, beginning on 1 January, 2008, only the currents pensioners, ex-employees of Toyota Caetano Group with "deferred pensions" and current employees and directors over 50 years and with at least 15 years of Group service.
Additionally, and as consequence of changes introduced in 2008 according to the ISP – Instituto de Seguros de Portugal, a fair share of Toyota Caetano Group employees, which was previously covered by the Defined benefit plan mentioned above, was no longer covered by that Plan and started being covered by a Defined contributions plan. Relatively to this Defined contributions plan, the Toyota Caetano Group (through the associates that make part of the Method) contributes for an Autonomous Fund (also managed by ESAF – Espírito Santo Activos Financeiros, S.A.) with 3% of the annual total payroll of each beneficiary.
In order to estimate its liabilities for the payment of the mentioned responsibilities, the Group obtains annually an actuarial calculation of the liabilities for past services in accordance with the "Projected Unit Credit Method".
Recorded liabilities as of the statement of financial position date relate to the present value of future benefits adjusted for actuarial profits or losses and/or for liabilities for past services non recognised, net of the fair value of net assets within the pension fund (Note 25).
Contingent liabilities are defined by the Group as (i) possible obligations from past events and which existence will only be confirmed by the occurrence or not of one or more uncertain future events not totally under Group's control or (ii) present obligations from past events not recognized because it is not expected that an output of resources that incorporate economic benefits will be necessary to settle the obligation or its amount cannot be reliably measured.
Contingent liabilities are not recorded in the consolidated financial statements, being disclosed in the respective Notes, unless the probability of a cash outflow is remote. In these situations no disclosure is made.
Contingent assets are possible assets that arise from past events and whose existence will only be confirmed by the occurrence or not of one or more uncertain future events not totally under the Group's control.
Contingent assets are not recorded in the consolidated financial statements but only disclosed when it is likely the existence of future economic benefits.
Income tax is determined based on the taxable results of the companies included in consolidation, according to the fiscal regime applicable in the country of each Group company's head office, and also considers the recording of deferred taxes.
The current income tax is calculated based on the taxable results of the companies included in consolidation.
Deferred income taxes are computed using the statement of financial position liability method and reflect the timing differences between the amount of assets and liabilities for accounting purposes and the corresponding amounts for tax purposes. Deferred tax assets and liabilities are not recorded when the timing differences arise from consolidation or initial recognition of assets and liabilities that are not through business combinations. The deferred tax assets and liabilities are computed on an annual basis using the tax rates that are expected to be in force at the time these temporary differences are reversed.
Deferred tax assets are only recorded when there is reasonable expectation that sufficient taxable profits will arise in the future to allow their use or when there are temporary taxed differences that overcome temporary deductible differences at the time of its reversal. At the end of each year the Company reviews its recorded and unrecorded deferred tax assets which are reduced whenever their realization ceases to be likely, or recorded if it is likely that taxable profits will be generated in the future to enable them to be recovered.
Deferred tax assets and liabilities are recorded in the income statement, except if they relate to items directly recorded in equity, situations in which the corresponding deferred tax is also recorded in equity captions.
With Movicargo exception, income tax is computed in accordance with the Special Taxation Regimen for Groups of Companies ("Regime Especial de Tributação dos Grupos de Sociedades" - RETGS), which includes subsidiaries with headquarters in Portugal, and are reflected in Toyota Caetano Group consolidated financial statements as of 31 December of each year.
The remaining Toyota Caetano Group companies with headquarters in foreign countries are taxed on an individual basis and in accordance with the applicable legislation.
Revenues and expenses are recorded according to the accrual basis, by which they are recognized in the period to which they relate independently of when the amounts are received or paid. Differences between the amounts received and paid and corresponding income and expenses are recorded in the captions "accruals and deferrals" included in "Other current assets" and "Other current liabilities".
Income and expenses for which the actual amount is yet unknown are recorded based on the best estimate of the Board of Directors of the Group companies.
The revenue is recognized net of taxes and commercial discounts, by the fair value of the amount received or to be received.
Sales' revenue is recognized in the consolidated income statement when the inherent assets risks and significant advantages are already under the buyer's jurisdiction and when it is reasonably possible to measure the corresponding income.
Revenue related with services rendered is recognized in accordance with the percentage of completion method.
p) Legal Reserve
Portuguese commercial legislation requires that, at least, 5% of net profit for each year must be appropriated for increases in legal reserve until it represents at least 20% of share capital. Such reserve is not subject to distribution, unless the Company is under liquidation, but it can be used either to absorb losses after the extinction of all the other reserves or to be incorporated in share capital.
All assets and liabilities, including assed and liabilities deferred tax, accomplishable or receivable in more than one year after the statement of financial position date are classified as "Non-current assets or liabilities".
Assets and liabilities stated in foreign currency were translated into Euros using applicable exchange rates as of statement of financial position date. Exchange differences, favourable and unfavourable, resulting from differences between applicable exchange rates as of the date of the transactions and those applicable as of the date of cash collection, payments or as of statement of financial position date, were recorded as gains and losses in the consolidated income statement.
In each year the Group identifies the most adequate business and geographic segments.
Information related to revenue of the identified business segments is included in Note 31.
Non current assets (and the groups of assets and liabilities to be disposed that are related to them) are classified as held for sale if it is expected that its accounting value will be recovered through disposal, and not through its continuous usage. This condition is only accomplished at the moment in which the sale is highly probable and the asset (and the group of assets and liabilities to be disposed that are related to them) is available for immediate sale under present conditions. Additionally, actions must be in place to allow the conclusion of the sale within a twelve month period after the classification date in this caption.
Non current assets (and the group of assets and liabilities to be disposed that are related to them) classified as held for sale are computed considering the lowest of its accounting or fair value, net of its sale expenses.
As of 31 December, 2010 and 2009 there were no Non current assets held for sale which fulfil the requirements mentioned above.
During the preparation of the consolidated financial statements, the Board of Directors of the Group based itself in the best knowledge and in the experience of past and/or present events considering some assumptions relating to future events.
Most significant accounting estimates included in attached financial statements as of 31 December, 2010 and 2009 include:
The underlying estimations and assumptions were determined based on the best knowledge existing at the date of approval of the financial statements of the events and transactions being carried out as well as in the experience of past and/or present events. Nevertheless, some situations may occur in subsequent periods which, not being predicted at the date of approval of the financial statements, were not consider in these estimations. The changes in the estimations that occur after the date of the financial statements shall be corrected in a foresight way. Due to this fact and to the uncertainty degree associated, the real results of the transactions may differ from the corresponding estimations. Changes to these estimates, which occur after publication of these consolidated financial statements, will be corrected in a prospective way, in accordance with IAS 8.
Main estimates and judgments related to future events included in the consolidated financial statements preparation are described in the attached Notes.
The Group's activity is exposed to a variety of financial risks, such as market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. These risks arise from the unpredictability of financial markets that affect the capacity of projected cash flows and profits subject to a perspective of long term ongoing. Management seeks to minimise potential adverse effects that derive from that uncertainty in its financial performance.
The financial risks management is controlled by Toyota Caetano financial department, according to the policies established by the Group Board of Directors. The Board of Directors has established the main principles of global risk management as well as specific policies for some areas, as interest rate risk and credit risk.
The Group operates internationally and has subsidiaries operating in the United Kingdom and in Cape Verde (although the United Kingdom subsidiary is inactive and has changed in 2008 its functional currency to euros). The group selects a functional currency for each subsidiary (Cabo Verde Escudo, for the subsidiary Cabo Verde Motors, S.A.R.L.), corresponding to the currency of the economical environment and the ones that better represents its cash flows composition. Foreign currency risk arises mainly from future commercial transactions, as a result of purchases and sales of products and services in a different currency than the functional currency used by each Company.
Foreign currency risk management policies seek to minimize the volatility of investments and transactions made in foreign currencies, aiming to reduce Group's results impact to changes in foreign exchange rates.
The Group foreign currency risk management hedge policies are decided casuistically, considering the foreign currency and country specific circumstances (as at 31 December, 2010 and 2009, this situation is not applicable to any of the Group Subsidiaries).
Foreign currency risk related to the foreign subsidiaries financial statements translation, also named translation risk, presents the impact on net equity of the Holding Company, due to the translation of foreign subsidiaries financial statements.
As mentioned in Note 2.2 d), foreign subsidiaries assets and liabilities are translated into Euros using the exchange rates at statement of financial position date, and gains and losses in the income statement are translated into Euros using the average exchange rate of the year. Resulting exchange differences are recorded in equity caption "Translation reserves".
The Group's assets and liabilities amounts (expressed in Euros) recorded in a different currency from Euro can be summarized as follows:
| Assets | Liabilities | ||||
|---|---|---|---|---|---|
| Dec-10 | Dec-09 | Dec-10 | Dec-09 | ||
| Cabo Verde Escudo (CVE) | 6.700.716 | 6.367.001 | 542.686 | 416.762 | |
| Great Britain pounds (GBP) | 531.753 | - | (695) | 8.580 | |
| Norwegian kroner (DKK) | 240.552 | - | - | - | |
| Swedish kronor (SEK) | 122.345 | - | 2.468 | 4.275 | |
| Japanese yen (JPY) | - | - | 255.810 | 241.758 | |
| American Dollar (USD) | - | - | - | - |
During 2010 and 2009, the Group was exposed to the risk of price variations on "Investments available for sale". As of 31 December 2010, this caption includes essencialy the shares of Banco BCP, S.A. and shares of Cimóvel - Real Estate Investment Fund, acquired during the year. Because those investments are classified as "Investments available for sale", the effect of the changes in the fair value are recognized according to principles described in Note 2.3.j), i) for that kind of financial instrument.
The Group's sensitivity to price variations in investments available for sale can be summarized as follows (increases/(decreases)):
| Dec-10 | ||
|---|---|---|
| Variation | Net Income | Equity |
| 10% | - | 40.315 |
| 10% | - | 292.815 |
| -10% | - | (40.315) |
| -10% | - | (292.815) |
Toyota Caetano debt is indexed to variable interest rates, exposing the total cost of debt to a high risk of volatility. The impact of this volatility on the Group's results and shareholders´ equity mitigated due to the effect of the following factors: (i) possible correlation between the market interest rate levels and economic growth, having a positive effect on the other lines of the Group's consolidated results (particularly operational), thus partially offsetting the increased Finance Costs ("natural hedge") and (ii) the availability of consolidated liquidity or cash, also remunerated at variable rates.
Toyota Caetano Board of Directors approves the terms and conditions of the funding, analyzing the debt structure, the inherent risks and the different options available in the market, particularly considering the type of interest rates (fixed / variable) and, permanently monitoring conditions and alternatives existing in the market, and decides upon the contracting of occasional interest rate hedging derivative financial instruments.
The sensitivity analysis presented below was based on exposure to changes in interest rates for financial instruments at the statement of financial position date. For floating rate liabilities, the analysis is prepared assuming the following:
The sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some assumptions may be correlated.
Group's sensitivity to changes in interest rates is summarized as follows (increases/(decreases)):
| Dec-10 | Dec-09 | |||||
|---|---|---|---|---|---|---|
| Variation | Net Income | Equity | Net Income | Equity | ||
| Guaranteed account | 1 p.p | 123.000 | - | 252.700 | - | |
| Bank Credits | 1 p.p | 3.548 | - | 5.494 | - | |
| Commercial Paper | 1 p.p | 467.000 | - | 440.000 | - | |
| Total | 593.548 | - | 698.194 | - | ||
| Guaranteed account | (1 p.p) | (123.000) | - | (252.700) | - | |
| Bank Credits | (1 p.p) | (3.548) | - | (5.494) | - | |
| Commercial Paper | (1 p.p) | (467.000) | - | (440.000) | - | |
| Total | (593.548) | - | (698.194) | - | ||
The above analysis does not include the consideration of the hedging (swap) financial instrument agreed by the Group to face the rates variation (Note 27).
iv) Liquidity risk
Liquidity risk is defined as the risk that the Group could not be able to settle or meet its obligations on time or at a reasonable price.
The existence of liquidity in the Group requires the definition of some parameters for the efficient and secure management of liquidity, enabling maximisation of the return obtained and minimisation of the opportunity costs relating to the liquidity.
Toyota Caetano Group liquidity risk management has a threefold objective:
(i) Liquidity, which is to ensure permanent access in the most efficient way to sufficient funds to cover current payments on the respective maturity dates, as well as any unexpected requests for funds;
(ii) Safety, which is the minimisation of the probability of default in the repayment of any application in funds; and
(iii) Financial Efficiency, which is ensuring that the Companies maximise the value / minimize the opportunity cost of holding excess liquidity in the short-term.
All excess liquidity is applied in short-term debt amortization, according to economic and financial reasonableness criteria.
A maturity analysis of each financial liability instrument is presented in Notes 20 and 22, considering amounts not discounted and the worst case scenario, that is, the shortest period in that the liability can become due.
At 31 December 2010 and 2009, the Group presents a net debt of 41.621.774 Euros and 50.542.859 Euros, respectively, divided between current and non current Borrowings (Note 20) and cash and cash equivalents (Note 16), agreed with the different financial institutions.
v) Credit risk
Credit risk refers to the risk that the counterpart will default on its contractual obligations resulting in financial loss to the Group.
The Group's exposure to the credit risk is mainly associated to the receivable accounts of its ordinary activities.
Risk management seeks to guarantee an effective collection of its credits in the terms negotiated without impact on the financial Group's health. This risk is regularly monitored, being Management's objective (i) to impose credit limits to customers, considering the number of days of sales outstanding, individually or on groups of customers, (ii) control credit levels and (iii) perform regular impairment analysis. The Group obtains credit guarantees whenever the customers' financial situation demands.
Regarding independent dealership customers, the Group requires guarantees "on first demand", whose amounts, as of 31 December, 2010 were of, approximately, 9.900.000 Euros (9.980.000 as of 31 December, 2009), and whenever these amounts are exceeded, these customers' supplies are suspended (Note 12).
The Group uses credit rating agencies and has specific departments for credit control, collections and management of processes in litigation, which all contribute to the mitigation of credit risk.
The adjustments for accounts receivable are calculated considering (a) the client risk profile, (b) the average time of receipt, (c) the client financial situation. The movements of these adjustments for the years ending at 31 December, 2010 and 2009 are stated in Note 26.
At 31 December, 2010 and 2009, the Group considers that there is no need for additional impairment losses, besides the amounts registered on those dates and stated, briefly, in Note 26.
The amount of customers and other debtors in financial statements, which is net of impairment losses, represents the maximum exposure of the Group to credit risk.
Events occurring after the statement of financial position date which provide additional information about conditions prevailing at the time of the statement of financial position ('adjusting events') are reflected in the consolidated financial statements. Events occurring after the statement of financial position date that provide information on post-statement of financial position conditions ('non adjusting events'), when material, are disclosed in the Notes to the consolidated financial statements.
During the year ended as of 31 December 2010, there were no changes in accounting policies and no material mistakes related with previous periods were identified.
The affiliated companies included in consolidation by the full consolidation method and share of capital held as of 31 December, 2010 e 2009, are as follows:
| Companies | Effective | |||
|---|---|---|---|---|
| Percentage Held | ||||
| Dec-10 | Dec-09 | |||
| Toyota Caetano Portugal, SA | Parent Company | |||
| Saltano - Investimentos e Gestão (SGPS), SA. | 99,98% | 99,98% | ||
| Salvador Caetano (UK), Ltd. | 99,82% | 99,82% | ||
| Caetano Components, SA | 99,98% | 99,98% | ||
| Cabo Verde Motors SARL | 81,24% | 81,24% | ||
| Caetano Renting, SA | 99,98% | 99,98% | ||
| Caetano Auto, SA | 98,39% | 93,18% | ||
| Caetano Retail (Norte) II, S.G.P.S., S.A. | 49,20% | 46,59% | ||
| Auto Partner - Comércio de Automóveis, S.A. | 49,20% | 46,59% | ||
| Caetano Colisão (Norte), SA | 49,20% | 46,59% | ||
| Movicargo – Movimentação Industrial, Lda. | 100,00% | 100,00% |
These subsidiaries were included in the consolidated financial statements using the full consolidation method, as established in IAS 27 – "Consolidated and Separate Financial Statements" (subsidiary control through the major voting rights or other method, being owner of the company's share capital– Note 2.2 a)).
During the year ended at 31 December, 2010, the following variations were noticed in the composition of the consolidation perimeter:
Saltano – Investimentos e Gestão (S.G.P.S), S.A. increased its participation in society Caetano-Auto, S.A. through the acquisition of 1.355.213 shares representing 5.21% of capital.
During the year ended at 31 December, 2009, there were no variations in the composition of the consolidation perimeter.
During the year ended as 31 December, 2010 and 2009, the movement in intangible assets, as well as in the respective accumulated depreciation and accumulated impairment losses, was as follows:
| 2010 | |||||||
|---|---|---|---|---|---|---|---|
| Installations Expenses |
Research and Development Expenses |
Industrial Real Estate and Other Rights |
Key Money |
Software | Intangible Assets in progress |
Total | |
| Gross Assets: Opening Balances at 31 December, 2009 |
13.601 | 4.099.769 | 165.310 | 1.065.053 | - | - | 5.343.733 |
| Increases | - | - | - | - | 12.258 | 200.000 | 212.258 |
| Transfer Writte-offs Ending Balances at 31 December, |
(13.601) | (4.099.769) | (24.494) | (983.568) | 1.152.417 | - | (3.969.015) |
| 2010 | - | - | 140.816 | 81.485 | 1.164.675 | 200.000 | 1.586.976 |
| Accumulated Depreciation and Impairment losses: Opening Balances at 31 December, 2009 |
13.601 | 3.906.697 | 24.233 | 1.065.053 | - | - | 5.009.584 |
| Increases | - | - | 24.395 | - | 39.309 | - | 63.704 |
| Transfer Writte-offs | (13.601) | (3.906.697) | (1.024) | (983.568) | 1.104.777 | - | (3.800.113) |
| Ending Balances at 31 December, 2010 |
- | - | 47.604 | 81.485 | 1.144.086 | - | 1.273.175 |
| Net Intangible Assets | - | - | 93.212 | - | 20.589 | 200.000 | 313.801 |
| 2009 | |||||
|---|---|---|---|---|---|
| Installations Expenses |
Research and Development Expenses |
Industrial Real Estate and Other Rights |
Key Money | Total | |
| Gross Assets: | |||||
| Opening Balances at 31 December, 2008 | 13.601 | 4.003.023 | 120.525 | 1.065.053 | 5.202.202 |
| Increases | - | 69.430 | 17.283 | - | 86.713 |
| Transfer Writte-offs | - | 27.316 | 27.502 | - | 54.818 |
| Ending Balances at 31 December,2009 | 13.601 | 4.099.769 | 165.310 | 1.065.053 | 5.343.733 |
| Accumulated Depreciation and Impairment losses: Opening Balances at 31 December, 2008 Increases Transfer Writte-offs |
13.601 - - |
3.613.832 297.994 (5.129) |
239 23.903 91 |
1.065.053 - - |
4.692.725 321.897 (5.038) |
| Ending Balances at 31 December,2009 | 13.601 | 3.906.697 | 24.233 | 1.065.053 | 5.009.584 |
| Net Intangible Assets | - | 193.072 | 141.077 | - | 334.149 |
The company proceeded with the write-off of values recorded under "Development expenses", with a net book value of approximately 193.000 Euros, as it no longer meet the criteria for recognition as an asset, in particular, the uncertainty regarding the ability to generate future economic benefits has increased significantly.
(Amounts in Euros)
The intangible assets in progress refer to disbursements made during the year related to the implementation of the new management software by the subsidiary Caetano Auto.
During the years ended as of 31 December, 2010 and 2009, the movement in Property, plant and equipment, as well as in the respective accumulated depreciation and accumulated impairment losses, was as follows:
| 2010 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Land | Buildings and Other Constructions |
Machinery and Equipment |
Vehicles | Tools | Administrative Equipment |
Other Property, plant and equipment |
Property, plant and equipment in progress |
Total | |
| Gross Assets: | |||||||||
| Opening Balances | 16.608.116 | 84.266.504 | 49.276.657 | 47.009.517 | 10.484.698 | 7.872.652 | 4.186.655 | 3.825.199 | 223.529.998 |
| Increases | 488.336 | 5.355.607 | 671.466 | 32.357.474 | - | 144.361 | 108.110 | 203.345 | 39.328.699 |
| Disposals | - | (665.045) | (1.294.742) | (21.999.022) | - | (253.746) | (95.264) | (3.766) | (24.311.585) |
| Transfer Writte-offs | (881.363) | (1.775.422) | 10.858.663 | 990.878 (10.484.698) | (43.655) | (1.530) | (2.583.443) | (3.920.570) | |
| Ending Balances | 16.215.089 | 87.181.644 | 59.512.044 | 58.358.847 | - | 7.719.612 | 4.197.971 | 1.441.335 | 234.626.542 |
| Accumulated Depreciation and Impairment losses: |
|||||||||
| Opening Balances | - | 53.242.926 | 38.690.456 | 17.534.068 | 10.232.334 | 7.134.775 | 3.207.617 | - | 130.042.176 |
| Increases | - | 3.944.296 | 6.883.806 | 6.585.990 | - | 278.272 | 247.395 | - | 17.939.759 |
| Transfer Writte-offs | - | (2.029.598) | 4.778.810 | (3.297.622) | (10.232.334) | (293.638) | (74.337) | - | (11.148.719) |
| Impairment losses | - | (650.000) | - | - | - | - | - | - | (650.000) |
| Ending Balances | - | 54.507.624 | 50.353.072 | 20.822.436 | - | 7.119.409 | 3.380.675 | - | 136.183.216 |
| Net Tangible Assets | 16.215.089 | 32.674.020 | 9.158.972 | 37.536.411 | - | 600.203 | 817.296 | 1.441.335 | 98.443.328 |
| 2009 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Buildings and | Machinery | Other Property, | Property, plant | ||||||
| Land | Other Constructions |
and Equipment |
Vehicles | Tools | Administrative Equipment |
plant and equipment |
and equipment in progress |
Total | |
| Gross Assets: | |||||||||
| Opening Balances | 15.420.559 | 80.081.778 | 47.641.863 | 60.027.677 | 10.690.070 | 8.290.393 | 4.276.039 | 2.565.761 | 228.994.140 |
| Increases | 1.150.991 | 4.225.153 | 2.059.548 | 19.132.284 | 75.096 | 12.304 | 92.177 | 1.498.855 | 28.246.408 |
| Disposals | (63.027) | (664.981) | (474.291) | (33.823.018) | (282.354) | (385.449) | (18.014) | (600.000) | (36.311.134) |
| Transfer Writte-offs | 99.593 | 624.554 | 49.537 | 1.672.574 | 1.886 | (44.596) | (163.547) | 360.583 | 2.600.584 |
| Ending Balances | 16.608.116 | 84.266.504 | 49.276.657 | 47.009.517 | 10.484.698 | 7.872.652 | 4.186.655 | 3.825.199 | 223.529.998 |
| Accumulated Depreciation and Impairment losses: |
|||||||||
| Opening Balances | 49.802.638 | 36.674.409 | 21.538.992 | 10.232.225 | 7.300.224 | 3.085.980 | 128.634.468 | ||
| Increases | 3.813.915 | 2.448.482 | 10.994.820 | 307.672 | 357.093 | 266.912 | 18.188.894 | ||
| Transfer Writte-offs | (373.627) | (432.435) | (14.999.744) | (307.563) | (522.542) | (145.275) | (16.781.186) | ||
| Ending Balances | 53.242.926 | 38.690.456 | 17.534.068 | 10.232.334 | 7.134.775 | 3.207.617 | 130.042.176 | ||
| Net Tangible Assets | 16.608.116 | 31.023.578 | 10.586.201 | 29.475.449 | 252.364 | 737.877 | 979.038 | 3.825.199 | 93.487.822 |
The movements registered in item "Vehicles" mainly refer to vehicles that are being used by the Group, as well as forklifts being used by the Group and also being rented to clients.
During 2010, the Group transferred the amount of 5.352.405 Euros from fixed assets(and the respective depreciations amounting to 2.471.945 Euros) from Property, plant and equipment ("Land" and "Buildings and other constructions") to the caption "Investment properties", because the mentioned real estate properties were no longer used in the development of the Group's operations.
During the year, the Group used independent specialized entities to determine the fair value of certain of its Property, plant and equipment for which, taking into account internal and external factors, there were indications that could be booked at a value higher than its fair value.
According to those evaluations, with reference to 2010 and in accordance with evaluation criteria usually accepted for real estate markets, the Group proceeded to the recognition of an impairment loss amounting to approximately 650.000 Euros which was recognized in the income statement, in "provisions and impairment losses".
| Real Estate | Carrying Amount (before impairment) |
Fair Value - evaluation | Impairment loss |
|---|---|---|---|
| PORTIMÃO | 924.782 | 410.000 | 500.000 |
| MONTIJO | 3.544.637 | 3.394.200 | 150.000 |
The management doesn't expect that any change (under a normal scenery) on assumptions assumed on fair value's measurement, could cause additional impairment losses.
As of 31 December, 2010 and 2009, the caption "Investment properties" refers to real estate's assets held to obtain gains through its rental or for capital gain purposes. These real estate assets are recorded at acquisition cost.
Gains related to "Investment properties" are recorded in the caption "Finance income" and amounted to 2.676.444 Euros in the year ended as of 31 December, 2010 (2.815.517 Euros as of 31 December 2009) (Note 36). The depreciations of 2010 of the Investment Properties amount to 916.724 Euros (1.138.524 Euros as of 31 December, 2009).
Additionally, in accordance with external appraisals made by independent experts, with reference to 2010, and in accordance with evaluation criteria usually accepted for real estate markets, the fair value of those investment properties amounts to, approximately, 51,6 million Euros.
Also according to those external evaluations estate, it was detected a property which carrying amount exceeded its fair value. The Group proceeded to the recognition of an impairment loss amounting to approximately 1.130.000 Euros which was recognized in income statement, in "provisions and impairment losses".
| Carrying Amount (before | |||
|---|---|---|---|
| Real Estate | impairment) | Fair Value - evaluation | Impairment loss |
| VISEU | 2.804.446 | 1.650.000 | 1.130.000 |
The management doesn't expect that any change (under a normal scenery) on assumptions assumed on fair value's measurement, could cause additional impairment losses.
The real estate assets recorded in the caption "Investment properties" as of 31 December, 2010 and 2009 are made up as follows:
| Dec-10 | Dec-09 | ||||
|---|---|---|---|---|---|
| Building | Place | Net asset value |
Valuation Value (2010) |
Net asset value |
Valuation Value (2008) |
| Industrial Instalations | V.N. Gaia | 1.107.830 | 11.035.000 | 1.005.302 | 11.000.000 |
| Industrial Instalations | Carregado | 7.729.468 | 24.100.000 | 5.924.378 | 26.000.000 |
| Industrial Warehouse | V.N. Gaia | 1.559.960 | 5.235.000 | 791.440 | 5.034.000 |
| Comercial Instalations | Several places | 3.455.617 | 6.536.000 | 3.876.398 | 8.113.000 |
| Lands not used | Several places | 3.057.652 | 4.675.000 | 4.479.274 | 4.134.000 |
| 16.910.528 | 51.581.000 | 16.076.792 | 54.281.000 | ||
The movement in the caption "Investment properties" as of 31 December, 2010 and 2009 was as follows:
| 2010 | ||||
|---|---|---|---|---|
| Gross Assets: | Land | Buildings | Total | |
| Opening Balances | 9.107.019 | 28.223.703 | 37.330.722 | |
| Transfer Writte-offs | 942.168 | 4.410.237 | 5.352.405 | |
| Impairment Losses | (1.130.000) | - | (1.130.000) | |
| Ending Balances | 8.919.187 | 32.633.940 | 41.553.127 | |
| Accumulated Depreciation | Land | Buildings | Total | |
| Opening Balances | - | 21.253.930 | 21.253.930 | |
| Increases | - | 916.724 | 916.724 | |
| Transfer Writte-offs | - | 2.471.945 | 2.471.945 | |
| Ending Balances | - | 24.642.599 | 24.642.599 |
| 2009 | |||
|---|---|---|---|
| Gross Assets: | Land | Buildings | Total |
| Opening Balances | 9.107.019 | 29.010.902 | 38.117.921 |
| Transfer Writte-offs | - | (787.199) | (787.199) |
| Ending Balances | 9.107.019 | 28.223.703 | 37.330.722 |
| Accumulated Depreciation | Land | Buildings | Total |
| Opening Balances | - | 20.743.372 | 20.743.372 |
| Increases | - | 1.138.524 | 1.138.524 |
| Transfer Writte-offs | - | (627.966) | (627.966) |
| Ending Balances | - | 21.253.930 | 21.253.930 |
The investment properties fair value disclosed in 31 December, 2010 was determined on an annual basis by an independent appraiser – American Appraisal (Market Method, Cost Method and Return Method), with reference to 2010.
At 31 December, 2010 there were not any movements in item "Goodwill".
The item "Goodwill" is totally related to the amount calculated in the acquisition of the affiliate Movicargo whose business was transferred to the parent Toyota Caetano Portugal, S.A.
Goodwill is not depreciated. Impairment tests are made annually.
(Amounts in Euros)
For impairment analysis, the recoverable amount was determined based on the value in use, according to the discounted cash flows model, based on business plans developed by the people in charge and approved by the management and using discount rates that reflect the risks inherent of the business.
On 31 December, 2010, the method and main assumptions used were as follows:
| Movicargo – BT Industrial Equipment Division |
|
|---|---|
| Goodwill | 611.997 |
| Period | Projected cash flows for 5 years |
| Growth rate (g) (1) | 0% |
| Discount rate (2) | 9,93% |
1 growth rate used to extrapolate cash flows beyond the period considered in the business plan 2 Discount rate applied to projected cash flows
The Management, supported by the estimated discounted cash flows discounted, concluded that on 31 December, 2010, the net book value of assets, including goodwill, does not exceed its recoverable amount. The projections of cash flows were based on historical performance and on expectations of improved efficiency. The management believes that a possible change (within a normal scenario) in key assumptions used in calculating the recoverable amount will not result in impairment losses.
As of 31 December, 2010 and 2009 the movements in item "Investments available for sale" were as follows:
| Dec-10 | Dec-09 | |
|---|---|---|
| Fair value at 1 January | 5.367.157 | 4.712.757 |
| Increases during the year | 3.604.898 | - |
| Disposals durig the year | (5.305.021) | - |
| Increase/(decrease) in fair value | (271.329) | 654.400 |
| Other regularizations | - | - |
| Fair value at 31 December | 3.395.705 | 5.367.157 |
| Current Assets Non Current Assets |
3.395.705 0 3.395.705 |
62.136 5.305.021 5.367.157 |
During the period, the Group sold all the shares held in December 2009 of companies listed on Euronext Lisbon (BCP and BPI). Additionally, during the period it has purchased shares in companies listed on Euronext Lisbon (BCP) and shares of Cimóvel - Real Estate Investment Fund.
As of 31 December, 2010, "Available for sale investments" include the amount of 402.916 Euros corresponding to shares of listed companies in Euronext Lisbon (BCP), which are recorded at its fair value (the acquisition cost of those shares ascended to 588.451 Euros and accumulated change in fair value to 185.535 Euros). It also includes the amount of 2.928.153 Euros corresponding to shares of Cimóvel - Real Estate Investment Fund, which are recorded at its fair value (the acquisition cost of those shares ascended to 3.013.947 Euros and accumulated change in fair value to 85.794 Euros).
The remaining "Investments available for sale" refer to small investments in non listed companies. The Board of Directors understands that the net accounting value is similar to its fair value.
Additionally, the impact in equity and impairment losses in 2010 and 2009 from recording "Investments held for sale" at fair value can be summarized as follows:
| Dec-10 | Dec-09 | |
|---|---|---|
| Recognition on Results from the Disposal | (885.936) | |
| Fair value variation | (271.329) | 654.400 |
| Deferred tax liabilities | - | - |
| Equity effect | (1.157.265) | 654.400 |
| Impairment losses | - | - |
| (1.157.265) | 654.400 |
As of 31 December, 2010 and 2009, this caption breakdown is as follows:
| Dec-10 | Dec-09 | |
|---|---|---|
| Raw Materials and Others | 9.398.703 | 8.454.175 |
| Production in Process | 6.235.204 | 7.229.196 |
| Built-up and Finished Products | 3.869.884 | 3.896.895 |
| Goods | 49.655.887 | 51.975.486 |
| 69.159.678 | 71.555.752 | |
| Accumulated impairment losses in inventories (Note 26) | (2.361.786) | (2.382.475) |
| 66.797.892 | 69.173.277 | |
During the years ended as of 31 December, 2010 and 2009, cost of sales was as follows:
| Dec-10 | Dec-09 | |||||
|---|---|---|---|---|---|---|
| Goods | Raw Materials and Others |
Total | Goods | Raw Materials and Others |
Total | |
| Opening Balances | 51.975.486 | 8.454.175 | 60.429.661 | 78.870.567 | 15.457.434 | 94.328.001 |
| Net Purchases | 286.191.814 | 41.208.347 | 327.400.161 | 242.535.393 | 26.722.104 | 269.257.497 |
| Perimeter variation | - | - | - | - | - | - |
| Ending Balances | (49.655.887) | (9.398.703) | (59.054.590) | (51.975.486) | (8.454.175) | (60.429.661) |
| Total | 288.511.413 | 40.263.819 | 328.775.232 | 269.430.474 | 33.725.363 | 303.155.837 |
During the years ended as of 31 December, 2010 and 2009, the variation in production was computed as follows:
| Built-up and Finished Products | |||
|---|---|---|---|
| Dec-10 | Dec-09 | ||
| Ending Balances | 10.105.088 | 11.126.091 | |
| Perimeter variation | - | - | |
| Inventories Regularizations | (15.726) | 12.616 | |
| Opening Balances | (11.126.091) | (14.433.950) | |
| Total | (1.036.729) | (3.295.243) | |
As of 31 December, 2010 and 2009, the detail of this caption was as follows:
| Current Assets | Non-Current Assets | |||
|---|---|---|---|---|
| Dec-10 | Dec-09 | Dec-10 | Dec-09 | |
| Accounts Receivable | 71.282.984 | 63.616.495 | 1.556.626 | 2.093.425 |
| Notes Receivable | 76.650 | 19.576 | - | - |
| Doubtful Accounts Receivable | 10.327.614 | 11.432.098 | - | - |
| 81.687.248 | 75.068.169 | 1.556.626 | 2.093.425 | |
| Accumulated impairment losses in accounts Receivable (Note 26) | (12.878.734) | (13.050.481) | - | - |
| 68.808.514 | 62.017.688 | 1.556.626 | 2.093.425 | |
Accounts receivable from customers recorded as non current assets corresponds to the customers of the affiliated company Caetano Auto – Comércio de Automóveis, S.A. that are being paid under formal agreements (whose terms of payment may vary between 1 to 6 years, and which bear interests (2.093.425 Euros as of 31 December, 2009).
Group exposure to credit risk is mainly related to trade receivables resulting from its operational activity. Before accepting new customers, the Group contacts credit rating agencies and performs internal analysis of credit risk, through specific credit control, collection and legal service departments, and assigns credit limits by customer, based on the gathered information.
| 2010 | |||||
|---|---|---|---|---|---|
| 0- 60 days | 60-90 days | 90-120 days | + 120 days | Total | |
| Accounts receivable | 48.914.659 | 2.295.975 | 651.587 | 9.362.244 | 61.224.465 |
| Personnel | 87.219 | 38.616 | 24.586 | 1.508.091 | 1.658.512 |
| Independent Dealers | 8.811.823 | 28.835 | 661 | 171.780 | 9.013.099 |
| Fleets | 333.444 | 35.168 | 8.792 | 147.780 | 525.184 |
| Total | 58.147.145 | 2.398.594 | 685.626 | 11.189.895 | 72.421.260 |
| 2009 | |||||
|---|---|---|---|---|---|
| 0- 60 days | 60-90 days | 90-120 days | + 120 days | Total | |
| Accounts receivable | 38.268.380 | 4.291.102 | 1.464.260 | 8.953.502 | 52.977.244 |
| Personnel | 161.609 | 35.618 | 39.826 | 2.021.939 | 2.258.992 |
| Independent Dealers | 5.624.857 | 418.843 | 25.449 | 181.272 | 6.250.421 |
| Fleets | 316.803 | 102.378 | 56.066 | 126.492 | 601.739 |
| Total | 44.371.649 | 4.847.941 | 1.585.601 | 11.283.205 | 62.088.396 |
| 2010 | ||||||
|---|---|---|---|---|---|---|
| 0- 60 days | 60-90 days | 90-120 days | + 120 days | Total | ||
| Accounts receivable | 0 | 0 | 0 | 495.000 | 495.000 | |
| Doubtful Accounts Receivable | 20.818 | 1.882 | 0 | 10.304.914 | 10.327.614 | |
| Total | 20.818 | 1.882 | 0 | 10.799.914 | 10.822.614 | |
| 2009 | ||||||
|---|---|---|---|---|---|---|
| 0- 60 days | 60-90 days | 90-120 days | + 120 days | Total | ||
| Accounts receivable | - | - | - | 3.641.100 | 3.641.100 | |
| Doubtful Accounts Receivable | - | - | - | 11.432.098 | 11.432.098 | |
| Total | - | - | - | 15.073.198 | 15.073.198 | |
The amounts presented in the consolidated Statement of financial position are net of accumulated impairment losses to doubtful accounts receivable estimated by the Group, in accordance with its experience based on its evaluation of the economic environment at the statement of financial position date. Credit risk concentration is limited, because the customers' basis is wider and not relational. Thus, the Board of Directors understands that the accounting values of accounts receivable are similar to their respective fair value.
(Amounts in Euros)
As of 31 December, 2010 and 2009, the detail of this caption was as follows:
| Dec-10 | Dec-09 | |
|---|---|---|
| Down Payments | 32.737 | 42.292 |
| Other receivable accounts | 7.937.888 | 13.131.131 |
| 7.970.625 | 13.173.423 | |
The caption "Other receivable accounts" includes the amount of, approximately, 5,1 Million Euros (9,9 Million Euros as of 31 December, 2009) in referring to advance payments made by the Group related with leasehold improvements in commercial facilities for automotive retail, which were fully invoiced in previous years, being that the remaining amount is expected to be supported in the short term by third parties.
Additionally, this caption also includes, as of 31 December, 2010, the amount of, approximately, 800.000 Euros (2.000.000 Euros as of 31 December 2009) to be received from Auto Partner III, SGPS, S.A.
As of 31 December, 2010 and 2009, the detail of this caption was as follows:
| Dec-10 | Dec-09 | |
|---|---|---|
| Accrued Income | ||
| Rentals | - | 329.969 |
| Warranties reclaims | 332.514 | 172.136 |
| Fleet programs | 146.177 | 120.016 |
| Comission | 229.228 | 102.784 |
| Bonus suppliers | 217.593 | 81.259 |
| Interest | - | 51.528 |
| Subsidies to formation | - | - |
| Insurance | - | - |
| Others | 382.049 | 301.585 |
| 1.307.561 | 1.159.277 | |
| Deferred Costs | ||
| Insurance | 204.984 | 229.337 |
| Interest paid | 146.186 | 120.196 |
| Maintenance charge | 83.297 | 75.624 |
| Rentals | 135.440 | - |
| Waranties | - | 54.814 |
| Others | 238.424 | 74.364 |
| 808.331 | 554.335 | |
| Total | 2.115.892 | 1.713.612 |
The detail of deferred tax assets and liabilities recorded in the accompanying consolidated financial statements as of 31 December, 2010 and 2009 is as follows:
| 2010 | ||||
|---|---|---|---|---|
| Dec-09 | Profit and Loss Impact (Note 29) |
Equity Impact | Dec-10 | |
| Assets Deferred tax: | ||||
| Provisions not accepted as fiscal costs | 1.051.730 | 105.071 | - | 1.156.801 |
| Fiscal losses | 133.607 | 81.967 | - | 215.574 |
| Annulment in Property, plant and equipment | 305.970 | 870.049 | (140.004) | 1.036.015 |
| Annulment in deferred costs | 59.998 | (22.958) | - | 37.040 |
| Derivative financial instruments valorization | 246.893 | (185.826) | - | 61.067 |
| 1.798.198 | 848.303 | (140.004) | 2.506.497 | |
| Liabilities Deferred tax: | ||||
| Depreciation as a result of legal and free reavaluation of fixed assets | (1.058.113) | (66.334) | - | (1.124.447) |
| Effect of the reinvestments of the surplus in fixed assets sales | (484.148) | 58.146 | - | (426.002) |
| Future expenses that will not be accepted by fiscal authorities | 0 | (4.853) | (185.675) | (190.529) |
| Fiscally surplus at the base of n.º 7 Artº7 30/G 2000 Portuguese Law | (36.669) | 6.112 | - | (30.557) |
| (1.578.930) | (6.929) | (185.675) | (1.771.535) | |
| Net effect | 841.374 | (325.679) | ||
| Dec-08 | Profit and Loss Impact (Note 29) |
Equity Impact | Dec-09 | |
|---|---|---|---|---|
| Assets Deferred tax: | ||||
| Provisions not accepted as fiscal costs | 1.721.709 | (669.979) | - | 1.051.730 |
| Fiscal losses | 133.607 | - | - | 133.607 |
| Annulment in Property, plant and equipment | 331.845 | (25.875) | - | 305.970 |
| Annulment in deferred costs | 158.528 | (98.530) | - | 59.998 |
| Derivative financial instruments valorization | 214.189 | 32.704 | - | 246.893 |
| 2.559.878 | (761.680) | - | 1.798.198 | |
| Liabilities Deferred tax: | ||||
| Depreciation as a result of legal and free reavaluation of fixed assets | (1.127.243) | 69.130 | - | (1.058.113) |
| Effect of the reinvestments of the surplus in fixed assets sales | (547.436) | 63.288 | - | (484.148) |
| Fiscally surplus at the base of n.º 7 Artº7 30/G 2000 Portuguese Law | (42.781) | 6.112 | - | (36.669) |
| (1.717.460) | 138.530 | (1.578.930) | ||
| Net effect | (623.150) | |||
In accordance with the applicable legislation in Portugal, tax losses can be carried forward for a period of four years (six years for period ended up to 31 December, 2009) after their occurrence and subject to deduction to tax profits realized during that period. As of 31 December, 2010, the Group companies that had tax losses that can be carried forward in relation to which deferred tax assets were recorded as follows:
| Dec-10 | Dec-09 | ||||
|---|---|---|---|---|---|
| With date of utilization limit: | Fiscal Losses | Deferred tax Assets |
Fiscal Losses | Deferred tax Assets |
Date limit of utilization |
| At 2004 | |||||
| - Caetano Components, S.A. | - | - | 328.442 | 98.880 | 2010 |
| At 2005 | |||||
| - Caetano Retail (Norte) II SGPS S.A. | 69.055 | - | 69.055 | - | 2011 |
| - Caetano Components, S.A. | 315.793 | 58.463 | 315.793 | 34.727 | 2011 |
| - Caetano Colisão (Norte), SA | 396.421 | - | 481.169 | - | 2011 |
| At 2006 | |||||
| - Caetano Retail (Norte) II SGPS S.A. | 2.059 | - | 2.059 | - | 2012 |
| - Caetano Colisão (Norte), SA | 388.237 | - | 388.237 | - | 2012 |
| At 2007 | |||||
| - Caetano Retail (Norte) II SGPS S.A. | 63.772 | - | 63.772 | - | 2013 |
| - Auto Partner CA, SA | 219.604 | - | 219.604 | - | 2013 |
| - Caetano Colisão (Norte), SA | 1.100.930 | - | 1.100.930 | - | 2013 |
| At 2008 | |||||
| - Caetano Retail (Norte) II SGPS S.A. | 70.511 | - | 70.511 | - | 2014 |
| - Caetano Colisão (Norte), SA | 121.526 | - | 121.526 | - | 2014 |
| - Auto Partner CA, SA | 343.145 | 85.786 | 343.145 | - | 2014 |
| At 2009 | |||||
| - Caetano Retail (Norte) II SGPS S.A. | 48.248 | - | 48.248 | - | 2015 |
| - Auto Partner CA, SA | 409.584 | 71.325 | 409.584 | - | 2015 |
| 3.463.252 | 215.574 | 3.962.075 | 133.607 | ||
In a prudent way, some of the Toyota Caetano Group companies do not processed and/or derecognized in 2010 the assets by deferred taxes associated to fiscal losses reportable.
As of 31 December, 2010 and 2009 tax rates used to compute current and deferred tax assets and liabilities were as follows:
| Tax rates | ||||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | |||
| Country of origin of affiliate: | ||||
| Portugal | 26,5%/25% | 26,5%/25% | ||
| Cape Verde | 25,0% | 25,0% | ||
| United Kingdom | 30,0% | 30,0% |
Toyota Caetano Group companies with head office in Portugal, except Movicargo, are taxed according to the Corporate Income Tax (CIT) in accordance with the Special Taxation Regimen for Groups of Companies ("Regime Especial de Tributação de Grupos de Sociedades - RETGS") as established by articles 70 th and 71th of the CIT. For the years beginning from January 1, 2010, the taxable income calculated in excess of € 2.000.000, adds a 2,5% Additional State Tax.
In accordance with the applicable legislation, the income tax returns of Toyota Caetano and other Group companies with headquarters in Portugal are subject to review and correction by the tax authorities for a 4-year period (five years for the Social Security), except when there were no fiscal losses, there were granted some fiscal gains or there are being undertaken inspections, complaints or impugnments, cases in which, depending on the circumstances, the deadlines are extended or suspended. Therefore, the tax declarations since the year of 2007 are still subject to review. The Board of Directors believes that the corrections that may arise from such reviews/inspections will not have a significant impact in the accompanying consolidated financial statements.
Under the terms of article 88th of the Corporate Income Tax Code, the companies with headquarters in Portugal are additionally subject to an income tax over a set of expenses at the rates foreseen in the above mentioned article.
As of 31 December, 2010 and 2009 cash and cash equivalents detail was the following:
| Dec-10 | Dec-09 | |
|---|---|---|
| Cash | 156.425 | 270.497 |
| Bank Deposits | 19.945.500 | 24.906.861 |
| Cash equivalents | 450 | 36.647 |
| 20.102.375 | 25.214.005 | |
The Company and its affiliates have available credit facilities as of 31 December, 2010 amounting to approximately 120,6 Million Euros, which can be used in future operational activities and to fulfill financial commitments. There are no restrictions on the use of these facilities.
As of 31 December, 2010, the Company's share capital, fully subscribed and paid for, consisted of 35.000.000 bearer shares, with a nominal value of 1 Euro each.
The entities with over 20% of subscribed capital are as follows:
| - Grupo Salvador Caetano SGPS, S.A. | 60% |
|---|---|
| - Toyota Motor Europe NV/SA | 27% |
According to the General shareholders meeting deliberation, as of 23 April 2010, a dividend of 0,15 Euros per share was paid (total dividend of 5.250.000 Euros). As of 30 April 2009, the dividend paid was of 0,07 Euros per share (total dividend of 2.450.000 Euros).
In relation to 2010, the Board of Directors proposes that it should be paid a dividend of 0,18 Euros per share. This proposal must to be approved in the General Shareholders Meeting and was not included as a liability in the financial statements. The proposed dividend amounts to a total of 6.300.000 Euros. The dividend payment will have no tax effect on the Group.
Commercial legislation establishes that at least 5% of the net profit of each year must be appropriated to a legal reserve until this reserve equals the statutory minimum requirement of 20% of the share capital. This reserve is not available for distribution, except in case of dissolution of the Company, but may be used in share capital increases or used to absorb accumulated losses once other reserves have been exhausted.
The revaluation reserves can not be distributed to the share holders, except if they are completely depreciated and if the respective assets that were revaluated have been alienated.
The translation reserves reflect the currency variations during the passage of the financial statements of affiliated companies in a currency other than Euro and cannot be distributed or used to absorb losses.
The fair value reserves reflect the fair value variations of the investments available for sale and cannot be distributed or used to absorb losses.
According to the Portuguese law, the amount of distributable reserves is determined according to the individual financial statements of Toyota Caetano Portugal, presented according to the Normas Contabilísticas e de Relato Financeiro (NCRF, Portuguese GAAP).
Movements in this caption during the year ended as of 31 December, 2010 and 2009 were as follows:
| Dec-10 | Dec-09 | |
|---|---|---|
| Opening Balances in January, 1 | 3.284.681 | 3.490.459 |
| Net profit attributable to Non-Controlling Interests | 196.593 | (137.850) |
| Acquisition variation | (2.399.454) | - |
| Others | - | (67.928) |
| Ending Balances in December, 31 | 1.081.820 | 3.284.681 |
During the period, the group reinforced its position in Caetano-Auto and purchased 5.21% of its capital.
As of 31 December, 2010 and 2009 the caption "Borrowings" was as follows:
| Dec-10 | Dec-09 | |||||
|---|---|---|---|---|---|---|
| Current | Non-Current | TOTAL | Current | Non-Current | TOTAL | |
| Bank Loan | 59.000.000 | 250.000 | 59.250.000 | 72.838.146 | 250.000 | 73.088.146 |
| Bank Credits | 354.790 | - | 354.790 | 549.360 | - | 549.360 |
| Other Borrowings | 210.612 | 1.908.747 | 2.119.358 | - | 2.119.358 | 2.119.358 |
| 59.565.402 | 2.158.747 | 61.724.149 | 73.387.506 | 2.369.358 | 75.756.864 | |
(Amounts in Euros)
As of 31 December, 2010 and 2009, the detail of Borrowings, overdrafts, others Borrowings and Commercial Paper Programs, as well as its conditions, were as follows:
| 2010 | ||||
|---|---|---|---|---|
| Description/Beneficiary Company | Used Amount | Limit | Beginning Date |
Date-Limit |
| Non-current | ||||
| Subsidy repayable: | ||||
| Toyota Caetano Portugal | 1.908.747 | 1.908.747 | 30-01-2009 | 6 years |
| Credit line PME Invest III: | ||||
| Caetano Components | 250.000 | 250.000 | 24-04-2009 | 5 years |
| 2.158.747 | 2.158.747 | |||
| Current | ||||
| Guaranteed account | 12.300.000 | 43.990.000 | ||
| Bank Credits | 354.790 | 11.500.000 | ||
| Confirming | 0 | 5.000.000 | ||
| Subsidy repayable | 210.612 | 210.612 | 30-01-2009 | 6 years |
| Comercial Paper: | ||||
| Toyota Caetano Portugal | 8.200.000 | 11.200.000 | 25-08-2006 | 5 years |
| Toyota Caetano Portugal | 10.000.000 | 10.000.000 | 07-12-2006 | 5 years |
| Toyota Caetano Portugal | 12.500.000 | 12.500.000 | 29-06-2007 | 5 years |
| Toyota Caetano Portugal | 15.000.000 | 15.000.000 | 08-09-2008 | 5 years |
| Toyota Caetano Portugal | - | 8.000.000 | 12-07-2007 | 5 years |
| Caetano Auto | 1.000.000 | 1.000.000 | 29-02-2008 | 4 years |
| 59.565.402 | 118.400.612 | |||
| 61.724.149 | 120.559.359 | |||
| 2009 | ||||
|---|---|---|---|---|
| Description/Beneficiary Company | Used Amount | Limit | Beginning Date |
Date-Limit |
| Non-current | ||||
| Subsidy repayable: | ||||
| Toyota Caetano Portugal | 2.119.358 | 2.119.358 | 30-01-2009 | 6 years |
| Credit line PME Invest III: | ||||
| Caetano Components | 250.000 | 250.000 | 24-04-2009 | 5 years |
| 2.369.358 | 2.369.358 | |||
| Current | ||||
| Guaranteed account | 25.270.000 | 55.850.000 | ||
| Bank Credits | 549.360 | 15.850.000 | ||
| Confirming | 3.568.146 | 5.000.000 | ||
| Comercial Paper: | ||||
| Toyota Caetano Portugal | - | 8.200.000 | 25-08-2006 | 5 years |
| Toyota Caetano Portugal | 10.000.000 | 10.000.000 | 07-12-2006 | 5 years |
| Toyota Caetano Portugal | 15.000.000 | 15.000.000 | 29-06-2007 | 5 years |
| Toyota Caetano Portugal | - | 12.500.000 | 27-11-2007 | 5 years |
| Toyota Caetano Portugal | - | 6.800.000 | 05-06-2008 | 3 years |
| Toyota Caetano Portugal | 15.000.000 | 15.000.000 | 08-09-2008 | 5 years |
| Toyota Caetano Portugal | - | 20.000.000 | 12-07-2007 | 5 years |
| Caetano Auto | 4.000.000 | 4.000.000 | 29-02-2008 | 2 years |
| 73.387.506 | 168.200.000 | |||
| 75.756.864 | 170.569.358 | |||
Interests relating to the financial instruments mentioned above are indexed to Euribor, plus a spread which varies between 1,00% and 2,125%.
With the closure of the project application n.º 00/07099 of the program SIME A of AICEP (Agência para o Investimento e Comércio Externo de Portugal, E.P.) fit was granted a refundable incentive with the following amortization plan:
| Average Effective |
|||||||
|---|---|---|---|---|---|---|---|
| Dez-10 | Interest Rate | 2011 | 2012 | 2013 | 2014 | 2015 | Total |
| Repayable Subsidy |
|||||||
| Amortization | 210.612 | 545.356 | 545.356 | 545.356 | 272.678 | 2.119.358 | |
| Interests | 0% | - | - | - | - | - | - |
| 210.612 | 545.356 | 545.356 | 545.356 | 272.678 | 2.119.358 | ||
As of 31 December, 2010 and 2009 this caption was composed of current accounts with suppliers, which end at short term.
The Group, relating to financial risk management, has implemented policies to ensure that all liabilities are paid for within the defined payment period.
As of 31 December, 2010 and 2009 the detail of this caption was as follows:
| Current Liabilities | Non-Current Liabilities | |||
|---|---|---|---|---|
| Dec-10 | Dec-09 | Dec-10 | Dec-09 | |
| Shareholders – Others | 59.825 | 48.650 | - | - |
| Advances from Customers | 636.666 | 704.223 | - | - |
| Property, plant and equipment Suppliers | 1.689.397 | 2.699.009 | 6.621.087 | 8.308.619 |
| Other Creditors | 2.626.075 | 2.276.274 | - | 571.614 |
| 5.011.963 | 5.728.156 | 6.621.087 | 8.880.233 | |
The item "Fixed assets suppliers" (current and non-current) include the Group liabilities for leasing contracts, related to the purchase of facilities and equipment. The detail of this caption, as well as the reimbursement plan can be summarized as follows:
| Medium-and long-term | ||||||||
|---|---|---|---|---|---|---|---|---|
| Contract | Leasings | Short-term | 2012 | 2013 | 2014 | > 2014 | TOTAL | TOTAL |
| 343616 | Industrial Equipment | |||||||
| Capital | 125.458 | 127.551 | 77.219 | 0 | 0 | 204.770 | 330.227 | |
| Interests | 4.698 | 2.605 | 17.889 | 0 | 0 | 20.494 | 25.191 | |
| 2028278 | Comercial Installations | |||||||
| Capital | 86.785 | 88.316 | 89.874 | 91.459 | 706.294 | 975.942 | 1.062.727 | |
| Interests | 17.904 | 16.373 | 14.815 | 13.229 | 45.801 | 90.218 | 108.122 | |
| 559769 | Comercial Installations | |||||||
| Capital | 54.808 | 55.650 | 56.504 | 57.372 | 933.690 | 1.103.215 | 1.158.023 | |
| Interests | 17.278 | 16.436 | 15.582 | 14.714 | 98.977 | 145.709 | 162.987 | |
| 626064 | Comercial Installations | |||||||
| Capital | 130.255 | 135.282 | 140.093 | 145.076 | 1.700.685 | 2.121.136 | 2.251.391 | |
| Interests | 73.120 | 71.488 | 66.690 | 61.722 | 300.331 | 500.231 | 573.351 | |
| Various | Industrial Equipment | |||||||
| Capital | 1.292.091 | 981.029 | 798.736 | 431.825 | 4.435 | 2.216.024 | 3.508.115 | |
| Interests | 42.508 | 25.612 | 12.689 | 3.235 | 9 | 41.545 | 84.053 | |
| Total Capital | 1.689.397 | 1.387.826 | 1.162.426 | 725.732 | 3.345.103 | 6.621.087 | 8.310.483 | |
| Total Interests | 155.508 | 132.514 | 127.664 | 92.900 | 445.118 | 798.196 | 953.704 |
The fair value of the liabilities for leasing contracts is similar to the fair value of the leased assets.
As of 31 December, 2010 and 2009 the detail of this "Public Entities" caption was as follows:
| Assets | Liabilities | |||
|---|---|---|---|---|
| Dez-10 | Dez-09 | Dez-10 | Dez-09 | |
| Public Entities | ||||
| Income Taxes deduction | - | - | 349.190 | 310.457 |
| Value Added Taxes | 1.635.733 | 127.892 | 11.641.562 | 7.980.742 |
| Income Taxes (estimated tax) (Note 29) | - | - | 3.449.898 | 3.369.318 |
| Income Taxes(advance tax pay) | - | - | (2.133.269) | (1.760.238) |
| Vehicles Taxes | - | - | 3.836.667 | 2.439.866 |
| Custom Duties | - | - | 727.142 | 771.895 |
| Employees'social contributions | - | - | 733.598 | 752.904 |
| Others | 1.036 | - | 214.186 | 181.942 |
| 1.636.769 | 127.892 | 18.818.974 | 14.046.886 | |
As of 31 December, 2010 and 2009 the caption "Other current liabilities" was as follows:
| Dec-10 | Dec-09 | |
|---|---|---|
| Accrued Cost | ||
| Vacation pay and bonus | 6.036.037 | 6.196.156 |
| Advance costing | 2.349.319 | 1.689.093 |
| Vehicles Tax related with disposed vehicles not registered | 710.473 | 693.073 |
| Our reimbursement to dealers in Sales Campaigns | 780.628 | 587.151 |
| Rentals | - | 553.621 |
| Comission | 693.720 | 336.932 |
| Optimo's warranty costs | - | 253.470 |
| Insurance | 224.903 | 238.477 |
| Royalties | - | 53.010 |
| Interest | 122.934 | 28.785 |
| Others | 2.166.863 | 2.996.181 |
| 13.084.877 | 13.625.949 | |
| Deferred Income | ||
| Publicity recuperation | 890.257 | 868.426 |
| Debtors interest | 80.148 | 161.479 |
| investment's Subsidies | 706.936 | 245.966 |
| Deferred revenue | 2.271.797 | - |
| Rappel | - | 8.008 |
| Others | 171.009 | 51.598 |
| 4.120.147 | 1.335.477 | |
| Total | 17.205.024 | 14.961.426 |
Toyota Caetano (together with other associated and related companies) incorporated, by public deed dated December 29, 1988, the Salvador Caetano Pension Fund, which was subsequently updated in January 2, 1994, in December 29, 1995 and in December 23, 2002.
As of 31 December, 2010, the following companies of Toyota Caetano Group were associates of the Salvador Caetano Pension Fund:
The Pension Fund was set up to, while Toyota Caetano Group maintains the decision to make contributions to the referred fund, provide employees (beneficiaries), at their retirement date, the right to a pension complement, which is not subject to update and is based on a percentage of the salary, among other conditions.
A request was made as of 19 December 2006 to the fund manager of the Salvador Caetano Pension Fund (ESAF – Espirito Santo Activos Financeiros, S.A.), to act near the "ISP - Instituto de Seguros de Portugal" and take the necessary measures to change the defined benefit plan into a defined contribution plan, among other changes.
Following the above mentioned, a dossier was sent on December 18, 2007 to Instituto de Seguros de Portugal containing the proposals to change the "Constitutive Contract" of Salvador Caetano Pension Fund, as well as the minute of approval of these changes by the Pensions Fund Advisory Committee, and requesting, with effects as from January 1, 2008, the approval of these changes.
The proposal for changing the pension complement, dully approved by the Pension Funds Advisory Committee ("Comissão de Acompanhamento do Fundo de Pensões"), includes the maintenance of a defined benefit plan for the current retired workers and ex-employees with acquired rights, as well as for all the current employees with more than 50 years and more than 15 years of service completed until January 1, 2008. A new group will be created to which all current employees with less than 50 years and/or less than 15 years of service will be transferred.
At December 29, 2008 Toyota Caetano Portugal, S.A. received a letter from ISP - Instituto de Seguros de Portugal (Portuguese Insurance Institute) with the approval of the pretended alterations and entering into force starting from January 1, 2008. ISP determined in the referred approval that the employees associated to the Salvador Caetano Pension Fund who at January 1, 2008 had achieved 15 years of service and had ages inferior to 50 years (and that shall integrate a Defined Contribution Plan) have the right to an individual "initial capital" according to the new Plan, determined according to the actuarial responsibilities as at 31 December, 2007 and based on the presumptions and criteria used on that year.
According to the actuarial study made by the fund manager, Toyota Caetano Group has been contributing to this Fund (contributions registered in the financial statements in item "Personnel costs"), having this contribution in 2010 amounted to 1.676 thousand Euros (60 thousand de Euros as of 31 December 2009), allowing the patrimonial situation of the Fund to achieve, at 31 December, 2010, approximately, 28,8 million Euros. The global responsibilities parcel estimated actuarially for the defined benefit plan relating to Toyota Caetano Group at 31 December, 2010, approximately, 29,5 million Euros. Thus, the responsibilities of the Fund on 31 December, 2010 are not fully covered by the Fund patrimonial situation being expected by the administration that this situation reverses during 2011 through the appreciation of the assets comprising the Fund.
Following the clarification of the alteration request of the existing Benefit Plan at 31 December, 2007 and the corresponding approval of ISP – Instituto de Seguros de Portugal, the Board of Directors of Toyota Caetano Portugal decided to adopt once again the Mortality Table TV 73/77 in the actuarial calculation of the responsibilities with that Plan, instead of using the Mortality Table TV 88/90, as adopted in previous years. The main reasons for this decision were:
-the information reported by the fund manager that proceeds with the actuarial calculations that the Mortality Table TV 73/77 has an adequate adhesion to the beneficiaries group of the Retirement Pensions Complement; and
-the fact that the alteration approved by the ISP – Instituto de Seguros de Portugal has interrupted the increase of the number of beneficiaries, being the present group composed by retired people, ex-employees of the Company with "Differed Pensions" and present employees and directors with ages superior to 50 years.
The actuarial presumptions used by the fund manager include the "Projected Unit Credit" calculation method, the Mortality Table and disability TV 73/77 and SuisseRe 2001, respectively, as well as well as salary increase rate, pensions increase rate and average rate of return of 2%, 0% and 5%, respectively.
The movement of the Fund responsibilities of the Company with the Defined benefit plan in 2010 can be summarized as follows:
| Responsibilities at January 1, 2010 | 29.035.762 |
|---|---|
| Cost of the current services | ---------------- 250.429 |
| Cost of interest | 1.404.113 |
| (Gains) and actuarial losses | 767.458 |
| Pension payment | (1.907.016) |
| Responsibilities at 31 December, 2010 | ---------------- 29.550.745 |
| ========= |
The allocation of this amount during 2010 to both plans (Defined benefit plan and Defined contribution plan) can be summarized as follows:
| Item | Defined benefit plan |
Defined contribution plan |
Total |
|---|---|---|---|
| Fund amount at 31 December, 2009 | 28.901.854 | 7.687.422 | 36.589.276 |
| Contributions | 1.675.929 | 366.560 | 2.042.489 |
| Real recovery of the plan assets | 79.758 | 9.871 | 89.629 |
| Pension payment | -1.907.016 | 0 | -1.907.016 |
| Transfers between Members | 61.895 | -143.017 | -81.122 |
| Fund amount at 31 December, 2010 | 28.812.418 | 7.920.838 | 36.733.256 |
As of 31 December, 2010, the breakdown of the asset portfolio of the Fund that covers the defined benefit plan was as follows:
| Asset Portfolio | Portfolio Weight | 31-12-2010 |
|---|---|---|
| Stocks | 11% | 3.054.116 |
| Bonds | 43% | 12.446.965 |
| Real Estate | 36% | 10.401.283 |
| Cash | 7% | 1.988.057 |
| Other Assets | 3% | 921.997 |
| Total | 100% | 28.812.418 |
(Amounts in Euros)
At 31 December, 2010, the investments with an individual weight greater than 5% of the total portfolio of assets in the Fund that covers the defined benefit plan was as follows:
| Asset | Portfolio Weight | 31-12-2010 |
|---|---|---|
| Cimóvel - Fundo de Investimento Imobiliário Fechado | 36% | 10.401.283 |
The evolution of the Group's responsabilities in the defined benefit plan and the assets of the Fund allocated can be summarized as follows:
| 2010 | 2009 | 2008 | 2007 | |
|---|---|---|---|---|
| Responsabilities | 29.550.745 | 29.035.762 | 28.358.503 | 28.258.700 |
| Fund's Value | 28.812.418 | 28.901.854 | 28.067.165 | 27.916.070 |
Movements occurred in provisions during the years ended as of 31 December, 2010 and 2009 were as follows:
| 2010 | |||||
|---|---|---|---|---|---|
| Opening Balances |
Increases | Disposals | Other regularizations |
Ending Balances |
|
| Accumulated impairment losses in investments (Note 7 and 8) | 1.471.651 | 1.780.000 | (1.469.656) | 1.781.995 | |
| Accumulated impairment losses in accounts Receivable (Note 12) | 13.050.481 | 268.798 | (45.184) | (395.361) | 12.878.734 |
| Accumulated impairment losses in inventories (Note 11) | 2.382.475 | 274.395 | (295.084) | 2.361.786 | |
| Provisions | 828.133 | 675.232 | (401.663) | 1.101.702 | |
| Opening Balances |
Increases | Disposals | Other regularizations |
Ending Balances |
|
|---|---|---|---|---|---|
| Accumulated impairment losses in investments (Note 10) Accumulated impairment losses in accounts Receivable (Note 12) Accumulated impairment losses in inventories (Note 11) Provisions |
1.540.978 12.508.374 3.069.099 631.184 |
513.027 115.720 911.995 |
(69.327) (34.493) (599.245) (143.951) |
- 63.573 (203.099) (571.095) |
1.471.651 13.050.481 2.382.475 828.133 |
The column "Other regularizations" in the caption "Provisions" is related to the payment of bonus to employees during 2010, regarding to their performance in 2009.
As of 31 December, 2010 and 2009, the detail of the caption "Provisions" was as follows:
| Description | Dec-10 | Dec-09 |
|---|---|---|
| Bonus to employees | 0 | 510.295 |
| Provisions for guaranties | 126.689 | 127.748 |
| Provisions for litigation in progress | 975.014 | 190.090 |
| 1.101.702 | 828.133 |
Provisions for guarantees, intend to deal with any reliability issues on used cars sold by the Group, which comprise, a warranty period of two years.
Provisions for litigation in progress, relate mainly to expenses that the Group estimates to incur with the processes that are currently in the courts.
Given the unpredictability of the moment of the reversal of the provisions, the Group did not discount the amounts.
The derivative financial instruments used by Toyota Caetano Group, existing at 31 December, 2010, refer to interest rate swaps. Although not fulfilling the requirements to be considered for hedge accounting purposes (cash flow hedging), their acquisition was made with the objective of interest rate risk coverage of Borrowings. In fact, they contribute for the reduction of exposure to the interest rate variation or for the optimization of funding costs.
The fair value at 31 December, 2010 was negative in 174.782 Euros, and includes a total exposition of 20 Million Euros, for a 3 years term, counting from December 21, 2010.
These derivative instruments were valued considering the future cash flows that are expected from those instruments. Toyota Caetano Group intends to hold these instruments until their maturity, so this kind of evaluation translates the best estimation of future cash flows resulting from these instruments.
Swaps are measured at fair value at 31 December 2010, which is determined through valuation techniques used by financial institutions that are counterparties on the derivatives contract.
As of 31 December, 2010 and 2009, Toyota Caetano Group had assumed the following financial commitments:
| Responsilities | Dec-10 | Dec-09 |
|---|---|---|
| For Notes Discounted | - | - |
| Credit | 47.561 | 38.220 |
| Guarantee of Import | 14.091.676 | 15.370.792 |
| 14.139.237 | 15.409.012 | |
At 31 December 2010 and 2009, the financial commitments classified as "Guarantees for Imports" (i) the amount of 8.080.910 Euros (8.500.000 Euros in 2009) is related with guarantees on imports provided to Customs Agency,
(ii) the amount of 2.500.000 Euros refers to a guarantee of Contrac GmbH and (iii) the amount of 1.497.178 Euros (1.300.000 GBP) refers to a guarantee related to S.C. UK, Ltd.
The income tax for the year ended as of 31 December, 2010 and 2009 was as follows:
| Dec-10 | Dec-09 | |
|---|---|---|
| Income Taxes (Note 23) | 3.449.898 | 3.369.318 |
| Deferred income taxes (Note 15) | (841.618) | 623.150 |
| 2.608.280 | 3.992.468 | |
The reconciliation of the earnings before taxes of the years ended at 31 December, 2010 and 2009 can be analyzed as follows:
| Dec-10 | Dec-09 | |
|---|---|---|
| Profit before taxation | 14.544.990 | 14.234.027 |
| Tax on profit | 26,50% | 26,50% |
| 3.854.422 | 3.772.017 | |
| Provisions not accepted as fiscal costs | -105.071 | 669.979 |
| Fiscal losses | -81.967 | 0 |
| Annulment in Property, plant and equipment | -870.049 | 25.875 |
| Annulment in deferred costs | 22.958 | 98.530 |
| Derivated financial instrutments valorization | 185.826 | -32.704 |
| Depretiation as a result of legal and free reavaluation of fixed assets | 66.334 | -69.130 |
| Effect of the reinvestments of the surplus in fixed assets sales | -58.146 | -63.288 |
| Future costs that will not be accepted fiscally | 4.853 | 0 |
| Fiscally surplus at the base of nr. 7 Art.7th 30/G 2000 Portuguese Law | -6.112 | -6.112 |
| Additional income tax | 401.626 | 409.091 |
| Others | -806.395 | -811.791 |
| 2.608.280 | 3.992.468 | |
The earnings per share for the year ended as of 31 December, 2010 and 2009 were computed based on the following amounts:
| Dec-10 | Dec-09 | |
|---|---|---|
| Net Income | ||
| Basic | 11.936.710 | 10.241.559 |
| Diluted | 11.936.710 | 10.241.559 |
| Number of shares | 35.000.000 | 35.000.000 |
| Earnings per share (basic and diluted) | 0,341 | 0,293 |
| 0,341 | 0,293 | |
During 2010 and 2009 there were no changes in the number of shares.
The main information relating to the business segments existing on December, 2010 and 2009, prepared according to the same accounting policies and criteria adopted in the preparation of the consolidated financial statements, is as follows:
| NATIONAL | FOREIGN | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Vehicles | Industrial Equipment | Others | Vehicles | Industrial Equipment | Removals | Consolidated | |||||||||
| Industrie | Commercial | Services | Rental | Machines | Services | Rental | Industrie | Commercial Machines Services | Rental | ||||||
| PROFIT | |||||||||||||||
| External sales | 38.106.185 489.328.143 21.899.030 | 5.872.328 8.823.641 2.801.900 10.873.626 | - | 15.332.147 | 19.468.567 | 311.125 | 7.838 | 103.084 -177.207.742 | 435.719.872 | ||||||
| Income | - | - | - | - | |||||||||||
| Operational income | -1.147.912 | 6.862.824 | 3.738.951 | -157.787 | -94.251 1.481.034 | 800.686 | 2.334.982 | -1.925.961 | 880.148 | 6.213 | 5.381 | -22.283 | 371.858 | 13.133.885 | |
| Financial income | -222.541 | 2.274.152 | -11.317 | -95.507 | -28.532 | -16.864 | -486.912 | 84.549 | -91.255 | -5.088 | -2.063 | -54 | -627 | 13.164 | 1.411.105 |
| Net Income with Non-Controlling Interests | -1.456.908 | 6.415.419 | 3.725.593 | -170.092 | -122.783 1.210.900 | 276.798 | 5.268.339 | -2.017.216 | 683.977 | 3.433 | 4.406 | -22.910 | -1.862.244 | 11.936.710 | |
| - | - | ||||||||||||||
| Other Information | |||||||||||||||
| Total consolidated assets | 82.062.458 223.289.765 23.896.567 15.029.133 8.598.177 | 569.003 51.630.476 42.870.854 - | 10.272.408 - | - | - | -167.048.293 | 291.170.549 | ||||||||
| Total consolidated liabilities | 37.953.317 130.689.756 | 6.312.885 13.680.081 3.724.038 | 259.411 26.521.163 18.431.311 - | 600.480 - | - | - | -87.829.579 | 150.342.863 | |||||||
| Capital Expenses | 199.276 | 571.359 | 44.164 13.860.773 | 53.619 | 9.225 | 98.129 | - | - | 90.170 - | - | - | 8.011.905 | 22.938.621 | ||
| Depreciation | 2.093.932 | 5.023.427 | 1.600.784 | 3.652.744 | 294.090 | 50.596 | 5.228.358 | - | - | 195.603 - | - | - | -136.072 | 18.003.463 | |
| NATIONAL | FOREIGN | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Vehicles Vehicles Industrial Equipment |
Others | Industrial Equipment | Removals | Consolidated | |||||||||||
| Industrie | Commercial | Services | Rental | Machines | Services | Rental | Industrie | Commercial | Machines Services | Rental | |||||
| PROFIT | |||||||||||||||
| External sales | 40.881.687 | 446.089.501 36.391.501 | 5.264.096 | 12.012.423 | 3.044.159 10.585.666 | - | 8.891.743 | 24.668.344 | 270.356 | 6.489 | 105.419 | -180.718.942 | 407.492.441 | ||
| Income | - | ||||||||||||||
| Operational income | (4.140.900) | 9.896.732 | 5.238.002 | (193.169) | (169.554) | 1.765.807 | 168.518 | 103.371 | (1.174.870) | 1.162.952 | 17.298 | 5.378 | (15.094) | 1.820.939 | 14.485.410 |
| Financial income | (226.778) | (1.385.523) | (77.777) | (96.039) | (48.080) | (19.372) | (553.828) | 74.414 | (53.157) | (20.315) | (1.493) | (38) | (659) | 2.157.262 | (251.383) |
| Net Income with Non-Controlling Interests | (4.273.417) | 4.854.553 | 4.987.044 | 440.590 | 126.022 | 1.474.266 | 363.622 | 180.744 | (1.228.027) | 851.345 | 13.342 | 4.507 | (15.753) | 2.462.721 | 10.241.559 |
| - | |||||||||||||||
| Other Information | |||||||||||||||
| Total consolidated assets | 52.570.875 | 185.414.413 24.126.872 13.444.037 16.708.767 | 10.630.416 57.381.659 37.623.716 | - | 9.915.967 | - | - | - | (116.627.285) | 291.189.437 | |||||
| Total consolidated liabilities | 26.285.691 | 108.528.876 11.389.521 12.260.645 | 8.052.018 | 5.268.818 33.104.598 13.744.464 | - | 520.984 | - | - | - | (65.594.546) | 153.561.069 | ||||
| Capital Expenses | 2.374.603 | 13.585.283 | 77.202 | (5.410.135) | (2.770.739) | 8.428 | 4.016.631 | 93 | - | 102.148 | - | - | - | (519.901) | 11.463.613 |
| Depreciation | 4.083.537 | 9.079.517 | 1.138.994 | 2.910.670 | 426.220 | 10.177 | 2.083.472 | 93 | - | 190.197 | - | - | - | (1.412.086) | 18.510.791 |
The line "Turnover" includes Sales, Service Rendered and the amount of about 9.461.606 Euros (8.340.565 Euros as of 31 December 2009) related to equipment rentals accounted in Other Operating Income.
The column "Eliminations" mainly includes the elimination of transactions between Group companies included in consolidation, mainly belonging to Vehicles segment.
During the years ended as of 31 December, 2010 and 2009, the average number of personnel was as follows:
| Personnel | Dec-10 | Dec-09 |
|---|---|---|
| Employees | 1.223 | 1.106 |
| Workers | 675 | 837 |
| 1.898 | 1.943 |
The detail of sales and services rendered by geographic markets, during the years ended as of 31 December, 2010 and 2009, was as follows:
| Dec-10 | Dec-09 | |||
|---|---|---|---|---|
| Market | Value | % | Value | % |
| National | 399.447.852 | 93,71% | 374.172.902 | 93,75% |
| Germany | 53.574 | 0,01% | 4.378 | 0% |
| United Kingdom | 1.225 | 0% | 1.494 | 0% |
| Spain | 389.421 | 0,09% | 225.180 | 0,05% |
| Palop's | 11.879.499 | 2,79% | 14.602.419 | 3,66% |
| Other markets | 14.486.695 | 3,40% | 10.118.539 | 2,54% |
| 426.258.266 | 100% | 399.124.912 | 100% | |
Additionally, sales and services rendered by activity were as follows:
| Dec-10 | Dec-09 | ||||
|---|---|---|---|---|---|
| Activity | Value | % | Value | % | |
| Vehicles | 335.675.555 | 78,75% | 310.946.223 | 77,91% | |
| Spare parts | 59.060.790 | 13,86% | 56.538.168 | 14,17% | |
| Repairs | 26.061.086 | 6,11% | 26.924.356 | 6,75% | |
| Others | 5.460.835 | 1,28% | 4.716.165 | 1,18% | |
| 426.258.266 | 100% | 399.124.912 | 100% | ||
(Amounts in Euros)
As of 31 December, 2010 and 2009, the caption "Other operating income" was as follows:
| Other operating income | Dec-10 | Dec-09 | |
|---|---|---|---|
| Equipment rented | 9.461.899 | 8.340.565 | |
| Guarantees recovered (Toyota) | 5.862.292 | 5.281.884 | |
| Advertising expenses and sales promotion recovered | 1.585.165 | 3.396.111 | |
| Commissions of automotive financial intermediation | 2.799.435 | 2.890.882 | |
| Services provided | 2.612.430 | 2.767.186 | |
| Surplus in Property, plant and equipment | 1.699.229 | 2.499.205 | |
| Subsidies | 1.151.928 | 1.863.824 | |
| Transport expenses recovered | 1.833.192 | 659.888 | |
| Payed taxes recovered (Note 38) | 1.578.720 | - | |
| Work for the company | 2.724.091 | 2.775.715 | |
| Gains on disposal of financial assets | 1.140.590 | - | |
| Cancelation of cost increases Pension Fund | - | 3.862.549 | |
| Others | 4.558.093 | 4.611.228 | |
| Total | 37.007.063 | 38.949.037 | |
The compromises assumed at 31 December, 2010 and 2009 with operating lease contracts are as follows:
| Minimum payments of operating lease | Dec-10 | Dec-09 |
|---|---|---|
| Not more than one year | 1.940.383 | 2.501.386 |
| More than one year and no more than five | 6.336.806 | 8.834.471 |
| More than five years | 2.177.498 | - |
| 10.454.687 | 11.335.857 |
Consolidated net financial results as of 31 December, 2010 and 2009 were as follows:
| Expenses and Losses | Dec-10 | Dec-09 |
|---|---|---|
| Interest | 2.854.506 | 3.496.908 |
| Other Finance Costs | 105.483 | 123.481 |
| Net Financial Results | 1.411.105 | (251.383) |
| 4.371.094 | 3.369.006 | |
| Income and Gains | Dec-10 | Dec-09 |
|---|---|---|
| Interest | 581.385 | 553.489 |
| Revenue from Real Estate (Note 8) | 2.676.444 | 2.815.517 |
| Other Financial Gains | 1.113.265 | - |
| 4.371.094 | 3.369.006 | |
Balances and transactions between the Parent Company and its affiliates, which are related entities to the Parent Company, were eliminated in the consolidation process, so they will not be disclosed in this Note. Balances and transactions details between the Group and the related parties can be summarized as follows:
| Comercial Debts | Comercial Debts | Fixed Assets | Products | Others | |||||
|---|---|---|---|---|---|---|---|---|---|
| Company | Receivable | Payable | Sales | Rendered | Obtained | Rendered | Obtained | Costs | Income |
| ALBITIN- CIMFT, LDA | 0 | 5.907 | 0 | 37.951 | 0 | 8 | 267 | 0 | 0 |
| AMORIM BRITO & SARDINHA LDA | 435 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2.253 |
| ATLANTICA, SA | 5.111 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| AUTO PARTNER IMOBILIARIA, SA | 0 | 73.490 | 0 | 0 | 0 | 0 | 370.510 | 0 | 0 |
| BAVIERA - COMÉRCIO DE AUTOMÓVEIS, SA | 1.127.639 | 83.303 | 5.012.834 | 578.040 | 0 | 2.813 | 150.474 | 170.743 | 143.653 |
| CAETANO AUTOBODY,COMERCIO DE AUTOCARROS,SA | 3.984.156 | 7.500 | 88.732 | 2.494 | 0 | 0 | 199.963 | 0 | 112.509 |
| CAETANO CITY E ACTIVE (NORTE), SA | 47.499 | 45.773 | 49.783 | 196.421 | 233.099 | 30.765 | -13.612 | 120.715 | 301.696 |
| CAETANO COLISÃO (SUL) SA | 0 | 0 | 366 | 0 | 0 | 0 | 0 | 0 | 0 |
| CAETANO DRIVE, SPORT E URBAN ( CENTRO), SA | 3.397 | 0 | 22.906 | 0 | 927.447 | 0 | 0 | 288.272 | 1.087.647 |
| CAETANO DRIVE, SPORT E URBAN ( NORTE), SA | 22.843 | 47.763 | 62.441 | 408.815 | 270.665 | 53.824 | 1.018 | 26.042 | 284.482 |
| CAETANO DRIVE, SPORT E URBAN (SUL), SA | 0 | 6.042 | 51.027 | 257.781 | 0 | -52.722 | -59.927 | 0 | 0 |
| CAETANO FORMULA (NORTE),SA | 27.345 | 65.519 | 42.158 | 249.778 | 18.210 | 15.066 | 16.501 | 4.654 | 29.434 |
| CAETANO MOTORS (NORTE), SA | 3.936 | 473 | 23.121 | 0 | 0 | 9.869 | 0 | 0 | 15.946 |
| CAETANO MOTORS (SUL), SA | 1.586 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 931 |
| CAETANO PARTS & COLISÃO(SUL), SA | 0 | 0 | 0 | 0 | 0 | 0 | 576 | 0 | 1.523 |
| CAETANO PARTS ( NORTE) , LDA | 94.138 | 692.456 | 448.576 | 1.549.690 | 0 | -213 | 300.009 | -2.171 | 51.964 |
| CAETANO POWER (PORTO), SA | -166 | 19.814 | 6.811 | 83.132 | 0 | 2.842 | 176 | 0 | 948 |
| CAETANO POWER (SUL), SA | 3.579 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 931 |
| CAETANO RETAIL (NORTE), SA | 811.923 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| CAETANO RETAIL SERVIÇOS, SA | 14.275 | 0 | 3.800 | 0 | 0 | 0 | 0 | 0 | 32.117 |
| CAETANO SPAIN, SA 219.672 211 142.908 0 0 0 562 0 0 CAETANO STAR (SUL) SA 3.853 0 0 0 0 0 0 0 3.402 CAETANO TECHNIK (SUL), SA 1.126 0 0 0 0 0 0 0 931 CAETANO TECHNIK E SQUADRA, LDA 18.389 294.177 168.457 815.951 302.994 90.396 210.325 198.950 445.600 CAETANO UK LIMITED 8.330 32.263 0 0 0 0 33.845 3.163 0 CAETANOBUS-FABRICAÇÃO DE CARROÇARIAS SA 3.064.683 388.319 4.623.383 909.986 0 0 930.749 480 2.318.355 CAETANOLYRSA, S.A 112 0 0 0 0 0 0 0 1.110 CAETSU PUBLICIDADE,SA 12.057 465.442 405 1.216 0 0 4.765.796 0 23.824 CARPLUS ( NORTE), LDA 17.794 3.699 202.873 60.789 34.379 15.526 82.931 26.538 274.494 CARPLUS (CENTRO), SA 15.639 0 34.573 7.292 0 14.791 0 0 1.841 CARPLUS-COMÉRCIO DE AUTOMÓVEIS, SA 4.913 0 6.638 0 0 0 0 0 10.689 CARVEGA-COMERCIO AUTOMOVEL,SA 3.853 0 0 0 0 0 0 0 0 CHOICE CAR-COMERCIO AUTOMOVEIS SA 0 0 0 0 0 0 0 0 0 CIBERGUIA, SA 9.954 0 0 0 0 0 0 0 0 CIMOVEL-FUNDO DE INVESTIMENTO IMOBILIÁRIO FECHADO 5.140.010 7.734 0 0 0 0 0 12.192 0 COCIGA - CONSTRUÇÕES CIVIS DE GAIA, SA 19.256 293.208 6.034 0 0 11.259 487.435 0 0 CONTRAC GMBH MASCHINEN UND ANLAGEN -25.769 110.122 786 1.420 0 0 67.961 0 0 DICUORE-DECORACAO SA 0 180 0 0 0 0 16.048 0 0 ENP-ENERGIAS RENOVÁVEIS PORTUGAL, S.A. 8.653 25.047 947 0 0 0 84.000 0 21.548 EUFER-CAETANO-ENERGIAS RENOVÁVEIS,LDA 6.438 0 0 0 0 0 0 0 14.000 FINLOG - ALUGUER E COMÉRCIO AUTO, SA 1.477.094 812.952 6.355.103 3.543.201 0 155.622 1.437.813 0 224.635 GILLCAR NORTE - COM. IND. MAQUINAS E TINTAS,SA 790 55.978 0 303.588 0 8.426 1.634 0 0 Comercial Debts Comercial Debts Fixed Assets Products Others Company Receivable Payable Sales Products Aquisition Rendered Obtained Costs Income GLOBALIA AUTOMOVILES SL 48.172 0 48.172 0 0 0 0 0 0 GRUPO SALVADOR CAETANO,SGPS, SA 2.385 2.861 0 0 0 0 1.542 0 0 GRUPO SOARES DA COSTA, SA 30.451 0 0 0 0 0 0 0 0 |
(Amounts in Euros) | ||||
|---|---|---|---|---|---|
| GUÉRIN-RENT-A-CAR(DOIS),LDA 137.008 78.963 1.067.094 0 0 1.926 328.708 134.396 159.462 |
|||||
| LUSILECTRA - VEÍCULOS E EQUIPAMENTOS, SA 36.512 86.539 225.392 299.322 0 7.877 278.738 0 20.616 |
|||||
| MDS AUTO - MEDIAÇÃO SEGUROS SA 22.969 84.234 0 0 0 0 220.063 0 78.694 |
|||||
| NOVEF-SGPS 19.500 0 0 0 0 0 0 0 0 |
|||||
| POAL, SA 17.806 0 0 0 0 0 0 0 0 |
|||||
| PORTIANGA - COMÉRCIO INTERNACIONAL E PARTICIPAÇÕES, SA 2.127 28.367 4.208 0 54.943 0 0 0 1.994 |
|||||
| RARCON - ARQUITECTURA E CONSULTADORIA, SA 12.633 13.847 0 0 0 12.126 105.885 0 0 |
|||||
| RIGOR - CONSULTORIA E GESTÃO, SA 288.192 1.743.749 132.881 82.475 200 1.734 5.390.429 35.770 135.273 |
|||||
| SALVADOR CAETANO (MOÇAMBIQUE), SARL 356.468 0 0 0 0 0 0 0 0 |
|||||
| SALVADOR CAETANO-AUTO-SGPS, SA 123.802 13.288 0 0 0 0 0 0 0 |
|||||
| SIMANOR-COMÉRCIO DE AUTOMÓVEIS, LDA 121 0 1.214 0 0 25.771 521 0 0 |
|||||
| SIMOGA - SOC. IMOBILIÁRIA DE GAIA, SA 1.643 0 0 0 0 0 0 0 0 |
|||||
| SOL PORTUGAL - VIAGENS TURISMO Lda. 0 290 0 0 0 0 26.268 0 0 |
|||||
| SPRAMO - PUBLICIDADE & IMAGEM, S.A. 0 681 0 0 0 0 0 0 0 |
|||||
| TURISPAIVA - SOCIEDADE TURÍSTICA PAIVENSE, LDA. 431 0 0 0 0 612 0 0 0 17.254.764 5.590.190 18.833.625 9.389.343 1.841.937 408.318 15.437.208 1.019.745 5.802.502 |
Goods and services purchased and sales to related parties were made at market prices.
(Amounts in Euros)
As a result of favorable decisions on the judicial impugnation processes, referring to the additional payments of the Corporate Income Tax and relating to the fiscal years of 1995 it is expected that the reimbursement of the remaining tax paid, and recognized as expenses in previous years, added by the corresponding compensatory interest, may occur soon.
During the year has been recovered approximately 1.331.000 Euros recorded under "Other operating income" connected with the judicial impugnation process related to the fiscal years of 1997, 1998 and 1999 (Note 34), remaining to receive the corresponding compensatory interest.
Regarding the tax inspection to the years 2003 and 2004, the additional assessments related with Corporate Income Tax already paid and recognizes as expenses in previous years were claimed, amounting to 725.542 Euros, as the Company understands that there are legal reasons for this procedure. During the year has been recovered approximately 218.000 Euros recorded under "other operating income" related with this judicial process (Note 34).
Regarding to the tax inspection to the year 2004, an additional Corporate Income tax assessment was received and paid during 2007, amounting to 453.895 Euros, and recorded as an expense, although it was partially judicially claimed by the Company.
Related to the tax inspection to the year 2004, additional tax assessments were received and paid during 2007, amounting to 677.473 Euros, and recorded as an expense, having the Company decided to claim them judicially. Also in relation with this tax inspection, the Group received a notification from the tax authorities to correct its tax losses that can be carried forward, and that had already been used in prior years, amounting to 354.384 Euros.
The Board of Directors and its legal advisors believe that the arguments presented by a former agent, who claims compensation for the termination of the agency contract, is not in accordance with applicable law and thereby no losses will result to the company, so it was not recorded any provision in the financial statements.
Group companies, Toyota Caetano Portugal and Caetano Auto are being subjected to a counter-ordination process by Market Authority (Autoridade de Concorrência), arising from the complaint of monopolistic practices. The process is currently under investigation and the companies have responded to all information requests. The Board of Directors and its legal advisors believe that the complaint on the basis of this process is unfounded and will not result in losses to the company, so it was not recorded any provision in the financial statements to address this situation.
The remuneration of the board members in Toyota Caetano Portugal, S.A. during the years 2010 and 2009, was as follows:
| Board Members | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Board of Directors | ||
| Fixed remunerations | 830.097 | 1.122.115 |
| Variable remunerations | 169.662 | 220.160 |
The remuneration of the Statutory Auditor, PricewatherhouseCoopers & Associados – S.R.O.C., Lda. for 2010, was as follows:
| 31.12.2010 | |
|---|---|
| Total fees related statutory audit Total fees for other services |
93.200 4.600 |
The Group adopts the necessary measures relating to the environment, aiming to fulfill current applicable legislation.
The Toyota Caetano Group Board of Directors does not estimate that there are risks related to the environmental protection and improvement, not having received any infraction related to this matter during 2010.
In September 2000, the European Commission approved a Directive regarding end-of-life vehicles and the responsibility of Producers/Distributors for dismantling and recycling them.
Producers/Distributors will have to support at least a significant part of the cost of the dismantling of vehicles that went to the market after 1 July, 2002, as well as in relation to vehicles produced before this date, but presented as of 1 January, 2007.
This legislation will impact Toyota vehicles sold in Portugal. Toyota Caetano and Toyota are closely monitoring the development of Portuguese National Legislation in order to access the impact of these operations in its financial statements.
It is our conviction, in accordance with studies performed on the Portuguese market, and taking in consideration the possible usage of the vehicles parts resulting from the dismantlement, that the effective impact of this legislation in the Company accounts will be reduced or nil.
Meanwhile, and according to the legislation in force (Dec./Law 196/2003), the Company signed a contract with "ValorCar – Sociedade de Gestão de Veículos em Fim de Vida, Lda" - a licensed entity for the management of an integrated system of ELV- the transfer of the liabilities in this process.
Since the end of the year and up to date no significant events occurred.
The consolidated financial statements were approved by the Board of Directors on 31 March, 2011. Additionally, the enclosed financial statements at 31 December 2010 are still waiting to be approved at the Share Holders General Meeting. Nevertheless, the Group Board of Directors believes that they shall be approved without any meaningful alterations.
(Amounts in Euros)
These financial statements are a translation of financial statements originally issued in Portuguese language in accordance with IFRS. In the event of discrepancies, the Portuguese language version prevails.
ADMINISTRATIVE MANAGER BOARD OF DIRECTORS ALBERTO LUÍS LEMA MANDIM JOSÉ REIS DA SILVA RAMOS - President HIROYUKI OCHIAI MIGUEL SILVA RAMALHO DA FONSECA MARIA ANGELINA MARTINS CAETANO RAMOS SALVADOR ACÁCIO MARTINS CAETANO MIGUEL PEDRO CAETANO RAMOS RUI MANUEL MACHADO DE NORONHA MENDES
Dear Shareholders,
Thus,
All members of the Board of Auditors of the TOYOTA CAETANO PORTUGAL, SA under the terms of item c) of number1 of Article 245.º of the Stock of Exchange Code, hereby confirm, as far as it is our knowledge, that the information provided in item a) of the above referred article was elaborated according to accounting rules applicable, evidencing a correct and clear image of the assets and liabilities, of the financial highlights and results of TOYOTA CAETANO PORTUGAL, SA and that the Management's Report clearly shows the business evolution, the performance and the position of the Company, evidencing as well a description of the mains risks and incertitude's to be faced.
Under these terms, we propose that the General Meeting of Shareholders: -Approves the Management's Report and Consolidated Accounts of Toyota Caetano Portugal Group referring to the period ending at 31 st December 2010.
Vila Nova de Gaia, 31st March 2011
The Board of Auditors José Jorge Abreu Fernandes Soares - President António Pimpão & Maximino Mota, SROC, represented by António Maia Pimpão
"All members of the Board of Auditors of the TOYOTA CAETANO PORTUGAL, SA under the terms of item c) of number1 of Article 245.º of the Securities of Exchange Code (Código de Valores Mobiliários), hereby confirm, as far as it is our knowledge, that the information provided in item a) of the above referred article was elaborated according to accounting rules applicable, evidencing a correct and clear image of the assets and liabilities, of the financial highlights and results of TOYOTA CAETANO PORTUGAL, SA and that the report of the management clearly shows the business evolution the performance and the position of the Company, evidencing as well a description of the mains risks and incertitude's to be faced."
José Jorge Abreu Fernandes Soares - President António Maia Pimpão on behalf of: António Pimpão & Maximino Mota, SROC
0.1. The Report was prepared in compliance with the guidelines laid down in CMVM (Comissão do Mercado de Valores Mobiliários – Portuguese Securities Market Commission) Regulation No. 1/2010 of 1 February, repealing CMVM Regulation No. 1/2007 and with the recommendations issued in September 2007. It is available on the Company website at www.toyotacaetano.pt, as well as in CMVM domain at www.cmvm.pt.
0.2. Below you can find the levels of compliance with the recommendations contained in CMVM's Corporate Governance Code and the chapters of this report where the measures taken to fulfil the recommendations are described:
| I. GENERAL SHAREHOLDERS' MEETING I.1 BOARD OF THE GENERAL SHAREHOLDERS' MEETING I.1.1 The Chairman of the General Meeting Board shall be equipped with the necessary and adequate human resources and logistic support, taking the financial position of the company into consideration. Yes I1/I2 I.1.2 The remuneration of the Chairman of the Board of the General Shareholders' Meeting shall be disclosed in the annual report on corporate governance. Yes I3. I.2 PARTICIPATION IN THE SHAREHOLDERS' MEETING I.2.1 The obligation to deposit or freeze shares in advance in order to participate in the General Shareholders' Meeting required by the Articles of Association shall not exceed 5 working days. Yes I4. I.2.2 Should the General Shareholders' Meeting be suspended, the company shall not compel share freezing during that period until the session is resumed and shall then follow the standard requirement of the first session. Yes I5. I.3 VOTING AND EXERCISING VOTING RIGHTS I.3.1 Companies shall not impose any statutory restriction on postal voting and, when adopted and permitted, on the electronic postal voting. Yes I.3.2 The statutory deadline for receiving early voting ballots by mail shall not exceed 3 working days. No I9/I11 I.3.3 The Companies' articles of association shall provide for the one share-one vote principal. No I6. I.4 QUORUM AND RESOLUTIONS I.4.1 Companies shall not set a constitutive or deliberating quorum which outnumbers that which is provided for by Law. No I8 I.5 MINUTES AND INFORMATION ON RESOLUTIONS ADOPTED I.5.1 The minutes of the General Shareholders' Meeting shall be made available to shareholders on the company's website within a 5 day period, irrespective of the fact that such information may not be legally classified as privileged information, and the list of attendees, agendas and resolutions passed at the meetings held within, at least, the last three years shall be kept on file on the company's website. Yes I13 I.6 MEASURES ON CORPORATE CONTROL |
CMVM Recommendations | Report Compliance | |
|---|---|---|---|
| I9/I10 | |||
| I.6.1 Measures adopted aiming at preventing successful takeover bids shall | |||
| respect both the company's and the shareholders' interests. Yes I20 |
|||
| I.6.2 In observance of the principle of the previous paragraph, the | |||
| companies' articles of association that limit the number of votes that may be |
| held or exercised by a sole shareholder, either individually or in concert with other shareholders, shall also provide for a resolution by the General Shareholders' Meeting, at least every 5 years, on whether the statutory provision is to prevail – without super quorum requirements as to the one legally in force - and that in such resolution, all votes issued be counted, without applying the aforementioned limitation. |
Not Applicable | |
|---|---|---|
| I.6.3 In cases such as change of control or changes to the composition of | ||
| the management body, defensive measures should not be adopted that instigate an immediate and serious asset erosion in the company, and further disturb the free transmission of shares and voluntary assessment of the performance of the management body by the shareholders. II. GOVERNING AND AUDITING BODIES II.1. GENERAL POINTS |
Yes | I20 |
| II.1.1. STRUCTURE AND REMIT | ||
| II.1.1.1 The management body shall assess the adopted model in its governance report and pin-point possible hold-ups to its operation and shall propose measures |
||
| that it deems suitable for surpassing such obstacles. II.1.1.2 Companies shall set up internal control systems in order to efficiently |
Yes | II5 |
| detect any risk to the company's activity, so as to protect its assets and keep its | ||
| corporate governance transparent. | Yes | II6 |
| II.1.1.3 The governing and auditing bodies shall establish internal regulations | ||
| and shall have these disclosed on the Company's website. | No | |
| II.1.2 INCOMPATIBILITIES AND INDEPENDENCE II.1.2.1 The Board of Directors shall include a number of non-executive |
||
| members that ensure the efficient supervision, auditing and assessment | ||
| of executive members' activity. | No | II14 |
| II.1.2.2 Non-executive members must include an adequate number of | ||
| independent directors. The size of the company and its shareholder | ||
| structure must be taken into account when devising this number and | ||
| may never be less than a fourth of the total number of directors. II.1.3 ELIGIBILITY AND APPOINTMENT |
No | II14 |
| II.1.3.1 The chairman of the audit board shall be independent and have | ||
| the appropriate skills to carry out its duties. | Yes | II21 |
| II.1.4 POLICY ON THE REPORTING OF IRREGULARITIES | ||
| II.1.4.1 The Company shall adopt a policy whereby irregularities occurring within the company, are reported. Such reports should contain the following information: i) the means through which such irregularities may be reported internally, including the persons that are entitled to receive such reports; ii) how the report is to be handled, including confidential handling, |
||
| should it be required by the reporter. | Yes | II35 |
| II.1.4.2 The general guidelines of this policy shall be disclosed on the | ||
| corporate governance report. | Yes | II35 |
| II.1.5 REMUNERATION | ||
| II.1.5.1 The remuneration of the members of the management body shall be | ||
| structured so as to enable the alignment of the interests of those members with the interests of the company. Thus: i) the remuneration of directors |
||
| carrying out executive duties should be based on performance and a | ||
| performance assessment shall be carried out periodically by the competent | ||
| body or committee; ii) the level of remuneration shall be consistent with the | ||
| maximization of the long term performance of the company, and shall |
| be dependent on the sustainability of the adopted levels of performance; iii) when the remuneration of non-executive members of the management body is not legally imposed, a fixed amount should be set exclusively. II.1.5.2 The remuneration committee and the management body shall submit to the Annual General Shareholders' Meeting for assessment a statement on the remuneration policy of the governing and auditing bodies and other directors, respectively, within the meaning of Article 248-B (3) of Código dos Valores Mobiliários (Portuguese Securities Code). Within this scope, the shareholders shall namely be informed on the criteria and main parameters proposed for the performance assessment in order to determine variable component, whether share bonuses, stock options, |
No | II33 |
|---|---|---|
| annual bonuses or other components. | Yes | II30 |
| II.1.5.3 At least one representative of the remuneration committee shall | ||
| be present at the Annual General Shareholders' Meetings. | No | I15 |
| II.1.5.4 A proposal shall be submitted at the General Shareholders' | ||
| Meeting on the approval of schemes for the allotment of shares and/or | ||
| stock options or further yet based on the fluctuations in share prices, to | ||
| members of the governing and auditing bodies and other directors within | ||
| the meaning of Article 248-B (3) of the Código dos Valores Imobiliários | ||
| (Portuguese Securities Code). The proposal shall mention all the necessary | ||
| information for a correct assessment of the scheme. The proposal must | ||
| be accompanied by the scheme regulation or in its absence, the scheme's general conditions. The main characteristics of the retirement benefit |
||
| schemes for members of the governing and auditing bodies and other | ||
| directors within the meaning of Article 248-B (3) of Código dos Valores | ||
| Mobiliários (Portuguese Securities Code), shall also be approved at | ||
| the General Shareholders' Meeting. | Not Applicable | |
| II.1.5.5 The remuneration of the members of the governing and auditing | ||
| bodies shall be individually and annually disclosed and, information on | ||
| fixed and variable components of the remuneration must be broken down, | ||
| when applicable, as well as any other remuneration received from other | ||
| companies within the group companies or companies held by shareholders | ||
| of qualifying holdings. | Yes | II31 |
| II.2. BOARD OF DIRECTORS | ||
| II.2.1 Within the limits established by law for each governing and auditing | ||
| structure, and unless the company is of a reduced size, the board of | ||
| directors shall delegate the day-to-day running of the company and the | ||
| delegated duties should be identified in the annual report on Corporate | ||
| Governance. | No | II6 |
| II.2.2 The board of directors shall ensure that the company acts in accordance | ||
| with its goals, 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 that should be considered to | ||
| be strategic due to the amounts, risk or particular characteristics. | Yes | II6 |
| II.2.3 Should the chairman of the board of directors carry out executive duties, | ||
| the board of directors shall set up efficient mechanisms for coordinating the | ||
| work of non-executive members that can ensure that these may decide upon, | ||
| in an independent and informed manner, and furthermore shall duly explain | ||
| such mechanisms to the shareholders within the scope of the corporate | ||
| governance report. | No | II17 |
| II.2.4 The annual management report shall include a description of the | ||
|---|---|---|
| activity carried out by non-executive board members and shall mention | ||
| any restraints encountered. | Yes | II6 |
| II.2.5. The management body shall promote a rotation of the member | ||
| responsible for financial matters at least after 2 mandates. | Yes | II11 |
| II.3. II.3 CHIEF EXECUTIVE OFFICER (CEO), EXECUTIVE COMMITTEE AND | ||
| EXECUTIVE BOARD OF DIRECTORS | ||
| II.3.1 When the board members that carry out executive duties are requested | ||
| by other members of governing bodies to supply information, the former | ||
| shall do so in a timely manner and the information supplied must adequately | ||
| suffice the request made. | Yes | II8 |
| II.3.2 The chairman of the executive committee shall send the convening | ||
| notices and minutes of the meetings to the chairman of the board of directors | ||
| and, when applicable, to the chairman of the audit board or of the audit committee. | Not Applicable | |
| II.3.3 The chairman of the executive board of directors shall send the convening | ||
| notices and minutes of the meetings to the chairman of the general and supervisory | ||
| board and to the chairman of the financial matters committee. | Not Applicable | |
| II.4. GENERAL AND SUPERVISORY BOARD, FINANCIAL MATTERS | ||
| COMMITTEES, AUDIT COMMITTEES AND AUDIT BOARD | ||
| II.4.1 In addition to fulfilling its auditing duties, the general and supervisory | ||
| board shall advise, follow-up and carry out on an on-going basis, the | ||
| assessment on the management of the company carried out by the executive | ||
| board of directors. In addition to other subject matters, the general and supervisory | ||
| board shall decide on: i) definition of the strategy and general policies | ||
| of the company; ii) the corporate structure of the group; and iii) decisions | ||
| that should be considered to be strategic due to the amounts, risk and particular | ||
| characteristics. | Not Applicable | |
| II.4.2 The annual reports on the activity carried out by the general and supervisory | ||
| board, the financial matters committee, the audit committee and the audit board | ||
| shall be disclosed on the company's website together with the financial statements. Yes | III15 | |
| II.4.3 The annual reports on the activity carried out by the general and supervisory | ||
| board, the financial matters committee, the audit committee and the audit board | ||
| shall include the description on the auditing activity carried out and shall mention | ||
| any restraints that they may have come up against. | Yes | III15 |
| II.4.4 The financial matters committee, the audit committee and the audit | ||
| board, depending on the applicable model, shall represent the company for | ||
| all purposes next to the external auditor, and shall propose the provider | ||
| for this services, the respective remuneration, ensure that adequate conditions | ||
| for the provision of such services are in place within the company, as well as | ||
| being the liaison officer of the company and the first recipient of the | ||
| respective reports. | Yes | II24 |
| II.4.5 Depending on the applicable model, the financial matters committee, | ||
| the audit committee and the audit board, shall assess the external auditor | ||
| on an annual basis and advise the General Shareholders' Meeting | ||
| that he/she be discharged whenever justifiable grounds are present. | Yes | II24 |
| II.5. SPECIALISED COMMITTEES | ||
| II.5.1 Unless the company is of a reduced size and depending on the | ||
| model adopted, the board of directors and the general and | ||
| supervisory board, shall set up the necessary committees in order to: | ||
| i) ensure that a competent and independent assessment of the | ||
| executive board members' 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. |
No | |
|---|---|---|
| II.5.2 Members of the remuneration committee or alike, shall be independent from the members of the management body. |
Yes | II39 |
| II.5.3 All committees shall prepare minutes of all meetings held. III. REPORTING AND AUDITING III.1 GENERAL REPORTING DUTIES |
Yes | II12. |
| III.1.1 Companies shall ensure permanent contact with the market thus upholding the principle of equality for shareholders and ensuring that investors are able to access information in a uniform fashion. To this end, the company shall keep an investor assistance office. |
Yes | III16 |
| III.1.2 The following information available at the company's website shall be disclosed in English: |
||
| a) The firm, public company status, headquarters and other data set out in Article 171 of Código das Sociedades Comerciais (Portuguese Commercial Companies Code); |
||
| b) Articles of Association; c) Identity of the members of the governing bodies and of the market liaison officer representative; |
||
| d) Investor Assistance Office – respective duties and access tools; e) Financial statements; f) Half-yearly calendar of company events; |
||
| g) Proposals sent through for discussion and voting at the General Shareholders' Meeting; h) Notices for convening the General Shareholders' Meetings. |
Yes | III16 |
0.3. In relation to the recommendations that are not met, we wish to provide the following information: I.3.2. As per the current Articles of Association, the company establishes a minimum of 5 working days in advance for receipt of postal vote.
In accordance with Article 4 (6) of the Articles of Association it is established that one vote will correspond to a group of one hundred shares.
I.4. 1 Although a constitutive quorum that outnumbers that provided for by law has not been set, the Articles of Association of the Company provide for a set of resolutions, as defined in number I8 of the Report, which require a minimum quorum of 75% of the Company's share capital, a percentage higher than that provided for by law.
II.1.1.3 The company is working towards the creation and dissemination on the Company Website of the operating regulations of the governing and auditing bodies.
II.1.2.1 The Board of Directors consists of a total of seven members, two of whom are non-executive members (refer to number II14 of the Report for further details concerning the composition of the Board), the number of non-executives accounting for 29% of the total number of board members.
II.1.2.2 The non-executive members of the board of directors (2 out of a total of 7 members), appointed by Toyota Motor Europe, may not be regarded as independent.
II.1.5.1 Despite all the measures complied with and explained in number II33 the decision to explain noncompliance stems from the non-alignment of the variable remuneration of the Board Members with a policy of medium and long-term maximization of company income.
II.1.5.3 Although a statement of remuneration of the management and audit bodies is issued and submitted for the consideration of the General Shareholders' Meeting, containing all the elements required under said Law, this statement does not specifically cover compliance with the regulations applicable to the business of the Company or reference to containment of risk-taking, since it derives from the efficient internal control system implemented within the Company.
II.2.1 No formal delegation of duties to the executive board members took place. The Board of Directors' delegation of powers is described under point II14 of the Report.
II2.3 Recommendation has not been adopted as the non-executive members are not independent as per number II14 of the report.
II.5.1 The Board of Directors has not hitherto created specialised committees with the aim of ensuring the independent assessment of the performance of the board members.
0.4. Board of Directors:
Since there are no independent elements in the composition of the Board of Directors, it is not possible to register a statement of independence from each of the board members.
Audit Board:
This body, by means of written statement, passed judgment on the independence of each of its members, having detected no fact determining the loss of such independence.
I.1. The General Shareholders' Meeting consists of all shareholders with voting rights, whose remit is to deliberate on statutory changes, evaluate the overall management and auditing of the Company, deliberate on the management report and the financial statements for the year, elect the governing bodies falling under its remit and generally deliberate on all terms submitted thereunto by the Board of Directors.
The Board of the General Shareholders' Meeting consists of 4 members, as follows:
The company makes the necessary and adequate human resources and logistic support available for the members of the board of the General Shareholders' Meeting, through the company's legal department. The latter collaborates actively in the preparation of the General Shareholders' Meetings, ensuring publication of the respective convening notices, receipt and control of all communications from shareholders and financial intermediaries, working closely and also guaranteeing all the logistics of the general shareholders' meetings.
I.2. The current board of the General Shareholders' Meeting was elected in 2007 for a period of 4 years, and ends its mandate in 2010.
I.3. The remuneration of the Chairman and Vice-Chairman of do Board of the General Shareholders' Meeting consists of a fixed amount corresponding to the actual attendance to the meetings held during 2010, amounting to 477 Euros and 281 Euros respectively.
I.4. Shareholders intending to attend must have their shares registered under their name in the Company Share Register or otherwise provide proof of their deposit at a financial intermediary, by fax or e-mail, up to five working days prior to the date set for the General Shareholders' Meeting.
I.5 The share freezing rules, in case of suspension of the General Shareholders' Meeting, result from the direct application of the general law applicable, given that the Company's Articles of Association do not include specific rules for such matters.
I.6. Under Article 4 (6) of the Articles of Association, to each group of one hundred shares corresponds one vote.
I.7. The Company's Articles of Association do not include statutory provisions providing for the existence of shares that do not confer voting rights or which provide that no voting rights are counted over a certain number, when issued by a single shareholder or shareholders related to him/her.
I.8. Only those shareholders who are legitimate owners of shares entitling them to at least one vote have the right to attend the General Shareholders' Meeting and to participate in discussions and voting. However, shareholders who do not have the minimum number of one hundred shares may group themselves in such a way as to complete that amount. In this situation, one member must be elected to represent the group, and this representative's identity must be sent by letter addressed to the Chairman of the Board of the General Shareholders' Meeting.
No defined statutory rules exist on the exercise of voting rights except where pertaining to the minimum quorum of 75% required for the approval of the following resolutions:
a) Changes to the Articles of Association;
b) Incorporation of reserve funds in the share capital, namely and specifically revaluation reserves;
c) Transfer, leasing or cession of the operation of all or an important part of the company's activities, and the succession or acceptance of a third-party entity activity;
d) Reduction or increase in capital;
e) Sharing of profits and setting of the dividend percentage, as well as the possible distribution of Free Reserve funds;
f) Issuance of bonds;
g) Election or dismissal of all or some members of the governing bodies;
h) Election or dismissal of the members of the Remuneration Committee;
i) Merger, demerger or dissolution of the Company, as well as the appointment of liquidators;
j) Acquisition, disposal, transfer, leasing, cession and encumbrances of fixed assets
with a transaction value greater than two million, five hundred thousand Euros.
In order to deliberate on the matters referred to in the previous point, if the required majority is not present during the first convening notice, the General Shareholders' Meeting will meet fifteen days later in order to deliberate on the same matters, with the requirement that the respective decision be voted by a seventy-five percent majority of the votes from present or represented shareholders.
I.9. Shareholders may exercise their postal voting rights, in accordance with the following terms and conditions:
a) Postal votes are to be sent to, and received by, the Company's headquarters, by means of registered letter with acknowledgement of receipt, addressed to the Chairman of the Board of the General Shareholders' Meeting, at least five working days prior to the date of the Meeting. The letter should include a statement issued by a financial intermediary providing proof of share ownership and also a sealed envelope containing the vote;
b) The voting paper must be signed by the legitimate shareholder or by his/her legal representative, and if the shareholder is a natural person, the vote shall be accompanied by a certified copy of his/her identification card; if the shareholder is a legal person, the signature should be certified as and empowered to exercise the voting rights.
c) Postal votes shall be considered at the moment of voting at the General Shareholders' Meeting, when they will be added to the votes cast at the meeting.
d) Only votes containing the following clear and unequivocal information shall be deemed valid:
indication of the General Shareholders' Meeting and of the item/s of the respective agenda to which the vote refers;
the specific proposal for which it is to be cast, including the indication of the respective proponent or proponents; however, the shareholder casting a postal vote in relation to a given proposal may declare that he/she votes against all other proposals pertaining to the same point of the agenda, with no further specification.
the precise and unconditional indication of the voting decision for each proposal, as well as whether the vote is maintained in case the proposal is altered by its proponent, the shareholder being permitted to make his/her vote conditional on a given proposal to the approval or rejection of another proposal, within the scope of the same agenda item.
e) It is understood that shareholders who send postal votes vote negatively on all deliberative proposals submitted after issuing the vote.
I.10. Taking into account the previous number, Toyota Caetano Portugal provides a template for exercising the postal voting right on the Company's website (www.toyotacaetano.pt).
I.11. As described in sub-paragraph a) of number I9, the vote ballots must be received by the company up to five days prior to the General Shareholders' Meeting.
I.12. We are required to inform that, in accordance with the Company's current Articles of Association, there is no provision for voting by electronic means.
I.13. Within five days of the date of the General Shareholders' Meetings, information on the resolutions adopted is made available on the Company website (www.toyotacaetano.pt ) regarding the share capital represented and the results of voting.
I.14. On the Company web page (www.toyotacaetano.pt), a record is available of the attendance list and the resolutions passed at the Company's General Shareholders' Meetings in previous years.
I.15. At the General Shareholders' Meeting held on 23 April 2010, no representative of the remuneration committee was present.
I.16. The General Shareholders' Meeting has delegated to the Remuneration Committee the specification of the remunerative policies to be applied, as well as the performance assessment of the members of the management body and the communication of information to the General Shareholders' Meeting on proposed policies and their compliance.
I.17. The company does not have a Share Allocation Scheme for members of the Management Body.
I.18. Toyota Caetano Portugal, S.A. (together with other affiliates) has constituted a pension fund by public deed on 29 December1988. This Pension Fund initially provided, initially and as long as Toyota Caetano continued with its decision to make contributions to the fund, for the workers to receive, from the date of their retirement, a non-updateable supplement to be determined based on a percentage of salary, among other conditions.
Given the economic circumstances as of 1 January 2008 Toyota modified the conditions of Salvador Caetano Pension Fund, which can be summarised as follows:
retention of a Defined Benefits system (20% of social security pensionable salary as at the date of retirement (65 years)) for current pensioners and beneficiaries of deferred pensions, and also for all current employees of member companies of Salvador Caetano Group who on 1 January 2008 were over 50 years of age with more than 15 years' service in the company;
a Defined Contribution Scheme for the rest of the employees of the group.
The members of the Board of Directors benefit from the Salvador Caetano Pension Fund provided that they comply with all the requirements demanded of any other employee in any of the companies of the group covered by the Pension Fund.
I.19. The company's Articles of Association do not include the duty, at least every five years, to subject the resolution of the General Shareholders' Meeting, to maintenance or removal of the statutory rule which provides for limiting the number of votes likely to be held or exercised by a single shareholder individually or by arrangement with other shareholders.
I.20. There are no defensive measures intended to cause automatic and serious erosion of company assets in case of transfer of control or change of composition of the management body.
I.21. This company is aware of a parasocial agreement instituted under the aegis of a retailer contract celebrated with Toyota Motor Europe NV/SA, which provides a guarantee to the parent company Toyota Motor Corporation that the company Grupo Salvador Caetano (S.G.P.S), S.A. (Salvador Caetano family holding) will keep a minimum amount of approximately 60% of the share capital of this company as long as the Toyota national retailer contract is in force. This agreement is merely a pledge of honour, as no penalty clauses are to be applied in the event of non-fulfilment.
I.22. No agreement whatsoever exists between the Company and the members of the management body and other directors, within the meaning of Article 248/B (3) of Código dos Valores Mobiliários (Portuguese Securities Code), providing for compensation in the event of resignation, dismissal without fair grounds, or termination of the employment relationship following a change in company control.
II.1. The Company consists of the following bodies:
The Board of Directors elected in 2007 for a period of 4 years, its mandate ending in 2010, consists, in accordance with the Articles of Association of Toyota Caetano Portugal, S.A., of 7 members, shareholders or not, elected by the General Shareholders' Meeting for a renewable period of four years, on whom is incumbent the practice of all management activities in the fulfilment of the operations inherent to the object of the company, with the ultimate objective of upholding the interests of the Company, its shareholders and employees. The General Shareholders' Meeting may also elect two alternate board members.
On 29 January 2010, in face of the resignations of Salvador Fernandes Caetano and Ana Maria Martins Caetano, respectively Chairman and Member of the Board, the Board of Directors appointed by cooption, for the remaining period of the four years not yet elapsed, Miguel Pedro Caetano Ramos and Rui Manuel Machado de Noronha Mendes to perform the duties of Members of the Board and José Reis da Silva Ramos as Chairman.
The Board of Directors and its duties are detailed as follows:
Audit Board, consisting of 3 permanent members and one alternate member.
The Audit Board, elected in 2007 for a period of four years, its mandate ending en 2010. As at 31 December 2010 consisted of the following Members and its duties are detailed as follows:
Statutory Accountant, in the person of José Pereira Alves, representing the company PricewaterhouseCoopers & Associados - Sociedade de Revisores Oficiais de Contas, Lda. II.2. The company has no committee which can be fitted within this number.
II.4. The annual report and opinion of the Audit Board are disclosed together with the financial statements of the Board of Directors available on the Company website (www.toyotacaetano.pt).
II.5. At Toyota Caetano Portugal, S.A., the control of risks inherent to the activity is carried out directly by the Board of Directors, given the close relationship and the time dedicated to the performance of its duties. The main risks are described in number II.9.
The financial information is made available on the official website of Comissão do Mercado de Valores Mobiliários (Portuguese Securities Market Committee) and on the official website of Toyota Caetano Portugal, S.A., (www.toyotacaetano.pt), with the market liaison officer acting as a means of disclosing this information.
II.6. Each of the divisions identified in the above organisation chart has a responsible director to whom the Board of Directors delegates competences, particularly pertaining to general management, and with whom regular meetings are held in order to analyse and follow up on activities developed.
It is incumbent on the Board of Directors to exercise wide powers, namely to actively and passively represent the Company before the authorities and courts, as well as to conduct all acts for the fulfilment of the object of the company, in particular:
a) Without the need for resolution by the shareholders, the Board of Directors may create branches, agencies, delegations or other local forms of representation, in Portugal and abroad;
b) Install or acquire, keep, transfer or shut down establishments, factories, laboratories, workshops, deposits or warehouses;
c) Acquire, dispose of and commit their own shares and bonds in any manner, as per resolutions of the General Shareholders' Meeting; acquire and dispose of other fixed assets and commit them by any means; and acquire fixed assets and, with the prior opinion of the Audit Board, dispose of them by means of any acts or contracts, including to provide security interest.
d) Negotiate with any credit institution, particularly banks, each and every operation deemed necessary, namely by raising loans according to the terms, conditions and manner deemed most convenient;
e) Make bank account transactions, deposit and withdraw moneys; issue, draw, accept and endorse letters, promissory notes, checks, statements of invoices and any other credit instruments;
f) Admit to, desist from or compound with any actions;
g) Appoint Company representatives;
h) Carry out all other duties provided for in the Articles of Association or by law.
The executive members of the Board of Directors make available any information requested by the company's Governing Bodies, namely to the Audit Board and the Board of the General Shareholders' Meeting, in a timely manner and as appropriate to the request.
The Audit Board, consisting of 3 permanent members and one alternate member, is responsible for supervising the management, verifying the compliance of the Company's accounts, accounting records and supporting documents, and ensuring compliance with the law and with the Company's Articles of Association.
It is incumbent on the Audit Board to indicate, represent the company before, and supervise the activity and independency of, the External Auditor, directly interacting with him/her in accordance with his/her duties and the operating standards.
II.7. There are no limitations in the company's articles of association on the maximum number of cumulative functions exercised by the board members on governing bodies of other companies; however, the members of the Board of Directors of Toyota Caetano Portugal, S.A. try to take part in the management of the partially held companies of greater relevance in the Group, in order to enable a closer follow-up of their activities.
II.8. All information prior to Board meetings is periodically sent to the non-executive members of the Board of Directors at least 5 working days in advance to ensure that the decisions are of an independent nature.
II.9. At Toyota Caetano Portugal, S.A., the control of risks inherent to the activity is carried out directly by the Board of Directors, given the close relationship and the time dedicated to the performance of its duties.
The main financial risk that Toyota Caetano faces derives from risk of credit to customers, i.e. the risk that a customer pays late or does not pay for property acquired primarily due to lack of liquidity. To mitigate this risk, Toyota Caetano has implemented procedures for managing credit and credit approval processes and has credit insurance where necessary.
The economic risks that Toyota Caetano incurs are: interest rate risk, exchange rate risk and liquidity risk. Interest rate risk due to the relevant proportion of variable rate debt included in the Consolidated Statement of Financial Position and the resulting interest payment cash flows. Toyota Caetano has therefore made use of derived financial instruments to cover, at least partially, its exposure to interest rate variations.
In developing its business, the Group operates internationally and has subsidiaries operating in the United Kingdom and Cape Verde (although the subsidiary that operates in the UK is currently inactive and in 2008 changed its operating currency to the Euro). The exchange rate risk thus results essentially from commercial transactions for the purchase and sale of products and services in currencies other than the functional currency of each business.
Exchange rate risk management policy seeks to minimize the volatility of investments and operations denominated in foreign currency, making the Group's income less sensitive to exchange rate fluctuations.
The Group's exchange rate risk management policy is geared towards a case-by-case assessment of the opportunity to cover this risk, particularly in view of the specific circumstances of the countries and currencies concerned.
Liquidity risk is defined as the risk of lack of ability to settle or meet obligations under the terms defined and at a reasonable price.
The existence of liquidity in Group companies means that parameters are set for operation depending on the management of that liquidity enabling to maximize the return and minimize the opportunity costs associated with holding that liquidity safely and efficiently.
Liquidity risk management at Toyota Caetano Group aims at:
(i) Liquidity, i.e. guaranteeing continued access in the most efficient way to sufficient funds to meet current payments on their due dates, as well as any requests for funds, within the times set for such, even where these are not planned;
(ii) Safety, i.e. minimizing the probability of default in repayment of any application of funds; and
(iii) Financial efficiency, i.e. ensuring that Companies maximize the value/minimize the opportunity cost of holding excess liquidity in the short term.
Any surplus liquidity in the Group is applied to the amortization of short-term debt, as per the criteria of economic and financial reasonableness.
II.10. It is incumbent on the Board of Directors to exercise wide powers, namely to actively and passively represent the Company before the authorities and courts, as well as to conduct all acts for the fulfilment of the object of the company, in particular:
a) Without the need for resolution by the shareholders, the Board of Directors may create branches, agencies, delegations or other local forms of representation, in Portugal and abroad;
b) Install or acquire, keep, transfer or shut down establishments, factories, laboratories, workshops, deposits or warehouses;
c) Acquire, dispose of and commit their own shares and bonds in any manner, as per resolutions of the General Shareholders' Meeting; acquire and dispose of other fixed assets and commit them by any means; and acquire fixed assets and, with the prior opinion of the Audit Board, dispose of them by means of any acts or contracts, including to provide security interest.
d) Negotiate with any credit institution, particularly banks, each and every operation deemed necessary, namely by raising loans according to the terms, conditions and manner deemed most convenient;
e) Make bank account transactions, deposit and withdraw moneys; issue, draw, accept and endorse letters, promissory notes, checks, statements of invoices and any other credit instruments;
f) Admit to, desist from or compound with any actions;
g) Appoint Company representatives;
h) Carry out all other duties provided for in the Articles of Association or by law.
There is no explicit provision for granting specific powers in respect of resolutions for increase in capital.
II.1.1. The Board of Directors works in a collegiate manner, performing management and coordination duties for the different activities of the Company, but with no formal distribution of business branches, with the exception of the financial business branch which is the responsibility of the Member Rui Manuel Noronha Machado Mendes, thus promoting the rotation proposed in CMVM recommendations.
In accordance with Article 17 of Toyota Caetano Portugal's Articles of Association, the appointment and replacement of the members of the management body abide by the following rules:
a) By means of the calling in of alternate members by the Chairman of the Board of Directors, respecting the order in which they appear on the list submitted to the General Shareholders' Meeting;
b) In case there are not alternate members, through co-option, to be carried out within sixty days following a definitive absence, unless the number of acting board members is insufficient for the Board of Directors to be able to operate;
c) Should no co-option have been effected, the alternate member shall be designated by the Audit Board; d) By election of a new board member.
II.12. The Board of Directors holds regular meetings, its resolutions being valid only when the majority of its members are present.
During the course of 2010, the Board of Directors convened 16 times, and the corresponding minutes are registered in the Board of Directors' book of minutes.
The Audit Board convened four times during 2010.
The Remuneration Committee convened once during 2010.
II.13. Number II.12 refers the number of meetings held by the Board of Directors.
II.14. Among the current members of the Board of Directors of Toyota Caetano Portugal, S.A., 5 carry out executive duties, whereas the non-resident members carry out non-executive duties, to wit:
José Reis da Silva Ramos – Executive member
Hiroyuki Ochiai – Non-executive member
Miguel Silva Ramalho da Fonseca – Non-executive member
Maria Angelina Martins Caetano Ramos - Executive member
Salvador Acácio Martins Caetano – Executive member
Miguel Pedro Caetano Ramos – Executive member
Rui Manuel Machado Noronha Mendes – Executive member
Shigeki Enami – Non-executive member
The executive members of the Board of Directors of Toyota Caetano Portugal, S.A. cannot be considered independent insofar as they are all members of the Board of Directors of Grupo Salvador Caetano (S.G.P.S), S.A., a company holding approximately 60% of the share capital of Toyota Caetano Portugal, S.A., and which exercises a dominant influence over the latter.
The non-executive members do not perform any other role in resident companies and there is no incompatibility in the exercise of their duties. However, they may not be considered independent as they represent Toyota Motor Europe, a company holding approximately 27% of the share capital of Toyota Caetano Portugal, S.A.
II.15. The assessment of the independence of the Board of Directors' members carried out by the management body is based on Article 414 (5) of Código das Sociedades Comerciais (Portuguese Commercial Companies Code).
II.16. The appointment of non-executive board members is in accordance with Article 17 of Toyota Caetano Portugal, S.A.'s Articles of Association, and abiding by the following rules:
a) By means of the calling in of alternate members by the Chairman of the Board of Directors, respecting the order in which they appear on the list submitted to the General Shareholders' Meeting;
b) In case there are not alternate members, through co-option, to be carried out within sixty days following a definitive absence, unless the number of acting board members is insufficient for the Board of Directors to be able to operate;
c) Should no co-option have been effected, the alternate member shall be designated by the Audit Board; d) By election of a new board member.
II.17. The non-executive board members, having non-resident status, participate in the Board of Directors' meetings by videoconference. All information prior to the Board of Directors' meetings is sent at least 5 working days in advance. In view of the information periodically submitted to them, in these and other meetings, raising the issues they judge to be relevant for their elucidation on the activity which has been carried out. However there is no reference in the annual management report on the activity they have performed.
II.18. All the executive members of the Board of Directors have always carried out their professional activities within the management of the Companies of Grupo Salvador Caetano, where they were members of the Governing Bodies.
Of these, the Chairman holds 125,590 Company shares and the executive member Miguel Pedro Caetano Ramos holds 1,130 Company shares.
II.19. The executive members of the Board of Directors also carry out management duties in the following companies:
| NAME | COMPANY | ROLE |
|---|---|---|
| RIGOR - Consultoria e Gestão, S.A. | Chairman of BD | |
| SALTANO – Invest. e Gestão, SGPS, S.A. | Chairman of BD | |
| CAETANO AUTO, S.A. | Chairman of BD | |
| CAETANO RENTING, S.A | Chairman of BD | |
| CAETANOBUS – Fabricação. de Carroçarias, S.A. | Chairman of BD | |
| CAETANO COMPONENTS, S.A. | Chairman of BD | |
| LUSILECTRA – Veículos. e Equipamentos, S.A. | Chairman of BD | |
| FUNDAÇÃO SALVADOR CAETANO | Chairman of BD | |
| José Reis da Silva Ramos | Soc. Imobiliária Quinta da Fundega, S.A. | Chairman of BD |
| Chairman of BD | CABO VERDE MOTORS, SARL | Chairman of BD |
| TOYOTA CAETANO PORTUGAL, | PORTIANGA - Com. Int. e Participações, S.A. | Chairman of BD |
| S.A | SALVADOR CAETANO - Indústria (SGPS), S.A. | Chairman of BD |
| AUTO PATNER - Comércio de Automóveis, S.A. | Chairman of BD | |
| GRUPO SALVADOR CAETANO, SGPS, S.A. | Member of BD | |
| ATLÂNTICA – Comp. Portuguesa de Pesca, S.A. | Member of BD | |
| RARCON - Arquitectura e Consultadoria, S.A | Member of BD | |
| MDS AUTO - Mediação de Seguros, S.A. | Member of BD | |
| MOVICARGO - Movimentação Industrial, Lda. | Manager | |
| CRUSTACIL – Comércio de Marisco, Lda. | Manager | |
| COVIM - Soc. Agrícola, Silvícola e Imobiliária, S.A. | Chairman of the Board of GM | |
| NOVEF – SGPS, S.A. | Vice-Chairman of Board of GM |
| NAME | COMPANY | ROLE | ||
|---|---|---|---|---|
| GRUPO SALVADOR CAETANO, SGPS, S.A. | Chairman of BD | |||
| ATLÂNTICA – Comp. Portuguesa de Pesca, S.A. | Chairman of BD | |||
| POAL - Pvimentações e Obras Acessórias, S.A. | Chairman of BD | |||
| LAVORAUTO - Administração Imb. E Cons. de Empresas, S.A. Chairman of BD | ||||
| COMP. ADMINIST. IMOBILIÁRIA SÃO BERNARDO, S.A. | Chairman of BD | |||
| AUTO PARTNER - Imobiliária, S.A. | Chairman of BD | |||
| CAETANO, SGPS, S.A. | Chairman of BD | |||
| COCIGA – Construções Civis de Gaia, S.A. | Chairman of BD | |||
| SIMOGA – Soc. Imobiliária de Gaia, S.A. | Chairman of BD | |||
| TURISPAIVA – Soc. Turística Paivense, S.A | Chairman of BD | |||
| COVIM - Soc. Agrícola, Silvícola e Imobiliária, S.A. | Chairman of BD | |||
| NOVEF, SGPS, S.A. | Chairman of BD | |||
| RARCON - Arquitectura e Consultadoria, S.A | Member of BD | |||
| SALTANO – Invest. e Gestão, SGPS, S.A. | Member of BD | |||
| CAETANO AUTO, S.A. | Member of BD | |||
| PORTIANGA – Com. Int. e Participações, S.A. | Member of BD | |||
| BAVIERA - Comércio de Automóveis, S.A. | Member of BD | |||
| IBERICAR, Sociedad Iberica del Automóvil | Member of BD | |||
| CRUSTACIL – Comércio de Marisco, Lda. | Manager | |||
| RIGOR - Consultoria e Gestão, S.A. | Chairman of the Board of GM | |||
| CAETANO RETAIL (NORTE) II, SGPS,S.A | Chairman of the Board of GM | |||
| AUTO PATNER - Comércio de Automóveis, S.A. | Chairman of the Board of GM | |||
| Maria Angelina Martins | CAETANO COLISÃO (NORTE), S.A. | Chairman of the Board of GM | ||
| Caetano Ramos | CAETANO RETAIL (NORTE), SGPS, S.A. | Chairman of the Board of GM | ||
| Member of the Board of Directors | CAETANO CITY E ACTIVE (NORTE), S.A. | Chairman of the Board of GM | ||
| TOYOTA CAETANO PORTUGAL, | SALVADOR CAETANO-AUTO- SGPS, S.A. | Chairman of the Board of GM | ||
| S.A. | SALVADOR CAETANO CAPITAL (SGPS), S.A. | Chairman of the Board of GM | ||
| CAETSU PUBLICIDADE, S.A. | Chairman of the Board of GM | |||
| Soc. Imob. Quinta da Fundega, S.A. | Chairman of the Board of GM | |||
| CAETANO STAR (SUL), S.A. | Chairman of the Board of GM | |||
| CARPLUS (SUL),S.A. | Chairman of the Board of GM | |||
| CAETANO POWER (SUL), S.A. | Chairman of the Board of GM | |||
| CAETANO DRIVE, SPORT E URBAN (SUL), S.A. | Chairman of the Board of GM | |||
| CAETANO RENTING, S.A | Chairman of the Board of GM | |||
| CAETANO MOTORS (SUL),S.A. | Chairman of the Board of GM | |||
| CAETANO RETAIL (SUL) SGPS, S.A. | Chairman of the Board of GM | |||
| CAETANO DRIVE, SPORT E URBAN (CENTRO), S.A | Chairman of the Board of GM | |||
| CAETANO RETAIL (CENTRO), SGPS, S.A. | Chairman of the Board of GM | |||
| TOVICAR – Sociedade de Com. de Automóveis, S.A. | Chairman of the Board of GM | |||
| SALVADOR CAETANO - AUTO, SGPS, S.A. | Chairman of the Board of GM | |||
| CAETANO PARTS & COLISÃO (SUL), S.A. | Chairman of the Board of GM | |||
| CAETANO TECHNIK (SUL), S.A. | Chairman of the Board of GM | |||
| CAETANO RETAIL SERVIÇOS, S.A. | Chairman of the Board of GM | |||
| CAETANO DRIVE, SPORT E URBAN (NORTE), S.A. | Chairman of the Board of GM | |||
| CAETANO FÓRMULA (NORTE), S.A. | Chairman of the Board of GM | |||
| CAETANO POWER (PORTO), S.A. | Chairman of the Board of GM | |||
| CARPLUS (CENTRO),S.A. | Chairman of the Board of GM | |||
| CAETANO MOTORS (NORTE), S.A. | Chairman of the Board of GM | |||
| ENP - Energias Renováveis Portugal, S.A. | Chairman of the Board of GM |
| NAME | COMPANY | ROLE |
|---|---|---|
| BAVIERA – Comércio de Automóveis, S.A. | Chairman of BD | |
| CAETANO RETAIL (SUL) SGPS, S.A. | Chairman of BD | |
| SALVADOR CAETANO-AUTO, SGPS, S.A. | Chairman of BD | |
| TOVICAR – Sociedade de Com. de Automóveis, S.A. | Chairman of BD | |
| CAETANO RETAIL (SUL) SGPS, S.A. | Chairman of BD | |
| CAETANO RETAIL (NORTE), SGPS, S.A. | Chairman of BD | |
| CAETANO RETAIL (CENTRO), SGPS, S.A. | Chairman of BD | |
| GRUPO SALVADOR CAETANO, SGPS, S.A. | Vice-Chairman of BD | |
| RIGOR - Consultoria e Gestão, S.A. | Member of BD | |
| SALTANO – Invest. e Gestão, SGPS, S.A. | Member of BD | |
| CAETANO, SGPS, S.A. | Member of BD | |
| CAETANO RENTING, S.A | Member of BD | |
| PORTIANGA – Com. Int. e Participações, S.A. | Member of BD | |
| COCIGA – Construções Civis de Gaia, S.A. | Member of BD | |
| TURISPAIVA – Soc. Turística Paivense, S.A | Member of BD | |
| SIMOGA – Soc. Imobiliária de Gaia, S.A. | Member of BD | |
| CABO VERDE MOTORS, SARL | Member of BD | |
| GILLCAR NORTE - Comércio e Ind. De Máquinas e Tintas, S.A. Member of BD | ||
| FUNDAÇÃO SALVADOR CAETANO | Member of BD | |
| Salvador Acácio Martins | Amorim Brito & Sardinha, Lda. | Manager |
| Caetano | ALBITIN - Comércio e Industria de Maq. e Farram. e Tintas, Lda.Manager | |
| Member of the Board of Directors | CAETANO AUTO, S.A. | Chairman of the Board of GM |
| TOYOTA CAETANO PORTUGAL, | SALVADOR CAETANO INDÚSTRIA (SGPS), S.A. | Chairman of the Board of GM |
| S.A. | CAETANOBUS - Fabricação de Carroçarias, S.A. | Chairman of the Board of GM |
| LUSILECTRA – Veículos. e Equipamentos, S.A. | Chairman of the Board of GM | |
| MDS AUTO - Mediação de Seguros, S.A. | Chairman of the Board of GM | |
| CATEDRAL DO AUTOMÓVEL, S.A. | Chairman of the Board of GM | |
| LAVORAUTO - Administração Imb. E Cons. de Empresas, S.A. Chairman of the Board of GM | ||
| AUTO PARTNER - Imobiliária, S.A. | Chairman of the Board of GM | |
| CHOICE CAR – COMÉRCIO DE AUTOMÓVEIS, S.A. | Chairman of the Board of GM | |
| CHOICE CAR - SGPS, S.A. | Chairman of the Board of GM | |
| FINLOG - Aluguer e Comércio de Automóveis, S.A. | Chairman of the Board of GM | |
| CARPLUS – Comércio de Automóveis, S.A. | Chairman of the Board of GM | |
| LUSO ASSISTÊNCIA - Gestão de Acidentes, S.A. | Chairman of the Board of GM | |
| ISLAND RENT, Aluguer de Automóveis, S.A. | Chairman of the Board of GM | |
| COMP. ADMINIST. IMOBILIÁRIA SÃO BERNARDO, S.A. | Chairman of the Board of GM |
| NAME | COMPANY | ROLE |
|---|---|---|
| CAETSU PUBLICIDADE, S.A. | Chairman of BD | |
| SALVADOR CAETANO CAPITAL (SGPS), S.A. | Chairman of BD | |
| ENP - Energias Renovaveis Portugal, S.A. | Chairman of BD | |
| MERSOL - Projectos Solares de Mértola, S.A. | Chairman of BD | |
| CATEDRAL DO AUTOMÓVEL, S.A. | Chairman of BD | |
| CHOICE CAR - SGPS, S.A. | Chairman of BD | |
| VAS CABO VERDE, Sociedade Unipessoal, S.A. | Chairman of BD | |
| GLOBALWATT, SGPS, S.A. | Chairman of BD | |
| VAS AFRICA, (SGPS), S.A. | Chairman of BD | |
| CAETANOLYRSA, S.A. | Chairman of BD | |
| COVIM - Soc. Agrícola, Silvícola e Imobiliária, S.A. | Vice-Chairman of BD | |
| AUTOMOCION PENINSULAR INMEMBLES, S.A. | Vice-Chairman of BD | |
| IBERICAR, Sociedad Iberica del Automóvil, S.A. | Vice-Chairman of BD | |
| GRUPO SALVADOR CAETANO, SGPS, S.A. | Member of BD | |
| BAVIERA - Comércio de Automóveis, S.A. | Member of BD | |
| MDS AUTO - Mediação de Seguros, S.A. | Member of BD | |
| AUTO PARTNER - Imobiliária, S.A. | Member of BD | |
| CAETANO RETAIL (NORTE) II, SGPS, S.A. | Member of BD | |
| CAETANO RETAIL (NORTE), SGPS, S.A. | Member of BD | |
| CAETANO RENTING, S.A | Member of BD | |
| TOVICAR - Sociedade de Automóveis, S.A. | Member of BD | |
| Miguel Pedro Caetano Ramos | CAETANO RETAIL (SUL) SGPS, S.A. | Member of BD |
| Member of the Board of Directors | LAVORAUTO, S.A. | Member of BD |
| TOYOTA CAETANO PORTUGAL, S.A |
RIGOR - Consultoria e Gestão, S.A. | Member of BD |
| SALVADOR CAETANO.AUTO, SGPS, S.A. | Member of BD | |
| COMP. ADMINIST. IMOBILIÁRIA SÃO BERNARDO, S.A. | Member of BD | |
| CARPLUS – Comércio de Automóveis, S.A. | Member of BD | |
| CHOICE CAR – COMÉRCIO DE AUTOMÓVEIS, S.A. | Member of BD | |
| FINLOG - Aluguer e Comércio de Automóveis, S.A. | Member of BD | |
| LUSO ASSISTÊNCIA - Gestão de Acidentes, S.A. | Member of BD | |
| ISLAND RENT, Aluguer de Automóveis, S.A. | Member of BD | |
| CAETANO RETAIL (CENTRO), SGPS, S.A. | Member of BD | |
| DICUORE - Decoração, S.A. | Member of BD | |
| IBERICAR TECHNIK, S.A. | Member of BD | |
| QUERDILLER, S.A. | Member of BD | |
| IBERICAR QUERMOTOR, S.A. | Member of BD | |
| IBERICAR CARROCERIA CENTRO, S.A. | Member of BD | |
| IBERICAR RECAMBIOS CENTRO, S.L. | Member of BD | |
| IBERICAR GALICIA AUTO, S.L. | Member of BD | |
| IBERICAR CATALUÑA AUTO, S.L. | Manager | |
| IBERICAR HOLDING ANDALUCIA, S.L. | Manager | |
| LIDERAa SOLUCIONES, S.L. | Manager | |
| SOL GREEN WATT, S.L. | Manager | |
| GUÉRIN – RENT – A – CAR (DOIS), LDA. | Manager | |
| CENTRAL SOLAR DE CASTANHOS, S.A. | Chairman of the Board of GM | |
| RARCON, S.A. | Chairman of the Board of GM |
| NAME | COMPANY | ROLE |
|---|---|---|
| CAETANO AUTOBODY - Comércio de Autocarros, S.A. | Member of BD | |
| Rui Manuel Machado de | CAETANOBUS - Fabricação de Carroçarias, S.A. | Member of BD |
| Noronha Mendes Member of the Board of Directors |
CAETANO SPAIN, S.A. | Member of BD |
| SALVADOR CAETANO INDÚSTRIA (SGPS), S.A. | Member of BD | |
| TOYOTA CAETANO PORTUGAL, | FUNDAÇÃO SALVADOR CAETANO | Member of BD |
| S.A | MOVICARGO - Movimentação Industrial, Lda. | Manager |
Non-executive members do not perform any management duties in other companies, carrying out their professional activity in Toyota Motor Europe.
II.21 The members of Toyota Caetano Portugal, S.A.'s Audit Board carry out the following duties:
Makino Kenichiro Member
António Pimpão & Maximino Mota, SROC represented by António Maia Pimpão – Member
Fernando Sousa Matos Pires – Alternate Member
The Chairman of the Audit Board is independent, according to the criteria laid down in Article 414 (5) of Código das Sociedades Comerciais (Portuguese Commercial Companies Code), and has the appropriate skills.
II.22. During the past five years, the members of the Audit Board, with a degree in Economics, have carried out other duties in the companies indicated below.
The members of the Audit Board hold no Company shares.
The current Audit Board, elected in 2007 for a period of four years, its mandate ending in 2010.
II.23. During the past five years, the members of the Audit Board have carried out other duties in the following companies:
José Jorge Abreu Fernandes Soares (degree in Economics):
PORTIANGA – Comércio Internacional e Participações, S.A - Chairman of the Board of the General Shareholders' Meeting
Caetano Auto, S.A. - Chairman of the Audit Board
Baviera – Comércio de Automóveis, S.A. - Member of the Audit Board
Kenichiro Makino: performs no duties in other companies.
António Maia Pimpão (degree in Economics):
Statutory Accountant and Single Auditor in the following companies:
Companhia Administradora Imobiliária São Bernardo, S.A.
PORTIANGA – Comércio Internacional e Participações, S.A.
COCIGA – Construções Civis de Gaia, S.A.
Pavigrés – Cerâmicas, SA
Rarcon - Arquitectura e Consultadoria, SA
Mercado Abastecedor da Região de Coimbra, SA
Policeram - Comercio de Materiais Cerâmicos, S.A.
Nuno & Gradeço – Materiais de Construção, SA
Sulpastéis, Comércio de Produtos Alimentares Congelados, Lda
Novef - SGPS, SA
Milénio 3 - Sistemas Electrónicos, SA
Statutory Accountant and Chairman of the Audit Board Armazéns de Mercearia A. Monteiro, SA Statutory Accountant and alternate Single Auditor SIMOGA – Sociedade Imobiliária de Gaia, S.A. GORNOR - Investimentos Imobiliários, S.A. João Fernandes da Silva, SA Construções Gabriel A.S. Couto, SA PROANG - Comércio e Serviços, SA Covim - Sociedade Agrícola, Silvícola e Imobiliária, SA Algimo - Gestão Imobiliária, SA. Alternate member of the Audit Board Baviera – Comércio de Automóveis, SA.
II.24. The Audit Board has the duty of supervising the activity and independence of the External Auditor, interacting with him under the terms of his/her competences and operating standards (as described under number II3 of the Report), and is the first recipient of the External Auditor's Report. II.29. The policy for remuneration of the directors responsible for each of the divisions identified in the functional organization chart of the Company presented in section II.3. of this report is structured based on a balance between the level of responsibility, in the fixed part, and performance against targets set both at the level of budgetary follow-up and for the result of previously agreed projects, in the variable part.
II.30. The Remuneration Committee after reviewing the current economic situation and the possible performance of the company in 2010 is of the opinion that fixed remunerations for all elements of the governing bodies should be maintained.
Regarding the policies to be followed in respect of the variable remuneration of the Management Body, this has been exclusively dependent on the annual net profits obtained by the company, following in a certain way the dividend payment and employee bonus policy approved by the General Shareholders' Meeting which, in historical terms and in light of the aggregate total of the Board of Directors, has represented about 3% of annual net income, but with some flexibility in the range of allocation, which may fall to a lower limit of 1.5% and never exceed the upper limit of 4%.
II.31. The remunerations obtained by the members of the Board of Directors of Toyota Caetano Portugal, S.A. during the financial year of 2010 for the performance of their duties in the Company and in other Companies of the Group are as follows:
| Fixed | Variable | ||||
|---|---|---|---|---|---|
| Remunerations | Component | Component | Total | ||
| Toyota | Toyota | ||||
| Group | Group | ||||
| Company | Companies | Company | Companies | ||
| Executive Board Members | 419,265 | 410,833 | 103,098 | 66,564 | 999,760 |
| José Reis da Silva Ramos | 152,618 | 177,328 | 27,500 | 32,057 | 389,503 |
| Maria Angelina Martins Caetano Ramos | 112,175 | 192,028 | 27,500 | 34,507 | 366,210 |
| Salvador Acácio Martins Caetano | 51,485 | 41,477 | 27,500 | 120,462 | |
| Rui Manuel Machado Noronha Mendes | 102,987 | 20,598 | 123,585 | ||
| Miguel Pedro Caetano Ramos | |||||
| Non- Executive Board Members | 0 | 0 | 0 | 0 | 0 |
| Total | 419,265 | 410,833 | 103,098 | 66,564 | 999,760 |
The remunerations obtained by the members of the Audit Board of Toyota Caetano Portugal, S.A. during the financial year of 2010 for the performance of their duties in the Company were as follows:
| Remunerations | Fixed Component | Variable Component | |
|---|---|---|---|
| José Jorge Abreu Fernandes Soares | 12.626 | 0 | |
| Kenichiro Makino | 0 | 0 | |
| António Pimpãp & Maximino Mota, SROC | 8.593 | 0 | |
| Fernando Sousa Matos Pires | 3.946 | 0 | |
| Total | 25.165 | 0 |
II.32 As per the Remuneration Committee's attached statement, there are mechanisms within the Company that permit alignment of the interests of the members of the Management Body with the interests of the company.
II.33. As per approval by the Remuneration Committee, the fixed remuneration of the members of the Board of Directors is not directly dependent on the evolution of the Company share price or on income obtained.
However, all members of the Management Body are dependent on company income as regards the variable component of their annual remuneration, in what is usually designated as a "Balance Reward" or annual bonus, corresponding to an annual performance bonus calculated taking into account the assessment carried out by the Remuneration Committee within the scope of its duties.
II.34. Management body non-executive board members are not remunerated as per Number II.3.1.
II.35. The reporting of irregularities shall be effected through the delivery of a written document or by internal e-mail addressed to the market liaison officer. This officer will in turn use all available means for the analysis and verification of the reported facts, keeping, if required, the confidentiality of the initial information and firstly reporting the findings to the Board of Directors, who will then consider if they shall be disclosed to the market, within legally established parameters, if such disclosure is deemed necessary.
These reports are filed for a minimum period of five years, and are made available to the Auditors on demand.
II.36. The Remuneration Committee consists of the following members:
II.37. The Remuneration Committee held one meeting in 2010.
II.38. The professional experience of the members of the Remuneration Committee allows them to exercise their responsibilities effectively, while safeguarding the interests of the Company.
II.39. No member has any affinity or kinship up to and including third degree lineage with any member of the management body or their spouses.
III.1. As at 31 December 2010, the Company share capital consists of 35,000,000 fully subscribed and paid bearer shares, each with a nominal value of 1 Euro, all shares being listed on Euronext Lisbon. III.2. Qualified holdings in the share capital of Toyota Caetano Portugal, S.A:
| Salvador Fernandes Caetano | 3.998% |
|---|---|
| Maria Angelina Caetano Ramos and Salvador Acácio Caetano Ramos | |
| through Grupo Salvador Caetano (S.G.P.S.), S.A. | 60% |
| through Cociga | 0.008% |
| 60.008% | |
| Toyota Motor Europe NV/SA | 27% |
| Millenium BCP – Gestão de Fundos de Investimentos, S.A. | 3.96% |
III.6. Changes to the company's Articles of Association are only possible by means of approval at the General Shareholders' Meeting by a 75% majority of the share capital.
III.7. The company does not have a Share Allocation Scheme for employees.
III.8. During the financial year 2010, 14,786 shares were traded on the Stock Exchange.
No abnormal transaction activities were registered, these having maintained a low rate throughout the year.
The following chart shows the evolution of the company share price. The evolution of the share price as a reflex of the crisis in the financial markets, showed a negative trend with a value of 4.10 Euros at the beginning of the year – its maximum value – and a year-end value of 2.49 Euros. On the other hand, no changes in share price as a direct impact of the disclosure of income (08 April 2010) or of dividend payments (29 April 2010) were registered.
III.9. The Company's dividend payment policy can be evaluated in the following table, which registers the situation for the last five financial years:
| Items | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 |
|---|---|---|---|---|---|---|
| Net Income (mEuros) | 10,652 | 11,034 | 3,177 | 10,706 | 7,802 | 7,133 |
| Not Payable | 3,010 | 5,666 | ||||
| Payable | 7,642 | 5,368 | 3,177 | 10,706 | 7,802 | 7,133 |
| Dividends (mEuros) | 6,300 | 5,250 | 2,450 | 8,750 | 5,950 | 3,500 |
| Dividend per Share (Euros) | 0.18 | 0.15 | 0.07 | 0.25 | 0.17 | 0.10 |
In brief, despite being always conditioned by its own payable net profits and by the expectations thereby created for subsequent period(s), up until 2005 the Company had been paying dividends within a percentage range of 30% to 50% of the profits.
Taking into account the level of equity achieved in the meanwhile, from 2006 the Company has been paying dividends within a percentage range of 75% to 96% of payable net profits obtained. In 2010 this percentage is around 82%.
III.10. Toyota Caetano Portugal, SA. has no share allocation or stock option scheme for the members of the governing bodies or employees.
III.11. During the financial year 2010, no business was conducted between the Company and the members of the governing bodies (both management and audit), holders of qualified holdings or companies bearing a control or group relationship, other than under the normal market conditions pertaining to operations of the same kind, such business always having been included in the normal activities of the company.
III.12. During financial year 2010 no business or transactions were performed between the company and holders of qualified holdings or entities with whom they have any relationship, pursuant to Article 20. of Código dos Valores Mobiliários (Portuguese Securities Code), outside of normal market conditions.
III.13. The Audit Board, within the scope of its remit, in accordance with the previous points, did not conduct a preliminary assessment of the business carried out between the company and holders of qualified holdings or entities with whom they have any relationship, pursuant to Article 20 of Código dos Valores Mobiliários (Portuguese Securities Code).
III.14. There was no business subject to the prior intervention of the audit body.
III.15. Through its official Website (www.toyotacaetano.pt), Toyota Caetano Portugal, SA. provides financial information on its individual and consolidated activities. Also available on this page are documents containing the Company's financial statements for the last few years, the agendas and resolutions adopted in the last three years and the minutes of the General Shareholders' Meetings both in Portuguese and English.
III.16. Although no Investor Assistance Office has yet been formally established, this task is carried out by the market liaison officer. Whenever necessary, the market liaison officer ensures the provision to the market of all relevant information regarding noteworthy events, facts susceptible of inclusion within the framework of relevant facts, quarterly disclosure of income and answers to any clarification requests made by investors or by the general public as regards financial information of a public nature.
Investors desiring to obtain information can contact the Company by the following means: Market liaison officer:
Rui Manuel Machado de Noronha Mendes Telephone: +351 227 867 203 E-mail: [email protected]
III.17. The remunerations paid to our auditors and to other legal persons belonging to the same network, by the companies bearing a control or group relationship, amount to 90,500 Euro, distributed as follows:
Statutory Accounts Audit Services 95% Other services 5%
The item "Other services" includes verification of the supporting documentation of the investment project under the System of Incentives for Research & Development in the NSRF Operational Program.
The Board of Directors, when requesting projects, before awarding them ensures that, under the terms of European Commission Recommendation No. C (2002) 1873 of 16 May 2002, no services are contracted of the auditors and their network liable to compromise their independence.
III.18. The Audit Board undertakes an annual assessment of the work of the External Auditor, ensuring that the fulfilment of the provisions laid down in Article 54 of Decree-Law No. 487/99 of 16 November (amended by Decree-Law No. 224/2008, 20 November) in relation to the rotation of the partner responsible for implementing the work.
This was one of the reasons why the Company changed, early in 2010, the entity that performed the tasks of external audit.
Note: This Report on Corporate Governance is a translation of the Report on Corporate Governance originally issued in Portuguese language. In the event of discrepancies, the Portuguese language version prevails.
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